/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060621.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, June 21, 2006, Vol. 10, No. 146 Headlines 5G WIRELESS: Balance Sheet Upside-Down by $3.97 Mil. at March 31 ADA DINING: Case Summary & 4 Largest Unsecured Creditors ADVOCACY AND RESOURCES: Case Summary & 20 Largest Unsec. Creditors AMERICAN TECHNOLOGIES: Appoints Ennis and Luther as New Directors AMERICAN UNITED: March 31 Balance Sheet Upside-Down by $2.9 Mil. ANCHOR GLASS: Rebecca Roof Steps In as Finance Vice President ASARCO LLC: Wants Wachovia's Request on Equipment Lease Denied BALTIMORE MARINE: County's $47K Tardy Admin. Tax Claim Denied BANC OF AMERICA: S&P Affirms Class B-4 & B-5 Certs.' Low-B Ratings BEARD COMPANY: Files Four Amended Financial Statements BILLY BATY: Case Summary & 11 Largest Unsecured Creditors BLAST ENERGY: Posts $968,346 Net Loss in 2006 First Fiscal Quarter BODIES IN MOTION: Case Summary & 20 Largest Unsecured Creditors BOWATER INC: New Credit Deals Prompt Moody's to Affirm B1 Ratings BROOKS SAND: Trustees Hire Wise DelCotto as Special Counsel BWAY CORP: Moody's Rates Proposed $295 Million Facilities at Ba3 CABLE SATISFACTION: Monitor Wants Court Nod on Cabovisao Sale Pact CAJUN FUNDING: Moody's Holds B3 Rating on $155 Mil. Sec. Notes CATHOLIC CHURCH: T.D.H. Seeks Jury Trial to Resolve Damage Claim CATHOLIC CHURCH: Court Approves Spokane's Claim Objection Protocol CHARLES RIVER: S&P Rates $300 Mil. Convertible Senior Notes at BB- COLLINS & AIKMAN: Settles Tooling Dispute with Jason Inc. COLLINS & AIKMAN: Court Approves Fabrics Business Wind-Down COMVERSE TECH: Reports 36.9% Year-Over-Year Increase in Sales CONSPIRACY ENT: March 31 Balance Sheet Upside-Down by $2.5 Million CYBERCARE INC: Files Plan and Disclosure Statement in Florida CYBERCARE INC: Provides Updates on U.S. Sustainable Merger DELPHI CORP: Equity Panel Taps Fried Frank as Bankruptcy Counsel DELPHI CORPORATION: Renews Cinergy Corporation Lease DELPHI CORP: Equity Panel Wants More Part in GM Contract Rejection DIASYS CORP: Balance Sheet Upside-Down by $1.2 Million at March 31 EAST CAMERON: S&P Puts Junk Rating on $165 Million Certificates EDWARD CAIN: Case Summary & 8 Largest Unsecured Creditors ENTERGY NEW ORLEANS: Committee Wants FTI's Payment Terms Modified ENTERGY NEW ORLEANS: Wants to Hire BMC Group as Claims Agent EQUISTAR CHEMICAL: Moody's Lifts Rating on Sr. Unsec. Bonds to B1 EVERGREEN HOLDINGS: PwC Expresses Going Concern Doubt EXIDE TECHNOLOGIES: Delays Filing of 2005 Annual Report EXTENDICARE HEALTH: Parent's Reorganization Cues S&P's Neg. Watch FAMILY HOME: Case Summary & 20 Largest Unsecured Creditors FIRST ASSURED: Case Summary & 9 Largest Unsecured Creditors FORD MOTOR: Report Says Co. Will Invest $9.2 Billion in Mexico FORD MOTOR: Expects Up to 11,000 Workers to Accept Buyout Offers FOUNDATION COMMUNITY: Involuntary Chapter 11 Case Summary GENELINK INC: Balance Sheet Upside-Down by $792,975 at March 31 GENERAL MOTORS: Moody's Rates Proposed $4.5 Bil. Facility at B2 GENERAL MOTORS: S&P Rates Proposed $4.48 Bil. Bank Facility at B+ GENERAL NUTRITION: Sales Recovery Prompts Moody's Stable Outlook GENERAL NUTRITION: Parent's IPO Prompts S&P's Positive Watch GIARRIZZO LYONS: Chapter 7 Trustee to Auction Assets on June 28 GILMAN + CIOCIA: Files Amended 2005 Annual Financial Statements GOLF MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors GRANITE BROADCASTING: Harbinger Blocks Planned TV Station Sale GREENMAN TECH: Common Stock Delisted in AMEX on June 14 HILCORP ENERGY: S&P Rates $200 Million Senior Unsecured Notes at B HOLLINGER INC: Wants to Sue Former Directors to Recover Payments HOMELAND SECURITY: Balance Sheet Upside-Down by $1.9M at March 31 INDUSTRIAL ENTERPRISES: Buys Regional Auto Products Manufacturer INNOVATIVE COMM: Inks Settlement with Greenlight & Rural Telephone INTELSAT LTD: Gets FCC's Approval on PanAmSat Holding Merger INTERTAPE POLYMER: Targets $5.7 Million on Annual Cost Savings INTREPID LIGHTING: Auctions Machinery & Other Assets on June 28 IWORLD PROJECTS: Former CEO Files Involuntary Chapter 7 v. Company J. CREW: Planned IPO Prompts Moody's to Review B2 Ratings JOURNAL REGISTER: S&P Places BB Corp. Credit Rating on Neg. Watch KAYDON CORP: Moody's Holds Ba3 Rating on $200 Mil. Sr. Sub. Notes KMART CORP: Max Rudmann Wants Court to Enforce Settlement Pacts LASERSIGHT INC: Has Until July 31 to Fix Looming GECC Default LEINER HEALTH: Poor Performance Prompts S&P to Downgrade Ratings LIBERTY MEDIA: FTC Grants 4% Stake in Time Warner Voting Rights LOCATEPLUS HOLDINGS: Posts $425,700 Net Loss in 2006 1st Quarter LYONDELL CHEMICAL: Debt Reduction Cues Moody's to Lift Ratings MEDIANEWS GROUP: S&P Rates $896.2 Million Facilities at BB- MERIDIAN AUTOMOTIVE: Credit Suisse Wants Summary Judgment METALFORMING TECH: Court Confirms Amended Joint Chapter 11 Plan MIRANT CORP: Equity Committee Counsels Want $3.1 Million Bonus Fee MIRANT CORP: Miller Buckfire Asks for $1.5 Mil. Supplemental Fee NATIONAL CONSUMER: John Brinco Appointed as Chapter 11 Trustee NATIONAL ENERGY: USGen Wants Ocean State Entities to Pay Damages NATIONAL ENERGY: USGen Wants 2003 Valuation Documents Excluded NATIONAL LAMPOON: Posts $1.7 Mil. Net Loss for 3rd Quarter 2006 NVE INC: Gets Court Approval to Hire Carmin Reiss as Mediator O.M. REALTY: Case Summary & 12 Largest Unsecured Creditors OCA INC: Equity Panel Wants Adams & Reese as Local Bankr. Counsel OCA INC: General Claims Bar Date of the June Debtors is June 28 OREGON STEEL: S&P Withdraws B+ Corporate Credit Rating PALM BEACH: Voluntary Chapter 11 Case Summary PANAMSAT: FCC Gives Nod on Intelsat Holdings Merger PARMALAT USA: U.S. Court Extends TRO on Creditors Until Sept. 7 PARMALAT USA: Three Suits Consolidated in New York District Court PETROHAWK ENERGY: S&P Rates Proposed $650 Mil. Senior Notes at B- PROVIDENTIAL HOLDINGS: Gets Financing Pledge for Western Med. Buy REDPRAIRIE CORP: S&P Junks Rating on New $45 Million Facility REEDS INC: Post $369,597 Net Loss in First Quarter 2006 REFCO INC: Refco FX Issues Correction on FX Trading.com Release REYNOLDS AMERICAN: Tender Offer for Unit's $1.45 Bil. Notes Expire SANITARY & IMPROVEMENT: Wants Until July 1 to File Chapter 9 Plan SILICON GRAPHICS: Taps Morgan Lewis as Special IP Counsel SILICON GRAPHICS: Court OKs Lease Settlement Pact with 3 Landlords SOYODO GROUP: March 31 Balance Sheet Upside-Down by $420,032 SYSTEMS EVOLUTION: Files Four Amended Financial Statements TEXAS PETROCHEMICALS: S&P Rates $70 Million Facility at B+ TIER TECHNOLOGIES: Releases Unaudited Preliminary Financials TRIMEDIA ENT: April 30 Balance Sheet Upside-Down by $8.2 Million TRUMP ENT: Partners with Diamondhead to Develop Miss. Property ULTRADATA SYSTEMS: March 31 Balance Sheet Upside-Down by $3.9 Mil. UNITY VIRGINIA: Hires Cavazo Hendricks as Bankruptcy Counsel USG CORP: Emerges from Bankruptcy After Plan Effectivity VARIG S.A.: Preliminary Injunction Ends Today WCI STEEL: Adequate Protection Payment Unjustly Enriched Creditor WESTERN MEDICAL: Providential to Buy Assets for $5.25 Million Cash WINN-DIXIE: Five Creditors Want Trade Panel's Request Denied WINN-DIXIE: Can Assume Modified JEA Electrical Service Agreements XACT AID: Selling 1 Mil. Shares of Brooke Carlyle Stock to Nexgen XACT AID: Swapping 95% Outstanding Capital Stock with Technorient * Upcoming Meetings, Conferences and Seminars ********* 5G WIRELESS: Balance Sheet Upside-Down by $3.97 Mil. at March 31 ---------------------------------------------------------------- 5G Wireless Communications, Inc., incurred a $2,118,970 net loss on $209,100 in revenues for the quarter ending March 31, 2006. The Company disclosed its financial results for the second quarter in a Form 10-QSB filed with the U.S. Securities and Exchange Commission. As of March 31, 2006, the Company's balance sheet showed $400,375 in assets, $4,378,815 in liabilities and $3,978,440 in stockholders' deficit. The Company's auditor, Squar, Milner, Reehl & Williamson, LLP, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's 2005 financial statement filed in the Company's Annual Report. The auditor pointed to the Company's losses and accumulated deficit. The Company's management said that if the Company is unable to generate sufficient cash flow from operations and continue to obtain financing to meet its working capital requirements, it may have to curtail its business sharply or cease business altogether. A full-text copy of the regulatory filing is available at no charge at http://ResearchArchives.com/t/s?bad 5G Wireless Communications, Inc., fka Tesmark, Inc. (OTCBB: FGWC) -- http://www.5gwireless.com/-- develops and markets broadband wireless networks for university and municipal campuses and provides Wi-Fi networking equipment for a select group of VARs and WISPs. ADA DINING: Case Summary & 4 Largest Unsecured Creditors -------------------------------------------------------- Debtor: ADA Dining Corp. 208 East 58th Street, 3rd Floor New York, New York 10022 Bankruptcy Case No.: 06-11372 Chapter 11 Petition Date: June 19, 2006 Court: Southern District of New York (Manhattan) Debtor's Counsel: David Cohen, Esq. David Cohen, P.C. 575 Madison Avenue, 10th Floor New York, New York 10022 Tel: (212) 605-0404 Fax: (212) 208 2408 -- and -- Arlynne Lowell, Esq. 30 Waterside Plaza New York, NY 10010 Tel: (212) 213-3173 Total Assets: $1,002,500 Total Debts: $506,000 Debtor's 4 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 208 East 58th Street LLC Contract Dispute $400,000 Finkelstein Newman LLC 225 Broadway New York, NY 10007 Jagriti C. Parekh Loans $100,000 10 Colony Court Greenlawn, NY 11980 A. Grossman, CPA Accounting Services $5,000 5 Chase Commons Yaphank, NY 11980 New York State Tax Franchise Taxes $1,000 W.A. Harriman Campus Albany, NY 12227 ADVOCACY AND RESOURCES: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Advocacy and Resources Corporation aka ARC aka ARC-Diversified 436 Gould Drive Cookeville, Tennessee 38506 Bankruptcy Case No.: 06-03067 Type of Business: The Debtor is a non-profit agency that operates a facility for the production of manufactured goods sold to the feeding programs of the U.S. Government and private industry. The company utilizes the manufacture of food items to create opportunities for the development of people's work skills which transfer to local industry. See http://www.arcdiversified.com/ Chapter 11 Petition Date: June 20, 2006 Court: Middle District of Tennessee (Cookeville) Judge: Keith M. Lundin Debtor's Counsel: John Hayden Rowland, Esq. Baker Donelson Bearman Caldwell and Berkowitz, P.C. 211 Commerce Street, Suite 1000 Nashville, Tennessee 37219 Tel: (615) 726-5544 Fax: (615) 744-5544 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Owensboro Grain $2,890,125 Attn: Jeff Erb P.O. Box 1787 Owensboro, KY 42302-1787 Tel: (270) 926-2032 Fax: (270) 686-6505 NISH $1,491,351 Attn: Denise Lewis P.O. Box 79424 Baltimore, MD 21279-0424 Tel: (571) 226-4631 Fax: (866) 696-1815 CENTRAL CAN $495,707 Attn: Frank Nanina Slot 303255 P.O. Box 66973 Chicago, IL 60666-0973 Tel: (773) 254-8700 Fax: (773) 254-9127 Lakeland Electric, Inc. $219,188 Attn: Terry Kendall 1560 Brown Avenue P.O. Box 809 Cookeville, TN 38503 Tel: (931) 526-7216 Fax: (931) 526-9408 John R. White Company, Inc. $199,743 Cumberland Container, Inc. $186,061 Cargill Sweeteners $150,164 Nutriom, LLC $141,467 Lewis Durm $134,918 Signature Works Division $108,482 Ameriqual $93,124 Wise Staffing Services, Inc. $91,958 JTM Food Group $85,650 Institutional Wholesale $81,657 McRae-Durm Properties $72,618 Direct Bill Services $68,184 Columbus Foods Company $62,258 Brenntag Mid-South, Inc. $58,673 Horizon Milling $56,955 American Flange & Mfg. Co., Inc. $56,740 AMERICAN TECHNOLOGIES: Appoints Ennis and Luther as New Directors ----------------------------------------------------------------- The directors of American Technologies Group, Inc., appointed R. Barry Ennis and Michael S. Luther as additional Directors of the Company. Mr. Ennis also serves as President of North Texas Steel Company, Inc., a wholly owned subsidiary of the Company, and has been involved in the structural steel industry since 1970. Mr. Ennis has served as the President of the Greater SW Region Concrete Reinforcing Steel Institute, as President of the Texas Structural Steel Institute, and is a former board member of the National Association of Purchasing Management of Ft. Worth, Texas. Mr. Luther has been involved in corporate finance and merchant banking for 20 years. Most recently, Mr. Luther managed a hedge fund associated with Deutsche Bank and during his tenure Mr. Luther led combined transactions of over $1 billion, the most noteable of which was the purchase of Alamo National Car Rental acquired for roughly $4 billion by Cerberus Capital of New York. Based in California, American Technologies Group, Inc. develops, manufactures, and sells products that reduce and eliminate hazardous chemical by-products or emission resulting from industrial and combustion processes. The company's proprietary catalyst technology is also used in the manufacture of detergents and cosmetics. * * * As reported in the Troubled Company Reporter on Apr. 11, 2006, American Technologies' management stated that the company will not have funds to meet future working capital and financing needs as a result of recapitalization. Although the company is seeking financing to support working capital needs, there can be no assurances that it will be successful in raising the funds required, the management said. "The Company has incurred operating losses in the last two years, and ... dependent upon management's ability to develop profitable operations. These factors ... raise substantial doubt about the Company's ability to continue as a going concern." AMERICAN UNITED: March 31 Balance Sheet Upside-Down by $2.9 Mil. ---------------------------------------------------------------- American United Global, Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on June 5, 2006. The Company reported a $323,000 net loss on zero revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $2,075,000 in total assets, $5,034,000 in total liabilities, and $2,959,000 in stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $2,075,000 in total current assets available to pay $4,046,000 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://researcharchives.com/t/s?b79 Going Concern Doubt Seligson and Giannattasio, in White Plains, New York, raised substantial doubt about American United'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 working capital deficiency of $2,804,000, and an accumulated deficit of $58,355,000 at Dec. 31, 2005. In addition, the Company's cash of $91,000 at Dec. 31, 2005 is not sufficient to fund operations for the next twelve months. About American United Based in Somers, New York, American United Global, Inc. focuses on acquisitions of operating businesses in various sectors. The Company has interests in companies such as Kraft Rt., Western Power & Equipment Corp., Informedix Holdings, Inc., and New York Medical, Inc. ANCHOR GLASS: Rebecca Roof Steps In as Finance Vice President ------------------------------------------------------------- Judge Paskay of the U.S. Bankruptcy Court for the Middle District of Florida approved the employment of Rebecca A. Roof, a managing director of AP Services LLC, as Anchor Glass Container Corporation's interim executive vice president of finance and administration effective Feb. 21, 2006, and chief restructuring officer effective March 1, 2006. The Court also directs Anchor Glass to pay $400,000 to AP Services for the total Contingent Success Fee. As reported in the Troubled Company Reporter on Jan. 10, 2006, the Court authorized Anchor Glass to retain AP Services, LLC, as its crisis manager, pursuant to the terms of an engagement letter dated Sept. 6, 2005. Under the APS Engagement Letter, Anchor and APS agreed that: -- APS will provide, at Anchor's request, temporary employees to assist the Debtor in its restructuring efforts; and -- APS' Managing Director, John S. Dubel, will serve as the Debtor's Chief Restructuring Officer under the direct supervision of Anchor's Chief Executive Officer and the Special Committee of the Board of Directors. In addition to Mr. Dubel, the Temporary Staff from APS includes: Name Position Hourly Rate Commitment ---- -------- ----------- ---------- Jon Shell Assistant Treasurer $410 As Needed Ted Stenger TBD $670 As Needed Anchor will pay APS' employees at these hourly rates: Professional Hourly Rates ------------ ------------ Managing Directors $540 - $690 Directors $430 - $520 Vice Presidents $300 - $400 Associates $225 - $280 Analysts $150 - $190 Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents the Debtor in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. (Anchor Glass Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASARCO LLC: Wants Wachovia's Request on Equipment Lease Denied -------------------------------------------------------------- ASARCO LLC asks the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to deny Wachovia Financial Services Inc.'s request. The Wachovia Financial Services' request fails to assert sufficient justification to compel ASARCO LLC to immediately decide to assume or reject the leases in question, Nathaniel Peter Holzer, Esq., at Jordan, Hyden, Womble & Culbreth, PC, in Corpus Christi, Texas, argues. "Wachovia's sole justification is that the leased vehicles may deteriorate in value with the passage of time and in the ordinary course of business." When the vehicles were leased to ASARCO, the parties understood that their value would decrease over time. That is the nature of equipment leases and the same is reflected in the terms and conditions of the lease, Mr. Holzer tells the Court. ASARCO's bankruptcy has neither accelerated nor impacted the expected decline in value of the equipment, Mr. Holzer says. Rather, the parties have a standard lease agreement that requires ASARCO to make periodic lease payments to Wachovia. These payments represent Wachovia's bargained-for exchange. Thus, Mr. Holzer argues, Wachovia should not be permitted to re-trade its deal now. Moreover, Mr. Holzer says that ASARCO is current on all of its postpetition payments to Wachovia. However, ASARCO has unpaid prepetition obligations totaling $62,237. Mr. Holzer tells Judge Schmidt that ASARCO needs more time to make an informed decision whether to assume or reject the Wachovia leases. The haul trucks in question are currently used to generate revenues as part of the Debtors' reorganization efforts. In addition, ASARCO is still evaluating and analyzing its operations and assets. ASARCO's bankruptcy case is only nine months old and time is even more compressed given ASARCO's early struggles with corporate governance and the labor strike, Mr. Holzer asserts. Mr. Holzer adds that Wachovia will not be prejudiced if ASARCO fulfills the requirement to assume or reject its lease with Wachovia before plan confirmation. However, if ASARCO is compelled to prematurely assume or reject its lease with Wachovia, both ASARCO and its creditors may be damaged. Wachovia's Request As reported in the Troubled Company Reporter on May 29, 2006, Wachovia Financial Services, Inc., fka First Union Commercial Corporation, asked the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to: (a) compel ASARCO LLC to decide whether to assume or reject its Equipment Lease with Wachovia by May 30, 2006; (b) grant Wachovia adequate protection for its Equipment; and (c) direct ASARCO to pay all outstanding rental payments if ASARCO remains in possession of the Equipment. Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) BALTIMORE MARINE: County's $47K Tardy Admin. Tax Claim Denied ------------------------------------------------------------- The Honorable James F. Schneider of the U.S. Bankruptcy Court ruled this month that Baltimore County, Maryland, filed its request for payment of a $47,712.52 administrative expense claim too late and the claim will be disallowed. Judge Schneider's decision, published at 2006 WL 1620303, sustains an objection to the claim filed by Alan M. Grochal, Esq., the Liquidating Agent appointed under a liquidating plan confirmed in Baltimore Marine Industries, Inc.'s chapter 11 case on June 25, 2004. Baltimore Marine Industries, Inc., a closely-held Delaware corporation that owned and operated a shipyard located in Sparrows Point, Baltimore County, Maryland. The shipyard comprised 226 acres with docks, piers, basins, cranes and shops. Among the debtor's assets were a variable large, crude, carrier-capable drydock, and a floating dock, employed in the multiple repair, conversion and construction of large seagoing vessels. The Sparrows Point shipyard was built by Maryland Steel Company in 1889 and bought by Bethlehem Steel Company in 1917. During World War II, the shipyard was one of the leaders in this nation's war effort, producing an unprecedented number of ocean-going vessels, including tankers, cargo and passenger ships for military use. In those years, the shipyard was one of the State's largest employers with more than 20,000 workers producing ships on a daily basis around the clock. Bethlehem Steel sold the shipyard to Veritas Capital of New York for $16 million, at which time BMI was established to operate the facility. The company planned to engage in ship repair but lack of business forced it to layoff hundreds of employees. In a bankruptcy court-supervised auction managed by Michael Fox International, BMI sold its assets to Barletta Willis Investments, LLC for $11,250,000 on March 4, 2004. BMI did not file a liability-transfer report indicating that it had transferred ownership of personal property during the tax year, pursuant to Maryland Tax-Prop. Code Sec. 10-402(b). After the sale, Barletta Willis assigned its rights in the property to SPS Limited Partnership. The shipyard currently serves as a repair and demolition site for commercial and military vessels. On April 14, 2004, BMI and the Official Committee of Unsecured Creditors filed a Joint Plan of Liquidation. The Plan -- on page one -- fixed the 45th day after the Plan's Effective Date as the Administrative Claims Bar Date and required holders of administrative priority claims to file claim forms. Judge Derby confirmed the Joint Plan of Liquidation on June 25, 2004. On October 1, 2004, the Maryland State department of Assessments and Taxation assessed BMI's personal property taxes in the amount of $47,712.52, for the levy period July 1, 2004 through June 30, 2005. On November 22, 2004, Baltimore County filed its request for payment of BMI's unpaid personal property taxes -- two months late. Judge Schneider finds the County had actual notice (and timely filed another proof of claim) and can't demonstrate excusable neglect. Baltimore Marine Industries, Inc. filed for chapter 11 relief on June 11, 2003 (Bankr. Md. Case No. 03-80215). Martin T. Fletcher, Esq., Cameron J. Macdonald, Esq., and Dennis J. Shaffer, Esq., at Whiteford Taylor & Preston L.L.P., represented the Debtor. The Bankruptcy Court confirmed the Debtor's Joint Plan of Liquidation on June 25, 2004. The Plan projected a 36% recovery by General Unsecured Creditors. BANC OF AMERICA: S&P Affirms Class B-4 & B-5 Certs.' Low-B Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on 23 classes of mortgage pass-through certificates from Banc Of America Mortgage Trust 2005-2. The affirmations are based on credit enhancement percentages that are sufficient to support the certificates at the current ratings. As of May 2006 data, there have been no realized losses and no severe delinquencies for the mortgage pool. Credit support for the transaction is provided by subordination. The underlying collateral backing the certificates consists of fixed- or adjustable-rate, first-lien mortgage loans secured by one- to four-family residential properties. Ratings Affirmed: Banc Of America Mortgage Trust 2005-2 Mortgage pass-through certificates Class Rating ----- ------ 1-A-1,1-A-2,1-A-3,1-A-4,1-A-5,1-A-6,1-A-7 AAA 1-A-8,1-A-10,1-A-11,1-A-12,1-A-13 AAA 2-A-1,2-A-2,30-PO,30-IO,15-PO,15-IO AAA B-1 AA B-2 A B-3 BBB B-4 BB B-5 B BEARD COMPANY: Files Four Amended Financial Statements ------------------------------------------------------ The Beard Company filed with the Securities and Exchange Commission on June 5, 2006, its amended financial statements for: -- the fiscal year ended Dec. 31, 2004; -- the first quarter ended March 31, 2005; -- the second quarter ended June 30, 2005; and -- the third quarter ended Sept. 30, 2005. The company's Statement of Operations showed: For the period ended ---------------------------------------------- Year Quarter Quarter Quarter 12/31/04 03/31/05 06/30/05 09/30/05 ---------- ---------- --------- ----------- Revenue $972,000 $243,000 $327,000 $344,000 Net (Loss) $937,000 ($375,000) ($375,000) ($574,000) The company's Balance Sheet showed: For the period ended ---------------------------------------------- Year Quarter Quarter Quarter 12/31/04 03/31/05 06/30/05 09/30/05 ---------- ---------- ---------- ---------- Current Assets $366,000 $1,278,000 $1,223,000 $717,000 Total Assets $2,712,000 $3,900,000 $4,304,000 $4,795,000 Current Liabilities $1,360,000 $954,000 $2,436,000 $2,661,000 Total Liabilities $6,856,000 $8,227,000 $8,959,000 $9,983,000 Total Stockholders' Equity ($4,144,000)($4,347,000)($4,671,000)($5,200,000) During the three years ended Dec. 31, 2005, the Company took several steps which reduced its negative cash flow to some degree, including: -- salary deferrals by its chairman and president and deferrals of directors' fees into its Deferred Stock Compensation Plans, and suspension of the Company's 100% matching contribution under its 401(k) Plan; -- six private debt placements that raised gross proceeds of $4,434,000 during the period and an additional $193,000 in the first quarter of 2006; -- a loan of $850,000 in the first half of 2005, borrowed from a related party to finance most of the cost of the fertilizer plant in China; -- a loan of $1,100,000 in the fourth quarter of 2005, borrowed from a pond owner to begin construction of a coal plant for its coal fines recovery project in West Virginia; and -- a $350,000 long-term bank credit facility secured on March 28, 2006. The Company believes that the cash infusion from the Pinnacle Project, together with the funds from the new bank revolving credit facility, will provide sufficient working capital to sustain its activities until the operations of the Pinnacle Project and the China fertilizer plant are generating positive cash flow from operations. Full-text copies of the company's financial statements are available for free at: Year Ended Dec. 31, 2004 http://researcharchives.com/t/s?b7e First quarter ended March 31, 2005 http://researcharchives.com/t/s?b7f Second quarter ended June 30, 2005 http://researcharchives.com/t/s?b80 Third quarter ended Sept. 30, 2005 http://researcharchives.com/t/s?b81 About Beard Company Based in Oklahoma City, Oklahoma, The Beard Company -- http://www.beardco.com/home.htm-- focuses on fuel and chemical production. It operates coal fines reclamation facilities in the U.S., has produced carbon dioxide gas since the early 1980's, and operates organic chemical compound fertilizer plants in China. The Company also operates its e-Commerce segment, which develops business opportunities to leverage Starpay's(TM) intellectual property portfolio of Internet payment methods and security technologies. Going Concern Doubt As reported in the Troubled Company Reporter on June 19, 2006, Cole & Reed, P.C., in Oklahoma City, Oklahoma, raised substantial doubt about Beard Company'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 and negative cash flows from operations. BILLY BATY: Case Summary & 11 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Billy B. Baty 3626 East Ridge Road Salisbury, North Carolina 28144 Bankruptcy Case No.: 06-00894 Chapter 11 Petition Date: June 19, 2006 Court: Eastern District of North Carolina (Raleigh) Debtor's Counsel: Trawick H. Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P.O. Box 1654 New Bern, North Carolina 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Washington Mutual Loans 105 Woodstream $155,333 P.O. Box 3139 Drive Milwaukee, WI 53201-3139 Raleigh, NC 27615 7601 Huey Court $232,881 Raleigh, NC 27615 7601 Bryna Court $78,798 Raleigh, NC 27615 7801 Stephanie Lane $150,630 Raleigh, NC 27615 Wells Fargo Home Mortgage 105 Ashebrook $144,000 3476 Stateview Boulevard Drive Fort Mill, SC 29715 Raleigh, NC 27615 Countrywide Home Loans 7605 Bryna Court $91,663 P.O. Box 660694 Raleigh, NC 27615 Dallas, TX 75266-0694 7602 Huey Court $74,198 Raleigh, NC 27615 American Home Mortgage 7600 Huey Court $75,706 P.O. Box 631730 Raleigh, NC 27615 Irving, TX 75063 7606 Ladden Court $75,284 Raleigh, NC 27615 Option One Mortgage 7610 Huey Court $72,789 Raleigh, NC 27615 Household Financial Corp. 7620 Huey Court $23,748 Raleigh, NC 27615 Option One Mortgage 7610 Huey Court $18,596 Raleigh, NC Wachovia Bank 105 Woodsream Drive $9,321 Raleigh, NC Bankcard Services $4,411 Wachovia Bank, N.A. $1,001 Diversified Growth and 7600 Bryna Court Unknown Development Raleigh, NC 27615 BLAST ENERGY: Posts $968,346 Net Loss in 2006 First Fiscal Quarter ------------------------------------------------------------------ Blast Energy Services, Inc., filed its amended first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on June 5, 2006. The Company's amended quarterly report reflects the proper classification of the cash received from the 2005 sale of the Landers license, including the associated footnotes to the financial statements and disclosures. The Company reported a $968,346 net loss on $249,523 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $2,809,581 in total assets, $2,922,648 in total liabilities, and $113,067 in stockholders' equity deficit. The Company's March 31 balance sheet also showed strained liquidity with $648,507 in total current assets available to pay $1,415,868 in total current liabilities coming due within the next 12 months. Full-text copies of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://researcharchives.com/t/s?b78 Going Concern Doubt Malone & Bailey, P.C., in Houston, Texas, raised substantial doubt about Blast Energy'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, a working capital deficiency of $0.6 million, a net loss of $2.9 million, and an accumulated deficit of $29.9 million for the year ended Dec. 31, 2005. The Company is trying to raise additional capital in response to its financial difficulty. About Blast Energy Headquartered in Houston, Texas, Blast Energy Services, Inc. -- http://www.blastenergyservices.com/-- has developed a commercially viable lateral drilling technology with the potential to penetrate through well casing and into reservoir formations to stimulate oil and gas production. The Company also has a secondary business segment providing satellite communication services to energy companies. This service allows these energy companies to remotely monitor and control wellhead, pipeline, drilling, and other operations through low cost broadband data and voice services. BODIES IN MOTION: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Bodies in Motion Inc. dba Bodies in Motion 16663 Roscoe Boulevard North Hills, California 91343 Bankruptcy Case No.: 06-10931 Type of Business: The Debtor operates a chain of private fitness facilities offering boxing, yoga, personal training, and other physical fitness programs. See http://www.bodiesinmotion.com/ Chapter 11 Petition Date: June 20, 2006 Court: Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Ron Bender, Esq. Levene, Neale, Bender, Rankin & Brill, LLP 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Westside Capital Partners $4,200,000 VW #4 Sultana LLC, Sanborn Capital 11611 San Vicente Bl. Suite 1035 Los Angeles, CA 90049 Kilroy Realty LP $835,327 12200 West Olympic Bl. Suite 200 Los Angeles, CA 90064 Leonard G. Powell, et al. $300,000 c/o Scott E. Shapiro, Esq. 17337 Ventura Boulevard, Suite 200 Encino, CA 91316 The Irvine Co. $257,869 TIC Retail Properties 100 Innovation Drive Irvine, CA 92617 AMS - Walnut Investment $212,500 ABC Financial $129,691 Bensinger & Ritt $111,276 Outdoor Sales $94,750 BIM MBNA Platinum Plus for Business $61,399 LA County Assessor $60,000 Liberty Mutual Insurance Group $47,808 Fullbright & Jaworski $41,389 Ward Construction $36,220 Al Wittenbrock $33,750 Advo Inc. $31,788 HK Northridge LLC $25,101 Stubbs, Alderton & Markiles $23,750 Sydney Johnson $21,000 State Compensation Insurance Fund $20,000 Sandell Flowers $19,627 BOWATER INC: New Credit Deals Prompt Moody's to Affirm B1 Ratings ----------------------------------------------------------------- Moody's Investors Service affirmed Bowater Incorporated's B1 long term debt ratings and SGL-2 speculative grade liquidity rating. The outlook remains stable. The rating action responds to the company's May 31st announcement that it has entered into two new secured credit agreements totaling $580 million. The previous arrangements totaled $635 million, $200 million of which was represented by a secured 364-day accounts receivable vehicle. In aggregate, the proportion of commitments with priority claims on assets increases substantially to 16% from 6% of total adjusted debt, but remains below a level that would cause downwards notching of the company's senior unsecured rating from the B1 corporate family rating. The new facilities feature two financial covenants: a) senior secured debt to EBITDA of not more than 1.25 times; and b) adjusted EBITDA to Interest Expense of not less than 2.00:1. Moody's estimates the actual figures to be less than 0.5 times and more than 2.5 times respectively, and with adequate prospects for near term cash generation, compliance is not expected to be problematic. With the adequate cash generation and there being no covenant compliance issues, the extended 5 year term to maturity of the new arrangements and the lack of significant near term debt maturities, despite the $55 million decrease in aggregate commitments, Bowater continues to have good liquidity arrangements. Accordingly, the SGL-2 speculative grade liquidity rating was affirmed. Ratings and Outlook Affirmed: Bowater Incorporated: Outlook: Stable * Corporate family rating: B1 * Senior unsecured rating: B1 * Industrial and PC revenue bonds: B1 * Speculative grade liquidity rating: SGL-2 Bowater Canada Finance Corp. * Senior unsecured guaranteed notes: B1 The outlook is stable, it being noted that the potential of moderating general economic activity causes Moody's to view Bowater's near-to-mid term prospects cautiously. For example, lumber pricing has fallen quite dramatically over the past several weeks. So too have prices for other wood based building materials as housing start activity slows after a prolonged three year run. Aside from reducing cash flow generation from Bowater's lumber operations, in the event this circumstance is indicative of more broad based economic weakness, there is the potential of results from Bowater's communication paper business also being affected. As background, many commentators are concerned about inflation and Federal Reserve Board interest rate actions potentially retarding general economic activity. Recent equity market performance appears to reflect these concerns. Further, after a three year run of having the positive impact of increasing paper prices largely negated by the affects of exchange rate and input cost migration, Bowater is only now generating positive free cash flow. Should demand and pricing for paper moderate along with economic activity, and should recent performance turn out to be the peak, it would be unlikely that the current rating could be maintained. As noted, Moody's views Bowater's near-to-mid term prospects cautiously. For now however, moderating economic activity is not certain. Neither is the degree or impact of any slow-down that may occur. With this and given the company's commitment to reduce debt over the near term, the outlook remains stable. Bowater Incorporated, headquartered in Greenville, South Carolina is a global leader in newsprint, with additional operations in coated and uncoated groundwood papers, bleached kraft pulp, and lumber products. BROOKS SAND: Trustees Hire Wise DelCotto as Special 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 for Brooks Sand & Gravel, LLC, and J. Bruce Miller, Esq., the chapter 11 Trustee for Smith Mining & Materials, LLC, to hire Wise DelCotto PLLC, as their special counsel. Wise DelCotto will provide legal advice and services to: a) issues related to the automatic stay or abandonment of property of the Debtors' estates; b) matters related to the assumption or rejection of executory contracts and leases and performance; c) issues related to the use of cash collateral and the potential incurring of credit; d) issues related to any potential sale or other disposition of assets of the Debtors' estates; and e) any other specified matters designated by the Trustees other than representation of the Trustees in the overall conduct of the cases. Laura Day DelCotto, a Wise DelCotto member, discloses that the firm's hourly rates range between $150 to $295 for its counsel. Ms. DelCotto assures the Court that her firm does not hold any interest adverse to the Debtors or their estates. 