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/raid1/www/Hosts/bankrupt/TCR_Public/060515.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, May 15, 2006, Vol. 10, No. 114 Headlines ACCESS WORLDWIDE: Annual Stockholders' Meeting Scheduled on May 24 AFFILIATED COMPUTER: Stock Options Probe Delays Quarterly Report AGRIBIOTECH INC: Court Extends Creditor Trust Agreement's Term ALEKSANDRA ROVCANIN: Voluntary Chapter 11 Case Summary ALON USA: Acquisitions Prompt S&P to Lift Ratings from B to B+ ASARCO LLC: Files Adversary Proceeding Against Gerald Metals ASARCO LLC: Wants Judgment Given Against TMD Acquisition ASARCO LLC: Road & Hecla Resigns from Panel; Gold Fields Appointed BANC OF AMERICA: Fitch Holds BB Rating on Class L Certificates BRILLIANT DIGITAL: Vasquez & Company Raises Substantial Doubt CABLEVISION SYSTEMS: Annual Stockholders' Meeting Set for Thursday CALPINE CORP: Court Okays Repayment of $646 Mil. First Lien Debt CAPITAL BEVERAGE: Sherb & Co. Raises Going Concern Doubt CARDINAL COMMUNICATIONS: AJ. Robbins Raises Going Concern Doubt CELESTICA INC: Posts $17.4 Million First Quarter Net Loss CITIZENS COMMS: Earns $50 Million in Quarter Ended March 31 CITY OF GARDENA: Financing Cues S&P to Lift Certificates' Ratings CONGOLEUM CORP: Court Approves Settlement Agreement with Harper CONGOLEUM CORP: Has Until Aug. 14 to Make Lease-Related Decisions COPPER TIRE: Moody's Cuts Rating on Senior Unsecured Notes to Ba3 COVAD COMMS: Annual Stockholders' Meeting Set for June 15 COVALENCE SPECIALTY: Moody's Rates $300 Million Term Loan at Ba3 COVALENCE SPECIALTY: S&P Rates Proposed $300 Million Loan at B+ CREDIT SUISSE: Fitch Ups Rating on Class H Certificates to BB+ CRESCENT REAL: Posts $5 Million Net Loss in Quarter Ended March 31 CRICKET COMMS: S&P Rates Proposed $1.1 Bil. Sr. Secured Loan at B CUMULUS MEDIA: Moody's Reviews Ba2 Ratings and May Downgrade CURATIVE HEALTH: Hires Stevens & Lee as Conflicts Counsel CYC EXPRESS: Case Summary & 18 Largest Unsecured Creditors DANA CORP: Board of Directors Holds Grants in Dana Deferred Plan DANA CORP: Agrees with Underwriters to Continue Ohio Action DANA CORP: Five Entities Own Over 5% of Common Stock DEAN FOODS: S&P Assigns BB- Rating to Proposed $300 Million Notes DELTA AIR: Posts $2.1 Billion Net Loss in First Quarter 2006 DIALOG GROUP: Berenfeld Spritzer Raises Going Concern Doubt DOBSON CELLULAR: Moody's Rates New Senior Secured Notes at B1 DOBSON CELLULAR: S&P Rates Proposed $250 Mil. Sr. Sec. Notes at B EDISON MISSION: S&P Affirms B+ Rating on 190MM of Sr. Unsec. Bonds EOIN KILCULLEN: Voluntary Chapter 11 Case Summary FALCONBRIDGE LTD: Receives Inco's Increased Purchase Offer FIRSTLINE CORP: U.S. Trustee Names Two More Creditors to Committee FIRSTLINE CORP: Committee Hires Kilpatrick Stockton as Counsel FORD MOTOR: W.C. Ford Retains Influence After Shareholders Meet FRIENDLYWAY C0RP: Balance Sheet Upside-Down by $3.1M at Jan. 31 FTS GROUP: Auditor Raises Going Concern Doubt GATEWAY DISTRIBUTORS: Auditor Raises Going Concern Doubt GREEN TREE: Fitch Cuts Ratings on Two Class Certificates to C GREEN TREE: S&P Puts Default Rating on Two Transaction Classes HARD ROCK: Agrees to Sell Assets to Morgans Hotel for $770 Million HELLER FINANCIAL: Fitch Ups Ratings on $7.6 Million Certs. to BB+ HEMOSOL CORP: Has Until May 23 to File Proposals to Creditors HOMER CITY: S&P Affirms $875MM Bond's Rating With Stable Outlook INCO LTD: Increases Offer for Falconbridge's Assets INEX PHARMA: Balance Sheet Upside-Down by C$21.4 Mil. at Dec. 31 INLAND FIBER: Eisner LLP Raises Going Concern Doubt J.J. MOORE: Case Summary & 20 Largest Unsecured Creditors J.P. MORGAN: Fitch Holds BB+ Rating on $16.3 Mil. Class G Certs. JACK NAPOR: Voluntary Chapter 11 Case Summary KAISER ALUMINUM: District Court Affirms Confirmation Order KAISER ALUMINUM: Earns $38.4 Million in Quarter Ended March 31 KUSHNER-LOCKE: Wants to Use Bank Lenders' Cash Collateral LEGENDS GAMING: S&P Puts B- Rating on Proposed $65 Million Loan LIBERTY FIBERS: Ch. 7 Trustee Selling Rayon Building for $200,000 MEMPHIS HEALTH: Moody's Cuts Rating on $8.32 Million Bonds to B2 MIDWEST GENERATION: S&P Affirms B+ Corp. Credit & Sr. Sec. Ratings MISSION ENERGY: S&P Lifts Ratings to B- & Says Outlook is Positive MORGAN STANLEY: Fitch Holds BB Rating on $10.6MM Class F. Certs. MORGAN STANLEY: Moody's Holds Low-B Rating on Six Cert. Classes MORGAN STANLEY: S&P Junks Rating on Class G Certificates MORTGAGE CAPITAL: Fitch Holds Rating on $6.6 Mil. Certs. at B+ NORTHWEST AIRLINES: Posts $1.1 Billion Net Loss in First Quarter NRG VICTORY: Chapter 15 Petition Summary ONEIDA LTD: Court Okays Credit Suisse as Financial Advisor ONEIDA LTD: Wants to Ink Settlement with Committee and PBCG OXIS INT'L: Posts $700,000 Net Loss in 2006 First Quarter PATHMARK STORES: Incurs $40.1 Million Net Loss in Fiscal 2005 PJ MILLIGAN: Voluntary Chapter 11 Case Summary RADVIEW SOFTWARE: Dec. 31 Balance Sheet Upside-Down by $2.3 Mil. RANGE RESOURCES: Agrees to Acquire Stroud Energy for $450 Million RAVEN MOON: Auditor Raises Going Concern Doubt REDDY ICE: S&P Affirms B+ Rating & Revises Outlook to Stable REPUBLIC STORAGE: Completes $20 Million Asset Sale to Chrysalis REVLON INC: Annual Stockholders' Meeting Scheduled on June 2 RICHARD SHIELDS: Case Summary & 20 Largest Unsecured Creditors RUSSELL ROSSERO: Voluntary Chapter 11 Case Summary SATELINX INT'L: Gets Interest Purchase Deal from CQIP Investments SILICON GRAPHICS: Taps Weil Gotshal as Bankruptcy Counsel SILICON GRAPHICS: Delays Filing of Form 10-Q for Fiscal 3rd Qtr. STOCKERYALE INC: Reports $900,000 Operating Loss in First Quarter SMARTVIDEO TECHNOLOGIES: Sherb & Co. Raises Going Concern Doubt SOS REALTY: Voluntary Chapter 11 Case Summary TEXAS STATE AFFORDABLE: S&P Junks Rating on $2.9 Million Bonds THE WILLIAMS COS: S&P Raises $500MM Certificates' Ratings to BB- UNIFI INC: S&P Junks Rating on Proposed $225 Million Senior Notes UNITY VIRGINIA: Voluntary Chapter 11 Case Summary VITESSE SEMICONDUCTOR: Restating Financials Due to Options Probe WINN-DIXIE: Court Okays Rejection of Gem Cedar Lease for Store 997 WINN-DIXIE: Can Ink Commercial Surety Pact With RLI Insurance WINN-DIXIE: Broward County Wants Taxes Paid on Pompano Facility WORLD WIDE: U.S. Trustee Wants Ch. 11 Case Converted to Ch. 7 WORLD WIDE: Largest Unsec. Creditor Wants Ch. 11 Trustee Appointed * BOND PRICING: For the week of May 8 - May 12, 2006 ********* ACCESS WORLDWIDE: Annual Stockholders' Meeting Scheduled on May 24 ------------------------------------------------------------------ Access Worldwide Communications, Inc., will hold its annual stockholders meeting at 11:00 a.m. on May 24, 2006, at its executive offices at Suite 300, 4950 Communication Avenue, in Boca Raton, Florida. Access Worldwide's shareholders will be asked to: (1) elect seven directors, each to serve a one year term; (2) ratify the selection of BDO Seidman, LLP, as the independent registered public accounting firm for the fiscal year ending Dec. 31, 2006; and (3) transact other business as may properly come before the meeting. The Company's Board of Directors fixed the close of business on March 31, 2006, as the record date for the determination of stockholders entitled to notice of, and to vote at, the annual meeting. A full-text copy of the proxy statement is available for free at http://ResearchArchives.com/t/s?905 Going Concern Doubt BDO Seidman, LLP, in West Palm Beach, Florida, raised substantial doubt about Access Worldwide Communications, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditors pointed to the Company's recurring losses from operations, negative cash flows, and accumulated deficit. Access Worldwide Communications, Inc. (OTCBB: AWWC) -- http://www.accessww.com/-- is an established marketing company that provides a variety of sales, communication and medical education services. Its spectrum of services includes medical meetings management, medical publishing, editorial support, clinical trial recruitment, patient compliance, multilingual teleservices, product stocking and database management, among others. Headquartered in Boca Raton, Florida, Access Worldwide has about 1,000 employees in offices throughout the United States and the Philippines. At Dec. 31, 2005, Access Worldwide Communications, Inc.'s balance sheet showed a $5,060,322 stockholders' deficit compared to a $3,865,118 deficit at Dec. 31, 2004. AFFILIATED COMPUTER: Stock Options Probe Delays Quarterly Report ---------------------------------------------------------------- The Securities and Exchange Commission has begun an informal investigation into stock option grants made by Affiliated Computer Services, Inc., from October 1998 through March 2005. In response to the informal SEC investigation, the Company began an internal investigation, through its regular outside counsel, into its historical stock option practices, including a review of its underlying option grant documentation and procedures. Due to the volume of data to be reviewed, the Company is unable to complete and timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2006, without unreasonable effort or expense. The Company, historically, grants stock options with effective dates prior to the date when they were granted. In consultation with its independent public accounting firm, the Company has preliminarily determined that it will record a cumulative prior period non-cash stock-based compensation expense charge in an amount that is not presently anticipated to exceed approximately $40 million. This charge relates to certain of the option grants covering approximately 24 million common shares (after giving effect to forfeitures of option grants covering approximately 7 million common shares) subsequent to the Company's initial public offering in 1994 and through Dec. 31, 2005. During the same period, the Company recorded a cumulative pre-tax profit of approximately $3.5 billion. At this time, the Company is unable to determine the final amount of the adjustment, whether the adjustment will require a restatement of prior period financial statements or will be reflected in its third quarter 2006 result of operations. About Affiliated Computer Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to commercial and government clients. * * * As reported in the Troubled Company Reporter on Feb. 16, 2006, Moody's Investors Service downgraded Affiliated Computer's existing notes rating to Ba2 from Baa3 and assigned a Ba2 corporate family rating and Ba2 ratings to the company's $5 billion bank credit facilities. In addition, Moody's confirmed the Baa3 senior unsecured bank credit facility rating and will withdraw the rating upon the consummation of the proposed financing package. The rating action concludes a review for possible downgrade initiated on Jan. 26, 2006, following the company's announced plan to purchase 55.5 million shares of Class A common stock for approximately $3.5 billion through a Dutch Auction tender offer. Proceeds of the proposed term loan will be used to fund the tender offer, and to refinance approximately $322 million drawn under the company's existing credit facility. As reported in the Troubled Company Reporter on Feb. 16, 2006, Standard & Poor's Ratings Services held its ratings for Affiliated Computer Services Inc. on CreditWatch, where they were placed with negative implications, on Jan. 27, 2006. Standard & Poor's said it would lower its corporate credit rating on the company to 'BB-' from 'BB+', if ACS materially completes the repurchase of $3.5 billion of the company's shares. The outlook will be stable. AGRIBIOTECH INC: Court Extends Creditor Trust Agreement's Term -------------------------------------------------------------- Anthony H.N. Schnelling, Trustee of the Creditor Trust created pursuant to AgriBioTech Inc. and its debtor-affiliates' confirmed Reorganization Plan, obtained permission from the U.S. Bankruptcy Court for the District of Nevada to extend the term of the Creditor Trust Agreement through Dec. 31, 2007. The Creditor Trust was established to: a) liquidate the assets of the Debtors' estates; b) pursue, prosecute, litigate, resolve, and liquidate all litigation claims; c) distribute Trust Assets to the Beneficiaries (holders of allowed claims) of the Creditor Trust; d) pursue, litigate, and resolve objections to claims and otherwise implement the terms and provisions of the Plan; and e) implement any other applicable order entered by the Court. The Creditor Trust was created for a finite period of time and, by its own terms, expires on the earlier of: a) the distribution of the last of the Trust Assets; or b) five years after the date of the creation of the Trust. However, in order to fulfill the purposes of the Creditor Trust, the Trust Agreement provides that one or more extensions may be approved by the Court within six months of the start of each extended term. Although the Trustee has made five distributions to creditors during the term of the Creditor Trust, including a recent distribution of $11.4 million on Aug. 17, 2005, and $500,000 on Jan. 31, 2006, all assets of the Creditor Trust have not been distributed when the Creditor Trust expired on April 22, 2006. Mr. Schnelling says an extension of the Creditor Trust term is necessary to fulfill the purposes for which the Trust was created. He says these concerns must be addressed or resolved in order to terminate the Creditor Trust and close the Debtors' bankruptcy cases: a) the resolution of negotiations on the claim of the Wyoming Department and Employment, Workers' Safety and Compensation Division against the Creditor Trust for worker compensation premiums, interest and penalties for the years 2000 through 2005 in excess of $14,000; b) the culmination of the services and expenses of the ADP Payroll that makes distributions to former employees of the Debtors; c) the preparation and payment of 2005 and 2006 Tax Returns, which the Creditor Trust will be unable to determine until the Internal Revenue Service issues its tax forms; d) the resolution of the Agway subpoena and destruction of ABT records; e) the resolution of undelivered and uncashed distribution checks; f) the costs of preparing and finalizing a final distribution; and g) the payment of ordinary Creditor Trust expenses for 2006, relating to the final accounting report and the close of the Debtors' bankruptcy cases. About AgriBioTech Inc. Headquartered in Henderson, Nevada, AgriBioTech Inc., was a leading turf grass seed and forage seed supplier before filing for bankruptcy protection in January 2000 (Bankr. D. Nev. Case No. 00-10533), in one of the largest agricultural bankruptcies in U.S. history. The Court approved ABT's reorganization plan in 2001, appointing nationally recognized turnaround expert Anthony Schnelling as Creditor Trustee to pursue claims for the benefit of creditors. ALEKSANDRA ROVCANIN: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Aleksandra Ostojin-Rovcanin 10 Hollow Brooke Court Wayne, New Jersey 07470 Bankruptcy Case No.: 06-14136 Chapter 11 Petition Date: May 11, 2006 Court: District of New Jersey (Newark) Debtor's Counsel: Stuart D. Gavzy, Esq. 163 East Main Street, Suite B Little Falls, New Jersey 07424 Tel: (973) 256-6080 Fax: (973) 256-3665 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. ALON USA: Acquisitions Prompt S&P to Lift Ratings from B to B+ -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Alon USA Energy Inc. to 'B+' from 'B' and removed the rating from CreditWatch with positive implications. The rating action follows a review of its acquisitions of Paramount Petroleum Corp. and Edgington Oil Co. At the same time, Standard & Poor's assigned its 'BB-' senior secured rating and its '1' recovery rating to the company's proposed $450 million first-lien senior secured credit facilities, which will be used to fund the acquisitions. Pro forma the proposed offering Alon is expected to have around $480 million of debt outstanding. The rating was originally placed on CreditWatch May 2, 2006. The upgrade reflects the improved asset and market diversification provided by the acquisition of Paramount Petroleum and Edgington Oil. "The addition of Paramount and Edgington will more than double Alon's throughput capacity to 160,000 barrels per day and provide an entry into the typically high margin California market," said Standard & Poor's credit analyst Paul Harvey. "In addition, Alon should have solid financial results to support its elevated debt level," said Mr. Harvey. Standard & Poor's expects Alon to generate strong free cash flow in the near term and use these funds to repay borrowings under its term loan. The first-lien facilities are rated one notch higher than the corporate credit rating. This notching and the '1' recovery rating indicate that lenders can expect full recovery of principal in the event of payment default. All ratings are based on preliminary offering statements and are subject to review upon final documentation. ASARCO LLC: Files Adversary Proceeding Against Gerald Metals ------------------------------------------------------------ ASARCO LLC asks the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to enter a summary judgment in its favor and declare that it is entitled to: (a) payment of $7,166,365, as the principal amount due under the Contracts with Gerald Metals, Inc.; (b) judgment for accrued and unpaid interest on the debt before maturity; (c) judgment for interest on the matured, unpaid debt at the highest legal or contractual rate allowed by law; (d) judgment for its reasonable attorneys' fees and costs of court; (e) be awarded all applicable damages, both actual and punitive, to the fullest extent available under the law. ASARCO LLC and Gerald Metals, Inc., have engaged in several contractual commercial transactions for several years for the purchase, toll, and exchange of copper materials. As of May 1, 2006, Gerald owes ASARCO $7,166,365, under various agreements, James R. Prince, Esq., at Baker Botts LLP, in Dallas, Texas. The Gerald Debt is comprised of: -- more than $5,000,000, under a Copper Reverts Purchase Agreement No. C24043 dated March 5, 2004; -- approximately $1,500,000, withheld by Gerald under an October 2005 Oral Agreement and relates to Copper Concentrates Agreement No. C25007; -- $373,000, under seven Exchange Agreements, wherein one form of cooper is exchanged for another at a set price; -- $179,586, under Copper Concentrates Agreement No. C2404 dated November 22, 2004; and -- $24,280, under Concentrate Contracts Nos. C24021, C24025, C25004 and C25025. In October 2005, ASARCO sought the Court's approval of a DIP Financing with The CIT Group/Business Credit, Inc, as lenders. As a condition for ASARCO to obtain its DIP financing, CIT insisted that ASARCO's toll contract counterparties, including Gerald, release any liens they had on ASARCO's inventory. As consideration for release of its lien, Gerald demanded that ASARCO reject these three contracts -- the Subject Agreements: 1. Toll Agreement No. C25004, 2. Purchase Agreement No. 08-2537-05, and 3. Exchange Agreement No. 08-3539-05XS-NB. In October 2005, ASARCO and Gerald also reached an oral agreement, which generally provides that: (a) Gerald will withhold $1,500,000, as a deposit from payment on a receivable then due and owing on Invoice No. M-10502-R related to Contract No. C25007. The deposit will be used to set off amounts that ASARCO might owe Gerald on completion of the finalization process; (b) Gerald will pay ASARCO the undisputed balance on the receivable then due and owing; (c) ASARCO will file a motion to reject the three Subject Agreements; (d) ASARCO will not challenge Gerald's right to file rejection damages claims against its estate; (e) ASARCO will retain its right to challenge the calculation and substantiation of any rejection damages claim and that Gerald will be limited to actual out-of-pocket damages resulting from rejection; and (f) on completion of the finalization process, whichever party owed the other would remit full payment upon finalization. At ASARCO's request, the Court approved the rejection of the Subject Agreements. However, Gerald has failed and refused to pay the Gerald Debt, Mr. Prince tells the Court. Accordingly, ASARCO asserts six causes of action against Gerald: 1. Breach of Prepetition Contracts ASARCO performed all of its obligations under the prepetition Gerald Contracts. In return, Gerald is obligated to pay ASARCO all of the final invoices. However, Gerald failed to pay ASARCO the amounts due and owing under the Gerald Contracts. Thus, Gerald breached the prepetition contracts. As a consequence, ASARCO has suffered harm and is entitled to damages, Mr. Prince contends. 2. Breach of Postpetition Contracts Under the October 2005 Oral Agreement, Gerald was obligated to pay ASARCO all final invoices, and release the $1,500,000 deposit when the finalization process resulted in Gerald owing ASARCO. Gerald failed to pay ASARCO the amounts due and owing under the October 2005 Agreement. Thus, Gerald breached the October 2005 Agreement. As a consequence, ASARCO suffered harm, and is entitled to damages. 3. Fraud by Misrepresentation Gerald's promise to pay any amounts owing on outstanding invoices on completion of the finalization process were material and false misrepresentations, Mr. Prince argues. ASARCO relied on Gerald's promise to pay the amounts. ASARCO suffered harm as a result of its reliance on Gerald's misrepresentations. Thus, ASARCO seeks actual and exemplary damages. 4. Turnover of Estate Property As a result of Gerald's breach of its duties, Gerald owes a debt that is property of ASARCO's estate. Under Section 542(b) of the Bankruptcy Code, Gerald is required to deliver to ASARCO the amount of the Gerald Debt. 5. Conversion Gerald has converted property of ASARCO's estate inasmuch as the Gerald Debt is property of ASARCO's estate, Mr. Prince maintains. Gerald has failed and refused to surrender the $1,500,000 deposit it held under the October 2005 Agreement. Thus, ASARCO is entitled to at least $1,500,000 damages, the full amount converted by Gerald, and punitive damages to the fullest extent allowed by applicable law. 6. Attorneys' Fees and Expenses According to Mr. Prince, ASARCO made efforts to compel Gerald to make all the necessary payments it owes to ASARCO. However, Gerald still has not paid all of its debts to ASARCO. Gerald's default has made it necessary for ASARCO to employ legal counsel to file a complaint to recover the Gerald Debt. Thus, ASARCO is entitled to its reasonable and necessary costs and expenses, including attorneys' fees, Mr. Prince says. Gerald's Claim In January 2006, Gerald filed Claim No. 8351 against ASARCO. Gerald alleged that it has a secured claim for $13,904,158, as a result of ASARCO's rejection of some of its agreements in October 2005. ASARCO objects to the Gerald Claim for these reasons: (a) The Claim is in excess of the amounts reflected in the Debtor's books and records; (b) The claim does not contain adequate information or documentation supporting the claimed amounts; (c) Gerald is not entitled to interest or legal fees and expenses; (d) To the extent Gerald has a claim for rejection damages, that claim is not a valid secured claim as Gerald has asserted; (e) Gerald is unable to carry the burden of establishing its right to setoff the $7,154,312 that Gerald admits it owes ASARCO or any other amount that it owes ASARCO; (f) When ASARCO's labor unions went on strike in July 2005, ASARCO invoked the force majeure clauses under the Subject Agreements so to the extent Gerald has claim for rejection damages, ASARCO is not liable for any damages; and (g) To the extent Gerald has a claim for rejection damages, Gerald's failure to mitigate those damages bars its recovery. In the event Claim No. 8351 is not disallowed and expunged, ASARCO reserves its right to object to the Claim on any other grounds at a later date. Parties Stipulate The Debtors have advised Gerald Metals, Inc., that they intend to commence an adversary proceeding against Gerald to: (a) seek turnover of funds constituting the debt owed by Gerald to ASARCO; (b) object to Gerald Metal's claim; and (c) seek consolidation of Lift Stay Motion and any filed responses to the Motion. In a Court-approved stipulation, Gerald Metals, the Debtors and Mitsui Company (U.S.A.), Inc., agree that if the Debtors file the Adversary Proceeding and Claim Objection, then (i) the Lift Stay Motion, (ii) Mitsui's objection, (iii) the Debtors' Claim Objection, and (iv) the Adversary Proceeding will be consolidated and heard concurrently by the Court. The Court clarifies that Gerald Metal's retention of its debt owed to ASARCO pending the resolution of the issues will not be deemed a violation of the automatic stay. The automatic stay will remain in full force with respect to Gerald Metal's debt. About ASARCO LLC Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Wants Judgment Given Against TMD Acquisition -------------------------------------------------------- ASARCO LLC asks the United States Bankruptcy Court for the Southern District of Texas in Corpus Christi to enter a judgment in its favor on all claims and causes of action TMD Acquisition Corporation has asserted. ASARCO LLC admits that it received $250,000, from TMD Acquisition Corporation, but denies that the transfer was made consistent with the Asset Purchase Agreement. ASARCO relates that it intended to apply the Transferred Funds towards the Purchase Price to be paid to it at the Closing Date. Tony M. Davis, Esq., at Baker Botts LLP, in Dallas, Texas, tells the Court that ASARCO placed the Transferred Funds into its general operating account and did not place them in escrow. Mr. Davis notes that the parties neither entered into an Escrow Agreement nor appointed an Escrow Agent. ASARCO retained the Transferred Funds after the termination of the APA and did not return the Transferred Funds to TMD before the bankruptcy filing. Mr. Davis argues that TMD's Complaint failed to state a claim on which relief may be granted and should be dismissed pursuant to Rule 7012(b) of the Federal Rules of Bankruptcy Procedure. TMD also failed to serve the Complaint consistently with the requirements of Rule 7004 of the Federal Rules of Bankruptcy Procedure, Mr. Davis maintains. Mr. Davis argues that TMD's claims are barred, in whole or in part, by the doctrines of waiver and estoppel and because TMD failed to satisfy conditions precedent to ASARCO's obligations under the APA. TMD Seeks Summary Judgment TMD asks the Court to grant it a declaratory judgment as a matter of law that the APA was wrongfully terminated and remains executory. TMD maintains that it is entitled to a summary judgment because the APA specifically provides that the Transferred Fund be placed in an escrow account and the funds are not to be paid to ASARCO until the Closing Date. Michael P. Ridulfo, Esq., at Anderson, Lehrman, Barre & Maraist, LLP, in Corpus Christi, points out that it is undisputed that TMD paid the $250,000, ASARCO received the money, and ASARCO failed to place the funds in an escrow account as required by the APA. The sale contemplated in the APA did not close but that ASARCO nonetheless retained the $250,000. Mr. Ridulfo contends that ASARCO breached the APA by failing to place the Transferred Fund in escrow. Moreover, ASARCO was precluded from terminating the APA because it was already in breach of the escrow requirement. TMD also asks the Court to award it of its attorneys' fees. ASARCO Seeks Protective Order TMD served a notice demanding that ASARCO present a corporate representative for deposition. The Notice of Deposition requires the representative to appear for deposition before TMD's officers in Corpus Christi, Texas. However, TMD's counsel did not consult with ASARCO's counsel to confirm that a corporate representative would be available for deposition, Robert C. Wilmoth, Esq., at Baker Botts LLP, in Dallas, Texas, tells the Court. ASARCO has designated Dale C. Dixon as its corporate representative. TMD agreed to schedule the deposition, provided that the deposition be held in Corpus Christi, Texas, and ASARCO produces certain documents. Mr. Dixon lives in the Tucson, Arizona, area. Mr. Wilmoth says requiring Mr. Dixon to travel to Corpus Christi would impose an undue burden on Mr. Dixon. As for the document requests, ASARCO will produce the bank statements. With respect to the requested insurance policies, ASARCO has already complied with its obligations under Rule 26(a) of the Federal Rules of Civil Procedure. Mr. Wilmoth argues that TMD's request for directors' and officers' policies exceeds the scope of discovery because TMD has asserted no claims against any of ASARCO's officers or directors. Accordingly, ASARCO asks the Court to enter a protective order: (a) quashing TMD's Notice of Deposition; (b) requiring the deposition to be held around the Tucson, Arizona area; and (c) enjoining TMD from seeking discovery relating to any insurance policies covering ASARCO's directors and officers. ASARCO Seeks Summary Judgment ASARCO asserts it is entitled to summary judgment because the contract on which TMB based its claims was not executory on the Petition Date. Since the Bankruptcy Code only provides relief to creditors who hold executory contracts, Mr. Wilmoth concludes that TMD is ineligible to obtain its request for declaratory judgment. TMD failed to satisfy waiver of ASARCO's conditions to closing, Mr. Wilmoth asserts. Thus, ASARCO owed TMD no duty to complete performance under the APA. For the same reason, Mr. Wilmoth asserts that TMD's request for summary judgment should be denied. The thrust of TMD's request is that APA was still executory because ASARCO did not terminate the contract consistent with the APA. Mr. Wilmoth argues that this argument is no more than a red herring because the APA only applies to efforts to terminate it before August 1, 2005, and there is no evidence that ASARCO even tried to terminate the APA before that date. TMD Seeks to Amend Complaint TMD seeks the Court's permission to amend its Complaint. During the course of discovery, TMD learned that as of the bankruptcy filing, the account in which the Transferred Fund was deposited contained more than $250,000. By its Amended Complaint, TMD would ask the Court to: (a) declare that the Transferred Fund is not property of ASARCO's estate; (b) impose a constructive trust; and (c) order that the Transferred Funds be turned over to TMD. Background As reported in the Troubled Company Reporter on Dec. 12, 2005, TMD asks the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to find that: -- the APA was not properly terminated by ASARCO prepetition; -- the APA remains executory; and -- upon rejection of the APA, TMD is entitled to a lien on the Property for the recovery of the $250,000 escrow, interest and attorney's fees. On March 1, 2005, TMD Acquisition Corporation entered into an Asset Purchase Agreement with ASARCO LLC for the purchase of certain mining property in Tennessee. The closing date for the APA was scheduled for Aug. 1, 2005, subject to satisfaction of certain closing conditions contained in the APA. Pursuant to the APA, TMD paid a $250,000 deposit to ASARCO, which was required to be held by ASARCO in a segregated escrow pending closing. The $250,000 was part of the purchase price and was to be paid to ASARCO only in the event of closing. Contrary to the express provisions of the APA, Michael P. Ridulfo, Esq., at Sorrell, Anderson, Lehrman & Ridulfo, L.L.P., in Corpus Christi, Texas, related that ASARCO failed to place the $250,000 in escrow and instead placed the money in its general operating account. At no time prior to the bankruptcy filing did ASARCO establish the escrow as required by the APA. ASARCO retained the $250,000 even after it purported to terminate the APA. The APA also contains a "No Shop" provision that prevents ASARCO from shopping the Property to third parties during the term of the APA. Mr. Ridulfo said ASARCO violated this provision by "shopping" the Property to third parties during the time that the APA was in full force and effect. Mr. Ridulfo further argues that the APA cannot be terminated if either party's failure to close is a result of a breach of the APA by the party seeking termination. By letter dated Aug. 2, 2005, ASARCO purported to terminate the APA based on TMD's alleged failure to close by August 1. As of that date, however, Mr. Ridulfo says ASARCO was already in breach by: (1) failing to place the $250,000 into escrow; (2) failing to provide TMD required investor information in a timely manner; and (3) shopping the Property. Based on these breaches, ASARCO was prohibited from terminating the APA, Mr. Ridulfo contends. About ASARCO LLC Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Road & Hecla Resigns from Panel; Gold Fields Appointed ------------------------------------------------------------------ Richard W. Simmons, the United States Trustee for Region 7, appoints Gold Fields Mining LLC to the Official Committee of Unsecured Creditors in ASARCO LLC's Chapter 11 case. Road Machinery LLC and Hecla Mining Company have resigned as members of the original Creditors Committee. The Creditors Committee is now composed of: A. Deutsche Bank Trust Company 60 Wall Street, 60-2715, New York 10005 Attention: Mr. Stanley Burg Phone: (212) 250-5280 B. Wilmington Trust Company Rodney Square North, 1100 North Market Street Wilmington, Delaware 19890 Attention: Mr. Steve Cimalore Phone: (302) 636-6058 C. Pension Benefit Guaranty Corporation 1200 K Street, N.W., Washington D.C. 20005-4026 Attention: Mr. Roger Reiersen Phone: (202) 326-4070 x 3704 D. United Steelworkers Five Gateway Center, Pittsburgh, Pennsylvania 15222 Attention: David R. Jury Phone: (412) 562-2545 E. The Doe Run Resources Corporation 1801 Park 270 Drive, Suite 300, St. Louis, Missouri 63146 Attention: Mr. Lou Marucheau F. Gold Fields Mining LLC 14062 Denver West Parkway, Golden, Colorado 80401 Attention: Roger B. Wolcott, Jr. Phone: (314) 342-7771 Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000). BANC OF AMERICA: Fitch Holds BB Rating on Class L Certificates -------------------------------------------------------------- Fitch Ratings upgrades these classes of Banc of America Large Loans, Inc.'s commercial mortgage pass-through certificates, series 2003-BBA2: -- $31.1 million class E to 'AAA' from 'AA+'; -- $35.3 million class F to 'AA+' from 'AA'; -- $37.2 million class G to 'A+' from 'A'. In addition, these classes are affirmed: -- $22.2 million class A2 at 'AAA'; -- $272.6 million class A3 at 'AAA'; -- $25.1 million class B at 'AAA'; -- $47.8 million class C at 'AAA'; -- $61.2 million class D at 'AAA'; -- $22.7 million class H at 'A-'; -- $23.9 million class J at 'BBB+' -- $23.3 million class K at 'BBB-', -- $34.0 million class L at 'BB'; -- Interest-only classes X-1A, X-1B, X-2, X-3, X-4 at 'AAA'. Class A-1 has paid in full. The upgrades are due to the improved performance of seven of the eight loans in the transaction based on year-end 2005 Fitch stressed net cash flow, as well as the continued payoff of loans. The remaining collateral consists of seven A-note loan portions and one whole loan. The overall debt service coverage ratio for the remaining loans in the pool, is 1.67 times (x) compared to 1.48x for those loans at issuance, and 1.51x for the entire transaction at issuance. All loans except the Colonnade Portfolio loan have investment grade credit assessments. The review of all of the loans in this transaction is based on occupancy and financial information for the year ending Dec. 31, 2005. Fitch remains concerned with the ongoing poor performance of the Colonnade Portfolio loan (24.9%). The collateral consists of office properties in Atlanta (78%); Irving, Texas (15%); and Minneapolis (7 %). As of YE 2005, the Fitch stressed NCF had declined by 49% since issuance. The credit assessment on this loan remains below investment grade and Fitch will continue to closely monitor the performance of this loan. The Gas Company Tower (36.1%), the largest loan in the transaction, is 100% occupied and had a Fitch stressed DSCR of 1.65x at YE 2005 as compared to 1.50x at issuance. The JW Marriott hotel (11.0%) has experienced a 72% increase in NCF since issuance, bringing the YE 2005 Fitch stressed DSCR to 3.13x from 1.83x at issuance. The California Market Center (7.7%) was 75% occupied at YE 2005, and had a YE 2005 Fitch stressed DSCR of 3.07x compared to 1.85x at issuance. Two retail