/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060615.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, June 15, 2006, Vol. 10, No. 141 Headlines A.B. DICK: Confirmation Hearing Scheduled for July 19 ABRAXAS PETROLEUM: Mar. 31 Balance Sheet Upside-Down by $22 Mil. ADVANCED BEAUTY: Sells Assets to CirTran Corp. for $2.3 Million AFFILIATED COMPUTER: Initiates $1 Billion Share Repurchase Program AIRLIE CLO: Moody's Puts Ba2 Rating on $8 Million Class D Notes AIRWAY INDUSTRIES: Has Until June 29 to Decide on Three Leases ALLIED PRINTING: Court Says Printing Equipment Deal Is a Lease ATA AIRLINES: Court Confirms C8 Airlines' Amended Liquidation Plan BABSON CLO: Moody's Rates $12.1 Mil. Class E Junior Notes at Ba2 BAKER & TAYLOR: S&P Puts B- Rating on Proposed $200 Million Notes BAYOU GROUP: Hires Trumbull Group as Claims and Noticing Agent BROOKS SAND: Ch. 11 Trustee Hires J. Bruce Miller as Counsel CATHOLIC CHURCH: Portland Asks Court to Approve Estimation Method CATHOLIC CHURCH: Portland, Tort Panel Disagrees on Trial Schedules CE GENERATION: S&P Places Sr. Secured Notes' BB- Rating on Watch CG MULTIFAMILY: Case Summary & 10 Largest Unsecured Creditors CIRTRAN CORP: Buys Advanced Beauty Assets for $2.3 Million COLLINS & AIKMAN: Plan-Filing Deadline Moved to July 29 COLLINS & AIKMAN: Resolves to Wind Down Fabrics Business COLLINS & AIKMAN: Wants to Reject Forklift Leases with Toyota CONGOLEUM CORP: Compliance Plan Prompts Amex to Continue Listing CRUISECAM INT'L: David Hall Raises Going Concern Doubt DANA CORPORATION: Court Approves Toledo Press Settlement Pact DANA CORPORATION: Tonie Smith Wants Stay Lifted to Pursue Damages DANA CORPORATION: Wants To Enter Into Spicer Share Purchase Pact DELPHI CORP: Court Approves License Pact with Denso Corporation DELPHI CORP: Inks Transfer Pact for New Brunswick Plant DELPHI CORP: Judge Drain Adjourns CBA Rejection Hearing DELTA FUNDING: Moody's Lowers Rating on Class B-1F Certs. to B3 DRESSER RAND: Moody's Lifts Rating on Sr. Bank Debt to Ba3 from B1 DURATEK INC: EnergySolutions Merger Cues S&P to Withdraw Ratings ELINE ENT: Posts $10,421 Net Loss in 2006 1st Fiscal Quarter EMERITUS CORP: Reports $105 Mil. Shareholder's Deficit at March 31 ENVIRONMENTAL LAND: Secured Creditor Files Liquidating Ch. 11 Plan ERICO INT'L: Improved Performance Cues S&P to Lift Rating to BB- EXIDE TECH: Court Amends Exide Illinois' Fine Payment Schedule EXIDE TECHNOLOGIES: Government Wants Administrative Claim Paid FEDDERS CORP: Posts $8.8 Million Net Loss for First Quarter 2006 FRESH DEL MONTE: S&P Holds BB Rating and Revises Outlook to Neg. GENERAL MOTORS: S&P Maintains Neg. Watch on B Corp. Credit Rating GRACE INDUSTRIES: Auctioning Assets on June 27 GRANITES VENTURES: Moody's Rates $7 Million Class D Notes at Ba2 GREAT COMMISSION: Files Schedules of Assets and Liabilities GSC PARTNERS: Moody's Puts Ba2 Rating on $22MM Class 1 Securities HARRY FERRYMAN: Case Summary & 7 Largest Unsecured Creditors HEATING OIL: Connecticut Court Confirms Plan of Reorganization HIGHWOODS REALTY: Moody's Affirms Senior Debt Rating at Ba1 HOUSTON EXPLORATION: Jana's Takeover Bid Cues S&P's Negative Watch HOWARD MILLS: Case Summary & 5 Largest Unsecured Creditors ICOS CORP: Balance Sheet Upside-Down by $50.9 Million at March 31 INTERPUBLIC GROUP: Fitch Assigns B Rating to $750 Million Notes INTREPID TECH: Amends 2006 Financial Statements J.L. FRENCH: Creditors Unanimously Approve Plan of Reorganization JERRY WILLIAMS: Case Summary & 17 Largest Unsecured Creditors KAISER ALUMINUM: Court Signs Order Reducing Bonneville Claims KAISER ALUMINUM: Wants Zurich Insurance Settlement Pact Approved KING ELECTRICAL: Case Summary & 14 Largest Unsecured Creditors KOOSHAREM CORP: Moody's Rates Planned $300 Million Debt Deal at B2 KRISPY KREME: Sees Revenue Decline in Fiscal 2006 First Quarter LASER DENTISTRY: Voluntary Chapter 11 Case Summary MAJESTIC STAR: S&P Places B+ Corporate Credit Rating on Neg. Watch MARSH SUPERMARKETS: Board Opposes Cardinal Group's Purchase Bid MAVERICK TUBE: To Sell Assets to Tenaris S.A. for $3.185 Billion MAVERICK TUBE: Moody's Holds B2 Rating on $250 Mil. Sr. Sub. Notes MESABA AVIATION: Court Extends Lease Decision Period to Dec. 10 MT WILSON: Moody's Puts Ba2 Rating on $6.9 Mil. Class E Notes NELLSON NUTRACEUTICAL: Can Hire Seneca as Valuation Advisor NORTH END: Voluntary Chapter 11 Case Summary O'SULLIVAN IND: Reports 2nd Quarter Results for Fiscal Year 2006 OWENS CORNING: Financial Projections Underpinning 6th Amended Plan OWENS CORNING: Liquidation Analysis Under 6th Amended Ch. 11 Plan OWENS CORNING: Valuation Analysis Under Sixth Amended Ch. 11 Plan PACIFIC ENERGY: Sells Assets to Plains All for $2.4 Billion PACIFIC ENERGY: Moody's Places Ba2 Corp. Family Rating on Review PARMALAT USA: Court Approves Pact Disallowing 4 New Jersey Claims PARMALAT USA: Court Extends Preliminary Injunction to Sept. 15 PARMALAT USA: Minguito Estate Wants Disallowed Claim Reconsidered PAUL WYATT: Case Summary & 17 Largest Unsecured Creditors PROSOFT LEARNING: VCampus Completes $2.1 Million Acquisition RBS GLOBAL: Moody's Cuts Corporate Family Rating 1 Notch to B2 REFCO INC: Examiner Can File Status Report Under Seal REFCO INC: Walks Away From CIT Equipment Lease RICHARD DRAUGHON: Case Summary & 14 Largest Unsecured Creditors RISK MANAGEMENT: Court Confirms Liquidating Chapter 11 Plan ROCKWELLS RESTAURANT: Case Summary & 18 Largest Unsec. Creditors RURALMETRO CORP: March 31 Balance Sheet Upside-Down by $94 Mil. SAFETY KLEEN: Moody's Rates Proposed Sec. Credit Facilities at B1 SAINT VINCENTS: Can Assign Unexpired Staten Leases to Castleton SAINT VINCENTS: Staten Hospital Sale Hearing Set for July 24 SEA CONTAINERS: To Pay $16.3MM to GE SeaCo for Breach of Contract SEA CONTAINERS: Further Delays 10-K Filing & Remains on Default SEA CONTAINERS: Selling Silja Oy to Tallink Group for $594 Mil. SIERRA PACIFIC: Fitch Affirms B+ Senior Unsecured Debt Rating SILICON GRAPHICS: Court Approves Equity Trading Restrictions SILICON GRAPHICS: Will Honor Prepetition Taxes & Fees SITEWORKS: Posts $730,248 Net Loss in 1st Fiscal Quarter of 2006 SLATER STEEL: Court Closes Ch. 11 Cases After Plan Consummation SOLUTIA INC: Equity Panel Says Disclosure Statement is Inadequate SOLUTIA INC: Judge Defers Disclosure Statement Hearing to June 20 SPECIALTYCHEM PRODUCTS: Case Summary & 20 Largest Unsec. Creditors SPECTRUM BRANDS: Bank Facility Revision Cues S&P to Hold B- Rating STRIKEFORCE TECH: Massella & Associates Raises Going Concern Doubt TITANIUM METALS: Earns $58.8 Million in Quarter Ended March 31 TNT RESOURCE: Case Summary & 11 Largest Unsecured Creditors TRANS-ACTION: Court Dismisses Ch. 11 Case After Plan was Filed US AIRWAYS: Executives Plan to Exercise Options and Sell Stock VENTURE HOLDINGS: Chapter 7 Trustee Hires Akin Gump as Co-Counsel VERITAS CLO: Moody's Puts Ba2 Rating on $9.5MM Class E Notes VITESSE CLO: Moody's Puts Rating on $17MM Class B-2L Notes at Ba3 VULCAN ENERGY: Pacific Merger Prompts S&P to Affirm BB Rating WARNER CHILCOTT: Initial Public Offering Spurs S&P's CreditWatch WEIGHT WATCHERS: S&P Rates $850 Mil. Sr. Sec. Bank Facility at BB+ WERNER LADDER: Organizational Meeting Scheduled for June 22 WORLDCOM INC: Argues Seinfeld Lacks Standing to Pursue Claim WORLDCOM: Says It Obtained Licensing Rights to Use HUB Program WORLDCOM: Seeks Summary Judgment on Access & Division 1's Claim * Guicho Pons Joins A&M Real Estate Advisory Services as Director * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* A.B. DICK: Confirmation Hearing Scheduled for July 19 ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will hold a hearing on July 19, 2006, to consider confirmation of the Liquidating Plan of Reorganization filed by A.B. Dick Company, nka Blake of Chicago, Corp., and its debtor-affiliates. Objections to plan confirmation must be received by June 30, 2006, by: Bankruptcy Clerk U.S. Bankruptcy Court for the District of Delaware 824 North Market Street, Third Floor Wilmington, Delaware A copy of the written objection must be served on: (1) Debtors' counsel Dechert LLP Attn: H. Jeffrey Schwartz 30 Rockefeller Center New York, New York 10112 (2) counsel to the Official Committee of Unsecured Creditors McGuire Woods Attn: James Joseph 625 Liberty Avenue, 23rd Floor Pittsburgh, Pennsylvania 15222 (3) U.S. Trustee Office of the United States Trustee 844 King Street, Suite 2207 Wilmington, Delaware 19801 Ballots must be received by the Debtors' Balloting Agent by July 10, 2006: Trumbull Group P.O. Box 721 4 Griffin Road North Windsor, Connecticut 060695 Terms of the Plan The Plan provides for the transfer of the Debtors' cash and other remaining assets, including all causes of action and avoidance claims, to liquidating trusts that will be formed for the benefit of holders of unsecured and subordinated claims. The Blake Liquidating Trust will be set-up to handle claims against Blake of Chicago. The Paragon Liquidating Trust will be set-up to handle claims against Paragon Corporate Holdings, Inc. As reported in the Troubled Company Reporter on Nov. 8, 2004, Presstek, Inc., bought substantially all of the Debtors' assets for $40 million. The Debtors are still in the process of selling their remaining assets including a facility in Rexdale, Ontario. Proceeds from the sale of Blake's assets will be used to satisfy claims against Blake's estate. Proceeds from the sale of Paragon's assets will be used to satisfy Paragon's claims. Holders of unsecured claims against Blake, owed $23,250,000, are projected to recover 25.8% of their claims. Subordinated claim holders will get any cash left over after unsecured claims are fully satisfied. Holders of Blake equity interests get nothing under the Plan. Holders of unsecured claims against Paragon, owed $6,974,000, are projected to recover 1.35% of their claims. Subordinated claim holders will get any cash left over after unsecured claims are fully satisfied. Holders of Paragon equity interests get nothing under the Plan. The Liquidating Trust will delegate the obligation to recover preference and fraudulent transfers and other recoverable assets to an oversight committee. The Oversight Committee will be composed of members of the Official Committee of Unsecured Creditors, plus any members the Court may appoint. Headquartered in Niles, Illinois, A.B. Dick Company -- http://www.abdick.com/-- is a global supplier to the graphic arts and printing industry, manufacturing and marketing equipment and supplies for the global quick print and small commercial printing markets. The Company, along with its affiliates, filed for chapter 11 protection (Bankr. D. Del. Lead Case No. 04-12002) on July 13, 2004. Frederick B. Rosner, Esq., at Jaspan Schlesinger Hoffman, LLP, and H. Jeffrey Schwartz, Esq., at Benesch, Friedlander, Coplan & Aronoff, LLP, represent the Debtors in their restructuring efforts. Richard J. Mason, Esq., at McGuireWoods, LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed over $50 million in estimated assets and over $100 million in estimated liabilities. A.B. Dick Company changed its name to Blake of Chicago, Corp., on Dec. 8, 2004, as required by the terms of the APA with Presstek. The Debtors delivered their Liquidating Plan of Reorganization and an accompanying Disclosure Statement explaining that Plan to the U.S. Bankruptcy Court for the District of Delaware on Feb. 10, 2005. ABRAXAS PETROLEUM: Mar. 31 Balance Sheet Upside-Down by $22 Mil. ---------------------------------------------------------------- At March 31, 2006, Abraxas Petroleum Corporation's balance sheet showed total stockholders' deficit of $21,842,000 out of $124,852,000 in total assets and $146,694,000 in total liabilities. Abraxas's balance sheet also showed strained liquidity with $9,927,000 in total current assets and $15,989,000 in total current liabilities. The Company also earned $1,220,000 of net income on $13,305,000 of revenues for the three months ended March 31, 2006. A full-text copy of Abraxas Petroleum's quarterly report is available for free at http://researcharchives.com/t/s?b48 Headquartered in San Antonio, Texas, Abraxas Petroleum Corp -- http://www.abraxaspetroleum.com/-- is an independent natural gas and crude oil exploitation and production company with operations concentrated in Texas and Wyoming. Abraxas was founded in 1977 and is publicly traded on the American Stock Exchange under the ticker symbol "ABP". ADVANCED BEAUTY: Sells Assets to CirTran Corp. for $2.3 Million --------------------------------------------------------------- CirTran Corporation (OTCBB:CIRT) closed and received court approval of a transaction with Advanced Beauty Solutions, LLC of Los Angeles, to purchase certain of Advanced Beauty's assets for approximately $2,310,000. Iehab J. Hawatmeh, CirTran's founder and President, said an agreement was signed last week for CirTran to purchase virtually all of Advanced Beauty's assets, including flat iron and hair dryer kits marketed and sold via TV infomercials. Mr. Hawatmeh said that on June 7, the U.S. Bankruptcy Court adjudicating the bankruptcy proceedings of Advanced Beauty entered an order which approved the asset purchase, including the sale to CirTran of Advanced Beauty's product inventory, intellectual property, customer lists, a 30-minute infomercial, and trade secrets. In exchange for the assets it acquired, CirTran will pay Advanced Beauty $1,125,000 in cash at closing, and will reduce its approved claim in the bankruptcy against ABS by $750,000. In addition, CirTran will pay the balance of the $2.3 million -- $435,000 in all -- to ABS as a guaranteed royalty over two years, based on royalty of $3 per True Ceramic Pro flat iron sold by CirTran. CirTran - Advanced Beauty Agreement In January 2005, CirTran signed an exclusive manufacturing agreement with Advanced Beauty, a California limited liability company, relating to the manufacture of a flat iron hair product, and in July 2005, CirTran signed another exclusive manufacturing agreement with Advanced Beauty relating to the manufacture of a hair dryer kit. In early October 2005, CirTran was notified that Advanced Beauty had defaulted on obligations to its financing company, and, following the notice of ABS's default, CirTran terminated both agreements. In January 2006, following efforts to resolve the situation, CirTran sued Advanced Beauty, claiming breach of contract, interference with contractual relationships, unjust enrichment, and fraud, seeking damages from Advanced Beauty. Through October 2005, CirTran had shipped approximately $4,746,000 worth of flat iron product to Advanced Beauty, for which it had received total payments of approximately $788,000. In November 2005, CirTran repossessed approximately $2,341,000 worth of the products from Advanced Beauty in the U.S., as it was permitted to do pursuant to the agreement. Since November -- and until Advanced Beauty filed for bankruptcy protection -- Mr. Hawatmeh said his company was pursuing its rights under the agreements, including offering flat iron product for sale directly to Advanced Beauty's customers. In so doing, CirTran sold approximately $426,000 of product directly to Advanced Beauty's international customers, with all shipments paid in full. In January 2006, Advanced Beauty filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code. The orders entered by the Bankruptcy Court included approval of the sale of Advanced Beauty's assets to CirTran as well as resolutions and settlements of other aspects of the Advanced Beauty Solutions Bankruptcy. Entering the Beauty Products Business "Advanced Beauty had been one of CirTran's largest customers, and the failure of its business was a major cause of our not showing an anticipated profit for the final quarter of fiscal 2005 or for the fiscal year," Mr. Hawatmeh said. "With this interruption in our business and business plan now history, CirTran is moving forward to market and sell products originally built for Advanced Beauty through other sources, including our own sales organization, which hopefully will lead to manufacturing more of this traditionally-popular consumer line." Mr. Hawatmeh said the acquisition of assets from Advanced Beauty marked CirTran entrance into the multi-billion dollar worldwide beauty products industry, where Advanced Beauty, prior to its failure, had generated a total of more than $30 million in revenue over the past five quarters. "CirTran has the product, the ability to design and manufacture new product as needed, the customer lists and contacts, the infomercials, and now with our media and talent groups, the wherewithal to move the product directly to consumers," he said. "We believe that what started as adversity with the failure of ABS as a customer will result in a new and exciting profit center and opportunity for our company and its shareholders." About CirTran Corporation Founded in 1993, CirTran Corp. -- http://www.CirTran.com/-- is a premier international full-service contract manufacturer of low to mid-size volume contracts for printed circuit board assemblies, cables and harnesses to the most exacting specifications. Headquartered in Salt Lake City, CirTran's modern 40,000-square-foot non-captive manufacturing facility -- the largest in the Intermountain Region - provides "just-in-time" inventory management techniques designed to minimize an OEM's investment in component inventories, personnel and related facilities, while reducing costs and ensuring speedy time-to-market. About Advanced Beauty Solutions Advanced Beauty Solutions, LLC, filed for chapter 11 protection on January 24, 2006 (Bankr. C.D. Calif. Case No. 06-10076). James C. Bastian, Jr., Esq., at Shulman Hodges & Bastian LLP, represents the Debtor. When the Debtor filed for protection against its creditors, it estimated assets and debts between $1 million and $10 million. AFFILIATED COMPUTER: Initiates $1 Billion Share Repurchase Program ------------------------------------------------------------------ Affiliated Computer Services, Inc., disclosed that the Company's Board of Directors authorized a share repurchase program of up to $1 billion of its Class A common stock effective immediately. At the current stock price, this program represents about eighteen percent of ACS' total common shares currently outstanding. The program, which is open-ended, will allow the Company to repurchase its shares on the open market, from time to time, in accordance with the requirements of the Securities and Exchange Commission, including shares that could be purchased pursuant to Rule 10b5-1. The number of shares to be purchased and the timing of purchases will be based on the level of cash and debt balances, general business conditions, and other factors, including alternative investment opportunities. About Affiliated Computer Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to commercial and government clients. * * * As reported in the Troubled Company Reporter on Feb. 16, 2006, Moody's Investors Service downgraded Affiliated Computer's existing notes rating to Ba2 from Baa3 and assigned a Ba2 corporate family rating and Ba2 ratings to the company's $5 billion bank credit facilities. Moody's also confirmed the Company's Baa3 senior unsecured bank credit facility rating and will withdraw the rating upon the consummation of the proposed financing package. As reported in the Troubled Company Reporter on Feb. 16, 2006, Standard & Poor's Ratings Services held its ratings for Affiliated Computer on CreditWatch, where they were placed with negative implications, on Jan. 27, 2006. Standard & Poor's said it will lower its corporate credit rating on the company to 'BB-' from 'BB+', if ACS materially completes the repurchase of $3.5 billion of the company's shares. The outlook will be stable. AIRLIE CLO: Moody's Puts Ba2 Rating on $8 Million Class D Notes --------------------------------------------------------------- Moody's Investors Service assigned ratings to six classes of notes issued by Airlie CLO 2006-1, Ltd. The collateral manager is Airlie CDO Capital Management L.P. Moody's Ratings: * Aaa to the $287,000,000 Class A-1 Senior Secured Floating Rate Notes, Due May 20, 2020; * Aa2 to the $16,000,000 Class A-2 Senior Secured Floating Rate Notes, Due May 20, 2020; * A2 to the $16,500,000 Class B Senior Secured Deferrable Floating Rate Notes, Due May 20, 2020; * Baa2 to the $31,000,000 Class C Senior Secured Deferrable Floating Rate Notes, Due May 20, 2020; * Ba2 to the $8,000,000 Class D Secured Deferrable Floating Rate Notes, Due May 20, 2020; and * Baa2 to the $4,000,000 Composite Notes, Due May 20, 2020. Moody's stated that the ratings of these notes address the ultimate cash receipt of all interest and principal payments required by the governing documents and are based on the expected losses posed to holders of notes relative to the promise of receiving the present value of such payments. Moody's rating assigned to the Composite Notes only addresses the ultimate receipt by the holders of the Rated Balance. The ratings do not address any other payments that may be receivable by such holders. AIRWAY INDUSTRIES: Has Until June 29 to Decide on Three Leases -------------------------------------------------------------- The Honorable Judith K. Fitzgerald of the U.S. Bankruptcy Court for the Western District of Pennsylvania extended, until June 29, 2006, the period within which Airway Industries, Inc., can assume, assume and assign or reject these leases: Non-Debtor Party Lease ---------------- ----- BRT Enterprises Building Lease for 6990 Haigh Street Orland, California Orland, CA 95963 dated November 25, 1997; First Amendment to and Extension of Lease dated July 15, 1998 Bruce Weiner Family Ltd. Partnership Building Lease for 930 Beaver Avenue Ellwood City, PA; Ellwood City, PA 16117 Amendment of Lease; and Amendment and Extension of Lease all dated February 12, 1996 Data Micro, Inc. Building Lease for 267 Matheson Boulevard, East Mississauga Unit 1 Missassauga, Ontario Canada L4Z 1X8 As reported in the Troubled Company Reporter on June 13, 2006, the Debtor needs to hold on to the leases until June 29 pursuant to an agreement with TravelPro International, Inc., the purchaser of substantially all of its assets. Under the terms of the sale, TravelPro is entitled to occupy the leased properties until June 29. The Debtor also continues to occupy portions of the Leased Real Property for purposes of the wind down of its business but it will not need to do so after June 29. Headquartered in Ellwood City, Pennsylvania, Airway Industries, Inc. -- http://www.atlanticluggage.com/-- manufactures suitcases, garment bags, briefcases and other travel products and accessories. The Company filed for chapter 11 protection on Jan. 20, 2006 (Bankr. W.D. Pa. Case No. 06-20224). Joel M. Walker, Esq., at Duane Morris LLP represents the Debtor in its restructuring efforts. The U.S. Trustee appointed the Official Committee of Unsecured Creditors on Feb. 6, 2006. George Angelich, Esq., at Arent Fox PLLC, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. ALLIED PRINTING: Court Says Printing Equipment Deal Is a Lease -------------------------------------------------------------- The Honorable Jerry A. Funk was called on to decide whether agreement between Creo Financial Services (a Financing Program of Fleet Business Credit, LLC) and Allied Printing, Inc., is a financing agreement or a true lease. If it's a financing agreement, Fleet wants adequate protection payments under 11 U.S.C. Sec. 361 to compensate it for diminution in the value of two pieces of equipment (a Lotem 800 Quantum and a Trendsetter 800 Quantum) used to make printing plates. If it's a lease, Fleet wants the Debtor to decide under 11 U.S.C. Sec. 365 whether to assume, assume and assign, or reject the agreement. Fleet says the deal is a true lease. The Debtor says the deal is a disguised financing transaction. The document evidencing the agreement is called a "Master Lease Agreement" and requires 48 monthly payments of $17,207.74. The Debtor's two principals guaranteed Allied Printing's obligations. Creo is the manufacturer of the Equipment. Brian Erwin, a market development manager for Creo remanufactured systems whose primary responsibility is monitoring sales and marketing of used Creo equipment, testified as an expert witness on behalf of Fleet. Mr. Erwin testified that as long as the Equipment is maintained, it should last eight to ten years. Judge Funk decided to use the eight-year estimate. Mr. Erwin testified that as of April, 2007, the Lotem will have an $80,769 value and the Trendsetter 800 will have a value of $106,047. Fleet disclaimed all warranties under the agreement and the Debtor is responsible for the risk of loss of the equipment and is required to pay insurance and taxes on the Equipment. In the event Debtor defaults on its payment and other obligations. Fleet has the right to accelerate all payments due under the agreement, remove and sell the Equipment, and hold the Debtor and guarantors responsible for any deficiency. At the end of the lease term the Debtor may: 1) return the Equipment to Fleet; 2) "extend the Lease term at the then fair rental value for an extension term the length of which shall be determined by agreement between [Debtor] and [Fleet] but in no case shall be less than four (4) months"; or 3) "purchase all of the [Equipment] for cash at the [Equipment]'s then fair market value. In the event Debtor does not renew, it is responsible for the cost of de-installing, shipping and refurbishing the Equipment. Mr. Erwin estimated that the total cost to de-install, ship, and refurbish the Lotem and the Trendsetter is approximately $58,000. In a decision published at 2005 WL 3947958, 19 Fla. L. Weekly B175, Judge Funk finds that under Florida law the transaction created a lease because Fleet retained a meaningful reversionary interest in the equipment. Thus, the debtor is required to assume or reject the agreement prior to confirmation of a chapter 11 plan. Headquartered in Jacksonville, Florida, Allied Printing -- http://www.alliedgraphics.net/-- provides printing services specializing in high quality color lithography. The company filed for chapter 11 protection on July 2, 2004 (Bankr. M.D. Fla. Case No. 04-06812). Earl M. Barker, Jr., Esq., at Slott & Barker represents the Debtor. When Allied Printing filed for protection from its creditors, it listed $3,373,230 in total assets and $6,099,485 in total debts. ATA AIRLINES: Court Confirms C8 Airlines' Amended Liquidation Plan ------------------------------------------------------------------ The Hon. Basil H. Lorch III of the U.S. Bankruptcy Court for the Southern District of Indiana confirmed C8 Airlines, Inc.'s Second Amended Plan of Liquidation dated April 13, 2006. The Court held that the Plan satisfied the 13 statutory requirements under Section 1129(a) of the Bankruptcy Code. Judge Lorch confirmed the plan on June 6, 2006. The Second Amended Plan, among others, provides for: (1) the inclusion of the ATSB Lender Parties and BearingPoint, Inc., as Loan Administrator under the ATSB Loan agreement, in the "Exculpation and Limitation of Liability" provision of the Plan; and (2) the addition of the ATSB Lenders as a consent party in the "Conditions to Confirmation" provision. More than two-thirds of C8's creditors under Class 2 - General Unsecured Claims voted to accept the Second Amended Plan: Votes (%) Amount (%) ----- --- ------ --- Accepted 66 92.96% $250,688,298.63 100% Rejected 5 7.04% $11,179.25 0% ----- ------ --------------- ---- Total 71 100% $250,699,477.88 100% Although C8's Balloting Agent received an aggregate of 79 votes, eight votes were excluded for reasons that the Ballots either: -- did not bear an original signature; -- did not indicate an acceptance or rejection of the Plan; or -- was received after the deadline. No votes were submitted in Class 1 - Other Priority Claims. C8's Liquidation Plan provides that C8 will pay Allowed Administrative Claims and Allowed Priority Tax Claims in Cash in full, but without interest. Allowed Professional Fee Claims will also be paid in Cash. Allowed Class 1 Other Priority Claims, on the other hand, will be paid in full from the Available Cash to the full extent permitted under Section 507(a) of the Bankruptcy Code, but without interest, while Allowed Class 2 General Unsecured Claims will be paid on a pro rata basis from recoveries of Avoidance Claims a total of the lesser of: (a) $1,000,000; or (b) one half of amounts, net of attorneys' and other professionals' fees and expenses, recovered through Avoidance Claims. No distributions will be made to Class 3. Equity Interests will be cancelled on the date C8's Chapter 11 case is closed. Additionally, the ATA Administrative Claim will not be paid in full due to insufficient funds. The Court's written order confirming C8's Second Amended Plan was not yet available as of press time. A black-lined copy of C8's Second Amended Plan is available for free at http://ResearchArchives.com/t/s?b63 About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago- Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. Daniel H. Golden, Esq., Lisa G. Beckerman, Esq., and John S. Strickland, Esq., at Akin Gump Strauss Hauer & Feld, LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 215/945-7000). BABSON CLO: Moody's Rates $12.1 Mil. Class E Junior Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned ratings to ten classes of notes issued by Babson CLO Ltd. 2006-I Moody's Ratings: * Aaa to the $194,600,000 Class A-1 Senior Notes, Due 2018; * Aaa to the $30,000,000 Class A-2 Senior Notes, Due 2018; * Aaa to the $150,000,000 Class A-2B Senior Delayed Draw Notes, Due 2018; * Aa1 to the $40,000,000 Class A-3 Senior Notes, Due 2018; * Aa2 to the $51,700,000 Class B Senior Notes, Due 2018; * A2 to the $27,600,000 Class C Deferrable Mezzanine Notes, Due 2018; * Baa2 to the $23,000,000 Class D Deferrable Mezzanine Notes, Due 2018; * Ba2 to the $12,100,000 Class E Deferrable Junior Notes, Due 2018; * Baa1 to the $14,000,000 Class Z Combination Notes Due 2018; and * Aa3 to the $10,000,000 Class P Notes Due 2018. The collateral manager is Babson Capital Management LLC. BAKER & TAYLOR: S&P Puts B- Rating on Proposed $200 Million Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Baker & Taylor Acquisition Corp. and a 'B-' rating to the company's proposed $200 million senior unsecured notes. The outlook is negative. "The senior notes are rated two notches below the corporate credit rating due to the potential significant amount of priority debt in the capital structure," said Standard & Poor's credit analyst Robert Lichtenstein. The notes will be issued under Rule 144A without registration rights. Proceeds from the notes offering, together with additional debt proceeds from a new bank loan (not rated), and equity contributions will be used to fund the purchase of the company by Castle Harlan Inc. The rating on Charlotte, North Carolina-based Baker & Taylor reflects the company's vulnerability to small changes in costs, given its narrow operating margin, customer concentration, and thin cash flow protection measures. Baker & Taylor is a leading distributor of books, music, and video to institutional and retail markets. The company distributes products from 36,000 suppliers to 38,000 customers in over 125 countries. The company is a leader in the stable library distribution market and has a growing presence in the fragmented retail distribution market. BAYOU GROUP: Hires Trumbull Group as Claims and Noticing Agent -------------------------------------------------------------- Bayou Group, LLC, and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ The Trumbull Group, LLC, as their claims, noticing, balloting, and disbursing agent. Trumbull Group is expected to: (a) prepare and serve required notices in the Debtors' chapter 11 cases, including: (i) a notice of the commencement of the Debtors' chapter 11 cases and the initial meeting of creditors under section 341(a) of the Bankruptcy Code; (ii) a notice of the claims bar date; (iii) notices of objections to claims; (iv) notices of any hearings on a disclosure statement and confirmation of a plan or plans of reorganization; and (v) other miscellaneous notices as the Debtors or Court may deem necessary or appropriate for an orderly administration of the Debtors' Chapter 11 cases. (b) within five business days after the service of a particular notice, file with the Clerk's Office a certificate or affidavit of service that includes: (i) a copy of the notice served, (ii) an alphabetical list of persons on whom the notice was served, along with their address, and (iii) the date and manner of service; (c) maintain copies of all proofs of claim and proofs of interest filed in the Debtors' cases; (d) maintain official claims registers in this case by docketing all proofs of claim and proofs of interest in a claims database that includes the these information for each such claim or interest asserted: (i) the name and address of the claimant or interest holder and any agent thereof, if the proof of claim or proof of interest was filed by an agent; (ii) the date the proof of claim or proof of interest was received by Trumbull or the Court; (iii) the claim number assigned to the proof of claim or proof of interest; and (iv) the asserted amount and classification of the claim; (e) implement necessary security measures to ensure the completeness and integrity of the claims registers; (f) transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; (g) maintain an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and make such list available upon request to the Clerk's Office or any party in interest; (h) provide access to the public for examination of the proofs of claim or proofs of interest filed in this case without charge during regular business hours; (i) record all transfers of claims pursuant to Bankruptcy Rule 3001(e) and provide notice of such transfers as required by Bankruptcy Rule 3001(e), if directed to do so by the Court; (j) comply with applicable federal, state, municipal, and local statues, ordinances, rules, regulations, orders, and other requirements; (k) promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; and (l) provide other claims processing, noticing, balloting, and relating administrative services as may be requested from time to time by the Debtors, including without limitation creating, maintaining, and servicing a website devoted exclusively to the Debtors' bankruptcy cases. The Debtors say that Trumbull will also assist them with, among other things: (a) the preparation of their schedules, statements of financial affairs, and master creditor lists, and any amendments thereto; (b) the reconciliation and resolution of claims; (c) the preparation, mailing, and tabulation of ballots of certain creditors for the purpose of voting to accept or reject a plan or plans of reorganization; and (d) the disbursement of funds to creditors. The Debtor asks the Court that the fees and expenses incurred by Trumbull be treated as an administrative expense. Documents filed with the Court did not state the total amount Trumbull will be paid for this engagement but the Debtor disclosed that it has already provided Trumbull with a $5,000 retainer. To the best of the Debtors' knowledge, Trumbull is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Chicago, Illinois, Bayou Group, LLC, operates and manages hedge funds. The company and its affiliates filed for chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No. 06-22306). Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BROOKS SAND: Ch. 11 Trustee Hires J. Bruce Miller as Counsel ------------------------------------------------------------ The Honorable Joan L. Cooper of the U.S. Bankruptcy Court for the Western District of Kentucky in Louisville allowed Kenneth C. Henry, the Chapter 11 Trustee of Brooks Sand & Gravel, LLC, to hire J. Bruce Miller, Esq., and his firm, J. Bruce Miller Law Group as his legal bankruptcy counsel, nunc pro tunc to April 24, 2006. The Trustee selected JBMLG as his legal counsel because of the firm's extensive experience and knowledge in litigation matters, including bankruptcy proceedings. The Trustee believes that JBMLG is well qualified and uniquely able to advise him in this Chapter 11 case in a most efficient and timely manner. JBMLG will: -- assist the Chapter 11 Trustee in connection with the management of litigation involving the Debtor; -- negotiate, analyze and address issues relative to the operation and liquidation of the Debtor's business; and -- perform other legal services necessary in the Debtor's bankruptcy case. Mr. Miller discloses that his firm's professionals bill: Designation Hourly Rate ----------- ----------- Members and Associates $250 to $295 Paralegals and Administrative Personnel $50 to $75 The Firm has not received any retainer from the Trustee in connection with this case. To the best of the Trustee's knowledge, the attorneys of JBMLG do not have any connection with the Trustee, the Debtor, its creditors, or any party-in-interest. Headquartered in Louisville, Kentucky, Brooks Sand and Gravel LLC leases an 184-acre sand reserve and processing plant in Bethlehem, Indiana, in Clark County and employs about 15 people. Smith Mining and Materials LLC owns a 226-acre limestone quarry in Brooks, Kentucky, in Bullitt County and employs about 25 people. Brooks Sand and Smith Mining filed for chapter 11 protection on Feb. 9, 2006 (Bankr. W.D. Ky. Case No. 06-30259). Dean A. Lang don, Esq., and Laura Day DelCotto, Esq., at Wise DelCotto PLLC represent the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. Judge Cooper approved the appointment of J. Bruce Miller as the Chapter 11 Trustee of Brooks Sand. CATHOLIC CHURCH: Portland Asks Court to Approve Estimation Method ----------------------------------------------------------------- The Archdiocese of Portland in Oregon asks the U.S. Bankruptcy Court for the District of Oregon to approve its methodology estimating present child sex abuse claims using multiple regression analysis. The multiple regression analysis will be performed by National Economic Research Associates, Inc. The Methodology is explained in Dr. Frederick C. Dunbar's report entitled "Methodology for Estimating Present Child Sex Abuse Claims against the Archdiocese of Portland in Oregon" dated May 31, 2006. A full-text copy of the NERA Report is available for free at http://researcharchives.com/t/s?b65 Thomas W. Stilley, Esq., at Sussman Shank LLP, in Portland, Oregon, relates that the NERA Methodology and the methodology the Archdiocese presented to the Court on November 15, 2005, address estimation issues identified by Judge Perris, including the lack of pertinent Oregon jury verdicts and the need for an estimation process that would not require mini-trials for every claim. Individualized Estimation Portland's Methodology, Mr. Stilley says, will result in an individual estimation of the Archdiocese's potential liability on each of the Unresolved Present Child Sex Abuse Tort Claims. The Analysis will be based on: * uncontroverted evidence previously submitted of the prepetition liquidation of child sex abuses tort claims in Portland's database; and * data to be compiled regarding the claim attributes of each individual tort claim. Jury Verdicts Issue Portland's Methodology provides two alternatives regarding the lack of Oregon jury verdicts for use in estimations of compensatory and punitive damages, Mr. Stilley informs the Court. In his report, Dr. Dunbar discusses that any additional jury value is already reflected in the liquidation in the database and no additional jury verdict information is necessary. The values are empirical data showing the full value of the claims derived in the tort system and should not be disregarded without clear proof to the contrary. Mr. Stilley says if the Court finds actual verdict information is necessary, the Archdiocese will undertake a survey of the Roman Catholic Dioceses in the United States to provide the jury verdict data, including: (1) number of total claims filed against a diocese; (2) number of jury verdicts, if any, and amounts of compensatory and punitive damages awarded; and (3) final resolution of any claim that resulted in a jury verdict, whether on appeal, by settlement or payment. Once the information is obtained, it will be factored into an equation to determine whether it has an effect on the estimated value of the present claims, Mr. Stilley says. Implementation Procedures Portland will commence collecting and providing data to implement the NERA Methodology, including: 1. obtaining claim attribute information for all Unresolved Present Child Sex Abuse Tort Claims in cases where the information has not been previously available to the Archdiocese. Portland has asked the Court to permit it to obtain the information through mini-depositions; or 2. to the extent it has not already been accomplished, collecting information regarding claims attributes from the Archdiocese's database for all Resolved and Unresolved Present Child Sex Abuse Tort Claims; and 3. designing and implementing a survey to collect data from all United States Dioceses. Mr. Stilley says the Archdiocese will complete the process of data collection including receipt of the survey information by the end of August 2006. Tort Panel Says Jury Awards Should Be Estimated The Official Committee of Tort Claimants in the Archdiocese of Portland in Oregon's Chapter 11 case asserts that estimation is unnecessary, will cause delay of the bankruptcy proceedings, and will incur additional estate expense. If estimation for purposes of distribution is allowed, it should be based on jury awards, Albert N. Kennedy, Esq., at Tonkon Torp, LLP, in Portland, Oregon, tells the U.S. Bankruptcy Court for the District of Oregon. According to Mr. Kennedy, the Archdiocese has produced evidence of jury awards in trials involving 20 survivors of priest abuse. Juries have awarded more than $156,000,000 to 20 plaintiffs. After post-judgment appeals and settlements, the 20 plaintiffs received compensation totaling $45,746,000, or an average of over $2,250,000 each. Hence, the ultimate recoveries ranged from $180,000 to over $3,000,000 each. Some cases involved punitive damages and some did not. Mr. Kennedy adds that there were two other jury trials involving claims of priest abuse against dioceses in the United States. In 1995, a jury awarded a survivor $737,000 in compensatory and punitive damages against the Diocese of Covington, Kentucky. In 1994, a jury awarded a survivor $1,519,000 in compensatory and punitive damages against the Diocese of Altoona in Johnstown, Pennsylvania. The purpose of any estimation for distribution should be to determine the Archdiocese's probable maximum total liability, Mr. Kennedy says. That will require consideration of both average jury awards and the range of jury awards. Because of the relatively small number of claims, the probability of a few very large jury awards must be considered and may have a major impact on the estimation of the probable maximum aggregate award, Mr. Kennedy notes. Several jury trials are scheduled in Portland's case. Mr. Kennedy says estimation of potential jury verdicts should be made only after several Oregon jury trials have been conducted. If estimation for the purposes of distribution is allowed, Mr. Kennedy points out that the estimation method should include: (a) available data on prior jury awards to survivors of priest abuse should be obtained; (b) several jury trials currently scheduled in Oregon should be concluded; and (c) the average and mean jury awards, together with the range of jury awards, should be considered in projecting the Archdiocese's probable maximum total liability. If the number of unresolved claims remains relatively high, then it may be appropriate to simply multiply the average or mean jury award by the number of claims, Mr. Kennedy says. If the number of unresolved claims declines to a small number, however, the possibility of a few large claims must be factored and given significant weight. The Tort Committee believes that individual claim characteristics are not helpful in projecting jury awards, Mr. Kennedy tells the Court. In the event that the Court estimates unresolved tort claims for distribution purposes, the Tort Committee asserts that an estimation of each unresolved claim at $2,250,000 will provide as much accuracy as any estimate costing hundreds of thousands of dollars and requiring months of litigation, Mr. Kennedy contends. The $2,250,000 estimation per claim would provide the Archdiocese with an upper limitation on its liability while protecting claimants' constitutional rights to a jury trial, Mr. Kennedy says. That estimation would be efficient and inexpensive. It will in no way impair the Archdiocese's potential to settle claims for a lower amount or pursue its right to trials by jury. Estimation Based on Settlements Moreover, if the Archdiocese wants to settle with known claimants, then it should settle with known claimants, Mr. Kennedy says. If a claimant does not wish to settle, then the claimant has a right to jury trial. Mr. Kennedy contends that historical settlement information is irrelevant if estimation will be used to cap tort liability. Historical settlement data is irrelevant because: (1) the Archdiocese is not offering to settle claims; (2) settlements do not cause undue delay; (3) the claims to be estimated have not, in fact, been settled; and (4) use of historic settlement data to cap liability will violate due process. For these reasons, the Tort Committee asks the Court to deny the Archdiocese's request for estimation. In the alternative, the Tort Committee asks the Court to base the estimation for distribution purposes on jury awards. 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. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) CATHOLIC CHURCH: Portland, Tort Panel Disagrees on Trial Schedules ------------------------------------------------------------------ At Judge Elizabeth L. Perris' direction, Margaret Hoffmann, Esq., at Schwabe, Williamson & Wyatt, PC, counsel for the Archdiocese of Portland in Oregon, and Erin K. Olson, Esq., counsel for certain tort claimants, met to work on a proposed trial schedule. The parties, however, could not come to an agreement. Portland wants the U.S. Bankruptcy Court for the District of Oregon to consider: (1) priority for cases involving an accused who is alive, elderly and in poor health. The cases involved are: Plaintiff Defendant --------- --------- Rossman Fr. Chester Faherty Dolores Price, a former nun Searls, Boaz, Clemens, Farris, Slaney, Masso, Bauer, G. Windom and W. Windom Fr. Durand Hill Frs. Kies and John Doe Nancy Hannon Fr. Alvares and Jean Frolick (2) that the Archdiocese cannot be in two trials at the same time; and (3) consolidation of cases. All cases, except for Hannon's case, were filed prepetition. Ms. Hoffman says Hannon's case was filed in January 2006 and several depositions have already been taken. Ms. Hoffman explains that the Archdiocese cannot proceed in simultaneous trials because of its limited staff. In addition, if the cases are not consolidated, the trial court will need to stack cases. The Tort Claimants, according to Ms. Olson, want the trial to proceed in another way. "While we are sympathetic to the [Archdiocese's] desire to try cases in which the accused is alive, the tort claimants also include those who are elderly, ill [or] infirm, and there are numerous witnesses we will call who are similarly fragile," Ms. Olson says. "While we would prefer with those cases first, we recognize that fairness to other tort claimants requires a different approach." Ms. Olson provided the Court with a list of cases to be tried beginning September 2006 through October 2008. The Claimants' proposed trial schedule is available for free at: http://researcharchives.com/t/s?b66 Portland's Statement on Trial Schedule The Archdiocese of Portland has resolved dozens of claims through the bankruptcy process by way of settlement or by dismissal and disallowance. We are interested in bringing about reasonable resolution, reconciliation, and healing in those cases that involve valid claims. In cases that cannot be resolved reasonably, we are prepared to defend, including trials if necessary. This is part of the ongoing process to attempt to achieve a fair, just and final resolution of this difficult situation, so that the Archdiocese can focus entirely upon its religious and charitable mission to serve the faithful and those in need in western Oregon. 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. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) CE GENERATION: S&P Places Sr. Secured Notes' BB- Rating on Watch ---------------------------------------------------------------- Standard & Poor's placed its 'BB-' rating on CE Generation LLC's senior secured notes ($355.4 million outstanding as of March 31, 2006) and its 'BB+' rating on Salton Sea Funding Corp.'s senior secured bonds series C, E, and F ($269.7 million outstanding as of March 31, 2006) on CreditWatch with positive implications. Both ratings were placed on positive outlook on July 26, 2005, primarily reflecting the strong short-run avoided cost price trends in California. The ratings are now placed on CreditWatch with positive implications following the amendments to the power purchase agreements that the projects in Salton Sea's geothermal portfolio have entered into with Southern California Edison. The amendments, subject to the approval of the California Public Utilities Commission, will result in an increase in the SRAC price, the energy price under the power purchase agreements, to 6.15 cents per kilowatt-hour from May 1, 2007, to April 30, 2012, escalated 1% annually. "This settlement strengthens cash flows at Salton Sea and provides Salton Sea with more certainty, improved coverages, and may permit a higher rating," Standard & Poor's credit analyst Swami Venkataraman said. "The settlement also strengthens cash flows at CE Generation since distributions from Salton Sea are subject to a 1.5x debt service coverage test." Salton Sea consists of a portfolio of 10 geothermal power projects in Southern California totaling 327 MW. CE Generation, which is owned 50% by MidAmerican Energy Holdings Co. and 50% by TransAlta Corp., is the holding company for MEHC's interests in its U.S. qualifying facilities. CG MULTIFAMILY: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: CG Multifamily-New Orleans, L.P. c/o Greystar MF-New Orleans, L.L.C. 11 State Street Charleston, South Carolina 29401 Bankruptcy Case No.: 06-10533 Chapter 11 Petition Date: June 12, 2006 Court: Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: John M. Landis, Esq. Michael Q. Walshe, Jr., Esq. Stone Pigman Walther Wittman, LLC 546 Carondelet Street New Orleans, Lousiana 70130 Tel: (504) 581-3200 Fax: (504) 596-0819 Estimated Assets: $50 Million to $100 Million Estimated Debts: $50 Million to $100 Million Debtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rimkus Consulting Group, Inc. Consulting Services $215,958 P.O. Box 4437 Houston, TX 77210 Winstead Sechrest & Minick PC Trade Debt $205,477 1201 Elm Street Dallas, TX 75270 Entergy Utilities $77,424 P.O. Box 61966 New Orleans, LA 70167 Haynes and Boone, LLP Legal Services $68,977 Stealth Private Security, Inc. Trade Debt $51,800 Sewerage & Water Board of Utilities $45,957 New Orleans Huron Consulting Services LLC Forensic Accounting $44,133 Services Rotolo Consultants, Inc. Trade Debt $27,333 Sher Garner Cahill Richter Legal Services $18,581 Open Door Solutions, LLP Trade Debt $9,588 Associated Time and Trade Debt $9,150 Parking Control Waste Management Trade Debt $8,672 Hughes Supply Trade Debt $8,072 Accent Furniture Rentals, Inc. Trade Debt $5,001 Home Depot Credit Services Trade Debt $3,813 Simplex Grinell LP Trade Debt $3,130 Vinson & Elkins Legal Services $2,452 BellSouth Utilities $2,325 Terminix Trade Debt $1,970 IKON Financial Services Trade Debt $1,965 CIRTRAN CORP: Buys Advanced Beauty Assets for $2.3 Million ---------------------------------------------------------- CirTran Corporation closed and received court approval of a transaction with Advanced Beauty Solutions, LLC of Los Angeles, to purchase certain of Advanced Beauty's assets for a total of $2,310,000. Iehab J. Hawatmeh, CirTran's founder and President, said an agreement was signed last week for CirTran to purchase virtually all of Advanced Beauty's assets, including flat iron and hair dryer kits marketed and sold via TV infomercials. Mr. Hawatmeh said that on June 7, the U.S. Bankruptcy Court adjudicating the bankruptcy proceedings of Advanced Beauty entered an order which approved the asset purchase, including the sale to CirTran of Advanced Beauty's product inventory, intellectual property, customer lists, a 30-minute infomercial, and trade secrets. In exchange for the assets it acquired, CirTran will pay Advanced Beauty $1,125,000 in cash at closing, and will reduce its approved claim in the bankruptcy against ABS by $750,000. In addition, CirTran will pay the balance of the $2.3 million -- $435,000 in all -- to ABS as a guaranteed royalty over two years, based on royalty of $3 per True Ceramic Pro flat iron sold by CirTran. CirTran - Advanced Beauty Agreement In January 2005, CirTran signed an exclusive manufacturing agreement with Advanced Beauty, a California limited liability company, relating to the manufacture of a flat iron hair product, and in July 2005, CirTran signed another exclusive manufacturing agreement with Advanced Beauty relating to the manufacture of a hair dryer kit. In early October 2005, CirTran was notified that Advanced Beauty had defaulted on obligations to its financing company, and, following the notice of ABS's default, CirTran terminated both agreements. In January 2006, following efforts to resolve the situation, CirTran sued Advanced Beauty, claiming breach of contract, interference with contractual relationships, unjust enrichment, and fraud, seeking damages from Advanced Beauty. Through October 2005, CirTran had shipped approximately $4,746,000 worth of flat iron product to Advanced Beauty, for which it had received total payments of approximately $788,000. In November 2005, CirTran repossessed approximately $2,341,000 worth of the products from Advanced Beauty in the U.S., as it was permitted to do pursuant to the agreement. Since November -- and until Advanced Beauty filed for bankruptcy protection -- Mr. Hawatmeh said his company was pursuing its rights under the agreements, including offering flat iron product for sale directly to Advanced Beauty's customers. In so doing, CirTran sold approximately $426,000 of product directly to Advanced Beauty's international customers, with all shipments paid in full. In January 2006, Advanced Beauty filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code. The orders entered by the Bankruptcy Court included approval of the sale of Advanced Beauty's assets to CirTran as well as resolutions and settlements of other aspects of the Advanced Beauty Solutions Bankruptcy. Entering the Beauty Products Business "Advanced Beauty had been one of CirTran's largest customers, and the failure of its business was a major cause of our not showing an anticipated profit for the final quarter of fiscal 2005 or for the fiscal year," Mr. Hawatmeh said. "With this interruption in our business and business plan now history, CirTran is moving forward to market and sell products originally built for Advanced Beauty through other sources, including our own sales organization, which hopefully will lead to manufacturing more of this traditionally-popular consumer line." Mr. Hawatmeh said the acquisition of assets from Advanced Beauty marked CirTran entrance into the multi-billion dollar worldwide beauty products industry, where Advanced Beauty, prior to its failure, had generated a total of more than $30 million in revenue over the past five quarters. "CirTran has the product, the ability to design and manufacture new product as needed, the customer lists and contacts, the infomercials, and now with our media and talent groups, the wherewithal to move the product directly to consumers," he said. "We believe that what started as adversity with the failure of ABS as a customer will result in a new and exciting profit center and opportunity for our company and its shareholders." About Advanced Beauty Solutions Advanced Beauty Solutions, LLC, filed for chapter 11 protection on January 24, 2006 (Bankr. C.D. Calif. Case No. 06-10076). James C. Bastian, Jr., Esq., at Shulman Hodges & Bastian LLP, represents the Debtor. When the Debtor filed for protection against its creditors, it estimated assets and debts between $1 million and $10 million. About CirTran Corporation CirTran Corp. (OTCBB:CIRT) -- http://www.CirTran.com/-- is a premier international full-service contract manufacturer of low to mid-size volume contracts for printed circuit board assemblies, cables and harnesses to the most exacting specifications. Headquartered in Salt Lake City, CirTran's modern 40,000-square- foot non-captive manufacturing facility -- the largest in the Intermountain Region - provides "just-in-time" inventory management techniques designed to minimize an OEM's investment in component inventories, personnel and related facilities, while reducing costs and ensuring speedy time-to-market. * * * Going Concern Doubt As reported in the Troubled Company Reporter on June 2, 2006, Hansen, Barnett & Maxwell in Salt Lake City, Utah, raised substantial doubt about CirTran Corporation'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 losses, negative working capital, and accumulated deficit. The Company reported a $277,998 net loss on $1,737,824 of net sales for the three months ended March 31, 2006. The Company had working capital of $300,528 as of March 31, 2006, and $1,142,874 as of Dec. 31, 2005. Accumulated deficit has increased to 19,605,311 at March 31, 2006, compared to $19,327,310 at Dec. 31, 2005. COLLINS & AIKMAN: Plan-Filing Deadline Moved to July 29 ------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan further extends Collins & Aikman Corporation and its debtor- affiliates' exclusive period to file a plan or reorganization to July 29, 2006. The Debtors' exclusive period to solicit acceptances of a Plan is also extended to Sept. 27, 2006. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, informed the Court that the Debtors have made substantial progress in their dual-track process. Several parties have showed interest in either sponsoring a plan of reorganization through an equity infusion or purchasing substantially all of the Debtors' assets. In addition, the Debtors and their advisors have contacted potential exit financing lenders and solicited preliminary term sheets to fund a stand-alone plan of reorganization. Mr. Schrock explained that although the Debtors continue to target confirming a plan of reorganization by the end of the year, completion of critical tasks requires time, which warranted a further extension of the exclusivity periods. Mr. Schrock related that during the next critical phase of their Chapter 11 cases, the Debtors, in conjunction with their major constituencies, will: * finalize negotiations with an investor or purchaser to serve as a stalking horse to sponsor a plan of reorganization or effectuate a sale of the Debtors' assets; * seek the Court's approval of the commitment for a stalking horse transaction, which commitment will serve as a benchmark for the Debtors to solicit higher and better offers; * solicit higher and better offers from interested parties, continue to negotiate the terms of those offers and allow those parties to complete any remaining due diligence; * select a successful bidder, continue negotiations with the successful bidder and the Debtors' major constituencies regarding the terms of a plan of reorganization; * continue to work with potential lenders to structure and underwrite the debt financing required to fund a plan of reorganization; * continue to work with the Debtors' customers regarding the award of future new business, which will maximize the value of the Debtors' estates and any potential transaction; * continue the claims reconciliation process, which involves over 8,000 proofs of claim totaling $53 billion; * continue the Debtors' ongoing efforts at cost-cutting and increasing operational efficiency, including shedding certain non-core assets; * continue discussions regarding an acceptable resolution of the Debtors' pension obligations; * resolve any issues relating to the ongoing Securities and Exchange Commission and Department of Justice investigations regarding the Debtors' historical operations; and * ultimately file a plan of reorganization and begin the formal Court approval process of that plan. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Resolves to Wind Down Fabrics Business -------------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates will be winding-down their fabrics business to reduce costs and increase the profitability and efficiency of their remaining operations. The Debtors have determined that they would not be able to sell the Fabrics Business as a going concern and that the continued operation of the Fabrics Business was not financially viable. In this regard, the Debtors ask the U.S. Bankruptcy Court for the Eastern District of Michigan to approve: (a) the wind-down of the Fabrics Business and other related actions; (b) benefits to employees who are affected by the wind-down of the Fabrics Business; (c) expedited procedures for rejecting and assuming and assigning executory contracts and unexpired leases; and (d) modification to the Court-approved authority under the de minimis asset sale procedures to increase the overall cap from $30,000,000 to $50,000,000 for sales of de minimis assets with a selling price equal to or less than $1,000,000. Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, relates that the Debtors and their investment banker, Lazard Freres & Co. LLC, marketed the Fabrics Business in 2005. However, parties that had initially expressed interest in acquiring the business backed down. A primary concern with those parties was the negative cash flow projections for the Fabrics Business, Mr. Carmel explains. The Fabrics Business had sales of $215,000,000 in 2005 with negative earnings of $2,500,000 before interest, taxes, depreciation and amortization. Due to a number of factors, the Fabrics Business was unable to quote and win new business. Thus, sales for the business were projected to further decline to $150,000,000 in 2006. Furthermore, the Fabrics Business was projected to incur additional losses over the next three years of $30,000,000. The automotive fabrics industry has also become highly price- sensitive and has shifted to less expensive technologies, Mr. Carmel says. The Fabrics Business' infrastructure is focused on woven technology, which is by nature more expensive than flat knit technology. Moreover, Mr. Carmel adds that the Fabrics Business has faced rising material costs, increased energy costs and higher employee-related costs. Employee Benefits The Debtors, the agents for their senior, secured prepetition lenders, and the Official Committee of Unsecured Creditors recognize that some assistance for the Fabrics Business employees will be necessary to facilitate an orderly wind-down. Following extensive discussions, the Debtors agree to provide these benefits to employees: (a) Salaried employees will receive: (i) severance benefits of 25% of base salary for employees in Tier A, 15% of base salary for employees in Tier B, and 10% of base salary for employees in Tier C; and (ii) continued medical benefits for 12 weeks; (b) Hourly employees will receive: (i) severance benefits of two weeks of base salary; (ii) retention benefits of one week of base salary; and (iii) continued medical benefits for 12 weeks; and Employees will also receive discretionary payments totaling: -- $300,000 if the net proceeds from the liquidation of the Fabrics Business are at least $17,500,000; -- $500,000 if the net proceeds from the liquidation of the Fabrics Business are at least $20,000,000; and -- $750,000 if the net proceeds from the liquidation of the Fabrics Business are at least $22,500,000. The payments would be determined by the executive vice president of the Debtors' Carpet and Acoustics business unit and approved by the Board of Directors. To remain consistent with the Key Employee Retention Plan, the Debtors also seek the Court's authority to modify the Fabric Business employees' benefits so that, if they are terminated without cause after the wind-down, their unpaid benefits will be paid on the earlier of (a) the current schedule in the KERP and (b) the date the participant is terminated without cause. Furthermore, the Debtors want the KERP participants to be allowed to receive 12 weeks of continued medical if they are terminated without cause following the wind-down of the Fabrics Business and eligible for certain discretionary amounts. Lease Rejection Procedures During the wind-down, the Debtors will need to reject certain contracts to minimize administrative claims. Moreover, the Debtors will need to assume and assign certain contracts to ensure a seamless transition of business for the benefit of the Debtors and their customers. Mr. Carmel asserts that absent expedited procedures for managing this process, the Debtors may suffer delays and incur costs. Accordingly, the Debtors ask the Court to approve these procedures for rejecting Contracts associated with the Fabrics Business: (a) The Debtors will file a rejection notice, which will set forth: (i) the Contracts to be rejected; (ii) the name and address of the counterparties to the Contracts; (iii) the effective date of the rejection for the Contracts, which date will be the date of the Rejection Notice or later; and (iv) the deadlines and procedures for filing objections to the Rejection Notice. (b) The Debtors will serve the Rejection Notice by an overnight delivery service on: (i) the Contract counterparties affected by the Rejection Notice; (ii) counsel to the Committee; (iii) counsel to the agent for the prepetition secured lenders; (iv) counsel to the agent for the postpetition secured lenders; and (v) the Office of the United States Trustee. (c) Parties objecting to the proposed rejection must file and serve a written objection within 10 days after the Rejection Notice was served. (d) If an objection to the rejection is not timely filed, the Debtors will file a certificate of no objection with a proposed order rejecting the Contracts with the effective date of rejection to be as set forth in the Rejection Notice or other date agreed by the parties. (e) If an objection to the rejection is timely filed and not withdrawn or resolved, the Debtors will file a notice for a hearing to consider the objection for the Contracts. The Debtors also seek approval of these procedures for assuming and assigning Contracts associated with the Fabrics Business: (a) The Debtors will file a notice to assume and assign a Contract, which will set forth: (i) the Contract to be assumed and assigned; (ii) the name and address of the counterparties to the Contract; (iii) the effective date of the assumption and assignment for the Contract; (iv) the proposed amount to cure defaults under the Contract; (v) the name of the party to which the Contract is being assigned and other relevant information for the counterparty to the Contract; and (vi) the deadlines and procedures for filing objections to the Assume/Assign Notice. (b) The Debtors will serve the Assume/Assign Notice by an overnight delivery service on: (i) the Contract counterparties affected by the Assume/Assign Notice; (ii) counsel to the Committee; (iii) counsel to the agent for the prepetition secured lenders; (iv) counsel to the agent for the postpetition secured lenders; and (v) the Office of the United States Trustee. (c) Parties objecting to the proposed assumption and assignment or the proposed amount to be paid to cure defaults must file and serve a written objection no later than 10 days after the date the Debtors serve the Assume/Assign Notice. (d) If an objection is not timely filed, the Debtors will file a certificate of no objection with a proposed order assuming and assigning the Contract, and the Debtors will pay the cure amounts. (e) If an objection is timely filed and is not withdrawn or resolved, the Debtors will file a notice for a hearing to consider the objection for the Contract. De Minimis Assets Sales In connection with the wind-down of the Fabrics Business, the Debtors anticipate selling certain de minimis assets. The Debtors also anticipate that the volume of those sales may lead them to exceed the overall cap of $30,000,000. Accordingly, as the Debtors did not request authority to encompass the wind-down of the Fabrics Business at the time the Debtors sought approval of the De Minimis Sale Procedures, the Debtors ask the Court to increase the overall cap to $50,000,000. DIP Credit Agreement Issues Certain aspects of the wind-down may require the Debtors to seek additional Court authority, including for the sale of equipment or operations within the Fabrics Business. The Debtors also expect that certain aspects of the wind-down may require the Debtors to seek an amendment to or consent under the Amended and Restated Revolving Credit, Term Loan and Guaranty Agreement, dated as of July 28, 2005, with JPMorgan Chase Bank, N.A., as administrative agent for the DIP Lenders. As an interim step, to avoid any dispute with the DIP lenders, the Debtors and JPMorgan agree that: (a) net proceeds arising from the wind-down of the Fabrics Business are to be applied in accordance with the DIP Credit Agreement. The Debtors will prepare a calculation of the net proceeds of the wind-down on a cumulative basis for the period subsequent to May 1, 2006, and deposit into or withdraw from a segregated account maintained at JPMorgan, amounts necessary to make it equal to the cumulative net proceeds. (b) after substantial completion of the wind-down of the Fabrics Business, but not later than August 31, 2006, the Debtors will permanently repay the loans under the DIP Credit Agreement to the extent the balance in the Segregated Account exceeds (i) $10,000,000 for the period August 31, 2006, through September 29, 2006, (ii) $5 million for the period September 30, 2006, through December 31, 2006, and (iii) $0 thereafter. (c) the parties will negotiate in good faith the terms of any amendment, waiver or consent to and under the DIP Credit Agreement that may be necessary. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Wants to Reject Forklift Leases with Toyota ------------------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan for permission to reject certain Forklift Leases with Toyota Motor Credit Corporation as of the earlier of: (a) August 31, 2006; (b) the date a plan of reorganization is confirmed; and (c) the date the Debtors return the Equipment to Toyota. The Debtors are parties to a master lease agreement with Toyota Motor Credit Corporation for the lease of forklift trucks. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, tells the Court that over the past several months, the Debtors have been evaluating their forklift truck fleets at each of their facilities to determine their future needs. The Debtors have also been working diligently to review all of their alternatives to secure the most cost-effective sources of the type of equipment under the Forklift Leases. The Debtors are in the process of negotiating terms with various alternative sources to supply replacement fleets. The Debtors anticipate that they will finalize negotiations with alternative sources soon. Mr. Schrock relates that the terms offered by the alternative sources are more favorable than the terms of the Forklift Leases. It will then take 12 to 14 weeks thereafter for the replacement fleets to be delivered to the Debtors' facilities. Upon delivery of the replacement fleets, the Debtors will no longer require the equipment under the Forklift Leases. Mr. Schrock asserts that rejecting the Forklift Leases will provide the Debtors with cost savings, as they will no longer make payments on personal property not useful in the operation of their businesses. The Debtors are current on all postpetition amounts due under the Forklift Leases and continue to maintain full coverage insurance for the equipment. A list of the 137 Forklift Leases is available for free at http://researcharchives.com/t/s?b5f Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000) CONGOLEUM CORP: Compliance Plan Prompts Amex to Continue Listing ---------------------------------------------------------------- The shares of Congoleum Corporation will continue to trade on the American Stock Exchange based upon a plan the company submitted to the Amex. "As we explained to the Amex, we would have been in compliance with the listing requirements were it not for the special charges in connection with our asbestos-related reorganization," Roger S. Marcus, Chairman of the Board, commented. "We are working diligently toward obtaining confirmation of our plan of reorganization and ending the extraordinary costs associated with that process, which we hope to conclude late this year or early in 2007. We appreciate the willingness of the Amex to continue our listing as we seek to accomplish this goal." The Amex determined that Congoleum has "made a reasonable demonstration of its ability to regain compliance with the continued listing standards" of the Amex and will continue to list Congoleum's Class A common stock pursuant to an extension. The continued listing is subject to Congoleum complying with the progress described in its plan to achieve compliance, which was submitted to the Amex. Compliance with the continued listing requirements must be attained no later than Oct. 13, 2007. the Amex had notified Congoleum that it was not in compliance with Section 1003(a) (i) of the Amex Company Guide, with stockholders' equity of less than $2,000,000 and losses from continuing operations and/or net losses in two of its three most recent fiscal years; and Section 1003(a) (ii) of the Amex Company Guide, with stockholders' equity of less than $4,000,000 and losses from continuing operations and/or net losses in three of its four most recent fiscal years. On Dec. 31, 2003, Congoleum Corporation filed a voluntary petition with the United States Bankruptcy Court for the District of New Jersey (Case No. 03-51524) seeking relief under Chapter 11 of the U.S. Bankruptcy Code as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. About Congoleum Corporation Headquartered in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM) -- 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 Dec. 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 March 31, 2006, Congoleum Corporation's balance sheet showed a $44,694,000 stockholders' deficit compared to a $44,960,000 deficit at Dec. 31, 2005. Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX:ABL). CRUISECAM INT'L: David Hall Raises Going Concern Doubt ------------------------------------------------------ David S. Hall, P.C., in Dallas, Texas, raised substantial doubt about Cruisecam International 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 lack of financial resources and liquidity. The Company reported a $1,330,395 net loss on $259,794 of sales for the year ended Sept. 30, 2005. At Sept. 30, 2005, the Company's balance sheet showed $15,830,964 in total assets, $5,298,270 in total liabilities, and $7,627,626 of stockholders' equity. The Company's Sept. 30 balance sheet also showed strained liquidity with $721,759 in total current assets available to pay $2,905,068 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?b58 About Cruisecam Headquartered in Troy, Michigan, CruiseCam International, Inc., is a holding company of small and medium size companies. GRP, Inc., an affiliate, manufactures and sells a complete line of mobile integrated video technology for law enforcement, original equipment manufacturers, motor sports and aftermarket applications. The company's patent portfolio encompasses cameras on the automotive seat that the company developed with Lear Corp. and Ford Motor Company. DANA CORPORATION: Court Approves Toledo Press Settlement Pact ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved Dana Corporation and its debtor-affiliates' request to enter into and perform under a settlement agreement with Toledo Press Company. The Settlement Agreement resolves certain disputes between the parties relating to shipping charges incurred in connection with the delivery of certain equipment sold by Toledo Press to the Debtors. Specifically, it provides that: (1) The Debtors will pay $200,000 to Toledo Press in respect of the Shipping Charge dispute; (2) The Payment will be non-disgorgeable even if it is later determined that Toledo Press did not have a valid security interest, securing the amount of the shipping charges, or that any security interest was subject to avoidance under Sections 544 through 550 of the Bankruptcy Code; and (3) The Debtors and Toledo Press will release one another from any claims or causes of action relating only to the Shipping Charge dispute. The parties retain their claims and causes of action unrelated to the Shipping Charge dispute. 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. 111; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORPORATION: Tonie Smith Wants Stay Lifted to Pursue Damages ----------------------------------------------------------------- Daniel M. Czamanske, Jr., Esq., at Chapman, Lewis & Swan, in Clarksdale, Mississippi, asserts that Tonie Smith has a cause of action against Dana Corporation and its debtor-affiliates, for an accident that occurred on Feb. 14, 2001, which resulted in injuries, damages and death to Garry Smith, Ms. Smith's spouse. Ms. Smith filed a lawsuit against the Debtors in the United States District Court for the Northern District of Mississippi, Oxford Division. The Mississippi Action has been stayed pursuant to the Debtors' bankruptcy filing. Accordingly, Ms. Smith asks the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay to allow her to litigate her claims in the Mississippi Action. Ms. Smith agrees to limit any recovery upon any claim arising out of her damages to the proceeds of any applicable policy of insurance; and agrees that any judgment, which might be entered pursuant to the litigation, would be limited to the proceeds of that policy and would not be a claim against the Debtors' other assets. Mr. Czamanske assures the Court that granting Ms. Smith's request would not create any liability upon the Debtors nor would it interfere with the administration of the Debtors or their reorganization. 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. 