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. BWAY CORP: Moody's Rates Proposed $295 Million Facilities at Ba3 ---------------------------------------------------------------- Moody's Investors Service affirmed the B1 corporate family rating of BWAY Corporation, assigned a Ba3 rating to BWAY's proposed $295 million in first lien credit facilities, affirmed the B3 rating on BWAY's $200 million 10% senior subordinated notes due 2010, withdrew ratings on BWAY's existing senior secured credit facility, and changed the ratings outlook to positive from stable. BWAY Corporation is refinancing its credit facility in connection with the $65 million acquisition of Canada-based Industrial Containers Ltd., representing an EBITDA purchase multiple of about 7.7 times before expected synergies. ICL is the leading Canadian industrial and general line manufacturer of plastic and steel pails. The acquisition, in Moody's view, reinforces BWAY's strong North American market position and complements BWAY's overall rigid plastic and steel general line packaging business. Pro forma for the acquisition, Moody's estimates that BWAY's total debt to EBITDA, adjusted for the effects of operating leases and underfunded pension liabilities, would be about 4.4 times, with EBIT interest coverage of about 1.4 times and free cash flow to debt in the mid single digits. Since the July 2004 $203 million acquisition of North America Packaging Corporation, which was funded with a $225 million term loan and $30 million equity contribution from BWAY's financial sponsor Kelso & Company, L.P., BWAY has performed well, integrating the company in an adverse operating environment characterized by high and rising raw materials and energy costs while reducing leverage, increasing free cash flow, and improving the overall credit profile of the firm. Moody's assigned these ratings: * $50 mm senior secured first lien revolver due 2012, assigned Ba3 * $5 mm Canadian senior secured first lien revolver due 2012, assigned Ba3 * $190 mm senior secured first lien term loan B due 2013, assigned Ba3 * $50 mm senior secured first lien term loan C due 2012, assigned Ba3 Moody's withdrew these ratings: * $30 million senior secured first lien revolver maturing June 30, 2009, B1 withdrawn * $165.3 million senior secured first lien term loan due June 30, 2011, B1 withdrawn Moody's affirmed these ratings: * $200 mm 10% senior sub notes due 15 October 2010, affirmed at B3 * Corporate family rating, affirmed at B1 * The ratings outlook is positive. The change of the outlook to positive from stable is based on Moody's expectation that BWAY's operating profile and competitive position will enable it to improve free cash generation and reduce leverage in the near term, as it integrates the ICL acquisition. Although the acquisition does entail integration risk, Moody's notes that the transaction is relatively modest in relation to BWAY's overall size as reflected in its $829 million in 2005 revenue. If BWAY is able to integrate the acquisition as planned, the ratings could be raised in the near term. Conversely, integration difficulties, exogenous shocks, business disruptions, or recapitalization events that inhibit BWAY's ability to improve free cash flow and reduce leverage could result in downward pressure on the outlook and ratings. For further information, please see the Credit Opinion available to subscribers at www.moodys.com. Headquartered in Atlanta, Georgia, BWAY Corporation is a leading North American manufacturer of metal paint and specialty containers and industrial general line rigid plastic containers for industrial and consumer products. Revenues for the twelve months ended April 2, 2006 were approximately $874 million. CABLE SATISFACTION: Monitor Wants Court Nod on Cabovisao Sale Pact ------------------------------------------------------------------ RSM Richter Inc., fka Richter & Associes Inc., in its capacity as Monitor and Interim Receiver of Cable Satisfaction International Inc. (TSX: CSQ), disclosed that in relation to proceedings filed by Cable Satisfaction under the Companies' Creditors Arrangement Act (Canada) and to Cable Satisfaction's Second Amended and Restated Plan of Arrangement and Reorganization: a) on June 5, 2006, Richter served and filed into the Court record a Motion to confirm the authority of the Interim Receiver/Monitor to enter into a transaction agreement for and on behalf of CSII, for orders relating to the implementation of the Plan and for related matters; b) the Motion was presented to the Quebec Superior Court, at the Montreal Courthouse, on June 15, 2006; and c) the hearing of the Motion was continued to June 22, 2006 at 9:15 a.m., in Room 16.04 of the Montreal Courthouse. Pursuant to the Motion, Richter is asking the Court to, inter alia: a) approve the transaction of sale by Cable Satisfaction to Cogeco Cable Inc. of the Debtor's wholly owned indirect subsidiary, Cabovisao - Televisao por Cabo, S.A., the whole as previously announced; b) dispense with a meeting of Cable Satisfaction's shareholders following the implementation of the Plan to approve the sale of Cabovisao to Cogeco and the distribution of the net proceeds to the Affected Creditors under the Plan, who, following implementation of the Plan, will then become Shareholders and Rightholders of Cable Satisfaction, by return of capital should the Debtor's board of directors deem it advisable to do so. The Motion and related materials can be obtained by requesting a copy from the Monitor by writing or calling the Monitor at the address and telephone number set out below or on the Monitor's website at http://www.rsmrichter.com/ Cable Satisfaction International Inc. -- http://www.csii.ca/-- builds and operates large bandwidth (750 MHz) hybrid fibre coaxial networks and, through its subsidiary Cabovisao, provides cable television services, high-speed Internet access, telephony and high-speed data transmission services in Portugal. CAJUN FUNDING: Moody's Holds B3 Rating on $155 Mil. Sec. Notes -------------------------------------------------------------- Moody's Investors Service affirmed Cajun Funding Corp.'s B2 corporate family rating and B3 2nd lien secured notes. At the same time, the SGL-3 Speculative Grade Liquidity rating was also affirmed. The outlook remains stable. Cajun is the financing company affiliated with Church's Chicken restaurants, which are operated by Cajun Operating Company. The rating affirmations reflect the established position of the Church's brand within the chicken QSR category, the recent track record for positive same store sales growth and the domestic and international development potential of the concept. The ratings also consider Church's high financial leverage, reliance on a single product, modest liquidity position and limited scale and scope in relation to its direct competitors. Moody's previous rating action on Cajun was December 3, 2004 when a B3 rating was assigned to the $155 million 2nd lien secured notes. Also at that time, Moody's assigned a B2 corporate family rating and a SGL-3 Speculative Grade Liquidity rating. Ratings affirmed with a stable outlook: * Corporate family rating at B2 * $155 million 2nd lien secured notes maturing in 2011 at B3 * Speculative Grade Liquidity rating at SGL-3 Cajun Funding Corp., the special purpose financing entity for Cajun Operating Company, Inc., are both headquartered in Atlanta, Georgia. The operating company develops, operates and franchises quick-service restaurants primarily under the trade name Church's Chicken. At December 25, 2005, the operating company operated 277 and franchised 1,264 restaurants with locations in 30 states, Puerto Rico and 15 foreign countries. Revenues for fiscal 2005 were $271 million. CATHOLIC CHURCH: T.D.H. Seeks Jury Trial to Resolve Damage Claim ---------------------------------------------------------------- T.D.H asks the U.S. Bankruptcy Court for the District of Oregon, for: (a) $2,000,000 in estimated non-economic damages, the actual amount to be determined at trial; (b) $300,000 in estimated economic damages, the actual amount to be determined at trial; (c) exemplary damages in an amount to be determined at trial; and (d) payment of his costs and disbursements. T.D.H. also seeks a jury trial. T.D.H., the holder of Claim No. 276, was a member of All Saints Parish and attended All Saints School in Oregon when he was a minor in 1948 to 1950. At that time, the Archdiocese of Portland in Oregon delegated to Fr. Aldo Orso-Manzonetta the duties of providing pastoral, educational, and religious ritual services to parishioners of All Saints Parish and students of All Saints School. Erin K. Olson, Esq., in Portland, Oregon, alleges that Fr. Orso- Manzonetta, while acting within the course and scope of his employment, used the power, authority and trust of his position to engage in sexual acts with T.D.H. The Archdiocese, according to Ms. Olson, learned no later than 1983 that T.D.H. had been sexually abused by Fr. Orso-Manzonetta, and did nothing. According to Ms. Olson, the sexual abuse caused damage to T.D.H., from physical and emotional pain to loss of religious faith. T.D.H. did not discover, nor in the exercise of reasonable care should he have discovered, the causal relationship between his injuries and Fr. Orso-Manzonetta's molestation until within three years before the filing of his complaint. T.D.H. complains that the Archdiocese and the All Saints Parish and School were negligent: (a) in allowing Fr. Orso-Manzonetta to perform his duties without properly investigating his propensity to engage in sexual misconduct with minors; (b) in following certain written policies to ensure that T.D.H. was not harmed; (c) in facilitating Fr. Orso-Manzonetta's access to T.D.H. without adequate supervision; (d) knowing that child endangerment and child abuse by priests was a long standing problem, by neglecting to monitor and supervise Fr. Orso-Manzonetta to ensure that his pastoral, educational, and social interaction with minors, including T.D.H., was not compromised by inappropriate or dangerous behavior; and (e) by ignoring information that Fr. Orso-Manzonetta engaged in sexual activity with minor boys, including T.D.H., and by subsequently concealing the information. 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: Court Approves Spokane's Claim Objection Protocol ------------------------------------------------------------------ Judge Patricia C. Williams of the U.S. Bankruptcy Court for the Eastern District of Washington approves the Diocese of Spokane's procedures to object to confidential proofs of claim for sexual abuse. A full-text copy of the Claim Objection Protocol is available for free at http://researcharchives.com/t/s?ba1 The Court directs all parties involved in the claims litigation to use the procedures to keep information confidential. The Court's Order will not affect the equitable or contractual rights or obligations of any insurance company, which the Diocese may assert has an obligation to provide coverage to Spokane for any of the claims. Any resolution of the claims against the Diocese will not operate as a determination, judgment or adjudication of any insurance company's liability to the Diocese or its successors-in-interest. All rights and obligations of each insurance company to the Diocese under certain policies will be determined in: * the declaratory judgment action currently pending in the United States District Court for the Eastern District of Washington, Case No. 05-CV-0075-JLQ; or * other appropriate non-bankruptcy forum in accordance with non-bankruptcy law and the insurance policies or contracts, upon consent by the insurance company. The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) CHARLES RIVER: S&P Rates $300 Mil. Convertible Senior Notes at BB- ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB-' senior unsecured debt rating to Charles River Laboratories International Inc.'s $300 million 2.25% convertible senior notes due 2013. Concurrent with the issue, Charles River purchased $149 million of its equity from purchasers of the notes and used $28 million to fund the net cost of the convertible note hedge and warrant transactions with some of the initial note purchasers. Remaining proceeds are expected to be used for general corporate purposes, including potential share repurchases. The notes are rated two notches below the 'BB+' corporate credit rating due to the amount of pre-existing borrowings with security provisions in the company's capital structure. Although the convertible notes increase leverage, there is enough cushion at the existing rating level to absorb this increase. The corporate credit rating is 'BB+' and the rating outlook is positive. The rating continues to reflect Charles River's fairly narrow business profile, which outweighs its diverse customer base and sound financial policies. Demand for the company's services is mainly driven by growth in pharmaceutical and scientific research budgets. While this demand has been growing in recent years, it can be unpredictable. Ratings List: Charles River Laboratories International Inc.: * Corporate credit rating -- BB+/Positive/-- Rating Assigned: * $300M 2.25% convertible senior notes due 2013 -- BB- COLLINS & AIKMAN: Settles Tooling Dispute with Jason Inc. --------------------------------------------------------- Jason, Inc., doing business as Janesville Sackner Products, supplied Collins & Aikman Corporation and its debtor-affiliates with component parts that were, in turn, supplied by the Debtors to original equipment manufacturers in the automotive industry, including DaimlerChrysler Corporation. Janesville was in possession of tooling owned by DaimlerChrysler that was necessary to manufacture component parts for the Debtors. In February 2006, a dispute arose between the parties whether certain obligations owed to Jason were secured by prepetition obligations. Without immediate possession of the Tooling, the Debtors would not have been able to supply component parts to DaimlerChrysler thereby affecting its supply lines. To resolve the dispute, the parties agree, with the consent of the U.S. Bankruptcy Court for the Eastern District of Michigan, that: a. Jason will immediately release the Tooling to the Debtors; b. The Debtors will seek Court approval that Jason will have an allowed administrative expense claim, in the event that the Court determines that Janesville has a valid lien in the Tooling; and c. Jason may apply the $107,800 deposit that it is holding to the balance owing to it on account of the building of the Tooling. 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. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: Court Approves Fabrics Business Wind-Down ----------------------------------------------------------- The U.S Bankruptcy Court for the Eastern District of Michigan approved Collins & Aikman Corporation and its debtor-affiliates' request to wind-down their Fabrics Business. Judge Rhodes directs the Debtors to use their best efforts to minimize breach of contract claims, if any, from the Fabrics Business customers. Breach Claims include customers' claims for any damages in connection with the wind-down of the Fabrics Business. General Electric Capital Corporation had asked the Court to deny the Fabrics Business sale request to the extent it seeks to violate the terms of certain GECC leases. The Debtors and GECC are currently in litigation regarding equipment that it leased to them pursuant to three Master Lease Agreements. The Debtors used a portion of the equipment leased under the Master Lease Agreements in their Fabrics Business. Subject to agreement between the Debtors and GECC or further Court order, Judge Rhodes rules that the Debtors should not take any actions contrary to the terms of the GECC Leases. Fabric (DE) GP may file an objection within 15 days after the Debtors serve a notice of rejection or assumption and assignment, if any, of its leases. As reported in the Troubled Company Reporter on June 15, 2006, the Debtors are selling their fabrics business to reduce costs and increase the profitability and efficiency of their remaining operations. The Debtors 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. 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. 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. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000) COMVERSE TECH: Reports 36.9% Year-Over-Year Increase in Sales ------------------------------------------------------------- Comverse Technology, Inc., generated sales of $373,528,000 for the first quarter of fiscal 2006, ended April 30, 2006, an increase of 36.9% year-over-year and 10.6% sequentially, representing the company's fourteenth consecutive quarter of sequential sales growth, and the highest quarterly sales in the company's history. The company ended the quarter with an orders backlog of $741,862,000, down 7.1% sequentially, and up 29.4% year-over-year. The company ended the quarter with cash and cash equivalents, bank time deposits and short-term investments of $2,123,771,000, accounts receivable of $369,298,000, inventories of $131,898,000, advance payments from customers of $218,181,000, and convertible debt of $419,706,000. Raz Alon, interim Chief Executive Officer, said "We continue to see strong demand drivers for our products, and maintain a leadership position in our main markets. Our Comverse subsidiary is enhancing its established leadership in network-based messaging, mobile data, content and billing, and leveraging that leadership to advance its position in emerging areas such as converged messaging, IMS and FMC services, new personalization applications such as avatars, and converged billing. During the quarter, Comverse achieved several new wins in multimedia messaging and mobile instant messaging, and our Insight IP-based multimedia Open Services Environment continues to experience market success, having now been selected by more than 70 service provider customers. "We also are pleased with the progress of our integration of the Kenan Billing Systems group, which Comverse acquired in December 2005. Comverse Converged Billing solutions have been selected to provide converged and postpaid billing by several new customers, and the implementation of those projects is proceeding according to our expectations. Our Verint subsidiary continues to reinforce its leadership in software-based analytics for security and business intelligence, with success in video security for customers such as Wells Fargo, and the City of Beijing in advance of the 2008 Olympics, and the expansion of its BI product portfolio with new solutions for contact center performance analytics and customer experience management. And our Ulticom subsidiary is positioning itself to address new and merging growth opportunities through its launch of IMS-ready signaling products. "We also continue to look for ways to expand our addressable market opportunity across each of our business units through new product development and strategic acquisitions, such as our recent purchase of Netcentrex, which closed after quarter-end, and has strengthened our Comverse subsidiary's presence in the emerging VoIP and IMS areas." 10-Q Filing Delay As a result of the ongoing review by the Special Committee of the company's Board of Directors relating to the company's stock option grants, the company informed Securities and Exchange Commission that its Quarterly Report on Form 10-Q for the quarter ended April 30, 2006 will not be filed by the June 9, 2006 deadline. The company intends to issue results for the quarterly period ended April 30, 2006 and the fiscal year ended January 31, 2006, and to file its Quarterly Report on Form 10-Q for the quarter ended April 30, 2006 and Annual Report on Form 10-K for the fiscal year ended January 31, 2006, together with any restated historical financial statements, as soon as practicable after the completion of the Special Committee's review. NASDAQ Listing Update The company has notified The NASDAQ Stock Market that it will not timely file its Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2006 and, accordingly, the company expects to receive an additional Staff Determination Letter from The NASDAQ Stock Market indicating that the delay in the filing of the Form 10-Q could serve as an additional basis for the potential delisting of the company's securities from NASDAQ, under NASDAQ Marketplace Rule 4310(c)(14). On April 20, 2006 the company announced that, due to the delay in the filing of its Annual Report on Form 10-K for the fiscal year ended January 31, 2006, it had received a Staff Determination Letter from The NASDAQ Stock Market indicating that the company's securities were subject to delisting based upon the delinquent Form 10-K, unless the company requested a hearing before the NASDAQ Listing Qualifications Panel. The company requested a hearing and presented its plan to regain compliance with NASDAQ's filing requirement at an in-person hearing before the NASDAQ Panel on May 25, 2006. The NASDAQ Panel has not yet issued a decision as a result of that hearing. About Comverse Comverse, a unit of Comverse Technology, Inc. (NASDAQ: CMVT) -- http://www.comverse.com/-- provides software and systems that enable network-based multimedia enhanced communication and billing services. Over 450 communication and content service providers in more than 120 countries use Comverse products to generate revenues, strengthen customer loyalty and improve operational efficiency. * * * As reported in the Troubled Company Reporter on May 4, 2006, Standard & Poor's Ratings Services held its ratings on Comverse Technology Inc. on CreditWatch with negative implications, where they were placed on March 15, 2006, on the disclosure that the board of directors at Comverse had created a special committee to review matters relating to the company's stock option grants and the likely need to restate prior-period financial results. As reported in the Troubled Company Reporter on March 17, 2006, Standard & Poor's placed its corporate credit and senior unsecured debt ratings on Comverse Technology on CreditWatch with negative implications. The company has S&P's 'BB-' corporate credit and senior unsecured debt ratings. CONSPIRACY ENT: March 31 Balance Sheet Upside-Down by $2.5 Million ------------------------------------------------------------------ Conspiracy Entertainment Holdings, Inc., filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on June 14, 2006. The Company reported a $132,351 net loss with no revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $926,181 in total assets and $3,480,768 in total liabilities resulting in a $2,554,587 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $46,473 in total current assets available to pay $3,480,768 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?bb0 About Conspiracy Entertainment Conspiracy Entertainment Holdings, Inc., develops, publish, and markets interactive video games software. The company also publishes titles for hardware platforms like Sony's PlayStation, Nintendo 64 and Nintendo's Game Boy Color and Game Boy Advance. Going Concern Doubt As reported in the Troubled Company Reporter on June 5, 2006, Chisholm, Bierwolf & Nilson, LLC, in Bountiful, Utah, raised substantial doubt about Conspiracy Entertainment Holdings, 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 operating losses and lack of working capital. CYBERCARE INC: Files Plan and Disclosure Statement in Florida ------------------------------------------------------------- Cybercare, Inc., and its debtor-affiliate, Cybercare Technologies, Inc., filed their Joint Chapter 11 Plan of Reorganization and a Disclosure Statement explaining that Plan with the U.S. Bankruptcy Court for the Middle District of Florida on June 16, 2006. Overview of the Plan The Plan divides Creditors and Holders of Equity Interests into twelve classes and proposes to pay creditors from existing funds and the exit financing loan proceeds and recoveries of causes of action. The Plan contemplates the distribution of New Stock of CyberCare to (a) the DIP Lender, which shares shall be contributed to the Equity Stock Pool, (b) to electing unsecured creditors, and (c) to U.S. Sustainable Energy Corporation in exchange for certain technology-related assts, business, and initiatives. Treatment of Claims Under the Plan, General Administrative Claims will be paid in full and in cash. The U.S. Trustee's Claims, Priority Tax Claims, Priority Claims and Secured Tax Claims will also be paid in full. On the effective date, all outstanding obligations of the Debtors to the DIP Lender shall be fully and finally satisfied through: (a) receipt of New Stock equal to five percent of the New Stock of Reorganized CyberCare, which New Stock shall be contributed by the DIP Lender to the Equity Stock Pool, and (b) payment in Cash from the Exit Financing equal to the outstanding DIP Indebtedness, less the value of the Equity Stock Pool as determined by the Marshal & Stevens Valuation. Cast-Crete's Claims The Secured Claim of Cast-Crete Corporation with respect to any secured post-petition DIP Financing will be waived as of the effective date. All of Cast-Crete's allowed administrative claim will be treated through the receipt of New Stock of Reorganized CyberCare equal to five percent of Reorganized CyberCare, as provided in the Plan. Cast-Crete, in full satisfaction of its unsecured claim, will receive 100% of the new stock in Reorganized Cybertech. Tang Entities' Secured Claims The Secured Claims of the Tang Entities consists of some or all of the security interests in the Debtors' accounts receivable, furniture, fixtures and equipment, Causes of Action and the proceeds thereof, and the Outreach Note. The Debtors tell the Court that except for CC Fortune's security interest in the Outreach Note and the Lien asserted by CC Fortune in the CyberTech Common Stock, the security interests of the Tang Entities are unperfected and avoidable pursuant to Section 544 of the Bankruptcy Code, and will be treated as a general unsecured claim. The Secured Claim of CC Fortune secured by the pledge of the CyberTech Common Stock will be satisfied through the issuance of a nonrevocable license to market and distribute the CyberTech Technology outside of North America. The Secured Claim of CC Fortune to the extent secured by the Outreach Note shall be paid from the Outreach Proceeds in accordance with the Outreach Stay Relief Order. Judgment Lien Creditors The Debtors disclose that the Judgment Lien Creditors consist of: * A. Razzak Tai, M.D.; * IMR Global Corp, n/k/a CGI Information Technology Services; * Medline Industries, Inc.; * Scott Printing; * Associated Global Systems; * Phoenix Leasing, Inc.; * Equilease Financial Services, Inc.; * Capital Publishing; * General Electric Capital; * International Business Machines Corp.; and * Rodger Hochman. The Debtors believe that certain of the claims of the Judgment Lien Creditors, including the claims of IMR Global, Phoenix Leasing and Equilease may have been satisfied through a Prepetition stock issuance. Unless the lien of any Judgment Lien Creditor is Subordinated Securities Claim pursuant to Section 510 of the Bankruptcy Code, or satisfied through prepetition issuance of stock, then holders of these claims will be paid an amount equal to their allowed secured Claim, to the extent secured by any assets of the Debtor other than Causes of Action, as determined by the Marshall & Stevens Valuation in accordance with the respective priority of their respective Judgment Lien in the Assets, other than Causes of Action, of the Debtors. Any Liens of Judgment Lien Creditors that attached to Causes of Action as of the Debtors filing of bankruptcy will continue in the proceeds or recoveries of such Causes of Action and the Judgment Lien Creditors will be paid the Net Recoveries of Causes of Action The Debtors tell the Court that holders of Judgment Lien Claims will be entitled to participate in distribution to general unsecured claims, however, if these holders are entitled to a distribution on account of a Lien against Net Cause of Action Recoveries, then the Debtors will be authorized to retain from any amounts to be paid, the amount of the prior payment that exceed the value of the Collateral securing the Judgment Lien Claims will be paid to general unsecured claims. The claim of A. Razzak Tai, M.D. will be subordinated pursuant to Section 510 of the Bankruptcy Code as a claim arising from the purchase or sale of a security of the Debtor and will receive a pro rata distribution of the Equity Share Pool along with all other Equity Interests based on the percentage of shares of stock of CyberCare owned by Mr. Tai. General Unsecured Claims Creditors holding general unsecured claims will receive, in satisfaction of their claims, either: a) a pro rata distribution of a number of shares of New Stock equal to the Holders of Claims' Unsecured Proportional Stock Pool Share, or b) a pro rata distribution of Cash from the Plan Fund and a pro rata distribution of any Net Recoveries of Causes of Action available for distribution to Holders of Allowed Unsecured Claims. The Debtors say that Holders of Allowed General Unsecured Claims have the option to elect whether to receive New Stock or Cash on the Ballot provided for submitting acceptances and rejections of the Plan. Holders of unsecured claims that fail to elect or vote will be deemed to have irrevocably elected to receive Cash from the Plan Fund, provided, however, the Tang Entities will be deemed to irrevocably elect to receive a Proportional Stock Pool Share of New Stock and shall not receive any distributions of Cash from the Plan Fund. Other Claims Holders of Intercompany Claims will receive no distributions under the Plan on account of their claims. Holders of Equity Interests in Cybercare will receive on the effective date, at the election of Reorganized CyberCare, either of these treatments: (i) CyberCare Equity Interests will be cancelled and Holders of CyberCare Equity Interests may be entitled to receive their pro rata share of the DIP Loan Claims Shares or (ii) Reorganized CyberCare may effectuate a 1:10 reverse split of Existing Common Stock so that the aggregate New Stock held by the Holders of Equity Interests in CyberCare will equal five percent of the total New Stock to be issued. CyberTech Equity Interests will be cancelled. A full-text copy of the Debtors' Disclosure Statement explaining their Joint Chapter 11 Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060620052421 About CyberCare Inc. Headquartered in Tampa, Florida, CyberCare, Inc., f/k/a Medical Industries of America, Inc., is a holding company that owns service businesses, including a physical therapy and rehabilitation business, a pharmacy business, and a healthcare technology solutions business. The Company and its debtor- affiliate, CyberCare Technologies, Inc., filed for chapter 11 protection on Oct. 14, 2005 (Bankr. M.D. Fla. Case No. 05-27268). Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' case. When the Debtors filed for protection from their creditors, they listed $5,058,955 in assets and $26,987,138 in debts. CYBERCARE INC: Provides Updates on U.S. Sustainable Merger ---------------------------------------------------------- U.S. Sustainable Energy Corporation and CyberCare, Inc. (PINKSHEETS: CYBR) provided progress on their proposed merger agreement. CyberCare, Inc. filed its Plan of Reorganization and related Disclosure Statement on June 16, 2006. The Bankruptcy Court should schedule a hearing on confirmation of the Plan within 30 days. Upon confirmation of the Plan, CyberCare, Inc. will change its corporate name to U.S. Sustainable Energy Corporation. U.S. Sustainable also contemplates that its technologies will include the rights to the certain patents and intellectual property rights currently contained in EarthFirst Technologies, Inc. (OTCBB: EFTI). Under EarthFirst's previously announced planned merger with Cast-Crete Corporation, EarthFirst/Cast-Crete will become the co-proponent of the Plan of Reorganization of CyberCare. After the merger with Cast-Crete and CyberCare's emergence from reorganization, EarthFirst/Cast-Crete intends to combine the existing energy technologies with CyberCare's technology assets. The surviving entity will be known as U.S. Sustainable Energy Corporation. Under the terms of the agreement and Plan, CyberCare will effect a 1:10 reverse split of its outstanding stock upon the effective date of the Plan. CyberCare will then issue approximately 100 million restricted shares to U.S. Sustainable to complete the merger transaction. Headquartered in Tampa, Florida, CyberCare, Inc., f/k/a Medical Industries of America, Inc., is a holding company that owns service businesses, including a physical therapy and rehabilitation business, a pharmacy business, and a healthcare technology solutions business. The Company and its debtor- affiliate, CyberCare Technologies, Inc., filed for chapter 11 protection on Oct. 14, 2005 (Bankr. M.D. Fla. Case No. 05-27268). Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' case. When the Debtors filed for protection from their creditors, they listed $5,058,955 in assets and $26,987,138 in debts. DELPHI CORP: Equity Panel Taps Fried Frank as Bankruptcy Counsel ---------------------------------------------------------------- The Official Committee of Equity Security Holders of Delphi Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Fried, Frank, Harris, Shriver & Jacobson LLP, as its attorneys. As attorneys, Fried Frank will: (a) provide legal advice with respect to the Equity Committee's rights, powers and duties in the Debtors' Chapter 11 cases; (b) inform the Equity Committee with respect to issues involving labor, pension, other post-employment benefits, and General Motors Corporation, and with respect to agreements that the Debtors may reach with their unions or GM, and assist the Equity Committee in relaying to the Debtors and other parties-in-interest its views in respect of these matters; (c) assist the Equity Committee in its analysis and negotiation of any plan of reorganization and related corporate documents; (d) assist and advise the Equity Committee with respect to its communications with the general equity body regarding significant matters in the Debtors' Chapter 11 cases; (e) review, analyze, and advise the Equity Committee with respect to documents filed with the Court and respond on behalf of the Equity Committee to any and all applications, motions, answers, orders, reports, and other pleading in connection with the administration of the Debtors' estates in their Chapter 11 cases; and (f) perform any other legal services requested by the Equity Committee in connection with the Chapter 11 cases and the confirmation and implementation of a plan reorganization. Fried Frank's professionals will be paid at these hourly rates: Partners $650 - $995 Of Counsel $550 - $850 Special Counsel $595 - $620 Associates $315 - $540 Legal Assistants $170 - $235 Bonnie Steingart, Esq., a member of the firm, assures the Court that Fried Frank is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Troy, Mich., 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 CORPORATION: Renews Cinergy Corporation Lease ---------------------------------------------------- On April 1, 2006, Delphi Corporation and its debtor-affiliates entered into a lease with Cinergy Corporation for premises located at 1301 Pennsylvania Avenue, Suites 109 & 116, in Washington, D.C. The Debtors occupy 400 square feet of office space pursuant to the Lease. The Lease expires November 30, 2007. The Debtors pay quarterly base rent and operating expenses of: * $11,726 for the quarters ending June 30 and September 30, 2006; * $11,878 for the quarter ending December 31, 2006; * $12,182 for the quarters ending March 31, June 30 and September 30, 2007; and * $8,121 for the two-month period ending November 30, 2007. The Debtors notify the U.S. Bankruptcy Court for the Southern District of New York and parties-in-interest that they will renew the Cinergy Lease, pursuant to the Court-approved lease procedures. Based in Troy, Mich., 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: Equity Panel Wants More Part in GM Contract Rejection ------------------------------------------------------------------ The Official Committee of Equity Security Holders of Delphi Corporation and its debtor-affiliates wants to be a notice party in contract rejections concerning General Motors Corporation. Bonnie Steingart, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP, in New York, asserts that as a statutory committee in the Debtors' Chapter 11 cases, the Equity Committee should be provided with notice of proposed GM contracts rejection to fulfill its duties and obligations to constituents. The Equity Committee must have the opportunity to analyze and assess the potential effects of rejection on the Debtors' estates, particularly with respect to potential claims of GM, and bring any concerns the Equity Committee may have to the attention of the U.S. Bankruptcy Court for the Southern District of New York, Ms. Steingart explains. The Equity Committee has concerns about the validity and size of GM's potential claims because of its continued involvement in the Debtors' affairs since the spun off. As reported in the Troubled Company Reporter on April 7, 2006, the Debtors asked the Court for authority to reject the supply contracts. The Debtors are restructuring their unprofitable supply relationships with GM. After studying the deteriorating financial health of their U.S. operations, the Debtors identified 21 operational sites that generate significant, and increasing, operating losses. The sites, which primarily produce parts for GM vehicles, are projected to generate $2.1 billion in operating losses in 2006. Based in Troy, Mich., 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. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000) DIASYS CORP: Balance Sheet Upside-Down by $1.2 Million at March 31 ------------------------------------------------------------------ DiaSys Corporation incurred a $348,879 net loss on $392,575 in revenues for the quarter ending March 31, 2006, the Company reported in a Form 10-QSB filed with the U.S. Securities and Exchange Commission. As of March 31, 2006, the Company's balance sheet reported $2,436,929 in assets. The Company's equity deficit narrowed to $1,208,903 at March 31, 2006, from a $1,475,061 deficit at June 30, 2005. Going Concern Doubt The Company's auditor, Deloitte & Touche LLP, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ending June 30, 2005. Deloitte & Touche pointed to the Company's recurring losses from operations, negative working capital, and accumulated deficit raise substantial doubt. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?bb3 DiaSys Corporation designs, develops, manufactures and distributes propriety workstation-instruments, consumables, reagents and specialized test kits to hospital, clinical and private physician laboratories worldwide. EAST CAMERON: S&P Puts Junk Rating on $165 Million Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'CCC+' rating to East Cameron Gas Co.'s (as trustee for East Cameron Gas Co. Sukuk Trust) $165.67 million investment trust certificates. The investment trust certificates represent the first future flow securitization backed by overriding royalty interests in the form of Sukuk. It is also the first Islamic finance securitization to be rated by Standard & Poor's. The preliminary rating reflects the credit enhancement available in the form of overcollateralization through production coverage, price hedge and off-take agreements, and reserve accounts. The preliminary rating reflects these characteristics of the transaction's structure: -- The credit enhancement available in the form of overcollateralization of production coverage; -- A reserve account to be opened by the purchaser special- purpose vehicle and held by Deutsche Bank AG ('AA-'), of which an amount equal to US$9.5 million (six months' return and expenses) will be credited from the proceeds on the closing date; -- An earnout account, to be held as an escrow account at Deutsche Bank, into which the purchaser SPV will deposit $38.28 million on the closing date. The originator will be entitled to have amounts in the earnout account disbursed to it from time to time as it performs its obligations under the development plan; -- The ECP Opex Account, an escrow account to be held at Deutsche Bank, into which $5 million of the proceeds will be deposited by the originator (East Cameron Partners L.P.) on the closing date; -- The royalty subordination account, an escrow account to be held at Deutsche Bank, into which 50% of the ORRI allocated to two additional parties will be pledged to fund this account until it reaches US$3 million. Both Opex accounts will be used by ECP to support ongoing operating expenses associated with the property; -- The engagement of Production Management Industries LLC as back-up operator if the originator fails to operate the properties adequately; -- The hedge agreement to be entered into by Merrill Lynch Commodities Inc., supported by Merrill Lynch & Co. Inc. ('A+') and ECP, and subsequently novated to the purchaser SPV at closing. The hedge mitigates price risk for a set volume of gas production from 2007-2010. Any payments owed by the purchaser SPV to the hedge counterparty are covered by a guarantee from Merrill Lynch Credit Products LLC up to $12 million; and -- The gas production off-taker is Cedar Gas Co., which has the benefit of a back-up off-take agreement from Merrill Lynch Commodities Inc., guaranteed by Merrill Lynch & Co. Inc. ('A+'). Gas production accounts for approximately 93% of total hydrocarbons produced by the field. The oil condensate off-taker is Shell Trading (U.S.) Co. The sale proceeds from the gas and oil condensate after appropriate allocations constitute the ORRI. Standard & Poor's preliminary rating on the certificates solely addresses the likelihood of scheduled payments of Sukuk return and redemption. The rating does not address the ability of certificate-holders to receive the residual return. The certificates will have a fixed quarterly return of 11.25%, and the redemption, including payment of residual return, will be by July 2019. Standard & Poor's based its credit rating opinion on Sukuk transactions' compliance with applicable commercial law, and the rating, therefore, does not reflect the compliance of the transaction with Shari'a law. Standard & Poor's will review a true-sale opinion, a non- consolidation opinion addressing the risk of substantive consolidation of the assets and liabilities of the seller and the trust, and other applicable opinions, addressing the sale of the ORRI from ECP (the originator) to the purchaser SPV. East Cameron Gas Co., a special-purpose vehicle, will take the certificate proceeds and advance them to Louisiana Offshore Holdings LLC (purchaser SPV) to purchase the ORRI over the properties from ECP. ECP, the originator, is an independent oil and gas exploration and production company with leasehold interests in a natural gas and condensate field in U.S. federal waters. The field is located 20 miles off the shores of Louisiana. Merrill Lynch International is sole bookrunner, and Merrill Lynch International and Bemo Securitisation SAL are co- arrangers of the transaction. EDWARD CAIN: Case Summary & 8 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Edward Lee Cain, Jr. 9100 Prestwick Club Drive Duluth, Georgia 30097 Bankruptcy Case No.: 06-67062 Chapter 11 Petition Date: June 20, 2006 Court: Northern District of Georgia (Atlanta) Judge: Margaret Murphy Debtor's Counsel: J. Robert Williamson, Esq. Scroggins and Williamson 1500 Candler Building 127 Peachtree Street, Northeast Atlanta, Georgia 30303 Tel: (404) 893-3880 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million Debtor's 8 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First Coastal Bank, N.A. Judgment/Loan $1,105,597 1644 West Redondo Beach Boulevard Gardena, CA 90247-0029 Jerry Franks Loan $125,000 1885 Kingsbury Prestcott, AZ 86305 Mercedes-Benz Credit Auto Lease $60,042 P.O. Box 685 Roanoke, TX 76262 Chase Leasing Auto Lease $59,224 Victor & Victor Legal Fees $34,082 Nations, Toman & McKnight LLP Legal Fees $25,507 United Mileage Plus MasterCard $24,839 Bank of America Visa $5,497 ENTERGY NEW ORLEANS: Committee Wants FTI's Payment Terms Modified ----------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Entergy New Orleans Inc.'s chapter 11 case, asks the U.S. Bankruptcy Court for the Eastern District of Louisiana to modify the terms of FTI Consulting, Inc.'s compensation to allow the fee caps from January 2006 through July 2006 to be cumulative. The Court's order approving the Committee's continued retention of FTI provides that the firm's compensation is capped at $100,000 for the month of January 2006 and at $75,000 for all subsequent months, plus reimbursement of actual and necessary expenses. The Committee relates that the fees incurred by FTI for 2006 have been: Month Fee Cap Fees Incurred ----- ------- ------------- January $100,000 $15,050 February 75,000 50,923 March 75,000 83,734 April 75,000 126,487 Although FTI was authorized to receive up to $325,000 for the months of January through April, FTI billed only $276,194, Carey L. Menasco, Esq., at Liskow & Lewis, APLC, in New Orleans, Louisiana, points out. Ms. Menasco explains that the monthly caps that were proposed by FTI and the Committee were based on the firm's projected workload, which in turn was based on discussions with Entergy New Orleans, Inc., in late December 2005 and early January 2006 and the Debtor's anticipated responses to the Committee's informal discovery requests. However, because ENOI has not produced documents within the anticipated time frame, the work FTI anticipated performing in January and February 2006 had to be postponed and compressed into later months, Ms. Menasco relates. Similarly, there has not been any substantive discussion on a plan of reorganization in the Debtor's bankruptcy case, she adds. Because much of FTI's projected workload involved the analysis of transactions among ENOI, its parent and affiliates, the firm anticipates that it will be caught up with its workload by the end of July 2006, when the Debtor's motions to authorize prepetition payments made to certain affiliates are scheduled for hearing. If the Court refuses to make the caps cumulative for the months of January to July 2006, FTI will be required to write off a minimum of $60,221 of its fees, Ms. Menasco avers. On the other hand, ENOI, according to Ms. Menasco, will not be prejudiced if the caps are considered cumulative for the months of January to July 2006 because it has budgeted the full amount of the caps for the payment of FTI's fees during the period. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENTERGY NEW ORLEANS: Wants to Hire BMC Group as Claims Agent ------------------------------------------------------------ Entergy New Orleans, Inc., asks the U.S. Bankruptcy Court for the Eastern District of Louisiana's authority to employ BMC Groups, Inc., as its claims reconciliation agent pursuant to Section 327(a) of the Bankruptcy Code. BMC's employment will expedite service of notices, streamline the claims administration and reconciliation process and permit the Debtor to focus efficiently on its reorganization efforts, Tara G. Richards, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., in New Orleans, Louisiana, tells the Court. BMC will: (1) prepare and serve required notices in the Debtor's Chapter 11 case, including notices of claims bar date and objection to claims, notices of hearings on a disclosure statement and confirmation of a plan of reorganization and other miscellaneous notices as the Debtor or the Court may deem appropriate and necessary; (2) assist with the publication of required notices; (3) prepare for filing with the Bankruptcy Clerk's office an affidavit of service that includes a copy of the notice served, an alphabetical list of persons on which the notice was served and the date and manner of service; (4) provide balloting and solicitation services, including producing personalized ballots and tabulating creditor ballots and other claims processing, noticing, balloting and administrative services required by the Debtor; and (5) assist the Debtor in: -- maintaining the master list of creditors; -- gathering data in conjunction with the preparation of the Debtor's schedule of assets and liabilities and statements of financial affairs; -- tracking and administration of claims; and -- performing other administrative tasks related to the Debtor's Chapter 11 case. ENOI will pay BMC's standard prices for its services, expenses and supplies. The BMC professionals' standard rates are: Professional Hourly Rate ------------ ----------- Seniors and Principals $205 - $300 Consultants $110 - $195 Case Support $65 - $110 Call Center and Data Entry $45 ENOI will also pay BMC for any necessarily incurred out-of-pocket expenses for transportation, lodging, meals and related items. Tinamarie Fiel, vice president of BMC Group, assures the Court that the firm does not represent any interest adverse to the Debtor and its estate. BMC is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code, and as modified by Section 1107(b). Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) EQUISTAR CHEMICAL: Moody's Lifts Rating on Sr. Unsec. Bonds to B1 ----------------------------------------------------------------- Moody's Investors Service raised the ratings of Lyondell Chemical Company and Equistar Chemicals LP due to the substantial debt reduction over the past two years at the combined company and the likelihood that the company will be able to achieve its $3 billion debt reduction target by the end of 2007. Moody's also affirmed the B1 ratings of Millennium Chemicals Inc. and Lyondell's SGL-2 speculative grade liquidity rating, and assigned corporate family ratings to both Equistar and Millennium. Moody's assigned CFR ratings to Equistar and Millennium to provide greater transparency. Additionally, the rating outlook for all three companies was changed to developing due to the potential sale of the Lyondell-CITGO Refining LP joint venture. Management has stated that it intends to utilize proceeds from this divestiture to further reduce debt. These actions conclude the review which began on May 5, 2006. Upgrades: Issuer: Equistar Chemicals, LP * Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 Issuer: Lyondell Chemical Company * Corporate Family Rating, Upgraded to Ba3 from B1 * Junior Subordinated Shelf, Upgraded to a range of (P)B2 to (P)B1 from a range of (P)B3 to (P)B2 * Preferred Stock Shelf, Upgraded to (P)B2 from (P)B3 * Senior Secured Regular Bond/Debenture, Upgraded to Ba3 from B1 * Senior Secured Shelf, Upgraded to (P)Ba2 from (P)Ba3 * Senior Subordinated Regular Bond/Debenture, Upgraded to B2 from B3 * Senior Subordinated Shelf, Upgraded to (P)B1 from (P)B2 * Senior Unsecured Medium-Term Note Program, Upgraded to B1 from B2 * Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 * Senior Unsecured Shelf, Upgraded to (P)Ba3 from (P)B1 * Subordinated Shelf, Upgraded to (P)B1 from (P)B2 Issuer: Lyondell Chemical Worldwide, Inc. * Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 from B1 Issuer: Lyondell Trust I * Preferred Stock Shelf, Upgraded to (P)B2 from (P)B3 Issuer: Lyondell Trust II * Preferred Stock Shelf, Upgraded to (P)B2 from (P)B3 Issuer: Lyondell Trust III * Preferred Stock Shelf, Upgraded to (P)B2 from (P)B3 Reinstatements: Issuer: Equistar Chemicals, LP * Corporate Family Rating, Reinstated to Ba3 Issuer: Millennium Chemicals Inc. * Corporate Family Rating, Reinstated to Ba3 Outlook Actions: Issuer: Equistar Chemicals, LP * Outlook, Changed To Developing From Rating Under Review Issuer: Lyondell Chemical Company * Outlook, Changed To Developing From Rating Under Review Issuer: Lyondell Chemical Worldwide, Inc. * Outlook, Changed To Developing From Rating Under Review Issuer: Millennium America Inc. * Outlook, Changed To Developing From Stable Issuer: Millennium Chemicals Inc. * Outlook, Changed To Developing From Stable Lyondell's Ba3 ratings reflect the significant volatility in earnings and cash flow due to the commodity nature of the company's products and its exposure to volatile petroleum and petrochemical feedstocks, substantial fixed charges for a cyclical company, significant non-debt obligations and elevated capital expenditures in 2006 and into 2007 required to meet regulatory requirements. The ratings are supported by a fairly diverse business portfolio including the operations of Equistar and Millennium, leading market shares in several commodity petrochemicals, plastics and titanium dioxide, solid financial metrics and significant free cash flow at this point in the cycle and management's ongoing dedication to debt reduction. The developing outlook reflects the potential for further debt reduction over the next six to 12 months if management is able to successfully divest its stake in LCR. If Lyondell is able to reduce debt by an additional $1.5 billion, Moody's could raise the company's ratings by another notch. It is unlikely that Moody's would raise the company's ratings by more than one notch, unless debt reduction exceded Moody's current estimate. Moody's noted that the divestiture of LCR is not a certainty and that joint ventures are more difficult to divest, especially when one partner has a greater interest in the value of the output of the venture. Moody's also noted that the ratings of Millennium Chemicals Inc. may not track upward with the ratings of Lyondell and Equistar due to potential lead paint liabilities at a former subsidiary. Moody's will need to receive additional information on this issue prior to any further changes to Millennium's ratings. Lyondell's speculative grade liquidity rating of SGL-2 reflects the decline in cash balances and the potential need to access its credit facilities or refinance debt maturities in 2007 and 2008. The combined company has ample liquidity to handle these maturities due to access to $1.6 billion in credit facilities and the lack of restrictions on Equistar's ability to make dividends to Lyondell over the forecast period. The company's credit facilities include an undrawn $475 million secured credit facility at Lyondell due in 2009, a $600 million accounts receivable and $400 million inventory-based credit facility at Equistar due in 2010, and a $125 million secured credit facility at Millennium due in 2010. Availability under Lyondell's facility at March 31, 2006 was $398 million due to $77 million of letters of credit. Availability under Equistar's facilities was $708 million due to $225 million of borrowing under the accounts receivable facility, a $50 million reserve and borrowing base limitations. Millennium had $97 million of availability due to outstanding letters of credit. Lyondell also has access to a $150 million accounts receivable program with roughly $85 million of availability. Headquartered in Houston, Texas, Lyondell Chemical Company manufactures propylene oxide, co-product stryene, MTBE and butanediol, as well as numerous other derivative chemicals. Both Equistar Chemicals LP and Millennium Chemicals Inc. are wholly owned subsidiaries of Lyondell. Equistar is a leading North American producer of commodity petrochemicals and plastics. Millennium Chemicals is among the largest global producers of titanium dioxide pigments and acetyls. Lyondell also participates in a refinery joint venture with CITGO Petroleum Corporation - Lyondell-CITGO Refining Company Ltd. LCR is a refiner that has the unique ability to process 100% heavy sour crude oil from Venezuela. These combined entities reported revenues of nearly $24 billion for the LTM dated March 31, 2006. EVERGREEN HOLDINGS: PwC Expresses Going Concern Doubt ----------------------------------------------------- PricewaterhouseCoopers LLP, in Portland, Oregon, raised substantial doubt about Evergreen Holding, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Feb. 28, 2006. The auditor pointed to the Company's failure to comply with existing debt covenants which would make the Company's debts callable. PricewaterhouseCoopers added that the Company has historically had violations of certain debt covenants. The Company explains that all of their assets are pledged as collateral under various debt agreements. An issuance of $215 million of 12% senior second secured notes, and a $100 million, three-year senior secured credit facility financing agreement both contain cross-default provisions wherein certain events of default under one or more of their debt obligations will result in an event of default under either or both of these long- term financing agreements. In the event that the Company is unable to cure these defaults or obtain waivers with respect to the defaults, the Company is at risk that their payment obligations under both credit agreements will be accelerated, forcing the Company to either obtain alternative financing or seek legal protection from their creditors. The Company earned $26,104,000 in net profit on $757,690,000 of total revenues for the year ended Feb. 28, 2006. At Feb. 28, 2006, the Company's balance sheet showed $733,665,000 in total assets and $521,874,000 in total liabilities, resulting in a $209,716,000 stockholders' equity. A full-text copy of the Company's 2006 Annual Report is available for free at http://researcharchives.com/t/s?b0c About Evergreen Holdings Based in McMinnville, Oregon, Evergreen Holdings, Inc. -- http://www.evergreenaviation.com/-- provides integrated air cargo transportation and aviation support services. It is the parent company of Evergreen International Aviation, Inc. The companies and their consolidated subsidiaries provide global air cargo shipping, ground handling and logistics services, helicopter transportation services, small aircraft charters, and aircraft maintenance and repair services. EXIDE TECHNOLOGIES: Delays Filing of 2005 Annual Report ------------------------------------------------------- Exide Technologies (NASDAQ: XIDE) discloses that wasn't able to file its Annual Report on Form 10-K with the Securities and Exchange Commission on the prescribed deadline of June 14, 2006. The delay in filing is due, in part, to the late identification of out of period deferred tax benefits. These tax-related items will have no impact on the Company's adjusted EBITDA calculations under its senior credit facility. The identification of out of period tax benefits has also impacted the timing of the completion of the Company's final assessment of its internal control environment as required by the Sarbanes-Oxley Act and will result in a restatement of the Company's prior years' results to reflect the allocation of deferred tax benefits to the appropriate periods. The Company's previously issued financial statements for these periods should no longer be relied upon. Consequently, the Company also postponed its conference call to discuss the 2006 results, previously scheduled for June 15, 2006, until it has filed its Form 10-K. The Company will file with the SEC a Form 12b-25 notice of late filing with details regarding the delay and related matters. It is expected that the Company's 10-K will again in 2006 contain a going concern qualification in the audit opinion and will again likely disclose one or more material weaknesses in internal controls, including one related to taxes. Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- is a worldwide manufacturer and distributor of lead acid batteries and other related electrical energy storage products and has operations in 89 countries. 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. EXTENDICARE HEALTH: Parent's Reorganization Cues S&P's Neg. Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings for Extendicare Health Services Inc., including the 'BB-' corporate credit rating, on CreditWatch with negative implications. This follows the announcement of a reorganization of the parent company, Extendicare Inc., into a Canadian REIT, and the spin-off of all of Extendicare's assisted living businesses into a new, separate public company. "We believe that the result of this reorganization, including the loss of its assisted living operations, could weaken both EHSI's business and financial positions," notes Standard & Poor's credit analyst David Peknay. EHSI's assisted living operations were bolstered by the acquisition of Assisted Living Concepts in early 2005. This acquisition expanded the company's services, and reduced its dependence on government revenues because it is mostly a private pay business. EHSI's assisted living operations generate an estimated 25% of its EBITDA. The loss of this business will lessen the company's business diversity and could weaken its business risk profile due to the consequent larger dependency on government payors. Standard & Poor's believes that the combination of the loss of this business, coupled with the costs that will be incurred by such a transaction, will likely weaken the company's financial profile. Resolution of the CreditWatch listing will require a more comprehensive analysis of the transaction and its impact on EHSI. EHSI operates about 350 nursing homes and assisted living facilities in 19 states. FAMILY HOME: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Family Home & Garden, Inc. 550 Corporate Center Drive Raleigh, North Carolina 27607 Bankruptcy Case No.: 06-00890 Type of Business: The Debtor sells lawn and garden products for home interior and exterior design. See http://www.familyhomeandgarden.com/ The Debtor's affiliate, Horne Commercial Properties, Inc., filed for chapter 11 protection on May 26, 2006 (Bankr. E.D. N.C. Case No. 06-00770). Chapter 11 Petition Date: June 19, 2006 Court: Eastern District of North Carolina (Raleigh) Judge: A. Thomas Small Debtor's Counsel: William P. Janvier, Esq. Everett Gaskins Hancock & Stevens, LLP P.O. Box 911 Raleigh, North Carolina 27602 Tel: (919) 755-0025 Fax: (919) 755-0009 Total Assets: $773,206 Total Debts: $3,330,995 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Southern States Inventory and $627,898 Cooperative, Inc. Receivables c/o Luther Starling P.O. Drawer 1960 Smithfield, NC 27577 Commercial Pine Straw $257,754 550 Corporate Center Drive Raleigh, NC 27607 Ray Vincent Pine Straw $152,509 26644 State Road 247 Branford, FL 32008 Reggie Barnes $150,000 Small Business Admin. $78,960 Lee Farms $73,402 Evelyn Sumner $70,000 Barbara Byrd $70,000 First Bank $60,000 Budd Seed $46,882 Southern Importers $41,871 MBNA America $32,353 Gerson International $30,852 Ann Davenport $30,000 Bissette Farm Supply $28,893 State Farmers Market $26,343 Invesco Trust $24,770 Midwest of Cannon Falls $22,887 N.C. Department of Agriculture $21,079 AT&T Universal Card $18,071 FIRST ASSURED: Case Summary & 9 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: First Assured Warranty Corporation dba 1SourceAutoWarranty.com dba First Warranty Corporation 9249 South Broadway, Suite #200-320 Highlands Ranch, Colorado 80129 Bankruptcy Case No.: 06-13669 Type of Business: The Debtor offers extended car warranty programs and services. Chapter 11 Petition Date: June 16, 2006 Court: District of Colorado (Denver) Judge: Sidney B. Brooks Debtor's Counsel: Douglas W. Jessop, Esq. Jessop & Company, P.C. 303 East 17th Avenue, Suite 930 Denver, Coloradi 80203 Tel: (303) 860-7700 Fax: (303) 860-7233 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Holden Investments, Inc. Loan $51,000 969 Hillsboro Mile Hillsboro Beach, FL 33062 American Express Credit Card Unknown P.O. Box 297812 Fort Lauderdale, FL 33329-7812 Mepco Insurance Premium Contract Unknown Financing, Inc. 174 North Michigan Avenue Chicago, IL 60601 Ralph Holden Unknown 969 Hillsboro Mile Hillsboro Beach, FL 33062 Ropers, Majeski Legal Services Unknown Kohn & Bentley 80 North First Street San Jose, CA 95113 State of California Unknown Insurance Commissioner Legal Division 45 Fremont Street San Francisco, CA 94105 State of Hawaii Unknown Insurance Commissioner Insurance Division 335 Merchant Street, Room 213 P.O. Box 3614 Honolulu, HI 96811 The Colorado Bank and Credit Card Unknown Trust Company 301 Colorado Avenue La Junta, CO 81050 The Realty Associates Rent Unknown Fund IV, LP 28 State Street, 10th Floor Boston, MA 02109 FORD MOTOR: Report Says Co. Will Invest $9.2 Billion in Mexico -------------------------------------------------------------- Ford Motor Co. will invest $9.2 billion in Mexico to leverage its low operating costs in the country, Reuters reports, citing the Oakland Press. The investment could potentially create up to 150,000 jobs in the country over a six-year period. Ford Motor has been slashing jobs and planning plant closures in the United States in its effort to return its North American operations to profitability. The automaker faces rising costs and decling market share in the United States. Ford spokesman Oscar Suris said the Mexico investment news is "speculative" when asked by Reuters. Oakland Press said it got the information from a document given to it by an unnamed Ford employee. The newspaper added that a second source vouched for the authenticity of the information. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- is the world's third largest automobile manufacturer. The Company manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on June 12, 2006, Fitch downgraded long-term ratings for both Ford Motor Company and Ford Motor Credit Company with a Negative Rating Outlook, and assigned these Recovery Ratings: Ford: -- Issuer Default Rating to 'B+' from 'BB' -- Senior unsecured to 'BB-/RR3' from 'BB' FMCC: -- Issuer Default Rating to 'B+' from 'BB' Fitch also affirms FMCC's senior unsecured debt at 'BB/RR2'. As reported in the Troubled Company Reporter on May 31, 2006, Standard & Poor's Ratings Services placed its ratings on nine U.S. single-issue synthetic ABS transactions related to Ford Motor Co. (Ford; BB-/Watch Neg/B-2) and Ford Motor Credit Co. (Ford Credit; BB-/Watch Neg/B-2) on CreditWatch with negative implications. The May 25, 2006, placement of the ratings on Ford, Ford Credit, and all related entities on CreditWatch with negative implications does not have any immediate rating impact on the Ford-related ABS supported by collateral pools of consumer auto loans or auto wholesale loans. As reported in the Troubled Company Reporter on Jan. 13, 2006, Moody's Investors Service lowered its ratings on Ford Motor Company (Corporate Family and long-term to Ba3 from Ba1). The rating outlook for Ford Motor is negative. FORD MOTOR: Expects Up to 11,000 Workers to Accept Buyout Offers ---------------------------------------------------------------- Ford Motor Co. expects 10,000 to 11,000 of its hourly workers to accept early retirement and buyout offers by December, CNN Money reports. These hourly workers are members of the United Auto Workers union. Ford Motors, as like General Motors Corporation, is offering buyout packages, including a $100,000 severance payment and a tuition reimbursement program, as part of its move to cut labor costs and improve profitability. The Company also plans to close 14 plants by 2012 and retrench 30,000 blue-collar workers to turn. On June 1, around 4,900 workers have accepted buyouts, Ford spokeswoman Marcey Evans told CNN Money. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- is the world's third largest automobile manufacturer. The Company manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on June 12, 2006, Fitch downgraded long-term ratings for both Ford Motor Company and Ford Motor Credit Company with a Negative Rating Outlook, and assigned these Recovery Ratings: Ford: -- Issuer Default Rating to 'B+' from 'BB' -- Senior unsecured to 'BB-/RR3' from 'BB' FMCC: -- Issuer Default Rating to 'B+' from 'BB' Fitch also affirms FMCC's senior unsecured debt at 'BB/RR2'. As reported in the Troubled Company Reporter on May 31, 2006, Standard & Poor's Ratings Services placed its ratings on nine U.S. single-issue synthetic ABS transactions related to Ford Motor Co. (Ford; BB-/Watch Neg/B-2) and Ford Motor Credit Co. (Ford Credit; BB-/Watch Neg/B-2) on CreditWatch with negative implications. The May 25, 2006, placement of the ratings on Ford, Ford Credit, and all related entities on CreditWatch with negative implications does not have any immediate rating impact on the Ford-related ABS supported by collateral pools of consumer auto loans or auto wholesale loans. As reported in the Troubled Company Reporter on Jan. 13, 2006, Moody's Investors Service lowered its ratings on Ford Motor Company (Corporate Family and long-term to Ba3 from Ba1). The rating outlook for Ford Motor is negative. FOUNDATION COMMUNITY: Involuntary Chapter 11 Case Summary --------------------------------------------------------- Alleged Debtor: Foundation Community Medical Center 8500 South Figueroa Street Los Angeles, California 90003 Tel: (323) 564-7000 Case Number: 06-12661 Type of Business: The Debtor is a medical services provider. Its affiliate, Southwest Family Dental Office, previously filed for chapter 11 protection on June 5, 2006 (Bankr. C.D. Calif. Case No. 06- 12401). Involuntary Petition Date: June 19, 2006 Chapter: 11 Court: Central District Of California (Los Angeles) Judge: Samuel L. Bufford Petitioner's Counsel: Edgar L. Borne III, Esq. 6025 South Verdun Avenue Los Angeles, California 90043 Tel: (323) 295-9562 Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ 501(C)3 Outsourcing Oral Agreement $15,490 Foundation Inc. for Donation Gotha B. Green, V.P. Pledge 5424 South Crenshaw Boulevard Los Angeles, California 90043 GENELINK INC: Balance Sheet Upside-Down by $792,975 at March 31 --------------------------------------------------------------- GeneLink, Inc., reported a $229,491 net loss on $47,711 of revenues for the quarter ending March 31, 2006, the Company disclosed on Form 10-QSB filed with the U.S. Securities and Exchange Commission. As of March 31, 2006, the Company's balance sheet reported assets amounting to $461,292 and liabilities aggregating $1,254,267. The Company's equity deficit widened to $792,975 as of March 31, 2006, from a $612,603 deficit at Dec. 31, 2005. Going Concern Doubt Buckno, Lisicky & Company, the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's 2005 financial statements. Buckno Lisicky pointed to the Company's recurring losses from operations and net capital deficiency. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?bb9 GeneLink, Inc., is a bioscience company and was organized to offer to the public the safe collection and preservation of a family's DNA material for later use by the family to identify and potentially prevent inherited diseases. More recently the Company has created a breakthrough methodology for SNP (single nucleotide polymorphism)-based genetic profiling (patents issued and pending) and intends to market and out-license these proprietary assessments to companies that manufacture or market to the nutraceutical, personal care, skin care and weight-loss industries. GENERAL MOTORS: Moody's Rates Proposed $4.5 Bil. Facility at B2 --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. The downgrade of the unsecured rating concludes a review that was initiated on May 5th when GM announced the possibility of granting security to its bank lenders. The ratings of General Motors Acceptance Corporation, and Residential Capital Corporation are unaffected. The assignment of a B2 rating to the secured credit facility reflects Moody's view that the borrowing base provisions of the proposed facility, in combination with the assets upon which lenders will have a first priority lien, would afford secured bank lenders with materially improved asset protection and recovery prospects relative to unsecured lenders. Assets included in the security package include certain US receivables and inventory, certain Canadian receivables and inventory, certain Canadian property plant and equipment, and 65% of the shares of Controladora GM -- the parent company of GM's profitable Mexican operation General Motors de Mexico. The downgrade of the unsecured debt reflects the diminution in the asset coverage that would be available to this class of creditors as a result of the granting of security to certain bank lenders. Moody's notes that under the terms of the proposed amendment and extension, lenders who vote in favor of the amendment will receive security in exchange for extending the maturity of their commitment to 2011, while lenders not voting in favor of the amendment will retain the original maturity date of June, 2008 but will remain unsecured. The rating agency said that any unsecured tranches of the credit facility would be rated Caa1, equivalent with the company's other unsecured debt. The affirmation of GM's B3 corporate family rating reflects Moody's view that the granting of security to its bank lenders does not fundamentally alter the company's overall credit risk or expected loss profile. Rather, with expected loss representing the probability of default times the degree of loss experienced in the event of default, the granting of security represents a redistribution of the loss-given-default component among secured and unsecured lenders. Moody's plans to supplement its traditional assessment of expected loss with a proposed Loss-Given-Default Methodology for which a request for comment was circulated during January 2006. Research by Moody's suggests that the realized credit losses on loans have tended to be lower than losses on similarly rated bonds. Moody's research further suggests that the application of a rigorous estimation model for LGD could support a higher degree of up- notching for bank facilities than has been the case with Moody's traditional notching methodology which ascribes considerable importance to asset coverage. Upon the implementation of its LGD methodology, Moody's will adjust the ratings of GM's secured credit facility accordingly. GM's negative outlook reflects the considerable near-and-intermediate-term operating challenges the company continues to face. These include achieving a successful reorganization of Delphi, completing the sale of a majority interest in General Motors Acceptance Corporation, stemming its share loss in North America, and achieving a 2007 UAW contract that affords material relief from its current health care obligations and jobs bank program. Ensuring adequate liquidity is a critical element in GM's strategy for contending with these operational challenges. The company's sizable liquidity position of approximately $22 billion in cash and short-term VEBA could benefit from the $10 billion in up front proceeds from the GMAC sale and from establishing an accessible credit facility of up to $4.5 billion. "The recent extension of the GM-Delphi buyout program helps to lessen the likelihood of a strike at Delphi and is a modestly positive development on the operational side. Similarly, the company's ability to put an accessible credit facility in place would be a modest enhancement of its liquidity profile," said Bruce Clark, a senior vice president with Moody's. Despite these potentially positive developments, GM continues to face formidable intermediate-term challenges. "GM still has a long road ahead of it and there isn't much likelihood of positive movement in the rating until the company can stem its loss in market share, show that it can preserve the profitability of its new line of large trucks and SUVs, achieve a viable UAW contract in 2007, and get on track for generating positive free cash flow for 2007," Clark said. General Motors Corporation, headquartered in Detroit, Michigan, is the world's largest automotive manufacturer. GENERAL MOTORS: S&P Rates Proposed $4.48 Bil. Bank Facility at B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' bank loan rating to General Motors Corp.'s proposed $4.48 billion senior bank facility, expiring 2011, with a recovery rating of '1'. The bank loan is rated one notch higher than the corporate credit rating. This and the '1' recovery rating indicate that lenders can expect full recovery of principal in the event of a payment default. At the same time, Standard & Poor's lowered its senior unsecured debt rating on GM to 'B-' from 'B'. The downgrade of the unsecured debt stems from the pending secured bank transaction, which disadvantages the unsecured debt. All ratings on GM, including the 'B+' bank loan rating -- but excluding the '1' recovery rating -- are on CreditWatch with negative implications. The new secured facility provides the company with approximately the same size bank facility as its existing $5.6 billion facility, but with more certain access and a longer maturity. Unlike the previous unsecured facility, we would expect GM to borrow from time to time under the new revolving credit facility for operating needs. S&P estimates that the absolute recovery prospects for the unsecured creditors is in the mid-50% area. In addition, the disadvantage to the unsecured debtholders is reflected by priority claims to adjusted assets in the low 20% area. S&P expects GM's ratings to remain on CreditWatch for several more months. Court hearings on Delphi Corp.'