properties in the transaction, Westland Mall (7.9%) and Searstown Mall (6.0%) are both performing at or above expectations since issuance. The Fitch stressed DSCR at the Westland Center has risen to 1.60x from 1.38x at issuance, and the Searstown Mall Fitch stressed DSCR at YE 2005 was 1.40x, versus 1.43x at issuance. With the recent payoff of the Independence Mall in Massachusetts, the percentage of retail collateral in the transaction had decline to 21.5% from 31.1% at issuance. Occupancy at the Meridian Apartment property (3.0%) has increased to 93% from 89% at issuance, and the Fitch stressed DSCR at YE 2005 was 1.55x compared to 1.42x at issuance. The Campus Lodge Apartment loan (3.5%), formerly a Fitch loan of concern, has seen an increase in occupancy to 97%, the same as at issuance. The Fitch stressed DSCR as of YE 2005 was 1.66x, up from 1.44x at issuance and 1.06x at the time of Fitch's previous review. BRILLIANT DIGITAL: Vasquez & Company Raises Substantial Doubt ------------------------------------------------------------- Vasquez & Company LLP in Los Angeles, California, raised substantial doubt about Brilliant Digital Entertainment, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's losses, and working capital and stockholders' deficiencies. The Company reported a $3,970,000 comprehensive net loss on $5,970,000 of total revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $2,649,000 in total assets and $4,840,000 in total liabilities, resulting in a $2,191,000 stockholders' deficit. The Company's Dec. 31 balance sheet also showed strained liquidity with $2,208,000 in total current assets available to pay $4,790,000 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?8fd Through its Altnet, Inc., subsidiary, Brilliant Digital Entertainment, Inc. -- http://www.brilliantdigital.com/-- operates a peer-to-peer-based content distribution network that allows the secure and efficient distribution of a content owner's music, video, software and other digital files to computer users via the Internet. CABLEVISION SYSTEMS: Annual Stockholders' Meeting Set for Thursday ------------------------------------------------------------------ Cablevision Systems Corporation will hold its Annual Meeting of Stockholders at 10:00 a.m., on Thursday, May 18, 2006, at the Company's headquarters at 1111 Stewart Avenue in Bethpage, New York. During the meeting, stockholders will be asked to: -- elect directors; -- ratify the appointment of an independent registered public accounting firm; -- approve an Employee Stock Plan; -- approve a Cash Incentive Plan; and -- approve a Stock Plan for Non-Employee Directors; Only stockholders of record on April 17, 2006, may vote at the meeting. A full-text copy of the Proxy Statement for the 2006 annual stockholders' meeting is available for free at: http://researcharchives.com/t/s?90e Headquartered in Manhattan, Cablevision Systems Corporation -- http://www.cablevision.com/-- is one of the nation's leading telecommunications and entertainment companies. Cablevision currently operates the nation's single biggest cable cluster, serving 3 million households in the New York metropolitan area. Its portfolio of operations ranges from high-speed internet access, robust digital cable television as well as advanced digital telephone services, professional sports teams, world- renowned entertainment venues and national television program networks. At Mar. 31, 2006, Cablevision System Corp.'s balance sheet showed a $2,517,442,000 stockholders' deficit compared to a $2,468,766,000 deficit at Dec. 31, 2005. CALPINE CORP: Court Okays Repayment of $646 Mil. First Lien Debt ---------------------------------------------------------------- Calpine Corporation and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to repay up to $646,110,000 -- the entire amount of outstanding principal -- of their first lien debt. As reported in the Troubled Company Reporter on May 5, 2006, Calpine Corp. issued $785,000,000 of 9.625% first priority senior secured notes due 2014. Since commencing their reorganization cases, the Debtors have indicated they will seek to pay the principal of their first lien debt. The Debtors will use the $852,000,000 proceeds from the domestic oil and natural gas reserves and related assets they sold in July 2005, for the planned repayment. Pursuant to the indenture governing the first lien debt, the Debtors deposited the sale proceeds into a designated control account. The balance of the sale proceeds in the control total $412,000,000, as of April 17, 2006. The noteholders of the debt have objected to the planned repayment to the extent the Debtors do not intend to also satisfy the lenders' demand for a "make-whole" premium payment. The Debtors do not believe that the proposed repayment triggers any make-whole obligation. Nevertheless, they believe that immediate repayment of the first lien debt principal - while postponing any litigation of the make-whole issue until a later date -- would significantly benefit their estates while effecting no prejudice to the noteholders. The planned repayment would halt the Debtors' continued losses. Samuel M. Greene, managing director of Miller Buckfire, the Debtors' financial advisor and investment banker, relates that the sale proceeds the Debtors propose to use to repay the first lien debt principal is earning interest at an average rate of 4.42%, much lower than the interest rate on the first lien debt. The negative arbitrage is causing a "loss" to the Debtors' estates of $413,000 per week, Mr. Greene relates. The Debtors may seek approval to borrow up to an additional $233,700,000 from their DIP facility to repay the remainder of the first lien debt principal, Mr. Greene notes. Because the interest rate under the DIP loan is 7.9%, doing so would "save" the Debtors' estates $77,500 each week. In addition, the Debtors are required under the Final Cash Collateral Order to pay the first lien noteholders' counsel and advisor fees. Thus, allowing the Debtors to pay down their first lien debt principal would reduce about $350,000 in administrative expenses they incur each month in paying for the fees of the noteholders' professionals, Mr. Greene says. The Debtors assure the Court that the first lien noteholders would suffer no disadvantage by deferring any resolution of the make-whole premium demand because all parties-in-interest would retain all rights to litigate the issue fully at a later date. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) CAPITAL BEVERAGE: Sherb & Co. Raises Going Concern Doubt -------------------------------------------------------- Sherb & Co., LLP, in New York, raised substantial doubt about Capital Beverage Corporation's ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the Company's significant losses. Financials The Company reported $3,849,701 of net income for the year ended Dec. 31, 2005, which includes $8,235,907 of gain on sale of distribution rights. The Company had no revenues for the 2005 fiscal year. At Dec. 31, 2005, the Company's balance sheet showed $2,765,535 in total assets, $2,425,100 in total liabilities, and a $340,435 stockholders' equity. The Company's Dec. 31 balance sheet also showed strained liquidity with $2,199,551 in total current assets available to pay $2,425,100 in total current liabilities coming due within the next 12 months. Distribution Rights The Company signed on Sept. 15, 2005, an Asset Purchase Agreement with Oak Beverages, Inc., to sell the Company's exclusive distribution rights for certain beer and malt liquor products manufactured by Pabst Brewing Company, Pittsburgh Brewing Company, and Ballantine brands for $9,300,000. Asset Purchase Agreement The Company and Oak also entered into a Sub-Distribution Agreement. Oak will became a Company sub-distributor of certain Pabst beers and malt beverages. The Sub-Distribution Agreement became effective when the Company filed an Information Statement on Schedule 14C with the SEC. Under the terms of the Sub-Distribution Agreement, Oak had the right to distribute the Products to customers located in Brooklyn, Queens, Staten Island, Manhattan and the Bronx. In exchange for those rights, Oak was required to pay Pabst directly for its Product purchases and, during the first 45 days after the effective date of the Agreement, Oak was required to pay to Capital the following amounts for Products received by Oak: (x) $0.50 for each case of Products and (y) $2.00 for each barrel of Products. The purchase price paid by Oak to Capital in connection with the closing of the transactions contemplated by the Asset Purchase Agreement was reduced by an amount equal to the sum of: (i) $.25 for each case of Products purchased by Oak and sold by Oak to customers in the Territory, plus (ii) $.50 for each case of Products purchased by Oak but not sold to such customers, plus (iii) $1.00 for each barrel of Products purchased by Oak and sold by Oak to customers in the Territory, plus (iv) $2.00 for each barrel of Products purchased by Oak but not sold to such customers, all determined during the 45-Day Period. Prior to the closing of the transaction, the Asset Purchase Agreement and sale of Assets to Oak were approved unanimously by the Company's Board of Directors and the terms of the transaction were submitted for stockholder approval. As permitted by Delaware law and the Company's Certificate of Incorporation, the Company received a written consent from the majority Approving Stockholders of the Company approving the Asset Purchase Agreement and the related Asset Sale. An Information Statement was furnished for the purposes of informing stockholders, in the manner required under the Securities Exchange Act of 1934, as amended, of the Asset Sale before it was consummated. As of Dec. 16, 2005, the Company closed the sale of the Assets to Oak. The Company deposited $1,500,000 with an escrow agent for at least 18 months for post closing indemnification claims which may be asserted by Oak. A substantial amount of the proceeds from the transaction were used by the Company to repay outstanding indebtedness and for working capital purposes. As of April 11, 2006, approximately $708,060 has been released from Escrow and has been used to pay outstanding liabilities of the Company. A full-text copy of the Company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?8f9 Capital Beverage Corporation is a shell company after selling the Company's exclusive distribution rights for certain beer and malt liquor products manufactured by Pabst Brewing Company, Pittsburgh Brewing Company, and Ballantine brands. CARDINAL COMMUNICATIONS: AJ. Robbins Raises Going Concern Doubt --------------------------------------------------------------- AJ. Robbins, PC, in Denver, Colorado, raised substantial doubt about Cardinal Communications, Inc., fka USURF America, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses, negative cash flows from operations, and working capital and stockholders' equity deficiencies. The Company reported an $11,225,278 net loss on $27,906,065 of total revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $59,875,996 in total assets, $57,585,132 in total liabilities, $2,804,837 in total committed stock, and $2,542,406 in total minority interest, resulting in a $3,056,379 stockholders' equity deficit. A full-text copy of the Company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?8fe Headquartered in Broomfield, Colorado, Cardinal Communications, Inc., fka USURF America, Inc., provides full-service solutions for residential and business applications including the delivery of next-generation voice, video, and data broadband networks to communities and cities throughout the United States; the construction and development of luxury single and multi-family homes, condominiums and apartment communities; home finance, real estate and title services. CELESTICA INC: Posts $17.4 Million First Quarter Net Loss --------------------------------------------------------- Celestica Inc. reported financial results for the first quarter ended March 31, 2006. Revenue was $1,934 million, compared to $2,151 million in the first quarter of 2005. Net loss on a GAAP basis for the first quarter was $17.4 million, compared to a GAAP net loss for the first quarter of 2005 of $11.6 million. Included in GAAP net loss for the quarter are charges of $17 million associated with the Company's previously announced restructuring plans. Adjusted net earnings for the quarter were $17.4 million, compared to $33.4 million for the same period last year. Adjusted net earnings is defined as net earnings before amortization of intangible assets, gains or losses on the repurchase of shares and debt, integration costs related to acquisitions, option expense, option exchange costs and other charges, net of tax and significant deferred tax write-offs. These results compare with the company's guidance for the first quarter, announced on Jan. 26, 2006, of revenue of $1.8 to $2 billion. "Our results in the first quarter reflected the impact of a seasonal revenue decline from the fourth quarter as well as substantial investments being made to support our major new program launches and growth in our low-cost facilities," said Steve Delaney, CEO, Celestica. "We continue to see a positive demand environment into the second quarter. As our new programs ramp, material flows stabilize and restructuring activities continue as planned, we expect to show improvements in our operating results in the coming quarters." Second Quarter Outlook For the second quarter ending June 30, 2006, the company anticipates revenue to be in the range of $2.05 billion to $2.25 billion. About Celestica Headquartered in Toronto, Ontario, Celestica, Inc. (NYSE: CLS, TSX: CLS/SV) -- http://www.celestica.com/-- is a world leader in the delivery of innovative electronics manufacturing services. Celestica operates a highly sophisticated global manufacturing network with operations in Asia, Europe and the Americas, providing a broad range of integrated services and solutions to leading OEMs (original equipment manufacturers). Celestica's expertise in quality, technology and supply chain management, enables the company to provide competitive advantage to its customers by improving time-to-market, scalability and manufacturing efficiency. * * * As reported in the Troubled Company Reporter on Dec. 26, 2005, Fitch Ratings initiated coverage of Celestica Inc. by assigning a 'BB-' rating to the company's issuer default rating and unsecured credit facility. Fitch also assigned its 'B+' rating to the company's senior subordinated debt. The Rating Outlook is Stable. Fitch's action affects approximately $750 million of debt. CITIZENS COMMS: Earns $50 Million in Quarter Ended March 31 ----------------------------------------------------------- Citizens Communications Company filed its financial statements for the quarter ended March 31, 2006, with the Securities and Exchange Commission on May 5, 2006. The Company reported a $50,483,000 net income on $506,861,000 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $6,344,116,000 in total assets, $5,350,231,000 in total liabilities, and $993,885,000 in total stockholders' equity. A full-text copy of the Company's financial statements for the quarter ended March 31, 2006, is available at no charge at: http://ResearchArchives.com/t/s?906 About Citizens Communications Based in Stamford, Conn., Citizens Communications Corporation -- http://www.czn.net/-- is a communications company providing services to rural areas and small and medium-sized towns and cities as an incumbent local exchange carrier, or ILEC. The Company offers its ILEC services under the "Frontier" name. Citizens Communications trades on the New York Stock Exchange under the symbol CZN. * * * As reported in the Troubled Company Reporter on Feb. 10, 2006, Moody's said that Citizens Communications' reported sale of Electric Lightwave to Integra Telecom, for $247 million, does not significantly alter Citizens' Ba3 corporate family rating, Ba3 senior unsecured revolving credit facility and Ba3 senior unsecured notes, debentures, bonds. Moody's said the Outlook for Citizens Communications and Citizens Utilities is Stable. CITY OF GARDENA: Financing Cues S&P to Lift Certificates' Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating to 'BBB-' from 'B' on the City of Gardena, California's series 1994 refunding certificates of participation and removed them from CreditWatch with positive implications. In addition, Standard & Poor's assigned its 'BBB-' rating to Gardena, California's 2006 refinancing project certificates of participation. The 2006 issue will consist of these series: * $12.225 million series A (taxable), * $8 million series B (taxable), and * $3.5 million series C (tax-exempt). The outlook is stable. "The rating reflects the effect of the current financing, which is being done in order to execute the terms reached in a memorandum of understanding with the city's two letter of credit banks, to which it has significant reimbursement obligations," said Standard & Poor's credit analyst Gabe Petek. "Once executed, the memorandum agreement relieves the city of these reimbursement terms on approximately $25.4 million in obligations to the banks that are presently in effect and viewed as not affordable relative to the city's budget," he added. Under the financing, the city's series 1994 COPs will be refunded, allowing the city's civic center to be pledged as collateral under the new bonds. Annual debt service for the 2006 refinancing project COPs (series A and series B) will be flat at approximately $1.53 million, as compared to the $2.5 million-$2.7 million annual obligations associated with the LOC reimbursement conditions. In addition, debt service on the city's 1994 refunding COPs will be flat at approximately $285,000, generating approximately $22,000 per year in debt service savings. Gardena (population, 60,100) is located about 15 miles south of downtown Los Angeles. The city is a fully developed residential community with access to employment throughout the metropolitan area. CONGOLEUM CORP: Court Approves Settlement Agreement with Harper --------------------------------------------------------------- The Hon. Kathryn C. Ferguson of the U.S. Bankruptcy Court for the District of New Jersey approved the Settlement Agreement between Congoleum Corporation, its debtor-affiliates and Harper Insurance Company Limited, fka Turegum Insurance Company. As reported in the Troubled Company Reporter on Mar. 23, 2006, under the Settlement Agreement, Harper will pay $1,375,000 in cash to Congoleum, or as otherwise directed in the Plan or Confirmation Order, on the Trigger Date. The Settlement Amount will be used only to pay Asbestos Claims and other amounts payable by the Plan Trust pursuant to the Debtors' Plan. The Settlement Agreement also provides for comprehensive mutual releases by, and among, Harper, the Plan Trust and Congoleum. In addition, Congoleum will designate Harper as a Settling Asbestos Insurance Company entitled to receive a 524(g) Injunction pursuant to a plan of reorganization. The Subject Policy has total limits of $1,575,000 in excess of $1,000,000 of primary coverage. The Settlement Amount is approximately 87% of policy limits. The Future Claims Representative in the Debtors' bankruptcy cases supports the settlement. Trigger Date The Trigger Date is the earliest date Harper received a written notice from the Debtors. The Debtors must send a notice within three business days after all three events occurred: (1) the Settlement Approval Order is a Final Order; (2) the Confirmation Order is a Final Order; and (3) the Plan, which includes the 524(g) Injunction, is declared to be effective. Background Congoleum and Harper are parties to a lawsuit styled Congoleum Corporation v. ACE American Insurance Company, et al., Docket No. MID-L-8908-01, pending in the Superior Court of New Jersey, Law Division, Middlesex County. In the Coverage Action, Congoleum seeks actual compensatory and consequential damages plus interest. Harper denies liability to Congoleum as alleged and has defended against Congoleum's claims in the Coverage Action. Harper subscribed to a 10.5% share of Insurance Policy No. UJL0389 issued to Congoleum for the policy period April 1, 1977, to Jan. 1, 1980, by Turegum Insurance Company and some other London Market companies. Congoleum and Harper -- the successor to Turegum Insurance Company -- disputed their respective rights and obligations with respect to insurance coverage under the Subject Policy for Asbestos Claims. To resolve the Coverage Dispute, Congoleum and Harper entered into the Settlement Agreement. About Congoleum Corporation Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors. Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP represents the Official Committee of Unsecured Bondholders. R. Scott Williams serves as the Futures Representative, and is represented by lawyers at Orrick, Herrington & Sutcliffe LLP. Aaron Van Nostrand, Esq., at Coughlin Duffy, LLP, represents Continental Casualty Company and Continental Insurance Company. When Congoleum filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. At. Dec. 31, 2005, Congoleum Corporation's balance sheet showed a $44,960,000 stockholders' deficit compared to a $20,989,000 deficit at Dec. 31, 2004. Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX:ABL). CONGOLEUM CORP: Has Until Aug. 14 to Make Lease-Related Decisions ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey extended, until Aug. 14, 2006, the period within which Congoleum Corporation and its debtor-affiliates may assume, assume and assign or reject certain unexpired leases of non-residential real property. The Debtors tell the Court that they are lessees under one unexpired lease of nonresidential real property. The lease is for space used by the Debtors for, among other things, their corporate headquarters and general business operations. The Debtors contend that the Lease is a significant asset of the Debtors' estates and is an integral component of the Debtors' business operations. The Debtors further contend that they are current, and will remain current, on all of their post-petition rent obligations under the lease. The Debtors say that they are moving forward on all aspects of these bankruptcy cases and remain confident that a plan incorporating Section 524(g), or the treatment of all asbestos claims, can be confirmed in their cases. About Congoleum Corporation Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors. Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP represents the Official Committee of Unsecured Bondholders. R. Scott Williams serves as the Futures Representative, and is represented by lawyers at Orrick, Herrington & Sutcliffe LLP. Aaron Van Nostrand, Esq., at Coughlin Duffy, LLP, represents Continental Casualty Company and Continental Insurance Company. When Congoleum filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. At. Dec. 31, 2005, Congoleum Corporation's balance sheet showed a $44,960,000 stockholders' deficit compared to a $20,989,000 deficit at Dec. 31, 2004. Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX:ABL). COPPER TIRE: Moody's Cuts Rating on Senior Unsecured Notes to Ba3 ----------------------------------------------------------------- Moody's Investors Service downgraded Cooper Tire & Rubber Company's Corporate Family and Senior Unsecured note ratings to Ba3 from Ba2. Cooper's liquidity rating of SGL-2, representing good liquidity over the next twelve months, was affirmed. The ratings outlook remains negative. The actions incorporate the challenges the company will continue to face in achieving material profitability as pricing actions have lagged escalating raw material costs. Returns realized in its core North American market have declined and have resulted in weaker debt protection measures and higher leverage even though the company redeemed significant amounts of long-term debt in 2005. Similarly, unit volumes in the replacement tire industry appear less robust than previous expectations, although Cooper's share may have marginally increased. Increases in oil and natural rubber prices will likely contribute to further pressure on the company's operating performance during 2006. Consequently, the negative outlook recognizes that key credit metrics are at risk to soften further. However, in facing these uncertainties, Cooper maintains a solid balance sheet with substantial liquidity and no significant long-term debt maturities until 2009. In addition, considerable investments the company has made during 2005 and early 2006 could strengthen its position in the replacement tire segment. These include expanding its offerings in higher margin performance tires and increasing its sourcing of tires produced in lower cost Asian facilities for value and broad- line tires. Unless Cooper can demonstrate during the coming quarters that these initiatives can begin to stem the erosion in its credit metrics, the company's rating could be vulnerable to further downgrade. Ratings lowered: * Corporate Family, to Ba3 from Ba2 * Senior Unsecured Notes, to Ba3 from Ba2 * Shelf filings, to (P)Ba3 and (P)B3 from (P)Ba2 and (P)B1 for senior unsecured and preferred respectively Ratings affirmed * Speculative Grade Liquidity rating, SGL-2 The last rating action was on October 26, 2005 at which time a Corporate Family rating of Ba2 was assigned, and the senior unsecured note rating was lowered to Ba2 from Baa3. Moody's Auto Supplier methodology indicates a Ba3 Corporate Family rating. The rating incorporates solid scores for the company's business profile, capital structure, liquidity, the relatively stable level of replacement tire demand and broad customer diversification across its distribution channels. However, recent scores for key credit metrics, particularly coverage ratios and cash flow measurements, have weakened with many ratios currently more indicative of the single-B rating level. Moody's notes that Cooper's use of LIFO accounting causes its operating performance to reflect the negative impact of higher commodity costs sooner than would be the case had the company utilized the FIFO method. Despite the LIFO methods adverse impact on reported earnings and on earnings-based credit metrics in periods of rising commodity costs, this method has no impact on cash flow. Pricing actions to recoup higher raw material costs have to date been insufficient to maintain or re-establish margins previously achieved. Given higher costs of natural rubber and petroleum based derivatives, these pressures are expected to continue. Similarly, re-investment in the business and in support of Asian ventures will limit free cash flow over the short-term. As a result, the Corporate Family rating was lowered one notch to Ba3. The two notch movement on the shelf filing for preferred securities represents Moody's standard notching for preferred issues at Corporate Family ratings below Ba2 to recognize lower recovery experiences at those rating categories. The negative rating outlook considers Cooper's current weak profitability and credit metrics as well as risks that replacement intervals for tires may lengthen should fewer aggregate miles be driven as a result of higher consumer fuel costs. It further incorporates a continuing challenge of realizing prices to offset higher raw material, transportation and energy costs should demand remain slack and the industry continue with excess capacity. Until material profitability is achieved and sustained, the potential for further erosion in credit metrics exists. Cooper's cash position serves to buffer some of these rating pressures, but the ultimate use of its remaining cash will influence the direction of future ratings. Cooper's liquidity rating of SGL-2 recognizes its significant balance sheet cash, good access to its $175 million revolving credit, comfortable levels of head room under its financial covenants, and capacity to develop alternative liquidity. Cash holdings at the end of March were roughly $194 million, the vast majority of which were at the parent and wholly-owned subsidiary levels. While funding Cooper's remaining investment in Chengshan and expenditures at Cooper Kenda will use a portion of these funds, a substantial amount is viewed as surplus to Cooper's cash requirements over the next 12 months. While there were a very modest amount of letters of credit issued under the revolving credit commitment, there were no borrowings under the credit facility at the end of March, historically the peak in seasonal working capital investment. The company was in compliance with its two financial covenants at the end of the first quarter. Headroom under the tighter of these, interest coverage, will be affected by Cooper's future level of defined EBITDA, but measured interest expense should taper-off following the major debt redemption in the fourth quarter of 2005. Cooper Tire & Rubber Company, headquartered in Findlay, OH, specializes in the design, manufacture and sale of passenger, light & medium truck tires and has subsidiaries specializing in motorcycle and racing tires, as well as tread rubber and related equipment. The company has 60 manufacturing, sales, distribution, design and technical facilities around the world. Revenues in 2005 were approximately $2.2 billion. COVAD COMMS: Annual Stockholders' Meeting Set for June 15 --------------------------------------------------------- Covad Communications Group, Inc., will hold its Annual Meeting of Stockholders at 2:00 p.m., Pacific Time, on June 15, 2006. The annual stockholders meeting will take place at the Hyatt Regency in Santa Clara, California. During the meeting, stockholders will be asked to vote on two proposals: 1. the election of three Class I directors to serve on the Company's Board of Directors for a term to expire at the third succeeding annual meeting, expected to be the 2009 annual meeting, and until their successors are elected and qualified; and 2. the ratification of independent registered public accounting firm, PricewaterhouseCoopers LLP, for the 2006 fiscal year. Only stockholders of record at the close of business on April 18, 2006, are entitled to vote during the meeting. A full-text copy of the Preliminary Proxy Statement for the 2006 annual stockholders' meeting is available for free at: http://researcharchives.com/t/s?90f Covad Communications Group, Inc. -- http://www.covad.com/-- provides broadband voice and data communications. The company offers DSL, Voice over IP, T1, Web hosting, managed security, IP and dial-up, and bundled voice and data services directly through Covad's network and through Internet Service Providers, value- added resellers, telecommunications carriers and affinity groups to small and medium-sized businesses and home users. Covad broadband services are currently available across the nation in 44 states and 235 Metropolitan Statistical Areas and can be purchased by more than 57 million homes and businesses, which represent over 50% of all US homes and businesses. Covad emerged from a chapter 11 restructuring in Dec. 2001 under a plan of reorganization that swapped $1.4 billion of bond debt with a combination of cash (about 19 cents-on-the-dollar) and a 15% equity stake in the company. Covad's prepetition shareholders retained an approximate 80% equity interest in the company. At Dec. 31, 2005, Covad Communications Group, Inc.'s balance sheet showed a stockholders' deficit of $20,169,000 compared to a $8,635,000 shareholders' equity deficit at Dec. 31, 2004. COVALENCE SPECIALTY: Moody's Rates $300 Million Term Loan at Ba3 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the proposed $300 million senior secured term loan C of Covalence Specialty Materials Corp. CSMC recently announced that it is replacing its existing $175 million first lien revolver and $350 million first lien term loan B with a new $200 million asset-backed revolver and a $300 million term loan C. The asset-backed revolver and term loan C also have first liens on all assets, but differ from the prior structure in that collateral comprised of accounts receivable and inventory would first be applied to the ABL, and collateral comprising all other assets would first be applied to the term loan. The new structure is not expected to have financial covenants associated with the first lien facilities. Moody's took these rating actions: * Corporate family rating, affirmed B1 * $300 million senior secured term loan C due 2013, assigned Ba3 * $175 million senior secured 2nd lien term loan due Feb. 16, 2013, B2 rating affirmed * $265 million senior subordinated notes due Mar. 1, 20016, B3 rating affirmed * $175 million senior secured revolver maturing Feb. 16, 2012, Ba3 withdrawn * $325 million senior secured term loan B due Feb. 16, 2013, Ba3 withdrawn The ratings outlook is stable. Key ratings factors for packaging companies: 1) financial leverage and interest coverage, 2) operating profile as reflected in operating profitability and asset efficiency, 3) competitive position as reflected in revenue size, the value-added nature of the company's products, ability of customers to switch to other suppliers, and substrate diversity. CSMC's high financial leverage and modest interest coverage weigh on the ratings. Pro forma for the proposed transaction and adjusted for operating leases and pension obligations, adjusted total debt to EBITDA of about 4.8 times, adjusted free cash flow to total debt in the range of 5% to 10%, and EBIT interest coverage of less than 2.0 times all are reflective of the current B1 corporate family rating. The ratings are supported by CSMC's operating profitability, which includes EBIT margins in the mid single digits, and competitive profile as reflected in its $1.7 billion in annual revenue and strong market positions. The outlook or ratings could come under pressure, if CSMC exhibits material deviation from expectations for financial leverage and interest coverage, operating profile, or competitive position. The outlook or ratings could be raised, if CSMC improves free cash flow to above 10% of adjusted debt on a sustained basis, while maintaining stability in the expected operating profile and competitive position. In assigning the same rating to the proposed term loan C as on the existing term loan B, Moody's assessed that the new term loan C is supported by the same guarantees and benefits from full collateral coverage as well as full coverage by enterprise value with surplus, all of which were deemed to warrant notching the loan above the corporate family rating. The lack of maintenance financial covenants did not affect the instrument rating in this instance. Although the lack of covenants provides additional flexibility to CSMC, it also removes a meaningful tool that lenders have to influence the company's actions. Headquartered in Princeton, New Jersey, Covalence Specialty Materials Corp. is predominantly a North American manufacturer of polyethylene-based plastic film, packaging products, bags, and sheeting in a wide range of sizes, gauges, strengths, stretch capacities, clarities and colors. End markets include Industrial, Building Products, Specialty/Custom, Institutional, Retail, and Flexible Packaging. Annual consolidated net revenue is approximately $1.7 billion. COVALENCE SPECIALTY: S&P Rates Proposed $300 Million Loan at B+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating and its recovery rating of '1' to Covalence Specialty Materials Corp.'s proposed $300 million senior secured term loan C, based on preliminary terms and conditions. The rating on the proposed term loan C is one notch above the corporate credit rating; this and the recovery rating of '1' indicate that lenders can have a high expectation of full recovery of principal in the event of a payment default. Proceeds from the proposed term loan C, a proposed $200 million (unrated) senior secured asset-based revolving credit facility due 2012, and cash on the balance sheet will be used to refinance outstanding balances under the company's existing $350 million term loan B due 2013 and its $175 million revolving facility due 2012. The corporate credit rating on Covalence is 'B'. The rating outlook is positive. Princeton, New Jersey-based Covalence had total debt outstanding of about $780 million at March 31, 2006. "The ratings reflect Covalence's vulnerable business risk profile incorporating its exposure to industrial and other end markets tied to general economic activity, potential exposure to volatile raw-material costs if business conditions weaken, and challenges associated with operating as a standalone company after the spin- off from Tyco International Ltd.," said Standard & Poor's credit analyst Liley Mehta. "The ratings also incorporate the company's aggressive debt leverage, and low operating margins that reflect a moderate dependence on commodity-like products." "These negative factors outweigh the benefits of leading market positions in various plastic films market segments, considerable scale, and decent product and customer diversity," she said. Ratings List: Covalence Specialty Materials Corp.: * Corporate credit rating: B/Positive/-- Ratings Assigned: * $300 million senior secured term loan C maturing 2013: B+ * Recovery rating: 1 CREDIT SUISSE: Fitch Ups Rating on Class H Certificates to BB+ -------------------------------------------------------------- Credit Suisse First Boston Mortgage Securities Corporation's mortgage pass-through certificates, series 1997-C1, are upgraded by Fitch to: -- $64.4 million class F to 'AA' from 'BBB+'; -- $13.6 million class G to 'A+' from 'BBB-'; -- $27.1 million class H to 'BB+' from 'B'. In addition, Fitch affirms the following classes and Distressed Recovery (DR) ratings*: -- $245.9 million class A-1C at 'AAA'; -- $42.5 million class A-2 at 'AAA'; -- Interest-only class A-X at 'AAA'; -- $94.9 million class B at 'AAA'; -- $67.8 million class C at 'AAA'; -- $61.0 million class D at 'AAA'; -- $17 million class I at 'B-'. -- $7.7 million class J remains at 'CC/DR4'. The $33.9 million class E is not rated by Fitch. Class A-1A and A- 1B have both paid in full. The rating upgrades reflect increased credit enhancement levels due to loan payoffs and scheduled amortization, as well as additional defeasance (11.5%) since Fitch's last rating action. As of the April 2006 distribution date, the pool's aggregate certificate balance has decreased 50.2% to $675.9 million from $1.36 billion at issuance and 82 loans remain from 161 at issuance. Since issuance, 18 loans (22.9%) have been defeased. Three of the pool's top 10 loans have either paid in full or defeased since Fitch's last rating action. Currently two loans (2.1%) are in special servicing. The largest specially serviced loan (1.7%) is a retail center in Wasilla, Arkansas, and is 90 days delinquent. The special servicer is evaluating workout strategies. The second largest specially serviced loan (0.4%) is a retail center in Lake Charles, Louisiana, and is current. The loan was transferred in November 2005 after the property was damaged by Hurricane Rita. Although the borrower had initially requested a forbearance to repair damages, he has since brought the loan current. The loan is scheduled to return to the master servicer after the receipt of three consecutive monthly payments. Fitch does not currently project any losses on the specially serviced loans. CRESCENT REAL: Posts $5 Million Net Loss in Quarter Ended March 31 ------------------------------------------------------------------ Crescent Real Estate Equities Company filed its financial statements for the second quarter ended March 31, 2006, with the Securities and Exchange Commission on May 5, 2006. The Company reported a $5,081,000 net loss on $238,604,000 of revenue for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $3,996,320,000 in total assets and $2,638,514,000 in total liabilities, resulting in a $1,195,165,000 stockholders' equity. Headquartered in Fort Worth, Texas, Crescent Real Estate Equities Company (NYSE: CEI) -- http://www.crescent.com/-- is one of the largest publicly held real estate investment trusts in the nation. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of 75 premier office buildings totaling 31 million square feet located in select markets across the United States, with major concentrations in Dallas, Houston, Austin, Denver, Miami and Las Vegas. Crescent also makes strategic investments in resort residential development, as well as destination resorts, including Canyon Ranch(R). * * * Moody's Investors Service assigned a B3 rating to Crescent Real Estate Equities Company's preferred stock on Nov. 11, 2004. Standard & Poor's assigned a BB- long-term foreign and local issuer credit rating to Crescent Real Estate Equities Company on June 30, 2004. CRICKET COMMS: S&P Rates Proposed $1.1 Bil. Sr. Secured Loan at B ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' bank loan rating and '1' recovery rating to Cricket Communications Inc.' proposed $1.1 billion senior secured bank loan. This and the '1' recovery rating indicate that lenders can expect full recovery of principal in the event of payment default or bankruptcy. Standard & Poor's also affirmed its 'B-' corporate credit rating and stable outlook on San Diego, California-based wireless service provider Leap Wireless International Inc., the parent company of Cricket. Cricket is an operating subsidiary and is rated on a consolidated basis with Leap Wireless. The proposed credit facilities are rated one notch above the corporate credit rating. "Despite the modest increase in total debt to EBITDA, credit measures are still supportive of a 'B-' rating," said Standard & Poor's credit analyst Allyn Arden. The ratings on Leap reflect: * a very high degree of business risk, given its nontraditional wireless business model and limited operating history; * execution risk from the build-out of new markets; and * the expectation for significant discretionary cash flow losses in 2006 as result of the planned market expansion. The secured bank loan consists of a $900 million term loan B and a $200 million revolver. Proceeds from the bank loan will be used to refinance the company's existing $600 million term loan B and $110 million revolver. In addition, the loan will be used to fund the acquisition and launch of new markets, fund the potential participation in the upcoming Advanced Wireless Services auction, and for working capital and general corporate purposes. CUMULUS MEDIA: Moody's Reviews Ba2 Ratings and May Downgrade ------------------------------------------------------------ Moody's Investors Service placed the ratings of Cumulus Media, Inc. on review for possible downgrade following the company's recent announcement that it intends to commence a Dutch auction tender offer to repurchase up to 11.5 million shares or 24.1% of the company's outstanding common stock. In addition, Cumulus entered a definitive agreement to repurchase 4.5 million shares of Class B Stock owned by Banc of America Capital Investors and BA Capital. Moody's estimates an aggregate purchase price of up to $200 million for the share repurchases. The review is prompted by our expectation that leverage will increase and credit metrics will weaken significantly in the near- term as the company uses debt to finance the share repurchase. It is likely that leverage will increase to in excess of 7.5 times. As a result, Moody's anticipates that the outcome of the review may result in a one to two notch downgrade. The review will focus on the company's ability to reduce the incremental leverage taken on to finance the share repurchase with internally generated cash flow. Moody's will conclude the review when there is greater visibility into the company's future capital structure. These ratings are under review for possible downgrade: Cumulus Media, Inc. (i) Senior Secured -- Ba2 (ii) Corporate Family Rating -- Ba2 Cumulus Media, Inc. is the 2nd largest radio company in the U.S. based on station count and pro forma for. Cumulus operates 345 radio stations in 67 markets. CURATIVE HEALTH: Hires Stevens & Lee as Conflicts Counsel --------------------------------------------------------- Curative Health Services, Inc., and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Stevens & Lee, P.C., as their conflicts counsel. Stevens & Lee is expected to: a. advise the Debtors of their rights, powers and duties as debtors-in-possession under chapter 11 of the Bankruptcy Code; b. prepare, on behalf of the Debtors, necessary and appropriate applications, motions, proposed orders, other pleadings, notices, schedules and other documents, and review financial and other reports, to be filed in these chapter 11 cases; c. advise the Debtors concerning, and prepare responses to, applications, motions, other pleadings, notices and other papers that may be filed and served in these chapter 11 cases; d. advise the Debtors with respect to, and assist in the negotiation and documentation of, financing agreements and related transactions; e. review the nature and validity of any liens asserted against the Debtors' property and advise the Debtors concerning the enforceability of such liens; f. advise the Debtors regarding their ability to initiate actions to collect and recover property for the benefit of their estates; g. as necessary, counsel the Debtors in connection with the formulation, negotiation and promulgation of any amendments to the Prepackaged Plan or the Disclosure Statement and any related documents; h. advise and assist the Debtors in connection with any potential property dispositions; i. advise the Debtors concerning executory contract and unexpired lease assumptions, assignments and rejections and lease restructurings and recharacterizations; j. assist the Debtors in reviewing, estimating and resolving claims asserted against the Debtors' estates; k. commence and conduct any litigation necessary or appropriate to assert rights held by the Debtors, protect assets of the Debtors' chapter 11 estates or otherwise further the goal of completing the Debtors' successful reorganization; l. provide health care, corporate, finance, litigation, securities and tax expertise and other general non-bankruptcy services to the Debtors to the extent requested by the Debtors; and m. perform other necessary or appropriate legal services in connection with these chapter 11 cases for or on behalf of the Debtors. Nicholas F. Kajon, Esq., a shareholder at Stevens & Lee, tells the Court that the firm was employed by the Debtor since Mar. 23, 2006, as conflicts counsel in connection with the Debtors' chapter 11 cases. Mr. Kajon relates that on Mar. 24, 2006, the firm received a $25,000 retainer. Mr. Kajon discloses that attorneys at the firm bill between $280 to $675 per hour while paralegals bill $150 per hour. Mr. Kajon assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Nashua, New Hampshire, Curative Health Services, Inc. -- http://www.curative.com/-- provides Specialty Infusion and Wound Care Management services. The company and 14 of its affiliates filed for chapter 11 protection on Mar. 27, 2006 (Bankr. S.D.N.Y. Case No. 06-10552). Brian E. Greer, Esq., and Martin N. Flics, Esq., at Linklaters, represent the Debtors in their restructuring efforts. No Committee of Unsecured Creditors has been appointed in the Debtors' chapter 11 cases. The Debtors financial condition as of Sept. 30, 2005 showed $155,000,000 in total assets and $255,592,000 in total debts. CYC EXPRESS: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: CYC Express, Inc. 3738 Hawkins Street, Northease, Suite B Albuquerque, New Mexico 87109 Tel: (505) 345-9992 Bankruptcy Case No.: 06-10751 Type of Business: The Debtor provides air transportation, delivery, and mailing services. Chapter 11 Petition Date: May 11, 2006 Court: District of New Mexico (Albuquerque) Judge: Mark B. McFeeley Debtor's Counsel: George M. Moore, Esq. Moore, Berkson, & Gandarilla, P.C. P.O. Box 216 Albuquerque, New Mexico 87103 Tel: (505) 242-1218 Fax: (505) 242-2836 Estimated Assets: Unknown Estimated Debts: $1 Million to $10 Million Debtor's 18 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Ann Hebenstreit $890,000 206 Laguna Southwest Albuquerque, NM 87104 Andrew Hebenstreit $420,000 3788 B Hawkins Northeast Albuquerque, NM 87109 FleetCor $145,994 P.O. Box 105080 Atlanta, GA 30348 Fred Stegman & Chang Y. Casebier $105,000 Wells Fargo Business Direct $98,460 Saenz Material Handling $24,112 Internal Revenue Service $17,146 Ryder Transportation Services, Inc. $16,464 Wishire Insurance $13,351 Pulakos & Alongi, Ltd. $13,316 Kangaroo Express $12,739 Cox American Car Care Center $11,027 American International Companies $10,698 Border International Trucks $10,087 GE Trailer Transport $9,314 BCP Goodyear, LLC $7,048 Penske Truck Leasing, LP $4,805 Conoco Commercial $4,375 DANA CORP: Board of Directors Holds Grants in Dana Deferred Plan ---------------------------------------------------------------- In a Form 8-K filed with the U.S. Securities and Exchange Commission, Dana Corporation reports that its Board of Directors, on April 28, 2006, suspended the annual crediting of units to participants' stock accounts under the Dana Corp. Director Deferred Fee Plan. Dana's non-management directors participate in the Plan. Prior to the Board's action, on the date of the Board's annual organizational meeting each year, each non-management director's stock account was credited with a number of units equivalent to the number of whole shares of Dana stock that could have been purchased for $75,000, based on the trading price of the stock on the grant date. According to Michael L. DeBacker, Dana's vice president, general counsel and secretary, to replace the annual grant of units under the Plan, the Board authorized an increase in the annual retainer paid to non-management directors for service on the Board from $40,000 to $115,000. In 2006, the $75,000 increase will be paid in equal installments, together with the quarterly retainer payments remaining in the year. Commencing in 2007, the $115,000 total annual retainer will be paid in equal quarterly payments. The increase is subject to the Bankruptcy Court's approval. In February 2006, the Board had suspended the deferral provisions of the Plan, under which non-management directors could elect to defer their compensation for services to the Board and Board committees, and directed that all the compensation be paid in cash. About Dana Corporation Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Agrees with Underwriters to Continue Ohio Action ----------------------------------------------------------- In February 2001, certain Underwriters at Lloyd's London commenced an action before the Court of Common Pleas of Lucas County, Ohio, against, among other parties, Allstate Insurance Company for contribution and interest arising from the Underwriters' payment of indemnity and defense expenses to Dana Corporation arising from asbestos-related bodily injury claims made against the Debtor. The Underwriters provide comprehensive general liability insurance to Dana Corporation. Allstate, as successor-in-interest to Northbrook Excess and Surplus Insurance Company, formerly known as Northbrook Insurance Company, also provide comprehensive general liability insurance to Dana. Dana subsequently was joined as a party to the Ohio Contribution Action, but there are presently no claims made by, or pending against, it in the Ohio Contribution Action. Dana and the Underwriters previously entered into a settlement agreement, under which Dana conceded that the Underwriters were entitled to pursue the Ohio Contribution Action against Allstate. Dana also agreed to refrain from taking steps to stay, prevent or otherwise hinder the Underwriters' pursuit of the Action against Allstate. Under the Settlement Agreement, the Underwriters agreed to reduce any amount they obtain from Allstate to the extent necessary to limit that amount solely to interest on amounts paid by the Underwriters to Dana as indemnity or defense expenses for asbestos bodily injury claims. Allstate, however, asserts that the automatic stay under Section 362(a)(3) of the Bankruptcy Code precludes the Underwriters from collecting contribution from Allstate in the Ohio Contribution Action and further asserts that any collection of contribution would reduce the limits of the Allstate Policies, which it contends are property of the Debtors' estate. The Debtors, in reliance on the Settlement Agreement, think otherwise since the collection of interest would not impair the limits of the Allstate Policies. In line with the Underwriters' desire that the Ohio Contribution Action continue, the Debtors and the Underwriters stipulate that: (1) the automatic stay will be modified solely to the extent necessary to permit the Underwriters to pursue the Ohio Contribution Action against Allstate to resolution; (2) the Stipulation does not permit the Underwriters to collect or seek to enforce the portion of any judgment or settlement from Allstate that would reduce the available limits of the Allstate Policies; (3) the Stipulation does not permit either the Underwriters or Allstate to seek or obtain any discovery from Dana -- although Dana will consider reasonable requests for necessary discovery-related material not otherwise available from sources other than Dana -- or to take or file any action or claim against Dana, in the Ohio Contribution Action, which discovery, actions and claims remain stayed; (4) the automatic stay, to the extent it is applicable, will be modified solely to the extent necessary to permit the Underwriters to collect from Allstate, and otherwise enforce, the interest portion of any judgment or settlement entered in the Ohio Contribution Action so long as the collection or enforcement will not reduce the available limits of the Allstate Policies; (5) the automatic stay precludes the Underwriters from collecting from, or enforcing against, Allstate the contribution portion of any judgment or settlement entered in the Ohio Contribution Action; and (6) the Stipulation is a compromise, and will not be admissible in any future litigation over the question of whether the automatic stay applies to the Ohio Contribution Action or any other similar matter. About Dana Corporation Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Five Entities Own Over 5% of Common Stock ---------------------------------------------------- In its annual report filed with the U.S. Securities and Exchange Commission, Dana Corporation discloses that five entities have filed reports with the SEC stating that they beneficially own more than 5% of Dana common stock: Number of Shares Percent Entity Beneficially Owned of Class ------ ------------------ -------- Appaloosa Investment Limited Partnership I 22,500,000 14.8% Brandes Investment Partners, L.P. 210,859,029 7.2% Donald Smith & Co., Inc. 15,037,400 9.99% GAMCO Investors, Inc. 7,308,889 4.86% Owl Creek Asset Management, L.P. 10,350,000 6.9% About Dana Corporation Headquartered in Toledo, Ohio, Dana Corporation -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000). DEAN FOODS: S&P Assigns BB- Rating to Proposed $300 Million Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to Dean Foods Inc.'s proposed issue of $300 million 10-year notes. The notes are a drawdown from a Rule 415 shelf filing. As senior unsecured obligations, the rating is notched down twice from the 'BB+' corporate credit rating on the company because of the amount of secured debt outstanding. These notes will be used to reduce borrowings under the senior secured revolving credit facility. The corporate credit rating on Dean Foods is BB+/Stable/--. "The rating reflects the company's position as the leading national dairy company in the U.S., with about a 35% share, due to the stable demand characteristics of the industry," said Standard & Poor's credit analyst Jayne Ross. "This is tempered by a moderately aggressive financial profile. The rating further reflects Dean Foods' strong portfolio of national, regional, local, and private-label brands; its solid regional market positions; its geographic diversity; its stable cash flow; its moderate capital expenditures; cost-saving opportunities; and an experienced management team." Ratings List: Dean Foods Co.: * Corporate credit rating: BB+/Stable/-- * Senior secured debt: BBB- * Senior unsecured debt: BB- Rating assigned: * $300 senior unsecured notes due 2016: BB- DELTA AIR: Posts $2.1 Billion Net Loss in First Quarter 2006 ------------------------------------------------------------ Delta Air Lines (Other OTC: DALRQ) reported results for the quarter ended March 31, 2006. Key points include: -- Delta's first quarter net loss was $2.1 billion. Excluding reorganization and special items, the first quarter net loss was $356 million. -- In April, Delta reached a tentative agreement with its pilot union on contractual changes designed to deliver $280 million in average annual pilot labor cost savings. -- As of March 31, 2006, Delta had $3.4 billion in cash and cash equivalents, of which $2.4 billion was unrestricted. -- Delta reported a net loss of $2.1 billion in the first quarter of 2006, compared to a net loss of $1.1 billion in the first quarter of 2005. -- Excluding the reorganization and special items described below, the net loss was $356 million in the first quarter of 2006 compared to a net loss of $684 million in the first quarter of 2005. Delta expects to file its Monthly Operating Report for March 2006 with the U.S. Bankruptcy Court today, May 15, 2006. In that report, the company will report a net loss of $1.6 billion for the month. Excluding reorganization and special items, the March 2006 net loss was $6 million. "While continued losses clearly are unacceptable, Delta's financial performance for the quarter was in line with expectations, especially in light of fast-rising fuel prices," said Gerald Grinstein, Delta's chief executive officer. "Despite these higher fuel costs, however, our company succeeded in reducing the first quarter operating loss by nearly fifty percent year-over-year - evidence that Delta's plan is on-track. I am extremely grateful to Delta people for their participation and their commitment to the hard work still ahead as we build a strong, lean, competitive airline with a long-term future." Agreement with ALPA On April 14, 2006, Delta announced that it reached a tentative comprehensive agreement with the Air Line Pilots Association, its pilot union, on contractual changes designed to deliver $280 million in average annual pilot labor cost savings through a combination of changes to wages, benefits and work rules. The tentative agreement is subject to ratification by Delta's pilots. The results of the ratification vote are expected on May 31, 2006. In addition to pilot ratification, the agreement is subject to approval by the U.S. Bankruptcy Court. Financial Performance Excluding special items, first quarter operating revenues increased by $202 million or 5.5%, compared to the first quarter of 2005, despite an 8.6% decrease in capacity. Excluding special items, passenger unit revenues increased 15.2% compared to the March 2005 quarter and a 12.4% improvement in yields drove the increase in passenger unit revenues. The load factor for the first quarter was 76.2%, a 1.9 point increase as compared to the first quarter of 2005. Excluding special items, operating expenses for the first quarter decreased 1.2% from the corresponding period in the prior year, despite a fuel expense increase of $266 million attributable to higher fuel prices. Delta's average fuel price for the first quarter of 2006 was $1.86 per gallon, compared to $1.42 per gallon in the prior year quarter. Excluding fuel and special items, mainline unit costs decreased 1.0%. The March 2006 quarter includes $1.7 billion in non-cash charges for reorganization and special items. Including those items, Delta's first quarter operating revenues increased by $13 million or 0.4%; passenger unit revenues increased 12.5 percent; yields increased 9.7%; operating expenses decreased 9.8%; and mainline unit costs decreased 5.8%, compared to the March 2005 quarter. "Our business plan initiatives to improve unit revenue performance, optimize our fleet, and reduce costs resulted in more than a half billion dollar impact to this quarter's financial results," said Edward H. Bastian, Delta's executive vice president and chief financial officer. "While we are encouraged by the results of our restructuring efforts, we still have a great deal of hard work ahead for Delta's turnaround to be successful." Liquidity At March 31, 2006, the company had $3.4 billion in cash and cash equivalents, of which $2.4 billion was unrestricted. Capital expenditures for the quarter were $92 million. At March 31, 2006, Delta was in compliance with all of the financial covenants in its post-petition financing arrangements. During the March 2006 quarter, Delta received approval from the lenders of its $1.9 billion debtor-in-possession credit facility to amend and restate that facility. The revised credit facility reduced Delta's interest rate on the three term loans making up the facility, resulting in annual interest savings of more than $30 million. Delta also reduced the interest rate for its post- petition financing from American Express Travel Related Services Company, Inc. Also during the March 2006 quarter, Delta completed a letter of credit facility with Merrill Lynch that allows the company to utilize up to $300 million in cash that would normally be held in reserve by Delta's Visa/MasterCard processor. Reorganization and Special Items In the first quarter of 2006, Delta recorded $1.7 billion in non- cash charges for reorganization items and accounting adjustments. These items are: -- a $1.4 billion charge for reorganization items, primarily reflecting estimated pre-petition bankruptcy claims for the restructuring of financing arrangements for 124 mainline aircraft. -- a $310 million net charge for three accounting adjustments: * A $112 million charge in landing fees and other rents, resulting from historical differences primarily associated with recording rent expense at Delta's JFK facility based on actual rent payments instead of on a straight-line basis over the lease term. * A $108 million net charge related to the sale of mileage credits under the SkyMiles(R) frequent flyer program, which is comprised of an $83 million decrease in passenger revenues, a $106 million decrease in other, net operating revenues, and an $81 million decrease in other operating expenses. * A $90 million charge in salaries and related costs to adjust an accrual for post-employment healthcare benefits. In the first quarter of 2005, Delta recorded $387 million in charges for special items, including: (1) a $453 million charge related to employee initiatives under Delta's 2004 Transformation Plan, (2) a $68 million charge related to the company's defined benefit pension plan for pilots, and (3) a $10 million charge related to aircraft retirements. These charges were offset by a $144 million benefit from a reduction in Delta's required deferred income tax asset reserve. About Delta Air Lines Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000). DIALOG GROUP: Berenfeld Spritzer Raises Going Concern Doubt ----------------------------------------------------------- Berenfeld, Spritzer, Shechter and Sheer in Coral Gables, Florida, raised substantial doubt about Dialog Group, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations and significant accumulated deficiency. The Company reported a $1,918,666 net loss on $6,722,703 of revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $1,648,491 in total assets and $5,909,946 in total liabilities, resulting in a $4,261,455 stockhlders' deficit. The Company's Dec. 31 balance sheet also showed strained liquidity with $973,986 in total current assets available to pay $4,200,655 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?909 Headquartered in New York, N.Y., Dialog Group, Inc., provides a combination of traditional advertising (print, broadcast) and marketing services (broadcast, new media, and internet-based promotional venues), as well as a broad spectrum of proprietary and exclusive databases for healthcare, pharmaceutical, consumer and business-to-business market clients. The Company and imx-eti LifePartners, Inc., its wholly owned subsidiary, filed for chapter 11 protection on Nov. 20, 2000 (Bankr. S.D. Fla. Case No. 00-35217). The Bankruptcy Court confirmed the Company's Third Amended Plan of Reorganization on Oct. 11, 2001, and that Plan took effect on Dec. 11, 2001. The Bankruptcy Court finally closed the Company's cases on Oct. 24, 2002. DOBSON CELLULAR: Moody's Rates New Senior Secured Notes at B1 ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Dobson Cellular Systems, Inc.'s new senior secured notes. At the same time, Moody's affirmed all existing long term ratings of DCS, American Cellular Corporation and their parent company, Dobson Communications Corporation, including Dobson's B3 corporate family rating. Dobson's speculative grade liquidity rating, however, has been changed to SGL-2 from SGL-3. Finally, Moody's withdrew the rating on Dobson's 12.25% senior exchangeable preferred stock, as that instrument has been redeemed. The outlook remains stable. The rating action is prompted by the company's announcement that it will issue $250 million of 8.375% series B first priority senior secured notes due 2011 to effectively refinance its existing $250 million of first priority senior secured floating rate notes also due in 2011. Following the transaction, Moody's expects the company's total amount of debt will remain unchanged. The upgrade in the SGL rating reflects Moody's expectation that free cash flow is likely to remain positive and grow over time such that the company's liquidity is now considered to be "good". The B3 corporate family reflects Dobson's position as a relatively small rural and suburban cellular operator with a meaningful dependence on one of its contractual roaming relationships as well as a relatively recent history of soft operating performance offset by Moody's expectations for improved results going forward. The rating also incorporates the company's high Debt to EBITDA leverage, and Moody's expectation that, while free cash flow is expected to grow, it is currently modest in relation to debt levels. Upgrades: Issuer: Dobson Communications Corporation * Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Assignments: Issuer: Dobson Cellular Systems, Inc * Senior Secured Regular Bond/Debenture, Assigned B1 Withdrawals: Issuer: Dobson Communications Corporation * Preferred Stock, Withdrawn, previously rated C Headquartered in Oklahoma City, Dobson Communications Corp. provides wireless service in rural and suburban areas of the US to approximately 1.5 million subscribers with LTM revenues of $1.2 billion. DOBSON CELLULAR: S&P Rates Proposed $250 Mil. Sr. Sec. Notes at B ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating and '1' recovery rating to Dobson Cellular Systems Inc.'s proposed offering of $250 million of 8.375% first-priority senior secured notes due 2011. The ratings indicate expectations for full recovery of principal in the event of a payment default. Proceeds from the offering will be used to refinance $250 million of first-priority senior secured floating-rate notes. At the same time, Standard & Poor's raised the ratings on Dobson's first-priority senior secured credit facility and existing first- priority senior secured notes to 'B' from 'B-', and the recovery ratings to '1', from '2' and '3', respectively, indicating expectations for a full recovery of principal in the event of a payment default. The recovery rating for the second-priority senior secured notes was raised to '4' from '5', indicating expectations for a marginal (25%-50%) recovery of principal in the event of a payment default, while the debt rating is unchanged at 'CCC'. "The upgrades reflect our view that Dobson's business is likely to be reorganized in the event of a payment default, given current demand for wireless services and the intrinsic value of the licensed wireless spectrum," said Standard & Poor's credit analyst Susan Madison. The corporate credit rating on Oklahoma City, Oklahoma-based Dobson Communications Corp., is 'B-' with a negative outlook. Dobson Cellular is a wholly owned subsidiary of Dobson Communications, a wireless company serving about 1.5 million subscribers in rural and suburban markets in 16 states. The ratings on Dobson Communications and its operating subsidiaries, Dobson Cellular and American Cellular Corp., reflect: * the company's limited subscriber growth over the last year; * increased competition from larger, better-capitalized, national wireless competitors; * its heavy reliance on roaming revenue; and * aggressively leveraged capital structure. These risks are somewhat tempered by: * an improving financial profile; * healthy wireless industry growth; and * opportunities for increased data revenue. Ratings List: Dobson Communications Corp.: Corporate credit rating: B-/Negative/-- Dobson Cellular Systems Inc.: Ratings Assigned: * $250 mil 8.375% senior secured notes B (Recovery rating: 1) Ratings Raised: To From -- ---- Senior secured credit facility B B- Recovery rating 1 2 First-priority senior secured notes B B- Recovery rating 1 3 Second-priority senior secured notes CCC CCC Recovery rating 4 5 EDISON MISSION: S&P Affirms B+ Rating on 190MM of Sr. Unsec. Bonds ------------------------------------------------------------------ Standard & Poor's Ratings Services' affirmed the 'B+' corporate credit and $190 million senior unsecured bond ratings on Edison Mission Energy Funding Corp. At the same time, Standard & Poor's revised the company's outlook to positive from stable, to reflect the outlook revision on owner Edison Mission Energy. The positive outlook on EME reflects the expectation that EME's financial position will improve once the proposed tender and refinancing is completed. The proposal eliminates the refinancing risk at EME while adding substantial liquidity. The rating on EME Funding's debt reflects primarily the rating on EME, the 100% owner of four guarantors in this project transaction. Because the guarantors are not bankruptcy remote from EME, they are at increased risk that if EME experiences credit deterioration or, in a worst-case scenario, an insolvency event, it could negatively affect EME Funding. Standard & Poor's does not rate EME Funding as a separate entity, because it does not benefit from the legal protections providing for separateness. Furthermore, EME Funding's lenders do not benefit from a security interest in the guarantors' project assets or project partnership interests. The positive outlook reflects the outlook on EME. The positive outlook also takes into consideration that a large cash balance remains on the books at EME, a portion of which is earmarked for repayment of the debt at Mission Energy Holding Co. "The rating could be raised if EME successfully repays the debt at MEHC, margins and distributions remain good at Midwest Gen and Homer City, and Homer City successfully finances the necessary pollution control equipment," said Standard & Poor's credit analyst Arleen Spangler. Absent these events, the outlook could be revised to stable. "The rating could move downward if Midwest Gen and Homer City do not contribute to the parent as expected, or if EME invests in new projects that do not contribute more stable and predictable cash flow," she continued. EOIN KILCULLEN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Eoin P. Kilcullen 5 Warren Avenue, No. 2 Milton, Massachusetts 02186 Bankruptcy Case No.: 06-11353 Chapter 11 Petition Date: May 9, 2006 Court: District of Massachusetts (Boston) Judge: Robert Somma Debtor's Counsel: William J. McLeod, Esq. McLeod Law Offices, P.C. 77 Franklin Street Boston, Massachusetts 02110 Tel: (617) 542-2956 Fax: (617) 695-2778 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. FALCONBRIDGE LTD: Receives Inco's Increased Purchase Offer ---------------------------------------------------------- Falconbridge Limited amended the terms of its Support Agreement with Inco Limited whereby it has agreed to recommend an increased offer from Inco to acquire all outstanding common shares of Falconbridge. Rachelle Younglai at Reuters reports, Inco increased the cash component of its original C$12 billion offer for Falconbridge, boosting the total value of the deal to C$19 billion. Under the revised terms, Inco's take-over offer will be amended to increase the amount of cash to be received by Falconbridge shareholders by CDN$5 per share, assuming full pro-ration. "We continue to believe in the compelling strategic and economic rationale of combining Falconbridge with Inco and the revised offer terms reflect Falconbridge's excellent financial results and tremendous prospects given the increases in metal prices and very strong market fundamentals," Derek Pannell, Chief Executive Officer of Falconbridge, said. "The added cash will provide our shareholders with about CDN$1.9 billion more in value compared with the original deal negotiated with Inco," Mr. Pannell added. "In addition, the tangible synergies available to the combined company are much greater under current metals prices than previously estimated and are focused directly on enhancing our operating platform, rather than simply eliminating corporate overlap and jobs. Assuming completion of this deal, Falconbridge shareholders will own approximately 47% of the combined company and will continue to benefit from increased earnings due both to higher metals prices and to the very significant operating synergies that will result from combining our two great companies." Inco and Falconbridge have amended the Support Agreement to revise the terms of Inco's offer such that each Falconbridge common shareholder may elect to receive either 0.6927 Inco common shares plus CDN$0.05 or CDN$51.17 per share, subject to a maximum number of shares and cash, and subject to pro-ration. The maximum amount of cash available is CDN$4.8 billion and the maximum amount of Inco common shares available is unchanged at 201 million. Assuming all shareholders tender for the cash option or all shareholders tender for the share option, each shareholder would be entitled to receive 0.524 Inco shares plus CDN$12.50. Among other amendments to the Support Agreement, Falconbridge has agreed to a "break fee" in the amount of $450 million, payable to Inco if a competing offer is recommended by Falconbridge and in certain other events. "We have always believed that combining Falconbridge with Inco makes the best strategic and economic sense for Falconbridge and its shareholders. The pro forma balance sheet of the combined company will not be stressed by the increased cash payment to our shareholders given the continued improvements in metal prices. We remain confident that regulatory approval will be received soon and look forward completing this outstanding transaction," Mr. Pannell said. "The Falconbridge management team is committed to this deal and to ensuring that the synergies identified can be delivered by the new Inco." Inco and Falconbridge continue to work with the U.S. Department of Justice and the European Commission in connection with reviews of pending transaction. About Inco Inco Limited -- http://www.inco.com/-- is the world's #2 producer of nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the UK. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel orebodies. It employs 14,500 people at its operations and offices in 18 countries. The Company owns nickel mines in Canada and the Dominican Republic and operates a refinery and sulfuric acid plant in Norway. It is also a major producer of copper (38% of sales) through its Kidd mine in Canada and its stake in Chile's Collahuasi mine and Lomas Bayas mine. Its other products include cobalt, platinum group metals, and zinc. * * * Falconbridge's CDN$150 million 5% convertible and callable bonds due April 30, 2007, carries Standard & Poor's BB+ rating. FIRSTLINE CORP: U.S. Trustee Names Two More Creditors to Committee ------------------------------------------------------------------ The U.S. Trustee for Region 21 appointed Mass Polymers Corp. and Chevron Phillips Chemical Company LP to the Official Committee of Unsecured Creditors in FirstLine Corporation's chapter 11 case. The Committee is now comprised of: 1. Sean Browne, CFO Trademark Plastics Corporation 2201 Edgar Road P.O. Box 4009 Linden, New Jersey 07036 Tel: (908) 925-5900, ext. 245 Fax: (908) 925-1180 2. John Rainey Accountant Standridge Color Corporation 1196 Hightower Trail Social Circle, Gergia 30025 Tel: (770) 464-3362, ext. 1257 Fax: (770) 464-2202 3. Roger Kolm, President Kolm Polymers, Ltd P.O. Box 130415 The Woodlands, Texas 77393-0415 Tel: (281) 364-6904 Fax: (281) 364-6921 4. Bob Mularz Senior Credit Analyst Formosa Plastics Corp. 9 Peach Tree Hill Road Livingston, New Jersey 07039 Tel: (973) 716-7214 Fax: (973) 716-7450 5. Steve J. Todt Managing Member Orion Polymers, LLC P.O. Box 2967 Murfreesboro, Tennessee 37133-2967 Tel: (615) 848-2911 Fax: (615) 849-2995 6. Wes Baker Sales Manager Lastique International Corp. 8331 Can Run Road Louisville, Kentucky 40258 Tel: (678) 319-1566 Fax: (678) 319-0422 7. Letha Black Assistant Constroller Poly-America, L.P. 2000 West Marshall Drive Grand Prairie, Texas 75051 Tel: (972) 337-7267 Fax: (972) 337-8267 8. Jeff Durham Credit Manager Mass Polymers Corp. 69 Adams Street Newton, Massachusetts 02458 Tel: (617) 964-9400 Fax: (617) 696-1248 9. Darren L. Ercolani Credit Manager Chevron Phillips Chemical Company LP 10001 Six Pines Drive - Room 7126-B The Woodlands, Texas 77380 Tel: (832) 813-4351 Fax: (832) 813-6094 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Valdosta, Georgia, FirstLine Corporation -- http://www.firstlinecorp.com/-- supplies home-building and construction materials. The company filed for chapter 11 protection on Mar. 6, 2006 (Bankr. M.D. Ga. Case No. 06-70145). Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represents the Debtor in its restructuring efforts. As of Jan. 31, 2006, the Debtor reported assets totaling $37,061,890 and debts totaling $26,481,670. FIRSTLINE CORP: Committee Hires Kilpatrick Stockton as Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Georgia gave the Official Committee of Unsecured Creditors appointed in FirstLine Corporation's Chapter 11 case permission to hire Kilpatrick Stockton LLP as its counsel. Kilpatrick Stockton will: -- render legal advice regarding the Committee's organization, duties and powers in the Debtor's chapter 11 case; -- assist the Committee in its investigation of the Debtor's acts, conduct, assets, liabilities and financial conditions, the operation of the Debtor's business and the desirability of continuing the same, the potential sale of the Debtor's assets, and any other matter relevant to the case or the formulation and analysis of any plan of reorganization or plan of liquidation; -- attend meetings of the Committee and meetings with the Debtor, its attorneys, and other professionals, as requested; -- represent the Committee in hearings before the Court; and -- provide other legal assistance as the Committee may deem necessary and appropriate. Todd C. Meyers, Esq., a partner at the firm, disclose that the firm's professionals charge these hourly rates: Partners $395 to $595 Counsel $335 to $355 Associates $195 to $280 Paralegals $130 to $170 Mr. Meyers assured the Court that his firm does not hold any interest materially adverse to the Debtor and is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. Headquartered in Valdosta, Georgia, FirstLine Corporation -- http://www.firstlinecorp.com/-- supplies home-building and construction materials. The company filed for chapter 11 protection on Mar. 6, 2006 (Bankr. M.D. Ga. Case No. 06-70145). Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represents the Debtor in its restructuring efforts. As of Jan. 31, 2006, the Debtor reported assets totaling $37,061,890 and debts totaling $26,481,670. FORD MOTOR: W.C. Ford Retains Influence After Shareholders Meet --------------------------------------------------------------- Proposals to diminish William Clay Ford Jr.'s influence in Ford Motor Company were voted down in the Company's annual shareholders meeting on May 11, 2005, The New York Times reports. William Clay Ford Jr. sits as Ford's Chairman and Chief Executive Officer. The "recapitalization plan", submitted by John Chevedden -- on behalf of the Ray T. Chevedden and Veronica G. Chevedden Family Trust, which owns 1,748 shares of common stock - proposes that all of the Company's outstanding stock will have one vote per share. Mr. Chevedden's proposal got 23% of the votes. Ford Family shares are currently allowed 16-votes per share compared to the one-vote per share for regular shareholders. According to Mr. Chevedden, this dual class voting stock reduces accountability by allowing insiders to retain corporate control disproportionate to their money at risk. Mr. Chevedden contended that the danger of giving disproportionate power to insiders is illustrated by Adelphia Communications, which was the nation's 6th largest cable television company in 2002. Adelphia's dual class voting stock gave the Rigas family control and contributed to Adelphia's participation in "one of the most extensive financial frauds ever to take place at a public company." The SEC alleged that Adelphia fraudulently excluded more than $2.3 billion in bank debt from its consolidated financial statements and concealed "rampant self-dealing by the Rigas Family." Meanwhile, the price of Adelphia stock collapsed from $20 in March 2002 to $0.79 in June 2002. In May 1994, the New York Stock Exchange issued a regulation prohibiting companies to issue new stock with excessive voting power. Many companies have subsequently switched to a one share - one vote structure. Since 1999, 14 companies have moved from a dual class to a single class of stock. These include: Raytheon, Freeport McMoRan, FCX and Readers' Digest Association. Ford had a market capitalization of $25 billion in 2004 -- falling to $15 billion in 2005. This still large capitalization magnifies the danger to investors that is inherent in any dual class voting structure, Mr. Chevedden pointed out. Independent Board Chairman Shareholders also voted down another of Mr. Chevedden's proposal. Mr. Chevedden suggested that the Chairman of the Board of Directors serve in that capacity only and have no management duties, titles, or responsibilities. Mr. Chevedden pointed out that the primary purpose of the Chairman of the Board is to protect shareholders' interests by providing independent oversight of management, including the CEO. Separating the roles of Chairman and CEO can promote greater management accountability to shareholders and lead to a more objective evaluation of the CEO. The move got 19% of the votes. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- is the world's third largest automobile manufacturer. The Company manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on March 15, 2006, Fitch Ratings downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'BB' from 'BB+'. As reported in the Troubled Company Reporter on Jan. 13, 2006, Moody's Investors Service lowered its ratings on Ford Motor Company (Corporate Family and long-term to Ba3 from Ba1). The rating outlook for Ford Motor is negative. As reported in the Troubled Company Reporter on Jan. 9, 2006, Standard & Poor's Ratings Services lowered its corporate credit ratings on Ford Motor Co., Ford Motor Credit Co. (Ford Credit), and all related entities to 'BB-/B-2' from 'BB+/B-1' and removed them from CreditWatch, where they were placed on Oct. 3, 2005, with negative implications. S&P said the outlook is negative. FRIENDLYWAY C0RP: Balance Sheet Upside-Down by $3.1M at Jan. 31 --------------------------------------------------------------- friendlyway Corporation delivered its quarterly report on Form 10-QSB for the quarter ending January 31, 2006, to the Securities and Exchange Commission on March 27, 2006. The Company reported a $362,567 net loss on $459,817 of net revenues for the quarter ending Jan. 31, 2006. At Jan. 31, 2006, the Company's balance sheet showed $549,330 in total assets and a $3,104,124 stockholders deficit. Alexander von Welczeck, the Company's Chief Executive Officer, told the SEC that the realization of a major portion of the Company's assets is dependent upon its ability to meet future financing requirements, and the success of future operations. Additionally, the Company is seeking additional sources of financing, primarily for working capital purposes. The Company's ability to continue as a going concern is highly dependent on its ability to obtain financing. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?8fa friendlyway Corporation -- http://www.friendlywayinc.com/-- through its wholly-owned subsidiary, friendlyway Technologies, Inc., is a self-service provider of customer-facing public access self-service systems primarily in the United States of America. The Company's products focus on the improvement of internet-based customer communication at the point of sale in retail stores, point of service/information in public locations or the Internet. FTS GROUP: Auditor Raises Going Concern Doubt --------------------------------------------- R. E. Bassie & Co. in Houston, Texas, raised substantial doubt about FTS Group, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations. The Company reported a $1,997,236 net loss on $1,310,731 of revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $1,974,495 in total assets, $1,762,084 in total liabilities, and $212,411 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?90b FTS Group, Inc. -- http://www.SatPhoneCentral.com/and http://www.CellChannel.com/-- develops and acquires businesses primarily in the wireless industry. Through FTS Wireless, Inc., a wholly-owned subsidiary, acquires and develops a chain of retail wireless locations in the Gulf Coast market of Florida. As of March 1, 2006, the Company operates nine retail wireless locations in Florida. GATEWAY DISTRIBUTORS: Auditor Raises Going Concern Doubt -------------------------------------------------------- Lawrence Scharfman & Co., CPA PC, in Boynton Beach, Florida, raised substantial doubt about Gateway Distributors, Ltd.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the Company's need for additional working capital for its planned activity and payment of debt. The Company reported a $903,728 net loss on $769,759 of sales for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $3,615,993 in total assets, $2,852,730 in total liabilities, and $763,263 in total stockholders' equity. The Company's Dec. 31 balance sheet also showed strained liquidity with $580,337 in total current assets available to pay $2,852,730 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?90d Gateway Distributors, Ltd., markets and distributes different nutritional and health products. These products are intended to provide nutritional supplementation to the users. These products are not intended to diagnose, treat, cure or prevent any disease. GREEN TREE: Fitch Cuts Ratings on Two Class Certificates to C ------------------------------------------------------------- Fitch Ratings upgrades four classes, downgrades one class, affirms three classes and assigns Distress Recovery Ratings to Green Tree Recreational, Consumer, and Equipment Trusts. The ratings are: Series 1996-B -- Certificates upgraded to 'CCC' from 'CC'; 'DR2' Distressed Recovery Rating Assigned. Series 1996-C -- Certificates upgraded to 'CCC' from 'CC'; 'DR2' Distressed Recovery Rating Assigned. Series 1996-D -- Certificates upgraded to 'CCC' from 'CC'; 'DR2' Distressed Recovery Rating Assigned. Series 1997-A -- Certificates affirmed at 'CC'; 'DR3' Distressed Recovery Rating Assigned. Series 1997-D -- Certificates upgraded to 'CCC' from 'CC'; 'DR2' Distressed Recovery Rating Assigned. Series 1998-B -- B-1 Certificates Affirmed at 'BBB'; -- B-2 Certificates Downgraded to 'C' from 'CC'; 'DR5' Distressed Recovery Rating Assigned. Series 1998-C -- B-1 Certificates Affirmed at 'BBB'; -- B-2 Certificates Downgraded to 'C' from 'CC'; 'DR6' Distress Recovery Rating Assigned. The rating changes reflect additions or reductions in the credit enhancement Fitch expects will be available to support each class in the above transactions. Anticipated credit enhancement is determined by Fitch's cash flow model and considers stressed remaining losses, delinquency experience, prepayment rates, recovery rates, and unique structural characteristics etc. The securities are backed by a pool of secured loans consisting primarily of marine and recreational vehicles made by Conseco Finance Corp. (originally Green Tree Financial Corporation). The loans are now serviced by Green Tree Servicing (GTS) LLC, a byproduct of Conseco Inc.'s 2003 restructuring. GTS is currently rated 'RPS3' as a residential mortgage servicer by Fitch. Distressed Recovery Ratings (DR) are issued on a scale of 'DR1' (highest) to 'DR6' (lowest) to denote the range of recovery prospects given a currently distressed or defaulted security. Fitch's Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. GREEN TREE: S&P Puts Default Rating on Two Transaction Classes -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings to 'D' on two classes from two Green Tree-related manufactured housing transactions. The lowered ratings reflect the reduced likelihood that investors will receive timely interest and the ultimate repayment of their original principal investments. Both Manufactured Housing Contract Sr./Sub Pass-Thru Trust 1999-5 and Manufactured Housing Contract Sr./Sub Pass-Thru Trust 1999-6 reported outstanding liquidation loss interest shortfalls for their class M-1 certificates on the May 2006 payment date. Standard & Poor's believes interest shortfalls for these transactions will continue to be prevalent in the future, given the adverse performance trends displayed by the underlying pools of collateral as well as the location of mezzanine and subordinate class write-down interest at the bottom of the transactions' payment priorities (after distributions of senior principal). As of the May 2006 payment date, series 1999-5 and 1999-6 had experienced cumulative net losses of 20.28% and 19.55% of their initial pool balances, respectively. Standard & Poor's will continue to monitor the outstanding ratings associated with these transactions in anticipation of future defaults. Ratings Lowered: Manufactured Housing Contract Sr./Sub Pass-Thru Trust 1999-5 Rating Class To From ----- -- ---- M-1 D CCC- Manufactured Housing Contract Sr./Sub Pass-Thru Trust 1999-6 Rating Class To From ----- -- ---- M-1 D CCC- HARD ROCK: Agrees to Sell Assets to Morgans Hotel for $770 Million ------------------------------------------------------------------ Hard Rock Hotel Inc. and Morgans Hotel Group Co. signed definitive agreements to acquire the Hard Rock Hotel & Casino in Las Vegas, an adjacent 23-acre land parcel, and other related assets from Peter Morton for an aggregate purchase price of $770 million in cash. The Hard Rock Hotel & Casino is located on 16.7 acres situated on Harmon Avenue, one of Las Vegas' fastest growing entertainment corridors. Built in 1995 and expanded in 1999, the property features an 11-story Hard Rock Hotel tower with 647 guest rooms; a 30,000 square foot casino; a beach club with a swimming pool; the Body English nightclub; "The Joint" concert hall; five restaurants; three cocktail lounges; several retail stores; and an 8,000 square foot spa, salon and fitness center. The adjacent 23-acre land parcel, including a 544-unit apartment complex currently situated on the parcel will be held for further development. The acquisition includes the rights to use the "Hard Rock Hotel" and "Hard Rock Casino" trademarks in connection with casinos and hotels in specified locations, as well as certain other intellectual property such as merchandising and retail rights. This transaction represents the third planned offering in the Las Vegas market by Morgans Hotel Group. The Company reported a joint-venture partnership with Boyd Gaming for their development project, Echelon Place that will be anchored by two prominent MHG brands, Delano and Mondrian, which are expected to add a total of 1,600 rooms to the market in 2010. MHG CEO Comment "We are excited about adding the Hard Rock Hotel & Casino to our portfolio," W. Edward Scheetz, President and Chief Executive Officer of MHG, stated. "Since Las Vegas is the largest hotel market in the U.S., it is key for our growth strategy. This transaction provides us with an immediate and highly-visible entry into this market." He continued, "The Hard Rock is already an extraordinary landmark and we are pleased to be able to acquire a property that has so much expansion potential. We believe we can further enhance it by applying MHG's management infrastructure, marketing approach and reservations system. We also believe that the Hard Rock will complement our existing collection of brands, which have a distinctive nature, eminent design, dynamic and exciting atmosphere, celebrity guests and high-profile events, by targeting a younger demographic that still seeks a unique experience. This hotel, along with our established and renowned Delano and Mondrian brands, will allow us to dominate the Las Vegas market at multiple price points by offering the style, innovation, and service with which our brands are synonymous." MHG may bring in one or more joint venture partners to share in the investment in the existing assets. Although the Company may use some of the excess land for expansion, it is also considering selling or establishing a joint venture partnership to develop a significant portion of it. It is anticipated that the casino will be leased to a third-party licensed operator. Acquisition Financing The acquisition will be financed with cash on hand and MHG's corporate line of credit, as well as a $700 million credit facility from an affiliate of Credit Suisse. The transaction is subject to applicable regulatory approvals and other conditions, and is expected to close no later than the first quarter of 2007. In connection with the transactions, Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Morgans Hotel Group. About Morgans Hotel Group Morgans Hotel Group Co. -- http://www.morganshotelgroup.com/-- which is widely credited with establishing and developing the rapidly expanding boutique hotel sector, owns and operates Morgans, Royalton and Hudson in New York, Delano and The Shore Club in Miami, Mondrian in Los Angeles and Scottsdale, Clift in San Francisco, and Sanderson and St Martins Lane in London. MHG has other property transactions in various stages of completion, including projects in Miami Beach, Florida, and Las Vegas, Nevada, and continues to vigorously pursue its strategy of developing unique properties at various price points in international gateway cities in the United States, Europe, South America, Asia and around the world. About Hard Rock Hotel Hard Rock Hotel, Inc. -- http://www.hardhotel.com/-- owns and operates the Hard Rock Hotel & Casino in Las Vegas, Nevada, which is located one mile east of the Las Vegas Strip. Revenues for the last twelve months ended Sept. 30, 2005, were approximately $170 million. Debt-to-EBITDA for the twelve-month period ended Sept. 30, 2005, was about 4.5x * * * As reported in the Troubled Company Reporter on Feb. 27, 2006, Moody's Investors Service affirmed Hard Rock Hotel Inc.'s B2 Corporate Family Rating and changed the outlook to developing. The rating action was prompted by an announcement that the company has received and will review proposals to acquire its hotel and casino in Las Vegas, Nevada. The developing outlook incorporates uncertainty as to the likelihood, timing and potential impact on creditors of a potential sale. The acquisition of the Hard Rock by a higher rated entity could have positive rating implications and conversely, acquisitions by a more leveraged entity could have negative rating implications. Moody's will continue to monitor developments and take further rating action as more information becomes available. HELLER FINANCIAL: Fitch Ups Ratings on $7.6 Million Certs. to BB+ ----------------------------------------------------------------- Fitch upgrades Heller Financial Commercial Mortgage Asset Corp.'s mortgage pass-through certificates, series 1999 PH-1, to: -- $37.9 million class F to 'AAA' from 'A+'; -- $17.7 million class G to 'AA' from 'A'; -- $35.3 million class H to 'BBB+' from 'BBB-'; -- $20.2 million class J to 'BBB-' from 'BB'; -- $7.6 million class K to 'BB+' from 'BB-'. In addition, Fitch affirms these classes: -- $8.9 million class A-1 at 'AAA'; -- $535.6 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $22.7 million class B at 'AAA'; -- $20.2 million class C at 'AAA'; -- $53 million class D at 'AAA'; -- $12.6 million class E at 'AAA'; -- $15.1 million class L at 'B'; -- $7.6 million class M at 'B-'. The $9.2 million class N is not rated by Fitch. The upgrades reflect the increased subordination levels due to loan payoffs and scheduled amortization, as well as additional defeasance (3.8%) since Fitch's last rating action. As of the April 2006 distribution date, the pool's balance has been reduced 20.5% to $803.2 million from $1 billion at issuance. Since issuance, 22 loans (11.2%) have defeased. Currently, there are six specially serviced assets (2.4%). The largest specially serviced loans (1.1%) are collateralized by a portfolio of three, cross-collateralized apartment buildings in Colorado Springs, CO. The loans remain current. The portfolio transferred to special servicing in January 2006 due to imminent default. The borrower is experiencing cash flow problems and is requesting debt relief. The special servicer is evaluating the borrower's request. The second largest specially serviced asset (0.7%) is a retail center in Watauga, Texas that is real-estate owned. Based on the most recent appraised value, losses are expected upon liquidation. Fitch projected losses on the specially serviced loans are expected to be absorbed by non-rated class N. Fitch reviewed the performance and underlying collateral of the two credit assessed loans in the pool: South Plains Mall (7.5%) and the Station Plaza Office Complex (2.4%). The Fitch stressed debt service coverage ratio is calculated using servicer provided net operating income less required reserves divided by debt service payments based on the current balance using a Fitch stressed refinance constant. Based on their stable performance, both credit assessments remain investment grade. The South Plains Mall, located in Lubbock, TX, consists of 1.1 million square feet, of which 1 million sf is collateral for the loan. The annualized year-to-date September 2005 Fitch stressed DSCR declined to 1.77 times (x) from 2.09x at issuance. Occupancy at the property has remained stable, dropping slightly to 97% as of September 2005 from 98% as of February 2005. The Station Plaza Office Complex consists of three office buildings (320,477 sf) located in Trenton, New Jersey. Year-end 2005 Fitch net cash flow (NCF) has decreased by 4% compared with YE 2004. The properties maintain a 100% occupancy level as of YE 2005, unchanged from 2004. HEMOSOL CORP: Has Until May 23 to File Proposals to Creditors ------------------------------------------------------------- The Ontario Superior Court of Justice (Commercial List) approved a further and final extension of the time within which Hemosol Corp. (TSX: HML) and its affiliate Hemosol LP are required to file proposals for their respective creditors pursuant to the provisions of the Bankruptcy and Insolvency Act (Canada). Hemosol will now have until May 23, 2006 to file one or more proposals. The negotiations with the potential purchaser that submitted a conditional offer for all of the assets of Hemosol are continuing. At this time there is no certainty as to whether the offer will culminate in a transaction for the sale of the assets of Hemosol, and if it does culminate in a transaction, it is unclear whether or not there will be any value for holders of Hemosol's shares at the conclusion of such transaction. As reported in the Troubled Company Reporter on Nov. 25, 2005, Hemosol Corp. reported that it was insolvent. Hemosol Corp. and Hemosol LP filed Notices of Intention to Make a Proposal to their creditors under the Bankruptcy and Insolvency Act of Canada, and appointed PricewaterhouseCoopers Inc., to act as trustee under the proposals. On Dec. 2, 2005, PricewaterhouseCoopers Inc., in its capacity as trustee, filed an application with the Ontario Superior Court of Justice seeking, among other things, its appointment as interim receiver over the property, assets and undertaking of Hemosol Corp. and Hemosol LP and approving interim financing by Hemosol's secured creditors in the amount of $2 million. About Hemosol Hemosol Corp. (NASDAQ: HMSLQ, TSX: HML) -- http://www.hemosol.com/ -- is an integrated biopharmaceutical developer and manufacturer of biologics, particularly blood-related protein based therapeutics. * * * Credit Facility Default On Nov. 22, 2005, Hemosol reported that it defaulted in the payment of interest under its $20 million credit facility. Hemosol said that it would require additional capital to continue as a going concern and is in discussions with its secured creditors with respect to its current financial position. Lay-Offs On Oct. 28, 2005, the company served approximately two thirds of its employees with layoff notices. The layoffs were necessary in order for the company to conserve its remaining cash and to continue to pursue potential strategic relationships and various financing options. On Nov. 9, 2005, the company said that its reduced workforce and limited resources have caused Hemosol to suspend the provision of bio-manufacturing services to third parties and, accordingly, the Company and Organon Canada Ltd. reached a mutual agreement to terminate the Manufacturing and Supply Agreement dated Sept. 24, 2004. This termination is effective immediately and was implemented without additional cost or penalty to either party. HOMER CITY: S&P Affirms $875MM Bond's Rating With Stable Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed the ratings on Homer City Funding LLC's $875 million senior secured bonds following the rating agency's annual review of the company. The outlook is stable. The ratings on Homer City reflect primarily its stand-alone credit quality. However, Standard & Poor's continues to link its ratings on Homer City to its controlling parent, Edison Mission Energy, which is currently rated 'B+'. Typically, a wholly owned subsidiary is not rated higher than its 100% owner. However, in this case, because of perceived strong economic incentives that would discourage EME from harming Homer City in the event of credit deterioration or filing the entity for bankruptcy protection, Standard & Poor's has delinked the ratings. The stable outlook reflects the stand-alone outlook on the Homer City project, which continues to operate well given high natural gas prices. While the outlook on its affiliate, EME and other EME entities were revised to positive, given the proposed refinancing at the EME level, Standard & Poor's concluded that Homer City's outlook would remain stable. Homer City has commenced a preliminary engineering assessment to determine the economics of adding new emissions control equipment at the plant by 2009, and expects to reach an investment decision during 2006. The addition of this equipment would result in large capital expenditures. Once the magnitude and financing plan for the emissions control equipment is known, Standard & Poor's may again review the rating and outlook. There is little chance for an upgrade until Standard & Poor's is comfortable that Homer City has a plan in place for this equipment and Homer City locks in strong gross margins on a longer-term basis, leaving debt-service coverage ratios similar to our original rated case. "An upgrade would also require an improvement in EME's credit rating, and a downgrade could occur if spark spreads reduce substantially and Homer City is unable to make necessary capital improvements," said Standard & Poor's credit analyst Arleen Spangler. "The rating on Homer City will continue to be linked to the rating on EME, so a downgrade of EME could lead to a downgrade of Homer City," she continued. INCO LTD: Increases Offer for Falconbridge's Assets --------------------------------------------------- Inco Limited and Falconbridge Limited reported that their respective Boards of Directors have unanimously agreed to an increase in the value of Inco's friendly offer to acquire all of the outstanding common shares of Falconbridge by C$5 to C$51.17 per share (based on Inco's closing share price on the TSX of $73.80 on May 12, 2006). The share component of the consideration remains unchanged. Rachelle Younglai at Reuters reports, Inco increased the cash component of its original C$12 billion offer for Falconbridge, boosting the total value of the deal to C$19 billion. "The enhanced terms reflect the change in metal market dynamics and the additional value created in Falconbridge because of higher metal prices," said Scott Hand, Chairman and Chief Executive Officer of Inco Limited. "They also demonstrate our continuing conviction that combining Inco and Falconbridge to create the great company that the new Inco will be is in the best interests of shareholders of both companies over the long term." "This is the right deal with the right company," said Derek Pannell, Chief Executive Officer of Falconbridge Limited. "The mining world has long understood that Inco and Falconbridge are logical partners and this has only been underscored by the improved metals market environment. Falconbridge has been actively creating value for its shareholders and that value is reflected in this enhanced offer." "The added cash will provide our shareholders with about CDN$1.9 billion more in value compared with the original deal negotiated with Inco," Mr. Pannell added. "In addition, the tangible synergies available to the combined company are much greater under current metals prices than previously estimated and are focused directly on enhancing our operating platform, rather than simply eliminating corporate overlap and jobs. Assuming completion of this deal, Falconbridge shareholders will own approximately 47% of the combined company and will continue to benefit from increased earnings due both to higher metals prices and to the very significant operating synergies that will result from combining our two great companies." "Our new offer demonstrates our commitment to realize the outstanding value that only the combination of these two companies can offer," Mr. Hand continued. "At the same time, as we work aggressively to complete the Falconbridge transaction, Inco will continue to evaluate appropriate strategic alternatives that would serve the best interests of our shareholders." Terms of the Support Agreement Under the terms of the revised support agreement, Inco will offer CDN$51.17 in cash or 0.6927 of an Inco Common Share plus CDN$0.05 in cash for each Falconbridge common share. Falconbridge's common shareholders will have the right to elect to receive all cash or all Inco Common Shares (plus CDN$0.05 per Falconbridge Common Share), subject to pro ration based upon the maximum amount of cash and Inco Common Shares offered. Under the terms of this offer, the maximum amount of cash to be paid by Inco will be approximately CDN$4.8 billion, and the maximum number of Inco Common Shares to be issued will be approximately 201 million, taking into account the conversion of Falconbridge's outstanding convertible debt securities and outstanding share options. Assuming full pro ration of these maximum amounts, this would mean CDN$12.50 in cash and 0.524 of an Inco Common Share for each Falconbridge Common Share subject to the offer. The revised support agreement also provides for the payment of a fee of up to $450 million to Inco by Falconbridge in the event that the acquisition is not completed for the reasons set forth in the original agreement. At the time the acquisition was announced on Oct. 11, 2005, the two companies estimated that synergies and cost savings resulting from their combination would total $350 million per year as a result of improved efficiencies and better use of resources, primarily in the Sudbury basin. Because the improved efficiencies will result in higher throughput, the total value of the synergies increases with higher metals prices. Using current analyst consensus prices, the annual synergies increase to $375 million and the total net present value of the synergies increases to $2.8 billion, and would be even higher using today's commodity prices. "The recent gains in copper and nickel markets and their outstanding prospects going forward make our transaction look even better today than when it was first announced," said Mr. Hand. The Inco-Falconbridge combination will create a mining and metals powerhouse, with outstanding growth prospects and a truly unique opportunity to create significant value for shareholders going forward. "As we have said, the combined company will have some of the best mines and project pipelines in nickel and copper, two metals we believe have the best economic fundamentals over the next few years," said Mr. Hand. The new Inco will create: * the world's largest nickel producer, with pro forma combined estimated 2006 nickel output of 815 million pounds, forecast to climb to approximately one billion pounds in 2009; * a leading copper producer, with pro forma combined estimated 2006 production of 1.4 billion pounds, and the potential to almost double production by 2011; * a diversified base metals company, with excellent positions in cobalt, zinc, platinum-group metals and aluminum; * a leading position in combined estimated proven and probable nickel mineral reserves from both sulphide and nickel laterite deposits and a leading portfolio of existing and greenfield nickel properties; * a globally diverse company with extensive operations in North and South America, Asia, the South Pacific and Europe; * a financially robust company with pro forma combined revenues of approximately $4 billion for the three months ended March 31, 2006 and pro forma combined cash flow from operations before changes in working capital of $971 million for the same period; * a "best-in-class" management team and global workforce. "This transaction will benefit not just the shareholders of both companies but other stakeholders as well, including our employees and the communities where we operate," says Mr. Hand. "We've been extremely gratified by the broad-based stakeholder support that we have received since we announced this acquisition." Inco and Falconbridge continue to work with the U.S. Department of Justice and the European Commission in connection with their respective reviews of our pending transaction. Based on current First Call consensus mean estimates, this transaction would be significantly accretive to Inco in the first full year after the acquisition from a cash flow perspective, and accretive from an earnings perspective. It will allow Inco to retain its investment grade credit rating. Assuming all Falconbridge common shares are tendered, on completion of the transaction current Inco shareholders would hold approximately 53% and former Falconbridge shareholders would hold approximately 47% of the fully diluted Inco common shares (in addition to the CDN$4.8 billion aggregate cash consideration to be received by Falconbridge shareholders as noted above). The Board of Directors of Falconbridge has unanimously determined that the offer is fair from a financial point of view and will recommend that its shareholders accept the offer from Inco. CIBC World Markets, Falconbridge's financial advisor, has provided an opinion to the Falconbridge Board of Directors that the offer is fair from a financial point of view. Morgan Stanley, RBC Capital Markets, and Goldman Sachs & Co., Inco's financial advisors, have each provided an opinion to the Inco Board of Directors that the offer is fair from a financial point of view. Inco has received sufficient commitments from the Morgan Stanley, Goldman, Sachs & Co., Royal Bank of Canada and Bank of Nova Scotia organizations to finance the cash portion of the offer. Mailing to Falconbridge shareholders of the terms of the revised Offer and the recommendation of the Falconbridge Board of Directors' Circular in support of the revised Offer is expected to occur in the next two weeks. The Offer is subject to certain conditions of completion, including receipt of all necessary regulatory clearances and acceptance of the Offer by Falconbridge shareholders owning not less than 66-2/3% of the Falconbridge common shares on a fully diluted basis. Once the 66-2/3% acceptance level is met, Inco intends, but is not required, to take steps to acquire all outstanding Falconbridge common shares. Morgan Stanley, RBC Capital Markets and Goldman, Sachs & Co. are acting as financial advisors to Inco and CIBC World Markets is acting as financial advisor to Falconbridge. Osler, Hoskin, & Harcourt and Sullivan & Cromwell LLP are acting as legal advisors to Inco and McCarthy Tetrault are acting as legal advisors to Falconbridge. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL.LV; NYSE:FAL) -- http://www.falconbridge.com/-- is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel orebodies. It employs 14,500 people at its operations and offices in 18 countries. The Company owns nickel mines in Canada and the Dominican Republic and operates a refinery and sulfuric acid plant in Norway. It is also a major producer of copper (38% of sales) through its Kidd mine in Canada and its stake in Chile's Collahuasi mine and Lomas Bayas mine. Its other products include cobalt, platinum group metals, and zinc. About Inco Inco Limited (TSX, NYSE:N - News News) -- http://www.inco.com/-- is the world's #2 producer of nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the UK. * * * Standard & Poor's Ratings Services placed its 'BB+' rating on Inco's $250 million subordinated convertible debentures in March 2003. INEX PHARMA: Balance Sheet Upside-Down by C$21.4 Mil. at Dec. 31 ---------------------------------------------------------------- Inex Pharmaceuticals Corporation incurred a C$9.4 million net loss for the year ended Dec. 31, 2005, as compared to C$33.7 million for 2004. The significantly lower net loss in 2005 is partly attributable to the termination of the Enzon Pharmaceuticals Corporation development and commercialization partnership for Marqibo that resulted in the recognition of C$11.2 million of deferred revenue and C$4 million of development expense recovery and milestone payments during the first quarter of 2005. In the second quarter of 2006, INEX expects to complete a license agreement for its Targeted Chemotherapy products with Hana Biosciences, Inc., that will include an up-front payment of US$11.5 million consisting of cash and Hana shares. At Dec. 31, 2005, the Company's balance sheet showed C$21.4 million in total assets and C$42.9 million in total liabilities, resulting in a C$21.4 million total shareholders' deficiency. INEX's December 2004 and June 2005 workforce reductions and program cut backs have generated further savings as reflected in reduced research and development and general and administrative expenses in 2005 as compared 2004. Furthermore, amortization expense decreased by C$4.5 million in 2005 as compared to 2004 largely due to the Company's Lynx medical technology being written off to nil through a C$3.4 million impairment loss in the fourth quarter of 2004 and therefore no ongoing amortization expense for this technology in 2005. Revenue from research and development collaborations, licensing fees and milestone payments was C$15.4 million for 2005 as compared to C$14.6 million for 2004. Revenue in 2005 was primarily a consequence of the recognition of deferred revenue and a one-time payment as a result of the termination of the Enzon partnership. All of INEX's 2005 revenue was earned or recognized in the first quarter. In the second quarter of 2006, INEX expects to complete a license agreement to its Targeted Chemotherapy products with Hana that will include an up-front payment of $11.5 million consisting of cash and Hana shares. Also, INEX expects to transfer its product expertise to Hana under a technology transfer agreement under which it will be reimbursed for time spent. Restructuring costs Net restructuring costs for the year ended Dec. 31, 2005, were $5.7 million and were $5.1 million for the year ended Dec. 31, 2004. In December 2004, following the Dec. 1, 2004, Oncologic Drugs Advisory Committee vote to not support accelerated approval for Marqibo INEX scaled back certain activities and implemented a workforce reduction of approximately 62% or 103 employees. INEX further reduced its workforce on June 21, 2005 from 57 to 30 employees (8 of which were interim employees resulting in a total of 22 full time employees). This restructuring was necessary to conserve cash and to facilitate a new strategic path for INEX's lead anticancer drug Marqibo, the other Targeted Chemotherapy products and the early stage Targeted Immunotherapy pipeline. Protiva Biotherapeutics Investment During the second quarter of 2005, INEX's Long-term Investment balance was reduced to nil as a result of the continued losses incurred by Protiva Biotherapeutics Inc., a company INEX spun out in 2001, as INEX's percentage of losses, based on ownership percentage, exceeded its initial investment. Consequently, and according to the Company's existing investment policy, the remaining deferred dilution gain was recognized. In the third quarter of 2005, Protiva issued new share capital thereby reducing INEX's ownership percentage from 34% to 7% that in turn gave rise to a dilution gain of $1.2 million. INEX also recorded $0.9 million as amortization of earlier dilution gains giving a total 2005 dilution gain from its Protiva investment of $2.1 million. INEX's equity in Protiva's loss for 2005 was $1.7 million and an impairment loss of CA$0.2 million on the balance of the investment in Protiva was recorded. As a result of INEX's dilution in this investment, it no longer has significant influence over Protiva so now applies the cost method of accounting to this investment. On March 28, 2006 INEX announced receipt of a statement of claim filed by Protiva in the Supreme Court of British Columbia. Under INEX's agreements with Protiva, INEX believes it has certain rights to obtain a fully paid-up, exclusive license from Protiva for certain oligonucleotide technology. In its statement of claim, Protiva is asking for a declaration that INEX has no claim over the disputed technology. Protiva has also asked for relief against certain of INEX's directors and officers in connection with this dispute. INEX disputes all claims made by Protiva and intends to vigorously enforce its rights. Corporate Strategic Initiatives Inex also disclosed that it expects the two corporate strategic initiatives it launched in 2005 with the intention of maximizing stakeholder value for all Company assets will be achieved during 2006. The two initiatives are the spin-off of the Company's Targeted Immunotherapy platform and product candidates into a new debt-free company and the partnering of its Targeted Chemotherapy drugs to a company with the technical and financial capability to commercialize them. Targeted Immunotherapy Spin Out On Jan. 26, 2006, INEX shareholders voted 98.3% in favor of spinning out the Targeted Immunotherapy assets into a new debt- free public company, called Tekmira Pharmaceuticals Corporation. INEX expects to receive the necessary court and regulatory approvals to implement the plan over the next few months. Before INEX can implement the plan, on May 18, 2006 the British Columbia Court of Appeal will hear appeals from INEX and from Stark Trading and Shepherd Investments Ltd. INEX is appealing the Supreme Court of British Columbia's ruling that provided the holders of INEX's outstanding convertible promissory notes the right to a separate vote on INEX's spin-out plan. Stark is appealing the Court's ruling that the spin out of Tekmira can take place given the terms of the convertible debt and the Court's decision to dismiss Stark's bankruptcy petition. INEX believes that the decisions of the Court dismissing the bankruptcy petition and ruling that the spin out can take place given the terms of the convertible debt were correct rulings and INEX will continue to defend its position with respect to these decisions. Stark is the majority holder of certain promissory notes issued by Inex International Holdings, a subsidiary of INEX. The promissory notes are not due until April 2007 and can be repaid in cash or in shares, at INEX's option, at maturity. Targeted Chemotherapy Partnership On March 17, 2006, INEX disclosed that it has signed a Letter of Intent to license three products from its Targeted Chemotherapy pipeline to Hana. Upon closing of the transaction, expected during the Second Quarter of 2006, Hana will pay INEX US$11.5 million in an upfront payment, consisting of cash and Hana shares. INEX will receive an additional US$30.5 million if development and regulatory milestones are achieved and will also receive royalties on product sales. Hana will be responsible for all future development of the three products including all future expenses. INEX will support Hana in the near term to transfer knowledge and expertise and to ensure the products can be advanced as quickly as possible and will also be reimbursed for this support. Timothy M. Ruane, President and Chief Executive Officer of INEX, said achievement of the spin out and the license agreement will set INEX on a new course for the future. "We are pleased that the two initiatives we began last year to maximize the value of the Company's assets are both likely to be successfully completed in 2006," said Ruane. "As a result, INEX will have financial stability into 2007 and will undertake new corporate objectives, including working with the University of British Columbia to develop a new generation of drug delivery technology." Abut INEX INEX Pharmaceuticals Corporation (TSX: IEX) -- http://www.inexpharma.com/-- is a Canadian biopharmaceutical company developing and commercializing proprietary drugs and drug delivery systems to improve the treatment of cancer. INLAND FIBER: Eisner LLP Raises Going Concern Doubt --------------------------------------------------- Eisner, LLP, in New York, raised substantial doubt about Inland Fiber Group, LLC, fka U.S. Timberlands Klamath Falls, LLC's ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the Company's receipt of Notices of Default and Acceleration of Maturity of the Notes under the indenture governing the Company's $225 million of Senior Notes due in 2007. Notices of Default The Trustee for the Company's $225 million 9-5/8% Senior Notes due 2007 under the Indenture alleged and the Court of Chancery of the State of Delaware determined that the Company violated certain covenants contained in the Indenture. The Trustee is not named in the Company's SEC filing. In January 2005 and July 2005, the Trustee sent the Company Notices of Default and Acceleration declaring the unpaid principal and any accrued interest on the Notes to be immediately due and payable. Accordingly, the Notes have been classified as a current liability in the accompanying balance sheet at Dec. 31, 2005, and 2004. The Company timely paid to the Trustee the semi-annual interest payment on the Notes due Nov. 15, 2004. The Company said that the Trustee subsequently withheld approximately $4.8 million, which was reduced to approximately $2.8 million, from that payment to fund its cost of litigation against the Company and paid the noteholders a corresponding reduced amount of interest. The Company believes the Trustee did not have the right to withhold that amount and is responsible to pay those interests to the noteholders. In December 2004, the Company commenced litigation against the Trustee. As of Dec. 31, 2005, the Company has not made its semi-annual interest payments on the Notes, due on May 15 and Nov. 15, 2005, which amounted to $21,656. The non-payment constitutes an event of default under the Indenture. Pre-Negotiated Reorganization Plan Inland Fiber Group, LLC, and Fiber Finance Corp. reached a tentative agreement with the Trustee for the Company's $225 million 9-5/8% Senior Notes due 2007 to resolve their outstanding disputes. Under the terms of the tentative agreement, the Company or its nominee would purchase all of the outstanding notes at a price of 69% of the principal amount of the notes through a pre-negotiated plan of reorganization. The agreement would include the settlement of the alleged existing defaults, the termination of all pending litigation and a release of all the parties. Completion of the contemplated settlement is subject to a number of conditions, including the commitment to support a pre- negotiated plan of reorganization to effectuate the settlement by a sufficient number of noteholders and holders of a sufficient face value of notes to be acceptable to the Company, and the receipt by the Company of financing sufficient to fund the settlement. The Company has agreements in principle for the financing, which are subject to the negotiation and execution of definitive documentation and confirmatory due diligence. The Company expects to finalize its financing arrangements within the next several weeks. The contemplated settlement is the result of negotiations between the Company and the Trustee. Financials For the year ended Dec. 31, 2005, the Company reported a $35,119,000 net loss on $13,305,000 of total revenues. At Dec. 31, 2005, the Company's balance sheet showed $84,775,000 in total assets and $253,471,000 in total liabilities, resulting in a $168,696,000 members' interest deficit. The Company's Dec. 31 balance sheet also showed strained liquidity with $1,713,000 in total current assets available to pay $253,471,000 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?903 About Inland Fiber Inland Fiber Group, LLC, fka U.S. Timberlands Klamath Falls, LLC, grows trees, and sells logs, standing timber and timberland. The Company owns approximately 162,000 fee acres of timberland and cutting rights on approximately 64,000 acres of timberland in Oregon east of the Cascade Range. These logs are processed for sale as lumber, plywood and other wood products, primarily for use in new residential home construction, home remodeling and repair and general industrial applications. The Company also owns and operates its own seed orchard and produces approximately 3,000,000 conifer seedlings annually from its nursery, approximately 50% of which are used for its own internal reforestation programs, 20% are sold to affiliates, with the balance sold to other forest products companies. J.J. MOORE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: J.J. Moore Sales, Inc. 8119 Wattsburg Road Erie, Pennsylvania 16509 Tel: (814) 825-6200 Fax: (814) 825-2224 Bankruptcy Case No.: 06-10493 Type of Business: The Debtor is a home furnishing company specializing in custom-made doors. See http://www.jjmooresales.com/ Chapter 11 Petition Date: May 11, 2006 Court: Western District of Pennsylvania (Erie) Judge: Warren W. Bentz Debtor's Counsel: Michael S. Jan Janin, Esq. Quinn Buseck Leemhuis Toohey & Kroto Inc. 2222 West Grandview Boulevard Erie, Pennsylvania 16506-4508 Tel: (814) 833-2222 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 ------ --------------- ------------ Thermo-True Virginia Ltd. Co. Promissory Note $366,521 1687 Woodlands Drive Maumee, OH 43537 ODL, Inc. $84,840 215 East Roosevelt Avenue Zeeland, MI 49464 Willbrook Employment Service $79,598 3939 West Ridge Road, Suite A Erie, PA 16506 Plastpro, Inc. $74,884 Endura Products Trade Debt $68,503 Weiser Lock $47,639 Distributed Network Software $27,810 Windsor Republic Doors $27,517 Advanta Business Cards $22,078 Infor Global Solutions $16,941 S. Parker Hardware Mfg. Corp. $16,582 Bank of America $10,243 Gossen Corp. $9,866 Access Hardware, Inc. $9,441 Lawrence Hardware, Inc. $6,606 Citgo Petroleum Corp. $6,550 S&S Packaging Products, Inc. $6,420 General Partitions Mfg. Corp. $6,005 Bayform $5,134 Keystone Ato. Ind. Inc. $4,618 J.P. MORGAN: Fitch Holds BB+ Rating on $16.3 Mil. Class G Certs. ---------------------------------------------------------------- Fitch Ratings upgrades and removes from Rating Watch Positive Class F of J.P. Morgan Commercial Mortgage Finance Corp.'s mortgage pass-through certificates, series 1997-C4, to: -- $26.4 million class F to 'AAA' from 'AA'. In addition, Fitch affirms these classes: -- Interest-only class X at 'AAA'; -- $9.4 million class C at 'AAA'; -- $20.3 million class D at 'AAA'; -- $6.1 million class E at 'AAA'; -- $16.3 million class G at 'BB+'. Fitch does not rate the $12.2 million class NR certificates. Classes A-1, A-2, A-3 and B have paid in full. The upgrade reflects increased credit enhancement levels resulting from loan payoffs and amortization. As of the April 2006 distribution date, the pool's aggregate balance has been reduced by 75% to $90.8 million from $407.0 million at issuance. The trust has had no realized losses to date. Two loans (8.0%) are currently in special servicing and are both 90 days delinquent. The largest loan in special servicing (7.0%) is secured by a 259-unit skilled nursing home in Bloomington, Illinois. The loan is 90 days delinquent and the special servicer has accepted a discounted payoff offer in the amount of $6.2 million which is expected to close by the end of May. The other specially serviced loan (1.0%) is secured by a multifamily property in Huntsville, Texas. The borrower filed bankruptcy back in May 2005. In addition, the borrower has been in litigation with Home Depot and its developer for some time due to the borrower's claim that the development of a Home Depot located adjacent to the property has shifted the property's foundation. The court has awarded the borrower with a settlement. The borrower's attorney is now negotiating a settlement with the developer. Fitch remains concerned about the healthcare (11%) concentration in the pool. JACK NAPOR: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Jack Napor 213 Tech Road Pittsburgh, Pennsylvania 15205 Bankruptcy Case No.: 06-22117 Type of Business: The Debtor previously filed for chapter 11 protection on Dec. 12, 2003 (Bankr. W.D. Pa. Case No. 03-35516). Chapter 11 Petition Date: May 11, 2006 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, Pennsylvania 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. KAISER ALUMINUM: District Court Affirms Confirmation Order ---------------------------------------------------------- Judge Joseph Farnan of the U.S. District Court for the District of Delaware affirmed Judge Judith K. Fitzgerald's Order confirming Kaiser Aluminum Corporation's Plan of Reorganization dated Feb. 6, 2006. The District Court adopts the Bankruptcy Court's findings of fact and conclusions of law regarding the Confirmation Order. In a 16-page Memorandum Opinion, Judge Farnan concludes that the insurance policies are properly considered "property of the estate" pursuant to Section 541. Thus, the Bankruptcy Court had in rem subject matter jurisdiction to adjudicate the assignment issues related to those policies. Judge Farnan says he reviewed the cases cited by the Insurers and found them to be inapplicable to the circumstances in the case. "While there is a split among the courts regarding whether these policies are properly considered property of the estate, that division of authority is based on the issue of whether those policies truly benefit the estate, a debate which does not exist in the context of general or product liability insurance policies," Judge Farnan explains. The other cases either involves Chapter 7 cases, the obligations of the insurer to pay on policies, or lien priority and attachment issues, all of which are irrelevant to the case, Judge Farnan notes. Judge Farnan points out that the Pacific Gas decision was issued a year before the Third Circuit's decision in Combustion Engineering. In any event, the Pacific Gas decision is not binding on the District Court. Hence, the District Court finds that the Bankruptcy Court did not err in concluding that the Bankruptcy Code preempts the anti- assignment clauses in the Reorganizing Debtors' insurance policies. A full-text copy of the Judge Farnan's Memorandum Opinion and Order is available for free at: http://bankrupt.com/misc/FarnanAffirmMemo&Order.pdf Insurers File Reply Briefs Before the District Court's plan confirmation, Thomas G. Whalen, Jr., at Stevens & Lee, P.C., in Wilmington, Delaware, asserts that the Plan Proponents and the Future Claimants Representative simply sidestep the main issue on the case -- that the Bankruptcy Court did not have jurisdiction to make Confirmation Findings that permitted the assignment of rights to receive insurance proceeds for claims that can now only be asserted against the Funding Vehicle Trust. Mr. Whalen, on behalf of the Century Insurers, explains that Judge Fitzgerald did not have that jurisdiction because the Bankruptcy Court's subject matter jurisdiction is limited to property of the Debtors' estate. Mr. Whalen asserts that the rights to receive insurance proceeds for Channeled Personal Injury Claims that can only be asserted against the Funding Vehicle Trust are not "property of the estate" because: -- these rights never existed as of the commencement of the Reorganizing Debtors' cases; and -- under the structure of the Plan of Reorganization, these rights can never exist under applicable California law. As a matter of procedural due process, any determination of the extent of the Reorganizing Debtors' state law rights in the property requires a declaratory judgment, which could be done under an adversary proceeding, Mr. Whalen further asserts. The Confirmation hearing, however, was not an adversary proceeding, Mr. Whalen contends. The Confirmation hearing was a contested matter under Rule 9014 of the Federal Rules of Bankruptcy Procedure. Hence, the Bankruptcy Court lacked jurisdiction to summarily issue declaratory relief as to whether these rights existed. For these reasons, the Century Insurers ask the District Court to reverse the portion of the Confirmation Order permitting assignment of rights to receive insurance proceeds, notwithstanding anti-assignment provisions in the policies and otherwise applicable state law. The CNA Insurers, on the other hand, ask Judge Farnan to reject the memoranda submitted by the Reorganizing Debtors' Plan constituencies. The CNA Insurers' attorney, Norman Monhait, Esq., at Rosenthal, Monhait & Goddess, P.A., in Wilmington, Delaware, tells the District Court that Judge Fitzgerald's rulings on preemption of the CNA Insurers' contract rights pursuant to Section 1123(a)(5): (a) attempt to override their insurance contracts with the Reorganizing Debtors in violation of the fundamental bankruptcy principles; (b) ignore canons of statutory construction in reading new powers for the debtor-in-possession and the Bankruptcy Court into Section 1123(a)(5) not intended by Congress; and (c) ignore the constitutional and statutory limits on the Bankruptcy Court's Article I power. For these reasons, the CNA Insurers ask the District Court to: -- reverse the Bankruptcy Court's determination that the Bankruptcy Code preempts certain insurers' "no assignment" clauses contained in their insurance policies; and -- affirm the balance of the Bankruptcy Court's rulings. The CNA Insurers believe that the dispute with the Reorganizing Debtors can and should be resolved as part of the on-going "Coverage Litigation" initiated by Kaiser Aluminum Corporation, et al., in the state court prior to the Petition Date. Republic Insurers' attorney, Christopher M. Winter, Esq., at Duane Morris LLP, in Wilmington, Delaware, tell Judge Farnan that the assignment of the Insurers' rights will harm the Republic Insurers in several ways. Mr. Winter argues that the assignment of the Republic Insurers' rights will radically alter the relationships on which the insurance contracts are based. The assignment will also: -- eliminate the Republic Insurers' contractual rights to obtain the cooperation of the insureds and participate in and control the defense, litigation, and settlement of asbestos claims; and -- increase the number of insureds under the insurance contracts. The Republic Insurers are concerned that their rights will be replaced with a lenient administrative process that would exclude insurers, process and pay claims that would never be paid in the tort system under the influence of plaintiff lawyers who are seeking payment on asbestos claims, Mr. Winter relates. Moreover, Mr. Winter asserts that In re Combustion Eng'g, Inc., 391 F.3d 190 (3d Cir. 2005), did not decide the preemption issue under Section 1123(a)(5). To the contrary, the Third Circuit, in the Combustion Engineering case, neither analyzed nor decided the preemption issue. Rather, In re Pacific Gas & Electric Corp., 350 F.3d 932 (9th Cir. 2003), is the only case that actually addressed the scope of preemption under Section 1123(a)(5). The Plan Proponents' interpretation of Section 1123(a)(5) conflicts with the other provisions of the Bankruptcy Code and would lead to absurd results, Mr. Winter says. About Kaiser Aluminum Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 96; Bankruptcy Creditors' Service, Inc., 215/945-7000) KAISER ALUMINUM: Earns $38.4 Million in Quarter Ended March 31 -------------------------------------------------------------- Kaiser Aluminum reported net income of $38.4 million for the quarter ended March 31, 2006, compared to $8.3 million for the same period in 2005, driven by strong broad based demand for fabricated aluminum products, particularly in the aerospace and high strength products. Net sales for the first quarter reached $336.3 million, up 20% from the same period in 2005 when the company reported net sales of $281.4 million. The improvement is attributed to an 11% increase in average realized prices, primarily reflecting higher underlying aluminum prices, and a 7% increase in shipments. "Favorable market conditions are broad based and look to be sustainable in the near term," Jack A. Hockema, president and CEO of Kaiser Aluminum said. "At the same time our first quarter operating income reflects more than $15 million of reported income from non-run-rate benefits such as metal profits, mark-to-market gains, and lower major maintenance costs." The Plan The company's second amended plan of reorganization was accepted by all classes of creditors entitled to vote on it and, on February 8, 2006, the POR was confirmed by the U.S. Bankruptcy Court for the District of Delaware. The confirmation order remains subject to motions for review and appeals filed by certain insurers and must still be adopted or affirmed by the United States District Court. Other significant conditions to emergence include completion of the company's exit financing, listing of the new common stock on the NASDAQ stock market and formation of certain trusts for the benefit of different groups of tort claimants. As provided in the Plan, once the Bankruptcy Court's confirmation order is adopted or affirmed by the District Court, even if the affirmation order is appealed, the company can proceed to emerge if the District Court does not stay its order adopting or affirming the confirmation order and the key constituents in the Chapter 11 proceedings agree. Assuming the court adopts or affirms the confirmation order, the company believes that it is possible that it will emerge during the second quarter of 2006 or early in the third quarter of 2006. No assurances can be given that the Bankruptcy Court's confirmation order will ultimately be adopted or affirmed by the District Court About Kaiser Aluminum Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. KUSHNER-LOCKE: Wants to Use Bank Lenders' Cash Collateral --------------------------------------------------------- The Kushner-Locke Company and its debtor-affiliates ask the U.S. Bankruptcy Court for the Central District of California for permission to use cash collateral, securing repayment of their debt to JPMorgan Chase Bank and other lenders under a Credit, Security, Guaranty and Pledge Agreement, dated as of June 19, 1996. When they filed for bankruptcy protection, the Debtors owe the bank lenders $67 million, plus around $8.9 million in accrued interest and other fees. The debt is secured by a lien on substantially all of the Debtors' assets. Charles D. Axelrod, Esq., at Stutman, Treister & Glatt, PC, informs the Court that during the last six months, the Debtors have continued to collect money from various prepetition receivables. The Debtors' collections from old receivables and new sales have contributed to more than $2 million that the Debtors are currently holding in their cash collateral account. The Debtors believe they have sufficient funds on hand to confirm a plan of reorganization. The Debtors have now exchanged several drafts of their proposed plan with the bank lenders, and will share the draft with the Official Committee of Unsecured Creditors in the next several weeks. However, the Debtors still need a valuation of its assets to complete their plan. Mr. Axelrod tells the Court the Debtors need the cash collateral to fund preparations of a chapter 11 plan, and ultimately, an exit from chapter 11. Mr. Axelrod assures the Court that the Debtors will use the cash collateral in accordance with a budget approved by the bank lenders. A copy of the Cash Collateral Budget is available for a free at http://ResearchArchives.com/t/s?917 To provide the bank lenders with adequate protection, the Debtors will grant replacement liens and security interests to the extent of any diminution in value of their collateral pursuant to Sections 361 and 363 of the Bankruptcy Code. Headquartered in Los Angeles, California, The Kushner-Locke Company is a low-budget movie production studio. The Company, along with its debtor-affiliates filed for chapter 11 protection on Nov. 21, 2001 in the U.S. Bankruptcy Court for the Central District of California. Charles D. Axelrod, Esq., at Stutman, Treister & Glatt, PC, represent the Debtors in their restructuring. Bennett L. Spiegel, Esq., at Los Angeles, California, represent the Official Committee of Unsecured Creditors. LEGENDS GAMING: S&P Puts B- Rating on Proposed $65 Million Loan --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating and a recovery rating of '1' to Legends Gaming LLC's proposed $157 million senior secured credit facility, indicating Standard & Poor's opinion that lenders can expect full recovery (100%) of principal following a payment default. At the same time, Standard & Poor's assigned its 'B-' rating and a recovery rating of '3' to the company's proposed $65 million six- year second-lien term loan, indicating Standard & Poor's assessment that lenders would likely realize a meaningful recovery of principal (50%-80%) in a payment default. Standard & Poor's also assigned a 'B' corporate credit rating to the company. Pro forma for the transaction, Legends will have $209 million in debt outstanding. The outlook is positive. Legends was formed to fund the $240 million acquisition of two casinos: * Isle of Capri Vicksburg, and * Isle of Capri Bossier City, from Isle of Capri Casinos Inc. The net proceeds from the proposed bank facilities, along with cash contributed by the owners, will be used to fund this acquisition and transaction expenses, with closing expected in the summer of 2006. The ratings on Legends reflect: * the company's high debt leverage; * relatively small pro forma cash flow base; * limited cash flow diversity; and * highly competitive market conditions in both Vicksburg and Bossier City. In addition, it is Standard & Poor's belief that the positive momentum in both of these markets, which have benefited from population shifts post-Hurricane Katrina, is expected to decelerate over time. Given that the company plans to re-brand these assets DiamondJacks, the rating agency also believes that marketing costs to familiarize the new brand to its customers will somewhat impact profitability over the near term. An offset, however, is the fact that the company will retain the customer database from these properties. LIBERTY FIBERS: Ch. 7 Trustee Selling Rayon Building for $200,000 ----------------------------------------------------------------- Maurice K. Guinn, the chapter 7 Trustee overseeing the liquidation of Liberty Fibers Corporation, fka Silva Acquisition Corporation, asks the U.S. Bankruptcy Court for the Eastern District of Tennessee to sell the Debtor's Rayon Filament Building to Tom's Salvage for $200,000. The trustee believes the contents are subject to the lien claim of LaSalle Business Credit, LLC, which does not object to the sale. Tom's Salvage will pay the $200,000 purchase price in two equal installments, with the first $100,000 payment due upon the finality of the Court Order approving the sale. The second $100,000 payment is due 30 days after the Court order. Tyler C. Huskey, Esq., at Gentry, Tipton, & McLemore, P.C., in Knoxville, Tennessee, contends that Tom's Salvage's offer is the highest and best offer for the property. Headquartered in Lowland, Tennessee, Liberty Fibers Corporation, fka Silva Acquisition Corporation, manufactures rayon staple fibers. The Debtor filed for chapter 11 protection on Sept. 29, 2005 (Bankr. E.D. Tenn. Case No. 05-53874). Robert M. Bailey, Esq., at Bailey, Roberts & Bailey, PLLC, represents the Debtor. The Bankruptcy Court converted the Debtor's chapter 11 case to a chapter 7 proceeding on Nov. 21, 2005. Maurice K. Guinn is the chapter 7 Trustee for the Debtor's estate. Robert M. Bailey, Esq., at Gentry, Tipton & McLemore P.C., represents the chapter 7 Trustee. When the Debtor filed for chapter 11 protection, it listed $14,610,857 in assets and $20,024,777 in debts. MEMPHIS HEALTH: Moody's Cuts Rating on $8.32 Million Bonds to B2 ---------------------------------------------------------------- Moody's downgraded the underlying rating on the Memphis Health, Education, and Housing Facilities Board's $8.325 million of Multifamily Housing Revenue Bonds, Series 2000A to B2 from B1. The negative outlook is being maintained. These bonds continue to be MBIA-insured and therefore benefit from MBIA's Aaa rating. Moody's does not rate the Subordinate Series 2000B bonds. The multiple notch downgrade on the underlying rating is due to continued taps to the Series A debt service reserve fund. The bonds were issued to finance the acquisition and renovation of Hickory Pointe Apartments and to fund a debt service reserve fund. Hickory Pointe is a 240 unit garden style property located in the southeast section of Memphis, TN. The bonds are special limited obligations of the issuer payable only from the trust estate: (i) lease payments to be made pursuant to a Lease agreement between the issuer and the borrower; and (ii) all the assets pledged under the trust indenture. To secure payments due under the bonds, the trustee has a first priority security interest in the project to secure the borrower's obligations under the lease agreement. The first transfer from the debt service reserve fund for Series 2000A bond occurred on January 1, 2005 to pay a portion of the principal and interest on the Series 2000A bonds. There were subsequent transfers from the debt service reserve fund on July 1, 2005 and January 1, 2006. The current remaining balance in the debt service reserve fund for the Series 2000A bonds is approximately $495,000. The property has not generated sufficient cash to pay some of the past due expenses and to pay for capital improvements. Since the borrower's default under the lease agreement which triggered an event of default under the indenture in mid 2004, MBIA, as the insurer of the senior bonds, has been directing the flow of funds under the indenture. Physical occupancy has improved significantly to a reported rate of approximately 97% as of February, 2006 according to the property manager. Delinquent accounts and collections, however, continue to be an issue at the property. * Maintaining and improving occupancy at current levels while reducing concessions * Reducing delinquent accounts and improving collections The negative outlook reflects the possibility of a further downgrade if the property's financial position does not significantly improve. Moody's will continue to monitor the property's occupancy rates, expenses, and debt service coverage closely. What could change the rating - UP * Clear signs of financial recovery such as improved net operating income and debt service coverage * Replenishment of debt service reserve fund What could change the rating - DOWN * Continued deterioration of net operating income and debt service coverage * Further transfers from the debt service reserve fund MIDWEST GENERATION: S&P Affirms B+ Corp. Credit & Sr. Sec. Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services' affirmed the 'B+' corporate credit and senior secured ratings on Midwest Generation LLC. At the same time, Standard & Poor's revised the outlook to positive from stable to reflect the outlook revision on owner Edison Mission Energy. The positive outlook on EME reflects the expectation that EME's financial position will improve once the proposed tender and refinancing is completed. The proposal eliminates a considerable amount of refinancing risk at EME while adding substantial liquidity. Standard & Poor's also affirmed the recovery ratings on MWG's secured debt. MWG is indirectly wholly owned by independent power producer EME and relies on payments from EME promissory notes to meet its lease payments on the Powerton/Joliet lease. MWG owns or leases 5,874 MW of base load, mid-merit, and peaking capacity in the MAIN region in and around Chicago, Illinois. The positive outlook reflects EME's positive outlook because of MWG's reliance on EME for certain interest payments under an intercompany note. The positive outlook on EME reflects Standard & Poor's expectation that the proposed refinancing, if executed, will improve EME's financial position by eliminating significant refinancing risk at EME in 2008 to 2011, while adding substantial liquidity. The positive outlook also takes into consideration that there remains a large cash balance on the books at EME, a portion of which is earmarked for repayment of the debt at Mission Energy Holding Co. "The rating could be raised if EME successfully repays the debt at MEHC, margins and distributions remain good at Midwest Gen and Homer City, and Homer City successfully finances the necessary pollution-control equipment," said Standard & Poor's credit analyst Arleen Spangler. Absent these events occurring, the outlook could be revised to stable, or the rating could be downgraded if Midwest Gen and Homer City do not contribute cash as expected, or EME invests in new projects that do not contribute more stable and predictable cash flow. "The ratings on Midwest Gen will remain tied to the ratings on EME, so to the extent the EME ratings change, so will the Midwest Gen ratings," she continued. MISSION ENERGY: S&P Lifts Ratings to B- & Says Outlook is Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed the corporate credit ratings on Edison Mission Energy and its wholly owned subsidiaries, Edison Mission Marketing and Trading. At the same time, Standard & Poor's revised the outlook on EME to positive from stable, and also raised the ratings on the debt of EME's 100% owner, Mission Energy Holding Co. to 'B-' from 'CCC+'. The ratings on EME and its direct owner, MEHC, reflect the credit quality of the distributable cash flow from a portfolio of generating assets. The rating also takes into account the financial risk of double and triple leverage at EME and MEHC. The positive outlook on EME reflects Standard & Poor's expectation that the financial position of the company and its major subsidiaries will improve once the proposed tender and refinancing is completed. Although it is Standard & Poor's view that EME's financial risk has stabilized, any significant, sustained reduction in cash flow from operations from adverse business conditions at the merchant assets may result in an outlook revision or ratings downgrade. "The current rating also anticipates that sufficient cash on hand will be retained and used to fully repay MEHC debt and that Homer City successfully finances the necessary pollution control equipment," said Standard & Poor's credit analyst Arleen Spangler "If wholesale markets improve dramatically and EME successfully pays down the MEHC debt and diversifies its portfolio, then the ratings could improve," she continued. MORGAN STANLEY: Fitch Holds BB Rating on $10.6MM Class F. Certs. ---------------------------------------------------------------- Fitch Ratings upgrades Morgan Stanley Capital I Inc.'s commercial mortgage pass-through certificates, series 1998-XL2 to: -- $75.9 million class B to 'AAA' from 'AA+'; -- $42.4 million class C to 'AA+' from 'AA'; -- $45.9 million class D to 'A+' from 'BBB' and -- $21.2 million class E to 'BBB' from 'BBB-'. In addition, these classes are affirmed by Fitch: -- $8.8 million class A-1 at 'AAA'; -- $467.1 million class A-2 at 'AAA'; -- $10.6 million class F at 'BB' and -- Interest-only class X at 'AAA'. The upgrades are the result of loan amortization and improved loan performance. As of the May 2006 distribution date, the transaction's principal balance has decreased 4.9% to $672 million from $706.5 million at issuance. Based on an analysis of year-end (YE) 2005 income and expenses, the Fitch stressed debt service coverage ratio (DSCR) for the transaction has risen to 1.56 times (x) from 1.34x at issuance. The certificates are collateralized by seven fixed rate mortgage loans consisting of four regional malls (62%) located in four states, two portfolio loans which include 28 shopping centers located in diverse geographic areas throughout the U.S. (29%), and one office property (9%) located in a desirable suburban Virginia/Washington D.C. office park. The six retail loans all have investment grade credit assessments. The Crystal Park IV loan (9.0%), the only office property in the transaction, is secured by a Class A-suburban office building located in the Crystal City submarket of Arlington, Virginia. U.S. Air, a tenant which leased 34% of the property as recently as YE 2005, vacated in March 2006 in a corporate reorganization resulting from a previous bankruptcy filing. As a result, the property currently has a vacancy rate of 42%. The current office vacancy rate in this submarket is 13%. Fitch has taken the additional vacancy into account in its analysis. Given the depth of experience and presence the owner/manager of this property has in that local market, Fitch anticipates the bulk of the vacant space will be leased up before year-end 2006. Two loans, the Edens & Avant Pools I & II (18.6% and 10.4% respectively), are secured by anchored retail strip centers in the northeast (Pool I - 14 centers) and southeast (Pool II - 14 centers plus securities substituting for two defeased properties). As of YE 2005, the net cash flow (NCF) for Pool I increased 21% above the NCF at issuance, while the NCF for Pool II has remained stable. All but two of the properties in Pool I have occupancy levels above 91%. Three of the 14 remaining properties in Pool II have below market vacancy rates, including one property that is being repositioned and rebuilt to accommodate a new grocery anchor tenant. Fitch will continue to monitor the ongoing occupancy issues in this pool. The Mall of New Hampshire (14.5%) and the Westside Pavilion (14.0%) have both demonstrated improved performance. As of YE 2005, their respective Fitch stressed DSCRs have risen to 1.49x and 1.61x from 1.10x and 1.19x at issuance. The remaining property, The Grapevine Mills value-centered mall in Texas (22.1%), which is the largest loan in the transaction, has maintained a stable NCF. This loan is currently on the servicer's watch list as a result of a pending SEC investigation of the Mills Corporation accounting practices. MORGAN STANLEY: Moody's Holds Low-B Rating on Six Cert. Classes --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Morgan Stanley Dean Witter Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2003-HQ2: * Class A-1, $164,932,323, Fixed, affirmed at Aaa * Class A-2, $522,232,000, Fixed, affirmed at Aaa * Class X-1, Notional, affirmed at Aaa * Class X-2, Notional, affirmed at Aaa * Class B, $39,591,000, Fixed, affirmed at Aa2 * Class C, $41,920,000, Fixed, affirmed at A2 * Class D, $9,316,000, Fixed, affirmed at A3 * Class E, $9,315,000, Fixed, affirmed at Baa1 * Class F, $10,480,000, WAC, affirmed at Baa2 * Class G, $8,151,000, WAC, affirmed at Baa3 * Class H, $13,974,000, Fixed, affirmed at Ba1 * Class J, $5,822,000, Fixed, affirmed at Ba2 * Class K, $2,329,000, Fixed, affirmed at Ba3 * Class L, $2,329,000, Fixed, affirmed at B1 * Class M, $4,658,000, Fixed, affirmed at B2 * Class N, $2,329,000, Fixed, affirmed at B3 As of the April 12, 2006 distribution date, the transaction's aggregate principal balance has decreased by approximately 9.5% to $842.7 million from $931.6 million at securitization. The Certificates are collateralized by 52 loans, ranging in size from less than 1.0% to 19.6% of the pool, with the top ten loans representing 69.3% of the pool. The pool includes four shadow rated investment grade loans, which represent 39.0% of the pool. The Tippecanoe Mall Loan, which represented 6.2% of the original pool balance and was shadow rated Baa2, prepaid in 2005. Five loans, representing 5.8% of the pool, have defeased and been replaced with U.S. Government securities. One loan has been liquidated from the pool resulting in an approximate realized loss of $5.2 million. There are currently no loans in special servicing. Four loans, representing 6.63% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2004 and partial or full year 2005 operating results for 86.1% and 83.3% of the pool, respectively. Moody's weighted average loan to value ratio for the conduit component is 83.9%, compared to 88.3% at securitization. However, as loans have exited the pool, the transaction has become more concentrated. Accordingly, Moody's has affirmed its ratings. The largest shadow rated loan is the 1290 Avenue of Americas Loan, which represents a participation interest in the senior component of a $385.0 million mortgage loan. The loan is secured by a 2.0 million square foot, 43-story office building located in New York City. Major tenants are Equitable Life Assurance and Morrison & Foerster. The property is currently 98.0% occupied, similar to securitization. The loan sponsors are Jamestown and Apollo Real Estate Investors. The property is also encumbered by a $55.0 million non-pooled junior loan. Moody's current shadow rating of the senior component is A1, compared to A2 at securitization. The second largest shadow rated loan is the Oakbrook Center Loan, which represents a participation interest in a $227.4 million mortgage loan. The loan is secured by a mixed-use property located in Oak Brook, Illinois that consists of an open-air regional mall, three office buildings and a ground lease to a hotel and a theater. Oakbrook Center totals approximately 2.4 million square feet. The mall is anchored by Lord & Taylor, Marshall Field's, Neiman Marcus, Bloomingdale's Home, Nordstrom, and Sears. The mall's in- line occupancy is 93.4%, compared to 94.5% at securitization and the office building's occupancy is 76.6%, compared to 75.5% at securitization. The loan sponsors are CalPERS and the Rouse Company. Moody's current shadow rating is A1, compared to A3 at securitization. The third largest shadow rated loan is the 52 Broadway Loan, which is secured by a 399,935 square foot office building located in New York City. The subject is 100.0% occupied by The United Federation of Teachers at $22.50 per square foot net through 2034, the same as at securitization. The loan sponsors are Jack Resnick & Sons and Lawrence Ruben and Company. Moody's current shadow rating is Baa1, the same as at securitization. The fourth largest shadow rated loan is the TruServe Portfolio I Loan, which is secured by three warehouse distribution facilities located in Fogelsville, Pennsylvania, Springfield, Oregon and Kingman, Arizona. The buildings are 100.0% leased to TrueServ Corporation as part of a sale-leaseback transaction. The loan sponsor is W.P. Carey & Company, LLC. Moody's current LTV and shadow rating are 65.0% and Baa1 respectively, compared to 67.7% and Baa1 at securitization. The top three conduit loans represent 21.7% of the pool. The largest conduit loan is the Katy Mills Loan, which represents a participation interest in a $148.0 million mortgage loan. The loan is secured by a 1.2 million square foot regional mall located in Katy, Texas in the Houston MSA. The mall is anchored by Bass Pro Shops, Burlington Coat Factory, AMC Theaters, Bed, Bath & Beyond, and Marshall's. The property is 89.7% occupied, compared to 92.8% at securitization. The loan sponsors are The Mills Corporation and KanAm. The property's performance has been impacted by a decline in rental income. Moody's LTV is 91.1%, compared to 81.0% at securitization. The second largest conduit loan is the ARC Portfolio Loan, which is secured by 13 manufactured home communities located in Florida, Colorado, Oklahoma, Texas, Idaho, Kansas and Wyoming. The portfolio is 88.0% occupied, compared to 90.0% at securitization. Moody's LTV is 79.8%, compared to 81.1% at securitization. The third largest conduit loan is the DC Portfolio Loan, which is secured by two mixed use properties located in Washington, DC. The properties total 214,666 square feet and were built in 1890 and renovated in 2000. Uses include retail, residential and a museum. The loan is on the master servicer's watchlist because the sponsors were indicted in September 2005 by a federal grand jury on conspiracy, bribery, fraud and tax evasion charges. Moody's LTV is 99.1%, compared to 92.8% at securitization. The pool's collateral is a mix of retail, office and mixed-use, industrial and self storage, multifamily, and U.S. Government securities. The properties are located in 21 states plus Washington, D.C. The highest state concentrations are New York, Texas, Illinois, Washington, D.C. and California. All of the loans are fixed rate. MORGAN STANLEY: S&P Junks Rating on Class G Certificates -------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on class G of Morgan Stanley Capital I Inc.'s commercial mortgage pass- through certificates from series 1997-XL1. At the same time, the ratings on five other classes are affirmed. The lowered rating on class G reflects anticipated credit support erosion upon the disposition of the only specially serviced asset in the pool. The affirmed ratings reflect increased credit support since the time of Standard & Poor's last review. There are five loans and one REO asset remaining in the pool. The REO asset, the Westshore Mall, is the smallest exposure in the pool at $20.8 million. Based on discussions with the special servicer, GE Capital Realty Group Inc., the mall will be liquidated by the third quarter of 2006. Standard & Poor's estimates a significant loss upon disposition. There are three defeased loans representing 67% of the pool balance, and they include the largest and second-largest loans. Details concerning the nondefeased loans are: -- Fashion Mall is the third-largest loan in the pool, with a $58.2 million loan balance, and is secured by a 700,000-sq.- ft. regional mall in the northern suburbs of Indianapolis, Indiana. The property has performed well, as evidenced by a 44% increase in net cash flow (NCF) since issuance in 1997. In-line tenant sales were in excess of $550 per sq. ft. for full-year 2005. Using operating results as of December 2005, Standard & Poor's estimated value for this asset is 60% above its level at issuance. -- Grand Kempinski Hotel (now known as the Hotel Inter- Continental Dallas) is the fifth-largest loan in the pool, with a $47.2 million loan balance, and is on the servicer's watchlist. A 528-room luxury hotel in Addison, Texas, secures the loan. While operating performance for this property has rebounded over the past two years, reported net operating income for full-year 2005 remains 48% below the level at issuance. Using the reported NOI and adjusting for management fees and reserves for furniture, fixtures, and equipment, Standard & Poor's estimates a loan-to-value ratio greater than 100%. However, actual debt service coverage has increased to 0.93x for full-year 2005 from 0.15x for full-year 2003. These levels compare with 1.73x at issuance. A major capital improvement plan is in place extending through 2008 that will total as much as $18 million. The plan calls for: -- renovation of all guest rooms; -- expansion of meeting space; and -- renovation of the ballrooms and the lounge and restaurant areas. Notwithstanding these improvements, this asset will continue to be challenged by an oversupply of hotel product in this submarket north of Dallas. Rating Lowered: Morgan Stanley Capital I Inc. Commercial mortgage pass-through certificates series 1997-XL1 Rating Class To From Credit support ----- -- ---- -------------- G CCC B- 2.29% Ratings Affirmed: Morgan Stanley Capital I Inc. Commercial mortgage pass-through certificates series 1997-XL1 Class Rating Credit support ----- ------ -------------- A-3 AAA 55.70% B AAA 49.77% C AAA 43.83% D AAA 31.96% E AA+ 20.09% MORTGAGE CAPITAL: Fitch Holds Rating on $6.6 Mil. Certs. at B+ -------------------------------------------------------------- Fitch upgrades Mortgage Capital Funding, Inc.'s multifamily and commercial mortgage pass-through certificates, series 1997-MC1 to: -- $39.5 million class F to 'BBB-' from 'BB'. In addition, Fitch affirms the remaining certificates and Distressed Recovery (DR) ratings: -- $9.2 million class A-3 at 'AAA'; -- Interest-only class X at 'AAA'; -- $39.5 million class B at 'AAA'; -- $36.2 million class C at 'AAA'; -- $32.9 million class D at 'AAA'; -- $6.6 million class G at 'B+'; -- $11.6 million class H remains at 'CC/DR2'. The $13.2 million class E is not rated by Fitch. Classes A-1 and A-2 have been paid off in full. Class J has been reduced to zero due to realized losses from the disposition of ten loans. To date, the transaction has realized losses in the amount of $18 million. The rating upgrade reflects improved credit enhancement levels due to loan payoffs and scheduled amortization since Fitch's last rating action. As of the April 2006 distribution date, the pool's aggregate certificate balance decreased 71.4% since issuance to $188.7 million from $658.5 million. Of the original 158 loans in the pool, 48 loans remain outstanding. Currently, three loans (6.1%) are in special servicing. The largest specially serviced loans (3.5%) are two crossed loans secured by two apartment buildings in New Orleans, Louisiana. The loans remain current. The loans transferred to the special servicer in September 2005 after the buildings were destroyed by Hurricane Katrina. The borrower received FEMA insurance proceeds on the properties; however, he cashed the insurance checks without the required authorization of the lender. The special servicer is in litigation with the borrower to obtain FEMA proceeds. The second largest specially serviced loan (2.6%) is collateralized by a hotel in Columbia, South Carolina and is 90+ days delinquent. The loan had transferred to special servicing in March 2004 due to monetary default. The borrower filed bankruptcy before the foreclosure sale in June 2005; however, the bankruptcy was dismissed in February 2006 and a receiver has been appointed. The special servicer anticipates taking title to the property via a deed-in-lieu of foreclosure. Fitch's Distressed Recovery (DR) ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. NORTHWEST AIRLINES: Posts $1.1 Billion Net Loss in First Quarter ---------------------------------------------------------------- Northwest Airlines Corporation realized a net loss of $1.1 billion during the first quarter of 2006. This compares to a net loss of $537 million in the first quarter of 2005. Excluding reorganization and unusual items, Northwest reported a first quarter 2006 net loss of $129 million versus a first quarter 2005 net loss of $450 million. For the quarter ended Mar. 31, 2006, Northwest's balance sheet showed $3.166 billion in total current assets and $3.333 billion in total current liabilities resulting in a working capital deficit of $167 million. Northwest reported total assets at Mar. 31, 2006, of $13.352 billion and a stockholders' equity deficit of $6.728 billion. Doug Steenland, president and chief executive officer, said, "During the quarter, Northwest continued to make progress on its restructuring goals to address the carrier's cost structure, resize and optimize its fleet and restructure its balance sheet." "We made progress during the first quarter on our goal of reducing labor costs by reaching tentative agreements with our three largest unions. Last week, our pilots ratified their contract bringing Northwest a step closer to realizing the $1.4 billion in annual labor cost savings it requires." Mr. Steenland continued, "Our pilots have continued to play a key leadership role in helping Northwest achieve the necessary cost reductions. We thank the pilots and their families for the significant financial sacrifice they have made to help secure the future of our airline. "We are hopeful that our flight attendants will ratify their tentative agreement next month and that through the 1113(c) process we can reach a settlement with the remaining two work groups represented by the International Association of Machinists and Aerospace Workers. "Reaching our labor cost savings goal would be a significant milestone in our ongoing efforts to achieve the $2.5 billion in annual business improvements necessary for Northwest to be profitable on a sustained basis," Mr. Steenland added. During the first quarter, Northwest made progress on its restructuring goals including: -- Resizing and optimizing its fleet to better address market needs. Northwest reduced its first quarter system available seat miles by 10.8 percent year- over-year. Domestic ASMs were down 12.5 percent and international ASMs declined by 8.2 percent. -- Securing additional agreements towards its goal of $400 million in annual fleet savings. Since entering bankruptcy last September, Northwest has targeted restructuring or rejecting leases on approximately 400 mainline and regional aircraft. To date, the company has either rejected or entered into new, more favorable lease or debt arrangements covering 211 aircraft. It remains on schedule to achieve its fleet savings goal. -- Receiving contract approval from the airline's International Association of Machinists and Aerospace Workers-represented customer service and reservations staff on permanent wage and benefit reductions. To date, in addition to the IAM-represented employees, Northwest has reached agreements on permanent wage and benefit reductions with the Air Line Pilots Association, the Aircraft Technical Support Association, the Transport Workers Union of America, and the Northwest Airlines Meteorologists Association. Two rounds of salaried and management employee pay cuts have also been implemented. In addition, the Professional Flight Attendants Association and the airline reached a tentative agreement on a new contract in March. Northwest has also obtained the needed aircraft maintenance employee labor cost savings. Later in May, the airline will address open labor and retiree issues during a Section 1113(c) and 1114 hearing in Bankruptcy Court. -- The submission by Independence Air and Compass Airlines, a subsidiary of Northwest Airlines Corporation, of a joint application to the U.S. Department of Transportation (DOT) in late March requesting the transfer of Independence Air's certificate of public convenience and necessity to Compass Airlines. The expansion of Northwest's regional flying to include 76- seat aircraft is an important part of Northwest's restructuring plan. Federal government approval would allow Northwest to accelerate development of Compass, thus creating job opportunities for furloughed Northwest pilots. -- Increasing revenue while providing the airline's late- booking customers with a greater choice of coach class seats. In March, Northwest introduced its new Coach Choice product which gives customers the opportunity to purchase preferred coach seat assignments on domestic flights. The program is expected to generate $15 million of revenue in the first year. -- Increasing international service to meet customer demand. During the quarter, Northwest re-established its daily nonstop Minneapolis/St. Paul-London service, restored flights between its WorldGateway at Detroit hub and Paris from five times per week to daily service, and resumed a third daily flight between the Twin Cities and Amsterdam. In addition, Northwest plans to increase its service during the summer months to its Tokyo hub from both Seattle and Minneapolis/St. Paul from daily service to eight flights per week. Mr. Steenland said, "While we are focused on restructuring, we understand the need to provide customers with reliable service. Through the first quarter, Northwest's completion factor and its on-time arrivals compared favorably to its network competitors." According to DOT statistics for January through March, "Northwest ranked first in lowest consumer complaints, second in on-time arrivals, and third in completion factor and mishandled luggage among the six major network U.S. carriers. This is a testament to the dedication of our front line employees who work daily to provide our customers with a reliable and efficient travel experience on Northwest." Mr. Steenland concluded, "Although we have made progress in our restructuring process, we still have work to do to position the company for long-term success." Neal Cohen, executive vice president and chief financial officer, said, "When we began the restructuring process last year, we prudently planned for oil prices averaging $65 per barrel in 2006, and $60 per barrel thereafter. With recent persistent record-high fuel costs, along with significant volatility in the markets, there remains great uncertainty around this key element of our plan. Northwest, like other airlines, is concerned about the impact of high fuel costs. Every dollar per barrel increase impacts Northwest's fuel costs by $43 million annually." Northwest's quarter-ending unrestricted cash and short-term investments balance was $1.28 billion. The Company expects to develop a reorganization plan during 2006 for emergence from Chapter 11. A full-text copy of NWA Corp.'s quarterly report is available for free at http://ResearchArchives.com/t/s?902 About Northwest Airlines Northwest Airlines Corporation (OTC: NWACQ) -- 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. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000). NRG VICTORY: Chapter 15 Petition Summary ---------------------------------------- Petitioner: Alan Boyce Chief Executive Officer NRG Victory Reinsurance Ltd. Charter House, Park Street Ashford, Kent TN24 8EQ United Kingdom Debtor: NRG Victory Reinsurance Ltd. Charter House, Park Street Ashford, Kent TN24 8EQ United Kingdom Case No.: 06-11052 Type of Business: The Debtor is a reinsurance company in the United Kingdom. It ceased its underwriting operations in 1993. Chapter 15 Petition Date: May 12, 2006 Court: Southern District of New York (Manhattan) Judge: James M. Peck Petitioner's Counsel: Sara M. Tapinekis, Esq. Andrew P. Brozman, Esq. David A. Sullivan, Esq. Clifford Chance US LLP 31 West 52nd Street New York, New York 10019 Tel: (212) 878-8569 Fax: (212) 878-8375 Estimated Assets: More than $100 Million Estimated Debts: More than $100 Million ONEIDA LTD: Court Okays Credit Suisse as Financial Advisor ---------------------------------------------------------- Oneida Ltd. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to employ and retain Credit Suisse Securities (USA) LLC, as their financial advisor, effective as of March 19, 2006. The Debtors tell the Court that Credit Suisse has provided them with professional services since August 2005 in connection with their recapitalization efforts. Credit Suisse has also been integrally involved with and has assisted the Debtors in negotiating a consensual restructuring of their indebtedness with their Prepetition Lenders. The Debtors say that these negotiations have resulted in the Plan Support Agreement with the Prepetition Lenders. Credit Suisse is expected to: a. review with members of the Debtors' management and board of directors the Debtors' financial plans and assist the Debtors in analyzing their strategic plans and business alternatives; b. assist the counsel to the Debtors in evaluating the Debtors' debt capacity and capitalization based on the Debtors' projected earnings and cash flows; c. advise the Debtors in negotiating potential interim waivers, to the extent the waivers are required, related to either: -- the Second Amended and Restated Credit Agreement, dated as of August 9, 2004, among the Debtors, the financial institutions party and JPMorgan Chase Bank; or -- the Debtors' accrued under-funded pension liability; d. advise and assist the Debtors in developing proposals and, if applicable, presenting and negotiating the proposals with their creditors and existing and potential equity investors; e. if appropriate, at the request of the Board, advise the Debtors concerning opportunities for: -- potential sale of all or a substantial portion of the assets or the capital stock of the Debtors; -- potential merger, spin-off, reverse spin-off, split-off or other business combination involving the Debtors; or -- other forms of transaction or disposition which results in the effective sale, transfer or other disposition of ownership or control over a substantial portion of one or more of the principal businesses of the Debtors, but not including a sale or disposition of the Debtors' non- core assets; f. advise and assist the Debtors in analyzing the terms and timing of a potential sale transaction or a transaction in which all or a portion of the obligations are restructured or refinanced in one or a series of related transactions provided, however, that the Debtors will retain their own legal counsel, pension consultants, actuaries and accountants for legal, accounting, tax and pension advice; g. advise and assist the Debtors in the preparation of Offer Documents in connection with a potential transaction; h. advise and assist the Debtors in structuring and implementing a potential transaction; i. to the extent applicable, and except with respect to financing in which the Firm and its affiliates are participating, advise and assist the Debtors in evaluating financing alternatives for the Debtors and assist the Debtors in obtaining debtor in possession and post- bankruptcy financing in connection with the Chapter 11 cases; j. assist the counsel to the Debtors in analyzing a potential transaction involving the contribution of shares of the Debtors' common stock to the Oneida Ltd. Employee Stock Ownership Plan Trust to satisfy the Pension Obligations, as well as restructurings of the Debtors' obligations with respect to deferred compensation on deposit with the Debtors, provided, however, that the Debtors will retain their own legal counsel, pension consultants, actuaries and accountants for legal, accounting, tax and pension advice; and k. to the extent requested by the Board and as appropriate, render to the board an opinion as to the fairness from a financial point of view to the Debtors or their stockholders, as appropriate, of the consideration to be received in a proposed potential sale transaction. Philippe Jacob, a managing director at Credit Suisse, tells the Court that the Debtors will pay the Firm these monthly financial advisory fees: a. $25,000 on August 15, 2005; b. $50,000 on September 15, 2005; c. $75,000 on October 15, 2005; d. $100,000 on November 15, 2005; e. $125,000 on December 15, 2005; and f. $150,000 on January 15, 2006 and the succeeding months until the engagement is terminated. Mr. Jacob discloses that the Debtors will pay the Firm these additional fees for financial transactions: -- $2 Million for Restructuring Transactions; -- greater than $2 Million and 1.25% of the aggregate value for Sale Transactions. Mr. Jacob assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. About Oneida Ltd. Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/ -- is the world's largest manufacturer of stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and the largest supplier of dinnerware to the foodservice industry. Oneida is also a leading supplier of a variety of crystal, glassware and metal serveware for the tabletop industries. The Company and its 8 debtor-affiliates filed for Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at Shearman & Sterling LLP represents the Debtors. Credit Suisse Securities (USA) LLC is the Debtors' financial advisor. As of May 4, 2006, the Official Committee of Unsecured Creditors has not sought for appointment of its counsel. When the Debtors filed for protection from their creditors, they listed $305,329,000 in total assets and $332,227,000 in total debts. ONEIDA LTD: Wants to Ink Settlement with Committee and PBCG ----------------------------------------------------------- Onedia Ltd., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to enter into a Settlement Agreement with the Official Committee of Unsecured Creditors and the Pension Benefit Guaranty Corporation. Termination of Pension Plans The Debtors remind the Court they had sought the termination of: (a) the Retirement Plan for the Employees of Oneida Ltd., for which Oneida is the plan sponsor; (b) the Retirement Income Plan for Employees of Buffalo China, Inc.; and (c) the GMP - Buffalo China, Inc. Pension Plan for Employees Who Are Members of Local 76A, for which Buffalo China is the plan sponsor. The Debtors say that each of these Pension Plans is underfunded. The Debtors disclose that they have been involved in discussions with relevant stakeholders to determine whether it is feasible to continue performing under the two Buffalo China Pension Plans, both of which give rise to substantially lesser obligations in comparison to the Oneida Plan. The Debtors tell the Court that if they and the relevant stakeholders determine that continued performance under the two Buffalo China Pension Plans is indeed feasible, then they would withdraw the request to terminate the two pension plans. Insurance Program The Debtors say that pension plans are administered by the PGBC and established under: * Title IV of the Employee Retirement Income Security Act of 1974, as amended, and * Sections 1201-1461 of Title 29 of the U.S. Code The Debtor relates that under that insurance program, when an underfunded pension plan properly is terminated, the PBGC generally becomes trustee of that plan and, subject to certain statutory limitations, defrays the plan's unfunded benefits from the PBGC's insurance funds. Settlement with the Committee & PBGC The Debtors say that although all of the legal and factual requirements for termination of the Pension Plans are satisfied, litigation involving the Pension Termination Motion is potentially costly and time consuming, and its outcome uncertain The Debtors believe that by entering into the Settlement Agreement, they will be able to eliminate the possibility of a protracted litigation with the Committee or the PBGC that could delay, or ultimately even prevent, the confirmation of the Plan of Reorganization. The Debtors assure the Court that the terms of the Settlement Agreement are fair and equitable and it is in the best interests of the Debtors and their creditors. Terms of the Settlement The Settlement Agreement contains these key terms: * The Debtors, the Creditors' Committee and the PBGC will consent to the entry of the Pension Termination Order; * The Debtors will not seek to terminate the Buffalo China Pension Plans under Section 1341(c) of Title 29 of the U.S. Code; * The PBGC will receive the PBGC Note, as defined in the Debtors' Plan of Reorganization, on account of the Secured PBGC Claim and as a distribution under the Plan of Reorganization; * On the Effective Date, and subject to the terms of the Settlement Agreement, the PBGC will fully, finally and forever release any and all claims in connection with, or arising out of, the Oneida Plan or the termination of the Oneida Plan under Section 1341(c) of Title 29 of the U.S Code that can be asserted against, or demanded from, Oneida or any of its domestic or foreign affiliates, including, without limitation, the Pension Termination Claim, to the fullest extent waivable by the PBGC; provided, however, that nothing contained in the Settlement Agreement or in the Plan of Reorganization will be deemed to: (i) affect any rights or obligations any of the Parties may have in connection with any premiums arising under Section 8101 of the Deficit Reduction Act of 2005; or (ii) release any claim of the PBGC or any pension plan, currently or formerly sponsored by the Debtors, against any person arising under Sections 1104-1109 of Title 29 of the U.S. Code with respect to the Pension Plans; * Solely for purposes of the Plan of Reorganization, and so long as the treatment of the Debtors' general unsecured creditors under the Plan is not materially changed, the Pension Termination Claim will be deemed to be a general unsecured claim against each of the Debtors, on a joint and several basis, determined in accordance with ERISA and the PBGC's regulations pertaining thereto. The Parties tell the Court that the estimated amount of the Pension Termination Claim is $56,236,900; * No distribution will be made on account of the Oneida Equity Interests unless: (i) each of the Secured PBGC Claim and the Pension Termination Claim is paid in full; or (ii) the PBGC consents, in writing, to the making of such distribution; * As soon as practicable following the date of the Settlement Agreement, the PBGC staff will recommend to the TWG that: (i) the Debtors have satisfied the requirements under Section 1341(c) of Title 29 of the U.S. Code with respect to the Oneida Plan; and (ii) May 31, 2006 should be accepted as the date of termination of the Oneida Plan under Section 1348 of Title 29 of the U.S. Code; * On the Effective Date, the PBGC will: (i) be deemed to have fully and finally released any and all Oneida Plan Liens on any properties or assets of, or any equity or ownership interests in, Oneida or any of its domestic and foreign affiliates; and (ii) cooperate in any efforts to release such liens; and * The Settlement Agreement will terminate and be of no further force and effect in the event: (i) the Debtors fail to obtain an order from the Court approving the Settlement Agreement on or before June 1, 2006; or (ii) upon notice by the Debtors to the PBGC and the Committee that the Debtors are required to materially amend or modify the Plan of Reorganization in a manner inconsistent with the terms of the Settlement Agreement, except as the Parties mutually agree. About Oneida Ltd. Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/ -- is the world's largest manufacturer of stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and the largest supplier of dinnerware to the foodservice industry. Oneida is also a leading supplier of a variety of crystal, glassware and metal serveware for the tabletop industries. The Company and its 8 debtor-affiliates filed for Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at Shearman & Sterling LLP represents the Debtors. Credit Suisse Securities (USA) LLC is the Debtors' financial advisor. As of May 4, 2006, the Official Committee of Unsecured Creditors has not sought for appointment of its counsel. When the Debtors filed for protection from their creditors, they listed $305,329,000 in total assets and $332,227,000 in total debts. OXIS INT'L: Posts $700,000 Net Loss in 2006 First Quarter --------------------------------------------------------- Oxis International, Inc., reported a $700,000 net loss for the first quarter ended March 31, 2006, compared to a net loss of $200,000 for the first quarter of 2005. In the fourth quarter of 2005, the Company reported a net loss of $2.2 million. Revenues for the first quarter of 2006 were $1.5 million, an increase of $900,000, or 140%, over the same period last year, and $700,000 over the fourth quarter of 2005. Cost of product revenues on a GAAP basis were $800,000 for the first quarter of 2006, an increase of $500,000, or 185%, from $300,000 incurred in the first quarter of 2005. Total operating expenses on a GAAP basis were $1.3 million for the first quarter of 2006, an increase of $700,000, or 114%, from $600,000 incurred in the first quarter of 2005. Gross profit as a percentage of revenues was 46% in first quarter of 2006. OXIS ended the quarter with approximately $700,000 in cash and cash equivalents of which $500,000 was held by OXIS and $200,000 was held by its majority-owned subsidiary, BioCheck, Inc. The Company's consolidated financial statements for the three months ended March 31, 2006, include the results of operations and the assets and liabilities of BioCheck at Dec. 31, 2005, and March 31, 2006. First quarter 2006 highlights: -- OXIS strengthened its management team with the appointment of Michael D. Centron as Chief Financial Officer in January 2006, and Randall Moeckli as Senior Director of Sales and Marketing in February 2006; -- The Company's Board of Directors was further enhanced with the appointment of Gary M. Post, Managing Director of Ambient Advisors, LLC, in March 2006; -- The Company improved its short-term financial position by securing $200,000 and $400,000 in promissory note agreements with President and Chief Executive Officer Steve Guillen and Fagan Capital, respectively, in March 2006; -- On April 3, 2006 OXIS and BioCheck jointly announced the upcoming launch in late spring and summer 2006 of new immunoassay (ELISA) test kits and reagent products for the oncology research market, including assays based on the HMGA2 and Id proteins shown to play a role in the control of cell growth, differentiation and tumorigenesis related to breast cancer and other tumor related angiogenesis functions. -- In early May, OXIS expanded its product portfolio for the cardiovascular research markets with the addition of new assay products from BioCheck, including assays for the measurement of biomarkers of inflammation related to cardiovascular disease, including Troponin I, Myoglobin, High Sensitivity C-Reactive Protein, CK-MB, and Fatty Acid Binding Protein. "With the successful consolidation of the key product manufacturing, sales and marketing functions of OXIS and BioCheck, we are beginning to realize significant merger synergies," stated Steve Guillen, President and CEO of OXIS International. "We are now able to offer our life sciences research and clinical customers a more comprehensive menu of products that are known for their high quality, stability and strong technical support." The consolidation of the companies' operations has resulted in improved margins in the first quarter of 2006 and combined lower manufacturing costs than incurred by each company prior to the relocation of OXIS' operations to Foster City, California and, as a result, has allowed OXIS to implement new value pricing programs. These initiatives are expected to drive revenue and product profit margin expansion for both companies. Going Concern Doubt Williams & Webster, PS, expressed substantial doubt about OXIS International, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's significant and ongoing operating losses. About OXIS and BioCheck: OXIS International, Inc. (OTCBB: OXIS.OB) (Nouveau March,: OXIS) (FWB: OXI) -- http://www.oxis.com/-- develops technologies and products to research, diagnose, treat and prevent diseases of oxidative stress associated with damage from free radical and reactive oxygen species. OXIS has acquired a 51% interest in and has the option to purchase the remaining 49% of BioCheck. BioCheck, Inc. -- http://www.biocheckinc.com/-- provides enzyme immunoassay research services and products including immunoassay kits for cardiac and tumor markers, infectious diseases, thyroid function, steroids, and fertility hormones. The company operates a 15,000 square-foot, U.S. Food and Drug Administration certified cGMP, and ISO device-manufacturing facility in Foster City, California. PATHMARK STORES: Incurs $40.1 Million Net Loss in Fiscal 2005 ------------------------------------------------------------- Pathmark Stores, Inc., reported $993.3 million of sales for the fourth quarter ended Jan. 28, 2006, a decrease of 0.4% from $996.8 million of sales in the prior year's fourth quarter. The Company reported a net loss of $14.6 million in the fourth quarter of fiscal 2005 compared to a net loss of $301.6 million in the prior year's fourth quarter. Sales for fiscal 2005 were $3,977 million compared to $3,978.5 million in the prior year. Same-store sales decreased 0.8% in fiscal 2005. The Company reported a net loss of $40.1 million in fiscal 2005, compared to a net loss of $308.6 million in the prior year. John Standley, Chief Executive Officer, said, "Fiscal 2005 was a year of transition. The first half was focused on the review of strategic alternatives, which led to the Yucaipa transaction. During the second half of the year we began making important investments to improve the long-term health of our business. These investments included the merchandising and store initiative, which refreshed the look and added new merchandise to our stores, a store-level labor buyout and administrative cost reduction program and the strengthening of our management team. While our financial results for the fourth quarter and full year were disappointing, we believe that the steps we have taken will lead to a stronger Pathmark in fiscal 2006." Capital investments in fiscal 2005 were $64.5 million. During fiscal 2005, the Company opened two new stores, one of which was a replacement store, closed four stores and completed eight store renovations. Total capital investments for fiscal 2006 are expected to be approximately $70 million. Pathmark Stores, Inc. (Nasdaq: PTMK) -- http://www.pathmark.com/ -- is a regional supermarket currently operating 142 supermarkets primarily in the New York - New Jersey and Philadelphia metropolitan areas. The Company filed for chapter 11 protection on July 12, 2000 (Bankr. Case 00-02963). The Court confirmed its prepackaged Plan of Reorganization on Sept. 7, 2004. * * * As reported in the Troubled Company Reporter on Dec. 21, 2005, Standard & Poor's Ratings Services lowered its ratings on Pathmark Stores Inc. to 'B-' from 'B'. The rating outlook is negative. "The downgrade reflects Pathmark's weakening credit metrics, limited cash flow generation, and our view that it will be very challenging for the company to significantly improve its market share and profitability levels given the competitive supermarket environment in which it operates," said Standard & Poor's credit analyst Stella Kapur. PJ MILLIGAN: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: PJ Milligan & Co. LLC 740 Cacique Street Santa Barbara, California 93013-3620 Bankruptcy Case No.: 06-10242 Type of Business: The Debtor manufactures furniture and other home furnishings. See http://www.pjmilligan.com Chapter 11 Petition Date: May 12, 2006 Court: Central District Of California (Santa Barbara) Judge: Robin Riblet Debtor's Counsel: Karen L. Grant, Esq. 205 East Figueroa Street Santa Barbara, California 93101 Tel: (805) 962-4413 Total Assets: $287,765 Total Debts: $1,026,131 The Debtor did not file the list of its 20 largest unsecured creditors. RADVIEW SOFTWARE: Dec. 31 Balance Sheet Upside-Down by $2.3 Mil. ---------------------------------------------------------------- RadView Software Ltd. generated $5,645,000 of revenues during the year ended Dec. 31, 2005, compared to $4,663,000 in 2004. The Company's net loss for 2005 was $2,465,000, compared to a net loss of $3,780,000 million in 2004. Revenues for the fourth quarter of 2005 were $1,251,000 compared to $1,329,000 for the same period last year. The Company's net loss for the fourth quarter of 2005 was $518,000 compared to a net loss of $866,000 for the same period last year. At Dec. 31, 2005, the Company's balance sheet showed $1,591,000 in total assets and $3,972,000 in total liabilities, resulting in a $2,381,000 stockholders' deficit. "We are encouraged by the improvement in our annual revenues and the substantial reduction in our loss," said Ilan Kinreich, President and CEO of RadView. "We look forward to continuing our efforts toward future profitability while expanding our presence in the marketplace." The Company also signed definitive agreements on April 4, 2006 for a financing with Fortissimo on behalf of itself and several co- investors, with a minimum initial investment of $1,500,000 and, at the election of the investors, an additional investment of up to $2,250,000. A full-text copy of RadView's 2005 annual report on Form 10-K is available for free at http://researcharchives.com/t/s?907 About RadView RadView Software Ltd. (OTCBB: RDVWF) -- http://www.radview.com/-- provides solutions for verifying the performance, scalability and integrity of business-critical Web applications. Deployed at over 1,600 customers worldwide from major industries such as financial services, retail, manufacturing, education and technology, RadView's products enable customers to reduce costs while improving the quality of their Web applications throughout the development lifecycle. RANGE RESOURCES: Agrees to Acquire Stroud Energy for $450 Million ----------------------------------------------------------------- Range Resources Corporation entered into a definitive agreement to acquire Stroud Energy, Inc. for approximately $450 million, including approximately $82 million in assumed debt. Stroud is a private Fort Worth-based independent oil and gas company with operations located in the Barnett Shale play in North Texas, the Cotton Valley in East Texas and the Austin Chalk in Central Texas. Stroud has interests in 126 producing wells and owns a leasehold position covering 87,200 gross (67,000 net) acres. During the first quarter of 2006, Stroud produced approximately 33 Mmcfe per day, of which approximately one-half was attributable to the Barnett Shale. Range estimates the proved reserves attributable to the Stroud properties total 171 Bcfe and that proven and unproven reserves total 370 Bcfe. Range has identified 236 drilling locations on the Stroud leasehold, of which 182 are attributable to the Barnett Shale acreage. Over 90% of Stroud's Barnett Shale acreage is located in the core or expanding core portions of the Barnett Shale play. Upon completion of the transaction, Range plans to retain nearly all of Stroud's 27 employees, including those involved in the Barnett Shale play. This will expand Range's Barnett shale team under the leadership of Mark Whitley, Range's Senior Vice President. By adding Stroud's leasehold position, Range will own approximately 42,900 gross (35,300 net) acres in the Barnett Shale play. Range plans to develop the leasehold position with a five- rig drilling program, including the three rigs Stroud is currently running, plus two additional contracted rigs scheduled to arrive in the third quarter. In announcing the transaction, Range indicated that it would consider divesting of the Austin Chalk properties. These properties produced approximately 16 Mmcfe per day in the first quarter of 2006. "This transaction doubles Range's leasehold position in the Barnett Shale play and our shale play team benefits from the addition of the Stroud employees, who are highly regarded," John Pinkerton, Range's President and CEO, said. "We believe the expanded Barnett team will enhance and accelerate our shale effort. Excluding the Austin Chalk properties, which we will consider divesting, we estimate that the fully developed cost of the Barnett Shale and East Texas reserves will be approximately $2.35 per mcfe. The transaction expands our leasehold position with high-quality Barnett acreage, increases our drilling inventory and provides us with a number of additional top-tier people. Importantly, it continues Range's strategy of growing production and reserves at a top quartile cost structure. Assuming the transaction closes in late June, we are increasing our 2006 production growth target from 11% to 15%." The acquisition is structured as a merger pursuant to which Stroud's shareholders who satisfy certain suitability standards may individually elect to receive, in exchange for their shares of Stroud common stock, consideration in one of three forms: -- 100% in Range common stock, -- 100% in cash or 50% in Range common stock and -- 50% in cash, subject to adjustments and allocations provided for in the definitive agreement. The exchange ratio for the Stroud stock, and on which the cash consideration will be determined, will be based upon the average closing price for Range's stock for the 15 days ending five days prior to closing. Based on the latest 15-day average price of Range's common stock, and assuming all of Stroud's shareholders were to elect to receive Range common stock in the transaction, Range would issue approximately 13.2 million shares of stock, representing approximately 9% of the outstanding Range stock giving effect to such issuance. Stroud shareholders who do not satisfy the suitability standards will receive their consideration 100% in cash. Range intends to utilize funds currently available under its bank credit facility to finance the cash portion of the transaction. The Stroud acquisition is subject to approval by the shareholders of Stroud and other customary closing conditions. Assuming the Stroud shareholders approve the transaction and the other closing conditions are satisfied, closing is expected to occur in late June 2006. There is no assurance the acquisition will be consummated. Headquartered in Forth Worth, Texas, Range Resources Corporation (NYSE:RRC) -- http://www.rangeresources.com/-- is an independent oil and gas company operating in the Southwestern, Appalachian and Gulf Coast regions of the United States. The Company pursues a balanced growth strategy that targets exploitation of its sizeable inventory of lower risk development drilling locations with higher potential exploration projects and a complementary acquisition effort. Range seeks to manage risk in every aspect of its business while generating attractive returns. * * * Range Resources Corporation's 7-3/8% Senior Subordinated Notes due 2013 carry Moody's Investors Service's B2 rating and Standard & Poor's B rating. RAVEN MOON: Auditor Raises Going Concern Doubt ---------------------------------------------- Richard L. Brown & Company, P.A., in Tampa, Florida, raised substantial doubt about Raven Moon Entertainment, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's losses from operations and stockholders' deficiency. The Company reported a $7,614,400 net loss on $10,160 of total revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $153,276 in total assets and $2,595,633 in total liabilities, resulting in a $2,442,357 stockholders' deficit. A full-text copy of the Company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?90a Raven Moon Entertainment, Inc. -- http://www.ravenmoon.net/-- develops and produces children's television programs and videos, CD music. At http://www.ginadskidsclub.com/Raven Moon sells DVDs, music CDs and plush Cuddle Bug toys. Raven Moon also talks about music publishing and talent management on its Web site. REDDY ICE: S&P Affirms B+ Rating & Revises Outlook to Stable ------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Dallas, Texas-based Reddy Ice Holdings Inc. and its operating subsidiary, Reddy Ice Group Inc., to stable from negative. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'B+' corporate credit rating. As of March 31, 2006, Reddy Ice Holdings had consolidated debt of about $355.8 million outstanding, which excludes operating lease obligations. "The revised outlook reflects Reddy Ice's enhanced financial profile and credit measures resulting from improved operating performance, in addition to lower debt levels following the paydown of debt subsequent to the company's initial public offering in 2005," said Standard & Poor's credit analyst Mark Salierno. The corporate credit rating on Reddy Ice reflects: * the company's narrow product focus; * its participation in the highly fragmented and competitive packaged ice industry; * the seasonal nature of demand for its products; and * an aggressive shareholder-oriented financial policy through a commitment to substantial dividends via its recent IPO. For analytical purposes, Standard & Poor's views Holdings and Reddy Ice Group as one economic entity. REPUBLIC STORAGE: Completes $20 Million Asset Sale to Chrysalis --------------------------------------------------------------- Republic Storage Systems Company, Inc., completed the sale of substantially all of its assets to an affiliate of Chrysalis Capital Partners, LP, a private equity investment firm. According to Jim Mackinnon of the Akron Beacon Journal, Chrysalis Capital purchased Republic Storage for $20 million. As reported in the Troubled Company Reporter on May 2, 2006, the asset sale was approved by the U.S. Bankruptcy Court at a hearing on April 28, 2006. "With this transaction accomplished, Republic has ensured its ability to deliver the superior solutions and top-notch service its customers expect and enjoy," Greg Segall, Managing Partner of Chrysalis, said. "We are very pleased that Republic now has the additional resources and flexibility it needs to remain a market leader." The business will operate under the Republic name, and the senior management team will be led by James T. Anderson, President and CEO. "This is an important and exciting day for all of us, as it essentially marks the end of our involvement in the bankruptcy process and the beginning of our next phase as a new company," said Mr. Anderson. "The tremendous financial support of Chrysalis enables us to focus on what matters most -- outstanding products and customer service, delivered by outstanding people." Mr. Anderson added that Chrysalis' acquisition gives Republic the resources to expand production and reduce lead times during its peak summer season. Republic voluntarily filed for Chapter 11 protection on March 14, 2006, citing the negative impacts of a major flood resulting in a factory shutdown in 2003, the doubling of steel prices in 2004 and unsustainable legacy costs for retiree health care and pension benefits. While the bankruptcy case will continue for some time to resolve the various claims and rights of historical creditors, the involvement of the Republic business in the bankruptcy process concluded with the closing of the sale to Chrysalis. About Chrysalis Capital Partners Philadelphia-based Chrysalis Capital Partners, Inc. -- http://www.ccpfund.com/-- is a private equity investment firm with $300 million in committed equity capital under management. Chrysalis focuses on "special situation" investments including turnarounds, restructurings, reorganizations and recapitalizations in a wide range of industries and circumstances throughout the United States. About Republic Storage Systems 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. Dov Frankel, Esq., at Buckley King, LPA, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. REVLON INC: Annual Stockholders' Meeting Scheduled on June 2 ------------------------------------------------------------ Revlon, Inc., will hold its Annual Meeting of Stockholders at 10:00 a.m., New York City time, on, June 2, 2006, at Revlon, Inc., The Showroom, 21st Floor, 237 Park Avenue in New York City. These proposals will be voted on at the Annual Meeting: a) the election of these persons as members of the Board of Directors of the Company, to serve until the next Annual Meeting and until their successors are elected and qualified: -- Ronald O. Perelman, -- Alan S. Bernikow, -- Paul J. Bohan, -- Donald G. Drapkin, -- Meyer Feldberg, -- Howard Gittis, -- Edward J. Landau, -- Debra L. Lee, -- Linda Gosden Robinson, -- Kathi P. Seifert, -- Jack L. Stahl, and -- Kenneth L. Wolfe; and b) the ratification of the selection of KPMG LLP as the Company's independent registered public accounting firm for 2006. Only stockholders of record at the close of business on April 5, 2006 are entitled to notice of, and to vote at, the 2006 Annual Meeting. A full-text copy of the proxy statement describing the matters to be considered at the 2006 Annual Meeting is available for free at: http://researcharchives.com/t/s?910 About Revlon Revlon -- http://www.revlon.com/-- is a worldwide cosmetics, skin care, fragrance, and personal care products company. The Company's vision is to deliver the promise of beauty through creating and developing the most consumer preferred brands. The Company's brands include Revlon(R), Almay(R), Vital Radiance(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R). At Dec. 31, 2005, Revlon, Inc.'s balance sheet showed a $1,095,900,000 equity deficit compared to a $1,019,900,000 deficit at Dec. 31, 2004. RICHARD SHIELDS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Richard J. Shields dba Shields Trucking P.O. Box 1355 1055 Ohio Street Gridley, California 95948 Tel: (530) 846-4805 Fax: (530) 846-5766 Bankruptcy Case No.: 06-21524 Type of Business: The Debtor assembles and distributes motorcycle and vehicle components, and assembles 50% of all motorcycles distributed to California dealerships. The Debtor also hauls lumber and moldings. See http://shieldstrucking.com/ Chapter 11 Petition Date: May 11, 2006 Court: Eastern District of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: Charles L. Rathbun, Esq. 2445 Oro Dam Boulevard, Suite #4 Oroville, California 95966 Tel: (530) 532-1492 Total Assets: $3,386,522 Total Debts: $2,939,194 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Neal McLean Business Loan $290,000 c/o Russell Longaway, Esq. 369 Pine Street, Suite 818 San Francisco, CA 94104 Lakeview Petroleum Fuel $73,092 P.O. Box 510 Marysville, CA 95901 Butte County Tax Collector Property Taxes $44,605 25 County Center Drive Oroville, CA 95965 Dennis Diver Accountant $40,291 Carson Oil Fuel $35,000 Harris Sanford & Hamman Attorneys Fees $29,286 State Fund Worker's Compensation $25,375 First Insurance Funding Insurance $20,126 Shifflett Brothers Truck Repair $18,227 Sacramento Truck Center Truck Parts $16,579 Gridley Utilities Utility Bills $16,123 Whitchurch & Son Hauling Services $15,869 Star Insurance Insurance $14,723 Butte Auto Parts Truck Parts $12,069 Aldridge Keylock Fuel $10,703 Max's Diesel Repair Truck Repair $9,372 Les Schwab Tires for Trucks $8,503 Franchise Tax Board 2001 State Taxes $8,494 Blue Angels Security $7,866 Discover Credit Card Purchases $7,061 RUSSELL ROSSERO: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Russell L. Rossero aka Rossero Construction Company, LLC aka Rossero Properties, LLC 303 North Avenue P.O. Box 372 Midway, Pennsylvania 15060 Bankruptcy Case No.: 06-22131 Chapter 11 Petition Date: May 11, 2006 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Donald R. Calaiaro, Esq. Calaiaro, Corbett & Brungo, P.C. Grant Building, Suite 1105 330 Grant Street Pittsburgh, Pennsylvania 15219-2202 Tel: (412) 232-0930 Fax: (412) 232-3858 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. SATELINX INT'L: Gets Interest Purchase Deal from CQIP Investments ----------------------------------------------------------------- Satelinx International Inc. received a letter of Intent from CQIP Investments to acquire 51% of Satelinx. The deal would include the transfer of assets and businesses totaling over $100 million over the next four months. CQIP will also add a minimum of $25 million through a letter of credit facility for further development and acquisitions. "This is huge! Not only does it allow further growth in our existing products but it also adds new products for many new sectors," Rob Ireland, CEO Satelinx, quoted. "It also secures and ensures we have enough financial stability for many years to come." About CQIP CQIP Investments is an early or seed-stage through to mature stage hands-on venture capital investment firm dedicated to helping exceptional entrepreneurs build world-class companies. Typical investments can range between $250,000 and $1 million, and the Company follows that up with active participation in the various enterprises. CQIP's present portfolio includes: -- Engineering quality inspection firm (est. 2006 volume $6 million) -- Global IP, satellite technology and service provider (est. 2006 volume $16 million) -- Conglomerate of varied manufacturers and distributors (est. 2006 volume $20 million) -- Consolidated companies in the construction industry (est. 2006 volume $6 million) -- Local and national publisher and printer of varied newspapers and journals (est. volume $4 million) -- Environmental waste company (est. 2006 volume $7 million) About Satelinx Satelinx International Inc. provides satellite vehicle tracking units that integrate GSM/GPS/GPRS wireless technologies and the Internet to deliver wireless vehicle tracking and location services. Satelinx seeks to be recognized as the world leader in providing safety and security solutions on a global scale in a cost-effective manner for vehicle owner, trucking or private vehicle fleet and insurance companies. At Sept. 30, 2005, Satelinx International Inc.'s balance sheet showed a stockholders' deficit of $3,458,309, compared to a $3,230,618 deficit at Dec. 31, 2004. SILICON GRAPHICS: Taps Weil Gotshal as Bankruptcy Counsel --------------------------------------------------------- Silicon Graphics, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Weil, Gotshal & Manges LLP as their bankruptcy counsel. Barry Weinert, Esq., Silicon Graphics, Inc.'s vice president, secretary and general counsel, explains that the Debtors selected Weil Gotshal because of the firm's knowledge of their business and financial affairs, and its extensive general experience and knowledge on debtors' protections and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. In July 2005, SGI engaged Weil Gotshal to help and provide advice with respect to formulating, evaluating, and implementing various restructuring, reorganization, and other strategic alternatives. Weil Gotshal helped and advised the Debtors in connection with the preparation for, and commencement of, their chapter 11 cases. As counsel, Weil Gotshal is expected to: (a) take all necessary actions to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; (b) prepare on behalf of the Debtors, as debtors in possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; (c) negotiate and prepare on behalf of the Debtors a plan of reorganization and all related documents; and (d) perform all other necessary legal services in connection with the prosecution of the Debtors' chapter 11 cases. The firm's hourly rates are: Professionals Hourly Rate ------------- ----------- Members and Counsel $575 - $810 Associates $275 - $520 Paraprofessionals $70 - $275 Weil Gotshal also intends to charge the Debtors for out-of-pocket expenses incurred in connection with their services. Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, assures the Court that Weil Gotshal is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code and does not represent any party-in-interest other than the Debtors in their chapter 11 cases. About Silicon Graphics Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high-performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. The Debtor and 13 of its affiliates filed for chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. (Silicon Graphics Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000). SILICON GRAPHICS: Delays Filing of Form 10-Q for Fiscal 3rd Qtr. ---------------------------------------------------------------- Kathy Lanterman, senior vice president, chief financial officer and controller of Silicon Graphics, Inc., informs the Securities and Exchange Commission that the company's Form 10-Q has not been completed by the due date because the company needs more time to finalize its unaudited financial statements for the quarter ended March, 31, 2006. Silicon Graphics disclosed early last week its third quarter updated preliminary results, which was furnished to the Securities and Exchange Commission. The company expects that it will file the Form 10-Q as soon as practicable and that the financial statements included in that filing will reflect any potential adjustments that may be required as the result of an asset impairment evaluation as well as any other necessary adjustments and disclosures that must be included in order for those financial statements to be stated in accordance with U.S. generally accepted accounting principles. As reported in the Troubled Company Reporter on May 12, 2006, the company updated preliminary results for its third fiscal quarter which ended March 31, 2006. Revenue for the three months ended March 31, 2006 was $108 million, compared to revenue of $144 million in the prior quarter and $159 million in the same quarter one year ago. On a GAAP basis, net loss for the three months ended March 31, 2006 was $43 million, compared to a net loss of $45 million in the same quarter one year ago. About Silicon Graphics Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high-performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. The Debtor and 13 of its affiliates filed for chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. (Silicon Graphics Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000). STOCKERYALE INC: Reports $900,000 Operating Loss in First Quarter ----------------------------------------------------------------- StockerYale, Inc., generated $4.4 million of revenues from continuing operations for the first quarter ended March 31, 2006, representing a 12% comparable increase over the first quarter of 2005. Sequentially, revenues grew 9% over the fourth quarter of 2005. The growth in revenues was primarily a result of stronger OEM sales of the Company's laser products into the machine vision and defense markets, as well as growth of specialty optical fiber for industrial, defense and telecom equipment applications. Specialty optical fiber and laser revenues increased 52% and 10%, respectively. The Company expects this trend to continue due to strong order bookings in the first quarter of 2006. Gross profit increased 21% to $1.7 million in the first quarter versus $1.4 million in the comparable quarter of 2005. Gross margin improved from 34.7% to 37.7% due to higher sales, better product mix and improved manufacturing efficiencies. The operating loss for the first quarter was $900,000 versus $1.4 million in the comparable 2005 quarter, a 37% improvement. Operating expenses declined 9% compared to the first quarter of 2005. The decrease primarily reflected lower administrative expenses due to the elimination of 2005 non-recurring legal fees. Research and development expenses of $707,000 reported in the first quarter of 2006 were 5% lower than the first quarter of 2005 and selling expenses increased 6% to $640,000. The current quarter includes a charge of $94,000 of stock-based compensation and deferred compensation, for expenses incurred following the adoption of FAS123R; this is the first quarter impacted by the new standard. EBITDA loss dropped 69% to $266,000 in the first quarter 2006 compared to $848,000 in the same period in 2005 and $1.2 million the previous quarter. Other expenses, which include primarily non-cash debt expense and interest expense, dropped 59% from $700,000 to $300,000 due primarily to the prepayment of the Company's convertible debt in December 2005. Net loss in the first quarter before discontinued operations was $1.2 million versus $2.1 million for the comparable period in the prior year, a 44% improvement. Net loss including discontinued operations was $1.2 million, versus $2.2 million, or a 43% improvement. "On January 7, 2006 the Company announced that it was narrowing its focus to its highest margin products which offer the best long term growth potential, namely lasers, chip-on-board LEDs and specialty optical fiber. The Company is already seeing the positive impact of these actions as evidenced by the significant reduction in the EBITDA loss this quarter," said Mark W. Blodgett, President and Chief Executive Officer. "Because lasers and specialty fiber represent the Company's highest margin products we expect further improvement in both margins and our operational performance," added Mr. Blodgett. First Quarter Financial Highlights: -- Revenues excluding discontinued operations increased 12% to $4.4 million due to strong performance in lasers and specialty optical fiber; -- Gross profit increased 21% to $1.7 million versus $1.4 million a year ago. Gross margins improved to 37.7% from 34.7%; -- Operating expenses declined 9% versus first quarter 2005 due to lower administrative and R & D costs. Research & development expenditures represented 16% of revenues. -- Operating loss declined 37% to $0.9 million from the comparable quarter due to higher revenue and lower operating expenses. -- EBITDA loss was reduced 69% to $266,000 versus $848,000 loss reported in the comparable quarter of the prior year. -- Completed the sale of two business units discontinued effective Dec. 31, 2005. On March 2, 2006 the Company announced the sales of its StockerYale Asia subsidiary to Radiant Scientific Pte. Ltd. and the Company's fiber optic lighting business to Techni-Quip Corp. of Pleasanton, California. The two business units were sold for total consideration of $1.1 million, which included $525,000 in cash and a note, as well as the assumption of approximately $570,000 of liabilities. In addition, the Company agreed to supply specialty fiber products to Techni-Quip over a five-year period with a minimum value of $275,000 and a maximum value of $550,000. Outlook "During the first quarter the Company implemented significant changes to focus operational resources on our three core growth businesses, reduce costs and strengthen the platform for future growth initiatives," said Mr. Blodgett. "The Company's balance sheet is stronger, liquidity and working capital efficiency have improved and we expect to continue our trend of improved financial performance" added Mr. Blodgett. Going Concern Doubt Vitale, Caturano & Company, Ltd., expressed substantial doubt about StockerYale's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations, accumulated deficit and significant financial obligations. About StockerYale Headquartered in Salem, New Hampshire, StockerYale, Inc. (NASDAQ: STKR) -- http://www.stockeryale.com/-- is an independent designer and manufacturer of structured light lasers, LED modules, and specialty optical fibers for industry leading OEMs. In addition, the company manufactures fluorescent lighting products and phase masks. The Company serves a wide range of markets including the machine vision, industrial inspection, defense, telecommunication, sensors, and medical markets. StockerYale has offices and subsidiaries in the U.S., Canada, and Europe. SMARTVIDEO TECHNOLOGIES: Sherb & Co. Raises Going Concern Doubt --------------------------------------------------------------- Sherb & Co., LLP, SmartVideo Technologies, Inc.'s auditor, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statement for the year ending Dec. 31, 2005. Sherb & Co. pointed to the Company's suffered recurring losses from operations, cash burn as well as working capital, stockholders' and accumulated deficits. For the year ending Dec. 31, 2005, the Company incurred $19,740,274 net loss on $197,257 of net revenues. The Company incurred $3,859,141 net loss in 2003 and $6,792,930 net loss in 2004. At Dec. 31, 2005, the Company had an accumulated deficit of $39,953,756, a working capital deficit of $2,653,622, and cash flows used in operations of $5,351,783. The Company's assets amounted to $11,920,674 and stockholders' deficit was $2,320,615 as of December 31, 2005. A full-text copy of the Company's Annual Report on Form 10-KSB filed with the Securities and Exchange Commission is available for free at http://ResearchArchives.com/t/s?8fb Based in Norcross, Georgia, SmartVideo Technologies, Inc. -- http://www.smartvideo.com/-- provides video content technology and distribution services. SOS REALTY: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: SOS Realty LLC 5170 Washington Street, Suite #308 West Roxbury, Massachusetts 02132-6049 Bankruptcy Case No.: 06-11381 Type of Business: The Debtor's affiliate, Adam Corporation, filed for chapter 11 protection on Nov. 21, 2005 (Bankr. D. Mass. Case No. 05-30110). Chapter 11 Petition Date: May 11, 2006 Court: District of Massachusetts (Boston) Debtor's Counsel: Jennifer L. Hertz, Esq. Duane Morris LLP 470 Atlantic Avenue, Suite 500 Boston, Massachusetts 02210 Tel: (617) 289-9200 Fax: (617) 289-9201 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. TEXAS STATE AFFORDABLE: S&P Junks Rating on $2.9 Million Bonds -------------------------------------------------------------- Standard & Poor's Ratings Services lowered: * its underlying rating on Texas State Affordable Housing Corp.'s $53.7 million multifamily housing revenue bonds (South Texas Apartment Portfolio) series 2002A to 'BB' from 'BB+'; * its standard long-term rating on the corporation's $6.7 million multifamily mortgage revenue bonds series 2002B to 'B' to 'BB-'; and * its standard long-term rating on the corporation's $2.9 million multifamily mortgage revenue bonds series 2002C to 'CCC' from 'B-'. The outlook is stable. The downgrades reflect: * the trustee's draw on the series 2002C debt service reserve fund to pay March 1, 2006; * debt service and debt service coverage of 1.15x maximum annual debt service on the senior bonds; * 0.99x on the subordinate bonds; and * 0.94x on the junior subordinate bonds, based on fiscal year-end Dec. 31, 2005, audited financial statements. The trustee, Wells Fargo Bank N.A., informed Standard & Poor's that there was a $35,118 draw on the series 2002C debt service reserve fund to make the March 1, 2006, payment on the bonds. The series 2002C debt service reserve fund had approximately $236,000 left in it after the draw. The trustee did not draw on the series 2002A and 2002B debt service reserve funds, as project revenues were sufficient to meet the March 1, 2006, debt service due on these two issues. Those two reserve funds are currently fully funded. Original projected debt service coverage levels were at 1.44x maximum annual debt service for senior debt, 1.27x for junior debt, and 1.15x for junior subordinate debt. The issue is currently well below these projected levels. THE WILLIAMS COS: S&P Raises $500MM Certificates' Ratings to BB- ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings to 'BB-' from 'B+' on The Williams Cos. Inc. Credit-Linked Certificate Trust III's $400 million 6.750% certificates due April 15, 2009, and The Williams Cos. Inc. Credit-Linked Certificate Trust IV's $100 million floating-rate certificates due May 1, 2009. The rating actions reflect the May 9, 2006, raising of the corporate credit and senior unsecured debt ratings on The Williams Cos. Inc. to 'BB-' from 'B+'. The Williams Cos. Inc. Credit-Linked Certificate Trust III is a swap-dependent synthetic transaction that is weak-linked to the lowest ratings assigned to The Williams Cos. Inc. as borrower and Citibank N.A. as the swap counterparty, the deposit bank, and the subparticipation seller. The Williams Cos. Inc. Credit-Linked Certificate Trust IV is weak-linked to the lowest ratings assigned to The Williams Cos. Inc. as borrower. UNIFI INC: S&P Junks Rating on Proposed $225 Million Senior Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' debt rating and a recovery rating of '4' to yarn processor Unifi Inc.'s proposed $225 million senior secured notes due 2014. (The 'CCC+' rating is at the same level as the corporate credit rating on Unifi.) These ratings indicate the expectation for marginal (25%-50%) recovery of principal in the event of a payment default. The notes will be issued pursuant to Rule 144A, with registration rights. The ratings are subject to review upon receipt of final documentation. Note proceeds will be used to refinance the company's existing 6.5% notes due 2008. Once this transaction is complete, the 'CCC+' rating on the 6.5% notes will be withdrawn. Existing ratings on Unifi, including the 'CCC+' corporate credit rating, were affirmed. The outlook is negative. Greensboro, North Carolina-based yarn processor Unifi had about $268 million of debt outstanding on March 26, 2006. "The corporate credit rating reflects the company's narrow business focus, the highly competitive conditions in its market, and the fundamental changes in the way the industry operates, which have hurt the company's operating performance," said Standard & Poor's credit analyst Susan Ding. "The rating also reflects our expectation that financial results will be pressured due to continued escalating raw material costs -- in particular for petroleum-based chemical derivative products, which account for a significant portion of the company's cost structure. It is uncertain when these costs will stabilize. In addition, the difficult operating environment and adverse market conditions, characterized by excess industry capacity and a shrinking domestic customer base, have led to negative unit volume and pricing trends." UNITY VIRGINIA: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Unity Virginia Holdings LLC 5950 Sherry Lane, Suite 550 Dallas, Texas 75225 Bankruptcy Case No.: 06-31937 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Glamorgan Coal Resources LLC 06-31953 Glamorgan Processing LLC 06-31954 Glamorgan Properties LLC 06-31955 Glamorgan Refuse LLC 06-31956 Type of Business: The Debtor is a coal mining and processing company. The Debtor's affiliates filed for chapter 11 protection on May 12, 2006. Chapter 11 Petition Date: May 10, 2006 Court: Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtors' Counsel: James C. Jarrett, Esq. Arnaldo N. Cavazos, Jr., Esq. Cavazos, Hendricks & Poirot, P.C. 900 Jackson Street, Suite 570 Dallas, Texas 75202 Tel: (214) 748-8171 Fax: (214) 748-6750 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million The Debtors did not file the list of their 20 largest unsecured creditors. VITESSE SEMICONDUCTOR: Restating Financials Due to Options Probe ---------------------------------------------------------------- Vitesse Semiconductor Corporation's Board of Directors determined that its previously reported financial statements for the three months ended Dec. 31, 2005, and the three years ended Sept. 30, 2005, and possibly earlier periods, should not be relied upon. The Board of Directors also determined that the Management Report on Internal Control over Financial Reporting as of Sept. 30, 2005, and the Report of KPMG LLP, the Company's independent registered public accounting firm, relating to the effectiveness of the Company's internal controls over financial reporting and management's assessment thereof as of Sept. 30, 2005, both of which reports are included in the Company's Annual Report on Form 10-K for the year ended Sept. 30, 2005, should not be relied upon. The Company's Board of Directors has appointed a Special Committee of independent directors to conduct an internal investigation relating to past stock option grants, the timing of those grants and other related accounting and documentation issues. The Special Committee is being assisted by independent legal counsel. In the course of its investigation, issues have arisen relating to the integrity of documents concerning the Company's stock option grants. During the internal investigation, additional issues have arisen concerning the Company's practices in connection with credits issued to or requested by customers (for returned products or otherwise) and the related accounting treatment, as well as the application of payments received to the proper accounts receivable. The Special Committee is reviewing these issues and, pending further investigation, believes that the Company's accounts receivable and revenues may have been misstated during certain periods. Whether the Company's accounts receivable and revenues were misstated and, if so, the extent of those misstatements are still under investigation. The Company has engaged Alvarez & Marsal, LLC, and specifically Shawn C.A. Hassel as acting Chief Financial Officer of the Company. Mr. Hassel, a Managing Director at Alvarez & Marsal, brings 12 years of experience as an interim manager and financial advisor to under-valued or under-performing companies and companies in transition. About Alvarez & Marsal Founded in 1983 and headquartered in New York, Alvarez & Marsal is a global professional services firm specializing in operational and financial services to companies in transition. A&M helps businesses solve problems and create shareholder value. With more than 650 professionals across the US, Europe, Asia, and Latin America, A&M delivers a distinct blend of leadership, problem solving and value creation. Drawing on its strong operational heritage and hands-on approach, A&M works closely with organizations and their stakeholders to help navigate complex business issues. About Vitesse Vitesse Semiconductor Corporation (Nasdaq:VTSS) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for communications and storage networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in Gigabit Ethernet LAN, Ethernet- over-SONET, Advanced Switching, Fibre Channel, Serial Attached SCSI, Optical Transport, and other applications. * * * Moody's Investors Service revised Vitesse Semiconductor Corporation's outlook to stable from negative and affirmed all existing ratings for the company in October 2004. * Senior Implied Rating of B1; * Long-Term Issuer Rating of B1; and * $135.4 million 4% convertible subordinated debentures due March 2005, rated B3. WINN-DIXIE: Court Okays Rejection of Gem Cedar Lease for Store 997 ------------------------------------------------------------------ Winn-Dixie Stores, Inc., and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Middle District of Florida to: (a) reject the Gem Cedar Lease for Store No. 997 effective April 20, 2006; and (b) establish a bar date for Gem Cedar to file any rejection damage claim arising in connection with the Lease. The Court directs Gem Cedar, L.L.C., to file any claim resulting from the rejection of the Lease not later than May 20, 2006. As reported in the Troubled Company Reporter on April 24, 2006, On Nov. 21, 1997, Winn-Dixie Raleigh, Inc., and Gem Cedar, L.L.C., entered into a lease for Store No. 997. Pursuant to the terms of the Lease, WD Raleigh pays Gem Cedar $503,782 in annual rent. On Aug. 21, 2002, WD Raleigh subleased the premises to Cornerstone Christian Church. Under the Sublease, Cornerstone Christian is required to pay WD Raleigh monthly rent at graduated rates in the range between $8,298 and $23,744. Cornerstone Christian defaulted under the Sublease by failing to pay the correct prepetition rent due. Cornerstone Christian also stopped paying any rent since the Petition Date, D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court. WD Raleigh notified Cornerstone Christian of the default. Cornerstone Christian failed to cure the default. As a result, WD Raleigh terminated the Sublease effective March 14, 2006. As of March 14, 2006, Cornerstone Christian owes WD Raleigh $405,780 in past due rent. The Debtors now have no subtenant in the store and have exited the Chesapeake, Virginia, market area. The Debtors therefore have no further need for the Lease and by rejecting it, will save the estates $500,000 a year. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Can Ink Commercial Surety Pact With RLI Insurance ------------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Middle District of Florida to enter into a commercial surety agreement with RLI Insurance Company. As reported in the Troubled Company Reporter on April 24, 2006, the Debtors and RLI have agreed that: 1. RLI, in its sole discretion, will issue bonds on the Debtors' behalf of up to $10,000,000 and pay any claims made against the bonds; 2. the Debtors will indemnify RLI for any losses incurred as a result of the issuance; 3. the Debtors will pay RLI a percentage of each bond issued and a minimum annual payment -- the Premium Commitment; 4. the Debtors will post letters of credit, obtained from the DIP Lender, as collateral under the bonds; and 5. the Debtors will pay RLI reasonable attorneys' fees incurred in negotiating, documenting and obtaining approval of the Surety Agreement. Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, asserts that the Surety Agreement is beneficial to the Debtors and their estates because: 1. RLI has agreed to a financial fee of 2% of the principal amount of any bond issued, with a minimum fee of $100 for each bond, which is competitive with other surety's rates; 2. RLI will only require a collateral of 100% of any bond issued unlike other sureties that require posting of collateral of 125% of the face amount of the bond; 3. RLI has agreed to a $120,000 Premium Commitment compared to other sureties, which require the Debtors to make a Premium Commitment of $250,000 or more; and 4. establishing a relationship with a surety willing to help the Debtors meet the demands of the marketplace will assist the Debtors greatly as they prepare to exit from bankruptcy. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000). WINN-DIXIE: Broward County Wants Taxes Paid on Pompano Facility --------------------------------------------------------------- Broward County asks the U.S. Bankruptcy Court for the Middle District of Florida to hold that it possesses a valid secured claim for Winn-Dixie Stores, Inc., and its debtor-affiliates' 2005 real estate and commercial personal property taxes, and that it is entitled to payment for the taxes from the proceeds of the proposed sale of the facility in Pompano Beach. On April 6, 2005, the Broward County Revenue Collector filed its secured Claim No. 205 for estimated 2005 real estate and commercial personal property taxes for all of the Debtors' stores and facilities located in Broward County, Florida. Jeffrey J. Newton, Esq., counsel for Broward County, tells the Court that a portion of Claim No. 205 included real estate and commercial personal property taxes for the Debtors' distribution facility located at 1141 SW 12th Avenue in Pompano Beach, Florida. As of April 12, 2006, Broward County has not received any payments on the taxes on the Debtors' distribution facility. Broward County asserts a lien pursuant to Florida Statutes. Broward County also asserts that it holds a valid secured claim for taxes and it is entitled to payment from the proceeds of the proposed sale. Mr. Newton says that Broward County consents to the sale if the Debtors acknowledge its lien for taxes, and if the Debtors agree to pay all taxes out of the proceeds of the proposed sale. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000). WORLD WIDE: U.S. Trustee Wants Ch. 11 Case Converted to Ch. 7 ------------------------------------------------------------- Saul Eisen, the U.S Trustee for Region 9, asks the U.S. Bankruptcy Court for the Eastern District of Michigan to convert World Wide Financial Services, Inc.'s Chapter 11 case to a liquidation proceeding under Chapter 7 of the Bankruptcy Code. Paul J. Randel, Esq., reminds the Court that early in the case, concerns were raised about the Debtor's ability to reorganize because it has overwhelming debt and its ability to generate revenue was questionable. The revenue was a concern because the Debtor was the subject of a highly publicized dispute with state regulators and its license was potentially in jeopardy. The Debtor has now conceded that it engaged in numerous inappropriate activities, many of which are broadly described as "fraud" under state law. The violations include: (a) engaging in improper lending practices including providing false data on loan application such as false borrower income data, false payment data, false debt obligation data and false employment data; (b) transmitting improper payoff information; (c) failing to maintain proper record of loan applications; (d) failing to property notify borrowers of denial of loan; (e) failing to maintain sufficient escrow funds; and (f) failing to provide annual statements of borrower accounts for loans it serviced. According to Mr. Randel, the Debtor has now surrendered its license. It is asking for an extension of its exclusive right to file a plan of reorganization to permit it to essentially create a new business for which it does not need a license. The Debtor has not yet filed its monthly operating reports for February, March and April. The January operating report reported revenues amounting to $4,420 against expenses amounting to $57,424, Mr. Randel points out. The Company is down to four employees, though it is not clear what work they do because the Company is a shell company now. Headquartered in Southfield, Michigan, World Wide Financial Services, Inc., is a mortgage company. The company filed for chapter 11 protection on Oct. 4, 2005 (Bankr. E.D. Mich. Case No. 05-75180). Dennis W. Loughlin, Esq., and Lynn M. Brimer, Esq., at Raymond & Prokor, P.C., represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors was appointed in the case. The Debtors' reported $2.5 million in assets and $32.5 million in liabilities in their statement of assets and debts. WORLD WIDE: Largest Unsec. Creditor Wants Ch. 11 Trustee Appointed ------------------------------------------------------------------ GMAC-RFC asks the U.S. Bankruptcy Court for the Eastern District of Michigan to appoint a chapter 11 trustee in World Wide Financial Services, Inc.'s bankruptcy case. GMAC-RFC is the Debtor's largest unsecured creditor. Sheryl L. Toby, Esq., at Dykema Gossett, PLLC, in Detroit, Michigan, contends that the appointment of a chapter 11 trustee is warranted because of the Debtor's: -- prepetition mismanagement; -- non-disclosure of insider transactions on its schedules; -- lack of current operations; and -- settlement with the State of Michigan Office of Financial and Insurance Services, which resulted to the loss of its license to continue operations and increased debt due to penalties to be assessed against the Debtor. GMAC-RFC received Court authority to look into insiders' tax returns. The most recent return is for 2004. GMAC-RFC found discrepancies among the filed including unexplained and undisclosed transfers of substantial assets prepetition to insiders. Headquartered in Southfield, Michigan, World Wide Financial Services, Inc., is a mortgage company. The company filed for chapter 11 protection on Oct. 4, 2005 (Bankr. E.D. Mich. Case No. 05-75180). Dennis W. Loughlin, Esq., and Lynn M. Brimer, Esq., at Raymond & Prokor, P.C., represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors was appointed in the case. The Debtors' reported $2.5 million in assets and $32.5 million in liabilities in their statement of assets and debts. * BOND PRICING: For the week of May 8 - May 12, 2006 ---------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 01/15/04 0 ABC Rail Product 10.500% 12/31/04 0 Acme Metals Inc 10.875% 12/15/07 0 Adelphia Comm. 3.250% 05/01/21 2 Adelphia Comm. 6.000% 02/15/06 1 Adelphia Comm. 7.500% 01/15/04 50 Adelphia Comm. 7.750% 01/15/09 51 Adelphia Comm. 7.875% 05/01/09 50 Adelphia Comm. 8.125% 07/15/03 50 Adelphia Comm. 8.375% 02/01/08 50 Adelphia Comm. 9.250% 10/01/02 51 Adelphia Comm. 9.375% 11/15/09 53 Adelphia Comm. 9.500% 02/15/04 50 Adelphia Comm. 9.875% 03/01/05 47 Adelphia Comm. 9.875% 03/01/07 51 Adelphia Comm. 10.250% 06/15/11 55 Adelphia Comm. 10.250% 11/01/06 47 Adelphia Comm. 10.500% 07/15/04 50 Adelphia Comm. 10.875% 10/01/10 48 Aetna Industries 11.875% 10/01/06 8 Allegiance Tel. 11.750% 02/15/08 47 Allegiance Tel. 12.875% 05/15/08 45 Amer & Forgn Pwr 5.000% 03/01/30 68 Amer Color Graph 10.000% 06/15/10 68 Antigenics 5.250% 02/01/25 58 Anvil Knitwear 10.875% 03/15/07 53 Armstrong World 9.000% 04/17/01 62 Arvin Capital I 9.500% 02/01/27 70 At Home Corp. 0.525% 12/28/18 2 At Home Corp. 4.750% 12/15/06 4 Atlantic Coast 6.000% 02/15/34 21 Atlas Air Inc 8.010% 01/02/10 73 Atlas Air Inc 9.702% 01/02/08 74 Autocam Corp. 10.875% 06/15/14 58 Aviation Sales 8.125% 02/15/08 44 Avondale Mills 10.250% 07/01/13 58 Banctec Inc 7.500% 06/01/08 73 Bank New England 8.750% 04/01/99 8 BBN Corp 6.000% 04/01/12 0 Big V Supermkts 11.000% 02/15/04 0 Builders Transpt 6.500% 05/01/11 1 Burlington North 3.200% 01/01/45 53 CCH II/CCH II CP 10.250% 01/15/10 69 Cell Therapeutic 5.750% 06/15/08 62 Charter Comm Hld 10.000% 05/15/11 62 Charter Comm Hld 11.125% 01/15/11 65 Cherokee Int'l 5.250% 11/01/08 70 Chic East Ill RR 5.000% 01/01/54 61 CIH 9.920% 04/01/14 64 CIH 10.000% 05/15/14 63 CIH 11.125% 01/15/14 65 Ciphergen 4.500% 09/01/08 72 Clark Material 10.750% 11/15/06 0 CMI Industries 9.500% 10/01/03 0 Collins & Aikman 10.750% 12/31/11 34 Comcast Corp. 2.000% 10/15/29 41 Concentric Network 12.750% 12/15/07 0 CPNL-Dflt12/05 4.750% 11/15/23 31 CPNL-Dflt12/05 6.000% 09/30/14 26 CPNL-Dflt12/05 7.625% 04/15/06 56 CPNL-Dflt12/05 7.750% 04/15/09 53 CPNL-Dflt12/05 7.750% 06/01/15 25 CPNL-Dflt12/05 7.875% 04/01/08 58 CPNL-Dflt12/05 8.500% 02/15/11 37 CPNL-Dflt12/05 8.625% 08/15/10 38 CPNL-Dflt12/05 8.750% 07/15/07 58 CPNL-Dflt12/05 10.500% 05/15/06 58 Cray Research 6.125% 02/01/11 5 Curagen Corp. 4.000% 02/15/11 71 Curative Health 10.750% 05/01/11 61 Dal-Dflt09/05 9.000% 05/15/16 28 Delco Remy Intl 9.375% 04/15/12 50 Delco Remy Intl 11.000% 05/01/09 56 Delphi Trust II 6.197% 11/15/33 46 Delta Air Lines 2.875% 02/18/24 28 Delta Air Lines 7.541% 10/11/11 68 Delta Air Lines 7.700% 12/15/05 27 Delta Air Lines 7.900% 12/15/09 30 Delta Air Lines 8.000% 06/03/23 28 Delta Air Lines 8.187% 10/11/17 36 Delta Air Lines 8.270% 09/23/07 70 Delta Air Lines 8.300% 12/15/29 29 Delta Air Lines 8.540% 01/02/07 42 Delta Air Lines 8.540% 01/02/07 70 Delta Air Lines 8.950% 01/12/12 28 Delta Air Lines 9.200% 09/23/14 69 Delta Air Lines 9.250% 03/15/22 27 Delta Air Lines 9.300% 01/02/10 75 Delta Air Lines 9.320% 01/02/09 72 Delta Air Lines 9.375% 09/11/07 74 Delta Air Lines 9.480% 06/05/06 58 Delta Air Lines 9.590% 01/12/17 66 Delta Air Lines 9.750% 05/15/21 28 Delta Air Lines 9.950% 06/01/06 70 Delta Air Lines 9.950% 06/01/06 70 Delta Air Lines 10.000% 06/01/07 66 Delta Air Lines 10.000% 06/01/08 66 Delta Air Lines 10.000% 06/01/09 66 Delta Air Lines 10.000% 06/01/10 66 Delta Air Lines 10.000% 06/01/10 67 Delta Air Lines 10.000% 06/01/11 51 Delta Air Lines 10.000% 06/01/12 62 Delta Air Lines 10.000% 06/05/11 58 Delta Air Lines 10.000% 06/05/13 59 Delta Air Lines 10.000% 08/15/08 28 Delta Air Lines 10.060% 01/02/16 70 Delta Air Lines 10.080% 06/16/07 59 Delta Air Lines 10.125% 05/15/10 27 Delta Air Lines 10.125% 06/16/10 60 Delta Air Lines 10.375% 02/01/11 28 Delta Air Lines 10.375% 12/15/22 28 Delta Air Lines 10.500% 04/30/16 75 Deutsche Bank NY 8.500% 11/15/16 65 Diva Systems 12.625% 03/01/08 1 Dov Pharmaceutic 2.500% 01/15/25 72 Dura Operating 9.000% 05/01/09 57 DVI Inc 9.875% 02/01/04 13 Dyersburg Corp 9.750% 09/01/07 0 Eagle Family Food 8.750% 01/15/08 75 Eagle-Picher Inc 9.750% 09/01/13 60 Emergent Group 10.750% 09/15/04 0 Encysive Pharmacy 2.500% 03/15/12 68 Encysive Pharmacy 2.500% 03/15/12 68 Epix Medical Inc. 3.000% 06/15/24 70 Exodus Comm. Inc. 5.250% 02/15/08 0 Exodus Comm. Inc. 11.250% 07/01/08 0 Exodus Comm. Inc. 11.625% 07/15/10 0 Falcon Products 11.375% 06/15/09 2 Federal-Mogul Co. 7.375% 01/15/06 63 Federal-Mogul Co. 7.500% 01/15/09 61 Federal-Mogul Co. 8.160% 03/06/03 57 Federal-Mogul Co. 8.250% 03/03/05 53 Federal-Mogul Co. 8.330% 11/15/01 47 Federal-Mogul Co. 8.370% 11/15/01 62 Federal-Mogul Co. 8.370% 11/15/01 57 Federal-Mogul Co. 8.800% 04/15/07 64 Finova Group 7.500% 11/15/09 32 Ford Motor Co 6.500% 08/01/18 69 Ford Motor Co 6.625% 02/15/28 68 Ford Motor Co 7.125% 11/15/25 69 Ford Motor Co 7.400% 11/01/46 68 Ford Motor Co 7.500% 08/01/26 70 Ford Motor Co 7.700% 05/15/97 68 Ford Motor Co 7.750% 06/15/43 69 Ford Motor Cred 5.650% 01/21/14 74 Ford Motor Cred 5.750% 01/21/14 74 Ford Motor Cred 5.750% 02/20/14 73 Ford Motor Cred 5.750% 02/20/14 73 Ford Motor Cred 6.000% 01/21/14 74 Ford Motor Cred 6.000% 01/20/15 72 Ford Motor Cred 6.000% 02/20/15 72 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 03/20/14 74 Ford Motor Cred 6.000% 11/20/14 73 Ford Motor Cred 6.000% 11/20/14 72 Ford Motor Cred 6.000% 11/20/14 72 Ford Motor Cred 6.050% 02/20/14 72 Ford Motor Cred 6.050% 02/20/15 72 Ford Motor Cred 6.050% 02/20/15 72 Ford Motor Cred 6.050% 04/21/14 74 Ford Motor Cred 6.050% 12/22/14 73 Ford Motor Cred 6.050% 12/22/14 74 Ford Motor Cred 6.050% 12/22/14 73 Ford Motor Cred 6.100% 02/20/15 73 Ford Motor Cred 6.150% 01/20/15 74 Ford Motor Cred 6.150% 12/22/14 74 Ford Motor Cred 6.200% 03/20/15 73 Ford Motor Cred 6.250% 12/20/13 74 Ford Motor Cred 6.250% 04/21/14 75 Ford Motor Cred 6.250% 01/20/15 75 Ford Motor Cred 6.250% 03/20/15 72 Ford Motor Cred 6.500% 03/20/15 75 Ford Motor Cred 7.500% 08/20/32 70 Gateway Inc. 2.000% 12/31/11 72 GB Property Fndg 11.000% 09/29/05 62 General Motors 7.400% 09/01/25 69 General Motors 7.700% 04/15/16 73 General Motors 8.100% 06/15/22 71 General Motors 8.250% 07/15/23 74 General Motors 8.800% 03/01/21 74 Glenoit Corp 11.000% 04/15/07 0 Global Health SC 11.000% 05/01/08 2 GMAC 5.900% 01/15/19 74 GMAC 5.900% 01/15/19 73 GMAC 5.900% 02/15/19 74 GMAC 5.900% 10/15/19 72 GMAC 6.000% 02/15/19 75 GMAC 6.000% 02/15/19 74 GMAC 6.000% 03/15/19 74 GMAC 6.000% 03/15/19 73 GMAC 6.000% 03/15/19 74 GMAC 6.000% 03/15/19 74 GMAC 6.000% 04/15/19 74 GMAC 6.000% 09/15/19 74 GMAC 6.000% 09/15/19 74 GMAC 6.050% 08/15/19 74 GMAC 6.050% 08/15/19 75 GMAC 6.100% 09/15/19 74 GMAC 6.150% 09/15/19 75 GMAC 6.250% 01/15/19 75 GMAC 6.350% 04/15/19 75 Graftech Intl 1.625% 01/15/24 74 GST Network Fndg 10.500% 05/01/08 0 Gulf Mobile Ohio 5.000% 12/01/56 74 HNG Internorth 9.625% 03/15/06 30 Imperial Credit 9.875% 01/15/07 0 Inland Fiber 9.625% 11/15/07 61 Insight Health 9.875% 11/01/11 48 Iridium LLC/CAP 10.875% 07/15/05 26 Iridium LLC/CAP 11.250% 07/15/05 30 Iridium LLC/CAP 13.000% 07/15/05 29 Iridium LLC/CAP 14.000% 07/15/05 30 Isolagen Inc. 3.500% 11/01/24 57 Isolagen Inc. 3.500% 11/01/24 56 JL French Auto 11.500% 06/01/09 0 Kaiser Aluminum & Chem. 9.875% 02/15/02 54 Kaiser Aluminum & Chem. 10.875% 10/15/06 55 Kaiser Aluminum & Chem. 10.875% 10/15/06 56 Kaiser Aluminum & Chem. 12.750% 02/01/03 7 Kellstrom Inds 5.750% 10/15/02 0 Kevco Inc 10.375% 12/01/07 0 Kmart Corp. 8.540% 01/02/15 16 Kmart Corp. 8.990% 07/05/10 7 Kmart Corp. 9.350% 01/02/20 7 Kmart Funding 8.800% 07/01/10 75 Kmart Funding 9.440% 07/01/18 43 Lehman Bros Hldg 10.000% 10/30/13 72 Liberty Media 3.750% 02/15/30 58 Liberty Media 4.000% 11/15/29 64 Lifecare Holding 9.250% 08/15/13 68 Macsaver Financl 7.400% 02/15/02 2 Macsaver Financl 7.600% 08/01/07 3 Macsaver Financl 7.875% 08/01/03 0 Merisant Co 9.500% 07/15/13 66 Metamor WorldWide 2.940% 08/15/04 1 Metricom Inc 13.000% 02/15/10 0 Missouri Pac RR 5.000% 01/01/45 74 Movie Gallery 11.000% 05/01/12 62 MSX Int'l Inc. 11.375% 01/15/08 64 Muzak LLC 9.875% 03/15/09 60 New Orl Grt N RR 5.000% 07/01/32 67 Northern Pacific RY 3.000% 01/01/47 53 Northern Pacific RY 3.000% 01/01/47 53 Northwest Airlines 6.625% 05/15/23 49 Northwest Airlines 7.039% 01/02/06 5 Northwest Airlines 7.625% 11/15/23 49 Northwest Airlines 7.875% 03/15/08 49 Northwest Airlines 8.130% 02/01/14 66 Northwest Airlines 8.700% 03/15/07 50 Northwest Airlines 8.875% 06/01/06 48 Northwest Airlines 8.970% 01/02/15 70 Northwest Airlines 9.875% 03/15/07 51 Northwest Airlines 10.000% 02/01/09 50 Northwest Airlines 10.500% 04/01/09 49 Northwest Stl&Wir 9.500% 06/15/01 0 Nutritional Src. 10.125% 08/01/09 65 NWA Trust 11.300% 12/21/12 69 O'Sullivan Ind 10.630% 10/01/08 60 Oakwood Homes 8.125% 03/01/09 10 Oscient Pharm 3.500% 04/15/11 74 Outboard Marine 10.750% 06/01/08 1 Overstock.com 3.750% 12/01/11 72 PCA LLC/PCA Fin 11.875% 08/01/09 21 Pegasus Satellite 9.625% 10/15/49 9 Pegasus Satellite 12.375% 08/01/06 10 Pegasus Satellite 12.500% 08/01/07 10 Phar-Mor Inc 11.720% 09/11/02 1 Piedmont Aviat 9.900% 11/08/06 0 Pixelworks Inc. 1.750% 05/15/24 71 Pliant-DFLT/06 13.000% 06/01/10 46 Pliant-DFLT/06 13.000% 06/01/10 48 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 7.250% 01/15/07 0 Polaroid Corp. 11.500% 02/15/06 0 Primedex Health 11.500% 06/30/08 64 Primus Telecom 3.750% 09/15/10 50 Primus Telecom 8.000% 01/15/14 71 Radnor Holdings 11.000% 03/15/10 68 Read-Rite Corp. 6.500% 09/01/04 14 Reliance Group Holdings 9.000% 11/15/00 21 Reliance Group Holdings 9.750% 11/15/03 1 Salton Inc. 12.250% 04/15/08 68 Silicon Graphics 6.500% 06/01/09 51 Solectron Corp. 0.500% 02/15/34 70 Source Media Inc. 12.000% 11/01/04 0 Spinnaker Inds 10.750% 10/15/06 0 Summit Secs Inc 9.500% 09/15/05 0 Tekni-Plex Inc. 12.750% 06/15/10 74 Teligent Inc 11.500% 12/01/07 0 Tom's Foods Inc 10.500% 11/01/04 9 Transtexas Gas 15.000% 03/15/05 0 Tribune Co 2.000% 05/15/29 70 Trism Inc 12.000% 02/15/05 1 Triton Pcs Inc. 8.750% 11/15/11 74 Triton Pcs Inc. 9.375% 02/01/11 75 Tropical SportsW 11.000% 06/15/08 10 Twin Labs Inc 10.250% 05/15/06 2 United Air Lines 7.270% 01/30/13 50 United Air Lines 7.870% 01/30/19 55 United Air Lines 9.020% 04/19/12 56 United Air Lines 9.350% 04/07/16 29 United Air Lines 9.560% 10/19/18 56 United Air Lines 10.020% 03/22/14 44 United Air Lines 10.360% 11/13/12 5 Univ Health Svcs 0.426% 06/23/20 59 US Air Inc. 10.250% 01/15/49 6 US Air Inc. 10.250% 01/15/49 11 US Air Inc. 10.250% 01/15/49 6 US Air Inc. 10.250% 01/15/49 6 US Air Inc. 10.300% 01/15/49 1 US Air Inc. 10.550% 01/15/49 1 US Air Inc. 10.610% 06/27/07 0 US Air Inc. 10.680% 06/27/08 1 US Air Inc. 10.700% 01/01/49 20 US Air Inc. 10.850% 01/01/49 48 US Air Inc. 10.900% 01/01/49 6 Venture Hldgs 12.000% 06/01/09 0 Werner Holdings 10.000% 11/15/07 34 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Winsloew Furniture 12.750% 08/15/07 20 Winstar Comm Inc 10.000% 03/15/08 4 World Access Inc. 4.500% 10/01/02 4 World Access Inc. 13.250% 01/15/08 4 ********* 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 ***