/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060721.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, July 21, 2006, Vol. 10, No. 172 Headlines ACANDS INC: Legal Analysis Hired as Asbestos Panel's Consultant ACANDS INC: Wants Exclusive Plan-Filing Period Extended to Oct. 17 ACRO BUSINESS: Can Access M&I's Cash Collateral on Interim Basis ADELPHIA COMMS: Ct. Bars America Channel from Going After Assets ADELPHIA COMMUNICATIONS: Wants Court Nod on Extended DIP Facility ADM TRONICS: Stockholders' Deficiencies Spur Going Concern Doubt AEROTECH FILTRATION: Case Summary & Six Largest Unsec. Creditors ALAN VEYS: Case Summary & 16 Largest Unsecured Creditors ALLIED HOLDINGS: Ralph Vollman Proceeds with Federal Ct. Action AMR CORP: Reports $291 Million 2006 Second Quarter Profit APHTON CORP: Court Okays Flaster/Greenberg as Committee's Counsel ARR-MAZ CUSTOM: S&P Junks Ratings on $52.5 Million Term Loan ARROWHEAD GENERAL: S&P Rates Planned $45 Million Facility at CCC+ ASARCO LLC: Can Enter Into East Helena Demolition Agreement ASARCO LLC: Wants Pate Auction to Sell East Helena Equipment ASARCO LLC: Wants to Auction East Helena Equipment on August 25 ASHTEAD GROUP: Sunbelt Unit Buys NationsRent for $1.05 Billion ASHTEAD GROUP: NationsRent Buy Cues Moody's to Downgrade Ratings BALDEMAR SALAZAR: Voluntary Chapter 11 Case Summary BCBG MAX: S&P Junks Rating on Proposed $50 Million Term Loan BECKMAN COULTER: Earns $32.6 Million in Quarter Ended March 31 BNY CONVERGEX: Moody's Puts Low-B Ratings on $675 Million Loans BNY CONVERGEX: High Debt Level Prompts S&P to Assign Low-B Ratings BROOK MAYS: Court Gives Interim Nod on Gardere Wynne as Counsel BROOK MAYS: Wants to Borrow $10.64 Million & Use Cash Collateral CHARLES DEVLIN: Case Summary & 17 Largest Unsecured Creditors CHURCH & DWIGHT: S&P Places BB+ Loan Rating on Negative Watch CISTERA NETWORKS: Recurring Losses Spurs Going Concern Doubt COLLINS & AIKMAN: Court Allows Fourth Amendment to DIP Agreement COLLINS & AIKMAN: GECC Counsel Fined for Hearing Walkout CONSECO INC: Files Involuntary Ch. 7 Petition v. Former Director CONSOLIDATED COMMS: To Repurchase Providence Shares for $56.7 Mil. DELTA AIR: Comair Wants Court Nod on Interim Pact For 3 Aircraft DELTA AIR: Wants to Amend and Assume Discover Financial Agreement DIAMOND ENTERTAINMENT: Pohl McNabola Raises Going Concern Doubt EDGEWATER FOODS: May 31 Balance Sheet Upside-Down by $13.6 Million ELEC COMMS: May 31 Balance Sheet Upside-Down by $3.9 Million ENRON CORP: Court Okays $30-Mil. Settlement with Vinson & Elkins ENRON CORP: Court OKs Allowance of U.K. Units' $51.9-Mil. Claims EVANS INDUSTRIES: U.S. Trustee Reconstitutes Official Committee FALCON AIR: Ch. 11 Trustee Wants to Use IRS' Cash Collateral FALCONBRIDGE LTD: Xstrata Raises Buy Offer to $16.9 Billion FOAMEX INTERNATIONAL: Court Approves Thurmo-Sleep Settlement Pact FOAMEX INT'L: Gets Court OK to Advance Funds to Mexican Subsidiary FR X OHMSTEDE: S&P Junks Rating on Proposed $65 Million Loans GERARD DUENAS: Case Summary & 10 Largest Unsecured Creditors GLASS GROUP: Delaware Court Confirms Chapter 11 Liquidating Plan GLOBAL HOME: Has Until November 6 to Decide on Leases HANGER ORTHOPEDIC: Acquires Mississippi-Based Temple Medical HEATING OIL: HOP Holdings Wants Chapter 11 Case Dismissed IFSA STRONGMAN: Bouwhuis Morrill Expresses Going Concern Doubt IFSA STRONGMAN: Posts $362,094 Net Loss in First Quarter 2006 INTERSTATE BAKERIES: Can Reject 17 Unexpired Real Property Leases INTERSTATE BAKERIES: Posts $2.5 Million Bond to MO Labor Dept. IRIDIUM OPERATING: Has Until November 14 to File Chapter 11 Plan JAMES MASSEY: Conseco Files Involuntary Chapter 7 Petition JAMES MASSEY: Involuntary Chapter 7 Case Summary JEROME DUNCAN: Chapter 7 Trustee Gets Access to Mesirow's Files KAISER ALUMINUM: Reports Changes in Ownership of Securities KAISER ALUMINUM: Wants to Assume 67 Contracts and Leases KINGSTON SYSTEMS: Hansen Barnett Raises Going Concern Doubt KL INDUSTRIES: Can Obtain DIP Financing from LaSalle Bank LAIDLAW INTERNATIONAL: Earns $34.1 Million in Second Quarter 2006 LOS FRAILES: Case Summary & Five Largest Unsecured Creditors LOVESAC CORP: Secured Creditor G&G Says Plan is Unconfirmable MARKETSHARE TELECOM: Voluntary Chapter 11 Case Summary MASTERCRAFT INTERIORS: Hires Executive Sounding as Fin'l Advisors MERIDIAN AUTOMOTIVE: Ct. Removes GSC Entities From Adversary Suit MERIDIAN AUTOMOTIVE: GECC Wants to Repossess Leased Equipment MUSICLAND HOLDING: Committee Has Until August 4 to File Claim NAT'L DATACOMPUTER: March 31 Balance Sheet Upside-Down by $4.7MM NATIONSRENT COS: Sells Assets to Sunbelt Rentals for $1.05 Billion NAVIGATORS GROUP: S&P Rates $300 Million Multipurpose Shelf at BB+ NORTEL NETWORKS: Forms Strategic Alliance with Microsoft Corp. NORTHWEST AIRLINES: Refinances Bank Obligations to Reduce Costs OCA INC: Hawaii Unit Files Schedules of Assets and Liabilities OWENS CORNING: Confirmation Hearing Scheduled for September 18 OWENS CORNING: Wants Okay on Century Indemnity, et al. Settlement PEP BOYS: Chief Executive Officer Larry Stevenson Resigns PINNACLE ENT: Launches Offer for President Casinos' Issued Notes PLATFORM LEARNING: Court Gives Interim Nod on Herrick as Counsel PLATFORM LEARNING: Wants Argus Management as Financial Advisor PLIANT CORP: Asks Court to Approve EPA Settlement Agreement PLIANT CORP: Ontario Court Rules Ch. 11 Plan Effective in Canada PREFERRED VOICE: Philip Vogel Expresses Going Concern Doubt PRESIDENT CASINOS: Pinnacle Offers to Buy Back Issued Notes QUIGLEY COMPANY: Court Approves Paul Street Employment Agreement QUIGLEY COMPANY: Court Extends Removal Period to October 4 REFCO INC: Chapter 11 Trustee Inks Settlement Pact with Rogers Raw REVLON CONSUMER: Lender Support Cues Additional $25 Million Add-On RIVERSTONE: Equity Panel Hires Poovayya as Special Counsel SAINT VINCENTS: Aptium Can File Claims Until August 31 SEA CONTAINERS: Closes $585 Million Silja Sale to Tallink Grupp SECUNDA INT'L: Prices $125 Million Senior Notes Tender Offer SILICON GRAPHICS: Court Approves Stipulation Modifying Stay SILICON GRAPHICS: LSI Logic, et al.'s Demands Return of All Goods SPECIALTYCHEM PRODUCTS: Committee Wants Brennan Steil as Counsel SPECIALTYCHEM: Has Until Today to File Statements and Schedules STEELCASE INC: Moody's Affirms Ba1 Rating with Positive Outlook TD AMERITRADE: Earns $140 Million in Third Quarter of 2006 TITAN GLOBAL: Losses Continue in Quarter Ended May 31 TOWER AUTOMOTIVE: Inks Tentative Contract Agreements with Unions TRI-CONTINENTAL EXCHANGE: Chapter 15 Petition Summary TRISTAR HOTELS: Section 341(a) Meeting Scheduled for July 25 USG CORP: Appellate Court Overturns Tort Suit Against US Gypsum USP DOMESTIC: S&P Rates $400 Million Revolving Loan at BB- VARIG S.A.: Sold to Volo do Brasil for $600 Million VENETO LLC: Inks Financing to Complete Condo Project in Calif. VERTICAL HEALTH: Reports $715,088 Net Loss in Amended 2005 10-K WESTERN APARTMENT: Taps Reinwald O'Connor as Special Counsel WESTERN APARTMENT: Taps Thomas R. Cole as Counsel in Maui Dispute WORLDWATER & POWER: Mar. 31 Balance Sheet Upside-Down by $1.6 Mil. * Euler Sees Significant Increase In Global Business Failures * Focus Management Group Opens New Chicago Office * BOOK REVIEW: The Managerial Mystique: Restoring Leadership in Business ********* ACANDS INC: Legal Analysis Hired as Asbestos Panel's Consultant --------------------------------------------------------------- The Honorable Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware allowed the Official Committee of Asbestos Personal Injury Claimants in ACandS, Inc.'s chapter 11 case, to retain Legal Analysis Systems, Inc., as its asbestos-related bodily injury consultant, nunc pro tunc to Sept. 29, 2005. As reported in the Troubled Company Reporter on Feb 13, 2006, Legal Analysis is expected to: a) estimate the number and value of present and future asbestos personal injury claims; b) develop claims procedures to be used in the development of financial models of payments and assets of a claims resolution trust; c) review and analyze the Debtors' claims database and review and analyze the Debtors' resolution of asbestos claims; d) evaluate reports and opinions of experts and consultants retained by other parties; e) evaluate and analyze proposed proofs of claim and bar dates and analyze data from these proofs of claim; f) Quantitatively analyze other matters related to asbestos bodily injury claims; and g) provide testimony, as requested by the Committee. The lead professionals who will work on the Debtor's case and their hourly rates were: Professional Designation Hourly Rate ------------ ----------- ----------- Mark A. Peterson President $600 Daniel Relles Statistician $375 Mr. Peterson assured the Bankruptcy Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code and holds no interest adverse to the Debtor or its estate. Headquartered in Lancaster, Pennsylvania, ACandS, Inc., was an insulation contracting company, primarily engaged in the installation of thermal and mechanical insulation. In later years, the Debtor also performed a significant amount of asbestos abatement and other environmental remediation work. The Company filed for chapter 11 protection on September 16, 2002, (Bankr. Del. Case No. 02-12687). Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub, P.C., represents the Debtor in its restructuring efforts. Kathleen Campbell Davis, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. When the Company filed for protection from its creditors, it estimated debts and assets of over $100 million. Chapter 11 Plan Update Judge Fitzgerald approved the adequacy of the Debtor's Amended Disclosure Statement explaining their proposed Plan of Reorganization on Oct. 3, 2003. On Jan. 26, 2004, Judge Fitzgerald entered Proposed Findings of Fact and Conclusions of Law Re Chapter 11 Plan Confirmation (Doc. 979), recommending that the U.S. District Court deny confirmation of the Debtor's Plan. On Feb. 5, 2004, the Debtor and the Official Committee of Asbestos Personal Injury Claimants jointly filed with the District Court an objection to the Bankruptcy Court's Proposed Findings. In that filing, the Debtor and the Committee asked the District Court to reject the Bankruptcy Court's Findings and Conclusions and confirm the proposed chapter 11 plan. ACANDS INC: Wants Exclusive Plan-Filing Period Extended to Oct. 17 ------------------------------------------------------------------ ACandS, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to further extend the time within which the Debtor has the exclusive right to file a Chapter 11 plan, through and including the earlier of the effective date of its plan or Oct. 17, 2006. The Debtor also wants until the earlier of the plan effective date or Jan. 17, 2007, to solicit acceptances of that plan from its creditors. The Debtor wants to preserve its exclusive period to file a plan to allow for any alternative structure that may result from continuing negotiations. The extension, the Debtor says, will result in a more efficient use of its estate assets and resources. Headquartered in Lancaster, Pennsylvania, ACandS, Inc., was an insulation contracting company, primarily engaged in the installation of thermal and mechanical insulation. In later years, the Debtor also performed a significant amount of asbestos abatement and other environmental remediation work. The Company filed for chapter 11 protection on September 16, 2002, (Bankr. Del. Case No. 02-12687). Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub, P.C., represents the Debtor in its restructuring efforts. Kathleen Campbell Davis, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. When the Company filed for protection from its creditors, it estimated debts and assets of over $100 million. Chapter 11 Plan Update Judge Fitzgerald approved the adequacy of the Debtor's Amended Disclosure Statement explaining their proposed Plan of Reorganization on Oct. 3, 2003. On Jan. 26, 2004, Judge Fitzgerald entered Proposed Findings of Fact and Conclusions of Law Re Chapter 11 Plan Confirmation (Doc. 979), recommending that the U.S. District Court deny confirmation of the Debtor's Plan. On Feb. 5, 2004, the Debtor and the Official Committee of Asbestos Personal Injury Claimants jointly filed with the District Court an objection to the Bankruptcy Court's Proposed Findings. In that filing, the Debtor and the Committee asked the District Court to reject the Bankruptcy Court's Findings and Conclusions and confirm the proposed chapter 11 plan. ACRO BUSINESS: Can Access M&I's Cash Collateral on Interim Basis ---------------------------------------------------------------- The Hon. Robert J. Kressel of the U.S. Bankruptcy Court for the District of Minnesota allowed ACRO Business Finance Corp., on an interim basis, to use up to $28,886 cash collateral securing repayment of its debts to M&I Marshall and Ilsley Bank and about $600,000 to make additional advances to clients, The Deal reports. Use of the cash collateral will allow the Debtor to pay the costs and expenses of operating its business. A copy of the budget from July to September is available for free at http://researcharchives.com/t/s?e1d The Court will convene a final hearing to consider approval of that request on Aug. 3, 2006. According to John Blakeley, writing for The Deal, M&I Marshall and Ilsley Bank objected to the use of its cash even on an interim basis because it was unsecured on additional cash advances the Debtor intends to provide customers until the final hearing. As adequate protection of M&I's interest, M&I received a postpetition replacement security interest of the same priority, dignity and effect as its prepetition interest in the Debtor's cash collateral. If the replacement lien is not sufficient to secure M&I, the Court gives the bank a superpriority claim on the cash, which is paid before every other administrative or general unsecured claim except superpriority claims and liens granted to postpetition lenders. The Debtor has negotiated to arrange a DIP financing of up to $650,000 with M&I, to have sufficient working capital on hand and to fund all of the Debtor's customer needs. Until it reaches an agreement with the bank on a DIP, ACRO will fund the borrowing needs of its customers through the cash collateral. Loan Agreement The debtor's relationship with M&I began in Aug. 5, 1997, when M&I issued the Debtor a $5 million credit line. The loan agreement was amended eight times until it was eventually increased to $21 million and extended through May 31, 2006. On April 21, 2006, the bank refused to extend the maturity on the loan, prompting the Debtor to file for bankruptcy because it did not have enough cash on hand to pay in full. M&I Dispute As of its bankruptcy filing, the Debtor has 14 outstanding loans to its customers, totaling $22,424,728. The debtor sold a "participation interest" in six of the 14 loans to nine different banks or investors, amounting to $4,416,624. The Debtor, which typically sells participation interest on its loans from a high of 66.7% to a low of 25%, said that the clients -- not the Debtor -- actually own the portion of the loan sold. M&I, however, contends that the loan participations are not true sales, but "disguised loans." As a result, the bank claims to have a security interest in all the portions of the loans sold. The Debtor tells the Court that it proposes to commence an adversary proceeding against M&I to determine the bank's entitlement to the portions in question. Because of the dispute, the exact value of the bank's collateral is unknown. Either way, M&I is undersecured because even including the disputed portion of some loans, the value of the collateral securing the loans is less than the bank's $12.6 million claim, Mr. Blakeley reports. The Debtor says the estimated value of its loan portfolio is about $4.3 million as of June 30, 2006. The debtor notes that this value is less than the face value of the loans it issued customers because several clients have been unable to make their payments. Headquartered in Minneapolis, Minnesota, Acro Business Finance Corp. provides financial services. The Company filed for chapter 11 protection on July 12, 2006 (Bankr. D. Minn. Case No. 06-41364). Clinton E. Cutler, Esq., at Fredrikson & Byron, P.A., represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. ADELPHIA COMMS: Ct. Bars America Channel from Going After Assets ---------------------------------------------------------------- On June 5, 2006, the Honorable Robert D. Gerber of the U.S. Bankruptcy Court for the Southern District of New York modified his prior order to provide that The America Channel, LLC; Gray, Plant, Mooty, Mooty & Bennett, P.A.; and Alioto Law Firm are temporarily restrained, until the Bankruptcy Court rules on the Debtors' motion for a preliminary injunction, from: (a) continuation of further proceedings in their action against Time Warner Cable, Inc., Time Warner NY Cable, LLC, Time Warner, Inc., and Comcast Corporation in the United States District Court for the District of Minnesota; (b) taking any other action, with the exception of any action taken in the Bankruptcy Court, to interfere with the Bankruptcy Court's jurisdiction over the chapter 11 cases of Adelphia Communications Corporation and its debtor- affiliates; and (c) taking any other action, with the exception of any action taken in the Bankruptcy Court, to interfere with the sale of substantially all of Adelphia's assets to the Purchasers. Judge Gerber also issued a bench decision explaining his issuance of the temporary restraining order against America Channel, et al. According to Judge Gerber, "an interference with the estate's ability to dispose of its property, or, for that matter, with its contractual right to secure the $17 billion in cash and stock that it will obtain on the closing of the Time Warner and Comcast deal, is a classic, and egregious, violation of Section 362(a)(3) of the Bankruptcy Code." "I find, as a mixed question of fact and law, that Adelphia plainly has shown irreparable injury, by reason of the threatened loss of the $17 billion it will receive on the sale of its business, and the threatened interference with Adelphia's reorganization. There is nothing in the record now, if there ever will be, to lead me to believe that TAC, a company yet to start business, could answer for such an astronomical loss in damages. The irreparable injury is especially severe since the proposed sale involves a control premium which Adelphia was unable to obtain from anyone else, and since any delay in closing will subject the Adelphia estate to even greater prejudice, as interest on secured bank claims continues to accrue," Judge Gerber notes. America Channel, et al., Oppose TRO America Channel, et al., argue that the Court's original order was an impermissible restraint on their right to bring a federal antitrust action in the court of their choice, and wrongfully interfered with the jurisdiction of the Minnesota District Court. Entry of a preliminary or permanent injunction would repeat and compound that error, America Channel, et al., assert. America Channel, et al., ask the Bankruptcy Court to vacate its temporary restraining order and not issue a permanent or preliminary injunction. In the event the Bankruptcy Court enters an injunction, America Channel, et al., request that: (1) the injunction be narrowly drawn so as only to prevent America Channel, et al., from seeking injunctive relief against the sale of the Adelphia assets to Comcast and Time Warner in the Minnesota case, and otherwise permit America Channel, et al., to proceed with their antitrust action in Minnesota; and (2) the injunction be sufficiently final to allow America Channel, et al., to take an immediate appeal of the injunction to the United States District Court for the Southern District of New York, or, alternatively, the Court grant America Channel, et al., leave to appeal under Section 158(a) of the Judiciary Code. ACOM Responds The ACOM Debtors point out that America Channel, et al., fail to address or disclaim the important public policies compelling the prosecution in the Bankruptcy Court of any action that threatens to impair the Bankruptcy Court's ability to supervise their reorganization -- including the Sale -- and the rights of the Debtors and their constituents to the fruits of the Sale. The ACOM Debtors insist that America Channel, et al.'s filing of the lawsuit in the Minnesota District Court violated the automatic stay and threatens the Bankruptcy Court's ability to administer the Debtors' estates. The ACOM Debtors contend that the Bankruptcy Court has the power, jurisdiction and authority to enjoin America Channel, et al., from continuing to prosecute the Action in the Minnesota District Court. "[I]f the TAC Action is to be prosecuted anywhere, [the Bankruptcy] Court is the appropriate forum, both because of the strong public policies favoring [the Bankruptcy] Court's ability to manage the Debtors' estates and because of [the Bankruptcy] Court's intimate knowledge of and experience with the Sale," the ACOM Debtors note. Moreover, the ACOM Debtors continue, an injunction enjoining America Channel, et al., from prosecuting the TAC Action in any court other the Bankruptcy Court would not run afoul of the public policies underlying the antitrust laws, and, indeed, would allow the full and fair enforcement of those laws. The ACOM Debtors believe that America Channel, et al., will not be materially prejudiced should the Bankruptcy Court grant their request for an injunction. "[A]lthough [the Bankruptcy] Court can issue a narrow injunction that would allow [America Channel, et al.] to prosecute the TAC Action to the extent that such prosecution would not interfere with the Sale or the Debtors' estates, [America Channel, et al.'s] suggested injunction is too narrow," the ACOM Debtors say. Permanent Injunction Judge Gerber has issued a permanent injunction enjoining America Channel, et al., from taking any steps to exercise control over the ACOM Debtors' property in any forum other than the Bankruptcy Court. The Bankruptcy Court finds that (i) Adelphia plainly has shown irreparable injury, (ii) the resulting loss to Adelphia cannot be compensated for by damages, (iii) the balance of hardships favors Adelphia, and (iv) public interest would not be disserved by issuance of a permanent injunction. But the injunction is in a form narrower than the original TRO. Judge Gerber permits America Channel, et al., to proceed with their action in Minnesota if they seek damages only, or seek equitable relief that does not interfere with the sale. Judge Gerber reiterates that America Channel, et al.'s efforts to enjoin the sale of the ACOM Debtors' assets constituted "a classic and egregious violation of the automatic stay." Judge Gerber notes that the sale represents an extraordinary achievement, and the loss of it would be a corresponding disaster. "The injunction requested in Minnesota would have the effect of holding the sale of Adelphia's assets hostage in [America Channel, et al.]'s effort to cause Time Warner and Comcast to carry [America Channel, et al.]'s programming on their cable properties. If [America Channel, et al.] contends that Comcast or Time Warner acted wrongfully in declining to put [America Channel, et al.] on their cable systems' channel lineups, it can seek to convince a court of that, and secure an order requiring [America Channel, et al.]'s programming to be carried, or to secure damages for a refusal. But as the remedy for the alleged offense, [America Channel, et al.] seeks very different relief -- an injunction prohibiting Adelphia and its creditors from realizing on the value of their assets -- directly and materially interfering with the estate's realization of the value of its assets, and with its reorganization. That goes to the heart of what section 362(a)(3) prohibits." Moreover, the Bankruptcy Court points out that there is no written or unwritten exception to the automatic stay provision for litigants prosecuting private actions under the antitrust laws. Judge Gerber states that America Channel, et al., would not be deprived of a place to litigate their claims -- or to secure a fair adjudication of the claims -- because they could still litigate the claims in the bankruptcy court, with appellate rights in the three courts above the bankruptcy court, and with the right to move for withdrawal of the reference. The Bankruptcy Court believes that if America Channel, et al., wish to secure an order requiring Time Warner or Comcast to carry The America Channel on their cable properties, which the Court understands to be the main grievance America Channel, et al., assert, America Channel, et al., can seek that order without material prejudice to Adelphia's reorganization, and the Court will permit a claim for relief of that character to proceed. "The same could be said with respect to any [America Channel, et al.] claims for damages, and [the Bankruptcy] Court will permit claims for damages to proceed too. And the Court will even permit [America Channel, et al.] to seek divestiture, after Adelphia has successfully realized on the value of its assets," Judge Gerber adds. Judge Gerber rejects America Channel, et al.'s suggestion that America Channel, et al., should be free to enjoin Time Warner and Comcast from proceeding under agreements they entered into with each other as part of the sale transaction under which Adelphia will dispose of its assets, so long as America Channel, et al., do not try to enjoin the closing of the sale itself. A full-text copy of the Bankruptcy Court's 30-page Decision is available for free at http://ResearchArchives.com/t/s?e0c About Adelphia Communications Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06- 10642). Their cases are jointly adminsitered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 141; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA COMMUNICATIONS: Wants Court Nod on Extended DIP Facility ----------------------------------------------------------------- Adelphia Communications Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to authorize and approve: (a) the amendment, restatement and extension of their existing Fourth Amended and Restated Credit and Guaranty Agreement dated as of March 17, 2006, with a group of lenders led by J.P. Morgan Securities, Inc., and Citigroup Global Markets, Inc., as Joint Bookrunners and Co-Lead Arrangers; (b) the related commitment letter for the Extended DIP Facility; and (c) the payment of related fees and expenses as provided for in the Commitment Letter and the related fee letter. Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, tells Judge Gerber that while the Debtors expect to consummate the Sale Transaction prior to its outside date of July 31, 2006 -- and thus prior to the current Aug. 7, 2006, maturity date of the Existing DIP Facility -- in the exercise of prudent business judgment, the Debtors have taken steps to obtain the DIP Lenders' agreement to an extension of the Existing DIP Facility in the event the Sale Transaction closing is delayed. Among other things, the Extended DIP Facility: (a) provides for a $1.3 billion facility, comprised of an $800,000,000 revolving credit facility -- including a $500,000,000 letter of credit sub facility -- and a $500,000,000 term loan, although prior to the closing date of the Extended DIP Facility, the Co-Lead Arrangers are entitled to change the allocations between the revolving credit facility and the term loan facility, but in any event the aggregate amount of the Extended DIP Facility cannot be reduced below $1.3 billion; (b) provides for a Maturity Date of Nov. 7, 2006; (c) provides for the termination of the Extended DIP Facility on the earlier of: (i) the Maturity Date, (ii) the acceleration of the loans and the termination of the commitments in accordance with the terms of the Extended DIP Facility, (iii) the date on which the transactions contemplated by either Purchase Agreement are consummated, (iv) the date on which any Break-Up Fee is paid to either Buyer pursuant to the terms of the applicable Purchase Agreement, and (v) subject to the terms of the Extended DIP Facility, the substantial consummation of a plan of reorganization; and (d) provides that the EBITDA and EBITDAR definitions contained in the Extended DIP Facility will be modified to add back to net income the aggregate amount of any charges recorded or reserves taken by any Loan Party during any period for any Break-Up Fee that becomes payable under the Purchase Agreements or is otherwise accrued by the Loan Parties during that period, provided, that the aggregate amount of those charges or reserves does not exceed $440,350,000. The Borrowing Limits under the July 10, 2006, Commitment Letter are: Initial Final Borrower Group Borrowing Limits Borrowing Limits -------------- ---------------- ---------------- Century $690,000,000 $650,000,000 Century-TCI 230,000,000 250,000,000 UCA 100,000,000 75,000,000 Parnassos 10,000,000 10,000,000 FrontierVision 215,000,000 205,000,000 Olympus 25,000,000 25,000,000 Seven A 0 0 Seven B 20,000,000 75,000,000 Seven C 10,000,000 10,000,000 ---------------- ---------------- TOTAL: $1,300,000,000 $1,300,000,000 ================ ================ The ACOM Debtors are required to pay certain fees to the DIP Lenders as consideration for the commitments under the Commitment Letter and the extension of the Existing DIP Facility: -- Marketing Fees totaling $650,000 -- Annual Administrative Fee equal to $250,000 -- Collateral Fee equal to $250,000 -- Arrangement Fee equal to $250,000 The ACOM Debtors have agreed to reimburse each Co-Lead Arranger and each Lead Lender for their reasonable out-of-pocket expenses incurred. According to Ms. Chapman, none of the fees associated with the Extended DIP Facility will become payable -- except for reimbursement of out-of-pocket expenses associated with the negotiation and documentation of the extension -- unless the Sale Transaction fails to close prior to the Existing DIP Facility's August 7, 2006, maturity date and the Extended DIP Facility is closed. A full-text copy of the Fifth Amended and Restated Credit and Guaranty Agreement is available for free at: http://ResearchArchives.com/t/s?e09 A full-text copy of the Commitment Letter is available for free at http://ResearchArchives.com/t/s?e0a Use of Cash Collateral The Debtors further ask the Court to approve their continued use of cash collateral. The ACOM Debtors and the administrative agents for certain prepetition lenders: -- Bank of America, N.A., for the Century Lenders; -- Bank of Montreal, for the Olympus Lenders; -- Wachovia Bank, N.A., for the UCA Lenders; and -- JPMorgan Chase Bank, for the FrontierVision Lenders, agree that the Debtors will be authorized to continue to use the Cash Collateral in which the Pre-Petition Secured Lenders claim an interest. The Debtors are directed to continue to provide Adequate Protection Obligations pursuant to the terms and conditions contained in the Final DIP Order; provided that following consummation of the Purchase Agreements and the JV Plan, the Debtors no longer will be obligated to: (a) comply with the requirements of Articles 5 and 6 of the DIP Credit Agreement; and (b) implement and follow the Cash Management Protocol. Investment Guidelines Upon the closing of the Sale Transaction, the Debtors will require the services of one or more investment managers, a custodian, and a cash management bank to hold, manage, and disburse the proceeds of the Sale Transaction. The Debtors conducted an extensive selection process over the past several weeks, during which representatives of the Debtors met with and considered six sophisticated and qualified financial services firms for the position of investment manager and five such firms for the position of cash manager. After careful consideration, the Debtors have determined to retain UBS Global Asset Management (Americas) Inc., and Morgan Stanley & Co., Inc., as investment managers, with each Investment Manager to manage 50% of the net proceeds received from the Sale Transaction. Ms. Chapman explains that the Debtors' determination was based on, among other things, the reputation and experience of UBS and Morgan Stanley, the quality of the personnel from each firm who will be dedicated to serving the Debtors' account, and the willingness of the Investment Managers to offer highly competitive pricing. The Debtors also have determined to continue using Wachovia Bank, National Association, who throughout their cases has operated as the primary cash management bank for the Debtors, as the institution that will transact the majority of the cash activities for the Debtors. "This determination was based on, among other things, the operational efficiency of avoiding a transition to a different system and Wachovia's willingness to keep the same customer service team in place and offer competitive pricing," Ms. Chapman says. Accordingly, the Debtors seek the Court's authority (i) to enter into investment management agreements with the Investment Managers; and (ii) to continue using Wachovia as the Cash Management Bank. The Investment Management Agreements, among other things, contain industry standard indemnification provisions. The Debtors also ask Judge Gerber to approve certain investment guidelines. The Investment Guidelines are designed to: (a) safely preserve the value of the principal proceeds received from the Sale Transaction pending distribution to the Debtors' creditors; (b) maintain appropriate liquidity for the cash disbursements of the Debtors; (c) provide for prudent diversification of investments; and (d) maximize the after-tax rate of return on investments consistent with the safety, liquidity and diversification guidelines. A full-text a copy of the Investment Guidelines is available for free at http://ResearchArchives.com/t/s?e0b About Adelphia Communications Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06- 