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/raid1/www/Hosts/bankrupt/TCR_Public/060504.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, May 4, 2006, Vol. 10, No. 105 Headlines AAT COMMS: SBA Merger Completion Cues S&P to Withdraw BB- Ratings ABB LUMMUS: Wants Kirkpatrick & Lockhart as Bankruptcy Counsel ABB LUMMUS: Wants Pachulski Stang as Bankruptcy Co-Counsel ACTIVANT SOLUTIONS: Completes PIK and Senior Notes Offering AFC ENTERPRISES: Buys Thirteen Franchised Restaurants in Tennessee ALASKA AIR: Good Financial Profile Prompts S&P's Stable Outlook ALLEGHENY ENERGY: S&P Affirms BB+ Corporate Credit Rating ALLIED HOLDINGS: Court Allows $1.1 Million Forbearance Fee Payment ALLIED HOLDINGS: Secures Protective Order for Proposed Union CBA ALLIED HOLDINGS: Can Enter into Jack Cooper Lease Agreement ALON USA: Proposed Paramount Purchase Prompts S&P's Positive Watch AMERICAN TECHNOLOGIES: Incurs $2.1 Mil. Net Loss in First Quarter AMN HEALTHCARE: S&P Rates Proposed $40 Mil. Sr. Add-On Loan at BB- ANCHOR GLASS: Emerges From Chapter 11 Protection APOSTOLIC ADVANCEMENT: Voluntary Chapter 11 Case Summary ARGENT TRUST: Moody's Rates Class M-10 Certificates at Ba1 ATLAS PIPELINE: Completes 25% Interest Purchase in NOARK Pipeline BANC OF AMERICA: S&P Holds Low-B Ratings on 4 Certificate Classes BELDEN CDT: Reduced Financial Leverage Cues S&P's Positive Outlook BOOKER T. WASHINGTON: S&P Rates Financial Strength at R BROOKLYN HOSPITAL: Wants to Assume Workforce Retraining Contracts CAREY INTERNATIONAL: Weak Performance Cues S&P's Negative Outlook CATHOLIC CHURCH: Court Sets Claims Estimation Schedule in Portland CATHOLIC CHURCH: Portland Wants to Hire NERA as Economic Advisors CENTRAL AMERICAN: Killman Murrell Raises Going Concern Doubt COMMUNICATIONS & POWER: Debt Reduction Cues S&P's Stable Outlook COMVERSE TECHNOLOGY: S&P Holds Ratings on Negative CreditWatch COMVERSE TECH: Names Raz Alon as Interim Chief Executive Officer CONMED CORP: Earns $4.3 Million in Quarter Ended March 31 CONSORTIUM SERVICE: Losses Prompt Auditor's Going Concern Doubt CPI INTERNATIONAL: Debt Reduction Prompts S&P's Stable Outlook CREDIT SUISSE: DBRS Rates Class B-4 Certificates at BB CRUISECAM INTERNATIONAL: Auditor Raises Going Concern Doubt DAVID SCHACHTER: Case Summary & 17 Largest Unsecured Creditors DELPHI CORP: Officers Defend Move to Reject Union Contracts DELPHI CORP: Court Approves Ernst & Young as Independent Auditors DORNOCH DEVELOPMENT: Case Summary & 3 Largest Unsecured Creditors DURANGO GEORGIA: LandMar & Trustee Extend Closing of Tract Sale DYNEGY INC: Extends 4.75% Conv. Sub. Debentures Offering to May 15 EMPIRE RESORTS: Equity Deficit Tops $27 Million at December 31 ENTERGY NEW ORLEANS: Wants to Assume Amended Chaparral Contract ENTERGY NEW ORLEANS: Apache Agrees to Pay Part of Repair Costs F.G. METALS: Case Summary & 20 Largest Unsecured Creditors FOAMEX INTERNATIONAL: Exclusive Periods Extended Until June 16 FOAMEX INTERNATIONAL: Court Extends Removal Period to July 14 FOAMEX INT'L: CFO Douglas Ralph to Step Down Effective May 12 FRUIT OF THE LOOM: Court Allows Trust to Make Final Distribution GEORGE GONZALEZ: Case Summary & 6 Largest Unsecured Creditors GSRPM MORTGAGE: Moody's Puts Ba1 Rating on Class B-4 Certificates HARTVILLE GROUP: BDO Seidman Raises Going Concern Doubt HEXION SPECIALTY: S&P Rates Proposed $1.675 Billion Sr. Loan at B+ HUMANA INC: Moody's Outlook on Low-B Ratings is Negative INFINITE GROUP: Equity Deficit Widens to $3.2 Million at Dec. 31 J.A. JONES: Court Extends Claims Objection Deadline to Sept. 29 KANSAS CITY SOUTHERN: S&P Junks Preferred Stock Ratings KMART CORP: Trade Creditors Sell Claims Exceeding $114,227,955 LEVITZ HOME: Assigning 20 Leases to PLVTZ LLC LEVITZ HOME: Court Allows AMEC to Terminate Remediation Contract MAGNUM COAL: S&P Rates $260 Million Senior Secured Facility at B MERISTAR HOSPITALITY: Moody's Cuts Rating on Senior Notes to B3 MICROFIELD GROUP: Russell Bedford Raises Going Concern Doubt MID-STATE RACEWAY: Completes Asset Sale to Vernon Downs MUSICLAND HOLDING: Panel Taps Giuliani Capital as Fin'l Advisor MWB SPECIAL: Case Summary & 27 Largest Unsecured Creditors NATIONAL LAMPOON: Incurs $1 Mil. Net Loss in First Quarter 2006 NBC AUSTIN: Case Summary & 27 Largest Unsecured Creditors NEW ORLEANS PADDLEWHEELS: Case Summary & 20 Largest Creditors NORTH AMERICAN: S&P Downgrades Senior Unsecured Debt Rating to CCC NORTHWEST AIRLINES: Can Advance Employees' Legal Defense Costs O'SULLIVAN INDUSTRIES: Board Okays Mgmt. & Director Equity Plan OLD HOLLAND: Hires TB Harris & Assoc. as Real Estate Appraiser OXFORD INDUSTRIES: Moody's Reviews Sr. Unsecured Debt for Upgrade PEAK ENT: Balance Sheet Upside Down by $2 Million at December 31 PENN NATIONAL: Earns $42 Million in Quarter Ended March 31 PENN OCTANE: Burton McCumber Raises Going Concern Doubt PROGRESSIVE GAMING: Poor Performance Cues S&P to Cut Ratings to B- PROTECTION ONE: Incurs $29.1 Mil. Net Loss in Year Ended Dec. 31 Q.C. ONICS: Case Summary & 20 Largest Unsecured Creditors RALI SERIES: Moody's Rates Class M-10 Certificate at Ba1 REFCO INC: Chapter 7 Trustee Hires Neal Gerber as Special Counsel REPUBLIC STORAGE: Committee Hires Buckley King as Co-Counsel REPUBLIC STORAGE: Panel Hires Borges & Associates as Co-Counsel RIVERSTONE NETWORKS: Hires Sonenshine as Financial Advisor S EDWARD: Case Summary & 20 Largest Unsecured Creditors SBA COMMS: AAT Merger Completion Cues S&P to Withdraw B+ Ratings SEA CONTAINERS: Moody's Junks Corp. Family & Sr. Unsec. Debt SEA CONTAINERS: S&P Lowers Corp. Credit Rating to CCC- from CCC+ SIERRA HEALTH: Sustained Earnings Cues S&P to Lift Ratings to BB+ SITEL CORPORATION: Unit's Irregularities Cause Reporting Delay SOUTH FINANCIAL: DBRS Places Rating on Subor. Debt at BB(high) SOUTHERN COPPER: Moody's Ups Ba1 Rating on Sr. Notes to Baa2 STAR GAS: Recapitalization Prompts S&P to Upgrade Ratings to B- SYLVEST FARMS: Taps Baker & Hostetler as Bankruptcy Counsel SYLVEST FARMS: Has Interim Access to $34 Million Wachovia DIP Loan TENET HEALTHCARE: Amends Three Quarters of 2005 Financial Reports TNS INC: BB- Corp. Credit & Sr. Debt Ratings Remain on S&P's Watch TRANSTECHNOLOGY CORP: Completes New $50 Million Refinancing Deal TOWER AUTOMOTIVE: Has Until June 27 to File Chapter 11 Plan TOWER AUTOMOTIVE: Court Okays Waiver Agreement with DIP Lenders ULTCO INC: Case Summary & Largest Unsecured Creditor VARIG S.A.: Brazilian Court OKs A&M as Restructuring Advisor VARIG S.A.: Halts Service to Portugal and Sends Passengers to TAP VARIG S.A.: Preliminary Injunction in Place Until June 1 VILLAJE DEL RIO: Case Summary & 14 Largest Unsecured Creditors * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* AAT COMMS: SBA Merger Completion Cues S&P to Withdraw BB- Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew the ratings for Boca Raton, Florida-based wireless tower operator SBA Communications Corp., including its 'B+' corporate credit rating. At the same time, it withdrew the ratings on St. Louis, Missouri- based wireless tower operator AAT Communications Corp., including the 'BB-' corporate credit rating. "These actions follow the completion of the acquisition of AAT by SBA, and the concurrent completion of a debt tender for $424 million of SBA's public debt and repayment of AAT's $285 million of first- and second-lien bank debt," said Standard & Poor's credit analyst Catherine Cosentino. ABB LUMMUS: Wants Kirkpatrick & Lockhart as Bankruptcy Counsel -------------------------------------------------------------- ABB Lummus Global Inc., asks the United States Bankruptcy Court for the District of Delaware for permission to employ Kirkpatrick & Lockhart Nicholson Graham LLP, as its bankruptcy counsel, nunc pro tunc to April 21, 2006. Kirkpatrick & Lockhart will: a. provide legal advice with respect to the Debtor's powers and duties as a debtor-in-possession in the continued operation of its businesses and management of its properties; b. take all necessary legal action to protect and preserve the Debtor's Bankruptcy Estate, including the prosecution of actions on behalf of the Debtor, the defense of any actions commenced against the Debtor, negotiations concerning litigation in which the Debtor is involved, and objection to claims filed against the Debtor's bankruptcy estate; c. prepare on behalf of the Debtor all necessary motions, answers, orders, reports, and other legal papers on connection with the administration of its bankruptcy estate; d. assist the Debtor in connection with approval of its disclosure statement in accordance with Section 1125 of the Bankruptcy Code; e. assist the Debtor in confirming and consummating its prepackaged plan of reorganization at the earliest possible date; f. perform any and all other legal services for the Debtor in connection with its chapter 11 case; and g. perform such other legal services as the Debtor may request. Jeffrey N. Rich, Esq., a member of Kirkpatrick & Lockhart, tells the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $350 - $625 Counsel $260 - $385 Legal Assistants $170 - $210 Mr. Rich assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Court. Headquartered in Houston, Texas, ABB Lummus Global Inc. -- http://www.abb.com/lummus/-- offers advanced process technologies, project management, engineering, procurement and construction-related services for the oil and gas, petroleum refining and petrochemical process industries. The group oversees the construction of process plants and offshore facilities. The company filed for chapter 11 protection on Apr. 21, 2006 (Bankr. D. Del. Case No. 06-10401). Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Nicholson Graham LLP, represents the Debtor. Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl Young, Jones & Weintraub, LLP, serves as the Debtor's co-counsel. When the Debtor filed for protection from its creditors, it estimated more than $100 million in assets and debts. ABB LUMMUS: Wants Pachulski Stang as Bankruptcy Co-Counsel ---------------------------------------------------------- ABB Lummus Global Inc., asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Pachulski Stang Ziehl Young Jones & Weintraub LLP, as its bankruptcy co-counsel, nunc pro tunc to April 21, 2006. The Debtor tells the Court that Pachulski Stang will handle matters arising in its chapter 11 case that could create conflicts issues for its lead counsel, Kirkpatrick & Lockhart Nicholson Graham LLP. The Debtor assures the Court that Pachulski Stang will complement and not duplicate the services of Kirkpatrick & Lockhart. The Debtor says that it will implement appropriate procedures to ensure that there is minimal duplication in the services rendered. Pachulski Stang will: a. provide legal advice with respect to the Debtor's powers and duties as a debtor-in-possession in the continued operation of its businesses and management of its properties; b. take all necessary legal action to protect and preserve the Debtor's Bankruptcy Estate, including the prosecution of actions on behalf of the Debtor, the defense of any actions commenced against the Debtor, negotiations concerning litigation in which the Debtor is involved, and objection to claims filed against the Debtor's bankruptcy estate; c. prepare on behalf of the Debtor all necessary motions, answers, orders, reports, and other legal papers; d. assist the Debtor in connection with approval of its disclosure statement in accordance with Section 1125 of the Bankruptcy Code; e. assist the Debtor in confirming and consummating its prepackaged plan of reorganization at the earliest possible date; f. appear in Court and protect the interests of the Debtor before the Court; and g. perform all other legal services for the Debtor which may be necessary and proper in the Debtor's chapter 11 case and in any related proceedings. Laura Davis Jones, Esq., a partner at Pachulski Stang, tells the Court that she will bill $675 per hour for this engagement. Ms. Jones says that the other professionals who will render services and their hourly rates are: Professional Hourly Rate ------------ ----------- Scotta E. McFarland, Esq. $450 Curtis A. Hehn, Esq. $350 Patricia Cuniff, Esq. $155 Ms. Jones assures the Court that her firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Court. Headquartered in Houston, Texas, ABB Lummus Global Inc. -- http://www.abb.com/lummus/-- offers advanced process technologies, project management, engineering, procurement and construction-related services for the oil and gas, petroleum refining and petrochemical process industries. The group oversees the construction of process plants and offshore facilities. The company filed for chapter 11 protection on Apr. 21, 2006 (Bankr. D. Del. Case No. 06-10401). Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Nicholson Graham LLP, represents the Debtor. Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl Young, Jones & Weintraub, LLP, serves as the Debtor's co-counsel. When the Debtor filed for protection from its creditors, it estimated more than $100 million in assets and debts. ACTIVANT SOLUTIONS: Completes PIK and Senior Notes Offering ----------------------------------------------------------- Activant Solutions Holdings Inc. and Activant Solutions Inc. completed the cash tender offers and consent solicitations for any and all of ASHI's outstanding Senior Floating Rate PIK Notes due 2011 and Activant's outstanding 10-1/2% Senior Notes due 2011 and Floating Rate Senior Notes due 2010. As reported in the Troubled Company Reporter on April 4, 2006, the tender offers for the Notes expired at 8:00 a.m., New York City time, on May 2, 2006. The tender offers and consent solicitations were conducted in connection with the agreement of ASHI to merge with an affiliate of Hellman & Friedman LLC and Thoma Cressey Equity Partners, Inc. ASHI and Activant accepted for payment and paid for all Notes validly tendered and not validly withdrawn on or before the Offer Expiration Date in the tender offers for the Notes, totaling these aggregate principal amounts: Percentage of Aggregate Principal Principal Amount Amount of of Outstanding Notes Notes Tendered Notes Tendered ----- -------------- -------------- PIK Notes $40,000,000 100.0% 10-1/2% Notes $154,800,000 98.7% Floating Rate Notes $242,445,000 91.5% On April 12, 2006, ASHI and ASI reported the receipt of the requisite consents for the supplemental indentures relating to the Notes which, when the amendments contained therein became operative, eliminated substantially all of the restrictive covenants contained in the Notes and related indentures (except for certain covenants related to payment of interest, payment of principal, asset sales, change of control and other repurchase offers and certain other covenants) and also eliminated certain events of default, certain covenants relating to mergers, and certain conditions to legal defeasance and covenant defeasance, as well as modify or eliminate certain other provisions contained in the Notes and related indentures. The amendments contained in the supplemental indentures became operative immediately prior to the Merger. On May 2, 2006, ASI issued a notice to redeem all remaining outstanding Floating Rate Notes. The redemption is scheduled to occur on June 1, 2006 at a price equal to 102% of the aggregate principal amount of the Floating Rate Notes, plus accrued and unpaid interest and accrued and unpaid liquidated damages due pursuant to the registration rights agreement relating to the Floating Rate Notes to, but not including, June 1, 2006. ASHI and Activant engaged Deutsche Bank Securities Inc. to act as the Dealer Manager for the tender offers and Solicitation Agent for the consent solicitations. Deutsche Bank Securities Inc. Toll Free (800) 553-2826 The Information Agent can be contacted at: MacKenzie Partners, Inc. Toll Free (800) 322-2885 About Activant Based in Tex., Activant Solutions Inc. -- http://www.activant.com/ -- is a technology provider of business management solutions serving small and medium-sized retail and wholesale distribution businesses in three primary vertical markets: hardlines and lumber; wholesale distribution; and the automotive parts aftermarket. Founded in 1972, Activant provides customers with tailored proprietary software, professional services, content, supply chain connectivity, and analytics. More than 30,000 customer locations use an Activant solution to manage their day- to-day operations. Activant has operations in California, Colorado, Connecticut, Illinois, New Jersey, Pennsylvania, South Carolina, Utah, Canada, France, Ireland, and the United Kingdom. * * * As reported in the Troubled Company Reporter on April 17, 2006, Moody's Investors Service affirmed Activant Solutions, Inc.'s corporate family rating of B2; assigned B2 ratings to its proposed senior secured credit facilities and Caa1 to its senior subordinated notes. Moody's also revised the Company's rating outlook to negative from developing. AFC ENTERPRISES: Buys Thirteen Franchised Restaurants in Tennessee ------------------------------------------------------------------ AFC Enterprises, Inc. (Nasdaq:AFCE) acquired 13 franchised restaurants from Popeyes(R) Chicken & Biscuits franchisee Shelton Development Company. The acquisition of 13 franchised restaurants included 11 restaurants located in the Memphis, Tennessee market and 2 restaurants in the Nashville, Tennessee market. Shelton Development Company will continue its relationship with Popeyes as a developer of Popeyes restaurants. "We were attracted to this acquisition because these Tennessee restaurants provide Popeyes additional company-operated test markets for our new menu items, promotional concepts and new restaurant designs which will benefit the entire Popeyes system," Ken Keymer, CEO and President stated. "In addition, the acquisition of these strong performing restaurants bring geographic diversity to our company-operated restaurant base." About AFC Enterprises AFC Enterprises, Inc. -- http://www.afce.com/-- is the franchisor and operator of Popeyes(R) Chicken & Biscuits, the world's second- largest quick-service chicken concept based on number of units. As of Dec. 25, 2005, Popeyes had 1,828 restaurants in the United States, Puerto Rico, Guam and 24 foreign countries. AFC has a primary objective to be the world's Franchisor of Choice(R) by offering investment opportunities in its Popeyes Chicken & Biscuits brand and providing exceptional franchisee support systems and services. At Dec. 25, 2005, AFC's balance sheet showed a $48.7 million stockholders' deficit compared to $140.9 million of positive equity at Dec. 26, 2005. ALASKA AIR: Good Financial Profile Prompts S&P's Stable Outlook --------------------------------------------------------------- Standard & Poor's Rating Services revised its outlook on Alaska Air Group Inc. to stable from negative. The ratings on Alaska Air Group and its major operating subsidiary, Alaska Airlines Inc., including the 'BB-' corporate credit rating on both entities, were affirmed. "The outlook revision is based on the company's stabilized financial profile after the company's successful conversion of $150 million of senior convertible notes into equity on April 27, 2006," said Standard & Poor's credit analyst Betsy Snyder. "The conversion approximates the cash payments related to the accelerated retirement of its MD80 aircraft fleet," she continued. Alaska Air Group's financial profile is better than those of most other U.S. airlines. Despite record high fuel prices, the company reported only a modest loss of $6 million in 2005, and a small operating profit in the first quarter of 2006, excluding a $131 million non-cash pre-tax impairment charge related to the accelerated retirement of its MD80's. The company's earnings have benefited from its fuel hedging program, among the best of the U.S. airlines; in 2005, approximately 50% of its fuel was hedged at approximately $30 a barrel relative to fuel prices that averaged close to $60 a barrel over that period. A lesser amount is hedged at somewhat higher prices through 2008. The accelerated retirement of the MD80's, which will be replaced by new Boeing 737-800's, is expected to result in annual cost savings of over $100 million when the transition is completed in 2008. Although the company expects to make cash payments of $130 million to $150 million through 2008 associated with early lease terminations of the MD80's, Standard & Poor's expects the company's financial profile to remain relatively consistent over that period. ALLEGHENY ENERGY: S&P Affirms BB+ Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating on power generation company Allegheny Energy Supply Co LLC. At the same time, Standard & Poor's assigned its 'BBB-' rating and '1' recovery rating to the company's $967 million senior secured bank loan. The outlook is positive. As of Dec. 31, 2005, the Greensburg, Pennsylvania-based company had $2.4 billion of debt outstanding. The '1' recovery rating indicates that the expectation of full recovery of principal in a payment default scenario. Proceeds will be used to refinance the existing term loan C. The rating on AE Supply reflects the consolidated corporate credit rating on its parent, diversified energy company Allegheny Energy Inc. (BB+/Positive/B-2). "The positive outlook on AE Supply reflects the expectation that parent Allegheny will continue to improve its financial risk profile by paying down debt," said Standard & Poor's credit analyst Aneesh Prabhu. ALLIED HOLDINGS: Court Allows $1.1 Million Forbearance Fee Payment ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Georgia authorized Allied Holdings, Inc., and its debtor-affiliates to pay a $1,150,000 Forbearance Fee to their DIP Facility Lenders and to take other necessary action for the implementation of the matters contemplated in the Forbearance Agreement. As reported in the Troubled Company Reporter on March 28, 2006, the Debtors entered into a Forbearance Agreement, with respect to their amended DIP Credit Agreement, with General Electric Capital Corporation, Morgan Stanley Senior Funding, Inc., Marathon Structured Financing Fund, L.P., GECC Capital Markets Group, Inc., and other lenders. Allied Holdings had determined that it was not in compliance with certain of the DIP Facility's financial covenants related to their EBITDA and Maximum Leverage Ratio. Failure to comply with those financial covenants constitutes a Default or an Event of Default. Pursuant to the Forbearance Agreement, during the forbearance period, the Lenders agreed that the financial covenants violations do not constitute a Default or an Event of Default. In addition, the Lenders agree to temporarily refrain from exercising certain of their remedies under the DIP Facility. On April 3, 2006, the Debtors and the DIP Lenders extended the Forbearance Agreement. The Extension extends the forbearance term until April 18, 2006. Under the terms of the Extension, the Lenders will be required to make additional advances of funds to the Company under the DIP Facility as long as the Company is in compliance with the terms of the DIP Facility and the Extension. Committee Objects The Official Committee of Unsecured Creditors asked the Court to deny the Debtors' request to pay a forbearance fee to the postpetition lenders, or in the alternative, approve a reduced forbearance fee. Richard B. Herzog, Esq., at Nelson Mullins Riley & Scarborough, LLP, in Atlanta, Georgia, contended that in order to obtain approval of the forbearance under Section 501(b)(1)(A) of the Bankruptcy Code, the Debtors must show that a $1,150,000 fee for 15 days of forbearance is both an actual expense of the postpetition lenders and that it is necessary to preserve the value of the Debtors' estates. Specifically, the Committee wanted the Debtors to show that: (a) the postpetition lenders will actually incur tangible costs if they forbear for 15 days; and (b) the postpetition lenders would not forbear for 15 days unless they are paid $1,150,000. Mr. Herzog noted that the postpetition lenders' willingness (i) to enter into the prior forbearance agreement for 25 days with no fee to forbear for an indefinite period pending a hearing on the approval of the forbearance fee; and (ii) to waive half of the $1,150,000 fee if the Debtors amend their postpetition financing agreement, implies that the fee is not related to any of the actual incurred costs and that it is not really motivating the lenders' forbearance. About Allied Holdings 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. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Secures Protective Order for Proposed Union CBA ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia entered a protective order preventing disclosure of any confidential information provided in connection with Allied Holdings, Inc. and its debtor-affiliates' proposal to modify their the collective bargaining agreement with the International Brotherhood of Teamsters, Teamsters National Automobile Transporters Negotiating Committee and applicable local unions. Members of the International Brotherhood of Teamsters, including some who are employees of Debtors, either own or could reasonably be expected to purchase shares of AHI stock. 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. The relevant information necessary to evaluate the Debtors' Proposal includes confidential, commercial, proprietary, financial, or otherwise non-public data, Mr. Kelley said. Mr. Kelley contended that the unlimited disclosure of that relevant information could compromise the Debtors in an increasingly competitive industry. "Furthermore, the litigation of any CBA Matter might require the disclosure in open court of sensitive or confidential information that, if disclosed to the public or a competitor, could compromise the Debtors' position in the auto hauling industry." Moreover, the Debtors' contracts with its customers prohibit Allied Holdings from disclosing confidential information included in the agreements. Mr. Kelley told the Court that the Debtors want to provide to the IBT those relevant information as is necessary to evaluate the Proposal. However, the Debtors and the IBT have not been able to agree upon the terms of a protective order with respect to the Debtors' rights under Sections 1113(d)(3) and 1114(k)(3) of the Bankruptcy Codes and the IBT's obligations under Regulation FD. About Allied Holdings 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. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALLIED HOLDINGS: Can Enter into Jack Cooper Lease Agreement ----------------------------------------------------------- The U.S Bankruptcy Court for the Northern District of Georgia authorized Allied Holdings, Inc., and its debtor-affiliates to enter into a Lease Agreement with Jack Cooper Transport Company, Inc., effective as of March 17, 2006. Under the Lease Agreement, the Debtors lease the Property Jack Cooper, as tenant, for $5,625 per month, on a short-term basis. The Lease has an initial term of 30 days and continues on a month- to-month basis thereafter. Pursuant to the Lease, Jack Cooper took possession of the Property on April 1, 2006. As reported in the Troubled Company Reporter on April 13, 2006, Allied Systems, Ltd., as landlord, executed a lease with Jack Cooper Transport Company, Inc., as tenant, for approximately 9.43 acres of industrial land located at 239 Triport Road in the City of Georgetown, County of Scott, Commonwealth of Kentucky. The Lease commenced on April 1, 2006, and continues on a month-to- month basis thereafter, with $5,625 in monthly rent due on the first day of each month. The parties also entered into a purchase and sale agreement for the Real Property, pursuant to which Jack Cooper will purchase the Real Property for $625,000, subject to higher and better offers. About Allied Holdings 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. 20; Bankruptcy Creditors' Service, Inc., 215/945-7000) ALON USA: Proposed Paramount Purchase Prompts S&P's Positive Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B' corporate credit rating on independent petroleum refiner and retail marketer Alon USA Energy Inc. on CreditWatch with positive implications. The rating action follows the company's announcement that it has entered into separate definitive agreements to acquire Paramount Petroleum Corp. for about $407 million and Edginton Oil Co. for about $52 million, respectively. Dallas, Texas-based Alon had about $32 million of total debt outstanding as of March 31, 2006. Alon intends to fund the proposed transaction with a potential new term loan and cash on hand. The proposed acquisitions are expected to close by the end of the second quarter of 2006. "The proposed transactions could improve Alon's credit quality based on an enhanced business risk profile," said Standard & Poor's credit analyst Brian Janiak. Before the proposed acquisitions, Alon had significantly improved its financial profile and liquidity due to debt reduction and excess cash flow generation from favorable refining margins during 2005. Although the acquisition improves Alon's business risk profile, we will conduct a comprehensive review of the acquired assets and future capital expenditure needs before resolving the CreditWatch. Standard & Poor's plans to meet with Alon's management in the near term and resolve the CreditWatch before the transaction closes. AMERICAN TECHNOLOGIES: Incurs $2.1 Mil. Net Loss in First Quarter ----------------------------------------------------------------- American Technologies Group, Inc., reported a $2.1 million net loss for the three months ended Jan. 31, 2006, compared to a net loss of $112,032 for the same period in 2005. Revenues for the quarter ended Jan. 31, 2006 totaled $6.3 million, which according to the company, were heavily influenced by its acquisition of North Texas Steel Company, Inc., in September last year. The company's balance sheet at Jan. 31, 2006 showed $17.2 million in total assets and $19 million in total liabilities, resulting in a $1.7 million in total shareholders' equity deficit. The company's balance sheet also showed strained liquidity with $11.9 million in total current assets available to pay for $18.5 million of total current liabilities. A full-text copy of American Technologies' quarterly report for the three-months ending Jan. 31, 2006 is available for free at: http://researcharchives.com/t/s?87e Going Concern Doubt As reported in the Troubled Company Reporter on Apr. 11, 2006, American Technologies' management stated that the company will not have funds to meet future working capital and financing needs as a result of recapitalization. Although the company is seeking financing to support working capital needs, there can be no assurances that it will be successful in raising the funds required, the management said. "The Company has incurred operating losses in the last two years, and ... dependent upon management's ability to develop profitable operations. These factors ... raise substantial doubt about the Company's ability to continue as a going concern." Based in California, American Technologies Group, Inc. develops, manufactures, and sells products that reduce and eliminate hazardous chemical by-products or emission resulting from industrial and combustion processes. The company's proprietary catalyst technology is also used in the manufacture of detergents and cosmetics. AMN HEALTHCARE: S&P Rates Proposed $40 Mil. Sr. Add-On Loan at BB- ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB-' senior secured bank loan rating to San Diego, California-based AMN Healthcare Inc.'s proposed $40 million senior secured term loan B add-on due in 2011. "A recovery rating of '3' also was assigned to the add-on, indicating the expectation for meaningful (50%-80%) recovery of principal in the event of a payment default," said Standard & Poor's credit analyst Jesse Juliano. Existing ratings on AMN, including the 'BB-' corporate credit rating, were affirmed. The rating outlook remains negative. AMN plans to use the proceeds from the $40 million add-on to repurchase $40 million of company stock. This transaction essentially offsets AMN's solid operating performance since the company purchased The MHA Group Inc. on Nov. 2, 2005. The ratings on travel nurse staffing company AMN Healthcare Inc., a subsidiary of AMN Healthcare Services Inc., reflect the: * company's operating focus in health care staffing, * variable supply of available travel nurses, and * company's debt burden. These concerns are partially mitigated by: * favorable long-term demand trends for temporary nurses, * AMN's position as an industry leader, * the greater revenue diversity provided by its acquisition of The MHA Group Inc., and * the company's proven ability and willingness to reduce its outstanding debt. AMN is a leading provider of travel nurse staffing services and allied health staffing and, with MHA, also provides locum tenens (doctors) and permanent placement services. AMN's revenue mix consists of about 60% travel nurse staffing, 35% locum tenens staffing, and 5% allied health staffing. The company recruits nurses, doctors, and other allied health care professionals and places them on a temporary basis (generally 13 weeks for nurses and six to eight weeks for doctors) at health care facilities in all 50 states. ANCHOR GLASS: Emerges From Chapter 11 Protection ------------------------------------------------ Anchor Glass Container Corporation reported that all conditions to the effectiveness of its Chapter 11 Plan of Reorganization have been satisfied or waived and accordingly, Anchor has emerged from bankruptcy. In connection with its emergence, Anchor closed its $215 million exit financing facility with Credit Suisse. "We are well-positioned competitively with our customers and suppliers," Mark Burgess, Anchor's Chief Executive Officer, said. "During the course of our reorganization, we successfully renegotiated multi-year contracts with substantially all of our contract customers and suppliers. Our debt load has been substantially reduced and we obtained our exit financing on favorable terms. We look forward to working with our new Board of Directors and shareholders in becoming an even stronger competitor with a high quality product in the glass container market. We thank our customers, vendors, and employees for their continued willingness to provide top-notch support." Under the terms of Anchor's Plan of Reorganization, which was overwhelmingly supported by Anchor's creditors who voted on the Plan, Anchor's Senior Secured Note holders will own the majority of the company's equity and Anchor is exiting chapter 11 as a privately held company. Anchor will file a Form 15 with the Securities and Exchange Commission and will no longer file reports as a public reporting entity. About Anchor Glass Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. APOSTOLIC ADVANCEMENT: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Apostolic Advancement Association 4607 8th Street Meridian, Mississippi 395462 Bankruptcy Case No.: 06-50363 Chapter 11 Petition Date: May 3, 2006 Court: Southern District of Mississippi (Gulfport Divisional Office) Judge: Edward Gaines Debtor's Counsel: Craig M. Geno, Esq. Harris & Geno, PLLC 587 Highland Colony Parkway P.O. Box 3380 Ridgeland, Mississippi 39157 Tel: (601) 427-0048 Fax: (601) 427-0050 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file the list of its 20 largest unsecured creditors. ARGENT TRUST: Moody's Rates Class M-10 Certificates at Ba1 ---------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by Argent Securities Trust 2006-W4, Asset- Backed Pass-Through Certificates, Series 2006-W4, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by adjustable-rate and fixed rate subprime mortgage loans originated through Ameriquest's wholesale division, Argent Mortgage Company using underwriting guidelines that are slightly less stringent than those used by Ameriquest's retail channel. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, overcollateralization, mortgage insurance, and an interest rate swap agreement. After taking into account the benefit from the mortgage insurance, Moody's expects collateral losses to range from 4.35% to 4.85%. Ameriquest Mortgage Company will act as Master Servicer and AMC Mortgage Services will act as sub-servicer for the mortgage collateral. Ameriquest previously disclosed discussions with financial regulatory agencies or attorneys general offices of several states, regarding lending practices of AMC. ACC Capital Holdings Corporation, the parent company of Argent and AMC, had recorded a provision of $325 million in its financial statements with respect to this matter. ACC recently announced that it had entered into a settlement agreement with forty-nine states and the District of Columbia. Under the terms of the settlement agreement, ACC agreed to pay $295 million toward restitution to borrowers and $30 million to cover the States' legal costs and other expenses. In addition, ACC agreed on behalf of itself, AMC and AMC's retail affiliates, to supplement several of its business practices and to submit itself to independent monitoring. The agreement is not expected to have any material credit implications on securitizations backed by collateral originated by AMC, Argent or their affiliates. The Complete Rating Actions are: Argent Securities Trust 2006-W4, Asset-Backed Pass-Through Certificates, Series 2006-W4 * Cl. A-1, Assigned Aaa * Cl. A-2A, Assigned Aaa * Cl. A-2B, Assigned Aaa * Cl. A-2C, Assigned Aaa * Cl. A-2D, Assigned Aaa * Cl. M-1, Assigned Aa1 * Cl. M-2, Assigned Aa2 * Cl. M-3, Assigned Aa3 * Cl. M-4, Assigned A1 * Cl. M-5, Assigned A2 * Cl. M-6, Assigned A3 * Cl. M-7, Assigned Baa1 * Cl. M-8, Assigned Baa2 * Cl. M-9, Assigned Baa3 * Cl. M-10, Assigned Ba1 ATLAS PIPELINE: Completes 25% Interest Purchase in NOARK Pipeline ----------------------------------------------------------------- Atlas Pipeline Partners, L.P. (NYSE:APL) completed the acquisition of a 25% interest in NOARK Pipeline System Limited Partnership, previously owned by Southwestern Energy Company (NYSE:SWN), bringing the Partnership's interest in NOARK to 100%. NOARK's assets, which are included within the Partnership's Mid-Continent operations, include a FERC regulated interstate pipeline and an unregulated natural gas gathering system. Total consideration paid for the 25% minority stake was $65.5 million, net of approximately $3.5 million of working capital. The acquisition will be initially financed through the Partnership's credit facility. The Partnership expects the acquisition of the remaining 25% NOARK interest to be accretive to distributable cash flow in a range of $0.05 to $0.15 per limited partner unit over the next 12 months. NOARK, through its 100% ownership of Ozark Gas Transmission, L.L.C., operates 565 miles of FERC regulated interstate pipeline, extending from eastern Oklahoma through central and northeastern Arkansas and into Missouri. OGT has throughput capacity of approximately 322,000 dth/d. In addition, NOARK, through its 100% ownership of Ozark Gas Gathering, L.L.C., operates 365 miles of unregulated gathering pipeline in Oklahoma and Arkansas. OGG provides access to natural gas basins through approximately 400 receipt points that are then transported through OGT. "The completion of our purchase of the remaining interest in NOARK provides us with the additional benefit of operations that are core to our business," Edward E. Cohen, Chairman and CEO of the general partner of the Partnership, stated. "This transaction clearly demonstrates the commitment to our strategy to grow our business through a well-positioned and consistent asset base." About Atlas Pipeline Partners Headquartered in Moon Township, Pennsylvania, Atlas Pipeline Partners, L.P. -- http://www.atlaspipelinepartners.com/-- is active in the transmission, gathering and processing segments of the midstream natural gas industry. In the Mid-Continent region of Oklahoma, Arkansas, northern Texas and the Texas panhandle, the Partnership owns and operates approximately 2,565 miles of intrastate gas gathering pipeline and a 565-mile interstate natural gas pipeline. The Partnership also operates two gas processing plants and a treating facility in Velma, Elk City and Prentiss, Oklahoma where natural gas liquids and impurities are removed. In Appalachia, it owns and operates approximately 1,500 miles of natural gas gathering pipelines in western Pennsylvania, western New York and eastern Ohio. Atlas America, Inc. -- http://www.atlasamerica.com/-- the parent company of Atlas Pipeline Partners, L.P.'s general partner and owner of 1,641,026 units of limited partner interest of APL, is an energy company engaged primarily in the development and production of natural gas in the Appalachian Basin for its own account and for its investors through the offering of tax advantaged investment programs. * * * Atlas Pipeline Partners L.P.'s 8-1/8% Senior Unsecured Notes due 2015 carry Moody's Investors Service's and Standard & Poor's single-B rating. BANC OF AMERICA: S&P Holds Low-B Ratings on 4 Certificate Classes ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 24 classes of mortgage pass-through certificates from Banc of America Funding 2005-A Trust. The affirmations are based on current credit enhancement percentages that are sufficient to support the certificates at the current ratings. According to April 2006 data, realized losses for the mortgage pool totaled 0.03% and severe delinquencies were 0.34%. Credit support for this transaction is provided by subordination or overcollateralization. The underlying collateral backing the certificates consists of fixed- or adjustable-rate first lien mortgage loans secured by one- to four-family residential properties. Ratings Affirmed Banc of America Funding 2005-A Trust Mortgage pass-through certificates Class Rating ----- ------ 1-A-1,2-A-1,2-A-2,2-A-3,2-X-1,3-A-1,4-A-1 AAA 5-A-1,5-A-2,5-A-3 AAA CB-1,5-M-1 AA+ CB-2,4-B-1 AA 5-M-2 AA- 4-B-2 A CB-3,5-B-1 A- 5-B-2 BBB+ 4-B-3 BBB CB-4,4-B-4 BB CB-5,4-B-5 B BELDEN CDT: Reduced Financial Leverage Cues S&P's Positive Outlook ------------------------------------------------------------------ Standard & Poor's Rating Services revised its outlook on St. Louis, Missouri-based Belden CDT Inc. to positive from stable, and affirmed its 'BB-' corporate credit rating, and 'B' subordinated debt rating. The revised outlook reflects reduced financial leverage stemming from improved profitability. Adjusted total debt to EBITDA basis, was 2.0x, as of March 2006, compared with 3.2X at March 2005. "The ratings reflect the company's participation in highly competitive, cyclical, and low-return wire and cable markets, partially offset by improving profitability, solid positions in segments of the relatively more value-added specialty electronic wire segments, and a currently moderate financial profile for the rating," said Standard & Poor's credit analyst Stephanie Crane. Belden CDT's position in specialty electronic wire and cable, which accounts for roughly two-thirds of the company's revenues, provides ratings support. The company's presence across a range of specialty product lines, including aerospace/aviation, automobiles, broadcast/entertainment, and safety and security, provide relatively stable revenues and profitability, with EBITDA margins exceeding 10%. The networking segment, which supplies enterprise premise network cables and accounts for about one-third of company revenues, is viewed as more risky, although the market and the business has improved somewhat. Demand conditions have improved after a three- year downturn in information technology investment, and profitability in the segment is improving off of a low base, reflected by disciplined pricing and efforts to achieve cost efficiencies. S&P believes Belden CDT is positioned to participate in the high end of the market with other leading suppliers, such as CommScope Inc. BOOKER T. WASHINGTON: S&P Rates Financial Strength at R ------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'R' financial strength rating to Booker T. Washington Insurance Co. after the company voluntarily submitted to being placed into receivership in Jefferson County Circuit Court in Alabama. In early March, an examination by the Alabama Department of Insurance revealed that the company is insolvent by $4.3 million. The company is now in the hands of receivership by the Alabama Department of Insurance. Denise B. Azar is the receiver and will serve as the court-appointed administrator of the company until it is rehabilitated or liquidated. An Insurer rated 'R' is under regulatory supervision owning to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others. The rating does not apply to insurers subject only to nonfinancial actions such as market conduct violations. BROOKLYN HOSPITAL: Wants to Assume Workforce Retraining Contracts ----------------------------------------------------------------- The Brooklyn Hospital Center and Caledonian Health Center, Inc., ask the U.S. Bankruptcy Court for the Eastern District of New York for permission to assume certain agreements with The Hospital League/1199 Training and Upgrading Fund. CHCCDP Program The Debtors receive grants from the New York State Department of Health, through the Community Health Care Conversion Demonstration Project, to support workforce retraining, primary care expansion and healthcare infrastructure improvements. Under the CHCCDP program, the Debtors are required to allocate at least 25% of the grant for workforce retraining. The remaining 75% is reserved for other infrastructure projects. The Hospital League/1199 administers and provides training to the Debtors' qualifying employees under a fund agreement. Under the scheme, the Debtors transfer the workforce retraining allocation from CHCCDP to The Hospital League/1199 during every grant cycle. The Debtors expect to receive approximately $890,000 and $5.4 million in CHCCDP Grants for cycle 4 and cycle 5. They want to assume the fund agreement with The Hospital League/1199 so that they can continue funding their workforce retraining with the 25% allocation from the CHCCDP Grants. In addition, the Debtors want to pay $650,000 of outstanding workforce retraining fees owed to The Hospital League/1199 from the previous grant cycles. Lawrence M. Handelsman, Esq., at Stroock & Stroock & Lavan LLP, tells the Bankruptcy Court that the assumption of the fund agreement and the cure of the defaults will allow the Debtors to continue participating in the CHCCDP grant program. Mr. Handelsman explains that the CHCCDP grants are an important source of revenue and support for the Debtors' hospital. About Brooklyn Hospital Headquartered in Brooklyn, New York, The Brooklyn Hospital Center -- http://www.tbh.org/-- provides a variety of inpatient and outpatient services and education programs to improve the well being of its community. The Debtor, together with Caledonian Health Center, Inc., filed for chapter 11 protection on Sept. 30, 2005 (Bankr. E.D.N.Y. Case No. 05-26990). Lawrence M. Handelsman, Esq., and Eric M. Kay, Esq., at Stroock & Stroock & Lavan LLP represent the Debtors in their restructuring efforts. Glenn B. Rice, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. Mark Dominick Alvarez at Alvarez & Marsal, LLC, serves as the Committee's financial advisor. When the Debtors filed for protection from their creditors, they listed $233,000,000 in assets and $337,000,000 in debts. CAREY INTERNATIONAL: Weak Performance Cues S&P's Negative Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Carey International Inc. However, the outlook was revised to negative from stable. The outlook change reflects Carey's weaker-than-expected financial performance over the past year, and the potential for a rating downgrade if performance does not improve in the next few quarters or if covenant issues arise and limit the company's access to bank lines. The Washington, D.C.-based limousine company has about $167 million of lease- adjusted debt. "The ratings on Carey reflect the limousine company's highly leveraged capital structure and exposure to cyclical and competitive end markets with limited barriers to entry," said Standard & Poor's credit analyst Lisa Jenkins Helping to mitigate these challenges are a fairly flexible cost structure and significant market share in a fragmented industry. The ratings on Carey reflect the limousine company's highly leveraged capital structure and exposure to cyclical and competitive end markets with limited barriers to entry. Helping to mitigate these challenges are a fairly flexible cost structure and significant market share in a fragmented industry. Demand for Carey's services is primarily driven by the state of the economy. The impact of a cyclical downturn is reflected in Carey's performance during the 2001 to 2003 period, when the company's annual trip volume declined by 14% and financial results suffered accordingly. To better deal with such cyclical pressures, Carey has reduced further the fixed component of its cost structure by increasing its use of independent operators, rather than company-owned vehicles and employees. The company estimates that slightly over two-thirds of its cost base is now variable. The company has also pursued geographic diversification to help offset cyclical pressures in individual markets. Carey currently provides services in 542 cities in 59 countries. This global footprint, along with a global reservation system, enhances the company's competitive position somewhat relative to other providers of similar services, but barriers to entry remain relatively low and many local competitors exist in individual markets. Ratings assume that the company's financial performance will improve over the next few quarters as a result of various efficiency improvement measures being undertaken, and that the company will be able to achieve covenant relief, if required. Continued earnings pressures or failure to achieve covenant relief if needed will lead to a downgrade of the rating. Conversely, greater-than-expected success in improving financial performance could lead to an outlook revision to stable or positive, depending upon the magnitude of the improvement. CATHOLIC CHURCH: Court Sets Claims Estimation Schedule in Portland ------------------------------------------------------------------ On April 17, 2006, the U.S. Bankruptcy Court for the District of Oregon convened a hearing to consider several claims estimation requests, including: * estimation of child sex abuse and other claims as well as the temporary allowance of those claims; * estimation of future claims; * requests for temporary allowance of claims for voting purposes; and * estimation of unresolved present abuse tort claims for voting and confirmation purposes. Consequently, Judge Perris issued a scheduling order: Date Schedule ---- -------- May 15, 2006 Deadline for the FCR Report to file a report relating to the estimation of future claims May 31, 2006 Deadline for the Archdiocese to file a request estimating future claims May 31, 2006 Deadline for the Archdiocese and the claimants to each file proposed claims estimation procedures June 12, 2006 Deadline for parties to file objections or responses to the Archdiocese's and the claimants' proposed estimation procedures June 16, 2006 Hearing on: * the parties' proposed estimation procedures; and * the Archdiocese's request to estimate future claims The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. No Official Committee of Unsecured Creditors has been appointed in Portland's case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Portland Wants to Hire NERA as Economic Advisors ----------------------------------------------------------------- Susan S. Ford, Esq., at Sussman Shank LLP, in Portland, Oregon, notes that a hearing to determine the appropriate methodology to be used in estimating the claims has been set on June 16, 2006. In line with the claims estimation, the Archdiocese of Portland in Oregon wants to employ its own experts to assist it in: -- refining its proposed methodologies for estimation of the claims; and -- evaluating and providing advice regarding the other proposals that will be submitted for the estimation of claims. The Archdiocese seeks authority from the U.S. Bankruptcy Court for the District of Oregon to employ National Economic Research Associates, Inc., as its economic consultants. Frederic C. Dunbar, one of NERA's principals, will work on the Archdiocese's claims estimation. NERA and Dr. Dunbar will also provide professional services with respect to related issues regarding the proposal, confirmation, and implementation of a plan of reorganization. NERA's professionals will be paid at its customary hourly rates in effect at the time services are performed. The currently hourly rates are: Professional Hourly Rate ------------ ----------- Fred Dunbar $585 Jan Larsen $275 Qian Li $210 Prem Neupane $160 NERA's services will be billed as an administrative expense against the Archdiocese. The Archdiocese believes in the experience of Dr. Dunbar and NERA in the estimation of tort claims and other similar matters, Ms. Ford tells the Court. To the best of the Archdiocese's knowledge, Dr. Dunbar and NERA have no connection with Portland, its creditors, or any other party-in-interest, or their attorneys or accountants. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. No Official Committee of Unsecured Creditors has been appointed in Portland's case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) CENTRAL AMERICAN: Killman Murrell Raises Going Concern Doubt ------------------------------------------------------------ Killman, Murrell & Company, P.C., in Odessa, Texas, raised substantial doubt about the ability of Central American Equities Corp. 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 sales growth uncertainty and inability to raise sufficient capital. The Company reported a $367,154 net loss on $1,412,393 of revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $5,506,775 in total assets, $750,651 in total liabilities, and $4,756,124 in total stockholders' equity. The company's Dec. 31 balance sheet also showed strained liquidity with $177,745 in total current assets available to pay $496,605 in total current liabilities coming due within the next 12 months. A full-text copy of the company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?889 Central American Equity Corp. provides an integrated eco-vacation experience in Costa Rica, and owns and operates hotels and real property in that place. COMMUNICATIONS & POWER: Debt Reduction Cues S&P's Stable Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Communications & Power Industries Inc. and its parent, CPI International Inc., including the 'B+' corporate credit rating on both entities. The outlooks on both entities were revised to stable from negative. "The outlook revision reflects improved credit protection measures following a recent IPO, and expected debt reduction using the proceeds," said Standard & Poor's credit analyst Christopher DeNicolo. CPI International issued 2.9 million shares of common stock at $18 a share and could issue an additional 441,000 shares via an overallotment option. The total expected net proceeds of $45 million to $55 million are to be used to repay debt. Pro forma for the debt reduction, fiscal 2006 (ending Sept. 30, 2006) debt to EBITDA should decline to around 3.5x from previous expectations of 4.5x. Other financial measures should improve modestly and are expected to be generally appropriate for the rating, with EBITDA interest coverage above 3x and funds from operations to debt in the 10%-15% range. CPI's equity sponsor, The Cypress Group, also issued 4.1 million shares in the offering and its ownership will decline to around 50% if the overallotment option is exercised. The ratings on CPI and CPI International reflect a highly leveraged capital structure and modest scope of operations, offset somewhat by leading positions in niche markets. The company is a leading provider of vacuum electron devices used in commercial and defense applications requiring high power or high frequency power generation. VEDs are used in radar, electronic warfare, satellite communications, and certain medical, industrial, and scientific applications. CPI is first or second in all of the markets in which it competes. Revenues related to satellite communications have benefited recently from sales to direct-to-home video providers, although otherwise the worldwide satellite market remains weak, but is improving. Military sales have benefited from increased defense spending, especially for electronics. Program diversity is good, with no one program accounting for more than 6% of revenue. A significant portion of CPI's products are consumable, resulting in a steady stream of generally higher margin aftermarket sales, which account for approximately 50% of total revenue. Operating margins (before depreciation) are good at around 20%, as a result of management's efforts to reduce costs, consolidate facilities, and rationalize product lines. However, the costs of the San Carlos facility move and a one-time special bonus paid to management could depress margins somewhat in 2006. Reduced leverage, lower interest expense, and good market demand for most segments should enable the company to maintain a credit profile consistent with current ratings. The outlook could be revised to positive if growing earnings and improved cash generation result in a steadily strengthening financial profile. The outlook could be revised to negative if debt levels increase materially to fund acquisitions. COMVERSE TECHNOLOGY: S&P Holds Ratings on Negative CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services held its ratings on Comverse Technology Inc. on CreditWatch with negative implications, where they were placed on March 15, 2006, on the disclosure that the board of directors at Comverse had created a special committee to review matters relating to the company's stock option grants and the likely need to restate prior-period financial results. As reported in the Troubled Company Reporter on March 17, 2006, Standard & Poor's placed its corporate credit and senior unsecured debt ratings on Comverse Technology on CreditWatch with negative implications. The company has S&P's 'BB-' corporate credit and senior unsecured debt ratings. "Comverse announced on May 1 the departure of three members of senior management, to be replaced on an interim basis by two of the company's directors and other members of management," said Standard & Poor's credit analyst Philip Schrank. Other recent events include the possibility that the company's stock will be delisted from the NASDAQ Stock Market because of a failure to file financial statements by required deadlines. Under indentures to Comverse's convertible notes, a stock exchange delisting could give note holders the right to put the notes back to the company for cash. Standard & Poor's further notes that with reported cash balances as of Jan. 31, 2006, of $2.1 billion compared to approximately $500 million of notes, Comverse is expected to be able to meet a potentially accelerated maturity with current balance sheet liquidity. Changes in senior management could result in new business strategies or financial policies that ultimately could have an effect on debt ratings. Standard & Poor's will continue to monitor developments with Comverse including: * the financial restatements, * changes to strategy and corporate governance practices, * potential litigation, and * debt maturity acceleration to determine what, if any, affect they have on debt ratings. COMVERSE TECH: Names Raz Alon as Interim Chief Executive Officer ---------------------------------------------------------------- Comverse Technology, Inc., reported changes to its senior management team and Board of Directors. These changes are effective immediately: -- Ron Hiram, an independent director of the Company since 2001, has been named non-executive Chairman of the Board of Directors. -- Raz Alon, an independent director since 2003, has been named interim Chief Executive Officer. -- Avi T. Aronovitz, currently Vice President of Finance and Treasurer of the Company, has been appointed interim Chief Financial Officer. -- Paul L. Robinson, currently Vice President of Legal and General Counsel, will assume the role of Executive Vice President, Chief Administrative Officer, General Counsel, and Corporate Secretary. The changes followed the resignations of Kobi Alexander, former Chairman and CEO, David Kreinberg, former CFO, and William F. Sorin, a former director, Senior General Counsel, and Corporate Secretary. Mr. Alexander, Mr. Kreinberg and Mr. Sorin will become advisors to the Company on an interim basis. They will cooperate with the special committee of the Board of Directors in its review relating to the Company's stock option grants and help ensure a smooth transition for the Company's senior management. "We wish to acknowledge the past contributions of Mr. Alexander," Mr. Hiram said. "He was the Company's founder and a visionary leader. We also acknowledge the work of Messrs. Kreinberg and Sorin in assisting Mr. Alexander in developing Comverse into the strong market and technology leader it is today." "We are confident that our major markets have excellent long-term prospects, and our management team has the experience and depth to continue to deliver outstanding growth and operational performance," said Mr. Alon. "We remain focused on providing our customers with innovative technology and outstanding service, and we are committed to strengthening our leadership position in each of our businesses." About Comverse Comverse, a unit of Comverse Technology, Inc. (NASDAQ: CMVT) -- http://www.comverse.com/-- is the provides of software and systems enabling network-based multimedia enhanced communication and billing services. Over 450 communication and content service providers in more than 120 countries use Comverse products to generate revenues, strengthen customer loyalty and improve operational efficiency. CONMED CORP: Earns $4.3 Million in Quarter Ended March 31 --------------------------------------------------------- CONMED Corporation reported $158.5 million of sales for the first quarter ended March 31, 2006, compared to $155.9 million in the first quarter of 2005. Net income totaled $4.3 million compared to $10.8 million in the first quarter of 2005. Excluding transition charges related to an acquisition and other unusual charges, non-GAAP net income for the first quarter was $5.9 million, compared to first quarter 2005 non-GAAP net income of $13.5 million. Mr. Joseph J. Corasanti, President and Chief Operating Officer, noted, "Our first quarter 2006 financial results came in at the high end of our expectations. We are beginning to see a turn- around in the sales softness we encountered in the last half of 2005. Across all our product lines, our single-use products grew 2.5% (3.4% in constant currency) over the first quarter of 2005, and the sequential growth over the fourth quarter of 2005 was even higher at 4.2%. Capital equipment sales experienced a slight decline of 1.2% compared to the first quarter of 2005. We believe, however, our new powered instrument handpieces that were introduced at the American Academy of Orthopaedic Surgeons conference last month will drive the capital products portion of our business back to positive growth." Sales outside the United States were $61.1 million in the first quarter of 2006 growing 4.2% overall and 6.4% on a constant currency basis compared to the first quarter of 2005. International sales grew to 38.5% of the Company's total sales in the March 2006 quarter continuing the trend for higher growth in international markets. The Company's cash flow continued to be strong with cash from operations totaling $14.0 million for the three months ended March 31, 2006. This enabled the Company to reduce its senior credit lines and receivable securitization facilities by $9.5 million. Additionally, the Company repurchased $3.4 million of its common stock. During the second half of 2005, the Company experienced soft sales in a number of product lines and has since seen improvements in certain areas. In the first quarter of 2006, the Arthroscopy product line experienced growth of 1.3% compared to the 4.4% sales decline recorded in the fourth quarter of 2005. Powered Surgical Instruments declined 3.7% quarter over quarter due to lower capital equipment handpiece sales, offset by a 7.0% increase in single-use blade and burr sales. Electrosurgery continues to increase its market share and improve sales of the System 5000r generators and single-use disposables resulting in growth of 12.0%, compared to the same period 2005. Endoscopic Technologies' sales growth in the first quarter of 2006 was 2.8% over the first quarter of 2005, due to increased sales of biliary and stricture management devices. Endosurgery's decline of 3.3% was due to reduced orders from distributors outside the United States following a strong order flow in the fourth quarter of 2005, offset by a 3.7% increase in U.S. sales. Patient Care grew 3.7% primarily due to improved sales of ECG electrodes. Compared to the first quarter of 2005, the Company's profitability has been impacted by several previously discussed factors including the adverse effects of foreign currency translation, higher costs of production caused by higher petroleum based plastic raw materials and transportation, quality initiatives, litigation expense, greater research and development expenditures, and higher interest costs. Management expects these higher costs to be mitigated as progress is made throughout 2006 on various profit improvement initiatives. Outlook Mr. Corasanti concluded, "Based on our sales results for the first quarter of 2006, we are starting to see an improvement in our revenue growth rate compared to the last six months of 2005. We believe that the steps we have taken over the last three months to improve our margins will have a positive impact on our profitability. Our long-term goal is to achieve steady growth in our top and bottom lines. We continue to believe that our operating margin in 2007 will improve to approximately 14% of sales as growing revenues leverage the Company's fixed-cost structure and as we realize measures to improve margins and reduce costs." About Conmed Headquartered in Utica, New York, Conmed Corp. (Nasdaq: CNMD) -- http://www.conmed.com/-- is a medical technology company with an emphasis on surgical devices and equipment for minimally invasive procedures and monitoring. The Company's products serve the clinical areas of arthroscopy, powered surgical instruments, electrosurgery, cardiac monitoring disposables, endosurgery and endoscopic technologies. The Company's 2,800 employees distribute its products worldwide from eleven manufacturing locations. * * * As reported in the Troubled Company Reporter on March 28, 2006, Moody's Investors Service placed a Ba2 rating on ConMed Corporation's $250 million senior secured credit facility. Moody's also affirmed the Ba3 Corporate Family Rating and the B2 rating on ConMed's $150 million senior subordinated convertible notes. Moody's changed the rating outlook to negative from stable. Standard & Poor's Ratings Services also placed a BB- rating on ConMed Corp.'s $250 million secured credit facility, consisting of a $150 million seven-year term loan; and a $100 million five-year revolving credit facility. At the same time, Standard & Poor's affirmed the existing 'BB-' corporate credit rating on the company. S&P said the outlook is stable. CONSORTIUM SERVICE: Losses Prompt Auditor's Going Concern Doubt --------------------------------------------------------------- Gary Skibicki, CPA, PC, raised substantial doubt about the ability of Consortium Service Management Group, Inc., to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2004, and 2005. The auditor pointed to the company's recurring losses from operations. Consortium Service Management Group, Inc., filed its consolidated financial statements for the year ended Dec. 31, 2005, with the Securities and Exchange Commission on April 7, 2006. The company reported a $3,261,409 net loss on $414 of revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $612,540 in total