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/raid1/www/Hosts/bankrupt/TCR_Public/060523.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, May 23, 2006, Vol. 10, No. 121 Headlines 2929 PANTHERSVILLE: Hires Schreeder Wheeler as Bankruptcy Counsel 2929 PANTHERSVILLE: Has Until June 8 to File Schedules ADELPHIA COMMS: DIP Lenders Waive Default on Century/ML Settlement AFFINITY GROUP: March 31 Balance Sheet Upside-Down by $64 Million AIRNET COMMS: Files Voluntary Chapter 11 Petition in Florida AIRNET COMMS: Case Summary & 20 Largest Unsecured Creditors AK STEEL: Plans to Make Early $84M Pension Trust Fund Contribution ALLIED HOLDINGS: Eton Park Resigns from Creditors Committee AMCAST INDUSTRIAL: Hires Alvarez & Marsal as Panel's Fin'l Advisor AMCAST INDUSTRIAL: Hires BMC as Notice, Claims and Balloting Agent AMERICAN TOWER: Board Conducts Inquiry into Stock Option Practices AMERICAN TOWER: Stock Option Inquiry Prompts S&P's Negative Watch AMES DEPARTMENT: Wants to Hire Atwell Curtis as Collection Agent AZTAR CORP: Inks $2.75-Bil. Merger Agreement with Columbia Sussex BOMBARDIER RECREATIONAL: Buying Back $200 Mil. of 8-3/8% Sr. Notes BUFFALO COAL: Section 341(a) Meeting Scheduled for June 15 CARDSYSTEMS SOLUTIONS: Creditors Meeting Scheduled for July 13 CATHOLIC CHURCH: Portland Hires NERA as Economic Consultants CENVEO CORP: Commences Tender Offer for $350MM of 9-5/8% Sr. Notes COIN BUILDERS: Files Ch. 11 Plan of Reorganization in W.D. Wis. COIN BUILDERS: Committee Wants Ch. 11 Case Converted to Ch. 7 COMM 2006-C7: S&P Puts Low-B Ratings on Six Certificate Classes COMPACT MANIFOLDS: Case Summary & 20 Largest Unsecured Creditors CONTINENTAL AIR: Moody's Places Corporate Family Rating at B3 COPA CASINO: Moody's Places B3 Rating on $230 Mil. Debt facility DANA CORP: Asks Court to Approve Sypris Settlement Agreement DENNY'S CORP: March 29 Balance Sheet Upside-Down by $260 Million DURATEK INC: Earns $3.2 Million in Three Months Ended March 31 EASY GARDENER: Gets Court's Final Nod on $30 Million DIP Loan EASY GARDENER: Committee Wants to Hire Young Conaway as Counsel EDISON MISSION: S&P Rates Proposed $1 Billion Senior Notes at B+ EL POLLO: Moody's Rates Proposed $200 Million Debt Facility at B1 EL POLLO: S&P Assigns B+ Rating to Planned $200 Million Bank Loan EQUITY ONE: S&P Affirms One Security Class Rating at BB+ EXCO RESOURCES: Moody's Lowers Corp. Family Rating to B2 from B1 FALCONBRIDGE LTD: Earns $238 Million for the Month of April 2006 FDL INC: Selling Substantially All Assets at May 30 Auction FDL INC: Court Approves Dale & Eke as Bankruptcy Counsel FDL INC: U.S. Trustee Names China Export to Creditors Committee FEDERAL-MOGUL: Acquires Majority Stake in Goetze India FOAMEX INTERNATIONAL: Amends $80 Million Loan with Silver Point FRANKLIN PIERCE: Moody's Downgrades Debt Rating to Ba3 From Ba1 FREMONT HOME: DBRS Puts BB Rating on $3 Million NIM Notes FURNAS COUNTY: Court Dismisses Chapter 11 Bankruptcy Proceedings GATEHOUSE MEDIA: Plans to Raise $762 Million to Fund Acquisitions GATEHOUSE MEDIA: Moody's Assigns Low-B Rating on $762MM of Loans GENESIS HEALTHCARE: Faces Nasdaq Delisting Due to Late 10-Q Filing GLAZED INVESTMENTS: Court OKs $3.5M DIP Loan & Cash Collateral Use GLIMCHER REALTY: Expects $270MM from Sale on Five Mall Properties GOODING'S SUPERMARKETS: Water Tower Wants to Join Creditors' Panel GRAFTECH FINANCE: Moody's Affirms B2 Rating on $450 Mil. Notes GREYSTONE HOLDINGS: Voluntary Chapter 11 Case Summary GULF COAST: Gets Court's Interim Order on MTGLQ DIP Loan HEALTHTRONICS INC: Earns $1.2 Million in 2006 First Fiscal Quarter HEALTHTRONICS INC: Sam B. Humphries Appointed as President & CEO HEARTLAND PARTNERS: Hires Shaw Gussis as Bankruptcy Counsel HEARTLAND PARTNERS: Section 341(a) Meeting Scheduled for June 6 HERBST GAMING: Moody's Puts Low-B Rating on Sr. Sub. Debt & Loan HOST HOTELS: Buying Westin Kierland Resort for $393 Million IKON OFFICE: S&P Affirms BB Rating & Revises Outlook to Stable J.L. FRENCH: Can Lend Up to $1.2 Million to Ansola Foreign Unit JEREMIAH AGUOLU: Involuntary Chapter 11 Case Summary KL INDUSTRIES: Taps Shaw Gussis as Bankruptcy Counsel KL INDUSTRIES: U.S. Trustee Appoints Seven-Member Committee L & M VIDEO: Case Summary & 20 Largest Unsecured Creditors LARRY'S MARKETS: Court Gives Interim Nod on Bush Strout as Counsel LARRY'S MARKETS: U.S. Trustee Appoints Five-Member Committee LGB INC: Files Schedules of Assets and Liabilities LIBERTY MEDIA: Moody's Cuts Sr. Unsec. Debt Rating to Ba2 from Ba1 LODGENET ENT: March 31 Balance Sheet Upside-Down by $69 Million LORBER INDUSTRIES: Court OKs Weiland as Panel's Bankruptcy Counsel LORBER INDUSTRIES: Judge Donovan Denies Tobin Lucks' Retention MAGRUDER COLOR: Hires Environmental Waste as Consultants MASTERCRAFT INTERIORS: Wants to Conduct Sales & Close Stores MIRANT CORP: Plans to Shut Down Two Power Units in California MORGAN STANLEY: S&P Lowers $3.5MM Class A-14 Notes' Rating to BB MOTHERS WORK: S&P Affirms B- Rating & Revises Outlook to Positive MUSICLAND HOLDING: ACD Wants Star Agreement Filed Under Seal NAKOMA LAND: Court Names Angelique I.M. Clark as Ch. 11 Trustee NORTHWEST AIRLINES: Reaches Tentative Agreement with Machinists NOVA CHEMICALS: S&P Lowers Corp. Credit & Sr. Debt Ratings to BB- OCA INC: Hires Jenner & Block as Committee's Bankruptcy Counsel OCA INC: Committee Hires Loughlin Meghji+Company as Fin'l Advisor OPTICAL DATACOMM: Ch. 11 Trustee Wants Case Converted to Chapter 7 OWENS CORNING: Bankr. Court Rules Bank Claims are Unimpaired OWENS CORNING: Equity Holders Insist on Committee Appointment PALAZZO DI: Court Sets June 2 General Claims Bar Date PARMALAT USA: Citibank Lawsuit Standstill Period is Until May 31 PERFORMANCE TRANSPORTATION: Wants More Time to File Ch. 11 Plan PERFORMANCE TRANSPORTATION: Taps Reed Smith as Special Counsel PLIANT CORP: Inks $200 Mil. Credit Facility from Merrill Lynch REFCO INC: Ch. 11 Trustee Gets Interim Nod on Bingham as Counsel REO MOVING: Voluntary Chapter 11 Case Summary REYNOLDS AMERICAN: Launches Exchange Offer for $1.45 Billion Notes RITE AID: Will Hold Annual Stockholders Meeting on June 21 RODNEY POLAND: Case Summary & 20 Largest Unsecured Creditors SAINT VINCENTS: Asks for Authority to Pay $1 Mil. Break-Up Fee SENECA GAMING: S&P Raises Corp. Credit & Sr. Unsec. Ratings to BB SERACARE LIFE: Creditors' Panel Hires Pachulski Stang as Counsel SILICON GRAPHICS: U.S. Trustee Picks Four-Member Creditors Panel SILICON GRAPHICS: Moody's Lowers Rating to Ca Post-Bankruptcy SOUNDVIEW HOME: DBRS Puts Rating on $12.05 Million NIM NOTES at B SUPERIOR ENERGY: Gets Requisite Consents from 8-7/8% Noteholders SUSQUEHANNA MEDIA: S&P Withdraws BB- Corporate Credit Rating SYLVEST FARMS: Court Okays FOCUS Management as Financial Advisor TOMMY HILFIGER: APAX Acquisition Cues Moody's to Withdraw Rating TRIPLE A: Case Summary & 20 Largest Unsecured Creditors TURNING STONE: S&P Affirms BB- Rating & Revises Outlook to Neg. USG CORP: Fights Anderson Over Asbestos PD Class Certification USG CORP: Anderson Memorial Wants Stay Lifted to Unseal Records VII SERIES: Voluntary Chapter 11 Case Summary WINN-DIXIE: Bids for Hollywood Tract Must Be Submitted by May 26 WORLDCOM INC: Court Approves Deutsche Bank Settlement Agreement X-RITE INC: Moody's Assigns B1 Rating to Proposed Sr. Sec. Loan ZOOMERS HOLDING: Fla. Community Bank Wants Chap. 11 Case Dismissed * Maureen Corcoran Joins Sheppard Mullin as Corporate Partner * Large Companies with Insolvent Balance Sheets ********* 2929 PANTHERSVILLE: Hires Schreeder Wheeler as Bankruptcy Counsel ----------------------------------------------------------------- 2929 Panthersville Associates obtained authority from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Schreeder, Wheeler & Flint, LLP, as its bankruptcy counsel. Schreeder Wheeler is expected to: a. prepare pleadings, schedules and statement of financial affairs, adversary proceedings and application incidental to administering the Estate; b. develop the relationship and status of the debtor-in- possession and handle claims of creditors in the Debtor's bankruptcy proceedings, in the best interest of the Debtor, creditors and other interested parties; c. advise the debtor-in-possession of its rights, duties and obligations; d. perform legal services incidental and necessary to the day-to-day operation of the Debtor including, but not limited to, institution and prosecution of necessary legal proceedings, loan restructuring, general business, corporate and legal advice and assistance necessary to the proper preservation and administration of the estate; e. take all necessary actions incident to the proper preservation and administration of the Debtor and to the conduct of its business; f. prepare a plan of reorganization and disclosure statement; and g. provide post-confirmation legal services in connection with implementation of the plan. John A. Christy, Esq., a partner at Schreeder Wheeler, tells the Court that the firm has received a $115,299 retainer. Mr. Christy assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Atlanta, Georgia, 2929 Panthersville Associates owns a 518-unit apartment known as the Spanish Trace East Apartments in Decatur, Georgia. The company filed for chapter 11 protection on May 1, 2006 (Bankr. N.D. Ga. Case No. 06-64988). John A. Christy, Esq., at Schreeder, Wheeler & Flint, LLP, represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million and $50 million. 2929 PANTHERSVILLE: Has Until June 8 to File Schedules ------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Georgia gave 2929 Panthersville Associates until June 8, 2006, to file its Schedules and Statement of Financial Affairs. The Debtor tells the Court that it has substantial assets and debt and needs additional time to collect accurate information to include in the schedules. The Debtor says it has been preoccupied with case administration activities since filing for bankruptcy such as establishing appropriate bank accounts, closing bank accounts, establishing accounting procedures, obtaining the use of cash collateral, preparing operating budgets and addressing utility deposit requirements. Headquartered in Atlanta, Georgia, 2929 Panthersville Associates owns a 518-unit apartment known as the Spanish Trace East Apartments in Decatur, Georgia. The company filed for chapter 11 protection on May 1, 2006 (Bankr. N.D. Ga. Case No. 06-64988). John A. Christy, Esq., at Schreeder, Wheeler & Flint, LLP, represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million and $50 million. ADELPHIA COMMS: DIP Lenders Waive Default on Century/ML Settlement ------------------------------------------------------------------ In a regulatory filing with the Securities and Exchange Commission, Adelphia Communications Corporation discloses that Waiver No. 1 to the Fourth Amended and Restated Credit and Guaranty Agreement, dated as of March 17, 2006, became effective. The waiver was signed in connection with the execution of the Century/ML Settlement Agreement dated May 11, 2006. The parties to the Fourth Amended and Restated Credit and Guaranty Agreement are: -- UCA LLC, Century Cable Holdings, LLC, Century-TCI California, L.P., Olympus Cable Holdings, LLC, Parnassos, L.P., FrontierVision Operating Partners, L.P., ACC Investment Holdings, Inc., Arahova Communications, Inc., Adelphia California Cablevision, LLC, as borrowers; -- ACOM and certain of its other direct and indirect subsidiaries, as guarantors; -- JPMorgan Chase Bank, N.A., as Administrative Agent; -- Citigroup Global Markets Inc., as Syndication Agent; -- J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., as Joint Bookrunners and Co-Lead Arrangers; -- Citicorp North America, Inc., as Collateral Agent; -- Wachovia Bank, N.A., as Co-Syndication Agent; -- The Bank of Nova Scotia, Bank of America, N.A. and General Electric Capital Corporation, as Co-Documentation Agents; and -- other lenders. Pursuant to the terms of the Waiver, the DIP Lenders agreed to waive certain defaults or events of default that would have occurred under the terms of the DIP Credit Agreement upon the consummation of the transactions contemplated by the Settlement Agreement. A full-text copy of the Waiver is available for free at: http://ResearchArchives.com/t/s?997 Based in Coudersport, Pa., Adelphia Communications Corporation -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. (Adelphia Bankruptcy News, Issue No. 133; Bankruptcy Creditors' Service, Inc., 215/945-7000) AFFINITY GROUP: March 31 Balance Sheet Upside-Down by $64 Million ----------------------------------------------------------------- Affinity Group, Inc., filed its financial statements for the quarter ended March 31, 2006, with the Securities and Exchange Commission on May 8, 2006. The Company earned $2,264,000 of net income on $116,870,000 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $415,009,000 in total assets and $479,110,000 in total liabilities resulting in a stockholders' deficit of $64,101,000. At March 31, 2006, the working capital deficit was $10.2 million, compared with $6.7 million at Dec. 31, 2005. 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?98d Headquartered in Ventura, California, Affinity Group, Inc. -- http://www.affinitygroup.com/-- and its affiliated companies serve the safety, security, comfort, and convenience needs of the North American recreational vehicle market. * * * As reported in the Troubled Company Reporter on May 5, 2006, Standard & Poor's Ratings Services lowered its ratings on Affinity Group Holding Inc. and its operating subsidiary, Affinity Group Inc., including lowering the corporate credit ratings to 'B' from 'B+'. The outlook is stable. Total debt outstanding was $412.7 million as of Dec. 31, 2005. AIRNET COMMS: Files Voluntary Chapter 11 Petition in Florida ------------------------------------------------------------ AirNet Communications Corporation filed a voluntary petition for relief under Chapter 11 of the Federal Bankruptcy Code in the Middle District of Florida on May 22, 2006. The filing is in response to continuing adverse market conditions. While under Chapter 11, AirNet Communications plans to operate its business in the ordinary course under the protection of the bankruptcy court while seeking to work out a plan of reorganization that is in the best interests of its customers, employees, creditors and shareholders. If a plan of reorganization is filed with the bankruptcy court, the Company expects to emerge as a privately held company. AirNet Communications remains committed to marketing, selling, maintaining and further enhancing its award winning line of GSM base station products and services. The Company intends to fulfill existing domestic and international customer contracts for both products and services. AirNet also reported that no further reductions in the Company's workforce are planned at this time. About AirNet Based in Melbourne, Florida, AirNet Communications Corporation -- http://www.airnetcom.com/-- is a supplier of wireless base stations and other telecommunications equipment that allow service operators to cost-effectively and simultaneously offer high-speed wireless data and voice services to mobile subscribers. AirNet's patented broadband, software-defined AdaptaCell(R) SuperCapacity(TM) adaptive array base station solution provides a high-capacity base station with a software upgrade path to high- speed data. The Company's RapidCell(TM) base station provides government communications users with up to 96 voice and data channels in a compact, rapidly deployable design capable of processing multiple GSM protocols simultaneously. The Company's AirSite(R) Backhaul Free(TM) base station carries wireless voice and data signals back to the wireline network, eliminating the need for a physical backhaul link, thus reducing operating costs. AIRNET COMMS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: AirNet Communications Corporation 3950 Dow Road Melbourne, Florida 32934 Tel: (800) 984-1990 Bankruptcy Case No.: 06-01171 Type of Business: The Debtor designs, manufactures, and markets wireless infrastructure products and offers infrastructure solutions for commercial GSM customers, and government, defense, homeland security based agencies. See http://198.170.117.146/ Chapter 11 Petition Date: May 22, 2006 Court: Middle District of Florida (Orlando) Judge: Arthur B. Briskman Debtor's Counsel: R. Scott Shuker, Esq. Gronek & Latham LLP 390 North Orange Avenue, P.O. Box 3353 Orlando, Florida 32802 Tel: (407) 481-5800 Fax: (407) 481-5801 Total Assets: $15,701,881 Total Debts: $21,615,346 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Trillium Digital Systems, Inc. Trade $280,356 2200 Mission College Boulevard Santa Clara, CA 95052-8119 Japan Radio Co., Ltd. Trade $257,924 5-1-1 Shimorenjaku Mitaka-shi, Tokyo Japan 181-8510 Sanmina-Sci Corp. Trade $200,645 P.O. Box 848413 Dallas, TX 75284-8413 Ulticom Licenses $140,000 Powerwave Technologies Trade $101,335 ArrayComm Trade $98,065 Comsys Licenses $93,500 Velocite Systems Trade $52,443 FSY Microwave, Inc. Trade $47,620 GE Access, MRA Systems Trade $47,491 Performance Technologies Trade $38,750 Decimal Engineering Trade $34,906 GAO Research Licenses $30,000 Clerc, Jean Yves, Trustee Building Lease $28,458 Clearcomm Technologies, Inc. Trade $24,520 Computer Power Systems Trade $24,428 AJ's Power Source Trade $21,295 Atlantic Scientific Corp. Trade $18,234 Deloitte & Touche Accounting Services $15,870 Lambda Electronics, Inc. Trade $15,115 AK STEEL: Plans to Make Early $84M Pension Trust Fund Contribution ------------------------------------------------------------------ AK Steel Corp.'s board of directors authorized the company to make an $84 million contribution to its pension trust fund months ahead of schedule. The company said it would make its full required 2006 pension contribution next week, more than five months before the final due date. AK Steel's previous pension contribution was a voluntary $150 million contribution made in January of 2005. "AK Steel is proud to continue honoring a retiree tradition unique in the steel industry," James L. Wainscott, chairman, president and CEO said. "In more than half a century, this company has not missed a pension fund contribution, or a payment to any of its 32,000 pensioners." AK Steel provides pension benefits to approximately 32,000 retirees and their beneficiaries. The company said that while it has continued to fund its retiree health care and pension legacy costs, most of its competitors have reduced or eliminated their legacy obligations through the bankruptcy process. Middletown, Ohio-based, AK Steel Corp. (NYSE: AKS) -- http://www.aksteel.com/-- produces flat-rolled carbon, stainless and electrical steel products, as well as carbon and stainless tubular steel products, for automotive, appliance, construction and manufacturing markets. * * * AK Steel Corp.'s 7-3/4% Senior Notes due 2012 carry Moody's Investors Service's and Standard & Poor's single-B rating. ALLIED HOLDINGS: Eton Park Resigns from Creditors Committee ----------------------------------------------------------- Eton Park Capital Management, L.P., represented by Joshua Astrof, resigned from the Official Committee of Unsecured Creditors in Allied Holdings, Inc., and its debtor-affiliates' Chapter 11 cases. William T. Neary, the U.S. Trustee for the Northern and Eastern Districts of Texas, reports that the Creditors Committee is now comprised of: A. Wells Fargo Bank, as Indenture Trustee Attn: Thomas M. Korsman, Vice President Sixth & Marquette Mac # N9303-120 Minneapolis, MN 55479 Phone: (612) 466-5890 Fax: (612) 667-9825 B. International Brotherhood of Teamsters Attn: Frederick Perillo, Counsel Previant, Goldberg, Uelmen, Gratz, Miller & Brueggeman, S.C. l555 North RiverCenter Drive Suite 202, P.O. Box 12993 Milwaukee, WI 53212 Phone: (414) 271-4500 Fax: (414) 271-6308 C. Cummins South, Inc. Attn: Susan Stephens, Controller 5125 Highway 85 Atlanta, Georgia 30349 Phone: (404) 765-5104 Fax: (404) 766-2132 D. Exotic Auto Transport, LLC Attn: Bradley M. Segebarth, President P.O. Box 72, 500 W. Elm Lebanon, MO 65536 Phone: (417) 532-9808 Fax: (417) 532-9815 E. D. E. Shaw Laminar Portfolios, LLC Attn: John Chiang 120 West 45th Street New York, NY l0036 Phone: (212) 487-0685 Fax: (212) 845-1685 About Allied Holdings Headquartered in Decatur, Georgia, Allied Holdings, Inc. (OTC Pink Sheets: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMCAST INDUSTRIAL: Hires Alvarez & Marsal as Panel's Fin'l Advisor ------------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in Amcast Industrial Corporation and its debtor-affiliates' bankruptcy cases obtained permission from the U.S Bankruptcy Court for the Southern District of Indiana in Indianapolis to retain Alvarez & Marsal, LLC, as its financial advisor. A&M is expected to: a) provide analytical support to the Committee's counsel on certain litigation issues, including, but not limited to, the agreement between Amcast and General Motors; b) advise the Committee and its counsel on contract and commercial issues; c) perform an extensive analysis and review of the profitability of the Debtors' existing contracts and, if necessary, participate in the contract renegotiation process; d) assist the Committee and its counsel in any other Financial Advisor service, as requested by the Committee or its counsel, to maximize the recovery to the estate. These services include: -- analyzing and monitoring the Debtors' postpetition cash flow forecasts and assess the associated operational reasonableness, viability and risks; -- reviewing the Debtors' operational performance and business plans and analyzing the various operational risks and opportunities; -- analyzing the potential cost savings proposed by the Debtors' as well as potential cost savings incremental to those proposed by the Debtors; and e) assist the Committee and its counsel in responding to various developments or motions during the course of the Debtors' Chapter 11 proceedings. The customary hourly rates for A&M's professionals are: Professional Hourly Rate ------------ ----------- Managing Director $500 to $650 Directors $400 to $500 Associates $300 to $400 Thomas E. Hill, a Managing Director at A&M, assures the Bankruptcy Court that his firm does not hold any interest adverse to the Debtors' estates and is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. About Alvarez & Marsal Alvarez & Marsal -- http://www.alvarezandmarsal.com-- is a leading global professional services firm with expertise in guiding under performing companies and public sector entities through complex financial, operational and organizational challenges. About Amcast Industrial Headquartered in Fremont, Indiana, Amcast Industrial Corporation, manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., filed for chapter 11 protection a second time on Dec. 1, 2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C., represent the Debtors in their restructuring efforts. Henry A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP, represent the Official Committee of Unsecured Creditors. Kevin I. Dowd at Berkeley Square Group LLC serves as Amcast's financial advisor. The Creditors' Committee receives financial advice from Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its affiliate filed for protection from their creditors, they listed total assets of $97,780,231 and total liabilities of $100,620,855. AMCAST INDUSTRIAL: Hires BMC as Notice, Claims and Balloting Agent ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis gave Amcast Industrial Corporation and its debtor- affiliates permission to retain BMC Group, Inc., as their notice, claims and balloting agent. The Debtors proposed to hire BMC as their claims agent to relieve the Bankruptcy Court Clerk of the heavy administrative burden brought by the numerous creditor and parties-in-interest involved in their bankruptcy cases. BMC is expected to: a) prepare and serve required notices in the Debtors' Chapter 11 cases; b) after the mailing of a particular notice, file with the Clerk's office a certificate or affidavit of service that includes a copy of the notice involved, and alphabetical list of persons to whom the notice was mailed and the date and manner of mailing; c) reconcile and resolve claims as requested; d) receive and record original proofs of claim and proofs of interest filed; e) create and maintain official claims registers; f) implement necessary security measures to ensure the completeness and integrity of the claims registers; g) transmit to the Clerk's office a copy of the claims registers upon request and at agreed intervals; h) act as balloting agent, which will include: -- printing ballots; -- preparing voting reports; and -- coordinating the mailing of ballots, Disclosure Statement and Plan of Reorganization and other appropriate material; i) establish a toll free "800" number to receive questions regarding voting on the Plan; j) receive and record ballots, inspect ballots for conformity with voting procedures, and tabulate and certify the results. k) maintain up to date mailing list for all entities that have filed a proof of claim; l) provide access to the public for the examination of copies of the proofs of claims or interest; m) record all transfers of claims and notice of the transfers; n) provide temporary employees to process claims; and o) perform other administrative and support services related to noticing claims, docketing, solicitation and distribution, as requested by the Debtors or the Clerk of Court. The Debtors will pay BMC according to the Firm's standard hourly rates. A copy of BMC's Fee Schedule is available for free at: http://ResearchArchives.com/t/s?72a In addition, the Debtors will pay BMC a $15,000 retainer at the start of the Firm's engagement. The Debtors agree to make necessary monthly payments to BMC to maintain the retainer balance at $15,000. Tinamarie Feil, BMC's Chief Financial Officer, assures the Bankruptcy Court that her firm does not hold any interest adverse to the Debtors' estates and is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. About Amcast Industrial Headquartered in Fremont, Indiana, Amcast Industrial Corporation, manufactures and distributes technology-intensive metal products to end-users and suppliers in the automotive and plumbing industry. The Company and four debtor-affiliates filed for chapter 11 protection on Nov. 30, 2004. The U.S. Bankruptcy Court for the Southern District of Ohio confirmed the Debtors' Third Amended Joint Plan of Reorganization on July 29, 2005. The Debtors emerged from bankruptcy on Aug. 4, 2005. Amcast Industrial Corporation and Amcast Automotive of Indiana, Inc., filed for chapter 11 protection a second time on Dec. 1, 2005 (Bankr. S.D. Ind. Case No. 05-33322). David H. Kleiman, Esq., and James P. Moloy, Esq., at Dann Pecar Newman & Kleiman, P.C., represent the Debtors in their restructuring efforts. Henry A. Efromson, Esq., and Ben T. Caughey, Esq., at Ice Miller LLP, represent the Official Committee of Unsecured Creditors. Kevin I. Dowd at Berkeley Square Group LLC serves as Amcast's financial advisor. The Creditors' Committee receives financial advice from Thomas E. Hill at Alvarez & Marsal, LLC. When the Debtor and its affiliate filed for protection from their creditors, they listed total assets of $97,780,231 and total liabilities of $100,620,855. AMERICAN TOWER: Board Conducts Inquiry into Stock Option Practices ------------------------------------------------------------------ American Tower Corporation's Board of Directors created a special committee comprised of independent directors to conduct an internal review of the Company's historical stock option practices and related accounting. The special committee will be assisted by independent legal counsel and advisors. The Company initiated this review following the release of a third party research report regarding practices related to the timing and pricing of stock option grants. Depending on the outcome of this review, the Company may need to correct its historical determinations of non-cash stock-based compensation expense and, if such corrections are material, it could result in the need to restate the Company's financial statements. Although the impact to the Company's historical financial statements, if any, is not yet known, the Company does not expect the review to result in material changes to its historical revenues or non-option related operating expenses, nor would it have a material impact on the Company's cash flow from operations. The Company also reported that, subsequent to the formation of the special committee and the events described, it received a letter of informal inquiry from the Securities and Exchange Commission requesting documents related to Company stock option grants and stock option practices. The Company intends to cooperate fully with the SEC in this matter. Headquartered in Boston, Massachusetts, American Tower Corporation -- http://www.americantower.com/-- is the leading independent owner, operator and developer of broadcast and wireless communications sites in North America. American Tower owns and operates over 22,000 sites in the United States, Mexico, and Brazil. Additionally, American Tower manages approximately 2,000 revenue producing rooftop and tower sites. AMERICAN TOWER: Stock Option Inquiry Prompts S&P's Negative Watch ----------------------------------------------------------------- Standard & Poor's Rating Services placed its ratings on American Tower Corp., including its 'BB+' corporate credit rating, on CreditWatch with negative implications. The ratings on related entities: * American Tower International Inc., * American Tower L.P, * American Tower LLC, * American Towers Inc., * SpectraSite Inc., and * SpectraSite Communications Inc. also were placed on CreditWatch with negative implications. "These actions follow American Tower's announcement today that its board of directors has created a special committee to conduct an internal review of the company's historical stock option practices and related accounting," said Standard & Poor's credit analyst Catherine Cosentino. Standard & Poor's will monitor events to assess what impact, if any, these developments may have on the ratings on American Tower. American Tower said the review might lead to a restatement of some financial statements but that it does not expect such historical restatements, if any, to materially affect cash flow from operations. American Tower also said it received a letter of informal inquiry from the Securities and Exchange Commission requesting documents related to its stock option grants and practices. AMES DEPARTMENT: Wants to Hire Atwell Curtis as Collection Agent ---------------------------------------------------------------- During 2003, Ames Department Stores and its debtor-affiliates commenced 2,000 preference actions. Many defendants failed to timely answer or otherwise appear in the Preference Actions, and the Debtors sought entry of default judgments. To date, 62 Judgments totaling $754,000 have been entered in favor of the Debtors in the Preference Actions on which collection has not been realized, notwithstanding diligent efforts by the Debtors and their retained counsel. Pursuant to Sections 327 and 328 of the Bankruptcy Code, the Debtors seek the Court's permission to employ Atwell, Curtis & Brooks, Ltd., as collection agent to assist in the collection of the Judgments entered in favor of the Debtors in the Preference Actions. Rolando de Aguiar, president of Ames Department Stores, Inc., relates that as collection agent, Atwell's responsibilities include: (a) reviewing and analyzing files for the Judgments in the Preference Actions; (b) investigating the location and assets of the defendants against which Judgments have been entered; (c) negotiating with the defendants; (d) collecting and settling Judgments; and (e) preparing reports regarding Judgment recovery efforts to allow the Debtors to evaluate the collection process. The Debtors will pay Atwell a contingent fee, which is 10% of any cash recovery or administrative claim reduction realized from the resolution or settlement of the Judgments. The contingent fee will be paid in addition to the cumulative contingency fee for the settlement or recovery of any Preference Action. Arlene Angelilli, president of Atwell, assures the Court that her firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code and as modified by Section 1107(b) of the Bankruptcy Code. Counsel for the Committee of Unsecured Creditors and the Office of the U.S. Trustee have reviewed the Debtors' employment agreement with Atwell. The Committee and the U.S. Trustee have no objections to the proposed retention or the employment terms. Ames Department Stores filed for chapter 11 protection on Aug. 