10642). Their cases are jointly adminsitered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 141; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADM TRONICS: Stockholders' Deficiencies Spur Going Concern Doubt ---------------------------------------------------------------- Raich Ende Malter & Co. LLP expressed substantial doubt about ADM Tronics Unlimited, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended March 31, 2006 and 2005. The auditing firm pointed to the Company's recurring losses and accumulated deficits and stockholders' deficiencies. The auditing firm also noted certain errors in the Company's financial statements resulting in understatement of previously recorded deferred compensation and additional paid-in capital as of March 31, 2005, which were later discovered by the Company's management. Accordingly, the 2005 consolidated financial statements have been restated to correct the errors. ADM Tronics' balance sheet at March 31, 2006 showed total stockholders' deficiency of $6,199,807 resulting from $3,239,663 in total assets and $9,439,470 in total liabilities. The Company's balance sheet also showed total current assets of $1,564,879 and total current liabilities of $1,258,469. For the year ended March 31, 2006, the Company reported net loss of $7,171,130 from $1,724,269 of revenues. A full-text copy of the Company's financial report for the year ended March 31, 2006 is available for free at: http://researcharchives.com/t/s?df8 About ADM Tronics Based in Northvale, New Jersey, ADM Tronics Unlimited Inc. -- http://www.admtronics.com/-- produces and markets chemical products for industrial users. The Group also manufactures, markets and leases medical equipment and medical devices. AEROTECH FILTRATION: Case Summary & Six Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Aerotech Filtration, Inc. 900 Carpenters Crossing Folcroft, Pennsylvania 19032 Bankruptcy Case No.: 06-13007 Type of Business: The Debtor installs and repairs air conditioning and heating systems. Chapter 11 Petition Date: July 19, 2006 Court: Eastern District of Pennsylvania (Philadelphia) Debtor's Counsel: Aris J. Karalis, Esq. Maschmeyer Karalis P.C. 1900 Spruce Street Philadelphia, Pennsylvania 19103 Tel: (215) 546-4500 Fax: (215) 985-4175 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's Six Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Flanders Corporation $2,477,288 2399 26th Avenue North P.O. Box 7568 St. Petersburg, FL 33713 New Century Bank $586,416 513 Kimberton Road Phoenixville, PA 19460 Clifton Coastal $88,978 555 East Baltimore Pike Clifton Heights, PA 19018 Holmes Partners $15,589 Holmes Corporate Center 500 Pine Street Holmes, PA 19043 The Devcon Group $12,482 dba Clarion Data Systems 4919 Township Line Road, Suite 343 Drexel Hill, PA 19026 Robert J. Pomante, Ltd. $4,390 850 West Chester Pike, Suite 205 Havertown, PA 19083 ALAN VEYS: Case Summary & 16 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Alan J. Veys Cannery Cove, P.O. Box 33497 Juneau, Alaska 99803 Bankruptcy Case No.: 06-12338 Type of Business: The Debtor is the owner of Alan J. Veys Properties, LLC, which filed for chapter 11 protection on May 1, 2006 (Bankr. W.D. Wash. Case No. 06-40911). Alan J. Veys Properties is an affiliate of Lone Eagle Resorts, Inc. dba Pybus Point Lodge, which filed for chapter 11 protection on May 1, 2006 (Bankr. W.D. Wash. Case No. 06-40912). Chapter 11 Petition Date: July 19, 2006 Court: Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Albert N. Kennedy, Esq. Tonkon Torp LLP 888 Southwest 5th Avenue, Suite 1600 Portland, Oregon 97204-2099 Tel: (503) 221-1440 Total Assets: $8,876,949 Total Debts: $3,766,598 Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Applequist Reed Jones and Judgment $850,000 Pybus Alaska Resorts P.O. Box 2508 c/o Mark W. Gifford Casper, WY 82602 Dan Garner Services $14,000 1622 North 2nd Avenue Kelso, WA 98626 Val Svendsen Rent/Loan $13,524 P.O. Box 33497 Juneau, AK 99802 Riske Salisbury and Attorney Fees $8,800 Kelly P.C. c/o Don W. Riske, Esq. 1720 Carey Avenue, Suite 500 Cheyenne, WY 92001 Wells Fargo Bank Bank Charges $6,400 1610 Anka Street Juneau, AK 99801 Pure Fishing Wholesale Trade Debt $6,000 John Homme Loan/Trade Debt $5,000 P. Michael Long Attorney Fees $4,800 Jerry Lewis Trade Debt $3,500 Terry Gillmore Trade Debt $1,650 U.S. Cellular Utilities $913 Rocky's Marine Bank Loan $900 Cowlitz County PUD Utilities $550 Brenda Hornduckle Labor/Services $250 Cellular One Utilities $250 Qwest Utilities $61 ALLIED HOLDINGS: Ralph Vollman Proceeds with Federal Ct. Action --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia entered a consent order modifying the automatic stay in effect in Allied Holdings, Inc., and its debtor-affiliates' cases, solely to permit Ralph Vollman to: -- continue his Federal Court action against the Debtors in respect of his claims to proceed to final judgment or settlement; and -- attempt to recover any liquidated final judgment upon, or settlement of, the Claims from available insurance policies of the Debtors, if any, related to the Claims. As reported in the Troubled Company Reporter on June 13, 2006, Mr. Vollman asked the Court to: * terminate or modify the stay to allow him to proceed with his personal injury case and collect any judgments in his favor, to the extent they are covered and payable by insurance; * allow him to amend his Proof of Claim, if appropriate, to the extent he is awarded a judgment in excess of the insurance coverage, or which are not otherwise covered by insurance, in order to participate in any distributions made to similarly situated creditors; and * obtain verification of insurance coverage available to satisfy claims. Mr. Vollman filed a claim for serious personal injuries against Delphi Corporation and its debtor-affiliates. Mr. Vollman was injured when his car collided with the Debtors' car carrier on MacArthur Boulevard in Barnstable County, Massachusetts, in April 2003. Rodger Grubb, the driver of the Debtors' car carrier, received a criminal citation for gross negligence. Frank N. White, Esq., at Arnall, Golden, Gregory, LLP, in Atlanta, Georgia, related that Mr. Vollman: -- incurred more than $800,000 for medical treatment; -- lost wages in excess of $25,000; -- lost earning capacity; and -- was and continues to be restricted in his activities. As a result of his losses, Mr. Vollman sought $5,000,000 in damages. Mr. Vollman filed a lawsuit on Dec. 30, 2003, against Roger Lynn Grubb and Allied Systems, Ltd. The litigation is pending in the United States District Court for the District of Massachusetts. Mr. Vollman estimated that discovery is 80% completed in his case and believes that the Debtors have insurance policies that would compensate him for his losses. Mr. Vollman wants to continue the discovery. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMR CORP: Reports $291 Million 2006 Second Quarter Profit --------------------------------------------------------- AMR Corporation, the parent company of American Airlines, Inc., reported a net profit of $291 million for the second quarter of 2006, compared to a profit of $58 million in the second quarter of 2005. "We are pleased to have earned a quarterly profit -- just our second in the last 22 quarters without the benefit of special items," said AMR Chairman and CEO Gerard Arpey. "Our performance indicates very clearly that we are on the right track, but also demonstrates -- just as clearly -- that we have more work to do to return our company to financial health." According to Arpey, the high cost of fuel and ongoing competitive pressures in the industry remain significant obstacles. "Fuel costs continue to raise the bar in terms of revenue generation, while the growth of low-cost carriers and continuing competition from bankrupt carriers with significant cost advantages drive the need for increased efficiencies and cost savings across all areas of our business," Arpey said. During the second quarter, the Company paid $374 million more for fuel than it would have paid at the fuel prices prevailing during the same period a year ago. American's mainline cost per available seat mile in the quarter was up 8.5% year over year. Excluding fuel, the airline's unit cost for the second quarter was up 1.4% year over year. AMR's full-year 2006 fuel cost estimates have continued to grow. In January, the Company said it expected a full-year average price of $1.95 a gallon and, in April, revised this forecast to $2.07. AMR now forecasts a full-year 2006 average fuel cost of $2.18 a gallon. In spite of rising fuel costs, Arpey pointed out that AMR continues to enjoy solid revenue momentum. "The combination of capacity restraint, the changes we have made to our network and product offerings, and the consistent, high-quality service provided by our employees has enabled us to drive unit revenues to a level approaching the highs reached in 2000." AMR reported second quarter consolidated revenues of approximately $6 billion, an increase of 12.5% year over year. Other revenues in the second quarter, including such sources as confirmed flight change, purchased upgrades, Buy-on-Board food services and third- party maintenance work, increased 20.9% year over year to $347 million. "Our summer is off to a strong start, and as always, our employees deserve enormous credit for getting millions of customers where they are going safely, comfortably and on time," Arpey said. Arpey also pointed out, however, that the second quarter is a traditionally strong period for American, so more performance improvements will be required to sustain profitability through the rest of 2006. "These results point the way to our continued progress," Arpey said. "We need to keep finding new ways to care for our customers while reducing expenses wherever possible. It's a tall order, but as today's results demonstrate, our team is up to the job." American continues to execute on the fundamentals of its Turnaround Plan by working together with employees to identify ways to reduce costs, grow revenues, improve the customer experience and simplify its operations, Arpey noted. A few recent examples: -- American made a decision in the second quarter to return 19 non-standard 757 aircraft, originally acquired from TWA, when their leases expire in 2007 and 2008. The decision will save more than $50 million in annual lease costs and also allow the Company to avoid costly upgrades and higher required maintenance costs. -- in June, American announced the AAdvance Bag Check SM program that allows passengers on cruise ships, at hotels and at convention centers to drop off their luggage for American flights at select remote locations. -- in May, management and Transport Workers Union Local 567 employees at the American Airlines Alliance Maintenance Base, including Texas Aero Engine Services Ltd., American's engine repair facility joint venture with Rolls Royce, set a "breakthrough goal" of obtaining $400 million in value for the airline by the end of 2008. Work teams were formed to focus on such areas as revenue generation, productivity increases and employee involvement. -- also in May, American began introducing a new service to accept credit and debit cards for onboard purchases, in addition to cash, using wireless handheld devices. Arpey pointed out that in addition to earning a profit, AMR was able to contribute $149 million to its various defined benefit pension plans since the end of the first quarter, bringing its total 2006 contributions to the plans to $184 million through July 14. AMR also was able to grow its cash balance, ending the period with $5.7 billion in cash and short-term investments, including a restricted balance of $525 million. American Airlines is the world's largest airline. American, American Eagle and the AmericanConnection regional airlines serve more than 250 cities in over 40 countries with more than 3,800 daily flights. The combined network fleet numbers more than 1,000 aircraft. American's Web site -- http://www.AA.com/-- provides users with easy access to check and book fares, plus personalized news, information and travel offers. American Airlines is a founding member of the oneworld Alliance, which brings together some of the best and biggest names in the airline business, enabling them to offer their customers more services and benefits than any airline can provide on its own. Together, its members serve more than 600 destinations in over 135 countries and territories. * * * As reported in the Troubled Company Reporter on June 8, 2006, Standard & Poor's Ratings Services raised its ratings on AMR Corp. and subsidiary American Airlines Inc., including the long-term corporate credit ratings on each entity to 'B' from 'B-'. The short-term rating on AMR was raised to 'B-2' from 'B-3'. The ratings were removed from CreditWatch with positive implications, where they were placed on April 21, 2006. The outlook is stable. APHTON CORP: Court Okays Flaster/Greenberg as Committee's Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Aphton Corp.'s chapter 11 case obtained permission from the U.S. Bankruptcy Court for the District of Delaware to retain Flaster/Greenberg P.C. as its counsel, nunc pro tunc to June 5, 2006. As reported in the Troubled Company Reporter on July 11, 2006, Flaster/Greenberg is expected to: a) give the Committee legal advice with respect to its powers and duties as a Committee; b) prepare necessary applications, answers, orders, reports and other legal papers; and c) pursue any claims or matters as the Committee desires. William J. Burnett, Esq., a member at Flaster/Greenberg, told the Court that he charges $325 per hour for his services, while his firm's other professionals bill: Professional Hourly Rate ------------ ----------- Colleen A. Garrity $210 Shareholders/counsel $255 - $420 Associates $165 - $265 Paralegals $105 - $170 Mr. Burnett assures the Court that he and his firm's professionals do not hold any material interests adverse to the Debtor, and that they are "disinterested persons" as that term is defined in Sec. 101(14) of the Bankruptcy Code. Headquartered in Philadelphia, Pennsylvania, Aphton Corporation -- http://www.aphton.com/-- is a clinical stage biopharmaceutical company focused on developing targeted immunotherapies for cancer. Aphton filed for chapter 11 protection on May 23, 2006. (Bankr. D. Del. Case No. 06-10510). Michael G. Busenkell, Esq., at Eckert Seamans Cherin & Mellot, LLC, represents the Debtor in its restructuring efforts. William J. Burnett, Esq., at Flaster Greenberg, represents the Official Committee of Unsecured Creditors. Aphton estimated its assets and debts at $1 million to $10 million when it filed for protection from its creditors. At Dec. 31, 2005, Aphton's balance sheet showed assets totaling $6,775,858 and debts totaling $11,641,182. ARR-MAZ CUSTOM: S&P Junks Ratings on $52.5 Million Term Loan ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Arr-Maz Custom Chemicals Inc. At the same time, the rating agency assigned a 'B+' and a recovery rating of '1' to Arr-Maz's $15 million 6-year revolving credit facility and its $125 million 6-year 1st-lien term loan, reflecting its expectation of full recovery of principal in its default scenario. Standard & Poor's also assigned a 'CCC+' rating to Arr-Maz's $52.5 million 6.5-year 2nd-lien term loan, with a recovery rating of '5', indicating negligible (0%-25%) recovery prospects for 2nd- lien lenders. The outlook is stable. Proceeds from the credit facilities, which were underwritten by UBS Securities LLC, together with $42.5 million of equity and an $8 million contingent seller note, were used to finance the recent acquisition of Arr-Maz by certain funds managed by GSO Capital Partners LP from Wind Point Partners, repay existing debt, and pay transaction expenses. "The ratings on Arr-Maz reflect good positions in niche specialty chemical markets, as well as risks associated with its high debt leverage and modest scope of operations," said Standard & Poor's credit analyst Cynthia Werneth. Mulberry, Florida-based Arr-Maz is a narrowly-focused producer of process chemicals and functional additives, including reagents and coatings, to the phosphate fertilizer and mining industries, which account for more than half of total sales. The company also manufactures additives for ammonium nitrate used in nitrogen fertilizers and explosives and additives for asphalt used in paving and roofing. These businesses, which are of approximately equal size, are much smaller. In addition, Arr-Maz makes other diversified industrial mineral flotation and surfactant chemicals and toll produces chemicals for third parties. Sales are concentrated in North America, but during the past few years the company established a manufacturing joint venture in Brazil (of which it currently owns 90%) and a presence in Europe through a tolling arrangement with a third- party manufacturer. Sales originating from overseas locations account for about 14% of revenues, which totaled $153 million in 2005. Proprietary chemistry, a value-added product mix, and a high degree of technical sales and service should ensure the continuation of good operating profitability and reasonable cash flow generation despite the company's high debt leverage. However, the outlook could be revised to negative or the ratings lowered in the event of significant, debt-financed acquisitions, a leveraged recapitalization, a sharp deterioration in operating conditions, or a significant loss of business from a major customer, none of which is currently anticipated. Upward rating movement is likely to be constrained by the company's aggressive financial policies and weak credit measures. ARROWHEAD GENERAL: S&P Rates Planned $45 Million Facility at CCC+ ----------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B' counterparty credit rating to San Diego, California-based Arrowhead General Insurance Agency Inc. At the same time, Standard & Poor's assigned its 'B' first lien senior secured bank loan rating to Arrowhead's proposed $125 million term loan facility and $15 million revolver and assigned its 'CCC+' second lien junior secured bank loan rating to Arrowhead's proposed $45 million credit facility. The outlook is stable. "The ratings on Arrowhead, a competitive multiline general agent with niche property/casualty insurance focus, reflects the challenges it faces in an industry segment which exhibits somewhat high revenue and earnings cyclicality, high fragmentation, and constraints to carrier access," explained Standard & Poor's credit analyst Michael Gross. "Most importantly, the ratings reflect strained cash flow and diluted quality of capital expected from the pending leveraged majority investment in Arrowhead by California based Spectrum Equity Investors." Partially mitigating the weaknesses, are an experienced management team and a new equity investor that will allow management to continue to pursue organic growth nationally, complemented by possible opportunistic acquisitions. Moreover, the company's operating performance has improved in recent years on an absolute basis and in revenue and earnings sources. Arrowhead's business platform was significantly enhanced by its January 2005 acquisition of Cypress Point Insurance Services Inc., a niche workers' compensation general agent. Standard & Poor's expects Arrowhead to be purchased by Spectrum Equity Investors, resulting in high debt servicing needs and strained cash flow for a multiyear period. However, Arrowhead's revenue diversification is expected to further increase organically, by product and geography. Net income of $10 million or more is expected in 2006, and again in 2007, as well as a healthy EBITDA margin of 28%-32%. Adjusted financial leverage will be high at about 112% at year-end 2006 with low fixed-charge coverage of 2x expected in 2006 and 2007. The outlook could be revised to negative for a variety of reasons including weaker revenue growth, EBITDA margin fluctuation and weaker than expected fixed-charge coverage. Although unlikely in the next two to three years, a positive outlook might ultimately warrant consideration should management succeed with its profitable growth plan complemented by greater than expected balance sheet and cash flow strength. ASARCO LLC: Can Enter Into East Helena Demolition Agreement ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi authorized ASARCO LLC to sign an agreement, with an entity that submits the best bid, for demolition work to be performed at a lead smelter plant in East Helena, Montana. As reported in the Troubled Company Reporter on July 5, 2006, since 1888, ASARCO LLC has operated the lead smelter plant. Before filing for bankruptcy, ASARCO entered into Consent Decrees with the Environmental Protection Agency and the Montana Department of Environmental Quality that required it to clean up the East Helena facility by the end of 2006. ASARCO has discovered that demolishing the East Helena facility is easier and more efficient than merely cleaning up the site. Thus, pursuant to the Consent Decrees, ASARCO must demolish two large areas within the smelter complex by year end. The demolition areas includes: * the Drossing Plant, * the Bullion Casting, * the Speiss Granulation Pit, * the MCC building, * part of the run-off water containment tank MCC building, * the Lab building, * the mist precipitation building, * the clarifier building, * the Acid Tank, * the Dust Bin building, * the Scrubber Tower, * Cottrell, and * Baghouse. Tony M. Davis, Esq., at Baker Botts LLP, in Houston, Texas, informs the Court that demolition will include activities necessary to: (a) safely demolish all buildings and components within the project; (b) clean and recycle all recyclable materials; (c) properly dispose all non-hazardous and hazardous materials; and (d) grade and cap all exposed soil areas within the demolition areas. ASARCO lacks the manpower and other resources to do the demolition itself, and thus needs to hire a demolition contractor, Mr. Davis says. ASARCO sent bidding invitations to seven entities. All seven entities have conducted pre-bid site inspections. ASARCO anticipates that those entities will submit their bids any time soon. Mr. Davis notes that the seven Contractors meet the criteria for being environments contractors, are familiar with EPA and Occupational Safety & Health Administration requirements, and have previous experience with ASARCO environmental work. Once bids are received, ASARCO will consult with the Official Committee of Unsecured Creditors to select the best bid. Based 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. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Wants Pate Auction to Sell East Helena Equipment ------------------------------------------------------------ In connection with its intent to sell its East Helena Property, ASARCO LLC seeks permission from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to employ Pate Auction, Inc., as auctioneer. As auctioneer for the East Helena Property, Pate Auction is expected to: (a) advertise the Auction; (b) prepare brochures; (c) make minor repairs and improvements as necessary to maximize the Property's value; and (d) conduct the Auction. ASARCO will pay Pate Auction a 12% commission from the Property's gross sales price. The commission is expected not to exceed $3,500. ASARCO will also pay Pate Auction for any additional advertising costs and repair expenses for the Property. Pate Auction will collect the full proceeds from the Auction. All expenses incurred for the promotion, advertisement and conduct of the Auction will be first paid from the sales proceeds. Within 14 days after the conclusion of the Auction, Pate Auction will deliver to ASARCO the sales proceeds, less Pate Auction's commission and the Approved Expenses, together with an accounting of the successful bids, the monies received, and the expenses incurred. The Accounting should also reflect the Gross Sales Proceeds, the amount of the commission, the amount of the Approved Expenses, and the Net Sales Proceeds being turned over to ASARCO. Doug Dandro, secretary and treasurer of Pate Auction, Inc., assures the Court that his firm does not represent any interest adverse to ASARCO or its estates, and is disinterested as defined in Section 101(14) of the Bankruptcy Code. Based 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. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASARCO LLC: Wants to Auction East Helena Equipment on August 25 --------------------------------------------------------------- ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to sell the East Helena Facility Equipment, free and clear of liens, claims, encumbrances or interests, subject to an auction to be held on Aug. 25, 2006. Before ASARCO LLC filed for bankruptcy, it entered into a Consent Decree with the Environmental Protection Agency and the Montana Department of Environmental Quality requiring ASARCO to clean up its lead smelter plant in East Helena, Montana. ASARCO owns various pieces of heavy equipment at the East Helena Facility used for its clean-up efforts. A 3-page list of the East Helena Equipment is available for free at http://ResearchArchives.com/t/s?dec ASARCO has determined that it is more cost-effective to hire contractors to perform the clean-up work. As a result, ASARCO no longer has any use for the Equipment. Tony M. Davis, Esq., at Baker Botts L.L.P., in Houston, Texas, says that the Auction will be an unreserved auction. The Property offered will be sold at the highest bidder on the date of the Auction. Based 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. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000). ASHTEAD GROUP: Sunbelt Unit Buys NationsRent for $1.05 Billion -------------------------------------------------------------- Sunbelt Rentals, Inc., a subsidiary of Ashtead Group plc, will acquire NationsRent Companies, Inc. in a transaction valued at approximately $1.05 billion. Following the closing of the transaction, it is expected that the combined company will rank as the third largest U.S. equipment rental company by 2005 revenues, with 477 locations in 35 states, employing 7,000 associates. "NationsRent is a high quality company which, like Sunbelt, has an attractive and significant exposure to the growing non-residential construction market in the US," George Burnett, Chief Executive Officer of Ashtead, said. "The merger of NationsRent with Sunbelt uniquely creates a chain of 477 outlets with minimal overlap and accelerates our 'clustering' strategy that has delivered consistent profitable growth over the past few years. NationsRent and Sunbelt have similar rental fleets both in age and in mix and through the combination of these businesses we believe we will enjoy benefits of scale in both customer service and buying power. The acquisition represents the latest step in Ashtead's development and provides the Company with an excellent opportunity to create additional shareholder value." "This transaction with Sunbelt represents an excellent opportunity for our employees and stockholders," Jeff Putman, Chief Executive Officer of NationsRent, said. "The NationsRent employees will be joining a company that is performing at the top of our industry with strong revenue and operating cash flow growth. With limited geographic overlap, this combination will allow the NationsRent employees to continue to serve our customers and provide an opportunity for career growth in one of the largest most successful companies in our industry. For the stockholders of NationsRent, the transaction will allow them to realize an attractive return generated by the growth of the company over the past three years." "NationsRent's board of directors, after a careful review of the transaction, unanimously voted in favor of the merger. I sincerely appreciate the confidence our stockholders have shown in our management and employees over the past three years," Mr. Putman added. "We are excited to announce the proposed merger of Sunbelt and NationsRent," Chief Executive Officer and President of Sunbelt, Cliff Miller, said. "This will bring together two well-known brands and two well-respected companies that share a very strong focus on customer satisfaction. It is fitting that the primary beneficiaries of this combination will be the customers of Sunbelt and NationsRent as well as employees who have worked so hard to build both organizations." Mr. Miller added, "This transaction will immediately extend the reach of the combined companies to eight additional states. Since there are very few overlapping branch locations, there will be plenty of growth opportunities for branch network employees of both companies as the combined company works to serve its expanded customer base. The two companies also have very different specialty operations, which are complementary rather than redundant, such as NationsRent's Lowe's retail-based program and its expanding dealership network along with Sunbelt's pump, power and scaffolding operations. By adding NationsRent's relatively new rental fleet to Sunbelt's already significant investment in fleet, the combined company will feature a rental fleet base of $2.2 billion of original cost." Terms of the Transaction 1) Merger Consideration The aggregate consideration payable at closing for the outstanding shares of NationsRent common stock is $495 million in cash, less transaction expenses incurred by NationsRent. In addition to this cash consideration at closing, NationsRent common stockholders may receive additional payments from a $28 million escrow amount remaining after settlement of any indemnification claims, the remainder of a $5 million reserve account established to cover the costs of any disputed claims, and a "common stock deferred payment" of up to $89 million. The earliest date funds may begin to be released to stockholders from the escrow account will be six months following the closing date. The common stock deferred payment is payable in full if Ashtead's share price equals or exceeds 140% of an agreed upon "reference price" of 223.5 pence, adjusted for the dilutive effect of Ashtead's proposed rights offering. Payments may be earned in installments of approximately $5 million for each percentage point of appreciation above the reference price between 122.2% and 140%. The period in which the common stock deferred payment could be paid will last until the third anniversary of the closing date of the merger, and payments, if any, would be made on a quarterly basis. Each outstanding share of NationsRent preferred stock will entitle the holder to receive $1,000, the liquidation preference, for an aggregate of $72 million. In addition, pursuant to the transaction, Sunbelt will assume all of NationsRent's outstanding indebtedness. 2) Conditions to Closing The consummation of the merger is subject, among other things, to approval by the Ashtead shareholders, and the consummation of certain financing arrangements, including a rights offering. Other conditions to closing include the consummation of NationsRent bond tenders and consent solicitations and the expiration or the early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Simultaneously with the execution of the merger agreement, a majority of the stockholders of NationsRent approved the merger. The transaction is expected to close on or about Aug. 31, 2006. Stroock & Stroock & Lavan LLP acted as legal counsel to NationsRent with respect to the negotiation of the merger agreement and the other transactions. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel to Ashtead and Sunbelt with respect to the negotiation of the merger agreement and other transactions. Jefferies & Company, Inc. acted as financial advisor to NationsRent with respect to the merger transactions. UBS Investment Bank and JPMorgan Cazenove acted as financial advisors to Ashtead and Sunbelt with respect to the merger transactions. Tender Offers and Consent Solicitations In connection with the merger, NationsRent will commence an offer to purchase for cash any and all of its outstanding 9-1/2% Senior Notes due May 1, 2015 in an aggregate principal amount of $150 million and 9-1/2% Senior Secured Notes due Oct. 15, 2010 in an aggregate principal amount of $250 million. In connection with the offers, holders of the 2015 Notes are being solicited to provide consents to certain amendments to the indenture for the 2015 Notes that would eliminate most of the restrictive covenants and events of default contained in the indenture, and holders of the 2010 Notes are being solicited to provide consent to amend the satisfaction and discharge section of the indenture for the 2010 Notes. The consent solicitation will expire at 5:00 p.m., New York City time, on July 31, 2006, and the offer will expire at 5:00 p.m., New York City time, on Aug. 29, 2006, in each case unless extended by NationsRent. Completion of the offers and consent solicitations is subject to the satisfaction of certain conditions, including, but not limited to, receipt of valid tenders and consents from at least a majority in principal amount of each series of outstanding Notes and the consummation of the merger and the other transactions contemplated by the merger agreement. As described in more detail in the offer to purchase and consent solicitation statement that will be distributed to holders of the Notes promptly, the total consideration for each $1,000 principal amount of Notes validly tendered and accepted for purchase will be calculated, in accordance with standard market practice, based upon a fixed spread of 50 basis points over the bid side yield on the 3.875% U.S. Treasury Note due May 15, 2010, in the case of the 2015 Notes, and the 4.250% U.S. Treasury Note due Oct. 31, 2007, in the case of the 2010 Notes. The foregoing total consideration for the Notes includes a consent payment equal to $30 per $1,000 principal amount of Notes tendered. Holders must validly tender their Notes on or before the Consent Deadline in order to be eligible to receive the total consideration. Holders who validly tender their Notes after the Consent Deadline and before the expiration of the offer will only be eligible to receive an amount equal to the total consideration minus the consent payment. Additionally, holders whose Notes are purchased pursuant to the offer will receive any accrued but unpaid interest up to, but not including, the payment date for the Notes. The dealer managers for the offer are Jefferies & Company, Inc. (800-801-1081) and Citigroup Global Markets Inc. (800-558-3745). The depositary for the offer is Wilmington Trust Company. Noteholders with questions or who would like additional copies of the offer documents may call the information agent, Innisfree M&A Incorporated, toll-free at (888) 750-5834. (Banks and brokers may call collect at (212) 750-5833.) About NationsRent Headquartered in Fort Lauderdale, Florida, NationsRent Companies -- http://www.nationsrent.com/-- specializes in rentals and also sells new and used equipment with related merchandise, parts and supplies, and provides maintenance and repair services. NationsRent offers a broad range of high- quality construction equipment with a focus on superior customer service at affordable prices with convenient locations in major metropolitan markets throughout the United States. About Ashtead Ashtead Group Plc -- http://www.ashtead-group.com/-- based in the U.K. together with its U.S. subsidiary, Sunbelt Rentals, provides equipment rental services. The company is publicly traded on the London Stock Exchange. About Sunbelt Headquartered in Charlotte, North Carolina, Sunbelt Rentals -- http://www.sunbeltrentals.com/-- provides equipment rental solutions for the industrial, construction, and municipal markets, plus the DIY markets, from its network of 209 branches in 26 states. Its extensive equipment fleet includes a wide range of general construction and industrial equipment, and is further broadened by specialty businesses serving the Pump, Power, Trench Shoring and Scaffold markets. ASHTEAD GROUP: NationsRent Buy Cues Moody's to Downgrade Ratings ---------------------------------------------------------------- Moody's Investors Service downgraded Ashtead Group Plc's corporate family rating to B1 from Ba3 following its announcement of an agreement to acquire NationsRent Companies, Inc. Concurrently Moody's downgraded the rating of: * the $250 million second priority senior secured notes issued by Ashtead Holdings Plc due 2015 to B3 from B2; and * the GBP78 million second priority senior secured notes issued by Ashtead Holdings Plc due 2014 to B3 from B2. Moddy's also assigned a: * (P) Ba3 rating to the new $1.6 billion senior secured credit facilities to Sunbelt Rental, Inc. et al, an indirect subsidiary of Ashtead Group Plc; and * (P)B3 rating to the new $550 million second priority senior secured notes of Ashtead Capital, Inc. maturing 2016. Ashtead intend to fully redeem the 2014 GBP78 million second priority senior secured notes assuming favorable market conditions. Security supporting these notes will fall away where greater than 50% are redeemed. Moody's will withdraw ratings and the outlook on these notes and the $800 million senior secured credit facilities rated Ba3 due 2010 to Ashtead Holdings LLC once the notes are redeemed and credit facilities are cancelled. The rating on the 2014 notes will be re-assessed if any remain outstanding and become unsecured. Rating actions follow the company's stated intention to acquire NationsRent Companies, Inc., one of the largest full-service equipment rental companies in the United States with GBP379 million in annual revenues in 2005 and a US market share of around 2%. The corporate family rating reflects the revised capital structure and resulting higher leverage. The company will increase net debt by around GBP 460million to combine with NationsRent, currently rated B2. The acquisition will see pro-forma Total Debt to EBITDAR above three times and RCF to Net Debt calculated by Moody's around the high teens. The combined group's pro-forma credit metrics lead to pressure to revise the corporate family rating to B1. This is supported by peer comparatives. The rating also considers event risk and the material scale of the acquisition. NationsRent generates revenues close to 60% of Ashtead's. Negative impacts to the credit profile are countered by an upward trend in the company's performance, demonstrated by its 2006 operating performance and its access to equity capital markets. Liquidity is considered to remain acceptable for the rating. Availability under the senior credit facilities is expected to be over GBP245 million at closing. Mandatory debt amortisation is also not onerous with 1% of senior secured credit facilities repayable annually over the next four years. No material debt maturities occur until 2011 when senior credit facilities expire. The company has a flexible growth capex model and can be scaled to assist liquidity. The new 2016 $550 million notes are not underwritten. The company has obtained a commitment for a GBP95 million bridge facility to be used if this debt issue is not completed. The ratings factor Ashtead's exposure to the cyclical construction industry, which is compounded by its high operational gearing, strong competition and the company's continuing need for high maintenance and growth capex. Credit metrics could change rapidly with cyclical movements. However, the ratings and stable outlook are supported by the company's robust market positions in both the US and the UK and its increasing scale. Moody's understands that demand for rental equipment in the U.S. is experiencing a cyclical recovery. End markets are expected to remain robust into 2007 given improvements in the non-residential construction market. Ratings may experience upward pressure if the company successfully integrates the material NationsRent acquisition and demonstrates sustainable improvements in credit metrics to help it manage through cyclical changes. This could be achieved through improved operating performance. Sustainable credit metrics which could indicate upward rating pressure include: EBIT interest cover approaching 2.5 times and Debt to EBITDAR less than 3 times. The Ba3 rating of the senior secured credit facilities reflect their senior position in the company's capital structure as well as the comprehensive security package provided to lenders of these facilities by the company's material subsidiaries. The senior secured credit facilities rank ahead of both the existing 2015 and new 2016 second priority senior secured notes. Moody's applied a two notch differential between the corporate family rating and the second priority senior secured notes to reflect their contractual subordination and the large percentage of total debt that ranks ahead. These ratings have been affected: Ashtead Group Plc * the corporate family rating has been downgraded to B1 from Ba3. * the Ba3 rating on the $800 million senior secured credit facilities due 2010 will be withdrawn on cancellation of this facility. Ashtead Holdings Plc * the rating on the $250 million second priority senior secured notes due 2015 has been downgraded to B3 from B2; * the rating on the GBP 78 million second priority senior secured notes due 2014 has been downgraded to B3 from B2. This rating will be withdrawn on redemption of notes. Sunbelt Rentals, Inc. et al * (P) Ba3 rating has been assigned to the new $1,600 million senior secured credit facilities maturing 2010. At Ashtead Capital Inc * (P) B3 rating has been assigned to the $550 million second priority senior secured notes due 2016. The outlook for all ratings is stable. Headquartered in Leatherhead, Surrey, United Kingdom, Ashtead is a leading provider of construction and other industrial rental equipment services primarily in the USA and UK. Recorded revenues for the FYE April 30, 2006, were GBP638 million. BALDEMAR SALAZAR: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Baldemar Salazar, Jr. Maria S. Rodriguez dba South Texas Masonry dba South Texas Masonry LLP 1306 East Pecan Pharr, Texas 78577 Bankruptcy Case No.: 06-70303 Type of Business: The Debtors previously filed for chapter 11 protection on Feb. 15, 2006 (Bankr. S.D. Tex. Case No. 06-70060). Chapter 11 Petition Date: July 19, 2006 Court: Southern District of Texas (McAllen) Judge: Richard S. Schmidt Debtor's Counsel: John Ventura, Esq. John Ventura, P.C. 4900 North 10th Street Northtown Centre, Suite E-2 McAllen, Texas 78504 Tel: (956) 630-2822 Fax: (956) 631-0742 Total Assets: $617,450 Total Debts: $1,205,636 The Debtor did not file a list of its 20 largest unsecured creditors. BCBG MAX: S&P Junks Rating on Proposed $50 Million Term Loan ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings, including its corporate credit rating to 'B' from 'B+', on specialty apparel retailer BCBG Max Azria Group Inc. The outlook is negative. At the same time, Standard & Poor's assigned a 'CCC+' rating and '5' recovery rating to the Los Angeles-based company's proposed $50 million third-lien term loan due 2012, indicating its expectation for negligible recovery of principal in the event of default. Proceeds from the third-lien term loan, together with a $30 million add-on to the existing term loan and a $12 million borrowing from its revolving credit facility will be used to fund the purchase of the majority interest in Max Rave LLC from Guggenheim Corporate Funding LLC. Max Rave was formed to acquire G+G Retail Inc. out of bankruptcy auction in early 2006. "The downgrade reflects the debt-financed acquisition of Max Rave and the assumption of related operating leases, resulting in a meaningful increase in debt leverage, as well as increased business risk due to the challenges of turning around the newly acquired chain," said Standard & Poor's credit analyst Ana Lai. "We believe that the acquisition of Max Rave adds significant risk to BCBG's business profile due to the challenges of turning around this operation." G+G filed for bankruptcy in early 2005 following periods of falling sales due to poor execution, a high operating cost structure, and increased competition. The acquisition of Max Rave results in a significant growth of BCBG's retail operations, by adding about 450 stores to its base of 120 BCBG retail and outlet stores. Following the acquisition, Max Rave will remain a specialty retailer targeting teenage and preteen girls by delivering fashion goods at value price points. BECKMAN COULTER: Earns $32.6 Million in Quarter Ended March 31 -------------------------------------------------------------- Beckman Coulter, Inc., earned $32.6 million of net income on $569 million of total revenue for the three months ended March 31, 2006, compared to $41.4 million of net income earned on $576.1 million of revenue for the same period in the prior year. Revenues in the U.S. were up 5.1% for the three months ended March 31, 2006. The growth in the U.S. was primarily a result of the acquisitions of Agencourt Personal Genomics and Diagnostic Systems Laboratories. Partially offsetting this growth were declines in revenue growth in Chemistry Systems and Cellular Systems which were negatively impacted by a leasing policy change. However, unit placements and reagent revenues were up across several product lines in the U.S. Immunoassay and Discovery & Automation revenues were up significantly for the three months ended March 31, 2006 aided by automation placements and revenue growth in the life sciences markets in the U.S. International revenue was down 7.7% in the three months ended March 31, 2006, and down 3.2% in constant currency in the three months ended March 31, 2006. This revenue decline was primarily a result of unusually strong international consumables growth in the first quarter of 2005. Revenues in Europe were down approximately 8.2%, 1.4% in constant currency, as a result of lower sales in France and the United Kingdom, partially offset by modest growth in Germany and strong sales in Italy and our European dealer markets. Sales in Asia were down about 14.8%, 10.2% in constant currency, due primarily to a decline in demand in Japan for the Company's Discovery and Automation products as this country continues to contend with health care reimbursement reforms and constraints on spending in the life sciences research market. The Company's balance sheet at March 31, 2006, showed $3.04 billion in total assets and $1.8 billion in total liabilities. Cash flows provided by operating activities were $56.2 million in the first three months of 2006 as compared to $100.2 million in the first three months of 2005. A full-text copy of Beckman Coulter's quarterly report is available for free at http://researcharchives.com/t/s?e10 Audit Committee Probe During the second quarter 2006, the Audit and Finance Committee of Beckman Coulter's Board of Directors oversaw an investigation of claims made by a former employee relating to certain accounting and financial reporting issues. The individual alleged that his recent termination, as part of the Company's restructuring, was the result of certain accounting issues he brought to the attention of his supervisor. The issues involved obsolescence of about $25 million in inventory, valuation of returned equipment under lease, and disclosure of reasons for changes in certain operating expense accounts. The Audit and Finance Committee retained legal counsel and an outside forensic accounting firm to conduct the inquiry into the allegations made by the former employee. Based upon the work and recommendations of its counsel and forensic accountants, the Audit and Finance Committee concluded that the former employee's allegations were not substantiated and that no adjustment to the company's financial statements was required. Headquartered in Fullerton, California, Beckman Coulter, Inc. -- http://www.beckmancoulter.com/manufactures biomedical testing instrument systems, tests and supplies that simplify and automate laboratory processes. * * * As reported in the Troubled Company Reporter on Jan. 26, 2006, Moody's Investors Service confirmed its Baa3 rating on Beckman Coulter's $240 Million 7.45% Senior Notes due 2008; $235 Million 6.875% Senior Notes due 2011; and $100 Million 7.05% Senior Debentures due 2026. Moody's also confirmed its (P)Baa3/(P)Ba1 on the Company's $500 Million Universal Shelf Registration (Senior and Subordinate. Moody's said the outlook on Beckman's ratings is stable. BNY CONVERGEX: Moody's Puts Low-B Ratings on $675 Million Loans --------------------------------------------------------------- Moody's Investors Service assigned a first-time Corporate Family Rating of B2 to ConvergEx Holdings LLC. Moody's also assigned first-time B1 and B3 ratings to a $420 million first-lien term loan and a $180 million second-lien term loan, respectively, both co-issued and cross-guaranteed by BNY ConvergEx Group LLC and EZE Castle Software Inc., which are direct subsidiaries of ConvergEx. The credit facilities are fully guaranteed by the parent and the direct and indirect subsidiaries of the co-issuers, with the exception of those registered as broker-dealers. The outlook on all the ratings is stable. ConvergEx is a holding company whose assets include substantially all of the former brokerage subsidiaries of BNY Securities Group and Eze Castle, formerly a privately-held trade order management software vendor. ConvergEx is being formed as a result of a leveraged buyout transaction led by GTCR, a private equity firm, for total consideration of $1.05 billion. The purchase was financed with $700 million of debt and the balance in rollover and cash equity. GTCR and Bank of New York will each have a 35.4% fully diluted equity stake in the new venture, with EZE Castle shareholders and the ConvergEx management team retaining the rest of the stake. In explaining its rationale for the assigned ratings, Moody's noted the strong competitive position enjoyed by BNY Brokerage, ConvergEx's main brokerage subsidiary, in the agency-only equities brokerage business based on its considerable scale, first-rate execution capabilities in both broker-assisted and electronic trading, and its many client relationships with institutional asset managers. BNY Brokerage also benefits from a relatively low-cost expense structure as a result of its advanced electronic trading platform, self-clearing capabilities, and a high proportion of variable costs in its overall expense base. Moody's further recognized the firm's competitive offerings in soft-dollar administration, commission recapture, transition management, and independent research aggregation services. These business lines help to somewhat broaden the firm's earnings mix beyond pure trading commissions, for which the many existing agency-only brokers increasingly -- and fiercely -- compete on price and quality of execution, the latter dimension likely to continue getting commoditized as a result of technological advances. The firm's five-year marketing and referral agreement with the Bank of New York is likely to help to generate an important proportion of business flow from the bank's many institutional and corporate clients. Also providing support to the ratings is the attractive business model and earnings prospects of EZE Castle, which creates and markets trade order management software. EZE Castle's main product is a desktop-based, front-end application that provides hedge fund traders and asset managers with a complete set of pre- trade, trade, and post-trade analytics functionality, including portfolio management, commission optimization, compliance, and reporting features. EZE Castle generates a substantial portion of its revenue from "connectivity" fees, which are paid, on a per-traded-share basis, by brokers that receive order flow originating from EZE Castle's front-end. The remaining portion of the revenue comes from EZE Castle's software clients in the form of application and licensing fees. As a result, in Moody's view, EZE Castle possesses an important degree of pricing power, and its software and revenue have a high level of stickiness and repeatability. While most of EZE Castle's clients are hedge funds, BNY Brokerage has a relatively modest penetration of this market segment, and ConvergEx intends to cross-market its various existing and future products to this important, and lucrative, clientele. The primary constraint on the ratings is the high degree of financial leverage embedded in ConvergEx's capital structure and the resulting relative weakness in its credit metrics, such as Debt and interest coverage. With no tangible equity, a high level of indebtedness, and thin interest coverage, there is little room for error for ConvergEx as it works to complete the integration of its constituent businesses against a backdrop of intense competitive pressures in the equities brokerage industry. Notwithstanding some degree of earnings diversification and a flexible expense base, as noted above, ConvergEx's fortunes remain broadly tied to equities trading volumes, which are cyclical, and trading commission levels, which have declined precipitously over the last number of years. The agency-only brokerage model has its advantages in appealing to clients that for some or all of their trade flow do not necessarily require liquidity provision from the broker, but do demand low-cost, high-speed execution. Despite this, ConvergEx is likely to continue to experience relentless competitive pressures from both other agency-only and full-service brokers as they compete with each other for order flow, likely exerting further downward influence on commission levels. The B1 rating on the first-lien facilities, which is one notch higher than the CFR, benefits from the structural subordination of the second-lien facilities and the mezzanine notes in the capital structure of the firm. The stable rating outlook reflects Moody's expectations that ConvergEx will focus in the short to medium term on executing its integration strategy targeted at generating meaningful revenue synergies from its existing combination of businesses, which now span virtually the entire trade lifecycle. What Could Change the Rating -- UP The ratings could go up if the company achieves and sustains its targets of lower leverage and improved interest coverage by means of an aggressive reduction of debt and/or strong growth in earnings. A sustained and profitable growth in revenue, particularly from sources less dependent on cyclical revenue drivers like trading volumes, would also exert upward pressure on the ratings. What Could Change the Rating -- DOWN The ratings could go down if there is a significant change in the capital structure that increases leverage and negatively impacts the already thin interest coverage. Also weighing negatively on the ratings would be a deterioration of credit metrics caused by a slowdown in earnings stemming from a prolonged decline in executed trade volumes or market share erosion in its major business lines. These ratings were assigned: ConvergEx Holdings LLC: * Corporate Family Rating -- B2 BNY ConvergEx Group LLC and EZE Castle Software Inc: * $420 Million 7-Year First-Lien Term Loan -- B1 * $75 Million 6-Year First-Lien Revolving Credit Facility -- B1 * $180 7.5-Year Second-Lien Term Loan -- B3 The outlook on all the ratings is stable. BNY ConvergEx Group LLC, headquartered in New York City, New York, is a global agency brokerage and technology company, with 2005 pro-forma revenue of $339 million. BNY CONVERGEX: High Debt Level Prompts S&P to Assign Low-B Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' long-term counterparty credit, 'B+' senior secured, and 'B-' subordinated debt ratings to BNY ConvergEx LLC. The outlook is stable. "The ratings are based primarily on the company's very weak pro forma interest coverage and high debt level," said Standard & Poor's credit analyst Robert B. Hoban, Jr. ConvergEx will combine several institutional brokers currently owned by the Bank of New York Co. Inc. with Eze Castle Software Inc. While each entity has good operational management and track records in its individual business line, as a newly independent company, combining complementary, though very different operations, there is some transition risk. While the company earns almost all of its revenue from transactional business tied to highly cyclical & volatile U.S. equity trading, ConvergEx's agency-only model and expense flexibility have allowed it to earn stable, relatively low-risk returns, which helps to alleviate some concerns over the very low interest coverage ratios. The rating also reflects ConvergEx's position as one of the largest independent agency-only equity trading shops with some good niche businesses that are poised to grow with current industry, regulatory, and technology trends, though the company remains a relatively small player in the highly competitive U.S. cash equity trading business. ConvergEx will consist of several brokerage operations purchased from BoNY and Eze, a provider of trade order management software systems. As an agency-only broker, ConvergEx's brokerage income is almost entirely from trading commissions, with no proprietary trading or securities inventory. ConvergEx, and the agency-only segment as a whole, has benefited from the growth of hedge funds and the desire of these and other institutional equity traders to both diversify their brokerage relationships and lower commission rates. ConvergEx will be one of the largest independent agency- only equity trading shops, but competition in this segment is currently quite diverse and poised to consolidate. The purchase of the brokers and Eze is being financed largely with the issuance of $700 million in debt as well as equity contributions from a private equity investor and management, and the rollover of some of the existing BoNY equity. The resulting entity has a high debt burden, no tangible equity, and very weak interest coverage. Included as part of this transaction is $100 million of debt to finance the purchase from BoNY of two additional brokers to occur at a later date. Pro forma interest coverage is very weak at 1.8x and is not projected to improve meaningfully until the other two businesses are acquired, no later than mid-2008. The senior lenders have flexibility to block interest payments on the $100 million of mezzanine notes if it would cause a covenant breach on the secured debt. With the majority of revenues either directly or indirectly earned from U.S. cash equity trading, the firm's performance is subject to transaction volume volatility and trends in commission pricing. Nevertheless, this concern must be balanced against the company's history of very stable earnings and its lower-risk agency-only model. Variability of expenses is key to managing this risk and historically the broker's expenses were quite variable; however, the addition of so much interest expense greatly decreases this flexibility. BROOK MAYS: Court Gives Interim Nod on Gardere Wynne as Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Brooks Mays Music Company, on an interim basis, to employ Gardere Wynne Sewell LLP as its bankruptcy counsel. Gardere Wynne is expected to: a. advise the Debtor of its powers and duties in the management of its properties; b. attend meetings and negotiate with representatives of creditors and other parties-in-interest; c. assist the Debtor in the preparation of all administrative documents required to be filed or prepared, and to prepare, on behalf of the Debtor, all necessary applications, motions, answers, responses, orders and other legal documents required; d. assist the Debtor in obtaining Court approval for the use of cash collateral or debtor-in-possession financing and other negotiations with secured creditors; e. take action as is necessary to preserve and protect the Debtor's assets and interests, including prosecution of actions on the Debtor's behalf, defend any action commenced against the Debtor, and represent the Debtor's interest in negotiations concerning all litigation in which the Debtor is involved, including objection to claims filed against the estate; f. advise the Debtor in connection with any potential sale of assets; g. assist the Debtor in the formulation of a disclosure statement and in the formulation, confirmation, and consummation of a plan of liquidation or reorganization; h. appear before the bankruptcy court, any appellate courts and the U.S. Trustee and protect the interests of the Debtor's estate before these courts and the U.S. Trustee; i. consult with the Debtor regarding tax matters; and j. perform any and all other legal services that may be necessary to protect the rights and interests of the Debtor in its bankruptcy proceedings and any actions hereafter commenced in its chapter 11 case. Stephen A. McCartin, Esq., a partner at Gardere Wynne, tells the Court that he will bill $510 per hour for this engagement. Mr. McCartin discloses that the firm's other professionals bill: Professional Designation Hourly Rates ------------ ----------- ------------ Paula K. Tucker, Esq. Associate $310 Marcus A. Helt, Esq. Associate $310 Michael S. Haynes, Esq. Associate $205 Kristi Williams Paralegal $148 The Debtor discloses that it has paid the firm a $100,000 retainer. The Debtor says that its secured lenders have agreed to provide a "carve-out" for professional fees for the firm up to a maximum of $250,000. Mr. McCartin can be reached at: Stephen A. McCartin, Esq. Gardere Wynne Sewell LLP 1601 Elm Street, Suite 3000 Dallas, Texas 75201 Tel: (214) 999-3000 Fax: (214) 999-4667 http://www.gardere.com/ To the best of the Debtor's knowledge, the firm is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code. About Brook Mays Headquartered in Dallas, Texas, Brook Mays Music Company -- http://www.brookmays.com/-- is a full-line musical instrument retailer in the U.S and offers a broad range of educational services, complete instrument repair and overhaul facilities and operates a rental program for musical instruments. The Company filed for chapter 11 protection on July 11, 2006 (Bankr. N.D. Tex. Case No. 06-32816). Marcus Alan Helt, Esq., and Michael S. Haynes, Esq., at Gardere Wynne Sewell LLP, represent the Debtor. The Recovery Group, Inc., serves as the Debtor's financial advisor while Houlihan Lokey Howard and Zukin Capital, Inc., acts as restructuring advisor. The Debtor has selected Kurtzman Carson Consultants LLC as its Notice, Claims and Balloting Agent. When it filed for bankruptcy, the Debtor estimated its assets at $10 million to $50 million and its debts at $50 million to $100 million. BROOK MAYS: Wants to Borrow $10.64 Million & Use Cash Collateral ---------------------------------------------------------------- Brook Mays Music Company asks the U.S. Bankruptcy Court for the Northern District of Texas for permission to borrow $5,075,000 on an interim basis from a group of lenders with J.P. Morgan Chase Banks, N.A., as administrative agent. Marcus A. Helt, Esq., at Gardere Wynne Sewell LLP, in Dallas, Texas, tells the Court that the Debtor needs a reliable source of financing to: (a) alleviate potential cash flow difficulties that may arise with operations; and (b) reassure suppliers, customers, employees, and taxing authorities of its continued viability during the its case. Before the Debtor filed for bankruptcy protection, it entered into a Credit Agreement with a group of lenders, with J.P. Morgan as agent, for a $60-million credit facility. To secure its performance under the Credit Agreement, Brook Mays granted a first-priority lien and security interest in substantially all of its assets to the prepetition lenders. During the Debtor's bankruptcy filing, it owed the prepetition lenders $41,000,000 in principal, interest and other fees and costs. The Debtor is also asking the Court for permission to use cash collateral securing that repayment of that indebtedness. Under a debtor-in-financing agreement the Debtor signed with J.P. Morgan, it Debtor wants to borrow as much as $10,640,000. The DIP financing matures on Aug. 19, 2006, unless the Debtor or J.P. Morgan prematurely terminates the DIP agreement or a plan of reorganization is confirmed before that. The Debtor proposed to grant the DIP lenders an allowed superpriority administrative claim under Sections 364(c)(1) and 507(b). To protect against any diminution in the value of its interest owing the Debtor's use of its prepetition collateral, the prepetition lenders will also be granted a replacement security interest in and lien upon all of the Debtor's assets subject only to the security interests and liens granted for the DIP lenders and a carve-out. The Carve-Out will be for the payment of: (1) statutory fees payable to the U.S. Trustee under Section 1930(a)(6) of the Judiciary Procedures Code; (2) fees payable to the Clerk of Court; (3) fees and expense reimbursement to hired bankruptcy professionals subject to this cap: Gardere Wynne Sewell LLP $250,000 The Recovery Group, Inc. $250,000 Creditors Committee's professionals $ 50,000 Houlihan Lokey $ 75,000 Headquartered in Dallas, Texas, Brook Mays Music Company -- http://www.brookmays.com/-- is a full-line musical instrument retailer in the U.S. It offers a broad range of educational services, complete instrument repair and overhaul facilities and operates a rental program for musical instruments. The Company filed for chapter 11 protection on July 11, 2006 (Bankr. N.D. Tex. Case No. 06-32816). Marcus Alan Helt, Esq., and Michael S. Haynes, Esq., at Gardere Wynne Sewell LLP, represent the Debtor. The Recovery Group, Inc., serves as the Debtor's financial advisor while Houlihan Lokey Howard and Zukin Capital, Inc., acts as restructuring advisor. The Debtor has selected Kurtzman Carson Consultants LLC as its Notice, Claims and Balloting Agent. When it filed for bankruptcy, the Debtor estimated its assets at $10 million to $50 million and its debts at $50 million to $100 million. CHARLES DEVLIN: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Charles Francis Devlin aka Chris Devlin 7031 East Dreyfus Avenue Scottsdale, Arizona 85254 Bankruptcy Case No.: 06-02192 Chapter 11 Petition Date: July 19, 2006 Court: District of Arizona (Phoenix) Debtor's Counsel: Michael G. Tafoya, Esq. Michael G. Tafoya, P.C. 1212 East Osborn Road Phoenix, Arizona 85014 Tel: (602) 604-7577 Fax: (602) 604-7555 Total Assets: $1,091,395 Total Debts: $809,122 Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Diane C. Devlin Loan $500,000 7031 West Dreyfus Avenue Scottsdale, AZ 85254 BP Pinnacle Properties, LLC Rent $52,710 4747 North 17th Street Suite 400 Phoenix, AZ 85014 Sherman Galloway Loan $30,000 [no address indicated] Wells Fargo Bank Loan $27,300 P.O. Box 29746 Phoenix, AZ 85038-9746 American Express Credit Card Purchases $22,527 P.O. Box 297879 Fort Lauderdale, FL 33329-7879 Bank of America Credit Card Purchases $21,848 P.O. Box 60073 City of Industry, CA 91716-0073 Wells Fargo Visa Credit Card Purchases $21,290 Citi Advantage Master Card Credit Card Purchases $14,397 Chase AARP Credit Card Purchases $14,232 Sysco Food Operating Expense $12,840 Citizens Bank Vehicle $12,000 Rose Hodges Unpaid Payroll $11,700 Sams Club Discover Credit Card Purchases $11,525 Allergo Acceptance Corp. Operating Expenses $9,000 Advanta Bank Corporation Credit Card Purchases $5,141 Chase Business Card Credit Card Purchases $6,744 Sams Club Business Card Credit Card Purchases $4,483 CHURCH & DWIGHT: S&P Places BB+ Loan Rating on Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Church & Dwight Co. Inc.'s senior secured bank financing on CreditWatch with negative implications. The loan rating is 'BB+' (one notch higher than the 'BB' corporate credit rating on Church & Dwight) and the recovery rating is '1', indicating a high expectation for full recovery of principal in the event of a payment default. The CreditWatch listing for these ratings is based on Church & Dwight's planned use of its $250 million accordion feature under its bank facility to fund the acquisition of Orange Glo International, for $325 million. As a result of the additional bank debt, the loan rating could be lowered to 'BB' and the recovery rating could be revised to '2', indicating the expectation for substantial recovery of principal in the event of a payment default. All other existing ratings on the company, including the 'BB' corporate credit rating, were affirmed. The rating outlook is stable. "The affirmation reflects Church & Dwight's stable operating performance, good free cash flow generation, and the expectation that debt leverage will be managed in line with the current rating over the intermediate term as the company integrates the acquisition," said Standard & Poor's credit analyst Patrick Jeffrey. CISTERA NETWORKS: Recurring Losses Spurs Going Concern Doubt ------------------------------------------------------------ Robison, Hill & Co. raised substantial doubt on Cistera Networks, Inc., fka CNH Holdings Company, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended March 31, 2006 and 2005. The auditing firm pointed to the Company's recurring losses from operations and net capital deficiency. Cistera Networks's balance sheet at March 31, 2006 showed $3,048,495 in total assets and $2,270,050 in total liabilities resulting to a total stockholders' equity of $778,445. The Company's balance sheet also showed strained liquidity with $2,103,484 in total current liabilities out of $347,989 in total current assets. For the year ended March 31, 2006, the Company reported net loss of $4,572,094 from $1,587,900 in revenues. A full-text copy of the Company's financial report for the year ended March 31, 2006 is available for free at: http://researcharchives.com/t/s?df5 Based in Dallas, Texas, Cistera Networks Inc. fka CNH Holdings Company, Inc. -- http://www.cistera.com/-- designs and develops XML-based application appliances utilized in the IP Communications and Enterprise Application Integration markets. COLLINS & AIKMAN: Court Allows Fourth Amendment to DIP Agreement ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan authorizes Collins & Aikman Corporation and its debtor-affiliates to enter into a Fourth Amendment to their Revolving Credit, Term Loan and Guaranty Agreement, dated as of July 28, 2005, with JPMorgan Chase Bank, N.A., as administrative agent. The Debtors sought to modify the DIP Credit Agreement to allow them to, among other things: (a) wind down their Fabrics business unit; (b) sell their Convertibles division; (c) sell their facilities in Williamston, Michigan; and (d) sell or dispose of other non-core assets that the current DIP Credit Agreement currently prohibits or restricts. The original DIP Credit Agreement had restricted the Debtors' ability to sell certain assets. The Debtors estimated that total net proceeds from transactions that will be addressed by the Amendment will total at least $75,000,000. Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, explained that under the current terms of the DIP Credit Agreement, the Debtors would be required to use 100% of the proceeds from the transactions to prepay the Lenders. The Amendment will allow the Debtors to share in the proceeds to fund operations and invest in capital expenditures. The Amendment will also permit the Debtors to engage in certain other transactions currently restricted, continue the moratorium on its Borrowing Base, and conform their obligations under the DIP Credit Agreement to current and future operations. The Debtors are required to pay an amendment fee as a condition to the effectiveness of the Amendment, Mr. Carmel related. 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. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000) COLLINS & AIKMAN: GECC Counsel Fined for Hearing Walkout -------------------------------------------------------- General Electric Capital Corporation's counsel, David Heller, Esq., at Latham & Watkins LLP, walked out in the middle of the hearing held on July 13, 2006, related to the extension of Collins & Aikman Corporation and its debtor-affiliates' exclusive plan- filing period. At the hearing, the U.S. Bankruptcy Court for the Eastern District of Michigan agreed to extend the Debtors' exclusive period to file a plan of reorganization to Sept. 27, 2006, over an objection filed by GECC. Mr. Heller argued that the Debtors' extension request "does not allege with specificity reasonable prospects for filing a viable plan of reorganization." The Debtors have not provided the Court or their creditors with any concrete information with respect to the Debtors' recent financial performance, Mr. Heller pointed out. Mr. Heller faces possible sanctions for violating Judge Rhodes' order on the record not to leave the courtroom without the Court's permission. The Honorable Steven W. Rhodes ordered Mr. Heller to appear before the Court on July 18. Mr. Heller was fined $7,500 for his walkout. He is required to pay that amount to the Clerk of Court. 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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000) CONSECO INC: Files Involuntary Ch. 7 Petition v. Former Director ---------------------------------------------------------------- Conseco Inc. filed an involuntary Chapter 7 petition against its former director, James D. Massey, with the U.S. Bankruptcy Court for the Southern District of Indiana on July 17, 2006. Conseco seeks to recover approximately $6.9 million in unpaid loans from Mr. Massey, J.K. Wall at the Indianapolis Star reports. Mr. Massey allegedly used these company-backed loans to buy Conseco stock in the late 1990's. Mr. Massey disputes Conseco's allegations and insists that he owes the Company nothing. Henry Price, Esq., Mr. Massey's attorney, says that the involuntary petition has no basis. According to Mr. Price, the purported debt is in dispute and a bankruptcy petition should not have been filed. Headquartered in Carmel, Indiana, Conseco, Inc. (NYSE:CNO) -- http://www.conseco.com/-- through its subsidiaries, engages in the development, marketing, and administration of supplemental health insurance, annuity, individual life insurance, and other insurance products throughout the United States. The company operates in two segments, Bankers Life and Conseco Insurance. The Bankers Life segment markets and distributes Medicare supplement insurance, life insurance, long term care insurance, and certain annuity products to the senior market. * * * As reported in the Troubled Company Reporter on May 8, 2006, Standard & Poor's Ratings Services affirmed its 'BB+' counterparty credit and financial strength ratings on Conseco Inc.'s core insurance companies and its 'BB-' counterparty credit rating on Conseco Inc. Standard & Poor's also said that the outlook on Conseco Inc. is stable, and the outlook on the operating companies is positive. CONSOLIDATED COMMS: To Repurchase Providence Shares for $56.7 Mil. ------------------------------------------------------------------ Consolidated Communications Holdings, Inc. (Nasdaq: CNSL) entered into an agreement to repurchase and retire 3.8 million shares of its common stock from Providence Equity for $56.7 million, or $15 per share. This price per share was based on negotiations between Providence Equity and the company, and represents a 6.5% discount to the average closing price of the company's common stock during the last 20 trading days. The closing of the transaction, which is currently expected to occur on July 28, 2006, is subject to certain conditions, including the company's receipt of an amendment to its credit agreement. "This transaction accomplishes a number of strategic goals," Bob Currey, Consolidated's president and chief executive officer, said. "In addition to removing the market overhang related to this large position, it improves cash flow by decreasing our annual dividend obligation by 12.8% and improving our payout ratio. Providence has been a great business partner since we re- formed the company in 2002 and we thank the firm for its support." With this transaction, Providence Equity will have sold its entire position in Consolidated, which, prior to the transaction, totaled 12.7% of Consolidated's outstanding shares of common stock. This is a private transaction and will not decrease the company's publicly available shares. The company expects to finance this repurchase using $15 million of cash on hand and $41.7 million of additional term-loan borrowings. These additional borrowings are expected to increase the company's after-tax interest expense by $2.5 million annually. After the transaction, the company's total debt is expected to be $596.7 million, which would have resulted in a net debt leverage ratio of 4.23 times for the last twelve months ended March 31, 2006. About Consolidated Communications Based in Mattoon, Illinois, Consolidated Communications Holdings, Inc. -- http://www.consolidated.com/-- is a rural local exchange company providing voice, data and video services to residential and business customers in Illinois and Texas. Each of the operating companies has been operating in their local markets for over 100 years. With approximately 241,000 local access lines and over 43,000 digital subscriber lines, the Company offers a wide range of telecommunications services, including local and long distance service, custom calling features, private line services, dial-up and high-speed Internet access, digital TV, carrier access services, and directory publishing. Consolidated Communications is the 17th largest local telephone company in the United States. * * * As reported in the Troubled Company Reporter on May 16, 2006, Standard & Poor's Ratings Services affirmed its loan rating on Consolidated Communications Holdings Inc.'s $455 million secured credit facility at 'BB-' and revised its recovery rating on the loan to '2' from '3'. The '2' recovery rating indicates expectations for substantial recovery of principal in the event of a payment default. Other existing ratings on Consolidated Communications, including the 'BB-' corporate credit rating, were affirmed. The rating outlook is negative. DELTA AIR: Comair Wants Court Nod on Interim Pact For 3 Aircraft ---------------------------------------------------------------- Comair, Inc., asks the United States Bankruptcy Court for the Southern District of New York for authority to execute and perform its obligations under the Interim Agreement with its Lenders. Pursuant to loan and security agreements with Sumitomo Mitsui Banking Corporation and Citigroup Financial Products, Inc., as lenders, and Commerzbank, AG, as lender and as security trustee, Comair, operates three aircraft bearing Tail Nos. N969CA, N971CA and N973CA. In exchange for the Lenders' financing to Comair in connection with the acquisition of the Aircraft and to secure its obligation to repay that financing, Comair granted the Security Trustee, for the benefit of the Lenders, security interests in the Aircraft Equipment. After arm's-length, good faith negotiations, the parties have reached an interim agreement providing for: (a) Comair's continued use of the Aircraft during the Debtors' Chapter 11 cases; and (b) the restructuring of the Existing Transaction Documents. Richard F. Hahn, Esq., at Debevoise & Plimpton LLP, in New York, asserts that Comair will obtain significant savings under the terms of the Tentative Agreement. At the same time, prior to substantial consummation of the Debtors' plan of reorganization, Comair will retain the right to abandon the Aircraft at any time in the event that circumstances make it prudent for it to do so. The principal terms of the Interim Agreement are: a. Comair and each Lender will enter into the Amendment relating to each Aircraft, effective as of the date when all these conditions are satisfied: * Execution and delivery of the applicable Amendment by parties and execution and delivery of an Amended and Restated Promissory Note by the Debtor; * Substantial consummation of the Debtor's plan of reorganization; * Debtor will not have abandoned the Aircraft; * No "Event of Loss" with respect to the Aircraft will have occurred; * Bankruptcy Court approval of the form of Amendment will have been obtained; * Filing with the U.S. Federal Aviation Administration of the Amendment and registration of same with the International Registry; and * An authorized officer of Debtor provides written representations and warranties as of effective date of the Amendment; b. Commencing on July 20, 2006, Comair will make a monthly payment to the Security Trustee with respect to each Aircraft in an agreed amount; c. Starting July 20, Comair will pay in a designated number of equal monthly installments for each Aircraft a catch up payment equal to the total of: -- the principal portion of the November 2005 scheduled payment due and owing under the applicable Existing Loan Agreement for the Aircraft; plus -- interest on the principal amount due and owing under that Existing Loan Agreement from the Petition Date up to, but excluding, June 20, 2006; d. With respect to each Aircraft, the Interim Payments will terminate upon the earlier of: * the Amendment Effective Date; * the date Comair abandons that Aircraft or the date that Aircraft's Existing Loan Agreement is deemed rejected pursuant to Section 1110(c) of the Bankruptcy Code; or * the date on which the Forbearance Period terminated with respect to the Aircraft; e. Administrative Expense Claims: * Payment in full of the Catch-Up Payment for an Aircraft will be deemed to satisfy in full all administrative expense priority claims with respect to that Aircraft for the period from the Petition Date through the applicable Amendment Effective Date if both: -- the Amendment Effective Date has occurred; and -- the applicable Existing Loan Agreement, as amended, remains in effect immediately after substantial consummation of the Debtors' Plan; * the Aircraft Parties will have an administrative expense claim for "maintenance burn" if prior to the Amendment Effective Date for an Aircraft: -- Comair abandons that Aircraft; or -- in addition to any claim for unpaid Interim Payments, the Existing Loan Agreement for that Aircraft is deemed rejected pursuant to Section 1110(c) in connection with a written demand for surrender and return of that Aircraft after a breach by Comair of any of the forbearance conditions in the Interim Agreement; * In the event the Amendment Effective Date does not occur with respect to an Aircraft, the Lenders will be entitled to an administrative expense claim equal to the sum of: -- any unpaid Agreed Monthly Payment, prorated for any partial month in which the Interim Agreement Termination Date occurs, for the period from July 20, 2006 to, but excluding, the Interim Agreement Termination Date; -- any unpaid portion of the Catch-Up Payment; and -- the Usage Claim. * The Administrative Claim will be payable by Comair to the Security Trustee: -- upon substantial consummation of Comair's Plan; or -- when Comair's Chapter 11 case is converted to a case under Chapter 7, in which the Administrative Claim will be paid in the same manner and at the same time as all other administrative expense claims of equal priority are paid; f. Each Aircraft Party will forbear from exercising remedies in respect of any default under any of the applicable Existing Transaction Documents, as long as: * Comair complies with its obligations to make the Interim Payments; and * there are no defaults under the Existing Transaction Documents; g. The Section 1110 Period will be extended for all purposes with respect to the Aircraft from Nov. 14, 2005, until the applicable Interim Agreement Termination Date, as long as Comair complies with the forbearance conditions and none of the termination events occur; h. On July 20, 2006, Comair will pay the actual, reasonable and documented out-of-pocket fees and expenses of legal counsel incurred by all of the Aircraft Parties with respect to all Chapter 11 and Section 1110 activity relating to the Aircraft, the Amendments and the Interim Agreement, up to a cap per Aircraft upon which the parties have agreed. From and after July 20, Comair will pay the reasonable and customary ongoing trustee fees and expenses of the Security Trustee. The Existing Transaction Documents are amended to: (i) reflect Comair's issuance to the Security Trustee of an amended and restated note on the applicable Amendment Effective Date, evidencing Comair's obligation to repay the original principal amount of the loan, and accrued and unpaid interest through the payment of: * monthly installments equal to the Agreed Monthly Payment with payment to be allocated to principal and interest in accordance with the applicable Existing Loan Agreement; and * to the extent that any portion of the Catch-Up Payment remains due and owing as of the applicable Amendment Effective Date, further equal monthly installments of the Catch-Up Payment until the Catch-Up Payment is paid in full; and (ii) to delete all terms, references and provisions relating to swap transaction and swap breakage. About Delta Air Lines Based in Atlanta, Ga., Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000). DELTA AIR: Wants to Amend and Assume Discover Financial Agreement ----------------------------------------------------------------- Delta Air Lines, Inc., and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of New York for authority to enter into the Amendment and to assume the Agreement, as amended, with Discover Financial Services LLC. Delta Air, and Discover, are parties to a Master Services Agreement dated December 9, 1985, under which Discover operates and administers a merchant authorization and settlement program for transactions involving Discover credit cards. Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, explains that when a customer presents a Discover Card to the Debtors for the purchase of goods or services, the Debtors process the Discover Card and produce a record of sale. The Debtors then submit the record of sale to Discover, which makes a settlement payment to the Debtors in the amount of the sale, net of fees and other amounts. Delta and Discover have entered into an amendment to the Discover Agreement. The amendment will be considered to have taken effect as of April 1, 2006, subject to, among other things, the Court's approval of the amendment. The term of the Discover Agreement automatically renews for successive one-year periods on its anniversary date, unless either party gives notice to the other party of an intent not to renew. As such, Discover will continue to provide processing services for transactions involving Discover Cards at least through Dec. 9, 2007. As provided by the amendment, the fees charged by Discover for the processing services remain very attractive to the Debtors, Mr. Huebner relates. Mr. Huebner notes that credit card transactions account for approximately 90% of the Debtors' total revenue in 2005 and the Debtors' acceptance of Discover Cards provides an important payment option for the Debtors' customers. Any interruption in the processing of purchases made using Discover Cards would adversely affect a critical source of revenue, to the detriment of all parties in interest, Mr. Huebner avers. The amendment is a fair accommodation that will preserve the Debtors' ability to accept Discover Cards from their customers. About Delta Air Lines Based in Atlanta, Ga., Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05- 17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000). DIAMOND ENTERTAINMENT: Pohl McNabola Raises Going Concern Doubt --------------------------------------------------------------- Pohl, McNabola, Berg and Company, LLP raised substantial doubt about Diamond Entertainment Corp.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended March 31, 2006 and 2005. The auditing firm pointed to the Company's substantial losses and negative cash flows from operations for the year ended March 31, 2006. Diamond Entertainment's balance sheet at March 31, 2006 showed $1,655,944 in total stockholders' deficit resulting from $1,581,246 in total assets and $3,237,190 in total liabilities. The Company's balance sheet also showed strained liquidity with $979,802 in total current assets and $3,230,875 in total current liabilities. For the year ended March 31, 2006, the Company reported a $1,650,802 net loss out of $3,510,475 in revenues. A full-text copy of the Company's financial report for the year ended March 31, 2006 is available for free at: http://researcharchives.com/t/s?df7 Based in Walnut, California, Diamond Entertainment Corporation, dba e-DMEC, markets and sells a variety of DVD and videocassette titles to the budget home video and DVD market. The Company's wholly owned subsidiary, Jewel Products International Inc., manufactures and distributes general merchandise, children's toy products and other sundry items from U.S. based importers or directly from Asia for distribution to mass merchandisers in the United States. During the years ended March 31, 2006 and 2005, JPI was dormant and did not record sales of its products. EDGEWATER FOODS: May 31 Balance Sheet Upside-Down by $13.6 Million ------------------------------------------------------------------ Edgewater Foods International Inc. delivered its financial results for the quarter ended May 31, 2006, to the Securities and Exchange Commission on July 17, 2006. Edgewater incurred a $2,929,000 net loss for the three months ended May 31, 2006, compared to a net loss of approximately $114,000 for the three months ended May 31, 2005. Majority of the net loss increase can be attributed to the loss associated with the change in fair value of the Company's recently issued warrants. Revenues for the three months ended May 31, 2006, were $133,000. The Company had generated approximately $35,000 of revenues for the three months ended May 31, 2005. Management attributes the revenue increase in 2006 to the increased emphasis on the development and production of larger scallops crops in 2005 and continuing into 2006. The Company's balance sheet at May 31, 2006 showed total assets of $3,721,908 and total liabilities of $17,402,676, resulting in a stockholders' deficit of $13,680,768. At May 31, 2006 the Company had a cash balance of approximately $1,372,000. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?e02 Going Concern Doubt Lopez, Blevins, Bork & Associates, LLP, expressed substantial doubt about Edgewater's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Aug. 31, 2005. The auditing firm pointed to the Company's losses from operations, negative net worth and working capital deficit. During the three months ended May 31, 2006, the Company completed two private equity financings that resulted in net proceeds of approximately $2,332,000. The financings contain warrants which, if fully exercised, could raise approximately an additional $20,470,000. About Edgewater Foods Based in Qualicum Beach, B.C., Edgewater Foods International Inc. -- http://www.edgewaterfoods.com/-- is the parent company of Island Scallops Ltd., a Vancouver Island aquaculture company. ISL was established in 1989 and for over 15 years has successfully operated a scallop farming and marine hatchery business. ISL is dedicated to the farming, processing and marketing of high quality, high value marine species: scallops and sablefish. Scallop farming is relatively new to North America and ISL is the only producer of both live-farmed Pacific scallops and live sablefish. ELEC COMMS: May 31 Balance Sheet Upside-Down by $3.9 Million ------------------------------------------------------------ eLEC Communications Corp. reported a $647,941, net loss for the three months ended May 31, 2006, as compared to a $1,235,060 net loss for the same period in the prior year. The Company's revenue for the three-month period ended May 31, 2006 decreased by $2,659,000, or approximately 55%, to $2,156,000 as compared to $4,815,000 reported for the three-month period ended May 31, 2005. The reduction in revenues was directly related to the decrease in the customer base or number of local access lines served by eLEC's two Competitive Local Exchange Carriers, New Rochelle Telephone Corp. and Telecarrier Services Inc. In lieu of telemarketing new CLEC customers, the Company used its financial resources to further build and enhance its VoIP operations. ELEC's balance sheet at May 31, 2006, showed $3,999,599 in total assets and $7,939,212 in total liabilities, resulting in a stockholders' deficit of $3,939,613. At May 31, the Company had cash and cash equivalents of approximately $456,000 and negative working capital of approximately $2,130,000. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?e06 Laurus Private Placement On May 31, 2006, eLEC consummated a private placement with Laurus Master Fund, Ltd., pursuant to which it issued to Laurus: -- a secured term note in the principal amount of $1,700,000; -- an amended and restated secured term note that amended and restated its secured convertible term note in the original principal amount of $2,000,000 issued to Laurus on Feb. 8, 2005; -- an amended and restated secured term note that amended and restated its secured convertible term note in the original principal amount of $2,000,000 issued to Laurus on Nov. 30, 2005; and -- a common stock purchase warrant that entitles Laurus to purchase up to 3,359,856 shares of the Company's common stock, par value $.10 per share. The Warrant expires on May 31, 2020. The Note and the Warrant were sold to Laurus, for a purchase price of $1,700,000. The Amortizing Principal Amount of the Note, which amounts to $650,000, requires interest payments at prime plus 2% on the first day of each month during the term of the Note, commencing on July 1, 2006. The Non-Amortizing Principal Amount of the Note, which amounts to $1,050,000, does not require interest or principal payments until the Company sends documentation to Laurus, and Laurus decides in its sole discretion, to release such funds from a restricted cash account for the potential acquisition of a business. Going Concern Doubt As reported in the Troubled Company Reporter on Mar. 7, 2006, Nussbaum Yates & Wolpow, PC, expressed substantial doubt about eLEC's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Nov. 30, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations. About eLEC Comms eLEC Communications Corp. (OTCBB:ELEC) -- http://www.elec.net/-- is a Competitive Local Exchange Carrier that offers local and long distance calling plans to small business and residential customers. The Company sells under the names of New Rochelle Telephone and eLEC Communications, and the Company delivers telephone services. ENRON CORP: Court Okays $30-Mil. Settlement with Vinson & Elkins ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approves the settlement agreement dated June 15, 2006, between Reorganized Enron Corporation and its debtor-affiliates and Vinson & Elkins LLP. The principal terms of the settlement are: (1) Enron Corp. will receive a $10,500,000 preference claims payment in full satisfaction of the preferential transfer claims the Official Committee of Unsecured Creditors may pursue against Vinson; (2) Enron will receive $19,500,000 as full satisfaction for other claims, causes of action, damages, obligations, rights and interests that any of the Debtors or the Official Committee of Unsecured Creditors may have against Vinson; (3) neither party makes any admission relating to any of the settled claims; and (4) the parties will mutually release each other from all claims that they asserted or may have against each other. Vinson's scheduled claims against the Debtors are expunged in their entirety: Debtor Schedule No. Schedule Amount ------ ------------ --------------- Enron Corp. 100104330 $1,400,389 Enron Corp. 100104310 540,144 Enron Corp. 100104320 555,163 Enron Management 100945300 475 Enron Middle East LLC 100977320 63,536 Enron India, LLC 100977310 356 Enron Wind Energy Systems Corp. 100864490 Unliquidated Enron Wind Systems, Inc. 100860750 Unliquidated Enron Corp. 100104340 Unliquidated Enron Corp. 100104350 Unliquidated Enron North America 100186920 577,084 Calypso Pipeline, LLC 100834090 295 Enron Broadband 100225820 338,577 Services, Inc. Enron Energy Services 100239360 285,039 Operations, Inc. Enron North America 100186910 82,910 Calypso Pipeline, LLC 100834080 99 Enron Global LNG LLC 100834450 140 Enron Broadband Services, Inc. 100225810 28,152 Enron Energy Services Operations, Inc. 100239350 27,757 Enron Asia Pacific/ Africa/China 100977300 Unliquidated Enron Caribbean Basin LLC 100979220 19,763 --------------- $3,919,879 Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, represent the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 176; Bankruptcy Creditors' Service, Inc., 15/945-7000) ENRON CORP: Court OKs Allowance of U.K. Units' $51.9-Mil. Claims ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the stipulation allowing Enron Corporation's U.K. affiliates claims for an aggregate amount of $51,916,252. In late 2001, Enron Capital & Trade Resources Limited, Enron Gas & Petrochemicals Trading Limited, Enron Metals & Commodity Limited and Enron Metals Group Limited, as successor-in-interest to Enron Metals Limited and now known as Keresforth Three Limited, were placed into administration under Part II of the English Insolvency Act of 1986 in the United Kingdom. Steven Anthony Pearson, Anthony Victor Lomas, Neville Barry Kahn and Dipankar Moham Ghosh of PricewaterhouseCoopers LLP, in Plumptree Court, London, were appointed as joint administrators of EMCL, EMGL, ECTRL and EGPTL by the High Court of Justice in London, England. Messrs. Kahn and Ghosh were subsequently removed as administrators on June 20, 2002, and Dec. 20, 2004. On April 9, 2002, Enron Coal Services Limited was placed into liquidation pursuant to Part IV of the English Insolvency Act of 1986. Ian Christopher Oakley Smith and David James Waterhouse of PwC were appointed joint liquidators for ECSL. Before filing for bankruptcy, Enron Corp., Enron North America Corp., Enron Metals & Commodity Corp., Risk Management & Trading Corp., and Enron Gas Liquids, Inc., and the UK Enron Entities entered into several trading and financial transactions, including commodities trading, recharging of costs, financial and trading swaps, foreign currency exchanges and hedging and market to market trades. The UK Enron Entities filed claims in the Debtors' Chapter 11 cases: Claimant Debtor Claim No. Amount -------- ------ --------- ------ EGPTL EGLI 15377 $935,915 ECSL ENA 15381 1,312,467 EML RMTC 24518 17,234,666 EMCL EMCC 24519 9,046,208 ECTRL ENA 24520 8,514,691 ECTRL RMTC 24521 18,010,011 In their 77th Omnibus Claims Objection, the Reorganized Debtors sought to disallow and expunge Claim Nos. 15377, 15381, 24518 and 24521. In their 78th Omnibus Claims Objection, the Reorganized Debtors sought to reduce and allow Claim No. 24519. In their 81st Omnibus Claims Objection, the Reorganized Debtors sought to disallow, among others, Claim No 24520. After negotiations, the parties entered into a stipulation to resolve their dispute. The parties agree that: (1) Claim No. 15377 will be allowed as a Class 17 general unsecured claim for $935,915; (2) Claim No. 15381 will be allowed as a Class 5 general unsecured claim for $1,312,467; (3) Claim No. 24520 will be allowed as a Class 5 general unsecured claim for $8,514,691; (4) Claim No. 24521 will be allowed as a Class 109 general unsecured claim for $18,010,011; (5) Claim No. 24519 will be allowed as a Class 3 general unsecured claim for $8,860,000; and (6) Claim No. 24518 will be reduced and allowed as a Class 3 general unsecured claim for $14,283,168. Any contingent, disputed or unliquidated balance of the six Claims will be disallowed. The parties also agree that the Administrators or Liquidators will apply the same approach used in resolving Claim No. 15377 in dealing with various outstanding claims of $1,000,000 or less that the Reorganized Debtors and their non-debtor affiliates hold against the UK Enron Entities and their affiliated entities where the pre-Systems Application Protocol or similar types of records are the only evidence available to prove the claim. The English Courts will have the exclusive jurisdiction to these claims. Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, represent the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 176; Bankruptcy Creditors' Service, Inc., 15/945-7000) EVANS INDUSTRIES: U.S. Trustee Reconstitutes Official Committee --------------------------------------------------------------- R. Michael Bolen, the U.S. Trustee for Region 5, informed the U.S. Bankruptcy Court for the Eastern District of Louisiana that he has reconstituted the Official Committee of Unsecured Creditors in Evans Industries, Inc.'s chapter 11 case. Mr. Bolen says that this was due to the addition of Consorcio Internacional S.A. DE C.V., and Mobile Paint Mfg. Co. Inc. The Committee is now composed of: 1. Entergy Louisiana LLC Attn: Jon Majewski 4809 Jefferson Highway Mail Unit L-JEF-359 Jefferson, LA 70121 2. Paul T. Gariepy, Jr., CPA 17 Poplar Drive Covington, LA 70433-4327 3. SK Global America, Inc., Creditor Trust Attn: Craig Sheldon, Esq., Counsel c/o Krebs, Farley & Pelleteri, PLLC Matt Farley, Esq. Thomas Beh, Esq. Shashauna M. Dermody, Esq. Attorneys for SK Global 400 Poydras Street, Suite 2500 New Orleans, LA 70130 4. Consorcio Internacional S.A. DE C.V. Attn: Elias Alfredo Charur 7330 N.W. 12th St., Suite 201 Miami, FL 33126 5. Mobile Paint Mfg. Co. Inc. Attn: Richard Wilbur P.O. Box 717 Theodore, AL 36590 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Harvey, Louisiana, Evans Industries, Inc. -- http://www.evansindustriesinc.com/-- manufactures and distributes steel drums. The company filed for chapter 11 protection on Apr. 25, 2006 (Bankr. E.D. La. Case No. 06-10370). Eric J. Derbes, Esq., and Melanie M. Mulcahy, Esq., at The Derbes Law Firm, LLC, represent the Debtor. C. Davin Boldissar, Esq., at Locke Liddell & Sapp, LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $500,000 and $1 million and debts between $10 million and $50 million. FALCON AIR: Ch. 11 Trustee Wants to Use IRS' Cash Collateral ------------------------------------------------------------ Kenneth A. Welt, the chapter 11 trustee appointed in the chapter 11 cases of Falcon Air Express, Inc., and MAJEL Aircraft Leasing Corp., asks the U.S. Bankruptcy Court for the Southern District of Florida for permission to use cash collateral which the Internal Revenue Service has interest in. IRS filed several notices of federal tax liens, which attach to all of the Debtors' property, including cash and cash equivalents. Frank P. Terzo, Esq., at Katz Barron Squittero Faust, in Miami, Florida, tells the Court that the cash collateral will be used to fund the Debtors' continued operations as a going concern for 90 days. If the Chapter 11 Trustee cannot use the cash collateral, he will be unable to operate the business, to the detriment of all of the Debtors' creditors, including the IRS, Mr. Terzo argues. As adequate protection against the diminution in value of its cash collateral, the Debtors grant IRS a replacement lien for $300,000 on all property acquired or generated postpetition by the Debtors' estates. Additionally, the Debtors will provide further adequate protection by paying: (a) $5,000 on Aug. 1, 2006, (b) $20,000 on Sept. 1, 2006, (c) $30,000 on Oct. 1, 2006. Headquartered in Miami, Florida, Falcon Air Express, Inc. -- http://www.falconairexpress.net/-- is a small and low-cost airline company that provides charter service and renders foreign and U.S. carriers sub-services on schedules routes. The Debtor and its affiliate, MAJEL Aircraft Leasing Corp., filed for chapter 11 protection on May 10, 2006 (Bankr. S.D. Fla. Case Nos. 06-11877 & 06-11878). Brian G. Rich, Esq., at Berger Singerman, P.A., represents the Debtors in their restructuring efforts. Peter D. Russin, Esq., and Michael S. Budwick, Esq., at Meland Russin & Budwick, P.A., represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. FALCONBRIDGE LTD: Xstrata Raises Buy Offer to $16.9 Billion ----------------------------------------------------------- Xstrata plc, through its wholly-owned subsidiary Xstrata Canada Inc., has increased its fully underwritten all-cash offer to acquire all of the outstanding common shares of Falconbridge Limited not already owned by the Xstrata group from CDN$59 to CDN$62.50 in cash per Falconbridge share, representing a total consideration of approximately CDN$19.2 billion, approximately $16.9 billion. In addition, Xstrata has amended its offer to provide that Falconbridge shareholders will receive the special cash dividend of CDN$0.75 per Falconbridge share declared by Falconbridge on July 16, 2006, representing a total consideration of CDN$63.25 per Falconbridge share, including the special dividend. The expiry time for the increased Xstrata offer is Aug. 14, 2006, at 8 pm (Toronto time). The increased Xstrata offer values the total common share capital of Falconbridge at approximately CDN$24.1 billion, approximately $21.2 billion, including the special dividend. Xstrata expects to mail a formal notice of variation to all Falconbridge shareholders on July 21, 2006. The acquisition of Falconbridge is again conditional on approval by Xstrata shareholders at a meeting to be held on Aug. 14, 2006. Xstrata has received irrevocable undertakings from Credit Suisse Securities (Europe) Limited and Glencore International AG to vote in favour of the resolution to be proposed at the meeting. In aggregate, these undertakings are given in respect of 35.84% of Xstrata's current issued ordinary share capital. In keeping with its consistently stated objective of acquiring 100% of Falconbridge, Xstrata's offer is no longer subject to a minimum tender condition. As a result, following receipt of approval under the Investment Canada Act and approval from its own shareholders, Xstrata will be in a position to take up and pay for any shares tendered to its offer without further delay. "Xstrata's revised offer reflects our belief in the fundamental value of this acquisition to Xstrata," Mick Davis, Xstrata Chief Executive, said. "Xstrata's 20% stake in Falconbridge, purchased at CDN$28 per share, puts us in the unique position of being able to offer CDN$63.25 per share, a price that is simply more than any other company can justify under any realistic commodity price scenario. At the revised offer of CDN$62.50, together with the dividend of CDN$0.75 per share, Xstrata's average cost per share of acquiring all of Falconbridge's shares will be approximately CDN$56.44 per share. Due to the flexibility of the nearly CDN$7 per share advantage Xstrata has secured in this transaction, we have been able to present a definitive, compelling and generous offer to Falconbridge shareholders, while ensuring that the acquisition of Falconbridge remains value, earnings and cash flow accretive to Xstrata shareholders. "Given the overwhelming support of Xstrata's shareholders for this acquisition at the first shareholders' meeting, and the undertakings already received to vote in favour of the transaction at the next meeting, the process of shareholder approval impacts the closing date of our offer but represents no material risk. In respect of Industry Canada approval, Xstrata has now concluded an extensive and comprehensive process with the Investment Review Division and we have been advised to expect a decision shortly. We believe the undertakings we have given will underpin the positive benefits to Canada that we have always identified in our acquisition of Falconbridge. We remain confident that, as a committed and long-term investor with a track record of delivering growth and value to stakeholders wherever we operate, approval will be forthcoming. "It is therefore time for the Falconbridge Board to give Xstrata's compelling offer due and careful consideration and recognise that Xstrata's certain cash offer is a superior value-creating proposition for Falconbridge shareholders that provides an opportunity to bring this prolonged process to a close, to the benefit of Falconbridge employees and shareholders. I therefore urge all Falconbridge shareholders who wish to receive the full cash value of CDN$63.25 per share to tender their shares to Xstrata as soon as possible and not to tender to the Inco offer. I reiterate our repeatedly stated position that it is Xstrata's intention to secure 100% of the Falconbridge shares." Financing Xstrata will finance its increased offer through committed debt facilities of US$19 billion, including US$7 billion under an equity bridge facility agreement. Xstrata remains committed, following the successful completion of its acquisition of Falconbridge, to undertake one or more equity capital raisings to refinance the equity bridge facility agreement. Deutsche Bank AG and J.P. Morgan Securities Ltd. have irrevocably undertaken to underwrite any future equity offering to raise funds to repay any amounts outstanding under the equity bridge facility agreement. Xstrata also remains committed to maintaining a solid investment grade credit rating. The directors of Xstrata remain confident that any rights issue will be fully supported by Credit Suisse and Glencore International, Xstrata's two largest shareholders with a combined shareholding of approximately 35.84% of Xstrata's issued ordinary share capital. Falconbridge shareholders wishing to withdraw their shares from the Inco offer should immediately contact their broker or other financial intermediary and instruct such intermediary to withdraw their Falconbridge common shares. For assistance in withdrawing shares from the Inco offer, or for questions or requests for copies of documents, Falconbridge shareholders should contact Kingsdale Shareholder Services Inc. at 1-866-639-7993. Banks and brokers should call at 416-867-2272. About Xstrata Xstrata plc (LSE: XTA) -- http://www.xstrata.com/-- is a major global diversified mining group, listed on the London and Swiss stock exchanges. The Group is and has approximately 24,000 employees worldwide, including contractors. Xstrata does business in six major international commodities markets: copper, coking coal, thermal coal, ferrochrome, vanadium and zinc, with additional exposures to gold, lead and silver. The Group's operations and projects span four continents and nine countries: Australia, South Africa, Spain, Germany, Argentina, Peru, Colombia, the U.K. and Canada. About Falconbridge Headquartered in Toronto, Ontario, Falconbridge Limited (TSX:FAL.LV)(NYSE: FAL) -- http://www.falconbridge.com/-- is a leading copper and nickel company with investments in fully integrated zinc and aluminum assets. Its primary focus is the identification and development of world-class copper and nickel orebodies. It employs 14,500 people at its operations and offices in 18 countries. The Company owns nickel mines in Canada and the Dominican Republic and operates a refinery and sulfuric acid plant in Norway. It is also a major producer of copper (38% of sales) through its Kidd mine in Canada and its stake in Chile's Collahuasi mine and Lomas Bayas mine. Its other products include cobalt, platinum group metals, and zinc. * * * Falconbridge's CDN$150 million 5% convertible and callable bonds due April 30, 2007, carries Standard & Poor's BB+ rating. FOAMEX INTERNATIONAL: Court Approves Thurmo-Sleep Settlement Pact ----------------------------------------------------------------- The Hon. Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware approved Foamex International Inc. and its debtor-affiliates' mediated settlement agreement between Foamex L.P. and Thurmo-Sleep USA, Inc. As reported in the Troubled Company Reporter on July 4, 2006, the parties participated in a Mediated Settlement Conference. In an effort to avoid the costs and risks associated with litigating the issues raised before the State Court, the parties agreed to resolve all issues and disputes between them. The principal terms of the Settlement were: (a) Thurmo-Sleep will make a settlement payment $515,000 to Foamex. Payment will be made in equal installments of $57,222 per month beginning July 15, 2006, until the settlement amount is paid in full; (b) Thurmo-Sleep will execute and deliver a Uniform Commercial Code financing statement and a security agreement for Foamex to record and file to secure the payment of the settlement amount; (c) Thurmo-Sleep will execute and deliver to Foamex an irrevocable confession of judgment for the settlement amount, which will not be filed until or unless Thurmo- Sleep defaults in any monthly payment; and (d) Foamex will pay $875 to cover the whole cost of the Mediated Settlement Conference. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOAMEX INT'L: Gets Court OK to Advance Funds to Mexican Subsidiary ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized Foamex L.P. to provide Foamex de Cuautitlan, S.A. de C.V., with funding in the form of cash advances and revolving loans of up to $750,000. As reported in the Troubled Company Reporter on July 5, 2006, Foamex de Cuautitlan, a Mexican corporation, is an indirect non- debtor wholly owned subsidiary of Foamex L.P. engaged in the automotive industry. Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, related that the Loans would enable Foamex de Cuautitlan to upgrade its facility, purchase certain manufacturing equipment and raw materials, pay other costs of production, and expand its business. The Loans were permitted under the terms of Foamex's DIP financing facilities, which allow Foamex to advance up to $750,000 at any time to certain of its foreign subsidiaries, Mr. Barry related. Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) FR X OHMSTEDE: S&P Junks Rating on Proposed $65 Million Loans ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to FR X Ohmstede Acquisitions Co., a manufacturer and servicer of shell and tube heat exchangers used in the refining and petrochemical industries. At the same time, Standard & Poor's assigned its 'B-' rating and '2' recovery rating to Ohmstede's proposed $130 million first-lien bank facilities, and its 'CCC' rating and '5' recovery rating to Ohmstede's proposed $65 million second-lien bank facilities. The outlook is stable. Pro forma for the pending bank debt issuances, Beaumont, Texas- based Ohmstede is expected to have $165 million in debt. Ohmstede's ratings reflect several weaknesses: * the company's small niche market position; * aggressive financial leverage of roughly 6x debt to EBITDA; * unproven ability to operate profitably throughout the cycle; and * low barriers to entry as several competitors have the ability to provide aftermarket services for refineries' heat exchangers. These weaknesses are only partially offset by these strengths: * Ohmstede's strong recent financial performance, driven by operational improvements and an emphasis on after-market services; * good near-term backlog; and * low capital requirements. Management has implemented several initiatives to improve operational efficiencies and has expanded its more profitable aftermarket services business. Financial performance has significantly improved. The outlook is stable. Assuming future cash flows remain near expected 2006 levels, the company should have the ability to service its high debt burden with a modest cushion. A negative ratings action could result if cash flows prove lower than expected and create liquidity concerns, whether due to general industry conditions, increased competition, the loss of key customers, or operational challenges. A ratings upgrade would be dependent on consistent operating results and noticeably lower financial leverage. GERARD DUENAS: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Gerard Duenas 526 South East Street Santa Rosa, California 95404 Bankruptcy Case No.: 06-10433 Chapter 11 Petition Date: July 19, 2006 Court: Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: David N. Chandler, Esq. David N. Chandler, P.C. 1747 4th Street Santa Rosa, California 95404 Tel: (707) 528-4331 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ George S. May International $25,000 3750-60 South Janes Boulevard Las Vegas, NV 89103-2259 Realty World $10,000 Northern California & Nevada Inc. Headquarters 2316 Orchard Parkway, Suite 200 Tracy, CA 95377 Bank of America $8,900 P.O. Box 60069 City of Industry, CA 91716-0069 Enrique Guzman $4,500 1529 Wimbledon Court Santa Rosa, CA 95401 Pat Lansdown $4,000 2 Padre Park Petaluma, CA 94954 Lescure Engineers $3,000 Peter Church $2,000 Home Depot $1,600 American Storage $500 A. Kuba $350 GLASS GROUP: Delaware Court Confirms Chapter 11 Liquidating Plan ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered an order confirming the Amended Liquidating Plan of Reorganization of The Glass Group, Inc. The Court determined that the Plan satisfies the 13 standards for confirmation under Sec. 1129(a) of the Bankruptcy Code. The Court had approved the Debtor's Amended Disclosure Statement explaining that Plan on May 5, 2006, citing that the Disclosure Statement contained adequate information within the meaning of Sec. 1125(a) of the Bankruptcy Code. Overview of the Plan The Plan provides for the liquidation and distribution of all of the Debtor's assets. The Debtors sold substantially all of its assets to Kimble Glass Inc. for $20 million. The Debtor projects that on the plan' effective date, it will have $7 million cash on hand for distribution. The Plan Administrator may also pursue litigation claims and avoidance actions. The Debtor transferred in excess of $16,195,845 to creditors within the 90 days prior to the Debtor's bankruptcy filing. Treatment of Claims Under the Confirmed Plan, persons who are parties to executory contracts that are rejected pursuant to the Plan and who claim damages by reason of the rejection will become Class 4-General Unsecured Creditors and will be treated in the same manner as other Class 4-General Unsecured Creditors. In full satisfaction of its secured claim and other claims, MAP V LLC will get: (a) land consisting of approximately 30.45 acres in Hamilton Township, Atlantic County, New Jersey; (b) a warehouse and surrounding land in 1401 Wheaton Avenue, Millville, New Jersey; (c) a mold sop and the surrounding land in 1401 Wheaton Avenue, Millville, New Jersey; (d) all leases or other agreements and security deposits from those properties. Under a settlement agreement between MAP and the Debtor, MAP will also contribute around $2 million for distribution to the other creditors. Holders of general unsecured claims will be paid their pro rata share of assets to be held by the plan administrator. The Debtor estimates that general unsecured creditors will recover 36.66% of their claims. Under the Debtor's liquidation analysis, general unsecured creditors will get 15.76% of their claims under a liquidation scenario. Holders of equity interests will get nothing. A copy of the Amended Disclosure Statement is available for a fee at http://www.researcharchives.com/bin/download?id=060608055806 Headquartered in Millville, New Jersey, The Glass Group, Inc. -- http://www.theglassgroup.com/-- manufactures molded glass container and specialty products with plants in New Jersey and Missouri. Its products include cosmetic bottles, pharmaceutical vials, specialty jars, and coated containers. The Company filed for chapter 11 protection on Feb. 28, 2005 (Bankr. D. Del. Case No. 05-10532). Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell represents the Debtor in its restructuring efforts. Jeffrey R. Waxman, Esq., and Mark E. Felger, Esq., at Cozen O'Connor represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts of $50 million to $100 million. GLOBAL HOME: Has Until November 6 to Decide on Leases ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Global Home Products, LLC, and its debtor-affiliates until Nov. 6, 2006, to assume, assume and assign or reject non-residential real property leases and executory contracts. These debtor-affiliates have until August 23, 2006, to assign some of their leases and contracts to C.R. Gibson, Inc.: * Burnes Acquisition, Inc., * Intercraft Company, * Burnes Puerto Rico, Inc., * Picture LLC, * Burnes Operating Company LLC. The Burnes Debtors sold substantially all of their assets to C.R. Gibson in May 2006. The Debtors are also selling its WearEver businesses and have yet to file a plan of reorganization. Section 365(d)(4) of the Bankruptcy Code, as amended by The Bankruptcy Abuse, Prevention and Consumer Protection Act of 2005, gives a debtor only 210 days from the filing of the case within which to decide whether to assume or reject its leases. Under current law, all proceeds received from the sale of leases go to a debtor's estate. Under the new law, debtors will be forced to negotiate with their landlords to obtain extensions beyond 210 days. Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on Apr. 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at Lowenstein Sandler, P.C., represents the Official Committee Of Unsecured Creditors. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and estimated debts of more than $100 million. HANGER ORTHOPEDIC: Acquires Mississippi-Based Temple Medical ------------------------------------------------------------ Hanger Orthopedic Group, Inc. acquired Temple Medical, Inc. based in Meridian, Mississippi. This is the first acquisition for Hanger Orthopedic Group, Inc. in 2006. "We are very pleased to have the professionals from Temple Medical join our team," Chairman and CEO, Ivan R. Sabel stated. "This acquisition is part of an initiative focused on enabling us to grow opportunistically. Given the enhanced stability and flexibility in our capital structure from the recent global refinancing, we plan to continue to acquire additional practices that further support our market-based strategies and are accretive to earnings." About Hanger Orthopedic Headquartered in Bethesda, Maryland, Hanger Orthopedic Group, Inc. (NYSE: HGR) -- http://www.hanger.com/-- is the world's premier provider of orthotic and prosthetic patient care services. Hanger is the market leader in the United States, owning and operating 621 patient care centers in 46 states including the District of Columbia, with 3,290 employees including 1,021 practitioners (as of 12/31/05). Hanger is organized into four units. The two key operating units are patient care, which consists of nationwide orthotic and prosthetic practice centers and distribution which consists of distribution centers managing the supply chain of orthotic and prosthetic componentry to Hanger and third party patient care centers. The third is Linkia, which is the first and only provider network management company for the orthotics and prosthetics industry. The fourth unit, Innovative Neurotronics, introduces emerging neuromuscular technologies developed through independent research in a collaborative effort with industry suppliers worldwide. * * * As reported in the Troubled Company Reporter on May 8, 2006, Standard & Poor's Ratings Services assigned its 'B' senior secured bank loan rating to Hanger Orthopedic Group Inc.'s (B/Negative/--) proposed $75 million revolving credit facility due in 2011 and $230 million term loan B due in 2013. A recovery rating of '2' also was assigned to the secured loan, indicating the expectation for substantial recovery of principal in the event of a payment default. At the same time, Standard & Poor's assigned its 'CCC+' senior unsecured debt rating to the company's proposed $190 million of senior unsecured notes due in 2014. The rating agency also affirmed its 'B' corporate credit rating. The rating outlook remains negative. HEATING OIL: HOP Holdings Wants Chapter 11 Case Dismissed --------------------------------------------------------- The Honorable Alan H.W. Shiff of the U.S. Bankruptcy Court for the District of Connecticut will convene a hearing at 10:00 a.m. on Aug. 8, 2006, at Room 123, Courtroom, 915 Lafayette Blvd., in Bridgeport, Connecticut, to consider HOP Holdings, Inc.'s motion to dismiss its pending Chapter 11 case. HOP Holdings is an affiliate of Heating Oil Partners, LP, and Heating Oil Partners, GP, Inc. HOP Holdings has no assets and virtually no creditors except for being a guarantor of HOP's prepetition and postpetition secured debt. The Heating Oil companies filed for Chapter 11 protection on Sept. 26, 2006. Their cases are administratively consolidated. Concurrent with their filing in the U.S. Bankruptcy Court, the Debtors commenced recognition proceedings in the Ontario Superior Court of Justice pursuant to Section 18.6 of the Companies Creditors Arrangement Act. The Bankruptcy Court confirmed HOP and HOP, GP's First Amended Joint Plan of Reorganization on June 15, 2006. The Plan did not include the HOP Holdings' pending Chapter 11 case. The Ontario Superior Court of Justice Commercial List has issued an order recognizing and implementing the Bankruptcy Court's confirmation of the Plan. The CCAA Court also issued an order authorizing HOP Holdings to file an assignment in bankruptcy pursuant to the Bankruptcy and Insolvency Act. Craig I. Lifland, Esq., at Zeisler & Zeisler, PC, tells the Bankruptcy Court that there is no possibility of reorganization for HOP Holdings and no point would be served by liquidating the case under U.S. law. Mr. Lifland pointed out there is already a pending Canadian proceeding pursuant to which HOP Holdings can be liquidated. Following an entry of an order dismissing the case, HOP Holdings will be liquidated under the CCAA in the Canadian Court. About Heating Oil Partners Headquartered in Darien, Connecticut, Heating Oil Partners, L.P. -- http://www.hopheat.com/-- is one of the largest residential heating oil distributors in the United States, serving approximately 150,000 customers in the Northeastern United States. The Company's primary business is the distribution of heating oil and other refined liquid petroleum products to residential and commercial customers. The Company and its subsidiaries filed for chapter 11 protection on Sept. 26, 2005 (Bankr. D. Conn. Case No. 05-51271) and filed for recognition of the chapter 11 proceedings under the Companies' Creditors Arrangement Act (Canada). Craig I. Lifland, Esq., and James Berman, Esq., at Zeisler and Zeisler PC, represent the Debtors in their restructuring efforts. Jeffrey D. Prol, Esq., at Lowenstein Sandler PC, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $127,278,000 in total assets and $155,033,000 in total debts. The Bankruptcy Court confirmed Heating Oil Partners, LP, and Heating Oil Partners, GP, Inc.'s First Amended Joint Plan of Reorganization on June 15, 2006. The Ontario Superior Court of Justice Commercial List issued an order on June 26, 2006, recognizing and implementing the order of the U.S. Bankruptcy Court. IFSA STRONGMAN: Bouwhuis Morrill Expresses Going Concern Doubt -------------------------------------------------------------- Bouwhuis, Morrill & Company, LLC, in Layton, Utah, raised substantial doubt about IFSA Strongman, 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 negative cash flows and losses from operations since inception. The Company reported a $403,958 net loss on $137,873 of total revenues for the year ended Dec. 31, 2005. At Dec. 31, 2005, the Company's balance sheet showed $1,863,724 in total assets and $377,471 in total current liabilities, and a $1,486,253 stockholders' equity. The Company continues to develop a strategy of exploring all options available so it can have sufficient funds to be able to operate over the next twelve months. As a part of this plan, the Company is currently in negotiations with their target industries' key players to develop additional business opportunities. In addition, it is exploring options in order to raise additional operating capital through debt and equity financing. A full-text copy of the Company's 2005 Annual Report is available for free at http://researcharchives.com/t/s?dd8 About IFSA Strongman Based in London, England, IFSA Strongman, Inc., fka Synerteck Inc. -- http://www.ifsastrongman.com/-- is an integrated media, entertainment and athlete representation company, principally engaged in the development, production and marketing of television programs, live events and the licensing and sale of branded consumer products. The content of their entertainment and consumer products is centered on the various strongman competitions and events worldwide. IFSA STRONGMAN: Posts $362,094 Net Loss in First Quarter 2006 ------------------------------------------------------------- IFSA Strongman, Inc. filed its first quarter financial statements for the quarterly period ended March 31, 2006, with the Securities and Exchange Commission. The Company reported a $362,094 net loss on $32,243 of sale for the quarterly period ended March 31, 2006. This compares to a $441,723 net loss on $317,847 of sales for the period ended March 31, 2005. At March 31, 2006, the Company's balance sheet showed $1,938,304 in total assets, $703,320 in total current liabilities, and $1,234,983 in stockholders' equity. A full-text copy of the Company's financial statements for the quarterly period ended March 31, 2006, are available for free at http://researcharchives.com/t/s?dda Going Concern Doubt Bouwhuis, Morrill & Company, LLC, in Layton, Utah, raised substantial doubt about IFSA Strongman, 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 negative cash flows and losses from operations since inception. The Company reported a $403,958 net loss on $137,873 of total revenues for the year ended Dec. 31, 2005. About IFSA Strongman Based in London, England, IFSA Strongman, Inc., fka Synerteck Inc. -- http://www.ifsastrongman.com/-- is an integrated media, entertainment and athlete representation company, principally engaged in the development, production and marketing of television programs, live events and the licensing and sale of branded consumer products. The content of their entertainment and consumer products is centered on the various strongman competitions and events worldwide. INTERSTATE BAKERIES: Can Reject 17 Unexpired Real Property Leases ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri authorized Interstate Bakeries Corporation and its debtor- affiliates to reject 17 unexpired non-residential real property leases, pursuant to Sections 105(a) and 365(a) of the Bankruptcy Code. As reported in the Troubled Company Reporter on June 26, 2006, the 17 leases are: Rejection Landlord Location Date -------- -------- --------- Clifford J. Catlin Jamestown, New York 6/07/06 Charles D. Thompson Paris, Texas 6/07/06 RJ Enterprises Victoria, Texas 6/07/06 Church Way Mall, Inc. Hamilton, Ohio 6/27/06 P/A Builders & Developers North Vernon, Indiana 6/27/06 RJ DMD Investments Pico Rivera, California 6/27/06 T.F. James Company Anoka, Minnesota 6/27/06 Shaben Michael Sons Aliquippa, Pennsylvania 6/27/06 Max F. Rosarius Gibsonia, Pennsylvania 6/27/06 Empire Realty Investments Tampa, Florida 6/27/06 Saidul Kabir Nacogdoches, Texas 6/27/06 Knox Corp. Bettendorf, Iowa 6/27/06 Jenny Brandt Scott City, Missouri 6/27/06 Thomas L. Metzger Hammond, Indiana 6/27/06 Midwest Bank and Trust Co. Berwyn, Illinois 6/27/06 Les Brooke Aurora, Colorado 6/27/06 Arietta Motley, DDR Downreit Lebanon, Ohio 6/27/06 The Court also authorized the Debtors to abandon to the landlord of each Real Property Lease any of their remaining personal property in each of the Premises after the effective date of the rejection. The Landlord will be entitled to remove or dispose of the property in its sole discretion. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014 on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000) INTERSTATE BAKERIES: Posts $2.5 Million Bond to MO Labor Dept. -------------------------------------------------------------- Judge Venters authorizes Interstate Bakeries Corporation and its debtor-affiliates to arrange for the Missouri Department of Labor and Industrial Relations, Division of Workers' Compensation to receive an appropriate bond totaling $2,542,047. A full-text copy of the Addendum, which provides for the $2.5 million bond, is available for free at http://ResearchArchives.com/t/s?de0 Background As reported in the Troubled Company Reporter on June 23, 2006, the Missouri Department of Labor asked the Bankruptcy Court to compel the Debtors to comply with state laws related to workers' compensation. The Debtors elected to be responsible for their own workers' compensation risk, Christie A. Kincannon, Esq., in Jefferson City, Missouri, related. The Division granted the Debtors the privilege of becoming an individual self-insured pursuant to Chapter 287, Section 280.1 of the Missouri Revised Statutes and Labor; and the Rules Governing Self-Insurers 8 CSR 50-3.010. The Debtors were self-insured from July 1, 1972, through July 1, 1984, and again from July 1, 1992, through May 30, 2006. In order to qualify as a self-insured employer in the state of Missouri, the Debtors are required to post security consistent with the statute and regulations governing self-insured employers. The security requirement protects workers if the Debtors default or fail to honor all compensation obligations to their injured workers. The self-insured employer is also required to file certain reports with the Division, including the Self-Insurer's Annual Financial Statement. The Debtors failed to file their 2004 and 2005 annual reports, Ms. Kincannon relates. The Division conducted a reserve audit. On March 25, 2005, the Debtors informed the Division that it would be unable to provide the audited financial statements to the Division. At the Division's request, the Debtors submitted loss runs in order for the Division to ascertain whether the Debtors were in compliance with the rules applicable to self-insurers. On April 22, 2005, the Division conducted a security review. The results of the Audit and the April Security Review prompted the Division to send the Debtors a demand letter requesting additional security to be posted -- $2,641,640. The Division conducted another security review on April 6, 2006. The April 2006 Security Review was based on loss runs submitted by the Debtors. Ms. Kincannon says that the Division determined that the Debtors must provide additional security of $2,542,047. The Division believes that the current security provided by the Debtors fail to adequately represent and cover their workers' compensation obligations and liabilities as required by law. Debtors' Response According to J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, the Debtors have continuously stood ready, willing and able to post a letter of credit payable to the Missouri Department of Labor & Industrial Relations, Division of Workers' Compensation, in full satisfaction of their workers compensation bonding obligations with the State of Missouri. However, the Division has advised Debtors that relevant regulations prevent it from accepting a letter of credit, and instead limit the Debtors' options to posting a bond or making a cash deposit. The Debtors have recently filed a motion seeking the Court's approval of its surety bond program and related blanket indemnity agreement with Federal Insurance Company. If granted, the Federal Insurance Agreement should allow the Debtors to fully resolve the issues in the Motion to Compel, Mr. Ivester contends. However, the Debtors reserve the right to investigate and possibly dispute the amount of the bond necessary to post with the State of Missouri, the exact terms of any bond, and whether a bond is necessary in lieu of a letter of credit. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014 on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000) IRIDIUM OPERATING: Has Until November 14 to File Chapter 11 Plan ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended the period within which only Iridium Operating LLC and its debtor-affiliates can file a chapter 11 plan of reorganization until Nov. 14, 2006. The Court also extended the period within which the Debtors have the sole right to solicit acceptances of that chapter 11 plan to Jan. 9, 2007. Eric R. Markus, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP, in Washington, D.C., reminded the Bankruptcy Court that the Debtors halted negotiations on their plan when they had to focus their efforts to the sale of their assets and their litigation with Motorola, Inc. What Kept the Debtors Busy The Debtors sold substantially all of their assets, valued at $5 billion, to Iridium Satellite, LLC, for $25 million in December 2000. Iridium Satellite is in no way connected to the Debtors. The Official Committee of Unsecured Creditors sued Motorola for $8 billion, in July 2001, alleging ten different causes of action. Motorola is Iridium's principal investor. The lawsuit is still pending. The Debtors signed a settlement with The Chase Manhattan Bank and the rest of their senior secured lenders resolving a suit commenced by the Creditors Committee in the Debtors' behalf, seeking to avoid liens on $154.6 million of the Debtors' assets. The Bankruptcy Court has approved the Settlement Agreement. The U.S. District Court for the Southern District of New York affirmed the decision after Motorola appealed the Bankruptcy Court's decision. Motorola has brought the issue to the U.S. Court of Appeals for the Second Circuit. Mr. Marcus told the Bankruptcy Court that the preference litigation is largely completed and the Debtors were able to recover $18 million as a result of 275 cases filed. Mr. Marcus argues that extensions are warranted to maintain the status quo, and to allow Debtors, the Committee, and the Lenders to implement the Proposed Settlement once the Motorola appeals and the claims against Motorola are resolved. The Debtors submit that they should not be compelled to complete their plan or plans at this time or to evaluate plans submitted by other interested parties, unsuccessful bidders, or third parties. In these circumstances, Debtors remain in the best position to propose and confirm promptly a consensual chapter 11 plan or plans in these chapter 11 cases. Iridium Operating LLC used to develop and deploy global wireless personal communication systems. On August 19, 1999, some holders of Iridium's senior notes filed an involuntary chapter 11 petition (Bankr. S.D.N.Y. Case No: 99-45005) against Iridium and its subsidiary Capital Corp. At that time, the Debtors were highly leveraged with $3.9 billion in secured and unsecured debt. On the same date, Iridium and 7 other subsidiaries filed voluntary chapter 11 petitions in Delaware. They consented to the jurisdiction of the N.Y. Court in Sept. 7, 1999. William J. Perlstein, Esq., and Eric R. Markus, Esq., at Wilmer, Cutler & Pickering represent the Debtors in their restructuring efforts. John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP represent the petitioning creditors: Magten Partners, Wall Financial Investments (USA) Ltd., and Canyon Capital Advisors LLC, as Fund Manager for The Value Realization Fund, L.P. Bruce Weiner Rosenberg, Esq., at Musso & Weiner, LLP, represent the Official Committee of Unsecured Creditors. JAMES MASSEY: Conseco Files Involuntary Chapter 7 Petition ---------------------------------------------------------- Conseco Inc. filed an involuntary Chapter 7 petition against its former director, James D. Massey, with the U.S. Bankruptcy Court for the Southern District of Indiana on July 17, 2006. Conseco seeks to recover approximately $6.9 million in unpaid loans from Mr. Massey, J.K. Wall at the Indianapolis Star reports. Mr. Massey allegedly used these company-backed loans to buy Conseco stock in the late 1990's. Mr. Massey disputes Conseco's allegations and insists that he owes the Company nothing. Henry Price, Esq., Mr. Massey's attorney, says that the involuntary petition has no basis. According to Mr. Price, the purported debt is in dispute and a bankruptcy petition should not have been filed. Headquartered in Carmel, Indiana, Conseco, Inc. (NYSE:CNO) -- http://www.conseco.com/-- through its subsidiaries, engages in the development, marketing, and administration of supplemental health insurance, annuity, individual life insurance, and other insurance products throughout the United States. The company operates in two segments, Bankers Life and Conseco Insurance. The Bankers Life segment markets and distributes Medicare supplement insurance, life insurance, long term care insurance, and certain annuity products to the senior market. * * * As reported in the Troubled Company Reporter on May 8, 2006, Standard & Poor's Ratings Services affirmed its 'BB+' counterparty credit and financial strength ratings on Conseco Inc.'s core insurance companies and its 'BB-' counterparty credit rating on Conseco Inc. Standard & Poor's also said that the outlook on Conseco Inc. is stable, and the outlook on the operating companies is positive. JAMES MASSEY: Involuntary Chapter 7 Case Summary ------------------------------------------------ Alleged Debtor: James Massey 3316 Walnut Creek Drive North Carmel, Indiana 46032 Indianapolis, Indiana Involuntary Petition Date: July 17, 2006 Case Number: 06-03895 Chapter: 7 Court: Southern District of Indiana (Indianapolis) Judge: Basil H. Lorch III Petitioners' Counsel: William P Means, Esq. Riley Bennett & Egloff, LLP Fourth Floor 141 East Washington Street Indianapolis, Indiana 46204 Tel: (317) 636-8000 Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Conseco Services, LLC Loan Obligation $6,878,370 11825 North Pennsylvania Street Carmel, Indiana 46032 Tel: (317) 817-6100 http://www.conseco.com/ JEROME DUNCAN: Chapter 7 Trustee Gets Access to Mesirow's Files --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan orders Mesirow Financial Consulting, LLC, to turnover files to Sheila J. Solomon, the chapter 7 trustee liquidating Jerome Duncan Inc.'s estate. In August 2005, the then Official Committee of Unsecured Creditors retained Mesirow to: (a) reviewing filings, including, bankruptcy schedules, statements of financial affairs and monthly operating reports; (b) review the Debtor's financial information, including, analysis of receipts and disbursements; (c) review business valuations; (d) analyze creditors' claims; and (e) consult and provide expert witness testimony regarding valuation issues and avoidance actions. Robert K. Siegel, Esq., at Jacob & Weingarten, in Troy, Michigan, contended that to effectively and efficiently and administer the Debtor's estate, the Chapter 7 Trustee needs to obtain Mesirow's files relating to the case because through the use of those files, the Debtor's estate may avoid substantial costs for duplicative work. The case conversion effectively dissolved the Committee, Mr. Siegel pointed out. The Chapter 7 Trustee, then, has no entity to which she can request permission for the files from. Headquartered in Sterling Heights, Michigan, Jerome Duncan Inc., was the largest dealer of automobiles manufactured by Ford Motor Company in the state of Michigan. The Debtor employed over 200 individuals in its operations and generated between $300 and $500 million in annual sales. The company filed for chapter 11 protection on June 17, 2005 (Bankr. E.D. Mich. Case No. 05-59728). Arnold S. Schafer, Esq., at Schafer and Weiner, PLLC, represents the Debtor. On April 12, 2006, Judge McIvor converted the case to chapter 7 liquidation. Shelia J. Solomon serves as the Debtor's chapter 7 trustee. Robert K. Siegel, Esq., at Jacob & Weingarten, in Troy, Michigan, represent the Chapter 7 Trustee. KAISER ALUMINUM: Reports Changes in Ownership of Securities ----------------------------------------------------------- In regulatory filings with the U.S. Securities and Exchange Commission, these directors disclosed that they do not own securities of Kaiser Aluminum Corporation: -- George Becker, -- Carl Bennett Frankel, -- Teresa A. Hopp, -- William F. Murdy, -- Alfred E. Osborne, Jr., -- Georganne Proctor, -- Jack Quinn, -- Thomas Melton Van Leeuwen, and -- Brett Wilcox. KAC made restricted stock grants to these executive officers on July 6, 2006, according to the company's filings with the SEC: No. of Shares of Name Restricted Stock ---- ----------------- Jack A. Hockema President, CEO & Director 185,000 Joseph P. Bellino EVP, CFO & Director 15,000 John Barneson SVP & Chief Administrative Officer 48,000 John Malcolm Donnan VP, Secretary & General Counsel 45,000 Daniel D. Maddox VP & Controller 11,334 Daniel J. Rinkenberger VP & Treasurer 24,000 The restricted stock grants were made pursuant to the company's 2006 Equity and Performance Incentive Plan. All restrictions will lapse on July 6, 2009. On July 6, 2006, eight parties disposed their shares of common stock, at par value of $0.01 per share: Shares of Common Stockholder Stock Disposed Price ----------- -------------- ----- Daniel J. Rinkenberger 33 $0 John Malcolm Donnan 2,706 0 MAXXAM, Inc. 750,000 $0.0134 MAXXAM, Inc. 27,938,250 0 MAXXAM, Inc. 21,311,750 0 John Barneson 10,700 0 Daniel D. Maddox 4,429 0 Jack A. Hockema 17,851 0 George T. Haymaker 2,542 0 Robert J. Cruikshank 2,000 0 Pursuant to KAC's Reorganization Plan, all outstanding shares of common stock, at par value of $0.01 per share, were cancelled without consideration on July 6, 2006. About Kaiser Aluminum Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service, Inc., 609/392-0900) KAISER ALUMINUM: Wants to Assume 67 Contracts and Leases -------------------------------------------------------- Kaiser Aluminum Corporation and its debtor-affiliates propose to assume or assume and assign 67 executory contracts or unexpired leases as of July 6, 2006. Notices regarding the executory contracts or unexpired leases with the Reorganized Debtors' proposed cure amounts have been mailed to the respective counterparties of the contracts and leases, Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, relates. The Executory Contracts or Unexpired Leases are: Cure Counterparty ID No. Location Amount ____________ ______ ________ ______ ADP 1002 Chandler, AZ $0 Aerospatiale 1729 Bristol, UK 0 American Axle MFG 801 Southfield, MI 0 Anglesey Aluminium Ltd. 1713A Bristol, UK 0 Anglesey Aluminium Ltd. 1715B Gwynedd, UK 0 Anglesey Aluminium Metal Ltd. 1744A Gwynedd, UK 0 Anglesey Aluminium Metal Ltd. 1719 Gwynedd, UK 0 Anglesey Aluminium Metal Ltd. 1756 Gwynedd, UK 0 Anglesey Aluminium Metal Ltd. 1705C Gwynedd, UK 0 Boeing Company 1726 Seattle, WA 0 Boeing Company 1734 Seattle, WA 0 Boeing TMX 1942 Trentwood, WA 0 Canadair-Bombardier 1943 Trentwood, WA 0 Centerpoint Properties Trust 389 Bridgeview, IL 0 Continental Teves 800 Southfield, MI 0 Dana Corporation 803 Southfield, MI 0 Decision One Corporation 1700 Houston, TX 0 Delage Landen 1602 Sherman, TX 1,577 Delphi 798 Southfield, MI 0 Delphi 797 Southfield, MI 0 Drake Communications 1605 Sherman, TX 2,128 Dun & Bradstreet Software 1701 Pleasanton, CA 0 Getrag Corporation 890 Greenwood, SC 0 Gila River Telecommunications 1023 Chandler, AZ 1,197 Hastech 806 Southfield, MI 0 Honda of America 804 Southfield, MI 0 Honda of America/Team Indust. 879 Greenwood, SC 0 Houghton 1285 Trentwood, WA 0 IDG/B&J Industrial Supply Co. 1290 Trentwood, WA 0 IMSAMET 1894 Los Angeles, CA 25,646 IAM Local Lodge 10 2357 Bellwood, VA 0 IAM District 776 2356 Sherman, TX 0 Iron Mountain 1896 Los Angeles, CA 2,159 Jobscope Software 906 Bellwood, VA 12,800 Local 786 2366 Bridgeview, IL 0 Local 986 2359 Los Angeles, CA 0 Lone Butte Industrial 1022 Chandler, AZ 5,073 Main Steel Polishing Co. Inc. 1204 Trentwood, WA 0 NEC Financial Services 842 Greenwood, SC 2,442 Oracle Corporation 1697 Spokane, WA 0 Orient Overseas Cont. Line 1315 Trentwood, WA 0 Port of Benton 970 Richland, WA 3,331 Praxair 1366 Trentwood, WA 8,230 Praxair 1367 Trentwood, WA 18,994 Reliance-AMI 1958 Trentwood, WA 0 Reliance-AMI 1957 Trentwood, WA 0 Rush Truck Leasing 1910 Los Angeles, CA 0 Rush Truck Leasing 1911 Los Angeles, CA 0 Santown Limited Partnership 386 Los Angeles, CA 0 Signode Corporation 1281 Trentwood, WA 1,682 Southern California Edison 1918 Los Angeles, CA 0 Southwest Gas Corporation 1020 Chandler, AZ 0 Spicer Driveshaft Inc. 886 Greenwood, SC 0 TRW 796 Southfield, MI 0 U.S. Bancorp Oliver-Allen Tech 410 Bellwood, VA 0 United Steelworkers 2361 Trentwood, WA 0 United Steelworkers (London) 2364 Ontario, Canada 0 United Steelworkers Local 338 2365 Spokane, WA 0 United Steelworkers Local 338 2363 Trentwood, WA 0 United Steelworkers Local 341 2362 Newark, OH 0 United Steelworkers Local 4788 2360 Tulsa, OK 0 United Steelworkers Local 440 2358 Bellwood, VA 0 USL Capital 408 Greenwood, SC 0 Verizon 913 Bellwood, VA 0 Waste of Mgmt. Of Oklahoma 2189 Tulsa, OK 0 Worldcom 730 Southfield, MI 0 ZF Lemforder Corporation 885 Greenwood, SC 0 Any party that disputes the assumption, assumption and assignment of a contract or lease, or the proposed cure amount is required to file with the Bankruptcy Court and serve on counsel to the Reorganized Debtors a written objection not later than August 4, 2006. About Kaiser Aluminum Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service, Inc., 609/392-0900) KINGSTON SYSTEMS: Hansen Barnett Raises Going Concern Doubt ----------------------------------------------------------- Hansen, Barnett & Maxwell expressed substantial doubt about Kingston Systems Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended March 31, 2006 and 2005. The auditing firm pointed to the Company's incurred losses and current ratio deficits. Kingston Systems's balance sheet at March 31, 2006 showed total shareholders' deficit of $1,114,101 resulting from $689,249 in total assets and $1,803,350 in total liabilities. The Company's balance sheet also showed strained liquidity with $465,983 in total current assets and $1,685,566 in total current liabilities. For the year ended March 31, 2006, the Company reported net loss of $1,844,396 from $630,575 in revenues. A full-text copy of the Company's financial report for the year ended March 31, 2006 is available for free at: http://researcharchives.com/t/s?df4 Based in Hampton, New Hampshire, Kingston Systems Inc. operated a proprietary recovery system that reclaimed paper pulp and non- biodegradable polyethylene from packaging material scrap. The Company sold the recovered fiber as substitute for virgin wood pulp and the reclaimed polyethylene for use in injection molding. The Company remained "dormant" until August of 2005, when it acquired all of the issued and outstanding common stock of Parallel Robotics Systems Corporation making Robotics a wholly owned subsidiary. KL INDUSTRIES: Can Obtain DIP Financing from LaSalle Bank --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, authorized KL Industries, Inc., on a final basis, to obtain debtor-in-possession financing from LaSalle Bank, NA, pursuant to Section 364 of the Bankruptcy Code. LaSalle holds liens on and security interests in substantially all of the Debtor's assets on account of loans made prior to the Debtor's bankruptcy filing. As of May 2, 2006, the Debtor owed LaSalle approximately $6.1 million with respect to loans made pursuant to certain prepetition loan documents. The Debtor is authorized to borrow additional funds from LaSalle until the aggregate of its prepetition indebtedness and postpetition loans reaches approximately $6.5 million. All postpetition loans will accrue interest at a rate equal to the Prime Rate, as announced by LaSalle from time to time, plus three percent. The DIP Funds will be used to pay payroll and other direct operating expenses and obtain goods and services needed to carry on its business. The Debtor will use the DIP loan proceeds in accordance with a budget. A copy of the budget is available for free at http://researcharchives.com/t/s?dfb As security for the postpetition loans, the Court grants LaSalle valid and perfected liens on all of the Debtor's assets, junior only to other liens that are not subject to avoidance or subordination and subject a carve-out for fees due to the U.S. Trustee and to professionals employed by the Debtor and the Official Committee of Unsecured Creditors. As adequate protection on account of the prepetition indebtedness, LaSalle is also granted replacement liens to secure an amount of prepetition indebtedness equal to the sum of the aggregate amount of diminution in value of the prepetition collateral. LaSalle obligations to provide the DIP credit facility will terminate on the earlier of: -- July 31, 2006; -- the sale of the Debtor's assets pursuant to Section 363 of the Bankruptcy Code; -- the effective date any plan of reorganization; -- the appointment of a Chapter 11 Trustee or Examiner; or -- conversion of the Debtors case into a liquidation proceeding under Chapter 7. Headquartered in Addison, Illinois, KL Industries, Inc., manufactures springs, assemblies and other products for the automotive and electronic markets. The Company does business as KL Spring & Stamping Division, KL Spring Division, KL Stamping Division, KL Assembly Division and American Metal Forming Division. The Company filed for bankruptcy protection on May 2, 2006 (Bankr. N.D. Ill. Case No. 06-04882). Peter J. Roberts, Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has retained Winston & Strawn LLP, to represent it in the Debtor's case. CM&D Capital Advisors LLC is the Debtor's financial Advisor. When the Debtor filed for bankruptcy protection, it reported assets totaling between $1 million and $10 million and debts amounting between $10 million to $50 million. LAIDLAW INTERNATIONAL: Earns $34.1 Million in Second Quarter 2006 ----------------------------------------------------------------- For the three months ended May 31, 2006, Laidlaw International Inc. earned $34.1 million from $860.7 million in revenues. Laidlaw's balance sheet at May 31, 2006 showed $2,950 million in total assets and $1,312 million in total liabilities resulting to a total shareholders' equity of $1,637.1 million. The Company's balance sheet also showed total current assets of $745.8 million and total current liabilities of $506.4 million. A full-text copy of the Company's financial report for the quarter ended May 31, 2006 is available for free at: http://researcharchives.com/t/s?df1 Headquartered in Arlington, Texas, Laidlaw, Inc., nka Laidlaw International, Inc. (NYSE:LI) -- http://www.laidlaw.com/-- is a North American bus operator. Laidlaw's school buses transport more than 2 million students daily, and its Transit and Tour Services division provides daily city transportation through more than 200 contracts in the US and Canada. Laidlaw filed for chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No. 01-14099). Garry M. Graber, Esq., at Hodgson Russ LLP, represented the Debtors. Laidlaw International emerged from bankruptcy on June 23, 2003. * * * As reported in the Troubled Company Reporter on July 11, 2006, Moody's Investors Service affirmed Laidlaw International Inc.'s corporate family rating at Ba2 following the Company's announcement of a $500 million debt-financed share repurchase program. Moody's also assigned a Ba2 rating to the Company's new senior secured term loan. The rating outlook is stable. LOS FRAILES: Case Summary & Five Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Los Frailes Services Station Inc. P.O. Box 195392 San Juan, Puerto Rico 00919 Bankruptcy Case No.: 06-02371 Chapter 11 Petition Date: July 19, 2006 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Juan A. Santos Berrios, Esq. Juan A. Santos Berrios, P.S.C. P.O. Box 9102 Humacao, Puerto Rico 00792-9102 Tel: (787) 285-1001 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Five Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Banco Popular de Puerto Rico $910,000 P.O. Box 362708 San Juan, PR 00936-2708 American Petroleum $68,000 P.O. Box 2529 Toa Baja, PR 00951-2529 Aurora Loan Services $52,000 P.O. Box 1706 Scottsbluff, NE 69363-1706 Mr. Rosario $46,000 c/o Enrique Reyes Martinez BBA P.O. Box 6746 Bayamon, PR 00960-5746 JJ Petroleum $23,000 P.O. Box 1916 Trujillo Alto, PR 00977-1916 LOVESAC CORP: Secured Creditor G&G Says Plan is Unconfirmable ------------------------------------------------------------- G&G, LLC, one of the secured creditors of The LoveSac Corporation and its debtor-affiliates, objects to confirmation of the Debtors' Joint Plan of Liquidation. The Debtor owed $2.2 million on account of the G&G loan as of Jan. 30, 2006. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, tells the Court that the Debtors' Plan has a separate class of general unsecured claims and for each deficiency claim of the secured creditors whose liens and priorities were disrupted by the purported February 2005 merger. While the Bankruptcy Code gives debtors some latitude in classifying claims, so long as dissimilar claims are not placed in the same class, limits exist, and the Plan's current classification system is impermissible, Mr. Macauley laments. Mr. Macauley points out that the Plan improperly classifies most of the sale proceeds from the sale of inventory and fails to allocate value to leases, fixtures, equipment and other assets. This improper allocation prevents G&G from receiving the "indubitable equivalent" of its secured claim. Rearranging the value of the assets sold to ensure that no value is allocated to property in which G&G has a lien is not fair and equitable to G&G, Mr. Macauley argues. The Plan discloses that the Debtors have reached a settlement with the Series A Investors, which proposes to release any and all claims the Debtors may have against the Series A Investors in exchange for a $150,000 payment. According to Mr. Macauley, the release of the Series A Investors demonstrates bad faith and violates the fair and equitable rule. The Plan provides that Sac Acquisition LLC, the proposed purchaser of substantially all of the Debtors' assets will assume the unpaid professional compensation claims. Mr. Macauley points out that this violates Section 1129(a)(1) because it is inconsistent with Sections 327(a) and 330(a)(2), which provide that fees are paid from the estate and that the Court can reduce the awards. Mr. Macauley asserts that any benefit for reduced awards should accrue to the estates, not the Purchaser. Mr. Macauley adds that the Plan is not feasible because it makes no provision for what happens in the event that G&G is successful in an adversary proceeding G&G commenced to have the Court determine the validity, priority and extent of G&G's lien on the Debtors' assets. Treatment of Claims As reported in the Troubled Company Reporter on June 19, 2006, under the Plan, these claims are entitled to full recovery: 1. Class 1 Other Priority Claims; 2. Class 2 Secured Tax Claims; 3. Class 4-C Secured Claims of Celtic Bank Corp.; 4. Class 4-F Secured Claims of G&G LLC; 5. Class 4-G Secured Claims of REM LLC; 6. Class 4-H Secured Claims of Triple Net Investments; and 7. Class 4-K Miscellaneous Secured Claims. Pursuant to an asset purchase agreement, five creditors agreed to assign any distribution received on their claims to the liquidating trust for the sole benefit of the Class 5A through 5E Unsecured Creditors. These creditors will not receive any distribution on account of their claims: 1. Class 4-A Secured Claims of Barfair, Ltd.; 2. Class 4-B Secured Claims of Brand Equity Ventures II, LP; 3. Class 4-D Secured Claims of Dinesh Patel; 4. Class 4-J Secured Claims of Walnut Investment Partners, LP; and 5. Class 4-J Secured Claims of Walnut Private Equity Fund, LP. The Debtors will surrender a 2003 Ford Econoline Van to Ford Credit in full satisfaction of Ford Credit's secured claim. Class 3 DIP Financing Claims will be assumed by the purchaser, without recourse to the Debtors or the Liquidating Trust. The Debtors' estates will have no further liability for the claims upon assumption. Holders of these claims will receive a pro rata share of their claims from 0% to 50%: 1. Class 5-A General Unsecured Claims; 2. Class 5-B Deficiency Claim of G&G; 3. Class 5-C Triple Net Investments Deficiency Claim; 4. Class 5-D Celtic Bank Deficiency Claims; and 5. Class 5-E REM Deficiency Claim. Class 5-F Series A Deficiency Claims and Class 6 Interest Claims will receive nothing under the Plan. A full-text copy of LoveSac Corp.'s Chapter 11 Liquidation Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060616052444 A Disclosure Statement explaining that Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060616052013 The Court will consider confirmation of the plan at 11:30 a.m., on July 26, 2006. About LoveSac Corporation Headquartered in Salt Lake City, Utah, The LoveSac Corporation -- http://www.lovesac.com/-- operates and franchises retail stores selling beanbags furniture. The LoveSac Corp. and three affiliates filed for chapter 11 protection on Jan. 30, 2006 (Bankr. D. Del. Case No. 06-10080). Anthony M. Saccullo, Esq., and Charlene D. Davis, Esq., at The Bayard Firm and P. Casey Coston, Esq., at Squire, Sanders & Dempsey LLP represent the Debtors in their restructuring efforts. Michael W. Yurkewicz, Esq., at Klehr Harrison Harvey Branzburg & Ellers represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million to $50 million. MARKETSHARE TELECOM: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: MarketShare Telecom, LLC 2212 Cliffside Drive Plano, Texas 75023 Bankruptcy Case No.: 06-41106 Type of Business: The Debtor is a wholesale distributor of telecommunications equipment. See http://www.marketsharetelecom.com/ Chapter 11 Petition Date: July 19, 2006 Court: Eastern District of Texas (Sherman) Debtor's Counsel: Christopher J. Moser, Esq. Quilling, Selander, Cummiskey & Lownds 2001 Bryan Street, Suite 1800 Dallas, Texas 75201-3005 Tel: (214) 871-2100 Fax: (214) 871-2111 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. MASTERCRAFT INTERIORS: Hires Executive Sounding as Fin'l Advisors ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland gave Mastercraft Interiors Ltd. and Kimels of Rockville Inc. authority to employ Executive Sounding Board Associates Inc. as financial advisors. ESBA is expected to: a. assist management in the selection of third parties to manage the liquidation of the Debtors' inventory, store fixtures, real estate and other assets; b. assist management and the Debtors' counsel in the preparation for a chapter 11 filing; c. assist in the management of the bankruptcy process to insure compliance with Court and Office of the U.S. Trustee reporting requirements, including the preparation of statements of financial affairs, schedules, and monthly operating reports; d. analyze, review and refine the Debtors' cash flow projections; e. assist in obtaining DIP financing or the use of cash collateral; f. interact with other retained professionals and creditors, with the approval of the designated officer of Mastercraft, as requested; and g. participate in court hearings and, if necessary, provide expert testimony in connection with any court hearing. The Debtors want to employ ESBA under a general retainer because of the extensive services required. The Debtors disclose that they have already paid to ESBA a $100,000 advance retainer for postpetition services. No details of the Firm's compensation have been filed with the Court Neil Gilmour, III, a managing director of ESBA, assured the Court that the Firm does not hold any interest adverse to the Debtors and is disinterested as that term is defined in Sec. 101(14) of the Bankruptcy Code. Headquartered in Beltsville, Maryland, Mastercraft Interiors Ltd. -- http://www.mastercraftinteriors.com/-- manufactures furniture and other home furnishings. The Company and its subsidiary, Kimels of Rockville, Inc., filed for bankruptcy on May 15, 2006, (Bankr. D. Md. Case No. 06-12769). Morton A. Faller, Esq., Michael J. Lichtenstein, Esq., and Stephen A. Metz, Esq., at Shulman, Rogers, Gandal, Pordy & Ecker, P.A., represent the Debtors in their restructuring efforts. When Mastercraft Interiors filed for bankruptcy, it reported assets amounting to $10,600,288 and debts amounting to $25,485,847. Kimels of Rockville reported assets totaling $704,227 and debts amounting to $10,341,704 when it filed for bankruptcy. MERIDIAN AUTOMOTIVE: Ct. Removes GSC Entities From Adversary Suit ----------------------------------------------------------------- Judge Walrath of the U.S. Bankruptcy Court for the District of Delaware grants the Official Committee of Unsecured Creditors' request for the dismissal of the GSC Entities. The GSC Entities are removed from the Avoidance Action, without prejudice. The Committee and Defendants GSC Recovery II. L.P. and GSC Recovery IIA, L.P., asked the Court to dismiss the GSC Entities from the adversary proceeding without prejudice. The GSC Entities had advised the Committee that they no longer hold any position and do not assert any interest in the Debtors' assets with respect to either the First Lien Facility or the Second Lien Facility. The Parties stipulate that the GSC Entities will represent that: (a) their economic interest in the First Lien Facility was terminated in connection with the sale of interests before May 25, 2006; and (b) they never held any position in the Second Lien Facility. The Parties further agree the GSC Entities will be dismissed from the Avoidance Action, without prejudice, subject to certain conditions. Committee Seeks to Strike First American's Brief Don A. Beskrone, Esq., at Ashby & Geddes, P.A., in Wilmington, Delaware, relates that the Court established in a scheduling order that as the First Lien Agent, Credit Suisse Cayman Islands Branch's reply brief regarding its Summary Judgment Motion and its answering brief to the Cross Motion of the Official Committee of Unsecured Creditors should be filed and served no later than June 9, 2006. Mr. Beskrone notes that the Scheduling Order did not reference First American Title Insurance Company nor does it authorize First American to file any pleading in connection with the Motion or the Cross-Motion. Nonetheless, First American filed its brief, claiming sole responsibility for any modifications made to the First Lien Termination Statement and rejecting any suggestion that it was otherwise authorized to modify the UCC filing, Mr. Beskrone informs the Court. Accordingly, the Committee asks the Court to strike First American's Brief because it was: (1) not authorized; (2) not timely filed; and (3) duplicative of the arguments of the First Lien Agent. First American Talks Back First American maintains that it is a party to, and is entitled to participate meaningfully in, the litigation. Neil B. Glassman, Esq., at the Bayard Firm, in Wilmington, Delaware argues that despite not being referenced in the Scheduling Order, First American is entitled to assert any defenses that Credit Suisse has against the Committee's claims pursuant to Rule 14(a) of the Federal Rules of Civil Procedure. Civil Rule 14(a) made applicable pursuant to Rule 7014 of the Federal Rules of Bankruptcy Procedure provides, inter alia, that a third-party defendant may assert against the plaintiff any defenses, which that third-party has to the plaintiff's claim. Mr. Glassman asserts that the Scheduling Order does not limit in any way First American's right to file a dispositive motion or joinder. First American does not need prior authorization from the Court to assert its defenses by motion, joinder or otherwise. If the Court deems that First American is subject to the Scheduling Order, Mr. Glassman contends that First American's Brief is timely filed because the Aug. 9, 2006, deadline to file case dispositive motions has been stayed pursuant to the Scheduling Order. Moreover, the Committee will not suffer any prejudice if the Brief is permitted by the Court, Mr. Glassman maintains. On the contrary, First American would suffer significant prejudice of the Joinder is stricken for it will be denied the opportunity to participate meaningfully in the resolution of the issues raised in the Summary Judgment Motion and the Cross Motion. The Brief is in the interests of judicial economy, Mr. Glass says. It is the most efficient means for First American to participate in the resolution of common issues in the litigation. Accordingly, First American asks the Court to allow its Brief. 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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000). MERIDIAN AUTOMOTIVE: GECC Wants to Repossess Leased Equipment ------------------------------------------------------------- General Electric Capital Corporation asks the U.S. Bankruptcy Court for the District of Delaware to: (a) terminate automatic stay under Section 362 of the Bankruptcy Code as to GECC and the Leased Equipment; and (b) permit it to exercise and enforce the terms and conditions of the Equipment Lease Documents and applicable law to reduce Meridian Automotive Systems, Inc., and its debtor-affiliates' indebtedness, including, without limitation: -- obtaining immediate possession of the Leased Equipment; -- selling the Leased Equipment; or -- re-leasing the Leased Equipment. Meridian Automotive Systems, Inc., and General Electric Capital Corporation signed a master lease agreement dated Aug. 1, 1997, and Equipment Schedule No. 005 dated Sept. 30, 1998. Under the agreement, GECC is leasing to the Debtors flax and polypropylene blending and web forming system, and various related parts and accessories. The Equipment Lease Documents provide that: -- the Debtors will make certain monthly payments to GECC; and -- on Sept. 15, 1997, the Debtors will either return or purchase the Leased Equipment under certain terms and conditions. GECC contends that the Debtors failed to comply with the provisions of the Equipment Lease. Louis J. Ebert, Esq., at Gebhardt & Smith LLP, in Baltimore, Maryland, relates that on May 2006, the Debtors ceased all monthly payments for the Leased Equipment. Mr. Ebert argues that the Leased Equipment is not necessary for an effective reorganization of the Debtors. The value of the Leased Equipment is rapidly depreciating, and GECC will sustain significant damages and injury unless it is permitted to obtain immediate possession of the Leased Equipment, Mr. Ebert asserts. 