assets, $6,717,884 in total liabilities, $206,000 in minority interest, resulting in a $6,311,344 stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquity with no current asset to pay its $6,417,884 of total current liabilities coming due within the next 12 months. A full-text copy of the company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?888 Headquartered in Corpus Christi, Texas, Consortium Service Management Group, Inc. (OTCBB: CTUM) -- http://www.ctum.com/-- is a technology management company that finances, owns, develops, patents, manages, licenses and markets innovative technologies. The company maintains offices in Atlanta, Georgia; Alexandria, Virginia; and Kiev, Ukraine. Technologies invented by scientists and engineers of Ukraine and brought to the U.S. and other countries, include: -- the company's platform, medical, Live Biological Tissue Bonding technology, which bonds human tissue without the use of sutures, staples, sealants or glues. More than 700 successful human surgeries have been performed in clinical trials in Ukraine using more than 30 different types of surgical procedures; -- the 390,000-pound proprietary Landfill Gas Purification System, now being installed at a municipal waste landfill in Chastang, Alabama, that processes raw landfill gas to pipeline quality; and -- the environmentally friendly, large-farm, Anaerobic Animal Waste Processing System. CPI INTERNATIONAL: Debt Reduction Prompts S&P's Stable Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Communications & Power Industries Inc. and its parent, CPI International Inc., including the 'B+' corporate credit rating on both entities. The outlook on both entities were revised to stable from negative. "The outlook revision reflects improved credit protection measures following a recent IPO, and expected debt reduction using the proceeds," said Standard & Poor's credit analyst Christopher DeNicolo. CPI International issued 2.9 million shares of common stock at $18 a share and could issue an additional 441,000 shares via an overallotment option. The total expected net proceeds of $45 million to $55 million are to be used to repay debt. Pro forma for the debt reduction, fiscal 2006 (ending Sept. 30, 2006) debt to EBITDA should decline to around 3.5x from previous expectations of 4.5x. Other financial measures should improve modestly and are expected to be generally appropriate for the rating, with EBITDA interest coverage above 3x and funds from operations to debt in the 10%-15% range. CPI's equity sponsor, The Cypress Group, also issued 4.1 million shares in the offering and its ownership will decline to around 50% if the overallotment option is exercised. The ratings on CPI and CPI International reflect a highly leveraged capital structure and modest scope of operations, offset somewhat by leading positions in niche markets. The company is a leading provider of vacuum electron devices used in commercial and defense applications requiring high power or high frequency power generation. VEDs are used in radar, electronic warfare, satellite communications, and certain medical, industrial, and scientific applications. CPI is first or second in all of the markets in which it competes. Revenues related to satellite communications have benefited recently from sales to direct-to-home video providers, although otherwise the worldwide satellite market remains weak, but is improving. Military sales have benefited from increased defense spending, especially for electronics. Program diversity is good, with no one program accounting for more than 6% of revenue. A significant portion of CPI's products are consumable, resulting in a steady stream of generally higher margin aftermarket sales, which account for approximately 50% of total revenue. Operating margins (before depreciation) are good at around 20%, as a result of management's efforts to reduce costs, consolidate facilities, and rationalize product lines. However, the costs of the San Carlos facility move and a one-time special bonus paid to management could depress margins somewhat in 2006. Reduced leverage, lower interest expense, and good market demand for most segments should enable the company to maintain a credit profile consistent with current ratings. The outlook could be revised to positive if growing earnings and improved cash generation result in a steadily strengthening financial profile. The outlook could be revised to negative if debt levels increase materially to fund acquisitions. CREDIT SUISSE: DBRS Rates Class B-4 Certificates at BB ------------------------------------------------------ Dominion Bond Rating Service these ratings to the Home Equity Pass-Through Certificates, Series 2006-4 issued by Credit Suisse First Boston Mortgage Securities Corp. Home Equity Asset Trust 2006-4: * The AAA ratings on the class series 1-A, 2-A, R, and R-II certificates reflect 19.65% of credit enhancement provided by the subordinate classes, initial overcollateralization, and monthly excess spread. * The AA (high) ratings on Class M-1 and Class M-2 reflect 16.15% and 12.90% of credit enhancement, respectively. * The AA rating on Class M-3 reflects 11.00% of credit enhancement. * The AA (low) rating on Class M-4 reflects 9.35% of credit enhancement. * The A (high) rating on Class M-5 reflects 7.75% of credit enhancement. * The "A" rating on Class M-6 reflects 6.30% of credit enhancement. * The A (low) rating on Class M-7 reflects 4.95% of credit enhancement. * The BBB (high) ratings on Class M-8 and Class B-1 reflect 3.95% and 3.25% of credit enhancement, respectively. * The BBB rating on Class B-2 reflects 2.75% of credit enhancement. * The BB (high) rating on Class B-3 reflects 1.75% of credit enhancement. * The BB rating on Class B-4 reflects 0.95% of credit enhancement. The certificate ratings also reflect the quality of the underlying assets and the capabilities of Select Portfolio Servicing, Inc., as special servicer, Wells Fargo Bank, N.A., Select Portfolio Servicing, Inc., and JPMorgan Chase Bank, N.A. as Servicers. U.S. Bank National Association will act as Trustee and LaSalle Bank National Association, Wells Fargo Bank, N.A., and JPMorgan Trust Company, N.A. will act as custodians. In addition, the certificates will also be entitled to the benefits of an interest rate swap with Credit Suisse International. The Trust will pay a fixed payment at 5.29% per annum to the Swap Provider in exchange for a floating payment at one-month LIBOR on declining swap notional. Interest and principal payments collected from the mortgage loans will be distributed on the 25th of each month commencing May 2006. Interest will be first paid concurrently to the Senior Certificates, followed by sequential interest payments to the subordinate classes. Until the step-down date, principal collected will be paid exclusively to the Senior Certificates unless each of such classes has been paid down to zero. After the step-down date, and provided that certain performance tests have been met, principal payments will be distributed among the certificates of all classes on a pro rata basis. In addition, provided that certain performance tests have been met, the level of overcollateralization may be allowed to step down to 1.90% of the then-current balance of the mortgage loans. On the closing date, the depositor will deposit approximately $249,174,533 into a segregated Pre-Funding Account, which the Trust will use to buy additional mortgage loans from the depositor on or prior to July 24, 2006. The mortgage loans in the Underlying Trust were acquired by DLJ Mortgage Capital, Inc. primarily from Wells Fargo, N.A., Finance America, LLC, Aames Capital Corporation, and Aegis Mortgage Corporation. As of the cut-off date April 1, 2006, Loan Group I has an initial aggregate principal balance of US$519,196,057, the weighted average mortgage rate is 7.81%, the weighted average FICO is 621, and the weighted average combined loan-to-value ratio is 79.3%, without taking into consideration the CLTV ratio on the piggybacked loans. Loan Group II has an initial aggregate principal balance of US$831,629,510, the weighted average mortgage rate is 7.82%, the weighted average FICO is 621, and the weighted average OLTV ratio is 79.6%. CRUISECAM INTERNATIONAL: Auditor Raises Going Concern Doubt ----------------------------------------------------------- David S. Hall, P.C., in Dallas, Texas, raised substantial doubt about the ability of CruiseCam International, Inc., to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Sept. 30, 2004. The auditor pointed to the Company's losses since inception, working capital deficiency, and lack of financial resources. CruiseCam International, Inc., filed its consolidated financial statements for the year ended Sept. 30, 2004, with the Securities and Exchange Commission on April 6, 2006. The Company reported a $5,762,105 net loss on $241,015 of net sales for the year ended Sept. 30, 2004. At Sept. 30, 2004, the company's balance sheet showed $16,357,951 in total assets, $7,992,972 in total liabilities, and $8,364,979 in total stockholders' equity deficit. The company's Sept. 30 balance sheet also showed strained liquidity with $666,156 in total current assets available to pay $2,694,702 in total current liabilities coming due within the next 12 months. A full-text copy of the company's 2004 Annual Report is available for free at http://ResearchArchives.com/t/s?884 Headquartered in Troy, Michigan, CruiseCam International, Inc., is a holding company of small and medium size companies. GRP, Inc., an affiliate, manufactures and sells a complete line of mobile integrated video technology for law enforcement, original equipment manufacturers, motor sports and aftermarket applications. The company's patent portfolio encompasses cameras on the automotive seat that the company developed with Lear Corp. and Ford Motor Company. DAVID SCHACHTER: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: David M. Schachter Susan I. (Depalo) Schachter aka David M. Schachter, Ltd. dba Bangs Street Gallery P.O. Box 1146 Truro, Massachusetts 02666 Bankruptcy Case No.: 06-11261 Chapter 11 Petition Date: May 3, 2006 Court: District of Massachusetts (Boston) Debtor's Counsel: Richard J. Cohen, Esq. Richard J. Cohen, Esq., P.C. Monument Square, P.O. Box 1085 Centerville, Massachusetts 02632 Tel: (508) 771-6401 Fax: (508) 771-6216 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ MBNA America Credit $54,452 P.O. Box 15026 Wilmington, DE 19850 Basil, Robinson & Rubino $49,801 8 Wood Hollow Road, Suite 202 Parsippany, NJ 07054 Lasser Hochman, LLC Judgment $28,892 75 Eisenhower Parkway Roseland, NJ 07068 American Express $27,686 Wilentz, Goldman and Legal Services $24,307 Spitzer, P.A. Citibank South Dakota, N.A. $15,032 Sugarman, Rogers, Legal Services $6,176 Barshak and Cohen, P.C. Capital One Services, Inc. Personal Obligation $2,406 Mass DOR $551 Verizon Utilities $501 Buttery Condo Association Association Dues $470 Hutt & Shimanowitz, P.C. Services $55 HSBC Mortgage Corporation Property Unknown Investment Cap. Property Unknown Commercial Mtg. LLC Seamen's Bank Property Unknown Sovereign Bank Property Unknown Town of Provincetown Real Estate Taxes Unknown DELPHI CORP: Officers Defend Move to Reject Union Contracts ----------------------------------------------------------- Certain of Delphi Corporation and its debtor-affiliates' officers and experts filed declarations and analysis in support of the Debtors' request to reject their collective bargaining agreements with unions. (1) John Sheehan John D. Sheehan, Delphi Corp. vice president, chief restructuring officer, chief accounting officer and controller, tells the U.S. Bankruptcy Court for the Southern District of New York that in formulating its five-year restructuring business plan, Delphi determined a "Steady State Scenario" that represents Delphi's best estimate of costs and revenue in each division based on: (a) the assumption that Delphi's existing labor agreements continued in effect; (b) the assumption that Delphi retained all of its existing lines of business; and (c) Delphi's best estimate of business volumes, pricing, and material costs based on existing economic trends. The Steady State Scenario did not consider the potential effect of the UAW Special Hourly Attrition Program recently negotiated by Delphi. In creating the Steady State Scenario, Delphi conducted an in- depth evaluation of each of its businesses, taking into account revenue and costs forecasts in light of changed economic conditions, including the Chapter 11 filings. Delphi concluded that most of the economic trends leading to its current financial crisis -- GM's loss of market share, reduced GM revenues, pressure for price-downs, higher material costs, and the like -- will continue for the foreseeable future. Delphi relied largely on estimates of GM market share and volumes provided by a vendor that specializes in making the estimates, but reduced the predicted volume for the years 2007 to 2010 by 5% to reflect GM's failure to meet prior volume projections. Thus, Delphi assumed that GM's U.S. market share will fall from 25.2% in 2006 to 23.3% by 2010, and that Delphi's revenue from GM will fall from $12.8 billion in 2005 to $9.4 billion in 2010. Delphi also projects an operating loss of $8.1 billion, and a net loss of $12.9 billion over the five-year period from 2006 to 2010. The losses are in large part attributable to Delphi's U.S. operations. Even with the deterioration in revenue and costs that Delphi has assumed for 2006 to 2010, Delphi's projections show that its international operations will be profitable during the period, earning approximately $3.4 billion in operating income over the five-year period. These same projections show that Delphi's North American operations, on the other hand, would lose approximately $11.5 billion in operating income during the same period. According to Mr. Sheehan, the UAW Special Hourly Attrition Program and any other potential future Hourly Attrition Programs reduce the losses under the Steady State Scenario but do not create a viable business plan. The precise effect of the programs will depend on how many employees elect retirement and flow-back options, but even under the best case -- 100% of eligible employees accept one of the packages -- Delphi would still lose approximately $6.1 billion. Thus, the Hourly Attrition Programs reduce the impact of Delphi's restructuring on its employees but it does not alleviate the need for the modifications that Delphi seeks in its labor agreements. Delphi's Restructuring Plans In light of the plainly untenable projections under the Steady State Scenario, Delphi prepared and served on its Unions proposals under Sections 1113 and 1114 of the Bankruptcy Code for modifications to the labor agreements and modification of retiree benefits. Delphi created two different financial scenarios -- the Competitive Benchmark Scenario based on Delphi's proposals of November 2005, and the GM Consensual Scenario based on Delphi's proposals of March 2006. Competitive Benchmark Scenario The "Competitive Benchmark Scenario" represents Delphi's financial projections following implementation of: (a) Delphi's Competitive Benchmark Proposals to the Unions pursuant to Sections 1113 and 1114; (b) other planned efforts to reduce costs including an effort to reduce SG&A costs by $450 million per year by 2009; (c) the sale, wind-down, or consolidation of a certain number of its product lines and associated manufacturing sites; and (d) Delphi's best estimate of GM revenue and pricing if Delphi implemented the other proposed changes. Under the Competitive Benchmark Scenario, Delphi projects approximately $784 million in operating losses in 2006 and 2007, and positive operating income beginning in 2008. While the Competitive Benchmark Scenario substantially improves Delphi's operating projections over the five-year period from 2006 to 2010, it does not produce a business plan that is viable without further cost reduction, Mr. Sheehan says. GM Consensual Proposal Scenario The GM Consensual Scenario represents Delphi's financial projections following: (a) obtaining modified labor agreements consistent with Delphi's GM Consensual Proposals; (b) negotiating a mutually agreeable level of financial support from GM, or, if that is not possible, dealing with the thousands of GM supply contracts under which Delphi consistently loses money; and (c) a pension solution. Based on the financial assumptions and projections in the Competitive Benchmark Scenario, Delphi generated the GM Consensual Scenario and has adopted a restructuring plan with five key elements that Delphi believes can form the basis for a successful reorganization: 1. Modifying its labor agreements to create a competitive arena in which to conduct business going forward; 2. Concluding negotiations with GM to finalize GM's financial support for the legacy costs Delphi currently carries and to ascertain GM's business commitment to Delphi going forward; 3. Streamlining its product portfolio to capitalize on its World-class technology and market strengths, and making the necessary manufacturing alignment with Delphi's new focus; 4. Transforming its salaried workforce to ensure that Delphi's organizational and cost structure is competitive and aligned with its product portfolio and manufacturing footprint; and 5. Devising a workable solution to its pension funding obligations by reducing its contributions to manageable levels. Impact on Major Parties Mr. Sheehan discloses that there are many significant parties that will be bearing their share of the Debtors' cost-cutting measures including equity holders, General Motors Corporation, bondholders, suppliers, and unsecured creditors. Mr. Sheehan notes that the Debtors' outstanding payables as of the Petition Date to their thousands of suppliers were in excess of $1 billion. "[T]he Debtors' suppliers have already borne a significant portion of the burden of the Debtors' restructuring and, given the dire financial straits in which many such suppliers find themselves, cannot reasonably be expected to bear additional burdens without jeopardizing the Debtors' supply chain and the prospects for their successful restructuring," he says. The Debtors are seeking the Court's authority to reject burdensome executory contracts pursuant to which the Debtors are supplying GM parts at a significant loss. Relief on that request will permit the Debtors to renegotiate reasonable prices that will permit the Debtors to reorganize successfully. Mr. Sheehan also informs the Court that GM has estimated its pre- tax liability at $5.5 billion to $12 billion. GM said in January 2006 that the GM Benefit Guarantee could be triggered as a result of reductions in Delphi's hourly Other Post-employment Benefits or pension liabilities in bankruptcy, resulting in a financial impact on GM of $3.6 billion after-tax. Under the GM Benefit Guarantee, if Delphi ceases to do business, terminates, or freezes its pension plan due to "financial distress," GM agreed to provide virtually all of Delphi's former GM hourly employees with the difference between pension benefits paid by Delphi, and the benefits otherwise payable under the Delphi pension plan -- but not more than the benefits provided by GM to its own hourly employees and retirees. GM also agreed to provide Delphi's former GM employees with "up to 7 years of credited [pension] service at the level and scope in effect at Delphi at such time." If, as a result of "financial distress," Delphi fails or refuses to provide post-retirement health care or life insurance to retired Delphi employees, or reduces such benefits below the level being provided to GM's hourly retirees, GM will provide the covered employees with the same scope and level of postretirement medical or life insurance benefits provided by GM to its own retirees. Mr. Sheehan further relates that Delphi's unsecured creditors, whose claims exceed $2.3 billion, are likely to be impaired from recovering the full value of their claims. Delphi has approximately $2 billion, plus unpaid interest, in senior unsecured securities outstanding as of the Petition Date. Because of the substantial liabilities faced by the Debtors, in all likelihood the holders of these securities will receive only a percentage of their face value under a restructuring plan. Holders of Delphi's 8.25% junior subordinated notes due 2033 and adjustable rate junior subordinated notes due 2033 are contractually subordinate to the Senior Unsecured Securities as well as any Delphi trade debt. With an aggregate principal amount of approximately $412 million, the beneficiaries of the Subordinated Notes represent, as a class, one of the seven largest unsecured claims against the Debtors. Mr. Sheehan says the Subordinated Notes are only one step above Equity holders based on the absolute priority rule. Hence, holders of the Subordinated Notes will receive, at best, only a minimal percentage of their face value under a restructuring plan. Shareholders are out of the money. A full-text copy of John Sheehan's declaration is available at no charge at http://bankrupt.com/misc/Delphisheehandeclaration.pdf (2) Kevin Butler Kevin M. Butler, vice president for human resource management of Delphi, attests that each of Delphi's proposals presented to the Unions were based on the most complete and reliable information available to Delphi at that time, including Delphi's most recent revenue and cost projections. Delphi's financial advisors also met several times with the UAW's financial advisors, and with the IUE-CWA's financial advisors, to explain and clarify the information that Delphi provided to the Unions in conjunction with the proposals. In light of the financial projections Delphi presented, Mr. Butler says Delphi does not anticipate that its Unions will contend that the company can survive without modifications to its labor agreements. In constructing its wage and benefit proposals, Delphi, Mr. Butler relates, sought to produce a wage and benefit package equivalent to the wages and benefits prevailing at other U.S.- based automotive parts suppliers. That package, Delphi believes, would allow it to bid for new work on a competitive basis while still providing employees with competitive wages and benefits. To determine the "market" wage and benefit package, Delphi conducted a detailed analysis of these data: 1. The wages and benefits under certain existing supplemental new-hire agreements between Delphi and the IUE-CWA and USW; 2. Estimates by Delphi's operating divisions of the all-in labor rates of their principal competitors; 3. The all-in labor rates provided by GM under the Growth and Opportunity process for competitors that had underbid Delphi; 4. The all-in labor rates provided by Delphi's own suppliers for their own business; 5. Bureau of Labor Statistics data showing wages for comparable jobs and for other auto suppliers; 6. A study by the Center for Automotive Research showing average, all-in wage rates for union-represented and non-union suppliers; 7. The anecdotal experience of Delphi's business teams regarding what Delphi's customers believed Delphi's labor costs should be in order to bid successfully; and 8. Information obtained from public and private sources regarding the wages and benefits of Delphi's competitors. Based on its competitive analysis, Delphi concluded that a competitive average labor cost for production employees could not exceed $22 per hour. After establishing its labor cost goal through the benchmarking exercise, Delphi constructed its proposals to produce a labor cost, excluding legacy retirement costs, of $20.79 per hour for production employees. Skilled employees would receive total compensation averaging $35.34 over the life of the labor contract, and production employees would receive total compensation averaging $23.90 over the life of the contract. Mr. Butler explains that, historically, in bidding for new work Delphi included all of its legacy costs, in determining its average hourly rate. The logic of this long-standing past practice was that all of these costs were attributable to labor, and the company therefore needed to recover these costs to remain profitable. In connection with the current restructuring, however, Delphi management made an important policy decision in November 2005 to exclude those legacy costs in analyzing its average U.S. hourly labor costs and in direct bidding for new supply contracts. "[A]s Delphi down-sizes and its number of active employees decreases, the legacy costs become increasingly burdensome, ultimately dictating that Delphi could never achieve competitive labor costs because of its legacy obligations. Delphi concluded, therefore, it must deal with the legacy costs as part of its restructuring. The change in practice allows Delphi to consider resultant legacy costs as corporate burden, offer a competitive base wage for its U.S. employees, and win more business," Mr. Butler says. A full-text copy of Kevin Butler's declaration is available at no charge at http://bankrupt.com/misc/DelphiButlerdeclaration.pdf (3) Mark Weber Mark R. Weber, Delphi executive vice president, operations, human resource management, and corporate affairs, says that in determining whether the modifications sought in the Delphi labor agreements are "fair and equitable" relative to salaried and management employees, it is necessary to examine the base-line under which hourly employees on the one hand, and salaried and management employees on the other hand, entered into the Chapter 11 cases. According to Mr. Weber, Delphi's salaried and management employees will suffer a significant number of job reductions as part of Delphi's restructuring. About 3,650 of Delphi's salaried and management employees in the United States will be separated from Delphi as a result of the planned sales or wind-downs of certain of Delphi's U.S. manufacturing sites, he says. These reductions will affect both salaried and management employees at the manufacturing sites, and engineering and corporate and divisional management that support the manufacturing operations. Mr. Weber also discloses that another 1,600 salaried and management positions in the U.S. will be eliminated in 2006 as part of a project designed to reduce Delphi's Sales, General & Administrative expenses. The project -- developed by an outside management consultant, Booz Allen Hamilton -- is intended to reduce costs attributable to salaried and management employees, and the information systems that support those employees, by approximately $450 million per year. In comparing the treatment of hourly employees to salaried and management employees, it is also critical to understand the differences between the two employee groups, Mr. Weber asserts. Mr. Weber points out that Delphi's salaried employees are not protected in their positions by a union agreement that pays above-market wages and benefits, nor are they deterred from switching employers by the prospect of starting at the bottom of a wage scale or a seniority system at a new company. The salaried employees could more easily leave Delphi tomorrow, and obtain "market" wages and benefits with another employer. In the last six months, more than 470 salaried employees have left Delphi for other career options. Unless Delphi is able to provide market wages and benefits to salaried and management, many are and will likely continue to depart. In addition, Mr. Weber notes that some 7,250 employees -- more than half of Delphi's salaried and management workforce -- are engineers who are engaged in research, product development, and execution. Much of Delphi's market position depends on its technological expertise, and the engineers have extremely valuable institutional knowledge of the company's products and processes that cannot easily be replaced by new-hires. There is a well-documented shortage of qualified engineers in the U.S., Mr. Weber relates. Nine original equipment manufacturers from Germany, Japan, and Korea have invested in engineering facilities in Michigan, and Asian automakers have hired approximately 3,000 engineers in Michigan in the past year alone. The loss of engineering employees to Delphi's competitors would greatly undercut Delphi's ability to remain a profitable enterprise going forward. A full-text copy of Mark Weber's declaration is available at no charge at http://bankrupt.com/misc/DelphiWeberdeclaration.pdf (4) Other Directors Delphi's executive director for benefits & policy, Steven Gebbia, addressed the employment benefits applicable to Delphi's workforce, and the potential changes to those benefits. According to Mr. Gebbia, salaried personnel have already taken their fair share of sacrifice. Mr. Gebbia states that value of the compensation and benefit package for salaried and management employees has decreased by more than 15% since Delphi's spin-off from GM. A full-text copy of Steven Gebbia's declaration is available at no charge at http://bankrupt.com/misc/DelphiGebbiadeclaration.pdf Bernard J. Quick, director of labor relations at Delphi, described the Debtors' various agreements with the Unions. Mr. Quick's responsibilities include negotiating, or overseeing the negotiation of, Delphi's National and Local Agreements with the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers - Communications Workers of America, and the United Steelworkers of America, Local 87. He provided details of the Union Agreements in his declaration. A full-text copy of Bernard Quick's declaration is available at no charge at http://bankrupt.com/misc/DelphiQuickdeclaration.pdf Darrell Kidd, division director of labor relations at Delphi, also described the provisions in the Union Agreements. Furthermore, Mr. Kidd relates that Delphi has diligently responded to information requests from the Unions or their financial advisors. Mr. Kidd says that to further allow the Unions and their advisors to easily access information, Delphi, in conjunction with FTI Consulting, established a virtual data room. The data room went live on January 3, 2006, after which time anyone with identification and password has been able to access the data. The data has been continually updated with information responsive to new Union information requests. Mr. Kidd believes that the broad access has proven beneficial to the Unions. He notes that the advisors to the IUE-CWA have formulated additional information requests based on data posted in response to other Unions' requests. A full-text copy of Darrell Kidd's declaration is available at no charge at http://bankrupt.com/misc/DelphiKidddeclaration.pdf (5) Experts Delphi retained Michael L. Wachter, a law and economics professor, to evaluate the current wages and benefits of Delphi employees and to assess the wage proposals the company has made for its unionized employees. In his study, Prof. Wachter concludes that Delphi's wage and benefit proposals will set the compensation levels for their skilled and production workers equal to the level for comparable workers economy-wide. With the implementation of the wage and benefit proposals, Prof. Wachter believes Delphi would continue to have a strong position in the labor market and would be able to attract and retain a highly qualified workforce. Keith Williams, enrolled actuary for the Delphi Hourly-Rate Employees Pension Plan and the Delphi Corporation Retirement Program for Salaried Employees, says that Delphi's assumptions in its benefits forecast is reasonable. Mr. Williams also discusses healthcare trends and the cash costs if hourly health programs for retirees were eliminated. A full-text copy of Michael Wachter's declaration is available for free at http://bankrupt.com/misc/DelphiWachterdeclaration.pdf A full-text copy of Keith Williams' declaration is available for free at http://bankrupt.com/misc/DelphiWilliamsdeclaration.pdf 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. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Court Approves Ernst & Young as Independent Auditors ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Delphi Corporation and its debtor-affiliates to employ Ernst & Young LLP as their independent auditors, nunc pro tunc to Jan. 1, 2006. As reported in the Troubled Company Reporter on Apr 4, 2006, E&Y will: (a) perform an audit of Delphi Corporation's consolidated financial statements and its internal control over financial reporting, including auditing and reporting on the consolidated financial statements of the Debtors for the year ending December 31, 2006; (b) audit and report on management's assessment of the effectiveness of internal control over financial reporting and on the effectiveness of internal control over financial reporting as of December 31, 2006; and (c) review the Debtor's unaudited interim financial information before the Debtors file their Form 10-Q; and (d) as and when requested by the Debtors from time to time, provide accounting advisory and research services in connection with various accounting matters. In addition to Audit Services, E&Y will provide tax services to the Debtors. The Debtors will identify tax services that they want to be performed by E&Y. E&Y will authorize the performance of those services on a project-by-project basis. E&Y will not provide any tax service to the Debtors until those services have been approved by the Debtors' audit committee. In connection with the tax services, Ernst & Young will: (a) advise and assist the Debtors on the federal, state, and local income tax consequences of proposed plans of reorganization, including, if necessary, assistance in the preparation of IRS ruling requests regarding the tax consequences of alternative reorganization structures; (b) prepare "Section 382 calculations" and apply the appropriate federal, state, and local tax law to historic information regarding changes in ownership of the Delphi's stock to calculate whether any of the shifts in stock ownership may have caused an ownership change that will restrict the use of tax attributes and the amount of any limitation; (c) through analysis of the information contained in historic tax returns and other relevant records of the company and application of relevant consolidated tax return rules, prepare calculations and apply the appropriate federal, state, and local tax law to determine the tax asset and stock basis and deferred inter-company transactions and other consolidated return issues for each legal entity in the company's U.S. tax group, and identify major deferred inter-company transactions, excess loss accounts, etc.; (d) prepare calculations and apply the appropriate federal, state, and local tax law to determine the amount of tax attribute reduction related to debt cancellation income; (e) provide analysis of the federal, state, and local tax treatment governing the timing of deductions of plant shut down, severance, and other costs incurred as the company rationalizes its operations, including tax return disclosure, and presentation; (f) provide analysis of the federal, state, and local tax treatment of the costs and fees incurred by the Debtors in connection with the bankruptcy cases, including tax return disclosure and presentation; (g) provide analysis of the federal, state, and local tax treatment of interest and financing costs related to debt subject to the automatic stay, and new debt incurred as the Debtors emerge from bankruptcy, including tax return disclosure and presentation; (h) provide analysis of the federal, state, and local tax consequences of restructuring and rationalization of inter-company accounts; (i) provide analysis of the federal, state, and local tax consequences of proposed dispositions of assets during bankruptcy, including tax return disclosure and presentation; (j) provide analysis of the federal, state, and local tax consequences of restructuring the U.S. or worldwide corporate groups during bankruptcy, including tax return disclosure and presentation; (k) provide analysis of the federal, state, and local tax consequences of potential bad debt and worthless stock deductions, including tax return disclosure and presentation; and (l) provide analysis of the federal, state, and local tax consequences of employee benefit plans. Fees & Expenses For the Audit Services, the Debtors will pay Ernst & Young a fixed domestic fee of $7,500,000 plus expenses. The Debtors and Ernst & Young have agreed that Ernst & Young may submit invoices for the Audit Services in accordance with this schedule: Date Amount ---- ------ March 2006 $3,000,000 August 2006 $3,000,000 January 2007 $1,500,000 For the Additional Accounting Advisory Services, the Debtors will pay Ernst & Young pursuant to these standard hourly rates: Partner $525 - $750 Senior Manager $400 - $625 Manager $300 - $470 Senior $220 - $375 Staff $125 - $200 Client Service Associate $75 - $125 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. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) DORNOCH DEVELOPMENT: Case Summary & 3 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Dornoch Development Ltd. P.O. Box 20029 Columbus, Ohio 43220 Bankruptcy Case No.: 06-52059 Chapter 11 Petition Date: May 3, 2006 Court: Southern District of Ohio (Columbus) Judge: John E. Hoffman Debtor's Counsel: Myron N. Terlecky, Esq. Strip Hoppers Leithart McGrath & Terlecky 575 South Third Street Columbus, Ohio 43215 Tel: (614) 228-6345 Fax: (614) 228-6369 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 3 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ New Green Highlands Ltd. Account Payable $303,602 1200 Old Henderson Road Suite C Columbus, OH 43220 Paul Dennis Loan $150,000 7005 Stadium Drive, #100 Brecksville, OH 44141 Fifth Third Bank Lease Obligation $44,117 110 North Main Street Dayton, OH 45402 DURANGO GEORGIA: LandMar & Trustee Extend Closing of Tract Sale --------------------------------------------------------------- Bridge Associates, LLC, Liquidating Trustee of Durango Georgia Paper Company, and LandMar Group, LLC agreed to extend the time for the closing of LandMar's purchase of a 750-acre tract located on the North River in St. Marys, Georgia. LandMar intends to redevelop the former paper mill tract for residential, commercial, and recreational uses. The sale, approved by the U.S. Bankruptcy Court for the Southern District of Georgia in the Durango Georgia Paper Company Chapter 11 Case, was to close by April 30, 2006. The parties agreed to extend the closing for up to 180 days in order to provide additional time for the Environmental Protection Division of the Georgia Department of Natural Resources to approve environmental components of LandMar's Brownfield redevelopment plan for the former mill site. Georgia law requires EPD approval of the environmental aspects of the redevelopment plan prior to the transfer of title to the Developer. Anthony Schnelling, the Managing Director of Bridge Associates, LLC, and Edward E. Burr, President and CEO of LandMar Group, LLC, each confirmed that the parties are making every effort to meet the requirements of the EPD, so that the redevelopment of the mill site can begin on the earliest date possible. LandMar is also actively pursuing local rezoning and entitlements for the redevelopment from the City of St. Marys and the Georgia DNR. Mr. Burr, speaking for LandMar, stated that the company remains committed to meeting the regulatory prerequisites and to completing the formulation of its redevelopment plan as soon as development standards are confirmed by the EPD, consistent with Georgia's Brownfield law. "LandMar is committed to a high-quality redevelopment of this excellent site that meets or exceeds the EPD's standards for health and safety. The additional time is necessary to allow adequate planning to achieve these goals and to bring forward the best possible approach to redevelopment of this site. LandMar's vision is to create a true landmark property for St. Marys and the region," Mr. Burr added. About LandMar LandMar Group LLC -- http://www.landmargroup.com/-- has been a leading community developer since 1987, creating some of Florida's best communities. Today, LandMar is expanding its leadership position with a wide array of residential, commercial and mixed- use offerings throughout the Southeast including Jacksonville, Jacksonville Beach, Fernandina Beach, St. Augustine, Palm Coast, New Smyrna Beach, Clermont, Tampa, Brooksville, Fort Myers, and St. Marys, Georgia. LandMar communities offer homesites, homes and condominiums in a wide range of prices and feature a wealth of amenities including several championship golf courses. The company also develops luxury condominiums focused on high amenity areas on oceanfront, Intracoastal Waterway and riverfront locations. About Durango Georgia Based in St. Mary's, Georgia, Durango Georgia Paper Company -- http://www.durangopaper.com/-- was a nationally recognized bleached board and kraft paper producer in the U.S. offering coast-to-coast and international service. On Oct. 29. 2002, creditors filed an involuntary chapter 7 petition against Durango. The Company filed for chapter 11 relief on Nov. 20, 2002 (Bankr. S.D. Ga. Case No. 02-21669). George H. Mccallum, Esq., at Stone & Baxter, LLP, Kate D. Strain, Esq., at Hunter, Maclean, Exley & Dunn, PC, and Neil P. Olack, Esq., at Duane Morris LLP, represent the Debtor in its restructuring efforts. Bridge Associates, LLC, was appointed as Liquidating Trustee under the terms of a Plan of Liquidation approved by creditors and confirmed by the Bankruptcy Court in June 2004. DYNEGY INC: Extends 4.75% Conv. Sub. Debentures Offering to May 15 ------------------------------------------------------------------ Dynegy Inc. extended the expiration date of its offer to convert and consent solicitation with respect to all of its outstanding 4.75% Convertible Subordinated Debentures due 2023. As a result of the extension, the offer to convert and consent solicitation will expire at 5:00 p.m., New York City time, on May 15, 2006, unless terminated or extended. Holders that validly tender (and do not withdraw) their debentures in the offer will receive for each $1,000 principal amount of debentures (a) 242.6595 shares of Dynegy Class A common stock issuable upon conversion of the debentures, (b) a premium of $193.85 payable in cash and (c) accrued and unpaid interest from February 15, 2006 up to (but not including) the date of payment payable in cash, subject to the terms and conditions of the offer. In connection with the offer, Dynegy is also soliciting consents from the holders of the debentures to amend the indenture governing the debentures. The amendments would eliminate the cross-default and cross-acceleration provisions contained in the indenture. Holders that validly tender (and do not withdraw) their debentures in the offer will be deemed to have validly delivered their consents to the proposed amendments. The offer and consent solicitation is being made solely by means of the prospectus contained in the registration statement, as amended, and the prospectus supplement thereto, filed by Dynegy with the SEC and the related letter of transmittal. Debenture holders are urged to read the prospectus (and prospectus supplement thereto) and related materials filed as part of the registration statement, as amended, as well as the tender offer statement on Schedule TO, as amended, because they contain important information. As set forth in the prospectus (and prospectus supplement thereto) forming a part of the registration statement, as amended, the offer and consent solicitation is subject to specified conditions. Dynegy may waive any and all of the conditions to the offer and consent solicitation, other than those relating to governmental approvals. Although Dynegy's acceptance of debentures for conversion is not subject to any minimum tender condition, the proposed indenture amendments will be effective only if Dynegy receives valid consents from holders of a majority in aggregate principal amount of the debentures. Dynegy has retained Citigroup Global Markets Inc. to serve as Dealer Manager for the offer and consent solicitation and Global Bondholder Services Corporation to serve as the Information Agent. Requests for documents relating to the offer, including the Prospectus and the Letter of Transmittal, may be directed to: Global Bondholder Services Telephone (212) 430-3774 Toll Free (800) 470-4200 Dynegy has filed a registration statement with the SEC relating to the offer and consent solicitation, which was declared effective by the SEC on April 14, 2006. Dynegy has been advised by the conversion agent for the offer that the principal amount of debentures tendered as of 5:00 p.m., New York City time, on May 1, 2006 was $225,000,000 or 100% of the aggregate principal amount outstanding. About Dynegy Inc. Headquartered in Houston, Texas, Dynegy Inc. (NYSE:DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The company's power generation portfolio consists of more than 12,800 megawatts of baseload, intermediate and peaking power plants fueled by a mix of coal, fuel oil and natural gas. * * * As reported in the Troubled Company Reporter on April 11, 2006, Moody's Investors Service assigned a Ba3 rating to Dynegy Holdings Inc.'s $600 million senior secured bank facility. Moody's says the rating outlook is stable. EMPIRE RESORTS: Equity Deficit Tops $27 Million at December 31 -------------------------------------------------------------- Empire Resorts, Inc., filed its consolidated financial statements for the year ended Dec. 31, 2005, with the Securities and Exchange Commission on March 30, 2006. The company reported a $20,078,000 net loss applicable to its common stockholders on $86,764,000 of net revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $57,245,000 in total assets and $84,460,000 in total liabilities, resulting in a $27,215,000 stockholders' equity deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $16,178,000 in total current assets available to pay $19,460,000 in total current liabilities coming due within the next 12 months. "The fourth quarter showed further growth in our core operations and progress in our path towards profitability, reflecting on these results, David Hanlon, CEO and president, commented. "While we felt it necessary to take a charge of $11.9 million in the period related to certain development projects, the company, excluding such non-cash write-offs, achieved operating income in the fourth quarter. "We are also pleased to have entered into arbitration with our horsemen earlier this year, and we expect to have a resolution reached soon. "In terms of our casino plans at Monticello, we continue to await feedback from the Bureau of Indian Affairs. We anticipate a meeting with the Bureau of Indian Affairs in the near future, during which our partners, the St. Regis Mohawk Tribe, will be given a list of items requiring additional review to complete the environmental impact assessment. "We look forward to discussions with the BIA and moving forward with our plans to bring a world-class Native American casino to the Catskills." A full-text copy of the company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?88e About Empire Resorts Empire Resorts, Inc. -- http://www.empireresorts.com/-- operates the Monticello Raceway and is involved in the development of other legal gaming venues. Empire's Mighty M Gaming facility features over 1,500 video gaming machines and amenities including a 350-seat buffet and live entertainment. Empire is also working to develop a $500 million "Class III" Native American casino and resort on a site adjacent to the Raceway and other gaming and non-gaming resort projects in the Catskills region and other areas. At Dec. 31, 2005, the company's stockholders' equity deficit widened to $27,215,000 from a $14,992,000 equity deficit at Dec. 31, 2004. ENTERGY NEW ORLEANS: Wants to Assume Amended Chaparral Contract --------------------------------------------------------------- Entergy New Orleans, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Louisiana for authority to assume the amended Chaparral Contract. Chaparral Contract ENOI owns and operates natural gas pipeline facilities along U.S. Highway 90 east of Chef Menteur Pass, in Orleans Parish, Louisiana. Chaparral Energy LLC produces natural gas in Orleans Parish. On Apr. 26, 2004, ENOI and Chaparral entered into an Interconnect Agreement for Chaparral to connect with ENOI's natural gas pipeline facilities within the Metering Property to deliver natural gas to ENOI. The Chaparral Contract is effective for a three-year term, through April 25, 2007, and continues month-to- month thereafter unless terminated in accordance with its terms. The Contract also provides that any gas delivered by Chaparral through the Facilities is sold to ENOI only. The gas that ENOI has historically purchased from Chaparral has been resold by ENOI to its gas distribution system customers and has not been used for generating electricity. In addition, ENOI is not required to purchase or receive any quantity of natural gas, and Chaparral is not required to sell or deliver any quantity of natural gas. However, Hurricane Katrina damaged the Facilities. Chaparral offered to repair the Facilities at its sole cost, risk, and liability. On March 14, 2006, ENOI and Chaparral amended the Chaparral Contract to provide for Chaparral's repair of the Facilities. The parties agreed that ENOI is not in default of the Agreement. Need for the Contract Nan Roberts Eitel, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in Washington, DC, asserts that assumption of the Amended Chaparral Contract provides ENOI with the flexibility to meet its potential future needs for natural gas in a changing environment. Given that the Chaparral Contract does not obligate ENOI to purchase Chaparral's natural gas, assumption does not obligate ENOI to incur any administrative expense. Similarly, assumption now does not present the risk that any future breach by ENOI would give rise to a claim for postpetition damages for breach, Ms. Eitel says. About Entergy New Orleans Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENTERGY NEW ORLEANS: Apache Agrees to Pay Part of Repair Costs -------------------------------------------------------------- In March 1995, New Orleans Public Service, Inc., and Aquila Energy Resources Corporation entered into a contract for the purchase of gas from the Rigolets Field in New Orleans East. Apache Corporation acquired the Rigolets Field from Aquila. The Apache Contract obligated Entergy New Orleans Inc. as successor-in-interest to NOPSI, to purchase up to 15,000 MMBtu of gas per day. However, the prepetition daily average actually produced by Apache was only 2,800 MMBtu. The purchased gas is transported from the Rigolets Field into the City of New Orleans on pipeline and other related facilities owned by ENOI. One of the key components of ENOI's transportation and delivery network is City Gate Number 9 and the Alligator Point Platform. Currently, Apache has no other means to deliver gas to ENOI except on ENOI's pipeline and related facilities. Both City Gate Number 9 and the Alligator Point Platform suffered damages from Hurricanes Katrina and Rita. New Orleans East was also particularly hit by the Hurricanes. Repairs on City Gate Number 9 have begun, but are not yet complete as of this time. The Alligator Platform is inaccessible, and ENOI only have aerial surveillance and visual inspections from a boat. ENOI believe that the pipeline between the Rigolets Field and Alligator Point is undamaged, but that cannot be confirmed until the Alligator Point Platform will become accessible. Because of the damage to its transportation and delivery system in September 2005, ENOI notified Apache of the force majeure events that would prevent it from performing under the Apache Contract, including receiving delivery of any Apache gas. ENOI estimates that the cost to repair the subject facilities in order to accept delivery of Apache's gas is $150,000 to $200,000. After engaging in negotiations, ENOI and Apache agree that: (a) Apache will pay $90,000, for the repairs of Alligator Point Platform and $125,000, for repairs of City Gate Number 9; (b) if additional repairs are needed to permit ENOI to receive gas from the Rigolets Field, Apache has the right, but not the obligation, to make those repairs at its cost; (c) upon completion of the repairs, ENOI will resume natural gas purchases under the Apache Contract in accordance with its existing terms, except that Apache will not require any additional financial security from ENOI as long as ENOI pays it invoices as they become due; and (d) a decision on assumption or rejection of the Apache Contract will be deferred until the confirmation of a plan of reorganization. Accordingly, the Debtor asks the U.S. Bankruptcy Court for the Eastern District of Louisiana to approve its settlement agreement with Apache. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) F.G. METALS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: F.G. Metals, Inc. 7503 124th Avenue North Largo, Florida 33773 Bankruptcy Case No.: 06-02108 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Metalfab of the Southwest, Inc. 06-02109 Type of Business: The Debtor manufactures and installs various types of metal roofing systems for buildings. See http://www.fgmetals.com Chapter 11 Petition Date: May 3, 2006 Court: Middle District of Florida (Tampa) Judge: Paul M. Glenn Debtors' Counsel: Scott A. Stichter, Esq. Stichter, Riedel, Blain & Prosser, P.A. 110 East Madison Street, Suite 200 Tampa, Florida 33602-4700 Tel: (813) 229-0144 Fax: (813) 229-1811 Estimated Assets Estimated Debts ---------------- --------------- F.G. Metals, Inc. $1 Million to $1 Million to $10 Million $10 Million Metalfab of the $100,000 to $1 Million to Southwest, Inc. $500,000 $10 Million Debtors' Consolidated List of 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Insco-Dico $425,000 17780 Fitch, Suite 200 Irvine, CA 92614 Developers Surety and Indemnity Co. $366,762 c/o Louis White 17780 Fitch, #200 Irvine, CA 92614 Internal Revenue Service $350,000 Bankruptcy Section 400 West Bay Street, Suite 35045 Jacksonville, FL 32202-4437 Berridge Mfg. Co. $172,039 CAN Insurance $124,610 Bradco Supply Corp $110,121 National Stabilization Agreement $90,000 Sheet Metal Workers Local $76,000 Ring Power Corp. $63,031 Sheet Metal Workers National $48,000 Morin Corporation $44,935 Jack Rice Insurance $43,739 N.B. Handy Company $25,959 Mike Hennessy $25,000 All Area Roofing $18,640 First Florida Business Consult $15,413 Premium Steel Sales, LLC $13,500 McElroy Metal, Inc. $12,370 Kelley Equipment Co. of Florida $10,995 Wagner Bonding & Insurance $8,752 FOAMEX INTERNATIONAL: Exclusive Periods Extended Until June 16 -------------------------------------------------------------- The U.S Bankruptcy Court for the District of Delaware extended Foamex International Inc., and its debtor-affiliates' exclusive periods to file a plan of reorganization and solicit acceptances for that plan through and including June 16, 2006. The Ad Hoc Committee's objection to the extension of the plan filing and solicitation periods was resolved. The parties disclosed the terms of the settlement in open court. As previously reported, Foamex International Inc., and its debtor- affiliates asked the U.S. Bankruptcy Court for the District of Delaware to extend their exclusive solicitation period until Aug. 15, 2006, and, to the extent it did not expire by operation of law on Jan. 17, 2006, extend their exclusive period to file a chapter 11 plan through Aug. 15, 2006. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, told the Court that there is still more work to be done before the Plan can be finalized Ad Hoc Committee Objects In February 2006, the Ad Hoc Committee of Senior Secured Noteholders, the Official Committee of Unsecured Creditors, Steel Partners II, LP, and the Debtors have reached an agreement in principle on the economic terms of a consensual plan of reorganization that would achieve the goals of the Debtors' reorganization, John H. Knight, Esq., at Richards, Layton & Finger, PA, in Wilmington, Delaware, relates. However, the Debtors chose to withdraw from the agreement, and instead sought a five-month extension of the exclusive period within which only they can file a plan. The Debtors have also announced in a March 14, 2006 hearing that they need to obtain assistance from Alvarez & Marsal Business Consulting LLC to review and validate their business projections and assumptions. The Debtors clarified that any projections previously provided were no longer valid and would have to be disregarded. Since then, the Debtors have made no substantive move towards the development or finalization of the terms of a plan, Mr. Knight notes. Accordingly, the Ad Hoc Committee asked the Court to deny the Debtors' extension request. By seeking an extension, the Debtors' Board of Directors is holding its creditors hostage while it pursues its own as yet undisclosed agenda, Mr. Knight claimed. In addition, the Debtors have continued to squander the opportunity to promptly emerge from Chapter 11 by delaying negotiations, preparation and filing of a plan, Mr. Knight said. Mr. Knight told the Court that an extension of the Exclusive Plan Filing Period will add interest of more than $3,000,000, to the amount the Debtors owe to the Senior Secured Noteholders, thus making it more difficult and expensive to secure plan funding. Debtors Response The Debtors asserted that their decision to adjourn the disclosure statement hearing have been quite helpful, not harmful, to their pursuit of a fully consensual plan. According to the Debtors, the Disclosure Statement hearing has been adjourned on consent of all the parties, including the Ad Hoc Committee, to allow the parties to pursue a fully consensual plan without the distraction of simultaneously having to prepare for litigation. According to Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, the Debtors' excellent performance in the last five months -- punctuated by the approximately 58% increase over forecast in their EBITDA for February 2006 -- suggests that the recoveries negotiated as part of the "agreement in principle" may no longer be supportable. "The Debtors cannot and, indeed, will not, know for sure whether the 'agreement in principle' or some variant of it is worth pursuing until they finish updating their projections for 2006 and beyond to incorporate the trends from the last five months," Ms. Morgan said. Ms. Morgan argued that the Debtors have done what any responsible fiduciary in their position would -- wait until they can better understand how the five-month trend impacts their business plan and projections for the remainder of 2006 and beyond. The Debtors intend to utilize the time extension to evaluate the results of Alvarez & Marsal's work. Ms. Morgan says the delay on Alvarez & Marsal's work was caused by the Committee and Steel Partners' objections to Alvarez & Marsal's employment. The Debtors argued that the Court should not give the Ad Hoc Committee, Steel Partners and the Committee a co-extensive right to file a plan. The Debtors are the only parties that represent the interests of all stakeholders, Ms. Morgan insisted. If the Ad Hoc Committee is given co-exclusivity rights, only the interests of the Ad Hoc Committee and those whom it represents would be served. Thus, the Debtors believe that it is important that they continue as the plan gatekeeper and "peace broker" among their varied stakeholders. About Foamex Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOAMEX INTERNATIONAL: Court Extends Removal Period to July 14 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware further extended until July 14, 2006, the period within which Foamex International Inc., and its debtor-affiliates can file notices of removal with respect to prepetition civil actions. The Debtors are parties to various actions currently pending in different state and federal tribunals. Since the Petition Date, the Debtors have been primarily focused on stabilizing their postpetition operations, and negotiating and developing a consensual Plan of Reorganization with their major creditor constituencies. To date, the Debtors have not had adequate time to fully investigate and evaluate all of the Actions to determine whether removal is appropriate, Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, says. An extension will give the Debtors more time to make fully informed decisions concerning removal of each action and will assure that the Debtors do not forfeit valuable rights, Ms. Morgan asserts. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOAMEX INT'L: CFO Douglas Ralph to Step Down Effective May 12 ------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Foamex International Inc. discloses that on April 7, 2006, K. Douglas Ralph resigned as the Company's executive vice president and chief financial officer. Mr. Ralph's resignation, which was in mutual agreement with the Company, will be effective May 12, 2006. According to Gregory Christian, chief restructuring officer of Foamex International, the Company has commenced a search for Mr. Ralph's successor. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) FRUIT OF THE LOOM: Court Allows Trust to Make Final Distribution ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized The Unsecured Creditors' Trust, successor-in-interest to Fruit of the Loom, Inc., and its debtor-affiliates, to make final distributions to holders of Class 4A Unsecured Claims. The Court further approved the Creditor Trust's request to discharge Clingman & Hanger Management Associates, LLC, the Trust Administrator, the Unsecured Creditors Trust Advisory Committee and their members, employees, agents, representatives and professionals after the Trust dissolution. As reported in the Troubled Company Reporter on Feb. 23, 2006, the Trust was created under the Debtors' Third Amended Joint Plan of Reorganization. The Trust took charge of completing the claims analysis and objection process for Class 4A Unsecured Claims and calculating and implementing distributions of trust assets to holders of those claims. There were 3,450 claims in Class 4A as of the Plan's Effective Date. The Trust had $2 million on that date for distribution and was given until April 30, 2006, to complete its work. David B. Stratton, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, told the Court that the Trust has made three interim distributions to date. The first interim distribution for 3.9297% of the allowed Class 4A Unsecured Claims was made on Oct. 30, 2002. The second interim distribution for 4.5446% was made on July 30, 2003. The third interim distribution for 2.1000% was made on March 30, 2005. The Trust wanted to make a final distribution in the amount of 0.9182% of the amount of each allowed claim, for a total distribution of 11.4925% to holders of Class 4A claims. The Trust also wanted to establish a $100,000 reserve account for the payment of fees and expenses related to the dissolution of the Trust, including the preparation of final report and accounts. Any amounts remaining in the Reserve Account after dissolution will be contributed to a charitable organization pursuant to the Trust. The Trust also wanted to dissolve after completing the final distribution. About Fruit of the Loom Headquartered in Chicago, Illinois, Fruit of the Loom, Inc., is a leading international, vertically integrated basic apparel company, emphasizing branded products for consumers ranging from infants to senior citizens. The Company and its debtor-affiliates filed for chapter 11 protection on Dec. 29, 1999 (Bankr. D. Del. Case No. 99-04497). Aaron A. Garber, Esq., at Pepper Hamilton LLP and Donald J. Detweiler, Esq., at Saul Ewing LLP represent the Debtors. When the Debtors filed for protection from their creditors, they listed $2,283,700,000 in total assets and $2,495,200,000 in total debts. The Court confirmed the Debtors' Third Amended Joint Plan of Reorganization on April 19, 2002, under which Berkshire Hathaway purchased substantially all of the company's assets. The Plan took effect on April 30, 2002. The Plan also allowed for the creation of The Unsecured Creditors' Trust that was charged with completing the claims analysis and objection process for Class 4A Unsecured Claims and implementing distributions of trust assets to holders of those claims. GEORGE GONZALEZ: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: George P. Rivera Gonzalez P.O. Box 360653 San Juan, Puerto Rico 00936 Bankruptcy Case No.: 06-01344 Type of Business: The Debtor filed for chapter 11 protection on November 24, 2003 (Bankr. D. Puerto Rico, Case No. 03-12871). Chapter 11 Petition Date: May 3, 2006 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Jacqueline Hernandez Santiago, Esq. P.O. Box 366431 San Juan, Puerto Rico 00936-6431 Tel: (787) 751-1836 Total Assets: $15,180,000 Total Debts: $2,286,094 Debtor's 6 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Banco Popular De Puerto Rico Personal Loan $36,535 Card Products Division P.O. Box 70100 San Juan, PR 00936 First Bank Personal Loan $35,197 P.O. Box 13817 San Juan, PR 00908-3817 CRIM Unsecured Taxes $20,000 P.O. Box 195387 San Juan, PR 00919-5387 Departamento De Hacienda Unsecured Taxes $10,000 Coop A/C Manati Personal Loan $8,000 Island Finance Personal Loan $2,800 GSRPM MORTGAGE: Moody's Puts Ba1 Rating on Class B-4 Certificates ----------------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by GSRPM Mortgage Loan Trust Series 2006-1, and ratings ranging from Aa2 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Ameriquest Mortgage Company, Bank of America, National Association, WMC Mortgage Corp., Household Financial Services, Inc. and other loan sellers originated adjustable-rate and fixed-rate sub-performing and re-performing mortgage loans acquired by Goldman Sachs Mortgage Company. The ratings are based primarily on the credit quality of the loans including payment velocities, and on the protection from subordination, excess spread, overcollateralization, and an interest rate swap agreement. Moody's expects collateral losses to range from 7.35% to 7.85%. Litton Loan Servicing LP will service the loans. Moody's assigned Litton Loan Servicing LP its top servicer quality rating as a special servicer. The Complete Rating Actions: Issuer: GSRPM Mortgage Loan Trust Series 2006-1 * Cl. A-1, Assigned Aaa * Cl. A-2, Assigned Aaa * Cl. A-3, Assigned Aaa * Cl. M-1, Assigned Aa2 * Cl. M-2, Assigned A2 * Cl. B-1, Assigned Baa1 * Cl. B-2, Assigned Baa2 * Cl. B-3, Assigned Baa3 * Cl. B-4, Assigned Ba1 HARTVILLE GROUP: BDO Seidman Raises Going Concern Doubt ------------------------------------------------------- BDO Seidman, LLP, raised substantial doubt about the ability of Hartville Group, Inc., to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2004, and 2005. The auditing firm pointed to the company's recurring losses from operations, substantial accumulated deficit, and impending due dates of some material financial obligations. Hartville Group, Inc., filed its consolidated financial statements for the year ended Dec. 31, 2005, with the Securities and Exchange Commission on March 30, 2006. The company reported a $8,017,062 net loss on $136,797 of total reinsurance income for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $9,417,651 in total assets, $3,942,431 in total liabilities, and $5,475,220 in total stockholders' equity. ASPCA(R) Partnership On Feb. 23, 2006, Hartville entered into a three-year strategic partnership with the American Society for the Prevention of Cruelty to Animals(R) as the preferred provider of pet insurance to the ASPCA's one million-plus supporters. "Since joining the Company in April of 2005, we have instituted a series of corporate initiatives designed to prepare Hartville for profitable future growth," Dennis Rushovich, the Company's chief executive officer, commented. "We eliminated unprofitable marketing programs, significantly improved our operating infrastructure and customer service capabilities, revamped and enhanced our financial reporting, initiated spending control policies and stabilized our relationship with our bondholders. "Additionally, our new relationship with the American Society for the Prevention of Cruelty to Animals(R), is a significant partnership which we expect to drive an increase in policies sold in 2006 and beyond as we validate our product and expand our marketing efforts. "We now have a more streamlined organization, appropriate financial discipline focused on profits, and a significantly upgraded marketing team and strategy to build consumer awareness for pet insurance. We believe these factors should enable us to capitalize on the large and under penetrated market of uninsured pets." A full-text copy of the company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?88c About Hartville Corporation Hartville Group, Inc. -- http://www.hartvillegroup.com/-- is a holding company whose wholly owned subsidiaries include Hartville Re Ltd. and Petsmarketing Insurance.com Agency, Inc. Hartville is a reinsurance company that is registered in the Cayman Islands, British West Indies. Hartville was formed to reinsure pet health insurance that is being marketed by the Agency. The Agency is primarily a marketing/administration company concentrating on the sale of its proprietary health insurance plans for domestic pets. Its business plan calls for introducing its product effectively and efficiently through a variety of distribution systems. The Company accepts applications, underwrites and issues policies. HEXION SPECIALTY: S&P Rates Proposed $1.675 Billion Sr. Loan at B+ ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' rating and its recovery rating of '3' to Columbus, Ohio-based Hexion Specialty Chemicals Inc.'s proposed $1.675 billion senior secured term loan and synthetic letter of credit facilities, based on preliminary terms and conditions. The rating on the proposed credit facilities is the same as the corporate credit rating; this and the recovery rating of '3' indicate that bank lenders can expect meaningful (50% to 80%) recovery of principal in the event of a payment default. The rating on the existing $225 million revolving credit facility was lowered to 'B+' with a recovery rating of '3', from 'BB-' with a recovery rating of '1', to reflect the similar security package as the new term loan and synthetic letter of credit facility. The ratings on the existing senior second secured notes were raised to 'B', with a recovery rating of '3', from 'B-' with a recovery rating of '5'. The ratings on the senior second secured notes reflect the amount of priority claims of the revolving facility and the first-lien term loan lenders. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on Hexion and revised the outlook to stable from negative. "The outlook revision recognizes a slightly better than expected operating performance over the past year, the potential for material cash flow generation once the company completes the integration of the merged predecessor companies and begins to realize a modest level of synergies, an improved debt maturity profile, and expectation of the successful completion of an IPO," said Standard & Poor's credit analyst George Williams. The IPO is expected to provide about $100 million of proceeds to the company for debt reduction, with the balance representing a secondary offering of shares by existing owners. In addition, the new term loan facility will allow Hexion to improve its capital structure, with proceeds used to repurchase more expensive debt. Finally, although Apollo Management L.P. will continue to control about 70% of Hexion's outstanding common stock, the risks of additional large dividends to shareholders will be diminished by the broader ownership. The ratings on Hexion reflect a highly leveraged financial profile, a very aggressive financial policy, and a weak business risk profile as a global manufacturer and marketer of thermoset resins. Hexion was created by the merger of Borden Chemical Inc. (including Bakelite AG), Resolution Specialty Materials LLC, and Resolution Performance Products LLC. The combination created one of the largest specialty chemical companies in North America with a diversified product portfolio, technology base, end market sales and geographic sales base. During the next few years, we expect management to balance capital spending, integration efforts, and modest expansion efforts so that some debt reduction can be achieved, thus maintaining key financial ratios at appropriate levels for the ratings. HUMANA INC: Moody's Outlook on Low-B Ratings is Negative -------------------------------------------------------- Moody's Investors Service assigned provisional ratings to Humana Inc.'s new shelf registration. This new shelf registration replaces Humana's previously filed shelf registration, which had $300 million of available securities remaining. The ratings on the old shelf have been withdrawn but existing securities issued from the shelf program remain outstanding and remain rated. Humana maintains its shelf for general corporate purposes, including debt refinancing. The outlook on all the shelf ratings is negative. On Dec. 20, 2005, Moody's affirmed Humana's ratings and changed the outlook on the ratings to negative. The negative outlook reflects the company's recently announced aggressive Medicare strategy and its underperforming commercial segment. Moody's assigned the following provisional ratings with a negative outlook: Humana Inc. * senior unsecured debt at (P)Baa3 * subordinated debt at (P)Ba1 * preferred stock at (P)Ba2 Humana Inc., based in Louisville, KY, is a provider of health and life insurance products primarily to group customers. As of March 31, 2006, the company reported consolidated GAAP revenues of approximately $4.7 billion, shareholders' equity of approximately $2.6 billion, and medical enrollment as of March 31, 2006 of over 7 million members. INFINITE GROUP: Equity Deficit Widens to $3.2 Million at Dec. 31 ---------------------------------------------------------------- Infinite Group, Inc., filed its financial results for the year ended Dec. 31, 2005, with the Securities and Exchange Commission on Mar. 31, 2006. For the year ended Dec. 31, 2005, the company reported $34,146 of net income on $8.5 million of net revenues compared to $577,981 of net income on $5.8 million of net revenues in 2004. At Dec. 31, 2005, the company's balance sheet showed total assets of $1.6 million and total debts of $4.7 million. As of Dec. 31, 2005, the Company's equity deficit widened to $3.2 million from a $3.0 million deficit at Dec. 31, 2004. A full-text copy of Infinite Group's Annual Report for the year ended Dec. 31, 2005, is available for free at: http://researcharchives.com/t/s?890 Headquartered in Warwick, Rhode Island, Infinite Group, Inc. -- http://www.us-igi.com/-- is a leading systems integrator providing custom and enterprise solutions for commercial and government clients. The company's solutions portfolio includes Business and Technology Strategy Development, Enterprise Application Implementation, Network Services, Web Services, and Integrated Biometric Solutions. J.A. JONES: Court Extends Claims Objection Deadline to Sept. 29 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of North Carolina extended, until Sept. 29, 2006, the time within which J.A. Jones, Inc., and its debtor-affiliates may file objections to claims. John R. Miller, Jr., Esq., at Rayburn Cooper & Durham, P.A., in North Carolina, tells the Court that the Debtors need time after the Claims Objection Deadline, which is on June 30, 2006, to review and determine the validity of Class 6 and Class 10 claims. In addition, the Liquidating Trustee has requested a further extension of time to object to claims through July 25, 2006. Headquartered in Charlotte, North Carolina, J.A. Jones, Inc., is a subsidiary of insolvent German construction group Philipp Holzmann and a holding company for several US construction firms. The Debtors filed for chapter 11 protection on September 25, 2003 (Bankr. W.D. N.C. Case No. 03-33532). John P. Whittington, Esq., at Bradley Arant Rose & White, LLP, and W. B. Hawfield, Jr., Esq., at Moore & Van Allen represented the Debtors in their restructuring. When the Debtors filed for protection from its creditors, they listed debs and assets of more than $100 million each. On Aug. 19, 2004, the United States Bankruptcy Court for the Western District of North Carolina approved the Third Amended and Restated Joint Plan of Liquidation of J.A. Jones and certain of its debtor-subsidiaries. The Plan took effect on Sept. 28, 2004. KANSAS CITY SOUTHERN: S&P Junks Preferred Stock Ratings ------------------------------------------------------- Standard & Poor's Ratings Services lowered its preferred stock ratings on Kansas City Southern to 'C' from 'CCC'. The ratings remain on CreditWatch with negative implications, where they were initially placed on March 23, 2006; ratings were lowered on April 4 and maintained on CreditWatch. At the same time, Standard & Poor's withdrew its rating on subsidiary Kansas City Southern Railway Co.'s old bank credit facility, which was replaced by a new credit facility on April 28, 2006. Standard & Poor's assigned its 'BB-' rating and a recovery rating of '1' to the new credit facility on April 26, 2006. The rating on the new credit facility is on CreditWatch with negative implications, along with all other Kansas City Southern (B/Watch Neg/--) ratings. "The preferred stock downgrade reflects our expectation that Kansas City Southern will not make the preferred dividend payments due in mid-May 2006 because of bond indenture covenant restrictions," said Standard & Poor's credit analyst Lisa Jenkins. At Dec. 31, 2005, Kansas City Southern failed to meet the consolidated coverage ratio (EBITDA to 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 its ability to pay cash dividends and to incur additional debt (except to repay existing debt.) Once the dividend payments are missed, the ratings on the preferred stock will be lowered to 'D'. Kansas City Southern called for a shareholder meeting in late March 2006 to vote on a proposed amendment to terms of its 4.25% redeemable cumulative convertible 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. While the company is allowed to pay stock dividends on its 5.125% cumulative convertible perpetual preferred stock, series D, it cannot do so unless it can also pay dividends on the series C preferred stock. KMART CORP: Trade Creditors Sell Claims Exceeding $114,227,955 -------------------------------------------------------------- From Jan. 6, 2004, to Jan. 12, 2006, the Clerk of Court for the U.S. Bankruptcy Court for the Northern District of Illinois recorded over 90 claim transfers, aggregating more than $114,227,955. The transfers include: Original Claimant Transferee Amount ----------------- ---------- ------ A&R Knitwear Co., Inc. Contrarian Funds LLC $981,473 Bell Sports Inc. SPCP Group LLC 3,307,556 Bluff Retail Seminole Mall 4,452 Associates LP Acquisition LLC Del Laboratories Inc. Contrarian Funds LLC 2,880,000 Epson America Inc. Contrarian Funds LLC 255,728 Florida Power & Fireman's Fund 1,539,250 Light Company Insurance Company Gore Bros. Inc. Brookings Limited 98,893 Partnership Greased Lightning Contrarian Funds LLC 194,631 International Inc. Hub Group Distribution Contrarian Funds LLC 450,542 Services Johnson City BNY Trust Company of 620,722 Tennessee Realty LLC Missouri Monessen Hearth Contrarian Funds LLC 745,632 Systems Next Factors Inc. NF Capital Inv 582,033 OZ Master Fund, Ltd. Oz Special Master Fund Ltd. 2,010,575 OZF Credit Opportunities Oz Special Master Fund Ltd. 655,573 Master Fund Ltd. OZF Credit Opportunities Oz Special Master Fund Ltd. 707,299 Master Fund II Ltd. Paris Presents Inc. Merrill Lynch Credit 7,267,620 Products LLC Polaroid Corporation Goldman Sachs Credit 4,005,000 Partners LP Recreational Water Contrarian Funds LLC 589,209 Products Inc. Saltru Associated Alpine Associates 16,522,956 Joint Venture St. Charles Partners The Chase Manhattan Bank 318,842 U.S. Bank National Alpine Associates 2,525,787 Association US Security Contrarian Funds LLC 179,160 Associates Inc. In addition, Oz Special Master Fund Ltd. transferred claims to: * OZF Credit Opportunities Master Fund, Ltd. for $16,341,775; * OZF Credit Opportunities Master Fund II, Ltd. for $13,744,517; and * OZ Master Fund, Ltd. for $37,698,730. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 109; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEVITZ HOME: Assigning 20 Leases to PLVTZ LLC --------------------------------------------- PLVTZ, LLC, and the Pride Capital Group, doing-business-as Great American Group, as purchasers of substantially all of Levitz Home Furnishings, Inc. and its debtor-affiliates' assets, provided the Debtors with Lease Assumption Notices for 12 store leases. The Debtors seek authority from the U.S. Bankruptcy Court for the Southern District of New York to assume and assign these leases to the Purchasers, and pay the cure amounts: Store# Address Landlord Cure Amount ------ ------- -------- ----------- 10302 Brooklyn, J.W. Mays, Inc. $0 New York 30301 Rosemead, Glendon Way Associates, $30,118 California c/o Primestor Development 30307 Hawthorne, Primstor Development, $12,567 California Inc., c/o Sherwood Village, LLC 30507 Murrieta, Village Walk Retail, $0 California L.P., c/o Aurthur Pearlman Corporation 30701 Tigard, Oregon Krausz Enterprises & $0 Krausz Puente, LLC 40603 Las Vegas, Nevso, L.L.C. $0 Nevada 40506 Tempe, Arizona Commercial Net Lease $46,301 Realty, Inc. 10102 Holbrook, Sun Lakes Plaza $32,415 New York Associates 10304 Brooklym, Richard Sachs Interiors, $107,979 New York Inc., c/o A.J. Richard & Sons, Inc. 10903 Valley Stream, Green Acers Mall, L.L.C. $75,211 New York 20502 Bronx, Bay Plaza Community $111,807 New York Center, LLC, c/o Prestige Properties & Development Co. 40401 Concord, R&B Heritage Investors, $120,131 California LP, and Marina Square Partners, LP, c/o Reynolds & Brown 30401 Anaheim, Wohl/Anaheim LLC, c/o $15,475 California Wohl Investment Company 30101 Ontario, Ontario Home Partners, $49,320 California Ltd. 30302 Cerritos, Cerritos Best Plaza, $116,493 California c/o Barco Real Estate Management 30204 San Dimas, R&W San Dimas, LLC $24,499 California 30206 Newhall, Glendon Way Associates & $57,177 California PETsMART, Inc. 30402 Huntington Freeway Industrial Park $90,795 Beach, Huntley Associates California 40602 Las Vegas, Constantino Noval Nevada $148,908 Nevada LLC, c/o American Management Company 40502 Mesa, Arizona Krausz Puente, LLC, c/o $40,641 The Krausz Companies, Inc. Richard H. Engman, Esq., at Jones Day, in New York, tells the Court that the proposed assumptions and assignments provide the Landlords with adequate assurance of future performance. Constantino Noval Nevada, LLC, supports the Debtors' request to assume and assign Store No. 40602 located at Las Vegas, Nevada. The Court granted the Debtors' request as it relates to the leases for Store Nos. 40602 and 40502. Commercial Net Objects Commercial Net Lease Realty, Inc., asserts that the cure amount with respect to its lease is understated because it fails to conform to the amount Commercial Net agreed upon with Levitz Furniture of the Midwest, Inc., as tenant, and PLVTZ, LLC. Commercial Net submits that as of May 1, 2006, the Cure Amount will be $88,265, composed of these postpetition amounts: * $9,936 for October Stub Rent; * $461 in common area maintenance charges; * $39,358 in postpetition real estate taxes through April 30, 2006; plus * $38,507 for May 2006 rent, including base rent, real estate taxes and sales tax. Commercial Net explains that since rent is due on the first day of each month pursuant to the Commercial Net Lease, the $88,265 Cure Amount is accurate. Commercial Net is willing, however, to accept a pro-rated Cure Amount as to the month of May 2006. In particular, Commercial Net says, it would accept: -- a $49,757 cure amount, plus -- a $1,242 per diem amount, for every day in May 2006, before the effective date of the assumption and assignment of the Commercial Net Lease. Commercial Net wants the Court to condition the assumption and assignment of the CNLR Lease on Commercial Net being paid the proper Cure Amount. About Levitz Home Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP represents the Official Committee of Unsecured Creditors. Levitz sold substantially all of its assets to Prentice Capital on Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEVITZ HOME: Court Allows AMEC to Terminate Remediation Contract ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York lifts the automatic stay to allow AMEC Earth & Environmental, Inc., to terminate its Environmental Remediation Contract with Levitz Home Furnishings, Inc., and its debtor-affiliates. The request for allowance and immediate payment of an administrative claim is adjourned upon consent of the parties. Remediation Contract The Debtors and AMEC are parties to an environmental remediation contract for continuing remedial operations pursuant to a corrective action plan. The Corrective Plan was intended to fulfill requirements of the Arizona Department of Environmental Quality Underground Storage Tank Section implemented by the Debtors for petroleum soil and groundwater contamination caused by a leaking underground storage tank incident at the former Levitz Furniture store located at Phoenix, Arizona. When the Debtors filed for Bankruptcy Protection, they owed AMEC $88,046 for work performed prepetition pursuant to the Remediation Contract. AMEC engaged in negotiations early in the Chapter 11 cases, regarding the Debtors' intentions regarding the Contract. The Debtors provided assurances to AMEC that it would continue to pay for any postpetition services under the Remediation Contract, Noel C. Burnham, Esq., at Montgomery, McCracken, Walker & Rhoads, LLP, in Wilmington, Delaware, told the Court. However, to date, the Remediation Contract has not been assumed or rejected by the Debtors and was not part of the sale of assets to PLVTZ, LLC and The Pride Capital Group, LLC. Mr. Burnham noted that the Debtors also failed to pay for: * December invoices for $29,678, which are over 90 days past due; * a February 9, 2006 invoice for $2,075, which is over 45 days old; and * a March 20, 2006 invoice for $21,700, which was due on April 20, 2006. Additionally, work in progress as of March 29, 2006, is $1,715, and attorneys' fees and costs have been incurred with respect to the request and collection on the account for $5,000. AMEC continues to accrue minimal monthly remediation charges of approximately $9,000 per month for: -- remediation system equipment rental; -- City of Phoenix pre-treatment discharge reporting and coordination; and -- subcontractor management. Recently, the Debtors' counsel informed AMEC that the Debtors were administratively insolvent and did not know when they would pay the outstanding balance in full. Moreover, the Debtors' counsel could not provide an explanation as to what the Debtors intend to do regarding the Remediation Contract. AMEC submits that it has suffered and continues to suffer undue hardship and damages based on the Debtors' failure to pay postpetition expenses. The Debtors, on the other hand, continue to reap the benefits of AMEC's continued performance. Against this backdrop, AMEC asked the Court: (a) to lift the automatic stay to terminate the Remediation Contract; and (b) to compel the Debtors to immediately pay the outstanding amounts due under the Remediation Contract for $55,169, plus attorneys' fees and costs. Debtors Want to Walk Away From Contract Nicholas M. Miller, Esq., at Jones Day, in New York, informed Judge Lifland that the Debtors no longer conduct any business at the Phoenix Store. Accordingly, the Debtors' Remediation Contract with AMEC no longer provides any benefit to the Debtors' estates. Since immediate rejection of the Remediation Contract is appropriate, the Debtors sought the Court's authority to reject the Contract effective as of April 6, 2006. Mr. Miller noted that most or all unpaid amounts owed to AMEC are either prepetition claims not entitled to administrative priority, or are being paid by the Purchasers. About Levitz Home Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP represents the Official Committee of Unsecured Creditors. Levitz sold substantially all of its assets to Prentice Capital on Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) MAGNUM COAL: S&P Rates $260 Million Senior Secured Facility at B ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Magnum Coal Co. of Beaver, West Virginia. The outlook is stable. At the same time, Standard & Poor's assigned its 'B' bank loan rating and '1' recovery rating to Magnum Coal's $260 million senior secured credit facility. The credit facility is rated one notch above the corporate credit rating, this and the '1' recovery rating, indicate that lenders can expect full recovery of principal in the event of a payment default. "We expect coal markets to remain favorable in the intermediate term," said Standard & Poor's credit analyst Dominick D'Ascoli. "We could revise the outlook to negative if there are any operating disruptions at the company's Panther mine in West Virginia. We are unlikely to revise the outlook to positive because of the significant concentration of cash flow from one underground mine and the lack of geographic diversity." Magnum Coal lacks operating and geographic diversity and has a difficult operating environment and aggressive financial leverage. It does have a low-cost position at its key Panther mine, a contractual revenue base, and good coal market conditions. Magnum produced 19 million tons of coal in 2005 (less than 2% of total U.S. production), pro forma for the purchase of some of the eastern operations of Arch Coal Inc. (BB-/Stable/--) on Dec. 31, 2005. The proposed $460 million senior secured credit facility comprises: * a $40 million revolving credit facility; * a $200 million term loan; and * a $20 million letter of credit facility. MERISTAR HOSPITALITY: Moody's Cuts Rating on Senior Notes to B3 --------------------------------------------------------------- Moody's Investors Service lowered the senior unsecured ratings on MeriStar Hospitality Operating Partnership, LP's notes to B3 from B2. The rating agency confirmed the ratings of MeriStar Hospitality Corporation's senior subordinate debt at Caa1. MeriStar acquired by affiliates of The Blackstone Group, an investment and advisory firm. This concludes Moody's review. The outlook is stable. According to Moody's, the lower ratings reflect significant use of secured debt and the considerably diminished claim of the unsecured debt holders in the new capital structure. In addition, unencumbered assets are practically non-existent. As a result of the tender and consent offer, most restrictive covenants pertaining to the notes have been removed. Furthermore, given that MeriStar has been acquired by and merged into entities controlled by the private entity, Blackstone, Moody's anticipates considerably less transparency with respect to the financial and operational aspects of the firm. Moody's indicated that an upgrade of MeriStar's ratings is unlikely given this strategic turn of events. The ratings agency expects to withdraw the ratings on the shelf registrations once the REIT is delisted. These ratings were lowered with a stable outlook: 1) MeriStar Hospitality Operating Partnership, LP -- Senior unsecured to B3 from B2; senior unsecured shelf to (P)B3 from (P)B2 ; subordinate debt shelf to (P)Caa2 from (P)Caa1. 2) MeriStar Hospitality Corporation] -- Senior unsecured shelf to (P)Caa1 from (P)B3; subordinate debt shelf to (P)Caa2 from (P)Caa1. 3) MeriStar Hospitality Finance Corporation III -- Senior unsecured shelf to (P)Caa1 from (P)B3; subordinate debt shelf to (P)Caa2 from (P)Caa1. The senior subordinated rating of MeriStar Hospitality Corporation's convertible notes were confirmed at Caa1 with a stable outlook. In its last rating action pertaining to MeriStar, Moody's placed the ratings under review for downgrade on February 22, 2006. MeriStar Hospitality Corporation is a hotel REIT based in Bethesda, Maryland, USA and owns 47 principally upper-upscale, full-service hotels in major markets and resort locations with 14,404 rooms in 19 states and the District of Columbia. MeriStar owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Ritz-Carlton, Westin, Doubletree and Radisson. The Blackstone Group, a global private investment and advisory firm with offices in New York, Atlanta, Boston, Los Angeles, London, Hamburg, Mumbai and Paris, was founded in 1985. Blackstone's real estate group has raised approximately $10 billion for real estate investing and has a long track record of investing in office buildings, hotels and other commercial properties. In addition to Real Estate, The Blackstone Group's core businesses include Private Equity, Corporate Debt Investing, Marketable Alternative Asset Management, Mergers and Acquisitions Advisory, and Restructuring and Reorganization Advisory. MICROFIELD GROUP: Russell Bedford Raises Going Concern Doubt ------------------------------------------------------------ Russell Bedford Stefanou Mirchandani LLP in McLean, Virginia, raised substantial doubt about the ability of Microfield Group, Inc., 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 recurring losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. Microfield Group, Inc., filed its consolidated financial statements for the year ended Dec. 31, 2005, with the Securities and Exchange Commission on April 6, 2006. The company reported a $78,364,253 net loss on $57,935,035 of sales for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $55,241,347 in total assets, $27,337,400 in total liabilities, and $27,903,947 in total stockholders' equity. The company's Dec. 31 balance sheet also showed strained liquidity with $12,654,373 in total current assets available to pay $18,352,556 in total current liabilities coming due within the next 12 months. A full-text copy of the company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?887 Headquartered in Portland, Oregon, Microfield Group, Inc. -- http://www.microfield.com/-- is engaged in the arena of energy related technology products and services. Through its subsidiaries, Microfield offers an array of new technologies for energy production, distribution, and management. Microfield also offers services within other segments including data, telephony and fire/life/security systems. The company's strategic objective is to grow its customer base and brand value to capitalize on acquisition opportunities and strategic partnerships that broaden its product and service offerings in the energy field. MID-STATE RACEWAY: Completes Asset Sale to Vernon Downs ------------------------------------------------------- Nevada Gold & Casinos, Inc. (AMEX:UWN) reported that Vernon Downs Acquisition, LLC, completed the acquisition of Mid-State Raceway, Inc. Raceway operates Vernon Downs racetrack and is also the 100% equity holder of Mid-State Development Corp., which operates a hotel at Vernon Downs racetrack. VDA is a limited liability company owned by American Racing and Entertainment, LLC, a limited liability company in which Nevada Gold NY, Inc. (a 98%-owned subsidiary of Nevada Gold & Casinos) is a 40% member. The other members of American Racing are Southern Tier Acquisitions II, LLC, TrackPower, Inc. and Oneida Entertainment, LLC, each of which has a membership interest of 20%. American Racing was formed to develop Tioga Downs Raceway, located in Nichols, New York and to pursue the acquisition of Vernon Downs Raceway from Chapter 11 bankruptcy. H. Thomas Winn, Chairman and CEO of Nevada Gold & Casinos, Inc., commented, "We are thrilled to have completed this acquisition, enabling us to move forward with the redevelopment and expansion of Vernon Downs' facilities. We look forward to working with our partners to bring an exciting and greatly improved entertainment facility to the region." Nevada Gold & Casinos, Inc. develops and operates gaming, lodging and entertainment facilities in Colorado, California, Oklahoma, and New Mexico. Headquartered in Vernon, New York, Mid-State Raceway, Inc., dba Vernon Downs -- http://www.vernondowns.com/-- operates a racetrack, restaurant and gaming resort. The Company and its debtor-affiliate filed for chapter 11 protection on August 11, 2004 (Bankr. N.D.N.Y. Case No. 04-65746). Lee E. Woodard, Esq., at Harris Beach LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection, they listed estimated debts of $10 million to $50 million but did not disclose its assets. MUSICLAND HOLDING: Panel Taps Giuliani Capital as Fin'l Advisor --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Musicland Holding Corp. and its debtor-affiliates asks the U.S. Bankruptcy Court for the Southern District of New York's for permission to retain Giuliani Capital Advisors LLC as its financial advisor, nunc pro tunc to January 20, 2006. The Committee believes that Giuliani Capital are thoroughly familiar with and experienced in Chapter 11 matters and have served as advisors for creditors' committees and debtors in many other Chapter 11 cases. The Committee anticipates that Giuliani Capital will provide financial advisory services as needed throughout the course of the Debtors' Chapter 11. Giuliani Capital will: a. advise the Committee regarding: -- the Debtors' business plans, cash flow forecasts, financial projections and cash flow reporting; -- available capital restructuring, sale and financing alternatives including but not limited to a DIP facility, including recommending specific courses of action and assisting with the design, structuring and negotiation of alternative restructuring and transaction structures; -- financial information prepared by the Debtors and in its coordination of communication with interested parties and their advisors; -- preparation for, meeting with, and presenting information to interested parties and their advisors; -- the development of a plan of reorganization for the Debtors and negotiation with parties-in-interest or in the sale of a portion or substantially all of the assets of the Debtors, whether structured as a stock transfer, merger, purchase and assumption transaction or other business combination; -- the Debtors' proposals from third parties for new sources of capital or the sale of the Debtors; b. assist and advise the Committee and its counsel in the development, evaluation and documentation of any plan of reorganization or strategic transaction, including developing, structuring and negotiating the terms and conditions of potential plans, financing or strategic transaction and strategic alternatives for recovery, and the consideration that is to be provided to unsecured creditors; c. provide testimony in the Bankruptcy Court; and d. perform other services as may be reasonably requested in writing from time to time by the Committee and its counsel and agreed by Giuliani Capital. Giuliani Capital will be paid: a. a $125,000 monthly compensation for the first three months while employed by the Committee and $100,000 per month thereafter. Monthly payments will be prorated for any partial month period; b. a $300,000 completion fee on the consummation of either: -- the sale of substantially all of the Debtor's assets; or -- the confirmation of a Chapter 11 plan; c. an incentive fee of: -- 1% of a transaction amount in the case of any party introduced by GCA that purchases, provides financing or equity to the Debtors; or -- 50% of a transaction amount in the case of any party introduced by another party-in-interest. The Transaction Amount will be the amount of: a. a DIP credit facility or exit or other loan facility; or b. cash, liquidity, property or liabilities assumed in a proposed acquisition of all or substantially all of the Debtors' assets or plan of reorganization completed by an investor or purchaser. Up to 50% of the Incentive Fee will be credited against the Completion Fee, but the credit should not exceed the lesser of $250,000 or 50% of the Completion Fee earned and received by Giuliani Capital. The Completion Fee and the Incentive Fee will be payable to Giuliani Capital on the earlier of the effective date pursuant to a plan of reorganization or as earned pursuant to a sale of any or all of the assets on the closing date of each that sale. Giuliani Capital will also receive monthly reimbursements for reasonable out-of-pocket expenses it incurs. David S. Miller, Giuliani Capital's managing director, assures the Court that his firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Informal Committee Objects The Informal Committee of Secured Trade Vendors asserts that the services of Giuliani Capital have not provided any benefit to the Debtors or their estates, nor will they do so on a going forward basis. According to Richard S. Toder, Esq., at Morgan, Lewis & Bockius LLP, in New York, none of Giuliani Capital's proposed services has any applicability to a liquidation, which is effectively what the Debtors' cases have become. Accordingly, the Informal Committee asks the Court to deny Giuliani Capital's retention and fee requests. At the very least, Giuliani Capital's proposed Monthly Advisory Fee should be sharply reduced and terminated as of the recent sale of substantially all of the Debtors' assets, the Informal Committee contends. The Informal Committee objects to the proposed Success Fees because Giuliani Capital actually opposed the consummated transactions during the course of the Debtors' Chapter 11 cases. Clearly, Giuliani Capital did not assist or add value to those transactions, Mr. Toder maintains. If Giuliani Capital's retention were to be approved in some modified form, the Informal Committee asserts that several provisions of the Retention Application require substantial alteration or clarification. About Musicland Holding Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) MWB SPECIAL: Case Summary & 27 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: M.W.B. Special Projects, Inc. 8500 Soapstone Creek Circle Hiawassee, Georgia 30546 Bankruptcy Case No.: 06-20604 Debtor affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Marcus W. Buttrill, Jr. 06-20606 Chapter 11 Petition Date: May 2, 2006 Court: Northern District of Georgia (Gainesville) Judge: Robert Brizendine Debtors' Counsel: J. Robert Williamson, Esq. Scroggins and Williamson 1500 Candler Building 127 Peachtree Street, Northeast Atlanta, Georgia 30303 Tel: (404) 893-3880 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million A. M.W.B. Special Projects, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ David Scott Trade Debt $125,000 1594 Rainier Falls Drive Atlanta, GA 30329 Hiawassee Hardware Trade Debt $45,926 P.O. Box 366 Hiawassee, GA 30546 RWK Construction Trade Debt $28,833 142 McClung Road Hiram, GA 30141 Rose Tennies Trade Debt $27,943 Griffin Cochran Marshall Trade Debt $14,025 Utica National Insurance Trade Debt $12,880 Higdon Construction Trade Debt $12,763 Byers Well Drilling Trade Debt $11,000 Patterson & Dewar Trade Debt $11,000 Doyle Dickerson Company Trade Debt $7,900 Jack Leathers Trade Debt $6,739 Rabern Nash Carpet, Inc. Trade Debt $5,763 Jobson's Carpet Mart, Inc. Trade Debt $4,112 Lantrac Properties Trade Debt $4,000 BP Oil c/o Focus Rec Man Trade Debt $3,385 David Reed Trade Debt $3,200 Cecil Breedlove Insulation Trade Debt $2,520 Jerry D. Elmore Trade Debt $1,804 Culvert Sales Trade Debt $1,767 Capital City Mechanical Trade Debt $1,557 B. Marcus W. Buttrill, Jr.'s 7 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ R. Lamar Wakefield $55,000 6405 Haddington Lane Suwanee, GA 30024 Wilbur & Virginia Foote $25,000 8475 Soapstone Creek Circle Hiawassee, GA 30546 John L. Avery $5,000 8528 Soapstone Creek Circle Hiawassee, GA 30546 John W. Barber $5,000 Robert L. & Eva Shepherd $1,500 Thomas J. McDaniel $1,500 Sears Unknown NATIONAL LAMPOON: Incurs $1 Mil. Net Loss in First Quarter 2006 --------------------------------------------------------------- National Lampoon, Inc., fka J2 Communications, Inc. reported a $1 million net loss in the first quarter ended Jan. 31, 2006, a $2.6 million decrease from the $3.6 million net loss for the same period in the prior year. The company's balance sheet at Jan. 31, 2006, disclosed $5.6 million in total assets and $3.2 million in liabilities resulting to a $2.4 million in total shareholders' equity. The company's balance sheet also showed strained liquidity with $2.3 million in total current assets and $3 million total current liabilities. A full-text copy of the company's first quarter 2006 financial statement is available for free at: http://researcharchives.com/t/s?88f Going Concern Doubt The management believes that the company's net losses of $8.6 million and $5.1 million in the prior two years, net loss of $2.9 million during the first six months of the 2006 fiscal year, and accumulated deficit of $34.8 million at Jan. 31, 2006, raise concerns about its ability to continue as a going concern. J2 Communications, Inc., was primarily engaged in the acquisition, production and distribution of videocassette programs for retail sale. In 1991, the Company acquired all of the outstanding shares of National Lampoon, Inc., and subsequent to the Company's acquisition of NLI, it de-emphasized its videocassette business and publishing operations and began to focus primarily on exploitation of the National Lampoon(TM) trademark. The Company reincorporated in Delaware under the name National Lampoon, Inc., in November 2002. NBC AUSTIN: Case Summary & 27 Largest Unsecured Creditors --------------------------------------------------------- Debtor: NBC/Austin Windridge, Ltd. 9521 Westheimer, No. 156 Houston, Texas 77063-3369 Bankruptcy Case No.: 06-31901 Debtor affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- NBC Las Brisas, Ltd. 06-80154 Chapter 11 Petition Date: May 2, 2006 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtor's Counsel: Richard L. Fuqua, II, Esq. Fuqua & Keim, LLP 2777 Allen Parkway, Suite 480 Houston, Texas 77019 Tel: (713) 960-0277 Estimated Assets Estimated Debts ---------------- --------------- NBC/Austin Windridge, Ltd. $10 Million to $10 Million to $50 Million $50 Million NBC Las Brisas, Ltd. $1 Million to $1 Million to $10 Million $10 Million A. NBC/Austin Windridge, Ltd.