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service, Inc., 215/945-7000) AZTAR CORP: Inks $2.75-Bil. Merger Agreement with Columbia Sussex ----------------------------------------------------------------- Columbia Entertainment, the gaming affiliate of Columbia Sussex, entered into a definitive merger agreement with Aztar Corporation under which it will acquire all of the outstanding common shares of Aztar for $54 per share in cash. The holders of Aztar's Series B preferred stock will receive $571.13 per share in cash. The fully financed transaction is valued at $2.75 billion, including the assumption of approximately $676 million in debt. Credit Suisse has provided a firm commitment for $3.15 billion in debt financing. Aztar's Tropicana casino resorts in Atlantic City, N.J., and Las Vegas, Nev.; Ramada Express casino hotel in Laughlin, Nev.; and Casino Aztar riverboat casino in Evansville, Ind., are highly complementary to Columbia Sussex and Columbia Entertainment's 82 hotels and resorts and 8 casinos throughout the United States, Canada and the Caribbean, as well as its new resort and casino property under construction in St. Maarten. Columbia Sussex is the largest licensee of full-service Marriott Hotels in the U.S., and owns and operates Marriott, Hilton, Westin, Sheraton, Renaissance and Doubletree branded properties. The combined company will have approximately 33,000 rooms and will own and operate 12 casinos in Nevada, Louisiana, Mississippi, New Jersey, Illinois and Indiana. "This is a breakthrough transaction for our company which will significantly enhance our gaming assets in key growth markets and strengthen our position as one of the leading owners, developers and operators of hotels, resorts and casinos," said William J. Yung III, President and CEO of Columbia Sussex. "Aztar's unique assets are a perfect fit with our existing hotel and gaming properties, and we see many opportunities to improve financial performance by expanding the Tropicana brand, finishing the building projects in Indiana and Atlantic City and developing the Las Vegas property. We look forward to working with Aztar's talented managers and employees to maximize the potential of these properties as we leverage our 25-year track record as a successful owner, builder and operator." To underscore its confidence in its ability to close the transaction, Columbia has made a deposit of $313 million, payable to Aztar in certain circumstances (including failure to obtain regulatory approval), if the merger agreement is terminated. In addition, Columbia has agreed to increase the purchase price at a rate of $0.00888 per day per Aztar common share beginning Nov. 19, 2006, if closing has not occurred by that date. The additional daily payment would increase to $0.01184 per Aztar common share beginning February 19, 2007, if the transaction has not closed by that date. Columbia obtained its first gaming license in 1990 and has been licensed and re-licensed numerous times in Nevada, Louisiana and Mississippi. Columbia will seek and expects to receive gaming licenses in New Jersey and Indiana. It will work with Aztar to divest the Casino Aztar riverboat casino in Caruthersville, Miss. prior to closing the transaction. The transaction is subject to regulatory approvals and customary closing conditions and is expected to close by the end of the year. Banc of America Securities acted as financial advisor to Columbia Entertainment in connection with this transaction, and Credit Suisse is providing debt financing. Katz, Teller, Brant & Hild and Milbank, Tweed, Hadley & McCloy LLP are acting as legal advisors. About Columbia Sussex Columbia Sussex Corporation and its Columbia Entertainment gaming affiliate are among the largest privately held owners, developers and operators of hotel properties and casinos in the world. Columbia Sussex is the largest licensee of full-service Marriott Hotels in the U.S., and the Company and its affiliates own a total of 82 hotels and 8 casinos with approximately 27,000 rooms, including Marriott, Hilton, Westin, Sheraton, Renaissance and Doubletree branded properties across the United States, Canada and the Caribbean. Founded in 1972, the Company is led by William J. Yung III and owned by Mr. Yung and the Yung family. Columbia Sussex Corporation and Columbia Entertainment are headquartered in Fort Mitchell, Kentucky and have more than 18,000 employees worldwide. About Aztar Corporation Headquartered in Phoenix, Arizona, Aztar Corporation (NYSE: AZR) -- http://www.aztar.com/-- is a publicly traded company that operates Tropicana Casino and Resort in Atlantic City, New Jersey, Tropicana Resort and Casino in Las Vegas, Nevada, Ramada Express Hotel and Casino in Laughlin, Nevada, Casino Aztar in Caruthersville, Missouri, and Casino Aztar in Evansville, Indiana. * * * As reported in the Troubled Company Reporter on March 15, 2006, Standard & Poor's Ratings Services' BB rating on Aztar Corp. remained on CreditWatch with negative implications, where they were placed on Feb. 16, 2006. The CreditWatch update followed the announcement by Pinnacle that it signed a definitive merger agreement to acquire the outstanding shares of Aztar. BOMBARDIER RECREATIONAL: Buying Back $200 Mil. of 8-3/8% Sr. Notes ------------------------------------------------------------------ Bombardier Recreational Products Inc. commenced a cash tender offer to purchase any and all of the $200 million outstanding principal amount of its 8-3/8% Senior Subordinated Notes due 2013 (CUSIP No. 09776LAC0). In conjunction with the tender offer, the Company is soliciting consents from holders to effect certain proposed amendments to the indenture governing the Notes, which would eliminate substantially all of the indenture's restrictive covenants and also amend certain other provisions. The tender offer and consent solicitation are being made pursuant to an Offer to Purchase and Consent Solicitation Statement dated May 19, 2006, and a related Consent and Letter of Transmittal, which more fully set forth the terms and conditions of the tender offer and consent solicitation. Holders who properly tender and deliver valid consents to the proposed amendments at or prior to 5:00 p.m., New York City time, on June 2, 2006, unless extended will be eligible to receive the total consideration for the Notes. The "Total Consideration" for the Notes will be determined in accordance with the formula set forth in the Offer to Purchase, pricing to the earliest redemption date at a fixed spread of 50 basis points over the bid side yield on the 3-3/8% U.S. Treasury Note due Dec. 15, 2008. The Total Consideration includes a consent payment equal to $50 per $1,000 principal amount of tendered Notes. The price is expected to be determined at 5:00 p.m., New York City time, on June 2, 2006, unless extended. Holders who validly tender Notes after the Consent Expiration Date, but on or prior to midnight, New York City time, on June 16, 2006, will be eligible to receive the Total Consideration for the Notes less the Consent Payment. In addition, Holders who validly tender and do not validly withdraw their Notes in the tender offer will also be paid interest from, and including, the relevant previous interest payment date up to, but not including, the Settlement Date. The tender offer expires at midnight, New York City time, on June 16, 2006, unless extended. The Total Consideration or Offer Consideration, as applicable, will be payable to holders on the Settlement Date. The Company expects the Settlement Date to occur promptly following the acceptance for purchase of Notes validly tendered in the offer and satisfaction of the other conditions to the Offer to Purchase. Holders may withdraw their tenders and revoke their consents at any time prior to the Consent Expiration Date. Holders who wish to tender their Notes on or prior to the Consent Expiration Date must consent to the proposed amendments and Holders may not deliver consents without tendering their related Notes. Holders may not revoke consents without withdrawing the Notes tendered pursuant to the tender offer. The Offer to Purchase contains several conditions, including but not limited to, the receipt of valid consents from holders of a majority in principal amount of the outstanding notes and the concurrent completion of a recapitalization, which includes the execution of a new senior secured credit facility. If any of the conditions are not satisfied or waived, the Company is not obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered notes, and may even terminate the tender offer. Merrill Lynch & Co. is acting as the sole Dealer Manager and Solicitation Agent for the tender offer and the consent solicitation. The Information Agent is Global Bondholder Services Corporation. Requests for documentation should be directed to: Global Bondholder Services Corporation Telephone (212) 430-3774 (for banks and brokerage firms) Toll Free (866) 470-4300 Questions regarding the tender offer and consent solicitation should be directed to: Merrill Lynch & Co. Telephone (212) 449-4914 Toll Free (888) ML4-TNDR About Bombardier Recreational Products Inc. Based in Valcourt, Quebec, Bombardier Recreational Products Inc. -- http://www.brp.com/-- a privately-held company, is a world leader in the design, development, manufacturing, distribution and marketing of motorised recreational vehicles. The Company's portfolio of brands and products includes: Ski-Doo(R) and Lynx(TM) snowmobiles, Sea-Doo(R) watercraft and sport boats, Johnson(R) and Evinrude(R) outboard engines, direct injection technologies such as Evinrude E-TEC(R), Can-Am(TM) all-terrain vehicles, Rotax(R) engines and karts. Bombardier Recreational Products Inc.'s 8-3/8% Senior Subordinated Notes carry Moody's Investors Service's B3 rating and Standard & Poor's B rating. BUFFALO COAL: Section 341(a) Meeting Scheduled for June 15 ---------------------------------------------------------- The United States Trustee for Region 4 will convene a meeting of Buffalo Coal Company, Inc.'s creditors at 11:00 a.m., on June 15, 2006, at the U.S. Bankruptcy Court -- Divisional Office, Northern District of West Virginia, 324 West Main Street -- Edel Building in Clarksburg, West Virginia. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Oakland, Maryland, Buffalo Coal Company, Inc., is engaged in coal mining and processing services. The company filed for chapter 11 protection on May 5, 2006 (Bankr. N.D. W.Va. Case No. 06-00366). David A Hoyer, Esq., at Hoyer, Hoyer & Smith, PLLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $119,323,183 and total debts of $105,887,321. CARDSYSTEMS SOLUTIONS: Creditors Meeting Scheduled for July 13 -------------------------------------------------------------- The U.S. Trustee for Region 14 will convene a meeting of Cardsystems Solutions, Inc.'s creditors at 10:30 a.m., on July 13, 2006, at the U.S. Trustee Meeting Room, James A. Walsh Court, 38-S Scott Ave., St 140 in Tucson, Arizona. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Sonoita, Arizona, Cardsystems Solutions, Inc. -- http://www.cardsystems.com/-- is a subsidiary of the electronic payment solutions company Pay By Touch Payment Solutions, LLC -- http://www.paybytouch.com/Pay By Touch is a global leader of biometric authentication, loyalty & membership, and provides convenient and secured payment electronic transactions for businesses and consumers. The Company filed for bankruptcy protection on May 12, 2006 (Bankr. D. Ariz. Case No. 06-00515). Frederick J. Petersen, Esq., at Mesch, Clark & Rothschild, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy protection, it disclosed assets amounting to $13,087,515 and debts totaling $23,860,343. CATHOLIC CHURCH: Portland Hires NERA as Economic Consultants ------------------------------------------------------------ The Hon. Elizabeth L. Perris of the U.S. Bankruptcy Court for the District of Oregon authorized the Archdiocese of Portland in Oregon to employ the National Economic Research Associates, Inc., as its economic consultant. NERA's compensation will be subject to application and Court approval. NERA will be entitled to seek compensation as an authorized professional pursuant to all previous order entered by the Court, provided that the firm must comply with any requirement in those orders regarding disclosing ability to repay if fees are not ultimately approved. As reported in the Troubled Company Reporter on May 4, 2006, Frederic C. Dunbar, one of NERA's principals, will work on the Archdiocese's claims estimation. NERA and Dr. Dunbar will also provide professional services with respect to related issues regarding the proposal, confirmation, and implementation of a plan of reorganization. NERA's professionals will be paid at its customary hourly rates in effect at the time services are performed. The currently hourly rates are: Professional Hourly Rate ------------ ----------- Fred Dunbar $585 Jan Larsen $275 Qian Li $210 Prem Neupane $160 NERA's services will be billed as an administrative expense against the Archdiocese. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) CENVEO CORP: Commences Tender Offer for $350MM of 9-5/8% Sr. Notes ------------------------------------------------------------------ Cenveo, Inc.'s wholly owned subsidiary, Cenveo Corporation, a Delaware corporation, commenced a cash tender offer for any and all of the Company's outstanding $350,000,000 aggregate principal amount of 9-5/8% Senior Notes due 2012 (CUSIP No. 56032EAD5). The total consideration per $1,000 principal amount of Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on June 1, 2006 unless extended will be calculated based on the present value on the initial payment date of the sum of $1,048.13 (the redemption price for the Notes on March 15, 2007, which is the earliest redemption date for the Notes) plus interest payments through March 15, 2007, determined using a discount factor equal to the yield on the Price Determination Date of the 3-3/8% U.S. Treasury Note due February 28, 2007 plus a fixed spread of 50 basis points. The Company expects that the Price Determination Date will be 2:00 p.m., New York City time, on June 9, 2006 (unless the Company extends the tender offer prior to the Price Determination Date, in which case such date will be the tenth business day prior to expiration of the tender offer). Holders who validly tender their Notes by the Consent Payment Deadline will receive payment on or about the initial payment date, which is expected to be on or about June 16, 2006. In connection with the tender offer, the Company is soliciting consents to proposed amendments to the indenture governing the Notes, which would eliminate substantially all of the restrictive covenants and certain events of default in the indenture. The Company is offering to make a consent payment of $30.00 per $1,000 principal amount of Notes to holders who validly tender their Notes and deliver their consents on or prior to the Consent Payment Deadline. Holders may not tender their Notes without delivering consents, and may not deliver consents without tendering their Notes. The tender offer is scheduled to expire at 12:00 midnight, New York City time, on June 22, 2006, unless extended or earlier terminated. However, no consent payments will be made in respect of Notes tendered after the Consent Payment Deadline. Holders who tender their Notes after the Consent Payment Deadline but on or prior to the expiration date will receive the total consideration referred to above per $1,000 principal amount of Notes validly tendered and not withdrawn, less $30.00 per $1,000 principal amount. Tendered Notes may not be withdrawn and consents may not be revoked after the date on which the Company and the trustee for the Notes execute a supplemental indenture to effect the proposed amendments to the indenture governing the Notes, which is expected to be 5:00 p.m., New York City time, on June 1, 2006. The tender offer and consent solicitation are subject to the satisfaction of certain conditions, including the receipt of debt financing that, together with balance sheet and/or otherwise available cash, if necessary, is sufficient to fund the tender offer and consent solicitation on terms satisfactory to the Company in its sole discretion and the receipt of tenders from holders of a majority in principal amount of the outstanding Notes, and satisfaction of customary conditions. The complete terms and conditions of the tender offer and consent solicitation are described in the Offer to Purchase and Consent Solicitation Statement of the Company dated May 18, 2006, copies of which may be obtained by contacting the information agent for the offer: D.F. King and Co., Inc. Telephone (212) 269-5550 (collect) Toll Free (888) 542-7446 Banc of America Securities LLC and Wachovia Securities are the dealer managers and solicitation agents for the tender offer and consent solicitation. Additional information concerning the tender offer and consent solicitation may be obtained by contacting: Banc of America Securities LLC High Yield Special Products Telephone (704) 388-4813 (collect) Toll Free (888) 292-0070 or Wachovia Securities Liability Management Group Telephone (704) 715-8341 (collect) Toll Free (866) 309-6316 Headquartered in Stamford, Connecticut, Cenveo Corporation -- http://www.cenveo.com/-- is one of North America's leading providers of print and visual communications, with one-stop services from design through fulfillment. The company's broad portfolio of services and products include commercial printing, envelopes, labels, packaging and business documents delivered through a network of production, fulfillment and distribution facilities throughout North America. * * * As reported in the Troubled Company Reporter on April 25, 2006, Moody's Investors Service affirmed Cenveo Corporation's B1 Corporate Family rating; Ba3 rating of $300 million Senior Secured Credit Facility, due 2008; B1 rating of $350 million 9-5/8% Senior Unsecured Notes, due 2012; and B3 rating of $320 million 7 7/8% Senior Subordinated Notes, due 2013. The rating outlook is changed to negative from stable. COIN BUILDERS: Files Ch. 11 Plan of Reorganization in W.D. Wis. --------------------------------------------------------------- Coin Builders, LLC, delivered to the U.S. Bankruptcy Court for the Western District of Wisconsin its chapter 11 plan of reorganization and the disclosure statement explaining that plan on May 16, 2006. The Debtor's plan filing came a few days after its Official Committee of Unsecured Creditors sought for conversion of the case to a chapter 7 liquidation proceeding. Terms of the Plan The Debtor proposes to pay Wood County National Bank, a secured creditor, together with interest at the contractual rate, at $10,000 per month on the third day of each month until paid in full. The Debtor owes the Bank $650,000, as of March 1, 2006. Wood County National Bank will retain its lien; provided, however, that the debtor may return medallions to creditors or provide for the sale and segregation of proceeds of these medallions. The medallions promote athletes in basketball, baseball and football. Coin Builders was provided with an exclusive national distribution contract for these medallions. Holders of unsecured claims with claims arising from medallion sales or returns may elect to: (a) accept the same dollar amount of medallions as they had returned or sold in full satisfaction of their claims. This return would take place within 30 days after the effective date of the plan. Claims, which had violated the return policy, including those that had failed to properly market the medallions and those that had failed to pay according to the business terms for those medallions, will simply have their medallions for which payment had been made, returned. No credit is allowable for these creditors. (b) allow Coin Builders LLC to repackage and sell the medallions and place the proceeds in a segregated fund. From this fund, the costs of the repackaging and sale would be deducted, including shipping costs and tax. The balance from that sale would be available for distribution on a pro-rata basis to all medallion creditors. Distributions would take place after the sum of $10,000 had been accumulated in the account, but no more frequently than on a quarterly basis. This program will terminate after five years. No other distribution shall be made on account of these claims other than the monies derived from the segregated fund established. Creditors making this election should realize that there are 4,678,941 medallions currently in inventory at a suggested retail price value of $2.99 per medallion for a total retail value of $13,990,034. The inventory levels will be reduced by the return of medallions to creditors electing to receive a return of the medallions in lieu of participating in the repack or sale arrangement. Their return under this arrangement would vary based upon the success of the repack or sale arrangement and the number of creditors choosing to participate in this pool. Under no circumstance will the return the to the creditors under this election exceed the amount of their claim plus 5% simple interest. (c) In the event a creditor does not make an election, the creditor will be deemed to have elected the return of medallions in complete satisfaction of their claim. Holders of unsecured claims arising from other than medallion sales or returns will be paid from sales and profits generated. This will allow them to recoup 100% of their prepetition claims over a period of time. After operating expenses, taxes, and bank debt retirement, 50% of the net profit after tax of Coin Builders will be allocated to each creditor based on their prepetition claim. This distribution will be made on a quarterly basis, and a reserve will be held for estimated taxes to the extent that actual taxes have not yet been calculated for the affected quarter. Holders of equity interests will retain their stake in the Company. A full-text copy of the Disclosure Statement is available for a fee at: http://www.ResearchArchives.com/bin/download?id=060522040837 About Coin Builders Headquartered in Wisconsin Rapids, Wisconsin, Coin Builders, LLC -- http://www.coinbuilders.net/-- has four subsidiaries that operate in the merchandising, wholesale, restaurant, and aviation sectors. The Debtor filed for chapter 11 protection on September 26, 2005 (Bankr. W.D. Wis. Case No. 05-18109). George B. Goyke, Esq., at Goyke, Tillisch & Higgins LLP represents the Debtor in its restructuring efforts. Claire Ann Resop, Esq., at Brennan, Steil & Basting, S.C., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $1 million to $10 million and debts between $10 million to $50 million. COIN BUILDERS: Committee Wants Ch. 11 Case Converted to Ch. 7 ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Coin Builders, LLC's chapter 11 case asks the United States Bankruptcy Court for the Western District of Wisconsin to convert the case to a chapter 7 liquidation proceeding. Eliza M. Reyes, Esq., at Brenna, Steil & Basting, S.C., in Madison, Wisconsin, contends that the Debtor's operating reports indicate a continuing loss to or diminution of the Debtor's estate. It is unlikely that the Debtor can rehabilitate its business, she argues. Ms. Reyes adds that the Debtor failed to file a plan and disclosure statement even after seeking for extension of their exclusive periods twice. Two weeks after the Committee sought the conversion, the Debtor filed its plan and disclosure statement. Headquartered in Wisconsin Rapids, Wisconsin, Coin Builders, LLC -- http://www.coinbuilders.net/-- has four subsidiaries that operate in the merchandising, wholesale, restaurant, and aviation sectors. The Debtor filed for chapter 11 protection on September 26, 2005 (Bankr. W.D. Wis. Case No. 05-18109). George B. Goyke, Esq., at Goyke, Tillisch & Higgins LLP represents the Debtor in its restructuring efforts. Claire Ann Resop, Esq., at Brennan, Steil & Basting, S.C., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $1 million to $10 million and debts between $10 million to $50 million. COMM 2006-C7: S&P Puts Low-B Ratings on Six Certificate Classes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to COMM 2006-C7's $2.4 billion commercial mortgage pass-through certificates series 2006-C7. The preliminary ratings are based on information as of May 19, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: * the credit support provided by the subordinate classes of certificates; * the liquidity provided by the trustee; * the economics of the underlying loans; and * the geographic and property type diversity of the loans. Class A-1, A-2, A-3, A-AB, A-4, A-1A, A-M, A-J, B, and C are currently being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis the pool has: * a debt service coverage of 1.33x; * a beginning LTV of 102.2%; and * an ending LTV of 91.9%. Preliminary Ratings Assigned COMM 2006-C7 Preliminary Recommended credit Class Rating amount support ----- ------ ----------- ------------------ A-1 AAA $90,000,000 30.000% A-2 AAA $107,982,000 30.000% A-3 AAA $40,099,000 30.000% A-AB AAA $98,832,000 30.000% A-4 AAA $1,052,704,000 30.000% A-1A AAA $323,552,000 30.000% A-M AAA $244,739,000 20.000% A-J AAA $189,672,000 12.250% B AA $52,007,000 10.125% C AA- $24,474,000 9.125% D A $36,711,000 7.625% E A- $21,414,000 6.750% F BBB+ $30,593,000 5.500% G BBB $24,474,000 4.500% H BBB- $30,592,000 3.250% J BB+ $12,237,000 2.750% K BB $6,118,000 2.500% L BB- $9,178,000 2.125% M B+ $3,059,000 2.000% N B $6,119,000 1.750% O B- $9,177,000 1.375% P NR $433,652,352 0.000% X* AAA $2,447,385,352 N/A * Interest-only class with a notional amount NR -- Not rated N/A -- Not applicable COMPACT MANIFOLDS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Compact Manifolds International, Inc. 104 Row Three Lafayette, Louisiana 70508 Tel: (337) 233-5333 Bankruptcy Case No.: 06-50341 Type of Business: The Debtor manufactures and retails valves and fittings for home and industrial uses. Chapter 11 Petition Date: May 19, 2006 Court: Western District of Louisiana (Lafayette/Opelousas) Judge: Gerald H. Schiff Debtor's Counsel: Thomas E. Schafer, III, Esq. 328 Lafayette Street New Orleans, Louisiana 70130 Tel: (504) 522-0203 Fax: (504) 523-2975 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Technical Control Systems, Inc. $552,871 c/o Keith M. Borne, Esq. P.O. Box 435 Lafayette, LA 70502-4305 Quality Construction & Production LLC $169,114 P.O. Box 1139 Youngsville, LA 70592 New Century Fabricators, Inc. $162,000 2904 West Old Spanish Trail P.O. Box 9488 New Iberia, LA 70562-9488 Circor Energy Products $89,476 KF Industries, Inc. Guico Machine Works, Inc. $70,000 Jim Camel Specialty Co., Inc. $40,038 USA Fastener Group, Inc. $10,568 Diamond Grear Company $9,829 Gator Valve $8,765 Lormand Manufacturing LLC $2,894 Lafayette Threaded Products $2,075 The Gauge House, LLC $2,045 Rodney & Etter, LLC $1,300 Sprint $1,200 Saia Motor Freight Line, Inc. $1,049 Sam Broussard Trucking Co., Inc. $965 Arsement & Hayes, LLC $591 Bellsouth $400 Coastal Supply, Inc. $393 Shipping Etc. LLC $391 CONTINENTAL AIR: Moody's Places Corporate Family Rating at B3 ------------------------------------------------------------- Moody's Investors Service upgraded the Speculative Grade Liquidity rating of Continental Airlines Inc. to SGL-2 from SGL-3. Moody's also affirmed Continental's long term debt ratings. The outlook is stable. The upgrade of the SGL reflects a combination of strong unrestricted cash and short-term investment balances, better than expected operating cash flow, and the expectation that the company's improved cash flow generation should maintain its balance sheet liquidity while covering a meaningful portion of expected cash demands. Cash balances have been bolstered by a combination of non-fuel cost control, access to capital markets and a stronger revenue environment driven by both volume as well as better yield. However, cost containment measures have been somewhat offset by record level fuel costs. Since only a limited portion of the company's jet fuel needs are hedged, sustained high fuel expenses could put pressure on the company's cash flows and profitability. The SGL-2 rating also considers that Continental has few remaining assets that could be monetized. Should operating cash flows decline, the company has limited options for raising cash as substantially all of its assets were encumbered as of March 31, 2006, and it has no lines of credit available. The company could sell its remaining stakes in Copa Airlines Inc. and ExpressJet Holdings, Inc.; however, sale proceeds would produce only a minor amount. Moody's expects that Continental will remain in compliance with its financial covenants over the next twelve months related to both its credit card processing agreement and its $350 million loan secured by the assets of Continental Micronesia, Inc. The company's sizeable balance sheet cash liquidity is a major factor for the long term debt ratings, and the SGL-2 rating. Given Continental's debt maturities, pension contribution requirements, capital expenditures and possibly rising fuel costs, the ratings could come under pressure if balance sheet liquidity or cash flow were to significantly decline from anticipated levels. Improving the SGL rating will be dependent on the company's ability to continue to increase cash flow generation and balance sheet cash liquidity, continue to reduce costs and achieve steady profitability. Continental's B3 Corporate Family Rating and stable outlook reflects Moody's expectation of continued improvements in operating performance, financial credit metrics and continued reduction of non-fuel costs. Moody's anticipates further growth in the company's cash flows in FY 2006 which should be sufficient to meet all cash demands without meaningfully increasing its debt. Continental Airlines, Inc. is headquartered in Houston, Texas. COPA CASINO: Moody's Places B3 Rating on $230 Mil. Debt facility ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to first time issuer Copa Casino of Mississippi, LLC's proposed $230 million credit facilities consisting of a $185 million senior secured term loan due 2012 and a $45 million senior secured revolver due 2011, and a B3 corporate family rating. The ratings outlook is stable. Proceeds from the term loan, cash equity, cash flow generated from the initial expansion, and revolver borrowings will be used to fund the entire refurbishment, re-branding and expansion of the former Grand Casino Gulfport into the Gulfport Oasis Casino Resort. The initial refurbishment is expected to be completed by September 2006, while an expansion is slated for completion in March 2007. The B3 corporate family rating considers: (1) development and ramp-up risk related to the issuer's plan to refurbish and expand the former Grand Casino Gulfport property; (2) reliance on cash flow generated from the opening of Phase 1 to support completion of Phase 2 and the risk that if projected returns from Phase 1 fall short of expectations, the project's liquidity position could weaken; (3) management's limited experience developing and operating a hotel and casino property of this size; (4) the uncertainty regarding the future growth of the Mississippi Gulf Coast market in the aftermath of hurricane Katrina; and (5) similar to other gaming projects, high leverage during the first two years of operations. Positive ratings consideration is given to Moody's expectation that the Mississippi Gulf Coast market will recover, adequate liquidity for the project which includes a funded interest reserve through April 2007, a 15% budget contingency, and availability under the proposed $45 million senior secured revolving credit facility. The stable rating outlook reflects Moody's view that the Mississippi Gulf Coast market will recover to at least historic levels so that the cash flow generated from the opening of Phase 1 together with availability under the revolver will provide adequate liquidity to complete Phase 2. Copa Casino of Mississippi, LLC is a 75% owner of, through a subsidiary company called Gulfside Casino Partnership, the former Grand Casino Gulfport in Gulfport, Mississippi. The other 25% owner of Gulfside is Gulfside Casino, Inc. Both GCI and Copa have mutual owners. Currently, Copa is in the process of refurbishing the existing property and re-branding it as the Gulfport Oasis Casino Resort, which will have 1,020 slot machines, 14 table games and a 564 room hotel. Concurrent with the construction of the initial refurbishment, the company will undergo an expansion of the footprint and create a casino property with an additional 1,280 slot machines and 36 table games with an expected opening in April 2007. DANA CORP: Asks Court to Approve Sypris Settlement Agreement ------------------------------------------------------------ Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, Dana Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve their settlement agreement with Sypris Solution, Inc. Debtors Dana Corporation, Torque-Traction Manufacturing Technologies, LLC, and their nondebtor affiliate, Dana Heavy Axle Mexico, S.A. de C.V., have been parties to a series of contractual agreements and amendments with Sypris since 2001. In 2001, the Dana Companies sold to Sypris their interests in Marion Forge. In connection with that transaction, Dana and Sypris entered into an eight-year supply contract for axle shaft forgings and ring gear and pinion forgings previously produced by the Dana Companies at the Marion Forge facility. In 2003, Sypris purchased the Dana Companies' Morganton, North Carolina facility. In conjunction with that transaction, Dana and Sypris entered into another eight-year supply contract for the casting products that had previously been produced by the Dana Companies at that facility. In 2004, Sypris purchased the Dana Companies' Toluca, Mexico facility. In conjunction with this transaction, Dana and Sypris once again entered into an eight-year supply contract. Under the contract, Sypris was to supply Dana with large steer axle beams and other products. During the course of their relationship, Dana and Sypris entered into a number of amendments to the Supply Contracts. The terms of the amendments ranged from: -- adding additional parts to the Supply Contracts and establishing the prices of the added parts; to -- extending the term of the Marion Supply Contract through December 2014. Through the Supply Contracts, Sypris is Dana's single largest component supplier, accounting for over $120,000,000 in purchases for 2005, Corinne Ball, Esq., at Jones Day, in New York, relates. Temporary Payment Assurances Agreement In 2005, Sypris began to express concerns to Dana about its financial position. Based on those concerns, on December 15, 2005, the parties entered into a Temporary Payment Assurances Agreement. The TPAA was to run from December 19, 2005 through April 18, 2006 -- the probationary period -- subject to renewal for subsequent 120-day periods. The critical terms of the TPAA include: a. for the duration of the Probationary Period, Dana would pay Sypris on a weekly basis by ACH Transfer; b. Sypris agreed not to suspend Dana's trade credit before its Second Event of Default, which was Dana's failure to pay any invoice in accordance with Sypris' books and records within 45 days of the invoice date; c. any default of the TPAA would automatically extend the Probationary Period by 120 days; and d. Sypris agreed to provide Dana with weekly invoice registers and work in good faith with Dana to resolve any disputes. In February 2006, disputes between the parties arose regarding Sypris' claims that Dana had committed both a First and Second Event of Default under the TPAA. To temporarily resolve the outstanding disputes, in mid-February, Dana agreed to a reduction in payment terms from 62 days to 45 days. On March 2, 2006 -- the day before the Petition Date -- Sypris announced that it was eliminating all trade credit to Dana, and unless Dana agreed to pay for Parts on "cash-in-advance" terms, Sypris would not ship products to Dana's facilities. Sypris continued its refusal to supply Dana with Parts. Accordingly on March 6, 2006, the Debtors filed a notice of repudiating vendor with respect to Sypris. The Court conducted a hearing on the notice and the Debtors' oral motion for a temporary restraining order. Under an agreed TRO, the Court required Sypris, among other things, to restore the 45-day credit terms. Other Disputes Between the Parties Owing to the unique "buy-sell" relationship that exists between the Dana Companies and Sypris under the Supply Contracts, Dana was indebted to Sypris for approximately $22,000,000 in prepetition deliveries of goods and services Sypris was also indebted to Dana in excess of $12,000,000 for prepetition deliveries of goods and services. Owing to the complex set-off and recoupment issues raised by the parties' various relationships, the parties could not reach consensus on the validity or scope of those rights, Ms. Ball tells Judge Lifland. On April 27, 2006, Sypris filed a notice of its intent to implement certain of the proposed set-offs and recoupments. Furthermore, the parties have disagreed regarding the purchase of materials to be used in the production of Parts at Sypris' Morganton facility. While Sypris had historically purchased these materials from Dana's suppliers -- as opposed to the Marion Facility where Dana itself continued to purchase the materials after the sale of its facility to Sypris -- Sypris asserted that its payment of its own material suppliers somehow impacted the parties' relationship, Ms. Ball informs the Court. Settlement Agreement Recognizing the risks and costs associated with protracted litigation, the Dana Companies and Sypris negotiated a framework for the resolution of their disputes. As the parties were not able to bring those matters to a close, they engaged the assistance of the former bankruptcy judge James Garrity to serve as mediator. On May 10, 2006, the parties reached a final agreement. The key terms of the parties' settlement agreement are: a. Sypris and Dana will commit to supply each other with Parts and raw materials pursuant to the Supply Contracts. Dana will pay Sypris for Parts and Materials on 44-day ACH payment terms for goods purchased in the United States and on 20-day ACH payment terms for goods purchased in Mexico. Sypris will continue to pay Dana for Parts and Materials purchased from Dana on 59-day payment terms; b. The TPAA will be superseded by the Settlement Agreement, and Dana will release Sypris from any claims relating to actions taken by Sypris pursuant to the TPAA; c. Dana will assume the responsibility for purchasing materials for Sypris' Morganton facility, and the parties will use good faith efforts to facilitate the transfer of this function by May 15, 2006; d. Dana will pay Sypris $9,200,000 representing a partial payment of Sypris' administrative claim under Section 503(b)(9) of the Bankruptcy Code. The remainder of the claim will be paid after a reconciliation of the parties' books and records, and if necessary, an arbitration of those amounts; e. In the event of any insolvency, bankruptcy or liquidation of Dana Heavy Axle, Sypris will be entitled to administrative expense claim against the estates of Dana and TT Manufacturing for amounts owed by Dana Heavy Axle; f. Subject to the parties' reconciliation, Dana would agree that Sypris has valid and enforceable set-off or recoupment rights with respect to those amounts owed by Sypris to Dana for materials purchased prior to the Petition Date. After reconciliation, any additional amounts due and owing to or from Dana will be paid within five days, provided that any disputes regarding those amounts will be subject to binding arbitration; and g. The parties agree to default, notice and remedy provisions, and alternative dispute resolution procedures. 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. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000). DENNY'S CORP: March 29 Balance Sheet Upside-Down by $260 Million ---------------------------------------------------------------- Denny's Corporation filed its financial statements for the quarter ended March 29, 2006, on Form 10-Q with the Securities and Exchange Commission on May 8, 2006. The Company reported a $712,000 of net income on $247,985,000 of revenues for the three months ended March 29, 2006. At March 29, 2006, the Company's balance sheet showed $504,981,000 in total assets and $765,658,000 in total liabilities resulting in a stockholders' deficit of $260,677,000. The Company's working capital deficit was $74.9 million at March 29, 2006 compared with $85.6 million at Dec. 28, 2005. Full-text copies of the Company's financial statements for the quarter ended March 29, 2006, is available at no charge at: http://ResearchArchives.com/t/s?98c Headquartered in Spartanburg, South Carolina, Denny's Corporation -- http://www.dennys.com/-- is America's largest full-service family restaurant chain, consisting of 543 company-owned units and 1,035 franchised and licensed units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. DURATEK INC: Earns $3.2 Million in Three Months Ended March 31 -------------------------------------------------------------- Duratek, Inc., filed its financial statements for the quarter ended March 31, 2006, on Form 10-Q, with the Securities and Exchange Commission on May 8, 2006. The Company reported $3,232,000 of net income on $73,437,000 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $257,210,000 in total assets and $163,563,000 in total liabilities resulting in a stockholders' equity of $93,647,000. 