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 been postponed also until Aug. 11. S&P expects negotiations between Delphi, the United Auto Workers, and GM to continue, however. Still, S&P 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. Although the proposed bank facility is considered an incremental positive for GM's liquidity, even prior to establishment of the new bank facility, S&P believes GM's liquidity should remain adequate to meet near-term funding requirements. RATINGS LIST General Motors Corp. Corporate credit rating B/Watch Neg/B-3 Rating Assigned $4.48 billion secured bank loan B+/Watch Neg Recovery rating 1 Rating Lowered To From Senior unsecured debt B-/Watch Neg B/Watch Neg Ratings Remaining On CreditWatch With Negative Implications Corporate credit rating B/Watch Neg Short-term rating B-3/Watch Neg GENERAL NUTRITION: Sales Recovery Prompts Moody's Stable Outlook ---------------------------------------------------------------- Moody's Investors Service improved the rating outlook of General Nutrition Centers, Inc to stable from negative, and affirmed all ratings. Revision of the rating outlook is prompted by the sales recovery since the middle of 2005 and the associated improvements in financial flexibility and debt protection measures. Moody's notes that the company has filed a registration statement for an initial public offering. These ratings were affirmed: * Senior secured bank loan at B1, * $150 million of 8.625% senior notes (2011) at B3, * $215 million of 8.5% senior subordinate notes (2010) at Caa1, and the * Corporate family rating of B2. GNC's corporate family rating of B2 balances certain qualitative aspects of the company's franchise that have low investment grade or high non-investment characteristics against its aggressive financial policy, weak credit metrics, and revenue vulnerability to new product introductions. The company's geographic diversification and the relative lack of cash flow seasonality have solidly investment grade scores, while the company's scale and the relative importance in the intensely competitive segment of vitamin, mineral, and nutritional supplement retailing have Ba scores. Weighting down the overall rating with B characteristics are the company's aggressive financial policy in which GNC is the indebted product of a leverage buyout and recently paid a preferred shareholder dividend and the credit metrics that have remained weak since the November 2003 leveraged buyout. Moody's also believes that the ongoing challenges in matching short-term consumer preferences also score at the B level. The stable rating outlook recognizes that the recent negative trends in sales and operating profit have turned positive, and that debt protection measures have started to progress to levels that are appropriate for a B rated credit. The outlook also considers Moody's expectation that the company's policy with respect to uses of discretionary cash flow will be measured, and a material portion will be applied to balance sheet improvement. A permanent decline in cash balances or revolving credit facility availability that would result if free cash flow fell below break- even, a return to declining store-level operating performance, or an aggressive financial policy action would cause the ratings to be lowered. Financial difficulties at a significant proportion of franchisees also would negatively impact the ratings. Specifically, an increase in debt to EBITDA towards 6.5 times, EBIT to interest expense falling below 1 time, or free cash flow to debt falling to break-even would cause ratings to be lowered. Ratings could eventually move upward if the company establishes a lengthier track record of sales stability and margin improvement, the system expands both from new store development and existing store performance, and if financial flexibility were to sustainably strengthen such that EBIT coverage of interest expense approaches 2 times, leverage falls toward 5 times, and Free Cash to Debt rises to exceeds 5%. General Nutrition Centers, Inc., with headquarters in Pittsburgh, Pennsylvania, retails vitamin, mineral, and nutritional supplement products domestically and internationally through about 5700 company-operated and franchised stores. Revenue for the four quarters ending March 31, 2006 was $1.4 billion. GENERAL NUTRITION: Parent's IPO Prompts S&P's Positive Watch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on General Nutrition Centers Inc., including the 'B' corporate credit rating, on CreditWatch with positive implications. The placement follows the S-1 filing with the SEC by parent company GNC Corp. for an IPO of up to $400 million of its common stock. Pittsburgh, Pennsylvania-based GNC intends to use about $100 million of the proceeds to redeem its Series A preferred stock, which is considered as debt for analytical purposes. "GNC has achieved improvement in its operating performance for the past two quarters, with solid increases in comparable-store sales and a recovery of profit margins," said Standard & Poor's credit analyst Ana Lai. As such, the completion of the IPO as planned, and a continued recovery in operating performance are expected to result in a meaningful improvement in GNC's credit measures. Total debt to EBITDA should decline to at least 5x, from about 6x for the 12 months ended March 31, 2006, depending on the use of the balance of the IPO proceeds. Standard & Poor's expects to resolve the CreditWatch listing once the IPO is completed and after meeting with management to evaluate the company's business and financial strategies and use of proceeds. GIARRIZZO LYONS: Chapter 7 Trustee to Auction Assets on June 28 --------------------------------------------------------------- R. Kenneth Barnard, the chapter 7 Trustee overseeing the liquidation of Giarrizzo Lyons Restaurant, Inc.'s case, will sell through David R. Maltz & Co., Inc., his proposed Auctioneers, the Debtor's interest in and to its personal assets, and to the Debtor's interest in the remainder of its lease property located at 1879-5 Route 112, Coram, in Long Island, New York. The auction will be conducted on the same location on June 28, 2006, at 2:00 p.m. All items are available for viewing at 1:00 p.m. on the day of sale. Interested buyers may contact: David R. Maltz & Co., Inc. 155 Terminal Drive Plainview, New York 11803 Tel: (516) 349-7022 Fax: (516) 349-0105 The Trustee has received an offer subject to any better offers tendered at the public auction sale in the amount of $75,000. The Trustee notes that the next acceptable bid must be equal to or greater than $90,000. All prospective buyers must make a $25,000 deposit in the form of check payable to Kenneth Barnard. Objections to the proposed sale must be filed no later than June 23, 2006, by 5:00 p.m., with: The Clerk of the U.S. Bankruptcy Court Eastern District of New York Long Island Courthouse 290 Federal Plaza Central Islip, NY 11722 The Hon. Stan Bernstein will convene an objection hearing on June 27, 2006, 9:30 a.m. Giarrizzo Lyons Restaurant, Inc., filed for chapter 7 liquidation on May 12, 2006 (Bankr. S.D.N.Y. Case No. 06-71038). Robert J Musso, Esq., at Rosenberg Musso & Weiner LLP, represents the Debtor. R. Kenneth Barnard, Esq., at LaMonica, Herbst & Maniscalco, LLP, serves as the chapter 7 Trustee for the Debtor's estate. GILMAN + CIOCIA: Files Amended 2005 Annual Financial Statements --------------------------------------------------------------- Gilman + Ciocia Inc., filed its amended annual statements for the fiscal year ended June 30, 2005, with the Securities and Exchange Commission on June 15, 2006. The Company reported a $1,825,576 net loss on $56,082,790 of total revenues for the year ended June 30, 2005. The Company's June 30, 2005 balance sheet showed $17,135,712 in total assets and $19,868,059 in total liabilities, resulting in a $2,732,347 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $5,752,959 in total current assets available to pay $19,585,635 in total current liabilities 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?b9d About Gilman + Ciocia Gilman + Ciocia, Inc. and subsidiaries, provides income tax preparation and financial planning services to individuals and businesses. The Company has six active wholly owned subsidiaries, Prime Capital Services, Inc. and North Ridge Securities, Inc., which are registered broker-dealers pursuant to the provisions of the Securities Exchange Act of 1934; Prime Financial Services, Inc. and North Shore Capital Management, Inc., which manage PCS and North Ridge, respectively, as well as sell life insurance and fixed annuities; Asset and Financial Planning, Ltd., an asset management business; and e1040.com, Inc., an internet tax preparation business. GOLF MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Golf Management Enterprises, Inc. dba Grand Marais Golf Course 4500 Pocket Road East Saint Louis, Illinois 62203 Bankruptcy Case No.: 06-30934 Type of Business: The Debtor operates a golf course. Chapter 11 Petition Date: June 19, 2006 Court: Southern District of Illinois (East St. Louis) Debtor's Counsel: Laura K. Grandy, Esq. Mathis Marifian Richter and Grandy Ltd. P.O. Box 307 Belleville, Illinois 62222-0307 Tel: (618) 234-9800 Fax: (618) 234-9786 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Barbara Taylor Trade Debts $657,000 14805 Grantley Drive Chesterfield, MO 63017 Joe Munie Outdoor Services Trade Debts $126,639 1000 Milburn School Road Caseyville, IL 62206 Illinois Department of Trade Debts $98,000 Natural Resources One Natural Resources Way Springfield, IL 62701 Internal Revenue Service Taxes $56,000 National City Bank Trade Debts $36,000 M & L Foods Inc. Trade Debts $12,000 FS Turf Solutions Trade Debts $10,566 Battery Specialists Trade Debts $9,753 Erb Equipment Trade Debts $9,370 Richmond North (Titleist) Trade Debts $6,600 Illinois Department of Taxes $6,600 Revenue Vogt Oil Trade Debts $4,017 Bel-O Trade Debts $2,376 Husch & Eppenberger Trade Debts $1,311 Mr. J's Ice Company Trade Debts $1,239 A-Age Electrical Trade Debts $800 Ecolab $706 Athletic World Advertising $330 Carl Weakley Trade Debts $320 Midwest Wholesale $257 GRANITE BROADCASTING: Harbinger Blocks Planned TV Station Sale -------------------------------------------------------------- Harbinger Capital Partners Master Fund I, Ltd. filed a lawsuit in the Court of Chancery of the State of Delaware in New Castle County, C.A. No. 2205-N, against Granite Broadcasting Corporation, DS Audible San Francisco, LLC and DS Audible Detroit, LC on June 7, 2006. Harbinger holds 12-3/4% of the Company's Cumulative Exchangeable Preferred Stock. Harbinger alleges that the proposed sales by the Company of TV Stations KBWB-TV and WDWB-TV to DS Audible pursuant to Asset Purchase Agreements dated as of May 1, 2006 constituted fraudulent conveyances under the New York Uniform Fraudulent Conveyance Act and the California and Michigan Uniform Fraudulent Transfer Acts, and seeking to have the Delaware Court enjoin the Sales, or if the Sales occurred, to rescind the Sales, as well as damages. Also on June 7, 2006, Harbinger filed a petition before the Federal Communications Commission asking the FCC not to consent to the transfer of FCC licenses relating to KBWB-TV and WDWB-TV pending resolution of the Delaware Suit. Granite says that the Delaware Suit is without merit and on June 13, 2006, filed a Motion to Dismiss and requested an expedited hearing. Additionally, the Company believes the Petition to Deny is without merit and that Harbinger lacks standing before the FCC, and on June 12, 2006 the Company filed an Opposition to Petition to Deny with the FCC. The Company intends to vigorously defend the Delaware Suit. While the Company believes that the Delaware Suit and the Petition to Deny are without merit, there can be no assurances that the closings under the Sale Agreements will occur by June 30, 2006, failing which the Company will be unable to make the $19.7 million interest payment on its 9-3/4% Senior Secured Notes due 2010 on or prior to June 30, 2006. The June 30 deadline is the end of the 30-day grace period for making the payment under the Indenture governing the Notes, unless other funds are made available to the Company by June 30, 2006. Bankruptcy Warning If the interest payment is not timely made, an "Event of Default" will have occurred under the Indenture governing the Notes which would permit the Trustee under the Indenture or holders of at least 25% of the aggregate principal amount of the Notes to accelerate the due date of the entire $405 million principal amount of the Notes. Following such an acceleration, the Trustee could foreclose on substantially all of the Company's and its subsidiaries' assets unless the Company and its subsidiaries file for bankruptcy under Chapter 11 of the Bankruptcy Code. About Granite Broadcasting Granite Broadcasting Corporation (OTCBB: GBTVK) owns and operates, or provides programming, sales and other services to 13 channels in the following 8 markets: San Francisco, California, Detroit, Michigan, Buffalo, New York, Fresno, California, Syracuse, New York, Fort Wayne, Indiana, Peoria, Illinois, and Duluth, Minnesota-Superior, Wisconsin. The Company's station group includes affiliates of the NBC, CBS, ABC, WB and UPN networks, and reaches approximately 6% of all U.S. television households. * * * Moody's Investors Service lowered Granite Broadcasting Corporation's corporate family rating to Caa2 from Caa1 and preferred stock rating to C from Ca following the company's announcement that it intends to market its two WB affiliate stations while AM Media Holdings LLC evaluates is interest in purchasing these assets in light of the likely loss of the WB affiliation when the network ceases operations in 2006. Additionally, Moody's affirmed the B3 rating on the company's senior secured notes. Moody's said the outlook remains negative. GREENMAN TECH: Common Stock Delisted in AMEX on June 14 ------------------------------------------------------- The American Stock Exchange delisted GreenMan Technologies, Inc.'s common stock after the close of trading on June 14, 2006. The Exchange will proceed with filing an application with the Securities and Exchange Commission to strike GreenMan's common stock from listing on the AMEX. The Exchange's Listing Qualifications Panel affirmed that GreenMan is not in compliance with AMEX's requirements for continued listing set forth in Section 1003(a)(ii) of AMEX's Company Guide, which requires a company to maintain stockholders' equity in excess of $4,000,000 if it has sustained losses from continuing operations and net losses in three out of its four most recent fiscal years. "While not pleased with the Panel's decision, we accept it and are proceeding with our efforts to ensure that GreenMan's common stock is quoted and eligible for trading on the Over-The-Counter Bulletin Board . . . as soon as practicable thereafter," Chuck Coppa, GreenMan's Chief Financial Officer, stated. "We will provide updates on a timely and continual basis to keep our shareholders informed and facilitate a smooth transition to our new exchange. "Our primary focus today remains the implementation of our previously discussed five-point action plan intended to ensure the future viability and profitability of GreenMan as well as maximize the value of our existing core operating assets," Lyle Jensen, GreenMan's Chief Executive Officer, stated. Financials As reported in the Troubled Company Reporter on June 6, 2006, the Company reported a $1,280,501 net loss on $3,911,225 of net sales for the second fiscal quarter of 2006. At March 31, 2006, the Company's balance sheet showed $9,582,964 in total assets and $20,955,961 in total liabilities, resulting in a $11,372,997 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $3,214,205 in total current assets available to pay $14,788,126 in total current liabilities coming due within the next 12 months. Going Concern Doubt As reported in the Troubled Company Reporter on June 6, 2006, Wolf & Company, PC, in Boston, Massachusetts, raised substantial doubt about GreenMan Technologies Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Sept. 30, 2005. The auditor pointed to the Company's losses from operations and working capital deficiency of $8,667,886 at September 30, 2005. About GreenMan GreenMan Technologies, Inc., markets scrap granular tires in the United States. The company's products are used as a tire-derived fuel used by pulp and paper producers. HILCORP ENERGY: S&P Rates $200 Million Senior Unsecured Notes at B ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on oil and gas exploration and production company Hilcorp Energy I L.P. to 'B+' from 'BB-', and affirmed its 'B' senior unsecured debt rating on the company. The outlook is stable. At the same time, Standard & Poor's assigned its 'B' rating to Hilcorp's $200 million senior unsecured notes due 2018. Houston, Texas-based Hilcorp had $373 million of balance sheet debt as of March 31, 2006. "The rating action in part reflects the financially leveraging effect of Hilcorp's recent acquisitions of oil and gas producing properties on the Texas and Louisiana Gulf Coast," said Standard & Poor's credit analyst Ben Tsocanos. The company will increase debt considerably in order to fund the purchase prices, which reflect current high valuations for reserves. "Although the properties fit well within Hilcorp's operational and geographic focus, the high acquisition prices contribute to the company's rising cost structure," said Mr. Tsocanos. "Historically, Hilcorp was able to buy depleted properties at relatively low prices, somewhat mitigating the cost required for enhancement and operation." Standard & Poor's also said that the stable outlook on Hilcorp reflects the expectation that the company will manage its high financial leverage incurred to make acquisitions, and will limit cost increases. HOLLINGER INC: Wants to Sue Former Directors to Recover Payments ---------------------------------------------------------------- Hollinger Inc.'s board of directors is asking Ontario Superior Court Judge Colin Campbell to remove part of a severance agreement that protects the former directors from lawsuits. The Company wants to sue the former directors to recover the payments. The Court approved a $538,744 severance agreement that the Company inked with its former Chairman Gordon Walker and three other ex- directors in July 2005. These executives resigned after shareholders complained that they were billing the company at rates equal to C$1.5 million a year. About Hollinger Inc. Hollinger Inc.'s -- http://www.hollingerinc.com/-- principal asset is its 66.8% voting and 17.4% equity interest in Hollinger International, a newspaper publisher with assets, which include the Chicago Sun-Times and a large number of community newspapers in the Chicago area. Hollinger also owns a portfolio of commercial real estate in Canada. Delinquent Financial Statements Hollinger Inc. has been unable to file its annual financial statements, Management's Discussion & Analysis and Annual Information Form for the years ended Dec. 31, 2003, 2004 and 2005 on a timely basis as required by Canadian securities legislation. In addition, Hollinger has not filed its interim financial statements for the fiscal quarters ended March 31, June 30 and September 30 in each of its 2004 and 2005 fiscal years. The Company says that its Audit Committee is working with the auditors, and discussing with regulators, various alternatives to return its financial reporting requirements to current status. Ravelston Receivership and CCAA Proceedings On April 20, 2005, the Court issued two orders by which The Ravelston Corporation Limited and Ravelston Management Inc. were: (i) placed in receivership pursuant to the Bankruptcy & Insolvency Act (Canada) and the Courts of Justice Act (Ontario); and (ii) granted protection pursuant to the Companies' Creditors Arrangement Act (Canada). Pursuant thereto, RSM Richter Inc. was appointed receiver and manager of all of the property, assets and undertakings of Ravelston and RMI. Ravelston holds 16.5% of the outstanding Retractable Common Shares of Hollinger. On May 18, 2005, the Court further ordered that the Receivership Order and the CCAA Order be extended to include Argus Corporation Limited and its five subsidiary companies, which collectively own, directly or indirectly, 61.8% of the outstanding Retractable Common Shares and 4% of the Series II Preference Shares of Hollinger. On June 12, 2006, the Court appointed Richter as receiver and manager and interim receiver of all the property, assets and undertaking of Argent News Inc., a wholly owned subsidiary of Ravelston. The Ravelston Entities own, in aggregate, 78% of the outstanding Retractable Common Shares and 4% of the Series II Preference Shares of Hollinger. The Court has extended the stay of proceedings against the Ravelston Entities to Sept. 29, 2006. As reported in the Troubled Company Reporter on Apr. 25, 2005, Hollinger is in default under the terms of the indentures governing Hollinger's US$78 million principal amount of 11.875% Senior Secured Notes due 2011 and US$15 million 11.875% Second Priority Secured Notes due 2011 due to Ontario Superior Court of Justice's appointment of RSM Richter as receiver of all of the Ravelston Entities' assets (except for certain shares held directly or indirectly by them, including shares of Hollinger Inc. and RMI). Litigation Risks Hollinger, Inc., faces various court cases and investigations: (1) a consolidated class action complaint filed in Chicago, Illinois; (2) a class action lawsuit that was filed in the Saskatchewan Court of Queen's Bench on September 7, 2004; (3) a US$425,000,000 fraud and damage suit filed in the State of Illinois by International; (4) a lawsuit seeking enforcement of a November 15, 2003, restructuring proposal to uphold a Shareholders' Rights Plan, a declaration that corporate by-laws were invalid and to prevent the closing of a certain transaction; (5) a lawsuit filed by International seeking injunctive relief for the return of documents of which it claims ownership; (6) a US$5,000,000 damage action commenced by a lessor of an aircraft lease, in which Hollinger was the guarantor; (7) an action commenced by the United States Securities and Exchange Commission on November 15, 2004, seeking injunctive, monetary and other equitable relief; and (8) investigation by the enforcement division of the OSC. HOMELAND SECURITY: Balance Sheet Upside-Down by $1.9M at March 31 ----------------------------------------------------------------- Homeland Security Network, Inc., reported a $251,776 net loss on $3,641 in revenues in the quarter ending March 31, 2006, the Company disclosed in a Form 10-QSB filed with the Securities and Exchange Commission. As of March 31, 2006, the Company reported assets amounting to $930,469. The Company's equity deficit widened to $1,918,596 at March 31, 2006, from a $1,691,820 deficit at Dec. 31, 2005. Going Concert Doubt The Company's auditor, BKR Cornwell Jackson, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's 2005 financial statements. BKR Cornwell pointed to the Company's losses from operations, negative cash flows from operations, and shareholders' deficit. Credit Facility Default In November 2003, the Company executed a revolving credit facility in the amount of $10,000,000 with a financial institution that bore interest at a rate of prime plus 2% and matured in November 2004. The purpose of the credit facility was to provide funding for the purchase of automobile finance installment contracts for sale to banks and credit unions. The outstanding balance totaling $166,085 at December 31, 2005 is in default. The line of credit is collateralized by automobile finance installment contracts approximating $44,608. However, the Company is presently negotiating revised payment terms with the lender. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?bb2 Homeland Security Network, Inc., provides technology products and services for tracking and recovering valuable mobile assets. INDUSTRIAL ENTERPRISES: Buys Regional Auto Products Manufacturer ---------------------------------------------------------------- Industrial Enterprises of America, Inc. (OTCBB:IEAM) signed a Letter of Intent to acquire a well-established automotive aftermarket filler and supplier. The acquisition target is a profitable specialty blender, packager and distributor of motor and lube oils and related automotive aftermarket products based in the Southeastern United States. The acquisition is anticipated to close within 60 days and will effectively double company's geographical presence in an adjoining market to those presently serviced by existing operations. John Mazzuto, Chief Executive Officer of Industrial Enterprises of America, stated, "This acquisition allows us to enter the Southeast market immediately and leverage our existing infrastructure while providing additional capacity for future growth. Upon closing, this acquisition will significantly increase the regional scope of our private label manufacturing, oil packaging and shipping operations. Based on the sales results of the first 90 days of the combination of the Pitt Penn and Unifide sales forces, we will need the additional capacity within the next 12 months. This regional combination will immediately increase our manufacturing capacity, national distribution, and purchasing power while growing revenues and net income by at least 20 percent during our 2007 Fiscal Year, which begins on July 1, 2006. The funds for the acquisition will come from our existing resources without increasing the number of fully diluted shares." Headquartered in New York, Industrial Enterprises of America, Inc., is an automotive aftermarket supplier that specializes in the sale of anti-freeze, auto fluids, and other automotive additives & chemicals. The company has distinct proprietary brands that collectively serve the retail, professional, and discount automotive aftermarket channels. Going Concern Doubt Beckstead and Watts, LLP, in Henderson, Nevada, raised substantial doubt about Industrial Enterprises' 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 net losses from its inception, and its limited operations, since the Company has not commenced planned principal operations. INNOVATIVE COMM: Inks Settlement with Greenlight & Rural Telephone ------------------------------------------------------------------ Innovative Communication Company, LLC, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve a settlement agreement it entered into with Greenlight Capital Qualified, L.P., and certain of Greenlight Capital's affiliates and Rural Telephone Finance Cooperative under seal. Judge Judith K. Fitzgerald approved a stipulation entered into by the parties modifying the automatic stay to pave the way for implementing the settlement terms. The Court has not yet approved the settlement. The Debtors have been at odds with Greenlight Capital Qualified, Greenlight Capital, L.P., and Greenlight Capital Offshore, Ltd., over the involuntary chapter 11 petitions filed by Greenlight Capital against them. Still pending before the Court are the Debtors' request to: * change the bankruptcy venue to U.S. District for the District of Virgin Islands; * have the Greenlight Capital Entities issue a bond; and * have the Court dismiss their cases. Earlier this year, Greenlight Capital LLC won a $130 million award in a Delaware securities suit. Rural Telephone asserted in March 2005 that Innovative Communication defaulted on its loan. Rural Telephone is a consolidated affiliate of National Rural Utilities Cooperative Finance Corporation. As reported in the Troubled Company Reporter on March 31, 2005, Innovative Communication was required to pay $10,034,876 for a maturing secured line of credit, including accrued interest, to Rural Telephone. Innovative Communication paid $34,876 representing the accrued interest due. On March 22, 2005, Rural Telephone notified Innovative Communication in writing that an event of default had occurred as a result the non-payment of the $10,000,000 due on its maturing secured line of credit. Innovative Communication's asserted then that it was not in default with its obligations. Jeffrey J. Prosser, chairman, president and CEO of Innovative Communication, said. "These claims are false and misleading and are the newest links in the Rural Telephone's chain of predatory conduct for which we have sued the Rural Telephone." Innovative Communication believed that Rural Telephone's management has spearheaded an aggressive litigation and public disinformation campaign against ICC fueled by false information in response to Innovative Communication recent investigation into potentially improper accounting practices and the potential concealment of tens of millions of dollars of profits. Rural Telephone once threatened to seize the equity Virgin Islands Telephone Co., one of Innovative Communication's subsidiary but was not included in Greenlight Capital's petitions. A group of investors holding preferred shares in Vitelco also filed suit to accelerate $74 million in payments, because of alleged violations by Vitelco, the Deal reports. About Innovative Communication Innovative Communication Company, LLC, is a diversified, telecommunications and media company with extensive holdings throughout the Caribbean basin. The company's operations are in Belize, British Virgin Islands, Guadeloupe, Martinique, Saint-Martin, Sint Maarten, U.S. Virgin Islands and France and include local, long distance and cellular telephone companies, Internet access providers, cable television companies, business systems, and The Virgin Islands Daily News, a Pulitzer Prize- winning newspaper. Management offices are in West Palm Beach, Florida and headquarters are in Christiansted, St. Croix, U.S. Virgin Islands. With more than 1,200 employees, ICC is one of the largest private employers in Belize and the second largest in the U.S. Virgin Islands. Creditors Greenlight Capital Qualified, L.P., Greenlight Capital, L.P., and Greenlight Capital Offshore, Ltd., holding a $18,780,614 claim against the Company filed an involuntary chapter 11 petition against Innovative Communication, Emerging Communications, Inc., the Company's subsidiary and Jeffrey J. Prosser, the Company's principal, on February 10, 2006 (Bankr. Del. Case Nos. 06-10133 to 06-10135). Gregg M. Galardi, Esq., and Thomas J. Allingham II, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the petitioners. INTELSAT LTD: Gets FCC's Approval on PanAmSat Holding Merger ------------------------------------------------------------ The Federal Communications Commission approved the merger of Intelsat Holdings, Ltd., with PanAmSat Holding Corporation. Upon completion of the transaction, PanAmSat will become an indirect wholly owned subsidiary of Intelsat. Post-merger, PanAmSat and its subsidiaries will continue as separate corporate entities. The transaction involves the transfer of control, to Intelsat, of Commission-issued licenses and authorizations held by PanAmSat Licensee Corp. and PanAmSat H-2 Licensee Corp., two subsidiaries of PanAmSat. The two licensees are authorized to operate non-common carrier Fixed-Satellite Service (FSS) satellites using the C- and Ku-bands, as well as numerous non- common carrier earth stations that transmit and/or receive signals in those frequency bands. Intelsat is an FSS operator that owns and operates a global satellite system providing end-to-end network services to telecommunications operators, corporate network integrators, governments, Internet service providers, and broadcasters around the world. Intelsat primarily serves the voice, data, and interconnectivity requirements of telecommunications and government customers. PanAmSat is an FSS provider that serves the video market in North America and Latin America and provides satellite services elsewhere in the world. The transaction was unopposed. The Commission conditioned its approval on Intelsat's compliance with certain national security and law enforcement commitments and undertakings Intelsat made to the U.S. Department of Justice, including the Federal Bureau of Investigation, and the U.S. Department of Homeland Security. About PanAmSat Through its owned and operated fleet of 25 satellites, PanAmSat Holding Corp. (NYSE: PA) -- http://www.panamsat.com/-- is a leading global provider of video, broadcasting and network distribution and delivery services. It transmits 1,991 television channels worldwide and, as such, is the leading carrier of standard and high-definition signals. In total, the Company's in- orbit fleet is capable of reaching over 98 percent of the world's population through cable television systems, broadcast affiliates, direct-to-home operators, Internet service providers and telecommunications companies. In addition, PanAmSat supports satellite-based business networks in the U.S., as well as specialized communications services in remote areas throughout the world. About Intelsat Intelsat, Ltd. - http://www.intelsat.com/-- offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat's global satellite, teleport and fiber network for high- quality connections, global reach and reliability. * * * As reported in the Troubled Company Reporter on June 19, 2006, Fitch upgraded the Issuer Default Rating for Intelsat to 'B' from 'B-' pro forma for its pending acquisition of PanAmSat. The ratings were also removed from Rating Watch Negative, where they had originally been placed on Aug. 30, 2005. Fitch said the Rating Outlook is Stable. As reported in the Troubled Company Reporter on June 13, 2006, Moody's Investors Service affirmed the B2 corporate family rating of Intelsat, Ltd., and downgraded the corporate family rating of PanAmSat Corporation to B2, given the greater clarity regarding the final capital structure and the near-term completion of the PanAmSat acquisition by Intelsat. INTERTAPE POLYMER: Targets $5.7 Million on Annual Cost Savings -------------------------------------------------------------- Intertape Polymer Group Inc. disclosed that as part of its ongoing operational review it will implement a number of initiatives which combined will result in approximately $5.7 million pre tax annual cost savings commencing in the second quarter of this year, with full annual realization expected by the first quarter of 2007. The initiatives to achieve these savings along with other items will result in approximately $17.6 million of pre tax charges. Intertape anticipates these charges will be recorded in the quarter ending June 30, 2006. The cost savings and charges will include: Annual cost savings of $4.3 million are expected from reductions in selling, general and administrative expenses and the termination of an operating lease. One time charges related to these initiatives include $5.3 million for severance costs and related expenses associated with reduced staffing requirements and an estimated charge of $2.8 million arising from the early termination of an aircraft operating lease. The Company is implementing changes to the manner in which it handles packaging, sales and delivery of products to retail customers in its consumer business and will close its repackaging facility in Gretna, Virginia. These changes are expected to yield annual savings of approximately $0.5 million while improving overall service levels. As a consequence, there will be a one time charge of $2.1 million related to the Gretna facility closure, including the supporting information technology assets. As a result of improved manufacturing efficiencies achieved through plant consolidations, ongoing productivity improvements and the implementation of an improved sourcing strategy, the Company is retiring unnecessary capacity primarily related to the production of carton sealing tape. IPG will incur a one-time charge of $4.9 million related to the write-off of certain manufacturing equipment in connection with these improvements and, correspondingly, depreciation expense will be reduced by approximately $0.7 million per year. During the last several weeks, the Company has entered into agreements to sell two previously closed facilities in Edmunston, New Brunswick, and Green Bay, Wisconsin. These sales are anticipated to close during the next forty-five days and will generate cash of $2.6 million and are expected to result in reduced facility maintenance expenses of $0.2 million annually. The sales will result in a charge of $1.0 million to reduce the carrying value of these facilities to their realizable values. IPG will also record a charge of $1.5 million for the cost of additional remediation expenses at its Montreal manufacturing facility that was closed at the end of 2004. At that time, the Company estimated that the cost of environmental remediation at the facility would be approximately $0.5 million. Remediation activities commenced in April 2006. The Company was recently notified that excavation activities had uncovered additional environmental contamination requiring remediation in excess of the original estimate. The Company expects that the additional $1.5 million will fully cover the cost of the remediation. "The total savings related to these initiatives are approximately $5.7 million on an annualized basis. The Company continues to carefully review all of its costs and to take steps to improve operating asset utilization," stated H. Dale McSween, Interim Chief Executive Officer. The one time charges discussed above, when combined with the charges of $13.2 million previously announced on May 9 and May 24 of this year, are comprised of approximately $21.8 million in cash charges and $9.0 million in non-cash charges. The majority of the cash related charges are payable over the next six quarters. "We do not expect the near term cash requirements associated with the one-time charges to have a material impact on the Company's liquidity," noted IPG's Chief Financial Officer, Andrew M. Archibald, C.A. Intertape Polymer Group (NYSE:, TSX: ITP) is a recognized leader in the development and manufacture of specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. Headquartered in Montreal, Quebec and Sarasota/Bradenton, Florida, the Company employs approximately 2,600 employees with operations in 16 locations, including 12 manufacturing facilities in North America and one in Europe. * * * Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to St. Laurent, Quebec-based Intertape Polymer Group Inc. in July 2004. At the same time, Standard & Poor's assigned its 'B+' bank loan rating and a recovery rating of '2' to the company's proposed $250 million senior secured credit facilities based on preliminary terms and conditions. The 'B+' rating and the '2' recovery rating indicated an expectation of substantial (80%-100%) recovery of principal in the event of a default. INTREPID LIGHTING: Auctions Machinery & Other Assets on June 28 --------------------------------------------------------------- Robert L. Pryor, Esq., the Chapter 7 Trustee of Intrepid Lighting Manufacturing Inc. and its debtor-affiliates, will sell the Debtors' CNC metal fabricating machinery, U.S. patents and production drawings in an auction at 11:00 a.m. on June 28, 2006, to be held at 130 Hoffman Lane, Hauppauge in Long Island, New York. Inspection of the items for sale will be at 9:00 a.m. on the morning of sale. Assets for sale include: 1. punch presses; 2. press brakes; 3. miscellaneous machinery; 4. welding machines; 5. warehouse equipment; and 6. office furniture. A 25% deposit in cash or certified check is required on knockdown of bid. David R. Maltz & Co., Inc., will facilitate the auction. The auctioneer can be contacted at: David R. Maltz & Co., Inc. Attn: David R. Maltz Tel: (516) 349-7022 Fax: (516) 349-0105 E-mail: http://maltzauctions.com Intrepid Lighting Manufacturing Inc. and its debtor-affiliates filed for chapter 7 liquidation proceeding on Jan. 10, 2003 (Bankr. E.D.N.Y. Cases No. 03-80164 to 03-80478). Robert L. Pryor, Esq., is the Chapter 7 Trustee of the Debtors. IWORLD PROJECTS: Former CEO Files Involuntary Chapter 7 v. Company ------------------------------------------------------------------ iWorld Projects & Systems, Inc. (Pink Sheets:IWPS) disclosed that an Involuntary Bankruptcy petition was filed against the Corporation in U.S. Bankruptcy Court in the Middle District of Florida on June 14, 2006, by Robert Hipple, former CEO of the Corporation. The petition was filed under Chapter 7 of the Bankruptcy Code. In the filing, Mr. Hipple represented himself and iTrust Financial, Inc. of Cocoa, Florida, and claimed amounts owed by the Corporation of $47,9252 to Mr. Hipple and $58,404 to iTrust Financial, Inc., a company owned by Mr. Hipple. iWorld is currently evaluating the effect of this event on the Company, including impact on the Company's current financial condition, future capital requirements, turnaround plans and survival. The Company plans to dispute the bankruptcy petition and the amounts claimed to be owed to both parties. According to iWorld President, David Pells, "We were not only surprised by this action but also dismayed. In recent weeks, efforts have been underway to restructure the company and turn it around. We had no warning that Mr. Hipple planned to take this action. His motive is suspect, to say the least, and we can only speculate why he has taken this action without discussing it with the current management and Board. We certainly plan to dispute the filing in Florida." iWorld Projects & Systems, Inc. is a Business Development Company registered in the USA under the Investment Company Act of 1940 and also a reporting company for SEC purposes under the Securities Exchange Act of 1934. As a BDC, the Company is engaged in the business of investing in and assisting small public and private operating companies with a focus on project management. In its Form 10-Q filing for the quarter ended Sept. 30, 2005, the Company reported total assets of $10,634,330 and total liabilities of $985,998. J. CREW: Planned IPO Prompts Moody's to Review B2 Ratings --------------------------------------------------------- Moody's Investors Service placed the ratings of J. Crew Operating Corp. on review for possible upgrade following the company's launch of a planned initial public offering. The company intends to use the proceeds from the initial public offering to deleverage its balance sheet. These ratings were placed on review for possible upgrade: * Corporate family rating of B2; * $285 million senior secured term loan due 2013 of B2. Moody's noted that the company has announced its intention to redeem all of its Series A and Series B preferred stock with the proceeds from its initial public offering. The terms of the redeemable preferred stock are onerous and created a debt heavy capital structure and an arduous interest burden for J. Crew. The redemption of the preferred stock will result in a significantly stronger balance sheet and credit metrics. Moody's review will focus on the success of the planned initial public offering and the pro forma credit metrics as a result of the subsequent deleveraging of the company's balance sheet. In addition, the review will focus on the company's prospects for continued improvement in operating performance. Ratings could possibly move upward by two notches should pro forma for the transaction, as calculated using Moody's standard analytical adjustments, Debt/EBITDA fall below 5 times, EBITA/IE climb above 2 times, and RCF/Net Debt rise above 14%. The review is expected to conclude in the middle of July upon the funding of the IPO and the conclusion of the redemption of the preferred stock. J. Crew Operating Corp., headquartered in New York, NY, is a multi-channel apparel retailer who operates 165 retail stores, 46 factory outlet stores, a catalogue, and website under the name J. Crew. Revenues for fiscal year ended January 28, 2006 were approximately $953 million. JOURNAL REGISTER: S&P Places BB Corp. Credit Rating on Neg. Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Journal Register Co., including the 'BB' corporate credit rating, on CreditWatch with negative implications. This Trenton, New Jersey- headquartered newspaper publisher had about $750 million of debt outstanding at March 2006. "The CreditWatch listing reflects Journal Register's continued soft revenue performance at a time when the company's financial profile is weak for the ratings," said Standard & Poor's credit analyst Donald Wong. Advertising revenues for the first five months of 2006 declined 2.3%, primarily reflecting weakness in the company's Greater Cleveland and Michigan operations. Circulation revenues were down 2.2% for the 2006 first quarter. Debt to EBITDA was in the high- 5x area for the 12 months ended March 2006. This measure is adjusted for operating leases and debt-like unfunded pension and other post-employment benefit obligations. Standard & Poor's will review its ratings on Journal Register following an evaluation of the company's operating and financial strategies. If Standard & Poor's lowers Journal Register's ratings, it is expected to be limited to one notch. KAYDON CORP: Moody's Holds Ba3 Rating on $200 Mil. Sr. Sub. Notes ----------------------------------------------------------------- Moody's Investors Service affirmed the corporate family rating of Kaydon Corporation and the rating on the $200 million 4% contingent convertible senior subordinated notes due 2023. The rating outlook was changed to positive from stable. Ratings Affirmed: * Ba2 for the corporate family rating; * Ba3 for the $200 million 4% contingent convertible senior subordinated notes due 2023. Outlook action: * Ratings outlook has been changed to positive from stable. Moody's does not rate the Company's $300 million unsecured senior revolving credit facility, due 2010 The rating action reflects: (1) Kaydon's strong, niche market positions that generate above-average contribution margins; (2) the diversity of the end-markets into which the Company's products are sold; and (3) management's conservative financial policies and disciplined acquisition strategy. The ratings also reflect: (1) the Company's small scale, (2) its historic earnings volatility due to its exposure to demand cyclicality in many of its end-markets, (3) the relative level of the Company's free cash flow generation, after dividends and capital expenditures, which, though consistently positive, is modest for the rating category and (4) the possibility that the Company utilizes its significant liquidity and debt capacity to opportunistically pursue a large, debt-financed acquisition strategy. The rating outlook change to positive from stable reflects Moody's expectation of a continued strong market demand for the Company's products and the Company's current strong liquidity. Kaydon's operating cash flow coupled with its sizeable cash position provide ample liquidity to pursue a acquisition program consistent with management's disclosed parameters. Moody's previous rating action on Kaydon was the assignment of the Ba2 corporate family rating in August 2003. Kaydon is a diversified designer and manufacturer of engineered products that are used as components in products serving a wide variety of end-markets. Its principle products include specialty bearings, filter elements, media and filtration systems, linear deceleration products, performance seals and other critical performance products that are used in a wide variety of medical, instrumentation, material handling, aerospace, defense and other industrial applications. Revenues for the twelve months ended March 31, 2006 totaled approximately $371 million. KMART CORP: Max Rudmann Wants Court to Enforce Settlement Pacts --------------------------------------------------------------- In 2004, John Miceli and Juan Reyes entered into separate settlement agreements with Kmart Corporation resolving their claims for employment discrimination and violations of the Federal Medical Leave Act. The U.S. Bankruptcy Court for the Northern District of Illinois signed the agreed orders approving the settlement agreements. Messrs. Miceli and Reyes' counsel, Max Rudmann, Esq., in Boca Raton, Florida, tells the Court that each agreement was based on the understanding that settlement checks would be sent to him on May 6, 2006. However, payments were issued directly to Messrs. Miceli and Reyes on May 13, 2006, in direct violation of Illinois Supreme Court Rules of Professional Conduct 4.2. Rule 4.2 states that during the course of representing a client, a lawyer will not communicate or cause another to communicate on the subject of the representation with a party the lawyer knows to be represented by another lawyer in that matter unless the first lawyer has obtained the prior consent of the lawyer representing the other party, or as may otherwise be authorized by law. Kmart also did not follow customary practice which dictates that settlement payments be issued in the client's and attorney's names and sent to the attorney for deposit in a client trust account to be distributed in accord with the retainer contract between the Attorney and Client, Mr. Rudmann complains. The agreements incorporate the provision that Kmart and its counsel would abide by Rule 4.2, and customary practice regarding payment of settlements. Despite Kmart awareness of Mr. Rudmann's representation, Kmart breached the agreements. Accordingly, Mr. Rudmann asks the Court to enforce the settlement agreements and: (1) direct Kmart to: * stop payment on the checks issued to Messrs. Miceli and Reyes; and * re-issue the checks -- this time properly addressed to him and Messrs. Miceli and Reyes; (2) issue sanctions against Kmart's counsel for violations of the Rules of Professional Conduct; and (3) award him attorney's fees and costs. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 112; Bankruptcy Creditors' Service, Inc., 215/945-7000) LASERSIGHT INC: Has Until July 31 to Fix Looming GECC Default ------------------------------------------------------------- LaserSight Inc. received notice from General Electric Capital Corporation on June 7, 2006, informing the Company of defaults under the Third Amended and Restated Secured Term Note dated June 30, 2004, made by the Company in the original principal amount of $2,149,249.23. The Company signed the three-year Note on August 30, 2004, the Note bears interest at the rate of nine percent (9%), and it is secured by all of the Company's assets. According to GECC, LaserSight is in violation of covenants in the Note that require the Company: -- not to allow its net revenue, as determined in accordance with GAAP, to fall below $1,000,000 for any calendar quarter; and -- not to allow its EBITDA for any trailing 12-month period, measured as of the last day of any calendar quarter, to fall below $840,000. The Company's net revenue for the calendar quarter ended March 31, 2006, was $616,093.30, and its EBITDA for the trailing 12-month period ended March 31, 2006, was $411,639.73. In the Notice, GE advised the Company that, if not waived by GE within ten days, the specified defaults would become "Events of Default" under the Note, which would allow GE to accelerate the amounts due under the Note. The amount that would be due currently is approximately $629,434, consisting of $476,077 of principal and $153,357 of fees. GE also presented the Company a proposed Forbearance Agreement pursuant to which GE would forbear from exercising its rights and remedies under the Note with respect to the specified defaults until the earlier of (i) June 30, 2006, or (ii) the occurrence or existence of Events of Default under the Note other than the specified defaults. Under that agreement, the Company would be required to pay immediately a fee of $10,000, and an additional $10,000 would be added to the indebtedness under the Note. On June 13, 2006, GE agreed to waive the defaults without any additional charge to the Company and to extend until July 31, 2006, the date on which the specified defaults will become "Events of Default" under the Note. The Company intends to pursue alternative financing arrangements during this waiver period. Headquartered in Winter Park, Florida, LaserSight Inc. -- http://www.lase.com/-- is principally engaged in the manufacture and supply of narrow beam scanning excimer laser systems, topography-based diagnostic workstations, and other related products used to perform procedures that correct common refractive vision disorders such as nearsightedness, farsightedness and astigmatism. Since 1994, it has marketed it laser systems commercially in over 30 countries worldwide. It is currently focused on selling in selected international markets; primarily China. On Sept. 5, 2003, LaserSight filed for bankruptcy protection under chapter 11 of the Bankruptcy Code and operated in this manner from Sept. 5, 2003 through June 10, 2004, when the re- organization was approved by the U.S. Bankruptcy Court for the Middle District of Florida. Going Concern Doubt As reported in the Troubled Company Reporter on May 5, 2006, Moore Stephens Lovelace, PA, expressed substantial doubt about LaserSight Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005, 2004 and 2003. The auditing firm pointed to the Company's substantial losses since its inception, and negative working capital at Dec. 31, 2005. LEINER HEALTH: Poor Performance Prompts S&P to Downgrade Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and other ratings on store brand vitamin manufacturer Leiner Health Products Inc. to 'B-' from 'B'. The outlook is revised to stable from negative. Leiner had about $403 million of total debt outstanding at March 25, 2006. "The downgrade reflects financial performance below our expectations in fiscal 2006," said Standard & Poor's credit analyst Alison Sullivan. Results were tempered by lower sales of higher-margin vitamin E and naproxen because of: * negative publicity; * lack of new branded product introductions; and * a reduction in Canadian sales because of a significant over-the-counter supplier in Canada choosing to supply retail customers directly on selected items. As a result, Leiner's lease-adjusted total debt to EBITDA ratio remained substantially above 6.5x in fiscal 2006, at a level no longer appropriate to maintain the 'B' rating. Standard & Poor's believes Leiner will continue to be challenged to meaningfully reduce leverage given challenging industry conditions. The ratings on Leiner Health Products Inc. reflect: * the company's leveraged capital structure; * its customer concentration; * its lack of pricing flexibility in the highly competitive private-label vitamin market; and * the segment's vulnerability to adverse publicity. Leiner is the largest U.S. private-label vitamins, minerals, and supplements manufacturer, a sector that accounts for about 61% of company sales, with the remainder coming from OTC drugs and contract manufacturing. The company's products are mainly sold under store brand labels through mass merchandisers, grocery and supermarket chains, drug stores, and warehouse clubs. The company also markets its own brands, including the Your Life trademark, although private-label products are growing more quickly than their branded counterparts at many retailers. Leiner's September 2005 acquisition of private-label OTC product manufacturer Pharmaceutical Formulations Inc. is expected to expand its pain management category and add to its contract manufacturing business. LIBERTY MEDIA: FTC Grants 4% Stake in Time Warner Voting Rights --------------------------------------------------------------- The Federal Trade Commission approved a February 2006 request by Liberty Media Corporation to reopen and set aside FTC's final order prohibiting Liberty from holding any ownership interest in Time Warner, Inc., that is entitled to exercise voting power, with certain limited exceptions. In its request, Liberty stated that while the order is set to expire in less than a year, continuation of the order during that time -- particularly its restrictions on Liberty's ownership of voting stock in Time Warner -- "has the potential to significantly disrupt the efficient operations of securities markets." Liberty also asserted that it has not had any ownership interest in any U.S. cable system since 2001, nor has it any intention of acquiring such interests. Liberty argued that these changed circumstances mean that there is no continuing public interest served by the maintenance of the order provisions relating to Liberty, and that those provisions should therefore be set aside. Liberty's 4% stake in Time Warner now has voting rights and may use that voice as negotiating point in its move to buy Atlanta Braves from Time Warner. About Liberty Media Based in Englewood, Colorado, Liberty Media Corporation (NASDAQ: LINTA, LCAPA) -- http://www.libertymedia.com/-- owns a broad range of electronic retailing, media, communications and entertainment businesses and investments. Its businesses include some of the world's most recognized and respected brands and companies, including QVC, Encore, Starz, IAC/InterActiveCorp, Expedia and News Corporation. The company was a subsidiary of AT&T, which had acquired former parent Tele-Communications, Inc., in 1999. In 2001 AT&T spun off Liberty Media as part of the phone giant's plan to split its empire into several companies. Liberty Media completed a spin off of its own in 2004 by separating its international assets into a new company. The firm is chaired by former TCI head John Malone. * * * As reported in the Troubled Company Reporter on May 23, 2006, Moody's Investors Service downgraded Liberty Media Corporation's corporate family and senior unsecured long term debt ratings to Ba2 from Ba1 concluding the review for downgrade initiated on March 31, 2006. The outlook is stable. As reported in the Troubled Company Reporter on May 22, 2006, Standard & Poor's Ratings Services held its ratings, including the 'BB+' corporate credit rating, on Englewood, Colorado-based Liberty Media Corp. on CreditWatch, where they were placed with negative implications on Nov. 10, 2005. LOCATEPLUS HOLDINGS: Posts $425,700 Net Loss in 2006 1st Quarter ---------------------------------------------------------------- LocatePLUS Holdings Corp. filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 30, 2006. The Company reported a $425,700 net loss on $3,099,908 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $8,021,817 in total assets, $3,484,019 in total liabilities, and $4,537,798 in stockholders' equity. A full-text copy of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://researcharchives.com/t/s?ad9 Going Concern Doubt Livingston & Haynes, P.C., in Wellesley, Massachusetts, raised substantial doubt about LocatePLUS' 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 accumulated deficit at December 31, 2005 and substantial net losses in each of the last two years. About LocatePLUS Based in Beverly, Massachusetts, LocatePLUS Holdings Corp. - http://www.locateplus.com/-- and its subsidiaries are industry-leading providers of public information and investigative solutions that are used in homeland security, anti- terrorism and crime fighting initiatives. The Company's proprietary, Internet-accessible database is marketed to business- to-business and business-to-government sectors worldwide. LYONDELL CHEMICAL: Debt Reduction Cues Moody's to Lift Ratings -------------------------------------------------------------- Moody's Investors Service raised the ratings of Lyondell Chemical Company and Equistar Chemicals LP due to the substantial debt reduction over the past two years at the combined company and the likelihood that the company will be able to achieve its $3 billion debt reduction target by the end of 2007. Moody's also affirmed the B1 ratings of Millennium Chemicals Inc. and Lyondell's SGL-2 speculative grade liquidity rating, and assigned corporate family ratings to both Equistar and Millennium. Moody's assigned CFR ratings to Equistar and Millennium to provide greater transparency. Additionally, the rating outlook for all three companies was changed to developing due to the potential sale of the Lyondell-CITGO Refining LP joint venture. Management has stated that it intends to utilize proceeds from this divestiture to further reduce debt. These actions conclude the review which began on May 5, 2006. Upgrades: Issuer: Equistar Chemicals, LP * Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 Issuer: Lyondell Chemical Company * Corporate Family Rating, Upgraded to Ba3 from B1 * Junior Subordinated Shelf, Upgraded to a range of (P)B2 to (P)B1 from a range of (P)B3 to (P)B2 * Preferred Stock Shelf, Upgraded to (P)B2 from (P)B3 * Senior Secured Regular Bond/Debenture, Upgraded to Ba3 from B1 * Senior Secured Shelf, Upgraded to (P)Ba2 from (P)Ba3 * Senior Subordinated Regular Bond/Debenture, Upgraded to B2 from B3 * Senior Subordinated Shelf, Upgraded to (P)B1 from (P)B2 * Senior Unsecured Medium-Term Note Program, Upgraded to B1 from B2 * Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 * Senior Unsecured Shelf, Upgraded to (P)Ba3 from (P)B1 * Subordinated Shelf, Upgraded to (P)B1 from (P)B2 Issuer: Lyondell Chemical Worldwide, Inc. * Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 from B1 Issuer: Lyondell Trust I * Preferred Stock Shelf, Upgraded to (P)B2 from (P)B3 Issuer: Lyondell Trust II * Preferred Stock Shelf, Upgraded to (P)B2 from (P)B3 Issuer: Lyondell Trust III * Preferred Stock Shelf, Upgraded to (P)B2 from (P)B3 Reinstatements: Issuer: Equistar Chemicals, LP * Corporate Family Rating, Reinstated to Ba3 Issuer: Millennium Chemicals Inc. * Corporate Family Rating, Reinstated to Ba3 Outlook Actions: Issuer: Equistar Chemicals, LP * Outlook, Changed To Developing From Rating Under Review Issuer: Lyondell Chemical Company * Outlook, Changed To Developing From Rating Under Review Issuer: Lyondell Chemical Worldwide, Inc. * Outlook, Changed To Developing From Rating Under Review Issuer: Millennium America Inc. * Outlook, Changed To Developing From Stable Issuer: Millennium Chemicals Inc. * Outlook, Changed To Developing From Stable Lyondell's Ba3 ratings reflect the significant volatility in earnings and cash flow due to the commodity nature of the company's products and its exposure to volatile petroleum and petrochemical feedstocks, substantial fixed charges for a cyclical company, significant non-debt obligations and elevated capital expenditures in 2006 and into 2007 required to meet regulatory requirements. The ratings are supported by a fairly diverse business portfolio including the operations of Equistar and Millennium, leading market shares in several commodity petrochemicals, plastics and titanium dioxide, solid financial metrics and significant free cash flow at this point in the cycle and management's ongoing dedication to debt reduction. The developing outlook reflects the potential for further debt reduction over the next six to 12 months if management is able to successfully divest its stake in LCR. If Lyondell is able to reduce debt by an additional $1.5 billion, Moody's could raise the company's ratings by another notch. It is unlikely that Moody's would raise the company's ratings by more than one notch, unless debt reduction exceded Moody's current estimate. Moody's noted that the divestiture of LCR is not a certainty and that joint ventures are more difficult to divest, especially when one partner has a greater interest in the value of the output of the venture. Moody's also noted that the ratings of Millennium Chemicals Inc. may not track upward with the ratings of Lyondell and Equistar due to potential lead paint liabilities at a former subsidiary. Moody's will need to receive additional information on this issue prior to any further changes to Millennium's ratings. Lyondell's speculative grade liquidity rating of SGL-2 reflects the decline in cash balances and the potential need to access its credit facilities or refinance debt maturities in 2007 and 2008. The combined company has ample liquidity to handle these maturities due to access to $1.6 billion in credit facilities and the lack of restrictions on Equistar's ability to make dividends to Lyondell over the forecast period. The company's credit facilities include an undrawn $475 million secured credit facility at Lyondell due in 2009, a $600 million accounts receivable and $400 million inventory-based credit facility at Equistar due in 2010, and a $125 million secured credit facility at Millennium due in 2010. Availability under Lyondell's facility at March 31, 2006 was $398 million due to $77 million of letters of credit. Availability under Equistar's facilities was $708 million due to $225 million of borrowing under the accounts receivable facility, a $50 million reserve and borrowing base limitations. Millennium had $97 million of availability due to outstanding letters of credit. Lyondell also has access to a $150 million accounts receivable program with roughly $85 million of availability. Headquartered in Houston, Texas, Lyondell Chemical Company manufactures propylene oxide, co-product stryene, MTBE and butanediol, as well as numerous other derivative chemicals. Both Equistar Chemicals LP and Millennium Chemicals Inc. are wholly owned subsidiaries of Lyondell. Equistar is a leading North American producer of commodity petrochemicals and plastics. Millennium Chemicals is among the largest global producers of titanium dioxide pigments and acetyls. Lyondell also participates in a refinery joint venture with CITGO Petroleum Corporation - Lyondell-CITGO Refining Company Ltd. LCR is a refiner that has the unique ability to process 100% heavy sour crude oil from Venezuela. These combined entities reported revenues of nearly $24 billion for the LTM dated March 31, 2006. MEDIANEWS GROUP: S&P Rates $896.2 Million Facilities at BB- ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on MediaNews Group Inc., including the corporate credit rating to 'BB-' from 'BB'. In addition, the ratings were removed from CreditWatch where they were listed with negative implications on April 27, 2006. The outlook is stable. The company had about $880 million of debt outstanding at March 2006. At the same time, Standard & Poor's assigned its 'BB-' senior secured debt ratings to MediaNews' $896.2 million in senior secured credit facilities. These facilities consist of: * $596.2 million of existing revolving credit, term loan A and term loan B facilities; and * a planned $300 million seven-year term loan C. Because the credit facilities are secured only by the capital stock of MediaNews' subsidiaries and joint operating arrangements, Standard & Poor's did not assign recovery ratings to these facilities. The lower ratings follow a review of MediaNews' planned purchase of the Contra Costa Times and San Jose Mercury News from McClatchy Co. and related transactions. The downgrades reflect Standard & Poor's expectation that MediaNews' financial profile will not improve to levels more appropriate for the former ratings. The ratings on MediaNews reflect the Denver, Colorado- headquartered newspaper publisher's heavy debt levels, attributable to growth over the years through acquisitions. In addition, the firm has a moderate-size cash flow base and operates in a challenging climate. These factors are tempered by: * MediaNews' strong and geographically diverse market positions; * free cash flow generation; and * no significant debt maturities over the next several years. MERIDIAN AUTOMOTIVE: Credit Suisse Wants Summary Judgment --------------------------------------------------------- Dennis A. Meloro, Esq., at Greenberg Traurig, LLP, in Wilmington, Delaware notes that Rule 56(e) of the Federal Rules of Civil Procedure states that "an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading." To defeat a motion for summary judgment, the adverse party is required to "set forth specific facts showing that there is a genuine issue for trial." "The Official Committee of Unsecured Creditors has still not done so," Mr. Meloro argues. The only question to be resolved at this stage is whether Credit Suisse, Cayman Islands Branch, as First Lien Administrative Agent and First Lien Collateral Agent, authorized the Purported Termination Statement, Mr. Meloro maintains. Mr. Meloro states that Meridian Automotive Systems, Inc., and its debtor-affiliates hired First American Title Insurance Company to act as closing agent for a sale to a third party. Credit Suisse had no connection to the sale other than voluntarily agreeing, for the Debtors' benefit, to release its perfected security interest in the assets being sold. In that regard, Credit Suisse prepared a financing statement amendment. Without Credit Suisse' knowledge, First American changed the Amendment by checking the "termination box", Mr. Meloro tells the Court. However, nobody was harmed by this flawed filing or otherwise relied on its accuracy, Mr. Meloro maintains. Mr. Meloro contends that to issue summary judgment in favor of the Committee, the Court would need to find, without the benefit of any actual evidence, any participation by any other party or any expert testimony in the Debtors' Chapter 11 cases that each of these factors were undisputed: * The enterprise value of the Debtors on April 26, 2005; * The recovery to Credit Suisse if the Second Composites UCC was not avoided; and * The recovery to Credit Suisse if the Second Composites UCC was avoided. However, each of these facts is intensely disputed, Mr. Meloro says. Thus, to the extent Credit Suisse' request for summary judgment as to the Purported Termination Statement is denied, the Committee's cross motion must be denied as well, according to Mr. Meloro. As a matter of law, Credit Suisse is entitled to know the genesis of the support for any cause of action filed against it. Because the Committee has still not produced a single alleged fact in support of its claim with respect to Credit Suisse' claim against each Guarantor in the First Lien Collateral Agreement, Credit Suisse is entitled to summary judgment. Mr. Meloro says that the Committee is pursuing claims to avoid liens as unperfected that it admits are actually properly perfected. Pursuant to Sections 544, 550, and 551 of the Bankruptcy Code, Credit Suisse' properly perfected security interests cannot be avoided. Credit Suisse admits that it refused to produce a witness absent a Court order because there was no rational or reasonable basis for the deposition. Accordingly, Credit Suisse asks the U.S. Bankruptcy Court for the District of Delaware to grant summary judgment in its favor. To preserve estate assets, Credit Suisse will not contest the Committee's request for summary judgment avoiding Credit Suisse' purported liens on: (a) the Vehicles; and (b) domestic real property, based on the results of a real property search that shows that the First Lien Agent failed to record mortgages as required by applicable state law. First American Responds Firs American supports Credit Suisse's argument in relation to the Purported Termination Statement. Charlene D. Davis, Esq., at The Bayard Firm, in Wilmington, Delaware, relates that Kina L. Clayton, the escrow officer at Firs American assigned to the closing on the sale of the Debtors' Centralia Facility, mistakenly checked the termination box on the Amendment. Credit Suisse forwarded the Amendment to First American with the partial release box checked and directed First American only to date and file it, Ms. Davis tells the Court. Credit Suisse did not make any statements or conduct itself in any way that misled anyone. The only parties that relied on the Amendment were those on the buyer side of the Centralia Sale, and they relied on the Amendment to effect a release of the security interest on only the assets being sold. Ms. Davis asserts that no one disputes that the Amendment, with the partial release box checked and a description of the assets subject to the Centralia Sale attached, was effective as a partial release covering the assets sold. Ms. Davis contends that the fact the termination box on the Amendment was erroneously checked does not mean that the financing statement, taken as a whole with all filed records linked to the First Composites UCC, contains an error that is more than minor or that renders the financing statement seriously misleading. This is because the financing statement still gives notice to searchers that Credit Suisse may have a security interest in the remaining collateral. Therefore, First American asks the Court to grant Credit Suisse' request and deny the Committee's cross-motion. About Meridian Automotive Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000) METALFORMING TECH: Court Confirms Amended Joint Chapter 11 Plan --------------------------------------------------------------- The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware confirmed the Amended Joint Chapter 11 Plan of Reorganization of Metalforming Technologies, 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. Modifications in the Plan Under the Modified Plan, four claims totaling $11,460,208 filed by the Internal Revenue Service against the Debtors are deemed withdrawn. In addition, the resolution of the three claims asserted by the Pension Benefit Guaranty Corporation will be determined by the results of the Debtors' consultation with the Claims Agent and the Official Committee of Unsecured Creditors. The PBGC Claims involve insurance obligations in the Northern Tube Pension Plan. The Debtors say that the consultation will lead to objections to the PBGC Claims or the Debtors will move to terminate the Northern Tube Pension Plan. The Debtors relate that if the Northern Tube Pension Plan is terminated, PBGC could assert additional claims for termination liability and minimum funding liability, in amounts substantially lower than the claims is has already filed. The Debtors believe that absent termination of the Northern Tube Pension Plan, the PBGC Claims fail. Settlement Agreement In December 2005, the Bankruptcy Court approved the settlement agreement resolving objections raised by the Official Committee of Unsecured Creditors in connection with the sale of the Debtors' assets to Zohar. The settlement agreement recognizes all proceeds of the Zohar sale as collateral securing the Debtors' prepetition and DIP Loan obligations to a consortium of lenders led by Patriarch Partners, LLC. It also outlines how the proceeds should be distributed and allocates appropriate levels of funding for a wind-down budget. Under the settlement agreement, the Debtors: -- repaid their DIP Loan obligations; -- made a $20 million interim distribution to Patriarch; -- allocated $4 million to a General Unsecured Claim Fund; -- created a reserve amount escrow; -- created a tax reserve account with a $1.8 million allocation; and -- created a prepetition lender account that will hold any excess cash from the Zohar Sale and the sale of the Debtors' other remaining assets. Treatment of Claims Patriarch and the prepetition lenders, which received $20 million of their $52 million allowed claim under a settlement agreement, will get additional cash on the effective date that will bring the lenders' recovery to 70%. The remaining 30% will be paid using 85% of the cash available from a prepetition lender account. Holders of General Secured Claims will either receive the collateral securing the their claims or cash equal to the value of the collateral securing the obligations. General unsecured claimholders will receive cash equal to a pro rata share of the general unsecured claim fund. That fund comes from the 15% slice of the money in the prepetition lender account that won't be turned over to the lenders. Equity interests in Metalforming Technologies and its subsidiaries will be extinguished on the effective date of the Plan and interest holders get nothing under the Plan. Headquartered in Chicago, Illinois, Metalforming Technologies, Inc., and its debtor-affiliates manufacture seating components, stamped and welded powertrain components, closure systems, airbag housings and charge air tubing assemblies for automobiles and light trucks. The Company and eight of its affiliates filed for chapter 11 protection on June 16, 2005 (Bankr. D. Del. Case Nos. 05-11697 through 05-11705). Michael E. Foreman, Esq., Sanjay Thapar, Esq., and Lia M. Pistilli, Esq., at Proskauer Rose LLP, and Joel A. Waite, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Timothy P. Cairns, Esq., at Young Conaway Stargatt & Taylor LLP represent the Debtors in their restructuring efforts. Francis J. Lawall, Esq., at Pepper Hamilton LLP represents the Official Committee of Unsecured Creditors. Robert del Genio at Conway, Del Genio, Gries & Co., LLC, provides the Debtors with financial and restructuring advice and Larry H. Lattig at Mesirow Financial Consulting LLC serves as the Committee's financial advisor. As of May 1, 2005, the Debtors reported $108 million in total assets and $111 million in total debts. MIRANT CORP: Equity Committee Counsels Want $3.1 Million Bonus Fee ------------------------------------------------------------------ Brown Rudnick Berlack Israels LLP and Hohmann, Taube & Summers, L.L.P., are counsel to the Official Committee of Equity Security Holders in the chapter 11 cases of Mirant Corporation and its debtor-affiliates. The Firms ask the U.S. Bankruptcy Court for the Northern District of Texas to award them $3,124,208 as bonus fee. Specifically, Brown Rudnick asks for $3,032,032, while Hohmann Taube seeks payment of $92,176. The proposed bonus fee is 25% of the Firms' total monthly fees and expenses. Eric J. Taube, Esq., at Hohmann, Taube & Summers, L.L.P., in Austin, Texas, asserts that the Firms should be awarded with a fee bonus because of the superior work they performed, the outstanding results they obtained for the equity holders, and the risks of non-payment they faced. Among other things, the Firms' work throughout Mirant's bankruptcy proceeding resulted in a consensual plan of reorganization whereby equity holders, who faced total elimination of their interests under the Debtors' original plan, and an enormous valuation "gap" between the parties, have received meaningful value, Mr. Taube tells the Court. New Mirant Objects The New Mirant Entities believe that no professional, including Brown and Hohmann, should be rewarded with a success fee. Craig H. Averch, Esq., at White & Case LLP, in Miami, Florida, contends that providing adequate services does not qualify a professional for a fee enhancement. Rather, fee enhancements should be granted only in "rare and exceptional" circumstances. New Mirant asserts that the award of a fee enhancement to Hohmann and Brown would not be appropriate because the success of the Debtors' Chapter 11 cases was the result of a combination of many factors. New Mirant asks the Court to deny Brown and Hohmann's request for fee enhancement. Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on January 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. Shearman & Sterling LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services placed a 'B+' corporate credit rating on Mirant Corporation and said the outlook is stable. MIRANT CORP: Miller Buckfire Asks for $1.5 Mil. Supplemental Fee ---------------------------------------------------------------- Miller Buckfire & Co., LLC, as financial advisor and investment banker to the Official Committee of Unsecured Creditors of Mirant Corporation, et al., asks Judge Lynn to award it $1,500,000 as supplemental fee. Samuel M. Greene, a managing director at Miller Buckfire, tells Judge Lynn that the supplemental fee request is separate from its request for payment of fees and reimbursement of expenses totaling $7,112,568. Mr. Greene says that the Mirant Committee approves of the supplemental fee request. The supplemental fee, Mr. Greene notes, is pursuant to the Miller Buckfire's engagement letter dated August 5, 2003, which contemplated the payment of monthly fees and a fixed restructuring transaction fee plus "further compensation after confirmation of a Plan, based on, among other things, recoveries to the unsecured creditors . . . and timing of the Company's bankruptcy cases." Mr. Greene asserts that the supplement fee is appropriate and reasonable because Mirant's bankruptcy cases were "unusually and extraordinarily successful" and creditor recoveries exceeded the reasonable expectations of the parties. Mirant's bankruptcy cases, Mr. Greene says, required exceptional amounts of activity on the part of Miller Buckfire and consumed substantial amounts of the firm's available resources. Additionally, Miller Buckfire's total compensation is consistent with the compensation sought by the other financial advisors, Mr. Greene notes. New Mirant Objects The New Mirant Entities recognize that Miller Buckfire played a role in the Debtors' cases and must be compensated accordingly. New Mirant does not oppose the approval of the majority Miller Buckfire's fees, including the $4,350,000 in total monthly fees and the $2,500,000 restructuring transaction fee. However, Miller Buckfire's fee enhancement cannot be approved under either Section 328 or Section 330 of the Bankruptcy Code, Michelle C. Campbell, Esq., at White & Case LLP, in Miami, Florida, points out. The U.S. Bankruptcy Court for the Northern District of Texas' order approving Miller Buckfire's retention does provide for a fee enhancement to be awarded to the firm, Ms. Campbell asserts. Additionally, Miller Buckfire's services do not support a fee enhancement under Section 330. Ms. Campbell notes that New Mirant, as the party that would be responsible for paying the fee enhancement, does not consent to Miller Buckfire's request for a fee enhancement. Moreover, Miller's engagement letter failed to provide a specific amount or even a general range of the amount of the "success fee." With Miller Buckfire's $6,850,000 in total monthly fees and restructuring fee, it would be unreasonable for Miller Buckfire to argue that it was not adequately compensated for its services, Ms. Campbell points out. Miller Buckfire Talks Back Mr. Greene explains that the Supplemental Fee was contemplated from the outset of Miller Buckfire's engagement, and is reflected in the engagement itself. The Engagement Letter, according to Mr. Greene, provides that Miller Buckfire will receive monthly fees, a restructuring fee and an "additional fee" in an unspecified amount. The Additional Fee will be determined after confirmation of a Plan, based on, among other things, recoveries to the unsecured creditors to Mirant Corporation, et al., and timing of the Company's bankruptcy cases." Mr. Greene notes that Miller Buckfire's fees are lower than the fees sought by comparable professionals. Thus, Miller Buckfire asks the Court to approve its supplemental fee request. Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-46590), and emerged under the terms of a confirmed Second Amended Plan on January 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. Shearman & Sterling LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 98; Bankruptcy Creditors' Service, Inc., 215/945-7000) * * * As reported in the Troubled Company Reporter on Dec. 8, 2005, Standard & Poor's Ratings Services placed a 'B+' corporate credit rating on Mirant Corporation and said the outlook is stable. NATIONAL CONSUMER: John Brinco Appointed as Chapter 11 Trustee -------------------------------------------------------------- The Hon. Theodor Albert of the U.S. Bankruptcy Court for the Central District of California allowed Steven J. Katzman, the U.S. Trustee for Region 16 to appoint John Brinco as the Chapter 11 Trustee for National Consumer Mortgage, LLC's case. The Court also approved the request to fix the Chapter 11 Trustee's bond at $10,000. To the best of the U.S. Trustee's knowledge, John Brinco does not hold or represent any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Orange, California, National Consumer Mortgage LLC -- http://www.nationalconsumermortgage.com/-- is an independent mortgage brokerage that creates and processes home loans. The Debtor filed for chapter 11 protection on Apr. 3, 2006 (Bankr. C.D. Calif. Case No. 06-10429). Lorraine L. Loder, in Los Angeles, California, represents the Debtor. David L. Neale, Esq., at Levene, Neale, Bender, Rankin & Brill L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $1,102,135 and total debts of $32,846,858. NATIONAL ENERGY: USGen Wants Ocean State Entities to Pay Damages ---------------------------------------------------------------- Pursuant to an Equalization Agreement, signed June 28, 2002, Ocean State Power and Ocean State Power II agreed to make payments to USGen New England, Inc., relating to certain negotiated rate agreements between USGen and Tennessee Gas Pipeline Company. The Equalization Agreement provided, among other things, that under USGen's negotiated rate agreement with TGP, USGen would convert its existing transportation contracts under a Rate Schedule NET-284 to a Rate Schedule FT-A contract. Under the Equalization Agreement, Ocean State also entered into a negotiated rate agreement with TGP under which Ocean State would convert their transportation contracts to Rate Schedule FT-A contracts. USGen executed the USGen Tennessee Agreements based upon the Ocean State's commitment to equalize the economic benefit conferred on them by the Agreements by adjusting USGen's fixed transportation costs in the form of a $1,615,634 equalization payment by the Ocean State Entities to USGen. The Equalization Agreement required the Ocean State Entities to pay the equalization payment to USGen in monthly installments of $31,235 for 60 months and to fund a security deposit of $187,409 to USGen. The conditions to the Ocean State Entities' obligation to pay the equalization payment to USGen were issuance by the U.S. Federal Energy Regulatory Commission of orders approving the USGen Tennessee Agreements and the OSP Tennessee Agreements. When the FERC approved the Agreements, the monthly installment became due and payable on the first business day of the first month after issuance of the FERC Orders. The Ocean State Entities had paid the security deposit to USGen, which it was required to hold and apply against the final six monthly installments, with any interest earned accruing to the benefit of USGen. USGen was also permitted to use the security deposit at any time to satisfy any delinquent monthly installments and the Ocean State Entities were required to replenish the security deposit to the extent so used by USGen on five-business days' notice from USGen. The Equalization Agreement states that it will not terminate until all monthly installments have been paid. Leslie J. Polt, Esq., at Blank Rome LLP in Washington, D.C., asserts that the Ocean State Entities have breached their obligations to USGen by refusing to pay the monthly installments since September 2004 and by refusing to replenish the security deposit. USGen has made a demand for payment, to no avail. Ms. Polt also asserts that the Ocean State Entities have violated the Equalization Agreement in terms of breach of contract, specific performance of contract and turnover of property to the estate. Moreover, USGen claims that the Ocean State Entities are in possession, custody and control of monies owed to USGen's estate under the Equalization Agreement to which USGen is entitled to use. The monies held by the Ocean State Entities constitute property of USGen's estate. USGen asks the U.S. Bankruptcy Court for the Middle District of Maryland to: (1) award USGen $593,000 in compensatory damages, plus interest, attorney's fees, costs and expenses, plus incidental and consequential damages; (2) compel the Ocean State Entities to perform all of their obligations under the Equalization Agreement; and (3) compel the Ocean State Entities to immediately turn over to USGen all amounts owed to it under the Agreement. Ocean State Responds The Ocean State Entities ask the Court to dismiss USGen's allegations of specific performance of the contract and turnover of property to the estate violations. They assert: -- that USGen's allegations should be dismissed for failure to state a claim; and -- an affirmative defense on the grounds that USGen is not entitled to the equitable relief it seeks in the Complaint and because USGen has an adequate remedy at law. Adam M. Spence, Esq., in Towson, Maryland, argues that USGen's claims are barred by the affirmative defense of discharge or breach of contract. According to Mr. Spence, USGen's rejection of the gas transportation agreements with TGP constitutes a material breach of the Equalization Agreement, excusing the Ocean State Entities' performance and barring USGen from seeking recovery of any alleged payments not made under the Agreement. * * * The Court noted that the Ocean State Entities conceded that the Complaint's count for breach of contract is a cause of action while the counts for specific performance of contract and turnover of property to the estate are both equitable remedies. Thus, there is no relief sought in the specific performance of contract and turnover of property violations that would not be covered by a judgment in USGen's favor with regards to the breach of contract, the Court ruled. The Court granted Ocean State Entities' request to dismiss the part of the Complaint with regards to specific performance of the contract and turnover of property to the estate violations. About National Energy Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas Transmission, Inc.) develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT received bankruptcy court approval of its reorganization plan in May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL ENERGY: USGen Wants 2003 Valuation Documents Excluded -------------------------------------------------------------- USGen New England, Inc., asks the U.S. Bankruptcy Court for the Middle District of Maryland to exclude the introduction of any testimony and exhibits relating to any valuations of the gas transportation contracts performed by USGen in 2003. In the summer of 2003, USGen personnel conducted a number of valuations of USGen's long-term contractual obligations. In anticipation of reorganization, USGen needed to determine whether specific contracts represented an asset or a liability. The purpose of the valuations was to contribute to USGen's analysis of whether to reject transportation agreements and other contracts, relates Gordon A. Coffee, Esq., at Winston & Strawn LLP in Washington, D.C. Tennessee Gas Pipeline Co. has indicated that it intends to offer evidence reflecting USGen's 2003 valuations. USGen counters that the valuations are irrelevant and evidence bearing upon them should be excluded. Mr. Coffee notes that the issues in the rejection claim dispute are the extent to which TGP has successfully resold the USGen turnback capacity and the extent to which TGP is likely to enjoy continued success selling that capacity in the future. The valuations performed by USGen in 2003 can shed no light on the issues and admitting evidence on the valuations will accomplish nothing but distraction and delay, Mr. Coffee asserts. Mr. Coffee explains that the 2003 valuations are irrelevant because they analyze different sales of different products by a different party. The fact that in USGen's hands, the pipeline capacity might not have represented a profitable commodity in the summer of 2003 sheds no light on TGP's subsequent ability to resell the capacity or the price at which the capacity is resold. The issue in the case is sales by TGP, not sales by USGen, he asserts. In addition to the difference between USGen as the seller and TGP as the seller, the 2003 valuations present "apples-and-oranges" comparison for the reason that what is being sold is different. The parties agree that USGen's rejection of the gas transportation contracts allowed TGP to combine the turnback capacity with upstream capacity for long-haul transportation agreements, Mr. Coffee says. TGP was also able to use the turnback capacity, coupled with upstream and downstream capacity, to enable backhaul transportation agreements. Moreover, TGP was able to package and sell the USGen turnback capacity together with other transportation segments located elsewhere on its system and make the total package more attractive to other customers. USGen could not do the things that TGP did, putting USGen in an inferior position to that of TGP in trying to leverage revenue from the turnback capacity, Mr. Coffee argues. USGen's analysis of its own ability to extract value from its contract path, with no ability to package the capacity in order to enhance its appeal in the market, tells nothing about TGP's ability to do so, Mr. Coffee further argues. The valuation methodology used by USGen also shows that the 2003 valuations are irrelevant to the case, Mr. Coffee contends. He explains that the basic method for valuation was to hypothesize gas prices at the gas transportation contracts' receipt point at Wright, New York, and the delivery point at Mendon, Massachusetts, and to compare the difference between the prices with the cost to USGen of transporting gas from Wright to Mendon. The analysis assumes a hypothetical purchase of gas at Wright, a hypothetical sale of the same gas at Mendon and transportation costs from Wright to Mendon. While the basis differential between Wright and Mendon may be relevant to a gas marketer or customer, they are not relevant to the calculation of damages in the case, Mr. Coffee asserts. TGP does not sell gas but its sells capacity on its pipeline, with the customer providing the gas at a certain point and TGP delivering the gas to a designated point. The prices for the transportation service are not based on the market price of gas, much less a fluctuating basis differential for gas between specific receipt and delivery points. Instead, the prices that TGP charges are based on zone rates. TGP's damages similarly are based on TGP's success in reselling the turnback capacity at the zone rates, and not on any basis differentials that gas customers are paying for delivered gas. TGP's damages have no relation to whether USGen thought the capacity had value to USGen. The damages are based on whether other shippers were willing to purchase the turnback capacity and whether they will continue to do so in the future. TGP Wants O'Keefe Testimony Limited Tennessee Gas Pipeline Co. asks the Court to limit David O' Keefe's trial testimony to those areas for which USGen did not block discovery. On November 10, 2005, TGP took a deposition of Mr. O' Keefe, a witness for USGen. During the deposition, USGen's counsel, Mr. Coffee, instructed Mr. O'Keefe not to answer a number of the questions that TGP presented on the basis of attorney-client privilege and work product privilege. USGen explicitly stated at the deposition that it will not be proffering Mr. O'Keefe as a witness to testify about TGP's mitigation efforts, TGP's counsel, Kenneth W. Irvin, Esq., at McDermott Will & Emery LLP Washington, D.C., relates. USGen also invoked privilege and instructed Mr. O'Keefe not to answer questions concerning the issues of, among others: (1) analytical work he has done after TGP's filing of its Claim No. 410 and USGen's objection to the Claim; (2) specific assignments or projects done at the direction of USGen' counsel, Mr. Coffee; (3) analysis after the filing of TGP's Claim as to whether USGen was in the money or out of the money under the TGP transportation agreements; (4) analysis of whether TGP has fulfilled its duty to mitigate the damages arising from rejection of the transportation agreements; and (5) USGen's contention that TGP has mitigated almost all its damages. Because USGen invoked privileged and barred any discovery of Mr. O'Keefe's testimony about the issues raised by TGP in the deposition, and because USGen never designated Mr. O'Keefe as a witness testifying about the subjects, Mr. O'Keefe cannot offer testimony at trial about the issues concerned, Mr. Irvin asserts. Moreover, TGP asserts that certain of USGen's proposed exhibits are irrelevant to the disputed facts and issues or inadmissible under the Federal Rules of Evidence or can be considered as hearsay. TGP also asks the Court to exclude: (1) exhibits related to TGP's expansion projects, reservation of capacity, open season and postings, ambient capacity and stranded capacity and discount pricing; (2) exhibits of e-mails consisting in whole or part, of third party communications and e-mail communications containing press releases; (3) exhibits of information from independent Internet posting sites; (4) exhibits of purporting to reflect testimony of a non-party in an unrelated proceedings; and (5) exhibits of deposition excerpts addressing USGen's abandoned mitigation credit claims, excerpts with no cognizable relevance and excerpts containing hearsay. USGen Wants Trial Delayed The Bankruptcy Court has scheduled the trial regarding Tennessee Gas Pipeline Co.'s rejection damage claim against USGen New England, Inc., to commence on July 17, 2006. USGen wants the July 17, 2006 trial continued or, in the alternative, stayed until October 15, 2006. Marc E. Richards, Esq., at Blank Rome LLP in New York, notes that, in USGen's Chapter 11 case, three claim objections remain before the Court: -- Tennessee Gas Pipeline Company's Claim No. 410 for $41,000,000, -- TransCanada Pipelines, Ltd.'s Claim No. 73 for C$71,133,276; and -- Brascan Energy Marketing, Inc.'s Claim for $24,934,700. The proceeds of the Claims are currently being held in the Disputed Claims Reserve. USGen wants to resolve the Claims as soon as possible so it can make the final distributions and close its bankruptcy case. On June 13, 2006, USGen filed with the U.S. Federal Energy Regulatory Commission a petition for, among others, declaratory order clarifying that TGP's gas transportation contracts do not restrict USGen's rights under Section 5 of the Natural Gas Act to challenge the justness and reasonableness of TGP's tariff rates. USGen also seeks the FERC's clarification that the filed rate doctrine does not limit mitigation revenues under state law so as to provide TGP with a double or even triple recovery of the damages it sustained from USGen's rejection of the Contracts. USGen asked the FERC to put its petition for expedited processing and requested that a ruling be made by September 1, 2006. USGen contends that an FERC ruling on its claims dispute with TGP will not only give the Court guidance in the trial of USGen's objection to TGP's Claim, but also will narrow the issues to be tried before the Court. A prior ruling by the FERC will limit the possibility of inconsistent rulings. USGen relates that it would be better use of the Court's resources to continue the trial or stay the matter pending the FERC's ruling on USGen's petition. If USGen is required to schedule the hearing on its motion for continuance or stay on 23 days' advance notice, the hearing date would be only a week before the rejection claims damage trial on July 17, 2006, Mr. Richards points out. Consequently, USGen and TGP would be gearing up for a trial on July 17 that may not take place on that date if the Court grants USGen's motion for continuance or stay. TGP Wants Trial to Proceed Kenneth W. Irvin, Esq., at McDermott Will & Emery LLP Washington, D.C., asserts that USGen's petition with the FERC does not establish cause for delaying the trial. Mr. Irvin notes that USGen's petition merely presents a contract damages dispute to the FERC. He adds that, while the FERC's rule of procedure 206 provides that any person may file a complaint, USGen has not availed itself of the process. USGen is not an active or potential shipper on TGP's system, but rather a liquidating estate fighting about contract damages, Mr. Irvin points out. He asserts that the FERC cannot exercise its jurisdiction where the true substance of the dispute is damages and the Natural Gas Act gives the FERC no authority to change TGP's rates retroactively. USGen's claim to the benefit of prospective reductions in TGP's rates cannot compare with USGen's admission that the USGen Gas Transportation Agreements have been terminated in accordance with this Court's order approving rejection and the FERC's order formally authorizing TGP to abandon service under the Contracts, Mr. Irvin adds. He maintains that, as a matter of basic contract law, USGen cannot claim the benefits of a contract after its breach and the formal termination of the contract. About National Energy Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- (n/k/a National Energy & Gas Transmission, Inc.) develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. NEGT received bankruptcy court approval of its reorganization plan in May 2004, and emerged from bankruptcy on Oct. 29, 2004. (PG&E National Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL LAMPOON: Posts $1.7 Mil. Net Loss for 3rd Quarter 2006 --------------------------------------------------------------- National Lampoon, Inc., fka J2 Communications, Inc. (AMEX:NLN) released financial results for the third quarter 2006 ended April 30, 2006. The Company decreased its net loss to $1,715,056 for the third quarter of fiscal 2006, as compared with a net loss of $1,751,184 for the third quarter 2005. The net loss for the third quarter of fiscal year 2006 includes charges related to the accrued stock dividend on the companies preferred shares. Revenues for the third quarter 2006 increased $395,816 or 34% from $1,537,806 compared to $1,141,990 for the third quarters ended April 30, 2006 and 2005, respectively. The increase was primarily due to the marketing, advertising and promotion of two motion pictures in the college markets with no comparable campaigns in the same period of the prior year. The Company continues to concentrate resources in this area and believes it will be a larger portion of its overall business in the future. Daniel Laikin, Chief Executive Officer, commented, "In the third quarter, we continued to expand the use of our brand and the various segments of our business. Last quarter we launched TogaTV, an IPTV video-on-demand initiative which started generating revenue immediately. This quarter we continued our marketing and advertising campaign of motion pictures in the college markets. We remain extremely focused on expanding our online platform business, with the launch of National Lampoon Humor Network in the third quarter. We will also release our first self published book titled 'The Saddam Dump' which is due out in book stores on June 27." National Lampoon, Inc., fka J2 Communications, Inc., is active in a broad array of entertainment segments, including feature films, television programming, interactive entertainment, home video, audio CDs and book publishing. The Company also owns interests in all major National Lampoon properties, including National Lampoon's Animal House, the National Lampoon Vacation series and National Lampoon's van Wilder. The National Lampoon Network serves over 600 colleges and universities throughout the United States. The network reaches as many as 4.8 million students, or nearly one in four of all 18-to-24-year-old college students. In addition, the Company operates a humor website, www.nationallampoon.com, on the Internet. The Company has four operating divisions: National Lampoon Network, Entertainment Division, Publishing Division and Licensing Division. J2 Communications, Inc., was primarily engaged in the acquisition, production and distribution of videocassette programs for retail sale. In 1991, J2 acquired all of the outstanding shares of National Lampoon, Inc., and subsequent to J2's acquisition of NLI, it de-emphasized its videocassette business and publishing operations and began to focus primarily on exploitation of the National Lampoon(TM) trademark. J2 reincorporated in Delaware under the name National Lampoon, Inc., in November 2002. Going Concern Doubt The management believes that the Company's net losses of $8.6 million and $5.1 million in the prior two years, net loss of $2.9 million during the first six months of the 2006 fiscal year, and accumulated deficit of $34.8 million at Jan. 31, 2006, raise concerns about its ability to continue as a going concern. NVE INC: Gets Court Approval to Hire Carmin Reiss as Mediator ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey gave NVE, Inc., permission to appoint Carmin C. Reiss of Resolutions, LLC, as its mediator. The Debtor has been in negotiation with the Creditors' Committee, retailer representatives and other interested parties in connection with the structuring of mediation procedures. The Debtor believes that Carmin Reiss' services is necessary to conduct a global mediation concerning the treatment of all claims against the Debtor and third parties. Ms. Reiss charges $300 per hour for her work. Interested parties have agreed that the cost of the mediation services will be divided into: a) one quarter of the mediation cost to be paid by the Debtor; b) one quarter of the mediation cost to be paid by the Debtor's president, Robert Occhifinto; c) one quarter of the mediation cost to be paid by the product liability plaintiffs; and d) one quarter of the mediation cost to be paid by the retail defendants. To the best of the Debtor's knowledge, Mr. Dobbs is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Andover, New Jersey, NVE Inc., dba NVE Pharmaceuticals, Inc., manufactures dietary supplements. The Debtor is facing lawsuits about its weight-loss products which contain the now-banned herbal stimulant, Ephedra. The Company filed for chapter 11 protection on August 10, 2005 (Bankr. D. N.J. Case No. 05-35692). Daniel Stolz, Esq., Leonard C. Walczyk, Esq., Michael McLaughlin, Esq., and Steven Z Jurista, Esq., at Wasserman, Jurista & Stolz, represent the Debtor in its restructuring efforts. Derek John Craig, Esq., at Brown Raysman Millstein Felder & Steiner LLP, and David J. Molton, Esq., at Brown Rudnick Berlack Israels LLP, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $10,966,522 in total assets and $14,745,605 in total debts. O.M. REALTY: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: O.M. Realty Corp. 9A South Broadway, Suite 160 Tarrytown, New York 10591 Bankruptcy Case No.: 06-22374 Type of Business: The Debtor previously filed for chapter 11 protection on December 29, 2005 (Bankr. S.D.N.Y. Case No. 05-27056). Chapter 11 Petition Date: June 19, 2006 Court: Southern District of New York (White Plains) Judge: Adlai S. Hardin Jr. Debtor's Counsel: Lewis D. Wrobel, Esq. 12 Raymond Avenue Poughkeepsie, New York 12603 Tel: (845) 473-5411 Fax: (845) 473-3430 Total Assets: $2,072,733 Total Debts: $1,436,261 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gerard Altieri, CPA Accountant $15,000 35 Highbridge Road Pelham, NY 10803 Errol McIntosh Architectural $15,000 20 East First Street Services Mount Vernon, NY 10550 Broadway Premium Insurance Premiums $10,000 Funding Corp. 100 Broadway 3rd Floor New York, NY 10005 Board of Water Supply Water Charges $176 P.O. Box 271 Mount Vernon, NY 10551 Andrew Romano, Esq. Legal Fees Unknown 20 South Broadway Yonkers, NY 10701 Betty Simmons Personal Injury Unknown Kelin & Folchetti Claim 15 Fisher Lane White Plains, NY 10603 Comm Preservation Corp. Notice Only Unknown 245 Saw Mill River Road Hawthorne, NY 10532 Gross & Gross Legal Fees Unknown 9 West Prospect Avenue Mount Vernon, NY 10550 Internal Revenue Service Taxes Unknown Special Procedures P.O. Box 266 Room 309 Buffalo, NY 14201 Joseph E. St. Onge. Esq. Legal Fees Unknown 670 White Plains Road Penthouse Scarsdale, NY 10583 NYS Department of Tax and Taxes Unknown Finance Bankruptcy Section P.O. Box 5300 Albany, NY 12205-0300 Stanley N. Kutcher, P.C. Legal Fees Unknown 1501 Broadway New York, NY 10036-5591 OCA INC: Equity Panel Wants Adams & Reese as Local Bankr. Counsel ----------------------------------------------------------------- The Official Committee of Equity Security Holders of OCA, Inc., and its debtor-affiliates asks the Honorable Jerry A. Brown of the U.S. Bankruptcy Court for the Eastern District of Louisiana in New Orleans for permission to retain Adams and Reese LLP as its local bankruptcy counsel, nunc pro tunc to June 14, 2006. Adams and Reese will assist in the performance of the Equity Committee's duties in the Debtors' bankruptcy cases and will take any action necessary or required to represent the Equity Committee's interests. The Equity Committee will oversee the coordination of Bell Boyd & Lloyd LLC, its lead counsel, and Adams and Reese to ensure that there is no duplication of costs and legal effort. Robin B. Cheatham, Esq., a partner at Adams and Reese LLP, did not disclose his or the firm's hourly rates. Mr. Cheatham assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/ -- provides a full range of operational, purchasing, financial, marketing, administrative and other business services, as well as capital and proprietary information systems to approximately 200 orthodontic and dental practices representing approximately almost 400 offices. The Debtor's client practices provide treatment to patients throughout the United States and in Japan, Mexico, Spain, Brazil and Puerto Rico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 14, 2006 (Bankr. E.D. La. Case No. 06-10179). Three Debtors also filed for bankruptcy protection on June 1, 2006 (Bankr. E.D. La. Case No. 06-10503). William H. Patrick, III, Esq., at Heller Draper Hayden Patrick & Horn, LLC, represents the Debtors. Patrick S. Garrity, Esq., and William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC represent the Official Committee of Unsecured Creditors. Carmen H. Lonstein, Esq., at Bell Boyd & Lloyd LLC and Robin B. Cheatham, Esq., at Adams and Reese LLP represent the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed US$545,220,000 in total assets and US$196,337,000 in total debts. OCA INC: General Claims Bar Date of the June Debtors is June 28 --------------------------------------------------------------- The Honorable Jerry A. Brown of the U.S. Bankruptcy Court for the Eastern District of Louisiana in New Orleans established 4:30 p.m. on June 28, 2006, as the deadline for all creditors owed money by the June OCA Inc. debtor-affiliates, arising prior to June 1, 2006, to file their proofs of claim. OCA Inc.'s debtor-affiliates that filed chapter 11 petitions on June 1, 2006, are: Entity Case No. ------ -------- Orthodontic Centers of Hawaii, Inc. 06-10503 Orthodontic Centers of Iowa, Inc. 06-10504 Orthodontic Centers of Idaho, Inc. 06-10505 All governmental units have until 4:30 p.m. on Nov. 12, 2006, to file their proofs of claim. Creditors must file written proofs of claim on or before the General or Governmental Bar Dates and those forms must be received electronically, by mail, hand delivery, courier, or overnight service to: Clerk of the Bankruptcy Court Eastern District of Louisiana 601 Hale Boggs Federal Building 501 Magazine Street New Orleans, LA 70130 A claimant must file a proof of claim in each of the June Debtor's bankruptcy case for which it asserts a claim against that particular June Debtor. Based in Metairie, Louisiana, OCA, Inc. -- http://www.ocai.com/ -- provides a full range of operational, purchasing, financial, marketing, administrative and other business services, as well as capital and proprietary information systems to approximately 200 orthodontic and dental practices representing approximately almost 400 offices. The Debtor's client practices provide treatment to patients throughout the United States and in Japan, Mexico, Spain, Brazil and Puerto Rico. The Debtor and its debtor-affiliates filed for Chapter 11 protection on March 14, 2006 (Bankr. E.D. La. Case No. 06-10179). Three Debtors also filed for bankruptcy protection on June 1, 2006 (Bankr. E.D. La. Case No. 06-10503). William H. Patrick, III, Esq., at Heller Draper Hayden Patrick & Horn, LLC, represents the Debtors. Patrick S. Garrity, Esq., and William E. Steffes, Esq., at Steffes Vingiello & McKenzie LLC represent the Official Committee of Unsecured Creditors. Carmen H. Lonstein, Esq., at Bell Boyd & Lloyd LLC and Robin B. Cheatham, Esq., at Adams and Reese LLP represent the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed US$545,220,000 in total assets and US$196,337,000 in total debts. OREGON STEEL: S&P Withdraws B+ Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B+' corporate credit rating on Oregon Steel Mills Inc. on CreditWatch with positive implications and subsequently, at the company's request, withdrew the ratings. The CreditWatch placement reflected: * the company's announcement to redeem its 10% first-mortgage notes due July 15, 2009, totaling $303 million; * the possibility it will maintain a conservative policy; and * its improved business profile. The company expects to use a combination of cash and drawdowns under its $175 million credit facility to fund the redemption. The notes will be redeemed effective July 15, 2006. "The proposed transaction would significantly improve the balance sheet and financial metrics," said Standard & Poor's credit analyst Thomas Watters. PALM BEACH: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Palm Beach Landscape, Inc. aka P.B. Landscaping, Inc. aka P.B. Landscape, Inc. c/o W. Clark Whiddon, Jr. 14375 Okeechobee Boulevard Loxahatchee, Florida 33470 Bankruptcy Case No.: 06-12642 Type of Business: The Debtors are landscape contractors. Chapter 11 Petition Date: June 19, 2006 Court: Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman Jr. Debtor's Counsel: Julianne R. Frank, Esq. Julianne R. Frank, P.A. 11380 Prosperity Farms Road, Suite 114 Palm Beach Gardens, Florida 33410 Tel: (561) 626-4700 Fax: (561) 627-9479 Total Assets: $963,106 Total Debts: $1,163,328 The Debtor did not file a list of its 20 largest unsecured creditors. PANAMSAT: FCC Gives Nod on Intelsat Holdings Merger --------------------------------------------------- The Federal Communications Commission approved the merger of Intelsat Holdings, Ltd., with PanAmSat Holding Corporation. Upon completion of the transaction, PanAmSat will become an indirect wholly owned subsidiary of Intelsat. Post-merger, PanAmSat and its subsidiaries will continue as separate corporate entities. The transaction involves the transfer of control, to Intelsat, of Commission-issued licenses and authorizations held by PanAmSat Licensee Corp. and PanAmSat H-2 Licensee Corp., two subsidiaries of PanAmSat. The two licensees are authorized to operate non-common carrier Fixed-Satellite Service satellites using the C- and Ku-bands, as well as numerous non-common carrier earth stations that transmit and/or receive signals in those frequency bands. Intelsat is an FSS operator that owns and operates a global satellite system providing end-to-end network services to telecommunications operators, corporate network integrators, governments, Internet service providers, and broadcasters around the world. Intelsat primarily serves the voice, data, and interconnectivity requirements of telecommunications and government customers. PanAmSat is an FSS provider that serves the video market in North America and Latin America and provides satellite services elsewhere in the world. The transaction was unopposed. The Commission conditioned its approval on Intelsat's compliance with certain national security and law enforcement commitments and undertakings Intelsat made to the U.S. Department of Justice, including the Federal Bureau of Investigation, and the U.S. Department of Homeland Security. About Intelsat Intelsat, Ltd. - http://www.intelsat.com/-- offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat's global satellite, teleport and fiber network for high- quality connections, global reach and reliability. About PanAmSat Through its owned and operated fleet of 25 satellites, PanAmSat Holding Corp. (NYSE: PA) -- http://www.panamsat.com/-- is a leading global provider of video, broadcasting and network distribution and delivery services. It transmits 1,991 television channels worldwide and, as such, is the leading carrier of standard and high-definition signals. In total, the Company's in- orbit fleet is capable of reaching over 98 percent of the world's population through cable television systems, broadcast affiliates, direct-to-home operators, Internet service providers and telecommunications companies. In addition, PanAmSat supports satellite-based business networks in the U.S., as well as specialized communications services in remote areas throughout the world. * * * As reported in the Troubled Company Reporter on Aug. 31, 2005, Standard & Poor's Ratings Services placed PanAmSat's `BB' corporate credit rating, the second highest junk level, on CreditWatch with negative implications. The action follows the announcement of a definitive merger agreement between Intelsat and PanAmSat Holding Corp., the parent of PanAmSat Corp. PARMALAT USA: U.S. Court Extends TRO on Creditors Until Sept. 7 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York continued its temporary restraining order until midnight (New York time) of September 7, 2006, at Gordon I. MacRae and James Cleaver's request. The Temporary Restraining Order bars all persons subject to the jurisdiction of the U.S. Court from commencing or continuing any action to collect a prepetition debt against the Debtors without obtaining relief from the Court. Unless further extended, Parmalat Finanziaria will have until October 10, 2006, to answer the petition commencing the ancillary proceedings. Messrs. MacRae and Cleaver were appointed as official liquidators of Parmalat Capital Finance Limited, Dairy Holdings Limited, and Food Holdings Limited by the Grand Court of Cayman Islands in May. The U.S. Bankruptcy Court's consideration of Messrs. MacRae and Cleaver's application for a preliminary injunction is adjourned to September 6, 2006. The Official Liquidators have opted not to seek entry of a preliminary injunction until after the proceedings in the Grand Court are concluded. 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 No. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT USA: Three Suits Consolidated in New York District Court ----------------------------------------------------------------- Gordon I. MacRae and James Cleaver, Joint Official Liquidators of Food Holdings Limited and Dairy Holdings Limited, has filed a lawsuit against various Bank of America entities, Grant Thornton entities, and Deloitte Touche Tohmatsu entities before the U.S. District Court for the Southern District of New York. Messrs. MacRae and Cleaver, also as Joint Official Liquidators of Parmalat Capital Finance Limited, brought separate suits against BofA in a North Carolina state court, and against Grant Thornton in an Illinois state court. The BofA and Grant Thornton litigations were subsequently removed to federal court in their original jurisdictions and then transferred to the Southern District of New York. The Illinois action was transferred pursuant to 28 U.S.C. Section 1404(a), while the North Carolina action was transferred solely for pre- trial administration. The Food & Dairy Litigation, the BofA Litigation and the Grant Thornton Litigation have been consolidated for pre-trial administration before the Honorable Lewis A. Kaplan of the U.S. District Court for the Southern District of New York. The lawsuits allege a myriad of financial improprieties, including fraud, negligent misrepresentation, and breach of fiduciary duty. The Liquidators seek to recover losses the Finance Companies incurred after Parmalat collapsed in 2003. 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 No. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) PETROHAWK ENERGY: S&P Rates Proposed $650 Mil. Senior Notes at B- ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on independent exploration and production company Petrohawk Energy Corp. to 'B' from 'B-'. The ratings upgrade follows the company's pending merger with KCS Energy Inc. Also, Standard & Poor's assigned a 'B-' rating to Petrohawk's $650 million proposed senior unsecured notes (due 2013) that will be used along with bank debt to fund the cash consideration with regards to the KCS Energy transaction, and to refinance existing debt. In addition, the ratings on Petrohawk were removed from CreditWatch with positive implications. The outlook is now stable. At the same time, Standard & Poor's removed the 'B-' ratings on KCS Energy's $250 million senior unsecured notes from CreditWatch with negative implications. The outlook is now stable, and the notes will remain outstanding after the merger with Petrohawk. The ratings are dependent on the successful completion of the transaction as outlined. Related financings and the merger are expected to close on July 12, 2006. The corporate credit rating on KCS Energy will be withdrawn on the close of the transaction. Pro forma for the transaction, Houston, Texas-based Petrohawk will have $1.3 billion in debt. Petrohawk will be purchasing KCS Energy for roughly $1.8 billion, including assumed debt. The purchase price reflects upcycle pricing that is consistent with recent onshore transactions, valued at close to $4 per thousand cubic feet equivalent on a total proved basis. "The stable outlook reflects the expectation that Petrohawk will maintain adequate liquidity to fund capital expenditures and cover fixed charges in the near to intermediate term," said Standard & Poor's credit analyst Jeffrey B. Morrison. Positive ratings actions will likely be limited in the near term, until the company can reduce debt leverage and demonstrate an ability to successfully replace reserves and grow production organically. "Negative ratings actions could result if operating performance deviates materially from our expectations, or if management pursues additional acquisitions in a manner that further degrades the company's financial risk profile," he continued. PROVIDENTIAL HOLDINGS: Gets Financing Pledge for Western Med. Buy ----------------------------------------------------------------- Providential Holdings Inc. (OTCBB:PRVH) (Berlin Stock Exchange and Frankfurt Stock Exchange:PR7 - WKN 935160) received a financing commitment for a total of $5.5 million from Northern Healthcare Capital, LLC, including a $2.5 million revolving working capital line that may be increased to accommodate future sales growth, for the acquisition of key assets of Western Medical, Inc., an Arizona corporation engaged in the business of selling durable medical equipment and providing related services, with headquarters in Phoenix, Arizona. According to the asset purchase agreement previously executed by Western Medical and Providential Holdings, the Company will purchase key assets, valued at approximately $15 million, of Western Medical for $5.25 million in cash. Western Medical filed a Chapter 11 Petition on June 15, 2006, with the U.S. Bankruptcy Court for the District of Arizona. Western Medical currently awaits the decision of the Court, which may assert and approve higher and better bids. The closing of the transaction is subject to the approval of the Court and other conditions as described in the asset purchase agreement and is expected to occur on an agreed-upon date no later than 10 business days following entry of a final Sale Order by the Court. Robert Buceta, corporate strategist of Providential Holdings, Inc., commented: "We are pleased to announce the financing commitment from Northern Healthcare Capital, LLC for this transaction and believe the consummation of this acquisition will greatly benefit all pertinent stakeholders, including Northern Healthcare Capital and Providential Holdings shareholders, in the very near future." About Western Medical Headquartered in Phoenix, Arizona, Western Medical, Inc. -- http://www.westernmedicalinc.net/-- sells and distributes medical and hospital equipment. The company filed for chapter 11 protection on June 15, 2006 (Bankr. D. Ariz. Case No. 06-01784). Brenda K. Martin, Esq., at Osborn Maledon, P.A., represents the Debtor. When the Debtor filed for protection from its creditors, it estimated asstes between $1 million to $10 million and debts between $10 million and $50 million. About Providential Holdings Basedin Huntington Beach, California, Providential Holdings, Inc. (OTCBB:PRVH) -- http://www.phiglobal.com/-- specializes in mergers and acquisitions and independent energy business. The Company acquires and consolidates special opportunities in selective industries to create additional value, acts as an incubator for emerging companies and technologies, and provides financial consultancy and M&A advisory services to U.S. and foreign companies. Going Concern Doubt As reported in the Troubled Company Reporter on Dec. 14, 2005, Kabani & Company, Inc., raised substantial doubt about Providential Holdings, Inc.'s ability to continue as a going concern after it audited the Company's financial results for the year ended June 30, 2005. The auditors pointed to the Company's accumulated deficit and losses in the years ended June 30, 2005, and 2004. At March 31, 2006, the Company's balance sheet showed accumulated deficit of $18,970,157. The company posted a $186,050 net loss for the period ended March 31, 2006. REDPRAIRIE CORP: S&P Junks Rating on New $45 Million Facility ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Waukesha, Wisconsin-based RedPrairie Corp. At the same time, Standard and Poor's assigned its 'B' rating, with a recovery rating of '2', to RedPrairie's proposed $170 million first-lien senior secured bank facility, which will consist of a 5-year, $20 million revolving credit facility and a 6-year, $150 million term loan. Standard & Poor's also assigned its 'CCC+' rating, with a recovery rating of '5', to RedPrairie's proposed 6.5-year, $45 million second-lien senior secured bank facility. The outlook is stable. The first-lien bank loan rating, which is the same as the corporate credit rating, along with the '2' recovery rating, reflect Standard & Poor's expectation of substantial (80%-100%) recovery of principal by creditors in the event of a payment default. The second-lien bank loan rating, which is two notches below the corporate credit rating, along with the '5' recovery rating, reflect Standard & Poor's expectation of negligible (0%-25%) recovery of principal by creditors in the event of a payment default or bankruptcy, given their priority in the capital structure. Proceeds from the facilities, along with approximately $29 million of cash and equity, will be used to fund the acquisition of BlueCube Software Inc. and to refinance existing debt. "The ratings on RedPrairie reflect its narrow product focus within a highly competitive and consolidating marketplace, moderately acquisitive growth strategy, and high debt leverage," said Standard & Poor's credit analyst Ben Bubeck. These are only partly offset by a largely recurring revenue base, supported by a broad customer base and relatively stable operating margins. RedPrairie is a global provider of supply chain execution software and services for warehouse, labor and transportation management activities, coordinating interaction between manufacturers, distributors, wholesalers and retailers. Pro forma for the proposed bank facilities, RedPrairie will have approximately $205 million of operating lease-adjusted total debt as of June 2006. REEDS INC: Post $369,597 Net Loss in First Quarter 2006 ------------------------------------------------------- Reed's Inc. filed its first quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on June 15, 2006. The Company reported an $369,597 net loss on $1,979,272 of sales for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $5,138,925 in total assets and $5,054,014 in total liabilities resulting in $84,911 stockholders' deficit. The March 31 balance sheet also showed accumulated deficit at $3,628,660. The Company's March 31 balance sheet further showed strained liquidity with $2,454,126 in total current assets available to pay $3,769,282 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?bae Going Concern Doubt Weinberg & Company, P.A., in Los Angeles, California, raised substantial doubt about Reed 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 incurred loss in operations and working capital deficiency. About Reed Inc. Reed's Inc. produces and distributes herbal drink supplements in the United State and Canada. Chris Reed, CEO and president, holds 60 percent of the company. REFCO INC: Refco FX Issues Correction on FX Trading.com Release --------------------------------------------------------------- In response to a number of serious factual errors contained in a news release issued by FX Trading.com on Saturday, June 17, 2006, Refco FX Associates, LLC, a subsidiary of Refco Inc., sought to clarify information regarding the sale of RFXA and its customers' ability to trade on the refcofx.com website. RFXA reiterated that, because of its bankruptcy filing October 17, 2005, RFXA customers have not been permitted to withdraw amounts on deposit with refcofx.com or to make additional deposits. Customers have been allowed to continue to trade throughout the bankruptcy based on the balances shown in their accounts as of the bankruptcy filing date and can continue to do so through June 30, 2006 at which time trading will no longer be permitted. In previous announcements, RFXA has said that it is seeking buyers both for its 35% stake in the website operation, which is majority owned and operated by Forex Capital Markets, Ltd., and its customer accounts and related assets. "In what seems to be a blatant attempt to solicit RFXA customers and interfere with the bankruptcy process, FX Trading distributed what purports to be a news release that contained a number of serious misstatements and factual errors," said Harrison J Goldin, chief executive officer of Refco, Inc. "This has the potential of impeding the sale process and serves neither our customers nor creditors, who would ultimately benefit from such a transaction. This is because a sale of the customer accounts would likely involve at least the partial assumption of account balances for those customers who trade with the buyer after the sale." 