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ City of Austin $40,031 P.O. Box 2267 Austin, TX 78768 Superior Floors, LLC $25,464 2707 Realty Road, Suite 206 Carrollton, TX 75006 Rasa Floor $23,733 P.O. Box 619130 Dallas, TX 75261 C&J Painting & Carpet Cleaning $14,621 Trugreen Landscapes $14,044 Floor Trend $10,984 Hughes MRO, Ltd. $10,602 Texas Gas Service $10,005 Quality Surface Solutions $9,770 Mendo's Painting Services $8,671 The Rock Painting $8,509 Powerhouse Carpet Cleaning $8,005 D&D Electronics $7,752 Changing Surface Inc. $7,405 Drytex $6,303 General Electric Co. $6,220 Proscape Landscaping, Inc. $6,170 RMI Property Mgmt., Tx. LP $5,355 Home Depot Supply $5,086 Lone Star Carpet $4,786 B. NBC Las Brisas, Ltd.'s 7 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Lone Star Overnight $289 P.O. Box 149225 Austin, TX 78714 Ozarka Natural Spring Water $170 Processing Center P.O. Box 52214 Phoenix, AZ 85072-2214 Air Rite Pest Control $108 860 South Major Beaumont, TX 77707 Warm Welcomes $98 Pax Supply $78 AMAC Supply $78 Coastal Welding Supply Inc. $16 NEW ORLEANS PADDLEWHEELS: Case Summary & 20 Largest Creditors ------------------------------------------------------------- Debtor: New Orleans Paddlewheels, Inc. 344 Camp Street New Orleans, Louisiana 70130 Bankruptcy Case No.: 06-10413 Type of Business: The Debtor offers entertainment and sightseeing tours in New Orleans. See http://www.neworleanspaddlewheels.com Chapter 11 Petition Date: May 3, 2006 Court: Eastern District of Louisiana (New Orleans) Debtor's Counsel: Stewart F. Peck, Esq. Lugenbuhi, Wheaton, Peck, Ranking & Hubbard 601 Poydras Street, Suite 2775 New Orleans, Louisiana 70130 Tel: (504) 568-1990 Fax: (504) 529-7418 Estimated Assets: $1 Million to $10 Million Estimated Debts: Unknown Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ City of New Orleans $2,800,000 Property Tax Bureau of the Treasury P.O. Box 60047 New Orleans, LA 70160-0047 Smith Law Firm, LLC $83,686 700 Camp Street New Orleans, LA 70130-3702 Louisiana Dept. of Revenue & Taxation $43,220 Collections Division 1555 Poydras Street, Suite 900 New Orleans, LA 70112 New Orleans Tours $42,865 Moore Wallace North America, Inc. $28,885 Stone Insurance, Inc. $28,755 ASCO $24,023 Klotz & Early $21,003 Hansen Music Productions, LLC $16,960 Sysco Food Services - New Orleans $13,169 Aububon Nature Institute $13,045 Sharpshooter Spectrum Imaging $12,168 John W. Stone Oil Distributor, LLC $12,159 Southern Outdoors & Marine, Inc. $11,534 New Orleans Fish House $9,978 Crescent Towing & Salvage Co. $9,576 Black Tie Service Co. $9,006 Gear Services, Inc. $8,697 Citicorp Vendor Finance, Inc. $7,967 Kushner Lagraize, LLP $7,271 NORTH AMERICAN: S&P Downgrades Senior Unsecured Debt Rating to CCC ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Edmonton, Alta.-based North American Energy Partners to stable from negative. At the same time, Standard & Poor's affirmed its 'B-' long-term corporate credit and its 'B' senior secured debt ratings on the company. The rating on the company's senior unsecured debt was lowered to 'CCC' from 'CCC+'. "The outlook revision reflects the high probability that NAEP will be able to fund its capital spending program and interest obligations through internally generated funds in the coming fiscal year," said Standard & Poor's credit analyst Jamie Koutsoukis. "The senior unsecured debt rating was lowered due to an increase in the mark-to-market losses attributed to of the company's cross currency and interest rate swaps, which are deemed to be priority claims and rank senior to the senior secured and unsecured notes. As a result of the strengthening Canadian dollar, the liability value of the swaps increased to such a level where the percentage of senior debt ahead of the unsecured notes exceeded Standard & Poor's threshold, which, in turn, resulted in the rating on the unsecured debt being lowered," Ms. Koutsoukis added. The ratings on NAEP reflect: * the company's aggressively leveraged balance sheet; * weak internal cash flow generation; * exposure to high customer concentration; and * a dependence on nonrecurring project work for revenues. These factors, which hamper the ratings, are somewhat offset by: * the company's strong market position in servicing oil sands projects; * the current robust environment for its services; and * some measure of capital spending flexibility. The stable outlook reflects the expectation that NAEP will be able to fund its capital spending program and interest obligations through internally generated funds over the coming fiscal year, based on its existing contracts and market share. Nevertheless, the company still needs to execute on its operational turnaround and the company's operational risk remains high, as it needs to properly bid contracts in an increasingly competitive environment. If the company is able to demonstrate sustained profitability and generate positive free cash flow after capital expenditures, while improving its liquidity, the outlook could be revised to positive. Alternatively, if the company continues to outspend internally generated cash flows and further restricts its financial flexibility, a negative rating action would likely occur. NORTHWEST AIRLINES: Can Advance Employees' Legal Defense Costs -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave Northwest Airlines Corp. and its debtor-affiliates authority to advance legal defense costs incurred by the Debtors former and current employees who are named as defendants in employment discrimination lawsuits. Peter B. Kenney, the Debtors' vice president of law, notes that the Debtors are already experiencing a high attrition rate, and employee attrition is likely to increase if they are unable to advance costs for the benefit of their employees. Moreover, the threat of personal pecuniary loss for complaints related to an employee's scope of work is likely to be a significant negative influence on employee morale, Mr. Kenney tells Judge Gropper. The Debtors have historically advanced these costs and the Debtors' employees have a reasonable expectation that this practice will continue. If the Debtors are not permitted to advance the cost of defense for these types of claims that have become routine in large corporations, employees are likely to leave the Debtors' employ to avoid the risk of personal liability for actions taken in the scope of employment, he relates. Pending Lawsuits On November 5, 2003, Edita Laurel, a current Northwest Airlines employee, filed a complaint in the San Mateo County Superior Court in the State of California against NWA Corp. and Kieran Sheridan, a current Northwest Airlines employee, alleging a cause of action for intentional tort stemming from alleged workplace harassment. On June 24, 2005, Ms. Laurel filed an amended complaint alleging violations of California's employment and labor statutes, and asserted additional torts. The Laurel Lawsuit was stayed with respect to the Debtors upon the commencement of the Debtors' Chapter 11 cases. On August 24, 2005, Alvin Wynn, a former Northwest Airlines employee, filed a complaint before the Wayne County Circuit Court in the State of Michigan against Paul Roegner, a former Northwest Airlines employee, alleging employment discrimination and retaliation in connection with Wynn's discharge from employment. The Debtors are not named defendants in the Wynn Lawsuit. On September 15, 2005, Orville Meaux filed a complaint before the United States District Court for the Northern District of California, alleging common law claims for wrongful discharge and violation of the Railway Labor Act, and included as additional defendants the Professional Flight Attendants Association and Eric Edmundson, a current Northwest Airlines employee. The Meaux Lawsuit was stayed as against the Debtors upon the commencement of their Chapter 11 cases. Northwest's Duty to Indemnify Employees Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, relates that Northwest Airlines has a duty to indemnify its officers, directors and employees as defined in the "Amended and Restated Bylaws of Northwest Airlines, Inc." adopted April 23, 1999. In addition, the Employee Defendants are entitled to be indemnified by Northwest Airlines for their legal expenses, including attorneys' fees, incurred to defend the Employment Discrimination Lawsuits under Minnesota Statutes. In the ordinary course of their business, the Debtors and their employees are sued routinely for employment-related complaints. It is Northwest Airlines' practice to advance the costs of defense to individual employee defendants for the defense of the type of claims asserted in the Employment Discrimination Lawsuits, Mr. Petrick relates. XL Insurance Policy NWA Corp. has a Broad Form Employment Practices Liability Insurance Policy with XL Insurance (Bermuda) Ltd., which provides coverage for loss, including defense costs, resulting from claims alleging employment practice liability against NWA Corp. or any of its director, officer, or employee. Northwest Airlines is an Additional Insured Organization. Under the terms of the Policy, the Insurer is liable only for the amount of loss, including defense costs, in excess of the retention amount of $5,000,000. Under the Policy and in practice, the Insurer is not obligated and does not advance defense costs for claims alleging employment practices liability. Unlike other insurance policies maintained by the Debtors, under the Policy, if Northwest Airlines does not advance defense costs on behalf of its employees, employee defendants must pay the amounts personally. About Northwest Airlines Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945- 7000). O'SULLIVAN INDUSTRIES: Board Okays Mgmt. & Director Equity Plan --------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, O'Sullivan Industries Holdings, Inc., discloses that its Board of Directors approved the Management and Director Equity Plan on April 18, 2006. As soon as practicable, O'Sullivan Holdings will grant or issue to members of its senior management and its directors who are not employees, officers, directors, agents, representatives or affiliates of any O'Sullivan stockholder a combination of: -- options to acquire O'Sullivan Holdings common stock, and -- restricted shares of O'Sullivan Holdings common stock. According to Rick Walters, O'Sullivan Holdings' chief executive officer, the Board will determine the amount of options to be granted. The options may be granted in multiple installments. Under the Equity Plan, the maximum of number of common stock shares that may be issued is 1,231,148. After the grant of the initial options, additional options will be granted from time to time as may be determined by the Board of Reorganized O'Sullivan Holdings. The initial options and the restricted stock to be granted or issued will not exceed the maximum aggregate amounts per scheduled vesting date and will vest in five increments: Max. Shares of Scheduled Max. Initial Options Restricted Stock Vesting Date Vesting on that Date Vesting on that Date ------------ -------------------- -------------------- Date granted 227,713 22,675 September 30, 2007 227,713 22,675 September 30, 2008 227,713 10,199 September 30, 2009 246,230 - September 30, 2010 246,230 - O'Sullivan Holdings will not issue more than 55,549 shares of restricted stock in the aggregate. The shares of restricted stock issued to each recipient will be subject to forfeiture, as determined by the Board, after termination of employment prior to that shares vesting. The Equity Plan may be amended or modified by the Board and amendment or modification will not require amendment of the Debtors' Plan of Reorganization or Court order, Mr. Walters adds. Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). Joel H. Levitin, Esq., at Dechert LLP, represents the Debtors. Michael H. Goldstein, Esq., Eric D. Winston, Esq., and Christine M. Pajak, Esq., at Stutman, Treister & Glatt, P.C., represent the Official Committee of Unsecured Creditors. On Sept. 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) OLD HOLLAND: Hires TB Harris & Assoc. as Real Estate Appraiser -------------------------------------------------------------- Old Holland Road, LLC, obtained authority from the U.S. Bankruptcy Court for the Western District of North Carolina to employ T.B. Harris, Jr. & Associates as its real estate appraiser and consultant. The Debtor expects T.B. Harris to facilitate the marketing and sale of its properties, including: -- performing formal real property appraisals; and -- providing consulting services regarding sale of its properties. The Debtor agreed to compensate T.B. Harris' services with a lump- sum payment aggregating $2,500. To the best of the Debtor's knowledge, T.B. Harris does not hold any interest adverse to its estate and is a "disinterested person" as that term is defined in Sec. 101(14) of the Bankruptcy Code. Headquartered in Charlotte, North Carolina, Old Holland Road, LLC filed for chapter 11 protection on Mar. 14, 2006 (Bankr. W.D. N.C. Case No. 06-30373). R. Keith Johnson, Esq., at R. Keith Johnson, P.A., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. The U.S. Bankruptcy Administrator for North Carolina reported that no creditor attended in the Sec. 341 meeting scheduled on April 12, 2006. When the Debtor filed for protection from its creditors, it listed assets totaling $2,878,980 and debts totaling $22,443,190. OXFORD INDUSTRIES: Moody's Reviews Sr. Unsecured Debt for Upgrade ----------------------------------------------------------------- Moody's Investors Service placed the ratings of Oxford Industries on review for possible upgrade following the announcement of the sale of the womenswear division to Li & Fung Group of Hong Kong for approximately $67 million. The transaction is expected to close in early June. Moody's placed these ratings of Oxford Industries on review for possible upgrade: * The corporate family rating of B1 * The senior unsecured debt rating of B2 The review will focus on the impact of the transaction on Oxford's diversification, its strategic transformation to a branded apparel business, and the company's operating metrics and leverage. Following the closing of the divestiture, the effect of which is expected to reduce leverage and improve Oxford's profitability, Moody's expects that Oxford's corporate family rating would likely be raised to Ba3 from B1 and that the senior unsecured debt rating would likely be raised to B1 from B2. In the event that the transaction fails to close, Moody's expects that the current ratings levels will likely be maintained. Oxford Industries, based in Atlanta, Georgia designs and markets men's and women's apparel under its owned brands, which include Ben Sherman, Tommy Bahama, Arnold Brandt and Oxford Golf; licensed brands including Orvis Signature, Geoffrey Beene, Nautica and Oscar de la Renta; and also supplies a variety of private label apparel brands in multiple channels. PEAK ENT: Balance Sheet Upside Down by $2 Million at December 31 ---------------------------------------------------------------- Peak Entertainment Holdings, Inc., filed its financial statements for the year ended Dec. 31, 2005, with the Securities and Exchange Commission on April 6, 2006. The company reported a $1,993,942 net loss on $1,166,156 of revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $3,900,059 in total assets and $5,977,292 in total liabilities, resulting in a $2,077,233 stockholders' equity deficit. The company's balance sheet at Dec. 31, 2005, also showed strained liquidity with $1,461,893 in total current assets available to pay $4,412,521 in total current liabilities coming due within the next 12 months. A full-text copy of the company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?885 Headquartered in Derbyshire, England, Peak Entertainment Holdings Inc. -- http://www.peakentertainment.co.uk/-- is a fully integrated multimedia company dedicated to quality children's television entertainment, character licensing and consumer products. The Company's unique, fully integrated business model, which includes concept creation and branding, production of entertainment programs, character licensing, and manufacturing and distribution of toys and related consumer products, gives it maximum quality control and speed-to-market while developing total brand equity. Peak's properties include Monster Quest, The Wumblers, Little Big Feet, Countin' Sheep and Mini Flora. PENN NATIONAL: Earns $42 Million in Quarter Ended March 31 ---------------------------------------------------------- Penn National Gaming, Inc. (PENN: Nasdaq) earned $42 million of net income on $569.2 million of revenues during the quarter ended March 31, 2006, compared to $15.8 million of net income on $289.3 million of revenues for the same period in 2005. Commenting on the results, Peter M. Carlino, Chairman and Chief Executive Officer of Penn National said, "Our record 2006 first quarter operating results surpassed the financial guidance provided when we reported the 2005 fourth quarter. Excluding the two hurricane damaged casinos and Bullwhackers, all of Penn National's casinos posted EBITDA gains that ranged from 8% to 89% on a year-over-year basis. In addition to the 'same property' improvements, Hollywood Slots at Bangor made its first full quarter of contributions since opening last November. "There are several recent developments related to our ongoing growth, expansion and the re-opening of our Gulf Coast properties. First, the Hollywood Slots - Bangor temporary facility is already generating attractive annualized EBITDA returns and continues to grow patronage and play resulting in four consecutive months of EBITDA gains since opening last November. We look forward to announcing details of the permanent facility shortly. "It has been a corporate priority to return Boomtown Biloxi and Casino Magic - Bay St. Louis, our gaming facilities that have been closed following damage from Hurricane Katrina, to operation as soon as possible. Through the efforts of our redevelopment teams, we are planning to re-open the Boomtown Biloxi Casino in the third quarter and Casino Magic - Bay St. Louis in the fall. "In Biloxi, upon re-opening, patrons will experience an all-new, re-modeled interior with the same local accents they have come to expect from the property. Casino Magic will initially re-open with an approximate 30,000 square foot temporary casino in the property's former hotel lobby, which will be replaced in the future by a permanent land-based casino. In addition, the damaged areas of the existing 290-room hotel tower will have been completely refurbished and the hotel will begin to accept reservations shortly. Boomtown Biloxi will feature approximately 1,100 slot machines and approximately 22 table games while Casino Magic will offer approximately 1,270 slot machines and approximately 20 table games. Penn National Gaming will soon begin recruiting programs and hosting job fairs and we look forward to welcoming back to work many of the employees who were responsible for the success of these properties prior to the hurricane. "The timetables of our other development projects including Hollywood Casino at Penn National; Charles Town's casino, parking and food and beverage expansions; the hotel at Argosy Casino Riverside; and the Argosy Casino Lawrenceburg barge and parking project, remain on track with our previously announced timetables. In preparation for the construction of the integrated racing and slots facility at Penn National Race Course, we recently closed the aging grandstand and clubhouse, which we plan to raze near the end of the second quarter. Last week, we opened The Paddock Club, a new 24,000-square-foot temporary facility offering pari-mutuel wagering, food and beverage services, more than 250 television monitors, administrative offices, and facilities for jockeys. At Argosy Casino Riverside, progress on the 258-room hotel is advancing and a 'topping off' ceremony took place last week signifying the completion of the core external structure. In each development and expansion project we remain focused on upgrading the entertainment experience for patrons while deriving attractive economic returns on capital for Penn National and its shareholders. "With the ownership of Raceway Park in Ohio, Penn National Gaming recently agreed to provide funding to support a referendum on the November 2006 ballot that would authorize up to 5,000 slot machines at each of Ohio's seven existing racetracks. Beyond additional employment and taxes in the state, one of the major benefits of this proposal is that the constitutional amendment, if passed, will eventually provide every high school graduate in Ohio the opportunity to earn free college tuition. Penn National's efforts and funding of this referendum will reduce our earnings on a short-term basis, as reflected in our full-year guidance. "During the quarter we completed the redemption of the $175 million of Penn National's outstanding 8 -7/8% Senior Subordinated Notes. The redemption was funded with available cash and borrowings under our revolving credit facility and will result in lower levels of debt service going forward. In addition, the Company recently entered into $300 million of new interest rate swap agreements, which brings our swapped portion of LIBOR rate debt to $1.3 billion, with an effective LIBOR rate of 4.90% and a 175 basis point spread. With these new swap agreements, Penn National has taken additional action intended to manage a portion of the interest rate risk associated with its outstanding indebtedness. "Penn National Gaming started 2006 with exceptional operating results and based on the continued positive trends at our properties and diversified, staggered development pipeline, we are confident in our growth prospects not only for the remainder of 2006 but for several years to come." About Penn National Penn National Gaming, Inc. -- http://www.pngaming.com/-- owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The Company presently operates fifteen facilities in thirteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's facilities feature over 17,500 slot machines, over 400 table games, over 2,000 hotel rooms and approximately 575,000 square feet of gaming floor space. The property statistics in this paragraph exclude two Argosy properties which the company anticipates divesting, but are inclusive of the Company's Casino Magic - Bay St. Louis, in Bay St. Louis, Mississippi and the Boomtown Biloxi casino in Biloxi, Mississippi, which remain closed following extensive damage incurred as a result of Hurricane Katrina. * * * As reported in the Troubled Company Reporter on Feb. 2, 2006, Moody's Investors Service raised the corporate family rating of Penn National Gaming, Inc., to Ba2 from Ba3. Moody's also raised its ratings on: -- $750 million revolver due 2010, to Ba2 from Ba3; -- $325 million term loan due 2011, to Ba2 from Ba3; -- $1,650 million term loan B due 2012, to Ba2 from Ba3; -- $175 million 8.875% guaranteed senior subordinated notes due 2010, to Ba3 from B2; -- $200 million 6.875% guaranteed senior subordinated notes due 2011, to Ba3 from B2; and -- $250 million 6.750% not guaranteed senior subordinated notes due 2015, to B1 from B3. PENN OCTANE: Burton McCumber Raises Going Concern Doubt ------------------------------------------------------- Burton McCumber & Cortez, L.L.P., Brownsville, Texas, raised substantial doubt about the ability of Penn Octane Corporation to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. Burton McCumber pointed to the Company's: (1) insufficient cash flow to pay its obligations when due, (2) inability to obtain additional financing because substantially all of the Company's assets are pledged or committed to be pledged as collateral on existing debt, (3) existing credit facility may be insufficient to finance its liquefied petroleum gas and Fuel Sales Business, and (4) working capital deficiency. Financials Penn Octane Corporation filed its consolidated financial statements for the year ended Dec. 31, 2005, with the Securities and Exchange Commission on April 6, 2006. The company reported a $2,032,802 net loss on $260,313,525 of revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the company's balance sheet showed $36,756,819 in total assets, $24,449,913 in total liabilities, $11,955,005 in minority interest, and $351,901 in total stockholders' equity. A full-text copy of the company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?886 Penn Octane Corporation formerly known as International Energy Development Corporation buys, transports and sells liquefied petroleum gas for distribution in northeast Mexico, and resells gasoline and diesel fuel. The Company has a long-term lease agreement for approximately 132 miles of pipeline, which connects ExxonMobil Corporation's King Ranch Gas Plant in Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim Wells County, Texas, to the Company's Brownsville Terminal Facility. PROGRESSIVE GAMING: Poor Performance Cues S&P to Cut Ratings to B- ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Progressive Gaming International Corp. to 'B-' from 'B'. The ratings on the Las Vegas-based gaming-related products developer remain on CreditWatch with negative implications where they were initially placed on March 15, 2006. "The downgrade primarily follows continued uncertainty regarding the company's long-term operating performance; however, other issues continue to be of concern, such as internal control weaknesses reported in the 10K and ongoing shareholder lawsuits," said Standard & Poor's credit analyst Peggy Hwan Hebard. Although the company recently signed a definitive financing agreement for a $10 million senior secured term loan due April 19, 2007, and has plans to replace this facility with a $22.5 million credit facility within the next 90 days, the company's access to capital may be limited if operating performance does not meet management's expectations. The ratings were initially placed on CreditWatch following the company's announcement that it had not completed its accounting and financial reporting process for the company's fiscal year ended Dec. 31, 2005, due to several transactions that came under review from a revenue recognition perspective. The company has since filed its 10K on March 31, 2006. Standard & Poor's will resolve the CreditWatch listing after it has the opportunity to review the underlying documents of the expected credit facility and after it has time to assess whether financial performance for 2006 is trending in line with expectations. PROTECTION ONE: Incurs $29.1 Mil. Net Loss in Year Ended Dec. 31 ---------------------------------------------------------------- Protection One, Inc. reported a $29.1 million net loss on $263 million of total revenue for the year ended Dec. 31, 2005. The company's balance sheet at Dec. 31, 2005, showed $434 million in total assets and $428 million in total liabilities, resulting in $5.9 million of total stockholders' equity. At Dec. 31, 2005, the company had $60.5 million in total current assets available to pay for $65.6 million in total current liabilities. A full-text copy of Protection One's annual report ended Dec. 31, 2005 is available for free at http://researcharchives.com/t/s?875 Headquartered in Lawrence, Kansas, Protection One, Inc. -- http://www.ProtectionOne.com -- is one of the largest providers of security monitoring services in the United States. Including its Network Multifamily subsidiary, a leading security provider to the multifamily housing market, Protection One provides monitoring and related security services to more than one million residential and commercial customers. * * * Protection One's senior unsecured and senior subordinate debts carries Fitch's CC and C ratings. The ratings were placed on Nov. 21, 2003 with a negative outlook. Q.C. ONICS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Q.C. Onics Ventures, LP P.O. Box 329 1410 Wohlert Street Angola, Indiana 46703 Tel: (260) 665-9493 Fax: (260) 665-8744 Bankruptcy Case No.: 06-10628 Type of Business: The Debtor is a full service supplier of wiring products, assemblies, and molded products for electrical and electronic applications for the automotive industry. See http://www.qconics.com/ Chapter 11 Petition Date: May 2, 2006 Court: Northern District of Indiana (Fort Wayne Division) Debtor's Counsel: Wesley N. Steury, Esq. Burt, Blee, Dixon, Sutton & Bloom LLP 1000 Standard Federal Plaza 200 East Main Street Fort Wayne, Indiana 46802 Tel: (260) 426-1300 Fax: (260) 422-3750 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Johnson Controls Business Purchases $648,042 One Prince Center Holland, MI 49423 J.S.T. Corp. Business Purchases $521,560 1957 South Lakeside Waukegan, IL 60085 Yazaki North America, Inc. Business Purchases $480,545 18 Leigh Fieher El Paso, TX 79906 TYCO/AMP Business Purchases $476,054 P.O. Box 3608 Harrisburg, PA 17105 Copperfield, LLC Business Purchases $460,294 Lock Box #7740 4007 Solutions Chicago, IL 60677-4000 Delphi Packard Electric Business Purchases $323,669 P.O. Box 71405 311 West Monroe Street Chicago, IL 60690 Rivercross Business Purchases $318,598 1405 East Jeffers Brownsville, TX 78521 FCI USA, Inc. Business Purchases $200,587 Amphenol RF Business Purchases $171,440 Power & Signal Group Business Purchases $147,539 ITT Cannon Business Purchases $136,474 Oaram Sylvania Business Purchases $92,874 Stranco Products, Inc. Business Purchases $60,300 Sebro Plastics, Inc. Business Purchases $59,193 Krah-RWI Business Purchases $55,850 Elliott Tape Business Purchases $38,349 E.I.S. Wire & Cable Business Purchases $31,512 Hosiden America Corp. Business Purchases $31,200 GCI Technologies Business Purchases $29,837 Foamade Industries Business Purchases $24,737 RALI SERIES: Moody's Rates Class M-10 Certificate at Ba1 -------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by RALI Series 2006-QO4 Trust, Mortgage Asset- Backed Pass-Through Certificates, Series 2006-QO4, and ratings ranging from Aa1 to Ba1 to the mezzanine certificates in the deal. The securitization is backed by HomeComings Financial Network, Inc. originated adjustable-rate Alt-A mortgage loans acquired by Residential Accredit Loans, Inc. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization and excess spread, and a financial gauranty policy issued by XL Capital Assurance Inc. for certificates I-A-2 and II-A-3. Moody's expects collateral losses to range from 1.10% to 1.30%. Primary servicing will be provided by HomeComings Financial Network, Inc. Residential Funding Corporation will act as master servicer. Moody's ssigned HomeComings its top servicer quality rating as primary servicer of prime loans and as primary servicer of subprime loans. Furthermore, Moody's has assigned RFC its top servicer quality rating as master servicer. The Complete Rating Actions: RALI Series 2006-QO4 Trust Mortgage Asset-Backed Pass-Through Certificates, Series 2006-QO4 * Cl. I-A-1, Assigned Aaa * Cl. I-A-2, Assigned Aaa * Cl. II-A-1, Assigned Aaa * Cl. II-A-2, Assigned Aaa * Cl. II-A-3, Assigned Aaa * Cl. M-1, Assigned Aa1 * Cl. M-2, Assigned Aa2 * Cl. M-3, Assigned Aa2 * Cl. M-4, Assigned Aa3 * Cl. M-5, Assigned A1 * Cl. M-6, Assigned A2 * Cl. M-7, Assigned A3 * Cl. M-8, Assigned Baa1 * Cl. M-9, Assigned Baa2 * Cl. M-10, Assigned Ba1 REFCO INC: Chapter 7 Trustee Hires Neal Gerber as Special Counsel ----------------------------------------------------------------- Albert Togut, the interim Chapter 7 Trustee for Refco LLC's estate, obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Neal, Gerber & Eisenberg LLP, as his special commodities litigation counsel. Refco LLC is a party to about 29 pending prepetition arbitrations and lawsuits pending before the National Futures Association and in the Circuit Court of Cook County, Illinois. The Risk Management Actions were commenced by several claimants against Refco LLC and have been consolidated for hearing. The Risk Management Actions have been stayed as to Refco LLC. However, one action asserts that Refco LLC caused claimants harm through the actions of an individual named Stephen Paoletti, whom the claimants contend is one of Refco LLC's employees. It has been Refco LLC's position that Mr. Paoletti was a floor broker and thus not one of its employees. Refco LLC requires immediate representation in the proceeding because, if the panel were to conclude that Mr. Paoletti is an employee of Refco, the NFA may determine to enter an award for damages caused by Mr. Paoletti acting within the scope of that employment. An award could adversely impact Refco LLC's estate. Neal Gerber represented Refco LLC in the Risk Management Actions before the Petition Date. The Chapter 7 Trustee also may use Neal Gerber to handle several other arbitration and litigation matters, including: (i) claim objections that are subject to mandatory arbitration before the NFA or other exchanges; (ii) certain exchange-related arbitrations; (iii) deficit account collection matters; (iv) other customers or broker litigation or arbitrations pending before the NFA, the Commodity Futures Trading Commission or elsewhere as to which the automatic stay does not apply or the stay has been lifted; and (v) other matters that the Trustee determines, in his discretion, that Neal Gerber should assist on. As special commodities litigation counsel, Neal Gerber will: a. prepare, on the Trustee's behalf, any submissions, motions, applications, answers, orders, reports, and papers necessary to represent the Trustee and his estate; b. prepare for and participating in, on the Trustee's behalf, proceedings before the NFA and other exchanges, including arbitration proceedings; and c. provide other necessary legal services and advice to the Trustee in connection with the Risk Management Actions and other matters. Neal Gerber will be paid according to its customary hourly rates: Position Rate -------- ---- Paraprofessionals $100 - $220 Associates $250 - $360 Partners $360 - $450 The firm will also be reimbursed for necessary expenses. Peter G. King, a member of Neal Gerber, assures the Court that the firm does not have any connection with, or hold any interest adverse to Refco LLC, its creditors or any other party-in- interest. Neal Gerber is a "disinterested person," as that phrase is defined in Section 101(14) of the Bankruptcy Code. About Refco Inc. Based in New York, New York, Refco Inc. -- http://www.refco.com/- - is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000). REPUBLIC STORAGE: Committee Hires Buckley King as Co-Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in Republic Storage Systems Company, Inc.'s chapter 11 case obtained authority from the U.S. Bankruptcy Court for the Northern District of Ohio to retain Buckley King, LPA, as its bankruptcy co-counsel, nunc pro tunc to Mar. 27, 2006. Buckley King is expected to: a. advise the Committee of its rights, powers, and duties; b. advise the Committee concerning actions that it might take; c. prepare on behalf of the Committee all necessary and appropriate applications, motions, pleading, draft orders, notices, schedules and other documents, and review all financial and other reports to be filed in the Debtor's chapter 11 case; d. advise the Committee in connection with any proposed sale of the Debtor's assets; e. represent the Committee in meetings, hearings, and negotiations with respect to the Debtor's chapter 11 case; f. counsel the Committee in connection with the Debtor's formulation, negotiation, and promulgation of a plan of reorganization or liquidation and related documents; and g. perform all other legal services for and on behalf of the Committee which may be necessary or appropriate in the representation of the Committee in the Debtor's chapter 11 case, including advising and assisting the Committee with respect to debt restructuring and litigation matters. Harry W. Greenfield, Esq., a member at Buckley King, tells the Court that he will bill $350 per hour for this engagement. Mr. Greenfield says that the other professionals who will be rendering services bill: Professional Hourly Rate ------------ ----------- Jeffrey C. Toole, Esq. $245 Dov Y. Frankel, Esq. $215 Mr. Greenfield assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Greenfield can be reached at: Harry W. Greenfield, Esq. Buckley King, LPA 1400 Fifth Third Center 600 Superior Avenue East Cleveland, Ohio 44114-2652 Tel: (216) 363-1400 Fax: (216) 579-1020 Toll-Free: (800) 255-2825 http://www.buckleyking.com/ Headquartered in Canton, Ohio, Republic Storage Systems Company, Inc. -- http://www.republicstorage.com/-- an employee-owned firm, manufactures industrial and commercial shelving, storage rack, mezzanine systems and shop equipment. The Company filed for Chapter 11 protection on March 14, 2006, (Bankr. N.D. Ohio Case No. 06-60316). James Michael Lawniczak, Esq., at Calfee, Halter & Griswold, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. REPUBLIC STORAGE: Panel Hires Borges & Associates as Co-Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Republic Storage Systems Company, Inc.'s chapter 11 case obtained authority from the U.S. Bankruptcy Court for the Northern District of Ohio to retain Borges & Associates, LLC, as its bankruptcy co- counsel. Borges & Associates is expected to: a. advise the Committee of its rights, powers, and duties; b. advise the Committee concerning actions that it might take; c. prepare on behalf of the Committee all necessary and appropriate applications, motions, pleading, draft orders, notices, schedules and other documents, and review all financial and other reports to be filed in the Debtor's chapter 11 case; d. advise the Committee in connection with any proposed sale of the Debtor's assets; e. represent the Committee in meetings, hearings, and negotiations with respect to the Debtor's chapter 11 case; f. counsel the Committee in connection with the Debtor's formulation, negotiation, and promulgation of a plan of reorganization or liquidation and related documents; and g. perform all other legal services for and on behalf of the Committee which may be necessary or appropriate in the representation of the Committee in the Debtor's chapter 11 case, including advising and assisting the Committee with respect to debt restructuring and litigation matters. Wanda Borges, Esq., a member at Borges & Associates, tells the Court that she will bill $350 per hour for this engagement. Ms. Borges tells the Court that Julie Mer, Esq., will also be rendering services and bills $200 per hour. Ms. Borges discloses that the Firm's other professionals bill: Professional Hourly Rate ------------ ----------- Counsel $225 - $325 Associates $125 - $250 Paralegals, Legal Assistants $85 - $120 Law Clerks Ms. Borges assures the Court that her firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Borges can be reached at: Wanda Borges, Esq. Borges & Associates, LLC 575 Underhill Boulevard Syossel, New York 11791 Tel: (516) 677-8200 Fax: (516) 677-0806 Headquartered in Canton, Ohio, Republic Storage Systems Company, Inc. -- http://www.republicstorage.com/-- an employee-owned firm, manufactures industrial and commercial shelving, storage rack, mezzanine systems and shop equipment. The Company filed for Chapter 11 protection on March 14, 2006, (Bankr. N.D. Ohio Case No. 06-60316). James Michael Lawniczak, Esq., at Calfee, Halter & Griswold, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. RIVERSTONE NETWORKS: Hires Sonenshine as Financial Advisor ---------------------------------------------------------- Riverstone Networks, Inc., and its debtor affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Sonenshine Partners LLC as their financial advisor nunc pro tunc to Feb. 7, 2006. The Debtors need Sonenshine's services to facilitate the sale of their assets. In particular, Sonenshine will: a) advise the Debtors with strategic and financial issues; b) advise the Debtors with discussions concerning the proposed sale transaction, and providing and reviewing related information; c) assist the Debtors with all financial aspects of a sale and developing a general negotiating strategy to accomplish the transaction; d) advise and assist management of Debtors in making presentations to the Board of Directors or the Bankruptcy Court concerning any proposed transaction; e) assist, advise and participate in negotiations and review of documents relating to a proposed transaction; f) render financial advisory services as Debtors may reasonably request in connection with seeking court or regulatory approvals of any proposed transaction; and g) provide an opinion on the fairness of the transaction. Marshall Sonenshine, a managing partner at Sonenshine told the Court that the firm has been providing strategic transactions and financial advisory services to the Debtors prior to their bankruptcy filing, and thus is familiar with the Debtors' business. According to Mr. Sonenshine, the firm's compensation includes a monthly fee capped at $20,000 and reimbursement of actual and necessary out of pocket expenses. For a consummated sale transaction, Sonenshine will receive 1.25% of the aggregate consideration, less: * all monthly and retainer fees previously paid to Sonenshine after the execution of a definitive agreement with respect to the same transaction; and * the $495,000 fee paid under Sec. 2b of the Retention Letter in connection with the same transaction. For aggregate considerations in excess of $135 million, a 1% bonus will be added to the firm's success fee. Mr. Sonenshine assured the Court that Sonenshine Partners does not hold any interest adverse to the Debtors and that the firm is a "disinterested person" as defined in Sec. 101(14) of the Bankruptcy Code. About Riverstone Networks Based in Santa Clara, California, Riverstone Networks, Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet infrastructure solutions for business and residential communications services. The company and four of its affiliates filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del. Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors. Jeffrey S. Sabin, Esq., at Schulte Roth & Zabel LLP represents the Official Committee of Unsecured Creditors. As of Dec. 24, 2005, the Debtors reported assets totaling $98,341,134 and debts totaling $130,071,947. S EDWARD: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: S. Edward, Inc. dba Aqua Soleil 229 West 36th Street New York, New York 10018 Bankruptcy Case No.: 06-10951 Chapter 11 Petition Date: May 3, 2006 Court: Southern District of New York (Manhattan) Debtor's Counsel: Clifford A. Katz, Esq. Platzer, Swergold, Karlin, Levine, Goldberg & Jaslow, LLP 1065 Avenue of the Americas, 18th Floor New York, New York 10018 Tel: (212) 593-3000 Fax: (212) 593-0353 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Darlington $438,741 36 Beach Street Westerly, RI 02891 Hafner Elastique USA $320,095 379 Racine Street Granby, Quebec, J2G3B7 Como Textile $183,030 191 East Railway Avenue Paterson, NJ 07503-2103 Derun $115,383 Stefan $101,700 Pacific Textile $79,881 Tresbien $76,675 LeBANON $46,545 Missbrener Prints $34,617 Tricots-Liesse $30,000 United Knitting $24,980 Euro Jersey Spa $21,514 Toray Marketing & Sales, Inc. $21,020 Handro Management $17,176 RAJ Manufacturing $14,661 Tex-Cellence $13,539 Charles Dunn Real Estate Services $9,989 Overton $9,879 Whinston and Wright Testile De $9,605 Design Work $9,090 SBA COMMS: AAT Merger Completion Cues S&P to Withdraw B+ Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services withdrew the ratings for Boca Raton, Florida-based wireless tower operator SBA Communications Corp., including its 'B+' corporate credit rating. At the same time, it withdrew the ratings on St. Louis, Missouri- based wireless tower operator AAT Communications Corp., including the 'BB-' corporate credit rating. "These actions follow the completion of the acquisition of AAT by SBA, and the concurrent completion of a debt tender for $424 million of SBA's public debt and repayment of AAT's $285 million of first- and second-lien bank debt," said Standard & Poor's credit analyst Catherine Cosentino. SEA CONTAINERS: Moody's Junks Corp. Family & Sr. Unsec. Debt ------------------------------------------------------------ Moody's Investors Service downgraded all debt ratings of Sea Containers Ltd -- corporate family rating to Caa1. The ratings remain under review for possible downgrade, continuing the review that was initiated on March 23, 2006. The rating actions reflect the continuing uncertainty of Sea Containers' financial position and liquidity, due to a further unspecified delay in the filing of the Form 10-K for 2005 and the likely delay in the filing of the Form 10-Q for the first quarter of 2006, as well as the uncertainty of Sea Containers' current cash burn rate coupled with the on-going challenges in each of the operating segments. Moody's is concerned about the adequacy of Sea Containers' liquidity for meeting debt maturities as scheduled, particularly a $115 million note due October 15, 2006. This concern is heightened by Sea Container's disclosure that it now expects to incur losses from operations throughout 2006. The company also disclosed that once the financial statements are completed, the independent auditors are expected to provide an unqualified audit opinion in which the auditors will raise substantial doubt about Sea Containers' ability to continue as a going concern. Moody's believes that the window for realizing a reasonable price from the sale of Silja Oy Ab is diminishing as the Baltic's peak summer ferry season nears. As well, provisions in the indenture of the 10.50% Unsecured Notes due 2012 could require the company to tender for certain of its public notes, which could limit the cash balances available for meeting other scheduled debt maturities. Moreover Sea Containers' disclosed its intent to "engage the public note holders" as part of its plans to restructure its operations, which could imply a debt restructuring. The Caa2 senior unsecured rating reflects Moody's expectation that note holders could receive less than full recovery in a negotiated debt restructuring. The B3 rating on the $85 million senior secured credit facility is up one notch from the corporate family rating, because the facility is secured by a portion of Sea Containers' legacy container fleet, and Moody's believes the realizable value of the related container collateral would be sufficient to cover this facility's obligation in the event of liquidation. All ratings remain on review for further downgrade due to the heightened prospects of a debt restructuring given Sea Containers' intent to hold discussions with public note holders, and the uncertainties of the timing of the closing of a sale of Silja Lines. In its review, Moody's will focus on the resolution of the prompt sale of Silja Lines. With respect to the potential sale of Silja Lines, Sea Containers could be challenged to close a transaction before the quickly approaching peak summer ferry season, and Moody's believes that a closing beyond June 2006 could be for lower value since the benefit of peak traffic would not accrue to the acquirer. Additionally, the sale transaction will likely require regulatory approval which could delay the closing of a transaction. In addition, provisions in the indenture governing the notes due 2012, could require Sea Containers to use some of the proceeds from the sale of the Orient Express shares to tender for certain of the notes outstanding. The Indenture requires 75% of Excess Cash Proceeds from sales of shares of Oriental Express to be returned to note holders via tender offers. These tenders, if required, will significantly reduce Sea Containers liquidity. Sea Containers last reported cash of approximately $89 million as of September 30, 2005, and subsequently sold the Orient Express shares for gross proceeds of approximately $300 million. Ratings downgraded: 1) Sea Containers Ltd.: -- Corporate Family Rating to Caa1 from B2 -- senior secured to B3 from B2 -- senior unsecured to Caa2 from B3 and -- Issuer Rating to Caa2 from B3 Sea Containers Ltd. headquartered in Hamilton Bermuda, is a provider of ferry services, primarily in the Baltic Sea, the franchisee-operator of the Great Northern Railroad in the U.K., and a lessor of cargo containers to the shipping industry. SEA CONTAINERS: S&P Lowers Corp. Credit Rating to CCC- from CCC+ ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Sea Containers Ltd., including lowering the corporate credit rating to 'CCC-' from 'CCC+'. All ratings remain on CreditWatch with negative implications; ratings were initially placed on CreditWatch on Aug. 25, 2005, and lowered on Feb. 16, 2006, and again on March 24, 2006. The rating action follows the company's announcement that it is continuing to evaluate a range of strategic and financial alternatives, including the "appropriate level of debt capacity, with the intent to engage the public note holders and other stakeholders." "The announcement appears to imply that the company could approach note holders with a proposal to restructure their debt," said Standard & Poor's credit analyst Betsy Snyder. "If such a restructuring were to occur and did not provide full value to the note holders, ratings on these notes would likely be lowered to 'SD'." Sea Containers expects its 2005 financial statements to include language "raising substantial doubt about the company's ability to continue as a going concern." In addition, late last week the company received the decision regarding its dispute with GE Capital relating to GE SeaCo, and is "evaluating the consequences of the decision for the company," and will make an announcement shortly. In the meantime, the company is continuing with the sale of its ferry assets. The company had previously stated that its exit from the ferry operations would result in a noncash, pretax impairment charge of approximately $500 million, to be taken in the fourth quarter of 2005. The charge would reduce Sea Containers' net worth by approximately $475 million, and result in noncompliance with certain net worth covenants in certain of its bank agreements. The company is currently in discussions with the bank lenders regarding covenant waivers or amendments. If the company is unsuccessful with its restructuring plans, a Chapter 11 bankruptcy filing could result. Standard & Poor's will monitor the: * potential financial restructuring of the company; * progress on the sale of the ferry operations; * progress on waivers or amendments to the covenants in the bank facilities; and * resolution of the arbitration with General Electric to resolve the CreditWatch. SIERRA HEALTH: Sustained Earnings Cues S&P to Lift Ratings to BB+ ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its counterparty credit rating on Sierra Health Services Inc. (NYSE:SIE) to 'BB+' from 'BB' and removed it from CreditWatch with positive implications, where it was placed on Feb. 7, 2006. Standard & Poor's also said that the outlook on Sierra is positive. "We raised the ratings primarily because of Sierra's sustained earnings and cash-flow strength and improved balance-sheet profile," explained Standard & Poor's credit analyst Joseph Marinucci. The rating reflects Sierra's well-established core market position in Nevada, strong profitability and cash-flow characteristics, and enhanced holding-company liquidity. Offsetting factors include Sierra's concentrated geographic business profile, narrow product scope relative to its larger peers, and relatively large share- repurchase program. Standard & Poor's expects Sierra's enrollment to grow at a moderately strong pace in 2006 to 660,000-680,000 members, with core HMO membership reaching 380,000-400,000 members. Operating performance is expected to remain very strong in 2006, with no special charges anticipated. If Sierra were to achieve Standard & Poor's earnings expectations in 2006, pretax income, debt leverage, and interest coverage would be extremely conservative for the rating. In 2006, Standard & Poor's expects cash inflow to the parent company to remain stable, as the holding company derives significant cash inflows from management fees from regulated subsidiaries. The positive outlook reflects the potential for the rating to be raised by another notch if Sierra sustains its earnings and cash- flow profile and effectively manages through an important near- term provider contract negotiation period. Conversely, the outlook could be revised to stable if profitability were to materially erode, if Sierra were to lose some of its competitive advantage, or if operational effectiveness were compromised by any provider system disruptions. SITEL CORPORATION: Unit's Irregularities Cause Reporting Delay -------------------------------------------------------------- SITEL Corporation says it will be unable to file its Annual Report on Form 10-K for the year ended Dec. 31, 2005, with the Securities and Exchange Commission. The delay is caused by the continuing investigation of some irregularities at one of the company's international subsidiaries and will allow KPMG LLP time to complete its audit of the Company's financial statements. The Company is continuing to complete the restatements of its previously issued financial statements for the fiscal years 2000 through 2004 and potentially for each of the three-month periods covered by the interim quarterly reports for the fiscal year 2005 determined necessary as a result of the investigation. The Company will complete the restatements and file all required SEC reports as quickly as practicable but cannot predict a precise date at this time. The Company is in discussions with its lenders concerning waiver of the technical event of default that will result from the Company's inability to deliver its audited financial statements for the year ended Dec. 31, 2005, to its lenders by March 31, 2006. SITEL Corporation (NYSE:SWW) -- http://www.sitel.com/-- provides outsourced customer support services. On behalf of many of the world's leading organizations, SITEL designs and improves customer contact models across its clients' customer acquisition, retention and development cycles. SITEL manages approximately two million customer interactions per day via the telephone, e-mail, Internet and traditional mail. SITEL has over 36,000 employees in 91 global contact centers, utilizing more than 32 languages and dialects to serve customers in 56 countries. SOUTH FINANCIAL: DBRS Places Rating on Subor. Debt at BB(high) -------------------------------------------------------------- Dominion Bond Rating Service confirmed its ratings of The South Financial Group, Inc. at BBB and R-2, and its bank subsidiaries, Carolina First Bank and Mercantile Bank, subsequent to a detailed review of the Company. Additionally, DBRS assigned a rating of BB (high) to TSFG's Subordinated Debt. The trends on all ratings are Stable. TSFG's ratings are underpinned by a growing three-state super- community banking franchise with strong deposit and loan growth, a demographically attractive operating footprint, and improving credit quality. The Company's concentration in commercial real estate, reliance on wholesale funding, and below peer capitalization are also incorporated into the assigned ratings level. Traditionally an acquisition-driven bank, TSFG has assembled a metropolitan-based franchise that targets high-growth markets within its southeastern footprint. With a 60/40 asset distribution between the Carolinas and Florida, the Company's opportunistic strategy focuses on providing quality service to small- and middle-market business customers whose banking relationships have been disrupted by the significant amount of regional bank consolidation over the past 20 years. TSFG's modest earnings power was further constrained over the past year due to a sharply narrowing wholesale spread and elevated operating expenses. Having doubled in size in the past three years, the Company has elected to defer its normally brisk acquisition pace in order to strengthen its initiatives to improve internal asset-liability management, deposit mix, and fee-based revenue stream while reducing expenses. DBRS expects gradual earnings improvement from these initiatives over the near to medium term. Modest fee income levels are not expected to grow significantly as a function of revenues, if TSFG remains an active acquirer of community banks whose low non- interest revenues are dilutive to TSFG's. Loan growth has been brisk with a noteworthy concentration in CRE, as it is a preferred asset class. The composition of acquired bank loan portfolios has exacerbated this concentration. TSFG subsidiary banks have demonstrated an improving ability to manage their loan portfolios, as evidenced by lower levels of non- performing loans that are approaching peer levels, although net charge-offs remain elevated. DBRS notes that TSFG has an adequate core deposit franchise that is ranked fourth by deposit market share in South Carolina, but is in a weaker 16th position in Florida, both of which are highly competitive markets. The Company's deposit growth has traditionally lagged its loan growth, requiring more expensive and less stable wholesale funding to finance the gap. Recently, however, TSFG began to make progress in reducing its wholesale funding levels with a renewed focus on deposit gathering. While capital levels consistently exceed regulatory requirements, they lag its peers and are not expected to change significantly due to the Company's acquisition appetite. The South Financial Group, Inc., the largest bank holding company based in South Carolina, is a regional financial services company with $14 billion in assets and 172 branches operating two bank subsidiaries, Carolina First Bank and Mercantile Bank, as of December 31, 2005. SOUTHERN COPPER: Moody's Ups Ba1 Rating on Sr. Notes to Baa2 ------------------------------------------------------------ Moody's Investors Service upgraded Southern Copper Corporation's senior unsecured notes to Baa2 from Ba1. In related rating actions, Moody's withdrew the company's Ba1 corporate family rating and its SGL-1 speculative grade liquidity rating. Additionally, Moody's affirmed the Ba2 senior unsecured ratings of Minera Mexico, a subsidiary of Southern Copper. The rating outlook is stable. The upgrade recognizes Southern Copper's progress in strengthening its operating platform following the successful integration of Minera Mexico, its balanced capital structure and improved financial metrics. In addition, copper fundamentals, although currently at unsustainably high levels in Moody's view, are expected to remain solid over the medium term given low inventory levels and lack of significant additional capacity coming on stream, thereby allowing Southern Copper to sustain improved financial metrics. The upgrade also anticipates that the company will continue to prudently evaluate the level of dividend payouts relative to cash flow generation and capital investment requirements and will not pressure its balance sheet or liquidity position with excessive dividends. However, Moody's ratings for Southern Copper reflect the cyclicality inherent in the copper industry as well as the political and labor environments in which the company operates. The rating outlook is stable. These ratings were upgraded: Southern Copper Corporation * $ 200 million notes due 2015 to Baa2 from Ba1 * $ 600 million notes due 2035 to Baa2 from Ba1 These ratings were withdrawn: Southern Copper Corporation * Ba1 Corporate Family Rating * SGL-1 Speculative Grade Liquidity Rating This ratings was affirmed: * Minera Mexico -- Ba2 senior unsecured notes Southern Copper, a Delaware incorporated company 75% owned by Grupo Mexico, conducts its operations through its branch in Peru and its Mexican subsidiary, Minera Mexico. Earnings and cash flow generation are roughly balanced between the Peruvian and Mexican operations. Despite cost pressures from energy and other input cost increases, which Moody's expects to continue, robust copper prices have contributed to significant earnings and cash flow improvement, indicating Southern Copper's high leverage to copper prices. Moody's previous rating action on Southern Copper was the July 11, 2005 assignment of Ba1 ratings to the company's senior unsecured note issues aggregating $800 million. Southern Copper Corporation, headquartered in Phoenix, Arizona, a majority owned subsidiary of Grupo Mexico S.A. de C.V. , is a leading global producer of copper and other metals with major mining and processing operations in Peru and Mexico. Revenues in 2005 were $4.1 billion. STAR GAS: Recapitalization Prompts S&P to Upgrade Ratings to B- --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Star Gas Partners L.P. to 'B-' from 'CCC+' and removed the rating from CreditWatch with developing implications. The outlook is stable. The rating action reflects the successful completion of the company's recapitalization plan, which included $57.7 million in new equity from Kestrel Energy Partners LLC and a repurchase of about $100 million of debt. As of Dec. 31, 2005, the Stamford, Connecticut-based fuel oil distributor had $267 million of debt outstanding. "Despite the vulnerable business risk profile, we expect the company's recapitalization plan to improve financial measures and overall credit quality," said Standard & Poor's credit analyst John Kennedy. Standard & Poor's expects the plan to result in total debt to capitalization below 55% and funds from operations interest coverage above 1.5X. These levels are consistent with the new rating category. "The stable outlook reflects our expectation that the recapitalized Star Gas Partners will operate at its current leverage and improve its cash flow coverage measures along with its cash flow stability," said Mr. Kennedy. Failure to execute on the plan, a weakening of the financial measures due to increased customer attrition, or further cash flow underperformance could cause downward pressure on the ratings. SYLVEST FARMS: Taps Baker & Hostetler as Bankruptcy Counsel ----------------------------------------------------------- Sylvest Farms, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division, for permission to retain Baker & Hostetler LLP as their bankruptcy counsel. The Debtors selected Baker & Hostetler as counsel based on the firm's extensive experience and knowledge of debtors' and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. Baker & Hostetler will: a) advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their business and properties; b) attend meetings and negotiate with representatives of creditors and other parties-in-interest and advise and consult on the conduct of the case, including all of the legal and administrative requirements of operating under Chapter 11; c) take all necessary actions to protect and preserve the Debtor's estates, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against those estates, negotiations concerning litigation in which the Debtors may be involved and objections to claims filed against the estates; d) prepare, on behalf of the Debtors, motions, applications, answers, orders, reports, papers and pleadings necessary to the administration of the estates; e) negotiate and prepare, on the Debtor's behalf, Chapter 11 plans of reorganization or liquidation, disclosure statements and related agreements and take any necessary action to obtain confirmation of any plan; f) advise the Debtors in connection with any sale of their assets; g) appear before the Bankruptcy Court, any appellate courts and the U.S. Trustee and protect the interests of the Debtor's estates; and h) perform other necessary legal services and provide necessary legal advice to the Debtors in connection with their Chapter 11 cases. The attorneys who will be primarily responsible for this engagement and their hourly rates are: Attorney Hourly Rate -------- ----------- Richard A. Robinson, Esq. $390 Eric S. Golden, Esq. $280 Mr. Robinson informs the Bankruptcy Court that his firm has used approximately $118,054 of the prepetition retainer provided by the Debtors. Baker & Hostetler currently holds a retainer balance of $56,945 for postpetition fees and expenses. Mr. Robinson assures the Bankruptcy Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Montgomery, Alabama, Sylvest