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?98e Headquartered in Columbia, Maryland, Duratek, Inc. -- http://www.duratekinc.com/-- provides radioactive materials disposition and nuclear facility operations for commercial and government customers. The Company offers technologies, services and experience to safely, cost-effectively and securely handle radioactive materials disposition and environmental remediation. * * * Standard & Poor's Ratings Services placed its ratings on Duratek Inc. on CreditWatch with negative implications, including the 'BB-' corporate credit rating in February 2006. Moody's Investors Service also affirmed the ratings of Duratek, Inc., following Feb. 7, 2006's announcement of a definitive merger agreement providing for the acquisition of Duratek by EnergySolutions, formerly known as Envirocare of Utah, LLC. Moody's affirmed the B1 rating on the $30 million secured revolving credit facility due 2008; B1 rating on the $69 million secured term loan B due 2009; and B1 Corporate Family Rating. The ratings outlook remains stable. EASY GARDENER: Gets Court's Final Nod on $30 Million DIP Loan ------------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware gave Easy Gardener Products, Ltd., and its debtor- affiliates permission, on a final basis basis, to obtain postpetition secured loans of up to $30 million from LaSalle Business Credit LLC and LaSalle Bank National Association. The Debtors will use the proceeds of the LaSalle loans to: * pay their vendors and employees; * buy materials; and * maintain their business operations without interruption. Use of Cash Collateral Pursuant to the Court's final order, the Debtors are also authorized to use cash collateral securing repayment of their prepetition obligations to LaSalle and CapitalSource Finance LLC. CapitalSource holds a $18.6 million secured claim against the Debtors' assets pursuant to a Term Loan and Security Agreement signed on Oct. 29, 2003. To the extent that there is a diminution in the value of CapitalSource's prepetition term loan collateral, including, but not limited to the Term Loan Lender's cash collateral, resulting from any loss in market value, the Debtors grant CapitalSource: i) replacement liens and security interests on all of thier assets; and ii) a superpriority administrative expense claim, provided that all liens, security interest and superpriority administrative expense claims granted to CapitalSource are junior and subordinate to LaSalle's liens and rights. As adequate protection of its interests, the Debtors grant LaSalle a fully perfected first priority priming lien and security interest, senior to any and all liens or interests, on all of their assets. Easy Gardener Products, Ltd. -- http://www.easygardener.com/-- manufactures and markets a broad range of consumer lawn and garden products, including weed preventative landscape fabrics, fertilizer spikes, decorative landscape edging, shade cloth and root feeders, which are sold under various recognized brand names including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and Ross. The Company and four of its affiliates filed for bankruptcy on April 19, 2006 (Bankr. D. Del. Case Nos. 06-10393 to 06-10397). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP represent the Debtors in their restructuring efforts. Joel A. Waite, Esq., and M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for bankruptcy, they reported assets amounting to $103,454,000 and debts totaling $107,516,000. EASY GARDENER: Committee Wants to Hire Young Conaway as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the chapter 11 cases of Easy Gardener Products, Ltd., and its debtor- affiliates asks the U.S. Bankruptcy Court for the District of Delaware for permission to hire Young Conaway Stargatt & Taylor, LLP, as its counsel. The Committee believes that Young Conaway is qualified to represent it in an efficient and competent manner. Young Conaway's services will include: (a) assisting and advising the Committee in its consultation with the Debtors and the United States Trustee relative to the administration of the Debtors' chapter 11 cases; (b) reviewing, analyzing and responding to pleadings filed with the Court by the Debtors and other parties and participating in hearing in those pleadings; (c) assisting and advising the Committee in its examination and analysis of the conduct of the Debtors' affairs and financial condition; (d) assisting the Committee in the review, analysis and negotiation of the disclosure statement and accompanying plans of reorganizations and any asset distribution proposal or sale pleadings that may be filed; (e) taking all necessary action to protect the rights and interests of the Committee, including, but not limited to: (i) possible prosecution of actions on its behalf; (ii) if appropriate, negotiations concerning all litigations in which the Debtors are involved; (iii) if appropriate, review and analysis of claims filed against the Debtors' estates; (f) representing the Committee in connection with the exercise of its powers and duties under the Bankruptcy code and in connection with the Debtors' chapter 11 cases; (g) preparing on behalf of the Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; (h) assisting the Committee in the review, analysis and negotiation of any financing arrangements; and (i) performing all other necessary legal services in connection with the Debtors' chapter 11 cases. M. Blake Cleary, Esq., a partner at the firm, discloses to the Court that he charges $425 per hour for his services. He added that other lawyers serving in the Debtors' cases charge these rates. Joel A. Waite $500 Edward J. Kosmowski $365 Sanjay Bhatnagar $215 Melissa Bertsh $115 Mr. Cleary assures the Court that his firm and its professionals do not hold material interest adverse to the Debtors' estates and are "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Easy Gardener Products, Ltd. -- http://www.easygardener.com/-- manufactures and markets a broad range of consumer lawn and garden products, including weed preventative landscape fabrics, fertilizer spikes, decorative landscape edging, shade cloth and root feeders, which are sold under various recognized brand names including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and Ross. The Company and four of its affiliates filed for bankruptcy on April 19, 2006 (Bankr. D. Del. Case Nos. 06-10393 to 06-10397). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they reported assets amounting to $103,454,000 and debts totaling $107,516,000. EDISON MISSION: S&P Rates Proposed $1 Billion Senior Notes at B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to Edison Mission Energy's proposed $1 billion senior notes, due 2013 and 2018. Standard & Poor's also affirmed its 'B+' corporate credit ratings on EME and its wholly owned subsidiary Edison Mission Marketing and Trading. The outlook is positive. As of March 31, Irvine, California-based EME had $4.3 billion of recourse debt, including a $1.4 billion guarantee of the termination value of the Powerton/Joliet operating leases. In addition to the debt at EME, direct owner Mission Energy Holding Co. currently has $800 million of debt. 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, respectively. EME, an indirect, wholly owned subsidiary of Edison International, is an independent power producer with an ownership or leasehold interest in 20 operating power plants, of which EME's share of capacity is 9,066 MW. EME also owns EMMT, a power marketing and trading subsidiary and several other rated subsidiaries. MEHC is a holding company that owns all of the stock of EME. 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. The proposal mitigates the refinancing risk at EME, while adding substantial liquidity so the company can expand its hedging activities. 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 cause the outlook to be revised or the rating lowered. The current rating also anticipates that sufficient cash on hand will be retained and used to fully repay the MEHC debt and that Homer City Funding LLC successfully finances the necessary pollution control equipment. If wholesale markets remain strong, EME successfully pays down the MEHC debt, and diversifies its portfolio, the ratings could improve. EL POLLO: Moody's Rates Proposed $200 Million Debt Facility at B1 ----------------------------------------------------------------- Moody's Investors Service upgraded El Pollo Loco, Inc.'s corporate family rating to B1 from B3 and assigned B1 ratings to the company's proposed $200 million senior secured credit facility following the company's proposed initial public offering of shares of its common stock and planned refinancing of its existing debt. At the same time, the SGL-2 Speculative Grade Liquidity rating was affirmed. The outlook remains stable. The upgrade of the corporate family rating reflects the expected material reduction in leverage with debt-to-EBITDA declining from over 7 times at March 31, 2006 to approximately 5.4 times after the application of 100% of the expected IPO proceeds to reduce debt. In addition, the continuation of strong same store sales growth and the company's steady progress in expanding beyond its core market of southern California further support the B1 rating. Moody's previous rating action on El Pollo was November 1, 2005 when a B3 corporate family rating was assigned following Trimaran Capital Partners' proposed leveraged buyout of the company from American Securities Capital Partners. In conjunction with that recapitalization, Moody's assigned a B3 rating to the proposed senior secured credit facility and a Caa1 rating to the proposed senior unsecured notes. A SGL-2 Speculative Grade Liquidity rating was also assigned at that time. Rating upgraded with a stable outlook: * Corporate family rating to B1 from B3 Ratings assigned with a stable outlook: * B1 for the $175 million proposed senior secured term loan maturing in 2013 * B1 for the $25 million proposed senior secured revolver maturing in 2012 Ratings affirmed: * Speculative Grade Liquidity rating of SGL-2 * B3 for the $104.5 million senior secured term loan maturing in 2011 * B3 for the $25 million senior secured revolver maturing in 2010 * Caa1 for the $123.4 million senior unsecured notes maturing in 2013 Moody's expects to withdraw El Pollo's existing debt ratings which include the $104.5 million senior secured term loan B, the $25 million senior secured revolver and the $123.4 million senior unsecured notes upon the successful completion of the tender offers for these securities. El Pollo Loco Inc, headquartered in Irvine, California, is a leading quick-service restaurant chain specializing in flame- grilled chicken and other Mexican-inspired entrees. The company operated or franchised 340 restaurants at March 31, 2006 with locations primarily around Los Angeles and throughout the Southwest. Revenues for fiscal 2005 totaled $237 million. EL POLLO: S&P Assigns B+ Rating to Planned $200 Million Bank Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services expects to raise its corporate credit rating on Irvine, California-based El Pollo Loco Inc. to 'B+' from 'B' upon the successful completion of the company's planned IPO. The outlook will be stable. Ratings on El Pollo remain on CreditWatch, where they were placed with positive implications on May 9, 2006, after the company announced plans for a $135 million IPO. Standard & Poor's also assigned a 'B+' rating, same as the expected corporate credit rating, to the company's planned $200 million senior secured bank loan. A recovery rating of '2' is also assigned to the loan, indicating the expectation for substantial (80%-100%) recovery of principal in the event of a payment default. Proceeds from the IPO and bank loan will be used to repay debt, including the current bank loan, redeem notes, and pay a fee to Trimaran Capital to terminate its management agreement. "The expected upgrade will be based on reduced leverage, as total debt to EBITDA will decrease to about 5.5x from about 7.0x," said Standard & Poor's credit analyst Robert Lichtenstein. The ratings on El Pollo Loco reflect: * the company's small size in the highly competitive quick- service sector of the restaurant industry; * regional concentration; * reliance on a primary product; and * a still-highly leveraged capital structure. El Pollo Loco is a small player in the highly competitive quick-service chicken sector of the restaurant industry. EQUITY ONE: S&P Affirms One Security Class Rating at BB+ -------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on the class M-1 mortgage-backed securities issued by Equity One Mortgage Pass-Through Trust 2002-5. At the same time, ratings are affirmed on 103 classes from various Equity One Mortgage Pass-Through Trust transactions. The raised rating is based on good pool performance and the fact that the M-1 certificates are now the most senior certificates in the transaction. If performance deteriorated and a trigger event occurred, class M-1 would be in position to receive all principal payments. Currently there are no trigger events in effect, so the overcollateralization and subordination levels are stepping down. As of the April 2006 distribution date, projected credit support was 3.14x the credit support associated with the higher rating. The higher support percentage is a result of the shifting interest feature of the transaction. Cumulative losses currently are 1.43% of the original pool balance, and 90-plus-day delinquencies are 16.37% of the current pool balance. The affirmations on the non-bond-insured transactions reflect sufficient credit support to maintain the current ratings. The 90-plus-day delinquency levels (including REOs and foreclosures) in these pools range from 4.35% to 19.38% of the current pool balances, and cumulative net losses range from 0.13% to 2.25% of the original pool balances. The rating affirmations on the bond-insured transactions are based on the 'AAA' financial strength rating of Ambac Assurance Corp. Credit support for all of these transactions is provided through a combination of subordination, excess interest, and overcollateralization. Series 1999-1, 2000-1, 2001-1, 2001-2, 2001-3, and 2002-2 have additional support through the bond insurance policies provided by Ambac. The underlying collateral for these transactions consists primarily of fixed- and adjustable-rate 30-year mortgages on one- to four-family homes. The loans were originated or purchased by Equity One Inc. or its affiliates in accordance with guidelines that target borrowers with less-than-perfect credit histories. The guidelines are intended to assess both the borrower's ability to repay the loan and the adequacy of the value securing the mortgaged property. Rating Raised Equity One Mortgage Pass-Through Trust Rating Series Class To From ------ ----- -- ---- 2002-5 M-1 AA+ AA Ratings Affirmed Series Class Rating ------ ----- ------ 1999-1 A* AAA 2000-1 A-5*, A-6* AAA 2001-1 A*, A-IO* AAA 2001-2 AF-4*, AV-1* AAA 2001-3 AF-3*, AF-4*, AV-1* AAA 2002-1 AF-2*, AV-1 AAA 2002-1 M-1 AA 2002-1 M-2 A 2002-1 B BBB 2002-2 AF-3*, AF-4*, AV-1* AAA 2002-3 AF-4, AV-1 AAA 2002-3 M-1 AA 2002-3 M-2 A 2002-3 B-1 BBB+ 2002-3 B-2 BBB 2002-4 AF-4, AV-1A*, AV-1B AAA 2002-4 M-1 AA 2002-4 M-2 A 2002-4 B BBB 2002-5 M2 A 2002-5 B BBB 2003-1 AF-4, AV-1A, AV-1B AAA 2003-1 M-1 AA 2003-1 M-2 A 2003-1 B BBB 2003-2 AF-4, AF-5, AV-1 AAA 2003-2 M-1 AA 2003-2 M-2 A 2003-2 M-3 BBB+ 2003-3 AF-2, AF-3, AF-4, AV-1 AAA 2003-3 M-1 AA 2003-3 M-2 A 2003-3 M-3 BBB+ 2003-4 AF-3, AF-4, AF-5 AAA 2003-4 AF-6, AV-1, AV-2 AAA 2003-4 M-1 AA 2003-4 M-2 A 2003-4 M-3 A- 2003-4 M-4 BBB+ 2003-4 B-1 BBB 2003-4 B-2 BBB- 2004-1 AF-2, AF-3, AF-4, AF-5 AAA 2004-1 AF-6, AV-1, AV-2 AAA 2004-1 M-1 AA 2004-1 M-2 A 2004-1 M-3 A- 2004-1 M-4 BBB+ 2004-1 B-1 BBB 2004-1 B-2 BBB- 2004-2 AF-1, AF-2, AF-3, AF-4 AAA 2004-2 AF-5, AF-6, AV-1, AV-2 AAA 2004-2 M-1 AA 2004-2 M-2 A 2004-2 M-3 A- 2004-2 M-4 BBB+ 2004-2 B-1 BBB 2004-2 B-2 BBB- 2004-3 AF-1, AF-2, AF-3, AF-4 AAA 2004-3 AF-5, AF-6, AV-1, AV-2 AAA 2004-3 M-1 AA 2004-3 M-2 A 2004-3 M-3 A- 2004-3 M-4 BBB+ 2004-3 B-1 BBB 2004-3 B-2 BBB- 2004-3 B-3 BB+ * Bond-insured EXCO RESOURCES: Moody's Lowers Corp. Family Rating to B2 from B1 ---------------------------------------------------------------- Moody's Investors Service downgraded EXCO Resources, Inc.'s ratings, moving its Corporate Family Rating from B1 to B2 and its senior unsecured note rating from B2 to B3. The rating outlook is stable. This concludes a review for downgrade begun on August 29, 2005 when, after having sold its Canadian reserves at for a peak price and continuing its ongoing evaluation of strategic alternatives, EXCO formally announced a long series of strategic moves that Moody's expected to wind up in the B2 or B1 corporate family rating range. EXCO continues to evaluate frequent acquisition packages and the formation of a master limited partnership with certain of its reserves. Now that EXCO has presented its actual and pro-forma reserve data and first quarter 2006 numbers, it is clear that it will remain much too leveraged and much too active to warrant a B1 corporate family rating. The stable rating outlook could be quickly affected to the downside if leverage escalates with acquisitions to levels not compatible with the rating and if sequential quarter operating results do not reasonably conform to EXCO's expectations. Moody's will track overall sequential quarter operating results and management's ability to grow at costs, margins, and leverage suitable to the ratings. The outlook could also be negatively affected if EXCO spun-off assets into an MLP and used proceeds buyback stock in proportions incompatible with the ratings. The outlook could firm if performance meets expectations. To firm the ratings, EXCO's performance will need to reasonably meet expectations while leverage would need to rise only moderately through potential leveraged acquisitions. In the last 16 months, EXCO sold its Canadian reserves, executed a management-led buyout of its former private equity group, executed a highly leveraged acquisition, built a still larger business base with several smaller acquisitions, and executed its initial public offering this year. It emerges with high leverage on proven developed reserves, an aggressive acquisition posture, the intention to fund acquisitions with bank debt until its current large undrawn bank borrowing base is fully borrowed and therefore driving leverage still higher, a potential further restructure by spinning off its Appalachian reserves into an MLP within the next twelve months, and considerable uncertainty about the underlying performance of its large proportion of newly acquired properties, paid for at up- cycle prices. Nevertheless, Moody's believes EXCO management, while aggressive and always strategically active, is seasoned and likely to navigate such waters in a manner that will weigh the risks of cyclical oil and natural gas prices, over-paying and over- leveraging acquisitions, and running too long with a heavy capital structure reliance on comparatively volatile bank borrowing base debt. In October 2005, management conducted a $699.3 million equity buyout funded by a $350 million interim bank loan, $183.1 million of new private equity financing, and the exchange by management and other stockholders of EXCO Holdings capital stock for $166.9 of the new Holdings II common stock. Holdings II was subsequently merged into EXCO Holdings. In late September prior to the buyout, an affiliate of EXCO, TXOK completed the acquisition of ONEOK Energy for $642.9 million funded through $20 million in private debt financing, the issuance of $150 million of TXOK preferred stock to BP EXCO Holdings LP, $308 million of borrowings under the TXOK Credit facility and $200 million of borrowings under a TXOK term loan. EXCO recently completed a $662 million IPO with proceeds used to repay the $350 million interim bank loan, fund the $150 million redemption of TXOK preferred stock, and repay part of the TXOK credit facility and the entire TXOK term loan. Immediately prior to the IPO, EXCO Holdings was merged into EXCO Resources. With the completion of the IPO and the redemption of the $150 million of TXOK preferred stock, EXCO Holdings was merged into EXCO Resources and TXOK became a wholly-owned subsidiary of EXCO Resources. Per Moody's global ratings methodology for independent exploration and production firms, on historic pro-forma estimates, EXCO's operating, financial, and strategy profile maps to a weak B1 corporate family rating. However, it achieved the B1 mapping solely due to the effect of very high but cyclical natural gas prices that have subsequently fallen substantially. Otherwise, its production scale, diversification, leverage, and full-cycle cost structure combine to map to a B2 corporate family rating. Furthermore, uncertainty on true underlying production and reinvestment results plus our forward view on its performance, higher leverage, acquisition activity, and oil and natural gas prices also warrant a B2 rating. We also expect 2006 drillbit F&D to remain high, if not higher than 2005 levels. EXCO has reduced leverage with proceeds from its successful initial public offering but its leverage remains full for the rating and will rise with leveraged acquisitions after the recent largely debt-financed West Texas and Appalachian Basin acquisitions. Overall, EXCO also faces the task of demonstrating that operating performance from its property base is supportive of a B1 rating. EXCO's reserve scale and diversification largely map EXCO to a higher rating than the methodology's overall B2 rating as does a reasonable track recording of reserve replacement costs. Production remains very small at approximately 127 mmcfe/day based on current run-rate production, mapping to the Caa category. Leverage metrics map to the high end of the B category. Overall returns map to the A range but this is partially a result of a previous large cash outflow related to the termination of underwater hedges. Critical elements of the cost structure including finding and development and full cycle costs map to the Ba, B, and Caa ranges. The ratings are supported by improved leverage from prior to the IPO, fairly durable production; a very strong price environment; good management team; and by EXCO's scale along with some onshore diversification, and a large lower risk drilling inventory. The ratings are constrained by (i) uncertainty concerning full- cycle unit economics performance, (ii) the company's future operating performance given its ownership of the ONEOK assets, and (iii) a small production base. EXCO Resources, Inc. is headquartered in Dallas, Texas. FALCONBRIDGE LTD: Earns $238 Million for the Month of April 2006 ---------------------------------------------------------------- Falconbridge Limited reported April 2006 net income of $238 million, compared with April 2005 net income of $81 million. Revenues for the month of April of 2006 were $1,288 million, 94% higher than revenues of $663 million in the same month of 2005. "Falconbridge's performance for the month of April further demonstrates our leverage to strong metals prices," Derek Pannell, Chief Executive Officer of Falconbridge, said. "Our operations again capitalized on the higher prices with their strong performance. Our earnings leverage to current metals prices is creating the backdrop for impressive earnings and free cash flow generation. While we realize that the release of monthly results is unusual, and we will not make a habit of it, we felt it was important that shareholders understand the magnitude of the earnings that we are generating at this crucial time." Liquidity and Capital Initiatives Long-term debt was $2.5 billion at the end of April excluding preferred share liabilities. Falconbridge's net-debt-to- capitalization ratio stood at 32.8% at the end of April 2006, a reduction of almost 400 basis points since the end of 2005. For 2006, the Company's projected capital investments are approximately $315 million for sustaining capital expenditures and other smaller projects and approximately $435 million in new copper and nickel investments. Falconbridge maintains long-term credit arrangements and relationships with a variety of financial institutions and investors in order to facilitate its ongoing access to domestic and international financial markets to meet its funding needs. Falconbridge's future financial requirements related to debt maturities, operating costs, the projects currently under development and other capital investments will be funded primarily from a combination of existing cash balances, committed bank lines, operating cash flows, project financing and new long- and short-term borrowings. The Company's committed bank facilities, which expire in 2010, total $780 million. At April 30, 2006, these lines were essentially undrawn. Redemption of Junior Preference Shares Falconbridge reported its intention to redeem the remaining balance of its 9,999,701 outstanding Junior Preference Shares for a total of approximately $253 million. The Junior Preference Shares will be redeemed on June 28, 2006 under a notice of redemption to be sent to shareholders of record on May 25, 2006. Falconbridge intends to utilize its internal cash resources to fund the redemption and will have no Junior Preference Shares outstanding upon redemption. In accordance with the terms of the Junior Preference Shares, Falconbridge will redeem the remaining balance of shares of each series of the Junior Preference Shares as follows: 3,999,899 Junior Preference Shares, Series 1 (TSX: FAL.PR.X), 3,999,899 Junior Preference Shares, Series 2 (TSX: FAL.PR.Y), and 1,999,903 Junior Preference Shares, Series 3 (TSX: FAL.PR.Z). Each Junior Preference Share will be redeemed at a price of US$25.25 plus accrued and unpaid dividends for the period from and including March 31, 2006 to and including June 27, 2006. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited -- 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. FDL INC: Selling Substantially All Assets at May 30 Auction ----------------------------------------------------------- The Hon. Frank J. Otte of the U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis authorized the sale of substantially all of FDL, Inc.'s assets to the highest bidder at an auction. The Debtor will hold the auction at 9:00 a.m., on May 30, 2006, at Courtroom 329, U.S. Courthouse, 46 E. Ohio St. in Indianapolis, Indiana. During the auction, the Debtor and Fifth Third Bank, in consultation with the Official Committee of Unsecured Creditors, will select the winning and the back-up bidders. Fifth Third holds liens and security interests in all of the Debtor's assets to guarantee repayment of Revolving and Term Notes. As of Feb. 16, 2006, the Debtor owed Fifth Third: -- approximately $23.1 million, plus accrued and unpaid interest, on account of a Dec. 15, 2005, Revolving Note in the principal sum of $24.8 million; and -- approximately $1 million, plus accrued and unpaid interest, on account of a Dec. 15, 2005, Term Note in the principal sum of $1.14 million. Stalking Horse Bidder The Debtor received a stalking horse bid from FDL Acquisition Corp. A copy of the Asset Purchase Agreement governing the proposed sale of the Debtors' assets to Acquisition can be obtained from: The Clerk of the Bankruptcy Court Southern District of Indiana 116 Birch Bayh, U.S. Courthouse, 46 E. Ohio, P.O. Box 44978 Indianapolis, Indiana, 44978 Phone: (317)-229-3800 and Robert W. Leasure LS Associates, LLC Sales Agent 462 South 4th Street, Suite 1170, Louisville, Kentucky 40202 Phone: (502)-583-1945 Acquisition is entitled to a $125,000 break-up fee in the event that it is not the successful bidder at the auction. Any alternative bid should be at least $260,000 more than Acquisition's bid. All alternative bids must be submitted by 12:00 noon, on May 26, 2006, to LS Associates. A copy of the Auction and Bid Procedures for the Debtor's assets is available for a fee at: http://www.ResearchArchives.com/bin/download?id=060522040212 Headquartered in Kokomo, Indiana, FDL, Inc., manufactures office and fast food metal furniture. The company filed for Chapter 11 protection on March 24, 2006 (Bankr. S.D. Ind. Case No. 06-01222). Deborah Caruso, Esq., and Erick P. Knoblock, Esq., at Dale & Eke, P.C., represent the Debtor. Elliott D. Levin, Esq., at Rubin & Levin, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it did not state its assets but estimated debts between $10 Million and $50 Million. FDL INC: Court Approves Dale & Eke as Bankruptcy Counsel -------------------------------------------------------- The Honorable Frank J. Otte of the U.S. Bankruptcy Court for the Southern District of Indiana in Indianapolis granted FDL, Inc.'s request to hire Dale & Eke, P.C., as its bankruptcy counsel, effective from the date of first provision of legal services. As reported in the Troubled Company Reporter on April 11, 2006, Dale & Eke will: a. provide the Debtor counseling and legal advice with respect to its powers and duties as a debtor in a Chapter 11 proceeding; b. prepare on behalf of the Debtor the necessary petitions, pleadings, motions, notices, orders, applications, documents, reports and other legal documents as may be required throughout these proceedings; c. prepare on behalf of the Debtor its first day motions, attending hearings thereon, and preparing related documents; and d. perform all other legal services for the Debtor. The Firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Deborah J. Caruso, Esq. Attorney $350 Erick P. Knoblock, Esq. Attorney $275 Lana D. Harves Legal Assistant $75 Headquartered in Kokomo, Indiana, FDL, Inc., manufactures office and fast food metal furniture. The company filed for Chapter 11 protection on March 24, 2006 (Bankr. S.D. Ind. Case No. 06-01222). Deborah Caruso, Esq., and Erick P. Knoblock, Esq., at Dale & Eke, P.C., represent the Debtor. Elliott D. Levin, Esq., at Rubin & Levin, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it did not state its assets but estimated debts between $10 Million and $50 Million. FDL INC: U.S. Trustee Names China Export to Creditors Committee --------------------------------------------------------------- Nancy J. Gargula, the United States Trustee for Region 10, appointed China Export & Credit Insurance Corporation to the Official Committee of Unsecured Creditors in FDL, Inc.'s chapter 11 case. The Committee is now composed of: (1) China Export & Credit Insurance Corporation aka Sinosure Attn: Malhar S. Pagay, Esq. Pachulski Stang Ziehl Young Jones & Weintraub LLP 10100 Santa Monica Boulevard, 11th Floor Los Angeles, CA 90067 Tel: (310) 277-6910 Fax: (310) 201-0760 eFax: (603) 462-5486 (2) Noppandon Mingvanish Torch 2100 Co., Ltd. No. 99 Moo & Taboonme Khochan Sub District Chonburi 20240 Thailand United States Representative Steven Strum P. O. Box 780 Mamaroneck, NY 10543-0780 (3) Susan McCardell UPS Global Trade Finance Corp. 800 Red Brook Boulevard Owings Mills, MD 21117-1008 (4) Charlie Wen Mean Young Universal Co., Ltd. c/o 2, Shang YI TS'US, TA BAY Hisiang, Yun Lin Hsien, 631 Taiwan United States Representative Steven Strum P.O. Box 780 Mamaroneck, NY 10543-0780 (5) Dianna Lynn Gustin Cole, Esq. Cole & Baer, LLP 108 North Main Street John M. Studebaker Building, Suite 322 South Bend, IN 46601 (6) Deborah Caruso, Esq. Erick P. Knoblock, Esq. Dale & Eke 9100 Keystone Crossing, Suite 400 Indianapolis, IN 46240-2159 (7) Martha R. Lehman, Esq. Krieg Devault LLP 1 Indiana Square, Suite 2800 Indianapolis, IN 46204-2079 (8) Sean T. White, Esq. Hoover Hull Baker & Heath 111 Monument Circle, Suite 4500 Indianapolis, IN 46204 (9) Ken Ho, Vice-President Excellent Tripod Co., Ltd. XiaoBian Village, ChangAn Town, DongGuan City, GuangDong Province, China 523852 (10) Ada Chen, Sales Manager King Technology B.V.I. Inc. Jinghe Industrial Area . Zhang Mu Tou Dongguan City, Guang-Dong, China (11) Millon Tsai Fusco Industrial Corporation 7F, No. 352, Sec. 1, FU Hsing S. Road Taipei 10640, Taiwan R.O.C. (12) Gregory Chang, Sales Manager ZhongShan QingYi Metal Products DingXi Village, ShenWan Town Zhong-Shan City, Guang-Dong Province, China 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 Kokomo, Indiana, FDL, Inc., manufactures office and fast food metal furniture. The company filed for chapter 11 protection on March 24, 2006 (Bankr. S.D. Ind. Case No. 06-01222). Deborah Caruso, Esq., and Erick P. Knoblock, Esq., at Dale & Eke, P.C., represent the Debtor. Elliott D. Levin, Esq., at Rubin & Levin, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it did not state its assets but estimated debts between $10 million and $50 million. FEDERAL-MOGUL: Acquires Majority Stake in Goetze India ------------------------------------------------------ Federal-Mogul Corporation (OTC Bulletin Board: FDMLQ) disclosed the acquisition of additional shares to own the majority stake of its long-standing joint venture, Goetze (India) Limited (GIL), a publicly traded leading supplier of automotive pistons, rings, liners, pins and sintered products. The transaction, which increases Federal-Mogul's share in GIL to 50.1 percent, supports the Company's growth strategy by expanding its presence in India, a key market for its global automotive products and aftermarket business. "Federal-Mogul's increased investment in GIL is a key part of our strategy to drive global profitable growth by providing our leading technology, and world-class quality products and services in India, one of the most dynamic and growing economies," said Federal-Mogul Chairman, President and Chief Executive Officer Jose Maria Alapont. "Developing best-cost capabilities and increasing our manufacturing footprint in India will enable us to better serve both new and existing customers in domestic and global markets." Headquartered in New Delhi, Federal-Mogul's GIL business has three operations in India - located in Patiala, Bangalore and Bhiwadi -- with nearly 5,000 employees. The Indian market leader in pistons and piston rings, GIL supplies all major Indian original equipment manufacturers in the automotive, heavy-duty, motorcycle, industrial and agricultural markets, in addition to a variety of aftermarket customers. GIL's 2005 net sales exceeded INR4.3 billion (more than $96.8 million USD at an exchange rate of 44.4 INR/USD). "Federal-Mogul's technology, global manufacturing, and distribution expertise, combined with GIL's high-quality, best- cost capabilities, result in a world-class automotive supplier with significant opportunities for future market and product development," said GIL's Non-Executive Chairman Anil Nanda. He added, "Federal-Mogul's investment in GIL recognizes the commitment of the employees and the market leading products they manufacture." Federal-Mogul's other businesses in India include a wholly owned Champion(R) brand ignition manufacturer and other joint ventures supplying powertrain products. These businesses, including GIL, employ nearly 7,000 people in India. About Federal-Mogul Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some US$6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed US$10.15 billion in assets and US$8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. (Federal-Mogul Bankruptcy News, Issue No. 108; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOAMEX INTERNATIONAL: Amends $80 Million Loan with Silver Point --------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Foamex L.P. discloses that it amended its Term Loan B Agreement with Silver Point Finance, LLC, effective as of May 12, 2006. The Credit Agreement was amended to: (a) reduce the interest rate payable on the term loan; (b) add a leverage ratio financial covenant; and (c) modify certain test amounts in the minimum EBITDA financial covenant. Specifically, the amendments include: (1) Foamex LP covenant with Silver Point that EBITDA will be not less than: Fiscal Period Maximum EBITDA ------------- -------------- one month ending Oct. 30, 2005 $3,900,000 two months ending Dec. 4, 2005 7,950,000 three months ending Jan. 1, 2006 5,800,000 four months ending Jan. 29, 2006 8,250,000 five months ending Feb. 26, 2006 11,750,000 six months ending April 2, 2006 16,250,000 seven months ending April 30, 2006 45,104,000 eight months ending May 28, 2006 53,944,000 nine months ending July 2, 2006 56,426,000 ten months ending July 30, 2006 61,710,000 eleven months ending Aug. 27, 2006 67,970,000 twelve months ending Oct. 1, 2006 79,942,000 twelve months ending Oct. 29, 2006 83,593,000 twelve months ending Dec. 3, 2006 78,733,000 twelve months ending Dec. 31, 2006 75,644,000 twelve months ending Jan. 28, 2007 76,100,000 twelve months ending Feb. 25, 2007 77,700,000 (2) Foamex further covenants with Silver Point that the leverage ratio will not be greater than: Date Leverage Ratio ---- -------------- April 30, 2006 2.50 : 1.00 May 28, 2006 2.25 : 1.00 July 2, 2006 2.25 : 1.00 July 30, 2006 2.25 : 1.00 August 27, 2006 2.25 : 1.00 October 1, 2006 2.25 : 1.00 October 29, 2006 2.25 : 1.00 December 3, 2006 2.25 : 1.00 December 31, 2006 2.25 : 1.00 January 28, 2007 2.25 : 1.00 February 25, 2007 2.25 : 1.00 (3) Applicable Margin means: (a) prior to May 12, 2006, -- with respect to Base Rate Loans and all other Obligations (other than LIBOR Rate Loans), 8.0%, and -- with respect to LIBOR Rate Loans, 10.0%. The Applicable Margin will be increased by 0.75% per annum if, commencing with the fiscal quarter of the Loan Parties ended January 1, 2006, the EBITDA of the Loan Parties for the immediately preceding 12-month period is less than $58,000,000; and (b) on and after May 12, 2006, -- with respect to Base Rate Loans and all other Obligations (other than LIBOR Rate Loans), 3.375%, and -- with respect to LIBOR Rate Loans, 5.375%. The Bank of America, N.A., as Administrative Agent, and the Majority Lenders consent to the amendment of the Term Loan B Agreement provided that the consent will be in effect only until July 1, 2006, unless before that time, Foamex L.P., the Guarantors, the requisite Lenders, and Bank of America have entered into an amendment to the Credit Agreement, which provides for: (a) the inclusion into the Credit Agreement of: -- the leverage ratio financial covenant; and -- an immediate Event of Default if that leverage ratio financial covenant will be breached; and (b) the amendment and restatement of the minimum EBITDA financial covenant in the Credit Agreement to be consistent with the current amendments. A full-text copy of the Amendment to Term Loan B is available for free at http://researcharchives.com/t/s?99a About Foamex Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) FRANKLIN PIERCE: Moody's Downgrades Debt Rating to Ba3 From Ba1 --------------------------------------------------------------- Moody's Investors