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). REYNOLDS AMERICAN: Tender Offer for Unit's $1.45 Bil. Notes Expire ------------------------------------------------------------------ Reynolds American Inc. (NYSE: RAI) reported the expiration of its previously announced offer to exchange, in a private offering, its new senior secured notes for up to $1.45 billion aggregate principal amount outstanding of notes previously issued by RAI's direct, wholly owned subsidiary, R.J. Reynolds Tobacco Holdings, Inc., and the related consent solicitation to amend the indentures under which the RJR Notes were issued. The exchange offer expired at 5:00 p.m., New York City time, on June 16, 2006. The RJR Notes consist of: * $300 million aggregate principal amount of 6.500% Notes due 2007; * $200 million aggregate principal amount of 7.875% Notes due 2009; * $300 million aggregate principal amount of 6.500% Secured Notes due 2010; * $450 million aggregate principal amount of 7.250% Notes due 2012; and * $200 million aggregate principal amount of 7.300% Secured Notes due 2015. As of the Expiration Date, approximately $1.29 billion aggregate principal amount of the RJR Notes (approximately 88.9% of the total outstanding) had been validly tendered for exchange and not withdrawn, including: * $236.4 million aggregate principal amount of 6.500% Notes due 2007 (78.8% of that series); * $185.7 million aggregate principal amount of 7.875% Notes due 2009 (92.9%); * $299.3 million aggregate principal amount of 6.500% Secured Notes due 2010 (99.8%); * $367.9 million aggregate principal amount of 7.250% Notes due 2012 (81.8%); and * $199.4 million aggregate principal amount of 7.300% Secured Notes due 2015 (99.7%). RAI will accept all of these RJR Notes validly tendered and not withdrawn as of the Expiration Date. Settlement of the exchange offer is expected to occur on June 20, 2006. Upon settlement of the exchange offer, RAI will issue its new series of RAI Exchange Notes, in the aggregate principal amount of approximately $1.29 billion, each of which series will have identical terms as the corresponding series of RJR Notes exchanged with respect to principal amounts, interest rates, redemption terms and interest payment and maturity dates. Holders of the RJR Notes were eligible to participate in the exchange offer only if they were either: (a) "institutional accredited investors" as defined in Rule 501(a)(1),(2),(3) and (7) under the Securities Act of 1933, as amended, and also "qualified institutional buyers" as defined in Rule 144A under the Securities Act; or (b) non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. The RAI Exchange Notes have not been registered under the Securities Act or any state securities laws. Therefore, the RAI Exchange Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws. In conjunction with the exchange offer, consents were solicited to eliminate substantially all of the restrictive covenants and a bankruptcy event of default contained in the two indentures governing the RJR Notes. As of the Expiration Date, the requisite number of consents to adoption of the proposed amendments to both indentures had been validly delivered and not validly revoked. Accordingly, The Bank of New York Trust Company, N.A., as trustee under the indentures, RJR as issuer, and RAI and the other guarantors of the RJR Notes will enter into supplemental indentures effecting the amendments, which will be operative upon RAI's acceptance of the RJR Notes validly tendered in the exchange offer and not validly withdrawn. Reynolds American Inc. -- http://www.ReynoldsAmerican.com-- is the parent company of R.J. Reynolds Tobacco Company, Conwood Company, L.P., Santa Fe Natural Tobacco Company, Inc., Lane Limited and R.J. Reynolds Global Products, Inc. R.J. Reynolds Tobacco Company, the second-largest U.S. tobacco company, manufactures about one of every three cigarettes sold in the country. The company's brands include five of the 10 best- selling U.S. brands: Camel, Kool, Winston, Salem and Doral. Conwood Company, L.P. is the nation's second-largest manufacturer of smokeless tobacco products. Its leading brands are Kodiak, Grizzly and Levi Garrett. Santa Fe Natural Tobacco Company, Inc. manufactures Natural American Spirit cigarettes and other tobacco products for U.S. and international markets. Lane Limited manufactures several roll-your-own, pipe tobacco and little cigar brands, and distributes Dunhill tobacco products. R.J. Reynolds Global Products, Inc. manufactures, sells and distributes American-blend cigarettes and other tobacco products to a variety of customers worldwide. * * * As reported in the Troubled Company Reporter on May 24, 2006, Fitch assigned a 'BB+' rating to Reynolds American Inc.'s Guaranteed secured notes. SANITARY & IMPROVEMENT: Wants Until July 1 to File Chapter 9 Plan ----------------------------------------------------------------- Sanitary & Improvement District 425 of Douglas County, Nebraska, and the Official Committee of Unsecured Creditors appointed in the District's Chapter 9 case ask the U.S. Bankruptcy Court for the District of Nebraska to further extend until July 1, 2006, the time within which the Debtor can file its plan of adjustment for the Debtor's debts. The Debtor and the Committee have been working closely to prepare a supplemental matrix and schedules of creditors and to inform creditors as to the status and nature of bankruptcy. Furthermore, they have been working with the Debtor's members and various security firms to prepare projections as to the Debtor's income over the next several years in order to determine feasibility of payments to creditors. The extension will provide the Debtor and the Committee more time to prepare and formulate a consensual plan. Headquartered in Omaha, Nebraska, Sanitary & Improvement District 425 of Douglas County, Nebraska filed for chapter 9 protection on Oct. 26, 2005 (Bankr. D. Nebr. Case No. 05-85871). Mark James LaPuzza, Esq., at Pansing Hogan Ernst & Bachman, LLP, represents the Debtor in its restructuring efforts. William L. Biggs, Jr., Esq., at Gross & Welch represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $500,000 to $1 million and estimated debts between $10 million to $50 million. SILICON GRAPHICS: Taps Morgan Lewis as Special IP Counsel --------------------------------------------------------- Pursuant to Sections 327(e) and 328(a) of the Bankruptcy Code, Silicon Graphics, Inc., and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of New York's authority to employ Morgan, Lewis & Bockius LLP as their special intellectual property counsel, nunc pro tunc to the Petition Date. According to Kathy Lanterman, senior vice president and chief financial officer of Silicon Graphics, Inc., it is essential for the Debtors to employ special advisors because of the nature of the Debtors' operations and contemplated reorganization. Ms. Lanterman relates that Morgan Lewis has extensive expertise, experience and knowledge in the field of intellectual property making it well qualified to represent the Debtors. The professionals of Morgan Lewis are members in good standing of the Bar of the states of California and New York, Ms. Lanterman says. In addition, Ms. Lanterman points out that Douglas J. Crisman, Esq., a partner at Morgan Lewis, is intimately familiar with the Debtors' intellectual property portfolio and businesses and the relevant legal issues because he was formerly SGI's director of Intellectual Property. As IP Counsel to the Debtors, Morgan Lewis will be responsible for: -- counseling the Debtors with respect to patent, trademark, licensing, open source, and other issues relating to transactional and non-transactional matters; and -- the litigation of intellectual property disputes, including matters that may come before the Court in connection with the Debtors' Chapter 11 case concerning intellectual property. Morgan Lewis' customary hourly rates are: Professionals Rates Per Hour ------------- -------------- Counsel $330 to $530 Douglas J. Crisman $450 Partners $430 to $750 Andrew Gray $530 James Bollinger $750 Associates $210 to $500 Tim Heaton $500 Paraprofessionals $130 to $200 Jeremy Sullivan $175 Mr. Crisman informs the Court that prior to the Petition Date, Morgan Lewis received a $50,000 general retainer for services rendered and expenses incurred on behalf of the Debtors. The firm has applied the retainer to prepetition fees and holds the balance to be applied to postpetition fees and expenses, as allowed by the Court. As of the Petition Date, the Debtors do not owe Morgan Lewis any amounts for prepetition services or expenses that are not covered by the retainer. Mr. Crisman assures the Court that his firm does not have any connection with or interest adverse to the Debtors or any party- in-interest. Morgan Lewis has not and will not represent any parties other than the Debtors in their Chapter 11 cases or in connection with any adverse matters, he says. 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) SILICON GRAPHICS: Court OKs Lease Settlement Pact with 3 Landlords ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York overruled all the objections not settled or withdrawn and approved Silicon Graphics, Inc., and its debtor-affiliates' settlement agreement with the landlords of three nonresidential real property leases located in Mountain View, California: Lease Landlord Location ----- -------- -------- CTC-A WXIII/Crittenden Realty 1200 Crittenden Lane A/B, L.L.C. CTC-C/D WXIII/Crittenden Realty C, 1400 Crittenden Lane L.L.C., and WXIII/Crittenden and 1500 Crittenden Realty D, L.L.C. Lane ATC WXIII/Amphitheatre 1600 Amphitheatre Realty, L.L.C. Parkway A copy of the Settlement Agreement is available for free at http://researcharchives.com/t/s?aab Capmark Responds Prior to the Court's approval, Capmark Financial Group, Inc., formerly known as GMAC Commercial Mortgage Corporation, is a leasehold mortgagee, and Silicon Graphics, Inc., is a tenant, for one of the premises located at 1200 Crittenden Lane, Mountain View, California 94043. Lorri E. Staal, Esq., at Dechert LLP, in New York, relates that to secure its obligations under its lease, SGI arranged for a $4,500,000 letter of credit to be issued by Wells Fargo Bank, N. A., for the benefit of both Capmark and the landlord of the Premises, WXIII/Crittenden realty A/B, LLC. The Lease defines "event of default" to include a filing of a bankruptcy petition by SGI. Pursuant to the Letter of Credit, by an Event of Default, Capmark is permitted to draw down the full amount of funds available. On May 8, 2006, the Debtors commenced the adversary proceeding seeking to permanently enjoin Capmark from drawing on or receiving proceeds of the Letters of Credit based on the Event of Default. The Debtors also asked for a temporary restraining order and a preliminary injunction. Capmark has not yet drawn on the Letter of Credit but has reserved all of its rights to do so in the future. Ms. Staal relates that the Debtors negotiated with the Landlord regarding termination of the Lease. The Landlord and its affiliates also negotiated a sale of their leasehold interests to and reached an agreement in principle with Google, Inc. Capmark does not object to the Settlement Agreement. However, if the Court does not approve the Settlement Agreement in its entirety, or if the purchase agreement with Google is not consummated, Capmark reserves all of its rights with respect to the Letter of Credit. Accordingly, Capmark asks the Court to deny the Debtors' request to the limited extent it impairs Capmark's right to draw down the entire amount of the Letter of Credit based on any Event of Default under the Lease. Committee Joins In Settlement The Official Committee of Unsecured Creditors supports the Debtors' request to approve their settlement agreement with WXIII/Amphitheatre Realty, L.L.C., WXIII/Crittenden Realty A/B, L.L.C., WXIII/Crittenden Realty C, L.L.C., and WXIII/Crittenden Realty D, L.L.C. Google Buys California Property On June 9, 2006, Google, Inc., entered into a Purchase and Sale Agreement with: * WXII/Amphitheatre Realty, L.L.C., * WXIII/Crittenden Realty A/B, L.L.C., * WXIII/Crittenden Realty C, L.L.C., and * WXIII/Crittenden Realty D, L.L.C. According to Eric Schmidt, chairman of the Executive Committee and chief executive officer of Google, Inc., the Company has agreed to purchase all of the Landlords' leasehold title to the property located at 1600 Amphitheatre Parkway and 1200-1500 Crittenden Lane, Mountain View, California, totaling approximately 978,066 square feet. Mr. Schmidt, in a regulatory filing with the Securities and Exchange Commission, discloses that Google will pay $319,000,000, of which $10,000,000 was placed into escrow on June 9, 2006. The ownership of the Property is subject to ground leases with the City of Mountain View, Santa Clara County, California. Google has agreed to assume the Landlords' rights and obligations under the Ground Lease. Mr. Schmidt discloses that the Ground Lease related to 1600 Amphitheatre contains an initial term expiring in 2050 with four options to extend the term for additional periods of ten years each. Rent payments under the 1600 Amphitheatre Ground Lease will be approximately $140,000 per month and will increase by 4% each year thereafter. In addition, rent payments under the 1600 Amphitheatre Ground Lease will be re-adjusted every ten years so that the annual rent equals 7% of the then-current fair market value. Additionally, Mr. Schmidt continues, the Ground Lease related to 1200-1500 Crittenden Lane contains an initial term expiring in 2051 with four options to extend the term for additional periods of ten years each. Rent payments under the 1200-1500 Crittenden Lane Ground Lease will be approximately $175,000 per month will increase by 4% each year thereafter. Rent payments under the 1200-1500 Crittenden Lane Ground Lease will be re-adjusted every ten years so that the annual rent equals 7% of the then-current fair market value. In addition to customary closing conditions, the purchase of the Property is subject to: (1) the approval by the bankruptcy court overseeing Silicon Graphics, Inc.'s bankruptcy action of a settlement agreement between SGI and the Sellers relating to certain commercial leases on the Property; and (2) the written consent by the City of Mountain View of the assignment of the Ground Lease by the Sellers to Google. With the recent bankruptcy court approval of the SGI Agreement, Google expects the transaction to close no later than June 30, 2006; provided, however, that the Landlords may extend the closing date for a period of up to 15 days in order to satisfy certain closing conditions. Prior to entering into the Purchase Agreement, Google subleased certain office space at 1600 Amphitheatre from SGI, subject to a master commercial lease between SGI and the Landlords. 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. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOYODO GROUP: March 31 Balance Sheet Upside-Down by $420,032 ------------------------------------------------------------ Soyodo Group Holdings, Inc. filed its 1st quarter financial statements for the three months ended March 31, 2006, with the Securities and Exchange Commission on May 30, 2006. The Company reported a $187,158 net loss on $680,103 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $1,407,954 in total assets, $1,827,986 in total liabilities, resulting in a $420,032 stockholders' deficit. A full-text copy of the Company's financial statements for the three months ended March 31, 2006, are available for free at http://researcharchives.com/t/s?ad7 Going Concern Doubt Jaspers + Hall, P.C., in Denver, Colorado, raised substantial doubt about Soyodo'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 difficulty to generate sufficient cash flows to meet its obligations and sustain its operations. As of December 31, 2005, the Company's current liabilities exceeded its current assets by $583,387, and it incurred a net loss of $232,874. The Company has signed operating leases with a financial commitment totaling $1,558,000 in the next three years. Soyodo's management believes that the Company's ability to continue as a going concern is dependent upon its ability to achieve profitable operations and to develop additional sources of capital. About Soyodo Group Based in Monterey Park, California, Soyodo Group Holdings, Inc. is engaged in the retail business in locations around the country with large Chinese immigrant populations, offering Chinese culture-related merchandise such as books, pre-recorded CDs, stationery, gifts, and sports goods from China. The company operates six stores in California and Illinois. SYSTEMS EVOLUTION: Files Four Amended Financial Statements ---------------------------------------------------------- Systems Evolution Inc. filed with the Securities and Exchange Commission on June 16, 2006, its amended financial statements for: -- the year ended May 31, 2005; -- the first quarter ended Aug. 31, 2005; -- the second quarter ended Nov. 30, 2005; and -- the third quarter ended Feb. 28, 2006. The Company's Statement of Operations showed: For the period ended ------------------------------------------------- Year Quarter Quarter Quarter 05/31/05 08/31/05 11/30/05 02/28/06 ---------- ---------- ---------- ----------- Revenues $3,768,687 $1,355,388 $1,049,601 $1,116,756 Net (Loss) ($1,718,908) ($1,325,088) ($2,858,873) ($9,577,812) The company's Balance Sheet showed: For the period ended ------------------------------------------------- Year Quarter Quarter Quarter 05/31/05 08/31/05 11/30/05 02/28/06 ---------- ---------- ---------- ----------- Current Assets $933,793 $902,086 $857,694 $809,245 Total Assets $9,294,788 $9,056,849 $8,368,799 $7,928,335 Current Liabilities $6,320,705 $7,215,103 $9,028,577 $18,087,113 Total Liabilities $6,477,848 $7,393,594 $9,259,745 $18,312,907 Total Stockholders' Equity (Deficit) $2,816,940 $1,663,255 ($890,946) ($10,384,572) Reasons of Amendment These financial statements were restated to properly reflect derivative accounting for warrants issued to consultants; and conversion features of convertible notes payable and their associated warrants. Warrants issued to consultants and those associated with the convertible notes payable have been accounted for as freestanding derivative liabilities instead of equity as were originally filed. Additionally, the embedded conversion options of the convertible notes payable have been bifurcated from the debt and accounted for separately as derivative liabilities instead of equity as were originally filed. Full-text copies of the company's financial statements are available for free at: Year Ended May 31, 2005 http://ResearchArchives.com/t/s?bb5 First quarter ended Aug. 31, 2005 http://ResearchArchives.com/t/s?bb6 Second quarter ended Nov. 30, 2005 http://ResearchArchives.com/t/s?bb7 Third quarter ended Feb. 28, 2006 http://ResearchArchives.com/t/s?bb8 Going Concern Doubt Malone & Bailey, PC, in Houston, Texas, raised substantial doubt about Systems Evolution Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended May 31, 2005. The auditor pointed to the Company's significant losses for the last three fiscal years. About Systems Evolution Systems Evolution Inc. (OTCBB: SEVI) is a professional service organization that provides computer software development services, computer network support, and contract staff. The Company uses Microsoft, Novell, and IBM Rational tools to build software and support computer networks and its largest client is the State of Texas government. TEXAS PETROCHEMICALS: S&P Rates $70 Million Facility at B+ ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Texas Petrochemicals LP and its 'B+' bank loan rating and recovery rating of '2' on TPC's proposed first-lien term loan facility. The term loan facility has been reduced to $210 million from $280 million, to provide for the addition of a proposed $70 million prefunded synthetic letter of credit facility. Standard & Poor's also assigned its 'B+' rating and '2' recovery rating to the company's $70 million prefunded synthetic letter of credit facility. These facilities, together with a $115 million revolving credit facility, constitute a $395 million package of senior secured credit facilities. The bank loan ratings are based on preliminary terms and conditions. The outlook is stable. TPC's revised financing plan follows a modification in the structure of a transaction to acquire a large butadiene facility from Huntsman Corp. The approximately $270 million acquisition price now incorporates a $70 million contingency component which is payable only on achievement of certain milestones by Huntsman Corp. These milestones relate to Huntsman's ability to meet certain performance thresholds in the supply of crude C4 feedstock to the acquired facility within 2.5 years of the closure of the transaction. Huntsman's ability to supply crude C4 to the facility acquired by TPC has been negatively affected by a recent explosion in Huntsman's Port Arthur facilities, which produce crude C4. "The ratings reflect TPC's narrow product range, concentration of revenue and earnings in a few customers and products, potential for cyclicality of some earnings, and uncertainty in demand growth in key markets," said Standard & Poor's credit analyst Paul Kurias. Standard & Poor's also notes the considerable integration and execution risks associated with the acquisition of a large butadiene facility from Huntsman Corp. and conversion of existing methyl tertiary butyl ether facilities to produce high value products. These risk factors are partly offset by the company's moderate leverage, although without the benefit of proven financial policies, stability in margins in key products resulting from favorable contractual terms with suppliers of crude C4 feedstock, and a favorable competitive position with leading market shares in key products. Houston, Texas-based TPC, along with its operating subsidiaries, processes petrochemical feedstocks (crude C4) to produce commodity chemicals including butadiene. The company's main product, butadiene, is an input in synthetic rubber production in the U.S., most of which is consumed by the domestic tire industry. TPC also currently produces MTBE, a fuel additive, whose sales are expected to decline sharply in the near-term following legislation that no longer requires refineries to add oxygenates into fuel, and following environmental concerns with the product. TPC plans to convert its MTBE facilities to produce specialty high-value products (therefore future contributions from MTBE have not been assumed as part of the business plan). TIER TECHNOLOGIES: Releases Unaudited Preliminary Financials ------------------------------------------------------------ Tier Technologies, Inc. (OTC: TIER) has released preliminary unaudited financial results for the fiscal year ended Sept. 30, 2005, and for the quarter ended Dec. 31, 2005. Currently, the Company's auditors are reviewing these financial results. The Company says the financial statements could change significantly. Tier's preliminary revenues were $150.6 million during fiscal 2005. Preliminary 2006 First Quarter Results During the quarter ended Dec. 31, 2005, Tier's revenues were $38.5 million, and net income was $400,000. Pre-tax operating costs and expenses exceeded revenues by $300,000 in the quarter. The $300,000 pre-tax operating loss incurred during the quarter ended Dec. 31, 2005, includes $1.0 million of costs incurred to reconcile the accounts of one of our payment processing centers, plus $300,000 of compensation expenses associated with the implementation of SFAS No. 123R -- Share-Based Payment. The audit and review of the Company's historical financial statements is ongoing. Accordingly, the Company is not in a position to refile its: -- historical financial statements; -- Annual Report on Form 10-K for fiscal year 2005; -- Quarterly Reports on Form 10-Q for the fiscal periods ended Dec. 31, 2005, and March 31, 2006. Tier is making every effort to help its auditors complete their work as quickly as possible, and will file its restatements when the work is completed. "As demonstrated by these unaudited financial statements, Tier is a healthy, growing company" Ronald L. Rossetti, the Company's chief executive officer, said. "With revenues in fiscal year 2005 of $151 million, approximately $65 million in cash, cash equivalents and investments and no debt, Tier is clearly financially stable, and well positioned for continued future growth." As reported in the Troubled Company Reporter on April 11, 2006, the Audit Committee of the Company's Board of Directors retained the independent law firm of Ropes & Gray LLP in December 2005 to conduct an independent investigation of restatement-related issues. The scope of the investigation includes: (i) examination of the qualitative and financial reporting issues giving rise to the restatement, including the issues Tier's management brought to the Audit Committee's attention; (ii) review of Tier's proposed restatement and related filings as they are prepared by the Company; (iii) review of accounting control and management issues that come to the Audit Committee's attention during the course of its investigation; and (iv) identification of remedial measures that the Audit Committee recommends the Company implement in light of its findings. On April 5, 2006, Tier provided the Panel with a substantive status report addressing the questions posed by the Panel on March 10, 2006, which the Company was required to address as a condition of continued listing on The Nasdaq National Market. While the Company believes it has satisfied this condition to continued listing, there can be no assurance that the Panel will find this report satisfactory, in which case Tier's common stock could be delisted from The Nasdaq National Market. About Tier Headquartered in Reston, Virginia, Tier Technologies, Inc. -- http://www.tier.com/-- provides transaction processing and packaged software and systems integration services to more than 2,200 federal, state, and local governments, educational institutions, utilities and commercial clients in the U.S. and abroad. The Company, through its subsidiary, Official Payments Corp. -- http://www.officialpayments.com/-- designs, installs and maintains cutting-edge public sector software systems, and delivers fast, secure and convenient financial transaction processing solutions. Defaults As reported in the Troubled Company Reporter on March 21, 2006, the expected restatement, the delayed availability of Tier Technologies, Inc.'s financial statements for the fiscal year ended Sept. 30, 2005, and the anticipated loss for the quarter ended Sept. 30, 2005, constituted events of default under the revolving credit agreement between the Company and its lender, City National Bank. In addition, the Company incurred similar events of default for the quarter ended Dec. 31, 2005. TRIMEDIA ENT: April 30 Balance Sheet Upside-Down by $8.2 Million ---------------------------------------------------------------- Trimedia Entertainment Group, Inc., filed its first quarter financial statements for the three months ended April 30, 2006, with the Securities and Exchange Commission on May 19, 2006. The Company reported an $836,573 net loss on $13,857 of net revenues for the three months ended April 30, 2006. At April 30, 2006, the Company's balance sheet showed $621,020 in total assets and $8,884,331 in total liabilities resulting in $8,263,311 stockholders' deficit. The Company's April 30 balance sheet also showed strained liquidity with $228,285 in total current assets available to pay $7,784,331 n 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?bb1 Going Concern Doubt As reported in the Troubled Company Reporter on March 27, 2006, Cogen Sklar, LLP expressed substantial doubt about TriMedia's ability to continue as a going concern after auditing the Company's financial statements for the years ended October 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations, negative working capital and negative cash flows. TriMedia says that it may incur further operating losses and experience negative cash flow in the future. Achieving profitability and positive cash flow depends on its ability to generate sufficient revenues from its films and recording studio and its ability to raise additional capital. "But there can be no assurances that the Company will be able to generate sufficient revenues or raise additional capital to achieve and sustain profitability and positive cash flow in the future," management says in its latest quarterly report. A full-text copy of TriMedia's quarterly report is available for free at http://ResearchArchives.com/t/s?6ed New CFO On June 14, 2005, the Company's Board of Directors terminated the employment of Shawn Taylor as chief financial officer and Daniel Taylor as president. The Board appointed Christopher Schwartz to the position of chief financial officer and president following the termination. About TriMedia Founded in 2002, TriMedia Entertainment Group, Inc., -- http://www.trimediaent.com/-- is an international multimedia entertainment company with a focus on developing entertainment content. The company primarily produces films and recorded music on the DVD and CD formats. The Company produces and distributes music and filmed entertainment content through holdings such as Ruffnation Music, Metropolitan Recording, Ruffnation Films, and Snipes Production. The company has a strategic partnership with Sony, giving Ruffnation Films access to Sony BMG artists, which the company plans to feature in its low-budget films and their related soundtracks. CEO Christopher Schwartz owns 46% of TriMedia. At Jan. 31, 2006, TriMedia Entertainment's stockholders' equity deficit widened to $7,426,738, from a $6,788,180 deficit reported at Oct. 31, 2005. TRUMP ENT: Partners with Diamondhead to Develop Miss. Property -------------------------------------------------------------- Trump Entertainment Resorts, Inc. and Diamondhead Casino Corporation signed a letter of intent pursuant to which the parties intend to form a joint venture partnership to develop, build and operate a destination casino resort in Diamondhead, Mississippi. The joint venture would cover a minimum of forty acres within a 404-acre tract of land owned by Mississippi Gaming Corporation, a wholly owned subsidiary of Diamondhead. The Diamondhead tract fronts Interstate 10 for approximately two miles and the Bay of St. Louis for approximately two miles and is located in Hancock County, Mississippi. The property is zoned as a Special Use District-Waterfront Gaming District by Hancock County. On October 17, 2005, following Hurricane Katrina, Mississippi Governor Haley Barbour signed a bill into law that permits casinos to be built on land up to 800-feet from the mean high water line of certain bodies of water. The new law applies to the Diamondhead property. "We believe a partnership with Trump Entertainment Resorts for this venture adds up to an ideal combination because of their experience, the value of the Trump brand, the location of our site on Interstate 10 and the vitality of the Gulf Coast market," said Deborah A. Vitale, the Chairman, Chief Executive Officer and President of Diamondhead. "We have the land, the location and the desire to pursue a master plan for the entire tract that should not only enhance long term shareholder value, but which should significantly enhance the surrounding economy." "As we renovate and re-brand our Atlantic City properties, we are also focused on our corporate development initiatives and expanding the Trump brand into new markets," said James B. Perry, President and Chief Executive Officer of Trump Entertainment Resorts, Inc. "We are excited about the prospect of bringing the Trump brand to the Gulf Coast, and we hope to join private and public entities in redeveloping the region. We believe that this is a great opportunity to create value for our company, our shareholders and the citizens of Mississippi." About Diamondhead Casino Diamondhead Casino Corporation (OTCBB: DHCC), through its wholly owned subsidiary, Mississippi Gaming Corporation, owns and intends to develop, in cooperation with a joint venture partner, approximately 404 acres of land in Diamondhead, Mississippi. Diamondhead intends to develop the property as a destination casino resort and hotel with condominiums and other amenities. About Trump Entertainment Headquartered in Atlantic City, New Jersey, Trump Entertainment Resorts, Inc., fka Trump Hotels & Casino Resorts, Inc. (NASDAQ: TRMP) -- http://www.thcrrecap.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The Company and its debtor-affiliates filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A., represent the Debtors in their successful chapter 11 restructuring. When the Debtors filed for protection from their creditors, they listed more than $500 million in total assets and more than $1 billion in total debts. The Court confirmed the Debtors' Second Amended Plan of Reorganization on Apr. 5, 2005, and the plan took effect on May 20, 2005. (Trump Hotels Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000). * * * As reported in the Troubled Company Reporter on Nov. 10, 2005, Moody's Investors Service affirmed the ratings of Trump Entertainment Resorts, Inc.'s $200 million senior secured revolver due 2010 at B2; $150 million senior secured term loan due 2012 at B2; $150 million senior secured delayed draw term loan due 2012 at B2; $1.25 billion second lien senior secured notes due 2015 at Caa1; Speculative grade liquidity rating at SGL-3; and Corporate family rating at B3. Moody's said the rating outlook is stable. ULTRADATA SYSTEMS: March 31 Balance Sheet Upside-Down by $3.9 Mil. ------------------------------------------------------------------ Ultradata Systems, Inc., incurred a $310,715 net loss on $85,326 in revenues in the quarter ending March 31, 2006, the Company reported in a Form 10-QSB filed with the U.S. Securities and Exchange Commission. As of March 31, 2006, the Company's balance sheet reported assets amounting to $182,983 and liabilities aggregating $4,096,037. The Company's equity deficit narrowed to $3,913,054 from a $4,919,458 equity deficit at Dec. 31, 2005. A full-text copy of the Company's Quarterly Report is available for free at http://ResearchArchives.com/t/s?bb4 Ultradata Systems, Inc., manufactures and markets handheld computers that provide travel information. The products are based upon a data compression technology that the Company developed, portions of which it patented. Going Concern Doubt Webb & Company, P.A., the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's 2005 financial statements. Webb & Company pointed to the Company's net losses, negative cash flow from operations, working capital deficiency and a stockholders' deficiency. UNITY VIRGINIA: Hires Cavazo Hendricks as Bankruptcy Counsel ------------------------------------------------------------ Unity Virginia Holdings, L.L.C., and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Northern District of Texas to employ Cavazos, Hendricks & Poirot, P.C., as their bankruptcy counsel. Cavazo Hendricks is expected to: 1. analyze the Debtors' financial situations and render advice to the Debtors pertaining to the filing of their petitions in bankruptcy; 2. prepare and file the Debtors' petitions, schedules, statements of affairs, plan and disclosure statement; 3. represent the Debtors at the meeting of creditors and at any confirmation hearing, and at any adjourned or continued hearings thereof; 4. represent the Debtors in negotiations with creditors in regard to the Debtors preparation and filing of a disclosure statement and a plan of reorganization; 5. advise and consult the Debtors concerning questions arising in the conduct of the administration of their respective estates and concerning applicants' rights and remedies with regard to assets and the claims of their respective estates and other issues pertaining thereto that may arise from unknown parties, creditors and parties in interest; and 6. represent the Debtors in any contested matters, adversary proceedings, claims litigation and actions and any an all other actions involving their respective bankruptcy cases or property of their respective bankruptcy estates, if, as and when required or necessary. Rod L. Poirot, Esq., a shareholder at Cavazo Hendricks, tells the Court that he will bill $275 per hour for this engagement. Mr. Poirot discloses that the firm's other professionals bill: Professionals Hourly Rate ----------------- ----------- Arnaldo N. Cavazos, Jr., Esq. $310 Charles B. Hendricks, Esq. $290 Craig H. Smitham, Esq. $275 James C. Jarrett, Esq. $180 Michael W. Sebesta, Esq. $195 Paralegals $10 - $90 Mr. Poirot further discloses that Karl Singer, the Debtors' manager, has agreed to pay the firm a $56,000 retainer. Mr. Poirot assures the Court that his firm does not represent any interest adverse to the Debtor, its estate or creditors. Mr. Poirot can be reached at: Rod L. Poirot, Esq. Cavazo, Hendricks & Poirot, P.C. Suite 570, Founders Square 900 Jackson Street Dallas, Texas 75202 Tel: (212) 748-8171 Fax: (212) 748-6750 http://www.chfirm.com/ Headquartered in Dallas, Texas, Unity Virginia Holdings LLC, operates a coal mining and processing company. The company filed for chapter 11 protection on May 10, 2006 (Bankr. N.D. Tex. Case No. 06-31937). James C. Jarret, Esq., and Arnaldo N. Cavazos, Jr., Esq., at Cavazos, Hendricks & Poirot, P.