111; Bankruptcy Creditors' Service, Inc., 215/945-7000). DANA CORPORATION: Wants To Enter Into Spicer Share Purchase Pact ---------------------------------------------------------------- Dana Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to: (a) enter into and perform a Master Share Purchase Agreement dated May 30, 2006, by and among the Debtors, Desc Automotriz, S.A. de C.V., Inmobilaria Unik, S.A. de C.V., Spicer, S.A. de C.V., and Dana Holdings Mexico, S. de R.L. de C.V., relating to dissolution of the Spicer Joint Venture; and (b) assume the Trademark License Agreement between Dana and Transmisiones TSP, S.A. de C.V., as amended, regarding the license of the 'Spicer" trademark. A full-text copy of the Master Share Purchase Agreement is available for free at http://researcharchives.com/t/s?b4d Spicer is a holding company, which, through its subsidiaries, is engaged in the manufacture and sale of automotive parts in Mexico. The Debtors have full title to 5,329,801,806 Spicer shares, which represents 48.803% of the issued and total outstanding shares of Spicer. The Debtors and Desc Automotriz are parties to the Spicer, S.A. de C.V. Shareholders Agreement, as amended, dated as of May 19, 2000, which: -- prohibits the Debtors from manufacturing or selling products in Mexico directly competitive with those of Spicer; and -- provides that Desc Automotriz will be a preferred partner through Spicer should the Debtors expand their production in Mexico. According to Corinne Ball, Esq., at Jones Day, in New York, the Debtors and Desc Automotriz have agreed on a series of transactions to unwind the Spicer JV which are memorialized in the Share Purchase Agreement and other related agreements. Upon completion of the transactions: (a) the Dana Companies will have acquire sole ownership of the Spicer Entities involved in the manufacture of axles, driveshafts and gears and the casting and forging businesses, along with some companies that support those operations -- the Dana Targets -- which include: * Ejes Tractivos, S.A. de C.V. -- Etrac, * Engranes C>nicos, S.A. de C.V. -- ENCO, * Cardanes, S.A. de C.V., * Autometales, S.A. de C.V. -- AMSA, * Forjas Spicer, S.A. de C.V., * Direcspicer, S.A. de C.V., * Spicer Servicios, S.A., and * Corporaci>n Inmobiliaria; and (b) Desc Automotriz and Spicer will have acquire sole ownership of the remaining JV Subsidiaries. The Share Purchase Agreement provides for the Debtors' divestiture of the Dana JV Shares and the acquisition of the shares of the Dana Targets: 1. The Debtors will contribute $19,500,000, to ENCO and Cardanes in return for hybrid securities, which will be treated as equity under U.S. law and debt under Mexican law; 2. The debt owed by AMSA to Spicer will be capitalized by each of Desc Automotriz and Inmobiliaria Unik, contributing cash to AMSA in an amount equal to their percentage ownership in AMSA times the value of AMSA's debt, with the remaining portion of AMSA's indebtedness to Spicer being converted into additional equity held by Spicer in AMSA; 3. All intercompany debt owed by the Dana Targets to Spicer will be assigned to Corporacion Inmobiliaria in return for Corporacion Inmobiliaria's issuance of additional shares of its stock to Spicer in satisfaction of all of the debt; 4. After satisfaction of certain obligations, the Debtors and Desc Automotriz will split the cash held in Spicer and all of its subsidiaries based on their ownership interests in Spicer, with the resulting cash distribution to the Dana Targets being used to fund their ongoing operations; 5. Desc Automotriz will buy the Debtors' shares in Spicer for $166,010,000, to be paid in the form of a promissory note; 6. ENCO and Cardanes will dividend the funds they received under the Hybrid Loans to Spicer and Inmobiliaria Unik; 7. The Debtors will transfer the Desc Automotriz Promissory Note to Dana Holdings Mexico SRL de C.V., which is a wholly owned non-debtor Mexican subsidiary, to facilitate the contemplated transactions; and 8. Dana Mexico will buy the Dana Targets from Spicer by transferring the Desc Automotriz Promissory Note to Spicer. After the Spicer Transaction is consummated, the Debtors will have swapped around 49% of their interest in Spicer, plus $19,500,000, for 100% ownership of the Dana Targets. A diagram of the Spicer Transaction is available for free at: http://researcharchives.com/t/s?b4e Pursuant to the Share Purchase Agreement, the parties will adjust the purchase prices of the Dana JV Shares and the shares of the Dana Targets at Closing to take into account levels of working capital and cash in Spicer and its subsidiaries as of June 30, 2006, with an adjustment for any prepetition payables paid after June 30, 2006. In the event that the actual working capital amounts for either the Desc Targets or the Dana Targets diverge by 15% or more from the average of the projected working capital amounts of the Desc Targets and the Dana Targets, Desc Automotriz or Dana Mexico will pay an adjustment to the purchase prices in the amount by which the divergence exceeds 15%. The parties have also agreed to estimate the level of cash as of June 30, 2006, in Spicer and its subsidiaries and to debit and credit from their own portions of that cash, which is based on the ownership percentages in Spicer and the JV Subsidiaries, the amounts required to satisfy the obligations of certain parties. The Share Purchase Agreement contemplates that the Debtors will reimburse Spicer for certain expenditures totaling $7,000,000, made on the Debtors' behalf to prepare and execute certain projects to be pursued by the Dana Targets post-Closing. The Debtors will reimburse Spicer for any amounts required to terminate certain leases with GE relating to automobiles used by employees of the Dana Targets. To optimize the production capacity of the Dana Targets, the Debtors plan to move a variety of production equipment from certain of their U.S. facilities to facilities that will be owned by the Dana Targets after the Spicer Transaction closes, including: 1. the moving assembly equipment from Fort Wayne, Indiana, and Buena Vista, Virginia, to a facility owned by Etrac in Mexico City; 2. the moving axle related equipment from Cape Girardeau, Missouri, and Fort Wayne, Indiana, to the Etrac Facility; 3. the moving plant steering machinery and assembly operations from Lima, Ohio, to a plant owned by Cardanes in Quer,taro, Mexico; 4. the moving plant driveshaft machining from Bristol, Virginia, to the Cardanes Facility; and 5. the moving plant driveshaft machining from Pottstown, Virginia, to the Cardanes Facility. 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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000). DELPHI CORP: Court Approves License Pact with Denso Corporation --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Delphi Corporation and its debtor-affiliates to enter into a license agreement with Denso Corporation. The agreement settles a patent infringement lawsuit between Denso and Delphi Automotive Systems LLC. As reported in the Troubled Company Reporter on May 24, 2006, Denso filed a patent infringement complaint against Delphi and DAS LLC in the United States District Court for the District of Delaware. Denso accused Delphi of infringing several of Denso's patents relating to gasoline management system. Delphi and Denso subsequently negotiated the terms of a License agreement to resolve the dispute. Under the License Agreement, Delphi obtains a license under 21 Denso Gasoline EMS U.S. patents as well as an option to designate two additional existing Denso Gasoline EMS patents for inclusion under the License Agreement, for Delphi's use in its future pursuit of business. Denso obtains a license for up to seven existing Delphi Gasoline EMS patents. In addition, Delphi will pay Denso a settlement amount, the specific amount of which was not publicly disclosed. Troy, Mich.-based, 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. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Inks Transfer Pact for New Brunswick Plant ------------------------------------------------------- Delphi Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve a Transfer Agreement with Johnson Controls, Inc. As part of its efforts to dispose of non-core assets, the Debtors sold its lead acid battery business to Johnson Controls, Inc., for $202,500,000, with post-closing adjustments of at least $12,500,000. However, Delphi was not able to transfer a battery manufacturing facility in New Brunswick, New Jersey, because of certain provisions in their agreements with the International Union, IUE-CWA and IUE-CWA Local 416. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, explains that a "no-sale" clause in the union agreements restricts the Debtors' ability to sell manufacturing sites, including the New Brunswick Facility, without the IUE-CWA's consent. Thus, Delphi retained ownership of the New Brunswick Facility following the sale. Delphi agreed to keep operating their facilities in Fitzgerald, Georgia, and New Brunswick to sell batteries exclusively to Johnson Controls under a Component Supply Agreement. The Debtors produce 3,000,000 batteries per year at the Fitzgerald Facility and 1,800,000 batteries per year at the New Brunswick Facility. Recently, the Debtors decided to explore a consensual transfer of the New Brunswick Facility to Johnson Controls. The Debtors want to: -- eliminate operating losses associated with the continued operation of the New Brunswick and the Fitzgerald facilities; -- minimize administrative liabilities associated with the transfer of the New Brunswick Facility; -- provide a "soft landing" for affected employees; and -- complete the smooth transition of the battery business to Johnson Controls. In this regard, the Debtors and Johnson Control have entered into a Transfer Agreement to effectuate the sale of the New Brunswick Facility in exchange for Johnson Control's payment of $1 plus the value of certain inventory estimated at $1,700,000. The Transfer Agreement also provides for the continued supply of batteries to Johnson Controls from the Fitzgerald Facility, the implementation of an attrition plan between Delphi and the IUE- CWA with respect to the New Brunswick Facility, and the IUE-CWA's waiver of the No-Sale Clause and contractual neutrality obligations with respect to the New Brunswick Facility. Mr. Butler relates that 100 hourly employees of Delphi would be transferred to Johnson Controls pursuant to the Attrition Plan. Johnson Control has agreed to pay the Debtors $12,500,000 at the sale closing to reimburse them for a significant portion of the amounts to be spent under the Attrition Plan. The Debtors estimate that implementing the Attrition Plan will cost $18,000,000 to $22,800,000. The sale completion would take place on the later of August 1, 2006, or 10 days after Court approval of the Transfer Agreement. Furthermore, pursuant to the Transfer Agreement, the Debtors will honor certain employee and environmental indemnification obligations, subject generally to a $100,000 deductible and a $20,000,000 cap. Mr. Butler asserts that, through the Transfer Agreement, the Debtors can sell their money-losing New Brunswick Facility to a buyer that has already purchased the Debtors' worldwide battery business and is in a unique position to acquire that facility. The Debtors would also be able to transition production from the Fitzgerald Facility, another money-losing battery operation for the Debtors, in an orderly manner that is consistent with the UAW Special Attrition Program while meeting Johnson Controls' production requirements. Troy, Mich.-based, 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. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELPHI CORP: Judge Drain Adjourns CBA Rejection Hearing ------------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York adjourned the hearing on Delphi Corporation and its debtor-affiliates' request to reject its labor contracts pursuant to Section 1113 and 1114 of the Bankruptcy Code. The hearing was postponed at the request of Delphi's lead counsel John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, who told the Court that it would be in the parties' best interest not to go forward with the hearing to give them an opportunity to continue discussions. Parties are said to be moving closer to a deal that would mirror an "accelerated attrition" program now under way at General Motors Corp., The Detroit News reports, citing people familiar with the negotiations. Delphi is allegedly preparing to offer lump-sum buyouts of up to $140,000 to workers with less time on the job, Detroit News says. Delphi is already offering buy-outs to workers with at least 27 years in the company. Troy, Mich.-based, 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. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) DELTA FUNDING: Moody's Lowers Rating on Class B-1F Certs. to B3 --------------------------------------------------------------- Moody's Investors Service downgraded the class B-1F certificates issued from Delta Funding Home Equity Loan Trust 1997-3. The transaction is primarily backed by first lien adjustable and fixed rate subprime mortgage loans. The B1-F certificates are being downgraded based upon low credit enhancement levels relative to the current projected losses on the underlying pool. Complete rating actions: Issuer: Delta Funding Home Equity Loan Trust 1997-3 * Class B-1F, downgraded to B3, previously Ba3. DRESSER RAND: Moody's Lifts Rating on Sr. Bank Debt to Ba3 from B1 ------------------------------------------------------------------ Moody's Investors Service upgraded Dresser-Rand Group, Inc.'s ratings, including its corporate family rating from B1 to Ba3, its senior secured bank debt from B1 to Ba3, and its senior subordinate notes from B3 to B2, with a stable ratings outlook. DRC is a long-standing leading manufacturing and fabrication firm providing primarily large-scale rotating process equipment and after-market services to the worldwide oil and natural gas production, crude oil refining, petrochemicals, and other process industries. The company operates globally with manufacturing facilities in the United States, France, Germany, Norway, India and Brazil. Retention of the stable outlook, if not the ratings, likely requires DRC to sustain its aggressive debt reduction pattern through 2006 in order to prepare for inevitably softening sector conditions. While oil prices remain historically strong through 2006, U.S. natural gas price realizations at the wellhead appear close to impairing the unit economics of some of the important new natural gas production play concepts in the U.S. which could eventually impede the pace at which new surface production infrastructure is installed. Additionally, regarding DRC's comparatively weaker equity market performance relative to its peers, the new ratings also would not support equity buybacks this year. The upgrade to Ba3 reflects very substantial debt and leverage reduction since DRC's $1.2 billion acquisition from Ingersoll-Rand by First Reserve Energy in 2004, a current record order backlog for compression and other equipment, still favorable booking trends, rising demand for aftermarket services, and overall improvement in DRC's credit metrics during strong up-cycle sector conditions. The ratings are supported by a degree of cyclical dampening provided by the after-market parts and services, DRC's long- standing client alliances, and the mission critical nature of its products and services. The ratings also reflect other conditions supportive of the demand for DRC's products and services. These include supportive oil prices at least through 2006, rising compression and other equipment orders for the downstream refining segment of the industry that should be less sensitive to oil and gas prices, and new product lines responding to the secular demand for quieter, environmentally sensitive, more energy efficient equipment. The ratings are restrained by comparatively low EBIT margins arising largely from DRC's product mix, the firm's modest size and comparatively narrow product line, low EBIT returns on assets and capital, and still fairly full leverage on EBITDA in spite of extended very strong up-cycle conditions. Moody's estimates approximately $60 million of 2006 adjusted interest expenses; $40 million to $50 million of working capital needs; and $12 to $15 million of budgeted capital expenditures. At the end of the first quarter 2006, DRC had $59 million of cash on hand and $150 million of secured bank revolver availability taking into account almost $200 million of letters of credit. This provides DRC with sufficient liquidity for growth capital outlays and modest acquisitions. Moody's expects the company will continue to de-lever through free cash flow, and expect 2006 year- end Adjusted Debt to be under $600 million fully-loaded for operating leases and unfunded pension obligations. Moody's does not envision any positive ratings moves in the foreseeable future in the absence of well-bought, heavily common equity funded, acquisitions that add diversification and reduce DRC's cyclicality. The ratings may be pressured if DRC does not continue reducing leverage, if it buys back stock, or if it completes debt-funded acquisitions without equal portions of common equity. Furthermore, internal control weaknesses could result in extended filing delays, investigations or financial restatements that are material to our analysis and may be viewed as a credit negative event. Dresser-Rand Group, Inc. is headquartered in Houston, Texas. DURATEK INC: EnergySolutions Merger Cues S&P to Withdraw Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services removed its 'BB-' corporate credit and other ratings on Duratek Inc. from CreditWatch following the announcement by EnergySolutions LLC that it had completed its acquisition of the radioactive materials disposition and nuclear facility operations company. The ratings on Columbia, Maryland-based Duratek, which have also been withdrawn following the completion of the acquisition, were originally placed on CreditWatch on Feb. 8, 2006, after EnergySolutions announced its acquisition plan. ELINE ENT: Posts $10,421 Net Loss in 2006 1st Fiscal Quarter ------------------------------------------------------------ Eline Entertainment Group, Inc., filed its first quarter financial statements for the three months ended January 31, 2006, with the Securities and Exchange Commission on June 6, 2006. The Company reported an $10,421 net loss on $453,218 of revenues for the three months ended Jan. 31, 2006. At January 31, 2006, the Company's balance sheet showed $1,586,362 in total assets and $1,428,656 in total liabilities, resulting in a $57,038 stockholders' deficiency. The Company's March 31 balance sheet also showed strained liquidity with $1,097,736 in total current assets available to pay $1,281,723 in total current liabilities coming due within the next 12 months. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?b59 Going Concern Doubt Baumann, Raymondo & Company PA, in Tampa, Florida, raised substantial doubt about Eline Entertainment Group, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Oct. 31, 2005. The auditor pointed to the Company's operating losses, and stockholders' and working capital deficits. About Eline Headquartered in Knoxville, Tennessee, Eline Entertainment Group, Inc., through its subsidiary, Industrial Fabrication & Repair, Inc., engages in component sales, machining, specialty design, and fabrication for conveyer systems used in the movement of raw materials, finished goods, and supplies in its customers' manufacturing processes. The company also specializes in prototype machining proprietary designs and short production runs. EMERITUS CORP: Reports $105 Mil. Shareholder's Deficit at March 31 ------------------------------------------------------------------ Emeritus Corporation disclosed a $104,718,000 shareholders' deficit at March 31, 2006, in a 10-Q filing with the Securities and Exchange Commission. The Company's balance sheet at March 31 showed $725,122,000 in total assets and $829,840,000 in total liabilities. The Company's balance sheet also showed strained liquidity with $89,306,000 in total current liabilities on total current assets of $70,491,000. For the three months ended March 31, 2006, Emeritus earned net income of $4,727,000 on $101,066,000 of total operating revenues. A full-text copy of Emeritus Corporation's quarterly report is available for free at http://researcharchives.com/t/s?b49 Based in Seattle, Washington, Emeritus Corporation (AMEX: ESC) -- http://www.emeritus.com/-- provides assisted living and related services to seniors throughout the United States. Emeritus holds interests in 183 communities representing capacity for approximately 18,500 residents in 35 states. ENVIRONMENTAL LAND: Secured Creditor Files Liquidating Ch. 11 Plan ------------------------------------------------------------------ Robert M. Brennan, one of Environmental Land Technology, Ltd.'s secured creditors, filed a Liquidating Plan of Reorganization with the U.S. Bankruptcy Court for the District of Columbia on May 22, 2006. Mr. Brennan also filed a Disclosure Statement explaining his Plan. The Debtor and Brennan are parties to several prepetition agreements, including: -- an Amended and Restated Trust Deed Note in the amount of $12,329,365.98 dated December 20, 2000; and -- an Affirmation and Acknowledgement of Debt dated September 26, 2003, to which James Doyle is also a party and under which the amount of the Debtor's obligation to Brennan is specified as $35,801,804.07, as of March 1, 2003, inclusive of principal and interest. The Debtor's obligations to Brennan are secured by a Trust Deed against the Debtor's property recorded on March 2, 2001. The Debtor's property is comprised of approximately 1,000 acres of land located in Washington County, Utah plus another 400 acres, in which the Debtor holds an undivided one-half interest. The Debtor values the property at no less than $61,000,000. In late 2003, the Debtor defaulted on its obligations to Brennan, and Brennan subsequently served a notice for a foreclosure sale. The Debtor filed for bankruptcy, effectively halting the foreclosure. Terms of the Plan The Debtor has not proposed its own plan of reorganization, and Mr. Brennan believes that there are presently no viable reorganization alternatives. The distributions and payments called for under Mr. Brennan's Plan will be funded from proceeds realized from liquidation of the Property and, if any, from liquidation of the other assets. School and Institutional Trust Lands Administration, on account of its secured claim will be paid 30% of the net proceeds from disposition of the Property until the aggregate total of all payments from the Debtor to SITLA, including those previously made to SITLA outside of this Plan, is $3 million. Additionally, SITLA will receive 12.5% of the net proceeds from disposition of the Property. Mr. Brennan will be paid out of proceeds from the liquidation of the Property. Other holders of secured claims will receive the legal, equitable, and contractual rights to which the claims entitle them. Holders of general unsecured claims will receive its pro rata share of the proceeds from liquidation of the Property, if and to the extent those proceeds become available after administrative, priority tax and secured claims are paid. They will also receive the proceeds, if any, from the liquidation of the Debtor's other assets. Holders of equity interests will receive its pro rate share of proceeds from liquidation of the Property, if and to the extent those proceeds become available after administrative, priority tax, secured and general unsecured claims are paid. They will also receive the proceeds, if any, from the liquidation of the Debtor's other assets. A full-text copy of the Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060614052019 Headquartered in Washington, District of Columbia, Environmental Land Technology, Ltd., filed for chapter 11 protection (Bankr. D.C. Case No. 04-00926) on June 8, 2004. Donald A. Workman, Esq., at Foley & Lardner, represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed over $10 million in estimated assets and over $50 million in estimated liabilities. ERICO INT'L: Improved Performance Cues S&P to Lift Rating to BB- ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on ERICO International Corp., including the corporate credit rating to 'BB-' from 'B+'. The outlook is stable. "This action follows the company's improved operating performance, enhanced credit profile, and maintenance of a disciplined financial profile," said Standard & Poor's credit analyst John R. Sico. The Solon, Ohio-based company continues to benefit from the upturn in the industrial economy. Gross margins have improved, despite higher raw material costs including steel and copper, as the company has been able to increase selling prices and has experienced higher volumes. Still, there is some exposure to further rising raw material and energy costs. Adjusted operating margins are in the 16%-18% range as the company has also gained margin from productivity improvements instituted in the past few years. The revolving credit facility provides adequate capacity to make tuck-in types of acquisitions. The company is expected to continue to generate positive free cash flow after relatively small capital spending requirements. EXIDE TECH: Court Amends Exide Illinois' Fine Payment Schedule -------------------------------------------------------------- Gordon A. Ulsh, president and chief executive officer of Exide Technologies, disclosed in a regulatory filing with the Securities and Exchange Commission that the U.S. District Court for the Southern District of Illinois issued an order: -- modifying the payment schedule for the prior fine imposed in February 2002 against Exide Illinois, Inc., a subsidiary of Exide Technologies; and -- adopting an agreement and joint resolution extending and modifying payments under Exide Illinois' pre-existing $27,500,000 fine. According to Mr. Ulsh, Exide Technologies is ultimately responsible for payment of the fine. The District Court's order resolves all issues raised in the U.S. Government's motion filed in November 2005. Among other things, the District Court Order provides that: (a) Exide does not have the present ability to pay interest on the fine and the interest will be waived. Should Exide become delinquent in the payment of the fine in the future, an additional penalty equal to 10% of the principal amount that is delinquent would be due; and (b) Exide Illinois will remain on probation for the remainder of its five-year probation term, through February 26, 2007. Prior to the termination of probation, Exide Technologies will provide to the U.S. Government adequate security for payment of the remaining fine due, the security being acceptable to the Court and to the U.S. Government. Should Exide believe that it may not be able to satisfy the requirement of adequate security without undue jeopardy to the overall financial viability of Exide, it will inform the Court and the U.S. Attorney not later than January 26, 2007, so that the parties can approach the Court jointly or separately prior to the expiration of Exide Illinois' probation. A full text copy of the Order modifying installments on fine previously imposed is available for free at: http://researcharchives.com/t/s?b3f A full text copy of the U.S. Government's and Exide's agreement and proposed joint resolution of issues is available for free at: http://researcharchives.com/t/s?b40 As reported in the Troubled Company Reporter on Dec. 29, 2005, the United States Attorney for the Southern District of Illinois accused the company of failing to pay certain fines. The U.S. Attorney's Office has filed a request with a federal district court for a hearing to conduct an inquiry on Exide's failure to comply with a court judgment and terms of probation, principally through failure to pay the fine. The U.S. Attorney's Office also a request to show cause why Exide should not be held in contempt. The U.S. Attorney's Office asserted that bankruptcy does not discharge criminal fines and that Exide did not adequately disclose its financial condition at the time the Plea Agreement and associated fine were approved by the District Court. In 2001, Exide reached a plea agreement with the U.S. Attorney to resolve an investigation into a scheme by former officers and certain corporate entities involving fraudulent representations and promises in connection with the distribution, sale, and marketing of automotive batteries between 1994 and 1997. Under the Agreement, Exide agreed to: -- pay a $27,500,000 fine for over five years; -- a five-year probation; and -- cooperate with the U.S. Attorney in her prosecution of the former officers. In 2002, the U.S. Attorney's Office filed a general unsecured claim for $27,900,000 in Exide's case. In January 2005, the U.S. Attorney's Office requested additional information regarding whether Exide adequately disclosed its financial condition at the time the Plea Agreement and the associated fine were approved by a federal district court. Exide supplied correspondence and other materials responsive to the request. About Exide Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- is the worldwide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represented the Debtors in their successful restructuring. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 86; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXIDE TECHNOLOGIES: Government Wants Administrative Claim Paid -------------------------------------------------------------- On behalf of the United States Environmental Protection Agency, the U.S. Government asks the U.S. Bankruptcy Court for the District of Delaware to compel Exide Technologies and its debtor- affiliates' to pay EPA's administrative expense claim Donna D. Duer, Esq., at the Environmental Enforcement Section of the U.S. Department of Justice, in Washington, D.C., relates that Exide Technologies owns: * the Price Battery Superfund Site, a lead-acid battery manufacturing plant in Hamburg, Pennsylvania; and * the Broomworks Superfund Site, a .5549-acre parcel of property located in Hamburg, Berks County, Pennsylvania. Ms. Duer says Exide's manufacturing and distribution operations at the Price Battery Site and Broomworks Superfund Site involved the use of hazardous substances, including lead. According to Ms. Duer, actual and threatened releases of hazardous substances at, and from, both sites have caused the EPA to incur response costs after the Debtors' Petition Date and before the effective date of the Debtors' Joint Plan of Reorganization. Specifically, the EPA has reported that it incurred and paid $418,216 for its postpetition response actions performed under the Comprehensive Environmental Response Compensation and Liability Act at both sites. Ms. Duer informs the Court that the EPA's costs in conducting the response actions are "actual, necessary costs and expenses of preserving the estate." Section 107(a)(1) of CERCLA also provides that "the owner or operator of a facility from which there is a release or threatened release of a hazardous substance will be liable for all costs of response actions incurred by the United States not inconsistent with the NCP." Exide, therefore, is liable for the postpetition response costs incurred by the EPA under the CERCLA, Ms. Duer says. Exide Responds Exide Technologies argues that the United States Environmental Protection Agency should not be awarded response costs for the Price Battery Superfund Site and the Broomworks Superfund Site. According to Sandra G. M. Sezer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, the EPA acted arbitrarily and capriciously when it failed to take reasonable steps to determine whether Exide owned the site for which its seeks response costs. Ms. Sezer says the EPA cannot recover its response costs because its actions were inconsistent with the National Contingency Plan. In the consent order between Exide and the EPA dated June 11, 2003, the parties agreed that the lead-contaminated sites would be remediated by capping -- covering the soil with a layer of asphalt or other material -- so that the contaminants would not be exposed to the environment. Ms. Sezer relates that although the EPA approved the method, it decided to conduct a full-scale removal of the soil, which created a large pile of dirt. As a result, the EPA caused Exide to incur greater expenses than it otherwise would have incurred because Exide had to replace the dirt piles in the excavations before it could properly cap the site. Ms. Sezer contends that it is clear that the EPA based the warrant, under which its actions were taken, on incorrect and misleading statements. Discovery into other response costs will also show that the EPA disregarded Exide's offers to perform all work on its own property, Ms. Sezer relates. Ms. Sezer emphasizes that the benefit of the EPA's expenditures to the estate is neither stated nor proven, and have instead been detrimental. The EPA has also not produced all of the cost documentation needed for Exide to review its claim and respond. Against this backdrop, Exide asks the Court to deny the EPA's request for response costs. In the alternative, Exide asks the Court to deny the EPA's request that the response costs be given administrative priority. Additionally, Exide asks the Court that it be allowed an opportunity to discover the evidence behind the EPA Claim, and supplement its objections, prior to any ruling allowing costs. About Exide Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- is the worldwide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represented the Debtors in their successful restructuring. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue Nos. 85 & 86; Bankruptcy Creditors' Service, Inc., 215/945-7000) FEDDERS CORP: Posts $8.8 Million Net Loss for First Quarter 2006 ---------------------------------------------------------------- For the three months ended March 31, 2006, Fedders Corporation incurred a net loss of $8,801,000 on $99,701,000 of net sales. Fedders' balance sheet at March 31, 2006 showed $356,695,000 in total assets, $364,700,000 in total liabilities, resulting in $8,005,000 of stockholders' deficit. Fedders' balance sheet also showed strained liquidity with $168,101,000 in total current assets and $176,811,000 total current liabilities. A full-text copy of Fedders Corporation's report for the quarter ended March 31, 2006 is available for free at: http://researcharchives.com/t/s?b4a Headquartered in Liberty Corner, New Jersey, Fedders Corporation (NYSE: FJC) -- http://www.fedders.com/-- manufactures air treatment products, including air conditioners, furnaces, air cleaners, dehumidifiers and humidifiers for residential, commercial and industrial markets. FRESH DEL MONTE: S&P Holds BB Rating and Revises Outlook to Neg. ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Cayman Islands-based Fresh Del Monte Produce Inc. to negative from stable. Existing ratings on the company, including the 'BB' corporate credit rating, were affirmed. About $434 million total debt was outstanding at March 31, 2006. "The outlook revision reflects weak performance that has persisted for the past two fiscal quarters, and is expected to continue into the second quarter of 2006," said Standard & Poor's credit analyst Alison Sullivan. Importantly, Fresh Del Monte typically generates a substantial majority of its annual gross profit during the first two quarters of the year, which could depress credit measures for the remainder of fiscal 2006. The company has been negatively affected by challenging industry conditions, including higher fuel and production costs. The ratings on Fresh Del Monte reflect its participation in the highly variable, commodity-oriented fresh fruit and vegetable industry, which is affected by uncontrollable factors such as: * global supply, * political risk, * weather, and * disease. Mitigating these concerns are the company's leading positions in the production, marketing, and distribution of fresh produce. Product concentration remains a rating concern due to the high sales and earnings concentration from bananas and pineapples. However, Fresh Del Monte is looking for ways to diversify within the produce industry, for example, by expanding into branded fresh-cut fruit and vegetables, and growing internationally. Sales outside North America represented about 52% of 2005 consolidated sales. Standard & Poor's expects Fresh Del Monte to continue investing in diversification without adding significant debt. GENERAL MOTORS: S&P Maintains Neg. Watch on B Corp. Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services held its ratings on General Motors Corp., including its 'B' long-term and 'B-3' short-term corporate credit ratings, on CreditWatch with negative implications, where they were placed March 29, 2006. The CreditWatch update follows the announcement that Delphi Corp., the United Auto Workers, and GM have reached an agreement to increase the number of employees covered by buyout and attrition programs for Delphi's hourly UAW workers. GM would bear the majority of costs, which are as yet undetermined because aggregate costs will be based on acceptance rates under the various programs as well on the costs of any offers made to Delphi's non- UAW unions. Standard & Poor's does not expect any increase in the number of UAW-represented Delphi employees permitted to transfer to GM. "The expanded offering further lessens the risk that a work stoppage at Delphi could eventually occur," said Standard & Poor's credit analyst Robert Schulz, "although crucial issues such as GM's obligations under benefit guarantees and Delphi's request to reject unprofitable supply contracts remain unresolved." Standard & Poor's does not currently expect the bankruptcy court to need to rule that Delphi can reject the labor and benefits contracts because the rating agency expects a negotiated resolution of these issues. But failure to reach a consensual solution, if that leads to a possible court-approved contract rejection and then to a potential prolonged Delphi work stoppage, would have a catastrophic effect on GM. Court hearings on Delphi's motion to reject its labor contracts have now been adjourned until Aug. 11, and hearings on Delphi's request to reject unprofitable supply contracts with GM have also been postponed until Aug. 11. Standard & Poor's expects negotiations between Delphi, the UAW, and GM to continue, however. GM's ratings could remain on CreditWatch for several more months. Still, Standard & Poor's could lower GM's ratings at any time if evolving events at Delphi warrant -- and an interim downgrade is possible prior to resolution of the CreditWatch. GRACE INDUSTRIES: Auctioning Assets on June 27 ---------------------------------------------- Grace Industries, Inc., and Grace Asphalt, Inc., will conduct an auction of their assets on June 27, 2006, 11:00 a.m., at 151-21 6th Road, in Whitestone, New York. Assets sold at the auction will be free and clear of any liens, claims, or encumbrances. All items are available for viewing from 8:00 a.m. to 4:00 p.m. on June 23 and June 26, 2006, and from 7:00 a.m. to 4:00 p.m. on June 24, 2006. A 5-page list of the assets to be sold is available for free at http://researcharchives.com/t/s?b64 All buyers are required to make a 25% deposit on the day of the sale for all purchases. All deposits and payments must be in the form of cash, cashiers checks, certified checks, wire transfers or other certified funds made payable to Daley-Hodkin Corp. Interested buyers may contact: Daley-Hodkin Corp. Attn: Larry Garten 135 Pinelawn Road Melville, New York 11747 Tel: (631) 293-0200 FaX: (631) 293-0328 Objections to the proposed sale must be filed today, June 15, 2006, at 4:00 p.m., with: The Clerk of the U.S. Bankruptcy Court Eastern District of New York 271 Cadman Plaza East Brooklyn, New York, 11201 Objecting Parties must also serve a copy of any objection upon: a) Counsel to the Debtors Attn: Matthew G. Roseman, Esq. Cullen And Dykman LLP 100 Quentin Roosevelt Boulevard Garden City, New York 11530 b) Office of the U.S. Trustee Attn: Linda Riffkin, Esq. 33 Whitehall Street New York, New York, 10004 c) Counsel to the Debtors' Secured Lender Attn: Karen Gilman, Esq. St. Paul, Wolff & Samson, P.C. One Boland Drive West Orange, New Jersey, 07052 d) Counsel to the Creditors' Committee Attn: Robert Schmidt, Esq. Kramer Levin Naftalis & Frankel LLP 1177 Avenue of the Americas New York, New York, 10036 The Hon. Carla E. Craig will convene an objection hearing on June 19, 2006, at 1:30 p.m. Headquartered in Whitestone, New York, Grace Industries Inc. -- http://www.graceindustriesinc.com/-- specializes in asphalt manufacturing & paving, concrete paving; airport, highway & bridge construction; electrical, interior & exterior engineering & design; demolition, foundations, piling, real estate, and roads, sewer and water main construction. The Company filed for chapter 11 protection on Dec. 6, 2004 (Bankr. E.D.N.Y. Case No. 04-27013). Matthew G. Roseman, Esq., at Cullen and Dykman Bleakley Platt LLP, represents the Debtor in its restructuring efforts. Gordon Z. Novod, Esq., and P. Bradley O'Neill, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $46 million in total assets and $30 million in total debts. GRANITES VENTURES: Moody's Rates $7 Million Class D Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Granite Ventures III Ltd: * Aaa to the $312,000,000 Class A-1 Floating Rate Senior Notes Due 2018, * Aa2 to the $19,000,000 Class A-2 Floating Rate Senior Notes Due 2018, * A2 to the $20,000,000 Class B Deferrable Floating Rate Senior Subordinate Notes Due 2018, * Baa2 to the $17,000,000 Class C Deferrable Floating Rate Subordinate Notes Due 2018 and * Ba2 to the $7,000,000 Class D Deferrable Floating Rate Subordinate Notes Due 2018. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of U.S. dollar- denominated senior secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Stone Tower Debt Advisors LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. GREAT COMMISSION: Files Schedules of Assets and Liabilities ----------------------------------------------------------- The Great Commission Care Communities, Inc., delivered to the U.S. Bankruptcy Court for the Middle District of Pennsylvania its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $5,000,000 B. Personal Property $252,719 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $14,268,221 E. Creditors Holding Unsecured Priority Claims $149,080 F. Creditors Holding $413,913 Unsecured Nonpriority Claims ---------- ----------- Total $5,252,719 $14,831,2143 Headquartered in Camp Hill, Pennsylvania, The Great Commission Care Communities, Inc., dba The Woods at Cedar Run -- http://www.woodsatcedarrun.com/-- is a non-profit retirement community providing independent housing and assisted living services. The company filed for chapter 11 protection on May 10, 2006 (Bankr. M.D. Penn. Case No. 06-00914). Robert E. Chernicoff, Esq., at Cunningham and Chernicoff, P.C., represents the Debtor. The Official Committee of Unsecured Creditors did not state who will represent them in the Debtor's case. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million and $50 million. GSC PARTNERS: Moody's Puts Ba2 Rating on $22MM Class 1 Securities ----------------------------------------------------------------- Moody's Investors Service assigned ratings to nine classes of notes issued by GSC Partners CDO Fund VII, Limited. Moody's Ratings: * Aaa to the $175,000,000 Class A-1 Floating Rate Senior Delayed Funding Notes Due 2020; * Aaa to the $77,000,000 Class A-2 Floating Rate Senior Notes Due 2020; * Aa2 to the $45,600,000 Class B Floating Rate Notes Due 2020; * A2 to the $29,000,000 Class C Deferrable Floating Rate Notes Due 2020; * Baa2 to the $21,700,000 Class D Deferrable Floating Rate Notes Due 2020; * Ba2 to the $17,750,000 Class E Deferrable Floating Rate Notes Due 2020; * Ba2 to the $22,000,000 Class 1 Combination Securities Due 2020. * Baa3 to the $9,500,000 Class 2 Combination Due 2020. * Aaa to the $3,250,000 Class P Principal Protected Notes Due 2020. The ratings reflect Moody's evaluation of the underlying collateral as of the Closing Date, the transaction's structure, the draft legal documentation, and the expertise of the manager, GSCP, L.P. Moody's stated that the ratings of these notes address the ultimate cash receipt of all required interest and principal payments required by the governing documents and are based on the expected losses posed to holders of notes relative to the promise of receiving the present value of such payments. This transaction, underwritten by Merrill Lynch, is a securitization of middle market and broadly syndicated loans. HARRY FERRYMAN: Case Summary & 7 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Harry E. Ferryman aka H.E. Ferryman dba Ferryman Enterprises 9110 Northeast Highway 99 Vancouver, Washington 98665 Bankruptcy Case No.: 06-41240 Type of Business: The Debtor previously filed for chapter 11 protection on April 13, 2006 (Bankr. W.D. Wash. Case No. 06-40748). Chapter 11 Petition Date: June 12, 2006 Court: Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: John D. Nellor, Esq. Nellor Retsinas Crawford PLLC 1201 Main Street P.O. Box 61918 Vancouver, Washington 98666 Tel: (360) 695-8181 Fax: (360) 695-8787 Total Assets: $9,597,983 Total Debts: $4,697,283 Debtor's 7 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ramada Worldwide, Inc. Franchise $500,000 c/o Craig Koster, Esq. Termination 100 Mulberry Street Newark, NJ 07102-4079 Cendent Franchise $361,857 dba Howard Johnson's Franchise Termination 1 Sylvan Way Parsippany, NJ 07054 Cendendent Corp. Travelodge Franchise $135,000 1 Sylvan Way Termination Parsippany, NJ 07054 BKR Fordham Goodfellow 2003 Tax Preparation $22,000 State of Oregon Civil Penalties $10,000 Sterling Elevator Elevator Repairs $5,120 Internal Revenue Service Delinquent Taxes Unknown HEATING OIL: Connecticut Court Confirms Plan of Reorganization -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut confirmed Heating Oil Partners, L.P.'s chapter 11 plan of reorganization on June 14, 2006. The Company expects that the Plan, which received the overwhelming support of the Company's creditors that voted on the Plan, will become effective by early July 2006. In connection with its emergence from Chapter 11, the Company has obtained a fully underwritten commitment from JP Morgan Chase for a $125 million working capital facility to refinance its existing debtor-in -possession facility and to provide for the Company's future working capital needs. Under the terms of the reorganization plan, 100% of the equity of the Company will be distributed to the Company's pre-petition secured lenders in complete satisfaction of their secured claims against the Company (approximately $118 million), which will result in the Company being a private company. This group of new equity holders will also provide an $8 million equity infusion following the Company's emergence from Chapter 11. Holders of unsecured claims will be entitled to receive their pro rata share of a cash distribution from a $525,000 settlement pool. Current equity investors in the Company, and holders of Heating Oil Partners Income Fund units will receive no distribution. It is anticipated that the Fund will be dissolved and all existing units will be cancelled. "We are very pleased that the Court has confirmed our plan of reorganization and we are excited about the Company's future," stated Michael Anton, Chief Executive Officer of HOP. "We will emerge from Chapter 11 as a healthy company with a strong platform for future growth and I would like to acknowledge the dedication of our employees and the support displayed by our customers, creditors and vendors during the course of our restructuring." Sean A. Gumbs, the Company's Interim Chief Financial Officer, stated "With our successful reorganization under Chapter 11, the $125 million financing commitment from JP Morgan Chase and the pending $8 million infusion of equity capital, the Company will have, in our view, one of the strongest balance sheets in the industry." The Company will continue to operate along four main lines of business: Residential Heating Oil, Commercial Heating Oil, Service and Installation, and Fleet Fueling. Headquartered in Darien, Connecticut, Heating Oil Partners, L.P. -- http://www.hopheat.com/-- is one of the largest residential heating oil distributors in the United States, serving approximately 150,000 customers in the Northeastern United States. The Company's primary business is the distribution of heating oil and other refined liquid petroleum products to residential and commercial customers. The Company and its subsidiaries filed for chapter 11 protection on Sept. 26, 2005 (Bankr. D. Conn. Case No. 05-51271) and filed for recognition of the chapter 11 proceedings under the Companies' Creditors Arrangement Act (Canada). Craig I. Lifland, Esq., and James Berman, Esq., at Zeisler and Zeisler, represent the Debtors in their restructuring efforts. Jeffrey D. Prol, Esq., at Lowenstein Sandler PC, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $127,278,000 in total assets and $155,033,000 in total debts. HIGHWOODS REALTY: Moody's Affirms Senior Debt Rating at Ba1 ----------------------------------------------------------- Moody's Investors Service confirmed the ratings of Highwoods Realty Limited Partnership. The outlook is stable and assumes that Highwoods will be current in its regulatory filings by the third quarter 2006. This rating action concludes Moody's review and reflects the recent refinancing of its bank credit facility and term loan, and the filing of its 2005 Form 10-K. In February 2006, Moody's placed Highwoods ratings under review for its concern surrounding the then approaching maturities of its bank credit facility and term loan in July 2006, the timely filing of audited 2005 financial data, and its refinancing of $110 million of public bonds maturing at the end of 2006. Moody's notes that Highwood's operating performance has been improving, but its fixed charge coverage remains weak at 1.6X at December 31, 2005. According to Moody's senior credit officer Karen L. Nickerson, "Highwood's has taken material steps to unencumber assets as well as reduced its cost of capital through the repayment of high coupon debt and preferred stock." At December 31, 2005, its leverage was 49% and its secured debt was 21%, exclusive of joint ventures. Moody's stated that upward rating movement would require: (1) current status with all SEC filings, (2) improvement of fixed charge coverage closer to 2.25 times, (3) reduction of secured debt levels below 20%, and (4) steady growth in its property portfolio. The rating agency also stated that a deterioration in operating performance or a shift in funding strategy, with total leverage and secured debt above 60% and 30%, respectively, would have negative consequences to the rating. Moody's does not see a shift in funding strategy as likely. These securities were confirmed with a stable outlook: * Highwoods Realty Limited Partnership -- Senior debt at Ba1, Senior debt shelf at (P)Ba1 * Highwoods Properties, Inc. -- Preferred stock at Ba2, Preferred stock shelf at (P)Ba2 In its last rating action with respect to Highwoods, Moody's placed the ratings under review for possible downgrade. Highwoods Properties, Inc. (NYSE: HIW), headquartered in Raleigh, North Carolina, is a Real Estate Investment Trust and one of the largest developers and owners of Class A suburban office and industrial properties in the Southeastern USA. As of March 31, 2006, Highwoods owned or had an interest in 417 in-service office, industrial and retail properties encompassing approximately 35 million square feet. Highwoods also owns 896 acres of development land. HOUSTON EXPLORATION: Jana's Takeover Bid Cues S&P's Negative Watch ------------------------------------------------------------------ Standard & Poor's Rating Services placed its 'BB-' corporate credit rating on The Houston Exploration Co. on CreditWatch with negative implications following the announcement of a hostile takeover bid of Houston Exploration by Jana Capital Partners LLC for about $1.8 billion. Jana Capital currently owns 12.3% of Houston Exploration's common shares. The Houston, Texas-based company has about $425 million in total debt outstanding as of March 31, 2006. "The CreditWatch listing reflects the company's significantly increased business and financial risk associated with external pressures and existing shareholders that may cause management to pursue equity-focused initiatives that are neither supportive of credit quality nor within our expectations for the current ratings," said Standard & Poor's credit analyst Brian Janiak. Standard & Poor's said that the uncertainty with respect to the strategic direction of the company and ultimate use of cash proceeds from its recent Gulf of Mexico asset sales further highlight concerns regarding Houston Exploration's credit quality. Standard & Poor's will continue to monitor the ultimate outcome of the current situation. Furthermore, Standard & Poor's will meet with management to discuss the company's near-term strategic initiatives and the potential effect of the increasing external pressure by its largest shareholders Jana Capital. Standard & Poor's expects to resolve the CreditWatch within the next 60 days. HOWARD MILLS: Case Summary & 5 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Howard O. Mills, Jr. Barbara Mills 2176 Dellesta Drive Bellingham, Washington 98226-7850 Bankruptcy Case No.: 06-11873 Type of Business: The Debtor owns H.E. Mills Electric Company, Inc., which filed for chapter 11 protection on April 7, 2006 (Bankr. W.D. Wash. Case No. 06- 10991). Chapter 11 Petition Date: June 13, 2006 Court: Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Bruce J. Borrus, Esq. Riddell Williams P.S. 1001 4th Avenue, Suite 4500 Seattle, Washington 98154-1192 Tel: (206) 624-3600 Fax: (206) 389-1708 Total Assets: $4,279,441 Total Debts: $5,663,213 Debtor's 5 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Skagit State Bank Guaranty of Mills $3,787,174 Mr. Geoff Wachter Electric Debt 301 Fairhaven Avenue P.O. Box 285 Burlington, WA 98233 Travelers Indemnity Agreement $750,000 3455 South 344th Way Suite 200 Auburn, WA 98001 Addson Electrical System Breach of Contract $400,000 David Evankovich c/o Bruce McIntyre, Perkins 1201 Third Avenue, Suite 4800 Seattle, WA 98101-3099 Whidbey Island Bank Co-Sign for $11,514 Company Debt Wachovia Visa Credit Card $525 ICOS CORP: Balance Sheet Upside-Down by $50.9 Million at March 31 ----------------------------------------------------------------- ICOS Corporation reported a $653,000 net loss on $18.7 million of revenues for the three months ended March 31, 2006, compared to a $46.4 million net loss on $13.8 million of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $248.5 million in total assets and $299.4 million in total liabilities, resulting in a $50.9 million stockholders' deficit. ICOS' balance sheet reflected a $59.2 million stockholders' deficit at Dec. 31, 2005. A full-text copy of the Company's 2006 Quarterly Report is available for free at http://researcharchives.com/t/s?b62 About ICOS Corp ICOS Corporation, a biotechnology company headquartered in Bothell, Washington, is dedicated to bringing innovative therapeutics to patients. Through Lilly ICOS LLC, ICOS is marketing its first product, Cialis (tadalafil), for the treatment of erectile dysfunction. ICOS is working to develop treatments for serious unmet medical conditions such as benign prostatic hyperplasia, pulmonary arterial hypertension, cancer and inflammatory diseases. INTERPUBLIC GROUP: Fitch Assigns B Rating to $750 Million Notes --------------------------------------------------------------- Fitch assigned a rating of 'B/RR4' to Interpublic Group's $750 million three-year Enhanced Liquidity Facility notes due June 15, 2009. Fitch also affirms these ratings: -- Issuer default rating 'B' -- Senior unsecured notes 'B/RR4' -- Cumulative convertible perpetual preferred stock 'CCC/RR6' -- Mandatory convertible preferred stock to 'CCC/RR6' The Rating Outlook is Negative. The company's ratings on its Senior unsecured credit facility 'B/RR4' are withdrawn. Fitch rates the revolving ELF structure pari-passu with the company's unsecured bank facility and with its outstanding senior unsecured notes. Although it is structured like a securitization, the facility does not encumber any assets or cash flows that would be available to satisfy senior unsecured obligations. Fitch's rating incorporates its analysis of a particular provision of the structure which allows IPG to draw the facility for a specified time period after an involuntary bankruptcy filing. Given the untested nature of the structure in bankruptcy, Fitch is uncertain whether the courts would uphold this provision as written. Furthermore, if upheld, Fitch believes that there is a risk that such drawings could have priority in bankruptcy over other general unsecured claims. However, given the rating agency's assessment of the probability and degree of priority, this risk did not warrant a notch between the facility and other unsecured claims. This structured finance vehicle replenishes the liquidity that was reduced when the company's senior unsecured bank revolver was amended to include a provision that required the company to maintain $300 million in deposits at the bank syndicate in addition to the balance of any borrowings. Fitch expects the company to terminate its unsecured bank credit facility in the near term. IPG had not used its stand-by facility in over two years and has been proactive in bolstering its financial flexibility, issuing $525 million in preferred stock in October of 2005. These transactions have improved financial flexibility for the company while it attempts to make progress on addressing its operational issues. Steady, sequential operational improvement will be required to stabilize the rating. The rating and Negative Outlook continue to reflect the heightened operational and financial risk given an extended time frame for its operational turn around. The ratings continue to reflect: * weak financial performance which has been driven by numerous accounting and operational challenges; * continued integration issues from IPG's restructuring initiatives, including major management changes, the ongoing material weaknesses and internal control issues, which have yet to be remedied; and * ongoing risk of client losses. These risks are balanced somewhat by IPG's position in the industry as a leading global advertising holding company and its diverse client base. Fitch had expected a very weak 2005 and had forecasted weakness in credit metrics through the first half of 2006. Fitch understood that negative effects of client losses on revenues, combined with an under utilized staff pitching new business and significant professional fees associated with the control issue remediation efforts could elevate cost levels significantly, and could result in significant deterioration in EBITDA levels through mid-2006. With the timeframe for an operational turnaround has been extended as Fitch now believes the operating and financial profile may not improve until well into 2007 and that IPG faces significant challenges in reaching a normalized operating and financial profile by 2008. Fitch expects IPG to make steady progress toward improved operating fundamentals, as measured by meaningful, consistent organic growth trends (trending toward mid-single digits initially) and healthier EBITDA margins (above 10%). Its liquidity position is supported by approximately $1.6 billion in cash at Mar. 31, 2006. Fitch incorporates into its analysis the meaningful working capital deficit (approximately $1.5 billion) resulting from payables and accrued liabilities which exceed receivables. Fitch expects that IPG will be free cashflow negative in 2006. Near-term flexibility is enhanced by the minimal debt maturities IPG faces in 2006 and 2007 and by Fitch's belief that capital expenditures are largely discretionary. IPG's next meaningful maturity is in 2008, when its $800 million 4.5% convertible senior notes due 2023 are putable by the note holders for cash. The Recovery Ratings and notching reflect Fitch's recovery expectations under a distress scenario. Fitch used an enterprise value analysis for these recovery ratings, given the limited tangible asset base which exists for companies in the advertising services industry. The 'RR4' recovery rating for IPG's bank facility, ELF notes and senior unsecured notes reflects Fitch's belief that approximately 30%-50% recovery is realistic, and the 'RR6' recovery rating for the preferred stock reflects Fitch's estimate that negligible recovery would be achievable. INTREPID TECH: Amends 2006 Financial Statements ----------------------------------------------- Intrepid Technology & Resources, Inc., filed with the Securities and Exchange Commission on June 6, 2006, its amended financial statements: -- for the quarterly period ended March 31, 2006; -- for the quarterly period ended December 31, 2005; and -- for the quarterly period ended March 31, 2006; The company's Statement of Operations showed: For the period ended --------------------------------- Quarter Quarter Quarter 03/31/06 12/30/05 03/31/06 ---------- ---------- --------- Revenue $97,592 $120,299 $97,592 Net (Loss) ($485,817) ($609,888) ($685,581) The company's Balance Sheet showed: For the period ended ---------------------------------- Year Quarter Quarter 03/31/06 12/30/05 03/31/06 ---------- ---------- ---------- Current Assets $ 416,977 $ 219,690 $ 416,977 Total Assets $1,904,649 $1,471,774 $1,904,649 Current Liabilities $1,267,250 $ 938,479 $1,267,250 Total Liabilities $1,267,250 $1,478,475 $1,267,250 Total Stockholders' Equity $ 637,399 $1,471,774 $ 637,399 Full-text copies of the company's financial statements are available for free at: quarterly period ended http://ResearchArchives.com/t/s?b5a March 31, 2006; quarterly period ended http://ResearchArchives.com/t/s?b5b December 31, 2005; quarterly period ended http://ResearchArchives.com/t/s?b5c March 31, 2006; Going Concern Doubt Jones Simkins, p.c., in Logan, Utah, raised substantial doubt about Intrepid Technology & Resources, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2005. The auditor pointed to the company's stockholders deficit and negative cash flows from operations. About Intrepid Intrepid Technology & Resources, Inc., provides engineering, construction, and operation services for alternative energy facilities, including methane gas production plants and hydroelectric, geothermal, and wind generation facilities. The company also promotes the use of its bioreactor technology in California. J.L. FRENCH: Creditors Unanimously Approve Plan of Reorganization ----------------------------------------------------------------- Each of the five voting creditor classes overwhelmingly accepted J.L. French Automotive Castings, Inc.'s Plan of Reorganization, which readies the company for its confirmation hearing on June 21. The second lien noteholders voted unanimously to accept the Plan, along with more than 98% in claims amount and 95% in number of the two classes of unsecured creditors who voted. The senior subordinated noteholders who voted also unanimously accepted the Plan. In addition, the company's rights offering, which was conducted concurrently with the solicitation of plan acceptances, was fully subscribed at $130 million by the second lien noteholders. Details on the rights offering subscriptions and the voting report will be filed with the Court prior to the confirmation hearing. The unsecured creditors' committee has filed a statement in support of Plan confirmation, and no objections to confirmation were filed prior to the objection deadline. If the court confirms the Plan, the company expects to emerge from bankruptcy shortly thereafter. Headquartered in Sheboygan, Wisconsin, J.L. French Automotive Castings, Inc. -- http://www.jlfrench.com/-- is one of the world's leading global suppliers of die cast aluminum components and assemblies. There are currently nine manufacturing locations around the world including plants in the United States, United Kingdom, Spain, and Mexico. The company has fourteen engineering/customer service offices to globally support our customers near their regional engineering and manufacturing locations. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2006 (Bankr. D. Del. Case No. 06-10119 to 06-06-10127). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young & Jones, and Marc Kiesolstein, P.C., at Kirkland & Ellis LLP, represent the Debtors in their restructuring efforts. Miller Buckfire & Co., LLC, serves as their financial advisor. Ricardo Palacio, Esq., and William Pierce Bowden, Esq., at Ashby & Geddes, PA, represents the Official Committee Of Unsecured Creditors. When the Debtor filed for chapter 11 protection, it estimated assets and debts of more than $100 million. JERRY WILLIAMS: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Jerry Wayne Williams 5466 Medinah Drive Newburgh, Indiana 47630 Bankruptcy Case No.: 06-70431 Chapter 11 Petition Date: June 13, 2006 Court: Southern District of Indiana (Evansville) Debtor's Counsel: Douglas Warren Patterson, Esq. Law Office of Douglas Patterson 2221 West Franklin Street Evansville, Indiana 47712 Tel: (812) 424-2991 Fax: (812) 468-8690 Total Assets: $1,731,445 Total Debts: $2,110,803 Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ John Satterfield Property Title $420,000 6733 Millcreek Drive Dispute Newburgh, IN 47630 Indiana Department of Revenue Income Taxes $202,213 Insolvency Revenue Division Stop SB 380 P.O. Box 44985 Indianapolis, IN 46244 Hayes Construction Services Rendered $24,500 1121 South Redbank Road Evansville, IN 47712 Lensing Wholesale Purchase of Goods $23,286 First Indiana Bank Line of Credit $19,045 MT Concrete Construction Concrete Work $13,416 Kight Home Center Building Materials $12,000 Counter Design Materials $11,000 Niehouse Construction Services Rendered $10,500 Evansville Tile Distributors Building Materials $10,147 Schaefer Drywall Services Rendered $9,000 Miller Block Co. Purchase of Goods $8,174 Indiana Department of Revenue 2003 Taxes $7,850 Schindler Heating Purchase of Goods $6,850 Hoosier Tile and Marble Purchase of Goods $6,575 Brackett Heating and Purchase of Goods $6,329 Air Conditioning Tri-State Stone Purchase of Goods $3,450 KAISER ALUMINUM: Court Signs Order Reducing Bonneville Claims ------------------------------------------------------------- Judge Judith K. Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware signs an agreed order presented by Kaiser Aluminum & Chemical Corporation and Bonneville Power Administration providing that: (1) Claim No. 16612 is allowed as an unsecured, nonpriority claim for $6,062,000; (2) Claim No. 3106 is allowed as an unsecured, nonpriority claim for $1,686,867; and (3) Claim No. 3107 is allowed as an unsecured, nonpriority claim for $555,351. Claim No. 3105, which is amended and superseded by Claim No. 16612, is disallowed in its entirety and expunged. The Reorganizing Debtors' claim in the agreed amount of $290,000 against the U.S. Department of Energy under their Extrusion Press Agreement dated June 6, 1997, will be set off against Claim No. 7325. Claim No. 7325 is allowed as an unsecured, nonpriority claim in for $3,013,939 less by 50% of a tax refund authorized in the Debtors' stipulations with various U.S. Government units, including the Internal Revenue Service. Any claims of the Debtors or the DOE under the Extrusion Press Agreement are deemed released. The Court's decision does not affect the rights and claims of any federal agency other than Bonneville Power and DOE nor will it limit the rights of the U.S. Government to set off any additional amounts it may determine to owe to the Debtors against Bonneville Power's claims. 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. 98; Bankruptcy Creditors' Service, Inc., 215/945-7000) KAISER ALUMINUM: Wants Zurich Insurance Settlement Pact Approved ---------------------------------------------------------------- Kaiser Aluminum & Chemical Corporation and its affiliates ask the U.S. Bankruptcy Court for the District of Delaware to: (i) approve their settlement agreement with Zurich Insurance Company (Switzerland), and Zurich International (Bermuda), Ltd.; and (ii) authorize the sale of certain Zurich-issued policies back to Zurich free and clear of liens, claims, encumbrances or other interests. In May 2000, KACC instituted an insurance coverage action against Zurich and other insurers before the Superior Court of California for the County of San Francisco. KACC is seeking: -- a declaratory judgment that the insurers are obligated to cover the asbestos-related bodily injury products that have been asserted against KACC; and -- damages for breach of contract and breach of the covenant of good faith and fair dealing against several of the insurers. Zurich subscribed to or issued certain policies that provide KACC insurance coverage that spans the period from 1977 to 1979, and 1985 to 1987. The Debtors and Zurich have engaged in negotiations to resolve their dispute regarding the Subject Policies, Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, relates. Pursuant to the Settlement Agreement, Zurich agrees to make a $1,600,000 settlement payment not later than June 30, 2006. Zurich will deliver the settlement amount to U.S. Bank National Association, as settlement account agent, unless a Trigger Date has occurred, in which case, payment will be made to Wells Fargo Bank, N.A., as insurance escrow agent, for distribution to the Funding Vehicle Trust. The Trigger Date is the day that the last of these events has occurred: -- the order approving the Settlement Agreement becomes a Final Order; -- the order confirming the Reorganizing Debtors' Plan becomes final; and -- the occurrence of the Plan Effective Date. Other terms of the Settlement Agreement are: (a) Zurich will receive all benefits of being designated as a Settling Insurance Company in the Plan of Reorganization, including the benefits of the Personal Injury Channeling Injunctions; (b) KACC releases all its rights with respect to Zurich's participation under the Subject Policies and other rights under additional policies, and will dismiss Zurich from the Products Coverage Action; (c) KACC will sell the Subject Policies back to Zurich, and Zurich will buy back the Policies free and clear of all liens, claims, or interests, with Zurich's payment of the Settlement Amount constituting the consideration for the buy-back; (d) If any claim is brought against any of the Zurich that is subject to a PI Channeling Injunction, the Funding Vehicle Trust will exercise all reasonable efforts to establish that the claim is enjoined as to Zurich; and (e) Zurich will not seek from any entity other than its reinsurers or retrocessionaires: * reimbursement of any payments that it is obligated to make under the Settlement Agreement; * any other payments Zurich has made to or for the benefit of KACC or, upon its creation, the Funding Vehicle Trust, under the Subject Policies, whether by way of contribution, subrogation, indemnification or otherwise. In no event will Zurich make any claim for or relating to the insurance, reinsurance or retrocession against any KACC Party. The Settlement Agreement contains certain rights to adjustment of the Settlement Amount if Asbestos Litigation is enacted into law before the earlier of the Trigger Date and June 30, 2006, and the Asbestos Legislation does not provide Zurich a dollar-for-dollar credit for payments under the Settlement. Ms. Newmarch tells the Court that through the Settlement Agreement: (i) KACC will eliminate its continuing costs of prosecuting the Products Coverage Action against Zurich; (ii) uncertainty regarding future payments by Zurich will be eliminated; and (iii) total fixed payment from Zurich will be secured without further delay and cost to KACC. 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. 98; Bankruptcy Creditors' Service, Inc., 215/945-7000) KING ELECTRICAL: Case Summary & 14 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: King Electrical Services, Inc. P.O. Box 1021 Long Island City, New York 11101 Bankruptcy Case No.: 06-42010 Type of Business: The Debtor is an electrical contractor. Chapter 11 Petition Date: June 14, 2006 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Stephen B. Kass, Esq. Stephen B. Kass, P.C. 225 Broadway, Suite 711 New York, New York 10007 Tel: (212) 843-0050 Fax: (212) 571-0640 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Payroll Taxes $506,901 Special Procedures Funtio 625 Fulton Street 10 Metrotech Center Brooklyn, NY 11201 Wells Fargo Revolving Credit $98,223 P.O. Box 6426 Carol Stream, IL 60197 HSBC Bank USA, N.A. Credit Line $93,029 Commercial Credit Loan SV Suite 0002 Buffalo, NY 14270-0002 Benfield Lighting Inc. Materials $54,547 New York Light Source Co. Materials $53,432 American Express Credit Card $50,000 Joint Industry Board Revolving Credit $48,000 Chase Revolving Credit $47,000 NYS Department of Tax & Finance Materials $36,104 Advanta Mastercard Credit Card $34,393 Turtle & Hughes, Inc. Materials $33,433 Avon Electrical Supplies Materials $24,340 American Express Loan Loan $20,000 Putnam Investments 401K $17,568 KOOSHAREM CORP: Moody's Rates Planned $300 Million Debt Deal at B2 ------------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to the proposed $300 million senior secured credit facility of Koosharem Corporation. This is the first time that Moody's has assigned ratings to Koosharem, a holding company that owns Select Personnel Services, Inc. On May 11, 2006, Select entered into a definitive agreement to acquire RemedyTemp, Inc. for $17 in cash per share, representing approximately $169 million in aggregate consideration before $27.9 million of unrestricted cash received. The acquisition is expected to close in June 2006 and is subject to customary closing conditions, including approval by Remedy shareholders. The acquisition of Remedy together with the refinancing of Select's existing debt is expected to be financed with a $215 million term loan, approximately $24 million of borrowings under a proposed $85 million revolving credit facility and $27.9 million of unrestricted cash on hand. The ratings reflect solid credit metrics for the rating category, a strong market position in California, low levels of customer concentration and good industry demand trends. The ratings are constrained by substantial integration risks, intense price competition, and pronounced earnings and margin cyclicality. Moody's assigned these ratings: * $85 million 5 year senior secured revolving credit facility, B2 * $215 million 6 year senior secured term loan B, B2 * Corporate family rating, B2 * The ratings outlook is stable. The ratings are subject to review of executed documents and Koosharem's 2005 audited financial statements. The stable rating outlook anticipates flat to modestly declining revenues as the company completes the integration of Remedy. The pro forma operating margin, reflecting Moody's estimate of cost savings, is expected to stabilize at about 3.5%. Cash flow from operations over the next year should exceed required capital expenditures, term loan amortization and non-recurring costs related to the integration. The ratings could be upgraded if the company achieves steady organic revenue growth and reaches management's targeted cost savings such that debt to EBITDA and free cash flow to debt can be sustained at less than 4 times and over 8%, respectively. The ratings could be downgraded if the company experiences difficulty completing the merger integration or suffers deteriorating operating margins such that debt to EBITDA and free cash flow to debt are expected to be sustained at over 6.5 times and below 3%, respectively. A material settlement of outstanding employment related litigation could also pressure the ratings. Select is a privately-held staffing services business with over 50 offices throughout California, Arizona, Florida, New Jersey and Texas. Select offers temporary, temp-to-hire, and direct placement positions primarily in the clerical, accounting, customer service, mortgage, industrial and technical fields. Pro forma for the acquisition of Remedy, 2005 revenues were about $1 billion. The combined company expects to provide its services in 35 states, Puerto Rico and Canada, through a network of 220 offices. KRISPY KREME: Sees Revenue Decline in Fiscal 2006 First Quarter --------------------------------------------------------------- On a preliminary basis, Krispy Kreme Doughnuts, Inc., expects to report revenues of $116 million for the first quarter of fiscal 2007, which ended April 30, 2006, compared to revenues of $153 million for the first quarter of fiscal 2006. The decrease in revenues principally reflects a decrease in the number of Company stores, lower sales to franchisees from the Company's Manufacturing and Distribution segment, and lower royalties and fees from franchisees. Systemwide sales fell approximately 17% in the first quarter of fiscal 2007 compared to the first quarter of the prior year primarily due to a 19% decrease in the number of factory stores to 310 (total stores, including satellites, decreased 6%). Average weekly sales per factory store increased 10% and 2% in Company stores and systemwide, compared to the first quarter of fiscal 2006. Average weekly sales per store increased approximately 10% for Company stores and decreased approximately 11% systemwide, compared to the first quarter of fiscal 2006. The average sales per unit data reflect, among other things, store closures and the related shift in off-premises doughnut production into a smaller number of stores. Systemwide sales data include sales at all Company and franchise locations. Systemwide sales is a non-GAAP financial measure; however, the Company believes systemwide sales information is useful in assessing the overall performance of the Krispy Kreme brand and, ultimately, the performance of the Company. "We are taking steps to turn around the Company," Daryl Brewster, President and Chief Executive Officer, said. "We have filed our fiscal 2005 financial statements. We have reached an initial settlement of the ERISA class action. We continue to see growth in our international markets, including two new international development agreements. We are also seeing signs of stability in the United States." The Company's financial results continue to be adversely affected by the substantial costs associated with the legal and regulatory matters. The Company expects to report a net loss for the first quarter of fiscal 2007. Financial Position The Company ceased consolidation of its sole remaining consolidated franchisee, Glazed Investments, in early February 2006 when Glazed filed for bankruptcy protection. Substantially all of Glazed's assets subsequently were sold to another of the Company's franchisees, which is continuing the business, and Glazed's affairs are being wound up. The Company believes that the amount, if any, it will be required to pay pursuant to its guarantee of a portion of certain of Glazed's indebtedness will not be significant. The indebtedness totaled $13 million. The Company believes that cash flow from operations, combined with other anticipated cash inflows, will be sufficient to meet its liquidity needs. As of April 30, 2006, the Company's cash balance was $19 million and its indebtedness was $121 million, compared to approximately $20 million and $122 million at Jan. 29, 2006. The January amount excludes any amount relating to Glazed Investments, its sole consolidated franchisee at the time. As of April 30, 2006, the Company had no consolidated franchisees. In May 2006, the Company sold for cash its notes receivable from Krispy Kreme Australia for their par balance of approximately $3.8 million and entered into a definitive agreement to sell its interest in Krispy Kreme UK for approximately $5.6 million cash. The Company's unused borrowing capacity under its credit facilities is expected to have declined during the quarter due to a reduction in the operating earnings on which such availability depends. The Company's operating plan for fiscal 2007 does not forecast any additional borrowings under these credit facilities. About Krispy Kreme Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme (NYSE: KKD) --http://www.krispykreme.com/-- is a leading branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. There are currently approximately 320 Krispy Kreme stores and 80 satellites operating systemwide in 43 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United Kingdom. Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC is a majority-owned subsidiary and franchisee partner of Krispy Kreme Doughnuts, Inc., in the Philadelphia region. The Debtor operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268). M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated $10 million to $50 million in assets and debts. Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). The bankruptcy filing will facilitate the sale of 12 Krispy Kreme stores, as well as the franchise development rights for Colorado, Minnesota and Wisconsin, for approximately $10 million to Westward Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho, Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP represents Glazed in its restructuring efforts. When Glazed filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. KremeKo, Inc., Krispy Kreme's Canadian franchisee, is currently restructuring under the Companies' Creditors Arrangement Act. Pursuant to the Court's Initial Order, Ernst & Young Inc. was appointed as Monitor in KremeKo's CCAA proceedings. The Monitor is attempting to sell the KremeKo business. LASER DENTISTRY: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Laser Dentistry, PLLC dba Houston Center for Laser Dentistry 5801 Logan Lane Houston, Texas 77007 Bankruptcy Case No.: 06-32619 Type of Business: The Debtor offers general dentistry services. Chapter 11 Petition Date: June 13, 2006 Court: Southern District of Texas (Houston) Judge: Wesley W. Steen Debtor's Counsel: Reese W. Baker, Esq. Baker & Associates LLP 5151 Katy Freeway, Suite 200 Houston, Texas 77007 Tel: (713) 869-9200 Fax: (713) 869-9100 Total Assets: $1,147,725 Total Debts: $1,421,207 The Debtor did not file a list of its 20 largest unsecured creditors. MAJESTIC STAR: S&P Places B+ Corporate Credit Rating on Neg. Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on Majestic Star Casino LLC and its subsidiaries, including the 'B+' corporate credit rating, on CreditWatch with negative implications. The CreditWatch placement follows the release of May 2006 Indiana state gaming revenues, where the 23% year-over-year decline in combined revenues for Majestic and Majestic Star II was greater than originally expected. The entire market revenue was up 1% for the month. Gaming revenues for the year-to-date period for the combined Majestic properties were down about 10% year-over-year as compared to the entire market, which was up about 5%. In resolving its CreditWatch listings, Standard & Poor's will review the company's pro forma capital structure given weaker year-to-date performance, management's near- and longer-term growth objectives, integration plans, and overall financial policy. If a downgrade for the company were the outcome of Standard & Poor's analysis, it would be limited to one notch. MARSH SUPERMARKETS: Board Opposes Cardinal Group's Purchase Bid --------------------------------------------------------------- The Board of Directors of Marsh Supermarkets, Inc., took action under its merger agreement with MSH Supermarkets Holding Corp., an affiliate of Sun Capital Partners Group IV, LP. Under the MSH merger agreement, holders of both classes of Marsh common stock will receive $11.125 per share in cash. As reported in the Troubled Company Reporter on June 1, 2006, the Company received letters from Cardinal Paragon, Inc. and Drawbridge Special Opportunities Advisors LLC. In those letters, the Cardinal Group requested that the Company consent to their making a proposal to acquire Marsh for $13.625 per share, subject to completion of due diligence, and otherwise on substantially the same terms as the MSH merger agreement. The Company entered into a merger agreement with MSH on May 2, 2006, after having conducted a six-month public process to consider strategic alternatives, including a sale. Cardinal had entered into a confidentiality agreement with Marsh as part of the strategic alternative process. The confidentiality agreement contains standstill provisions under which Cardinal agreed not to make an offer to acquire Marsh without Marsh's prior consent. The merger agreement with MSH contains a covenant prohibiting the Company from waiving or failing to enforce any standstill agreement without the prior consent of MSH. The Company has requested MSH to consent to the Company granting the request of Cardinal Group, but MSH and the Company have not been able to reach agreement on the terms under which MSH would provide its consent. Under the MSH merger agreement, if a competing transaction has been publicly disclosed, MSH would have the right to terminate the merger agreement and receive a $10 million termination fee from the Company if the Company failed to issue a press release announcing its opposition to the competing transaction within 10 business days. Given the uncertainty of the competing transaction and the adverse consequences from failing to report opposition within the 10 business day period, the Company's Board of Directors concluded that there is only one prudent course of action at this time. Accordingly, the Company is announcing its opposition to the Cardinal Group competing transaction. The Company's Board intends to continue to monitor any developments. The Company also expects to report results for the fourth fiscal quarter and fiscal year ended April 1, 2006, and file preliminary proxy materials with respect to the MSH merger. About Marsh Supermarkets Headquartered in Indianapolis, Indiana, Marsh Supermarkets, Inc. (Nasdaq:MARSA) (Nasdaq:MARSB) -- http://www.marsh.net/-- is a leading regional chain, operating 69 Marsh(R) supermarkets, 38 LoBill(R) Foods stores, eight O'Malia(R) Food Markets, 154 Village Pantry(R) convenience stores, and two Arthur's Fresh Market(R) stores in Indiana, Illinois, and western Ohio. The Company also operates Crystal Food Services(SM), which provides upscale catering, cafeteria management, office coffee, coffee roasting, vending, and concessions, and restaurant management and Primo Banquet Catering and Conference Centers, Floral Fashions(R), McNamara Florist(R), and Enflora(R) -- Flowers for Business. * * * As reported in the Troubled Company Reporter on May 8, 2006, Moody's Investors Service placed the ratings of Marsh Supermarkets, Inc., including the B3 Corporate Family Rating and Caa2 rating of 8.875% Senior Subordinated Notes due 2007 on review-direction uncertain. MAVERICK TUBE: To Sell Assets to Tenaris S.A. for $3.185 Billion ---------------------------------------------------------------- Tenaris S.A. and Maverick Tube Corporation signed a definitive merger agreement pursuant to which Tenaris will acquire Maverick for $65 per share in cash. The transaction is valued at $3.185 billion, including Maverick's net debt. The share price represents a premium of 42% to Maverick's closing share price of June 12, 2006, and a premium of approximately 24% to its 90-day average trading price. Tenaris will finance the acquisition through a combination of cash on hand and debt, for which bank commitments have already been secured. The transaction is subject to regulatory approvals, majority approval of Maverick's shareholders and other customary conditions. Maverick is a leading North American producer of welded oil country tubular goods, line pipe and coiled tubing for use in oil and natural gas wells. Its electrical products segment produces welded pipes for electrical conduits. With operations in the United States, Canada and Colombia, it has a combined annual capacity of two million short tons of steel pipes with a size range from one-quarter inch to 16 inches. Maverick has 4,650 employees and in 2005 had sales of $1.8 billion, of which 82% were from its energy products division. Tenaris is a leading global producer of seamless steel pipes for the oil and gas industry worldwide. Taken together, the United States and Canadian markets for oil country tubular goods products, both seamless and welded, amounted to more than five million tons in 2005, or approximately 40% of total world demand. "This is a major step for Tenaris," Paolo Rocca, Tenaris's Chairman and CEO, commented. "With Maverick, we will gain full access to the energy sector in the United States and Canada. We will be able to support the growing requirements of our customers in the full range of applications from onshore shallow wells to extremely demanding deepwater wells in the Gulf of Mexico." "We are excited about joining forces with Tenaris," Robert Bunch, Chairman and CEO of Maverick, stated. "Maverick's success in North America complements the strength of Tenaris in international markets. Moreover, the combined entity will be able to provide a broader array of products and services to our customers, positioning us better to compete in a highly competitive marketplace. This expanded platform will benefit our employees, and represents an attractive opportunity for stockholders." Assuming the acquisition is completed, the combined entity would have annual sales of $9 billion of which 30% would be in the USA and Canada. Goldman Sachs & Co. acted as financial advisor to Tenaris, while Morgan Stanley & Co. acted as financial advisor to Maverick. About Tenaris Tenaris S.A. [TS: NYSE, Buenos Aires, Mexico and TEN: MTA Italy] - - http://www.tenaris.com/-- is a leading global manufacturer and supplier of seamless steel pipe products and provider of pipe handling, stocking and distribution services to the oil and gas, energy and mechanical industries. It is also a leading regional supplier of welded steel pipes for gas pipelines in South America. With manufacturing facilities in Argentina, Brazil, Canada, Italy, Japan, Mexico, Romania and Venezuela and a network of customer service centers in over 20 countries, Tenaris has an annual production capacity of 3.3 million tons of seamless, and 930 thousand tons of welded pipes, annual consolidated net sales in excess of $6.5 billion and 17,500 employees worldwide. About Maverick Headquartered in Chesterfield, Missouri, Maverick Tube Corporation -- http://www.mavericktube.com/-- manufactures steel tubular products used to drill for oil and gas (known in the trade as oil country tubular goods or OCTG). Its products can be employed in wells up to 8,000 feet deep. The Company also makes line pipe for oil and gas surface handling and transportation and, outside the oil industry, it sells both structural tubing and standard pipe for a variety of transportation (boat trailers), agricultural (farm implements and tillage equipment), construction applications (building columns and handrails) and a variety of electrical applications. MAVERICK TUBE: Moody's Holds B2 Rating on $250 Mil. Sr. Sub. Notes ------------------------------------------------------------------ Moody's Investors Service put Maverick Tube Corporation's Ba3 Corporate Family Rating and B2 $250 million convertible senior subordinated notes ratings under review for a possible upgrade. The ratings review accompanies Maverick's pending acquisition by Tenaris, S.A., which is not rated by Moody's, for $3.185 billion, including the assumption of Maverick's net debt. For the twelve months ending March 31, 2006 Maverick reported approximately $80 million of cash on hand and $488 million of outstanding debt. Moody's review will focus on Tenaris' funding and growth strategies and the effect of the combination of the two companies will have upon Maverick's convertible senior subordinated note holders and whether they remain in place and if so, where in the corporate structure they will reside. The combined company will have annual sales of approximately $9 billion and will provide Tenaris with a significant presence in the U.S. OCTG market that it has otherwise been limited to because of Anti Dumping tarrifs. Projected leverage will be less than 1.0 times, as measured by Debt/EBITDA, as Tenaris will now be in a net debt position versus its current net cash position. Tenaris' $3.185 billion acquisition represents approximately a 9x multiple on historical Maverick EBITDA. Upon closing of the acquisition, each Maverick share will be converted into the right to receive $65 per share in cash. Furthermore, Moody's notes that the change of control provision will trigger the notes to become convertible beginning on the 30th scheduled trading day prior to the anticipated closing date. In the event of a conversion, the notes would be settled for cash at par, with any premium above the conversion price being settled in new shares prior to the closing or cash after the closing. If the notes are converted or redeemed Moody's will withdraw the ratings on the notes as well as the corporate family rating. MESABA AVIATION: Court Extends Lease Decision Period to Dec. 10 --------------------------------------------------------------- The Hon. Gregory Kishel of the U.S. Bankruptcy Court for the District of Minnesota further extended the period within which Mesaba Aviation, Inc., doing business as Mesaba Airlines, may assume or reject its unexpired Leases through the earlier of: (a) December 10, 2006; or (b) the confirmation of a plan of reorganization. The extension is without prejudice to the right of any party to an executory contract or unexpired lease to file a request with the Court for a hearing to consider a reduction of the Lease Decision Period. The Debtor is engaged in the ongoing process of evaluating its options with respect to assumption, assumption and assignment, or rejection of its unexpired leases, Will R. Tansey, Esq., at Ravich Meyer Kirkman McGrath & Nauman, P.A., in Minneapolis, Minnesota, tells the Court. Mr. Tansey relates that within the first seven months of the Debtor's bankruptcy case, several factors have made it impossible for the Debtor to intelligently appraise the Leases in the market, and the value of the Leases to the reorganization. These factors include: -- the size and complexity of the Debtor's operation; -- the Debtor's labor negotiations; -- unresolved proposals for air service agreements with larger carriers; -- the uncertain status of the Debtor's air services agreement with Northwest Airlines, Inc.; and -- the Debtor's attempts to obtain postpetition financing acceptable to the Official Committee of Unsecured Creditors and the potential lenders. According to Mr. Tansey, the Debtor's operations are dependent on the Debtor's ability to remain in possession of the Leased Premises. Continued possession of the Leased Premises is necessary for the Debtor to conduct its financial affairs and preserve the possibility that it can reorganize. If the Debtor is forced to prematurely assume the Leases, the estate and the unsecured creditors will be exposed to significant administrative priority claims arising from the possible termination of the Leases, Mr. Tansey maintains. The Debtor expects to determine the general course of its future operations, and hopes to have assumed or rejected the Leases, before December 10, 2006. Mr. Tansey assures the Court that the Debtor is current on all of its postpetition obligations under the Leases, and intends to make timely payment of all future obligations during the pendency of the Chapter 11 case. Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945- 7000). MT WILSON: Moody's Puts Ba2 Rating on $6.9 Mil. Class E Notes ------------------------------------------------------------- Moody's Investors Service assigned ratings to five classes of notes issued by Mt. Wilson CLO, Ltd. Moody's Ratings: * Aaa to the $227,600,000 Class A Floating Rate Senior Secured Notes Due 2018; * Aa2 to the $8,900,000 Class B Floating Rate Senior Secured Notes Due 2018; * A2 to the $22,200,000 Class C Floating Rate Deferrable Interest Notes Due 2018; * Baa3 to the $16,900,000 Class D Floating Rate Deferrable Interest Notes Due 2018; and * Ba2 to the $6,900,000 Class E Floating Rate Deferrable Interest Notes Due 2018. Western Asset Management Company will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. NELLSON NUTRACEUTICAL: Can Hire Seneca as Valuation Advisor ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Nellson Nutraceutical, Inc. and its debtor-affiliates to employ Seneca Financial Group, Inc., as their valuation and litigation advisor. Seneca Financial will: a. conduct a review of the Debtors' long-term business plan, financial projections, current capitalization and ownership structure, sources of liquidity, and ongoing capital requirements for the purposes of conducting a valuation of the Debtors' business and assets; b. review and assess any proposed Plan of Reorganization for purposes of valuing the securities or other consideration proposed to be issued under the plan and in developing alternatives; c. provide expert witness testimony concerning any of the areas encompassed by the Firm's activities under this agreement; d. assist in the development and presentation to the Board of Directors of the Debtors of matters relevant to a valuation of the Debtors; and e. provide other services as the Debtors, the Debtors' counsel, and the Firm agree upon relative to the reorganization of the Debtors. James W. Harris, president of Seneca Financial, tells the Court that the firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- James W. Harris President $625 Jesse DelConte Senior Analyst $250 Mark McDonald Analyst $175 Meeraj Thaker Analyst $175 Thomas Isenhour Analyst $175 As reported in the Troubled Company Reporter on June 12, 2006, the Court will conduct an evidentiary hearing concerning the Debtors' enterprise valuation from Sept. 13, 2006, to Sept. 22, 2006. The Debtors asked the Court to determine their enterprise value and the value of secured claims asserted by their prepetition lenders. Headquartered in Irwindale, California, Nellson Nutraceutical, Inc., formulates, makes and sells bars and powders for the nutrition supplement industry. The Debtors filed for chapter 11 protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski, Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent the Debtors in their restructuring efforts. Lawyers at Young, Conaway, Stargatt & Taylor, LLP, represent an informal committee of which General Electric Capital Corporation and Barclays Bank PLC are members. In its Schedules of Assets and Liabilities filed with the Court, Nellson Nutraceutical reports $312,334,898 in total assets and $345,227,725 in total liabilities when it filed for bankruptcy. NORTH END: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: North End Timber Productions LLC 255 Good Creek Road P.O. Box 153 Olney, Montana 59927 Tel: (406) 881-2311 Bankruptcy Case No.: 06-60440 Chapter 11 Petition Date: June 13, 2006 Court: District of Montana (Butte) Judge: Ralph B. Kirscher Debtor's Counsel: Gregory E. Paskell P.O. Box 919 Kalispell, Montana 59903 Tel: (406) 752-6222 Fax: (406) 752-6205 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. O'SULLIVAN IND: Reports 2nd Quarter Results for Fiscal Year 2006 ---------------------------------------------------------------- On June 5, 2006, O'Sullivan Industries Holdings, Inc., filed with the U.S. Securities and Exchange Commission its financial results for the second fiscal quarter ended December 31, 2005. For the three months ended Dec. 31, 2005, the Company reported a $11.1 million net loss on $50.9 million of revenues, compared to a $12 million net loss on $66.2 million of revenues for the same period in 2004. At Dec. 31, 2005, the Company's balance sheet showed $150.9 million in total assets and $396.6 million in total liabilities, resulting in a $245.7 million stockholders' deficit. A full-text copy of the Company's second quarter report on Form 10-Q is available for free at http://ResearchArchives.com/t/s?b55 Headquartered in Roswell, Georgia, O'Sullivan Industries Holdings, Inc. -- http://www.osullivan.com/-- designs, manufactures, and distributes ready-to-assemble furniture and related products, including desks, computer work centers, bookcases, filing cabinets, home entertainment centers, commercial furniture, garage storage units, television, audio, and night stands, dressers, and bedroom pieces. O'Sullivan sells its products primarily to large retailers including OfficeMax, Lowe's, Wal-Mart, Staples, and Office Depot. The Company and its subsidiaries filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ga. Case No. 05- 83049). Joel H. Levitin, Esq., at Dechert LLP, represents the Debtors. Michael H. Goldstein, Esq., Eric D. Winston, Esq., and Christine M. Pajak, Esq., at Stutman, Treister & Glatt, P.C., represent the Official Committee of Unsecured Creditors. On Sept. 30, 2005, the Debtor listed $161,335,000 in assets and $254,178,000 in debts. (O'Sullivan Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) OWENS CORNING: Financial Projections Underpinning 6th Amended Plan ------------------------------------------------------------------ Owens Corning and its debtor-affiliates believe that their Sixth Amended Plan of Reorganization meets the Bankruptcy Code's feasibility requirement that plan confirmation is not likely to be followed by liquidation or the need for further financial reorganization. In connection with the development of the Sixth Amended Plan, and for the purposes of determining whether the Plan satisfies the feasibility standard, the Debtors analyzed their ability to satisfy their financial obligations while maintaining sufficient liquidity and capital resources. Specifically, the Debtors' management, with Lazard Freres & Co. LLC's assistance, developed and refined a business plan and prepared financial projections for the calendar years ending December 31, 2006 through 2008. The Financial Projections are based on, and assume the successful implementation of the reorganized Debtors' business plan. Owens Corning and Subsidiaries Projected Balance Sheets (In millions) Fiscal Year Ended December 31, ------------------------------ 2006 2007 2008 ------ ------ ------ Assets Cash & cash equivalents $415 $625 $1,162 Accounts receivable, net 635 692 731 Inventories 604 693 712 Other current assets 35 35 35 ------ ------ ------ Total current assets 1,689 2,045 2,640 Property, plant & equip., net 2,780 2,830 2,870 Intangibles 111 106 101 Excess reorganization value 1,871 1,871 1,871 Debt issuance costs 23 18 14 Deferred tax assets 961 796 597 Pension related assets - - - Other non-current assets 210 223 235 ------ ------ ------ Total assets $7,645 $7,888 $8,329 ====== ====== ====== Liabilities & Shareholders' Equity Accounts payable $481 $525 $552 Accrued liabilities 465 493 521 New debt - current portion 10 10 10 Non-debtor debt - current portion 19 10 10 Contingent note 1,390 - - ------ ------ ------ Total current liabilities 2,365 1,038 1,093 New debt 461 1,841 1,831 Non-debtor debt 36 26 16 ------ ------ ------ Total long term debt 497 1,867 1,847 Pension plan liabilities 305 155 165 Other employee benefit liabilities 450 450 450 Other non-current liabilities 240 255 270 ------ ------ ------ Total liabilities 3,857 3,765 3,825 Minority interest 45 45 45 Shareholders' equity 3,743 4,079 4,459 ------ ------ ------ Total liabilities & shareholders' equity $7,645 $7,888 $8,329 ====== ====== ====== Owens Corning and Subsidiaries Projected Statement of Operations (In millions) Fiscal Year Ended December 31, ------------------------------ 2006 2007 2008 ------ ------ ------ Net sales $6,600 $7,000 $7,400 Cost of sales 5,346 5,657 5,968 ------ ------ ------ Gross profit 1,254 1,343 1,432 Marketing & admin. Expenses 570 606 640 Science $ technology expenses 64 68 72 Other expenses 20 20 19 ------ ------ ------ Total operating expenses 654 693 732 ------ ------ ------ Income from operations before fresh start adjustments 600 650 700 ------ ------ ------ Step-up in depreciation expense 5 25 25 Amortization of intangibles - 5 5 Amortization of debt issuance costs - 5 5 Decrease in amortization of deferred pension loss (9) (55) (55) Write-up of inventories 60 - - Deferred stock compensation expense 6 33 33 ------ ------ ------ Total fresh start adjustments 62 13 13 ------ ------ ------ Income from operations after fresh start adj. 538 637 687 ------ ------ ------ Restructuring expense, net 85 15 - Interest expense, net 215 114 106 ------ ------ ------ Income before income tax expense 238 508 582 Income tax expense 109 203 233 ------ ------ ------ Income after taxes 129 305 349 Minority interest & equity in net earnings of affiliates - (2) (2) Tax valuation &rate adjustment 220 - - Extraordinary Gain 5,621 - - ------ ------ ------ Net income $5,970 $303 $347 ====== ====== ====== Owens Corning and Subsidiaries Projected Statements of Cash Flows (In millions) Fiscal Year Ended December 31, ------------------------------ 2007 2008 ------ ------ Cash Flows From Operations: Net Income $303 $347 Depreciation & amortization 310 320 Deferred income taxes 165 199 (Increase) decrease in receivables (57) (39) (Increase) decrease in inventories (89) (19) (Increase) decrease in other assets (13) (13) Increase (decrease) in accounts payable 44 27 Increase (decrease) in accrued liabilities 28 28 Increase (decrease) in pension liabilities (150) 10 Increase (decrease) in other benefits - - Increase (decrease) in other liabilities 15 16 ------ ------ Net cash flows from operations 556 875 Cash flows from investing: Capital expenditures (350) (350) ------ ------ Net cash flows from investing (350) (350) Cash flows from financing: New debt (10) (10) Non-debtor debt (19) (10) Deferred Stock Compensation 33 33 ------ ------ Net cash flows from financing 4 13 ------ ------ Net increase (decrease) in cash & equivalents 210 538 Beginning cash & cash equivalents 415 625 Net increase (decrease) in cash & equivalents 210 538 ------ ------ Ending cash & cash equivalents $625 $1,162 ====== ====== A full-text copy of the Financial Projections underpinning the Debtors' Sixth Amended Plan is available for free at http://ResearchArchives.com/t/s?b69 Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 132; Bankruptcy Creditors' Service, Inc., 215/945-7000). OWENS CORNING: Liquidation Analysis Under 6th Amended Ch. 11 Plan ----------------------------------------------------------------- Owens Corning's management, with the assistance of Lazard Freres & Co. LLC, the Debtors' financial advisor and other advisors, prepared a liquidation analysis to show that the Sixth Amended Plan of Reorganization meets the "best interest of creditors" test under Section 1129(a)(7) of the Bankruptcy Code. Lazard prepared the Liquidation Analysis on a Debtor-by-Debtor basis consistent with the deconsolidated structure of the Sixth Amended Plan. Eight Debtors are not included in the analysis because they have de minimis claims and assets -- Engineered Yarns America, Inc., Falcon Foam Corp., Integrex Ventures LLC, Integrex Professional Services LLC, Integrex Supply Chain Solutions LLC, Integrex Testing Systems LLC, Homexperts LLC, Jefferson Holdings, Inc., and Owens Corning Overseas Holdings, Inc. Among others, the Liquidation Analysis assumes that: * it would not be possible to sell Owens Corning Delaware as a going concern in a Chapter 7 case, precipitating the shutdown of both the Debtor and its non-Debtor subsidiaries; * a Chapter 7 trustee would be forced to sell assets in a traditional "bricks and mortar" liquidation with the loss of most if not all "going-concern" value attributable to the Debtors' assets; * the Debtors' Chapter 11 cases would convert to Chapter 7 on October 30, 2006; * certain Non-Debtor Subsidiaries -- IPM Inc., Vytec Corp., and Owens-Corning Fiberglas Sweden, Inc. -- may file for relief under Chapter 11 of the Bankruptcy Code, and that their cases would also be converted to Chapter 7; * the unaudited book values as of March 31, 2006, are representative of the Debtors' asses and liabilities as of October 30, 2006; * the Debtors would begin to wind-down daily operations immediately and that all manufacturing operations would be closed and secured within 60 days; * the cost of administering the Debtors' Chapter 7 liquidation will total at approximately $291 million; and * there are no proceeds from the recoveries of any potential preferences, fraudulent conveyances or other causes of action. Based on the assumptions, Lazard estimates the net proceeds available to the Debtors' stakeholders, pursuant to a Chapter 11 liquidation, at these amounts: Amount (In millions) ------------------------------ Mid-Pt. Debtor Low Estimate High ------ -------- -------- -------- Owens Corning Delaware $2,156.3 $2,317.5 $2,478.7 Owens Corning Fiberglass Tech 24.3 36.5 48.6 Integrex 0.1 0.1 0.2 Soltech 14.4 15.4 16.3 CDC 1.9 2.0 2.2 OC HT 0.0 0.0 0.0 OC Remodeling 3.2 3.5 3.8 Vytec 8.3 9.0 9.8 Fibreboard 0.0 0.0 0.0 Fibreboard Trust 1,445.0 1,445.0 1,445.0 Exterior Systems, Inc. 137.1 151.3 165.6 IPM Inc. 244.0 244.0 244.0 All Other OCD Debtors 0.0 0.0 0.0 All Other IPM Non-Debtors 500.6 552.2 603.9 All Other OCD Non-Debtors 53.3 57.8 62.3 Based on its analysis, Lazard concludes that in a Chapter 7 liquidation, holders of allowed claims in the impaired classes of each of the Debtors would receive less than under the Sixth Amended Plan. Lazard acknowledges that the Debtors could also be liquidated under Chapter 11 of the Bankruptcy Code. The Debtors, however, believe that any alternative liquidation under Chapter 11, if feasible at all, is a much less attractive alternative to creditors than the Sixth Amended Plan. Hence, the Debtors assert that the Sixth Amended Plan affords substantially greater benefits to creditors than would a liquidation under Chapter 7 or Chapter 11. A full-text copy of Lazard's Liquidation Analysis is available for free at http://ResearchArchives.com/t/s?b68 Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 132; Bankruptcy Creditors' Service, Inc., 215/945-7000). OWENS CORNING: Valuation Analysis Under Sixth Amended Ch. 11 Plan ----------------------------------------------------------------- At the request of Owens Corning and its debtor-affiliates, Lazard Freres & Co. LLC, their financial advisors, determined the Reorganized Debtors' consolidated Enterprise Value on a going-concern basis. Subsequently, Lazard determined that the consolidated total value available for distribution to holders of Allowed Claims and Interests is comprised of: (a) the estimated value of the Reorganized Debtors' operations on a going concern basis; (b) the value of net operating loss tax carryforwards -- NOL Value -- assuming the Debtors emerge from bankruptcy on October 30, 2006; and (c) the estimated amount of cash-on-hand in excess of that which is required to operate the business as of the October 30, 2006 Effective Date. For purposes of the Sixth Amended Plan of Reorganization, and based on terms negotiated by holders of Allowed Claims and Interests, the Enterprise Value plus NOL Value was assumed to be $5.858 billion and the Total Distributable Value of the Reorganized Debtors was assumed to be approximately $7.258 billion. The estimated Total Distributable Value includes no less than $200 million associated with the expected utilization of NOLs created as part of the Debtors' Plan and $1.400 billion deemed to be Excess Cash. The assumed Total Distributable Value reflects information in respect of the Debtors' business and assets as of May 2006. Lazard also prepared a hypothetical range of the Enterprise Value of the Reorganized Debtors. Based upon an assumed range of the Enterprise Value of the Reorganized Debtors plus NOL Value of between $5.4 billion and $6.4 billion -- less an assumed total debt of $1.916 billion as of the October 30 Effective Date -- Lazard imputed an estimated range of equity values for the Reorganized Debtors of between $3.484 billion and $4.484 billion. The Assumed Total Debt includes approximately $55 million of existing debt, $1.8 billion of Exit Financing and approximately $61 million principal amount of debt issued to the Internal Revenue Service for its Allowed Priority Tax Claim. Assuming a distribution of 131.4 million shares of New OCD Common Stock pursuant to the Plan, the imputed estimate of the range of equity values on a per share basis is between $26.51 and $34.13 per share. Assuming an Enterprise Value plus NOL Value of $5.858 billion and an imputed equity value of $3.942 billion, the imputed equity value on a per share basis is $30.00 per share. Lazard's estimate of the hypothetical range of Enterprise Value does not constitute an opinion as to fairness from a financial point of view of the consideration to be received under the Plan or of the terms and provisions of the Plan. The equity value of $30.00 per share does not give effect to the potentially dilutive impact of any stock options that may be granted under a management incentive plan. At this time, it is anticipated that any stock options issued as of the Effective Date would be granted with an exercise price equal to the $30.00 per share Plan value. In addition, the equity value of $30.00 per share does not give effect to the potentially dilutive impact of the Warrants which are expected to be issued pursuant to the Plan. The Class A11 Warrants will consist of Warrants to obtain approximately 17.5 million shares of New OCD Common Stock -- 11.167% on a fully diluted basis before any management stock -- with an exercise price of $43.00 per share. The Class A12 Warrants will consist of Warrants to obtain approximately 7.8 million shares of New OCD Common Stock -- 5% on a fully diluted basis before any management stock options -- with an exercise price of $45.25 per share. Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 132; Bankruptcy Creditors' Service, Inc., 215/945-7000). PACIFIC ENERGY: Sells Assets to Plains All for $2.4 Billion ----------------------------------------------------------- Pacific Energy Partners, L.P. executed definitive agreements to sell assets to Plains All American Pipeline, L.P. The total value of the transaction is $2.4 billion, including the assumption of debt and estimated transaction costs, and is expected to close near the end of 2006. The boards of directors of Plains All American Pipeline and Pacific Energy Partners have each approved the terms of the proposed transaction. The completion of the acquisition is subject to the approval of the unitholders of Plains All American and Pacific Energy as well as customary regulatory approvals, including reviews under the Hart-Scott-Rodino Antitrust Improvements Act, and the approvals of certain state utility commissions and Canadian regulatory agencies. Under the terms of the agreements, Plains All American will acquire from LB Pacific, LP and its affiliates the general partner interest and incentive distribution rights of Pacific Energy as well as 2.6 million common units and 7.8 million subordinated units for a total of $700 million in cash. In addition, Plains All American will acquire the balance of Pacific Energy's equity through a tax-free unit-for-unit merger in which each other unitholder of Pacific Energy will receive 0.77 newly issued Plains All American common units for each Pacific Energy common unit. Under the terms of the contemplated transaction, the general partner and limited partner interests in Pacific Energy will be extinguished and Pacific Energy will be merged into Plains All American. Pacific Energy's operating subsidiaries will be directly or indirectly owned by Plains All American. Plains All American's management team and board of directors will continue in their current roles and manage the combined company. "The PAA board of directors and executive team see great merit in this combination with Pacific Energy," Greg L. Armstrong, Chairman and Chief Executive Officer of Plains All American, said. "In addition to being a synergistic, accretive and strategic business combination, we view this as a transforming transaction - one that we believe positions PAA for long-term stability and growth. From an industrial logic and strategic perspective, it is hard to imagine any two MLPs that fit better together than Plains and Pacific." Mr. Armstrong noted that Plains All American expects to realize near-term synergies of approximately $30 million on an annualized basis, increasing to approximately $55 million over the next few years, and further increasing to over $70 million in the outer years. Irv Toole, President and Chief Executive Officer of Pacific Energy, commented, "I am very pleased to move forward with this transaction, which I believe will be extremely attractive to Pacific Energy unitholders. Based on the 0.77 exchange ratio and the closing unit prices of the respective partnerships on June 9, 2006, Pacific Energy unitholders are receiving a market premium of approximately 10.6%. Based on the 20-day average closing prices of the respective partnerships, Pacific Energy's unitholders are receiving a market premium of approximately 14.3%. In addition, based on an annualized distribution for Plains All American of $3.20 per unit after the transaction closes, Pacific Energy unitholders will receive an equivalent distribution of $2.464 per unit, which represents an increase in their annualized distribution of 8.5% over the current level of $2.27 per unit. When these two components are combined, Pacific Energy unitholders are receiving a total near-term premium in the range of approximately 19.1% to 22.8%, assuming a constant unit price-to- distribution yield." Armstrong noted that Plains All American's general partner, in support of the transaction, agreed to reduce its incentive distributions by $20 million in 2007, $15 million in 2008, $15 million in 2009, $10 million in 2010 and $5 million in 2011, based on a year-end 2006 closing and a simultaneous increase in the annualized distribution to $3.20 per unit. "The profile of these reductions in the general partner's incentive distributions complements the increasing cash flow profile provided by the ramp- up in synergies and growing contributions from internal growth projects that come on-stream over the next five years. This action is a clear demonstration of our general partner's focus on the long-term success of the partnership and its willingness to help us grow," said Armstrong. Phil D. Kramer, Plains All American's EVP and Chief Financial Officer, noted that PAA intends to fund at least 50% of the acquisition with equity, which equates to approximately $1.2 billion. Approximately $1.0 billion, or 88%, of the total equity funding required to meet that minimum equity funding objective, will be accomplished by virtue of the unit-for-unit exchange feature of the transaction and contemporaneous capital contribution by the general partner. PAA intends to monitor the public and private equity markets for favorable opportunities to complete the remaining equity component. The remaining $1.2 billion will be funded with debt, of which nearly 36% will be met through Plains All American's assumption of Pacific's two issuances of senior notes having an aggregate principal amount of $425 million. The remaining $770 million of acquisition-related debt capital will initially be provided by either Plains All American's existing revolving credit facility or short-term credit facilities to be implemented that ensure optimal liquidity and flexibility in the interim period. Kramer noted that at March 31, 2006, pro forma for subsequent equity and debt financings, second-quarter acquisitions that have closed and the recently-announced pipeline acquisition from BP Oil Pipeline Company, Plains All American had approximately $618 million of available liquidity on its existing $1 billion credit facility, which can be expanded by $500 million, subject to additional lender commitments. On a permanent basis, Plains All American intends to fund this debt through the issuance of senior notes of varying maturities. In order to provide the financial community with updated information on Plains All American and thereby enable the unitholders of Plains All American and Pacific Energy to better assess the impact and merits of this combination, Plains All American also furnished today an 8-K that updated Plains All American's stand-alone guidance for the second half of 2006. In addition, the 8-K also provides preliminary Adjusted EBITDA guidance for 2007 that, excluding any contribution from the pending merger with Pacific, incorporates the full-year benefits of Plains All American's 2006 recent acquisition activities and also incorporates contributions from internal growth capital projects currently in progress. Financial advisors for this transaction are as follows: (1) Simmons & Company International for Plains All American; (2) Petrie Parkman & Co. for the conflicts committee of the board of the managing general partner of Pacific Energy; and (3) Lehman Brothers for LB Pacific, LP and Pacific Energy. Legal counsels are: (1) Vinson & Elkins LLP and Prickett, Jones & Elliott, P.A. for Plains All American; (2) Richards Layton & Finger, P.A. for the conflicts committee of the board of the managing general partner of Pacific Energy; (3) Andrews Kurth LLP for Pacific Energy; and (4) Baker Botts L.L.P. and Morris," target=_new>http://www.mnat.com/">Morris,Nichols, Arsht & Tunnell LLP for LB Pacific, LP. About Plains All Plains All American Pipeline, L.P. is engaged in interstate and intrastate crude oil transportation and crude oil gathering, marketing, terminalling and storage, as well as the marketing and storage of liquefied petroleum gas and other petroleum products, in the United States and Canada. Through its 50% ownership in PAA/Vulcan Gas Storage LLC, the Partnership is also engaged in the development and operation of natural gas storage facilities. The Partnership's common units are traded on the New York Stock Exchange under the symbol "PAA." The Partnership is headquartered in Houston, Texas. About Pacific Energy Pacific Energy Partners, L.P. is a master limited partnership headquartered in Long Beach, California. Pacific Energy is engaged principally in the business of gathering, transporting, storing and distributing crude oil, refined products and other related products. Pacific Energy generates revenues by transporting such commodities on its pipelines, by leasing capacity in its storage facilities and by providing other terminalling services. Pacific Energy also buys and sells crude oil, activities that are generally complementary to its crude oil operations. Pacific Energy conducts its business through two business units, the West Coast Business Unit, which includes activities in California and the Philadelphia, PA area, and the Rocky Mountain Business Unit, which includes activities in five Rocky Mountain states and Alberta, Canada. PACIFIC ENERGY: Moody's Places Ba2 Corp. Family Rating on Review ---------------------------------------------------------------- Moody's Investors Service placed Pacific Energy Partners, L.P.'s ratings under review for possible upgrade, including a Ba2 corporate family rating attached at PPX's general partner level, a Ba2 senior unsecured rating, and general partner LB Pacific's B1 senior secured Term Loan B rating. These actions accompany PPX's pending acquisition by Baa3 rated Plains All American Pipeline, L.P. for $2.4 billion, including the assumption of approximately $615 million of PPX debt. The degree to which PPX's ratings are upgraded will be a function of their location, and degree of PAA support, within the proforma business structure. Concurrently, Moody's affirmed acquirer PAA's debt ratings with a stable outlook. That stable outlook is contingent upon PAA issuing at least the amount of acquisition common equity funding that it reports, that pro-forma leverage be reduced significantly over the next 12 months, and that neither the credit intensive pro-forma merchant marketing and trading activity nor the proprietary hedged contango trading and borrowing activity would be expanded materially prior to significant core leverage reduction. Because of the embedded potential event risk associated with acquirer PAA's proportionately very large, high volume, low margin, trade and hedge counterparty sensitive merchant business, plus its fully leveraged hedged contango business, the pro-forma PPX and PAA ratings require that common equity, and not hybrid equity, be issued by PAA to fund acquisitions and ongoing needs. Moody's views PPX acquisition by PAA to be a potentially very favorable strategic business move for each firm. However, the acquisition is quite expensive, neither the scale or timing of merger synergies is assured, each firm faces substantial capital spending for major growth projects, ample common equity funding will need to support such activity, and the constant very heavy cash distributions basic to master limited partnerships injects added funding and market risk. In a gesture to unit holders, PAA will recommend to its board a significant boost in the cash distribution to unit holders. However, PAA's general partner has agreed to forego $20 million of incentive distributions in 2007 and a total of $65 in incentive distributions through 2011. Over time, Moody's has found PAA's general partner to have been consistently supportive of sound long-term business and financial policies. In a two step acquisition, PAA will first acquire LB Pacific's interests in PPX for $700 million in cash, including its 2% general partnership interests, incentive distribution rights, 2.6 million of PPX common units, and 7.8 million PPX subordinated units. Moody's expects that LB Pacific will pay off its existing $175 million senior secured Term Loan B with the proceeds, at which time Moody's would withdraw the ratings at LBP. PAA will also acquire PPX's remaining equity in a tax free unit- for-unit exchange, in which each PPX unit holder will receive 0.77 newly issued PAA common units in exchange for each PPX unit. PAA will also assume somewhat over $400 million of PPX's senior notes and look to refinance the existing $182 million of PPX revolving credit debt with either a bridge facility or availability under PAA's own revolving facility. Including assumed debt, the acquisition would be funded approximately 50% with new common equity units. In addition to assuming PPX debt, PAA would issue approximately $560 million of new debt and issue approximately $155 million of new common equity units. Pro-forma PAA long-term debt to total capital would be in the 49% range and pro-forma total debt would be in the 55% range. Total pro-forma debt would be in the $2.6 billion range with pro- forma 2006 EBITDA in the $650 million range. Moody's anticipates that PAA will fund the acquisition with a combination of senior unsecured notes, borrowings under its existing revolving credit facilities, short-term bridge credit facilities, and a large portion of common equity, consistent with PAA's historically disciplined pro-active funding strategies. PPX's operating subsidiaries will be directly or indirectly owned by PAA. Though acquirer PAA has successfully controlled its merchant marketing and trading business this decade, Moody's has frequently stated that it views such earnings to have limited debt capacity, that the activity contains significant potential event risk, and that a higher proportion of fee and tariff driven income would be supportive of the ratings. Since PPX conducts a small level of such activity, the merger substantially boosts the fee and tariff component of PAA's pro-forma cash flow mix to almost 70%. The pro-forma credit strength backing the PPX notes will benefit from several forms of strategic advantages and diversification brought by the merger with PAA, as well as from the larger pro- forma business and capitalization scale. Pro-forma, PAA will be a major participant in the growing crude oil import markets along the West Coast, Gulf Coast, and the north-to-south movement of conventional and synthetic crude oil from Canada to the U.S. PPX also provides PAA with immediate scale entry into the West and East Coast refined products market via its refined product storage and terminal assets located in the San Francisco Bay Area and in the Philadelphia area, recently acquired from Valero, with the Philadelphia assets injecting PAA into to the major Atlantic Basin refined products market. PPX provides PAA with direct access to growing volumes of crude oil imports into Southern California to replace the sector's falling Alaskan and California crude oil production. PPX intensifies PAA's system serving crude oil imports from Canada into the Rocky Mountain and Midwest markets and integrates very well with rising volumes of Canadian crude flowing to the strategic Cushing storage hub where PAA is a very major player. PAA has already been constructing large storage assets at the St. James, Louisiana hub, serving imported deepwater Gulf of Mexico production and rising volumes of imported crude oil flowing to regional refineries and north to Cushing. PPX also substantially augments and integrates PAA's California All-American Pipeline business, providing direct access to integrated pipelines south of the Los Angeles refining region and also expands PAA's foreign import activities to the West Coast through PPX's storage tank and terminal assets in Long Beach Harbor. Notably, PPX also provides the merged business with its pending Port of Los Angeles Pier 400 deepwater terminal project, awaiting final review and environmental and project approvals from the Port and the City of Los Angeles. PPX has long-term agreements with both Valero and ConocoPhillips, and expects the total 250,000 bpd capacity to be fully subscribed when operational in 2008. Pacific Energy Partners, L.P. is headquartered in Long Beach, California. PARMALAT USA: Court Approves Pact Disallowing 4 New Jersey Claims ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the stipulation between Parmalat USA Corporation and its debtor-affiliates and the State of New Jersey's Department of Treasury, Division of Taxation, disallowing New Jersey's four claims against the Debtors. The State of New Jersey filed Claim No. 876 asserting a $1,746,730 unsecured priority amount against Parmalat USA Corp. and Farmland Dairies LLC. Subsequently, New Jersey filed Claim No. 1003 for $458,079, amending Claim No. 876. The Debtors sought disallowance of Claim No. 876, as amended and superseded by Claim No. 1003. The Debtors also sought reduction of Claim No. 1003 to $421,723. New Jersey argued that Claim No. 1003 should not be reduced but should be filed against Farmland exclusively. In May 2005, the Court disallowed Claim No. 876 in its entirety and deemed Claim No. 1003 as filed against Farmland as an unsecured priority claim for $458,079. In June 2005, New Jersey filed Claim No. 1035, amending Claim No. 1003 as an unsecured priority claim for $373,707 against Farmland and Parmalat USA. New Jersey again modified Claim No. 1035 by filing Claim No. 1034 against Farmland and Parmalat USA for $429,341. The Debtors sought disallowance of: -- Claim Nos. 1003 and 1035, as amended and superseded by Claim No. 1034; and -- Claim No. 1034 since the obligation was not reflected in the Debtors' books and records. New Jersey agreed to the disallowance of Claim Nos. 1003 and 1035 but insisted that Claim No. 1034 should not be reduced. In February 2006, New Jersey filed Claim No. 1041 as a general unsecured claim for $115,117 against Farmland and Parmalat USA. New Jersey also filed Claim No. 1042, amending Claim No. 1034, for a $306,522 unsecured priority claim against the two Debtors. Accordingly, the Debtors, the Farmland Unsecured Creditors' Trust and New Jersey agreed to amicably resolve the disputes concerning the Claims. The parties agree that Claim Nos. 876, 1003, 1034 and 1035 are disallowed in their entirety. Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT USA: Court Extends Preliminary Injunction to Sept. 15 -------------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York extended the Preliminary Injunction to Sept. 15, 2006. In the interim, creditors subject to the jurisdiction of the U.S. court are enjoined from, among others, commencing or continuing any action to collect a prepetition debt against the Foreign Debtors or any of their subsidiaries and affiliates, or Reorganized Parmalat. The U.S. Bankruptcy Court will convene a hearing on Sept. 12, 2006, at 10:00 a.m., to consider entry of a permanent injunction. Any objection to the entry of the proposed permanent injunction must be filed and served on counsel for the Foreign Debtors by August 14, 2006. Responses to the objections, if any, must be submitted by September 5. Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT USA: Minguito Estate Wants Disallowed Claim Reconsidered ----------------------------------------------------------------- The decedent's estate of Benjamin Minguito asks the U.S. Bankruptcy Court for the Southern District of New York to reconsider and vacate the order expunging its Claim No. 614 against Farmland Dairies LLC, a Parmalat USA Corporation debtor- affiliate. The Minguito Estate timely filed Claim No. 614 against Farmland and Claim No. 623 against Parmalat USA Corp., Deirdre Woulfe Pacheco, Esq., at Wilentz Goldman & Spitzer P.A., relates. Parmalat USA objected to Claim No. 623. The Minguito Estate timely filed its response. Parmalat USA filed a reply in support of the Objection. The Reply mentioned of a motion filed by the Farmland Unsecured Creditors' Trust to expunge and an order expunging Claim No. 614. According to Ms. Pacheco, the Minguito Estate was not aware that the Farmland Trust sought expungement of Claim No. 614. Neither the Estate nor its counsel received the Farmland Trust's motion, and thus "failed" to respond. Section 502(j) of the Bankruptcy Code specifically provides that a claim that has been disallowed may be reconsidered for cause, Ms. Pacheco notes. The Minguito Estate was half anticipating objections to its claim. Ms. Pacheco assures the Court that the practice and procedures of the Estate's counsel encompassed reasonable safeguards to catch and address objections to its clients' claims in bankruptcy cases. Among others, the Minguito Estate asserts that its claims against the Debtors are meritorious and Farmland Trust's expungement request lacked authority. Claim No. 614 is for an unliquidated amount, Ms. Pacheco notes. The Claim was for personal injury or wrongful death. Under Section 502(a), Ms. Pacheco insists, the Claim is presumed allowable. "Unliquidated" does not mean "zero," Ms. Pacheco argues. It means that the amount of the claim has yet to be established. Thus, the Minguito Estate believes that the Court's disallowance of its "$0" claim is a nonevent. "The equities of the case clearly favor allowance of [the Minguito Estate's] claims against the Debtors," Ms. Pacheco maintains. The Estate's "failure" to respond to a motion not received cannot be deemed willful, she adds. Farmland Trust Wants Request Denied "The Motion asserts a faulty premise from which it builds a faulty conclusion," David M. LeMay, Esq., at Chadbourne & Parke LLP, in New York, argues. According to Mr. LeMay, a copy of the objection filed by the Farmland Dairies LLC Unsecured Creditors' Trust against Claim No. 614 was served on the decedent's estate of Benjamin Minguito by mail. Electronic notification of the objection was also sent to the Minguito Estate's counsel. However, the Estate did not respond. Furthermore, there was no response when a notice of a proposed order expunging the Claim was served on Minguito's counsel. Thus, after the prescribed notice period, the Claim was expunged. "Minguito places great weight . . . that it did not receive notice of the objection," Mr. LeMay notes. However, he continues, "it fails to overcome the presumption of proper notice that attaches to a duly executed affidavit of service. . . ." Mr. LeMay contends that although the Minguito Estate asserts that its neglect to respond is "excusable," the relevant factors to be considered by courts in the Second Circuit before granting a motion to reconsider based on "excusable neglect" all weigh in favor of the Farmland Trust. In Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380 (1993), the Supreme Court explained that "excusable neglect" is an equitable determination. The Supreme Court enunciated factors to consider, including: -- the danger of prejudice to the non-movant; -- the length of delay and its potential impact on judicial proceedings; -- the reason for the delay, including whether it was in the reasonable control of the movant; and -- whether the movant acted in good faith. The Farmland Trust believes that it would be significantly prejudiced if the Court reinstates the Claim. The Farmland Trust, Mr. LeMay says, had been operating for many months on the belief that the ongoing personal injury or wrongful death proceedings in the state court are fundamentally irrelevant. The Trust's entire approach to the state litigation has been based on that belief. Given the numerous claims expunged thus far, granting the request would also encourage holders of disallowed claims to flood the Court with similar motions, Mr. LeMay adds. Accordingly, the Farmland Trust asks the Court to deny the Minguito Estate's request in its entirety. About Parmalat Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue Nos. 72 & 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) PAUL WYATT: Case Summary & 17 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Paul Wade Wyatt Marni A. Wyatt 786 South 3rd Lander, Wyoming 82520 Bankruptcy Case No.: 06-20280 Chapter 11 Petition Date: June 12, 2006 Court: District of Wyoming (Cheyenne) Judge: Peter J. McNiff Debtors' Counsel: Donald J. Rissler, Esq. Donald J. Rissler, P.C. 107 South Broadway Avenue, Suite 214 Riverton, Wyoming 82501 Tel: (307) 856-2231 Fax: (307) 856-2230 Total Assets: $884,450 Total Debts: $1,568,774 Debtors' 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ HPSC Wyatt Eye LLC $199,456 One Beacon Street, 2nd Floor Equipment Boston, MA 02108 Republic Bank Optical Shop $90,840 2521 First Avenue Hibbing, MN 55746 Repossessed Vehicle $3,116 Wells Fargo Education Student Loan $87,491 Financial Services P.O. Box 5285 Sioux Falls, SD 57117-5185 Precision Lens Supplies $40,000 Chase Bank Credit Card $22,000 MBNA Credit Card $21,935 Kay Andersen Family Loan $21,000 Central Bank and Trust Commercial $10,000 Credit Line Vehicle $6,500 Vehicle $2,128 Twin City Optical Optical Services $15,000 First Interstate Bank Credit Card $14,549 Capital One Credit Card $10,300 Neiman Marcus Department Store Card $9,714 HSBC Card Services Credit Card $2,549 Great Western Bank Equipment $2,505 WyoNet, Inc. Phone $2,200 Internal Revenue Service Current Payroll $2,142 Taxes Wilson Opthalmic Medical Supplies $2,024 PROSOFT LEARNING: VCampus Completes $2.1 Million Acquisition ------------------------------------------------------------ VCampus Corporation closed on its acquisition of Prosoft Learning Corporation. The acquisition will enable VCampus to add the market-leading Certified Internet Web Professional certification to its Select Partner(R) Program, as well as offer the Convergence Technologies Professional credential, which Prosoft manages for the Telecommunications Industry Association. The $2.1 million purchase price was paid with approximately $1.4 million in cash and the balance in certain assumed liabilities and notes payable. VCampus acquired all of the newly issued capital stock of Prosoft at closing. VCampus' management will discuss the details of the acquisition and the synergies for future growth in its upcoming conference call for investors. About VCampus Headquartered in Reston, Virginia, VCampus Corporation (NASDAQ:VCMP) -- http://wwvcampus.com/-- provides end-to-end e-learning services, helps organizations that offer professional certifications and credentials unlock the value of their traditional branded course content. Through its innovative Select Partner(R) Program, VCampus publishes training content for online delivery to enhance and support professional certification programs. The Select Partner Program provides custom course development, publishing, hosting, e-commerce, reporting, account support and marketing services. About Prosoft Learning Headquartered in Phoenix, Arizona, Prosoft Learning Corporation -- http://www.prosoftlearning.com/-- develops and sells software for IT education. Prosoft also manages vendor-neutral certifications for IT professionals. The Company and its debtor-affiliate filed chapter 11 protection on April 12, 2006 (Bankr. D. Ariz. Case No. 06-01008 and 06-01009). Steven D. Jerome, Esq., and Eric S. Pezold, Esq., at Snell & Wilmer, LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they listed assets of $910,598 and debts of $5,288,922. RBS GLOBAL: Moody's Cuts Corporate Family Rating 1 Notch to B2 -------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of RBS Global, Inc., the parent company of Rexnord Corporation, and assigned new long term debt ratings in connection with its pending acquisition by an affiliate of Apollo Management. The rating outlook has been changed to stable. Moody's also assigned a SGL-2 liquidity rating reflecting good liquidity and expected covenant compliance. The rating outlook is stable. The ratings are subject to review of the final financing documentation. The rating action concludes the review for possible downgrade initiated on May 31, 2006. Ratings downgraded: * Corporate Family Rating: B2 from B1 New ratings assigned: * $705 million Senior Secured Bank Credit Facilities: B1 * $420 million Senior Unsecured Bonds, due 2014: B3 * $420 million Senior Subordinated Bonds, due 2016: Caa1 * Speculative Grade Liquidity Rating: SGL-2 Outlook actions: Outlook: Changed To Stable from Rating Under Review For Possible Downgrade The key drivers of the rating downgrade: (1) the increased debt load assumed by RBS in connection with its acquisition by an affiliate of Apollo Management and (2) the resulting deterioration in credit metrics. Apollo is acquiring RBS for $1.825 billion which represents an acquisition multiple of approximately 9.0 times trailing adjusted EBITDA of $200 million as of March 31, 2006. At closing, RBS will assume approximately $680 million in incremental funded debt increasing pro forma leverage to approximately 7.1 times from approximately 3.7 times prior to the acquisition. Moody's estimates that free cash flow will decline to approximately the low single digits as a percentage of reported debt from approximately 7% prior to the acquisition. The primary factors supporting the ratings: (1) management's track record in meeting its financial targets within a highly levered capital structure; (2) the breadth of the Company's product offering and its significant installed base, which enhance its leverage with key distribution partners; (3) the diversity of its end-markets, which could mitigate the economic or industry-specific cyclicality inherent to many of its markets; and (4) the consistency of the Company's free cash flow generation supported by low capital expenditure requirements and management's focus on working capital efficiency. The SGL-2 liquidity rating reflects good liquidity over the next twelve months. Moody's anticipates continued positive operating cash flow generation which, together with availability under the new revolving credit facility, should cover all of the Company's operating needs. The stable outlook reflects Moody's expectation that the Company's financial and operating profile will improve as (1) RBS benefits from favorable demand dynamics in many of its end-markets and (2) expected discretionary cash flow, supported by management's focus on improving inventory turns and reducing costs, is used to reduce debt. RBS Global, Inc., headquartered in Milwaukee, Wisconsin, is a manufacturer of motion technology products, primarily focused on power transmission products serving industrial and aerospace end- markets. For the fiscal year ended March 31, 2006, RBS generated sales of approximately $1.1 billion. REFCO INC: Examiner Can File Status Report Under Seal ----------------------------------------------------- Joshua R. Hochberg, the duly appointed examiner in Refco Inc. and its debtor-affiliates, obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to file under seal, for in camera review: (a) a status report and a request for approval of a proposed work plan and budget; and (b) all pleadings, hearings or conferences filed and held in connection with the Status Report and Work Plan. Robert A. Bartlett, Esq., at McKenna Long & Aldridge LLP, in Atlanta, Georgia, relates that the Status Report and Work Plan include the Examiner's assessment of investigative work and plans of the Official Committee of Unsecured Creditors Committee and the Debtors, as well as the Examiner's communications with various agencies. The Hon. Robert D. Drain rules that the sensitive or privileged information in the Sealed Pleadings and any further pleading or document filed in connection with the Sealed Matter will remain confidential and accessible only to: * counsel for the Debtors and Harrison J. Golden, the Creditors Committee, and the Bank of America N.A., as Administrative Agent; * the United States Trustee and its counsel; * the Office of the United States Attorney for the Southern District of New York; * the Securities and Exchange Commission; * the Commodity Futures Trading Commission; and * Marc Kirschner, the Chapter 11 Trustee for Refco Capital Markets, Ltd. Any further sealed pleadings will remain confidential and accessible only to the Interested Parties unless and until modified by further Court order. Any hearings or conferences relating to the Sealed Matter, or to any pleadings or documents filed in the Sealed Matter, will take place only in the presence of the Examiner and the Interested Parties. The Sealing Order is without prejudice to the right of the Examiner or any other party-in-interest to seek modification or removal of the seal. 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. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000). REFCO INC: Walks Away From CIT Equipment Lease ---------------------------------------------- Refco Inc. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to reject its Equipment Lease with CIT Technologies Corporation. The Debtors say that before filing for bankruptcy, they entered into a master equipment lease agreement, dated July 11, 2003, with CIT Technologies. The Debtors leased certain computer equipment from CIT. The monthly lease payment under the Equipment Lease is $9,948 and the initial lease term for the Lease expired August 1, 2005, Sally McDonald Henry, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court. Following the Initial Lease Expiration Date, CIT and the Debtors renewed the Lease for 12 more months. According to Ms. Henry, the Debtors currently have no use for the equipment leased under the Equipment Lease. In addition, the Debtors believe that the Equipment Lease is not a source of potential value for their estates, and constitutes an unnecessary drain on their resources. Ms. Henry also relates that the Debtors have been unable to locate any party interested in assuming the Equipment Lease. The Debtors want to reject the Lease to avoid any potential argument on the part of CIT that the Equipment Lease renews for an additional 12-month period on August 1, 2006. If the Equipment Lease is automatically renewed, the Debtors would be saddled with additional unnecessary administrative expenses. 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. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000). RICHARD DRAUGHON: Case Summary & 14 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Richard Scott Draughon 8040 Whisper Lake Lane West Ponte Vedra Beach, Florida 32082 Bankruptcy Case No.: 06-70405 Type of Business: The Debtor previously filed for chapter 11 protection on October 25, 2005 (Bankr. W.D. Pa. Case No. 05-80011). Chapter 11 Petition Date: June 12, 2006 Court: Western District of Pennsylvania (Johnstown) Judge: Bernard Markovitz Debtor's Counsel: James R. Walsh, Esq. Spence Custer Saylor Wolfe & Rose, LLC 400 U.S. Bank Building P.O. Box 280 Johnstown, Pennsylvania 15907 Tel: (814) 536-0735 Fax: (814) 539-1423 Total Assets: $2,308,569 Total Debts: $1,977,568 Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Taxes $113,758 Special Procedures Branch P.O. Box 628 Bankruptcy Section Pittsburgh, PA 15230 MBNA America Credit Card Purchases $69,276 P.O. Box 15019 Wilmington, DE 19850-5019 American Express Credit Card Purchases $56,000 Suite 00001 Chicago, IL 60679 Florida Office Owners Lawsuit $35,000 Optima Credit Card Purchases $28,746 Chase Bank Credit Card Purchases $20,000 Bank of America Credit Card Purchases $17,000 Bank One Credit Card Purchases $14,520 First USA Credit Card Purchases $13,742 Fleet Bank Credit Card Purchases $10,400 South Trust Credit Card Purchases $8,906 Citi Cards Credit Card Purchases $7,950 Wells Fargo Credit Card Purchases $7,289 First Union Credit Card Purchases $6,800 RISK MANAGEMENT: Court Confirms Liquidating Chapter 11 Plan ----------------------------------------------------------- The Honorable Kay Woods of the U.S. Bankruptcy Court for the Northern District of Ohio, Eastern Division, confirmed the Amended Liquidating Chapter 11 Plan of Risk Management Alternatives, Inc., and its debtor-affiliates. The Court determined that the Plan satisfies the 13 standards for confirmation under Section 1129(a) of the Bankruptcy Code. Overview of the Plan All of the Debtors' assets will be substantively consolidated and these assets will be transferred to a Liquidating Trust pursuant to the Plan. Cash necessary for distributions under the Plan will come from the Debtors' current cash reserves plus the proceeds of avoidance and non-avoidance actions. Prior to the effective date, the Debtors' Official Committee of Unsecured Creditors will appoint an Oversight Agent to oversee the administration of the Liquidating Trust and the Liquidating Trustee. The Oversight Agent's powers will be limited to seeking orders of the Bankruptcy Court to enforce implementation of the Plan. The Plan also incorporates the terms of the Global Settlement Agreement between the Debtors, the Creditors' Committee, GTCR Capital Partners and Heller Financial, Inc., as agent for the senior lenders. The Global Settlement, approved on Aug. 18, 2005, resolves the parties' dispute over issues related to the sale of substantially all of the Debtors' assets to NCO Group, Inc., as well as the Debtors' use of postpetition financing and cash collateral. NCO paid $118 million for the Debtors' assets. In exchange for mutual releases, the parties agreed that: -- on the closing of the NCO Sale, $1.3 million, less the professional fees of the Creditors' Committee, would be set aside for distribution to general unsecured creditors of the Debtors' parent and base businesses; and -- two-thirds of the net avoidance recoveries and net non- avoidance recoveries will be set aside for distribution to general unsecured creditors of the Debtors' parent and base businesses, with the remaining one-third distributed to GTCR Capital. Treatment of Claims Priority claims, totaling approximately $100,000, will be paid in full on the earlier of the effective date or 30 days after the priority claim is allowed. The $65 million secured claim of the Senior Lenders was paid in full at the closing of the sale of the Debtors' assets to NCO. Heller Financial, the senior lenders' agent, can assert a legal fee claim for post-petition fees and expenses of no greater than $35,000. The unpaid portion of Heller's claim will be paid in full on the effective date. The Senior Lenders' $25 to $29 million deficiency claim, on account of postpetition interests and fees, will be paid in accordance with the terms of the Subordination and Inter-creditor Agreement from amounts left over after GTCR Capital receives an aggregate distribution of $5 million for its mezzanine debt claim. GTCR Capital, which holds a $49 million mezzanine debt claim against the Debtors, will recover approximately 30% its claim pursuant to the Plan. Holders of general unsecured claims against the Debtors' portfolio business, estimated at $100,000, will be paid in full on the earlier of the effective date or 30 days after their claims are allowed. General unsecured claims against the Debtor's parent and base businesses, estimated at $15 to $20 million, will receive a pro rata share of the guaranteed minimum payment promised in the Global Settlement plus two-thirds of net avoidance recoveries and two-thirds of net non-avoidance recoveries. Creditors under this class are expected to recover between 5 to 10% of their claims. Cargill's $17 million secured claim was paid in full at the closing of the NCO sale. In addition, Cargill received a $4 million payment at the closing of the sale of the Debtors' assets in final satisfaction of its $12 million residual claim. Equity holders will get nothing under the Plan. A copy of the Debtors' 42-page amended disclosure statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060321210106 About Risk Management Headquartered in Duluth, Georgia, Risk Management Alternatives, Inc. -- http://www.rmainc.net/-- provides consumer and commercial debt collections, accounts receivable management, call center operations, and other back-office support to firms in the financial services, telecommunications, utilities, and healthcare sectors, as well as government entities. The Company and ten affiliates filed for chapter 11 protection on July 7, 2005 (Bankr. N.D. Ohio Case Nos. 05-43959 through 05-43969). Shawn M. Riley, Esq., at McDonald, Hopkins, Burke & Haber Co., LPA, represents the Debtors in their chapter 11 proceedings. Ronald E. Gold, Esq., at Frost Brown Todd LLC, 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 between $50 million to $100 million in debts. ROCKWELLS RESTAURANT: Case Summary & 18 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Rockwells Restaurant Corp. aka 105 Wolfs Lane Corp. 110 East 23rd Street, Suite 202 New York, New York 10010 Bankruptcy Case No.: 06-11340 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: June 14, 2006 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Debtor's Counsel: Martin P. Ochs, Esq. Ochs & Goldberg, LLP 60 East 42nd Street, Suite 1545 New York, New York 10165 Tel: (212) 983-1221 Fax: (212) 983-1330 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ NYS Department of Sales Tax $1,336,915 Taxation and Finance 90 South Ridge Street Rye, NY 10573-2800 Intuit Payroll Services Payroll Processor $383,380 1285 Financial Boulevard Reno, NV 89502 Internal Revenue Service Payroll Taxes $375,166 Holtsville, NY 00501 Tuckahoe Developers Landlord Tuckahoe $329,772 8 Depot Square Tuckahoe, NY 10707 M.D. Foods LLC Food Supplier $241,710 Advanceme Inc. $229,891 US Foodservice Food Supplier $221,710 Kings Food Service Food Supplier $111,584 Steven Culhane Unsecured Loan $88,125 H. Schrier Co., Inc. Food Vendor $80,288 Sysco Food Services of Albany Food Supplier $56,109 SE Equipment Leasing Corp. $50,000 TPI Lawsuit Old $42,752 American Express Credit Card $38,152 Rewards Network Establishment $32,594 Denise B. Rutledge Lawsuit $30,450 Con Edison $16,654 John Rapillo $15,673 RURALMETRO CORP: March 31 Balance Sheet Upside-Down by $94 Mil. --------------------------------------------------------------- For the three months ended March 31, 2006, Rural/Metro Corp. reported a $4,042,000 net loss on $137,917,000 net revenue. Rural/Metro's balance sheet at March 31, 2006, showed total assets of $302,454,000 and total liabilities of $395,221,000, resulting in a $94,874,000 stockholders' deficit. The Company's balance sheet showed $122,806,000 in total current assets and $73,049,000 in total current liabilities at March 31. A full-text copy of Rural/Metro Corp.'s report for the quarter ended March 31, 2006 is available for free at: http://researcharchives.com/t/s?b4b Headquartered in Scottsdale, Arizona, Rural/Metro Corporation -- http://www.ruralmetro.com/-- provides emergency and non-emergency medical transportation, fire protection, and other safety services in 23 states and approximately 350 communities throughout the United States. SAFETY KLEEN: Moody's Rates Proposed Sec. Credit Facilities at B1 ----------------------------------------------------------------- Moody's Investors Service assigned B1 ratings to the proposed senior secured credit facilities of Safety-Kleen Systems, Inc., an indirect, wholly-owned subsidiary of Safety-Kleen HoldCo., Inc. Concurrently, Moody's assigned a B1 Corporate Family Rating to HoldCo. The outlook for the ratings is stable. The transaction is in connection with the refinancing of the company's capital structure through a combination of equity and debt financing. This is the first time Moody's is rating the company's debt since its emergence from bankruptcy in December 2003. Notwithstanding the company being in a turnaround mode for a period that effectively spans the last seven years, Moody's believes that the company's track record since it emerged from Chapter 11 bankruptcy protection, including increasing revenue growth, improvements in working capital management, diversity of revenues, overall size, as well as valuable assets and prominence in the oil recycling and re-refinery business, offers substantive indication of ongoing improvement in business performance. Offsetting these positive trends is the need for substantial margin improvements for the company as a prerequisite for profitability. Moody's assigned these ratings: Safety-Kleen HoldCo., Inc.: * Corporate Family Rating, rated B1; Safety-Kleen Systems, Inc.: * $100 million senior secured revolving credit facility due 2012, rated B1; * $230 million senior secured term loan B due 2013, rated B1; * $65 million pre-funded letter of credit facility due 2013, rated B1. * The ratings outlook is stable. The ratings are contingent upon the receipt of executed documentation in form and substance acceptable to Moody's. Profitability improvements that lead to sustainable adjusted EBIT to interest coverage above two times and adjusted debt to EBITDA leverage ratios closer to three times could lead to a positive ratings outlook. Improved pricing, continued growth in the higher margin oil and oil products line of business as well as capturing cost reductions can move the company closer to this goal. Increased costs that cannot be passed through could put negative pressure on the company's margins and, consequently, the ratings. In addition, if the company is unable to make substantive progress toward sustained profitability and adjusted EBIT to interest coverage exceeding 1.5 times, the rating could be downgraded. Safety-Kleen Systems, Inc. headquartered in Plano, TX, is a provider of parts washers, industrial waste management and oil recycling and re-refining services. Safety-Kleen serves 400,000 customers in a broad range of industries in the United States, Canada and Puerto Rico and is the largest recovery and recycling company for used oil products in North America. The company is privately held and had revenues of approximately $925 million for the fiscal year ending December 31, 2005. Safety-Kleen emerged from Chapter 11 bankruptcy protection in December 2003. SAINT VINCENTS: Can Assign Unexpired Staten Leases to Castleton --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates to assume and assign executory contracts and unexpired leases related to St. Vincent's Hospital, Staten Island to Castleton Acquisition Corporation, an affiliate of Bayonne Medical Center Bayonne, or to any successful bidder for the Staten Island assets. The effective date of any assumption and assignment of any Assumed Contract or Lease will be the date on which the Sale closes. As reported in the Troubled Company Reporter on May 30, 2006, the Debtors asked the Court for permission to assume and assign these contracts: http://ResearchArchives.com/t/s?a0e The Successful Bidder will be fully responsible for satisfying the requirements of Section 365(b), including payment of the Cure Amounts, with regard to the Assumed Contracts and Leases. The Debtors will not be required to pay any Cure Amounts. Objections Several parties-in-interest filed objections to the Debtor's proposed assumption and assignment of the leases: A) QuadraMed QuadraMed Corporation filed a claim for $527,714 arising out of prepetition license and maintenance fees due under a prepetition agreement. Jon P. Newton, Esq., at Reid And Riege, P.C., in Hartford, Connecticut, tells the Court that the Debtors failed to list the Agreement as an executory contract to be assumed but proposes to sell software owned by QuadraMed. Mr. Newton asserts that the Debtors must cure the past due amounts to QuadraMed before they may assume and assign the Agreement. If the Agreement is not part of the assets to be sold, QuadraMed asks the Court to compel the Debtors to take prompt action to either assume or reject the Agreement. B) ORIX ORIX Financial Services, Inc., is an assignee of Fleet Capital Health Care Finance, a division of Fleet Business Credit, LLC, as to interests under a Master Agreement No. 1975 with Saint Vincent Catholic Medical Centers of New York, dated November 1, 2000, Equipment Schedule 3, and Certificate of Equipment Acceptances. ORIX filed a secured proof of claim for $902,701 on March 3, 2006. Robert M. Marshall, Esq., at Marshall & Quentzel, L.L.C., in Great Neck, New York, tells the Court that ORIX has not provided its consent to the transfer of its obligations, its security interests, and its collateral, which may or may not be included in the Purchased Assets to be sold or assumed under the Purchase Agreement. Mr. Marshall asserts that the Debtors must provide adequate assurance of future performance and cure of any arrears before they are allowed to assign their obligations. "Any assumption and assignment of the Debtors' obligations to ORIX must provide that the liens in connection with the related obligations will remain in full force and effect," Mr. Marshall says. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 27 Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT VINCENTS: Staten Hospital Sale Hearing Set for July 24 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on July 24, 2006, at 9:30 a.m., to consider: (a) approval of the sale of St. Vincent's Hospital, Staten Island and related assets to Castleton Acquisition Corporation or other successful bidders; (b) the proposed assumption and assignment of the Assumed Contracts and Leases and related cure claims in connection with the Sale; and (c) any issues or objections that are timely interposed by any parties. Several parties-in-interest raised objections to the proposed sale: A) Staten Island University Hospital Staten Island University Hospital and SVCMC provide advanced cardiac care services to Staten Island and surrounding communities through The Heart Institute, a New York not-for- profit corporation. Under a Joint Operating and Venture Agreement dated August 23, 2000, as amended, the parties agreed to incorporate The Heart Institute. On February 28, 2001, the parties entered into an Amended and Restated Clinical Sponsorship Agreement, whereby they agreed to provide services to The Heart Institute. SVCMC can't assign its interest in The Heart Institute without the University Hospital's written consent. The University Hospital does not consent to SVCMC's assignment of its interest in The Heart Institute. Accordingly, the University Hospital asks the Court to deny the Debtors' request as it pertains to the assumption and assignment of SVCMC's interest in The Heart Institute. B) City of New York The city of New York reserves all of its rights to object to the Debtors' proposed sale, free and clear of all liens, claims, encumbrances and other interests on all grounds. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 27 Bankruptcy Creditors' Service, Inc., 215/945-7000) SEA CONTAINERS: To Pay $16.3MM to GE SeaCo for Breach of Contract ----------------------------------------------------------------- Sea Containers and GE Capital entered into a settlement agreement on June 2 relating to their container leasing joint venture, GE SeaCo, and the terms of the temporary provision by Sea Containers to GE SeaCo of certain services previously provided under the Services Agreement. On April 28, the decision issued in the arbitration between Sea Containers and GE Capital directed the parties to attempt to reach agreement regarding both the amount due to GE SeaCo as a result of certain breaches of the Services Agreement under which Sea Containers provided services to GE SeaCo, and the amount to be paid to GE Capital as reimbursement of its arbitration costs. Sea Containers agreed to pay GE SeaCo a net aggregate amount of approximately $16.3 million, in addition to the amounts Sea Containers had previously paid to GE SeaCo in 2005 to cure then alleged breaches of the Services Agreement. Following discussion with GE Capital, this amount is about $4 million more than the estimated recovery. Under the settlement agreement, Sea Containers will also pay GE Capital approximately $1.75 million representing its arbitration costs. Simultaneously with the execution of the settlement agreement, Sea Containers paid a total of $4 million to GE SeaCo and GE Capital. The balance (approximately US$14 million), together with interest from June 2, will be paid in subsequent monthly installments of US$2 million each. If the sale of the Silja ferry business is completed before Sea Containers has paid the full amount due GE SeaCo, the remaining balance will be paid out of the net proceeds received from the Silja sale. Under the arbitration decision and the settlement agreement, the Services Agreement was terminated effective May 28, 2006. However, Sea Containers will continue to supply certain services to GE SeaCo on a temporary basis and be compensated accordingly. GE SeaCo will continue to occupy space in Sea Containers House in London, England until at least Dec. 31, 2006. GE SeaCo has the right to continue to occupy all or a portion of that space during 2007, subject to Sea Containers' right to cancel for any period after April 1, 2007, on six-months' prior notice. Sea Containers will also continue to furnish GE SeaCo with certain computer services through at least Sept. 30, 2006, and continuing through 2007 at GE SeaCo's option. Pursuant to the agreements establishing the GE SeaCo joint venture, GE Capital has had the right to appoint a ninth member of the GE SeaCo board of directors. On April 13, 2006, GE Capital exercised this right and, as a result, a majority of the GE SeaCo board is composed GE Capital appointees. GE Capital is therefore in a position to elect GE SeaCo's officers and to control and manage GE SeaCo's business affairs, subject to the provisions of the GE SeaCo joint venture agreements. The settlement agreement confirms GE Capital's right to appoint a ninth GE SeaCo director. GE SeaCo has withdrawn as a participant in the pension plan maintained by Sea Containers for United Kingdom employees, and is establishing its own pension plan specifically for GE SeaCo employees. The settlement agreement also resolves possible disputes between Sea Containers and GE SeaCo relating to GE SeaCo's withdrawal from the Sea Containers pension plan and the amounts which GE SeaCo may be required to contribute to that plan upon its withdrawal. GNER Update The Company and its subsidiary Great North Eastern Railway Limited (GNER) have decided to seek permission from the High Court in Britain for a judicial review of the decision made by the U.K. Office of Rail Regulation on March 23, 2006, regarding track access applications granting open access to Grand Central Railway Company Limited and Hull Trains Company Limited. GNER believes these open access operators unfairly compete for passenger traffic on portions of GNER's routes. Sea Containers has reluctantly decided to withdraw from its joint bid with the MTR Corporation for the new South Western passenger rail franchise. In light of the Company's current challenges and the need to divert senior specialist personnel from the bid to support GNER's legal challenge against the Office of Rail Regulation, Sea Containers feels that removing itself from the South Western franchise competition is the prudent step to take at this time. About Sea Containers London-based Sea Containers -- http://www.seacontainers.com/-- engages in passenger and freight transport and marine container leasing. The Bermuda registered company is primarily owned by U.S. shareholders and its common shares have been listed on the New York Stock Exchange (SCRA and SCRB) since 1974. * * * As reported in the Troubled Company Reporter on May 4, 2006, Moody's Investors Service downgraded all debt ratings of Sea Containers Ltd. -- corporate family rating to Caa1. The ratings remain under review for possible downgrade, continuing the review initiated on March 23, 2006. The rating actions reflected the continuing uncertainty of Sea Containers' financial position and liquidity, due to a further unspecified delay in the filing of the Form 10-K for 2005 and the likely delay in the filing of the Form 10-Q for the first quarter of 2006, as well as the uncertainty of Sea Containers' current cash burn rate coupled with the on-going challenges in each of the operating segments. As reported in the Troubled Company Reporter on May 4, 2006, Standard & Poor's Ratings Services lowered its ratings on Sea Containers Ltd., including lowering the corporate credit rating to 'CCC-' from 'CCC+'. All ratings remain on CreditWatch with negative implications; ratings were initially placed on CreditWatch on Aug. 25, 2005, and lowered on Feb. 16, 2006, and again on March 24, 2006. The rating action followed the company's announcement that it is continuing to evaluate a range of strategic and financial alternatives, including the "appropriate level of debt capacity, with the intent to engage the public note holders and other stakeholders." SEA CONTAINERS: Further Delays 10-K Filing & Remains on Default --------------------------------------------------------------- Sea Containers Ltd. is providing an update on its financial condition pending completion of its annual report on SEC Form 10-K for the year ended Dec. 31, 2005, and its quarterly report on SEC Form 10-Q for the three months ended March 31, 2006. The Company had a consolidated operating loss for the year ended Dec. 31, 2005, and the three months ended March 31, 2006, continues to generate operating losses and currently has negative cash flow. As at May 31, 2006, the Company's total consolidated cash was $183 million. This compares to $347 million at Dec. 31, 2005 and $106 million at Sept. 30, 2005. The increase in total consolidated cash from Oct. 1, 2005, to Dec. 31, 2005, was $241 million. This increase included the benefit of the net proceeds from the sale of shares in Orient- Express Hotels Ltd. (NYSE:OEH) of $301 million with operating cash inflows including working capital movements contributing $43 million and fixed asset sale proceeds contributing another $32 million. These receipts were partly offset by the payment of senior secured debt of $87 million and interest of $24 million and net capital expenditure and other outflows of $24 million. The reduction in total consolidated cash from Dec. 31, 2005, to May 31, 2006, was $164 million. Operating cash outflows including working capital movement amounted to $55 million with scheduled repayment of senior secured debt of $58 million and interest of approximately $35 million. Net capital expenditure necessary to maintain the operating capability of the business caused much of the remaining $16 million reduction. Of the $183 million of total consolidated cash at May 31, 2006, only approximately $52 million was readily available for the Company's use as free cash. The other $131 million of cash, was either restricted as security for Sea Containers' obligations to third parties, or was held by subsidiaries and cannot be remitted to the Company for various regulatory or financial covenant reasons. The Company is considering various options to increase its available free cash. The short-term liquidity of Sea Containers is dependent on the successful completion of the Silja transaction, a proposed refinancing of container assets, and other potential non-operational sources of funds. Sufficient short-term liquidity is also dependent on there continuing to be no acceleration of repayment of debt facilities in default and for the present, at least, the retention of part of the OEH share sale proceeds. 10-K Filing Delay As announced on May 1, 2006, the Company remains unable to file its 2005 Form 10-K annual report, including its audited 2005 consolidated financial statements, as it has not completed its internal processes with respect to applicable certifications. The Company's external professional advisers are assisting the Board in completing these processes as expeditiously as practicable. Because of the 10-K delay, the filing of the Company's first quarter 2006 Form 10-Q has also been delayed. Public Note Indentures The Company's public note indentures contain a covenant requiring it to maintain consolidated tangible net worth (as defined in the indentures) of at least $175 million. As noted above, the Company has not completed its internal processes to finalize its financial statements for the year ended Dec. 31, 2005 or for the first quarter ended March 31, 2006. Because the consolidated tangible net worth calculation is based on the financial statements, the Company will not be in a position to confirm whether it has been in compliance with this covenant until the financial statements are finalized. The calculation is subject to adjustment for events up to the date of 10-K and 10-Q filing, of which the most significant is continuing change in the estimated net sale value of ferry assets held for disposal at Dec. 31, 2005 including Silja. These continuing adjusting events could result in the consolidated tangible net worth of the Company being at less than $175 million as of Dec. 31, 2005, but this matter cannot be confirmed until the relevant financial statements are finalized. The Company's public note indentures also contain a covenant requiring that net proceeds from asset sales be applied to the payment of debt or the investment in replacement assets within six months of receipt of the net proceeds. Thereafter, under the covenant, any remaining net proceeds must be applied to an offer to purchase outstanding public notes. In addition, the Company's indenture for the public notes maturing in 2012 contains a specific covenant for the application of the proceeds of sale of the OEH shares. Of the net proceeds received from the sale of OEH shares, the Company has applied approximately $200 million as required in the indentures, and estimates that it will have approximately $100 million of excess proceeds at the time the indenture covenant requires the Company to make an excess proceeds offer. The approximate $52 million balance of the Company's "free cash" at May 31, 2006, however, includes these $100 million excess proceeds. Consequently the Company has decided to retain the OEH share sale proceeds unless it determines that they or a portion of them are not needed to fund operations during the coming months. A failure to make an excess proceeds offer would constitute a default under the public note indentures. Further to the Company's May 1, 2006 news release, Sea Containers' management is finalizing its business plan, including an assessment of the appropriate level of debt capacity and appropriate range of values of the Company. Management continues to explore a range of appropriate strategic and financial alternatives, which may include a restructuring of the Company's obligations under the public notes. To facilitate discussions with its public note holders and implementation of any of these alternatives, the Company has signed a confidentiality agreement with a law firm and with a financial advisor, each of whom will act in the interest of the public note holders in discussions with the Company. Sea Containers can give no assurance as to the results of any restructuring including the impact upon creditors and equity holders. The Company is currently unable to confirm whether it expects to pay the $115 million principal amount of 10-3/4% senior notes due on Oct. 15, 2006. Payment may not be made unless the Company expects that it will also be able to pay in full when due its other public notes maturing in 2008, 2009 and 2012 and all other unsecured creditors including potential significant pension liabilities. Credit Default The Company remains in default under many of its secured credit facilities due to breaches of certain financial covenants and other requirements contained in these facilities. The Company's secured and other credit facilities also generally include cross- default provisions so that non-compliance with a covenant in one secured credit facility constitutes a default under substantially all other credit facilities. The Company is continuing discussions with its lenders regarding waivers, amendments and forbearances to address pending and prospective defaults. No lender has taken any action to exercise remedies in respect of any events of default and many lenders have signed forebearance agreements effective through the end of June. About Sea Containers London-based Sea Containers -- http://www.seacontainers.com/-- engages in passenger and freight transport and marine container leasing. The Bermuda registered company is primarily owned by U.S. shareholders and its common shares have been listed on the New York Stock Exchange (SCRA and SCRB) since 1974. * * * As reported in the Troubled Company Reporter on May 4, 2006, Moody's Investors Service downgraded all debt ratings of Sea Containers Ltd. -- corporate family rating to Caa1. The ratings remain under review for possible downgrade, continuing the review initiated on March 23, 2006. The rating actions reflected the continuing uncertainty of Sea Containers' financial position and liquidity, due to a further unspecified delay in the filing of the Form 10-K for 2005 and the likely delay in the filing of the Form 10-Q for the first quarter of 2006, as well as the uncertainty of Sea Containers' current cash burn rate coupled with the on-going challenges in each of the operating segments. As reported in the Troubled Company Reporter on May 4, 2006, Standard & Poor's Ratings Services lowered its ratings on Sea Containers Ltd., including lowering the corporate credit rating to 'CCC-' from 'CCC+'. All ratings remain on CreditWatch with negative implications; ratings were initially placed on CreditWatch on Aug. 25, 2005, and lowered on Feb. 16, 2006, and again on March 24, 2006. The rating action followed the company's announcement that it is continuing to evaluate a range of strategic and financial alternatives, including the "appropriate level of debt capacity, with the intent to engage the public note holders and other stakeholders." SEA CONTAINERS: Selling Silja Oy to Tallink Group for $594 Mil. --------------------------------------------------------------- Sea Containers Ltd. and AS Tallink Grupp have entered into a definitive agreement whereby Sea Containers will sell its Baltic ferry subsidiary Silja Oy Ab to Tallink for a consideration of approximately $594 million in cash and shares. The consideration for the sale of Silja's core business is EUR450 million cash and five million ordinary shares in Tallink. The dollar equivalent values are approximately $570 million cash and $24 million in shares. Tallink's shares are listed on the Tallinn Stock Exchange and their closing price on June 9, 2006 was EUR3.77 per share. Sea Containers may not dispose of the shares within 12 months of the sale's completion without Tallink's permission. The sale of Silja is subject to customary conditions including the receipt of regulatory approvals from the relevant competition authorities and corporate approval of Tallink's shareholders. It is a condition of the contract that the sale be completed by July 28, 2006. Societe Generale, which advised Sea Containers on the disposal, indicated that the sale is expected to be completed on or before that date. The transaction with Tallink includes six of the eight ships held for sale by Sea Containers as part of the Silja core business. These ships generated an EBITDA profit before depreciation, amortization and non-recurring items of approximately EUR30 million (dollar equivalent $37 million) in 2005. During 2005 Silja has been undergoing an intensive restructuring programme, which is expected to lead to EBITDA improvements over the coming 12 to18 months. The transaction does not include the fast ferry services from Helsinki, Finland to Tallinn, Estonia and the two SuperSeaCat fast ferries, which operate on the route. That business will continue to be operated by Sea Containers on a stand-alone basis. The transaction also excludes Silja's three 'legacy' vessels which are not employed on the core routes. Tallink will continue to operate the business under the Silja brand and the ships will continue to sail under their current flags and with their existing officers and crew. Tallink will ensure that Silja's existing obligations towards the employees, including pension obligations, are not adversely affected by the transaction. Commenting on the sale, Enn Pant, Chairman and CEO of Tallink, said that as a result of the acquisition Tallink and Silja will together form the leading shipping company in the Baltic Sea area, which has been a vision of Tallink for years. "Tallink's bold and successful growth strategy is boosted by Silja Line's long history, valuable brand and outstanding professionals. This transaction is firmly founded in our conviction that clients, employees as well as shareholders will benefit from the integration of these two shipping companies." Bob MacKenzie, Chief Executive Officer of Sea Containers, added: "We updated the market on March 24, 2006 on the process of selling the core of the Silja fleet and we believe that the price we have negotiated is a fair one. The sale of Silja is a vital part of our efforts to reduce substantially the overall level of Sea Containers' debt. As a result of the transaction, approximately $510 million of related bank debt will be repaid." As a result of the above transaction, two of the non-core Silja 'legacy' fleet, Opera and Finnjet, which were not included in the transaction, will become free of bank debt and Sea Containers will continue to seek to dispose of them. Sea Containers has separately completed the sale of the third legacy ship, the Walrus, for a consideration of $21 million, paying all related bank debt of $21 million. Sea Containers has also signed a memorandum of agreement to sell its 81-meter fast ferry Rapide. If completed, all the proceeds of the sale would be used to retire debt secured by the ship. About Silja Silja -- http://www.silja.fi/-- was founded as the Finland Steamship Company in 1883 and was listed on the Helsinki Stock Exchange until January 2003. Sea Containers' association with Silja began in 1999 when it acquired a substantial minority position and Silja became a wholly-owned subsidiary of Sea Containers in June 2002. About Tallink AS Tallink Grupp -- http://www2.tallink.com/-- is a dynamic and fast-growing international shipping company operating currently 15 vessels in the Baltic Sea region and offering high quality cruise and passenger transport as well as cargo services. The company carried 3.2 million passengers in the financial year ending in August 2005, reached a revenue of EUR 260 million and employed 2 632 people. Tallink Grupp is listed on the Tallinn Stock Exchange. About Sea Containers London-based Sea Containers -- http://www.seacontainers.com/-- engages in passenger and freight transport and marine container leasing. The Bermuda registered company is primarily owned by U.S. shareholders and its common shares have been listed on the New York Stock Exchange (SCRA and SCRB) since 1974. * * * As reported in the Troubled Company Reporter on May 4, 2006, Moody's Investors Service downgraded all debt ratings of Sea Containers Ltd. -- corporate family rating to Caa1. The ratings remain under review for possible downgrade, continuing the review initiated on March 23, 2006. The rating actions reflected the continuing uncertainty of Sea Containers' financial position and liquidity, due to a further unspecified delay in the filing of the Form 10-K for 2005 and the likely delay in the filing of the Form 10-Q for the first quarter of 2006, as well as the uncertainty of Sea Containers' current cash burn rate coupled with the on-going challenges in each of the operating segments. As reported in the Troubled Company Reporter on May 4, 2006, Standard & Poor's Ratings Services lowered its ratings on Sea Containers Ltd., including lowering the corporate credit rating to 'CCC-' from 'CCC+'. All ratings remain on CreditWatch with negative implications; ratings were initially placed on CreditWatch on Aug. 25, 2005, and lowered on Feb. 16, 2006, and again on March 24, 2006. The rating action followed the company's announcement that it is continuing to evaluate a range of strategic and financial alternatives, including the "appropriate level of debt capacity, with the intent to engage the public note holders and other stakeholders." SIERRA PACIFIC: Fitch Affirms B+ Senior Unsecured Debt Rating ------------------------------------------------------------- Fitch affirmed the ratings of Sierra Pacific Resources and its subsidiaries Nevada Power Co. and Sierra Pacific Power Co. and also revised their Rating Outlooks to Positive from Stable. The Positive Rating Outlook for SRP and its subsidiaries reflects: * evidence of a supportive regulatory environment in Nevada; * reduced litigation exposure; * improved financial flexibility; * adequate liquidity; and * successful efforts to diminish reliance on the wholesale energy markets. Since January 2006, NPC has added approximately 1,700 MW of new generation capacity while SPPC has recently begun construction on its 514 MW gas-fired Tracy facility in northern Nevada following regulatory approval. Recent orders by the Public Utilities Commission of Nevada for both utilities have continued to allow for full recovery of deferred energy costs and adjustments to going forward energy rates. This is a primary rating consideration given the exposure of both utilities to the wholesale energy markets. The PUCN has also supported the company's efforts to reduce its exposure to the wholesale energy markets and has approved the purchase and construction of new generating facilities. Regulatory decisions will remain critical going forward as the utilities are expected to consistently file for recovery of capital investments and deferred energy costs. A change to this pattern of constructive regulatory orders would have adverse rating implications for the company. Fitch notes that NPC has a $172 million deferred energy case pending before the PUCN. A decision in the proceeding is expected by the end of July 2006. In addition to continued exposure to the wholesale power and natural gas markets and regulatory risk associated with recovering the utilities' deferred energy costs, a primary risk for fixed- income investors is SRP's significant capital expenditure commitments and related financing required over the next several years. Given the company's strategy to close its generation gap as well as expand its transmission and distribution system, substantial additional construction/acquisitions should be expected. SRP recently announced its intention to develop two 750 MW coal-fired plants and a 250 mile transmission line near Ely, Nevada. The project is subject to regulatory approval and permitting requirements and the first unit would be operational in 2011 with the second unit following in 2014. Total capital expenditures for the project are estimated at $3 billion and will significantly exceed internally generated cash. The company has not yet laid out its financing plans but Fitch expects that the company will utilize a balanced mix of debt and equity funding to support credit quality. SRP's financial metrics remain somewhat weak but Fitch expects these measures will improve as the company recovers its deferred energy costs and capital investments. For the latest twelve months ended March 31, 2006, debt to EBITDA and EBITDA to interest equaled 7.0x and 2.2x, respectively. During 2006, the utilities have continued to demonstrate access to capital markets. Several debt financings have pushed out maturities and lowered interest expense. In response to elevated commodity prices, both NPC and SPPC recently increased the capacity of each of their revolving credit facilities by $100 million to $600 million and $350 million, respectively. Positively, all remaining litigation stemming from the western energy crisis has been resolved. Of particular note was SRP's settlement agreement with the creditors of Enron that required only modest incremental cash payments. SRP's senior unsecured debt rating reflects its consolidated financial profile and structural subordination. Although the holding company's liquidity has improved, the parent relies on dividends from its subsidiaries to meet it obligations and certain limitations have been put in place. The most restrictive dividend limitation currently is from a February 2006 PUCN financing order that restricts the combined dividends from NPC and SPPC to the amount of SRP's debt service. Fitch believes that permitted dividends will be sufficient to meet parent needs over the next several years, but any further deterioration of the subsidiaries' financial results would affect parent cash flow. SRP also intends to hold $30 million in cash at the parent level. Supportive regulatory rulings in pending and future rate proceedings, further equity issuances or a significant reduction in system debt levels could lead to favorable resolution of the Positive Rating Outlook. A negative rating action could result from: * events restricting the parent's or utilities' access to adequate liquidity; * the disallowance of significant deferred energy costs or capital expenditures by regulators; or * over-reliance on debt financings to meet its capital requirements. Sierra Pacific Resources: -- Issuer Default Rating 'B+' -- Senior unsecured debt 'B+/RR4' -- Rating Outlook Positive Nevada Power Co.: -- IDR 'BB-' -- First mortgage bonds 'BB+' -- General and refunding mortgage bonds 'BB+' -- Secured revolving bank facility 'BB+' -- Senior unsecured debt 'BB-' -- Trust preferred securities 'B+' -- Rating Outlook Positive Sierra Pacific Power Co.: -- IDR 'BB-' -- First mortgage bonds 'BB+' -- General and refunding mortgage bonds 'BB+' -- Secured revolving bank facility 'BB+' -- Preferred stock 'B+' -- Rating Outlook Positive SILICON GRAPHICS: Court Approves Equity Trading Restrictions ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved the request of Silicon Graphics, Inc., and its debtor- affiliates to establish restrictions and notification requirements that must be satisfied before ownership and certain transfers of the Debtors' common stock, on a final basis. As reported in the Troubled Company Reporter on May 26, 2006, effective as of May 10, 2006, the procedures for trading in Silicon Graphics Stock are: (a) Notice of Substantial Equityholder Status Any person who beneficially owns as of the Petition Date or who becomes a beneficial owner of at least 4.75% of Silicon Graphics Stock will file with the Court and serve on the Debtors and their counsel, a notice of the status, unredacted, within 15 calendar days of the later of May 10, 2006, and the date the person becomes a beneficial owner of 4.75% or more stock. (b) Acquisition of Equity Securities At least 15 calendar days prior to the proposed date of any transfer of stock that would result in an increase in the amount owned by a person that beneficially owns 4.75% or more or that would result in a person becoming a beneficial owner of 4.75 % or more Stock, the person will file with the Court and serve on the Debtors and their counsel, an unredacted notice of intent to purchase, acquire or otherwise accumulate an equity interest, specifying the intended transaction. (c) Objection Procedures The Debtors will have 15 calendar days after the filing of an Equity Acquisition Notice to file with the Court and serve on a proposed equity transferee an objection to any proposed transfer of Silicon Graphics Stock on the grounds that the transfer may adversely affect the Debtors' ability to utilize their NOLs or other tax attributes as a result of an ownership change under Section 382 or Section 383 of the Internal Revenue Code. If the Debtors file an objection by the deadline, then the Proposed Equity Acquisition Transaction will not be effective unless approved by a final and non-appealable order of the Court. The Debtors will bear the burden of establishing the adverse effect of the proposed transfer on their ability to utilize their NOLs or other tax attributes. If the Debtors do not file an objection by the deadline, or if the Debtors provide written authorization to the Proposed Equity Transferee approving the Proposed Equity Acquisition Transaction prior to the Equity Objection Deadline, then the proposed transaction may proceed solely as described in the notice. (d) Unauthorized Transactions in Equity Securities Effective as of May 10, 2006, and until further Court order to the contrary, any acquisition of Silicon Graphics Stock in violation of the procedures will be null and void ab initio as an act in violation of the automatic stay under Sections 362 and 105(a) of the Bankruptcy Code. 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) SILICON GRAPHICS: Will Honor Prepetition Taxes & Fees ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the request of Silicon Graphics, Inc., and its debtor- affiliates to pay the Sales and Use Taxes, Business License Fees and Other Excise Taxes to the Taxing Authorities. The Debtors are authorized, but not directed, in their sole discretion, to pay all prepetition Taxes and Fees relating to the period prior to the Petition Date, including all Taxes and Fees subsequently determined upon audit, or otherwise, to be owed for periods prepetition, to the Taxing Authorities; provided that the payments will not exceed $2,300,000 in the aggregate absent further Court order. In addition, the Debtors are authorized to reimburse their non- Debtor affiliates to the extent they have paid Other Excise Taxes to applicable Taxing Authorities on the Debtors' behalf. As reported in the Troubled Company Reporter on May 22, 2006, the Debtors incur and collect various taxes, fees, and charges for payment to various taxing and licensing authorities. The taxes and fees are paid on a periodic basis. (a) Sales and Use Taxes The Debtors estimate $247,000 in sales tax and use tax liability incurred prepetition has not yet been paid. (b) Business License Fees The Debtors estimate that the amounts owed with respect to business license fees prior to the Petition Date total $66,000. (c) Other Excise Taxes As of the Petition Date, the Debtors collected an estimated $2,353,000 in "Value Added" Tax and "Goods and Services" Tax, offset by $366,000 input tax credits, leaving a net payment of $1,987,000 owed prepetition to the applicable foreign jurisdictions. 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) SITEWORKS: Posts $730,248 Net Loss in 1st Fiscal Quarter of 2006 ---------------------------------------------------------------- Siteworks Building And Development Co., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on June 6, 2006. The Company reported a $730,248 net loss on $68,617 of sales for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $2,695,270 in total assets and $2,905,532 in total liabilities resulting in $210,2624 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $393,553 in total current assets available to pay $2,905,532 in total current liabilities coming due within the next 12 months. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?b5d Going Concern Doubt Bagell, Josephs, Levine & Company, LLC., in Gibbsboro, New Jersey, raised substantial doubt about Siteworks Building And Development Co.'