/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060606.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, June 6, 2006, Vol. 10, No. 133 Headlines ADELPHIA COMMS: Plan Voting Deadline Extended Until June 19 AKSYS LTD: Posts $7.1 Million Net Loss in 2006 1st Fiscal Qtr. ALLEGHENY ENERGY: Unit Completes $27.4 Million Receivables Sale ALLIED HOLDINGS: Union Ready to Strike if Labor Deals are Rejected AMERICAN LAWYER: S&P Affirms 2nd-Lien Term Loan's Junk Rating AMERICAN TONERSERV: Posts $62,600 Net Loss in Qtr. Ended March 31 BEAZER HOMES: Fitch Puts BB+ Rating on $275 Mil. Sr. Unsec. Notes BIO-KEY INT'L: Posts $3.1 Mil. Net Loss in 2006 1st Fiscal Qtr. BLUE RIDGE: Low Liquidity Cues S&P to Put B- Ratings on Neg. Watch BOWATER INC: Secures New Five-Year Revolving Credit Facility BRIGHTPOINT INC: Earns $8.8 Million in 2006 First Fiscal Quarter BROWN SHOE: S&P Affirms BB Rating & Revises Outlook to Stable CALPINE CORP: Court Okays Execution of Employee Incentive Program CALPINE CORP: Agreements with Top Executives Get Court's Nod CALPINE CORP: Repays $645 Million of 9-5/8% Senior Secured Notes CARDINAL COMMS: Brings In Brian Karr as Chief Financial Officer CARDINAL COMMS: Posts $2.1 Mil. Net Loss in 2006 1st Fiscal Qtr. CARRINGTON MORTGAGE: Moody's Puts Ba1 Rating on Class M-10 Certs. CATHOLIC CHURCH: Court Denies Portland's Request to Settle Claim CATHOLIC CHURCH: Tort Panel Wants to Dip Hands on Endowment Fund CDS BUSINESS: Case Summary & 40 Largest Unsecured Creditors CHASE MORTGAGE: Fitch Affirms Two Cert. Classes' Low-B Ratings CINCINNATI BELL: March 31 Balance Sheet Upside-Down by $727 Mil. CITIZENS COMMS: Declares $0.25 Per Share Second Quarter Dividend CLAIMSNET.COM: Brings In Kent McRee as President CLARET TRUSTS: DBRS Places Low-B Rating on 6 Certificate Classes COGECO CABLE: DBRS Puts Senior Secured Notes' BB Rating on Review COGECO CABLE: S&P Puts BB+ Corp. Credit Rating on Negative Watch COLUMBIA COUNTY HOSPITAL: S&P Lowers $14.9 Mil. Bonds' Rating to B CONGOLEUM CORPORATION: Wants Navigant as TDP Consultant DANA CORP: Creditors Committee Gets Court Okay on FTI's Retention DANA CORP: Creditors Panel Retains Halperin as Conflicts Counsel DANA CORP: Wants to Continue Director Compensation Program DELPHI CORP: Withdraws Suit v. MDL Defendants Under Settlement DIGITAL LIGHTWAVE: Optel Capital Extends $2.1 Million Loan E.SPIRE COMMUNICATIONS: Court Converts Cases to Chapter 7 ECHOSTAR COMMS: March 31 Balance Sheet Upside-Down by $690 Mil. ENCOMPASS HOLDINGS: Files Amended 2003, 2004 & 2005 Financials ENTERCOM COMMS: S&P Puts BB Corp. Credit Rating on Negative Watch ENTERGY NEW ORLEANS: To Sell Market Street Power Plant ENTERGY NEW ORLEANS: Objects to Gordon & Lowenburg's Claims FOAMEX INTERNATIONAL: Wants to Amend Senior DIP Facility FOAMEX INTERNATIONAL: Wants Until Sept. 14 to File Chapter 11 Plan G+G RETAIL: Has Until August 22 to File Chapter 11 Plan GATEWAY: Posts $1.7 Mil. Net Loss in 2006 1st Fiscal Quarter GLOBAL HOME: Files Schedules of Assets and Liabilities GLOBAL HOME: Panel Taps Lowenstein Sandler as Bankruptcy Counsel GMAC 2005-C1: Fitch Affirms Six Certificates' Low-B Ratings GOODING'S SUPERMARKETS: Committee Hires Brumby as Special Counsel GOODING'S SUPERMARKETS: Can File Chapter 11 Plan Until June 16 GRANITE BROADCASTING: Expects to Make Interest Payment by June 30 GRANITE BROADCASTING: S&P Places Ratings on Default GREEN TREE: S&P Places Class B-1 Transaction's Rating on Default GREENMAN TECH: March 31 Balance Sheet Upside Down by $11.3 Mil. HCA INC: Inks Modified Purchase Agreement with LifePoint Hospitals HI-LIFT OF NEW YORK: Hires Finkel Goldstein as Bankruptcy Counsel INDYMAC HOME: Moody's Puts Low-B Rating on Two Cert. Classes INSEQ CORP: Acquiring GreenShift's "Clean Energy" Companies INT'L PAPER: To Sell Unit to Apollo Management for $1.4 Billion IRA CONKLIN: Involuntary Chapter 11 Case Summary JAMES ELWYN: Case Summary & 2 Largest Unsecured Creditors KAISER ALUMINUM: Wants Los Angeles Pension Plan Terminated KINGSLEY COACH: Equity Deficit Widens to $2.9 Million at March 31 KMART CORP: Big Beaver Settles LaSalle Bank's Claim for $22 Mil. KMART CORP: More Than 50 Creditors Withdraw Proofs of Claim LEVEL 3: Moody's Rates Proposed $150 Million Note Issue at Caa3 LIFE SCIENCES: March 31 Stockholders' Deficit Narrows to $9.6 Mil. LIFEPOINT HOSPITALS: Buys Four Hospitals from HCA Inc for $239MM MASTR ASSET: Moody's Puts Low-B Rating on Two Certificate Classes MCMORAN EXPLORATION: Posts $13.4 Mil. Net Loss in 2006 First Qtr. MIRANT CORP: Pirate Capital Questions NRG Energy Bid MUSICLAND HOLDING: Court OKs Expedited Lease Rejection Procedures NESCO INDUSTRIES: Jan. 31 Balance Sheet Upside-Down by $8.8 Mil. NORD RESOURCES: Auramet Agrees to $1 Mil. Additional Loan Advance ONEIDA LTD: Files Amended Plan and Disclosure Statement in N.Y. PARCONE DEVELOPMENT: Case Summary & 9 Largest Unsecured Creditors PATRON SYSTEMS: Posts $4.4 Million Net Loss in 2006 First Quarter PLYMOUTH RUBBER: Judge Feeney Approves Disclosure Statement REFCO INC: Investors Settle Claims v. BAWAG for $108 Million REFCO INC: Case Summary & 50 Largest Unsecured Creditors SILICON GRAPHICS: Wants Stay Enforced Against Solectron Corp. SILICON GRAPHICS: Has Until June 20 to Use Cash Collateral SORELL INC: March 31 Balance Sheet Upside Down by 5.5 Million SPECIALTY UNDERWRITING: Fitch Affirms Class B-3 Cert.'s BB Rating SUNCOM WIRELESS: March 31 Stockholders' Deficit Tops $228.3 Mil. SWISS MEDICA: March 31 Balance Sheet Upside Down by $33.2 Million TAG ENT: March 31 Balance Sheet Upside Down by $8.9 Million TELECONNECT INC: March 31 Balance Sheet Upside Down by $6.3 Mil. TOYS 'R' US: Amazon to Appeal Agreement Termination TRIBUNE CO: Sells Broadcasting Station to Gannett Co. for $180MM UNITED COMPONENTS: Completes ASC Industries Purchase VALCOM INC: Posts $2.55 Mil. Net Loss in 2006 1st Fiscal Quarter VTEX ENERGY: Amends Operating Agreement with U.S. Energy WINDSTREAM COMMS: Fitch Rates Proposed $2.5 Billion Notes at BB+ WORLDCOM INC: Asks Court to Disregard Richard Drew's Objection * Large Companies with Insolvent Balance Sheets ********* ADELPHIA COMMS: Plan Voting Deadline Extended Until June 19 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended the deadline for the submission of ballots to accept or reject the Modified Fourth Amended Joint Plan of Reorganization of Adelphia Communications Corporation and its debtor-affiliates. Pursuant to the Court's extension order, the voting deadline to accept or reject the Plan has been extended to 4:00 p.m., New York time, on June 19, 2006, and in the case of securities held through an intermediary, the deadline for instructions to be received by the intermediary has been extended to 4:00 p.m., New York time, on June 14, 2006. The Extension Order also adjourned the second hearing to consider confirmation of the Plan that was scheduled to begin on June 20, 2006. 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. AKSYS LTD: Posts $7.1 Million Net Loss in 2006 1st Fiscal Qtr. -------------------------------------------------------------- AKSYS, LTD., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 19, 2006. The Company reported an $7,105,990 net loss on $724,596 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $20,459,833 in total assets and $28,930,856 in total liabilities and resulting in a $8,471,023 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $14,425,689 in total current assets available to pay $12,820,837 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a65 About Aksys Aksys, Ltd. -- http://www.aksys.com/produces hemodialysis products, providing services for patients suffering from kidney failure. The Company's lead product, the PHD(R) System, is a currently available, advanced technology hemodialysis system designed to improve clinical outcomes of patients and reduce mortality, morbidity and the associated high cost of patient care. ALLEGHENY ENERGY: Unit Completes $27.4 Million Receivables Sale --------------------------------------------------------------- Allegheny Energy, Inc. disclosed in a Securities and Exchange Commission filing that its subsidiary, Allegheny Energy Supply Gleason Generating Facility, LLC, completed the sale of a receivable due from the Tennessee Valley Authority on May 25, 2006. Gleason received approximately $27,400,895 for the receivable after deducting fees and expenses. The receivable is due to be paid by the TVA no later than March 1, 2010, pursuant to an Interconnection Agreement dated March 14, 2000, as amended, between Gleason and the TVA. Allegheny Energy Based in Greensburg, Pennsylvania, Allegheny Energy, Inc. (NYSE:AYE) -- http://www.alleghenyenergy.com/-- is an investor- owned utility consisting of two major businesses. Allegheny Energy Supply owns and operates electric generating facilities, and Allegheny Power delivers low-cost, reliable electric service to customers in Pennsylvania, West Virginia, Maryland, Virginia and Ohio. * * * As reported in the Troubled Company Reporter on Jan. 20, 2006, Standard & Poor's Ratings Services raised its corporate credit ratings on diversified energy company Allegheny Energy Inc. and its subsidiaries to 'BB+' from 'BB-'. S&P said the outlook is positive. As reported in the Troubled Company Reporter on June 15, 2005, Moody's Investors Service assigned a Senior Implied rating of Ba1 and a Speculative Grade Liquidity Rating of SGL-2 to Allegheny Energy, Inc. This was the first time that Moody's assigned both such ratings to AYE. The company's other ratings, including the Ba2 senior unsecured rating, remained unaffected. ALLIED HOLDINGS: Union Ready to Strike if Labor Deals are Rejected ------------------------------------------------------------------ On June 4, 2006, Teamster Local 332 unanimously approved a strike authorization against Allied Automotive Group in the event that bankruptcy court allows the vehicle-hauling company to reject its labor contracts. Allied Automotive Group is the primary subsidiary of Allied Holdings, Inc., which is currently in bankruptcy proceedings. Hundreds of Teamsters from three Michigan Locals attended the meeting. "They can't make this company come out of bankruptcy without our hard work and dedication," Rex Wheeler, a member of Local 332 in Flint, MI and 16- year Allied worker, said. "We're going to stick together and get what we deserve." Nearly 5,000 Teamster members work for Allied, the largest motor carrier in North America specializing in the delivery of automobiles and light trucks. Allied distributes new vehicles for the "Big Three" automakers, import manufacturers, thousands of local auto dealerships and rental car companies. "Our members perform a vital service for the automotive industry and are recognized as the best in the industry," Fred Zuckerman, Director of the Teamsters Carhaul Division, said. "If they break our contract then our members will have no alternative to striking them." The Teamsters represent members in 60 locations, including Detroit, Flint and Pontiac, Michigan; Kansas City; Atlanta; Greensboro, North Carolina; Ridgefield and Port Jersey, New Jersey; Norfolk, Virginia; and Dayton, Ohio. These members would be adversely impacted if the bankruptcy court permits the company to void its labor agreements. "I applaud our members for taking a stand against corporate greed, the parasite feeding off our members' invaluable contributions," Teamsters General President James P. Hoffa, said. "I have no doubt that this is the first of the strike authorizations against Allied." The International Union has called on other locals with Allied members to authorize strikes in the next two weeks. Founded in 1903, the Teamsters Union represents more than 1.4 million hardworking men and women in the United States and Canada. 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. AMERICAN LAWYER: S&P Affirms 2nd-Lien Term Loan's Junk Rating ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on American Lawyer Media Holdings Inc. (B-/Stable/--) and operating subsidiary American Lawyer Media Inc. The operating subsidiary added on $24.7 million to its first-lien term loan due 2010. The loan rating on this facility was affirmed at 'B-' (at the same level as the corporate credit rating on the parent company) and the recovery rating was affirmed at '3', indicating the expectation for meaningful (50%-80%) recovery of principal in the event of a payment default. The borrower also added on $19.3 million to its second-lien term loan due 2011. The loan rating on this facility was affirmed at 'CCC' (two notches lower than the corporate credit rating) and the recovery rating was affirmed at '5', indicating the expectation of a negligible (0%-25%) recovery of principal in the event of a payment default. Term loan proceeds of $44 million and $13 million of existing cash will be used to: * pay a $27.5 million special dividend to the company's common stockholder, Wasserstein & Co.; and * redeem $28.9 million of 12% pay-in-kind preferred shares. Total debt, pro forma for the transaction, was $342 million at April 30, 2006. The New York-based company publishes national and regional magazines and newspapers for the legal profession. "The ratings reflect American Lawyer's high leverage, narrow business focus, modest discretionary cash flow, and prospect for rising cash interest payments in 2009," said Standard & Poor's credit analyst Hal Diamond. "These risks overshadow the company's established position in the legal publishing niche." AMERICAN TONERSERV: Posts $62,600 Net Loss in Qtr. Ended March 31 ----------------------------------------------------------------- American TonerServ Corp., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 19, 2006. The Company reported a $62,600 net loss on $89,896 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $136,347 in total assets and $1,613,255 in total liabilities resulting in $1,476,908 stockholders' equity. The Company's March 31 balance sheet also showed strained liquidity with $122,986 in total current assets available to pay $1,487,683 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a8c Going Concern Doubt As reported in the Troubled Company Reporter on May 12, 2006, Stonefield Josephson, Inc., in San Francisco, California, raised substantial doubt about American TonerServ Corp., fka Q MATRIX, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's losses in the past two years, negative working capital, and shareholders' deficit. About American TonerServ Headquartered in Santa Rosa, California, American TonerServ Corp., fka Q MATRIX, Inc. -- http://www.americantonerserv.com/-- repairs and maintains office equipment of small and mid sized businesses. BEAZER HOMES: Fitch Puts BB+ Rating on $275 Mil. Sr. Unsec. Notes ----------------------------------------------------------------- Fitch Ratings assigned a 'BB+' rating to Beazer Homes USA, Inc. (NYSE:BZH) $275 million, 8.125% senior unsecured notes due 2016. Fitch affirmed Beazer's 'BB+' Issuer Default, senior unsecured debt and unsecured bank credit facility ratings. The Rating Outlook is Stable. The issue will be ranked on a pari passu basis with all other senior unsecured debt, including the company's unsecured bank credit facility. The net offering proceeds will be used to repay amounts outstanding under the revolving credit facility. Ratings for Beazer are influenced by the company's operational record during the past decade and the financial progress that the company has achieved. Since the company went public in 1994, it has been an active consolidator in the homebuilding industry which has contributed to its above average growth. As a consequence, it has realized higher debt levels than its peers in recent years, especially following the Crossmann Communities acquisition. Management has generally exhibited an ability to quickly and successfully integrate its acquisitions, although Crossmann was an exception to the pattern. In any case, as the company has significant geographic breadth there should be less use of acquisitions going forward and acquisitions are likely to be moderate relative to Beazer's current size. The company's focus will be on organic growth in existing markets by increasing depth and breadth within those markets. The company is committed to maintaining a net debt to capitalization ratio of 45%-50%. Risk factors include the inherent (although somewhat tempered) cyclicality of the homebuilding industry. The ratings also manifest: * the company's historic aggressive growth strategy; * moderate exposure to the sluggish Midwest; * newly initiated share repurchase program; * below peer margins; and * Beazer's size. During fiscal 2005 Beazer took a non-cash goodwill impairment charge of $130.2 million as the company and its board concluded that substantially all of the goodwill allocated to certain operations in Indiana, Ohio, Kentucky and Charlotte, NC, which was recorded upon the acquisition of Crossmann Communities, was impaired. The company remains committed to those markets, but does expect to lessen incremental investment in the future. The charge does not impact Beazer's ability to generate cash flow in the future or its compliance with debt covenants. The company's EBITDA, EBIT and FFO to interest ratios tend to be lower than the average public homebuilder, while its inventory turnover is somewhat higher than its peers. Beazer's leverage is somewhat higher and debt-to-EBITDA ratio is above the peer averages. Although the company has certainly benefited from the generally strong housing market of recent years, a degree of profit enhancement is also attributed to purchasing design and engineering, access to capital and other scale economies that have been captured by the large national and regional public homebuilders in relation to non-public builders. These economies, the company's presale operating strategy and a return on equity and assets orientation provide the framework to soften the margin impact of declining market conditions in comparison to previous cycles. Beazer's ratio of sales value of backlog to debt as of calendar year end during the past five years has ranged between 1.7x to 2.2x and is currently 1.8x - a comfortable cushion. Beazer has grown rapidly since going public in 1994. The company has made eight acquisitions since its IPO. They have varied in size, but cumulatively have contributed meaningfully to Beazer's growth. The acquisitions have helped the company to build its position in certain markets, but primarily have enabled the company to enter new markets. The acquisitions typically were funded by cash on the balance sheet and debt and to a lesser degree by stock. Now that Beazer is in most of the markets it covets, it has adequate geographic diversity. As a corporate entity Beazer now has good scale. Future acquisitions are likely to be bolt on purchases of smaller, private companies in existing Beazer markets as it looks to increase metropolitan market scale so that it leverages its fixed costs. The key analysis is return on capital as to whether an acquisition will be made. Beazer believes that dominant size (typically top 5-10 ranking) in major metropolitan markets offers key competitive advantage, especially in a consolidating industry. A number of Beazer's major markets rank in the top 20 markets in size in the U.S. have been among the faster growing markets in the country. In certain key markets, notably Las Vegas, metro Washington D.C. and California, in general land is in short supply (from an intermediate and long term perspective), largely because of government constraints. But Beazer is well positioned in those markets as to current land reserves and access to new land. In most cases the company options or purchases land only after necessary entitlements have been obtained so that development or construction may begin as market conditions dictate. The use of non-specific performance rolling options gives the company the ability to renegotiate price/terms or void the option which limits down side risk in market downturns and provides the opportunity to hold land with minimal investment. At the end of Beazer's 2006 second quarter, 45% of the 104,109 total lots were owned, while 55% were controlled through options. Total lots controlled represented 5.5 years of land based on latest 12 months deliveries of 19,072. The company's closings, orders and land position (lots) are reasonably well dispersed among its major markets and regions. Traditionally Beazer has emphasized true starter entry level (economy) product, a position reinforced by the Crossmann acquisition, and to a lesser degree first and second move-up buyers (value and style). Since fiscal 2003 the company has scaled up its offerings at higher price points within entry level and above. In some markets value products have been introduced for the first time. Economy homes represented 18% of closings in fiscal 2005, while value accounted for 56% and style 26%. Profits should be enhanced in fiscal 2006 from the broadened product offering. Beazer's corporate margins trail many of its peers. Some of this is attributable to Crossmann Communities (acquired in early 2002) which had lower margins than Beazer and then was affected by the soft Midwest housing market. The company's focus on entry level customers tended to keep margins lower. Also, Beazer is not as active off balance sheet as certain of its peers. However, the company's on-going efforts to broaden price points, especially in the Midwest, and a more aggressive corporate pricing stance where possible should benefit margins. The effort to boost volume out of existing markets should leverage costs. Beazer's shift to a unified consumer brand across all operations has the potential of aiding margins. The company's efforts to leverage its size should lead to further economies of scale in materials purchasing and construction. Beazer is also undertaking an aggressive effort to simplify and standardize best practices and product designs. As of March 31, 2006 Beazer had $15.2 million in cash and equivalents and the company had $136.6 million in borrowings and available borrowings of approximately $481.6 million, less letters of credit, under the revolving credit facility at that date. The revolving credit facility matures on Aug. 21, 2009. The company had irregularly purchased modest amounts of its stock in the past and did not repurchase stock in fiscal 2005. On Nov. 18, 2005, the board expanded the outstanding stock repurchase authorization from 2 million shares as of Sept. 30, 2005 to 10 million shares. The decision to restrain land purchases, especially in the Midwest, enabled the board to authorize the redirection of capital to increased share repurchase. The company expects to execute the repurchase program within the following 36 months, with $200 million - $250 million allocated to repurchases in fiscal 2006. Through the first six months of fiscal 2006 Beazer has repurchased $133.2 million of common stock. Beazer pays a modest dividend. BIO-KEY INT'L: Posts $3.1 Mil. Net Loss in 2006 1st Fiscal Qtr. --------------------------------------------------------------- BIO-Key International, Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 22, 2006. The Company reported a $3,150,444 net loss on $3,149,191 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $26,005,020 in total assets, $22,817,512 in total liabilities and $3,187,508 of stockholders' equity. The Company's March 31 balance sheet also showed strained liquidity with $8,133,279 in total current assets available to pay $18,226,434 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a95 Going Concern Doubt DS&B, Ltd., in Minneapolis Minnesota, raised substantial doubt about BIO-key International, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the company's losses from operations and working capital deficit. About BIO-Key BIO-key International, Inc., develops and markets identification biometric software in the United States. The software provides identification technology that scans fingerprints and identifies a person in databases. BLUE RIDGE: Low Liquidity Cues S&P to Put B- Ratings on Neg. Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B-' corporate credit and senior secured debt ratings on Canton, North Carolina- based Blue Ridge Paper Products Inc. on CreditWatch with negative implications. "The CreditWatch placement reflects our concern about the company's low liquidity level, which is heightened by the company's unresolved labor negotiations," said Standard & Poor's credit analyst Dominick D'Ascoli. "We are concerned about the potential for workers to seek a substantial increase in pay after taking a 15% wage and benefit reduction in 1999 and enduring a seven-year wage freeze under the current labor contract." Blue Ridge had only $11.6 million available under its $50 million borrowing based revolving credit facility at March 31, 2006, and $1.4 million of cash, which was below our previous expectations. "We expect liquidity to decline further to a precarious level after the $5.9 million, June 15, 2006, interest payment on the $125 million of 9.5% notes," Mr. D'Ascoli said. "While liquidity should improve thereafter, because of higher product prices, the pass through of raw material surcharges, and favorable industry conditions, there is little cushion for any unforeseen operating disruptions." The current labor contract has been extended for 60 days past its original expiration on May 14, 2006, to facilitate scheduling of discussions. The company's low level of liquidity would only sustain operations for a brief period if the union decided to strike. However, the likelihood of a strike appears relatively low, because the employees own 40% of Blue Ridge's parent company through an employee stock ownership plan. "We could lower the ratings if a strike occurs, there is a substantial increase in wages, liquidity declines further than anticipated, market conditions deteriorate, or there is an operating disruption," said Mr. D'Ascoli. "We could affirm the ratings if a new labor contract is negotiated without a strike and there is only a nominal increase to wages and if liquidity improves to at least $10 million by the end of the third quarter." BOWATER INC: Secures New Five-Year Revolving Credit Facility ------------------------------------------------------------ Bowater Incorporated has established a new five-year revolving credit facility, which replaces both its current revolving credit facility and its 364-day accounts receivable securitization facility. Bowater accomplished this by entering into: a) a Credit Agreement among Bowater as Borrower, several lenders, and Wachovia Bank, National Association, as Administrative Agent; and b) a Credit Agreement, along with its subsidiary Bowater Canadian Forest Products Inc., among BCFPI as Borrower, Bowater as parent Guarantor, several lenders, and The Bank of Nova Scotia as Administrative Agent. The US Credit Agreement provides for a $415 million revolving credit facility with a scheduled maturity date of May 25, 2011. The US Credit Agreement is guaranteed by certain of Bowater's wholly owned subsidiaries in the United States, and is secured by: -- liens on the inventory, accounts receivable and deposit accounts of Bowater and the guarantors; -- pledges of the 65% of the stock of certain of Bowater's foreign subsidiaries, and -- pledges of the stock of Bowater's United States subsidiaries that do not own mills or converting facilities. Availability under the US Credit Agreement is limited to 90% of the net consolidated book value of Bowater's accounts receivable and inventory, excluding BCFPI and its subsidiaries. Letters of credit may be issued under the US Credit Agreement up to an aggregate of $100 million. The Canadian Credit Agreement provides for a $165 million revolving credit facility with a maturity date of May 29, 2007, subject to annual extensions. The Canadian Credit Agreement is secured by liens on the inventory, accounts receivable and deposit accounts of BCFPI. Availability under the Canadian Credit Agreement is limited to 65% of the net book value of the accounts receivable and inventory of BCFPI and its subsidiaries. Letters of credit may be issued under the Canadian Credit Agreement up to an aggregate of $50 million. Financial covenants under both the US Credit Agreement and Canadian Credit Agreement are based upon Bowater's Consolidated Financial Results and consist of these two ratios: 1) a maximum ratio of senior secured indebtedness (including all advances and letters of credit under the US and Canadian facilities, and any other indebtedness secured by assets of Bowater and its subsidiaries) to EBITDA of 1.25 to 1; and 2) a minimum ratio of Adjusted EBITDA (defined as EBITDA, plus gains (or minus losses) from asset dispositions) to interest expense of 2.00 to 1. As of May 31, 2006, Bowater and BFCPI have no debt outstanding under either the US Credit Agreement or the Canadian Credit Agreement, but do have outstanding letters of credit totaling approximately $98.8 million. As of May 31, 2006, Bowater has $481.2 of availability under the credit agreements on a consolidated basis. On May 31, 2006, in connection with the US Credit Agreement and the Canadian Credit Agreement, Bowater's current revolving credit facility and 364-day accounts receivable securitization facility were replaced and these agreements were terminated: 1) Credit Agreement dated as of April 22, 2004, as amended, among Bowater and BCFPI as Borrowers, the lenders from time to time party thereto, JPMorgan Chase Bank as Administrative Agent, and The Bank of Nova Scotia as Canadian Administrative Agent. This Credit Agreement provided a $400 million United States revolving credit facility and a $35 million Canadian revolving credit facility on an unsecured basis. 2) The Amended and Restated Receivables Sale Agreement dated as of Dec. 1, 2005, as amended, among Bowater and Bowater America Inc. as Sellers and Bowater Funding, Inc. as Buyer, and the Amended and Restated Loan Agreement dated as of Dec. 1, 2005, as amended, among Bowater Funding Inc. as Borrower, Bowater as Servicer, the Conduit Lenders, Committed Lenders, LC Issuers, and Agents identified therein, and SunTrust Capital Markets, Inc. as Administrative Agent. These agreements governed the $200 million accounts receivable securitization program of Bowater under which Bowater and Bowater America Inc. sold their accounts receivable to Bowater Funding Inc., and Bowater Funding Inc. obtained financing collateralized by those accounts receivable. Headquartered in Greenville, South Carolina, Bowater Incorporated (TSX: BWX) produces newsprint and coated mechanical papers. In addition, the company makes uncoated mechanical papers, bleached kraft pulp and lumber products. The company has 12 pulp and paper mills in the United States, Canada and South Korea and 12 North American sawmills that produce softwood lumber. Bowater also operates two facilities that convert a mechanical base sheet to coated products. Bowater's operations are supported by approximately 1.4 million acres of timberlands owned or leased in the United States and Canada and 30 million acres of timber cutting rights in Canada. Bowater is one of the world's largest consumers of recycled newspapers and magazines. Bowater common stock is listed on the New York Stock Exchange, the Pacific Exchange and the London Stock Exchange. A special class of stock exchangeable into Bowater common stock is listed on the Toronto Stock Exchange. * * * As reported in the Troubled Company Reporter on June 2, 2006, Dominion Bond Rating Service downgraded the rating of Bowater Canadian Forest Products Inc. to BB (low) from BB. The trend remains Negative. The downgrade reflected persistent weakness in Bowater's credit metrics and the expectation that a significant improvement will not take place over the near term. The Negative trend recognized the considerable headwinds facing the Company. Standard & Poor's Ratings Services lowered its ratings on Bowater and subsidiary Bowater Canadian Forest Products Inc., including the corporate credit rating on each entity to 'B+' from 'BB' in December 2005. S&P said the outlook is stable. Moody's Investors Service puts Ba3 senior implied, senior unsecured and issuer ratings on Bowater. Moody's says the outlook is negative. Fitch Ratings rated Bowater's senior unsecured bonds and bank debt 'BB-'. Fitch said the Rating Outlook is Stable. BRIGHTPOINT INC: Earns $8.8 Million in 2006 First Fiscal Quarter ---------------------------------------------------------------- Brightpoint, Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 9, 2006. The Company earned $8,868,000 of net income on $564,555,000 of total revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $436,662,000 in total assets, $287,701,000 in total liabilities, and $148,961,000 in stockholders' equity. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a9d Brightpoint, Inc. -- http://www.brightpoint.com/-- is one of the world's largest distributors of mobile phones. Brightpoint supports the global wireless telecommunications and data industry, providing quickly deployed, flexible and cost effective solutions. Brightpoint's innovative services include distribution, channel management, fulfillment, eBusiness solutions and other outsourced services that integrate seamlessly with its customers. * * * As reported in the Troubled Company Reporter on April 17, 2006, Standard & Poor's Ratings Services raised its corporate credit rating on Indianapolis, Indiana-based Brightpoint Inc. to 'BB-' from 'B+'. BROWN SHOE: S&P Affirms BB Rating & Revises Outlook to Stable ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on St. Louis, Missouri-based Brown Shoe Co. Inc. to stable from negative. All ratings, including the 'BB' corporate credit rating, are affirmed. "The outlook revision reflects the successful integration of Bennett Group and a recovery of credit measures to levels more appropriate for the rating due to good operating results and debt reduction," said Standard & Poor's credit analyst Ana Lai. "It also reflects our expectation that credit measures will remain at current levels, supported by improved efficiency and more focused merchandising at its retail division." Credit protection measures have strengthened. Debt leverage declined to 3.8x for the 12 months ended April 29, 2006, from peak levels of over 4x following the Bennett acquisition in early 2005, due to improved earnings and debt reduction. EBITDA interest coverage and funds from operations to total debt are appropriate for the rating at 3.1x and 25%, respectively for the 12 months ended April 29, 2006. The speculative-grade rating on Brown Shoe reflects: * the company's participation in the mature, competitive, and fragmented wholesale and retail footwear businesses; and * low operating margins relative to those of its peers. These factors are tempered by: * the company's good position as the largest specialty family footwear retailer; * a diversified sourcing and wholesale customer base; and * adequate credit measures. Standard & Poor's expects Brown Shoe's positive operating momentum to continue through the rest of 2006, driven by: * improving sales trends at its retail division; * a rationalized store base at Naturalizer; and * continued healthy sales at the wholesale division. Overall sales increased 10% in the quarter ended April 29, 2006, reflecting 4.7% sales growth at Famous Footwear, and a 20% sales increase in the wholesale division due to the addition of the Bennett brands. Operating margins remain adequate at 11.5% as lower-margin wholesale sales were offset by positive expense leverage and expense control. Despite a recent improvement in efficiencies, Brown Shoe lags its peers in profitability because of lower store productivity and operating losses at Naturalizer. CALPINE CORP: Court Okays Execution of Employee Incentive Program ----------------------------------------------------------------- Calpine Corp. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to implement an incentive program that provides market-based compensation opportunities for select members of the Debtors' workforce. As reported in the Troubled Company Reporter on April 19, 2006, the Calpine Incentive Program is intended to return the overall compensation opportunity for certain of Calpine's key employees to market-competitive levels to ensure the continued effective job performance necessary for Debtors' ongoing business operations and successful reorganization -- and to do so in a way that not only preserves but enhances the value of Debtors' estate. The Calpine Incentive Program has four components: a. the Emergence Incentive Plan, b. the Management Incentive Plan, c. the Supplemental Bonus Plan, and d. the Discretionary Bonus Plan Mr. Cieri says the core components of the Program -- the Emergence Incentive and Management Incentive Plans -- demand the achievement of specific reorganization objectives -- aimed at headcount reduction, cost-cutting, cash-flow improvement, and transaction goals -- or demonstrable increases in the adjusted enterprise value of Calpine before payments will be made. Ku Objects "The Debtors' decision to implement the program comes at a uniquely inopportune time and reflects a lack of consideration to seek consensus among all parties, notably of the equity security holders," Alan Ku, an individual shareholder and former Calpine employee, says. Mr. Ku contends that the Calpine Incentive Program falls short of the burden required under Sections 363(b) and 503(c) of the Bankruptcy Code. Stripped to its core, the CIP is nothing more than the status quo bonus system, with the added Executive Incentive Program plan which simply offers select insiders additional compensation to burden the Debtors' estate. Mr. Ku notes that the Adjusted Enterprise Value targets used to justify the payments to select insiders under the EIP component are asserted with no basis of independent evaluation. The AEV targets permit no review by the equity holders to determine whether the performance targets put forth by the Debtors are appropriately set in terms of the compensation bestowed for achieving them. Moreover, the improvements in the Debtors' AEV are governed by many factors beyond any conceivable influence by the insiders designed for compensation. Mr. Ku also maintains that the CIP was implemented in lieu of the Debtors' normally anticipated bonus structure for all its employees in 2006. "It was the very actions of the Debtors' current management to discard the status quo structure that led to the many ills cited by the Debtors -- namely below market compensation of the employees and the accompanying retention problems." The Debtors' request should be denied, Mr. Ku asserts, at least until the CIP can be reviewed and revised to more closely align the interests of the Debtors' targeted insiders and that of the Debtors' creditors and equity holders. Mr. Ku currently owns 30,000 pre-bankruptcy shares of Calpine common stock purchased while he was an employee through the Debtors' employee stock purchase program and shortly thereafter. After the Debtors' bankruptcy filing, Mr. Ku organized an Ad Hoc Committee of Equity Security Holders, which now represents approximately 200 retail equity holders holding approximately 19,000,000 shares. Debtors Respond The Debtors insist that the Calpine Incentive Program represents a proper exercise of their business judgment. Their Motion details the purpose and justifications of the two components of the Incentive Program as well as the process relied upon in calculating, discussing, negotiating, and ultimately approving the Incentive Programs. In addition, the Debtors retained outside expert compensation consultants to benchmark the compensation provided by the Emergence Incentive Program and Management Incentive Program provisions. The EIP and the MIP are properly analyzed under Section 503(c)(3) of the Bankruptcy Code and permissible under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The Debtors point out that the Calpine Incentive Program provides compensation opportunities to employees based on increases in the value of the Company, not based on retention or simply staying employed at Calpine. No employee will be entitled to incentive compensation simply for remaining with the Debtors through the bankruptcy period. Debtors Adjust EIP The Debtors inform the Court that based on their continuing discussions with interested parties, as well as their continuing review of the Incentive Program, they have incorporated a new calculation of Adjusted Enterprise Value into the EIP portion of the Program. The Debtors explain that the change to the method of calculating AEV reflects a more objective measure of value by incorporating the post-emergence market value of Calpine's securities, among other things. Accordingly, the Debtors propose that AEV will be equal to: 1. The market value of corporate-level debt (i.e., non- project level debt); 2. plus the market value of preferred equity; 3. minus cash -- other than any cash held by companies with project-level debt-- on the balance sheet of any of the reorganized companies upon the consummation date; 4. plus the market value of Calpine's common stock -- and any other equity-linked securities including warrants -- excluding non-vested equity, including options, issued as part of the management incentive compensation pursuant to a plan of reorganization. All market prices will be calculated beginning on the 60th trading day following the consummation date and for the following 10 trading days. Prices for debt and preferred equity will be calculated as an average price based on AdvantageData (ADI quote), Factset, Markit Loans (LoanX) and Bloomberg. Volume weighted-average prices for common equity will be determined by reference to Bloomberg's AQR function. AEV will be further adjusted for the exclusion of any corporate level debt used to refinance project level debt. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Agreements with Top Executives Get Court's Nod ------------------------------------------------------------ Calpine Corp. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to finalize employment agreements with three members of their management team: -- Chief Executive Officer and Director Robert P. May; -- Executive Vice President, Chief Financial Officer and Chief Restructuring Officer Scott J. Davido; and -- Executive Vice President-Power Operations Robert E. ' Fishman. Specifically, the Debtors obtained the Court's authority to assume the CEO Agreement, and enter into an employment agreement with Messrs. Davido and Fishman. Terms of the CEO Agreement As reported in the Troubled Company Reporter on April 19, 2006, Mr. May will serve an initial term of two years, which term is automatically renewable for successive 12-month terms. He will receive a base salary is $1.5 million per annum, subject to annual review by the Board, and may be increased. The CEO is eligible for an annual cash performance bonus so long as he remains employed by the company on the last day of the applicable fiscal year. The target bonus will be established by the Board, but the minimum target bonus will be 100% of the base salary, and may range from 0 to 200% of base salary. The CEO will receive minimum bonuses of $2.25 million and $1.5 million for the 2006 and 2007 fiscal years, and a one-time sign- on bonus of $2 million. The CEO will also receive a Base Emergence Incentive Payment of $4.5 million, payable on effectiveness of a confirmed plan of reorganization. He will also get an Additional Emergence Incentive Payment based on the achievement of a certain Adjusted Enterprise Value, which is total enterprise value less project debt. If Calpine emerges from Chapter 11 with an AEV of more than $5 billion, in addition to the Base Emergence Incentive Payment, Mr. May will receive an additional $239,000 for each $100 million increase in AEV over $4.5 billion. Mr. May will also get an additional $4 million potential emergence incentive payable solely at the discretion of the Official Committee of Unsecured Creditors. The CEO can also participate in the general employee benefits programs available to other senior executives. He will receive severance benefits if he resigns for good reason or the company terminates his employment without cause. The severance benefits include an amount equal to the sum of the CEO's base salary and target bonus at the time of the termination of his employment, paid over a year. To the fullest extent permitted by applicable law, Calpine will provide indemnification for the CEO under its Articles of Incorporation and Bylaws. The CEO will be covered by the company's standard indemnification agreement and by any director's and officer's liability insurance policy maintained by the company. Employment Agreements Amendments On May 18, 2006, Calpine Corporation entered into amended employment agreements with Robert P. May, the company's chief executive officer, and Scott J. Davido, the company's executive vice president, chief financial officer and chief restructuring officer. The amendments to the Employment Agreements include: * Each Employment Agreement will not automatically renew; notice of renewal is required within 150 days prior to the end of the applicable term. Non-renewal of the Employment Agreement will constitute Good Reason -- as defined in each Employment Agreement -- for the executive to terminate his employment. * The Success Fee, if any, will be paid in accordance with Compensation Schedules attached to the applicable Employment Agreement. * The executive will not be entitled to severance payments -- except as required by the Consolidated Omnibus Budget Reconciliation Act -- if he terminates his employment for Good Reason or the Company terminates his employment other than for Cause prior to the effective date of a plan of reorganization. * If the executive terminates his employment for Good Reason or the Company terminates his employment not for Cause prior to the plan effective date, the executive would be entitled to a Guaranteed Minimum Success Fee. If a Success Fee is earned and paid, the Success Fee, if any, will be reduced by the amount of any Guaranteed Minimum Success Fee paid to the executive. * Non-competition provisions will apply for 12 months after the executive's employment is terminated and are limited to a specified group of companies. * If the executive is a prevailing party in a dispute related to his Employment Agreement, the Company will reimburse any expenses, including attorneys' fees. The reimbursement is in addition to any rights the executive may have under the Company's Certificate of Incorporation, Bylaws or Director and Officer insurance policies. A full-text copy of the Amended May Employment Agreement is available for free at: http://ResearchArchives.com/t/s?a63 A full-text copy of the Amended Davido Employment Agreement is available for free at: http://ResearchArchives.com/t/s?a64 About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) CALPINE CORP: Repays $645 Million of 9-5/8% Senior Secured Notes ---------------------------------------------------------------- Calpine Corporation (OTC Pink Sheets: CPNLQ) repaid approximately $645 million of its 9-5/8% First Priority Senior Secured Notes due 2014, plus accrued interest. The total principal amount outstanding as of Dec. 31, 2005 was $646,105,000. "Today's announcement is another significant step in strengthening Calpine's financial position," Calpine Chief Executive Officer Bob May, stated. "By repaying these notes, we are reducing the company's annual interest expense by over $25 million. This cost savings will add value for both Calpine's estate and our stakeholders." Calpine utilized approximately $412 million from restricted cash to fund the majority of the repayment of the notes. These funds were being held in escrow following the sale of Calpine's oil and gas properties in July of 2005. The balance of the repayment was funded through borrowings under the company's $2 billion debtor- in-possession credit facility. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. CARDINAL COMMS: Brings In Brian Karr as Chief Financial Officer --------------------------------------------------------------- Cardinal Communications, Inc., disclosed that D. Brian Karr has joined the company as chief financial officer. Karr was most recently vice president of finance for The TriZetto Group, Inc., a $300 million provider of IT-related services to the healthcare industry. Mr. Karr brings more than 15 years of accounting and financial management expertise to Cardinal. He was a founding member of the TriZetto Group and served as chief financial officer prior to its initial public offering. During his nine years at TriZetto, Mr. Karr was responsible for a variety of finance-related functions, including accounting, financial reporting, treasury and operational finance. Mr. Karr is a certified public accountant and holds a bachelor of science degree in accounting from Biola University in California. He will work in Cardinal's Broomfield headquarters office. Ed Garneau, chief executive officer of Cardinal, said, "Brian is a proven, accomplished and versatile financial management executive, and joins Cardinal with an outstanding record of driving financial performance and enhancing corporate growth. He also has significant experience in public accounting, SEC reporting and corporate financial planning. He has demonstrated an in-depth knowledge of a host of strategic financial management issues that Cardinal is currently working to address. We are very fortunate that Brian has chosen to join the Cardinal management team." Mr. Karr stated, "There is tremendous change afoot in the telecommunications and real estate arena, and Cardinal is helping lead this transformation. I am excited by the opportunity to help shape these innovations and I share management's objective of accelerating Cardinal's growth and achieving profitability." Headquartered in Broomfield, Colorado, Cardinal Communications, Inc., fka USURF America, Inc. (OTCBB: CDNC) provides full-service solutions for residential and business applications including the delivery of next-generation voice, video, and data broadband networks to communities and cities throughout the United States; the construction and development of luxury single and multi-family homes, condominiums and apartment communities; home finance, real estate and title services. Going Concern Doubt As reported in the Troubled Company Reporter on May 15, 2006, AJ. Robbins, PC, in Denver, Colorado, raised substantial doubt about Cardinal Communications, Inc., fka USURF America, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses, negative cash flows from operations, and working capital and stockholders' equity deficiencies. CARDINAL COMMS: Posts $2.1 Mil. Net Loss in 2006 1st Fiscal Qtr. ---------------------------------------------------------------- Cardinal Communications, Inc., fka USURF America, Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 22, 2006. The Company reported a $2,178,542 net loss on $5,376,482 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $63,213,825 in total assets and $61,791,369 in total liabilities, resulting in a $3,327,659 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $63,213,825 in total current assets available to pay $66,541,484 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a97 Going Concern Doubt As reported in the Troubled Compay Reporter on May 15, 2006, AJ. Robbins, PC, in Denver, Colorado, raised substantial doubt about Cardinal Communications' ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses, negative cash flows from operations, and working capital and stockholders' equity deficiencies. About Cardinal Communications Headquartered in Broomfield, Colorado, Cardinal Communications, Inc., fka USURF America, Inc., provides full-service solutions for residential and business applications including the delivery of next-generation voice, video, and data broadband networks to communities and cities throughout the United States; the construction and development of luxury single and multi-family homes, condominiums and apartment communities; home finance, real estate and title services. CARRINGTON MORTGAGE: Moody's Puts Ba1 Rating on Class M-10 Certs. ----------------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by Carrington Mortgage Loan Trust Series 2006- RFC1, Asset-Backed Pass-Through Certificates, Series 2006-RFC1, and ratings ranging from Aa1 to Ba1 to the mezzanine certificates in the deal. The securitization is backed by HomeComings Financial Network, Inc., People's Choice Home Loan, Inc, FMF Capital LLC, and EFC Holdings Corporation originated adjustable-rate and fixed-rate subprime mortgage loans acquired by Stanwich Asset Acceptance Company, L.L.C. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, and excess spread. Moody's expects collateral losses to range from 5.10% to 5.60%. Primary servicing will be provided by HomeComings Financial Network, Inc. Moody's assigned HomeComings its servicer quality rating as primary servicer of subprime loans. The complete rating actions: Carrington Mortgage Loan Trust Series 2006-RFC1 Asset-Backed Pass-Through Certificates, Series 2006-RFC1 * Cl. A-1, Assigned Aaa * Cl. A-2, Assigned Aaa * Cl. A-3, Assigned Aaa * Cl. A-4, Assigned Aaa * Cl. M-1, Assigned Aa1 * Cl. M-2, Assigned Aa2 * Cl. M-3, Assigned Aa3 * Cl. M-4, Assigned A1 * Cl. M-5, Assigned A2 * Cl. M-6, Assigned A3 * Cl. M-7, Assigned Baa1 * Cl. M-8, Assigned Baa2 * Cl. M-9, Assigned Baa3 * Cl. M-10, Assigned Ba1 CATHOLIC CHURCH: Court Denies Portland's Request to Settle Claim ---------------------------------------------------------------- The Hon. Elizabeth L. Perris of the U.S. Bankruptcy Court for the District of Oregon denies the Archdiocese of Portland in Oregon's request to settle Claim No. 208. The Court sustains the Future Claimants Representative's objection with respect to the claim. As reported in the Troubled Company Reporter on May 3, 2006, the settling claimants include the holders of Claim Nos. 208 and 93. Pursuant to their settlement agreements with Portland, Claimants 208 and 93 have the right to terminate the settlement agreement in the event Portland fails to pay the agreed amount of the disputed claim in full by April 30, 2006. To fulfill that condition under the agreements, the Archdiocese will be required to pay by April 30, $950,000 on account of Claim No. 208 and $3,000 on account of Claim No. 93. FCR's Objection David A. Foraker, in his capacity as Future Claimants Representative, asked Judge Perris to deny approval of the Archdiocese's Settlement Motions to the extent that Portland seeks authority to selectively pay prepetition tort claims other than pursuant to a confirmed Plan of Reorganization. Mr. Foraker argued that under the present state of the law, it is unclear whether the bankruptcy court has the judicial power to authorize a debtor-in-possession to pay from the property of the estate all or any portion of certain general unsecured claims other than pursuant to a confirmed plan, except as part of a Court-approved settlement in which the bankruptcy estate receives, in exchange for the payment, an economic benefit over and above the mere satisfaction of a general unsecured claim. To the extent that the Bankruptcy Court has the judicial power at all to authorize a pre-plan distribution on account of certain general unsecured claims, there is no compelling reason for the Court to exercise that power in the Archdiocese's case, Mr. Foraker asserted. In addition, Mr. Foraker contended that creditors were not given the proper notice of the Settlement Motions. In any event, the Settlement Motions must be re-filed, not under seal, after appropriate redactions are made to preserve the confidentiality of the names of the tort claimants. Mr. Foraker also noted that the Archdiocese continues to maintain that all assets associated with its parishes and most of the other assets it controls are unavailable to pay its debts. Portland even indicated that if it were to prevail on its theories in the Property of the Estate litigation, about "$21.5 million [would be] available for unsecured creditors, resulting in payments to creditors of possibly only 50% or less of their Allowed Claims based on the Debtor's estimates of the Claims." Portland also sought and obtained an order to reduce to 60% the amount that it is paying to estate professionals on a monthly basis. However, according to Mr. Foraker, the Archdiocese expects that it will be able to come up with the cash needed to fund its settlement agreements with Claimants 208 and 93 once the Court approves them. It is unknown to the FCR how or from what source the Archdiocese would obtain those funds. 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. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Tort Panel Wants to Dip Hands on Endowment Fund ---------------------------------------------------------------- The Official Committee of Tort Claimants asks Judge Elizabeth L. Perris of the U.S. Bankruptcy Court for the District of Oregon to issue a summary judgment declaring that the Archdiocese of Portland's "Perpetual Endowment Fund" or the "Quasi-Endowment Fund," which contains $36,000,000 in cash and liquid investments, is property of the Archdiocese's estate and available to pay claims. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, in Portland, Oregon, on behalf of the Tort Committee, asserts that the Archdiocese's bankruptcy estate includes Portland's beneficial interest in the Perpetual Endowment Fund together with its powers to amend, modify, terminate and direct distribution of the Fund. Mr. Kennedy, among other things, contends that the Archdiocese was the "settlor," trustee and beneficiary of the Perpetual Endowment Fund. The Archdiocese, according to Mr. Kennedy, established the Perpetual Endowment Fund from the sale of certain real property it owned. The Archdiocese deposited additional unrestricted contributions and gifts into the Perpetual Endowment Fund. The Archdiocese's annual financial reports list the Perpetual Endowment Fund as its unrestricted net asset. The Perpetual Endowment Fund, Mr. Kennedy adds, is not subject to any donor- imposed restrictions. Portland Blocks Panel's Attempt The Perpetual Endowment Fund is not an asset of the estate, the Archdiocese of Portland tells the Oregon Bankruptcy Court. The Archdiocese's attorney, Howard M. Levine, Esq., at Sussman Shank LLP, in Portland, Oregon, explains that pursuant to a Declaration of Trust dated March 23, 1981, the Perpetual Endowment Fund is an irrevocable charitable trust for indefinite beneficiaries, including Catholics and non-Catholics throughout the world, of which the Archdiocese is the successor trustee and holds only legal title to the trust assets. Mr. Levine further explains that the original trustee of the Perpetual Endowment Fund was the "Archdiocese of Portland in Oregon," a corporation established in 1909 as an Oregon nonprofit religious corporation having both corporate officers and a board of trustees. That Corporation was not the reorganizing Archdiocese, Mr. Levine points out. That Corporation was initially titled "Archdiocese of Oregon City." Its name was changed to Archdiocese of Portland in Oregon in 1929. In 1981, the reorganizing Archdiocese was a separate corporation sole with no officers and only one director, the Archbishop, Mr. Levine notes. The two corporations merged in 1991 with the successor by merger being the reorganizing Archdiocese. It was at this point that the reorganizing Archdiocese, as successor trustee, had its first involvement with the Perpetual Endowment Fund. Mr. Levine argues that the Perpetual Endowment Fund is not a private self-settled trust, but a charitable trust. Under Section 541 of the Bankruptcy Code, assets, held by the Archdiocese in a charitable trust are not estate assets. The Archdiocese does not have the power to amend, modify, or terminate the Declaration of Trust. Mr. Levine points out that the Bankruptcy Court would violate the First Amendment and RFRA if it attempts to override canonical limitations of the power of the Archbishop. Since there is no genuine issue of material fact that the Perpetual Endowment Fund is a charitable trust and is not an asset of the estate, the Archdiocese asks the Court to: (a) deny the Tort Committee's Summary Judgment Motion; and (b) grant its cross-motion for partial summary judgment. 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. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000) CDS BUSINESS: Case Summary & 40 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: CDS Business Services, Inc. 303 Merrick Road Lynbrook, New York 11563 Tel: (516) 379-1053 Bankruptcy Case No.: 06-71251 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- CDS Companies, Inc. 06-71252 CDS Capital, LLC 06-71256 MyReceivables.Com LLC 06-71257 Store Charge, Inc. 06-71259 Type of Business: The Debtors offer financial services, accounts receivables management services & financing, electronic billing & processing, and credit, collection & marketing services. See http://www.myreceivables.com/ Chapter 11 Petition Date: June 5, 2006 Court: Eastern District of New York (Central Islip) Judge: Stan Bernstein Debtor's Counsel: Harold S. Berzow, Esq. Ruskin Moscou Faltischek, P.C. 190 EAB Plaza Uniondale, New York 11556 Tel: (516) 663-6596 Fax: (516) 663-6796 Debtors' Consolidated Assets and Liabilities as of April 30, 2006: Total Assets: $5,523,834 Total Debts: $10,758,072 A. CDS Business Services, Inc.'s 2 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Integrasys $16,089 Attn: David Selina 2601 Network Boulevard Frisco, TX 75034 Roger Rosenberg $15,000 630 Shore Road, Suite 5 Long Beach, NY 11561 B. CDS Companies, Inc.'s 22 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ 303 Merrick LLC $205,275 37-08 28th Avenue Long Island City, NY 11103 Absolute Logic Inc. $46,880 78 Pin Oak Lane Wilton, CT 06897 Access Communication Systems Inc. $36,218 80 Ruland Road Melville, NY 11747-6200 Oxford Health Plans $9,550 Competitive Business Forms, Inc. $3,043 Phoenix Home Life $2,422 Transend It, Inc. $2,421 Staples Business Advantage $2,146 Kahn Hoffman & Hochman, LLP $1,500 PBCC $1,436 NPA Computers, Inc. $1,308 United Parcel Service $915 Minuteman Press $674 Dun & Bradstreet $577 Experian $515 Nancy Digaetano $440 General Credit Forms, Inc. $396 Pitney Bowes, Inc. $341 Deluxe Business Forms and Supplies $135 M. Burr Keim Company $110 National Telephone Answering $40 TRXNS, LLC $17 C. CDS Capital, LLC 's 15 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Executive Sounding Board $11,139 1350 Broadway, Suite 702 New York, NY 10018 Euler Hermes ACI $17,583 800 Red Brook Boulevard Owings Mills, MD 21117 Kahn, Hoffman & Hochman, LLP $3,190 10 Esquire Road New York, NY 10956 Xerox Corporation $3,133 The U.S. Life Insurance Co. $3,100 UCC Direct Services $2,463 Canon Financial Services, Inc. $1,644 South Shore Record Management $1,481 Watkins Ludlam Winter & Sten $965 Brian Shube Consulting $600 Shumaker, Loop & Kendrick, LLP $330 Verizon Wireless $188 Certified Pest Control $108 Fast Signs $40 Roadway Express, Inc. $30 D. Store Charge, Inc.'s Largest Unsecured Creditor: Entity Claim Amount ------ ------------ M. Burr Keim Company $110 2021 Arch Street Philadelphia, PA 19103 E. MyReceivables.Com LLC has no creditors that are not insiders. CHASE MORTGAGE: Fitch Affirms Two Cert. Classes' Low-B Ratings -------------------------------------------------------------- Fitch Ratings affirmed these Chase Mortgage Finance Trust issue: Series 2005-S1: -- Classes I-A and 2-A at 'AAA' -- Class M at 'AA' -- Class B-1 at 'A' -- Class B-2 at 'BBB' -- Class B-3 at 'BB' -- Class B-4 at 'B' The affirmations affect approximately $539.1 million of the outstanding certificates and reflect a stable relationship between credit enhancement and expected loss. The above transaction has suffered no loss since its initial rating. The collateral of the above transaction consists of prime 15- and 30-year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties. All of the loans were originated and are serviced by Chase Home Finance, LLC, which is rated 'RPS1' by Fitch. The transaction is seasoned 12 months and has a pool factor (i.e., current mortgage loans outstanding as a percentage of the initial pool) of 90%. CINCINNATI BELL: March 31 Balance Sheet Upside-Down by $727 Mil. ---------------------------------------------------------------- Cincinnati Bell Inc. earned $14,100,000 of net income on $298,200,000 of revenue for the quarter ending March 31, 2006. The Company's balance sheet at March 31, 2006 showed $1,887,600,000 in total assets and $2,614,500,000 in total liabilities, resulting in a $726,900,000 shareholders' deficit. The Company's balance sheet also showed total current assets of $283,800,000 and total current liabilities of $251,100,000. Full-text copies of Cincinnati Bell's financial statements for the quarter ending March 31, 2006 are available for free at: http://researcharchives.com/t/s?aa8 Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/-- provides a wide range of local exchange and wireless telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. * * * Cincinnati Bell's senior secured debt, bank loan debt and corporate family ratings carry Moody's Ba3 rating. Moody's also junked the Company's preferred stock rating and placed its senior unsecured debt at B1 and senior subordinated debt at B2. On Aug. 17, 2005, Moody's assigned the Company a stable outlook. On March 17, 2006, Standard & Poor's placed the Company's long term foreign and local issuer credit ratings at B+ with a negative outlook. The Company's senior secured and bank loan debts carry Fitch's BB+ ratings. Fitch also assigned a BB- rating to the Company's senior unsecured debt, a B rating to its subordinated debt and a B- rating to its preferred stock. Fitch confirmed the ratings with a stable outlook on April 28, 2006. CITIZENS COMMS: Declares $0.25 Per Share Second Quarter Dividend ---------------------------------------------------------------- Citizens Communications Company's Board of Directors declared a regular quarterly cash dividend payment of $0.25 per share, payable on June 30, 2006, to holders of record at the close of business on June 9, 2006. About Citizens Communications Based in Stamford, Conn., Citizens Communications Corporation (NYSE:CZN) -- http://www.czn.net/-- is a communications company providing services to rural areas and small and medium-sized towns and cities as an incumbent local exchange carrier, or ILEC. The Company offers its ILEC services under the "Frontier" name. * * * As reported in the Troubled Company Reporter on May 30, 2006, Moody's Investors Service placed the debt ratings of Citizens Communications' on review for possible upgrade, reflecting the company's increased commitment to maintain a stable and predictable debt profile. Affected ratings include: * Corporate family rating -- Placed on Review for Possible Upgrade, currently Ba3; * Senior unsecured revolving credit facility -- Placed on Review for Possible Upgrade, currently Ba3; and * Senior unsecured notes, debentures, bonds -- Placed on Review for Possible Upgrade, currently Ba3. CLAIMSNET.COM: Brings In Kent McRee as President ------------------------------------------------ Claimsnet.com reported that Mr. Kent McRee has joined the Company as president, with primary responsibilities of sales and marketing. Don Crosbie continues as chairman and chief executive officer. Mr. McRee has more than 20 years experience in healthcare industry sales, sales management, marketing, consulting and business development strategies. He most recently served as the president of Resource Knowledge Management, LLC, of Dallas, Texas, a sales, marketing and business development consulting firm for the health care industry. Mr. McRee previously served in executive sales and marketing positions at Healthaxis, a technology based solutions company for Business Process Outsourcing and claims administration, A & G Healthcare of Dallas, Texas, a primary and secondary PPO network repricing company, and GTESS Corporation, a Business Process Outsourcing, Imaging and OCR technology and document management company. "Kent brings to Claimsnet a highly successful track record in health care sales and marketing," said Don Crosbie, chief executive officer of Claimsnet. "The addition of Kent McRee to our management team is a significant strengthening of the capabilities of Claimsnet management to bring 'best of breed' solutions to the healthcare payer industry. "I am very pleased to join the exceptional team at Claimsnet," commented Mr. McRee. "The extraordinary opportunity for the company within the healthcare payer marketplace has been demonstrated with more than 50 new clients over the past few years and I look forward to being a part of the continuing success of Claimsnet." Headquartered in Dallas, Texas, Claimsnet.com Inc. (OTCBB: CLAI.OB) -- http://www.claimsnet.com/-- provides Internet-based claim processing solutions for the healthcare payer industry, including distinctive, advanced ASP technology. Claimsnet offers systems that are distinguished by ease of use, customer care, security and measurable cost advantages. At March 31, 2006, Claimsnet's balance sheet showed a $794,000 stockholders' deficit compared to a $715,000 stockholders' deficit at Dec. 31, 2005. CLARET TRUSTS: DBRS Places Low-B Rating on 6 Certificate Classes ---------------------------------------------------------------- Dominion Bond Rating Service assigned provisional ratings of AAA through B (low) as indicated below to the various classes of Claret Trust's Commercial Mortgage Pass-Through Certificates, Series 2006-1. The Class X is notional. * Class A New Rating - Provisional AAA * Class X New Rating - Provisional AAA * Class B New Rating - Provisional AA * Class C New Rating - Provisional A * Class D New Rating - Provisional BBB * Class E New Rating - Provisional BBB (low) * Class F New Rating - Provisional BB (high) * Class G New Rating - Provisional BB * Class H New Rating - Provisional BB (low) * Class J New Rating - Provisional B (high) * Class K New Rating - Provisional B * Class L New Rating - Provisional B (low) Finalization of ratings is contingent upon receipt of final documents conforming to information already received. The collateral consists of 105 fixed-rate loans secured by 111 multi-family and commercial properties. The portfolio has a balance of Cdn$379,593,822. The loans were originated from 1998 to 2005 on a portfolio-lending basis with the intent being to hold them on balance sheet. Therefore, the pool is well seasoned with the weighted-average seasoning for the pool being 42 months. No loan has had a delinquent monthly payment in excess of 30 days from the later of three years prior to the Cut-Off Date or to the date of the origination of the loan. Although all of the third-party reports are dated as of each loan's respective origination date, DBRS underwrote sampled loans based on current market data from commercial real estate market sources and underwrote the higher of the engineer's recommended capital expenditure per square foot when available or the standard DBRS underwriting parameters based on property type. Additionally, Canadian Imperial Bank of Commerce will provide Reps and Warrants addressing the collaterals' shortcomings. The pool is more diverse than the average conduit product, with the largest loan representing 3.6% of the pool balance and the largest ten loans together representing 26.5% of the pool balance. DBRS shadow-rated 13 loans, representing 19.5% of the pool, investment grade. The investment-grade shadow-rated loans indicate the long-term stability of the underlying assets. The shadow-rated investment-grade ratings assigned by DBRS : (1) Control No. 4 (2.8% of the pool), shadow-rated BBB (2) Control No. 17 & 40 (2.6% of the pool), shadow-rated BBB (3) Control No. 8 (2.1% of the pool), shadow-rated BBB (4) Control No. 10 (1.9% of the pool), shadow-rated BBB (5) Control No. 15 (1.7% of the pool), shadow-rated BBB (6) Control No. 16 (1.6% of the pool), shadow-rated BBB (7) Control No. 22 (1.5% of the pool), shadow-rated BBB (high) (8) Control No. 27 (1.2% of the pool), shadow-rated BBB (9) Control No. 36 (1.0% of the pool), shadow-rated BBB (10) Control No. 37 (1.0% of the pool), shadow-rated BBB (12) Control No. 43 (0.9% of the pool), shadow-rated BBB (13) Control No. 56 (0.7% of the pool), shadow-rated BBB (14) Control No. 75 (0.5% of the pool), shadow-rated AA Eighty-six per cent of the pool provides for full or partial recourse to the loans. The weighted-average DBRS-stressed term debt service coverage ratio is 1.51 times and the weighted-average DBRS-stressed Refi DSCR is 2.03x. The DBRS-stressed loan-to-value is 62.8%. COGECO CABLE: DBRS Puts Senior Secured Notes' BB Rating on Review ----------------------------------------------------------------- Dominion Bond Rating Service placed the rating of Cogeco Cable Inc. "Under Review with Negative Implications", following the announcement that the Company intends on purchasing the second- largest cable operator in Portugal, Cabovisao-Televisao por Cabo, S.A., for approximately ?465 million, using 100% bank debt financing. * Senior Secured Notes & Debentures Under Review - Negative BB (high) * Second Secured Debentures, Series A Under Review - Negative BB Cogeco Cable's financial profile will be materially weakened, following the transaction with consolidated total debt-to-EBITDA expected to increase to approximately 4.9 times from its current 3.2 times and cash flow-to-total debt would weaken to 0.14 times from 0.24 times. DBRS notes this transaction will not be accretive to earnings; however, Cabovisao is not expected to be a free cash flow drain and Cogeco Cable's Canadian operations should continue to generate positive free cash flow. An acquisition outside of Cogeco Cable's incumbent market limits the degree of potential synergies and is a departure from its historical acquisition strategy. DBRS believes this international diversification increases the overall business profile of Cogeco Cable. The acquisition price represents approximately 10.6 times EBITDA purchase multiple, or approximately Cdn$2,500 per basic subscriber. DBRS notes the purchase multiple appears reasonable when considering other western European transactions, potential growth opportunities, and a monthly average revenue per user of Cdn$57. Given the increase in both business and financial risk, the ratings will likely be downgraded by one or two notches, dependent on the long-term capital structure and the future capital needs of Cabovisao. DBRS's ratings are expected to remain under review until the transaction closes or there is certainty the transaction will close. The acquisition remains subject to court approvals, possible shareholder approvals, and other customary closing conditions. Cogeco Cable's target date for closing is summer 2006. COGECO CABLE: S&P Puts BB+ Corp. Credit Rating on Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Cogeco Cable Inc., including its long-term 'BB+' corporate credit rating, on CreditWatch with negative implications, following Cogeco's announcement that it has entered into an agreement to purchase the second-largest cable TV operator in Portugal, Cabovisao-Televisao por Cabo S.A. The CreditWatch placement reflects an expected material weakening of the company's financial metrics resulting from the debt- financed acquisition. "The purchase price of EU465 million (CDN$661 million), which equates to a 12.6x trailing 12 months reported EBITDA, will be debt financed and should materially increase Cogeco's lease- adjusted debt to EBITDA, while other credit metrics should weaken correspondingly," said Standard & Poor's credit analyst Madhav Hari. "Lease-adjusted debt levels are expected to increase by 82% to about C$1.5 billion from C$806 million, with only a 20% corresponding increase in EBITDA, resulting in an increase in lease-adjusted debt to EBITDA to around 5.0x on a pro forma basis from 3.3x at Feb. 28, 2006," Mr. Hari added. Although the proposed acquisition is consistent with Cogeco's previously stated strategy of seeking appropriate international acquisition(s), Standard & Poor's initial assessment is that this will lead to a modest weakening in the company's overall business profile. Cabovisao generates lower operating margins, adds complexity to Cogeco's operations, and offers limited opportunities for cost synergies. Cabovisao is a leading communication services company in Portugal with a customer base comprising 264,000 analog cable TV, 130,000 high-speed Internet, and 217,000 telephony subscribers. The company has a highly upgraded cable plant, which passes 820,000 homes or about 20% of all Portuguese households. Standard & Poor's notes that the low penetration levels in Portugal may bode well for the long-term growth prospects. Standard & Poor's will resolve the CreditWatch status following a more detailed review of the acquisition; however, if the announced increase in debt is permanent, the ratings will likely be lowered by at least one notch. In resolving the CreditWatch, Standard & Poor's will focus its review on: * the ultimate capital structure of the company; * a thorough business risk assessment of Cabovisao, including the level of additional investment that may be required; * the level and trajectory of free operating cash flow; and * the ability and willingness of Cogeco to pursue an aggressive deleveraging strategy following completion of the acquisition. COLUMBIA COUNTY HOSPITAL: S&P Lowers $14.9 Mil. Bonds' Rating to B ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on Columbia County Hospital Authority, Pa.'s $14.9 million, series 1999 health care revenue bonds, issued for Bloomsburg Hospital, to 'B' from 'BB-'. The rating downgrade reflects the system's substantial reductions in liquidity during 2005, especially in light of current and planned capital expenditures. The rating outlook is negative. "Further downgrades for Bloomsburg Hospital are possible if management cannot control expenditures in line with the revenue base," said Standard & Poor's credit analyst Cynthia Keller Macdonald. "A higher rating is unlikely in the near future because Bloomsburg's historic liquidity cushion is gone and will take time to rebuild, especially in light of poor profitability." Bloomsburg's liquidity dropped to $5.3 million in 2005 from almost $9.0 million in 2004 due to a combination of factors including: * cash flow needs; * increased accounts receivable; and * capital expenditures. Cash is also weak at 33% of the $16.3 million of long-term debt, mortgages, and capital leases. Bloomsburg is in the midst of spending approximately $6 million of non-routine capital for technology needs and patient room renovations, which will further strain the balance sheet. Funding will be through a combination of: * grants, * contributions, * operating reserves, and * short-term debt. Moreover, losses from operations continue and, despite posting improvement during fiscal 2005, fiscal year-to-date 2006 results are below that of fiscal 2005 and budgeted performance levels. Volumes, however, have increased for the second consecutive year and remain a factor precluding further downgrades at this time. Bloomsburg, however, remains in the shadow of 'AA-' rated Geisinger Health System. "Any withdrawal of Geisinger business from the facility at this time could be extremely harmful," added Keller Macdonald. Bloomsburg Hospital operates a 78-bed general acute care hospital in central Pennsylvania. This analysis includes the entire Bloomsburg Health System, even though small components, specifically the self-insurance trust fund and home health corporation, are not obligated on the debt. CONGOLEUM CORPORATION: Wants Navigant as TDP Consultant ------------------------------------------------------- Congoleum Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of New Jersey for permission to employ Navigant Consulting, Inc., as their consultant with respect to a proposed Trust Distribution Procedures. Navigant Consulting will: a. advise the Debtors with regard to the proposed TDP; and b. to the extent necessary, provide a liability analysis for bodily injury claims derived from Congoleum products, which may involve analysis of the debtors' products and workforce, creation of claims data file from the debtors' paper files or cleanup of existing data files, analysis of claims data, and estimation of future claims and of total claims liability, as well as analysis and critique of reports by the experts retained by other parties in interest. The Debtors disclose that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Managing Director $375 - $550 Director $300 - $450 Associate Director $250 - $350 Managing Consultant $220 - $280 Senior Consultant $180 - $220 Consultant $150 to $190 Robin A. Cantor, managing director of the Insurance and Claims Services division of Navigant Consulting, assures the Court that the firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. About Congoleum Corporation Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennanat, Esq., at Pillsbury Winthrop Shaw Pittman LLP represent the Debtors. Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP represents the Official Committee of Unsecured Bondholders. R. Scott Williams serves as the Futures Representative, and is represented by lawyers at Orrick, Herrington & Sutcliffe LLP. Aaron Van Nostrand, Esq., at Coughlin Duffy, LLP, represents Continental Casualty Company and Continental Insurance Company. When Congoleum filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. At. Dec. 31, 2005, Congoleum Corporation's balance sheet showed a $44,960,000 stockholders' deficit compared to a $20,989,000 deficit at Dec. 31, 2004. Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX:ABL). DANA CORP: Creditors Committee Gets Court Okay on FTI's Retention ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York allowed the Official Committee of Unsecured Creditors in Dana Corporation and its debtor-affiliates' chapter 11 cases to retain FTI Consulting, Inc., as its restructuring advisors, effective March 14, 2006. The Court overruled the objection of Diana G. Adams, acting U.S. Trustee for Region 2, to the Committee' request. The Court ruled that: -- the U.S. Trustee and the Debtors will have the right to object to FTI Consulting, Inc.'s interim and final fee applications on all grounds, including but not limited to the reasonableness standard provided in Section 330 of the Bankruptcy Code; and -- the Completion Fee will be considered earned and payable, subject to Court approval, only on the earlier of: (i) the confirmation of a plan of reorganization or a plan of liquidation; or (ii) the sale or liquidation of all or substantially all of the Debtors' assets. The U.S. Trustee, in her motion to deny the Committee's application, contended that, even accepting that all fees are subject to a reasonableness standard, she "is hard pressed" to imagine a situation in which the fee would be warranted if the case converts to Chapter 7. In the Committee's application, FTI requested payment of a $1,000,000 completion fee if the Debtors' case converts Chapter 7 of the Bankruptcy Code -- the same fee as if the Debtors successfully confirm a plan. 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. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Creditors Panel Retains Halperin as Conflicts Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Dana Corporation and its debtor-affiliates' chapter 11 cases obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to retain Halperin Battaglia Raicht, LLP, as its conflicts counsel under a general retainer, nunc pro tunc, to March 31, 2006. As reported in the Troubled Company Reporter on May 22, 2006, the Committee needs the Halperin Battaglia's services to ensure that the Committee receives seamless legal representation to the extent of any actual or potential legal conflicts that may arise in the Debtors' cases. Alan D. Halperin, Esq., a member of Halperin Battaglia, told the Court that counsel to the Committee Kramer Levin Naftalis & Frankel LLP has identified a conflict with respect to certain of the Debtors' prepetition lenders that will necessitate Halperin Battaglia's involvement. Hence, Halperin Battaglia will perform these services to the Committee in lieu of Kramer Levin: -- review and analyze the liens of those lenders; -- conduct any necessary negotiations; -- file any necessary pleadings with the Court regarding those liens; and -- address the Committee's legal needs with respect to any other conflicts that may arise after Kramer Levin's notification. Halperin Battaglia will be paid based on its regular hourly rates: Professional Rate per Hour ------------ ------------- Attorneys $395 to $175 Law clerks $125 Paraprofessionals $100 to $75 Halperin Battaglia will also seek reimbursement of necessary and reasonable out-of-pocket expenses. Mr. Halperin assured the Court that Halperin Battaglia is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. 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. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORP: Wants to Continue Director Compensation Program ---------------------------------------------------------- Dana Corporation asks the Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York for permission to modify and continue its prepetition compensation program for the non-employee members of its board of directors, and perform its postpetition obligations under the program. Dana also seeks the Court's authority to pay certain prepetition fees and expenses owing to certain Directors totaling $57,500. With Mercer Management Consulting's assistance, Dana developed and implemented the Director Compensation Program. Directors were to receive retainers and fees under the Director Compensation Program: Duty Fee ---- --- Board participation $40,000 annual retainer, plus a $75,000 phantom stock unit grant In-person participation $1,500 fee in a Board meeting Telephonic participation $1,500 fee in a Board meeting Audit Committee and $15,000 annual retainer Compensation Committee Chairs Governance and Nominating $10,000 annual retainer Committee and Finance Committee Chairs Participation on the $5,000 annual retainer Audit Committee and Compensation Committee Participation on the $2,500 annual retainer Governance and Nominating Committee and Finance Committee In-person participation $1,500 fee in a Committee meeting Telephonic participation $1,000 fee in a Committee meeting The $75,000 phantom stock unit grant was to be made annually to each Director and was a form of deferred compensation. Each share of Phantom Stock held by a Director was to reflect the value of Dana's common stock at the time of the transfer, but it would not dilute Dana's common stock. Upon a Director's retirement, termination or resignation, the Director was to be entitled to receive, at his or her prior election, the value of his or her Phantom Stock, in cash or in equivalent shares of Dana's common stock, based on the value of Dana's common stock at that time. After its bankruptcy filing, Dana reviewed the Director Compensation Program to evaluate whether it was structured to address current circumstances and anticipated demands on the Board of Directors. Among other things, Dana reviewed the Board Fees under the Director Compensation Program and determined that the Phantom Stock component no longer provided any value as a result of the bankruptcy filing, thereby making the total value of the Directors' compensation below market levels. Dana determined that this development would make it difficult to retain Directors with the knowledge, skill, judgment and experience necessary to make the complicated and important decisions they will be called upon to make during the Debtors' Chapter 11 cases. Similarly, Dana also determined to complete the implementation of the Presiding Director concept to facilitate the work of independent Directors. Compensation for the Presiding Director would be established based on anticipated service demands. The Board of Directors began implementing the Presiding Direct concept prior to Dana's bankruptcy filing by: (a) creating a job description for the Presiding Director, (b) establishing a two-year term for the Presiding Director, (c) selecting Richard B. Priory as the initial Presiding Director, and (d) reviewing the corporate structure of similar companies in the industry to determine the appropriate compensation for the Presiding Director. Modified Director Compensation Program Dana now seeks to implement a modified Director Compensation Program and to continue to perform its postpetition obligations under that program. Among other things, the Modified Director Compensation Program will: (a) replace the Phantom Stock with equivalent cash compensation totaling $75,000, (b) authorize certain additional fees for the Presiding Director, and (c) otherwise reflect market levels for certain Board Fees. The Additional Fees for the Presiding Director are comprised of: (a) a $30,000 annual retainer, and (b) $3,000 for each full or partial day that the Presiding Director travels for the performance of his duties as the Presiding Director provided that he is not at the time performing other services for the Board of Directors or any of its committees. The Board Fees under the Modified Director Compensation Program are: Duty Fee ---- --- Board Participation $115,000 annual retainer Presiding Director $30,000 annual retainer Full or partial day spent $3,000 per day fee traveling to perform duties as Presiding Director In-person participation $1,500 fee in a Board meeting Telephonic participation $1,000 fee in a Board meeting Audit Committee and $15,000 annual retainer Compensation Committee Chairs Governance and Nominating $10,000 annual retainer Committee and Finance Committee Chairs Participation on the Audit $5,000 annual retainer Committee and Compensation Committee Participation on the $2,500 annual retainer Governance and Nominating Committee and Finance Committee In-person participation $1,500 fee in a Committee meeting Telephonic participation $1,000 fee in a Committee meeting According to Corinne Ball, Esq., at Jones Day, in New York, Dana believes that the adoption and continuation of the Modified Director Compensation Program constitutes use of estate assets in the ordinary course of Dana's business. "Without the Modified Director Compensation Program and assurance that the Directors will be compensated in a manner consistent with the market and reflective of the time commitment and dedication necessary for active participation on the Board of Directors during these chapter 11 cases, it would be difficult to ensure the Directors' continued service," Ms. Ball says. Prepetition Fees and Expenses As of the Debtors' bankruptcy filing, several of the Directors were owed or had accrued various sums for Prepetition Fees and Expenses. The Prepetition Fees and Expenses were due and owing as of the March 3, 2006, because, among other things: (a) the Debtors filed their Chapter 11 petitions in the midst of their regular reimbursement and payment cycle; and (b) certain checks issued to the Directors prior to the March 3, 2006, including expense reimbursement checks, had not yet been presented for payment or had not yet cleared the banking system and accordingly, were not honored and paid as of March 3, 2006. Ms. Ball assures the Court that the Debtors will not pay any Prepetition Fees owing to or on account of any particular Director in excess of the $10,000 allowable as a priority claim under Section 507(a)(4) of the Bankruptcy Code. Ms. Ball asserts that the payment of the prepetition fees and expenses would not deplete assets otherwise available to other unsecured creditors under a plan. The Prepetition Fees owed to the Directors are owed on account of services provided to the Debtors and should be permitted to be paid, up to the priority cap under Section 507(a)(4) of the Bankruptcy Code, Ms. Ball says. "Although the amount of the Prepetition Expenses is not large, those expenses nevertheless represent personal liabilities of the Directors incurred for providing services to Dana, and should be paid to preserve the goodwill and dedication of the Directors." 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. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000). DELPHI CORP: Withdraws Suit v. MDL Defendants Under Settlement -------------------------------------------------------------- Delphi Corporation and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to enter into settlement agreements with certain entities known as the Morgan Defendants, Schunk Defendants and SGL Defendants. In 2002, The Morgan Crucible Company plc and its U.S. affiliate, Morganite, Inc., pled guilty to the United States Department of Justice's charges of participation in a global conspiracy to suppress and eliminate competition by fixing the prices of electrical carbon products. Both companies paid fines aggregating $11,000,000. Four Morgan executives -- Ian P. Norris, Robin D. Emerson, Jacobus Johan Anton Kroef, and F. Scott Brown -- were also charged in connection with their role in the conspiracy. Except for Mr. Norris, who faces extradition from the United Kingdom, each of the executives pled guilty, paid a fine, and served time in federal prison. In addition, the European Commission fined EUR101,440,000 against participants in the price-fixing conspiracy. In 2004, Morgan Crucible and its Canadian affiliate, Morganite Canada Corporation, pled guilty and paid CN$1,000,000 in fines for their roles in implementing the price-fixing conspiracy in Canada. A number of private antitrust class actions were filed in courts throughout the United States against: -- The Morgan Crucible Company plc, Morganite Industries, Inc., Morganite, Inc., Morgan Advanced Materials and Technology, Inc., Morganite Electrical Carbon Ltd., and National Electrical Carbon Products, Inc.; -- Ludwig Schunk Stiftung e.V., Schunk GmbH, Schunk Kohlenstoff-Technik GmbH, Schunk of North America, Inc., Schunk Graphite Technology LLC, Hoffmann & Co. Elektrokohle AG, and Hoffmann Carbon, Inc.; -- SGL Carbon AG and SGL Carbon, LLC; -- C. Conradty Nuernberg GmbH; and -- Le Carbone Lorraine S.A., Carbone Lorraine North America Corporation, and Carbone of America Industries Corporation; Certain of these actions were ultimately consolidated before Judge Jerome B. Simandle of the U.S. District Court for the District of New Jersey in In re Electrical Carbon Products Antitrust Litigation, MDL No. 1514, Master Docket No. 03-CV-2182 (JBS). The class plaintiffs in the MDL Proceeding entered into settlement agreements with the MDL Defendants. In May 2005, the MDL Court granted preliminary approval of the proposed settlements. Shortly thereafter, notice of the MDL Settlements was forwarded to all class members. Delphi Corporation was a member of the settlement class. Delphi and 13 other similarly situated companies believe that they might be able to obtain a greater recovery than as a member of the class by filing a separate lawsuit. Thus, on August 19, 2005, they requested exclusion from the settlement class in the MDL Proceeding. On September 23, 2005, Delphi and 13 other similarly situated companies filed a complaint in the U.S. District Court for the Eastern District of Michigan against the MDL Defendants. The Complaint alleges that, from October 1988 through September 2001, the Defendants engaged in a worldwide conspiracy to fix, raise, maintain, and stabilize prices and to allocate markets and customers for Electrical Carbon Products sold in the United States, Europe, and elsewhere. Prior to the filing of the Action, Delphi settled and released its claims against the Morgan Defendants. Moreover, unlike the other Plaintiffs, Delphi elected not to bring suit against the Schunk Defendants. Only the SGL Defendants were named as defendants by Delphi in the Action. Delphi did not make any purchases of Electrical Carbon Products from the SGL Defendants, but brought the action against the SGL Defendants on the basis of joint and several liability. Shortly after the Action was transferred to the MDL Court, the Plaintiffs agreed to a request from the parties in the MDL Proceeding to participate in settlement negotiations with the MDL Defendants. After months of extensive arm's-length negotiations under court supervision, the Plaintiffs entered into separate stipulations and settlement agreements with each of the Morgan Defendants, Schunk Defendants and SGL Defendants. No agreement was reached with the Carbone Defendants, and the Plaintiffs intend to pursue their claims against the Carbone Defendants. Settlement Agreements In general, the Settlements provide that the Plaintiffs will: (a) dismiss the Action against the Settling Defendants and the Individual Defendants with prejudice and without costs; (b) withdraw their requests to exclude themselves from the Morgan, Schunk, and SGL MDL Settlements; and (c) release and discharge the Settling Defendants from all non-Foreign Claims arising from the Electrical Carbon Products price-fixing conspiracy. The Schunk Defendants have agreed to pay the Plaintiffs an additional aggregate sum. The Schunk and SGL Defendants have agreed to cooperate with the Plaintiffs in prosecuting the Action against the Carbone Defendants. The Morgan and Schunk Defendants have agreed to toll, for 12 months, the relevant statutes of limitation relating to the Plaintiffs' Foreign Claims. In addition, as an inducement to Delphi and the other Plaintiffs to rejoin some of the class settlements, class counsel in the MDL Proceeding agreed to reduce their requested fees from the settlement funds by $900,000. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, points out that the Debtors' anticipated recovery from the Settlements would likely exceed $1,100,000. Prior to filing the Action, the Debtors' last settlement demand to the Schunk Defendants was valued at $380,000. Thus, the Debtors' anticipated recovery as a result of the Settlements is nearly three times their last settlement demand. Moreover, the Debtors made no purchases from the SGL Defendants, but will share in the SGL Settlement. Headquartered in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) DIGITAL LIGHTWAVE: Optel Capital Extends $2.1 Million Loan ---------------------------------------------------------- Digital Lightwave, Inc., borrowed $2.1 million from Optel Capital, LLC, on May 15, 2006, to fund its obligation to pay the Termination Fee to Lightwave Drive, L.L.C. pursuant to an Expiration Agreement. Digital Lightwave and Lightwave Drive are parties to a Lease Expiration Agreement intended to accelerate the expiration of the lease under which the Company occupies the property located at 15550 Lightwave Drive, Clearwater, Florida to May 31, 2006. In consideration for Lightwave Drive's agreement to accelerate the expiration date pursuant to the Expiration Agreement, the Company agreed to pay Lightwave Drive a termination fee of $2.1 million Optel Loan The loan from Optel is evidenced by a separate secured promissory note, bears interest at 10.0% per annum, and is secured by a security interest in substantially all of the Company's assets. Principal and any accrued but unpaid interest under the secured promissory note is due and payable upon demand by Optel at any time after May 31, 2006; provided, however, that the entire unpaid principal amount of each loan, together with accrued but unpaid interest, shall become immediately due and payable upon demand by Optel at any time on the occurrence of: a) the sale of all or substantially all of the Company's assets or, subject to certain exceptions, any merger or consolidation of the Company with or into another corporation; b) the inability of the Company to pay its debts as they become due; c) the dissolution, termination of existence, or appointment of a receiver, trustee or custodian, for all or any material part of the property of, assignment for the benefit of creditors by, or the commencement of any proceeding by the Company under any reorganization, bankruptcy, arrangement, dissolution or liquidation law or statute of any jurisdiction, now or in the future in effect; d) the execution by the Company of a general assignment for the benefit of creditors; e) the commencement of any proceeding against the Company under any reorganization, bankruptcy, arrangement, dissolution or liquidation law or statute of any jurisdiction, now or in the future in effect, which is not cured by the dismissal thereof within 90 days after the date commenced; or f) the appointment of a receiver or trustee to take possession of the property or assets of the Company. The Company continues to have insufficient short-term resources for the payment of its current liabilities. As of May 15, 2006, the Company has been unable to secure any financing agreement or to restructure its financial obligations with Optel. As of May 15, 2006, the Company owed Optel approximately $53.3 million in principal plus approximately $7.9 million of accrued interest thereon, which debt is secured by a first priority security interest in substantially all of the Company's assets and such debt accrues interest at a rate of 10.0% per annum. The maturity dates and corresponding payment schedules related to these obligations are: -- Secured Convertible Promissory Note. Pursuant to that certain secured convertible promissory note, dated as of Sept. 16, 2004, the Company borrowed $27.0 million from Optel on the following terms: * Accrued and unpaid interest as of September 16, 2004, plus interest that accrued on such accrued and unpaid interest and interest that accrued on the $27.0 million outstanding principal from September 16, 2004 became due and payable on September 16, 2005, is now currently due and payable on demand at any time, and as of May 15, 2006 was approximately $3.7 million; and * Interest that accrues from September 17, 2005, is currently due and payable on demand at any time and as of May 15, 2006 was approximately $2.0 million; and * $27.0 million in principal is currently due and payable on demand at any time. -- Short-Term Notes. Pursuant to those several short-term secured promissory notes issued by the Company to Optel since September 30, 2004, the Company has borrowed approximately an additional $26.3 million on these terms: * Approximately $22.5 million in principal, plus accrued interest that as of May 15, 2006 was approximately $2.2 million, is currently due and payable on demand at any time; and * Approximately $3.8 million in principal, plus accrued interest that as of May 15, 2006 was approximately $13,250, is due and payable on demand at any time after May 31, 2006. * Approximately $57.3 million of principal and accrued interest is currently due and payable on demand. About Digital Lightwave Based in Clearwater, Florida, Digital Lightwave, Inc., provides the global communications networking industry with products, technology and services that enable the efficient development, deployment and management of high-performance networks. The Company designs, develops and markets a portfolio of portable and network-based products for installing, maintaining and monitoring fiber optic circuits and networks. The Company's product lines include: Network Information Computers, Network Access Agents, Optical Test Systems, and Optical Wavelength Managers. The Company's wholly owned subsidiaries are Digital Lightwave (UK) Limited, Digital Lightwave Asia Pacific Pty, Ltd., and Digital Lightwave Latino Americana Ltda. * * * As reported in the Troubled Company Reporter on May 11, 2006, Grant Thornton LLP raised substantial doubt about Digital Lightwave, Inc.'s ability to continue as a going concern following its review of the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's net losses in the years 2004 and 2005 and capital and stockholders' deficits as of Dec. 31, 2005. E.SPIRE COMMUNICATIONS: Court Converts Cases to Chapter 7 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware converted e.Spire Communications, Inc., and its debtor-affiliates' chapter 11 cases into chapter 7 liquidation proceedings. As reported in the Troubled Company Reporter on May 8, 2006, Gary F. Seitz, Esq., the Chapter 11 trustee appointed in the Debtors' cases asked the Court to convert the Debtors' cases to liquidation proceedings contending that the Debtors have become administratively insolvent after the sale of substantially all of their assets to Xspedius Management, Co., LLC, and Thermo Telecom Partners, LLC. Xspedius and Thermo Telecom assumed some of the Debtors' debts pursuant to the terms of the sale. Mr. McLaughlin argued that the Debtors no longer have enough money to pay postpetition obligations incurred in the ordinary course of business. He said unfunded administrative expenses amount to around $14 million. Mr. McLaughlin adds the Debtors' businesses could no longer be rehabilitated. Headquartered in Columbia, Maryland, e.Spire Communications is a facilities-based integrated communications provider, offering traditional local and long distance Internet access throughout the United States. The Company and its debtor-affiliates filed for chapter 11 protection on March 22, 2001 (Bankr. Del. Case No. 01-00974). Chad Joseph Toms, Esq., and Domenic E. Pacitti, Esq., at Saul Ewing LLP, and James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young & Jones, represented the Debtors in their chapter 11 proceedings. The Court converted the Debtors' chapter 11 cases to chapter 7 liquidation proceedings on May 6, 2006. Francis A. Monaco Jr., Esq., and Joseph J. Bodnar, Esq., at Monzack and Monaco, P.A., represented the Official Committee of Unsecured Creditors prior to the Debtors' cases being converted to chapter 7. When the Debtors filed for protection from their creditors, they listed $911.2 million in total assets and $1.4 billion in total debts. Gary F. Seitz, Esq., formerly the Court-appointed Chapter 11 Trustee, has also been appointed as the Chapter 7 Trustee in the Debtors' liquidation proceedings. Daniel K. Astin, Esq., and Anthony M. Saccullo, Esq., at The Bayard Firm; Erin Edwards, Esq., at Young Conaway Stargatt & Taylor LLP; and Deirdre M. Richards, Esq., at Obermayer Rebmann Maxwell & Hippel LLP, represent Mr. Seitz. ECHOSTAR COMMS: March 31 Balance Sheet Upside-Down by $690 Mil. --------------------------------------------------------------- Echostar Communications Corporation reported a $147,281,000 net income on $2,289,706,000 of total revenue for the quarter ending March 31, 2006. Echostar's balance sheet at March 31, 2006 showed $8,934,670,000 in total assets and $9,625,067,000 in total liabilities, resulting in a stockholders' deficit of $690,397,000. The Company's balance sheet also showed $2,385,849,000 in total current liabilities and $3,823,994,000 in total current assets. Full-text copies of Echostar's financial statements for the quarter ending March 31, 2006 are available for free at: http://researcharchives.com/t/s?aa7 Headquartered in Englewood, Colorado, EchoStar Communications Corporation (NASDAQ: DISH) -- http://www.dishnetwork.com/-- serves more than 12.2 million satellite TV customers through its DISH Network(TM), a growing U.S. provider of advanced digital television services. DISH Network offers hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. * * * On January 2006, Moody's assigned a stable outlook to Echostar's Ba3 long term corporate family rating. In the same month, Standard & Poor's also assigned a stable outlook to the Company's BB long term foreign and local issuer credit ratings. Fitch placed the Company's subordinated debt rating at B on Oct. 28, 2004 and assigned a stable outlook to the rating on January 2006. ENCOMPASS HOLDINGS: Files Amended 2003, 2004 & 2005 Financials -------------------------------------------------------------- Encompass Holdings, Inc., fka Nova Communications Ltd., filed with the Securities and Exchange Commission on May 31, 2006, its amended financial statements for: -- the year ended Dec. 31, 2003; -- the first quarter ended March 31, 2004; -- the second quarter ended June 30, 2004; -- the third quarter ended Sept. 30, 2004; -- the year ended Dec. 31, 2004; -- the first quarter ended March 31, 2005; -- the year ended June 30, 2005; -- the first quarter ended Sept. 30, 2005; -- the second quarter ended Dec. 31, 2005; The company's Statement of Operations showed: For the period ended --------------------------------------------- Year Quarter Quarter Quarter 12/31/03 03/31/04 06/30/04 09/30/04 ---------- ----------- --------- --------- Revenue $9,768 $1,420,254 $5,550 $0 Net (Loss) ($4,577,764) ($1,416,361) ($573,161) ($286,053) For the period ended ----------------------------------------------------------- Year Quarter Year Quarter Quarter 12/31/04 03/31/05 06/30/05 09/30/05 12/31/05 ---------- --------- ---------- ---------- ----------- Revenue $0 $145,000 $1,316,697 $1,119,416 $1,196,958 Net (Loss) ($4,053,975) ($227,342) ($5,394,890) ($874,355) ($1,194,177) The company's Balance Sheet showed: For the period ended ---------------------------------------------- Year Quarter Quarter Quarter 12/31/03 03/31/04 06/30/04 09/30/04 ---------- ---------- ---------- ---------- Current Assets $112,443 $62,196 $53,690 $51,435 Total Assets $845,576 $1,005,707 $981,506 $979,251 Current Debts $1,484,256 $1,389,248 $1,256,208 $1,028,268 Total Debt $1,748,488 $1,829,480 $1,697,440 $1,471,000 Total Stockholders' Deficit ($902,912) ($823,773) ($715,934) ($491,749) For the period ended ------------------------------------------------------------ Year Quarter Year Quarter Quarter 12/31/04 03/31/05 06/30/05 09/30/05 12/31/05 ---------- ---------- ---------- ----------- ---------- Current Assets $66,537 $179,603 $924,167 $799,814 $1,086,719 Total Assets $186,433 $411,946 $11,506,829 $11,531,371 $11,271,460 Current Debts $965,345 $1,345,750 $4,745,792 $5,454,505 $5,385,940 Total Debt $1,401,855 $1,839,260 $7,356,638 $8,019,705 $8,115,325 Total Stockholders' Equity ($1,215,422) ($1,427,481) $4,150,191 $3,511,666 $3,156,135 Restatements The consolidated financial statements have been restated to reflect certain derivative instruments as liabilities, measured at fair value, in the balance sheet and to recognize the change in their fair value in the statement of operations. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 31, 2005, Timothy L. Steers, CPA, LLC, in Portland, Oregon, expressed substantial doubt about Nova Communications, Ltd.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended June 30, 2005, and Dec. 31, 2004, and 2003. The auditing firm pointed to the Company's significant operating losses, negative working capital, and stockholders' deficiency. Full-text copies of the amended financial statements are available for free at: Period URL ------ --- year ended Dec. 31, 2003 http://ResearchArchives.com/t/s?aad quarter ended March 31, 2004 http://ResearchArchives.com/t/s?ab2 year ended June 30, 2004 http://ResearchArchives.com/t/s?ab0 quarter ended Sept. 30, 2004 http://ResearchArchives.com/t/s?aae year ended Dec. 31, 2004 http://ResearchArchives.com/t/s?aac quarter ended March 31, 2005 http://ResearchArchives.com/t/s?ab1 year ended June 30, 2005 http://ResearchArchives.com/t/s?aaf quarter ended Sept. 30, 2005 http://ResearchArchives.com/t/s?aa9 quarter ended Dec. 31, 2005 http://ResearchArchives.com/t/s?aaa Nova Communications Ltd. nka Encompass Holdings, Inc. (OTCBB: ECMH) -- http://www.encompassholdings.com/-- is involved in acquiring ownership interests in developing companies in a wide range of industries and providing financing and managerial assistance to those companies. The Company currently has one subsidiary, Aqua Xtremes, Inc., which is involved in manufacturing and marketing a personal watercraft and the rotary engine that drives the jet pump and propels the watercraft. Aqua Xtremes, Inc. in turn has a wholly owned subsidiary, Xtreme Engines, Inc. At present, Encompass Holdings owns 51% of the issued and outstanding common stock of Aqua Xtremes. ENTERCOM COMMS: S&P Puts BB Corp. Credit Rating on Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Entercom Communications Corp., including the 'BB' corporate credit rating, on CreditWatch with negative implications. The Bala Cynwyd, Pennsylvania-based radio broadcaster had approximately $655 million of debt outstanding at March 31, 2006. "The CreditWatch placement recognizes that Entercom's leverage is stretched for the current rating level," said Standard & Poor's credit analyst Alyse Michaelson Kelly. Higher debt levels have resulted from share repurchases, acquisitions, and EBITDA declines. EBITDA growth has not materialized as expected because of generally weaker-than-expected radio advertising demand and challenges in the company's key, large markets. In resolving the CreditWatch listing, Standard & Poor's will assess Entercom's ability to restore its debt to EBITDA ratio to a range appropriate for a 'BB' rating. Stagnant demand for radio advertising could limit credit profile improvement, and there does not appear to be a meaningful catalyst for growth in the intermediate term. Standard & Poor's currently believes that downgrade risk is limited to one notch. ENTERGY NEW ORLEANS: To Sell Market Street Power Plant ------------------------------------------------------ The Council for the city of New Orleans has approved a resolution allowing Entergy New Orleans, Inc.'s plan to sell its Market Street power plant, Pam Radtke Russell of The Times-Picayune reports. ENOI has received offers from St. Raymond Development Company and Samuel Development LLC, according to The Times-Picayune. The sale proceeds would go to help improve the reliability of the city's power grid. The Company considers the offer from Samuel Development attractive, ENOI spokeswoman Beth Raley tells the newspaper. Samuel offered to pay $10,000,000 for the property appraised at $8,000,000. Samuel also agreed to assume costs of relocating a substation and transmission lines and the environmental remediation of the building, which costs range from $9,000,000 to $15,000,000. Samuel proposes to develop the building for public use, which will include a museum, a concert hall and shops, the paper discloses. The land surrounding the building would be used for residential development. The Plant has been nominated as a historic landmark, and any changes on its exterior must be approved by the Historic District Landmark Commission. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENTERGY NEW ORLEANS: Objects to Gordon & Lowenburg's Claims ----------------------------------------------------------- Reverend C.S. Gordon, Jr., on behalf of the New Zion Baptist Church, J. Michael Malek, Darryl Malec-Wiley, Willie Webb, Jr., Masison St. Charles LLC, dba Quality Inn Maison St. Charles; and Thomas P. Lowenburg, Martin Adamo, Vern Baxter, Philip D. Carter, Bernard Gordon, Leonard Levine, Ivory S. Madison and Donetta Dunn Miller have filed a petition with the Civil District Court for the Parish of New Orleans, raising issues relating to the appropriateness of charges that Entergy New Orleans, Inc., has flowed through its fuel adjustment clause. Currently, there is a pending Regulatory Appeal in the Louisiana Fourth Circuit. The Gordon and Lowenburg Plaintiffs assert these claims pursuant to their lawsuits, complaints and appeals: Claimant Claim No. Claim Amount -------- --------- ------------ Gordon Plaintiffs 329 $82,796,573 Lowenburg Plaintiffs 328 240,000,000 Entergy New Orleans Inc. complains that the Claims are not itemized and did not provide the details to how the claim amount was calculated. Thus, ENOI asks the U.S. Bankruptcy Court for the Eastern District of Louisiana to require the Plaintiffs to amend their Claims and state with specificity each component and calculation. ENOI also asserts that the Plaintiffs' Claims should be disallowed. Settled laws establish that the Council for the city of New Orleans has exclusive authority over ENOI and its ratepayers. Nan Roberts Eitel, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in Washington, DC, points out that the Plaintiffs' Claims do not assert antitrust or other claims beyond the exclusive jurisdiction of the Council. If the Gordon Plaintiff's Claim asserts claims that are outside the exclusive jurisdiction of the Council, those claims have already been asserted in the lawsuit filed in the Civil District Court for the Parish of New Orleans. The CDC lawsuit has been moved to the Eastern District of Louisiana. However, it is still not determined whether the CDC Lawsuit will ultimately be referred to the Court or will be tried by the district court or will be tried at all given the bankruptcy claims process. Ms. Eitel adds that the Plaintiffs' Claims should be disallowed because only the pending regulatory proceeding appeal can determine their Claims. The Council has already rejected and paid out virtually all of the Gordon Plaintiffs' claims in the CDC lawsuit. A Regulatory Appeal is pending in the Louisiana Fourth Circuit, and Ms. Eitel asserts that the Fourth Circuit is the proper venue of any of the Plaintiffs' Claims. The Debtor also asserts that the Gordon Plaintiffs' Claim for punitive damages should be disallowed. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOAMEX INTERNATIONAL: Wants to Amend Senior DIP Facility -------------------------------------------------------- Foamex International Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware's authority to amend the Senior DIP Facility and make the Adequate Protection Payments. In light of their improved financial performance, the Debtors also ask their Senior DIP Lenders to reduce the interest rates provided in the Senior DIP Facility. In turn, the Debtors have agreed to pay a monthly interest as additional adequate protection to the Senior Noteholders commencing June 2006. The Senior DIP Facility is amended to include: (1) The applicable margin for both Base Rate Revolving Loans and LIBOR Rate Revolving Loans is being reduced by 75 basis points for the period June 1 to July 2, 2006. For quarterly periods on and after July 3, the applicable margin will fluctuate based on the average availability during the relevant testing period, with the spread being at all times at least 50 basis points less than what is currently provided; (2) The existing minimum EBITDA covenant is modified to reflect an increase in the Debtors' projected earnings. 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 (3) Foamex further covenants with the Senior DIP Lenders 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 (4) Applicable Margin means: (a) from and after May 1, 2006, but before June 1, 2006, -- with respect to Base Rate Revolving Loans and all other Obligations (other than LIBOR Rate Revolving Loans), 1.00%, and -- with respect to LIBOR Rate Revolving Loans, 2.50%; (b) from and after June 1, 2006, but before July 3, 2006, -- with respect to Base Rate Revolving Loans and all other Obligations (other than LIBOR Rate Revolving Loans), 0.25%, and -- with respect to LIBOR Rate Revolving Loans, 1.75%; and (c) from and after July 3, 2006, these percentages of Average Availability for the Availability Test Period most recently ended: LIBOR Rate Base Rate Average Revolving Revolving Level Availability Loans Loans ----- ----------- ---------- --------- 1 Equal or greater 1.25% 0.00% than $90,000,000 2 Less than $90,000,000 1.50% 0.00% but equal to or greater than $60,000,000 3 Less than $60,000,000 1.75% 0.25% but equal to or greater than $30,000,000 4 Less than $30,000,000 2.00% 0.50% (5) "Eligible Inventory" is amended to increase the amount of work-in-progress that may be included in the borrowing base from $20,500,000 to $25,000,000. (6) Foamex will pay a $120,000 amendment fee to the Senior DIP Lenders, and a closing fee payable to Bank of America, N.A. A full-text copy of the Amendment to the Senior DIP Facility is available for free at: http://bankrupt.com/misc/foamex_seniorDIPfacility_amendment.pdf The Debtors believe that savings from the rate reduction will outweigh the cost of the Amendment Fees. The Amendment Fees will pay for themselves after September 2006. The Debtors estimate an annual interest and fee savings of $1,300,000 based on the current balance of the Revolving Loans and Letters of Credit under the Senior DIP Facility. About Foamex International 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOAMEX INTERNATIONAL: Wants Until Sept. 14 to File Chapter 11 Plan ------------------------------------------------------------------ Pursuant to Section 1121(d) of the Bankruptcy Code, Foamex International Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive periods to: (i) file a Chapter 11 plan through September 14, 2006; and (ii) solicit acceptances of the plan through November 13, 2006. The Debtors and Alvarez & Marsal Business Consulting LLC are almost done updating the Debtors' business plan and revising the Debtors' projections, Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, informs the Court. The Debtors anticipate that A&M will soon complete the initial phase of its work and provide the results of its analysis to the Debtors' Board of Directors, the Ad Hoc Committee, the Official Committee of Unsecured Creditors, and Steel Partners II, LP, on meetings scheduled this June. In the past two months, the Debtors: (1) established notice and hearing procedures to preserve their $292,000,000 net operating losses; (2) negotiated interest rate and fee reductions on their DIP revolving credit and term loans that are expected to result in $5,000,000 annual savings; and (3) executed confidentiality agreements with three of their new, large shareholders and have engaged them in preliminary restructuring discussions. Despite these achievements, the Debtors need more time to formulate a plan and to negotiate its terms with their significant creditor and new shareholder constituents, Ms. Morgan maintains. Ms. Morgan says that a further extension of the exclusive periods will allow the Debtors to: (a) explore various financing alternatives to fund a plan of reorganization; (b) formulate a revised plan and negotiate its terms with key creditor and shareholder constituents; and (c) prepare and file a revised plan and disclosure statement and seek their approval. About Foamex International 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. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) G+G RETAIL: Has Until August 22 to File Chapter 11 Plan ------------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York extended, until Aug. 22, 2006, the period within which G+G Retail Inc. has the exclusive right to file a chapter 11 plan. Judge Drain also extended, until Oct. 23, 2006, the Debtor's exclusive period to solicit acceptances of that plan. The Debtor reminds the Court that since filing for bankruptcy, it has devoted its time and effort to completing a transition from operating as a chapter 11 debtor-in-possession to completing a sale of substantially all of its assets. The Debtor further tells the Court that it has paid its debts as they come due and has acted in good faith throughout the sale process and maximized the value of its estate for the benefit of all creditors. The Debtor says that because of this, it has managed to position itself for the next phase of its case, which is the negotiation and confirmation of a liquidating chapter 11 plan that allocates the proceeds of the sale of its assets. The Debtor tells the Court that the sale process has been closed and it is now in the process of completing the formulation of an appropriate plan of liquidation. The Debtor contends that the extension would enable it to complete and formulate a consensual plan. Headquartered in New York, New York, G+G Retail Inc. retails ladies wear and operates 566 stores in the United States and Puerto Rico under the names Rave, Rave Girl and G+G. The Debtor filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. S.D.N.Y. Case No. 06-10152). William P. Weintraub, Esq., Laura Davis Jones, Esq., David M. Bertenthal, Esq., and Curtis A. Hehn, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C. represent the Debtor in its restructuring efforts. Scott L. Hazan, Esq.. at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets of more than $100 million and debts between $10 million to $50 million. GATEWAY: Posts $1.7 Mil. Net Loss in 2006 1st Fiscal Quarter ------------------------------------------------------------ Gateway Distributors, Ltd., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 22, 2006. The Company reported an $1,762,550 net loss on $203,570 of sales for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $4,544,928 in total assets and $3,434,651 in total liabilities, resulting in a $171,178 stockholders' equity. The Company's March 31 balance sheet also showed strained liquidity with $1,455,335 in total current assets available to pay $2,487,970 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a9a Going Concern Doubt As reported in the Troubled Company Reporter on May 15, 2006, Lawrence Scharfman & Co., CPA PC, in Boynton Beach, Florida, raised substantial doubt about Gateway Distributors, Ltd.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the Company's need for additional working capital for its planned activity and payment of debt. About Gateway Distributors Gateway Distributors, Ltd., markets and distributes different nutritional and health products. These products are intended to provide nutritional supplementation to the users. These products are not intended to diagnose, treat, cure or prevent any disease. GLOBAL HOME: Files Schedules of Assets and Liabilities ------------------------------------------------------ Global Home Products LCC, and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware their schedules of assets and liabilities, disclosing: Global Home Products -------------------- Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $311,656,546 E. Creditors Holding Unsecured Priority Claims $5,000 F. Creditors Holding Unsecured Nonpriority Claims -- ------------ Total $0 [$311,661,546] GHP Holding Company LLC ----------------------- Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $311,636,546 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Nonpriority Claims -- ------------ Total $0 $311,636,546 GHP Operating Company LLC ------------------------- Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $101,213,330 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $311,636,546 E. Creditors Holding Unsecured Priority Claims $232,078 F. Creditors Holding $32,593,954 Unsecured Nonpriority Claims ------------ ------------ Total $101,213,330 $344,462,578 Mirro Acquisition Inc. ---------------------- Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $311,636,546 E. Creditors Holding Unsecured Priority Claims $13,954 F. Creditors Holding Unsecured Nonpriority Claims -- ------------ Total $0 $311,650,500 Anchor Hocking Consumer Glass Corp. ----------------------------------- Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $311,636,546 E. Creditors Holding Unsecured Priority Claims $47,538 F. Creditors Holding Unsecured Nonpriority Claims -- ------------ Total $0 $311,684,084 Anchor Hocking Inc. ------------------- Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $311,636,546 E. Creditors Holding Unsecured Priority Claims $1,000 F. Creditors Holding Unsecured Nonpriority Claims -- ------------ Total $0 $311,637,546 Anchor Hocking Acquisition Inc. ------------------------------- Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $0 B. Personal Property $0 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $311,636,546 E. Creditors Holding Unsecured Priority Claims $1,000 F. Creditors Holding Unsecured Nonpriority Claims -- ------------ Total $0 $311,637,546 Burnes Operating Company LLC ---------------------------- Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $12,339,446 B. Personal Property $92,846,059 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $312,079,509 E. Creditors Holding Unsecured Priority Claims $1,124,273 F. Creditors Holding $23,860,533 Unsecured Nonpriority Claims ------------ ------------ Total $105,185,505 $337,064,315 Mirro Operating Company and Mirro Puerto Rico, Inc., filed a consolidated summary of schedules disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $53,807,089 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $311,636,546 E. Creditors Holding Unsecured Priority Claims $74,613 F. Creditors Holding $71,163,176 Unsecured Nonpriority Claims ----------- ------------ Total $53,807,089 $382,874,335 Anchor Hocking Operating Company LLC, Anchor Hocking CG Operating Company LLC, and AH Acquisition Puerto Rico, Inc., filed a consolidated summary of schedules disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $45,753,121 B. Personal Property $136,615,285 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $312,115,846 E. Creditors Holding Unsecured Priority Claims $5,673,229 F. Creditors Holding $86,405,371 Unsecured Nonpriority Claims ------------ ------------ Total $181,368,406 $404,194,446 Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates , including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on Apr. 