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. Four of the Debtor's affiliates, Glamorgan Coal Resources LLC, Glamorgan Processing LLC, Glamorgan Properties LLC, and Glamorgan Refuse LLC, filed for chapter 11 protection on May 12, 2006 (Bankr. N.D. Tex. Case Nos. 06-31953 through 06-31956). Another affiliate, Glamorgan OPerations, LLC, filed for chapter 11 protection on May 17, 2006 (Bankr. N.D. Tex. Case No. 06-31995). No Official Committee of Unsecured Creditors has been appointed in the Debtors cases. USG CORP: Emerges from Bankruptcy After Plan Effectivity -------------------------------------------------------- USG Corporation's (NYSE:USG) Plan of Reorganization became effective yesterday, formally concluding its Chapter 11 proceedings. The Plan was confirmed last week by two judges for the United States Bankruptcy Court and the U.S. District Court for the District of Delaware, enabling the building materials company to complete the bankruptcy case and emerge from Chapter 11. The company is beginning the process of repaying its creditors and funding an asbestos trust that will be responsible for compensating asbestos personal injury claimants. "It is a great day for USG," said William C. Foote, USG Corporation chairman and chief executive officer. "The Courts' action enables us to bring to a close one of the most challenging and extraordinary events in the company's 104-year history." "The successful resolution of our Chapter 11 case is historic in the context of asbestos bankruptcy cases," said Foote. "Asbestos claimants will be compensated, our banks, bondholders and suppliers will be repaid in full with interest; and shareholders who stood by us through this process will be rewarded by retaining ownership in the company." The plan of reorganization, which was approved by more than 99 percent of the asbestos personal injury claimants voting, requires USG to establish and fund a personal injury trust to pay asbestos personal injury claims. A $900 million payment to the new trust was made today. Two subsequent payments totaling $3.05 billion would be made within the next 12 months if Congress fails to enact legislation establishing a national asbestos personal injury trust fund, such as the FAIR Act, which is currently being considered in the United States Senate (S. 3274). The terms of the agreement are contained in the plan of reorganization that was confirmed by the Delaware court. Financing for the plan is expected to be provided from USG's cash on hand, a $1.8 billion rights offering to stockholders backstopped by Berkshire Hathaway Inc., tax refunds and new long-term debt. "Our Plan is fair, fast, final and affordable," Foote explained. "It's fair for everyone who has a stake in USG, including those suffering from an asbestos-related illness, who will begin receiving compensation soon. The Plan is fast because it brings to a close a highly complex case less than six months after the initial agreement with the Asbestos Personal Injury Committee and Future Claimants Representative was first announced in January. The Plan provides a final solution to the company's asbestos personal injury liability; all present and future asbestos personal injury claims will be permanently channeled to an independent 524 (g) personal injury trust. And the Plan is affordable because the company's strong operational and financial performance over the past five years has given it the financial resources and access to capital that make the Plan possible. "Emerging from Chapter 11 is enormously satisfying to everyone at USG because we kept our promises," Foote said. "When we entered Chapter 11, we committed to treating asbestos claimants fairly; sustaining our market leadership and operational excellence; maintaining a strong organization; paying our creditors in full; gaining the best possible outcome for current shareholders; putting asbestos personal injury claims behind us, once and for all; and emerging as quickly as possible, without sacrificing our other goals. The 14,000 men and women of USG can look back over the past five years and be especially proud of what they have accomplished." About USG Corp. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. VARIG S.A.: Preliminary Injunction Ends Today --------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extends the Preliminary Injunction pending the entry of a Preliminary Injunction Order, as modified to reflect the Court's bench ruling at the June 13, 2006 hearing. The Preliminary Injunction is extended until June 21, 2006. VARIG, S.A.'s Foreign Representative Eduardo Zerwes requested the extension to permit the closing of the airline's auction or its possible "going concern" liquidation to occur. The Foreign Representative said that the Foreign Proceedings are still at a critical state. The Brazilian Court is expected to decide anytime soon on NV Participacoes' offer to buy VARIG's operations. Aside from last-minute offers that the Brazilian Court received, certain investment groups have also showed interests to submit bids for VARIG. Contingency Plan Not Yet Appropriate While a permanent injunction would not be appropriate at this time, in the event that the Brazilian Court approves NVP as able to complete the sale transaction, or orders a liquidation that provides for the continuation of the Foreign Debtors as a going concern, the Court should not order the implementation of the Contingency Plan for the Orderly Return of Aircraft, Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, asserts. "Implementation of the Contingency Return Plan at this time would clearly cripple any chance of the Foreign Debtors' continuing as a going concern," Mr. Antonoff maintains. Mr. Antonoff assures the Court that if the Brazilian Court orders a liquidation that does not permit the Foreign Debtors to emerge from judicial restructuring or liquidation as a going concern, they will cooperate with its lessors to implement the Contingency Return Plan. Mr. Antonoff intends to circulate to the objecting lessors a proposed form of Preliminary Injunction Order extending the Preliminary Injunction as extended at the June 13 Hearing, with a view to considering any comments the parties may have. About VARIG Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) WCI STEEL: Adequate Protection Payment Unjustly Enriched Creditor ----------------------------------------------------------------- WCI Steel, Inc., brought an adversary proceeding against Seaway Marine Transport seeking a determination of the validity and priority of maritime liens and asking the Bankruptcy Court to find that a $100,000 adequate protection payment unjustly enriched Seaway and should be returned to the estate. WCI is a corporation incorporated under the laws of Ohio with its principal place of business in Warren, Ohio. WCI is in the business of producing steel. Seaway is a Canadian company with its principal office located in St. Catharines, Ontario. Seaway is a company that operates transport vessels on the Great Lakes, St. Lawrence River and waterways of Eastern Canada. On October 19, 2001, WCI and Seaway entered into a Contract of Affreightment. Seaway agreed to transport Pellets purchased by WCI from Point Noire, Quebec, Canada to Pinney Dock in Ashtabula, Ohio. Pinney Dock is a dock and warehouse facility that receives iron ore shipments for WCI and is owned and operated by a third party. The Contract provides that WCI is required to pay Seaway within five days of the loading of the Pellets. The Contract provided Seaway with rights if WCI did not meet its payment obligations. A Bill of Lading, expressly incorporated into the Contract, contained a lien provision. Under the Contract, any dispute between the parties was to be resolved by a court or arbitrator using Canadian law. Seaway completed loading 28,816 MTS Pellets (valued at $215,000 on the M/V JEAN PARISIEN on September 5, 2003 and 23,745 MTS Pellets (valued at $190,000) on the M/V ALGOSTEEL on September 6, 2003. The Pellets on the M/V JEAN PARISIEN arrived at Pinney Dock in Ashtabula, Ohio on September 9, 2003, and the Pellets on the M/V ALGOSTEEL arrived at Pinney Dock on September 10, 2003. Seaway discharged both shipments of Pellets at Pinney Dock. At no time prior to discharge did Seaway notify WCI or the wharfinger or warehouseman, in writing or otherwise, that it was conditionally releasing the Pellets subject to WCI's obligation to pay for the Pellets. Instead, Seaway discharged the Pellets in accordance with Seaway's and WCI's standard operating practices under the Contract and Bill of Lading. On September 16, 2003, WCI filed for chapter 11 protection. WCI failed to pay Seaway for these two shipments in accordance with the terms of the Contract. As a result, on September 16, 2003 -- seven and six days, respectively, after Seaway discharged the Pellets -- Seaway served WCI and Pinney Dock two Notices of Claims of Lien, under general maritime law, against the Pellets delivered on September 9 and September 10, 2003 to Pinney Dock. As of the date of service, all of the Pellets remained in a warehouse at Pinney Dock. After WCI filed for bankruptcy, Seaway refused to continue providing transport services under the Contract unless WCI paid a portion of the alleged liens. On October 2, 2003, the Bankruptcy Court issued an Order Authorizing Debtors to Provide Adequate Protection to Seaway and Authorizing (a) Payment of Maritime Claim, (b) Granting Replacement Liens in Existing or New Inventory Located at Pinney Dock in Respect of Maritime Claim; (c) Authorizing and Directing Applicable Banks and Financial Institutions to Receive, Possess and Pay any and all Checks and Other Transfers Related to Such Claim. That Adequate Protection Order, as an inducement to Seaway to continue providing shipping services under the Contract, authorized WCI to pay Seaway $205,568.45, without prejudice to disputing or contesting the amount or validity of Seaway's Maritime Lien Claims. WCI paid $100,000 under the terms of the Adequate Protection Order. WCI commenced its adversary proceeding on December 10, 2003, asserting that (i) Canadian law applies; (ii) the Pellets were released without condition; and (iii) the adequate assurance payment was made subject to WCI's right to dispute the payment. Seaway asserts that (1) the law of the United States applies; (2) the Pellets were conditionally released pursuant to the Contract and Bill of Lading; and (3) the adequate assurance payment was voluntarily made and may not be recouped. In a decision published at 2005 WL 4088198, the Honorable Kay Woods finds and concludes that Seaway was unjustly enriched by WCI's $100,000 adequate protection protection following Seaway's refusal to continue to provide transport service for the debtor unless the debtor paid a portion of the operator's contested maritime liens, and that warrants the operator's return of those funds to the debtor. Judge Woods also finds and concludes that operator's maritime liens are invalid, meaning Seaway holds a general unsecured claim. Headquartered in Warren, Ohio, WCI Steel, Inc., is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steel at its Warren, Ohio facility. WCI products are used by steel service centers, convertors and the automotive and construction markets. WCI Steel filed for chapter 11 protection on Sept. 16, 2003 (Bankr. N.D. Ohio Case No. 03-44662) and emerged from chapter 11 in May 2006, under a plan proposed by 17 Noteholders led by Harbinger Capital Partners Master Fund I, Ltd., that gave the Noteholders $100,000,000 in new 8% Secured Notes and more than 98% of the equity of the reorganized steel company. Christine M. Pierpont, Esq., and G. Christopher Meyer, Esq., at Squire, Sanders & Dempsey, L.L.P., represent the Debtor. Amy M. Tonti, Esq., at Reed Smith LLP, represented the Official Committee of Unsecured Creditors. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP; represented the Noteholders in the hotly contested chapter 11 proceedings; the Noteholders hired CIBC World Markets as their financial advisor, and McDermott Will & Emery LLP, served as the Noteholders' special labor counsel to briker a deal with the United Steelworkers. When WCI Steel filed for chapter 11 protection it reported $356,286,000 in total assets and liabilities totaling $620,610,000. WESTERN MEDICAL: Providential to Buy Assets for $5.25 Million Cash ------------------------------------------------------------------ Providential Holdings Inc. (OTCBB:PRVH) (Berlin Stock Exchange and Frankfurt Stock Exchange:PR7 - WKN 935160) received a financing commitment for a total of $5.5 million from Northern Healthcare Capital, LLC, including a $2.5 million revolving working capital line that may be increased to accommodate future sales growth, for the acquisition of key assets of Western Medical, Inc., an Arizona corporation engaged in the business of selling durable medical equipment and providing related services, with headquarters in Phoenix, Arizona. According to the asset purchase agreement previously executed by Western Medical and Providential Holdings, the Company will purchase key assets, valued at approximately $15 million, of Western Medical for $5.25 million in cash. Western Medical filed a Chapter 11 Petition on June 15, 2006, with the U.S. Bankruptcy Court for the District of Arizona. Western Medical currently awaits the decision of the Court, which may assert and approve higher and better bids. The closing of the transaction is subject to the approval of the Court and other conditions as described in the asset purchase agreement and is expected to occur on an agreed-upon date no later than 10 business days following entry of a final Sale Order by the Court. Robert Buceta, corporate strategist of Providential Holdings, Inc., commented: "We are pleased to announce the financing commitment from Northern Healthcare Capital, LLC for this transaction and believe the consummation of this acquisition will greatly benefit all pertinent stakeholders, including Northern Healthcare Capital and Providential Holdings shareholders, in the very near future." About Providential Holdings Basedin Huntington Beach, California, Providential Holdings, Inc. (OTCBB:PRVH) -- http://www.phiglobal.com/-- specializes in mergers and acquisitions and independent energy business. The Company acquires and consolidates special opportunities in selective industries to create additional value, acts as an incubator for emerging companies and technologies, and provides financial consultancy and M&A advisory services to U.S. and foreign companies. About Western Medical Headquartered in Phoenix, Arizona, Western Medical, Inc. -- http://www.westernmedicalinc.net/-- sells and distributes medical and hospital equipment. The company filed for chapter 11 protection on June 15, 2006 (Bankr. D. Ariz. Case No. 06-01784). Brenda K. Martin, Esq., at Osborn Maledon, P.A., represents the Debtor. When the Debtor filed for protection from its creditors, it estimated asstes between $1 million to $10 million and debts between $10 million and $50 million. WINN-DIXIE: Five Creditors Want Trade Panel's Request Denied ------------------------------------------------------------ In separate pleadings, five creditors ask the U.S. Bankruptcy Court for the Middle District of Florida to deny the Ad Hoc Trade Committee's request. The five creditors are: 1. Gardens Park Plaza, Ltd.; 2. Windsor Foods; 3. Lassiter Properties, Inc.; 4. Domino Foods, Inc., as agent for American Sugar Refining, Inc.; and 5. Florida Crystals Food Corporation Gardens Park Plaza and Windsor Foods assert that unless and until they have the ability to review the papers filed under seal, they cannot fully evaluate whether or not to object to or support the Trade Committee's request. Domino and Florida Crystals also seek an opportunity to adequately evaluate the basis of the Trade Committee's request. Windsor Foods further asks the Court to extend the deadline to respond to the Trade Committee's request after the information filed under seal has been disclosed. Jimmy D. Parrish, Esq., at Gronek & Latham, LLP, in Orlando, Florida, contends that Lassiter and the other creditors are entitled to: (a) adequate notice of a confidentiality agreement that they are being required to execute as a condition to their access to important Court records; (b) an assurance that, upon executing the Confidentiality Agreement, they will obtain access to the documents; (c) information of the materials the Trade Committee seeks to conceal. Lassiter asks the Court to require the Trade Committee to establish grounds for sealing the materials and imposing on the creditors the obligations consequent to the Confidentiality Agreement, and show that there exist no less drastic means of protecting the materials. Background As reported in the Troubled Company Reporter on May 19, 2006, the Ad Hoc Trade Committee asks the U.S. Bankruptcy Court for the Middle District of Florida to substantively consolidate Winn-Dixie Stores, Inc., and its debtor-affiliates' estates pursuant to Section 105(a) of the Bankruptcy Code. The Trade Committee was reformed and reactivated in March 2006 to investigate substantive consolidation issues from the perspective of the Debtors' trade creditors. The current members of the Trade Committee are: -- ASM Capital, -- Amroc Investments, LLC, -- Avenue Capital Group, -- LCH Opportunities, LLC, -- DellaCamera Capital Management, LLC, -- Contrarian Capital Management, LLC, -- Longacre Fund Management, LLC, -- ConAgra Foods, Inc., -- The Procter & Gamble Distributing Co., -- S.C. Johnson & Son, Inc., -- Conopco, Inc., -- Madison Capital Management, -- VR Capital Group, Ltd., and -- General Mills, Inc. The Trade Committee members hold approximately $70,000,000 in unsecured claims, relating to goods, sold and delivered to the Debtors, services rendered to the Debtors, and rejection of leases. The Trade Committee informally asked the Debtors to provide documentation relating to their business, which are relevant to a substantive consolidation analysis, Thomas R. Califano, Esq., at DLA Piper Rudnick Gray Cary US LLP, in New York, tells the Court. On March 30, 2006, the Debtors and the Trade Committee entered into a confidentiality agreement to facilitate the Trade Committee's investigation. According to Mr. Califano, the Debtors would not have produced documents to the Trade Committee absent the Trade Committee entering into the Confidentiality Agreement. Mr. Califano asserts that substantive consolidation is appropriate because: (a) there is a substantial identity between the Debtors; and (b) consolidation is necessary to avoid some harm or realize some benefit. The Trade Committee seeks the Court's permission file under seal its brief supporting its substantive consolidation motion and the affidavit of M. Freddie Reiss. Mr. Califano explains that the Brief and the Reiss Affidavit are in part based on non-public, confidential and proprietary information about the Debtors that has been voluntarily disclosed to the Trade Committee by the Debtors, but are subject to the Confidentiality Agreement. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000) WINN-DIXIE: Can Assume Modified JEA Electrical Service Agreements ----------------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Middle District of Florida to assume certain Prepetition Agreements with Jacksonville Electric Authority, as modified. The Court directs the Debtors to pay $583,898 to the Jacksonville Electric Authority. The assumption of the contracts is effective on the payment of the Cure Amount. Background As reported in the Troubled Company Reporter on May 11, 2006, Jacksonville Electric Authority provides Winn-Dixie Stores, Inc., and its debtor-affiliates with electrical and water services for their operations in Northeast Florida. Because of the Debtors' use of a large volume of electrical services, JEA provides them with price discounts on these services under a General Service Large Demand Rider Electric Service Agreement and a Multiple Accounts Load Improvement Rider Service Agreement, both dated as of July 28, 1998. The Debtors realize monthly savings of $50,000 to $60,000 under the Prepetition Agreements, D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, tells the Court. The Prepetition Agreements include services for a store that the Debtors have closed and contain errors on the addresses of a number of store locations. To correct the errors and delete the closed store, JEA has agreed to modify each of the Prepetition Agreements. Mr. Baker assures the Court that the Debtors will pay an existing default of $583,898, under the Prepetition Agreements. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates stores across the Southeastern United States and in the Bahamas and employs approximately 90,000 people. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000) XACT AID: Selling 1 Mil. Shares of Brooke Carlyle Stock to Nexgen ----------------------------------------------------------------- Xact Aid, Inc., entered into a Stock Purchase Agreement with Nexgen Biogroup, Inc., for the sale of the 1,000,000 shares of the common stock of Brooke Carlyle Life Sciences, Inc. held by the Company, which represents all or substantially all of the assets of the Company, for $1,000 cash, representing a consideration of $.001 per share of Brooke Carlyle, Brooke Carlyle's par value per Share. Also, on May 4, 2006, the Company's Board of Directors and the shareholders of the Company holding the majority of issued and outstanding shares of the Company's common stock approved and accepted the offer for the Sale of Brooke Carlyle stock to Nexgen, thus authorizing the Company to enter into the Agreement. The Board believes that the Sale of the Brooke Carlyle stock is in the best interests of the Company and its shareholders in order to satisfy and comply with the terms of the Share Exchange Agreement requiring the Sale of the Brooke Carlyle stock. The Board of Directors further believes that such Sale in connection with entering into the Share Agreement will provide to the Company the best opportunity to proceed with restructuring its business via the acquisition of Technorient. Brooke Carlyle is a development stage company in the business of developing biomedical testing products. In accordance with the terms of the Agreement, the Company agreed to: (i) sell, assign and transfer to Nexgen any and all of its rights, title and interests in Brooke Carlyle; and (ii) transfer to Nexgen 1,000,000 shares of Brooke Carlyle common stock. Headquartered in Westlake Village, California, Xact Aid, Inc.'s -- http://www.xactaid.com/-- business included marketing of wound-specific first aid kits and development of biomedical products. It's business operations, held by its subsidiary Brook Carlyle Life Sciences, Inc., have recently been sold to Nexgen Biogroup, Inc. Xact Aid plans to transfer control of the Company to management at Technorient, Inc. Going Concern Doubt Armando C. Ibarra expressed substantial doubt about Xact Aid's ability to continue as a going concern after auditing the Company's financial statements for the year ended June 30, 2005. The auditor points to the Company's net losses of $1,200,010. According to the auditor, the successful completion of the Company's transition to the attainment of profitable operations is dependent upon its obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company's cost structure. XACT AID: Swapping 95% Outstanding Capital Stock with Technorient ----------------------------------------------------------------- Xact Aid, Inc., entered into a non-binding letter of intent with Technorient, Ltd., a company formed under the laws of Hong Kong, for a proposed share exchange with Technorient. Pursuant to the LOI, the Company intended to acquire not less than 99.92% of the capital stock of Technorient in exchange for the issuance of shares of the Company's Preferred Stock which were proposed to be authorized and would be convertible into 95% of the outstanding capital stock of the Company, as was disclosed in a definitive Information Statement on Schedule 14(c) filed with the Securities and Exchange Commission on March 28, 2006, and mailed to the Company's shareholders on March 30, 2006. In early May of 2006 the Board of Directors was presented with the agreement as referred to in the LOI for the share exchange with Technorient. On May 4, 2006 the Board of Directors of the Company and shareholders holding the majority of the Company's issued and outstanding common stock, approved for the Company to enter into said agreement. On June 9, 2006, the Share Exchange Agreement was entered into by and among the Company, Fred De Luca, a director of the Company; Corich, Enterprises Ltd., Herbert Adamczyk; and Technorient. Pursuant to the terms of the Share Agreement, the Company will acquire from the Sellers not less than 99.92% of the capital stock of Technorient in consideration of the Company issuing to the Sellers Series A Convertible Preferred Stock which will be convertible into 1,433,361,000 shares of the Company's Common Stock, representing 95% of the outstanding capital stock of the Company on a fully diluted basis, taking into account the Issuance. After giving effect to the Issuance, there will be approximately 1,508,801,053 shares issued and outstanding of the Company's common stock. Conditions precedent to the closing of the Share Agreement include, but are not limited to: (i) that the holders of the Company's 10% Callable Secured Convertible Notes in the aggregate amount of $1,000,000 will convert the Notes into 44,060,282 shares of the Company's common stock; (ii) that Edward W. Withrow, III, a related party of the Company, holder a certain note in the principal amount of $950,000 convert such amount into 16,600,000 restricted shares of the Company's common stock; and (iii) that the Company, at Closing, as defined in the Share Agreement, will have no assets or liabilities, such that on or before the Closing the Company will transfer all of its assets, including the shares of Brooke Carlyle Life Sciences, Inc., and liabilities to a third party or parties reasonably acceptable to Seller. Closing of the acquisition is scheduled for July 30, 2006. Technorient is a Hong Kong based company whose principal business is the importation and distribution of luxury sports cars in Hong Kong, Macau and China. Through its wholly owned operating subsidiaries Italian Motors Ltd. and Autoitalia Ltd., Technorient has operated as exclusive distributor for Ferrari and Maserati brand motorcars in Hong Kong and Macau since 1984 and, from 1994 to 2004, in the Peoples Republic of China. Since 2004, Technorient has been developing a dealer network in China to work closely with the Ferrari SpA controlled distributor based in Shanghai. Headquartered in Westlake Village, California, Xact Aid, Inc.'s -- http://www.xactaid.com/-- business included marketing of wound-specific first aid kits and development of biomedical products. It's business operations, held by its subsidiary Brook Carlyle Life Sciences, Inc., have recently been sold to Nexgen Biogroup, Inc. Xact Aid plans to transfer control of the Company to management at Technorient, Inc. Going Concern Doubt Armando C. Ibarra expressed substantial doubt about Xact Aid's ability to continue as a going concern after auditing the Company's financial statements for the year ended June 30, 2005. The auditor points to the Company's net losses of $1,200,010. According to the auditor, the successful completion of the Company's transition to the attainment of profitable operations is dependent upon its obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company's cost structure. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- June 21-23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Global Educational Symposium Hyatt Regency, Chicago, Illinois Contact: http://www.turnaround.org/ June 22-23, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ June 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ June 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION What to Do When Internal Crime Strikes Your Company New Jersey Contact: http://www.turnaround.org/ June 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Actual Case Study - Torn from the Headlines: The Restructuring Process at its Best McCormick and Schmicks Nevada Contact: http://www.turnaround.org/ June 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION 5th Annual Lenders Panel - Arizona Chapter National Bank of Arizona Conference Center, Phoenix, AZ Contact: http://www.turnaround.org/ June 29 - July 2, 2006 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Law Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: 770-535-7722 or http://www2.nortoninstitutes.org/ July 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION The New Bankruptcy Code Nine Months Later Rivers Club, Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/ July 12, 2006 BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Contact: 240-629-3300; http://www.beardaudioconferences.com July 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ July 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Center Club, Baltimore, Maryland Contact: 703-912-3309 or http://www.turnaround.org/ July 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Women's Event TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 13-16, 2006 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Newport Marriott, Newport, Rhode Island Contact: 1-703-739-0800; http://www.abiworld.org/ July 18, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Marriott, Red Bank, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 18-19, 2006 TURNAROUND MANAGEMENT ASSOCIATION Distressed & Turnaround Investing Congress Swiss"tel The Drake, New York, New York Contact: http://www.turnaround.org/ July 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner South Florida Contact: 561-882-1331 or http://www.turnaround.org/ July 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ July 26, 2006 BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Contact: 240-629-3300; http://www.beardaudioconferences.com July 26-29, 2006 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz Carlton Amelia Island, Amelia Island, Florida Contact: 1-703-739-0800; http://www.abiworld.org/ July 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Should legislative protection or indemnities be provided to Chief Restructuring Officers to encourage turnarounds? Bondi Room, Sydney, New South Wales Contact: http://www.turnaround.org/ July 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Annual Golf & Tennis Outing Raritan Valley Country Club, Bridgewater, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Summer Social BBQ Colonial Springs Country Club, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ August 3, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ August 3, 2006 BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Contact: 240-629-3300; http://www.beardaudioconferences.com/ August 3-5, 2006 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ August 9, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ August 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION DIP Panel Discussion Kansas City, Missouri Contact: http://www.turnaround.org/ August 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Family Night Baseball with the NJ Jackals (Yogi Berra Autograph Night) Jackals Stadium, Montclair, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ August 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Annual Fishing Trip Point Pleasant, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ August 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION 4th Annual Alberta Golf Tournament Kananaskis Country Golf Course, Kananaskis, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ September 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Business Mixer TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ September 7-8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Saratoga Regional Conference Gideon Putnam Hotel, Saratoga Springs, New York Contact: http://www.turnaround.org/ September 7-9, 2006 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Wynn Las Vegas, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ September 8-9, 2006 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium London, England Contact: http://www.turnaround.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast TBA, Secaucus, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI Turnaround Formal Event Long Island, New York Contact: http://www.turnaround.org/ September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Function Sydney, Australia Contact: 0438 653 179 or www.turnaround.org September 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Formal Event - Major Speaker to be Announced Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ September 17-24, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Optional Alaska Cruise Seattle, Washington Contact: 800-929-3598 or http://www.nabt.com/ September 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 21, 2006 TURNAROUND MANAGEMENT ASSOCIATION Restructuring Workshop With US Bankruptcy Judges Hale, Nelms and Lynn Belo Mansion - The Pavilion, Dallas, Texas Contact: http://www.turnaround.org/ September 24, 2006 TURNAROUND MANAGEMENT ASSOCIATION Restructuring the Troubled High Tech Company Arizona Contact: http://www.turnaround.org/ September 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint Education Program with NYIC Joint Reception CFA/RMA/IWIRC Woodbridge Hilton, Iselin, NJ Contact: http://www.turnaround.org/ September 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION 7th Annual Cross Border Business Restructuring and Turnaround Conference Banff, Alberta Contact: http://www.turnaround.org/ October 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Center Club, Baltimore, Maryland Contact: 703-912-3309 or http://www.turnaround.org/ October 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 11-14, 2006 TURNAROUND MANAGEMENT ASSOCIATION 2006 Annual Conference Milleridge Cottage, Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/ October 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION Updates on the New Bankruptcy Law Kansas City, Missouri Contact: http://www.turnaround.org/ October 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION Billards Networking Night - Young Professionals TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #3 TBA, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #3 TBA, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ October 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ October 31 - November 1, 2006 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC Annual Conference San Francisco, California Contact: http://www.iwirc.com/ November 1, 2006 TURNAROUND MANAGEMENT ASSOCIATION Halloween Isn't Over! - Ghosts of turnarounds past who remind you about what you should have done differently Portland, Oregon Contact: http://www.turnaround.org/ November 1-4, 2006 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges San Francisco, California Contact: http://www.ncbj.org/ November 2-3, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Third Annual Conference on Physician Agreements & Ventures Successful Strategies for Medical Transactions and Investments The Millennium Knickerbocker Hotel - Chicago Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ November 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Marriott, Bridgewater, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Australia National Conference Sydney, Australia Contact: http://www.turnaround.org/ November 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Program St. Louis, Missouri Contact: 815-469-2935 or http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint Reception with NYIC/NYTMA TBA, New York Contact: 908-575-7333 or http://www.turnaround.org/ November 15, 2006 LI TMA Formal Event TMA Australia National Conference Long Island, New York Contact: http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Bankruptcy Judges Panel Duquesne Club, Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner Program TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ November 23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Martini Party Vancouver, British Columbia Contact: 403-294-4954 or http://www.turnaround.org/ November 27-28, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Thirteenth Annual Conference on Distressed Investing Maximizing Profits in the Distressed Debt Market The Essex House Hotel - New York Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, FL Contact: 561-882-1331 or http://www.turnaround.org/ November 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Special Program TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Industry Trends Jasna Polana, Princeton, New Jersey Contact: http://www.turnaroung.org/ November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ December 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION Holiday Dinner Portland, Oregon Contact: 503-223-6222 or http://www.turnaround.org/ December 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast The Newark Club, Newark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Holiday Party TBA, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function GE Commercial Finance, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800; http://www.abiworld.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ March 15-18, 2007 NATIONAL ASSOCIATION OF BANKRUTPCY TRUSTEES NABT Spring Seminar Ritz-Carlton Buckhead, Atlanta, Georgia Contact: http://www.NABT.com/ March 27-31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spring Conference Four Seasons Las Colinas, Dallas, Texas Contact: http://www.turnaround.org/ March 29-31, 2007 ALI-ABA Chapter 11 Business Reorganizations Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, RI Contact: 1-703-739-0800; http://www.abiworld.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/ October 16-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergers - the New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Emerging Role of Corporate Compliance Panels Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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, Robert Max Quiblat, 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 ***