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 operating deficits and negative operating cash flow. About Siteworks SiteWorks Building & Development Co., was incorporated on Aug. 8, 2001. The Company started its business operations in September 2002 and did not have significant assets or liabilities until those reflected in the annual report for the period ending Dec. 31, 2004. SLATER STEEL: Court Closes Ch. 11 Cases After Plan Consummation --------------------------------------------------------------- The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware issue a final decree closing these chapter 11 cases: Debtor Case No. ------ -------- Slater Steel U.S., Inc. 03-11639 Slater Steel (U.S.) Finance, LLC 03-11640 Slater Finance Partnership 03-11641 Slater Leomont Corporation 03-11642 Slater Steels Corporation 03-11643 According to Joseph E. Myers, the Debtors' Liquidation Trustee, the Debtors' chapter 11 cases have been fully administered within the meaning of Section 350 of the Bankruptcy Code. As reported in the Troubled Company Reporter on Jan. 26, 2005, the Court confirmed the Debtors' Joint Plan of Liquidation and that Plan took effect on Jan 31, 2005. Pursuant to the Plan, the Trustee has the right and responsibility to close these cases. The Trustee told the Court that he has liquidated all tangible and intangible assets of value and all requests, contested matters and adversary proceedings have been finally resolved. The Trustee will distribute any remaining funds after payment of fees of the Trustee approved by the Plan and Trust Agreement, to remaining priority creditors. Headquartered in Wayne, Indiana, Slater Steel U.S., Inc., a mill producer of specialty steel products, filed for chapter 11 protection on June 2, 2003 (Bankr. Del. Case No. 03-11639). Daniel J. DeFranceschi, Esq., and Paul Noble Heath, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Kurt F. Gwynne, Esq., at Reed Smith LLP, represents the Official Committee of Unsecured Creditors. Joseph E. Myers, is the Liquidation Trustee appointed for the Debtors. When the Company filed for protection from its creditors, it listed estimated assets of $50 million and estimated debts of $100 million. SOLUTIA INC: Equity Panel Says Disclosure Statement is Inadequate ----------------------------------------------------------------- The Official Committee of Equity Security Holders appointed in the chapter 11 cases of Solutia Inc. and its debtor-affiliates objected to the Disclosure Statement explaining the Debtors' Joint Plan of Reorganization. "The Disclosure Statement as drafted is patently misleading and inadequate with respect to a number of material issues, all of which have direct bearing on the reasonableness of the Global Settlement on which the Plan is premised," Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, contends. Ms. Dine asserts that, as the recent discovery has revealed, the Disclosure Statement appears to have been deliberately crafted in close consultation with Pharmacia Corporation and Monsanto Company to trivialize and obscure the fundamental issues addressed by the Official Committee of Equity Security Holders' adversary proceeding against the two parties. The Equity Committee notes that since its formulation, it has been concerned that Monsanto and Pharmacia would manipulate Solutia's bankruptcy to gain unfair advantages for themselves while leaving Solutia's public shareholders "once again holding the proverbial bag." These concerns have been compounded by indications that other constituencies in the Debtors' Chapter 11 cases have seemed satisfied to cede control to Monsanto and Pharmacia rather than make the necessary investigation and analysis of the true nature of the claims of, and claims against, the two parties, Ms. Dine relates. The Equity Committee believes that consideration of the Disclosure Statement and solicitation of the Plan at this time is premature. The Equity Committee was excluded from the negotiations that led to the proposed settlement of the Equity Committee Complaint. If the Equity Committee Complaint is successful, the Global Settlement and the Plan that incorporates it will be null. Billions of dollars of value will effectively be returned to the Debtors' estates and the claims asserted by Monsanto and Pharmacia against the Debtors will be eliminated, Ms. Dine notes. Thus, Ms. Dine asserts, the approval of the Disclosure Statement and solicitation of votes to accept the Plan and Global Settlement should be deferred until the Equity Committee Complaint is fully adjudicated. Even if the Court were to consider the adequacy of the Disclosure Statement at this time, the Debtors' insufficient description of several key components of the Global Settlement denies creditors and equity holders the requisite information to meaningfully consider the Plan. The Equity Committee notes that: (1) The Disclosure Statement does not adequately describe the alleged claims asserted by Monsanto and Pharmacia, while the withdrawal of those unquantified claims serves as consideration for the Global Settlement. (2) The Disclosure Statement must describe the claims asserted by the Equity Committee and the projected value of the Equity Committee Complaint. The Disclosure Statement must describe the impact of the Equity Committee Complaint on the purported claims of Monsanto and Pharmacia. (3) The Disclosure Statement's description of Monsanto's $250,000,000 "contribution" to the Plan is misleading because it fails to make clear that the Rights Offering, if fully subscribed, will obviate Monsanto's obligation to make the contribution -- while still receiving significant equity in the reorganized company -- and, even if Monsanto is required to make the contribution, it will receive stock in Reorganized Solutia equal to the value of the contribution. (4) The Disclosure Statement fails to adequately disclose the valuation methods used to value Reorganized Solutia. (5) The Debtors' financial projections in the Disclosure Statement are materially lower than projections provided to the Equity Committee only a few months ago. The revised projections are designed to lower the apparent value of Solutia to permit Solutia, Monsanto, Pharmacia and the unsecured creditors to retain all of the stock of Reorganized Solutia and to prevent distributions to Solutia's public shareholders. Based in St. Louis, Mo., Solutia, Inc. -- http://www.solutia.com/ -- with its subsidiaries, make and sell a variety of high- performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 62; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOLUTIA INC: Judge Defers Disclosure Statement Hearing to June 20 ----------------------------------------------------------------- The Hon. Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York adjourned the hearing to consider the adequacy of the Disclosure Statement explaining Solutia, Inc., and its debtor-affiliates' Joint Plan of Reorganization to June 20, 2006, at 11:00 a.m. The Debtors filed their Plan and Disclosure Statement on Feb. 14, 2006. A number of parties, including the Official Committee of Equity Security Holders, the Ad Hoc Committee of Solutia Noteholders, The Bank of New York, and JPMorgan Chase Bank, filed objections to the Disclosure Statement. Based in St. Louis, Mo., Solutia, Inc. -- http://www.solutia.com/ -- with its subsidiaries, make and sell a variety of high- performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 62; Bankruptcy Creditors' Service, Inc., 215/945-7000) SPECIALTYCHEM PRODUCTS: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: SpecialtyChem Products Corporation dba SpecialtyChem dba ChemDesign 2 Stanton Street Marinette, Wisconsin 54143 Bankruptcy Case No.: 06-23131 Type of Business: The Debtor is a custom manufacturer of various fine organic chemicals for paper products, electronics, agricultural products and other materials. Chapter 11 Petition Date: June 12, 2006 Court: Eastern District of Wisconsin (Milwaukee) Judge: Pamela Pepper Debtor's Counsel: Christopher J. Stroebel, Esq. Timothy F. Nixon, Esq. LaFollette Godfrey & Kahn, S.C. P.O. Box 13067 Green Bay, Wisconsin 54307-3067 Tel: (920) 436-9300 Fax: (920) 436-7988 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Eastman Kodak Company Trade Debt $696,576 343 State Street Rochester, NY 14650 Onyx Environmental Services LLC Trade Debt $420,531 Department 73709 Chicago, IL 60673-7709 JLM Chemicals Trade Debt $270,415 867 Hidden River Parkway Tampa, FL 33637 Hydrite Chemical Co. Trade Debt $242,218 191 West 28th Avenue P.O. Box 2763 Oshkosh, WI 54903 Georgia Gulf Chemicals and Trade Debt $236,979 Vinyls LLC 26199 Highway 405 P.O. Box 629 Plaquemine, LA 70764 Enerfab Inc. Judgment $148,267 Safety Kleen Systems, Inc. Trade Debt $138,467 Airgas North Central Trade Debt $123,435 Brenntag Great Lakes LLC Trade Debt $112,476 Borregaard Synthesis Trade Debt $109,855 Dow Chemical Company Trade Debt $87,400 Houghton Chemical Corp. Trade Debt $73,929 Waste Management of Trade Debt $70,075 Central Wisconsin Eastman Chemical Company Trade Debt $69,338 Pollution Control Trade Debt $59,763 Industries Inc. Air Products & Chemicals Inc. Trade Debt $55,711 SF Chem. Inc. Trade Debt $48,384 United Rail Service, Inc. Trade Debt $47,588 FMC Lithium Inc. Trade Debt $37,471 Wisconsin Public Service Corp. Utilities $36,780 SPECTRUM BRANDS: Bank Facility Revision Cues S&P to Hold B- Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Spectrum Brands Inc., including the 'B-' corporate credit rating. At the same time, the ratings were removed from CreditWatch, where they were placed with negative implications April 6, 2006, following the company's substantially lowered earnings guidance for the second quarter. The rating outlook is negative. Approximately $2.3 billion of debt is affected by this action. "The ratings affirmation is based on the company's successful amendment of its bank facility, which provides further covenant relief as Spectrum continues to focus on stabilizing its operations," said Standard & Poor's credit analyst Patrick Jeffrey. "However, the revised covenants are expected to result in some tightness in the near term, and step-up provisions will require the company to begin to stabilize its operations over the next few quarters to avoid further covenant violations." Spectrum Brands has amended its bank facility twice since December 2005 as a result of poor operating performance. "The ratings could be lowered in the near term if the company's liquidity further weakens as a result of its operating challenges," noted Mr. Jeffrey. The ratings on Atlanta, Georgia-based Spectrum Brands reflect: * the company's poor operating performance over the past year (which has affected its liquidity); * high leverage; and * very aggressive acquisition history. These risks are offset somewhat by the company's leading market positions in many of its business segments. STRIKEFORCE TECH: Massella & Associates Raises Going Concern Doubt ------------------------------------------------------------------ Massella & Associates, CPA, PLLC, in Syosset, New York, raised substantial doubt about Strikeforce Technologies, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations, di minimis revenues and working capital deficiency. The Company reported a $5,174,926 net loss on $30,532 of revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $2,763,814 in total assets and $4,659,291 in total liabilities, resulting in a $1,895,477 stockholders' deficit. The Company's Dec. 31 balance sheet also showed strained liquidity with $618,345 in total current assets available to pay $1,136,880 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's 2005 Annual Report is available for free at http://ResearchArchives.com/t/s?b5e About Strikeforce StrikeForce Technologies Inc. -- http://www.sftnj.com/-- provides total identity assurance solutions to both industry and government. Its main product is ProtectID(TM) -- a "hack proof" authentication solution that guards both businesses and consumers from phishing, keylogging, malware, spyware and other identity attacks and scams. TITANIUM METALS: Earns $58.8 Million in Quarter Ended March 31 -------------------------------------------------------------- Titanium Metals Corporation earned $58.8 million of net income on $286.9 million of revenues for the three months ended March 31, 2006, compared to $41.4 million of net income on $155.2 million of revenues for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $989.9 million in total assets and $334.5 million in total liabilities. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?b61 Headquartered in Denver, Colorado, Titanium Metals Corporation -- http://www.timet.com/-- is a worldwide producer of titanium metal products. * * * Moody's Investors Services placed a Caa1 issuer rating and B3 LT Corp Family Rating on Titanium Metals. TNT RESOURCE: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: TNT Resource Development Inc. aka TNT Resources Inc. 145 Milligan Road Laguna Beach, California 92651 Bankruptcy Case No.: 06-10900 Chapter 11 Petition Date: June 14, 2006 Court: Central District Of California (Santa Ana) Judge: John E. Ryan Debtor's Counsel: Todd C. Ringstad, Esq. Ringstad & Sanders LLP 2030 Main Street, Suite 1200 Irvine, California 92614 Tel: (949) 851-7450 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Michael Zavala Lawsuit Pending $605,490 c/o Robert V. McMahon, Esq. 401 Glenneyre Street, Suite E Laguna Beach, CA 92651 Internal Revenue Service Taxes $91,850 Mail Stop 5107/Saul Hernandez 24000 Avila Road Laguna Niguel, CA 92677 Eddy Marin Unsecured Note $20,000 9917 Walker Street Cypress, CA 90630 Employee Development Department Taxes $16,000 American Contractors Indemnity Trade Debt $11,676 Morris Stone Trade Debt $2,000 Canyon Lake Property Owners Judgment $1,777 Interiors by Joann Trade Debt $850 Schmid Insulation Trade Debt $800 Northgate Market Trade Debt $583 Panorama Homeowners Judgment $202 TRANS-ACTION: Court Dismisses Ch. 11 Case After Plan was Filed -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado dismissed Trans-Action Equity Investors III, Co.'s chapter 11 case on June 8, 2006, a day after the Debtor filed its plan of reorganization. Beal Bank SSB sought the dismissal, alleging bad faith on the part of the Debtor over a failed single asset real estate apartment in Colorado Springs. The Debtor was involved in more than nine years of litigation on the matter. The Debtor owes Beal Bank over $28 million pursuant to promissory notes. The notes are secured by deeds of trust encumbering the apartment project. Donald D. Allen, Esq., at Block Markus & Williams LLC, pointed out that the Debtor chose to file the bankruptcy case the day before Beal Bank's foreclosure was to occur. He explains that the Debtor chose to file the bankruptcy case only after Beal Bank had finally obtained a decree of foreclosure, after more than nine years of litigation.. According to Mr. Allen, the Debtor has no significant creditors other than the Bank. Mr. Allen argued that the Debtor's schedules are inaccurate because they list unsecured debts that are not owed and they list creditors that have no claim against the Debtor. Mr. Allen contended that there is little likelihood of rehabilitation of the Debtor and claimed that the Debtor is using bankruptcy as a vehicle to resolve disputes solely between the Debtor and Beal Bank as its sole creditor. The Debtor will be unable to effectuate confirmation of a plan, Mr. Allen argued. Mr. Allen added that the Debtor is insolvent and is unlikely to be able to pay its sole secured creditor, Beal Bank. The Debtor had proposed under its chapter 11 plan to pay the Bank within 90 days of the plan's effective date. The Debtor's corporate General Partner sought and obtained an appraisal, which places the maximum non-discounted fair market value of Beal's collateral at a maximum of $6,463,528.64 as of June 2006. Headquartered in Colorado Springs, Colorado, Trans-Action Equity Investors III, Co. develops real estate and maintains apartments. The Debtor filed for chapter 11 protection on April 18, 2006 (Bankr. D. Col. Case No. 06-11886). Robert M. Duitch, Esq., at Robert M. Duitch, P.c., represents the Debtors in their restructuring efforts. When the Debtor filed for protection from their creditors, they listed $5,613,120 in assets and $28,333,020 in debts. US AIRWAYS: Executives Plan to Exercise Options and Sell Stock -------------------------------------------------------------- Several of US Airways Group, Inc.'s (NYSE: LCC) executive officers have previously adopted pre-arranged stock trading programs to facilitate the exercise of options and the sale of holdings in the company's stock. The company's securities trading policy permits the enactment of pre-determined plans for trades of specified amounts of company stock in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. Executives previously adopting 10b5-1 plans include Chairman, President and Chief Executive Officer Doug Parker; Executive Vice President Sales and Marketing Scott Kirby; Executive Vice President and Chief Administration Officer Jeff McClelland; Senior Vice President, Public Affairs C.A. Howlett; Senior Vice President and Chief Financial Officer Derek Kerr, and Senior Vice President and General Counsel Jim Walsh. As part of their 10b5-1 plans, on June 12, Kirby, McClelland, Kerr and Walsh exercised and sold 261,112 of their combined 750,883 vested options and vested restricted stock. The officers have elected to sell their stock as part of each individual's long-term strategy for asset diversification. Sales pursuant to these plans are reported to the Securities and Exchange Commission as required by law. About US Airways Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. VENTURE HOLDINGS: Chapter 7 Trustee Hires Akin Gump as Co-Counsel ----------------------------------------------------------------- Stuart A. Gold, the Chapter 7 Trustee overseeing the liquidation of Venture Holdings Company, LLC, and its debtor-affiliates, obtained permission from the U.S. Bankruptcy Court for the Eastern District of Michigan to retain Akin Gump Strauss Hauer & Feld LLP as his co-counsel for special purposes. Prior to the Debtors' chapter 7 conversion, Akin Gump served as co-counsel for the Official Committee of the Unsecured Creditors. Akin Gump is expected to: a) represent the Trustee with respect to the designated Committee actions; b) respond to inquiries from the Trustee regarding the designated Committee Actions; and c) handle any specific tasks that the Trustee required. Fred S. Hodara, Esq., and John Karaczynski, Esq., are the primary partners designated to provide services to the Trustee. They will bill at $795 and $600 per hour for their work, respectively. Mr. Hodara discloses that the Firm's other professionals bill: Designation Hourly Rate ----------- ----------- Partners $420 - $895 Special Counsel and Counsel $300 - $735 Associates $235 - $475 Paraprofessionals $65 - $225 Akin Gump is authorized to withdraw as co-counsel for the Trustee if there is no reasonable prospect of payment for the Firm's legal services. Mr. Hodara assures the Court that his firm does not represent or hold any interest adverse to the Debtors or their estates. About Venture Holdings Headquartered in Fraser, Michigan, Venture Holdings Company, LLC, nka NM Holdings Company, LLC, and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. Mich. Case No. 03-48939) on March 28, 2003. Deluxe Pattern Corporation and its debtor- affiliates filed for chapter 11 protection on May 24, 2004 (Bankr. E.D. Mich. Case No. 04-54977). Venture's prepetition lenders acquired Venture's assets during the chapter 11 proceeding. John A. Simon, Esq., at Foley & Lardner LLP represents the Debtors. On Jan. 17, 2006, the Court converted the Debtors' chapter 11 cases to chapter 7 liquidation. Stuart A. Gold was appointed as the chapter 7 Trustee for the Debtors' estates. VERITAS CLO: Moody's Puts Ba2 Rating on $9.5MM Class E Notes ------------------------------------------------------------ Moody's Investors Service assigned these ratings to Notes issued by Veritas CLO II, Ltd: * Aaa to $30,000,000 Class A-1R First Priority Senior Secured Revolving Notes Due 2021, * Aaa to $196,600,000 Class A-1T First Priority Senior Secured Floating Rate Notes Due 2021, * Aaa to $25,200,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2021, * Aa2 to $15,200,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2021, * A2 to $20,600,000 Class C Fourth Priority Mezzanine Secured Floating Rate Deferrable Interest Notes Due 2021, * Baa2 to $10,500,000 Class D Fifth Priority Mezzanine Secured Floating Rate Deferrable Interest Notes Due 2021 and * Ba2 to $9,500,000 Class E Sixth Priority Mezzanine Secured Floating Rate Deferrable Interest Notes Due 2021. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Rabobank International will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. VITESSE CLO: Moody's Puts Rating on $17MM Class B-2L Notes at Ba3 ----------------------------------------------------------------- Moody's announces assigned ratings to notes issued by Vitesse CLO Ltd. Moody's Ratings: * Aaa to the $80,000,000 Class A-1LR Floating Rate Revolving Notes Due August 17, 2020; * Aaa to the $374,000,000 Class A-1L Floating Rate Notes Due August 17, 2020; * Aa2 to the $28,000,000 Class A-2L Floating Rate Notes Due August 17, 2020; * A2 to the $41,000,000 Class A-3L Floating Rate Notes Due August 17, 2020; * Baa3 to the $25,000,000 Class B-1L Floating Rate Notes Due August 17, 2020; and * Ba3 to the $17,000,000 Class B-2L Floating Rate Notes Due August 17, 2020. TCW Advisors, Inc will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. VULCAN ENERGY: Pacific Merger Prompts S&P to Affirm BB Rating ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BBB-' corporate credit rating on master limited partnership Plains All American Pipeline L.P. and its 'BB' corporate credit rating on affiliate Vulcan Energy Corp. following the announcement that Plains intends to purchase Long Beach, Calif.-based MLP Pacific Energy Partners L.P. for about $2.4 billion. Standard & Poor's also placed its 'BB' corporate credit rating on Pacific Energy and its 'B-' corporate credit rating on the owner of its general partner, LB Pacific L.P., on CreditWatch with positive implications to reflect the prospect of merging into the higher-rated Plains. The outlook for Plains and Vulcan is negative. Plains, based in Houston, Texas, has about $1.8 billion of debt. "The proposed transaction could mildly increase Plains' risk profile despite the support of a significant amount of equity and the addition of steady, fee-based cash flows from Pacific Energy's established set of pipeline and storage assets," said Standard & Poor's credit analyst Todd Shipman. "More importantly, Plains must successfully manage the cost savings and the large, growth-related capital program that provide the basis for the purchase of Pacific Energy to maintain its ratings," said Mr. Shipman. WARNER CHILCOTT: Initial Public Offering Spurs S&P's CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Warner Chilcott Corp., including the 'B' corporate credit rating, on CreditWatch with positive implications. The CreditWatch placement is in response to Warner Chilcott's plans for an initial public offering, in which the specialty pharmaceutical company is expected to sell $1 billion in equity. Warner Chilcott has a diverse product portfolio, with a solid position in the women's health market, focusing on branded oral contraceptives and hormone replacement therapies. The company is also building a dermatology franchise. However, Warner Chilcott has been aggressive in conducting debt- financed product acquisitions. The company has more than $2.2 billion in debt, and debt to EBITDA, estimated at more than 6x, is very weak for the rating. "The capital influx from the announced IPO will enable the company to significantly de-lever," said Standard & Poor's credit analyst Arthur Wong. "A rating upgrade in the near term is dependent on the successful reduction of debt and the continued strength of the product pipeline." WEIGHT WATCHERS: S&P Rates $850 Mil. Sr. Sec. Bank Facility at BB+ ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its loan and recovery ratings to Weight Watchers International Inc.'s $850 million senior secured bank facility due in 2011. The loan consists of: * a $500 million revolving credit facility; and * a $350 million term loan A. The facility is rated 'BB+' (one notch higher than the 'BB' corporate credit rating on Weight Watchers) with a recovery rating of '1', indicating a high expectation for full recovery of principal in the event of a payment default. Net proceeds from the credit facility will be used to refinance the company's existing $650 million senior secured credit facility. The ratings on this existing facility will be withdrawn upon the execution of the new facility. The new loan is secured by substantially all of the borrower's assets and guaranteed by its domestic operating subsidiaries. Financial covenants include a minimum interest coverage ratio of 3.0x and a maximum net leverage ratio of 3.0x. Standard & Poor's also affirmed its current ratings on the commercial weight-loss service provider, including the 'BB' corporate credit rating. The rating outlook is positive. On a consolidated basis, New York, New York-based WWI had about $672.5 million of total debt outstanding at April 1, 2006. "The ratings on WWI reflect the company's narrow business focus, its participation in the highly competitive weight-loss industry, and its considerable debt levels," said Standard & Poor's credit analyst Mark Salierno. "These factors are somewhat mitigated by the company's leading market position, its well recognized brand name, geographic diversity, predictable cash flows, and favorable demographic trends." On a consolidated basis, pro forma for the additional debt and interest expense relating to the WW.com acquisition and adjusted for operating lease obligations, EBITDA interest coverage is estimated by Standard & Poor's to be in the 10x area, total debt to EBITDA at about 2x, and funds from operations to total debt in the 35%-40% range. Standard & Poor's expects the company to continue to apply its strong cash flows to debt reduction, and to restore consolidated credit protection measures close to pre-acquisition levels through continued earnings growth and debt reduction. WERNER LADDER: Organizational Meeting Scheduled for June 22 ----------------------------------------------------------- The U.S. Trustee for Region 3 will hold an organizational meeting to appoint an official committee of unsecured creditors in Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor- affiliates' chapter 11 cases at 1:00 p.m., on June 22, 2006, at the Doubletree Hotel, 700 King Street, Hagley Room in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtors will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Greenville, Pennsylvania, Werner Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, serves as the Debtors' counsel. The firm of Willkie Farr & Gallagher LLP represents the Debtors as its co-counsel. The Debtors hhave retained Rothschild Inc. as their financial advisor and invesement banker while Loughlin Meghji & Company serves as the Debtors' restructuring consultants. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. WORLDCOM INC: Argues Seinfeld Lacks Standing to Pursue Claim ------------------------------------------------------------ WorldCom, Inc. and its debtor-affiliates oppose Frank David Seinfeld's motion to prosecute a prepetition shareholder derivative action on their behalf. Adam P. Strochak, Esq., at Weil, Gotshal & Manges LLP, in Washington, DC, argues that Mr. Seinfeld lacks standing to pursue a stockholder derivative action for three reasons: (1) Pursuant to Sections 1141(b) and 541(a)(1) of the Bankruptcy Code and the Debtors' Plan of Reorganization, the right to pursue claims on behalf of WorldCom belongs solely to the Reorganized Debtors, and not to former WorldCom shareholders like Mr. Seinfeld; (2) The Plan's injunction provisions preclude Mr. Seinfeld from continuing the derivative action; and (3) Any claim Mr. Seinfeld possessed as a WorldCom shareholder was released in the class action settlement approved by Judge Cote in the WorldCom Securities Litigation. Mr. Seinfeld's prosecution of a derivative action would interfere with the implementation of the Plan, Mr. Strochak asserts. Moreover, Mr. Seinfeld filed a Proof of Claim and Release form in connection with the class action settlement in the WorldCom Securities Litigation. Mr. Strochak contends that by signing the Proof of Claim and Release, Mr. Seinfeld certified that: -- he was a class member; -- he had read and understood the contents of the Proof of Claim and Release; -- he had not filed a request to be excluded from the class; and -- he agreed to participate in the settlement of the class action. Mr. Strochak emphasizes that Seinfeld raised no objection to Judge Cote's approval of the WorldCom Securities Litigation settlement. 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 Oct. 31, 2003, and on Apr. 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 119; Bankruptcy Creditors' Service, Inc., 215/945- 7000) WORLDCOM: Says It Obtained Licensing Rights to Use HUB Program -------------------------------------------------------------- WorldCom, Inc., and its debtor-affiliates entered into a Master Software License & Services Agreement with Hansen Corporation Pty Limited, whereby the Debtors paid Hansen $1,500,000, for a perpetual license to use its Hansen Universal Billing software. The Debtors paid Hansen an additional $10,000,000, to develop customized software called Customer Management System. On Jan. 21, 2003, Hansen filed Claim No. 15798, seeking $1,500,000. Hansen alleged that the Debtors used Hansen's proprietary software outside the scope of uses permitted under the License Agreement. Sometime after Sept. 20, 2000, the Debtors permitted at least two other entities, Concert Communications Company and Bell Canada, to use the HUB Software outside the United States of America. The Debtors contended that Concert and Bell Canada's use of the HUB Software has been limited to the "thin-client" portion of the HUB Software. In addition, the Debtors assert that the use was expressly permitted since they exclusively own CMS and can permit Concert and Bell Canada to use it. The Debtors then asked the U.S. Bankruptcy Court for the District of New York for a summary judgment against Hansen and disallow Claim No. 15798. Hansen argued that there is no clause in the License Agreement that authorizes any third party to use Hansen's proprietary HUB software outside the United States. Debtors Respond Teresa L. Clark, Esq., at Stinson, Morrison & Hecker LLP, in Kansas, Missouri, asserts that under the Master Software License & Services Agreement, the Debtors obtained non-exclusive, fully paid-up, nontransferable, perpetual licensing rights to use the HUB program in the manner permitted under the Agreement. Ms. Clark maintains that the Debtors did not: -- sublicense the HUB software to Bell Canada or Concert Communications Company; and -- transfer or assign to Bell Canada or Concert the license to use the HUB software. Ms. Clark argues that Hansen Corporation's Claim No. 15798 should be disallowed because: -- there is no dispute of material fact; -- the unambiguous terms of the Agreement permitted the Debtors to allow Bell Canada and Concert to use CMS without paying an additional charge to Hansen; and -- the Agreement permitted Bell Canada and Concert to access CMS from their own premises on a thin-client basis. Hansen failed to submit any affidavit or other evidence actually challenging the Debtors' stated facts, Ms. Clark notes. The CMS system and any remaining vestiges of the HUB software were installed and used on a server located in the United States and were never installed and used on a server located outside the United States, Ms. Clark maintains. There is no evidence that the Debtors sublicensed, transferred or assigned the HUB software, and in fact, it did not do so. Accordingly, the Debtors ask the Court to disallow Claim No. 15798. 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 Oct. 31, 2003, and on Apr. 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 119; Bankruptcy Creditors' Service, Inc., 215/945-7000) WORLDCOM: Seeks Summary Judgment on Access & Division 1's Claim --------------------------------------------------------------- On January 14, 2003, Access All American L.L.C. and Division 1 Marketing L.C. filed Claim No. 10875, asserting an unsecured claim against WorldCom, Inc., and its debtor-affiliates in an indeterminate amount. On October 5, 1998, Access All American and Total Communications Services, Inc., entered into a resale agreement. Mark Iba, Esq., at Stinson, Morrison & Hecker LLP, in Kansas City, Missouri, tells the the U.S. Bankruptcy Court for the District of New York that during the same period, Access All American attempted to enter into a contract with the Debtors to provide certain telecommunication and related services, which it intended for TCSI to resell. However, the Debtors never reached an agreement with Access All American, Mr. Iba informs the Court. The Debtors refused to do business with Access All American because of its inability to obtain a line of credit attesting to the financial stability of the company. TCSI learned that Access All American did not have a telecommunications agreement with the Debtors. TCSI then repudiated its Resale Agreement with Access All American. Access All American also entered into a Confidentiality Agreement with the Debtors in August 1998, in order not to discuss whether the Debtors would be interested in providing telecommunication services. On October 29, 1998, Access All American amended the Confidentiality Agreement, providing that Access All American will not to assert any claims against the Debtors or demand any compensation arising out of its efforts to do business with TCSI. On the other hand, Division 1 Marketing contends that the Debtors breached an agreement to pay it a 5% commission on certain long distance services the Debtors allegedly sold to TCSI. Accordingly, the Debtors seek summary judgment against Access All American and Division 1 Marketing on Claim No. 10875. Mr. Iba argues that Access All American's claims fail as a matter of law for four reasons: 1. Access All American's claims are contractually barred because it executed a covenant not to sue the Debtors; 2. Access All American and the Debtors did not enter into a contract for the sale of telecommunication services; 3. Access All American has failed to provide any evidence, demonstrating that the Debtors interfered with its contractual relationships or business expectancies; and 4. Access All American's claims for interference with contractual relationships or business expectancies are time-barred under New York's three-year statute of limitations. Similarly, Mr. Iba asserts that Division 1 Marketing's claim fails as a matter of law because there is no evidence of: -- any contractual agreement between Division 1 Marketing and the Debtors; and -- any damages it sustained as a result of the Debtors' conduct. 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 Oct. 31, 2003, and on Apr. 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (WorldCom Bankruptcy News, Issue No. 119; Bankruptcy Creditors' Service, Inc., 215/945- 7000) * Guicho Pons Joins A&M Real Estate Advisory Services as Director ----------------------------------------------------------------- Alvarez & Marsal Real Estate Advisory Services, LLC, disclosed that Mauricio "Guicho" Pons, an experienced hospitality, tourism and real estate industry professional with domestic and international experience, has joined the firm as director. He is based in Dallas and will be a leader in the hospitality and Latin America practice areas. Mr. Pons brings substantial domestic and international experience, and specializes in advising a variety of hospitality properties including hotels, mixed-use resort developments, hotel condominiums, interval ownership, all-inclusive resorts, and marinas. He also has significant experience with residential, commercial and industrial projects in the US and Latin America. "Since forming A&M Real Estate Advisory Services nearly three years ago, we have attracted a highly sophisticated team of professionals with deep and diverse backgrounds," said Chuck Bedsole, managing director and head of the hospitality and Latin America practices for Alvarez & Marsal Real Estate Advisory Services. "Guicho's broad experience working with scores of hospitality and leisure companies strengthens our impressive roster of talent and industry-specific expertise. In addition, his extensive experience in the field of mergers and acquisitions and transaction support is an ideal complement to the restructuring practice we have established." Prior to joining A&M, Mr. Pons was responsible for the merger and acquisition activities in the Americas for Regus PLC, where his responsibilities included the due diligence, contract and deal negotiation, and post closing implementation and transitioning of the acquisitions. He also served as a manager in the transaction advisory services group of PricewaterhouseCoopers, and began his career in the real estate audit group at Ernst & Young. Mr. Pons earned his bachelor's degree in accounting and finance from Texas A&M University. He serves as an executive board member of the Dallas Center for Contemporary Art, and is fluent in Spanish. About A&M Real Estate Alvarez & Marsal Real Estate Advisory Services, LLC advises owners, investors, lenders, and users of real estate throughout the real estate lifecycle. Alvarez & Marsal Real Estate Advisory Services professionals align their interests with those of their clients, and are committed to providing senior-level attention, the right resources, objective advice and flawless execution to every engagement. Alvarez & Marsal Real Estate Advisory services include: Restructuring Advisory, Litigation Advisory, Strategy and Operations Consulting, Corporate Finance, Transaction Advisory, Public Sector Advisory, Hospitality Advisory, and Latin America Advisory. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re PoolsUSA, Inc. Bankr. N.D. Tex. Case No. 06-32321 Chapter 11 Petition filed June 6, 2006 See http://bankrupt.com/misc/txnb06-32321.pdf In re El Paso Fairview Foods, Inc. Bankr. W.D. Tex. Case No. 06-30570 Chapter 11 Petition filed June 7, 2006 See http://bankrupt.com/misc/txwb06-30570.pdf In re Family Buffett, Inc. Bankr. S.D. Ind. Case No. 06-02953 Chapter 11 Petition filed June 7, 2006 See http://bankrupt.com/misc/insb06-02953.pdf In re Foundation of Faith Ministeries, Inc. Bankr. N.D. Fla. Case No. 06-40221 Chapter 11 Petition filed June 8, 2006 See http://bankrupt.com/misc/flnb06-40221.pdf In re Global Grounds Greenery, LLC Bankr. D. Ariz. Case No. 06-01701 Chapter 11 Petition filed June 8, 2006 See http://bankrupt.com/misc/azb06-01701.pdf In re The Ranch Owners Association Bankr. D. Ariz. Case No. 06-01705 Chapter 11 Petition filed June 8, 2006 See http://bankrupt.com/misc/azb06-01705.pdf In re Jay Adam Cambra Bankr. D. Hawaii Case No. 06-00367 Chapter 11 Petition filed June 9, 2006 See http://bankrupt.com/misc/hib06-00367.pdf In re Mather Properties I, LLC Bankr. D. Mass. Case No. 06-40977 Chapter 11 Petition filed June 9, 2006 See http://bankrupt.com/misc/mab06-40977.pdf In re Plant Haus, Inc. Bankr. W.D. Mich. Case No. 06-02659 Chapter 11 Petition filed June 9, 2006 See http://bankrupt.com/misc/miwb06-02659.pdf In re Wet Pets and Friends, Inc. Bankr. N.D. Ill. Case No. 06-06698 Chapter 11 Petition filed June 9, 2006 See http://bankrupt.com/misc/ilnb06-06698.pdf In re LTC, Inc. Bankr. S.D.N.Y. Case No. 06-35576 Chapter 11 Petition filed June 12, 2006 See http://bankrupt.com/misc/nysb06-35576.pdf In re Bleeker Bros Inc. Bankr. C.D. Calif. Case No. 06-12555 Chapter 11 Petition filed June 13, 2006 See http://bankrupt.com/misc/cacb06-12555.pdf In re Dorothy Beam Limited, LLC Bankr. D. N.H. Case No. 06-10648 Chapter 11 Petition filed June 13, 2006 See http://bankrupt.com/misc/nhb06-10648.pdf In re Inman Inc. Bankr. M.D. Fla. Case No. 06-01376 Chapter 11 Petition filed June 13, 2006 See http://bankrupt.com/misc/flmb06-01376.pdf In re Law Offices of Travis R. Phillips, P.C. Bankr. W.D. Tex. Case No. 06-10913 Chapter 11 Petition filed June 13, 2006 See http://bankrupt.com/misc/txwb06-10913.pdf In re Stuart Francis Andrews, Jr. Bankr. M.D. Tenn. Case No. 06-02889 Chapter 11 Petition filed June 13, 2006 See http://bankrupt.com/misc/tnmb06-02889.pdf In re Studio B Architects, Inc. Bankr. E.D. Mich. Case No. 06-47509 Chapter 11 Petition filed June 13, 2006 See http://bankrupt.com/misc/mieb06-47509.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero Jainga, Joel Anthony 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 ***