Farms, Inc. -- http://sylvestcompanies.com/-- produces, processes and markets poultry products. The Debtors employ approximately 1,500 workers. The Company and two debtor-affiliates filed for chapter 11 protection on April 18, 2006 (Bankr. N.D. Ala. Case No. 06-40525). When the Debtors filed for protection from their creditors, they estimated their total assets and debts at $50 million to $100 million. SYLVEST FARMS: Has Interim Access to $34 Million Wachovia DIP Loan ------------------------------------------------------------------ The Hon. Tamara O. Mitchell of the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division, allowed on an interim basis, Sylvest Farms, Inc., and its debtor-affiliates to obtain debtor-in-possession financing and other extensions of credit from Wachovia Bank, National Association. The Debtors negotiated the DIP loan with Wachovia to obtain sufficient fund to operate their businesses and to manage and preserve their assets. Under a secured discretionary revolving credit facility, the Debtors can access up to $34 million of postpetition credit from Wachovia. The Debtors can also incur overdrafts and related liabilities from Wachovia arising from treasury, depository and cash management services or in connection with automated clearinghouse fund transfers. All advances under the credit facility will bear interest at a variable per annum rate of interest equal to 200 basis points in excess of the Base Rate. Wachovia's Priming Lien Wachovia and the Federal Land Bank Association of South Alabama hold liens on the Debtors' assets on account of prepetition debts. To secure repayment of the DIP loan, the Debtors grant Wachovia a primary security interest in and lien on all of their assets. Richard A. Robinson, Esq., at Baker & Hostetler LLP, told the Bankruptcy Court that under the DIP loan agreement, the Debtors are required to grant Wachovia a priming lien pursuant to Section 364(d)(1) of the Bankruptcy Code. Land Bank opposed the Debtors' move to prime its prepetition liens and said that the DIP Loan agreement violates its own contractual agreements with Wachovia. Judge Mitchell overruled Land Bank's objections and denied the Bank's request to stay the effectiveness of the interim DIP financing order. Wachovia's superpriority claim under the DIP financing is subject to a carve out for: -- administrative fees and expenses; -- reasonable hourly fees and expenses incurred by the Debtors' Professionals and Committee Counsel; -- employee success fees permitted under the DIP Loan agreement, and; -- a maximum of $125,000 for all hourly fees and expenses incurred by the Debtors' Professionals and Committee Counsel after the earlier of the Termination Date or the Debtors' receipt of a written notice of default. Adequate Protection Payments Under the DIP financing agreement, approximately $24 million of the DIP loan proceeds will be paid immediately upon closing to Wachovia as adequate protection for the postpetition consumption of its collateral. In addition, the Debtors are required to make monthly adequate protection payments of $40,000 and $20,000 to Land Bank and Wachovia, respectively. Apart from adequate protection payments, the Debtors will also pay Wachovia: -- a $10,000 monthly administrative fee; -- a $680,000 commitment fee; -- an asset preservation fee in an amount equal to 5% of the amount by which the total aggregate consideration paid for the successful consummation of any sale of the Debtors' Business as a going concern exceeds $10 million; and -- legal fees and other charges. About Sylvest Farms Headquartered in Montgomery, Alabama, Sylvest Farms, Inc. -- http://sylvestcompanies.com/-- produces, processes and markets poultry products. The Debtors employ approximately 1,500 workers. The Company and two debtor-affiliates filed for chapter 11 protection on April 18, 2006 (Bankr. N.D. Ala. Case No. 06-40525). When the Debtors filed for protection from their creditors, they estimated their total assets and debts at $50 million to $100 million. TENET HEALTHCARE: Amends Three Quarters of 2005 Financial Reports ----------------------------------------------------------------- Tenet Healthcare Corporation filed with the Securities and Exchange Commission on April 6, 2006, its amended financial statements for the: -- first quarter ended March 31, 2005; -- second quarter ended June 30, 2005; and -- third quarter ended Sept. 30, 2005. These financial statements were amended to reflect the restatements based on the findings of an independent investigation conducted by the audit committee of the company's board of directors. The company's Statement of Operations showed: For the quarter ended ----------------------------------------------- March 31, 2005 June 30, 2005 Sept. 30, 2005 -------------- -------------- -------------- Revenue $2,501,000,000 $2,420,000,000 $2,394,000,000 Net (Loss) ($4,000,000) ($33,000,000) ($401,000,000) The company's Balance Sheet showed: For the quarter ended ----------------------------------------------- March 31, 2005 June 30, 2005 Sept. 30, 2005 -------------- -------------- -------------- Current Assets $1,497,000,000 $4,123,000,000 $4,026,000,000 Total Assets $10,210,000,000 $10,252,000,000 $9,967,000,000 Current Liabilities $1,843,000,000 $1,976,000,000 $1,982,000,000 Total Liabilities $8,487,000,000 $8,543,000,000 $8,643,000,000 Total Stockholders' Equity $1,723,000,000 $1,709,000,000 $1,324,000,000 SEC investigation The Securities and Exchange Commission is conducting a formal investigation of whether: -- the company's financial reporting disclosures relating to Medicare outlier reimbursements and stop-loss payments under managed care contracts were misleading or otherwise inadequate; and -- there was any improper trading of securities by some of the company's current and former directors and officers. The securities law provisions implicated in the investigation include Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, regulations associated with those statutes, and Rules 12b-20, 13a-1 and 13a-13 under the Exchange Act. On April 27, 2005, the company received a Wells Notice from the staff of the SEC in connection with the investigation. The SEC also issued Wells Notices to some former senior executives of the Company who left their positions in 2002 and 2003, including the: -- former chief executive officer, -- former chief operating officer, -- former general counsel, -- former chief financial officer, -- former chief accounting officer, and -- former senior vice president of government programs. A Wells Notice indicates that the SEC's staff intends to recommend that the agency bring a civil enforcement action against the recipients for possible violations of federal securities laws. Recipients of Wells Notices have the opportunity to respond before the SEC's staff makes its formal recommendation on whether any action should be brought. The SEC is also investigating allegations made by a former employee that inappropriate contractual allowances for managed care contracts may have been established at three California hospitals through at least fiscal year 2001. At the request of the audit committee of the company's board of directors, the board's independent outside counsel, Debevoise & Plimpton LLP conducted an investigation of these allegations utilizing the forensic accounting services of Huron Consulting Group. This investigation was expanded and included determining whether similar issues might have affected other Tenet hospitals during the periods mentioned in the allegations and any other pertinent periods. Debevoise and Huron have completed their investigation and presented the results of their findings to the audit committee. Based on these findings, the audit committee determined that it would be necessary to restate the company's previously reported financial statements. The company is cooperating with the SEC with respect to its investigation, including responding to subsequent requests for voluntary production of documents, as well as a subpoena request for documents dated Oct. 6, 2005, and have provided regular updates to the SEC as to the progress of the investigation. Full-text copies of the company's amended financial statements are available for free at: first quarter ended March 31, 2005 http://ResearchArchives.com/t/s?87f second quarter ended June 30, 2005 http://ResearchArchives.com/t/s?880 third quarter ended Sept. 30, 2005 http://ResearchArchives.com/t/s?881 Tenet Healthcare Corporation -- http://www.tenethealth.com/-- through its subsidiaries, owns and operates acute care hospitals and related health care services. Tenet's hospitals aim to provide the best possible care to every patient who comes through their doors, with a clear focus on quality and service. * * * As reported in the Troubled Company Reporter on April 6, 2006, Fitch Ratings affirmed Tenet Healthcare Corp.'s issuer default rating at 'B-' and senior unsecured notes at 'B-/RR4'. Fitch say the rating outlook is negative. As reported in the Troubled Company Reporter on Jan. 25, 2006, Moody's Investors Service affirmed Tenet Healthcare Corporation's speculative grade liquidity rating at SGL-4. Moody's say the outlook for the ratings remains negative. TNS INC: BB- Corp. Credit & Sr. Debt Ratings Remain on S&P's Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services held its 'BB-' corporate credit and senior secured debt ratings for Reston, Virginia-based TNS Inc. remain on CreditWatch with negative implications. The ratings were listed on CreditWatch March 14, 2006, following an announcement that TNS received a nonbinding proposal from members of senior management to acquire the outstanding shares of TNS for a cash price of $22 per share, or about $500 million. The company recently announced that a special committee of the board of directors has rejected this offer. The company also announced that it has hired an investment bank to explore a range of strategic alternatives for the purpose of enhancing shareholder value. "We will monitor the progress of TNS' discussions with its investment bank, and meet with management to discuss financing plans, should the board of directors elect to adopt a more aggressive capital structure," said Standard & Poor's credit analyst Ben Bubeck. The CreditWatch listing reflects continued uncertainty surrounding long-term plans for TNS' capital structure. While TNS' current financial risk profile, including operating lease-adjusted total debt to EBITDA of about 2.2x, supports current ratings, shareholder initiatives appear to be a priority over the near term, and other acquisition offers may also be submitted. TRANSTECHNOLOGY CORP: Completes New $50 Million Refinancing Deal ---------------------------------------------------------------- TransTechnology Corporation (OTC: TTLG) completed the refinancing of its existing credit facility with a new $50 million credit facility provided by Wells Fargo Foothill, Inc. and Allied Capital's senior loan underwriting group, AC Finance LLC. In addition to allowing the company to retire all of its existing debt, the new facility provides working capital for the company's current and expected future needs. The new credit facility has a maturity of 60 months and provides for a $10 million revolving line of credit and term loans totaling $40 million. The refinancing will retire approximately $45 million of existing debt leaving approximately $5 million available for working capital. "We are very pleased to have accomplished this refinancing with Wells Fargo Foothill and AC Finance," Robert L. G. White, President and Chief Executive Officer of the company, said. "The new credit facility, the cost of which is indexed to LIBOR, has allowed us to reduce our blended cost of debt to approximately 8.5% from the 16% blended rate of our retired debt. We expect that, based on the amount of debt refinanced, the lower rates of the new facility will save us approximately $3.4 million in annual interest costs, or $.23 per diluted share." Mr. White continued, "In connection with the retirement of the old debt, we will recognize a pre-tax charge in the first quarter of fiscal 2007 currently estimated to be $1.3 million, or $.09 per diluted share, related to the write-off of capitalized fees and costs. Costs and fees associated with the refinancing and new debt are estimated at $400,000 and will be capitalized and expensed over the term of the new financing." About TransTechnology Corp. TransTechnology Corporation -- http://www.transtechnology.com/-- operating as Breeze-Eastern -- http://www.breeze-eastern.com/-- designs and manufactures sophisticated lifting devices for military and civilian aircraft, including rescue hoists, cargo hooks, and weapons-lifting systems. The company, which employs approximately 180 people at its facility in Union, New Jersey, reported sales from continuing operations of $64.6 million in the fiscal year ended March 31, 2004. At Dec. 25, 2005, TransTechnology Corporation's balance sheet showed a $5,734,000 stockholders' deficit, compared to a $6,359,000 deficit at March 31, 2005. TOWER AUTOMOTIVE: Has Until June 27 to File Chapter 11 Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York further extended, until June 27, 2006, the period within which Tower Automotive, Inc., and its debtor-affiliates have the exclusive period to file a chapter 11 plan of reorganization. The Court also extended, until Aug. 26, 2006, the Debtors' exclusive period to solicit acceptances of that plan. Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, tells Judge Gropper that despite the Debtors' most diligent efforts, they were not able to complete development of a Plan before April 28, 2006. The Debtors have made significant progress as evidenced by their operational restructuring efforts, the development of their business plan, and the considerable time and attention the Debtors have devoted to the development, and negotiation of proposals under Sections 1113 and 1114 of the Bankruptcy Code, Mr. Sathy relates. In light of this progress, the Debtors believe that they deserve the opportunity to continue to pursue their restructuring objectives without the distraction of allowing third parties the opportunity to file and solicit acceptances of a competing plan of reorganization. Among other things, the Debtors have been busy with: a. extensive discussions and meetings with their North American and European customers and suppliers to ensure the continued integrity of their supply chain and to garner the support and cooperation of these constituencies that are so vital to the success of the Debtors' restructuring efforts; b. on-going evaluation of their executory contracts and unexpired leases; c. analysis and reconciliation of claims in connection with developing a plan of reorganization; d. formal and informal dialogues with the Official Committee of Unsecured Creditors to explore restructuring alternatives and mechanisms; e. evaluation of their entire business model to rationalize, evaluate and enhance the efficiencies of these businesses. The Debtors have substantially completed the business plan that they expect will serve as the foundation for their Chapter 11 plan; and f. good faith discussions with their various unions and with the Official Committee of Retired Employees, and maintenance of a comprehensive on-line data room to facilitate the sharing of information with the unions and the Retiree Committee. About Tower Automotive 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. Ira S. Dizengoff, 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 $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000). TOWER AUTOMOTIVE: Court Okays Waiver Agreement with DIP Lenders --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave Tower Automotive, Inc., and its debtor-affiliates authority to: a. enter into a Waiver Letter with respect to a Revolving Credit, Term Loan and Guaranty Agreement with their postpetition secured lenders; b. pay waiver fees to JPMorgan Chase Bank, N.A, as administrative agent for the DIP Lenders, for $362,500 or 0.05% of the DIP Lenders' commitment under the DIP Credit Agreement; and c. pay JPMorgan a $250,000 arrangement fee. Need For Waiver On March 31, 2006, the Debtors notified the Securities and Exchange Commission that they would not be able to timely file their Annual Report for fiscal year 2005. The Debtors were unable to timely file the Form 10-K because they are still in the process of gathering and preparing the information required by their auditors, Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, explains. The DIP Credit Agreement requires the Debtors to supply JPMorgan and the DIP Lenders with audited financial reports within 90 days following the end of a fiscal year. The Debtors will be unable to satisfy this covenant. The DIP Credit Agreement provides that any failure to observe or perform a covenant or agreement in the DIP Credit Agreement will constitute an event of default. Waiver Conditions Accordingly, pursuant to the Waiver Letter, the DIP Lenders agree to waive the requirements of the DIP Credit Agreement so that: a. the Debtors' financial statements for the fiscal year ended December 31, 2005, may be delivered to JPMorgan and the DIP Lenders by June 30, 2006, rather than within 90 days after the end of the fiscal year; and b. the financial statements for the fiscal quarter ending March 31, 2006, may be delivered to JPMorgan and the DIP Lenders by June 30, 2006, rather than within 45 days of the end of the fiscal quarter. About Tower Automotive 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. Ira S. Dizengoff, 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 $787,948,000 in total assets and $1,306,949,000 in total debts. (Tower Automotive Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000). ULTCO INC: Case Summary & Largest Unsecured Creditor ---------------------------------------------------- Debtor: ULTCO, Inc. 3605 Robbins Road Austin, Texas 78730 Bankruptcy Case No.: 06-10661 Type of Business: The Debtor's affiliate, Ultimate Ford, Inc., filed for chapter 11 protection on January 24, 2006 (Bankr. W.D. Texas, Case No. 06-10061). Chapter 11 Petition Date: May 1, 2006 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: Christopher J. Tome, Esq. 8650 Spicewood Springs Road, PMB #504 Austin, Texas 78759-4322 Tel: (512) 249-1904 Fax: (512) 249-1920 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Lee County Tax 2006 Property Unknown Assessor-Collector Taxes P.O. Box 390 Giddings, TX 78942 VARIG S.A.: Brazilian Court OKs A&M as Restructuring Advisor ------------------------------------------------------------ Judge Luiz Roberto Ayoub of the 8th District Bankruptcy Court in Rio de Janeiro, Brazil, granted the request of VARIG, S.A.'s creditors to hand over the airline's management to Alvarez & Marsal Inc., Bloomberg News says, citing Valor Economico. Alvarez & Marsal will replace VARIG chief executive Marcelo Bottini. As reported in the Troubled Company Reporter on March 21, 2006, VARIG hired Alvarez & Marsal as chief restructuring advisors to work with the company's management and board as it moves forward with the restructuring process. The decision to retain a professional restructuring firm was initiated by Varig's creditors and the selection process followed strict technical criteria. Alvarez & Marsal was chosen from among a group of firms based on its long history of successful restructurings and its professional team's specific experience with other distressed airlines including US Airways and AeroMexico. About Alvarez & Marsal Alvarez & Marsal -- http://www.alvarezandmarsal.com/-- is a leading global professional services firm with expertise in guiding underperforming companies and public sector entities through complex financial, operational and organizational challenges. Alvarez & Marsal provide specialized services, including: Turnaround and Management Advisory, Crisis and Interim Management, Performance Improvement, Creditor Advisory, Global Corporate Finance, Dispute Analysis and Forensics, Tax Advisory, Business Consulting, Real Estate Advisory and Transaction Advisory. A network of experienced professionals in locations across the US, Europe, Asia and Latin America, enables the firm to deliver on its proven reputation for leadership, problem solving and value creation. 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. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) VARIG S.A.: Halts Service to Portugal and Sends Passengers to TAP ----------------------------------------------------------------- As widely reported, VARIG, S.A., will suspend flights to Portugal beginning May 15, 2006, as part of its restructuring strategies. VARIG will transfer its passengers to TAP Portugal. VARIG and TAP Portugal are parties to a code-sharing agreement. VARIG serves six or seven weekly flights between Brazil and Portugal. VARIG's decision will end 40 years of VARIG service to Portugal, AFX News Limited says, citing Jornal de Negocios. 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. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) VARIG S.A.: Preliminary Injunction in Place Until June 1 -------------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York issued a bridge order extending the Preliminary Injunction in VARIG S.A. and its debtor-affiliates' Section 304 cases, through and including June 1, 2006. Judge Drain made the bench ruling over the objections of: 1. Willis Lease Finance Corporation; 2. Mitsui & Co. Ltd.; 3. U.S. Bank National Association; 4. Wells Fargo Bank Northwest, N.A. and Wells Fargo Bank National Association, as Trustees; 5. International Lease Finance Corporation; 6. Aircraft SPC-6, Inc.; 7. The Boeing Company; 8. Ansett Worldwide Aviation U.S.A., et al.; 9. GATX Capital; 10. United States of America by the United States Attorney for Region 2; 11. The Port Authority of New York and New Jersey; and 12. Los Angeles World Airports. The disgruntled aircraft lessors have asked the Court to dissolve the preliminary injunction and deny the Foreign Debtors' request to convert the Preliminary Injunction to a permanent injunction. They also want VARIG to return their leased aircraft and engines. Willis, Mitsui, U.S. Bank and ILFC argued that the Foreign Proceedings have failed, and the entry of a Permanent Injunction or continuation of the existing Preliminary Injunction will prevent lessors from exercising remedies on account of postpetition defaults. Boeing, SPC-6, Ansett and GATX believe that entry of a permanent injunction would not be appropriate at this time due to the current "fluid" state of the Foreign Proceedings. Boeing pointed out that unless VARIG's current financial and operating crisis is resolved quickly and appropriately, lessors will be required to repossess their leased aircraft, and related engines and assets in Brazil as well as in other countries where those assets might be located. As lessors attempt to enforce remedies throughout the world, there is a real risk that any order entered by the U.S. Court at this time will bring an element of confusion, and thus prejudice. SPC-6 noted that VARIG is currently unable to repay its prepetition claims without additional infusions of cash from outside investors. Based on Alvarez & Marsal's March 2006 presentation to VARIG's creditors, the airline's recovery plan is no longer feasible. The Los Angeles World Airports, owner-operator of the Los Angeles International Airport, told Judge Drain that if VARIG wants to use LAWA property and operate aircraft to and from Los Angeles, VARIG must pay for that right. LAWA disclosed that as of the Petition Date, VARIG owed it $3,198,783 for estimated rent, passenger facility charges, landing fees and other charges. LAWA has filed a $345,245 claim with the Brazilian Court in October 2005. The Port Authority of New York and New Jersey operates the John F. Kennedy International Airport, LaGuardia Airport, Newark Liberty International Airport and Teterboro Airport. VARIG has not paid $129,585 in landing fees for February 2006 at JFK Airport. The Port Authority asked Judge Drain to direct the Foreign Debtors to pay its debt, and allow the preliminary injunction to expire. Foreign Representative's Response On behalf of Eduardo Zerwes, the Foreign Representative of VARIG, S.A., and its debtor-affiliates, Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, argued that recent developments in the Foreign Debtors' cases warrant extension of the preliminary injunction. Mr. Antonoff said the Brazilian Court has scheduled a meeting of the General Assembly of Creditors on May 2, 2006. The purpose of the meeting is to obtain creditor approval of a proposal made by Varig Logistica S.A. to invest $450,000,000 in the Foreign Debtors. If approved by creditors and the Brazilian Court, the Proposal will require certain modifications to the Recovery Plan and will enable the Foreign Debtors to successfully emerge from the Foreign Proceedings as a going concern, Mr. Antonoff explained. Mr. Antonoff also clarified that the existing Preliminary Injunction does not enjoin creditors from enforcing their rights with respect to defaults or obligations first arising after the Petition Date and not cured on or before January 13, 2006. Moreover, nothing in the Preliminary Injunction Order nor any of the Orders entered by the Brazilian Court require the Foreign Debtors to voluntarily return aircraft pursuant to the Contingency Plan for the Orderly Return of Aircraft upon a default under a lease. Rather, Mr. Antonoff said, the Contingency Plan was developed to be implemented in the event that the Foreign Debtors are required to liquidate. Contrary to suggestions that the Foreign Proceedings have failed, no liquidation has been ordered by the Brazilian Court. Based on the VarigLog Proposal, the Foreign Representative argued that implementation of the VARIG Contingency Plan now is unwarranted and would frustrate the Foreign Debtors' successful emergence from the Foreign Proceedings to the detriment of all creditors. Proposed Preliminary Injunction Order Judge Drain directs the counsel for the Foreign Representative to circulate to those aircraft and engine lessors that have filed objections to continuation of the Preliminary Injunction or that otherwise actively participated in the Preliminary Injunction Hearing, a proposed form of Preliminary Injunction Order with a view to considering any comments the parties may have. 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. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) VILLAJE DEL RIO: Case Summary & 14 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Villaje Del Rio, Ltd. 1121 Broadway San Antonio, Texas 78215 Bankruptcy Case No.: 06-50797 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: May 1, 2006 Court: Western District of Texas (San Antonio) Judge: Leif M. Clark Debtor's Counsel: Michael J. O'Connor, Esq. 322 West Woodlawn San Antonio, Texas 78212 Tel: (210) 735-2233 Fax: (210) 736-9025 Estimated Assets: Less than $50,000 Estimated Debts: $10 Million to $50 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Colina Del Rio, LP Lien Claimant $20,267,340 c/o Phillip A. Kolvson 13750 San Pedro, Suite 600 San Antonio, TX 78232 Vollmer Electric Lien Claim $0 4901 McCullough San Antonio, TX 78212 The Hartford Bond $0 Hartford Fidelity & Bonding 690 Asylum Avenue Hartford, CT 06115 Thad Ziegler Glass, Ltd. Lien Claim $0 Supreme Plumbing, Inc. Lien Claim $0 Southwest Mechanical Services Lien Claim $0 Phillip A. Kolvson Agent for Las Colinas $0 Elite Masonry, Inc. Lien Claim $0 Drash Consulting Engineering Lien Claim $0 Consolidated Electric Mechanics Lien $0 CFS Forming Structures Lien Claim $0 Baker Drywall Lien Claim $0 Andres Construction Lien Claim $0 Services, Inc. Aluminum Window & Glass Lien Claim $0 * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re Lifetime Roof Systems, Inc. Bankr. D. Kans. Case No. 06-20463 Chapter 11 Petition filed April 11, 2006 See http://bankrupt.com/misc/ksb06-20463.pdf In re Amys, Inc. Bankr. D. Ore. Case No. 06-30904 Chapter 11 Petition filed April 12, 2006 See http://bankrupt.com/misc/orb06-30904.pdf In Bluffview 02-01, L.P. Bankr. E.D. Tex. Case No. 06-20034 Chapter 11 Petition filed April 12, 2006 See http://bankrupt.com/misc/txeb06-20034.pdf In re Dream Team Oral Surgery, Inc. Bankr. M.D. Tenn. Case No. 06-01719 Chapter 11 Petition filed April 12, 2006 See http://bankrupt.com/misc/tnmb06-01719.pdf In re Integrated Fuel Cell Technologies, Inc. Bankr. D. Del. Case No. 06-10382 Chapter 11 Petition filed April 12, 2006 See http://bankrupt.com/misc/deb06-10382.pdf In re East Valley Youth & Family Support Centers Bankr. D. Ariz. Case No. 06-01024 Chapter 11 Petition filed April 12, 2006 See http://bankrupt.com/misc/azb06-01024.pdf In re Mack Van and Kim C. Huynh Bankr. W.D. La. Case No. 06-50218 Chapter Petition filed April 12, 2006 See http://bankrupt.com/misc/lawb06-50218.pdf In re Marshall's Security Services, Corp. Bankr. D. P.R. Case No. 06-01098 Chapter 11 Petition filed April 12, 2006 See http://bankrupt.com/misc/prb06-01098.pdf In re R & L Group LLC Bankr. E.D. Mich. Case No. 06-44591 Chapter 11 Petition filed April 12, 2006 See http://bankrupt.com/misc/mieb06-44591.pdf In re Sanjeev and Rajeev, Inc. Bankr. S.D. Ga. Case No. 06-60141 Chapter 11 Petition filed April 12, 2006 See http://bankrupt.com/misc/gasb06-60141.pdf In re Terra At Palm Beach Gardens, LLC Bankr. S.D. Fla. Case No. 06-11350 Chapter 11 Petition filed April 12, 2006 See http://bankrupt.com/misc/flsb06-11350.pdf In re A&M Pizza, L.L.C. Bankr. E.D. Va. Case No. 06-70497 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/vaeb06-70497.pdf In re Alan R. and Penelope M. McWain Bankr. W.D. Wash. Case No. 06-40752 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/wawb06-40752.pdf In re Coral Bay Paving, LLC Bankr. D. V.I. Case No. 06-30002 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/vib06-30002.pdf In re Coral Bay Concrete, LLC Bankr. D. V.I. Case No. 06-30003 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/vib06-30003.pdf In re Dental Arts Laboratory & Supply Co., Inc. Bankr. E.D. Ky. Case No. 06-20243 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/kyeb06-20243.pdf In re Huckleberry I, Ltd Bankr. E.D. Mich. Case No. 06-44652 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/mieb06-44652.pdf In re Jack Bernard Soodhalter Bankr. M.D. Tenn. Case No. 06-01784 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/tnmb06-01784.pdf In re Michael Richard Cook Bankr. W.D. Wash. Case No. 06-40749 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/wawb06-40749.pdf In re QUQ Trust Bankr. S.D. Fla. Case No. 06-11366 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/flsb06-11366.pdf In re Stones River Publishing Co., Inc. Bankr. M.D. Tenn. Case No. 06-01783 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/tnmb06-01783.pdf In re Tropical Home Health Agency, Inc. Bankr. S.D. Tex. Case No. 06-10240 Chapter 11 Petition filed April 13, 2006 See http://bankrupt.com/misc/txsb06-10240.pdf In re Central Illinois Partners, LLC Bankr. C.D. Ill. Case No. 06-70409 Chapter 11 Petition filed April 14, 2006 See http://bankrupt.com/misc/ilcb06-70409.pdf In re Crane and Service Hoist, LLC Bankr. M.D. Fla. Case No. 06-01656 Chapter 11 Petition filed April 14, 2006 See http://bankrupt.com/misc/flmb06-01656.pdf In re LaVita Corporation Bankr. D. Mass. Case No. 06-11021 Chapter 11 Petition filed April 14, 2006 See http://bankrupt.com/misc/mab06-11021.pdf In re LTC, Inc. Bankr. S.D.N.Y. Case No. 06-35324 Chapter 11 Petition filed April 14, 2006 See http://bankrupt.com/misc/nysb06-35324.pdf In re Lundallum Inc Bankr. D. Minn. Case No. 06-40611 Chapter 11 Petition filed April 14, 2006 See http://bankrupt.com/misc/mnb06-40611.pdf In re Michael O. Aufdemberg Bankr. C.D. Calif. Case No. 06-10530 Chapter 11 Petition filed April 14, 2006 See http://bankrupt.com/misc/cacb06-10530.pdf In re Palou Periodontal, Inc. Bankr. E.D. Tex. Case No. 06-40507 Chapter 11 petition filed April 14, 2006 See http://bankrupt.com/misc/txeb06-40507.pdf In re The Plastics Group, Inc. Bankr. N.D. Ga. Case No. 06-64242 Chapter 11 petition filed April 14, 2006 See http://bankrupt.com/misc/ganb06-64242.pdf In re Sangmun Kim Bankr. C.D. Calif. Case No. 06-10531 Chapter 11 Petition filed April 14, 2006 See http://bankrupt.com/misc/cacb06-10531.pdf In re Neely-Price Plumbing, Inc. Bankr. N.D. Tex. Case No. 06-31568 Chapter 11 Petition filed April 14, 2006 See http://bankrupt.com/misc/txnb06-31568.pdf In re Orange County Customs Inc. Bankr. C.D. Calif. Case No. 06-10535 Chapter 11 Petition filed April 17, 2006 See http://bankrupt.com/misc/cacb06-10535.pdf In re Michael L. Covillo & Associates, Inc. Bankr. D. Colo. Case No. 06-11869 Chapter 11 Petition filed April 17, 2006 See http://bankrupt.com/misc/cob06-11869.pdf In re Dahar Realty, Inc. Bankr. D. Mass. Case No. 06-40563 Chapter 11 Petition filed April 17, 2006 See http://bankrupt.com/misc/mab06-40563.pdf In re Dahar Service, Inc. Bankr. D. Mass. Case No. 06-40564 Chapter 11 Petition filed April 17, 2006 See http://bankrupt.com/misc/mab06-40564.pdf In re Ernest William Sangala Yap Bankr. E.D. Mich. Case No. 06-44742 Chapter 11 Petition filed April 17, 2006 See http://bankrupt.com/misc/mieb06-44742.pdf In re Metcom, Inc. Bankr. E.D.N.Y. Case No. 06-70816 Chapter 11 petition filed April 17, 2006 See http://bankrupt.com/misc/nyeb06-70816.pdf In re Tobacco Road Associates LP Bankr. E.D. Penn. Case No. 06-20470 Chapter 11 Petition filed April 17, 2006 See http://bankrupt.com/misc/paeb06-20470.pdf In re Liberty Vending Services, Inc. Bankr. S.D. Tex. Case No. 06-31561 Chapter 11 Petition filed April 17, 2006 See http://bankrupt.com/misc/txsb06-31561.pdf In re IM Einstein, Inc. Bankr. S.D. Tex. Case No. 06-31581 Chapter 11 Petition filed April 18, 2006 See http://bankrupt.com/misc/txsb06-31581.pdf In re New Azusa Ministries, Inc. Bankr. W.D. Tenn Case No. 06-22711 Chapter 11 Petition filed April 18, 2006 See http://bankrupt.com/misc/tnwb06-22711.pdf ********* 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, Joel Anthony Lopez, 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 ***