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at Lowenstein Sandler P.C., represents the Official Committee Of Unsecured Creditors. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and estimated debts of more than $100 million. GLOBAL HOME: Panel Taps Lowenstein Sandler as Bankruptcy Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors Appointed in Global Home Products, LLC, and its debtor-affiliates' chapter 11 cases, asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Lowenstein Sandler PC as its bankruptcy counsel. Lowenstein Sandler will: a. provide legal advice as necessary with respect to the Committee's powers and duties as an official committee appointed under Section 1102 of the Bankruptcy Code; b. assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business, potential claims, and any other matters relevant to the cases or to the formulation of a plan of reorganization; c. participate in the formulation of a plan; d. provide legal advice as necessary with respect to any disclosure statement and plan filed in the Debtors' chapter 11 cases and with respect to the process for approving or disapproving a disclosure statement and confirming or denying confirmation of a plan; e. prepare on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements and other legal papers; f. appear in Court to present necessary motions, applications, and pleading, and otherwise protect the interest of those represented by the Committee; g. assist the Committee in requesting the appointment of a trustee or examiner should an action be necessary; and h. perform other legal services as may be required and are in the interest of the Committee and creditors. Kenneth A. Rosen, Esq., a member at Lowenstein Sandler, tells the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Partners $320 - $595 Counsel $265 - $425 Associates $165 - $300 Legal Assistants $75 - $150 Mr. Rosen assures the Court that his firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates , including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on Apr. 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at Lowenstein Sandler P.C., represents the Official Committee Of Unsecured Creditors. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and estimated debts of more than $100 million. GMAC 2005-C1: Fitch Affirms Six Certificates' Low-B Ratings ----------------------------------------------------------- Fitch affirmed its ratings on these GMAC 2005-C1 commercial mortgage pass-through certificates series: -- $54.7 million class A-1 'AAA' -- $343.9 million class A-1A 'AAA' -- $300 million class A-2 'AAA' -- $187.3 million class A-3 'AAA' -- $68.1 million class A-4 'AAA' -- $157.4 million class A-5 'AAA' -- $159.8 million class A-M 'AAA' -- $127.8 million class A-J 'AAA' -- Interest -only classes X-1 and X-2 at 'AAA' -- $34 million class B 'AA' -- $12 million class C 'AA-' -- $24 million class D 'A' -- $16 million class E 'A-' -- $16 million class F 'BBB+' -- $16 million class G 'BBB' -- $20 million class H 'BBB-' -- $6 million class J 'BB+' -- $6 million class K 'BB' -- $8 million class L 'BB-' -- $4 million class M 'B+' -- $4 million class N 'B' -- $4 million class O 'B-' Fitch did not rate the $22 million class P. The rating affirmations reflect stable transaction performance and minimal paydown since issuance. As of the May 2006 distribution date, the pool's aggregate certificate balance has decreased 0.45% to $1.59 billion from $1.60 billion at issuance. Two loans (2.53%) are specially serviced. At issuance, Fitch credit assessed the General Motors Building and the Loews Miami Beach loans. These loans maintain their investment grade credit assessments. As of year-end 2005 the General Motors Building was 94% occupied and the Loews Miami Beach hotel had a revenue per average room of $202.8. Both properties remain stable since issuance. The largest specially serviced loan (1.3%) is secured by a 258- unit multifamily property located in San Marcos, Texas. The loan transferred to the special servicer due to monetary default and the special servicer is currently pursuing foreclosure. Recent appraisal valuations indicate losses are likely upon the liquidation of this asset. The second largest loan in special servicing (12%) is secured by 240-unit multifamily property located in College Station, Texas. The loan transferred to the special servicer due to monetary default and the special servicer is currently pursuing foreclosure. Recent appraisal valuations indicate losses are likely upon the liquidation of this asset. The loans are not cross defaulted but have the same borrower. Fitch expects that losses will be absorbed by the non-rated class P. GOODING'S SUPERMARKETS: Committee Hires Brumby as Special Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Gooding's Supermarkets, Inc.'s chapter 11 cases obtained authority from the U.S. Bankruptcy Court for the Middle District of Florida to retain Andrew M. Brumby and the law firm of Shutts & Bowen LLP as its special counsel. Shutts & Bowen is expected to advise the Committee regarding any settlement discussions or mediation of two actions styled: 1) Gooding's Supermarkets, Inc. v. Water Tower Retail, LLC and Unicorp National Developments, Inc.; and 2) Water Tower Retail, LLC v. Gooding's Supermarkets, Inc. Both of these actions are currently pending in the Circuit Court of the Ninth Judicial Circuit in and for Osceola County, Florida under Case Numbers CI-05-002332 and CI-05-002510, respectively. The cases pertain to issues arising out of a ground lease dated June 12, 2002, between the Debtor and Water Tower Retail, LLC, pursuant to which the Debtor paid for the construction of the anchor grocery store building in the Water Tower Place at Celebration Retail Center located at 6070 West Irlo Bronson Highway in Celebration, Osceola County, Florida. Mr. Burby will be primarily responsible for Shutts & Bowen's representation of the Committee and his standard hourly rate is $330 per hour. No hourly rates for the firm's other professionals were stated in the Debtor's application. The Committee assures the Court that Shutts & Bowen does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. 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. GOODING'S SUPERMARKETS: Can File Chapter 11 Plan Until June 16 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida gave Gooding's Supermarkets, Inc., until June 16, 2006 to file its chapter 11 plan of reorganization. The Court also extended the Debtor's exclusivity period until Sept. 1, 2006, provided a plan has been filed by June 16. As reported in the Troubled Company Reporter on May 18, 2006, the Debtor asked for extension of its plan filing period until May 30, 2006 and its exclusive period for solicitation until August 27, 2006. The Debtor did not cite any cause or raise any argument for the extension in its 2-page motion. In its 2-page order, the Court did not give reasons why its dates of extension differ from what the Debtor requested. 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. GRANITE BROADCASTING: Expects to Make Interest Payment by June 30 ----------------------------------------------------------------- Granite Broadcasting Corporation expects to make its June 1, 2006 interest payment of $19.7 million on its 9-3/4% Senior Secured Notes Due 2010 within the 30-day grace period provided in the indenture governing the notes. The Company expects to make the interest payment upon the closing of the sales of its San Francisco and Detroit television stations. The sales of the stations, which are subject to FCC approval, the restructuring of certain programming obligations, and customary closing conditions, are expected to close by June 30, 2006. Granite Broadcasting Corporation (OTCBB: GBTVK) owns and operates, or provides programming, sales and other services to 13 channels in the following 8 markets: San Francisco, California, Detroit, Michigan, Buffalo, New York, Fresno, California, Syracuse, New York, Fort Wayne, Indiana, Peoria, Illinois, and Duluth, Minnesota-Superior, Wisconsin. The Company's station group includes affiliates of the NBC, CBS, ABC, WB and UPN networks, and reaches approximately 6% of all U.S. television households. * * * Moody's Investors Service lowered Granite Broadcasting Corporation's corporate family rating to Caa2 from Caa1 and preferred stock rating to C from Ca following the company's announcement that it intends to market its two WB affiliate stations while AM Media Holdings LLC evaluates is interest in purchasing these assets in light of the likely loss of the WB affiliation when the network ceases operations in 2006. Additionally, Moody's affirmed the B3 rating on the company's senior secured notes. Moody's said the outlook remains negative. GRANITE BROADCASTING: S&P Places Ratings on Default --------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Granite Broadcasting Corp. to 'D ' from 'CCC-', because the company did not make its June 1, 2006, interest payment of $19.7 million on its 9.75% senior secured notes due 2010. Granite announced that it intends to make the interest payment within the 30-day grace period provided in the indenture governing the notes. The company expects to make the interest payment upon the closing of the previously announced sales of its San Francisco and Detroit, Michigan, TV stations for $150 million in cash, before closing and other adjustments. Standard & Poor's expects the sales of the stations to close by June 30, 2006, subject to: * FCC approval; * the restructuring of certain programming obligations; and * customary closing conditions. "If Granite makes the required interest payment within the grace period, then we could raise the ratings, most likely to the 'CCC' area," said Standard & Poor's credit analyst Alyse Michaelson Kelly. "This would follow our assessment of the company's use of station sale proceeds and its ability to continue meeting its financial obligations on a timely basis in the intermediate term." GREEN TREE: S&P Places Class B-1 Transaction's Rating on Default ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on class B-1 from Green Tree Financial Corp. Man Hsg Trust 1998-5 to 'D' from 'CCC-'. The lowered rating reflects the reduced likelihood that investors will receive timely interest and ultimate repayment of their original principal investment. The transaction reported an outstanding liquidation loss interest shortfall for class B-1 on the June 2006 payment date. Standard & Poor's believes that interest shortfalls for this transaction will continue to be prevalent in the future, given the adverse performance trends displayed by the underlying pool of collateral, as well as the location of subordinate class write- down interest at the bottom of the transaction's payment priorities (after distributions of senior principal). As of the June 2006 payment date, series 1998-5 had experienced a cumulative net loss of 11.80% of the initial pool balance. Standard & Poor's will continue to monitor the outstanding ratings associated with this transaction in anticipation of future defaults. GREENMAN TECH: March 31 Balance Sheet Upside Down by $11.3 Mil. --------------------------------------------------------------- Greenman Technologies, Inc., filed its financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 23, 2006. The Company reported a $1,280,501 net loss on $3,911,225 of net sales for the second fiscal quarter of 2006. At March 31, 2006, the Company's balance sheet showed $9,582,964 in total assets and $20,955,961 in total liabilities, resulting in a $11,372,997 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $3,214,205 in total current assets available to pay $14,788,126 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a8a Going Concern Doubt Wolf & Company, PC, in Boston, Massachusetts, raised substantial doubt about GreenMan Technologies Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Sept. 30, 2005. The auditor pointed to the Company's losses from operations and working capital deficiency of $8,667,886 at September 30, 2005. About GreenMan GreenMan Technologies, Inc., markets scrap granular tires in the United States. The company's products are used as a tire-derived fuel used by pulp and paper producers. HCA INC: Inks Modified Purchase Agreement with LifePoint Hospitals ------------------------------------------------------------------ HCA Inc. signed a modified purchase agreement for the sale of four hospitals in West Virginia and Virginia to LifePoint Hospitals, Inc., for a base purchase price of $239 million, plus price adjustments for capital expenditures and certain working capital items (including inventory and the assumption of employee paid- time-off) of approximately $15 million as of April 30, 2006. The original agreement reported last year, involved five facilities including Putnam General Hospital in West Virginia, which is not part of the modified agreement. HCA will continue to operate Putnam General and evaluate how to position the hospital to help ensure its future success. The facilities included in the modified agreement are: * 200-bed Clinch Valley Medical Center, Richlands, Virginia; * 325-bed St. Joseph's Hospital, Parkersburg, West Virginia; * 155-bed Saint Francis Hospital, Charleston, W. Virginia; and * 369-bed Raleigh General Hospital, Beckley, West Virginia. The transaction is expected to close by June 30, 2006. About LifePoint Headquartered in Brentwood, Tennessee, LifePoint Hospitals, Inc. -- http://www.lifepointhospitals2.com/-- is a leading hospital company focused on providing healthcare services in non-urban communities. Of the Company's 49 hospitals, 47 are in communities where LifePoint Hospitals is the sole community hospital provider. LifePoint Hospitals' non-urban operating strategy offers continued operational improvement by focusing on its five core values: delivering compassionate, high quality patient care, supporting physicians, creating excellent workplaces for its employees, providing community value and ensuring fiscal responsibility. LifePoint Hospitals is affiliated with approximately 19,000 employees. About HCA Headquartered in Nashville, Tennessee, HCA (Hospital Corporation of America) Inc. -- http://www.hcahealthcare.com/-- is the nation's leading provider of healthcare services, composed of locally managed facilities that include approximately 182 hospitals and 94 outpatient surgery centers in 22 states, England and Switzerland. At its founding in 1968, HCA was one of the nation's first hospital companies. * * * As reported in the Troubled Company Reporter on May 29, 2006, Standard & Poor's Ratings Services assigned its preliminary 'BB+' rating to HCA Inc.'s senior unsecured debt securities registered as a Rule 415 shelf filing. This filing falls under the SEC's well-known seasoned issuer rules, which do not require a dollar amount of securities issued. The corporate credit rating on HCA is 'BB+'. The outlook is stable. HI-LIFT OF NEW YORK: Hires Finkel Goldstein as Bankruptcy Counsel ----------------------------------------------------------------- Hi-Lift of New York, Inc., and TMR Realty Inc. obtained authority from the U.S. Bankruptcy Court for the Eastern District of New York to employ Finkel Goldstein Rosenbloom & Nash, LLP, as their bankruptcy counsel. Finkel Goldstein is expected to: a. provide the Debtors with necessary legal advice in connection with the operation and rehabilitation of their businesses during the chapter 11 proceedings; b. represent the Debtors in all Court proceedings and proceedings before the U.S. Trustee; c. prepare on behalf of the Debtors all necessary petitions, orders, application, motions, reports and other legal papers and plan documents; d. examine any liens, transfer, and claims and to bring necessary adversary proceedings or objection in connection with the Debtors' chapter 11 cases; and e. perform all other legal services for the Debtors as necessary. Kevin J. Nash, Esq., a partner at Finkel Goldstein, tells the Court that the firm received a $12,000 retainer prior to the Debtors bankruptcy filing. Mr. Nash assures the Court that his firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Nash can be reached at: Kevin J. Nash, Esq. Finkel Goldstein Rosenbloom & Nash, LLP 26 Broadway New York, New York 10004 Tel: (212) 344-2929 Headquartered in Farmingdale, New York, Hi-Lift of New York, Inc., sells and distributes Toyota tractors and forklifts. The Company and its affiliate TMR Realty Inc., which is engaged in the real estate business, filed for bankruptcy protection on April 3, 2006 (Bank. E.D.N.Y. Case Nos. 06-40943 and 06-40942) Kevin J. Nash, Esq., at Finkel Goldstein Rosenbloom & Nash, LLP, represent the Debtors in their restructuring. No Official Committee of Unsecured Creditors has been appointed in the Debtors' chapter 11 cases. Hi-Lift of New York reported assets between $1 million and $10 million and debts between $10 million and $50 million when it filed for bankruptcy. TMR Realty had assets between $50,000 and $1 million and debts between $100,000 and $10 million. INDYMAC HOME: Moody's Puts Low-B Rating on Two Cert. Classes ------------------------------------------------------------ Moody's Investors Service assigned Aaa ratings to the senior certificates issued by IndyMac Home Equity Mortgage Loan Asset- Backed Trust, Series INDS 2006-A and ratings ranging from Aa1 to Ba2 to the subordinated certificates in the deal. The securitization is backed by IndyMac Bank F.S.B. fixed-rate closed-end second mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, interest rate swap and excess spread. Moody's expects collateral losses to range from 9.25% to 9.75%. IndyMac Bank F.S.B. will service the loans. Moody's assigned IndyMac Bank F.S.B its servicer quality rating as a primary servicer of subprime loans. The complete rating actions: Issuer: IndyMac Home Equity Mortgage Loan Asset-Backed Trust, INDS 2006-A * Cl. A, Assigned Aaa * Cl. M-1, Assigned Aa1 * Cl. M-2, Assigned Aa2 * Cl. M-3, Assigned Aa3 * Cl. M-4, Assigned A1 * Cl. M-5, Assigned A2 * Cl. M-6, Assigned A3 * Cl. M-7, Assigned A3 * Cl. M-8, Assigned Baa1 * Cl. M-9, Assigned Baa3 * Cl. M-10, Assigned Baa3 * Cl. B-2, Assigned Ba1 * Cl. B-3, Assigned Ba2 INSEQ CORP: Acquiring GreenShift's "Clean Energy" Companies ----------------------------------------------------------- INSEQ Corporation executed agreements with GreenShift Corporation, its majority shareholder, to acquire GreenShift's stakes in Sterling Planet, Inc., TerraPass, Inc., as well as GreenShift's various pre-revenue clean energy project development companies. Pursuant to the acquisition agreement, INSEQ agreed to acquire GreenShift's stakes in Sterling Planet and TerraPass and 100% of the issued and outstanding stock of GreenShift's newly formed pre- revenue clean energy project development companies, GS Solar, Inc., GS Wind, Inc., GS Hydro, Inc., and GS Wave, Inc., in return for 450,000 shares of INSEQ's Series C Preferred Stock. These shares are in addition to GreenShift's existing 80% stake in INSEQ. Shares of INSEQ's Series C Preferred Stock have a face value of $1 per share and are convertible into INSEQ common stock at the rate of $0.01 per common share. INSEQ will change its name to GS Energy Corporation in conjunction with the closing of this acquisition, which is scheduled on or before June 30, 2006. "The acquisition of these clean energy companies marks a shift in INSEQ's business model to clean energy production and sales," said Kevin Kreisler, INSEQ's chairman and chief executive officer. "Sterling Planet is the nation's leading retail provider of renewable energy certificates, or Green Tags. They are also forging new and very exciting ground with their sales of energy efficiency certificates, or White Tags(TM). We intend to invest aggressively in the sales growth of both Green Tags and White Tags." Kreisler added: "We also plan to directly develop clean energy production projects, with an emphasis on distributed solar, wind, hydro and wave power projects, and we intend to rely on our existing manufacturing division to provide infrastructure support services for these projects in addition to this division's current clean technology manufacturing business. We are very excited by this transaction." About Sterling Planet Sterling Planet is the nation's leading retail provider of solar, wind and other clean, renewable energy through direct sales and electric utility partnerships. Founded in 2000, Sterling Planet was the first company to offer Renewable Energy Certificates to every U.S. home and business and is now introducing Energy Efficiency Certificates, or White Tags(TM) to the U.S. market. About TerraPass TerraPass -- http://www.terrapass.com/-- has a service that helps to eliminate personal vehicle contributions to global warming by issuing a "TerraPass" to its members. TerraPass then uses its members' contributions to promote global energy efficiency and greenhouse gas reduction through investment in targeted clean energy projects. It is through these clean energy projects that TerraPass counterbalances pollution from its members' vehicles. About INSEQ Headquartered in Mount Arlington, New Jersey, INSEQ Corporation (OTCBB:INSQ) -- http://www.inseq.com/-- manufactures and sells products that facilitate the efficient use of virgin and partially consumed natural resources, including metals, chemicals, fuels, and plastics. * * * Going Concern Doubt Rosenberg Rich Baker Berman & Company, P.A., in Bridgewater, New Jersey, raised substantial doubt about INSEQ Corporation's ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's operating losses and working capital deficits. INT'L PAPER: To Sell Unit to Apollo Management for $1.4 Billion --------------------------------------------------------------- International Paper signed a definitive agreement to sell its coated and supercalendered papers business to CMP Holdings LLC, an affiliate of Apollo Management L.P. for approximately $1.4 billion, subject to certain post-closing adjustments. The coated and supercalendered papers business includes four paper mills, located in Jay, Maine; Bucksport, Maine; Quinnesec, Michigan; and Sartell, Minnesota, and generated $1.6 billion in sales in 2005. The transaction is expected to close in mid-summer 2006, subject to various closing conditions including receipt of financing, regulatory approvals and other customary conditions. The purchase price consists of approximately $1.37 billion in cash plus approximately $30 million in the form of a 10% limited partnership interest in CMP Investments LP, the parent company of CMP Holdings LLC. This interest includes the right to receive certain additional payments contingent upon the buyer's achievement of certain investment return hurdles. The transaction is part of IP's transformation plan to focus on uncoated papers and industrial and consumer packaging globally. Expected proceeds from divestitures announced to date, including coated papers, are approximately $9.1 billion. "The coated papers sale agreement is another important step in transforming International Paper to narrow our focus, strengthen our returns and improve value for our shareowners," John Faraci, IP chairman and chief executive, said. "Our coated papers unit is a good business, with talented leadership, excellent employees, quality brands and an outstanding customer base. This business has been an important contributor to International Paper, and we expect it will continue to thrive under new ownership." "We are excited to be purchasing International Paper's Coated and SC Paper business, an asset with a leadership position in the North American coated papers markets," Scott Kleinman, a partner at Apollo Management, said. "We view the company as an excellent business and look forward to the opportunity to invest alongside a strong management team with whom we will work to grow the business and realize the full potential of the company's leading market positions." International Paper's coated and supercalendered papers business annually produces approximately 2 million tons of coated freesheet and coated groundwood papers for the magazine, catalog and retail insert markets. Its brands include Advocate(R), Influence(R), Liberty(TM), Savvy(R), Trilogy(R) and Velocity(TM). The business, headquartered in Memphis, Tennessee, employs approximately 3,000 people. About Apollo Management Apollo Management, L.P., founded in 1990, is among the most active and successful private investments-firms in the United States in terms of both number of investment transactions completed and aggregate dollars invested. Since its inception, Apollo has managed the investment of an aggregate of approximately $13 billion in equity capital in a wide variety of industries, both domestically and internationally, and is currently managing Apollo Investment Fund VI, L.P., its most recent fund with committed capital of $10.1 billion. About International Paper Based in Stamford, Connecticut, International Paper Company -- http://www.internationalpaper.com/-- is a leader in the forest products industry for more than 100 years. The company is currently transforming its operations to focus on its global uncoated papers and packaging businesses, which operate and serve customers in the U.S., Europe, South America and Asia. These businesses are complemented by an extensive North American merchant distribution system. International Paper is committed to environmental, economic and social sustainability, and has a long-standing policy of using no wood from endangered forests. * * * Moody's Investors Service assigned a Ba1 senior subordinate rating and Ba2 Preferred Stock rating on International Paper Company in Dec. 5, 2005. IRA CONKLIN: Involuntary Chapter 11 Case Summary ------------------------------------------------ Alleged Debtor: Ira D. Conklin & Sons, Inc. 94 Stewart Avenue, P.O. Box 7457 Newburgh, New York 12550 Tel: (845) 561-1512 Case Number: 06-35537 Involuntary Petition Date: June 5, 2006 Chapter: 11 Court: Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Petitioners' Counsel: Dana Patricia Brescia, Esq. Alter & Goldman 550 Mamaroneck Avenue Harrison, New York 10528 Tel: (914) 670-0030 Fax: (914) 670-0031 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Muchnick, Golieb & Golieb, P.C. Legal Services $100,000 Attn: Howard Muchnick, President 200 Park Avenue South Suite 1700 New York, NY 10003 MGM Construction Corp. Construction Loan $100,000 Attn: Tony Carpiento, President 16 Wampus Avenue Armonk, NY 10504 State Street Maintenance Corp. Long-Term Obligation $66,000 Attn: Cathy Matiello, President 19 Hampden Place Katonah, NY 10536 Kenneth Gunshor Legal Services $25,000 100 South Bedford Road Suite 150 Mount Kisco, New York 10549 Tel: (914) 241-1094 Michelle Savino Promissory Note Unknown 12 June Road North Salem, NY 10560 JAMES ELWYN: Case Summary & 2 Largest Unsecured Creditors --------------------------------------------------------- Debtor: James Elwyn James, M.D. P.O. Box 245 Moore, South Carolina 29369 Bankruptcy Case No.: 06-02355 Chapter 11 Petition Date: June 4, 2006 Court: District of South Carolina (Spartanburg) Debtor's Counsel: Robert H. Cooper, Esq. 3523 Pelham Road, Suite B Greenville, South Carolina 29615 Tel: (864) 271-9911 Fax: (864) 232-5236 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 2 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Deutsche Bank National Estimated Real $20,000 Trust Company Estate Deficiency fka Bankers Trust Company 7105 Corporate Drive MS PTX B 35 Plano, TX 75024 MBNA America Bank Credit Card Account $8,200 655 Paper Mill Road Wilmington, DE 19884-1411 KAISER ALUMINUM: Wants Los Angeles Pension Plan Terminated ---------------------------------------------------------- Kaiser Aluminum & Chemical Corporation asks the U.S. Bankruptcy Court for the District of Delaware to: -- approve the distress termination of the Los Angeles Plan pursuant to Section 4041(c)(2)(B) of the Employee Retirement Income Security Act of 1974; and -- authorize the implementation of KACC's participation in the Teamsters Pension Plan pursuant to Section 363(b) of the Bankruptcy Code. As of their bnakruptcy filing, KACC sponsored eight pension plans covering hourly and union employees, and salaried employees. The pension plans that cover hourly and union employees are: * Kaiser Aluminum Pension Plan * Kaiser Aluminum Inactive Pension Plan * Kaiser Aluminum Los Angeles Extrusion Pension Plan * Kaiser Center Garage Pension Plan * Kaiser Aluminum Tulsa Pension Plan * Kaiser Aluminum Bellwood Pension Plan * Kaiser Aluminum Sherman Pension Plan In 2003 and 2004, the Debtors encountered certain issues relating to their pension obligations with their retired and union employees. To put an end to those issues, the Debtors asked the Bankruptcy Court to: * determine that the financial requirement for a distress termination of each Hourly Plans were satisfied; * approve a distress termination of certain Hourly Plans; and * authorize implementation of certain replacement defined contributions. Among other things, the Bankruptcy Court approved the distress termination of each of the Hourly Plans other than the Inactive Plan, the Los Angeles Plan and the Garage Plan. In addition, the Bankruptcy Court authorized the replacement defined contribution plans, subject to the Pension Benefit Guaranty Corporation's right to review and challenge the plans. The PBGC took an appeal from the Bankruptcy Court's decision to the District Court. To resolve the PBGC and the Debtors' dispute over the Distress Termination Order, the parties entered into a settlement agreement. But before the Bankruptcy Court could approve the Settlement Agreement, the U.S. District Court for the District of Delaware affirmed the Distress Termination Order. As a result, the PBGC filed a notice of appeal with the U.S. Court of Appeals for the Third Circuit seeking a review of the District Court's ruling. The parties subsequently modified the PBGC Settlement Agreement so that the PBGC could pursue its appeal to the Third Circuit. The modifications provide that: -- irrespective of the outcome, no party may seek further appellate review; -- if the PBGC prevails in the Appeal, KACC will retain the remaining Hourly Plans, including the Los Angeles Plan; and -- if KACC prevails in the PBGC Appeal, the PBGC will approve the distress termination of, and assume responsibility for, the remaining Hourly Plans other than the Garage Plan. The PBGC's Appeal is still pending for the Third Circuit's decision. Teamsters' New Labor Pact In April 2006, KAAC and the Teamster Local 986 Miscellaneous Warehouseman Drivers and Helpers of the International Brotherhood of Teamsters entered into a new three-year collective bargaining agreement. The Unions are covered under the Los Angeles Plan. Paul N. Heath, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, tells the Court that the new CBA includes a letter agreement that relates to the pending PBGC Appeal and the potential termination of the Los Angeles Plan. The Letter Agreement provides that in the event that: (i) KAAC prevails in the PBGC Appeal, the Los Angeles Plan will be terminated and replaced with KAAC's participation in the Teamsters' multi-employer pension trust, the Western Conference of Teamsters Trust; and (ii) PBGC prevails in its Appeal, KACC will continue to maintain the Los Angeles Plan through the three-year term of the new collective bargaining agreement. Mr. Heath notes that KAAC's monthly contribution per employee to the Teamsters Pension Plan would be up to $1 an hour for each hour worked. The Teamsters Pension Plan invests the funds received from the employer participants and determines the pension benefits that will be paid at retirement. KACC's only liability in respect of the Teamsters Pension Plan will be its monthly obligation to pay the agreed contribution based on hours worked. Mr. Heath says that KACC's participation in the Teamsters Pension Plan was negotiated as part of the new CBA. The Debtors believe that participation in the Teamsters Pension Plan is both cost- effective and warranted under Section 363(b). About Kaiser Aluminum Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 97; Bankruptcy Creditors' Service, Inc., 215/945-7000) KINGSLEY COACH: Equity Deficit Widens to $2.9 Million at March 31 ----------------------------------------------------------------- Kingsley Coach, Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 22, 2006. The Company reported a $562,750 net loss on $1,197,867 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $2,295,048 in total assets and $5,204,464 in total liabilities, resulting in a $2,909,416 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $1,561,445 in total current assets available to pay $5,188,724 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a96 Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 25, 2005, Mantyla McReynolds, LLC, expressed substantial doubt about The Kingsley Coach, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended June 30, 2005, and 2004. The auditing firm pointed to the Company's accumulated losses since inception and negative working capital as of June 30, 2005. About Kingsley Coach The Kingsley Coach, Inc. -- http://www.kingsleycoach.com/-- manufactures motor homes, medical transport vehicles and emergency response vehicles, under the trade name "Kingsley Coach." Although available for a broad variety of uses, each Kingsley Coach has the same structural design. KMART CORP: Big Beaver Settles LaSalle Bank's Claim for $22 Mil. ---------------------------------------------------------------- In an agreed order signed by Judge Sonderby, Big Beaver of Florida Development, L.L.C., and LaSalle Bank, N.A., agreed that Claim No. 43267 will be allowed against Big Beaver for $22,020,191, and will be paid in two parts. Specifically: (1) Big Beaver will pay to LaSalle Bank a one-time cash payment for $125,000 that consists of attorney's fees for $75,000 and default interest for $50,000; and (2) LaSalle Bank and Big Beaver will continue to be bound by the Real Estate Purchase Agreement, which Big Beaver assumes, and the terms of the Note, which Big Beaver affirms. The principal balance of the Note as of Oct. 8, 2004, is $21,895,191. Under a pooling and servicing agreement dated February 1, 1996, LaSalle Bank serves as trustee for the holders of the Structured Asset Securities Corporation Multiclass Pass-Through Certificates Series 1996-CFL. In February 1990, Robert A. Mantovani assumed a mortgage in favor of Southeast Bank, N.A., which was amended and assigned to LaSalle Bank. On January 12, 2000, Kmart Corporation purchased from Mr. Mantovani a real property in Ocala, Florida. Kmart also assumed the Mortgage. Kmart assigned both the Real Estate Purchase Agreement and the Mortgage to its wholly owned subsidiary, Big Beaver of Florida Development, L.L.C. Consequently, LaSalle Bank filed Claim No. 43267, which relates to the Real Estate Purchase Agreement and the Mortgage. During Kmart's bankruptcy, LaSalle Bank sought to lift the automatic stay to pursue its Claim. After arm's-length negotiations, Big Beaver and LaSalle Bank, as assigns, settled the Stay litigation. LaSalle Bank and Big Beaver then entered into a letter agreement under which Kmart agreed to treat Claim No. 43267 in accordance with Section 1124(2) of the Bankruptcy Code. About Kmart Corp. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 111; Bankruptcy Creditors' Service, Inc., 215/945-7000) KMART CORP: More Than 50 Creditors Withdraw Proofs of Claim ----------------------------------------------------------- The Clerk of the U.S. Bankruptcy Court for the Northern District of Illinois recorded more than 50 notices of withdrawal of claims, including withdrawals filed by: Claimant Claim No. -------- --------- Azerty 4783 Blistex Inc. 1153 City of Mesquite 11887 Don O Daniels, Jr. 41616 Florida Tax Collectors 57668 GTFM Inc and GTFM LLC 34053 Iowa Department of Revenue 38759 Iowa Falls Partners 39507 James Bingham 9484 John Waters 46010 Massachusetts Mutual Life Insurance Co. 41118 Newman Haas 41338 Olympia Entertainment Inc 30753 Reno County Treasurer 34560 Sensormatic Electronics Corp. 53904 Trumbull Group 57668 The SBC Corporation 53750 Wells Fargo Bank National Association 41812 The Clerk of the Court also recorded claim withdrawals filed by: Claimant Claim Amount -------- ------------ City of Mesquite 82009 Cox Enterprises Inc. 76621 Cox North Carolina Publications Inc. 5852 Cox Texas Newspapers LP 8282 Dayton Newspapers Inc. 33299 Grand Junction Newspapers Inc. 14231 Hitachi High Technologies America Inc. 455,179 John Waters 4,178,288 Olympus America Inc. 582,899 The Claimants attest that they have not sold, assigned, factored or otherwise transferred any interest in the Claims. The Claimants release each of Kmart Corporation, its debtor- affiliates and their successors, assigns and estates from any and all claims, liabilities, debts, causes of action or other obligations arising from, relating to, or in connection with, the Claims. About Kmart Corp. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 111; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEVEL 3: Moody's Rates Proposed $150 Million Note Issue at Caa3 -------------------------------------------------------------- Moody's Investors Service assigned a Caa3 rating to Level 3 Communications, Inc.'s proposed $150 million convertible note issue maturing 2012. Moody's also upgraded Level 3's corporate family rating to Caa1 from Caa2, reflecting the company's improved leverage profile proforma the upcoming secondary equity issuance of 125 million shares. Up to $460 million of the proceeds from the capital raise is slated to reduce a large portion of debt maturing in 2008, the company's intermediate refinancing risk is greatly diminished, while Level 3 will be able to restore its historically high cash cushion used to bridge its operations to positive free cash flow. In conjunction with the capital markets activity, Level 3 is also seeking to amend the terms of its senior credit facility to reduce the Libor spread by at least 375 bps, resulting in annual interest savings of $27 million. In light of the ongoing improvements in the capital and cost structures, Moody's has also upgraded the ratings of all existing Level 3 and Level 3 Financing, Inc. debt securities. Moody's has taken these ratings actions: Issuer: Level 3 Communications, Inc * Corporate Family Rating -- Changed to Caa1 from Caa2 * New Convertible Senior Notes -- Assigned Caa3 * Senior Notes -- Changed to Caa3 from Ca * Senior Euro Notes - Changed to Caa3 from Ca * Convertible Senior Notes -- Changed to Caa3 from Ca * Convertible Subordinated Notes - Changed to Ca from C * Outlook - Stable Issuer: Level 3 Financing, Inc * Senior Secured Term Loan -- Changed to B2 from B3 * Senior Floating Rate Notes -- Changed to B3 from Caa1 * Senior Notes -- Changed to B3 from Caa1 * Outlook - Stable Level 3 has opportunistically taken advantage of the rebounding telecommunications sector, both organically and via acquisitions. However, the Caa1 rating reflects the continuing high business risk for the long-haul carrier industry, and we believe the company will be challenged to manage the confluence of the ongoing high cash burn and integrating the announced acquisitions. The stable outlook reflects Moody's views that Level 3 will continue to favorably augment its liquidity position, and the expectation that should acquisition activity continue, it will not materially impact the company's credit profile. Level 3 is a leading nationwide communications service provider and software distributor with sales of $3.6 billion for 2005. The company's headquarters are located in Broomfield, Colorado. LIFE SCIENCES: March 31 Stockholders' Deficit Narrows to $9.6 Mil. ------------------------------------------------------------------ Life Sciences Research, Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 9, 2006. The Company earned $470,000 of net income on $42,455,000 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $258,449,000 in total assets and $268,073,000 in total liabilities, resulting in $9,624,000 stockholders' deficit. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?aa1 Life Sciences Research, Inc. -- http://www.lsrinc.net/-- is a global contract research organization providing product development services to the pharmaceutical, agrochemical and biotechnology industries. LSR identifies risks to humans, animals or the environment resulting from the use or manufacture of a wide range of chemicals that are essential components of LSR's clients' products. The Company's services are designed to meet the regulatory requirements of governments around the world. LSR operates research facilities in the United States (the Princeton Research Center, New Jersey) and the United Kingdom (Huntingdon and Eye, England). At March 31, 2006, the company's stockholders' equity deficit narrowed to $9,624,000 compared to a $14,568,000 deficit at Dec. 31, 2005. LIFEPOINT HOSPITALS: Buys Four Hospitals from HCA Inc for $239MM ---------------------------------------------------------------- LifePoint Hospitals, Inc., reached an agreement with HCA on a modification of its purchase deal. Under the terms of the modified agreement, LifePoint will acquire three hospitals in West Virginia and one in Virginia for a purchase price of $239 million plus specific working capital, including inventory and the assumption of paid time off, as defined in the new agreement. The transaction is subject to certain closing conditions and is expected to close by June 30, 2006. The four facilities to be acquired are: * 200-bed Clinch Valley Medical Center, Richlands, Virginia; * 325-bed St. Joseph's Hospital, Parkersburg, West Virginia; * 155-bed Saint Francis Hospital, Charleston, W. Virginia; and * 369-bed Raleigh General Hospital, Beckley, West Virginia. Simultaneously with the closing of the transaction, LifePoint Hospitals will classify St. Joseph's Hospital and Saint Francis Hospital as assets held for sale. The modified agreement excludes 68-bed Putnam General Hospital, Hurricane, West Virginia, which will continue to be owned by HCA. "We are pleased to announce the modification of this agreement with HCA, and we believe the new terms of the agreement represent an excellent opportunity for LifePoint," Kenneth C. Donahey, president and chief executive officer of LifePoint Hospitals, said. "This transaction will provide LifePoint with additional operating synergies and economies of scale in Virginia and West Virginia, especially given that we share common systems with HCA. We look forward to working closely with the administration and healthcare professionals of these hospitals to seamlessly add these facilities to the LifePoint family in a manner benefiting LifePoint, its shareholders and the communities served by these hospitals." About HCA Headquartered in Nashville, Tennessee, HCA (Hospital Corporation of America) Inc. -- http://www.hcahealthcare.com/-- is the nation's leading provider of healthcare services, composed of locally managed facilities that include approximately 182 hospitals and 94 outpatient surgery centers in 22 states, England and Switzerland. At its founding in 1968, HCA was one of the nation's first hospital companies. About LifePoint Headquartered in Brentwood, Tennessee, LifePoint Hospitals, Inc. -- http://www.lifepointhospitals2.com/-- is a leading hospital company focused on providing healthcare services in non-urban communities. Of the Company's 49 hospitals, 47 are in communities where LifePoint Hospitals is the sole community hospital provider. LifePoint Hospitals' non-urban operating strategy offers continued operational improvement by focusing on its five core values: delivering compassionate, high quality patient care, supporting physicians, creating excellent workplaces for its employees, providing community value and ensuring fiscal responsibility. LifePoint Hospitals is affiliated with approximately 19,000 employees. * * * As reported in the Troubled Company Reporter on May 5, 2006, Fitch issued ratings to LifePoint Hospitals Inc. including a BB- Issuer Default Rating, a BB- Secured bank credit facility, and a B Senior subordinated convertible notes. The Rating Outlook is Stable. MASTR ASSET: Moody's Puts Low-B Rating on Two Certificate Classes ----------------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior certificates issued by MASTR Asset Backed Securities Trust 2006- FRE2, and ratings ranging from Aa1 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Fremont Investment & Loan originated, adjustable-rate and fixed-rate, subprime mortgage loans acquired by UBS Real Estate Securities Inc. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, and overcollateralization. The ratings also receive benefit from an interest-rate swap agreement and an interest-rate cap agreement, both provided by Bear Stearns Financial Products Inc. Moody's expects collateral losses to range from 5.05% to 5.55%. Wells Fargo Bank, N.A. will service the loans, and Wells Fargo Bank, N.A. will act as master servicer. Moody's assigned Wells Fargo its top servicer quality rating as a master servicer. The complete rating actions: MASTR Asset Backed Securities Trust 2006-FRE2 Mortgage Pass Through Certificates, Series 2006-FRE2 * Cl. A-1, Assigned Aaa * Cl. A-2, Assigned Aaa * Cl. A-3, Assigned Aaa * Cl. A-4, Assigned Aaa * Cl. A-5, Assigned Aaa * Cl. M-1, Assigned Aa1 * Cl. M-2, Assigned Aa2 * Cl. M-3, Assigned Aa3 * Cl. M-4, Assigned A1 * Cl. M-5, Assigned A2 * Cl. M-6, Assigned A3 * Cl. M-7, Assigned Baa1 * Cl. M-8, Assigned Baa2 * Cl. M-9, Assigned Baa3 * Cl. M-10, Assigned Ba1 * Cl. M-11, Assigned Ba2 The Class M-10 and Class M-11 certificates were sold in a privately negotiated transaction without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. MCMORAN EXPLORATION: Posts $13.4 Mil. Net Loss in 2006 First Qtr. ----------------------------------------------------------------- McMoRan Exploration Co. reported a $13,485,000 net loss on $39,746,000 of total revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $411,339,000 in total assets and $449,288,000 in total liabilities, resulting in a $37,949,000 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $135,770,000 in total current assets available to pay $137,038,000 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?aa2 McMoRan Exploration Co. -- http://www.mcmoran.com/-- is an independent public company engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area. McMoRan is also pursuing plans for the development of the MPEH(TM) which will be used for the receipt and processing of liquefied natural gas and the storage and distribution of natural gas. At March 31, 2006, the company's stockholders' deficit narrowed to $37,949,000 from an $86,590,000 deficit at Dec. 31, 2005. MIRANT CORP: Pirate Capital Questions NRG Energy Bid ---------------------------------------------------- Pirate Capital LLC informed Mirant Corporation's Board of Directors on June 1, 2006, that it does not believe that entering into a hostile bidding war for NRG Energy Inc. is not in the best interest of Mirant's shareholders. Pirate Capital further urged Mirant's board to engage a financial advisor and initiate a process to put itself up for sale. Pirate Capital, as the investment advisor to Jolly Roger Fund LP and Jolly Roger Offshore Fund LTD, is the beneficial owner of approximately 5 million shares, or 1.6%, of Mirant's common stock. Thomas R. Hudson Jr., Portfolio Manager at Pirate Capital, said in a letter to Mirant's board: "...while we believe that consolidation in the power sector is necessary, we question whether Mirant should be a consolidator. Mirant's reported first quarter 2006 earnings and outlook give proof to the strength of its assets. We believe shareholders would be substantially rewarded if Mirant put itself up for sale." As reported in the Troubled Company Reporter on May 31, 2006, Mirant Corporation made a proposal to acquire NRG at a premium of approximately 33% to NRG's share price as of May 30, 2006. Mirant had received a financing commitment from JPMorgan of approximately $11.5 billion for the transaction. NRG flatly rejected the proposal without engaging in any discussions with Mirant. Mirant Corporation is seeking a court order in Delaware directing NRG not to obstruct its unsolicited takeover bid. About Mirant Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- 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 Nos. 96 & 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. MUSICLAND HOLDING: Court OKs Expedited Lease Rejection Procedures ----------------------------------------------------------------- After the closing of the Trans World Entertainment Corporation sale, Musicland Holding Corp. and its debtor-affiliates will no longer require many of the properties, goods and services they obtained under various executory contracts and unexpired leases to which they are party, James H.M. Sprayregen, Esq., at Kirkland & Ellis LLP, in New York, tells the U.S. Bankruptcy Court for the Southern District of New York. Accordingly, pursuant to Sections 365 and 554 of the Bankruptcy Code, the Debtors sought and obtained the Court's approval of expedited procedures for rejecting executory contracts and unexpired personal and residential real property leases. A. The Rejection Notice 1. The Debtors will file written notice to reject any Contract pursuant to Section 365(a) and will serve the Rejection Notice on: -- the Office of the United States Trustee for the Southern District of New York; -- Hahn & Hessen LLP, the counsel for the Official Committee of Unsecured Creditors; -- Morgan Lewis & Bockius LLP, the counsel for the Informal Committee of Secured Trade Vendors; -- Skadden, Arps, Slate, Meagher & Flom, LLP, the counsel for TWEC; -- the Contract counter-party, landlord and subtenant affected by the Rejection Notice; and -- any other parties-in-interest to the Contract the Debtors want to reject. 2. The Rejection Notice will advise the Service Parties of the Debtors' intent to reject the Contract, as well as the deadlines and procedures for filing objections to the Rejection Notice. 3. The Rejection Notice will attach a copy of the Order approving the Debtors' Motion for Expedited Rejection Procedures and will contain, as applicable: -- a general description of the Contract; -- the name and address of the Contract Counterparty and when the Contract involves real property, the street address for that real property; and -- a general description of any de minimis assets located or contained within the property subject to a Contract that the Debtors wish to abandon. B. Objections to Rejection 1. If a Contract Counterparty objects to the Debtors' proposed rejection of a Contract, that party must file and serve a written objection with the Court and it must be received no later than 10 days after the date the Debtors served the Rejection Notice by: -- Kirkland & Ellis LLP, the Debtors' counsel; and -- the Service Parties; provided that any objection need not be served on any Counterparty to a Contract not the subject of that objection. 2. If a party files a timely objection that cannot be consensually resolved, the Court will schedule a hearing to consider that objection. If that objection is overruled or withdrawn, or if the Court when ruling on the objection does not determine the date of rejection, the Rejection Date of that Contract will be the date the Rejection Notice was served on the Service Parties or the date as may be indicated in the Rejection Notice. C. Effectiveness of Rejection 1. If no party files an objection within 10 days of the date the Debtors serve the Rejection Notice, the rejection of a Contract will become effective as of the date the Rejection Notice was served on the Service Parties, or the date as may be indicated in the Rejection Notice without further notice, hearing or Court order. 2. Even where there is an objection to a Contract on a particular Rejection Notice, any and all other Contracts that may be contained on the same Rejection Notice to which there is no timely objection will be deemed rejected as of the Rejection Date. If the Debtors have deposited funds with a Contract Counterparty as a security deposit or other arrangement, that Counterparty may not set off or use that deposit without prior Court approval. The Court authorizes the Debtors to abandon any unsold fixtures or other de minimis assets located within the property subject to a Contract without any liability to the Counterparty of the applicable Contract; provided that the Rejection Notice describes: -- the property to be abandoned; -- states the reason for the proposed abandonment; and -- identifies the entity to whom the property is proposed to be abandoned. Upon the rejection of a Contract pursuant to a Rejection Notice, all Counterparties to that Contract will be required to file rejection damages claims, if any, by the later of: (i) the General Claims Bar Date; or (ii) 30 days after the Debtors served the Rejection Notice. Judge Bernstein rules that the Debtors will provide: (a) Retail Choice LLC with a minimum of 60 days written notice of their intent to reject the customer agreement dated June 1, 2005, between Retail Choice and the Debtors; and (b) FrontNet Solutions, LLC, with a minimum of 60 days written notice of their intent to reject the master services agreement dated August 6, 2003, between FrontNet and the Debtors; provided that Retail Choice and FrontNet continue to perform under the Customer Agreement and the Master Agreement, until the Agreement are deemed rejected. 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. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) NESCO INDUSTRIES: Jan. 31 Balance Sheet Upside-Down by $8.8 Mil. ---------------------------------------------------------------- Nesco Industries, Inc., disclosed its third quarter financial statements for the three months ended Jan. 31, 2006, to the Securities and Exchange Commission on May 24, 2006. For the third quarter ended Jan. 31, 2006, the Company reported a $1,467,000 net loss on $190,000 of revenues, compared to a $1.5 million net loss on $184,000 of revenues for the three months ended Jan. 31, 2005. As of Jan. 31, 2006, the Company had cash of $22,000, an accumulated deficit of $22,855,000, a working capital deficit of approximately $9,235,000. At Jan. 31, 2006, the Company's balance sheet showed $673,000 in total assets and $9,436,000 in total liabilities, resulting in a $8,845,000 stockholders' deficit. A full-text copy of the Company's Quarterly Report is available for free http://researcharchives.com/t/s?a5b Going Concern Doubt Rothstein, Kass & Company, P.C., in Roseland, New Jersey, raised substantial doubt about Nesco Industries, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended April 30, 2005. The auditor pointed to the Company's recurring losses since inception, negative working capital, and stockholders' deficit. About Nesco Headquartered in New York, Nesco Industries, Inc. (OTCBB: NESK) dba Hydrogel Design Systems, manufactures, markets, sells and distributes aqueous polymer-based radiation ionized gels used in various medical and cosmetic consumer products. NORD RESOURCES: Auramet Agrees to $1 Mil. Additional Loan Advance ----------------------------------------------------------------- Auramet Trading, LLC, acting through Nedbank Limited, has advanced an additional $1,000,000 loan to Nord Resources Corporation. This amount has been added to the outstanding principal under the existing secured loan from Nedbank to the Corporation in the original principal amount of $3,900,000. Auramet had participated in the original loan through the contribution of a then outstanding loan from Auramet to the Corporation in the amount of $1,000,000, dated Oct. 17, 2005. In connection with the original Nedbank loan, the Corporation had issued a secured promissory note to Nedbank dated Nov. 8, 2005, which was subsequently amended by a Letter Agreement dated May 5, 2006 and a Modification Agreement dated May 15, 2006. The loan was secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated Nov. 8, 2005, relating to the Corporation's Johnson Camp property. Also in connection with the original Nedbank loan, Ronald A. Hirsch, Stephen D. Seymour and Nedbank had entered into a Subordination Agreement dated Nov. 8, 2005, where Mr. Hirsch and Mr. Seymour, who are directors of Nord, agreed to subordinate their loans to the Corporation in favor of any and all indebtedness of the Corporation with Nedbank. Upon closing of the additional $1,000,000 advance, the Corporation executed and delivered, among other things: a) an Amended and Restated Secured Promissory Note dated May 31, 2006, payable to Nedbank in the principal amount of $4,900,000; b) a First Amendment to Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing; and c) an Amendment to the Subordination Agreement. The Amended and Restated Promissory Note matures on the earlier of Aug. 15, 2006 or the closing of a registered equity offering by the Corporation that raises not less than $20,000,000. The Corporation will be obligated to make interest-only payments to Nedbank, at an interest rate of 10% per annum -- an increase of 1% per annum over the interest rate under the Original Secured Promissory Note -- payable monthly. The interest rate would increase to 13% in the event of a default by the Corporation. In consideration of the additional loan advance, Nord has paid to Auramet out of the loan proceeds the sum of $40,000, and has issued to Auramet warrants for the purchase of 250,000 shares of the Corporation's common stock, exercisable for a period of two years at an exercise price of $1.15 per share, being equal to 110% of the average closing price of the Corporation's common stock for the 20 trading days prior to the date of the Amended and Restated Secured Promissory Note. Upon closing, the Corporation received net proceeds of $910,908, after deduction of: Auramet's fee referred to above; accrued interest on the original principal amount of the Nedbank loan from May 1, 2006 through June 1, 2006, in the amount of $31,092; Nedbank's legal expenses in connection with the additional advance; and related title recording fees and expenses. About Nord Resources Headquartered in Dragoon, Arizona, Nord Resources Corporation -- http://www.nordresources.com/-- is a natural resource company focused on near-term copper production from its Johnson Camp Mine and the exploration for copper, gold and silver at its properties in Arizona and New Mexico. The Company also owns approximately 4.4 million shares of Allied Gold Limited, an Australian company. In addition, the Company maintains a small net profits interest in Sierra Rutile Limited, a Sierra Leone, West African company that controls the world's highest-grade natural rutile deposit. * * * Mayer Hoffman McCann PC expressed substantial doubt about Nord's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's significant operating losses. Nord incurred a $3,084,166 net loss for the year ended Dec. 31, 2005, in contrast to a $864,357 net loss in the prior year. ONEIDA LTD: Files Amended Plan and Disclosure Statement in N.Y. --------------------------------------------------------------- Oneida Ltd. and its debtor-affiliates presented to the U.S. Bankruptcy Court for the Southern District of New York an amended disclosure statement explaining its chapter 11 plan of reorganization. Treatment of Claims Under the Amended Plan, these claims are entitled to full recovery: a) Secured Tranche A Claims; b) Other Secured Claims; c) Other Priority Claims; d) General Unsecured Claims; and e) Secured PBGC Claims. Holders of Class 3 Secured PBGC Claims will receive a ratable portion of the PBGC note, which: 1. in the event Class 3 votes to accept the Plan, will be an unsecured variable interest promissory note in the principal amount of $3 million; or 2. in the event Class 3 votes to reject the Plan, will be an unsecured non-interest-bearing promissory note in the principal amount of $3 million. Holders of Class 2 Secured Tranche B Claims are expected to recover 51% of their claims. Holders of Secured Tranche B Claims will receive, in the aggregate, shares of the Reorganized Debtor's common stock equal to 100% of the issued and outstanding shares of the Reorganized Debtor's common stock as of the effective date of the Plan. In case a holder is unable to hold shares, the holder's designee will receive that number of shares of common stock equal to the holder's ratable portion of the Tranche B Common Stock; provided, however, that the number of Tranche B Common Stock holders do not exceed 50. Class 7 Specified Unsecured Claims will be discharged and each holder will not receive or retain any distribution or property on account of its claim. Holders of Subordinated Claims and Oneida Equity Interests will receive nothing under the Amended Plan. Based in Oneida, New York, Oneida Ltd. -- http://www.oneida.com/ -- is the world's largest manufacturer of stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and the largest supplier of dinnerware to the foodservice industry. Oneida is also a leading supplier of a variety of crystal, glassware and metal serveware for the tabletop industries. The Company and its 8 debtor-affiliates filed for Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at Shearman & Sterling LLP represents the Debtors. Credit Suisse Securities (USA) LLC is the Debtors' financial advisor. Scott L. Hazan, Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represent the Official Committee of Unsecured Creditors. Robert J. Stark, Esq., at Brown Rudnick Berlack Israels LLP represents the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $305,329,000 in total assets and $332,227,000 in total debts. On May 12, 2006, Judge Gropper approved the Debtors' original disclosure statement. PARCONE DEVELOPMENT: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: ParcOne Development Corporation 1321 Lady Street, Suite 800 Columbia, South Carolina 29201 Bankruptcy Case No.: 06-02302 Chapter 11 Petition Date: June 2, 2006 Court: District of South Carolina (Columbia) Debtor's Counsel: G. William McCarthy, Jr. Robinson, Barton, McCarthy, Calloway 1715 Pickens Street (29201), P.O. Box 12287 Columbia, South Carolina 29211 Tel: (803) 256-6400 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 9 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Kahn Development Company $75,000 Stick Thibodeaux VP Leasing 101 Flintlake Road Columbia, SC 29223 MB Kahn Construction Co. Inc. $48,000 Mr. Scott Spigner P.O. Box 1179 Columbia, SC 29202 CDA Architects $15,000 Mr. Ron Matlock 1136 Washington Street Suite 600 Columbia, SC 29201 Bank Capital & Financial Services Inc. $15,000 Lewis and Babcock Attorneys $6,000 Keenansuggs Insurance $4,500 Village at Sandhill $4,200 SCEG $3,000 Finch Hamilton and Co. CPAs $1,000 PATRON SYSTEMS: Posts $4.4 Million Net Loss in 2006 First Quarter ----------------------------------------------------------------- Patron Systems, Inc., generated $262,785 of revenues for the quarter ending March 31, 2006, compared to $6,430 in the same period a year ago. The increased revenue in the first quarter of 2006 versus the same period in 2005 is principally due to acquisitions completed in 2005 and new customer contracts. Patron reported a net loss of $4,400,074 in the quarter, compared to a net loss of $2,203,795 in the same period a year ago. The results for 2005 reflect the three acquisitions made in the first quarter of 2005 only for the period from the acquisition dates of Feb. 25, 2005 and March 30, 2005 to the end of the period March 31, 2005. The increased loss in the first quarter of 2006 versus the same period in 2005 is principally due to the full quarter impact of the 2005 acquisitions, the settlement of outstanding litigation under the creditor and claimant liabilities restructuring, legal and professional fees associated with the year-end audit and the settlement of outstanding litigation. The increased loss also includes increased interest expense that is primarily related to increased borrowings in 2006 versus 2005, the amortization of deferred financing costs and the intrinsic value of a conversion option for bridge note holders that has been classified as interest expense. During the three months ended March 31, 2006, Patron received new customer contracts and purchase orders totaling approximately $117,000. Revenues associated with new contract and purchase order bookings are typically recognized over time periods ranging from the current quarter to the upcoming 12 to 18 months. During the period from April 1 to May 15, 2006, Patron received new customer contracts and purchase orders totaling nearly $472,000. These contracts include new software license agreements, purchase of additional registered users under existing license agreements, renewal of maintenance and support agreements and purchase of professional services. Going Concern Doubt As reported in the Troubled Company Reporter on May 16, 2006, Marcum & Kliegman LLP expressed substantial doubt about Patron Systems, Inc.'s ability to continue as going concern after auditing the Company's financial statements for the year ended Dec. 31, 2005. The accounting firm points to the Company's net losses incurred since its inception, its working capital deficiency and the numerous litigation matters it is involved with. About Patron Systems Headquartered in Boulder, Colorado, Patron Systems, Inc. -- http://www.patronsystems.com/-- offers integrated enterprise email and data security and enforceable compliance. The Company's suite of Active Message Management(TM) products addresses eform creation, capture, sharing, and manages data in an industry standard format as well as providing solutions for mailbox management, email policy management, email retention policies, archiving and eDiscovery, proactive email supervision, and protection of messages and their attachments in motion and at rest. PLYMOUTH RUBBER: Judge Feeney Approves Disclosure Statement ----------------------------------------------------------- The Hon. Joan N. Feeney of the U.S. Bankruptcy Court for the District of Massachusetts approved the Disclosure Statement explaining the Second Amended Joint Plan of Reorganization of Plymouth Rubber Company, its debtor-affiliate, Brite-Line Technologies, Inc., and the Official Committee of Unsecured Creditors. Judge Feeney determined that the Disclosure Statement contained adequate information -- the right amount of the right type of information necessary for the Committee to make an informed decision -- as required under Section 1125 of the Bankruptcy Code. Overview of the Plan The Plan involves a reorganization of Debtors thorough an equity investment and loan transaction with Clarendon Investment Group, LLC, a Massachusetts limited liability company. Clarendon's managing member, Maurice Hamilburg, is also the Debtor's President, Co-CEO, and a member of the Debtors' Board of Directors. The Debtors tell the Court that Clarendon's proposal to fund the plan was accepted by Plymouth Rubber's Board of Directors after consideration of an alternative proposal to purchase the Debtors' assets other than real estate assets. The Debtors say that the Plan provides for the full payment of Allowed Secured Claims. Under the Clarendon Proposal, allowed secured claims must not exceed $20 million. The Debtors expect to demonstrate at the confirmation hearing that the total allowed secured claims in these cases will not exceed $20 million pursuant to Section 506(a) of the Bankruptcy Code. Under the Plan, creditors that held prepetition liens on assets of the Debtor of up to $20 million will get $12.5 million in cash to be sourced from the refinancing and investment transaction and $7.5 million in notes secured by certain retained liens and to be paid from the liquidation of the Debtors' equipment plus specified percentages of the Debtors' combined earnings through fiscal year 2010. The $12.5 million cash payment will be funded from the proceeds of: (1) a new revolver loan to be obtained from Wells Fargo in the minimum amount of $9 million (which will be supported by $2 million invested by Clarendon for the New Common Stock, to be used by Debtors for working capital); and (2) the proceeds of the Clarendon loan investment of $1.1 million and an additional $2.4 million to be loaned against the Real Estate by Jones Lang LaSalle. A full-text copy of the Clarendon Proposal is available for a fee at http://www.researcharchives.com/bin/download?id=060605023627 Treatment of Claims Under the Joint Plan, Administrative Priority Claims, Tax Priority Claims, and Allowed Priority Claims, will be paid in full. All Intercompany Claims will be discharged without any payment or distribution of any kind. The secured claim of the Town of Canton, at the election of the Debtors and Committee, will receive either: (a) payment in full, in cash, of its claim on the effective date or (b) retain its lien on the Debtors' real estate and be paid in full, with interest as provided by law, at the earlier of: * the time of and from the proceeds of the sale of the Debtors' real estate, and * no later than the first anniversary of the effective date. Secured Claims Payment On the effective date, LaSalle Bank National Association, will receive from the Secured Creditors' Trust, cash of no more than $12.5 million. The remaining balance of the claim will be paid from payments on the Secured Creditors' Notes and any real estate proceeds in the event that the real estate of the Debtors has not yet been sold as of this time. General Electric Capital Corporation, on account of its secured claims, will also receive cash from the Secured Creditors' Trust with the remaining balance to be paid from the Secured Creditors' Notes and any real estate proceeds. The secured claims of TD BankNorth, N.A., fka BankNorth, N.A., and the Pension Benefit Guaranty Corporation, will receive the same treatment as that of GECC. Unsecured Claims Payment The Debtors tell the Court that Unsecured Claims are divided in two subclasses. Holders of Unsecured Claims below $2,000 or creditors who agreed to reduce their claims to that amount will receive 25% of their claims, in cash, on or before the 14th day following the effective date. Holders of other Unsecured Claims will receive, on the effective date, a $1.5 million promissory note with a five-year term, without interest. Two years after satisfaction of the promissory note, holders of unsecured claims in this subclass will receive: * 25% of the first $4 million of available cash flow; and * 40% of available cash flow above $4 million. The Debtors say that unsecured creditors will also receive distributions from the proceeds of Avoidance Actions, such as preferential transfer actions under Section 547 of the Bankruptcy Code and fraudulent transfer actions under Sections 544(b) and 548 of the Bankruptcy Code. Equity Interests Holders of Class A Common Stock Interests and Class B Common Stock Interests in Plymouth Rubber will receive nothing under the Plan and these stocks will be cancelled. The Debtors tell the Court that the cancelled shares will be replaced by 200,000 shares of New Common Stock and will be issued to Clarendon for $2 million. Plymouth Rubber will retain its 100% common stock interest in Brite-Line. A copy of the Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060605023627 Plan Confirmation The Court has set a hearing at 11:30 a.m., on June 28, 2006, to consider confirmation of the Debtors and Committee's Joint Plan. Objections to the Plan, if any, must be filed by 4:30 p.m., on June 26, 2006. About Plymouth Rubber Headquartered in Canton, Massachusetts, Plymouth Rubber Company, Inc., manufactures and distributes plastic and rubber products, including automotive tapes, insulating tapes, and other industrial tapes, mastics and films. Through its Brite-Line Technologies subsidiary, Plymouth manufactures and supplies highway marking products. The Company and its subsidiary filed for chapter 11 protection on July 5, 2005 (Bankr. D. Mass. Case Nos. 05-16088 through 05-16089). Victor Bass, Esq., at Burns & Levinson LLP, represents the Debtors in their restructuring efforts. John J. Monaghan, Esq., at Holland & Knight LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. REFCO INC: Investors Settle Claims v. BAWAG for $108 Million ------------------------------------------------------------ Austrian bank BAWAG P.S.K. Group has agreed to settle with institutional investors who are lead plaintiffs in an ongoing securities fraud class action stemming from the bank's role in the collapse of U.S. futures broker Refco Inc. BAWAG's settlement comes as the bank agreed to a $675 million global payment announced by the U.S. Attorney for the Southern District of New York to resolve a federal investigation of BAWAG for its part in the Refco scandal. BAWAG has agreed to pay $108 million to Refco stock and bond purchasers, with the possibility of an additional $32 million depending on a possible future sale of the bank. The payments will settle investor claims arising from BAWAG's participation in a scheme to conceal hundreds of millions of dollars in related party receivables on Refco's balance sheet. This scheme enabled Refco to complete a $600 million bond offering in August 2004, and a $583 million IPO in August 2005, and caused investors to pay excessive prices for Refco's securities in subsequent open market transactions. A week after reporting a previously undisclosed $430 million debt by its former CEO Phillip Bennett, Refco filed for bankruptcy last October 17 in the Southern District of New York. Lead plaintiffs in the class action are Pacific Investment Management Company LLC, a Refco bond purchaser, and RH Capital Associates LLC, an equity purchaser. The investors are jointly represented by leading securities and corporate governance law firms Grant & Eisenhofer, P.A. and Bernstein Litowitz Berger & Grossmann LLP. The plaintiffs have agreed that a portion of BAWAG's obligations can be satisfied by payments received from a restitution fund established by the U.S. Attorney for victims of the Refco fraud. Under the agreement, BAWAG is obligated to pay the entire $108 million to the extent that payments from any restitution fund fall short. The settlement is subject to approval by Federal Judge Gerard E. Lynch in New York, who is overseeing the Refco securities litigation. The settlement with BAWAG comes less than four months after lead plaintiffs were appointed in February, a remarkably swift resolution in a securities litigation. In fact, defendants had until July 10 to submit their motions to dismiss the case. "We are very pleased with BAWAG's agreement to so quickly settle claims arising from its part in the Refco debacle," said Grant & Eisenhofer named partner Stuart M. Grant. "This is a positive first step in providing compensation to investors who were scammed by Refco's management and directors, along with its financial advisors, auditor and other professionals." John P. Coffey of Bernstein Litowitz, added, "In addition to a terrific monetary recovery, the settlement requires BAWAG to cooperate fully with our ongoing prosecution against other defendants. This is already aiding our efforts in that regard." Only months after Refco went public last fall, the company collapsed when it was disclosed that Mr. Bennett had hidden a $430 million loan from the company's books. BAWAG's role in the scandal became evident after reports that the bank gave Mr. Bennett a $420 million loan just before the previously unreported debts became public. Mr. Bennett was indicted on eight felony counts, including making false filings with the SEC and conspiracy to commit securities fraud. In addition to Mr. Bennett and Refco's former board of directors, the remaining defendants in the securities class action include: the company's former auditor Grant Thornton LLP; its majority owner private equity firm Thomas H. Lee Partners L.P.; and several investment banks that sold Refco securities to public investors, including Goldman Sachs, Credit Suisse and Bank of America. In addition to Stuart Grant, co-lead counsel for plaintiffs include James Sabella and Megan McIntyre of Grant & Eisenhofer, and Max Berger and Sean Coffey of Bernstein Litowitz. About Grant & Eisenhofer Wilmington, DE and New York-based Grant & Eisenhofer -- http://www.gelaw.com/-- represents institutional investors and shareholders nationally in securities class actions, corporate governance actions and derivative litigation. The firm has recovered more than $2 billion for shareholders in the last five years and was named one of the Top 5 firms for shareholder recovery in 2005 by Institutional Shareholder Services. Currently, Grant & Eisenhofer is lead counsel in shareholder securities cases against Tyco, Global Crossing, Parmalat, Marsh & McLennan and Refco. In 2005, the firm published the Shareholder Activism Handbook, a practical guide for shareholders on corporate governance matters. Grant & Eisenhofer has also obtained major corporate governance settlements in shareholder cases against News Corp., Health South and Siebel Systems. About Bernstein Litowitz Bernstein Litowitz Berger & Grossmann LLP -- http://www.blbglaw.com/-- with offices in New York, California, New Jersey and Louisiana, prosecutes class and private actions nationwide on behalf of institutional investors. Specializing in securities fraud, corporate governance and shareholders' rights litigation, the firm has obtained some of the largest recoveries in history, including WorldCom, a case resolved for $6.15 billion against WorldCom's former auditor, Arthur Andersen. Other major recoveries include Cendant and Nortel, cases resolved for $3.2 billion and $1.3 billion, respectively. 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 INC: Case Summary & 50 Largest Unsecured Creditors -------------------------------------------------------- Lead Debtor: Refco Inc. One World Financial Center 200 Liberty Street, Tower A New York, New York 10281 Bankruptcy Case No.: 05-60006 Debtor-affiliates filing separate chapter 11 petitions on June 6, 2006: Entity Case No. ------ -------- Westminster-Refco Management LLC 06-11260 Refco Managed Futures LLC 06-11261 Lind-Waldock Securities LLC 06-11262 Debtor-affiliates that filed separate chapter 11 petitions on Oct. 17, 2005: Entity Case No. ------ -------- Refco Global Finance Ltd. 05-60007 Refco Information Services LLC 05-60008 Bersec International LLC 05-60009 Refco Capital Management LLC 05-60010 Refco Global Capital Management LLC 05-60011 Marshall Metals LLC 05-60012 Refco Financial LLC 05-60013 New Refco Group Ltd., LLC 05-60014 Refco Regulated Companies LLC 05-60015 Refco Finance Inc. 05-60016 Refco Capital Holdings LLC 05-60017 Refco Capital Markets, Ltd. 05-60018 Kroeck & Associates, LLC 05-60019 Refco Administration, LLC 05-60020 Refco Mortgage Securities, LLC 05-60021 Refco Capital LLC 05-60022 Refco F/X Associates LLC 05-60023 Refco Global Futures LLC 05-60024 Summit Management LLC 05-60025 Refco Capital Trading LLC 05-60026 Refco Group Ltd., LLC 05-60027 Refco Global Holdings LLC 05-60028 Refco Fixed Assets Management LLC 05-60029 Type of Business: The Debtors constitute a diversified financial services organization with operations in 14 countries and a global institutional and retail client base. Refco Inc.'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, Paris and Singapore. In addition to its futures brokerage activities, Refco Inc. and its affiliates are major brokers 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.. Chapter 11 Petition Date: October 17, 2005 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Debtors' Counsel: J. Gregory Milmoe, Esq. Sally M. Henry, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 Tel: (212) 735-3770 Fax: (917) 777-3770 Lead Debtor's Financial Condition as of August 31, 2005: Total Assets: $16,500,000,000 Total Debts: $16,800,000,000 Financial condition of debtor-affiliates that filed on June 6, 2006: Entity Total Assets Total Debts ------ ------------ -------------- Westminster-Refco Management LLC $1,918,030 $1,032,386,039 Refco Managed Futures LLC $0 $1,035,345,960 Lind-Waldock Securities LLC $0 $1,032,000,000 Debtors' Consolidated List of 50 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Bawag International Finance $451,158,506 BAWAG P.S.K. Bank fur Arbeit und Wirtschaft und Osterreichische Postsparkasse Aktiengesellschaft Sietzergasse 2-4 A-1010 Vienna, Austria P: +43/1/534 53/3 12 10 F: +43/1/534 53/ 2284 Wells Fargo $390,000,000 Corporate Trust Services Mac N9303-120 Sixth & Marquette Minneapolis, MN 55497 P: 612-3 16-47727 Attn: Julie J. Becker VR Global Partners, LP $380,149,056 Avora Business Park 77 Sadovnicheskaya NAB. Building 1 Moscow, Russia 115035 Rogers Raw Materials Fund $287,436,182 c/o Beeland Management 141 West Jackson Boulevard, Suite 1340 Chicago, IL 60604 P: (312) 264-4375 Bancafe International Bank Ltd. $176,006,738 Carrera 11 82-76 Segundo 2 Bogota, Colombia P: 636-4349 - and - Bancafe International Bank Ltd. 801 Brickell Avenue Ph1 Miami, FL 33131 P: 305-372-9909 F: 305-372-1797 Markwood Investments $110,056,725 Via Lovanio #19 00198 Rome, Italy Capital Management Select Fund $109,009,282 Lynford Manor, Lynford Cay Nassau, Bahamas Leuthold Funds Inc $107,264,868 Leuthold Industrial Metals, LP 100 North 6th Street Suite 412A Minneapolis, MN 55403 P: 612-332-9141 F: 612-332-0797 Attn: David Cragg Rietumu Banka $100,860,048 JSC Rietumu Banka Reg. No. 40003074497 VAT No. LV40003074497 54 Brivibas str Riga, LV-1011 LATVIA P: +371-7025555 F: +371-7025588 Cosmorex Ltd. $91,393,820 CP 8057 28080 Madrid, Spain P: +34-607-745-555 F: +34-667-706-622 BCO Hipotecario Inv. Turistic $85,807,030 (Fidelicomiso Federal Forex Invest) Av Venezuela Torre Cremerca, Piso 2 Ofici B2 El Rosal Caracas, VENEZUELA VR Argentina Recovery Fund $77,710,311 Avrora Business Park 77 Sadovnicheskayanab BLDG 1 Moscow, 115035 Russia Rogers International Raw Materials $75,213,814 c/o Beeland Management 141 West Jackson Boulevard, Suite 1340 Chicago IL 60604 P: (312) 264-4375 Creative Finance Limited $65,111,071 Marcy Building, Purcell Estate P.O. Box 2416 Road Town, British Virgin Islands Cargill $67,000,000 PO Box 9300 Minneapolis, MN 55440-9300 P: (952) 742-7575 F: (952) 742-7393 JWH Global Trust $50,576,912 c/o Refco Commodity Management Inc. One World Financial Center 200 West Liberty St., 22nd Floor New York, NY 10281 RB Securities Limited $50,661,064 54 Brivibas Street LV-1011 Riga, Lativa P: + 371 702-52-84 F: + 371 702-52-26 Premier Trust Custody $49,365,415 Abraham De Veerstraat 7-A Curacao, Netherlands Antilles London & Amsterdam Trust Company $47,560,980 P.O. Box 10459 APO 3rd Floor Century Yard Cricket Square, Elgin Ave. Grand Cayman, Cayman Island Stilton International Holdings Trident Chambers, Wickhams Cay P.O. Box 146 Road Town, British Virgin Islands $46,820,415 Refco Advantage Multi-Manager Fund Futures Series $41,713,723 c/o Refco Alternative Investments Group One World Financial Center 200 West Liberty St., 22nd Floor New York, NY 10281 Banesco NY Banesco Banco Universal C.A. $39,596,609 Av Urdaneta, Esquina El Chorre, Torre Untbanca Caracas Venezuela Josefina Franco Sillier $32,862,419 Carretera Mexico-Toluca No. 4000 Col. Cuajimalpa D.R. 0500 Mexico Rovida $32,831,461 London & Amsterdam Trust Company P.O. Box 10459 APO 3rd Floor Century Yard, Cricket Sq. Caja S.A. $30,950,115 Sarmiento 299 1 Subsuelo (1353) Buenos Aires, Argentina P: (54 11) 4317-8900 F: (54 11) 4317-8909 Global Management Worldwide $28,976,612 Trident Corp. Service Floor 1 Kings Court Bay St. PO Box 3944 Nassau, Bahamas Abadi & Co. Securities $28,046,904 375 Park Avenue, Suite 3301 New York, NY 10152 P: (212) 319 -4135 Refco Winton Diversified Futures Fund $27,226,697 c/o Refco Global Finance One World Financial Center 200 West Liberty Street, 22nd Floor New York, NY 10281 Pioneer Futures, Inc. $25,932,000 One North End Ave., Suite 1251 New York, NY 10282 Daichi Commodities Co., Ltd. $24,894,833 10-10 Shinsen Cho, Shibuya-Ku Tokyo, I5O-0045 JAPAN GS Jenkins Portfolio LLC. $24,631,959 c/o Refco Capital Markets One World Financial Center 200 West Liberty Street, 22nd Floor New York, NY 10281 Winchester Preservation $23,349,765 c/o Joseph D, Freney Christiana Bank & Trust Co. 3801 Kennett Pike, Suite 200 Greenville, DE 19807 Banco Agri Banco Agricola (PANAMA) S.A. $22,314,386 Edificio Global Bank #17, Local F, Calle 50 PANAMA, PA - and - Banco Agricola, S.A. 1RA. Cakke Pte. Y 67 AV. Norte Final Blvd Constitucion #100 San Salvador, ES Peak Partners Offshore Master Fund Limited $22,205,344 P.O. Box 2199 GT Grand Pavilion Commercial Center 802 West Bay Road Grand Cayman, Cayman Islands Arbat Equity Arbitrage Fund $19,106,989 Trident Corporate Services 1st Floor Kings Court Bay Street P.O. Box N3944 Nassau, Bahamas Renaissance Securities (Cyprus) Ltd. $17,820,709 2-4 Arch Makarios 111 Avenue Capital Center, 9th Floor 1505 Nicosia Cyprus AQR Absolute Return $17,482,100 c/o Caledonian Bank & Trust Ltd. P.O. Box 1043 GT Caledonian House Grand Cayman, Cayman Islands Geshoa Fund $17,319,494 Corporate Center West Bay Road Po Box 31106 Smb GRAND CAYMAN RK Consulting $14,074,345 7, Kountouriotou Street 14563 Kifissia Greece VR Capital Group Ltd. $13,690,549 Avrora Business Park Calendonian House Mary Street NAB 77 Building 1 MOSCOW, RUSSIA 115035 P: +358 600 41 902 GTC Bank, INC. $12,971,439 Calle 55 Este Torre World Trade Center Piso 7 PANAMA GUATEMALA P: (507) 265-7371 F: (507) 265-7396 Inversiones Concambi $12,799,137 c/o AEROCAV 1029 P.O. BOX 02-5304 MIAMI, PL 33102 Miura Financial Services $12,150,213 AV. Francisco De Miranda TORRE LA PRIMERA PISO 3 CARACAS VENEZUELA NKB Investments Ltd. $11,699,430 199 Arch Makarios Ave 196 Makarios III Avenue Ariel Corner 3rd Floor Office 301 3030 Limassol CYPRUS Tokyo Forex Financial Inc $11,689,354 Shinjyuku Oak Tower, 35th Floor 6-8-1 Nishishinjyuku Shinjyuku-Ku, Tokyo JAPAN Birmingham Merchant S.A. $11,215,413 AV. ARGENTINA 4793 PISO 3 CALLAO PERU BAC International $10,906,506 Calle 43 Qnquillo De Laguar PANAMA P: (507) 265-8289 F: 507-205-4031 Total Bank $10,657,732 Calle Guaicaipuro Entre Av.Principalde Ias Mercedes Torre Alianza Piso 9 EL ROSAL, CAACAS, VENEZUELA P: (0212) 264.72.54/49.42 F: (0212) 266.58.12 Reserve Invest (Cypress) Limited $10,499,733 Maximos Plaza 3301 Block 3 3035 LIMASSOL CYPRUS Refco Commodity Futures Fund $10,166,045 c/o Refco Alternative Investments Group One World Financial Center 200 Liberty Street, 22nd Floor New York, New York 10281 P: 877 538 8820 F: 877 229 0005 SILICON GRAPHICS: Wants Stay Enforced Against Solectron Corp. ------------------------------------------------------------- Silicon Graphics, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to: -- compel Solectron Corporation to comply with the terms of the Agreement, including: * timely manufacture and delivery of goods to SGI, * honoring existing payment terms, * cessation of threats of non-performance, and * ordering of component parts for third party vendors consistent with how and when the orders were placed prepetition; and -- award SGI damages and attorney's fees and expenses. In 1999, the Debtors and Solectron Corporation executed a Contract Manufacturing Long Term Business Agreement pursuant to which Solectron agreed to provide manufacturing technology, labor, facilities and materials necessary for the production of the Debtors' computer systems. The Agreement had an initial term of a year, with one-year automatic renewals unless terminated by either party. The contract was renewed on May 2, 2006. Diane Gibson, a representative of Silicon Graphics, tells the Court that immediately after she informed Solectron of the Chapter 11 filings, the firm responded that it was canceling the Agreement. Solectron said it would cease performing under the Agreement. Solectron also demanded the Debtors to immediately assume the Agreement. Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, discloses that after lengthy discussions, Solectron notified the Debtors that it would honor the Agreement but only if the Debtors agreed to change the contract payment terms. Mr. Holtzer notes that despite knowledge of the automatic stay, Solectron's counsel made three demands, each in violation of the Bankruptcy Code: (a) For a two-week period, Solectron will not require cash in advance, but will ship products pursuant to existing purchase orders on seven-day credit terms. If SGI defaults, shipments will cease immediately; (b) Solectron will not enter into any new commitments to purchase components for SGI products until the parties have reached an agreement as to the assumption of the manufacturing agreement; and (c) The parties will meet to negotiate the terms of the assumption of the manufacturing agreement. If they are unable to reach an agreement, Solectron will file a motion to compel the assumption or rejection of the manufacturing agreement. The Debtor agrees to an expedited hearing so that the matter can be heard by the end of the two-week period, unless the parties agree to extend the seven day credit terms. Sections 362(a) and 365 of the Bankruptcy Code prohibits any act to obtain possession of or to exercise control over the property of the estate. The automatic stay is one of the fundamental protections afforded Debtors under the Bankruptcy Code, Mr. Holtzer emphasizes. Mr. Holtzer contends that Solectron's threats to terminate the Agreement, multiple attempts to modify its terms, and threats to cease ordering subcomponents making future performance impossible, is a clear violation of the stay. Solectron has attempted to use its position to threaten the reorganization of SGI's business from the outset of the bankruptcy cases to obtain special rights it is not entitled to, Mr. Holtzer notes. Furthermore, Mr. Holtzer asserts that awarding the Debtors damages, attorney's fees and costs is appropriate as Solectron's actions have been willful, highly disruptive and extraordinarily expensive. The Debtors estimate that expenses incurred in responding to Solectron's actions will total $25,000 in attorney's costs alone. 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: Has Until June 20 to Use Cash Collateral ---------------------------------------------------------- In addition to borrowings under a final DIP Facility for up to $130,000,000, Silicon Graphics, Inc., and its debtor-affiliates will continue to require the use of cash collateral of the holders of the Senior Secured Notes. The Debtors will limit their use of Cash Collateral to amounts specified in a 19-Week Budget. A full-text copy of the Debtors' Cash Flow Forecast commencing as of the week ending May 26, 2006, through and including the week ending September 29, 2006, is available for free at http://researcharchives.com/t/s?a66 The U.S. Bankruptcy Court for the Southern District of New York approves the continued use of the Cash Collateral until June 20, 2006. The Court also extends all adequate protections. The Prepetition Senior Lenders have consented to the Debtors' use of the Prepetition Senior Lenders' Cash Collateral in the ordinary course of business in accordance with the Agreed Budget. The Court notes that the interests of the Secured Noteholders are adequately protected for any diminution in the value of the Secured Noteholders' interest in the Collateral for the additional extension of credit. The Final Hearing is scheduled for June 20, 2006, at 10:00 a.m. In connection with the Debtors' $130,000,000 DIP Financing Arrangement, and as adequate protection for any actual diminution in the value of their interests in the Senior Secured Notes Collateral by reason of, among other things, the priming by the liens securing the DIP Facility, U.S. Bank, as indenture trustee for the Senior Secured Notes, will receive the replacement liens, superpriority claims and certain payments. According to Stephen A. Youngman, Esq., at Weil, Gotshal & Manges LLP, in New York, the Senior Secured Notes Replacement Liens will be subject only to (i) the liens granted to the $130,000,000 DIP Lenders, (ii) certain permitted liens, and (iii) the Carve Out. Similarly, the Senior Secured Notes SuperPriority Claims will be subject only to (i) the superpriority claims of the $130,000,000 DIP Lenders, (ii) certain permitted liens, and (iii) the Carve- Out. 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. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) SORELL INC: March 31 Balance Sheet Upside Down by 5.5 Million ------------------------------------------------------------- Sorell, Inc., fka NetMeasure Technology Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 22, 2006. The Company reported a $1,745,604 net loss on $2,309,613 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $20,128,176 in total assets and $ 25,706,284 in total liabilities resulting in $5,578,108 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $11,440,686 in total current assets available to pay $20,664,222 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a9b Going Concern Doubt As reported in the Troubled Company Reporter on May 16, 2006, SF Partnership, LLP, Chartered Accountants, in Toronto, Canada, raised substantial doubt about Sorell, Inc., fka NetMeasure Technology Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the Company's recurring losses. About Sorell Inc Sorell, Inc., fka NetMeasure Technology Inc. (OTCBB: SLII) develops, manufactures, sells consumer electronics, which includes mobile phones, MP3 players, MP3 CD players, portable media players, mobile cameras and other devices. S-Cam Co., Ltd., based in Korea, is an operating subsidiary of Sorell and a divestiture from Samsung Electronics. SPECIALTY UNDERWRITING: Fitch Affirms Class B-3 Cert.'s BB Rating ----------------------------------------------------------------- Fitch affirmed these mortgage pass-through certificates: Specialty Underwriting & Residential Finance Trust, series 2005-AB1 -- Class A affirmed at 'AAA' -- Class M1 affirmed at 'AA+' -- Class M2 affirmed at 'AA' -- Class M3 affirmed at 'A' -- Class M4 affirmed at 'A-' -- Class B-1 affirmed at 'BBB+' -- Class B-2 affirmed at 'BBB-' -- Class B-3 affirmed at 'BB' The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $196.72 million of outstanding certificates. The performance of the transactions has generally been consistent with expectations. The underlying collateral for the transaction listed consists of fixed- and adjustable- rates, fully amortizing and balloon, first lien residential mortgage loans on one- to four-family residential properties. At origination, the credit scores range from 620-814 and had an average score of 686. As of the May 2006 distribution, series 2005-AB1 is 12 months seasoned. The pool factor (current principal balance as a percentage of original) is approximately 73%. The cumulative loss as a percentage of the original principal balance is approximately 0.12%. The servicer for this transaction is Wilshire Credit Corporation, rated 'RPS-' by Fitch. Series 2005-AB1 was originated in accordance with the Specialty Underwriting and Residential Finance underwriting guidelines. SURF acts as program administrator for the seller, Merrill Lynch Mortgage Lending, Inc., and its loan acquisition program facilitates the purchase by Merrill Lynch Mortgage Lending, Inc. of eligible non-conforming loans from various SURF-approved originators. SUNCOM WIRELESS: March 31 Stockholders' Deficit Tops $228.3 Mil. ---------------------------------------------------------------- SunCom Wireless Holdings Inc. reported a $147,205,000 net loss on $201,892,000 of total revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $1,848,318,000 in total assets, $2,076,514,000 in total liabilities, and $116,000 in minority interest, resulting in a $228,312,000 stockholders' deficit. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?aa3 Based in Berwyn, Pennsylvania, SunCom Wireless Holdings Inc. -- http://www.suncom.com/-- fka Triton PCS, Inc., is licensed to provide digital wireless communications services in the southeastern United States, Puerto Rico and the U.S. Virgin Islands. As of Dec. 31, 2005, the network covers approximately 14.8 million potential customers in North Carolina, South Carolina, Tennessee and Georgia and 4.1 million potential customers in Puerto Rico and the U.S. Virgin Islands. At March 31, 2006, the company's stockholders' deficit widened to $228,312,000 from an $83,266,000 deficit at Dec. 31, 2005. * * * As reported in the Troubled Company Reporter on March 22, 2006, Standard & Poor's Ratings Services held its ratings on Berwyn, Pennsylvania-based SunCom Wireless Holdings Inc. and its operating subsidiaries, including the 'CCC+' corporate credit rating, on CreditWatch, where they were placed with negative implications on Jan. 23, 2006. The 'B-' bank loan rating for Suncom Wireless Inc. remained on CreditWatch with negative implications, but the bank loan recovery rating of '1' is not on CreditWatch, indicating high expectations for full (100%) recovery of principal in the event of bankruptcy or payment default. SWISS MEDICA: March 31 Balance Sheet Upside Down by $33.2 Million ----------------------------------------------------------------- Swiss Medica Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 18, 2006. The Company reported a $1,462,738 net loss on $1,221,501 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $6,691,088 in total assets and $5,778,215 in total liabilities, resulting in a $33,252,260 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $5,506,394 in total current assets available to pay $5,764,723 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a80 Going Concern Doubt Russell Bedford Stefanou Mirchandani, LLP, in McLean, Virginia, raised substantial doubt about Swiss Medica Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005 and 2004. The auditor pointed to the Company's difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. About Swiss Medica Swiss Medica - http://www.swissmedica.com/-- is a consumer healthcare company, which commercializes proprietary 100% pure bioscience products or all-natural compounds that have health promoting, disease preventing or medicinal properties. TAG ENT: March 31 Balance Sheet Upside Down by $8.9 Million ----------------------------------------------------------- Tag Entertainment Corp., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 22, 2006. The Company reported a $141,000 net loss on $791,000 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $7,462,000 in total assets, $3,406,000 in total liabilities, convertible preferred stock of $1,528,000, minority interests of $2,057,000, resulting in a $471,000 stockholders' equity. The Company's March 31 balance sheet also showed strained liquidity with $4,956,000 in total current assets available to pay $3,406,000 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a8b Going Concern Doubt As reported in the Troubled Company Reporter on April 25, 2006, A.J. Robbins, PC, in Denver, Colorado, raised substantial doubt about TAG Entertainment Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditors pointed to the company's recurring losses and negative cash flows from operations. About TAG Entertainment TAG Entertainment Corp. -- http://www.tagentertainment.com/-- its wholly owned subsidiary, TAG Entertainment USA, Inc., are independent producer of family oriented feature films, television programming and other entertainment products for theatrical, television and home video distribution. In 2004, the company produced 21 episodes of the television series Arizona Highways: The Television Series for local broadcast. TELECONNECT INC: March 31 Balance Sheet Upside Down by $6.3 Mil. ---------------------------------------------------------------- Teleconnect Inc. filed its financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 15, 2006. The Company reported a $2,907,000 net loss on $1,039,000 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $1,202,000 in total assets, $7,584,000 in total liabilities, resulting in a $6,382,000 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $603,000 in total current assets available to pay $7,496,000 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://researcharchives.com/t/s?a91 Going Concern Doubt Murrell, Hall, McIntosh & Co., PLLP, expressed substantial doubt about Teleconnect Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Sept. 30, 2005. The auditing firm pointed to the Company's recurring losses from operations and net capital deficiency at the end of fiscal 2005. Teleconnect Inc., formerly ITS Network, began as a call back service for foreign visitors to the south coast of Spain, but now provides prepaid fixed-line and mobile long-distance and rechargeable prepaid calling cards. After changing management in 2000, the company acquired Spanish telecommunications firm ITS Europe. In 2002, Teleconnect acquired prepaid calling card business Teleconnect Comunicaciones. Teleconnect sold its postpaid telephone operations to Affinalia in 2003. TOYS 'R' US: Amazon to Appeal Agreement Termination --------------------------------------------------- Amazon.Com, Inc., disclosed in a Securities and Exchange Commission filing that it is appealing a recent court decision terminating its contract with Toysrus.com. The Appellate Division of the New Jersey Superior Court had denied the Company's motion to stay the termination pending a decision on its appeal. Amazon believes that it will prevail on the appeal and that Toysrus.com's claims lack merit. The Chancery Court division of the Superior Court of New Jersey issued a decision on March 2006 severing the agreement between Toysrus.com and Amazon.com. This decision allowed Toysrus.com to move forward expeditiously to re-establish its own e-commerce business on the new platform supported by GSI Commerce, Inc. As reported in the Troubled Company Reporter on May 25, 2006, Toys "R" Us inked a partnership deal with GSI Commerce for its online business. The transition of Toysrus.com and Babiesrus.com to the new e-commerce platform is expected to occur on July 1,2006. About Toys "R" Us, Inc. Headquartered in Wayne, New Jersey, Toys "R" Us is the world's leading specialty toy retailer. Currently it sells merchandise through more than 1,400 stores, including 587 toy stores in the U.S. and 646 international toy stores, including licensed and franchise stores as well as through its Internet sites at http://www.toysrus.com/http://www.imaginarium.com/and http://www.sportsrus.com/ Babies "R" Us is the largest baby product specialty store chain in the world and a leader in the juvenile industry, and sells merchandise through 232 stores in the U.S. as well as on the Internet at http://www.babiesrus.com/ * * * Toys "R" Us Inc.'s 8-3/4 Debentures due 2021 carry Moody's Investors Service's B2 rating and Standard & Poor's CCC rating. TRIBUNE CO: Sells Broadcasting Station to Gannett Co. for $180MM ---------------------------------------------------------------- Tribune Company sold WATL-TV (channel 36), Atlanta, to Gannett Co. for $180 million. The transaction will close upon regulatory approval. "This reflects an important aspect of the stock repurchase strategy that we communicated last week," Dennis FitzSimons, Tribune chairman and chief executive officer, said. "Our goal is to generate additional shareholder value through improved operating performance, asset sales and the disciplined repayment of debt over the next several years. The sale of WATL further demonstrates our commitment to delivering value for shareholders." On May 30, Tribune reported that it would acquire up to 75 million shares of the company's common stock, sell at least $500 million in assets, and reduce operating expenses by $200 million over the next two years. "As an upcoming affiliate of MyNetworkTV, WATL has a great future under the ownership of a broadcasting leader like Gannett," said John Reardon, Tribune Broadcasting president. "Steve Carver and the entire team at WATL have built a strong station and we couldn't be more appreciative and proud of their dedication and professionalism." Tribune acquired a minority stake in WATL in 1995 and obtained full ownership of the station in 2000 as part of its acquisition of Qwest Broadcasting. WATL, currently an affiliate of The WB Network, will join Fox Television's MyNetworkTV when the network launches Sept. 5, 2006. About Tribune Headquartered in Chicago, Illinois, Tribune Company -- http://www.tribune.com/-- is one of the country's top media companies, operating businesses in publishing and broadcasting. It reaches more than 80% of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune operates 11 leading daily newspapers including the Los Angeles Times, Chicago Tribune and Newsday, plus a wide range of targeted publications. The company's broadcasting group operates 26 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. Popular news and information websites complement Tribune's print and broadcast properties and extend the company's nationwide audience. * * * As reported in the Troubled Company Reporter on June 1, 2006, Fitch Ratings downgraded Tribune Co.'s Issuer Default Rating to 'BBB-' from 'A-'. The Rating Outlook is Negative. Approximately $3.2 billion of outstanding senior unsecured and subordinated debt on the balance sheet as of March 31, 2006 is affected by this action. Fitch Ratings also downgraded the Company's senior unsecured revolving credit facility to 'BBB-' from 'A-', senior unsecured notes due 2006-2027 to 'BBB-' from 'A-', and subordinated exchangeable debentures due 2029 to 'BB+' from 'BBB+'. The downgrade reflects the significant debt load that Tribune is assuming in order to return capital to shareholders. Tribune announced that it will incur over $2 billion in additional bank debt and publicly issued bonds to fund its tender of 25% of its outstanding shares. The leveraged share buy-back represents a significant departure from Tribune's historically conservative financial policies and emphasizes the pressures that slower growing traditional media companies are under to boost their stock prices. UNITED COMPONENTS: Completes ASC Industries Purchase ---------------------------------------------------- United Components, Inc., has completed its acquisition of all of the capital stock of water pump manufacturer ASC Industries, Inc. With the completion of the transaction, ASC will now become UCI's Center of Excellence for water pump production and UCI's Airtex business unit will continue as the Center of Excellence for fuel pumps. "We are very pleased to now have ASC as an integral part of the UCI family," said Bruce Zorich, CEO of UCI. "We're excited to integrate ASC with our existing water pump business to create a strong global competitor for today's competitive marketplace." UCI also disclosed that, in connection with funding the acquisition, it has entered into an amendment of its existing senior credit facilities, which includes additional borrowings of approximately $115 million. About ASC Industries Founded in 1976, ASC Industries, Inc. is located in North Canton, Ohio in Foreign Trade Zone #181. ASC Industries is a leading manufacturer of automotive water pumps and industrial components. ASC specializes in the global sourcing, supply chain management, assembly, and distribution of those products. About United Components United Components, Inc. -- http://www.ucinc.com/-- is among North America's largest and most diversified companies servicing the vehicle replacement parts market. The company supplies a broad range of products to the automotive, trucking, marine, mining, construction, agricultural and industrial vehicle markets. The company's customer base includes leading aftermarket companies as well as a diverse group of original equipment manufacturers. * * * As reported in the Troubled Company Reporter on April 26, 2006, Moody's Investors Service lowered the ratings of United Components, Inc. -- Corporate Family, to B2 from B1; senior secured revolving credit to B2 from B1, and senior subordinated notes, to Caa1 from B3. Moody's also assigned a B2 rating to the company's new $330 million senior secured term loan D. The downgrade reflected Moody's expectation that UCI's credit metrics, which eroded during 2005 as a result of higher raw material costs, lower production volumes, other product mix issues will come under further pressure with the acquisition of water pump manufacturer ASC Industries, Inc. As reported in the Troubled Company Reporter on April 24, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on United Components Inc. to 'B+' from 'BB-' and its rating on UCI's $230 million senior subordinated notes to 'B-' from 'B'. Standard & Poor's also assigned its 'BB-' rating to UCI's proposed $330 million term loan D senior secured credit facility and assigned a recovery rating of '1'. VALCOM INC: Posts $2.55 Mil. Net Loss in 2006 1st Fiscal Quarter ---------------------------------------------------------------- ValCom, Inc., filed its financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 22, 2006. The Company reported a $2,557,443 net loss on $2,107,163 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $1,994,745 in total assets and $2,395,192 in total liabilities, resulting in $400,447 of stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $ 713,876 in total current assets available to pay $2,395,192 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://ResearchArchives.com/t/s?a90 Going Concern Doubt As reported in the Troubled Company Reporter on January 25, 2006, Armando C. Ibarra, CPAs, expressed substantial doubt about ValCom, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Sept. 30, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations About ValCom Headquartered in Las Vegas, Nevada, ValCom, Inc. -- http://www.valcom.tv/-- is a diversified and vertically integrated, independent entertainment company. ValCom, Inc. through its operating divisions and subsidiaries creates and operates full service facilities that accommodate film, television and commercial productions with its four divisions that are comprised of: studio, film and television, camera/equipment rentals, and broadcast television. As of Sept. 30, 2005, ValCom had four subsidiaries: Valencia Entertainment International, LLC; Half Day Video, Inc.; ValCom Studios, Inc. and ValCom Broadcasting, LLC. VTEX ENERGY: Amends Operating Agreement with U.S. Energy -------------------------------------------------------- VTEX Energy, Inc., and U.S. Energy Systems, Inc., entered into an amended and restated limited liability company operating agreement with respect to U.S. Energy Overseas Investments LLC on May 22, 2006. As reported in the Troubled Company Reporter on Oct. 20, 2005, VTEX Energy and its wholly owned subsidiary, Viking International Petroleum, PLC, inked an agreement with Marathon Capital, LLC and USEY for the joint acquisition of certain energy assets in the United Kingdom. The energy assets to be acquired included gas field licenses, gas gathering and processing systems and a related gas turbine power plant. The gas field licenses are owned by Viking Petroleum UK Limited, an entity in which VTEX Energy has an approximate 26% ownership interest. The May 22 agreement provides that at closing: -- the Company will contribute to Overseas all the outstanding share capital of Viking International Petroleum Limited, the entity that owns 26 shares of Viking Petroleum; -- Overseas will issue its Class B membership units to the Company; -- USEY will issue to the Company warrants to acquire up to 500,000 shares of USEY common stock; and -- USEY will make a capital contribution to Overseas, in addition to its prior capital contribution of $350,000, of $6,150,000. Class B Units Terms The Class B units will be convertible into up to 1,900,000 shares of USEY common stock beginning on the earlier to occur of the third anniversary of the closing or the date on which the average market price of USEY common stock exceeds $11.00 per share for 20 consecutive trading days. USEY has the right to cause these units to be converted into common stock if the average market price, exceeds $14.30. The right to convert these units ends after the sixth anniversary of the closing. The warrants are exercisable, until the fifth anniversary of the closing, for the number of shares of USEY common stock and at these exercise prices: Number Exercise Title of shares Price ----- --------- -------- Series D Common Stock Purchase Warrants 166,667 $8.00 Series E Common Stock Purchase Warrants 166,667 $9.00 Series F Common Stock Purchase Warrants 166,667 $10.00 The Company is entitled, under specified circumstances, to have the resale of the shares of common stock issuable upon conversion of the units and exercise of the warrants registered under the Securities Act of 1933, as amended. Distribution of Net Cash Flow The agreement provides that to the extent Overseas' Board of Managers determines that net cash flow is to be distributed, it is to be distributed in this descending order of priority: -- Pro rata based on the Company's and USEY's capital contributions until each has received distributions equal to their capital contribution and a preferred return of 12% per year on such contributions; -- Fifty percent to each party until such party has received total distributions of net cash flow equal to $350,000 plus 12% per annum thereon; and thereafter; -- 90% to USEY and 10% to the Company. Gain on a sale of all or substantially all of the assets of Overseas or the liquidation or dissolution of Overseas is to distributed in this order of priority: -- Pro rata based on the Company's and USEY's capital contributions until each has received distributions equal to their capital contribution and a preferred return of 12% per year on such contributions; -- ninety-nine percent to the Company and 1% to USEY, until the Company has received an amount equal to $20,900,000; and -- thereafter to USEY. Generally, income and losses are to be allocated in the same manner as net cash flow is distributed. Voting With limited exception, USEY will hold all the voting rights with respect to Overseas. About VTEX VTEX Energy, Inc., explores for and produces oil and gas primarily in Louisiana and Texas. The company focuses on low-risk drilling developments, recompletions, and workovers, and has estimated proved preserves of 103,000 barrels of crude oil and 9.4 billion cu. ft. of natural gas. * * * Going Concern Doubt Pannell Kerr Forster of Texas, P.C., in Houston, Texas, raised substantial doubt about VTEX Energy, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended April 30, 2005. The auditor pointed to the company's significant losses from operations, working capital deficiency, and additional funding requirement. WINDSTREAM COMMS: Fitch Rates Proposed $2.5 Billion Notes at BB+ ---------------------------------------------------------------- Fitch assigned an issuer default rating of 'BB+' to Windstream Communications. In addition, Fitch has assigned a 'BBB-' rating to its proposed credit facility, of which $2.4 billion is expected to be outstanding, and a 'BB+' rating to its proposed $2.5 billion of senior unsecured notes. The Rating Outlook is Stable. At the completion of the transaction, Fitch expects to assign a 'BBB-' rating to Valor's existing $400 million in senior notes (co-issued by Valor Telecommunications Enterprises, LLC and Valor Telecommunications Enterprises Finance Corp.). In addition, Fitch has removed from Rating Watch Negative and affirmed with a Stable Outlook the 'BBB-' ratings assigned to Alltel Georgia Communications senior debt and downgraded its IDR to 'BB+' from 'A'. The rating assigned to Alltel Communications Midwest (Aliant) has been downgraded to 'BB+' from 'BBB-' and removed from Rating Watch Negative. A 'BB+' IDR has been assigned to Alltel Communications Midwest and its Rating Outlook is Stable. The ratings of Alltel New York and Alltel Pennsylvania have been affirmed at 'BBB-' and removed from Rating Watch Negative. The ratings will be withdrawn following their retirement at the time of the transaction. Following the merger of Alltel Wireline with Valor, which is expected to take place in mid-July of 2006, the surviving corporation (which is Valor) will be renamed Windstream Communications. Alltel Corp. will remain a separate business focused on providing wireless services. Generally, Wireline-related assets will be spun off with the Alltel Wireline, including: * the directory business; * the competitive local exchange carrier operation; * the Internet access business; and * certain other support businesses. The long-distance operations will be retained by the wireline business, other than the fiber backbone supporting those operations and the revenues attributable to the wireless business' use of the fiber backbone. To bring about the spin-off, Alltel Wireline will issue common stock and distribute approximately $1.7 billion of notes (the exchange notes) to Alltel Corp. Alltel Wireline will also assume $181 million of local exchange subsidiary debt (net of $81 million to be refinanced after the merger) issued by Alltel Georgia and Alltel Communications Midwest. Alltel Wireline will then pay a special dividend of $2.275 billion to Alltel. Alltel Wireline's merger with Valor will take place immediately after Alltel distributes the common stock of Alltel Wireline to its shareholders. Following the merger, Alltel shareholders will own 85% of the company and Valor shareholders 15%. Valor's shareholders still need to approve the transaction, and the shareholder meeting is expected to take place on June 27, 2006. Windstream is expected to have up to $3.3 billion in available credit facilities, including a $500 million five-year revolving facility and up to $2.8 billion in term credit facilities. The company also plans to issue $800 million in senior notes. The credit facilities and notes will be used: * to pay the $2.275 billion dividend; * to refinance the $783 million outstanding on Valor's bank facility; and * to refinance a potential offer for Valor's $400 million in outstanding senior notes. Windstream will assume and guarantee equally and ratably with the credit facilities $400 million of outstanding Valor debt securities if they are not tendered to Windstream, and the availability of $400 million on the term credit facility will be terminated. Following the spin-off and merger, Windstream will be the second largest rural local exchange carrier and the sixth largest local exchange carrier in the U.S. The company will have at closing approximately 3.4 million access lines in 16 states, with about two-thirds of its access lines concentrated in the states of: * Georgia, * Kentucky, * Texas, * Ohio, and * Nebraska. Annual revenues are expected to approximate $3.4 billion. Fitch's rating incorporates expectations for Windstream to generate strong operating cash flows and to have access to ample liquidity. Fitch expects Windstream to pay out approximately 70% of its net free cash flow as dividends to common shareholders. The remaining free cash flows are expected to be used to maintain a relatively stable leverage ratio, with debt to EBITDA in the 3.2x to 3.3x range. Liquidity is also supported by the company's $500 million revolving credit facility, which will be in place until July 2011. Debt maturities in the next several years are expected to be nominal. Fitch believes that the company's rural footprint provides it with modestly lower exposure to competition than the urban-based regional Bell operating companies. The company indicated that it will have approximately 25 access lines per square mile, which compares favorably to the non-rural carrier average of 128 access lines per square mile. Concerns regarding Windstream include its dependence on voice service revenues. Fitch expects the company will continue to experience pressure on its cash flow from competition for its core voice services from technology substitution, including from wireless and cable operators. Cable operators are expected to materially increase their potential addressable market for voice services in Windstream's operating territory in 2006 and 2007, which could cause an acceleration of access line losses. Windstream is expected to mitigate this pressure through the growth in revenue from new services, including the continued deployment of high speed data services, and by bundling its voice services with data, wireless and video services. The company currently has an agreement with Echostar Communications to offer its DISH network satellite television service and expects to enter into agreements to sell wireless services. In addition, the company will attempt to mitigate pressure on cash flow through cost controls and the realization of synergies arising from the combination of Alltel Wireline's business with Valor. Fitch believes that Windstream's expected dividend payout ratio is somewhat high for the industry as a whole, but in line with its expected low-growth profile and other rural carriers. The company is expected to have moderate financial flexibility and Fitch expects the company to initially reduce debt with excess cash flows. In the intermediate to longer term, Fitch believes the company has an interest in participating in the consolidation of the rural wireline market, subject to a rigorous set of criteria. As a mature business, capital expenditures are expected to be relatively flat. The company has no current plans to deploy a wireline-based video network, but will monitor developments in this area. Such a deployment could lead to an increase in capital spending. Fitch's Stable Rating Outlook reflects expectations for relatively flat leverage as produced by moderate declines in EBITDA and debt. On a pro forma basis, and including a projected $40 million in net synergies, Windstream's gross debt-to-operating EBITDA was 3.2x in 2005. In Fitch's view, leverage is expected to remain relatively stable for the foreseeable future, assuming the continued loss of access lines, partly offset by the company's growth initiatives. Factors causing Fitch to revise the Rating Outlook to Negative would include an acceleration in the rate of EBITDA erosion arising from greater than anticipated access line losses and/or cost pressures, and an increase in cash flowing to equity holders through dividends or stock repurchases in the absence of improvements in operating cash flows. WORLDCOM INC: Asks Court to Disregard Richard Drew's Objection -------------------------------------------------------------- WorldCom, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to: (a) disregard Richard Drew's opposition; (b) deny Class Certification; and (c) grant summary judgment in their favor. Michael J. Leahy, Esq., at Stinson Morrison Hecker LLP, in Omaha, Nebraska, asserts that Richard Drew did not comply with Local Bankruptcy Rule 7056-1 in submitting his opposition brief. Mr. Drew failed to respond to the Debtors' numbered statements of facts not in dispute. In addition, Mr. Drew did not present his own statement of facts, with citations to the record or evidence to support it. Thus, pursuant to the Local Rules, the Debtors' statement of facts is deemed admitted and uncontroverted. Mr. Drew purports to make statements questioning Andrew M. Graves' affidavit testimony, but it is clear Mr. Drew lacks any knowledge or foundation for those statements, Mr. Leahy maintains. Mr. Leahy contends that any request by Mr. Drew for class certification would be untimely. The first opportunity for a claimant to seek application of Rule 7023 of the Federal Rules of Bankruptcy Procedure would be after an objection is made to the proof of claim. The Debtors objected to Mr. Drew's claim in October 2004. However, Mr. Drew has never once asked the Court to apply Bankruptcy Rule 7023 to his claim. Moreover, Mr. Drew cannot use the "fraud on the market" theory to avoid the numerous individualized inquiries attendant to each potential class member's claim. The "fraud on the market" theory has been utilized in securities fraud cases, but has not been used in consumer fraud cases, Mr. Leahy points out. Mr. Drew Seeks to Withdraw Reference As reported in the Troubled Company Reporter on May 9, 2006, John E. Wall, Jr., Esq., in Dallas, Texas, argued the issue between the Debtors and Mr. Drew is not a core proceeding. Rather, it is a proceeding where Mr. Drew is attempting to recoup overcharges to subscribers who were defrauded, and for the United States Government, who was defrauded if all the revenue generated and billed was not paid to the FCC/USF. Pursuant to Section 157 of the Judiciary and Judicial Procedures Code provides that a District Court may withdraw, in whole or in part any case referred to in that Section, for cause shown. Accordingly, Mr. Drew asked the Bankruptcy Court to withdraw the reference and transfer the case to the U.S. District Court for the Northern District of Texas, Dallas Division. Mr. Drew has demanded a jury trial, Mr. Wall maintains. Moreover, the Debtors' request is premature, Mr. Wall contends. "[Mr.] Drew has attempted to engage in discovery regarding the class, which discovery has been thwarted by the [Debtors] . . . [The Debtors have] refused to provide any discovery regarding the class identity, class damages and class commonality." Mr. Wall also contended that the Debtors did overcharge Mr. Drew. Mr. Wall pointed out that: * in initial disclosures, Mr. Graves was never identified as a person with knowledge of relevant facts. Thus, he cannot testify; * neither the Federal Universal Service Fee nor the Filed Tariffs authorized the Debtors to charge 6% of the plan fee, nor of the NAF. Thus, Mr. Drew and others were overcharged; * it is clear that either Class Certification should occur, or an alternative claim of a violation of the Federal False Claim Act should be brought. Contrary to the Debtors' suggestion, the case is susceptible to a Class Certification for fraud in light of the "fraud on the market" theory. Mr. Drew asked the Court to deny the Debtors' request for summary judgment. 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 $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 118; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- AFC Enterprises AFCE (44) 176 31 Abraxas Petro ABP (22) 125 (6) Accentia Biophar ABPI (9) 39 (19) 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) Empire Resorts I NYNY (28) 57 (5) 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. IEDU (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) Movie Gallery MOVI (171) 1,248 (843) NPS Pharm Inc. NPSP (129) 287 212 New River Pharma NRPH 3 96 82 Omnova Solutions OMN (15) 360 65 ON Semiconductor ONNN (224) 1,211 251 Qwest Communication Q (3,060) 21,126 (923) 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 (33) 143 19 USG Corp. USG (496) 6,522 1,956 Unigene Labs Inc. UGNE (7) 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. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero Jainga, Joel Anthony G. Lopez, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***