Service downgraded Franklin Pierce College's debt rating to Ba3 from Ba1. The rating action affects $48.4 million of rated debt, including the College's Series 1994, 1998, and 2004 bonds issued through the New Hampshire Higher Education and Health Facilities Authority. The Series 1998 and 2004 bonds, totaling $44 million of outstanding debt, are insured by ACA Financial Guaranty Corporation. Moody's does not rate ACA Financial Guaranty Corporation. The rating action reflects the College's currently limited financial flexibility within a highly competitive student market environment. The rating outlook is stable at the lower rating level. Payment of the Series 1994 bonds is a general obligation of the College, further secured by a first security interest in Gross Receipts, a security interest in all Equipment, and a mortgage lien on the Facility. Payment of the Series 1998 and Series 2004 bonds is a general obligation of the College, further secured by a first security interest in Gross Receipts, a security interest in all Equipment, a mortgage lien on the Facility, as well as debt service reserve funds. Debt-Related Rate Derivatives: none Strengths * Growing full-time equivalent enrollment at the College's main Rindge campus in fall 2005 and moderately improved freshmen selectivity. * Consistently increasing net tuition per student and total tuition revenue, a critical credit factor as the College relies on student charges for nearly 93% of its operating base. * Capital investment of nearly $25 million in the Rindge campus from 2002 to 2007, which should enhance the attractiveness of campus and ability to attract students. * Expected support from the State of New Hampshire for financial aid endowment, and capital campaign expected to be launched soon. Challenges * Limited financial reserves provide little financial flexibility and drive need to consistently generate positive operating cash flow; debt service coverage thin but adequate at 1.3 times. * Highly competitive market for students both at the main campus and in adult education programs; overall enrollment has declined due to drops in continuing education and degree-completion programs offered at the College's satellite campuses. * Moderate amount of private gift flow, with $1.5 million of average gift revenue over the past three years, in part due to the College's young alumni body; this number excludes over $1million of annual federal grant revenue. * High degree of leverage and need to grow operating cash flow to support increasing debt service; reliance on bank line of credit for cash needs adds a risk element. Recent Developments/Results: The primary driver of the rating downgrade is the College's limited financial flexibility as it continues to implement strategic initiatives to stabilize overall enrollment in a highly competitive market. While enrollment at the main campus in Rindge, NH has been growing, the College has experienced enrollment challenges in degree-completion and continuing education programs offered at satellite campuses. As a result, total enrollment declined to 2,254 full-time equivalent students in fall 2005. Management is focused on further growing higher profitability graduate programs including a new Doctor of Arts program starting in fall 2006 and a proposed nursing program working in conjunction with a New Hampshire hospital. Some of these programs have already shown increases. The College's ability to stabilize enrollment levels, grow net tuition per student, and improve annual operating cash flow would be positive credit factors. The College's very thin balance sheet leaves it with fairly limited flexibility given this competitive environment and relatively high debt load, with $56 million of outstanding direct debt. Franklin Pierce is in the early stages of a capital campaign which will have a component geared toward endowment growth; however, the College's fundraising has historically been modest. The College expects that the State will make a contribution to the endowment to be used for financial aid for New Hampshire residents. The College's operating performance has weakened moderately over the past two years, in large part due to expense increase, including a 9% jump in FY 2005, which management attributes largely to increased utility, healthcare, and depreciation expenses. An operating cash flow margin of 9.8% in FY2005 provided thin but adequate actual debt service coverage of 1.3 times. However, additional growth in cash flow will be necessary to absorb maximum debt service. Principal payments on the Series 1998 bonds are postponed until 2008, and the Series 2004 bonds do not begin to amortize until 2030. Management is expected a tight operating year again in FY2006. Favorably, the College has been able to consistently grow total tuition revenue, a key indicator as 93% of the College's revenues are derived from student charges. The College relies on a $5 million line of credit and draws from the quasi-endowment to meet seasonal cash flow needs. If a default occurs under the line of credit, the bank may accelerate the maturity of the line of credit, making it immediately due and payable. The line is secured by the College's accounts held at the bank, which do not include the quasi-endowment. Outlook The stable outlook reflects our expectation that the College will generate positive cash flow in the near-term and that operating cash flow will adequately cover debt service over the next two years. Balance sheet deterioration or weakening of annual debt service coverage could place further pressure on the College's debt rating longer-term. What could change the rating-UP * Successful execution of strategic enrollment plans leading to stronger operating performance and debt service support What could change the rating-DOWN * Financial resource deterioration; additional borrowing; tightening of operating cash flow and debt service coverage Key Indicators * Total Full-Time Equivalent Enrollment: 2,254 FTE enrollment * Total Financial Resources: $4.6 million * Direct Debt: $55.9 million * Expendable Financial Resources-to-Debt: 0.05 times * Expendable Financial Resources-to-Operations: 0.07 times * Average Operating Margin: -1.6% * Average Debt Service Coverage: 1.6 times * Reliance on Student Charges: 92.6% Rated Debt: * Series 1994: Ba3 * Series 1998: Ba3 (insured by ACA) * Series 2004: Ba3 (insured by ACA) FREMONT HOME: DBRS Puts BB Rating on $3 Million NIM Notes --------------------------------------------------------- Dominion Bond Rating Service assigned new ratings of A (low), BBB (low), BB, and B (high) to these NIM Notes issued by Fremont CI-6. * Fremont CI-6 $28.0 million, NIM Notes, Series 2006-1, Class N1 New Rating A (low) * Fremont CI-6 $6.0 million, NIM Notes, Series 2006-1, Class N2 New Rating BBB (low) * Fremont CI-6 $3.0 million, NIM Notes, Series 2006-1, Class N3 New Rating BB * Fremont CI-6 $3.0 million, NIM Notes, Series 2006-1, Class N4 New Rating B (high) The NIM Notes are backed by a 100% interest in the Class C and Class P Certificates issued by Fremont Home Loan Trust 2006-1. The Class C Certificates will be entitled to all excess interest in the Underlying Trust, and the Class P certificates will be entitled to all prepayment premiums or charges received in respect of the mortgage loans. The NIM notes will also be entitled to the benefits of the underlying interest rate swap agreement and an interest rate cap agreement with HSBC Bank USA, N.A. Payments on the NIM Notes will be made on the 25th of each month commencing in May 2006. The interest payment amount will be distributed sequentially to the holders of Class N1 through N4 Notes, followed by the principal payment amount to the holders of Class N1 through N4 Notes until the note balance of such class has been reduced to zero. Any remaining amounts will be distributed to the Issuer, the Indenture Trustee, and holders of Preference Shares. The mortgage loans in the Underlying Trust were all originated or acquired by Option One Mortgage Corp. FURNAS COUNTY: Court Dismisses Chapter 11 Bankruptcy Proceedings ---------------------------------------------------------------- The Honorable Timothy J. Mahoney of the U.S. Bankruptcy Court for the District of Nebraska dismissed Furnas County Farms' chapter 11 case at the Debtor's request. The Debtor has liquidated substantially all of their assets. All of the property of the estate has been sold for less than the amounts necessary to fully satisfy the secured creditors' claims. Joseph H. Badami, Esq., at Woods & Aitken LLP, in Lincoln, Nebraska, informed the Court that the Debtor and its secured creditors have reviewed potential additional claims held by the Debtors, all of which are collateral for the loans of the secured creditors, and have determined that no other claims should be pursued at this time. The Debtors and the secured lenders have determined that the most expeditious manner in which to conclude the bankruptcy cases is through dismissal of its proceedings. The Debtor holds cash on hand which is the cash collateral of the secured lender banks. After the payment of all expenses, including but not limited to attorneys fees and expenses, United States Trustee's fees and other expenses of the Debtors, the balance of the cash collateral remaining will be paid to Sun Trust Bank, as agent for the secured bank lenders. Headquartered in Columbus, Nebraska, Furnas County Farms operated the largest swine operations in Nebraska, South Dakota and Iowa. The Company, along with its affiliates, filed for chapter 11 protection (Bankr. D. Neb. Case No. 04-81489) on May 3, 2004. James Overcash, Esq., and Joseph H. Badami, Esq., at Woods & Aitken, LLP, represent the Debtors. When the Debtor filed for protection from its creditors, it listed over $50 million in estimated assets and over $100 million in estimated liabilities. GATEHOUSE MEDIA: Plans to Raise $762 Million to Fund Acquisitions ----------------------------------------------------------------- GateHouse Media, Inc., plans to raise approximately $762 million in a first lien institutional term loan and a secured bridge loan to refinance its existing credit facility and fund the purchase of CP Media and Enterprise NewsMedia, two Massachusetts based community newspaper operators. The transaction will consist of a $40 million revolving credit facility, $570 million first lien institutional term loan and a $152 million secured bridge loan. Wachovia Securities and Goldman Sachs are serving as joint lead arrangers and joint bookrunners in connection with the Credit Facilities. CP Media, Inc., a subsidiary of Herald Media, Inc., publishes 4 daily, 92 non-daily and 25 shoppers and specialty publications serving 140 communities surrounding Boston. Its largest daily newspaper is the Metrowest Daily News with daily circulation of around 25,000 and Sunday circulation of approximately 32,000. Enterprise NewsMedia Holding, LLC, publishes 2 daily and 11 non-daily newspapers in 13 communities south of Boston. The combined circulation of its 2 daily newspapers, The Patriot Ledger and Enterprise is approximately 88,000, with Sunday circulation of approximately 106,000. Upon the closing of these acquisitions, Downers Grove, Ill.-based GateHouse Media, Inc., will be one of the largest community newspaper companies in the United States publishing 77 daily newspapers, 271 non-daily newspapers and 136 shoppers and other publications, with operations in 17 states. The acquisitions are subject to regulatory approval and other customary conditions to closing. * * * As reported in the Troubled Company Reporter on May 11, 2006, Standard & Poor's Ratings Services revised its outlook on GateHouse Media Operating Inc., fka Liberty Group Operating Inc., to negative from stable. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'B+' corporate credit rating. GATEHOUSE MEDIA: Moody's Assigns Low-B Rating on $762MM of Loans ---------------------------------------------------------------- Moody's Investors Service has assigned a B1 rating to GateHouse Media Operating, Inc.'s proposed senior secured first lien credit facilities. In addition, Moody's has downgraded GateHouse's Corporate Family rating to B2 from B1. Details of the rating action are as follows: GateHouse Media Operating, Inc. Ratings assigned: * Proposed $40 million senior secured first lien revolving credit facility, due 2013 -- B1 * Proposed $570 million senior secured first lien term loan facility, due 2013 -- B1 * Proposed $152 million senior secured second lien term loan facility, due 2014 -- B3 Rating downgraded: * Corporate Family rating -- to B2 from B1 The rating outlook is stable. All ratings of Liberty Group Operating, Inc., have been withdrawn to reflect the name change and proposed refinancing. The downgrade of the Corporate Family rating largely reflects the incremental debt burden and heightened leverage which Moody's expects will result from GateHouse's proposed debt-funded acquisition of CP Media, Inc. and Enterprise NewsMedia Holding, LLC. In addition, the ratings reflect GateHouse's declining circulation trends, the geographic concentration of its operations in Massachusetts, rising newsprint costs, and the limited growth potential of the newspaper publishing industry. The ratings are supported by the defensibility of GateHouse's community newspaper model, the longstanding reputation of its newspaper titles, and barriers to competitive entry due the inability of most of its small rural markets to support more than one local newspaper. Moody's estimates that at closing, the company's leverage will increase to approximately 8.7 times debt to EBITDA from 6.3 times at the end of December 2005 based on Moody's standard global adjustments. However, Moody's estimates that GateHouse should be able to reduce its leverage to under 7.5 times debt to EBITDA by the end of 2007 through modest top line growth, the elimination of non-recurring expenses and cost-saving synergies. The stable ratings outlook reflects the relative steadiness of GateHouse's business model and the absence of any meaningful debt maturities prior to 2013, following the conclusion of the proposed financing. A near-term rating upgrade is unlikely as ratings are already testing the tolerance of the B2 rating floor. However, a downgrade could result if the company is unable to demonstrate that it is on track to reduce leverage to below 7.5 times by the end of 2007, according to Moody's standard global adjustments. The B1 rating on the proposed senior secured first lien facilities reflects Moody's view that first lien lenders can look to adequate recovery prospects in a downside scenario. Both the first lien loan facilities and the second lien loan facility will be secured by a pledge of substantially all the stock and assets of the company and its subsidiaries. The B3 rating on the second lien term loan reflects the subordination of second lien lenders' security interests on GateHouse's assets and stock behind those of approximately $610 million of first lien debtholder priority claims. However, according to the proposed terms and conditions, lenders under the $152 million second lien term loan will (1) be repaid from any proceeds from an IPO, and (2) receive a pledge of a capital call agreement between FIF III Liberty Holdings, LLC and GateHouse Media, Inc. According to the terms of the capital call agreement, in the event of a default, GateHouse Media, Inc. shall have the right to require FIF III Liberty Holdings, LLC to purchase additional common stock in GateHouse Media, Inc. in an amount equal to outstandings under the second lien term loan. In order to satisfy its obligations under the capital call agreement, FIF III Liberty Holdings, LLC is dependent upon the contractual performance of its owners to provide sufficient capital on a several basis. The owners of FIF III Liberty Holdings LLC comprise several equity fund partnerships associated with Fortress Investment Group LP. Moody's rating of the second lien term loan is subject to a satisfactory review of documentation and legal opinion, including legal opinion affirming the enforceability of the capital call agreement. In Moody's opinion, the proposed capital call agreement provides second lien lenders with a more complex and less certain assurance of repayment compared to an unconditional and irrevocable payment guarantee from the fund members. Moody's notes that the second lien facility will mature at the earlier of eight years from closing or 91 days prior to the date the capital call rights expire or can no longer be exercised. Headquartered in Downers Grove, Illinois, GateHouse Operating, Inc. is a leading US publisher of local newspapers and related publications. In 2005, the company recorded sales of $205 million. GENESIS HEALTHCARE: Faces Nasdaq Delisting Due to Late 10-Q Filing ------------------------------------------------------------------ Genesis HealthCare Corporation received a NASDAQ Staff determination letter dated May 17, 2006, indicating that GHC is not in compliance with the filing requirements for continued listing as set forth in Marketplace Rule 4310(c)(14) because GHC has not yet filed its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2006. As a result, GHC is subject to potential delisting from The NASDAQ Stock Market. On May 19, 2006, GHC requested a hearing before a NASDAQ Listing Qualifications Panel to appeal the NASDAQ Staff's determination, which request will stay the delisting until the appeal has been heard and the Panel has rendered its decision. Pending a decision by the Panel, GHC will remain listed on The NASDAQ Stock Market. The delay in filing GHC's Form 10-Q for the second fiscal quarter was the result of GHC's determination that the pending restatement of its historical consolidated financial statements will also reflect the consolidation of certain joint-venture arrangements in which it has an ownership interest and provides management services. GHC does not anticipate that the consolidation will have any significant impact to the financial condition, liquidity or underlying profitability of the Company. Such consolidation has no impact to previously provided earnings per share guidance for fiscal 2006. GHC is working diligently to consolidate the entities with its wholly owned subsidiaries in order to file its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2006 on or before May 30, 2006. Upon filing its Form 10-Q, GHC anticipates that it will be in compliance with Market Place Rule 4310(c)(14). GHC will also amend and restate its Form 10-K for the fiscal year ended Sept. 30, 2005 as soon as possible. About Genesis HealthCare Corporation Based in Kennett Square, Pa., Genesis HealthCare Corporation -- http://www.genesishcc.com/-- is one of the nation's largest long- term care providers with over 200 skilled nursing centers and assisted living residences in 12 eastern states. GHC also supplies contract rehabilitation therapy to over 650 healthcare providers in 18 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Feb. 20, 2006, Moody's Investors Service upgraded the ratings for Genesis HealthCare Corporation, moving the corporate family rating to Ba3 from B1 and the $154 million outstanding 8% senior subordinated notes to B2 from B3. Moody's also assigned a Ba2 rating to the company's amended and restated $125 million revolving credit facility. The outlook for the ratings is stable. GLAZED INVESTMENTS: Court OKs $3.5M DIP Loan & Cash Collateral Use ------------------------------------------------------------------ The Honorable Pamela S. Hollis gave Glazed Investments, LLC, permission, on a final basis, to borrow up to $3.5 million from Krispy Kreme Doughnut Corporation and to use cash collateral securing repayment to the Debtor's obligations to U.S. Bank National Association. Proceeds from the DIP loan and the cash collateral will be used to maintain postpetition business relationships with vendors, suppliers and customers, and to satisfy other working capital needs pending consummation of a sale of substantially all of the Debtor's assets. When the Debtor filed for bankruptcy, its loan to U.S. Bank amounted to $5.758 million. The Debtor also owes General Electric Capital Business Asset Funding Corporation around $4.725 million. The Debtor's obligations to GE are secured by liens on the leasehold improvements and the equipment at several of the Debtors' stores. GE's liens are senior to the liens granted to U.S. Bank for those stores. KKDC guarantees 33% of the Debtor's obligation under the GE Promissory Notes. The Debtor also owes American National Bank $648,000. The Debtor's obligations to ANB are secured by a lien on the Debtor's leasehold improvements and equipment at the Colorado Springs store. ANB's liens are senior to the liens granted on that store to US Bank. KKDC guarantees 97% of the Debtor's obligations under the ANB Loans. Judge Hollis granted KKDC perfected first priority security interests in and liens on all of the Debtor's assets. U.S. Bank is also granted replacement lien to the same extent, validity and priority as its prepetition lien. About Glazed Investments, LLC Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, operated 20 franchise locations of Krispy Kreme. Krispy Kreme owns 97% of the Debtor. The Debtor filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). Daniel A. Zazove, Esq., at Perkins Coie LLP represents the Debtor in its restructuring efforts. Elizabeth E. Richert, Esq., and Steven R Jakubowski, Esq., at Robert F. Coleman & Associates represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $28,599,346 in assets and $32,953,785 in debts. GLIMCHER REALTY: Expects $270MM from Sale on Five Mall Properties ---------------------------------------------------------------- Glimcher Realty Trust plans to sell five of its regional mall properties. In connection with these plans, the Company entered into an exclusive listing agreement with Eastdil Secured Broker Services, Inc. to market and sell the assets. The Company expects total consideration, net of expenses, to be approximately $250 million to $270 million from the sales. The five malls to be sold include: * Almeda Mall -- Houston, Texas * Eastland Mall -- Charlotte, North Carolina * Montgomery Mall -- Montgomery, Alabama * Northwest Mall -- Houston, Texas * University Mall -- Tampa, Florida "Aggressively selling non-core assets is a central part of our strategy to upgrade the overall quality of our real estate," Michael P. Glimcher, President and CEO, stated. "We would expect to redeploy the sales proceeds into our redevelopment program, acquisition of new higher income growth assets and selective ground-up development of premium retail properties." Primarily as a result of the Company's mall disposition plans, Glimcher also expects to recognize non-cash impairment charges of approximately $49 million during the second quarter of 2006. If the asset sales are not completed at estimated pricing levels, future adjustments to the impairment charges could be required. "Even with the initial recognition of the non-cash impairment charges, we are anticipating an overall net gain of $10 to $30 million on the sale of the five properties," Mark E. Yale, Exec. VP and CFO, stated. 2007 Outlook The Company's expectations for 2007 are based on these key factors and assumptions: * an increase in same-mall net operating income of 3.5% to 4.5%; * lease termination income and out-parcel sales of $3.25 million to $4.25 million in 2007; * general and administrative expenses of $16 to $17 million for the year; * approximately $100 million of acquisitions through the Company's Joint Venture with OMERS Realty Corporation; * $90 to $100 million of capital investment related to new development and redevelopment projects within the existing mall portfolio; * $18 million of recurring capital expenditures and tenant allowance/improvements; and * an average 25 basis point increase in LIBOR during 2007. About Glimcher Headquartered in Columbus, Ohio, Glimcher Realty Trust (NYSE: GRT) -- http://www.glimcher.com/-- a real estate investment trust, is a recognized leader in the ownership, management, acquisition and development of regional and super-regional malls. Glimcher Realty Trust's common shares are listed on the New York Stock Exchange under the symbol "GRT." Glimcher Realty Trust's Series F and Series G preferred shares are listed on the New York Stock Exchange under the symbols "GRT.F" and "GRT.G." Glimcher Realty Trust is a component of the Russell 2000 Index, representing small cap stocks, and the Russell 3000 Index, representing the broader market. * * * Moody's Investors Service's assigned a B1 preferred stock rating to Glimcher Realty Trust on August 2004. Standard & Poor's assigned a BB long-term foreign and local issuer credit rating to Glimcher Realty Trust on Sept. 2004. GOODING'S SUPERMARKETS: Water Tower Wants to Join Creditors' Panel ------------------------------------------------------------------ Water Tower Retail, LLC, asks the U.S. Bankruptcy Court for the Middle District of Florida to direct the U.S. Trustee for Region 21 to appoint the Company as an additional creditor to the Official Committee of Unsecured Creditors in Gooding's Supermarkets, Inc.'s chapter 11 case. Paul H. McLester, Esq., at Brown, Garganese Weiss & D'Agresta P.A., tells the Court that the Debtor is the single largest source of income for Water Tower. The Debtor is the anchor tenant, who occupies 31% of leasable space at Water Tower Place at Celebration, a real property in Osceola County, Florida. The U.S. Bankruptcy Code provides that the Court may order the U.S. Trustee to appoint a small business concern if the Court determines that the creditor holds claims the aggregate amount of which, in comparison to the annual gross revenue of that creditor, is disproportionately large. Water Tower clearly meets this test as the Debtor represents its largest single source of income, Mr. McLester points out. Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc., dba Gooding's, offers catering services and operates a chain of supermarkets in Central Florida. The Company filed for chapter 11 protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No. 05-17769). R. Scott Shuker, Esq., at Gronek & Latham LLP represents the Debtor. W. Glenn Jensen, Esq., at Akerman Senterfitt represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets of $1 million to $10 million and debts of $10 million to $50 million. GRAFTECH FINANCE: Moody's Affirms B2 Rating on $450 Mil. Notes -------------------------------------------------------------- Moody's Investors Service changed the rating outlooks of GrafTech International Ltd. and GrafTech Finance, Inc. to negative from stable in response to the company's consistently negative free cash flow, high leverage, and anticipated cost pressures. While GrafTech is experiencing strong demand from the steel and aluminum industries, and has been able to raise product prices, its financial performance has not met Moody's expectations. Even in the midst of very strong steel and aluminum markets, GrafTech still expects to have negative free cash flow in 2006. Moving into 2007, Moody's is concerned about the potential for dramatically higher calcined petroleum coke costs due to tight global supplies. This may further delay the generation of positive cash flow and the reining in of leverage, making the company vulnerable to a downturn in end-market demand. GrafTech's ratings, including its B1 corporate family rating, remain unchanged. Ratings affirmed for GrafTech: i) B1 corporate family rating, ii) B2 for the $225 million of 1.625% convertible debentures due 2024, iii) SGL-2 speculative grade liquidity rating. Ratings affirmed for GrafTech's special purpose financing vehicle, GrafTech Finance, Inc.: i) Ba3 for the guaranteed senior secured revolving credit facility, ii) B2 for the $450 million of 10.25% Global Notes due 2012. Despite price increases and numerous restructuring and cost saving initiatives, GrafTech is still not profitable and very likely will have negative free cash flow in 2006, for the sixth year in a row. This will raise debt, which was $835 million at March 31, 2006, compared to $586 million at the end of 2003. Debt rose by $60 million in 1Q06, in large part to support higher working capital, which typically rises in the first quarter as higher graphite electrode prices kick in. For the rest of 2006, realized graphite electrode prices are not likely to rise as GrafTech is essentially sold out at fixed prices. In 2007, the cost of needle coke, which is a petroleum refining byproduct, is expected to rise again in response to tight global supplies and higher energy prices. Therefore, much is riding on GrafTech's ability to offset higher needle coke and energy costs with price increases in 2007. While that may be possible, given the profitability of GrafTech's steel and aluminum customers, there is no reason to assume a correlation between energy costs and metal markets. Given these concerns, GrafTech's high debt levels and the maturity of the current economic upcycle, Moody's believes a negative rating outlook is warranted at this time. GrafTech's long-term debt ratings are supported by its significant market share for graphite and carbon electrodes, strong demand from the steel and aluminum industries, its market and production- base diversity, and good liquidity. Moody's last rating action on GrafTech was in November 2004, when we affirmed, with a stable outlook, the current ratings and assigned a Ba3 rating to its new credit facility. GrafTech International Ltd., headquartered in Parma, Ohio, is a leading global manufacturer of graphite and carbon electrodes, cathode blocks, and other graphite and carbon products. GREYSTONE HOLDINGS: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Greystone Holdings, Ltd. 1034 South Commerce Street Las Vegas, Nevada 89106 Bankruptcy Case No.: 06-11085 Chapter 11 Petition Date: May 22, 2006 Court: District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: William A. Hustwit, Esq. 7231 South Eastern Avenue, B-181 Las Vegas, Nevada 89119 Tel: 353-1200 Fax: 304-1015 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million The Debtor does not have any creditors who are not insiders. GULF COAST: Gets Court's Interim Order on MTGLQ DIP Loan -------------------------------------------------------- The Honorable Barbara J. Houser of the U.S. Bankruptcy Court for the Northern District of Texas gave Gulf Coast Holdings, Inc., interim permission to borrow $270,859 from MTGLQ Investors, L.P., and to use cash collateral securing repayment of the Debtor's prepetition debt to MTGLQ. When the Debtor filed for bankruptcy, it owed MTGLQ approximately $9,142,419. A portion of the debtor-in-possession loan will be reserved to pay professionals appointed in the Debtor's bankruptcy case. Approximately $95,000 is reserved for Hughes & Luce and $26,000 for CRP LLC. The proceeds of the DIP Loan and the cash collateral will be used pursuant to a budget presented in Court. A copy of the Budget is available for free at http://ResearchArchives.com/t/s?993 The Court granted MTGLQ perfected first priority claims and priming liens on the Debtor's asset pursuant to the DIP Loan. MTGLQ holds superpriority administrative claims and all other benefits and protections allowable under Sections 507(b) and 503(b)(1) of the Bankruptcy Code, senior in right to all other administrative claims against the estate, including its prepetition claim. MTGLQ, as a prepetition lender, is granted replacement lien to the same extent, validity and priority as the prepetition lien. Judge Houser will consider giving final approval for the Debtor's DIP loan and cash collateral requests during a hearing on May 25, 2006. Headquartered in Conroe, Texas, Gulf Coast Holdings, Inc., field for bankruptcy protection on April 28, 2006 (Bankr. N.D. Tex. Case No. 06-31695). Daniel I. Morenoff, Esq., and Jeffrey R. Fine, Esq., at Hughes & Luce, LLP, represent the Debtor in its restructuring efforts. Jaime Myers, Esq., at Myers Winstead, Sechrest & Minick, P.C., represents the Official Committee of Unsecured Creditors. In its schedules filed with the Court, the Debtor reported assets amounting to $18,258,575 and debts totaling $19,553,664. HEALTHTRONICS INC: Earns $1.2 Million in 2006 First Fiscal Quarter ------------------------------------------------------------------ HealthTronics, Inc., filed its first quarter financial statements for the three months ended March 31, 2006, on Form 10-Q with the Securities and Exchnage Commission on May 11, 2006. The Company earned $1,273,000 of net income on $64,453,000 of total revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $482,034,000 in total assets, $207,251,000 in total liabilities, $33,248,000 in minority interests, and $243,535,000 in total stockholders' equity. "The first quarter 2006 top line revenue met our expectations. We will continue to focus on improving our operating margins across all three business segments: Urology Services, Medical Device Sales & Services and Specialty Vehicles," John Q. Barnidge, HealthTronics' senior vice-president & chief financial officer commented. "We have deployed several Revolix systems to date and the response from our urology partners has been extremely positive in comparison to the current technology available," Christopher B. Schneider, urology division chief operating officer said. "They like the front-end firing mode of the laser as well as other unique features not offered on current BPH laser devices. In addition to the clinical benefits, the economics of the Revolix are clearly more favorable than those associated with the KTP laser technology. The improved economics will benefit our physician partners and our growing prostate treatment business." "The Revolix produces a wave length that is absorbed by water rather than hemoglobin which provides more consistent vaporization as compared to a KTP type laser," Kenneth Blunt, M.D., Medical Director who is managing the Revolix clinical demonstrations, stated. "Also, the Revolix is a continuous wave laser as opposed to the less efficient pulsed method of a holmium type laser which some believe is less efficient. This continuous wave creates a cleaner, smoother application to the soft tissue or gland." A full-text copy of the Company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?992 Headquartered in Austin, Texas, HealthTronics, Inc. -- http://www.healthtronics.com/-- provides healthcare services primarily to the Urology community, and manufactures and distributes medical devices. The Company also manufactures specialty vehicles used for the transport of high technology medical devices, broadcast & communications equipment and the Homeland Security marketplace. * * * As reported in the Troubled Company Reporter on April 7, 2006, Moody's Investors Service placed HealthTronics, Inc.'s ratings under review for possible downgrade following the company's announcement on March 31, 2006, that its financial statements should be restated. Moody's rates HealthTronic's corporate family rating at Ba3; $50 million senior secured revolving credit facility due 2010 at Ba3; and $125 million senior secured term loan B due 2011 at Ba3. HEALTHTRONICS INC: Sam B. Humphries Appointed as President & CEO ---------------------------------------------------------------- The Board of Directors of HealthTronics, Inc., appointed, on May 19, 2006, Sam B. Humphries as the Company's President and Chief Executive Officer effective on May 11, 2006. Mr. Humphries resigned from Uroplasty, Inc., as President and Chief Executive Officer, which he served since January 2005. He was previously a partner of Ascent Medical Technology Fund, L.P., a venture capital fund founded in 1995. Mr. Humphries has over 25 years experience in the healthcare and medical device industry, including serving as President and Chief Executive Officer of American Medical Systems, Inc., a publicly traded manufacturer of medical devices primarily for the urology market. Mr. Humphries serves on the Board of Directors of Uroplasty, Inc., Criticare Systems, Inc. and Universal Hospital Services, Inc. HealthTronics, Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchnage Commission on May 11, 2006. The Company earned $1,273,000 of net income on $64,453,000 of total revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $482,034,000 in total assets, $207,251,000 in total liabilities, $33,248,000 in minority interests, and $243,535,000 in total stockholders' equity. Headquartered in Austin, Texas, HealthTronics, Inc. -- http://www.healthtronics.com/-- provides healthcare services primarily to the Urology community, and manufactures and distributes medical devices. The Company also manufactures specialty vehicles used for the transport of high technology medical devices, broadcast & communications equipment and the Homeland Security marketplace. * * * As reported in the Troubled Company Reporter on April 7, 2006, Moody's Investors Service placed HealthTronics, Inc.'s ratings under review for possible downgrade following the company's announcement on March 31, 2006, that its financial statements should be restated. Moody's rates HealthTronic's corporate family rating at Ba3; $50 million senior secured revolving credit facility due 2010 at Ba3; and $125 million senior secured term loan B due 2011 at Ba3. HEARTLAND PARTNERS: Hires Shaw Gussis as Bankruptcy Counsel ----------------------------------------------------------- Heartland Partners, LP, and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Northern District of Illinois to retain Shaw Gussis Fishman Glantz Wolfston & Towbin LLC, as their bankruptcy counsel. Shaw Gussis is expected to: a. give the Debtors legal advice with respect to their rights, powers and duties as debtors-in-possession in connection with the administration of their estates and disposition of their property; b. take action as necessary with respect to claims that may be asserted against the Debtors and property of their estates; c. prepare applications, motion, complaints, orders and other legal documents as may be necessary in connection with the appropriate administration of the Debtors' cases; d. represent the Debtors with respect to inquiries and negotiations concerning creditors of their estates and property of their estates; e. initiate, defend or otherwise participate on behalf of the Debtors in all proceedings before the bankruptcy court or any other court of competent jurisdiction; and f. perform any and all other legal services on behalf of the Debtors which may be required to aid in the proper administration of their estates. The Debtors tell the Court that members at the firm bill between $380 to $525 per hour, while associates bill between $220 to $325 per hour. Steven B. Towbin, Esq., a member at Shaw Gussis, assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Towbin can be reached at: Steven B. Towbin, Esq. Shaw Gussis Fishman Glantz Wolfson & Towbin LLC 321 North Clark Street, Suite 800 Chicago, Illinois 60610 Tel: (312) 276-1333 Fax: (312) 275-0569 http://www.shawgussis.com/ Headquartered in Chicago, Illinois, Heartland Partners, LP, (Amex: HTL) is a based real estate limited partnership with properties, primarily in the upper Midwest and northern United States. CMC Heartland is a subsidiary of Heartland Partners, L.P. and is the successor to the Milwaukee Road Railroad, founded in 1847. The company and four of its affiliates filed for chapter 11 protection on Apr. 28, 2006 (Bankr. N.D. Ill. Case No. 06-04764). Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed total assets of $4,375,000 and total debts of $3,951,000. The Debtors' consolidated list of 20 largest unsecured creditors however showed more than $30 million in environmental litigation claims. HEARTLAND PARTNERS: Section 341(a) Meeting Scheduled for June 6 --------------------------------------------------------------- The U.S. Trustee for Region 11 will convene a meeting of Heartland Partners, LP, and its debtor-affiliates' creditors at 3:00 p.m., June 6, 2006, at 227 West Monroe Street, Room 3330 in Chicago, Illinois. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Chicago, Illinois, Heartland Partners, LP, (Amex: HTL) is a based real estate limited partnership with properties, primarily in the upper Midwest and northern United States. CMC Heartland is a subsidiary of Heartland Partners, L.P. and is the successor to the Milwaukee Road Railroad, founded in 1847. The company and four of its affiliates filed for chapter 11 protection on Apr. 28, 2006 (Bankr. N.D. Ill. Case No. 06-04764). Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed total assets of $4,375,000 and total debts of $3,951,000. The Debtors' consolidated list of 20 largest unsecured creditors however showed more than $30 million in environmental litigation claims. HERBST GAMING: Moody's Puts Low-B Rating on Sr. Sub. Debt & Loan ---------------------------------------------------------------- Moody's Investors Service placed Herbst Gaming, Inc.'s B1 corporate family rating, B3 senior subordinated debt rating, and B1 senior secured bank loan rating on review for possible upgrade based on continued revenue, cash flow, and liquidity improvement as well as the company's growing asset profile. The review for possible upgrade also considers that Herbst has been mapping to a higher rating category according to the risk factors and metrics outlined in Moody's Global Gaming Methodology, and may continue to do so depending on the company's future operating, growth and financial plans. The decision to place Herbst on review for possible upgrade also considers the company's recent announcement that it entered into a definitive merger agreement to acquire 100% of the outstanding common stock of The Sands Regent for $15 per share. The total purchase price is approximately $148 million, or about 8.4x EBITDA. The Sands Regent owns four casinos in Nevada: the Sands Regent located in downtown Reno; Rail City Casino located in Sparks; The Gold Ranch Casino and RV Park located in Verdi; and the Dayton Depot and Red Hawk Sports Bar located in Dayton. Once the merger is complete, The Sands Regent will become a wholly-owned subsidiary of Herbst. The merger is expected to close late in 2006. A key consideration with respect to a possible upgrade includes an evaluation of Herbst's growth and financial strategy going forward given Moody's expectation that the company will continue to pursue small to moderate sized acquisitions, as well as an evaluation of its operating plans with respect to The Sands Regent casino properties. An upgrade is not contingent upon the successful closing of this merger. Moody's expects to make a ratings decision within the next 60 days. Moody's previous rating action on Herbst took place on Nov. 4, 2004 with the assignment of a B3 rating to the company's $170 million 7% senior subordinated notes due 2014 and a B1 rating to its $275 million senior secured amended and restated bank credit facility effective Oct. 8, 2004. Proceeds from the bank facility and note offering were used to fund the acquisition of Grace Entertainment. Herbst Gaming, Inc. is an established slot route operator in Nevada with over 8,400 slot machines and owns and operates eight casinos in Nevada, Missouri and Iowa. Net revenues for the latest 12-month period ended Mar. 31, 2006 were $555 million. HOST HOTELS: Buying Westin Kierland Resort for $393 Million ----------------------------------------------------------- Host Hotels & Resorts, Inc. entered into an agreement to acquire The Westin Kierland Resort & Spa in Scottsdale, Arizona, from The Kierland Resort Company, LLC, a Delaware limited liability company comprising affiliates of: * Woodbine Development Corporation of Dallas, Texas; * the Herberger Interests of Phoenix/Scottsdale, Arizona * Cook Inlet Region, Inc., of Anchorage, Arkansas; and * Starwood Hotels & Resorts Worldwide, Inc. of White Plains, New York. The resort, which opened in November 2002, is situated on 252 acres of fee simple property and features 732 guestrooms, including 63 suites and 32 casita units, a 27-hole golf course and a full-service spa. The hotel has approximately 70,000 square feet of indoor meeting space, including a 24,600-square foot ballroom, and over 100,000 square feet of outdoor function space. Christopher J. Nassetta, president and chief executive officer, stated, "We are thrilled to be acquiring this recently constructed, world-class asset in the Phoenix/Scottsdale market, which is a strong growth market in which we have been seeking greater representation." The purchase price is approximately $393 million and includes the assumption of $135 million of existing debt with an interest rate of approximately 5.08%. The hotel's Earnings Before Interest Expense, Taxes, Depreciation and Amortization (EBITDA) for the first 12 months of ownership is forecast to be approximately $32 million (EBITDA equals forecasted GAAP operating profit of approximately $21 million plus depreciation expense of approximately $11 million). The purchase is subject to customary closing conditions and is expected to close during the third quarter of 2006. Molinaro Koger represented the seller on this transaction. About Host Hotels & Resorts Host Hotels & Resorts, Inc., (NYSE: HST - News) -- http://www.hosthotels.com/-- is a lodging real estate company that currently owns or holds controlling interests in 129 luxury and upper upscale hotel properties primarily operated under premium brands such as Marriott(R), Westin(R), Sheraton(R), Ritz- Carlton(R), Hyatt(R), W(R), Four Seasons(R), St. Regis(R), The Luxury Collection(R), Fairmont(R), Hilton(R) and Swissotel(R). * * * As reported in the Troubled Company Reporter on April 25, 2006, Standard & Poor's Ratings Services placed its ratings on Host Hotels & Resorts Inc., including the 'BB-' corporate credit rating, on CreditWatch with positive implications. IKON OFFICE: S&P Affirms BB Rating & Revises Outlook to Stable -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Malvern, Pennsylvania based IKON Office Solutions Inc., and revised the outlook to stable from negative. The outlook revision reflects Standard & Poor's expectation that IKON will sustain recent improvements in profitability and leverage. "The rating reflects IKON's lack of revenue growth; improved, but still somewhat high leverage for the rating; and mature, highly competitive industry conditions," said Standard & Poor's credit analyst Martha Toll-Reed. These factors partly are offset by: * IKON's good position as the leading independent office equipment distributor; * significant recurring revenue base; and * adequate liquidity. In the quarter ended March 31, 2006, IKON reported total revenues of $1.08 billion, down 1% from the prior-year period. More positively, revenues from targeted, continuing operations increased 3% year-over-year. Nevertheless, Standard & Poor's expects revenue growth will continue to be challenged by highly competitive industry conditions and the analog-to-digital transition in IKON's installed equipment base (which the company expects will be substantially complete by late 2007 or early 2008). In March 2004, IKON divested its U.S. leasing business, but retained a portfolio of U.S. leasing assets, as well as its European leasing business, which is relatively modest in size and not expected to grow materially. As a result of the maturing retained U.S. portfolio, annual gross profits from financing operations have declined steeply over the past two years. In April 2006, IKON completed the sale of substantially all of its remaining U.S. lease portfolio. Standard & Poor's excluded finance gross profits from our calculation of adjusted EBITDA, and excluded debt supporting finance contracts from our calculation of core debt. Prospectively, this adjustment will not be material to the rating agency's profitability and leverage calculations. The current rating incorporates the expectation that cost- reduction and restructuring actions will result in nonfinancing operating performance improvement over the near term, even in the absence of revenue growth. Last 12 months' EBITDA margins -- excluding finance income -- of about 5.3% remain weak for the rating, but have trended up over the past nine months. Adjusted EBITDA is expected to continue to show quarterly improvement on a year-over-year basis through fiscal 2006. Pro-forma for the completion of IKON's tender offer for its 7.25% notes due 2008, adjusted debt to EBITDA will be about 3.8x, down from 5.1x as of fiscal 2005. The current rating incorporates the expectation that IKON will maintain adjusted debt to EBITDA below 4x. J.L. FRENCH: Can Lend Up to $1.2 Million to Ansola Foreign Unit --------------------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware gave J.L. French Automotive Castings, Inc., and its debtor-affiliates permission to lend funds to their non- debtor affiliate J.L. French Ansola, S.R.L. Judge Walrath clarified that the loan should not exceed $1.2 million and the total loan extended to all of the Debtors' foreign subsidiaries and J.L. French Automotive Castings China Holdings LLC should not exceed $3 million. As reported in the Troubled Company Reporter on April 13, 2006, the Court allowed the Debtors to advance funds to J.L. French Automotive Castings China Holdings LLC, a non-debtor affiliate. The Debtors told the Court that the funds will be used to capitalize China Holdings' foreign-equity joint venture with Chonqing Yujiang Die Casting Co., Ltd., and Chongqing Liangjiang Machine Manufacture Co., Ltd. Yujiang is a die-casting company and Lianjiang is a machining company, both currently do the bulk of their business supplying China's motorcycle original equipment manufacturers. Headquartered in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc. -- http://www.jlfrench.com/-- is one of the world's leading global suppliers of die cast aluminum components and assemblies. There are currently nine manufacturing locations around the world including plants in the United States, United Kingdom, Spain, and Mexico. The company has fourteen engineering/customer service offices to globally support our customers near their regional engineering and manufacturing locations. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. Ricardo Palacio, Esq., and William Pierce Bowden, Esq., at Ashby & Geddes, PA, represents the Official Committee Of Unsecured Creditors. When the Debtor filed for chapter 11 protection, it estimated assets and debts of more than $100 million. JEREMIAH AGUOLU: Involuntary Chapter 11 Case Summary ---------------------------------------------------- Alleged Debtor: Jeremiah Aguolu, M.D. 8500 South Figueroa Street, Suite 109 Los Angeles, California 90003 Case Number: 06-12117 Involuntary Petition Date: May 22, 2006 Chapter: 11 Court: Central District Of California (Los Angeles) Judge: Samuel L. Bufford Petitioners' Counsel: Edgar L. Borne, III, Esq. 6025 South Verdun Avenue Los Angeles, California 90043 Tel: (323) 295-9562 Fax: (323) 295-5049 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Roger Brown Contract $26,459 8500 South Figueroa Street Suite 202 Los Angeles, California 90003 Alvin Brown Agreement $14,586 8500 South Figueroa Street Suite 202 Los Angeles, California 90003 KL INDUSTRIES: Taps Shaw Gussis as Bankruptcy Counsel ----------------------------------------------------- KL Industries, Inc., asks the U.S. Bankruptcy Court for the Northern District of Illinois for permission to retain Shaw Gussis Fishman Glantz Wolfston & Towbin LLC, as its bankruptcy counsel. Shaw Gussis will: a. give the Debtors legal advice with respect to its rights, powers and duties as debtor-in-possession in connection with the administration of its estates and disposition of its property; b. take action as necessary with respect to claims that may be asserted against the Debtor and property of its estates; c. prepare applications, motion, complaints, orders and other legal documents as may be necessary in connection with the appropriate administration of the Debtor's case; d. represent the Debtor with respect to inquiries and negotiations concerning creditors of their estates and property of their estates; e. initiate, defend or otherwise participate on behalf of the Debtor in all proceedings before the bankruptcy court or any other court of competent jurisdiction; and f. perform any and all other legal services on behalf of the Debtor which may be required to aid in the proper administration of its estates. The Debtors tell the Court that members at the firm bill between $380 to $525 per hour, while associates bill between $220 to $325 per hour. Steven B. Towbin, Esq., a member at Shaw Gussis, assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Towbin can be reached at: Steven B. Towbin, Esq. Shaw Gussis Fishman Glantz Wolfson & Towbin LLC 321 North Clark Street, Suite 800 Chicago, Illinois 60610 Tel: (312) 276-1333 Fax: (312) 275-0569 http://www.shawgussis.com/ Headquartered in Addison, Illinois, KL Industries, Inc., manufactures springs, assemblies and other products for the automotive and electronic markets. The Company does business as KL Spring & Stamping Division, KL Spring Division, KL Stamping Division, KL Assembly Division and American Metal Forming Division. The Company filed for bankruptcy protection on May 2, 2006 (Bankr. N.D. Ill. Case No. 06-04882). Peter J. Roberts, Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC represent the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy protection, it reported assets totaling between $1 million and $10 million and debts amounting between $10 million to $50 million. KL INDUSTRIES: U.S. Trustee Appoints Seven-Member Committee ----------------------------------------------------------- The U.S. Trustee for Region 11 appointed seven creditors to serve on an Official Committee of Unsecured Creditors in KL Industries, Inc.'s chapter 11 case: 1. Metals USA Specialty Metals Northcentral, Inc. 3000 Shermer Road Northbrook, Illinois 60062 Representative: Joseph F. Petz 2. Great Lakes Specialty Metals 3955 Commerce Drive St. Charles, Illinois 60174 Representative: Michael Dyer 3. Idola Fori Design LLC 17197 North Laurel Park Drive #572 Livonia, Michigan 48152 Representaitve: Maninder Kaushal 4. Erickson Tool Mfg. 47 West Commercial Drive Addison, Illinois 60101 Representative: Michael J. Morrisne 114 South Bloomingdale Road Bloomingdale, Illinois 60108 5. Tandem Metals Inc. 1149 South Central Avenue University Park, Illinois 60466 Representative: Raymond Feeley 575 West Exchange Street Crete, Illinois 60417 6. Industrial Steel & Wire 1901 North Narragansett Chicago, Illinois 60639 Representative: Wayne Bennett 7. Gibbs Wire and Steel Co. Inc. Mario Izzo P.O. Box 520 Southington, CT 06489 Representative: Evan S. Goldstein Reid and Riege, P.C. One Financial Plaza Hartford, CT 06103 The Committee has selected David W. Wirt, Esq., and Mindy D. Cohn, Esq., at Winston & Strawn LLP, as its counsel. 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 Addison, Illinois, KL Industries, Inc., manufactures springs, assemblies and other products for the automotive and electronic markets. The Company does business as KL Spring & Stamping Division, KL Spring Division, KL Stamping Division, KL Assembly Division and American Metal Forming Division. The Company filed for bankruptcy protection on May 2, 2006 (Bankr. N.D. Ill. Case No. 06-04882). Peter J. Roberts, Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC represent the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy protection, it reported assets totaling between $1 million and $10 million and debts amounting between $10 million to $50 million. L & M VIDEO: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: L & M Video Productions, Inc. 405 Madison Avenue Toledo, Ohio 43604 Tel: (419) 531-3351 Bankruptcy Case No.: 06-31157 Chapter 11 Petition Date: May 19, 2006 Court: Northern District of Ohio (Toledo) Judge: Mary Ann Whipple Debtor's Counsel: Grady L. Pettigrew, Jr. Cox, Stein & Pettigrew Co., LPA 115 West Main, Suite 400 Columbus, Ohio 43215-5099 Tel: (614) 224-1113 Fax: (614) 228-0701 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Teletech, Inc. Trade Debt $238,000 c/o James Nowak, Esq. 4808 North Summit Street Toledo, OH 43611 Gary & Karen Stewart Commercial Lease $200,000 24 East Woodruff Avenue Toledo, OH 43624 Alice V. Farley Trust Business Loan $140,000 c/o David Rohrbacker 405 Madison Avenue, 8th Floor Toledo, OH 43604 Corporate & Wealth Strategies Business Consulting $136,000 CWS Advisors, Ltd. Mildred Clark Business Loan $113,000 Eastman & Smith Professional $43,000 Services Ultra-Vision, Inc. Business Loan $43,000 Melvin E. Harbaugh Business Loan $41,365 The Toledo Journal Business Loan $30,000 Palace Sports and Programming $26,000 Entertainment, Inc. Rights Kevin Kenney & Associates Professional $15,000 Services John Gray & Co. Tax Consultant $13,500 American Tower Trade Debt $12,600 DiSalle Realty Commercial Lease $10,000 John Lepre Business Loan $7,700 WNWO-TV24 Trade Debt $5,500 B & J Video, Inc. Trade Debt $5,310 Warner Brothers Television Programming $5,200 Rights Richardson Electronics, Ltd. Trade Debt $5,000 Keith Mitchell Professional $4,000 Services LARRY'S MARKETS: Court Gives Interim Nod on Bush Strout as Counsel ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Washington gave its interim approval for Larry's Markets, Inc., to employ Bush Strout & Kornfeld as its bankruptcy counsel. Bush Strout will: a. give the Debtor legal advice with respect to its powers and duties as debtor-in-possession in the continued operation of its business and management of its property; b. take necessary action to avoid any liens subject to the Debtor's avoiding powers; c. prepare on behalf of the Debtor all necessary applications, answers, orders, reports, and other legal papers; and d. perform any and all other legal services for the Debtor which may be necessary. Armand J. Kornfeld, Esq., a member at Bush Strout, tells the Court that he will bill $350 per hour for this engagement. Mr. Kornfeld discloses that professionals and other support personnel of the firm bill between $55 and $375. Mr. Kornfeld assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Kornfeld can be reached at: Armand J. Kornfeld, Esq. Bush Strout & Kornfeld 5500 Two Union Square 601 Union Street Seattle, Washington 98101 Tel: (206) 292-2110 Fax: (206) 292-2104 http://www.bskd.com/ Headquartered in Kirklan, Washington, Larry's Markets, Inc. -- http://www.larrysmarkets.com/-- operates several supermarkets and department stores in the U.S. Northwest. The company filed for chapter 11 protection on May 7, 2006 (Bankr. W.D. Wash. Case No. 06-11378). Armand J. Kornfeld, Esq., at Bush Strout & Kornfeld, represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $12,574,695 and total debts of $21,489,800. LARRY'S MARKETS: U.S. Trustee Appoints Five-Member Committee ------------------------------------------------------------ The U.S. Trustee for Region 18 appointed five creditors to serve on an Official Committee of Unsecured Creditors in Larry's Markets, Inc.'s chapter 11 case: 1. Sysco Food Services of Seattle Attn: John Knapp, Esq. Cairncross & Hempelmann, P.S. 524 Second Avenue, Suite 500 Seattle, Washington 98104-2323 Tel: (206) 254-4492 Fax: (206) 254-4592 2. Draper Valley Farms, Inc. Attn: Mel R. Call P.O. Box 838 Mt. Vernon, Washington 98273 Tel: (360) 424-7947 Fax: (360) 424-1666 3. United Natural Foods, Inc. Attn: Ann L. Harman 1101 Sunset Boulevard Rocklin, California 95765 Tel: (916) 625-4100 Fax: (916) 625-4179 4. Interbay Food Company Attn: Matt Beyer 19210 - 144th Avenue Northeast Woodinville, Washington 98072 Tel: (425) 485-6292 Fax: (425) 485-6365 5. Service Paper Company Attn: Denise Collier P.O. Box 1000 Renton, Washington 98057 Tel: (425) 981-8740 Fax: (425) 981-8703 The Committee has selected Marc L. Barreca, Esq., and Michael J. Gearin, Esq., at Preston Gates & Ellis LLP, as its counsel. 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 Kirklan, Washington, Larry's Markets, Inc. -- http://www.larrysmarkets.com/-- operates several supermarkets and department stores in the U.S. Northwest. The company filed for chapter 11 protection on May 7, 2006 (Bankr. W.D. Wash. Case No. 06-11378). Armand J. Kornfeld, Esq., at Bush Strout & Kornfeld, represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $12,574,695 and total debts of $21,489,800. LGB INC: Files Schedules of Assets and Liabilities -------------------------------------------------- LGB, Inc., delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Eastern District of California disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $10,417,500 B. Personal Property $8,778,709 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $1,700,000 E. Creditors Holding Unsecured Priority Claims $2,235 F. Creditors Holding $2,842,085 Unsecured Nonpriority Claims ----------- ---------- Total $19,196,209 $4,544,320 Headquartered in Grass Valley, California, LGB, Inc., filed for chapter 11 protection on Apr. 27, 2006 (Bankr. E.D. Calif. Case No. 06-21340). George C. Hollister, Esq., at Hollister Law Corp., represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and estimated debts between $100,000 and $500,000. LIBERTY MEDIA: Moody's Cuts Sr. Unsec. Debt Rating to Ba2 from Ba1 ------------------------------------------------------------------ Moody's Investors Service downgraded Liberty Media Corporation's corporate family and senior unsecured long term debt ratings to Ba2 from Ba1 concluding the review for downgrade initiated on March 31, 2006. The outlook is stable. The Ba2 rating reflects Moody's continuing concerns over longer- term event and execution risk, partially offset by the company's valuable portfolio of wholly- and partially-owned businesses and equity securities. The rating also anticipates the likely increase of less liquid and venture stage assets as a percentage of the portfolio. It further recognizes that total debt is likely to increase as Liberty executes its leveraged investment strategy. The prospect of notching holding company debt below the corporate family rating may grow in the event that additional debt capital is raised at various existing and to be acquired operating companies, particularly at QVC. Under the recently established tracking stocks, approximately $5.3 billion of debt is allocated to the cash flow generating Liberty Interactive, while approximately $4.6 billion of exchangeable debt is allocated to Liberty Capital which contains Liberty's large public portfolio of assets as support. However, this allocation does not represent a legal separation of these obligations, and therefore Moody's does not differentiate among these obligations at present. Liberty Media Corporation is a holding company owning interests in a broad range of electronic retailing, communications, and entertainment businesses. The company maintains its headquarters in Englewood, Colorado. Downgrades: Issuer: Liberty Media Corporation * Corporate Family Rating, Downgraded to Ba2 from Ba1 * Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to Ba2 from Ba1 * Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 from Ba1 * Senior Unsecured Shelf, Downgraded to (P)Ba2 from (P)Ba1 * Subordinated Shelf, Downgraded to (P)Ba3 from (P)Ba2 Outlook Actions: Issuer: Liberty Media Corporation * Outlook, Changed To Stable From Rating Under Review LODGENET ENT: March 31 Balance Sheet Upside-Down by $69 Million --------------------------------------------------------------- LodgeNet Entertainment Corporation 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 $654,000 net loss on $70,193,000 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $261,326,000 in total assets and $331,230,000 in total liabilities, resulting in a stockholders' deficit of $69,904,000. As of March 31, 2006, working capital was $7.5 million, compared to $13.7 million at Dec. 31, 2005. The decrease was primarily caused by the $10 million prepayment on the Company's term loan. 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?98f Based Sioux Falls, South Dakota, LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides interactive television and broadband solutions to hotels throughout the United States and Canada as well as select international markets. These services include on-demand movies, music and music videos, on-demand videogames, Internet on television, and television on-demand programming, as well as high-speed Internet access, all designed to serve the needs of the lodging industry and the traveling public. LodgeNet provides service to more than one million interactive guest pay rooms and serves more than 6,000 hotel properties worldwide. LodgeNet estimates that during 2005, approximately 300 million travelers had access to LodgeNet's interactive television systems. In addition, LodgeNet is an innovator in the delivery of on-demand patient education, information and entertainment to medical care facilities. LORBER INDUSTRIES: Court OKs Weiland as Panel's Bankruptcy Counsel ------------------------------------------------------------------ The Honorable Thomas B. Donovan of the U.S. Bankruptcy Court for the Central District of California in Los Angeles gave the Official Committee of Unsecured Creditors appointed in Lorber Industries of California's chapter 11 case authority to employ Weiland, Golden, Smiley, Wang, Ekvall & Strok, LLP, as its bankruptcy counsel. As reported in the Troubled Company Reporter on April 25, 2006, Weiland Golden will: a. investigate the claims and liens of CIT Group and Anita Lorber, an insider of the Debtor; b. advise the Committee concerning the rights and remedies of the creditors and of the Committee in regard to the operation of the Debtor's business; c. represent the Committee in any proceedings or hearing, including lien avoidance, preference avoidance, and fraudulent coveyance litigation, and in any action where the rights of the estate or creditors may be litigated or affected; d. assist the Committee in reviewing the pending sale of assets and any plans of reorganization that will be filed by the Debtor, and assist the Committee in its analysis of any plans; and e. represent the Committee at hearings in connectin with the disclosure statements and plan confirmation. Philip E. Strok, Esq., a partner at Weiland Golden, tells the Court that the Firm's professionals bill between $130 and $500 per hour. He also adds that the Firm will not receive a retainer in this case. Mr. Strok assures the Court that the Firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Gardena, California, Lorber Industries of California -- http://www.lorberind.com/-- manufactures texturized and knitted fabrics. The company filed for chapter 11 protection on Feb. 10, 2006 (Bankr. C.D. Calif. Case No. 06-10399). Joseph P. Eisenberg, Esq., at Jeffer, Mangels, Butler & Marmaro LLP, represents the Debtor in its restructuring efforts. Reem J. Bello, Esq., at Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP represents the Official Committee of Unsecured Creditors. The Debtor's schedules show $25,580,387 in assets and $24,740,726 in liabilities. LORBER INDUSTRIES: Judge Donovan Denies Tobin Lucks' Retention -------------------------------------------------------------- The Honorable Thomas B. Donovan of the U.S. Bankruptcy Court for the Central District of California denied Lorber Industries of California's request to employ The Law Offices of Tobin Lucks LLP as its workers' compensation defense counsel. Judge Donovan denied the Debtor's application because the compensation arrangement was not explained in notice as required by Local Bankruptcy Rule 2014-1(3)(B). Judge Donovan will consider employment under Section 327 and compensation under Section 320 of the Bankruptcy Code, but not under Section 328 without further cause shown. Tobin was expected to deal with insurance coverage issues. Irvin L. Lucks, Esq., at partner at The Law Offices of Tobin Lucks LLP disclosed that the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners/Associates $150 to $250 Paralegals $75 With offices in Southern California, The Law Offices of Tobin Lucks LLP -- http://www.tobinlucks.com/-- provides legal services to the insurance and employer communities, with emphasis in workers' compensation, labor and employment counseling and litigation, and related areas of civil litigation. The firm employs over 60 attorneys. Headquartered in Gardena, California, Lorber Industries of California -- http://www.lorberind.com/-- manufactures texturized and knitted fabrics. The company filed for chapter 11 protection on Feb. 10, 2006 (Bankr. C.D. Calif. Case No. 06-10399). Joseph P. Eisenberg, Esq., at Jeffer, Mangels, Butler & Marmaro LLP, represents the Debtor in its restructuring efforts. Reem J. Bello, Esq., at Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP represents the Official Committee of Unsecured Creditors. The Debtor's schedules show $25,580,387 in assets and $24,740,726 in liabilities. MAGRUDER COLOR: Hires Environmental Waste as Consultants -------------------------------------------------------- Magruder Color Company, Inc., nka Maggyco Inc., and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the District of New Jersey to employ Environmental Waste Management Associates, LLC as their environmental consultants. As reported in the Troubled Company Reporter on April 11, 2006, Environmental Waste is expected to: (1) assist the Debtors in determining a fixed-price for cleanup of the Debtors' real estate and planning for completing any necessary remediation; (2) conduct further subsurface investigation at the Debtors' facilities; (3) prepare Preliminary Assessment Reports; preliminary site inspection, review environmental database records, review historical records and attempt to search for any other readily available information that may be required under the Industrial Site Recovery Act by the New Jersey Department of Environmental Protection; (4) obtain and review available historical fire insurance maps as an aid in identifying potential areas of environmental concern at the Debtors' facilities; (5) perform site inspection and private utility markout of the Debtors' facilities to identify and unmarked utilities; (6) investigate and delineate subsurface soil and ground water conditions, coordinate and oversee installation of corings in the concrete floors of any buildings in which borings will be installed; and (7) analyze soil and ground water for appropriate parameters, based upon known or suspected materials usage in the areas of the Debtors; facilities. Christopher W. Richter, a technical director of Environmental Waste, told the Court that the Firm will bill: * $15,000 for the preparation of the four preliminary assessment reports; * $68,000 for the remedial investigation proposed to determine the fixed price for cleanup; and * $12,000 for drilling, sampling and analysis to complete the remedial investigation activities. Mr. Richter assured the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Elizabeth, New Jersey, Magruder Color Company -- http://www.magruder.com/-- and its affiliates manufacture basic pigment and also supply quality products to the ink, paint, and plastics industries. The Company and its debtor-affiliates filed for chapter 11 protection on June 2, 2005 (Bankr. D.N.J. Case No. 05-28342). Bruce D. Buechler, Esq., at Lowenstein Sandler PC represent the Debtors in their restructuring efforts. Brian L. Baker, Esq., and Howard S. Greenberg, Esq., Ravin Greenberg, PC, represent the Creditors' Committee. When the Debtors filed protection from their creditors, they estimated assets and debts of $10 million to $50 million. MASTERCRAFT INTERIORS: Wants to Conduct Sales & Close Stores ------------------------------------------------------------ Mastercraft Interiors Ltd. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Maryland for permission to close their four stores and conduct "going out of business" sales. Morton A. Faller, Esq., at Shulman, Rogers, Gandal, Pordy & Ecker, P.A., tells the Court that the Debtor is engaged in the highly competitive retail furniture business. Throughout 2005, the Debtors' sales fell below levels necessary to allow it to operate profitably under its existing debt structure. Under current market conditions and with the Debtors' existing debt structure, it has been unable to turn around its business. Unfortunately, the market conditions in the furniture industry throughout the county rendered the Debtor unable to sell itself as a going concern, despite significant efforts to do so. Mr. Faller points out that mounting debt, a severe liquidity crisis, the inability to borrower and poor sales now require the Debtors to liquidate its assets in a store closing scenario. The Debtors hired Planned Furniture Promotions, Inc. and Great American Group, LLC, to act as their exclusive agents to liquidate inventory and debtor-owned furniture, fixtures and equipment at the stores and the distribution center. Gordon Brothers Retail Partners, LLC, and H.P.G. Enterprises, Ltd., offered to buy the assets. Court documents filed with the Court did not disclose how much the Gordon Brothers and H.P.G. are willing to pay. However, the Debtors disclosed that they agreed to pay $225,000 to Gordon Brothers and H.P.G. if these stalking horse bidders are not declared as winning bidders at an auction. Headquartered in Beltsville, Maryland, Mastercraft Interiors Ltd., -- http://www.mastercraftinteriors.com/-- manufactures high- quality furniture and other home furnishings. The Company and its subsidiary, Kimels of Rockville, Inc., filed for bankruptcy on May 15, 2006, (Bankr. D. Md. Case No. 06-12769). Morton A. Faller, Esq., Michael J. Lichtenstein, Esq., and Stephen A. Metz, Esq., at Shulman, Rogers, Gandal, Pordy & Ecker, P.A., represent the Debtors in their restructuring efforts. When it filed for bankruptcy, Mastercraft Interiors reported assets amounting to $10,600,288 and debts amounting to $25,485,847. Kimels of Rockville reported assets totaling $704,227 and debts amounting to $10,341,704 during the bankruptcy filing. MIRANT CORP: Plans to Shut Down Two Power Units in California ------------------------------------------------------------- Mirant Corporation (NYSE: MIR) filed a 90-day notice of its intent to shut down the Pittsburg 7 and Contra Costa 6 units located near San Francisco, California. The notice was filed with the California Public Utilities Commission (CPUC) and the California Independent System Operator (CAISO) in accordance with California law and agreements governing operations with the CAISO. Despite efforts over the last several months, Mirant has been unable to successfully negotiate contracts or secure reliability compensation for these units, without which operating the units is not economical. "Mirant will continue to work with all parties in an attempt to reach agreements that will allow us to continue operating Pittsburg 7 and Contra Costa 6," said Rob Hayes, President, Mirant California. "We will continue to do everything we can to achieve this result. If we're not successful in our negotiations, it's our intent to shut down these units at the end of the 90-day period," continued Mr. Hayes. Mr. Hayes further stated, "Mirant intends to continue operations of the remainder of its California fleet and to continue with efforts to permit the new Contra Costa 8 unit." The Contra Cost 8 unit is contemplated to be transferred to PG&E pursuant to Mirant's previous settlement of California matters. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on January 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 97; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services placed a 'B+' corporate credit rating on Mirant and said the outlook is stable. MORGAN STANLEY: S&P Lowers $3.5MM Class A-14 Notes' Rating to BB ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the $3.5 million class A-14 secured fixed-rate notes from Morgan Stanley ACES SPC series 2006-8 to 'BB' from 'BBB-' and removed it from CreditWatch, where it was placed with negative implications on April 25, 2006. The rating action reflects: * the May 4, 2006, lowering of the rating on the underlying securities; * the $250 million 5.25% senior notes issued by American Axle & Manufacturing Inc.; and * its subsequent removal from CreditWatch with negative implications. Morgan Stanley ACES SPC's $46 million secured fixed-rate notes series 2006-8 is a swap-independent synthetic transaction that is weak-linked to the reference obligations on the underlying collateral for each class. MOTHERS WORK: S&P Affirms B- Rating & Revises Outlook to Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Philadelphia-based Mothers Work Inc. to positive from negative. All ratings, including the 'B-' corporate credit rating, on this specialty maternity apparel retailer are affirmed. Mothers Work had total funded debt outstanding of about $129 million as of March 31, 2006. "The outlook revision reflects improving operating performance for the past two quarters as well as a recovery of credit protection measures," said Standard & Poor's credit analyst Ana Lai. Following a period of negative sales trends in fiscal 2004 and 2005, Mothers Work's recent operating results have recovered as competitive pressure from discounters and other specialty retailers has eased and consumers' response to its merchandising mix has improved. Mothers Work reported comparable-store sales growth of 2.4% in the six months ended March 31, 2006, compared to a 2.5% comparable-store sales decline in the fiscal year ended Sept. 30, 2005. Improved sales in the latest period contributed to an increase in adjusted EBITDA to about $19.5 million, from $16.6 million a year earlier. The ratings on Mothers Work continue to reflect: * the high business risk associated with the company's participation in the narrowly defined and intensely competitive maternity segment of the apparel retailing industry; * recent history of weak operating results; and * a highly leveraged capital structure. MUSICLAND HOLDING: ACD Wants Star Agreement Filed Under Seal ------------------------------------------------------------ Advanced Communication Design, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York's authority to file under seal a contract it entered into with The Musicland Group, Inc., as of September 15, 1998, for the sale, installation and use of a computerized audiovisual information system known as the Star(TM) System. Robert W. Dremluk, Esq., at Seyfarth Shaw LLP, in New York City, asserts that filing the 1998 Contract under seal is justified because certain commercial information contained in the Contract, particularly information concerning the components of the Star(TM) System and the pricing of product provided to Musicland Group, is confidential and proprietary to ACD. "The disclosure of that information would put ACD at a competitive disadvantage." In addition, the 1998 Agreement expressly imposes certain confidentiality restrictions on the parties. ACD asks the Court allow access to the 1998 Agreement to these persons and entities: (a) The Court, (b) The U.S. Trustee, (c) Professionals retained by an official committee in the Debtors' Chapter 11 cases, and (d) Those persons who: -- are deemed acceptable by the Debtors and ACD; -- have executed a confidentiality agreement acceptable to the Debtors and ACD; and -- present the Clerk of the Court with a document evidencing satisfaction of the previous two conditions, signed by ACD. ACD further asks the Court to rule that: (a) any party permitted access to the 1998 Agreement will not share any information contained in the document; and (b) any party found to violate those conditions will be subject to sanctions for violation of the Court's order. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) NAKOMA LAND: Court Names Angelique I.M. Clark as Ch. 11 Trustee --------------------------------------------------------------- The Honorable Gregg W. Zive of the U.S. Bankruptcy Court for the District of Nevada appointed Angelique I.M. Clark as chapter 11 trustee in the bankruptcy cases of Nakoma Land, Inc., and its debtor-affiliates. The U.S. Trustee for Region 13 recommended Ms. Clark's appointment after Investors Financial LLC, sought for the appointment of a trustee. Investors Financial, a secured creditor in the Debtors' chapter 11 proceedings, loaned approximately $15 million to the Debtors under a Promissory Note and Deed of Trust before the Debtors filed for chapter 11 protection. The loan is secured by real property owned by the Debtors. Dariel Garner and Margaret Garner each guaranteed the loan. In December 2004, the Debtors ceased making required monthly payments on the loan. On May 19, 2005, the Nakoma Land, Inc., Sierra Highlands, Inc., and Grizzly Golf, Inc., filed for chapter 11 protection. Nakoma Resort, LLC, Gold Mountain Ranch, LLC, and Dragon Golf, LLC, followed, filing chapter 11 petitions on June 6, 2005, to contemplate the sale of Nakoma Resort. On Sept. 22, 2005, the Debtors agreed to grant Investors additional security in the form of liens on all personal property used in connection with the Nakoma Resort. Kevin A. Darby, Esq., at Downey Brand LLP, told the Court that Mr. Garner sold his equity interest to Margaret Garner on Oct. 1, 2005, which now makes Ms. Garner the Resort's controlling member. Investors Financial gave the Court five reasons why the appointment of a chapter 11 trustee is warranted: (1) Mr. Garner's sudden departure as Nakoma Resort's sole owner compounds management instability and a chapter 11 trustee could bring credibility to the Debtor's management; (2) the Debtors have not been open with the Court or its creditors in relation to the filing of unscheduled claims by Mr. Garner. Thus a trustee is necessary to investigate the legitimacy of any claim asserted by insiders or related entities; (3) the Debtors selected an investment bank, General Capital Partners, to market and sell the Nakoma Resort, instead of an experienced real estate broker thus a need for the Court to appoint an independent party in whom Investors and other creditors can repose confidence; (4) the Debtors now rely on Ms. Garner, their new sole owner, to advance funds to preserve and protect the Dragon Golf Course during the winter season since they have no money and no positive cash flow. Investors believes that Ms. Garner has advanced few funds to winterize the golf course and that the Debtors will only spend the absolute minimum necessary to winterize the course. A trustee is necessary, Investors Financial continue, to prevent significant damage and loss in value; and (5) the Debtors did not include the Garners' personal 10 acre homesite, now owned by Sierra Highlands, or Melkon Inc.'s residential lots in their agreement with General Capital Partners which illustrates, Investors say, that the Garners are incapable of acting in the best interest of anyone but themselves. Headquartered in Reno, Nevada, Nakoma Land, Inc., operates the Nakoma Resort in Plumas County, California. The Debtor along with its affiliates filed for chapter 11 protection on May 19, 2005 (Bankr. D. Nev. Case No. 05-51556). Alan R. Smith, Esq., at the Law Offices of Alan R. Smith represents the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed total assets of $18,000,000 and total debts of $15,252,580. NORTHWEST AIRLINES: Reaches Tentative Agreement with Machinists --------------------------------------------------------------- The International Association of Machinists and Aerospace Workers reported a tentative agreement with Northwest Airlines covering 5,600 Equipment Service & Stock Clerks at the bankrupt airline. "The negotiating committee unanimously recommends ratification of the agreement to avoid the elimination of our contract," IAM District 143 President Bobby DePace said. "We are not recommending ratification because the terms are favorable, but because the alternative is worse." The ESSC membership rejected a company proposal on March 7, 2006. IAM members in the Clerical, Office, Fleet and Passenger Service and Plant Protection classifications ratified Northwest's settlement proposals. Flight Simulator Technicians & Simulator Support Specialists also rejected Northwest's proposal in March, but the airline has not moved to abrogate their agreement at this time. A full-text copy of the Tentative Agreement is available at no charge at: http://bankrupt.com/misc/NWA_RESTRUCTURING_AGREEMENT.pdf The International Association of Machinists and Aerospace Workers -- http://www.iam143.org/-- is the largest airline union in North America and the largest union at Northwest Airlines. About Northwest Airlines Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. NOVA CHEMICALS: S&P Lowers Corp. Credit & Sr. Debt Ratings to BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit and senior unsecured debt ratings on Calgary, Alta.-based Nova Chemicals Corp. to 'BB-' from 'BB+'. The outlook is stable. The ratings were lowered because of the company's continuing weak financial performance and heavy debt burden. Furthermore, Nova is heavily reliant on its profitable olefins division because the persistently poor performance of its styrenics division limits its cash flow diversity. The styrenics business has been EBITDA negative in four of the past five years, and is slightly EBITDA negative in total for the last decade. In addition, the styrenics division's EBITDA less capital expenditures has totaled negative US$678 million in the past five years, with the most severe cash burn in 2005 at US$310 million. This accentuates the importance of the olefins business in ensuring that the company generated positive free operating cash flow over the period. "The ratings on Nova reflect the volatility and commodity nature of the company's petrochemical products, heavy reliance on its olefins and polyolefins division for cash flow, and its high debt leverage," said Standard & Poor's credit analyst Donald Marleau. "The company's weak business profile is composed of a solid- performing olefins division that has a good cost profile and has generated good returns, which is counterbalanced by a weak styrenics division that consistently generates poor operating results," Mr. Marleau added. Nova's primary petrochemical segments are highly cyclical and operating margins trend in the same direction, thereby limiting the benefits of diversification because both product chains consume energy-related raw materials, and demand is linked to economic activity. The company's ethylene/polyethylene segment benefits from a strong cost profile relative to most North American producers due to access to competitive feedstocks at its Alberta facilities. The styrenics division, however, has a weak operating cost profile and is subject to intense global competition. Profitability in the styrenics chain has been hampered by large- scale capacity additions around the world, some of which relate to the development of propylene oxide facilities. These facilities often use technology that makes styrene as a co-product, thereby increasing industry capacity irrespective of fundamental market conditions. These poor industry fundamentals and Nova's high cost position have resulted in negative EBITDA generation for many years. Although Nova has taken a number of measures to reduce costs and introduce higher margin products, it is unclear whether these efforts will be successful in neutralizing the drag it has caused on the company's overall financial performance. Standard & Poor's expects that better olefins market conditions and the company's operational improvements will help improve credit measures in the near term, and will serve to support the continuing drag from the acutely unprofitable styrenics division. Stronger results in 2006 could yield a financial profile that is more consistent with the ratings, with FFO to total debt of about 20% and EBITDA interest coverage of about 3.5x. On the other hand, the adoption of more aggressive financial policies or a lack of improvement in operating results could result in the outlook being revised to negative. OCA INC: Hires Jenner & Block as Committee's Bankruptcy Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of OCA, Inc., and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Eastern District of Louisiana to employ Jenner & Block, LLP, as its bankruptcy counsel. Jenner & Block is expected to: a. represent the Committee in any proceedings and hearings related to the Debtors' Chapter 11 Cases; b. attend meetings and negotiate with representatives of the Debtors and other parties in interest; c. negotiate with the Debtors and other creditor and equity constituencies regarding a plan of reorganization; d. advise the Committee of its powers and duties; e. advise the Committee regarding matters of bankruptcy law; f. provide assistance, advice, and representation concerning the confirmation of, or objection to, any proposed plan; g. prosecute and defend litigation matters and other matters that might arise during the Debtors' Chapter 11 cases; h. provide counseling and representation with respect to assumption or rejection of executory contracts and leases, sales of assets, and other bankruptcy-related matters arising from these Chapter 11 Cases; i. render advice with respect to other legal issues relating to the Chapter 11 Cases, including, but not limited to, securities, corporate finance, tax, and commercial issues; j. prepare, on behalf of the Committee, any necessary adversary complaints, motions, applications, orders, and other legal papers relating to these Chapter 11 Cases; and k. perform other legal services necessary and appropriate for the efficient and economical administration of the Debtors' Chapter 11 Cases. The primary attorneys anticipated to work on this engagement are Mark K. Thomas, Esq., Michael S. Terrien, Esq., Peter J. Young, Esq., and Phillip W. Nelson, Esq. Jenner & Block's hourly billing rates are: Professional Hourly Rates ----------- ------------ Mark K. Thomas, Esq. $650 Michael S. Terrein, Esq. $515 Peter J. Young, Esq. $325 Phillip W. Nelson, Esq. $250 Partners $410 - $800 Associates $230 - $395 Paralegals $160 - $235 Project Assistants $100 - $130 Mr. Thomas, a partner at Jenner & Block, tells the Bankruptcy Court that his firm does not hold any interest adverse to the Debtors' estates or their creditors, and is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. About OCA Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/ -- provides a full range of operational, purchasing, financial, marketing, administrative and other business services, as well as capital and proprietary information systems to approximately 200 orthodontic and dental practices representing approximately almost 400 offices. The Company's client practices provide treatment to patients throughout the United States and in Japan, Mexico, Spain, Brazil and Puerto Rico. The Company and its debtor-affiliates filed for Chapter 11 protection on March 14, 2006 (Bankr. E.D. La. Case No. 06-10179). William H. Patrick, III, Esq., at Heller Draper Hayden Patrick & Horn, LLC, represents the Debtors. Patrick S. Garrity, Esq., and William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $545,220,000 in total assets and $196,337,000 in total debts. OCA INC: Committee Hires Loughlin Meghji+Company as Fin'l Advisor ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of OCA, Inc., and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Eastern District of Louisiana to employ Loughlin Meghji+Company as its financial advisor. Loughlin is expected to: a) evaluate the assets and liabilities of the Debtor; b) analyze and review the financial and operating statements of the Debtor; c) analyze the business plans and any financial and cash flow forecasts of the Debtor; d) review contractual arrangements between the Debtor and related entities; e) review and assist with the claims resolution process and distributions; f) review cash flow forecasts and other related issues; g) provide valuation and other financial analysis as the Committee may require; h) assess various strategic alternatives proposed by the Debtor and evaluate these alternatives, including: -- the Debtor's viability as a standalone entity; -- sale of all or some of the assets of the Debtor's estate; and -- any plan of reorganization proposed by the Debtor. i) provide testimony in Court on behalf of the Committee; and j) provide other appropriate and necessary services as requested by the Committee. Loughlin will charge an advisory fee of $75,000 per month for the first three months of its engagement. The firm will charge $50,000 in the succeeding months. Mohsin Y. Meghji, a principal at Loughlin, assures the Bankruptcy Court that his firm does not hold any interest materially adverse to the Debtor's estate and is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. A full-text copy of the Committee's eight-page engagement agreement with Loughlin is available for free at: http://ResearchArchives.com/t/s?806 About OCA Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/ -- provides a full range of operational, purchasing, financial, marketing, administrative and other business services, as well as capital and proprietary information systems to approximately 200 orthodontic and dental practices representing approximately almost 400 offices. The Company's client practices provide treatment to patients throughout the United States and in Japan, Mexico, Spain, Brazil and Puerto Rico. The Company and its debtor-affiliates filed for Chapter 11 protection on March 14, 2006 (Bankr. E.D. La. Case No. 06-10179). William H. Patrick, III, Esq., at Heller Draper Hayden Patrick & Horn, LLC, represents the Debtors. Patrick S. Garrity, Esq., and William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $545,220,000 in total assets and $196,337,000 in total debts. OPTICAL DATACOMM: Ch. 11 Trustee Wants Case Converted to Chapter 7 ------------------------------------------------------------------ Frederick B. Rosner, Esq., the Chapter 11 Trustee for Optical DataCom, LLC's bankruptcy estate, asks the U.S. Bankruptcy Court for the District of Delaware to convert the Debtor's chapter 11 case to chapter 7 liquidation proceeding. The Ch. 11 Trustee gave the Court three reasons why his request is warranted: a) the chapter 11 estate is administratively insolvent; b) the Trustee can't propose a feasible plan; and c) the estate's principal remaining asset can be more effectively prosecuted in the context of a chapter 7 liquidation proceeding. Since his appointment, the Ch. 11 Trustee prosecuted numerous avoidance actions and has collected proceeds. In addition, the Ch. 11 Trustee resolved litigation against the Bank Group. Under the settlement, the Bank Group now holds an allowed general unsecured claim of $35.5 million less the aggregate amount of all payments, if any, they may receive from the liquidation of any remaining collateral. The Ch. 11 Trustee also filed a lawsuit against Larry Large, et al. The Large Litigation seeks recovery of the $70 million on a fraudulent transfer theory and its effective prosecution presents the only hope for any recovery to the estate's general unsecured creditors. If the case is converted, the chapter 7 Trustee and his or her counsel will be able to devote the estate's unencumbered cash to prosecute the Large Litigation because the chapter 7 professional fees will enjoy a priority over the accrued chapter 11 professional fees. Optical Datacomm, LLC, now known as OODC LLC, supplies network integration services solutions and design and manufactures custom connectionized fiber optic, copper and coaxial cable assemblies to telecommunication companies worldwide. The Company filed for chapter 11 protection on November 17, 2001. H. Jeffrey Schwartz, Esq. at Benesch, Friedlander, Coplan & Aronoff, LLP and Joel A. Waite, Esq. at Young Conaway Stargatt & Taylor represent the Debtor in its restructuring efforts. Anthony M. Saccullo, Esq., and Neil B. Glassman, Esq, at The Bayard Firm represent the Debtor's Official Committee of Unsecured Creditors. In its petition, the Company listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. OWENS CORNING: Bankr. Court Rules Bank Claims are Unimpaired ------------------------------------------------------------ On a final basis, the Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware rules that the payment in full and in cash of claims of prepetition bank lenders renders the claim unimpaired pursuant to Section 1124 of the Bankruptcy Code under the Debtors' Fifth Amended Plan of Reorganization. Thus, the classes of Bank Holder Claims under the Plan of Reorganization are conclusively presumed to have accepted the Plan in accordance with Section 1126(f). Upon payment in full to the holders of the Bank Holder Claims: -- all Bank Holder Claims and remedies arising under or related to the Credit Agreement dated June 26, 1997, and the related guaranties against the Debtors, the Non-Debtors and the other Non-Debtor Subsidiaries, will be extinguished; -- the Debtors, the Non-Debtors and the other Non-Debtor Subsidiaries will have no further obligations under the Credit Agreement with respect to all Bank Holder Claims and will be deemed to be fully and completely discharged of the obligations, liabilities and responsibilities to the fullest extent of the law; -- each holder of a Bank Holder Claim will be permanently barred from taking any action against any of the Debtors, the Non-Debtors and the other Non-Debtor Subsidiaries with respect to all Bank Holder Claims; and -- each holder of a Bank Holder Claim will release each of the Debtors, the Non-Debtors and the other Non-Debtor Subsidiaries from the Bank Holder Claims. The definition of Bank Default Interest and Fee Amount in the Fifth Amended Plan is revised to mean the sum of: a. the amount of interest accrued through the date of delivery of the Initial Bank Holders' Distribution on the amount of principal, interest and fees outstanding under the Credit Agreement as of the Petition Date, when calculated at the floating Base Rate plus 2% on compounding basis; and b. the amount of any accrued and unpaid postpetition fees payable under the Credit Agreement through the date of delivery of the Initial Bank Holders' Distribution. If Class A4 is deemed Unimpaired, or if Class A4 is deemed Impaired and accepts the Plan, then, in full satisfaction and in exchange for their Allowed Claims against the Debtors and claims against certain of the Non-Debtor Subsidiaries, each holder of an Allowed Class A4 Claim will receive his pro rata share of cash in an aggregate amount equal to the sum of the amount of the Allowed Class A4 Claims plus the Bank Default Interest and Fee Amount. Owens Corning (OTC: OWENQ.OB) (BULLETIN BOARD: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue Nos. 129 & 130; Bankruptcy Creditors' Service, Inc., 215/945-7000). OWENS CORNING: Equity Holders Insist on Committee Appointment ------------------------------------------------------------- The Ad Hoc Committee of Preferred and Equity Security Holders in the chapter 11 cases of Owens Corning and its debtor-affiliates is appealing from the denial by the U.S. Bankruptcy Court for the District of Delaware of its request to appoint an official preferred and equity security holders committee to the U.S. District Court for the District of Delaware. The Ad Hoc Committee asks the District Court to review three issues: 1. Whether the Bankruptcy Court erred in denying the Official Committee Motion by ignoring or misapplying the legal factors relevant to considering whether preferred security and equity security holders are adequately represented in the Debtors' Chapter 11 cases as required by Section 1102(a)(2) of the Bankruptcy Code and applicable case law authority; 2. Whether the Bankruptcy Court erred in determining that the present purported insolvency of the Debtors warranted denial of the Official Committee Motion; and 3. Whether the Bankruptcy Court abused its discretion in denying the Ad Hoc Committee's request. Owens Corning (OTC: OWENQ.OB) (BULLETIN BOARD: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue Nos. 126 & 127; Bankruptcy Creditors' Service, Inc., 215/945-7000). PALAZZO DI: Court Sets June 2 General Claims Bar Date -------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia set June 20, 2006, as the deadline for all creditors owed money by Pallazo Di Stonecrest, LLC, on account of claims arising prior to March 7, 2006, to file their proofs of claim. Creditors must file written proofs of claim on or before the June 20 Claims Bar Date and those forms must be delivered to: Clerk, United States Bankruptcy Court 1340 Richard B. Russell Bldg. 75 Spring Street, SW Atlanta, Georgia 30303-3367 Headquartered in Atlanta, Georgia, Palazzo Di Stonecrest, LLC, filed for chapter 11 protection on Mar. 7, 2006 (Bankr. N.D. Ga. Case No. 06-62584). David L. Miller, Esq., at the Law Office of David L. Miller, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $1 million and $10 million. PARMALAT USA: Citibank Lawsuit Standstill Period is Until May 31 ---------------------------------------------------------------- Citibank, N.A., and Citibank, N.A. International Banking Facility, on one hand, and Dr. Enrico Bondi, extraordinary administrator of Parmalat Finanziaria S.p.A. and certain of its affiliates and CEO of Reorganized Parmalat, on the other hand, agree that at 5:00 p.m. New York time, on May 31, 2006, the Preliminary Injunction Order will automatically be deemed modified to permit Citibank to take any action to enforce its rights against Parmalat Paraguay S.A. or otherwise with respect to the obligations of Parmalat Paraguay to Citibank in Paraguay. During the Standstill Period, Reorganized Parmalat, as successor to the Foreign Debtors, will provide Citibank, concerning Parmalat Paraguay and its subsidiaries, with: -- access to company management; -- access to their Paraguayan advisers; -- access to their books and records; and -- copies of and access to forecasts, budgets, restructuring plans, term sheets relating to a sale or other disposition of the assets, purchase and sale agreements and correspondence of any kind or nature relating in any way to a sale or other disposition of the assets or the restructuring of the indebtedness. The Standstill Period may be extended for an additional period upon the parties' written agreement. Any information obtained by Citibank pursuant to the Stipulation will be used exclusively for accessing and seeking a restructuring of Parmalat Paraguay's debt and will not be used for any other purpose. The information will be maintained as confidential by Citibank. Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., 215/945-7000) PERFORMANCE TRANSPORTATION: Wants More Time to File Ch. 11 Plan --------------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the Western District of New York to extend the period during which they have the exclusive right to: a. file a plan through and including October 25, 2006; and b. solicit and obtain acceptances of that plan through December 25, 2006. Section 1121(b) of the Bankruptcy Code establishes an initial period of 120 days after the Petition Date during which a debtor has the exclusive right to file a Chapter 11 plan of reorganization. If the debtor files a plan within that period, Section 1121(c)(3) extends the exclusivity period to 180 days after the Petition Date to permit the debtor to garner support for the plan. The Debtors assert that their Chapter 11 cases are sufficiently large and complex to warrant an extension of the Exclusive Periods. Sven T. Nylen, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, points out that the Debtors are the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Debtors also possess a significant organizational and capital structure and have over a thousand unsecured creditors. The Debtors believe they have made very substantial progress in the first 120 days of their Chapter 11 cases. Since the Petition Date, the Debtors have devoted time and effort to a number of tasks, including: 1. finalizing the terms of the their postpetition financing and complying with its terms; 2. interviewing potential candidates for the chief restructuring officer role required by the DIP Financing; 3. shopping for and establishing a new insurance program that will result in cost savings; 4. implementing the relief authorized by the Court at the first day hearing to preserve the Debtors' relationships with their employees, customers, suppliers, lenders, lessors and others; 5. responding to creditor, supplier and customer inquiries; 6. gathering the information required to complete the Debtors' schedules of assets and liabilities and statements of financial affairs; 7. preparing for a potential contested hearing on the Debtors' proposed adequate assurance procedures for utility providers and negotiating deposits with numerous utility providers; and 8. preparing and presenting motions seeking additional relief. Currently, the Debtors are continuing to analyze their customer contracts and collective bargaining agreements. In particular, the Debtors are preparing for negotiations with their customers and the labor unions concerning concessions that will help strengthen financial and operational viability. "These negotiations represent the first analytical step towards the development of a viable exit strategy and, in turn, a feasible Chapter 11 plan," Mr. Nylen says. "Hence, these ongoing negotiations constitute unresolved contingencies so significant to the reorganization that they alone necessitate extension of the Exclusive Periods." The Debtors are confident that the discussions will yield results that will provide healthy prospects for the filing of a viable plan. Prior to the conclusion of the discussions, however, the Debtors will not be in a position to accurately evaluate their assets and liabilities and the universe of claims against them or determine an appropriate post-confirmation capital structure, much less propose a plan. Given the scale and complexity of the restructuring, much work remains before the Debtors can develop a business plan and propose a viable plan of reorganization. Thus, Mr. Nylen concludes, the extension is both necessary and appropriate to permit the Debtors to commence and consummate the next stages in the administration of their Chapter 11 cases. Mr. Nylen assures the Court that the extension is not intended to delay administration of the Debtors' Chapter 11 Cases or to pressure creditors to accept an unsatisfactory plan. To the contrary, the extension is sought to facilitate an orderly, efficient and cost-effective process for the benefit of all creditors. About Performance Transportation Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) PERFORMANCE TRANSPORTATION: Taps Reed Smith as Special Counsel -------------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the Western District of New York for authority to employ Reed Smith LLP as their special counsel in connection with labor union and pension plan matters. Reed Smith is an international law firm with 1,000 lawyers in 18 cities. Reed Smith will focus solely on negotiations concerning the Debtors' collective bargaining agreements with the International Brotherhood of Teamsters and the Debtors' related obligations. Specifically, the firm will: a. advise and represent PTS with respect to all issues involving or relating to its collective bargaining agreements; b. advise and represent PTS with respect to all issues relating to all pension plans, health plans and other employee benefits for both active and retired employees; c. advise and represent PTS with respect to any issues involving compensation of its hourly and salaried workforce; and d. perform all necessary or appropriate related services. Paul M. Singer, Esq., a partner at Reed Smith, tells Judge Kaplan that the firm will not represent the Debtors in connection with any relief sought before the Bankruptcy Court. Therefore, Mr. Singer says, the services the firm will provide will not be duplicative of any services provided by the Debtors' general bankruptcy counsel, Kirkland & Ellis LLP, or their local counsel, Hodgson Russ LLP. PTS will pay Reed Smith at these hourly rates: Billing Category Range ---------------- ----------- Partners $340 - $825 Associates and Counsel $235 - $490 Paralegals $120 - $290 Reed Smith professionals that are expected to have primary responsibility for the engagement are: Current Reed Smith Professional Hourly Rate ----------------------- ----------- Paul M. Singer $625 William Bevan III $490 Robert B. Cottington $425 Jeanne S. Lofgren $260 Mr. Singer assures the Court that neither he, Reed Smith, nor any partner or associate of the firm, holds or represents any interest adverse to the Debtors' estate in the matters on which the firm is to be engaged. Reed Smith, Mr. Singer asserts, is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code. About Performance Transportation Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) PLIANT CORP: Inks $200 Mil. Credit Facility from Merrill Lynch --------------------------------------------------------------- Pliant Corporation signed a commitment letter from Merrill Lynch Commercial Finance Corp. relating to a proposed $200 million revolving credit facility. This facility would replace Pliant's existing prepetition revolver and debtor-in-possession credit facility upon the company's emergence from Chapter 11, and is subject to approval and implementation of Pliant's proposed plan of reorganization, completion of definitive documentation, and other customary closing conditions. "This facility is a significant increase from Pliant's $140 million pre-petition credit facility," according to Bill Derrough, Managing Director of Jefferies & Company, Inc., Pliant's financial advisor. "It represents the accomplishment of another milestone towards Pliant's emergence from Chapter 11 and reconfirms the capital markets' support of Pliant's management and business plan." "We are pleased to have received this financing commitment from Merrill Lynch Commercial Finance Corp," Harold Bevis, President and CEO, said. "They are a premier partner and can help Pliant achieve our financial goals. This $200 million commitment meets our objectives. We believe the new credit facility will provide liquidity and cash flows needed to execute our business plan and enable Pliant to invest in its business on a sustained basis. This is a great outcome for Pliant." Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy counsel. The Ontario Superior Court of Justice named RSM Richter, Inc., as the Debtors' information officer in their restructuring proceeding under Companies Creditors Arrangement Act in Canada. Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C., serves as counsel to the Official Committee of Unsecured Creditors. Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is local counsel to the Creditors' Committee. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. REFCO INC: Ch. 11 Trustee Gets Interim Nod on Bingham as Counsel ---------------------------------------------------------------- The Hon. Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York gave his interim approval for Marc S. Kirschner, the Chapter 11 trustee overseeing the estate of Refco Capital Markets, Ltd., to employ Bingham McCutchen LLP, as his general bankruptcy counsel, nunc pro tunc to April 10, 2006. Judge Drain also rules that neither Bingham nor the RCM Trustee is authorized solely to negotiate or prepare a plan of reorganization limited to the RCM estate, or prepare any disclosure statement or seek approval of a disclosure statement or confirmation of a stand-alone RCM plan. Judge Drain will conduct a final hearing on the Application at a later date. If no objections are filed with the Court, the Interim Order will automatically be deemed final. Bingham Retention Mr. Kirschner selected Bingham because of its considerable experience in matters of financial restructuring. The firm has acted in a professional capacity in numerous Chapter 11 cases and out-of-court workouts. Specifically, Bingham will: (a) negotiate and prepare a plan of reorganization, disclosure statement, and all related agreements or documents for RCM, and take any necessary action to obtain confirmation of that plan on Mr. Kirschner's behalf; (b) assist Mr. Kirschner in compelling RCM's production of books and records concerning RCM's financial affairs and transfers of property interests; (c) advise Mr. Kirschner regarding any other sale or conveyance of RCM's assets; (d) appear before the Court and any appellate courts, and protect Mr. Kirschner's rights and interests; (e) prepare motions, applications, answers, orders, reports, and papers necessary to the administration of the RCM estate; and (f) perform all other necessary legal services and provide other legal advice to Mr. Kirschner. Mr. Kirschner clarifies that Bingham's role will not extend to litigation or other action that would be adverse to any client of the firm, nor does he anticipate needing Bingham's services. In those circumstances, Mr. Kirschner would engage other counsel as needed. Bingham's current hourly billing rates, which are adjusted in January of each year, range from $135 for paraprofessionals to $850 for attorneys. Tina L. Brozman, Esq., a partner at Bingham, attests that the firm does not have any connection with or any interest adverse to RCM or other parties-in-interest, and is a "disinterested person" as defined in Section 101(14) and as modified by Section 1107(6) of the Bankruptcy Code. About Refco Inc. Based in New York, New York, Refco Inc. -- http://www.refco.com/- - is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. (Refco Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000) REO MOVING: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: REO Moving & Van Lines, Inc. 7000 South Chicago Avenue Chicago, Illinois 60637 Bankruptcy Case No.: 06-05835 Chapter 11 Petition Date: May 20, 2006 Court: Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Karen J. Porter, Esq. Law Offices of Karen J. Porter, Ltd. 11 East Adams Street, Suite 604 Chicago, Illinois 60603 Tel: (312) 673-0333 Fax: (312) 673-0334 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million A full-text copy of the Debtor's 9-page list of its largest unsecured creditors is available for free at http://researcharchives.com/t/s?99c REYNOLDS AMERICAN: Launches Exchange Offer for $1.45 Billion Notes ------------------------------------------------------------------ Reynolds American Inc. is commencing an exchange offer pursuant to which it will offer to issue, in a private offering, new senior secured notes in exchange for up to $1.45 billion aggregate principal amount outstanding of: * 6.500% Notes due 2007 (CUSIP No. 76182KAM7), * 7.875% Notes due 2009 (CUSIP Nos. 76182KAL9 and 74960LBN5), * 6.500% Secured Notes due 2010 (CUSIP No. 76182KAR6), * 7.250% Notes due 2012 (CUSIP No. 76182KAN5) and * 7.300% Secured Notes due 2015 (CUSIP No. 76182KAS4) issued by RAI's direct, wholly owned subsidiary, R.J. Reynolds Tobacco Holdings, Inc., and the related consent solicitation to amend the indentures under which the RJR Notes were issued. The Exchange Offer and Consent Solicitation are being made upon the terms and conditions set forth in the Offer to Exchange and Consent Solicitation Statement dated May 19, 2006 and related materials, copies of which will be delivered to holders of the RJR Notes eligible to participate in the offer. The Exchange Offer will expire at 5:00 p.m., New York City time, on June 16, 2006, unless such date is extended. Tendered RJR Notes may not be withdrawn and consents may not be revoked after 5:00 p.m., New York City time, on June 16, 2006. Each eligible holder exchanging RJR Notes in the Exchange Offer will receive, in exchange for RJR Notes tendered, an equal principal amount of RAI Notes, having interest rates, maturity dates and interest payment dates identical to the RJR Notes exchanged. The RAI Notes will be guaranteed by additional guarantors as compared with the RJR Notes. In the Consent Solicitation, RAI is soliciting the consent of the holders of RJR Notes to eliminate substantially all of the restrictive covenants and one of the bankruptcy events of default contained in the indentures governing the RJR Notes. Holders may not tender their RJR Notes without delivering consents or deliver consents without tendering their RJR Notes. No exchange or consent fee is payable in connection with the Exchange Offer or Consent Solicitation. RAI's obligation to accept and exchange RJR Notes validly tendered pursuant to the Exchange Offer is conditioned on, among other things, the closing of RAI's acquisition of a to-be-formed holding company that will own Conwood Company, L.P., Conwood Sales Co., L.P., Rosswil LLC and Scott Tobacco LLC. It is not conditioned, however, upon the tender of any minimum aggregate principal amount of the outstanding RJR Notes. RAI reserves the right to terminate, withdraw, amend or extend the Exchange Offer in its discretion, subject to the terms and conditions set forth in the Offer to Exchange. The Exchange Offer has not been and will not be registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction. The RAI Notes will be issued in reliance upon exemptions from registration under the Securities Act. The RAI Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. The Exchange Offer and Consent Solicitation will only be made pursuant to the Offer to Exchange, which will be made available to eligible holders of RJR Notes by the information agent: Global Bondholder Services Corporation Telephone (866) 804-2200 or (212) 430-3774 About Reynolds American Inc. Based in Winston-Salem, North Carolina, Reynolds American Inc. (NYSE: RAI) -- http://www.ReynoldsAmerican.com/-- is the parent company of R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company, Inc., Lane Limited and R.J. Reynolds Global Products, Inc. R.J. Reynolds Tobacco Company, the second- largest U.S. tobacco company, manufactures about one of every three cigarettes sold in the country. The company's brands include five of the 10 best-selling U.S. brands: Camel, Kool, Winston, Salem and Doral. Santa Fe Natural Tobacco Company, Inc. manufactures Natural American Spirit cigarettes and other tobacco products for U.S. and international markets. Lane Limited manufactures several roll- your-own, pipe tobacco and little cigar brands, and distributes Dunhill tobacco products. R.J. Reynolds Global Products, Inc. manufactures, sells and distributes American-blend cigarettes and other tobacco products to a variety of customers worldwide. * * * As reported in the Troubled Company Reporter on May 18, 2006, Standard & Poor's Ratings Services assigned its 'BB' senior secured debt rating and '3' recovery rating to Reynolds American Inc.'s proposed issue of seven-, ten-, and 12-year senior secured notes, totaling $1.65 billion. (Allocation of maturities has not been determined yet.) These ratings are based on preliminary offering statements and are subject to review upon final documentation. In addition, Standard & Poor's lowered its senior unsecured debt rating on RJR's existing senior unsecured notes to 'BB-' from 'BB', because of the increased amount of priority debt ahead of it, and removed these ratings from CreditWatch where they were placed April 25, 2006. Standard & Poor's also lowered its existing preliminary senior secured/senior unsecured/subordinated debt ratings on RJR's shelf registration for debt securities to 'BB/BB-/BB-' from 'BB+/BB/BB-'. These ratings also were removed from CreditWatch, where they were placed on April 25, 2006. The corporate credit ratings on both RAI and RJR are BB+/Negative/--. RITE AID: Will Hold Annual Stockholders Meeting on June 21 ---------------------------------------------------------- Rite Aid Corporation will hold its annual stockholders meeting at 1:00 p.m. on June 21, 2006, at the Hilton Harrisburg located at One North Second Street in Harrisburg, Pennsylvania. Rite Aid's stockholders will be asked to: (1) elect three directors to hold office until 2009 and one director to hold office until 2007; (2) consider and vote upon a stockholder proposal, requesting that the Company's Board of Directors adopt a majority vote standard for the election of directors; and (3) transact other business as may properly come before the meeting. A full-text copy of the Company's proxy statements is available for free at http://ResearchArchives.com/t/s?990 Rite Aid Corporation -- http://www.riteaid.com/-- is a drugstore chain with 2005 annual revenues of $17.3 billion and approximately 3,320 stores in 27 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Feb. 16, 2006, Fitch affirmed Rite Aid Corporation's issuer default rating at 'B-'; $1.75 billion secured bank credit facility at 'BB-' and recovery rating at 'RR1'; secured notes at 'BB-' and recovery rating 'RR1'; and downgraded Rite Aid's senior unsecured notes to 'CCC+' from 'B-' and recovery rating to 'RR5' from 'RR4'. Fitch says Rite Aid's rating outlook remains stable. As reported in the Troubled Company Reporter on Sept. 1, 2005, Moody's lowered its speculative grade liquidity rating to SGL-3 from SGL-2 and affirmed Rite Aid Corporation 's $860 million 2nd-lien senior secured notes at B2; $1.28 billion of senior notes at Caa1; $250 million of 4.75% convertible notes at Caa1; and Corporate Family Rating (previously called the Senior Implied Rating) at B2. RODNEY POLAND: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Rodney Eugene Poland aka Rod Poland 2023 Cheyenne Street Golden, Colorado 80401 Bankruptcy Case No.: 06-12886 Type of Business: The Debtor is an officer, director, and shareholder of Newstrom-Davis Construction, New-Tek Building Systems, Rodney E. Poland Enterprises, and Blue Sky Concrete/NDCC, Inc. Chapter 11 Petition Date: May 19, 2006 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Lee M. Kutner, Esq. Kutner Miller, P.C. 303 East 17th Avenue, Suite 500 Denver, Colorado 80203 Tel: (303) 832-2400 Fax: (303) 832-1510 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Maria Custom Sheet Metal, Inc. Trade Debt $225,000 2905 South Wyandot Street Englewood, CO 80110 Marquez Constructor, Inc. Trade Debt $180,000 dba Mechanical Constructors, Inc. 5980 West 59th Avenue Arvada, CO 80003 Bank of the West Lease Guaranty $63,301 475 Sansome Street 19th Floor San Francisco, CA 94111-3112 Axis Capital, Inc. Lease Guaranty $54,347 U.S. Bank Loan $49,232 Marlon Leasing Lease Guaranty $33,930 Santa Barbara Bank Lease Guaranty $31,884 MBNA Visa Credit Card $30,000 Enterprise Fleet Lease $23,000 Equipment Finance Group, Inc. Lease $22,474 Sterling National Park Lease $20,936 Allaboard Trade Debt $13,473 Enterprise Fleet Trade Debt $8,000 NOS Equipment Rental Trade Debt $6,700 United Rentals Trade Debt $6,300 Ralph Canta�o, Esq. Legal Services $5,000 Concrete Equipment Supply Trade Debt $4,909 Wells Fargo Credit Card $3,000 GE Money Bank Trade Debt $1,400 Rocky Mountain Gastroenology Medical Services $414 SAINT VINCENTS: Asks for Authority to Pay $1 Mil. Break-Up Fee -------------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates ask the U.S Bankruptcy Court for the Southern District of New York to approve a Break-Up Fee and Expense Reimbursement related to the proposed sale of two of their hospitals to Caritas Health Care Planning, Inc. As reported in the Troubled Company Reporter on May 16, 2006, the Debtors entered into an Asset Purchase Agreement dated May 9, 2006, with Caritas Health Care Planning, Inc., an affiliate of Wyckoff Heights Medical Center, for the sale of the Mary Immaculate Hospital and St. John's Queen's Hospital located in Queens, New York, subject to higher or better offers received through a bidding process and auction. The Purchase Agreement between the Debtors and Caritas Health Care Planning, Inc., for the sale of the Mary Immaculate Hospital and St. John's Queens Hospital provides that in the event a transaction with a different Qualified Bidder is consummated and Caritas Health Care has not committed a material breach of the Purchase Agreement, it will be entitled to a Break-Up Fee of $1,000,000 and an Expense Reimbursement of up to $400,000. If the Debtors exercise their right to terminate the Purchase Agreement for the reason that the Sale has not closed by December 31, 2006, and: (i) Caritas Health Care has received approval of its certificate of need at the time of termination; (ii) an action or failure to act by a governmental body has prevented the parties from closing the Sale; and (iii) at the time of termination, Caritas Health Care was otherwise capable of closing the Sale; they will pay Caritas Health Care an Expense Reimbursement of up to $750,000. George A. Davis, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that the Break-Up Fee and Expense Reimbursement are reasonable in relation to the size of the proposed sale. Under the Purchase Agreement, the Break-Up Fee constitutes approximately 2.4% of the total consideration to be provided to the Debtors and the Expense Reimbursement constitutes, at most, 1.8% of total consideration. Given the size of the Break-Up Fee and Expense Reimbursement relative to the total amount of consideration provided for the Queens Assets and relative to the "overbid" requirements in the Bidding Procedures, the Fees are not so large as to have a "chilling effect" on other prospective bidders' interest in the Queens Assets, Mr. Davis maintains. The Break-Up Fee and Expense Reimbursement constitute actual and necessary costs and expenses of preserving the Debtors' estates within the meaning of Section 503(b) of the Bankruptcy Code, Mr. Davis emphasizes. Thus, the Break-Up Fee and Expense Reimbursement should be treated as allowed administrative expense claims under Sections 503(b) and 507(a)(1). About Saint Vincents Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) SENECA GAMING: S&P Raises Corp. Credit & Sr. Unsec. Ratings to BB ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and senior unsecured ratings on Niagara Falls, New York-based Seneca Gaming Corp. to 'BB' from 'BB-'. The outlook is stable. For the six months ended March 2006, EBITDA at Seneca Niagara Casino increased 8% to $62 million compared to the prior-year's period, due to additional gaming supply following the opening of SNC's new luxury hotel in December 2005. EBITDA at Seneca Allegany Casino increased 25% to $25 million for the six months ended March 2006 due to the July 2005 opening of a new parking garage. Ratings reflect: * Seneca Gaming's limited diversity as an operator of two casinos in western New York; * challenges in managing a larger gaming operation; and * an evolving competitive landscape. These factors are tempered by: * limited competition at Seneca Gaming's facilities at the present time; * good operating performance; and * credit measures that are satisfactory for the current ratings. SERACARE LIFE: Creditors' Panel Hires Pachulski Stang as Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of California authorized the Official Committee of Unsecured Creditors of SeraCare Life Sciences, Inc., to retain Pachulski Stang Ziehl Young Jones & Weintraub LLP as its counsel. The Committee selected Pachulski Stang as counsel because of the firm's extensive expertise and knowledge in the area of insolvency, business reorganizations and creditors' rights. Pachulski Stang is expected to assist, advise and represent the Committee: a) in its consultations with the Debtor and other creditor constituencies or parties in interest regarding the administration of the Debtor's bankruptcy case; b) in analyzing the Debtor's assets and liabilities, investigating the extent and validity of liens and participating in and reviewing any proposed asset sales, other asset dispositions, financing arrangements and cash collateral stipulations or proceedings; c) in any manner relevant to reviewing and determining the Debtor's rights and obligations under unexpired leases and Executory contracts; d) in connection with any review of management, compensation issues, analysis of retention or severance benefits, or other management related issues; e) in investigating the acts, conduct, assets, liabilities and financial condition of the Debtor, the operation of the Debtor's business and the desirability of the continuance of any portion of the business, and any other matters relevant to this case or to the formulation of a plan; f) in its participation in the negotiation, formulation and drafting of a plan of reorganization; g) on issues concerning the appointment of a trustee or examiner under section 1104 of the Bankruptcy Code; h) in the performance of all of its duties and powers under the Bankruptcy Code and the Bankruptcy Rules and in the performance of other services that are in the interests of those represented by the Committee; and i) in the evaluation of claims and any litigation matters. Henry C. Kevane, Esq., the lead attorney handling Pachulski Stang's Committee representation, charges $525 per hour for his services. The list of the hourly rates for the firm's other professionals is available for free at: http://ResearchArchives.com/t/s?996 Mr. Kevane assures the Bankruptcy Court that Pachulski Stand does not represent any other entity having an adverse interest in connection with the Debtor or its bankruptcy case and his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. About SeraCare Based in Oceanside, California, SeraCare Life Sciences, Inc. -- http://www.seracare.com/-- develops and manufactures biological based materials and services for diagnostic tests, commercial bioproduction of therapeutic drugs, and medical research. The Company filed for chapter 11 protection on March 22, 2006 (Bankr. S.D. Calif. Case No. 06-00510). The Official Committee of Unsecured Creditors selected Henry C. Kevane, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, as its counsel. When the Debtor filed for protection from its creditors, it listed $119.2 million in assets and $33.5 million in debts. SILICON GRAPHICS: U.S. Trustee Picks Four-Member Creditors Panel ---------------------------------------------------------------- Pursuant to Section 1102(a)(1) of the Bankruptcy Code, Diana G. Adams, the acting U.S. Trustee for Region 2, appointed four creditors willing to serve on the Official Committee of Unsecured Creditors in Silicon Graphics Inc., and its debtor-affiliates' Chapter 11 cases: 1. Hammerman Capital Master Fund L.P. as managed by Hammerman Capital Management LLC 101 Huntington Ave., 25th Floor Boston, MA 02199 Tel: (617) 424-4400 Fax: (617) 424-4401 Attn: Jaspaul Singh, Analyst 2. JP Morgan Chase Bank, N.A. Worldwide Securities Services as Indenture Trustee 4 New York Plaza, 15th Floor New York, NY 10004 Tel: (212) 623-6736 Fax: (212) 623-6624 Attn: F.J. Grippo, Vice President 3. Solectron Corp. 847 Gibraltar Drive, Building 5 Milpitas, CA 95035 Tel: (408) 956-7562 Fax: (408) 956-6445 Attn: Richard Schwalbe, Global Credit Manager 4. Xyratex 2031 Concourse Drive San Jose, CA 95131 Tel: (408) 325-7200 Fax: (408) 894-0880 Attn: Bruce Shimabukuro, U.S. Legal Counsel 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. 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) SILICON GRAPHICS: Moody's Lowers Rating to Ca Post-Bankruptcy ------------------------------------------------------------- Moody's Investors Service downgraded SGI's corporate family rating to Ca following the company's announcement that it has filed for bankruptcy. The downgrade reflects Moody's expectation of limited recovery for debt holders, particularly for the subordinated debt, currently rated C. Moody's will withdraw all ratings for SGI in accordance with Moody's rating withdrawal policy for companies in bankruptcy. Please refer to Moody's withdrawal policy on http://Moodys.com/ Ratings withdrawn include: Subordinated Convertible Debentures rating at C 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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOUNDVIEW HOME: DBRS Puts Rating on $12.05 Million NIM NOTES at B ----------------------------------------------------------------- Dominion Bond Rating Service assigned new ratings of A (low), BBB (low), BB, and B to these NIM Notes, Series 2006-OPT2, issued by Soundview CI-12. * $45.75 million, NIM Notes, Series 2006-OPT2, Class N1 New Rating A (low) * $14.05 million, NIM Notes, Series 2006-OPT2, Class N2 New Rating BBB (low) * $7.25 million, NIM Notes, Series 2006-OPT2, Class N3 New Rating BB * $12.05 million, NIM Notes, Series 2006-OPT2, Class N4 New Rating B The NIM Notes are backed by a 100% interest in the Class C and Class P Certificates issued by Soundview Home Loan Trust 2006- OPT2. The Class C Certificates will be entitled to all excess interest in the Underlying Trust, and the Class P Certificates will be entitled to all prepayment premiums or charges received in respect of the mortgage loans. The NIM Notes will also be entitled to the benefits of the underlying swap with HSBC Bank USA, National Association. Payments on the NIM Notes will be made on the 25th of each month, commencing in May 2006. The interest payment amount on the NIM Notes will be distributed sequentially to the noteholders of Class N1 through Class N4, followed by the principal payment amount distributed sequentially to the noteholders of Class N1 through Class N4 until the balance of such class has been reduced to zero. Any remaining amounts will be distributed to the Issuer, the Indenture Trustee, and holders of Preference Shares. All mortgage loans in the Underlying Trust were originated or acquired by Option One Mortgage Corporation. SUPERIOR ENERGY: Gets Requisite Consents from 8-7/8% Noteholders ---------------------------------------------------------------- Superior Energy Services, Inc.'s wholly owned subsidiary, SESI, L.L.C., received as of 5:00 p.m. New York City time on May 18, 2006, consents from the holders of approximately $195 million in aggregate principal amount, or approximately 97.6% of its outstanding 8-7/8% Senior Notes due 2011, to the proposed amendments to the indenture governing the Notes. The proposed amendments to the Indenture are described in the Company's Offer to Purchase and Consent Solicitation Statement dated May 5, 2006. Adoption of the proposed amendments requires the consent of holders of at least a majority of the aggregate principal amount of the outstanding Notes. Accordingly, the Company and the trustee under the Indenture will execute a supplemental indenture to effect the proposed amendments, which will eliminate substantially all of the restrictive covenants and certain events of default contained in the Indenture. However, the proposed amendments will not become operative unless and until the Company accepts the tendered Notes for purchase pursuant to the Offer Statement. Holders of the Notes who tendered their Notes and delivered consents on or prior to the Consent Date will receive total consideration of $1,045.63 per $1,000 principal amount of Notes validly tendered. The total consideration includes a consent payment of $10.00 per $1,000 principal of Notes validly tendered. Holders who tender their Notes after the Consent Date but on or prior to 5:00 p.m. New York City time on Monday, June 5, 2006, which is the scheduled expiration date of the offer, will not be entitled to receive the consent payment and will receive $1,035.63 per $1,000 principal amount of Notes validly tendered. In each case, holders who validly tender their Notes shall receive accrued and unpaid interest on the principal amount of such Notes up to, but not including, the applicable payment date. Following completion of the tender offer, the Company intends to redeem any remaining Notes in accordance with the procedures set forth in the Indenture. Under the terms of the Notes, the Company may redeem the Notes at the redemption price of $1,044.38 per $1,000 principal amount of Notes redeemed. The complete terms and conditions of the tender offer and consent solicitation are described in the Offer Statement, copies of which may be obtained by contacting either the information agent for the offer: D.F. King & Co., Inc. Telephone (212) 269-5550 (for banks and brokers only) Toll Free (888) 887-0082 or the depositary agent for the offer: The Bank of New York Trust Company, N.A. Telephone (904) 988-4718 The Company has engaged Bear, Stearns & Co. Inc. to act as the dealer manager in connection with the tender offer and as the solicitation agent in connection with the consent solicitation. Questions regarding the tender offer and consent solicitation may be directed to: Global Liability Management Group of Bear, Stearns & Co. Inc. Toll Free (877) 696-BEAR(2327) About Superior Energy Services Headquartered in Harvey, Louisiana, Superior Energy Services, Inc. -- http://www.superiorenergy.com/-- is a leading provider of specialized oilfield services and equipment focused on serving the production-related needs of oil and gas companies primarily in the Gulf of Mexico and the drilling-related needs of oil and gas companies in the Gulf of Mexico and select international market areas. The Company uses its production-related assets to enhance, maintain and extend production and, at the end of an offshore property's economic life, plug and decommission wells. The Company also owns and operates mature oil and gas properties in the Gulf of Mexico. * * * As reported in the Troubled Company Reporter on May 18, 2006, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Superior Energy Services Inc. and assigned its 'BB-' senior unsecured rating to the $300 million senior unsecured notes issued by SESI LLC and guaranteed by Superior, due 2014. The outlook is stable. Proceeds from the note offering would be used to redeem Superior's $200 million senior notes due 2011; fund the acquisition of oil and gas properties from Explore Offshore LLC; and help fund the recently announced $70 million investment in Coldren Oil & Gas Co. L.P. Superior will have around $320 million of debt on a pro forma basis after this transaction. SUSQUEHANNA MEDIA: S&P Withdraws BB- Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services removed its ratings on Susquehanna Media Co., including the 'BB-' corporate credit rating, from CreditWatch, where they were placed with negative implications on April 26, 2005, and withdrew them. The rating action acknowledges that Susquehanna Media tendered for all of its 7.375% subordinated notes on Jan. 31, 2006, and that the company's last paydown under its credit facility occurred on May 5, 2006. Proceeds from the sale of Susquehanna Media's cable and radio operations were used for debt repayment. SYLVEST FARMS: Court Okays FOCUS Management as Financial Advisor ---------------------------------------------------------------- FOCUS Management Group USA, Inc., has been appointed financial advisor to Sylvest Farms, Inc., effective May 15, 2006, under an order entered by the U.S. Bankruptcy Court for the Northern District of Alabama, Eastern Division. FOCUS provided Sylvest Farms, Inc. with advisory services in planning the Company's Chapter 11 filing, and post petition is assisting the Debtor in managing all aspects of its bankruptcy case. FOCUS is also leading Sylvest's bankruptcy sale process, following the filing by the Debtor of a motion to sell its operations to the highest bidder pursuant to Section 363 of the Bankruptcy Code. In this engagement FOCUS will: a) prepare and update a rolling four-week cash flow forecast, other projections and other financial data for the Debtors; b) prepare analyses of actual cash receipts and disbursements to cash budgets and prepare other reports required by the Debtor's DIP financing facility with Wachovia Bank. c) assist the Debtors in managing its working capital. d) assist the Debtors in negotiating with vendors on the continued and uninterrupted supply of materials and services necessary to maintain the operational integrity of the Debtors' business; e) assist the debtors in the preparation of required reports to the Bankruptcy Administrator; including Monthly Operating Reports and Statements of Financial Affairs; f) assist the Debtors in organizing and managing the auction of its business and assets in accordance with Section 363 of the Bankruptcy Code, including the preparation of a confidential offering memorandum, establishment of an on- line data warehouse, assisting the Debtor with developing management presentations to potential bidders, preparing special financial analyses requested by potential bidders and assisting in the due diligence efforts of potential bidders; g) assist the Debtors in communicating with its customers, vendors, employees and other stakeholders in the Client's business regarding the status of its bankruptcy case including the preparation of initial communication materials and updates; h) manage and coordinate information requested by any Official Committee of Unsecured Creditors and the legal and financial advisors for any such Committee; i) attend hearings of the Bankruptcy Court and provide testimony as required; j) attend and advise a meeting with Debtors, their legal counsel and other professionals involved in their bankruptcy cases; k) periodically communicate with and participate in meetings with the Debtors management and other parties in interest regarding the Debtors' financial condition and the status of its bankruptcy case; l) assist the Debtors in analyzing and reporting on any preference of payments, litigation rights and reclamation claims; m) review, evaluate, assist and analyze the financial ramifications of proposed transactions for which the Debtors seeks the approval of the Bankruptcy Court, including but not limited to debtor-in-possession financing, assumption or rejections of lease and other contracts and miscellaneous assets sales. n) assist the Debtors by providing other financial or consulting services required in their bankruptcy cases. FOCUS will hold a $71,278 retainer to be applied to fees and expenses payable by the Debtors. The firm's professionals charge at these hourly rates: Designation Hourly Rate ------------ ----------- Managing Directors $400 Senior Consultants $350 FOCUS is also entitled to a performance fee equal to 2% of any amounts received as payment for assets sold above the price set by the Debtors. Performance Fees due to FOCUS will not be funded from the retainer. The FOCUS restructuring and bankruptcy advisory team is led by Kenneth Naglewski, a turnaround manager and restructuring specialist who has extensive leadership experience in Chapter 11 reorganizations, financial restructurings, operational turnarounds and distressed business sales. Mr. Naglewski is a Certified Turnaround Professional and a Principal of FOCUS. Mr. Naglewski can be reached at: FOCUS Management Group Attn: Kenneth Naglewski 5001 W. Lemon Street Tampa, Florida 33609-1103 Phone: 813-281-0062 About FOCUS Headquartered in Tampa, Florida, FOCUS Management Group -- http://www.focusmg.com/-- offers nationwide capabilities in turnaround management, business restructuring and asset recovery. The Company provides a comprehensive array of services including turnaround management, interim management, operational analysis and process improvement, bank and creditor negotiation, asset recovery, recapitalization services and investment banking to distressed companies. FOCUS Management Group has significant expertise in the insolvency arena - in matters both with and without court protection. About Sylvest Farms Headquartered in Montgomery, Alabama, Sylvest Farms, Inc. -- http://sylvestcompanies.com/-- produces, processes and markets poultry products. The Debtors employ approximately 1,500 workers. The Company and two debtor-affiliates filed for chapter 11 protection on April 18, 2006 (Bankr. N.D. Ala. Case No. 06-40525). The Debtors selected Richard A. Robinson, Esq., and Eric S. Golden, Esq., at Baker & Hostetler LLP as their bankruptcy counsel. When the Debtors filed for protection from their creditors, they estimated their total assets and debts at $50 million to $100 million. TOMMY HILFIGER: APAX Acquisition Cues Moody's to Withdraw Rating ---------------------------------------------------------------- Moody's Investors Service withdrew the Ba2 corporate family rating and unsecured debt ratings of Tommy Hilfiger Corporation and its subsidiaries following the closing of the company's acquisition by affiliates of Apax Partners on March 10, 2006. On May 10, 2006, Tommy Hilfiger U.S.A., Inc., a wholly owned subsidiary of the Company, issued a press release stating that its previously announced tender offer and consent solicitation for any and all of its 6.85% Notes due 2008, with an aggregate principal amount of $192 million, was effectively complete with 92.5% of notes tendered as of that date. On May 16, 2006, TH USA announced its intent to seek voluntary withdrawal from listing and deregistration of the 2008 Notes from the New York Stock Exchange, Inc., TH USA has also announced that it has effected a covenant defeasance of its 9% Senior Bonds due 2031, with an aggregate principal amount of $150 million, of which 49.3% had been tendered by May 18, 2006. The ratings have been withdrawn because Moody's believes it lacks adequate information to maintain a rating. TRIPLE A: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Triple A Poultry, Inc. 142 Knobcrest Drive Houston, Texas 77060 Tel: (281) 876-4818 Bankruptcy Case No.: 06-32119 Type of Business: The Debtor sells meat and poultry products. Chapter 11 Petition Date: May 19, 2006 Court: Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: James Matthew Vaughn, Esq. Porter & Hedges, LLP 1000 Main Street, 36th Floor Houston, Texas 77002-6336 Tel: (713) 226-6687 Fax: (713) 226-6287 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tyson Foods, Inc. Trade $135,459 2210 Oaklawn P.O. Box 2020 Springdale, AR 72765 SSL Enterprises Trade $117,233 P.O. 550 Sunrise Beach, MO 65079 Custom Poultry Trade $46,563 Paul Kennedy 29811 I-45, Suite 102 Spring, TX 77381 Addison Foods, Inc. Trade $31,021 Holmes Foods Co., Inc. Trade $32,805 Shank Services Trade $18,240 Platinum Poultry Plus, LLC Trade $13,800 Refrigerated Storage Trailer R Trade $9,185 Versacold Trade $9,168 Action Poultry Trade $4,760 Martin Poultry Trading Trade $3,840 Mobile Refrigeration, Inc. Trade $3,010 Wonder Foods Trade $2,664 Trailer Box Repair Trade $2,087 Laxson Company Trade $1,425 Quintos Tire Service Trade $1,254 Miner Houston, Ltd. Trade $788 C & L Foods Trade $760 Concentra Medical Center Trade $442 Oscar Gutierrez Trade $420 TURNING STONE: S&P Affirms BB- Rating & Revises Outlook to Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services revised its ratings outlook on Oneida, New York-based casino operator Turning Stone Casino Resort Enterprise to negative from stable, and affirmed all ratings, including the 'BB-' corporate credit rating. The outlook revision reflects concerns that, following repeated court denials of the Oneida Indian Nation's appeals regarding the invalidation of its gaming compact with the State of New York York -- the latest of which was May 3, 2006 -- and in the absence of an intermediate-term resolution, authorities could ultimately be pressured to enforce the invalidation. This could include taking measures that potentially result in some level of interruption of gaming operations at Turning Stone casino. Although the Nation has stated it believes the risk at this point is limited that the state, with the concurrence of the federal government, would shut down operations at Turning Stone casino -- there has been no ruling or order to stop operations by any governmental authority -- the Nation has been denied all motions for appeal following the New York State Supreme Court's 2004 ruling invalidating the Nation's gaming compact with New York. The latest denial of appeal was on May 3, 2006. The Nation is expected to petition the U.S. Supreme Court over the near term in response to the denials of its appeals. Furthermore, the resolution of the Nation's gaming compact could be complicated by the U.S. Supreme Court's denial on May 15, 2006, of a petition filed by the Cayuga Nation of New York and the Seneca-Cayuga Tribe of Oklahoma to hear the tribes' land claims cases, which have been denied. The Nation also has land claims litigation with the State of New York that is currently stayed. USG CORP: Fights Anderson Over Asbestos PD Class Certification -------------------------------------------------------------- Anderson Memorial Hospital filed a statewide asbestos property damage lawsuit against USG Corporation and three other defendants in the South Carolina Circuit Court on December 23, 1972. The other defendants include W.R. Grace & Co., United States Mineral Products Company, and Turner & Newall, which was later purchased by Federal-Mogul, all of which also filed for bankruptcy. The PD Class Action sought identification of a class action consisting of owners of buildings damaged by asbestos contamination caused by a release of asbestos fibers from asbestos-containing surfacing materials allegedly manufactured, sold or distributed by the Debtors. Unlike previously certified nationwide class actions, which named as many as 70 or more manufacturers of all kinds of asbestos- containing material, Anderson limited its action to essentially six manufacturers of a particular type of ACM applied to steel beams as fireproofing and ceilings as acoustical plaster and texture. USG and Grace were the two largest manufacturers of Surface Treatment. Anderson later proved that USG's and Grace's Surface Treatment products had been applied in Anderson's buildings. Theodore J. Tacconelli, Esq., at Ferry, Joseph & Pearce, P.A., in Wilmington, Delaware, relates that in 1983, the South Carolina Supreme Court initially appointed Circuit Court Judge John Hamilton Smith to handle all state asbestos-related property damage cases. Judge Smith entered a number of substantive rulings on the various causes of action following briefing and full hearings. Judge Smith also entered various administrative and discovery rulings applicable to all asbestos cases. Before Anderson filed the PD class action, it designated and copied the entire USG documents depository and obtained a court order requiring USG to advise it whenever it supplemented its documents depository so that Anderson could make arrangements to review and copy those documents as well. By that time, Mr. Tacconelli states, South Carolina probably had produced more important precedents in asbestos building cases than any other state in the country. Specifically, Mr. Tacconelli explains, Anderson chose South Carolina Court as a forum for its PD Class Action because it had been the site of: (a) the first settlement of an asbestos PD case with USG; (b) the first successful asbestos PD trial in the country; (c) the first asbestos PD verdict in the country on behalf of a building owner; (d) a major asbestos settlement, which the asbestos defendants attempted to repudiate; (e) a major appellate decision holding that USG's lack of knowledge at the time of the sale was no defense to a South Carolina case based on implied warranty; and (f) two asbestos PD verdicts upheld by the U.S. Court of Appeals for the Fourth Circuit, including one against USG, one asbestos PD verdict upheld by the South Carolina Supreme, and one asbestos PD verdict which the defendant did not appeal. Immediately after Anderson filed its lawsuit, USG led the way in trying to litigate the case elsewhere by removing the action to the United States District Court for the District of South Carolina. On July 6, 1993, the South Carolina District Court found that USG had improvidently removed the action and remanded it back to the Circuit Court. The case was then assigned to Judge William L. Howard, Sr., from Charleston, South Carolina, who by then the Supreme Court had appointed to succeed the retiring Judge Smith as the statewide asbestos judge. Judge Howard would supervise the Anderson case until 1996, when he was elected to the South Carolina Court of Appeals, and the Supreme Court appointed Judge John C. Hayes, III, as his replacement. Anderson Pre-Certification Proceedings Following the remand to the State Court, the parties actively litigated a number of administrative, discovery and substantive issues. The parties initially engaged in an extensive negotiation of a case management order governing discovery in the action. On March 31, 1994, USG and some of the Debtor-Defendants sought to strike class action allegations as to non-residents whose causes of action are foreign to South Carolina. The Motion was based on S.C. Code Ann. Section 15-5-150, commonly referred to as the "door closing" statute, which provides that an action against a foreign corporation "may be brought in the circuit court" by either a South Carolina resident or a non-resident when the cause of action shall have arisen or the subject of the action shall be situated within this State." Judge Howard granted the Motion to Strike on July 6, 1994. However, following Anderson's request to reconsider the ruling, Judge Howard denied the Motion on May 28, 1996. At that point, Anderson could not appeal the interlocutory ruling. Furthermore, Mr. Tacconelli relates that various parties had disputed issues on fraudulent transfers, personal jurisdiction, lack of subject matter jurisdiction and venue, and non-asbestos formulas. Class Certification Battle On January 2, 1998, Anderson asked the U.S. Bankruptcy Court to certify the PD Class Action. Pursuant to a scheduling order, Judge Hayes conducted a two-day evidentiary hearing in September 2000, and was then prepared to promptly rule. However, Mr. Tacconelli recounts, the Debtor-Defendants delayed again the process by convincing Judge Hayes that they needed to submit another memorandum after they obtained a copy of the transcript of the hearing. After submitting their last memorandum, Judge Hayes informed the parties on May 7, 2001, that he had decided to certify a class. The Circuit Court certified a statewide class action against USG and its fellow travelers. Mr. Tacconelli notes that while Grace's argument about the circumstances of the certification against it are without merit, USG has not suggested that there was anything untoward about the certification. USG did not even join in the primary basis of Grace's opposition to certification in South Carolina. In its ruling, the Circuit Court recognized that Anderson "did not limit its putative class with geographic boundaries," and that Anderson reserved "its right to appeal" the door closing ruling. After USG's Petition Date, the South Carolina Supreme Court held in another case that the "door closing" statute limits a class in the Circuit Court to South Carolina residents, but that the door closing statute is not applicable to a putative class action in the federal court, Mr. Tacconelli says, citing in Bell v. Monsanto Corp., 353 S.C. 553 (S.C. 2003); Central Wesleyan College, et al., v. W.R. Grace & Co., et al., No. 2:87-1860-8 (D.S.C. filed July 17, 1987)(J. Houck); and Central Wesleyan College, et al., v. W.R. Grace & Co., 143 F.R.D. 628 (D.S.C. 1992), aff'd 6F.3d 177 (4th Cir. 1993). Consequently, but for USG's bankruptcy, Anderson was free to seek a broader certification in the South Carolina, Mr. Tacconelli points out. Anderson Wants Class Certification Recognized & Extended The Circuit Court certified a South Carolina class action on behalf of all South Carolina property owners whose buildings are contaminated with asbestos fibers released from asbestos- containing surfacing materials for which the Debtors are legally responsible, with these exceptions: -- any public and private elementary and secondary school within the class action In re: Asbestos School Litigation, 104 F.R.D. 422 (E.D.Pa.1984); -- any public and private college and university within the class action Central Wesleyan College v. W. R. Grace & Co. et al. 143 F.R.D. 628 (D.S.C.1992); -- any commercial building leased in any part to the U.S. government on or after May 30, 1986, within the class action Prince George Center. Inc. v. United States Gypsum Co., et al. CA No. 5388 in the Philadelphia Common Pleas Court); -- any building owned by the State of South Carolina within the action The State of South Carolina v. W. R. Grace & Co., et al., CA No. 3:872879-0 (D.S.C.); or -- any building owned by the federal government. Anderson seeks to remove the geographical limitation. Anderson recognizes that any building for which a PD claim is currently pending in the Debtors' cases which was not filed under the Anderson umbrella is an effective opt out from its proposed class. By this motion, Anderson asks the U.S. Bankruptcy Court to recognize the PD Class Certification the South Carolina Circuit Court entered against the Debtors. According to Mr. Tacconelli, the Statewide Circuit Court properly held that Anderson had met all the requirements for class certification. Rule 23(a) of the Federal Rules of Civil Procedure provides that one or more members of a class may sue or be sued as representative parties on behalf of all if: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. Mr. Tacconelli argues that if the Bankruptcy Court does not recognize the state certification judgment, it must provide notice to all members of the state class for whom Anderson, with authority, filed a class proof of claim. Furthermore, Anderson wants the PD Class Certification extended to include other similarly situated property owners located outside of South Carolina whose claims the Circuit Court could not include solely by reason of the South Carolina "door closing" statute. Even without prior judicial findings against USG, Mr. Tacconelli asserts that an extension of the certification would be extended with an almost unbroken line of authorities, which recognize that asbestos PD cases are perfectly matched for class action treatment. Mr. Tacconelli maintains that the recognition in the asbestos PD cases that certification achieves considerable economy in terms of the Bankruptcy Court's and litigants' time and financial resources is just as important in a bankruptcy setting "where the Debtors insist on reserving their option to ask the [Bankruptcy] Court to litigate all PD claims (even though admittedly unnecessary for the confirmation of its Plan) as opposed to sending the claims back to a host of jurisdictions." Certification would also correct USG's failure to provide individual notice of the PD bar date order to claimants USG knew had its products and who are within the definition of Anderson's putative class, and to known supply houses which distributed USG products. Certification would permit the Court to deal with issues surrounding adequate notice to homeowners with USG's texture products on their ceilings who at the time the PD bar date was established had no idea that their ceilings even contained asbestos, much less knew the manufacturer, and certainly did not know how to safely test for it. Debtors Object The concerns of the Third Circuit Court of Appeals in SEC v. Aberdeen Securities Co., Inc., 480 F.2d 1121 (3d Cir. 1973), ring true in Anderson's case, Paul N. Heath, Esq., at Richard, Layton & Finger, in Wilmington, Delaware, contends. Class certification under Rule 23(b)(3) of the Federal Rules of Civil Procedure against a debtor, after the notice and bar date, will seldom if ever present a superior alternative to the usual proceedings of bankruptcy. According to Mr. Heath, Anderson's request to certify a worldwide class makes no sense, from either a bankruptcy standpoint or from the perspective of Rule 23. Mr. Heath explains that bankruptcy procedures are intended to provide a vehicle for the orderly, relatively expeditious resolution of legitimate claims against the debtor so that it may reorganize and go forward. Anderson makes no real argument, however, that allowing it to seek certification of either a worldwide or South Carolina state-wide class of unidentified building owners would advance that purpose. Mr. Heath notes that the Bankruptcy Court recognized this problem at the April 17, 2006 Hearing. The Court held that: ". . . I really don't see at this point where the bar date that expired two, almost three years ago, why I would be opening up the concept of a bar date, because that's what the request to certify a class would do. It would simply provide additional notice to the world that already had notice of the fact that they have an obligation to file the class proof of claim." Mr. Heath points out that the identities of the members of the putative class sought by Anderson -- all property owners throughout the world, or even in South Carolina, whose buildings are or will be "contaminated" by asbestos-containing surfacing materials "for which the Debtors are legally responsible" -- are unknown and unknowable. Certifying a class would do nothing to further the objectives of the bankruptcy proceeding, but rather would delay the termination of that proceeding. On the other hand, there are no equitable reasons to allow class certification. Mr. Heath explains that the Debtors are unaware of any notice being provided to the South Carolina building owners who were members of the class certified in Anderson's state court case. No argument is made that Anderson "class members" previously received notice in that case or are otherwise likely aware of or relying on the South Carolina class proceeding in any way. In contrast, the Bankruptcy Court has recognized the substantial and specialized notice previously provided in USG's proceeding, the clarity and certainty of which would be undermined by certifying a class that entailed a second seemingly duplicative notice. About USG Corp. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 110; Bankruptcy Creditors' Service, Inc., 215/945-7000) USG CORP: Anderson Memorial Wants Stay Lifted to Unseal Records --------------------------------------------------------------- Anderson Memorial Hospital asks Judge Fitzgerald to modify the automatic stay so it may make a petition to Judge John C. Hayes, III, of the South Carolina Court of Common Pleas to unseal the record from the class certification proceedings in "Anderson Memorial Hospital v. W.R. Grace & Co., et al., 92-CP-25-279." USG Corporation is a defendant in that case. Theodore J. Tacconelli, Esq., at Ferry, Joseph & Pearce, P.A., in Wilmington, Delaware, asserts that if Anderson Memorial's petition is granted, it could then present the substantial record on class certification, including testimony and affidavits, for use in the Debtors' bankruptcy proceedings. Mr. Tacconelli maintains that the records would provide the Bankruptcy Court "with clear and incontrovertible evidence that the Anderson class certification issue was fully litigated before the South Carolina Court." About USG Corp. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 109; Bankruptcy Creditors' Service, Inc., 215/945-7000) VII SERIES: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: VII Series Inc. 400 South Beverly Drive Beverly Hills, California 90212 Bankruptcy Case No.: 06-12127 Chapter 11 Petition Date: May 22, 2006 Court: Central District Of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Charles Shamash, Esq. Caceres & Shamash, LLP 8383 Whilshire Boulevard, Suite 1010 Beverly Hills, California 90211 Tel: (323) 852-1600 Fax: (323) 852-9009 Total Assets: $1,200,000 Total Debts: $419,943 The Debtor does not have any creditors who are not insiders. WINN-DIXIE: Bids for Hollywood Tract Must Be Submitted by May 26 ---------------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to sell their fee simple title interest in the Hollywood Tract to South Florida Investment Group, LLC, free and clear of liens, claims and interests, subject to higher or better offers. Before its bankruptcy filing, the Debtors purchased a tract of land located in Hollywood, Florida. The Debtors planned to build a grocery store on the property. The Debtors no longer wish to develop the Hollywood Tract and have decided to sell it. D. J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that the Debtors have marketed the Hollywood Tract extensively through DJM Asset Management, Inc. The Debtors received five offers. After reviewing the offers, the Debtors determined that South Florida Investment Group, LLC's $6,250,000 bid is the highest and best offer for the Hollywood Tract. On May 1, 2006, the Debtors and South Florida Investment entered into a Real Estate Purchase Agreement. Pursuant to the Agreement, South Florida Investment has paid a $500,000 deposit. The Debtors will be responsible for payment of a brokerage commission, due South Florida Investment's broker, Wiz Realty, for 1% of the purchase price, only if the transaction is consummated at Closing. The Debtors will also be responsible for payment of their broker's fee. Higher and better offers must be submitted no later than 12:00 p.m. (prevailing Eastern Time) on Friday, May 26, 2006, to James Avallone at DJM, 445 Broadhollow Road, Suite 417 in Melville, New York; with a copy to the Debtors' counsel: D. J. Baker, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036 Tel: (212) 735-3000 Fax: (212) 735-2000 Cynthia C. Jackson, Esq. Smith Hulsey & Busey 225 Water Street, Suite 1800 Jacksonville, FL 32202 Tel: (904) 359-7700 Fax: (904) 359-7708 The minimum qualified competing bid is $6,260,000 and accompanied by a certified check or wire transfer made out to Winn-Dixie Stores, Inc., in an amount equal to 10% of the competing bid. If the Debtors receive a higher or better offer for the Assets, they will conduct an auction at 10:00 a.m. Prevailing Eastern Time on Wednesday, May 31, 2006, at the offices of Smith Hulsey & Busey, 225 Water Street, Suite 1800 in Jacksonville, Florida. 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. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000). WORLDCOM INC: Court Approves Deutsche Bank Settlement Agreement --------------------------------------------------------------- The Hon. Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York approved WorldCom, Inc., and its debtor-affiliates' Settlement Agreement with Deutsche Bank Securities Inc. in its entirety. Deutsche Bank will be deemed to be the record holder of each of the Settled and Satisfied Proofs of Claim. NECA Seeks Hearing Adjournment Prior to the Court-approved agreement, in a letter dated April 25, 2006, that National Exchange Carrier Association asks the Court to adjourn the hearing date on the Debtors' request. In the letter, Patricia A. Staiano, Esq., at Scarpone, Staiano & Savage LLC, in Newark, New Jersey, confirmed that NECA members transferred their claims to Deutsche Bank Securities, Inc. According to Ms. Staiano, NECA seeks an additional month to consider the Motion because it wants to: -- ensure that the claimants identified on the settlement are all NECA members; and -- determine the accuracy of the data provided by the Debtors. In addition, NECA plans to draft an alternative form of order that would preserve its rights in future third-party litigation. Adjournment is Not Warranted, Debtors Say Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in New York, contends that NECA's concerns fail to justify a one-month adjournment of the hearing date. NECA was given a full month between the filing of the Motion and the return date, Mr. Perez relates. That is ample time to review and comment on a proposed order that is less than five pages long. NECA's concern that a non-NECA member may have been identified in the Settlement does not give NECA the right to meddle in the Settlement, Mr. Perez maintains. Moreover, even if the reasons presented by NECA were valid concerns, the Court should overrule NECA's request because it is not a party-in-interest and has no standing with respect to the Motion, Mr. Perez asserts. Thus, the Debtors ask the Court to continue the hearing date on the Motion, as scheduled. Responses (1) CenturyTel CenturyTel, Inc., and its affiliates timely filed valid proofs of claim against the Debtors. On February 28, 2003, CenturyTel assigned its claims to Deutsche Bank through its agent, NECA, Alexander M. Laughlin, Esq., at Wiley Rein & Fielding LLP, in McLean, Virginia, tells the Court. CenturyTel does not object to the allowance of its claim for $21,283,515. However, the Assignment requires that at least 95% of the CenturyTel Claims be allowed against MCI WorldCom Network Services, Inc. CenturyTel believes that under the substantive consolidation of the Debtors' Plan of Reorganization, allowance as a Class 6 claim satisfies that requirement under the Assignment, and that Deutsche Bank would not be able to successfully assert any recourse against CenturyTel following allowance under Class 6. Nevertheless, in an abundance of caution, CenturyTel asks the Court to rule that any order on the Settlement Motion specifically include language clarifying that allowance of the CenturyTel Claims as a Class 6 claim under the Plan constitutes a fully perfected and allowed claim against the Debtors. (2) UBTA-UBET UBTA-UBET Communications, a small rural local exchange carrier that provides telecommunications services to the Reorganized Debtors, timely filed Claim No. 16457 for $717,731, for unpaid prepetition telecommunications services on January 21, 2003, Stephen Hogan, Esq., at Yeskoo Hogan & Tamlyn, LLP, in New York, tells the Court. Subsequently, UBET sold its Claim to Deutsche Bank in a transaction arranged by NECA, acting as agent for UBET and many other small and mid-sized local exchange carriers selling their claims. According to Mr. Hogan, the Assignment of Claims Agreement negotiated by NECA on UBET's behalf provided that Deutsche Bank initially would pay UBET an agreed-upon percentage of the amount of UBET's claim that the Debtors acknowledged in their Schedules of Assets and Liabilities was due and owing. However, the Claims Sales Contract provided that Deutsch Bank was purchasing all of UBET's claim, including any proof of claim filed by UBET. On allowance of the claim at an amount higher than the Scheduled Amount, the Claims Sale Contract required Deutsche Bank to make further payment to UBET equal to the applicable percentage multiplied by the difference between the Allowed Amount and the Scheduled Amount. In UBET's case, the claim amount was $717,731, but the Scheduled Amount was only $128,022. The Debtors have objected to UBET's claim. UBET's counsel then asked Deutsche Bank's counsel if Deutsche Bank agree that it would be responsible for further defense of the UBET Claim. Deutsche Bank's counsel agreed, Mr. Hogan relates. However, Deutsche Bank ignored its acknowledged duty to defend the UBET Claim, Mr. Hogan contends. Deutsch Bank agreed with the Debtors to reduce the $717,731 claim to $245,956, without ever contacting the designated UBET employee or UBET's counsel to seek any document or other support for the UBET Claim. The result of Deutsche Bank's failure to defend the UBET claim is a reduction in the claim amount that deprives UBET more than $200,000 in cash, Mr. Hogan asserts. UBET asks the Court to deny the Settlement Motion. Mr. Hogan tells Judge Gonzalez that UBET is not a party to the Settlement between the Debtors and Deutsche Bank and should not be bound by it in any way. Furthermore, the Settlement Motion does not contain sufficient notice of any attempt to adjudicate the rights of claims sellers relative to Deutsche Bank. Moreover, to the extent Deutsche Bank is seeking equitable relief against the claims sellers through seeking findings that it acted in good faith and entered into fair and reasonable settlements, that request for declaratory relief requires an adversary proceeding, Mr. Hogan adds. (3) NECA The National Exchange Carrier Association, Inc., on behalf of its members, intends to file a civil action against Deutsche Bank for breach of duty imposed by the contract wherein NECA members assigned to Deutsche Bank the claims that are being settled. NECA acknowledges that the claims have been assigned to Deutsche Bank, and does not object to its substitution as the record holder of the claims. NECA also acknowledges that the proposed settlement is in the Debtors' best interest. However, NECA objects to what appears to be an attempt by Deutsche Bank's counsel to write an opinion incorporating allegedly unnecessary findings of fact and conclusions of law for the purpose of precluding, limiting or altering the rights of a third party, who is not a party to the Motion. "Were it not for the terms of the proposed Order, NECA would agree with the Debtors' counsel that it has no standing to be heard on the terms of the settlement of the claims which have been assigned from NECA's members to Deutsche Bank," Patricia A. Staiano, Esq., at Scarpone, Staiano & Savage LLC, in Newark, New Jersey, tells the Court. Ms. Staiano asserts that ignoring the effect of settlement rights on third parties contravenes a basic notion of fairness. "NECA and its members were given no opportunity to participate in the negotiation of the claims reduction, the agreement between the Debtors and Deutsche Bank, and the form of order approving the settlement." Deutsche Bank agreed to pay NECA members who assigned their claims before February 28, 2003, 50% of their applicable claim amount. Those who assigned their claim from February 28 to March 7, 2003, would be paid 45%. The applicable claim amount was the lesser of the scheduled claim amount or the proof of claim amount, reduced by the creditors' good faith estimation of any set-offs to which the Debtors were entitled. If a claim was ultimately allowed for a greater amount, the contract required payment of the applicable percentage of the increased amount within two days of that increased allowance. If any assigned claim is disallowed or reduce, the contract provided for repayment by the claim assignor with interest. Ms. Staiano points out that the problems stem from the fact that the actual distribution percentage on the claims under the confirmed Plan is substantially less than the percentage that Deutsche Bank agreed to pay for the acquisition of its claims. NECA believes that the solution is to change the proposed order so that it gives the Debtors and Deutsche Bank the settlement that they negotiated without impacting any of NECA's rights, which were never part of any settlement discussion. NECA also seeks the elimination of the portion of the findings in the Proposed Order that says the settlement "in no way unjustly enriches any of the Parties." If those changes are made, NECA does not object to the Motion. However, if those changes are not made, then NECA objects to the settlement and demands an opportunity to be heard on both the settlement and on its claims against Deutsche Bank. CenturyTel joins in NECA's objections, insofar as it seek to clarify that the Settlement does not affect the rights of third parties under their assignment agreements to payments owed by Deutsche Bank. Deutsche Bank Responds to Objections NECA lacks standing to object to, or be heard, in connection with the Motion, Sunni P. Beville, Esq., at Brown, Rudnick, Berlack, Israels LLP, in Boston, Massachusetts, contends. NECA is neither a creditor of the Debtors' estates nor does it possess any equitable claim against the estates. Ms. Beville notes that: * all independent telephone carriers who are members of NECA authorized NECA to sell and assign their claims to Deutsche Bank; * NECA sold and assigned all right, title and interest in those claims to Deutsche Bank; * no individual ITC has objected to that sale assignment; and * no bar order or injunctive provision is given in the proposed Order or Settlement Agreement, precluding NECA from filing any claims it believes it may have against Deutsche Bank. NECA's lack of standing is generally a threshold question that the Court must address, Ms. Beville says. In order to have a standing, a litigant must have a legally protected interest affected by a bankruptcy proceeding. The party seeking standing must also establish that it is a "party-in-interest" under Section 1109(b) of the Bankruptcy Code. Ms. Beville asserts that NECA is not a party-in-interest in the Debtors' bankruptcy proceedings. NECA simply acted as a sales agent for the Debtors' creditors whose claims were transferred to Deutsche Bank. Even if creditor status could somehow be imputed to NECA by its role for the original claimants, NECA, through the execution of the assignment of claims, divested itself of all the creditors' rights, title, and interest in and to the Claims. Deutsche Bank is entitled to full rights and benefits of negotiating the Settlement, Ms. Beville maintains. In addition, by not challenging the settlement amount or the reasonableness of the Settlement, NECA is conceding that the settlement negotiations were in good faith, Ms. Beville points out. Therefore, Deutsche Bank asks the Court to approve its Settlement with the Debtors. Debtors Respond to Objections Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that the Proposed Order the Debtors submitted is entirely appropriate under the circumstances. In pertinent part, the Proposed Order states that the Settlement Agreement is fair and reasonable under the circumstances and in no way unjustly enriches any of the Debtors and Deutsche Bank. The Proposed Order also reflects that the Settlement Agreement is the product of extensive, arm's-length, good faith negotiations between the Parties. In considering whether to approve a settlement, a bankruptcy court must assess the settlement's terms and make a determination regarding whether those terms are in the best interest of the estate. Rule 9019 of the Federal Rules of Bankruptcy Procedure does not require a debtor to commence an adversary proceeding against third parties as a condition precedent to approval of a settlement with entirely different parties, Mr. Perez maintains. Accordingly, the Reorganized Debtors ask the Court to grant their Motion and enter the Proposed Order. About WorldCom Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 118; Bankruptcy Creditors' Service, Inc., 215/945-7000) X-RITE INC: Moody's Assigns B1 Rating to Proposed Sr. Sec. Loan --------------------------------------------------------------- Moody's Investors Service assigned a first-time corporate family rating of B1 to X-Rite, Inc., B1 to X-Rite's proposed senior secured first priority term loan and revolver and B3 to the proposed senior secured second priority term loan. Moody's also assigned a SGL-1 speculative grade liquidity rating, reflecting very good liquidity. Combined proceeds from the credit facilities together with approximately $93 million of new equity issuance and $46 million of cash will be used to finance X-Rite's acquisition of the outstanding shares of its primary competitor, Amazys Holding AG, a Switzerland-based publicly traded company, in a $318.6 million leveraged transaction. The ratings outlook is stable. X-Rite's B1 corporate family rating is constrained by the company's: (i) very high financial leverage and weak credit protection measures post-acquisition; (ii) declining free cash flow generation stemming from decelerating top-line revenue growth coupled with increasing operating expenses and rising working capital; (iii) potentially increasing competition; (iv) integration risk; (v) increasing exposure to consumer end markets; and (vi) limited asset protection from a very small base of pro forma tangible assets. The rating also acknowledges the combined company's improved scale and market leadership position in the niche colormetrics industry, relatively stable competitive landscape, mission-critical nature of its products with high switching costs resulting in stable gross margins of 60%, consistent operating profitability and positive free cash flow generation, large installed customer base of 7,500 companies broadly diversified across geographies and vertical markets and potential for operating margin expansion via cost reductions and efficiency improvements. The stable outlook reflects expectations for the combined company's improving financial leverage and credit protection measures driven by strong market penetration, relatively stable operating cash flows and attractive colormetrics industry dynamics, offset by integration risk, rising working capital needs, increasing exposure to consumer end markets and potentially increasing competition. These ratings were assigned: * Corporate Family Rating -- B1 * $ 40 million Senior Secured First Priority Revolver due 2011-- B1 * $120 million Senior Secured First Priority Term Loan due 2012 -- B1 $ 60 million Senior Secured Second Priority Term Loan due 2013 -- B3 * Speculative Grade Liquidity Rating -- SGL-1 The ratings outlook is stable Grandville, MI-based X-Rite, Inc. is acquiring Amazys in a leveraged transaction. Upon completion of the acquisition it will be the world's largest provider of color measurement systems offering hardware, software, and support solutions that ensure color accuracy. For the year ended December 31, 2005, pro forma revenue was $245 million. ZOOMERS HOLDING: Fla. Community Bank Wants Chap. 11 Case Dismissed ------------------------------------------------------------------ Florida Community Bank asks the U.S. Bankruptcy Court for the Middle District of Florida to dismiss the chapter 11 case of Zoomers Holding Company, LLC. Florida Community is a secured creditor of the Debtor. Florida Community contends that the Debtor's chapter 11 case was filed in bad faith citing: a. the Debtor's real property located in Lee County, Florida, is encumbered by liens which exceeds the fair market value of the real property; b. the Debtor has no other employees aside from its principals; c. the Debtor's financial problems involve a dispute between the Debtor and Florida Community, along with junior lien creditors, which can be resolved in the pending state court foreclosure action; d. the Debtor has no cash flow and no available sources of income to sustain a plan of reorganization or make adequate protection payments; e. there are no non-insider unsecured creditors whose claims are relatively small in light of the total obligation owed by the Debtor; and f. there is no realistic possibility of an effective reorganization. The Court will consider Florida Community's request at a hearing on May 25, 2006, at 11:00 a.m. Headquartered in Osprey, Florida, Zoomers Holding Company, LLC, filed for chapter 11 protection on Apr. 28, 2006 (Bankr. M.D. Fla. Case No. 06-02008). Richard Johnston, Jr., Esq., at Kiesel Hughes & Johnston, represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. * Maureen Corcoran Joins Sheppard Mullin as Corporate Partner ------------------------------------------------------------- Maureen E. Corcoran has joined the San Francisco office of Sheppard, Mullin, Richter & Hampton LLP as a partner. Ms. Corcoran, most recently with Pillsbury Winthrop Shaw Pittman in San Francisco and former chair of the firm's Health Care practice group, joins the Healthcare team as a member of the Corporate practice group. Ms. Corcoran focuses in the practice of health care law. She advises on the full range of legal issues arising in the health care industry. Ms. Corcoran's transactional and regulatory practice includes developing and implementing corporate compliance programs; counseling on fraud and abuse, and physician self- referrals (Stark law). Additionally, Ms. Corcoran provides general corporate and transactional advice to health care companies, including non- profits. She has represented a wide range of health industry clients, including managed care plans, hospitals, pharmacies, pharmacy benefit managers, physician organizations, ambulatory surgical centers, medical device companies, management services organizations, imaging facilities and community clinics, among others. Ms. Corcoran also advises health plans on issues related to fiduciary duty and ERISA regulatory matters. Ms. Corcoran has previously served as General Counsel of the U.S. Department of Education prior to joining the firm. She also served as Special Assistant to the General Counsel of the U.S. Department of Health and Human Services. "Maureen's impressive portfolio of experience, having practiced both publicly and privately, will be a huge asset to the firm in growing our health care and life sciences practices," Guy Halgren, chairman of the firm said. "She will also play an important role in the firm's ongoing expansion in San Francisco, especially given the strength of the health care industry in the Bay Area." "Sheppard Mullin has a solid Healthcare team and a successful Corporate practice group," Ms. Corcoran said. "I am excited to join a growing firm with an excellent reputation and look forward to building my practice in the San Francisco office." "We now have more than 75 attorneys based in San Francisco," Betsy McDaniel, managing partner of the San Francisco office, said. "Maureen is the second partner this month to bring a new specialization to the office. Media defense litigator James Chadwick joined us two weeks ago." Ms. Corcoran earned her law degree from University of California, Hastings College of the Law in 1979 and graduated from University of Iowa, with a M.A. and a B.A. About Sheppard, Mullin, Richter & Hampton LLP Founded in 1927, Sheppard, Mullin, Richter & Hampton LLP -- http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm with more than 480 attorneys in nine offices located throughout California and in New York and Washington, D.C. The firm's California offices are located in Los Angeles, San Francisco, Santa Barbara, Century City, Orange County, Del Mar Heights and San Diego. Sheppard Mullin provides legal expertise and counsel to U.S. and international clients in a wide range of practice areas, including Antitrust, Corporate and Securities; Entertainment, Media and Communications; Finance and Bankruptcy; Government Contracts; Intellectual Property; Labor and Employment; Litigation; Real Estate/Land Use; Tax/Employee Benefits/Trusts & Estates; and White Collar Defense. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Abraxas Petro ABP (22) 125 (6) Accentia Biophar ABPI (9) 39 (19) AFC Enterprises AFCE (49) 213 40 Adventrx Pharma ANX (26) 23 (27) Alaska Comm Sys ALSK (29) 550 12 Alliance Imaging AIQ (29) 683 19 AMR Corp. AMR (1,272) 29,918 (1,924) Atherogenics Inc. AGIX (114) 227 182 Bally Total Fitn BFT (1,463) 486 (442) Biomarin Pharmac BMRN 46 488 322 Blount International BLT (134) 462 129 CableVision System CVC (2,468) 12,832 2,643 CCC Information CCCG (95) 112 34 Centennial Comm CYCL (1,069) 1,409 32 Cenveo Inc CVO 56 1,045 157 Choice Hotels CHH (148) 274 (68) Cincinnati Bell CBB (727) 1,888 33 Clorox Co. CLX (427) 3,622 (258) Columbia Laborat CBRX 11 43 24 Compass Minerals CMP (59) 702 171 Crown Holdings I CCK 46 6,885 171 Crown Media HL CRWN (165) 1,229 93 Deluxe Corp DLX (71) 1,394 (264) Denny's Corporation DENN (261) 505 (75) Domino's Pizza DPZ (632) 387 (10) Echostar Comm DISH (690) 8,935 1,438 Emeritus Corp. ESC (105) 725 (19) Emisphere Tech EMIS (26) 13 (11) Encysive Pharm ENCY (38) 119 82 Foster Wheeler FWLT (239) 2,032 (52) Gencorp Inc. GY (84) 1,002 (3) Graftech International GTI (175) 919 286 H&E Equipment HEES 204 667 13 Hollinger Int'l HLR (198) 1,038 (271) I2 Technologies ITWO (65) 195 (20) ICOS Corp ICOS (51) 248 121 IMAX Corp IMAX (25) 238 33 Immersion Corp. IMMR (18) 47 33 Incyte Corp. INCY (38) 399 189 Indevus Pharma IDEV (134) 86 50 Investools Inc. IED (33) 87 (54) Koppers Holdings KOP (100) 556 150 Kulicke & Soffa KLIC 46 399 204 Labopharm Inc. DDS (8) 46 9 Level 3 Comm. Inc. LVLT (546) 8,284 713 Ligand Pharm LGND (212) 289 (144) Linn Energy LLC LINE (45) 280 (51) Lodgenet Entertainment LNET (70) 261 7 Maxxam Inc. MXM (661) 1,048 101 Maytag Corp. MYG (187) 2,954 150 McDermott Int'l MDR (50) 3,160 277 McMoran Exploration MMR (38) 411 (1) NPS Pharm Inc. NPSP (129) 287 212 New River Pharma NRPH 3 96 82 Nexstar Broadc NXST (73) 666 26 Omnova Solutions OMN (15) 360 65 ON Semiconductor ONNN (224) 1,211 251 Qwest Communication Q (3,060) 21,126 (923) Revlon Inc. REV (1,042) 1,085 37 Riviera Holdings RIV (30) 219 7 Rural/Metro Corp. RURL (93) 302 50 Rural Cellular RCCC (500) 1,427 144 Sepracor Inc. SEPR (128) 1,284 906 St. John Knits Inc. SJKI (52) 213 80 Sun Healthcare SUNH (1) 531 (46) Tivo Inc. TIVO (27) 162 27 USG Corp. USG (496) 6,522 1,956 Unigene Labs Inc. UGNE (6) 21 (2) Vertrue Inc. VTRU (24) 466 (78) Weight Watchers WTW (42) 856 (69) Worldspace Inc. WRSP (1,516) 682 197 WR Grace & Co. GRA (548) 3,506 881 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. 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