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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000). MUSICLAND HOLDING: Committee Has Until August 4 to File Claim ------------------------------------------------------------- Musicland Holding Corp., its debtor-affiliates, the Official Committee of Unsecured Creditors and the Secured Trade Creditors stipulate that the Creditors Committee's time to file any claim against the Secured Trade Creditors under the DIP Order is further extended until Aug. 4, 2006. The Creditors Committee reserves the right to seek the U.S. Bankruptcy Court for the Southern District of New York's permission for examination of the Secured Trade Creditors, provided that the Informal Committee of Secured Trade Vendors' rights to object to the examination of its members are reserved. The Court approves the parties' Stipulation. Headquartered in New York, New York, Musicland Holding Corp., is a specialty retailer of music, movies and entertainment-related products. The Debtor and 14 of its affiliates filed for chapter 11 protection on Jan. 12, 2006 (Bankr. S.D.N.Y. Lead Case No. 06-10064). James H.M. Sprayregen, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. Mark T. Power, Esq., at Hahn & Hessen LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Musicland Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) NAT'L DATACOMPUTER: March 31 Balance Sheet Upside-Down by $4.7MM ---------------------------------------------------------------- Worldwater & Power, Corp, incurred a $57,473 net loss on $771,537 of revenues for the three months ended March 31, 2006. This compares to a $108,378 net loss on $802,877 of revenues for the period ended March 31, 2005. At March 31, 2006, the Company's balance sheet showed $620,636 in total assets, $4,072,721 convertible preferred stock and $1,315,334 in total liabilities resulting in a $4,767,419 stockholders' deficit. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?d8a Going Concern Doubt Carlin, Charron & Rosen, L.L.P., in Westborough, Massachusetts, raised substantial doubt about National Datacomputer's Inability 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 incurred $19.2 million accumulated deficit. About National Datacomputer Based in Delaware, National Datacomputer, Inc., manufactures and sells inventory software used to collect and process product information. NATIONSRENT COS: Sells Assets to Sunbelt Rentals for $1.05 Billion ------------------------------------------------------------------ Sunbelt Rentals, Inc., a subsidiary of Ashtead Group plc, will acquire NationsRent Companies, Inc. in a transaction valued at approximately $1.05 billion. Following the closing of the transaction, it is expected that the combined company will rank as the third largest U.S. equipment rental company by 2005 revenues, with 477 locations in 35 states, employing approximately 7,000 associates. "NationsRent is a high quality company which, like Sunbelt, has an attractive and significant exposure to the growing non-residential construction market in the US," George Burnett, Chief Executive Officer of Ashtead, said. "The merger of NationsRent with Sunbelt uniquely creates a chain of 477 outlets with minimal overlap and accelerates our 'clustering' strategy that has delivered consistent profitable growth over the past few years. NationsRent and Sunbelt have similar rental fleets both in age and in mix and through the combination of these businesses we believe we will enjoy benefits of scale in both customer service and buying power. The acquisition represents the latest step in Ashtead's development and provides the Company with an excellent opportunity to create additional shareholder value." "This transaction with Sunbelt represents an excellent opportunity for our employees and stockholders," Jeff Putman, Chief Executive Officer of NationsRent, said. "The NationsRent employees will be joining a company that is performing at the top of our industry with strong revenue and operating cash flow growth. With limited geographic overlap, this combination will allow the NationsRent employees to continue to serve our customers and provide an opportunity for career growth in one of the largest most successful companies in our industry. For the stockholders of NationsRent, the transaction will allow them to realize an attractive return generated by the growth of the company over the past three years." "NationsRent's board of directors, after a careful review of the transaction, unanimously voted in favor of the merger. I sincerely appreciate the confidence our stockholders have shown in our management and employees over the past three years," Mr. Putman added. "We are excited to announce the proposed merger of Sunbelt and NationsRent," Chief Executive Officer and President of Sunbelt, Cliff Miller, said. "This will bring together two well-known brands and two well-respected companies that share a very strong focus on customer satisfaction. It is fitting that the primary beneficiaries of this combination will be the customers of Sunbelt and NationsRent as well as employees who have worked so hard to build both organizations." Mr. Miller added, "This transaction will immediately extend the reach of the combined companies to eight additional states. Since there are very few overlapping branch locations, there will be plenty of growth opportunities for branch network employees of both companies as the combined company works to serve its expanded customer base. The two companies also have very different specialty operations, which are complementary rather than redundant, such as NationsRent's Lowe's retail-based program and its expanding dealership network along with Sunbelt's pump, power and scaffolding operations. By adding NationsRent's relatively new rental fleet to Sunbelt's already significant investment in fleet, the combined company will feature a rental fleet base of $2.2 billion of original cost." Terms of the Transaction 1) Merger Consideration The aggregate consideration payable at closing for the outstanding shares of NationsRent common stock is $495 million in cash, less transaction expenses incurred by NationsRent. In addition to this cash consideration at closing, NationsRent common stockholders may receive additional payments from a $28 million escrow amount remaining after settlement of any indemnification claims, the remainder of a $5 million reserve account established to cover the costs of any disputed claims, and a "common stock deferred payment" of up to $89 million. The earliest date funds may begin to be released to stockholders from the escrow account will be six months following the closing date. The common stock deferred payment is payable in full if Ashtead's share price equals or exceeds 140% of an agreed upon "reference price" of 223.5 pence, adjusted for the dilutive effect of Ashtead's proposed rights offering. Payments may be earned in installments of approximately $5 million for each percentage point of appreciation above the reference price between 122.2% and 140%. The period in which the common stock deferred payment could be paid will last until the third anniversary of the closing date of the merger, and payments, if any, would be made on a quarterly basis. Each outstanding share of NationsRent preferred stock will entitle the holder to receive $1,000, the liquidation preference, for an aggregate of $72 million. In addition, pursuant to the transaction, Sunbelt will assume all of NationsRent's outstanding indebtedness. 2) Conditions to Closing The consummation of the merger is subject, among other things, to approval by the Ashtead shareholders, and the consummation of certain financing arrangements, including a rights offering. Other conditions to closing include the consummation of NationsRent bond tenders and consent solicitations and the expiration or the early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Simultaneously with the execution of the merger agreement, a majority of the stockholders of NationsRent approved the merger. The transaction is expected to close on or about Aug. 31, 2006. Stroock & Stroock & Lavan LLP acted as legal counsel to NationsRent with respect to the negotiation of the merger agreement and the other transactions. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel to Ashtead and Sunbelt with respect to the negotiation of the merger agreement and other transactions. Jefferies & Company, Inc. acted as financial advisor to NationsRent with respect to the merger transactions. UBS Investment Bank and JPMorgan Cazenove acted as financial advisors to Ashtead and Sunbelt with respect to the merger transactions. Tender Offers and Consent Solicitations In connection with the merger, NationsRent will commence an offer to purchase for cash any and all of its outstanding 9-1/2% Senior Notes due May 1, 2015 in an aggregate principal amount of $150 million and 9-1/2% Senior Secured Notes due Oct. 15, 2010 in an aggregate principal amount of $250 million. In connection with the offers, holders of the 2015 Notes are being solicited to provide consents to certain amendments to the indenture for the 2015 Notes that would eliminate most of the restrictive covenants and events of default contained in the indenture, and holders of the 2010 Notes are being solicited to provide consent to amend the satisfaction and discharge section of the indenture for the 2010 Notes. The consent solicitation will expire at 5:00 p.m., New York City time, on July 31, 2006, and the offer will expire at 5:00 p.m., New York City time, on Aug. 29, 2006, in each case unless extended by NationsRent. Completion of the offers and consent solicitations is subject to the satisfaction of certain conditions, including, but not limited to, receipt of valid tenders and consents from at least a majority in principal amount of each series of outstanding Notes and the consummation of the merger and the other transactions contemplated by the merger agreement. As described in more detail in the offer to purchase and consent solicitation statement that will be distributed to holders of the Notes promptly, the total consideration for each $1,000 principal amount of Notes validly tendered and accepted for purchase will be calculated, in accordance with standard market practice, based upon a fixed spread of 50 basis points over the bid side yield on the 3.875% U.S. Treasury Note due May 15, 2010, in the case of the 2015 Notes, and the 4.250% U.S. Treasury Note due Oct. 31, 2007, in the case of the 2010 Notes. The foregoing total consideration for the Notes includes a consent payment equal to $30 per $1,000 principal amount of Notes tendered. Holders must validly tender their Notes on or before the Consent Deadline in order to be eligible to receive the total consideration. Holders who validly tender their Notes after the Consent Deadline and before the expiration of the offer will only be eligible to receive an amount equal to the total consideration minus the consent payment. Additionally, holders whose Notes are purchased pursuant to the offer will receive any accrued but unpaid interest up to, but not including, the payment date for the Notes. The dealer managers for the offer are Jefferies & Company, Inc. (800-801-1081) and Citigroup Global Markets Inc. (800-558-3745). The depositary for the offer is Wilmington Trust Company. Noteholders with questions or who would like additional copies of the offer documents may call the information agent, Innisfree M&A Incorporated, toll-free at (888) 750-5834. (Banks and brokers may call collect at (212) 750-5833.) About Ashtead Ashtead Group -- http://www.ashtead-group.com/-- based in the U.K. together with its U.S. subsidiary, Sunbelt Rentals, provides equipment rental services. The company is publicly traded on the London Stock Exchange. About Sunbelt Headquartered in Charlotte, North Carolina, Sunbelt Rentals -- http://www.sunbeltrentals.com/-- provides equipment rental solutions for the industrial, construction, and municipal markets, plus the DIY markets, from its network of 209 branches in 26 states. Its extensive equipment fleet includes a wide range of general construction and industrial equipment, and is further broadened by specialty businesses serving the Pump, Power, Trench Shoring and Scaffold markets. About NationsRent Headquartered in Fort Lauderdale, Florida, NationsRent Companies -- http://www.nationsrent.com/-- specializes in rentals and also sells new and used equipment with related merchandise, parts and supplies, and provides maintenance and repair services. NationsRent offers a broad range of high- quality construction equipment with a focus on superior customer service at affordable prices with convenient locations in major metropolitan markets throughout the United States. * * * NationsRent Companies' 9-1/2% Senior Unsecured Notes due 2015 carry Moody's Investors Service's Caa1 rating and Standard & Poor's B- rating. NAVIGATORS GROUP: S&P Rates $300 Million Multipurpose Shelf at BB+ ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary 'BBB' senior debt, 'BBB-' subordinated debt, and 'BB+' preferred stock ratings to Navigators Group Inc.'s (NASDAQ:NAVG; BBB/Stable/--) $300 million multipurpose shelf. This shelf consists of $125 million of unused funds from its previous shelf and $175 million under the current one. Standard & Poor's does not expect any new issuance of securities in the foreseeable future. "The ratings reflect NAVG's strong competitive position in the marine insurance market, very strong capitalization, strong operating performance, and strong financial flexibility," said Standard & Poor's credit analyst Taoufik Gharib. "Partially offsetting these positive factors are the company's extensive reliance on reinsurance, a significant exposure to catastrophe risk, and the implementation risk associated with its diversification strategy." NAVG generated very strong operating performance in the first quarter of 2006, benefiting from the hardening market in its marine business. Its pretax operating income increased to $24 million as of March 31, 2006, compared with $14 million in the prior period. Similarly, over the same period, its combined ratio improved to 89.6% from 92.9%. NORTEL NETWORKS: Forms Strategic Alliance with Microsoft Corp. -------------------------------------------------------------- The convergence of the communications and IT industries took a significant step forward as Microsoft Corp. and Nortel Networks Corp. reported a strategic alliance based on a shared vision for unified communications. By engaging the companies at the technology, marketing and business levels, the alliance will allow both companies to drive new growth opportunities and has the potential to ultimately transform businesses communications, reducing costs and complexity and improving productivity for customers. By combining Nortel's network quality and reliability with Microsoft(R) software's ease of use, the alliance will accelerate the availability of unified communications -- an industry concept that uses advanced technologies to break down today's device- and network-centric silos of communication (such as e-mail, instant messaging, telephony and multimedia conferencing) and makes it easy and efficient for workers to reach colleagues, partners and customers with the devices and applications they use most. Taking a decisive step further, Nortel and Microsoft will transition traditional business phone systems into software, with a Microsoft unified communications software platform and Nortel software products to provide further advanced telephony functionality. This software-centric approach will provide the easiest transition path for businesses, helping enable them to reduce the total cost of ownership and better protect current and future investments. It will also more quickly enable the creation of new, innovative applications. "Nortel and Microsoft have each led fundamental transformations in their own market -- Nortel's digital innovation and Microsoft's software on every desktop," said Mike Zafirovski, president and CEO of Nortel. "By combining our unique strengths, Microsoft and Nortel will accelerate the delivery of unified communications -- delivering to our customers a higher-quality user experience, with greater reliability and lower total cost of ownership. That's where we can make a real difference." "We are investing together because the communications industry is at an inflection point," said Steve Ballmer, CEO of Microsoft. "We will have deep collaboration in product development with Nortel, allowing us to rapidly deliver high-quality, highly reliable solutions that will support mission-critical communications. The opportunity for our customers is fantastic. We will enable them to realize tremendous economic and business benefits from unified communications." "This is a gutsy play for Nortel -- accelerating the move of our voice technology into software and working with the world's software leader as part of our broader business strategy to transform the company into a software and services leader," Mr. Zafirovski said. "From this transaction, we believe we can capture well beyond $1 billion in new revenue, ramping up with increased momentum through 2009 via professional services, voice products and applications, as well as data pull-through in the enterprise." "Unified communications will drive the next major advance in individual, team and organizational productivity in today's 24x7, always-connected and increasingly mobile work environment," said Jeff Raikes, president of the Business Division at Microsoft. "Our software-based approach puts people at the center of communications through a single identity across e-mail, voice mail, voice over Internet protocol call processing, instant messaging and video, and intuitively embeds communications capabilities into people's everyday work processes, including the Microsoft Office system and third-party software applications." Components of the Agreement 1) Strategic alliance * The companies will enter into a four-year alliance agreement, with provisions for its extension. * Nortel will be Microsoft's strategic partner for advanced unified communications solutions and systems integration. * The two companies will form the Innovative Communications Alliance --http://www.innovativecommunicationsalliance.com -- as a go-to-market vehicle. * Microsoft and Nortel will deploy the other's technologies in their enterprise networks. 2) Solutions and systems integration * Nortel becomes a strategic systems integration partner for the advanced unified communications solution. * Nortel believes it can capture substantial new revenue through service offerings such as convergence planning, integration, optimization, monitoring and managed services. 3) Joint product development * Nortel and Microsoft will form joint teams to collaborate on product development that spans enterprise, mobile and wireline carrier solutions. * The two companies will cross-license intellectual property. * Nortel and Microsoft will engage in early-stage integration and testing. * Nortel will deliver solutions that complement Microsoft's unified communications platform, including enterprise contact center applications, mission-critical telephony functions, advanced mobility capabilities and data networking infrastructure. 4) Go-to-market initiatives * Microsoft and Nortel will jointly sell the advanced unified communications solution and integration services. The plan is to develop a training and incentive program for the companies' sales teams. * Both companies will invest substantial resources in marketing, business development and delivery. * Microsoft and Nortel will build a joint channel ecosystem using both companies' systems integrator, reseller, and service provider relationships. * The two companies will develop a series of compelling solutions for a range of customers, including small and medium-sized business, large corporations and service providers. About Microsoft Headquartered in Redmond, Washington, Microsoft Corp. (Nasdaq: MSFT) provides software, services and solutions that help people and businesses realize their full potential. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on July 10, 2006, Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. As reported in the Troubled Company Reporter on June 20, 2006, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed $2 billion senior note issue; downgraded the $200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed $2 billion notes. The outlook is stable. NORTHWEST AIRLINES: Refinances Bank Obligations to Reduce Costs --------------------------------------------------------------- Northwest Airlines filed documents with the U.S. Bankruptcy Court for the Southern District of New York related to the refinancing of some of its existing bank obligations. The agreement will allow Northwest to refinance $1.125 billion of existing bank obligations at more favorable terms and provide access to $250 million in incremental liquidity. In addition, the airline is seeking Court approval, as part of the agreement, to allow this new facility to be converted to permanent exit financing, securing part of the debt financing the company will need to emerge from Chapter 11 reorganization. The availability of this facility to the company is subject to certain legal and financial requirements, including Bankruptcy Court approval and finalized and fully implemented permanent labor cost savings. To secure exit financing, in addition to court approval of the new facility agreement and realization of needed labor cost savings, the company must obtain a satisfactory resolution of its pension funding obligations and maintain minimum liquidity as part of an overall plan of reorganization. "Since beginning its restructuring last September, Northwest has remained focused on its plan to realize $2.5 billion in annual business improvements in order to return the airline to profitability on a sustained basis," Neal Cohen, executive vice president and chief financial officer, said. "This restructuring plan is centered on three goals: resizing and optimization of the airline's fleet to better serve Northwest's markets; realizing competitive labor and non-labor costs; and restructuring and recapitalization of the airline's balance sheet." "This proposed financing will allow Northwest to make additional progress on its goal of restructuring and recapitalizing its balance sheet by lowering its costs and improving the company's long-term liquidity." About Northwest Airlines Northwest Airlines Corporation (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. OCA INC: Hawaii Unit Files Schedules of Assets and Liabilities -------------------------------------------------------------- Orthodontic Centers of Hawaii, Inc, Oca, Inc.'s debtor-affiliate, delivered to the U.S. Bankruptcy Court for the Eastern District of Louisiana its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property C. Property Claimed as Exempt D. Creditors Holding Secured Claims $92,255,022 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Nonpriority Claims --- ----------- Total $0 $92,255,022 A copy of the 22-page document containing the schedules is available for free at http://ResearchArchives.com/t/s?e12 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 debtor-affiliates 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 $545,220,000 in total assets and $196,337,000 in total debts. OWENS CORNING: Confirmation Hearing Scheduled for September 18 -------------------------------------------------------------- The Honorable Judith K. Fitzgerald will commence a hearing to consider confirmation of the Revised Sixth Amended Plan at 9:00 a.m. prevailing Eastern Time, on Sept. 18, 2006. The Confirmation Hearing may be continued from time to time by the Court or the Debtors without further notice except an announcement made at the Hearing. Parties-in-interest have until 4:00 p.m., prevailing Eastern Time, on Sept. 1, 2006, to file objections to the confirmation of the Plan. Confirmation Objections must: -- be in writing; -- state with particularity the basis and nature of the claim or interest; -- state with particularity the basis and nature of each objection to confirmation of the Plan or proposed modification to the Plan; and -- be filed, together with proof of service, with the Court and served so that they are received no later than the Confirmation Objection Deadline by the: * Office of the Clerk U.S. Bankruptcy Court for the District of Delaware 824 Market Street, Third Floor Wilmington, Delaware, DE 19801; * co-counsel to the Debtors: Saul Ewing LLP 222 Delaware Avenue P.O. Box 1266 Wilmington, DE 19899 Attn: Norman L. Pernick, Esq.; Saul Ewing LLP Lockwood Place 500 E. Pratt Street Baltimore, MD 21202-3171 Attn: Jay A. Shulman, Esq.; and Sidley Austin LLP One South Dearborn Street Chicago, IL 60603 Attn: Larry J. Nyhan, Esq. James F. Conlan, Esq. and Jeffrey C. Steen, Esq.; * counsel to the Official Committee of Asbestos Creditors: Caplin & Drysdale Chartered 375 Park Avenue, 35th Floor New York, NY 10152-3500 Attn: Elihu Inselbuch, Esq.; Campbell & Levine, LLC 800 King Street, Suite 300 Wilmington, DE 19801 Attn: Marla Eskin, Esq.; * counsel to James J. McMonagle, Legal Representative for Future Claimants: Kaye Scholer LLP 425 Park Avenue New York, NY 10022 Attn: Andrew A. Kress, Esq.; and Young, Conaway, Stargatt & Taylor, LLP The Brandywine Building 1000 West Street, 17th Floor P.O. Box 391 Wilmington, DE 19899-0391 Attn: James L. Patton, Esq.; and * Office of the United States Trustee J. Caleb Boggs Federal Building, 2nd Floor 844 King Street Wilmington, DE 19801 Attn: David M. Klauder, Esq. All discovery relating to Plan confirmation will be completed by Aug. 31, 2006. Judge Fitzgerald sets the deadline for submitting: -- ballots or master ballots with respect to the Revised Sixth Amended Plan at 4:00 p.m., prevailing Eastern Time, on Sept. 1, 2006; -- reports tabulating votes with respect to the Plan, with the exception of Classes A7, I7 and B8, on Sept. 11, 2006; and -- reports tabulating votes with respect to Classes A7, I7 and B8, on Sept. 15, 2006. Since the filing of the Revised Sixth Amended Plan and Disclosure Statement, the Debtors added minor modifications to the Plan documents, including: -- revision of estimated recovery of certain claims and interests; and -- modifications that address objections to the Disclosure Statement, including: * sections entitled Baron & Budd Administrative Deposits and NSP Administrative Deposits, which now provides that Administrative Deposits and Investment Proceeds will be distributed by Depository Law Firms upon delivery of the appropriate releases; * additional language that provides for the reservation of rights of Century Indemnity Company, Central National Insurance Company of Omaha and Pacific Employers Insurance Company; * additional language that states that attorneys' fees of the Successor Trustee are to be paid if Class A11 Claims (and consequently MIPS holders) are entitled to Distribution; * additional language that provide for the payment of postpetition interest on allowed unsecured claims; and * modified language stating that the percentage of stock that would go to Class A11 under the FAIR Act scenario is increased so that MIPS holders alone would receive 5.5%. Judge Fitzgerald further authorizes the Debtors to make nonsubstantive changes to the Disclosure Statement, the Plan and related documents without further Court authorization. A full-text copy of the Debtors' Revised Sixth Amended Chapter 11 Plan as further modified on July 10, 2006, is available for free at http://ResearchArchives.com/t/s?e0d A full-text copy of the Debtors' Revised Sixth Amended Disclosure Statement as further modified on July 10, 2006, is available for free at http://ResearchArchives.com/t/s?e0e Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 136; Bankruptcy Creditors' Service, Inc., 215/945-7000) OWENS CORNING: Wants Okay on Century Indemnity, et al. Settlement ----------------------------------------------------------------- Owens Corning and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve a settlement agreement between Owens Corning, on one hand, and Century Indemnity Company, Central National Insurance Company of Omaha and Pacific Employers Insurance Company, on the other. Over the past 20 years, Owens Corning's liability insurers, including the Century Parties, have paid more than $2 billion toward the settlement and defense of asbestos claims. Owens Corning and the Century Parties are among the parties to the Wellington Agreement pursuant to which they agreed on a framework by which disputes relating to coverage for asbestos- related claims would be resolved. By the mid-1990s, Owens Corning had consumed the products limits of all of its insurance policies issued by subscribing insurers to the Wellington Agreement. The Century Parties assert that, because of their prior products payments, all applicable limits of the excess liability policies issued by the Century Parties have been fully exhausted. Parties' Disputes Owens Corning and the Century Parties disagree with respect to whether, and the extent to which, the Century Parties have further coverage obligations to Owens Corning. Owens Corning contends that the Century Parties continue to have coverage obligations with respect to asbestos-related non- products claims notwithstanding the exhaustion of the policies' products limits. The Century Parties argue that the alleged non- products claims are subject to the policy limits that have already been exhausted. Owens Corning has initiated two alternative dispute resolution proceedings against one or more of the Century Parties pursuant to the Wellington Agreement, by which Owens Corning sought coverage for non-products claims. The first proceeding was initiated on June 2, 2000, and is pending in the proceeding phase before Judge John A. Reed, Jr. The second proceeding was initiated on April 18, 2006, and is pending in the negotiation phase before Dean Edward Dauer. Owens Corning and the Century Parties also dispute whether Owens Corning is obligated to pay certain interest amounts to the Century Parties pursuant to the Wellington Agreement as a result of the timing of the products payments made by the Century Parties prior to the mid-1990s. An alternative dispute resolution was initiated by the Century Parties against Owens Corning on April 30, 1996, which was pending in the negotiation phase before Dean John D. Feerick when it entered a period of dormancy -- the Interest ADR. The Century Parties subsequently filed a proof of claim in the Debtors' Chapter 11 cases that advances a similar claim -- the Interest Claim. On June 23, 2006, Owens Corning and the Century Parties entered into the Settlement Agreement, which pact encompasses the parties' dispute concerning coverage for non-products claims, as well as their dispute concerning any interest obligations under the Wellington Agreement. The principal terms of the Settlement Agreement are: a. The Century Parties will pay an undisclosed amount in three installments to the Asbestos Personal Injury Trust after a Final Order is entered confirming the Sixth Amended Plan; b. Owens Corning and the Century Parties will release each other from: -- all claims arising under various policies issued by the Century Parties or their related entities to Owens Corning, including those policies that are the subject of the Non-Products ADRs; -- claims to coverage for asbestos-related claims under certain other policies issued by the Century Parties and their related entities; and -- all claims raised in the Interest Claim or relating to the Interest ADR; c. Key terms, including the payment terms, of the Settlement Agreement are contingent upon the entry of a Final Order confirming a Plan that includes an injunction pursuant to Section 524(g) of the Bankruptcy Code providing specified protection to the Century Parties and their related entities; d. Owens Corning will also use its reasonable best efforts to obtain other injunctive protections for the Century Parties as part of the Debtors' Plan under Section 105 or otherwise; e. In the event of entry of a Final Order confirming a Plan that does not satisfy the contingencies of the Settlement Agreement, the payment, release, injunctive and other provisions of the Agreement will become null and void, and the Parties and their affiliates will be fully restored to their rights and obligations under the policies that are the subject of the Settlement Agreement, the Wellington Agreement, and otherwise; and f. Owens Corning, upon payment of the Settlement Amount, will be deemed to have sold its rights, title, and interests in certain of the policies to the Century Parties pursuant to Section 363(f). The Debtors assert that the Settlement Amount, and timing of payment, are reasonable in light of the expenses, delays, developments, and risks of ongoing coverage proceedings, and the fact that Owens Corning's demands against the Century Parties were premised in part on assertions of future payment obligations by the Century Parties. Anna P. Engh, Esq., at Covington & Burling, in Washington, D.C., notes that Owens Corning has also agreed pursuant to the Settlement Agreement that Century Indemnity may be afforded the protections given to other insurers. Additionally, the Settlement Agreement partially addresses some issues respecting policies issued by certain of the Century Entities for periods commencing on or after Jan. 1, 2000. As to these Recent Policies, the Settlement includes a release as to asbestos-related claims. Otherwise, the Settlement contemplates that the parties will continue to work in good faith to try to resolve any claim and Plan-related issues they may have regarding the Recent Policies. Ms. Engh clarifies that although working towards resolution is contemplated by the Settlement Agreement, the Settlement is an independent, integrated contract, and any agreement definitively resolving issues relating to the Recent Policies will proceed separately. In accordance with the confidentiality provisions of the Settlement Agreement, the Debtors seek the Court's authority to file the Settlement Agreement under seal. Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 136; Bankruptcy Creditors' Service, Inc., 215/945-7000) PEP BOYS: Chief Executive Officer Larry Stevenson Resigns --------------------------------------------------------- The Pep Boys - Manny, Moe & Jack reported the resignation of CEO and Director Larry Stevenson. Non-executive Chairman Bill Leonard was named interim CEO. Mr. Leonard has served on Pep Boys' Board of Directors since 2002 and as its Chairman since February. From 1992 through his retirement in 2004, he served as an officer, and ultimately President & Chief Executive Officer of ARAMARK Corporation. "On behalf of the Board, I want to thank Larry for his efforts during the past three and a half years, particularly in strengthening our management team and improving our retail offering," said Mr. Leonard. He continued, "I look forward to working with our management and our more than 20,000 associates to realize the potential of the Pep Boys brand and national footprint." The Board has appointed a special committee to conduct a search among internal and external candidates for a permanent CEO. About Pep Boys Pep Boys (NYSE: PBY) -- http://www.pepboys.com/-- has 593 stores and more than 6,000 service bays in 36 states and Puerto Rico. Along with its vehicle repair and maintenance capabilities, the Company also serves the commercial auto parts delivery market and is one of the leading sellers of replacement tires in the United States. * * * As reported in the Troubled Company Reporter on Feb. 14, 2006, Standard & Poor's Ratings Services placed its ratings on Pep Boys- Manny, Moe & Jack, including its 'B-' corporate credit rating, on CreditWatch with developing implications. This action follows the company's announcement that it has hired Goldman, Sachs & Co. to explore strategic and financial alternatives. Standard & Poor's will monitor developments associated with this process to assess the implications for the ratings. PINNACLE ENT: Launches Offer for President Casinos' Issued Notes ---------------------------------------------------------------- Pinnacle Entertainment, Inc. commences a cash tender offer for any and all of the outstanding 12% Notes due 2001 (Cusip No. 740822AA9) and 13% Senior Exchange Notes due 2001 (Cusip No. 740848AF3) issued by President Casinos, Inc., on the terms and subject to the conditions set forth in its Offer to Purchase dated July 19, 2006. The Tender Offer will expire at 8:00 a.m., New York City Time, on Aug. 16, 2006, unless extended or earlier terminated. The Tender Offer is subject to a number of conditions, including a condition that AIG Global Investment Corp. and MacKay Shields LLC tender all Notes held of record, beneficially owned or controlled, either directly or indirectly, by each of them. AIG and MacKay have represented to the Company that together they hold or control over 80% of the original principal amount of the outstanding Notes and have agreed to tender and not withdraw all Notes that they hold or control. Once AIG and MacKay complete the tender of their Notes, the Company will promptly accept (assuming the conditions to the Tender Offer are satisfied or waived) and purchase Notes tendered prior to or on the Early Tender Date. Notes once tendered may not be withdrawn. Holders who validly tender their Notes, either prior to the Expiration Date or prior to the Early Tender Date, will receive the purchase price of $809.07 per $1,000 of original principal amount of the Notes. The aggregate original principal amount of the Notes that are currently outstanding is approximately $75 million. Due to previous distributions in the bankruptcy proceedings of President Casinos, Inc. and its affiliates, the actual claims associated with the Notes are less than the original principal amount of the outstanding Notes. The claims associated with the Notes are believed to be no greater than the Purchase Price being offered by the Company in the Tender Offer. The aggregate Purchase Price under this Tender Offer, assuming that the Tender Offer is fully subscribed, is $60.7 million. Payment for the Notes will be made promptly after the Early Tender Date or the Expiration Date. The Company's obligation to accept Notes tendered and to pay the Purchase Price is subject to a number of conditions, including the condition relating to the tender of the AIG and MacKay Notes, which are set forth in the Offer to Purchase and the Letter of Transmittal for the Tender Offer. HSBC Bank USA, National Association, is the depositary agent in connection with the Tender Offer. D.F. King & Co., Inc. is the information agent for the Tender Offer. Requests for copies of the Offer to Purchase and Letter of Transmittal should be directed to the information agent at (800) 967-7635. About President Casinos Headquartered in St. Louis, Missouri, President Casinos Inc. -- http://www.presidentcasino.com/-- currently owns and operates a dockside gaming casino in St. Louis, Missouri through its wholly owned subsidiary, President Missouri. The Debtor filed for chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No. 02-53055). On July 11, 2002, substantially all of Debtor's other operating subsidiaries filed for chapter 11 protection in the same Court. The Honorable Judge Edward Gaines ordered the transfer of President Casino's chapter 11 cases from Mississippi to Missouri. The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No. 02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn LLP, represents the Debtors in their restructuring efforts. David A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP, represents the Official Committee of Unsecured Creditors. The Company's balance sheet at Nov. 30, 2005 showed assets totaling $66,292,000 and debts totaling $75,531,000. About Pinnacle Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc. (NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates casinos in Nevada, Louisiana, Indiana and Argentina, owns a hotel in Missouri, receives lease income from two card club casinos in the Los Angeles metropolitan area, has been licensed to operate a small casino in the Bahamas, and owns a casino site and has significant insurance claims related to a hurricane-damaged casino previously operated in Biloxi, Mississippi. Pinnacle opened a major casino resort in Lake Charles, Louisiana in May 2005 and a new replacement casino in Neuquen, Argentina in July 2005. * * * As reported in the Troubled Company Reporter on May 24, 2006, Standard & Poor's Ratings Services revised its CreditWatch implications on Las Vegas-based casino owner and operator Pinnacle Entertainment Inc. to positive from negative. As reported in the Troubled Company Reporter on March 20, 2006, Moody's Investors Service placed the ratings of Pinnacle Entertainment, Inc. on review for possible upgrade. Pinnacle ratings affected include its B2 corporate family rating, B1 senior secured bank loan rating, and Caa1 senior subordinated debt rating. As reported in the Troubled Company Reporter on Mar. 15, 2006, Fitch Ratings has placed the ratings of Pinnacle Entertainment on Rating Watch Negative. The ratings affected include 'B' issuer default rating; 'BB/RR1' senior secured credit facility rating; and 'CCC+/RR6' senior subordinated note rating. PLATFORM LEARNING: Court Gives Interim Nod on Herrick as Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Platform Learning, Inc., on an interim basis, to employ Herrick, Feinstein LLP as bankruptcy counsel, nunc pro tunc to June 21, 2006. As reported in the Troubled Company Reporter on July 13, 2006, Herrick Feinstein will: a) provide legal advice with respect to the Debtor's powers and duties as a debtor-in-possession in the continued operation of its business and management of its property; b) take necessary actions to protect and preserve the Debtor's estate, including the prosecution and defense of actions commenced for or against the Debtor; c) prepare necessary applications, motions, answers, orders, reports and other legal papers on behalf of the Debtor; d) appear in Court to protect the interests of the Debtor before the Court; e) attend meetings and negotiations with creditor representatives and other parties in interest and advise concerning the general conduct of the case; f) negotiate and prepare on the Debtor's behalf, plans, disclosure statements and all related documents, and take any action required on the Debtor's behalf to obtain confirmation of its plans; and g) perform all other legal services for the Debtor which may be necessary and proper in the Debtor's case and its proceedings. In addition, the Firm will to consult with the Debtor in connection with: 1) any actual or potential transaction involving the Debtor; and 2) the financial and other business matters relating to the ongoing activities of the Debtor. The Firm will also attend and participate in any of the creditors' committee hearings. Eric W. Sleeper, Esq., a member at Herrick Feinstein, tells the Court that the Firm's professional fees: Professional Hourly Rate ------------ ----------- Andrew C. Gold, Esq. $600 Eric W. Sleeper, Esq. $525 Paul Rubin, Esq. $525 David M. Bass, Esq. $475 John M. August, Esq. $450 About Platform Learning Based in Broad Street, New York, Platform Learning Inc. -- http://www.platformlearning.com/-- provides comprehensive supplemental educational services through their Learn-to-Succeed tutoring program to students attending public schools that are "in need of improvement." The Debtor works together with parents, schools, community organizations, and local educators to implement their research- based program, which ensures that all children can become successful students by providing appropriate support, motivation and curriculum tailored to their individual needs. The Company filed for chapter 11 protection on June 21, 2006 (Bankr. S.D.N.Y. Case No. 06-11391). Andrew C. Gold, Esq., Eric W. Sleeper, Esq., Paul Rubin, Esq., David M. Bass, Esq., and John M. August, Esq., at Herrick, Feinstein LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $21,026,148, and total debts of $36,933,490. PLATFORM LEARNING: Wants Argus Management as Financial Advisor -------------------------------------------------------------- Platform Learning Inc. asks the U.S. Bankruptcy Court for the Southern District of New York for authority to employ Argus Management Corp. as its financial advisor and chief financial officer, nunc pro tunc to June 21, 2006. Argus Management will: a) render accounting assistance and review cash and other projections, reports and statements of receipts, disbursements, and indebtedness, and various other submissions the Court may require; b) manage and oversee the process of securing the Debtor's post petition financing; c) monitor and assist in the collection of accounts receivable and the sale of other assets; d) identify and contact potential buyers of the Debtor's assets, and assist with due diligence inquiries; e) evaluate and discuss offers with Debtor's management and legal counsel to purchase and negotiate final and agreeable terms and conditions with buyers; f) work with creditors' accountants and other financial consultants in an effort to reach agreement with respect to the final disposition of this case; g) provide expert testimony as required; and h) assist with other matters as Debtor's management or legal counsel and the Firm may agree to from time to time. Thomas B. Doherty, a member of Argus Management, tells the Court that the Firm's professionals bill: Professional Hourly Rate ------------ ----------- Thomas B. Doherty $350 Lawton Bloom $250 Peter Armanetti $195 Sharon Koh $185 Staff and Associates $150 - $185 Mr. Doherty assures the Court that the Firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. About Platform Learning Based in Broad Street, New York, Platform Learning Inc. -- http://www.platformlearning.com/-- provides comprehensive supplemental educational services through their Learn-to-Succeed tutoring program to students attending public schools that are "in need of improvement." The Debtor works together with parents, schools, community organizations, and local educators to implement their research-based program, which ensures that all children can become successful students by providing appropriate support, motivation and curriculum tailored to their individual needs. The Company filed for chapter 11 protection on June 21, 2006 (Bankr. S.D.N.Y. Case No. 06-11391). Andrew C. Gold, Esq., Eric W. Sleeper, Esq., Paul Rubin, Esq., David M. Bass, Esq., and John M. August, Esq., at Herrick, Feinstein LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $21,026,148, and total debts of $36,933,490. PLIANT CORP: Asks Court to Approve EPA Settlement Agreement ----------------------------------------------------------- Pliant Corporation and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for permission to enter into a Settlement Agreement with the U.S. Environmental Protection Agency. EPA Investigation EPA is conducting an ongoing investigation to determine the parties responsible for leaving several thousand drums containing varying hazardous and solid wastes at a waste transfer facility located near Atlanta, Georgia. To this end, the EPA asked Pliant Corporation and its debtor- affiliates for information relating to materials that they may have shipped to the Site. The Debtors responded to the EPA's request in June 2005. The EPA found that before the Debtors filed for bankruptcy, their Washington, Georgia facility sent numerous containers consisting of mostly non-hazardous ink waste, ink wastewater, and some waste oil to the Site. The EPA identified the Debtors as one of more than 100 potentially responsible parties for the site contamination. Consequently, the Debtors are potentially liable for the clean up of the Site under the Comprehensive Environmental Response, Compensation, and Liability Act as provided for in 42 U.S.C. Section 9607 (2002). The EPA asserted claims against the PRPs for past and future costs related to the clean-up of the Site. EPA Settlement To resolve EPA's Claims, the EPA and the PRPs negotiated an arm's-length settlement. Under the Settlement, the EPA will: (i) release the Debtors for any potential liability associated with past costs it incurred totaling $2,600,000; (ii) release the Debtors for any potential liability for 54% of the oversight costs that non-participating PRPs may be required to pay; and (iii) provide the Debtors with contribution protection from a claim by any party who may be sued by the EPA for the costs. A full-text copy of the Settlement between the PRPs and the EPA is available for free at http://ResearchArchives.com/t/s?e0f Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, notes that if the Settlement is not approved, the EPA could pursue an enforcement action against the Debtors based on the provisions of the CERCLA. "The Debtors desire to resolve the issues raised by EPA in order to avoid a potential enforcement action and the costs, expenses, and uncertainty associated with the action," Mr. Brady explains. Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy counsel. The Ontario Superior Court of Justice named RSM Richter, Inc., as the Debtors' information officer in their restructuring proceeding under Companies Creditors Arrangement Act in Canada. Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C., serves as counsel to the Official Committee of Unsecured Creditors. Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is local counsel to the Creditors' Committee. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. The Debtors emerged from chapter 11 protection on July 19, 2006 (Pliant Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) PLIANT CORP: Ontario Court Rules Ch. 11 Plan Effective in Canada ---------------------------------------------------------------- RSM Richter, Inc., tells the Ontario Superior Court of Justice - Commercial List that under the Debtors' Fourth Amended Joint Plan of Reorganization: (i) all known Canadian creditors, employees and retirees are classified as Class 6 General Unsecured Creditors; and (ii) there may be at least one Canadian holding certain Pliant US common stock. RSM Richter is the information officer of Pliant Corporation of Canada Ltd., Pliant Packaging of Canada, LLC, and Uniplast Industries Co. Richter adds that the Debtors are in the process of finalizing exit financing arrangements. Class 6 claims are to be paid in full in the ordinary course and accordingly, are not impaired, Richter says. Payment of and obligations in respect of retiree benefits are also unaffected and unimpaired. The Fourth Amended Plan also provides continuance of the Debtors' obligations under all employment and severance contracts and policies, and all compensation and benefit plans applicable to their employees, retirees, and non-employee directors, Richter assures the Ontario Court. Stockholder interests are impaired and classified based on the nature of the stockholdings. Holders of outstanding common stock and Series A preferred stock will receive shares of New Pliant, Richter says. The quantum and class of stock to be received depends on those currently held. Holders of outstanding common stock and Series A preferred stock of Pliant US will receive a combined total of approximately 70% of the New Common Stock. Richter relates that the Fourth Amended Plan cannot be consummated unless and until, inter alia: (i) the Confirmation Order confirming the Plan has been entered by the United States Bankruptcy Court for the District of Delaware; (ii) the Confirmation Order has been recognized by the Ontario Court; and (iii) the Exit Facility Credit Agreement and all related documents provided for or contemplated in the Agreement have been executed and delivered by all parties, and all conditions precedent have been satisfied. Accordingly, Richter asks the Ontario Court to recognize the order confirming the Debtors' Fourth Amended Plan entered by the U.S. Bankruptcy Court for the District of Delaware on June 23, 2006. Richter assures the Ontario Court that sufficient notice was provided with respect to the Plan and its implication to Canadian stakeholders, and that it has not received any complaints or concerns from Canadian creditors or stakeholders regarding the Plan. Court Order The Ontario Court entered an order recognizing the U.S. Bankruptcy Court's June 23, 2006 Confirmation Order. The Ontario Court rules that the Fourth Amended Plan of Reorganization will be implemented and effective in Canada. According to Joseph P. Van Tassel, registrar of the Ontario Superior Court of Justice, no person or entity will, after the Effective Date, accelerate, terminate, rescind to perform or otherwise repudiate its obligations or force or exercise any rights under or in respect of any obligation or agreement by reason: (a) of any non-compliance with any agreement or any events which occurred on or before January 3, 2006 which would have entitled any party to enforce those rights or remedies all of which defaults or non-compliance will be deemed to have been waived; (b) of any and all notices of defaults and demands for payment under any agreement made on or before January 3, 2006, all of which will be deemed to be of no further force and effect; (c) that Pliant Corporation of Canada, Ltd., Pliant Packaging of Canada, LLC, and Uniplast Industries Co. have sought or obtained relief under the Companies Creditors Arrangement Act, R.S.C. 1985, c.C-36, as amended; (d) of the effect on the Companies of the completion of any transaction described; or (e) of any compromises effective pursuant to the Fourth Amended Plan. Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy counsel. The Ontario Superior Court of Justice named RSM Richter, Inc., as the Debtors' information officer in their restructuring proceeding under Companies Creditors Arrangement Act in Canada. Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C., serves as counsel to the Official Committee of Unsecured Creditors. Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is local counsel to the Creditors' Committee. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. The Debtors emerged from chapter 11 protection on July 19, 2006 (Pliant Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) PREFERRED VOICE: Philip Vogel Expresses Going Concern Doubt ----------------------------------------------------------- Philip Vogel & Co. PC expressed substantial doubt about Preferred Voice Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended March 31, 2006 and 2005. The auditing firm pointed to the Company's recurring losses from operations. Preferred Voice's balance sheet at March 31, 2006 showed $1,084,982 in total assets and $980,938 in total liabilities resulting to a total stockholders' equity of $104,044. The Company's balance sheet also showed total current assets of $419,858 and total current liabilities of $290,882. For the year ended March 31, 2006, the Company reported net loss of $1,239,731 from $1,188,083 in revenues. A full-text copy of the Company's financial report for the year ended March 31, 2006 is available for free at: http://researcharchives.com/t/s?df9 Based in Dallas, Texas, Preferred Voice Inc. integrates and markets services to phone companies, to complement their overall package of voice services. PRESIDENT CASINOS: Pinnacle Offers to Buy Back Issued Notes ----------------------------------------------------------- Pinnacle Entertainment, Inc. commences a cash tender offer for any and all of the outstanding 12% Notes due 2001 (Cusip No. 740822AA9) and 13% Senior Exchange Notes due 2001 (Cusip No. 740848AF3) issued by President Casinos, Inc., on the terms and subject to the conditions set forth in its Offer to Purchase dated July 19, 2006. The Tender Offer will expire at 8:00 a.m., New York City Time, on Aug. 16, 2006, unless extended or earlier terminated. The Tender Offer is subject to a number of conditions, including a condition that AIG Global Investment Corp. and MacKay Shields LLC tender all Notes held of record, beneficially owned or controlled, either directly or indirectly, by each of them. AIG and MacKay have represented to the Company that together they hold or control over 80% of the original principal amount of the outstanding Notes and have agreed to tender and not withdraw all Notes that they hold or control. Once AIG and MacKay complete the tender of their Notes, the Company will promptly accept (assuming the conditions to the Tender Offer are satisfied or waived) and purchase Notes tendered prior to or on the Early Tender Date. Notes once tendered may not be withdrawn. Holders who validly tender their Notes, either prior to the Expiration Date or prior to the Early Tender Date, will receive the purchase price of $809.07 per $1,000 of original principal amount of the Notes. The aggregate original principal amount of the Notes that are currently outstanding is approximately $75 million. Due to previous distributions in the bankruptcy proceedings of President Casinos, Inc. and its affiliates, the actual claims associated with the Notes are less than the original principal amount of the outstanding Notes. The claims associated with the Notes are believed to be no greater than the Purchase Price being offered by the Company in the Tender Offer. The aggregate Purchase Price under this Tender Offer, assuming that the Tender Offer is fully subscribed, is $60.7 million. Payment for the Notes will be made promptly after the Early Tender Date or the Expiration Date. The Company's obligation to accept Notes tendered and to pay the Purchase Price is subject to a number of conditions, including the condition relating to the tender of the AIG and MacKay Notes, which are set forth in the Offer to Purchase and the Letter of Transmittal for the Tender Offer. HSBC Bank USA, National Association, is the depositary agent in connection with the Tender Offer. D.F. King & Co., Inc. is the information agent for the Tender Offer. Requests for copies of the Offer to Purchase and Letter of Transmittal should be directed to the information agent at (800) 967-7635. About Pinnacle Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc. (NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates casinos in Nevada, Louisiana, Indiana and Argentina, owns a hotel in Missouri, receives lease income from two card club casinos in the Los Angeles metropolitan area, has been licensed to operate a small casino in the Bahamas, and owns a casino site and has significant insurance claims related to a hurricane-damaged casino previously operated in Biloxi, Mississippi. Pinnacle opened a major casino resort in Lake Charles, Louisiana in May 2005 and a new replacement casino in Neuquen, Argentina in July 2005. About President Casinos Headquartered in St. Louis, Missouri, President Casinos Inc. -- http://www.presidentcasino.com/-- currently owns and operates a dockside gaming casino in St. Louis, Missouri through its wholly owned subsidiary, President Missouri. The Debtor filed for chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No. 02-53055). On July 11, 2002, substantially all of Debtor's other operating subsidiaries filed for chapter 11 protection in the same Court. The Honorable Judge Edward Gaines ordered the transfer of President Casino's chapter 11 cases from Mississippi to Missouri. The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No. 02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn LLP, represents the Debtors in their restructuring efforts. David A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP, represents the Official Committee of Unsecured Creditors. The Company's balance sheet at Nov. 30, 2005 showed assets totaling $66,292,000 and debts totaling $75,531,000. QUIGLEY COMPANY: Court Approves Paul Street Employment Agreement ---------------------------------------------------------------- The Honorable Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York approved the employment agreement between Quigley Company, Inc., and Paul A. Street. Mr. Street has served as the Debtor's president and chairman of the board of directors since May 2003. The Debtor and Mr. Street entered into the Street Agreement in May 2004 for the purpose of continuing to retain Mr. Street's services as the Debtor prepared for and then commenced its chapter 11 case. The Street Agreement expired on May 10, 2006. As approved by the Court, the Debtor's board of directors resolved to extend Mr. Street's retention for an additional one-year term. During the term, Mr. Street will receive executive annual compensation of $900,000, with equal monthly installments of $75,000, payable in advance on the first day of the month for his services to the Debtor. Headquartered in Manhattan, Quigley Company, Inc., is a subsidiary of Pfizer, Inc., which used to produce and market a broad range of refractories and related products to customers in the iron, steel, glass and other industries. The Company filed for chapter 11 protection on Sept. 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) to resolve legacy asbestos-related liability. Michael L. Cook, Esq., Lawrence V. Gelber, Esq., and Jessica L. Fainman, Esq., at Schulte Roth & Zabel LLP, represent the Company in its restructuring efforts. Albert Togut, Esq., at Togut Segal & Segal serves as the Futures Representative. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $155,187,000 in total assets and $141,933,000 in total debts. QUIGLEY COMPANY: Court Extends Removal Period to October 4 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended, until Oct. 4, 2006, the period within which Quigley Company, Inc., can remove civil actions. Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, informs the Court that the Debtor has been actively involved in proposing and soliciting acceptances of a chapter 11 plan and, more recently, engaging in discovery disputes regarding, and responding to objections to, the Debtor's proposed procedures for tabulating the votes on the plan cast by asbestos personal injury claimants. Mr. Cook believes that the extension will provide the Debtor more time to review its pending litigation to determine whether it makes sense to remove some or all of those actions to federal court. Headquartered in Manhattan, Quigley Company, Inc., is a subsidiary of Pfizer, Inc., which used to produce and market a broad range of refractories and related products to customers in the iron, steel, glass and other industries. The Company filed for chapter 11 protection on Sept. 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) to resolve legacy asbestos-related liability. Michael L. Cook, Esq., Lawrence V. Gelber, Esq., and Jessica L. Fainman, Esq., at Schulte Roth & Zabel LLP, represent the Company in its restructuring efforts. Albert Togut, Esq., at Togut Segal & Segal serves as the Futures Representative. Elihu Inselbuchm Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $155,187,000 in total assets and $141,933,000 in total debts. REFCO INC: Chapter 11 Trustee Inks Settlement Pact with Rogers Raw ------------------------------------------------------------------ An agreement was reached between Marc S. Kirschner, as chapter 11 trustee for Refco Capital Markets, Ltd., and representatives for Rogers International Raw Materials Fund, L.P. and Rogers Raw Materials Fund, L.P. that will bring the claims of the two funds into the settlement agreement reported by Mr. Kirschner on June 30, 2006. On Oct. 24, 2005, one week after the Refco chapter 11 filings, the Rogers Funds filed a complaint in the bankruptcy court seeking a constructive trust over $364 million in cash and securities that the funds claimed were wrongfully diverted from Refco, LLC, a once active commodity broker registered with the CFTC, to RCM, an unregulated Bermuda unit of Refco, Inc. The settlement, which involves RCM customers who hold securities accounts and foreign-exchange accounts, will provide that the Rogers Funds shall receive the same treatment as the claims of securities customers at RCM. Under the settlement, Mr. Kirschner has said that securities customers would initially recover 70% of the value of their claims and foreign-exchange customers would initially recover 26% of the value of their claims. Future recoveries would depend on Mr. Kirschner's success at pursuing claims against other Refco entities and third parties. Importantly for the Rogers funds, the settlement of the funds' claims against RCM would be without prejudice to the right of the funds to assert the full amount of their claims against any other party, including Refco, LLC, which is in a chapter 7 liquidation proceeding. The settlement remains subject to bankruptcy court approval at a hearing scheduled for Aug. 16, 2006. "The settlement with RCM is in the best interests of the Rogers funds and their investors," said Walter T. Price, C.E.O. of Beeland Management Company, L.L.C., the operator of the two funds. "First, it should keep RCM in a chapter 11 proceeding under the expert guidance of Marc Kirschner, who we fully support as chapter 11 trustee. Second, it provides for a return of at least 70%, possibly more, on our claims at RCM. Finally, it fully preserves our claims against Refco, LLC, which wrongfully diverted the funds' cash and securities on the eve of the Refco bankruptcy filing." With respect to the Rogers funds' claims against Refco, LLC, Mr. Price stated that the Rogers funds are willing to sit down with Albert Togut, the chapter 7 trustee for Refco, LLC, to work out a resolution of those claims, but are prepared to bring their claims to trial if no deal can be reached. On June 30, 2006, Mr. Kirschner announced that he had reached the settlement agreement between RCM securities and foreign-exchange customers. By the terms of the settlement agreement, if the Rogers funds did not agree to join the settlement within 14 days, Mr. Kirschner would have been required to promptly file papers with the bankruptcy court asking that the court convert the RCM chapter 11 case to a chapter 7 stockbroker liquidation case. Mr. Kirschner would still have been able to seek bankruptcy court approval of the settlement agreement, though there are doubts that such a settlement could have been approved in a stockbroker liquidation proceeding. About Refco Inc. Based in 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. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000). REVLON CONSUMER: Lender Support Cues Additional $25 Million Add-On ------------------------------------------------------------------ Revlon, Inc., disclosed that due to the positive support from the lender group, the proposed term loan add-on to Revlon Consumer Products Corporation's existing $700 million term loan facility would be increased by an additional $25 million to a total add-on of $100 million. As reported in the Troubled Company Reporter on July 14, 2006, Revlon Consumer sought an amendment to its bank credit agreement, dated July 9, 2004, that would increase the existing $700 million term loan facility under the Credit Agreement by $75 million. The Company intends to use the net proceeds from the term loan add-on for general corporate purposes. The proposed credit agreement amendment is expected to be consummated in late July 2006, subject to market and other customary conditions, including receipt of consents from the appropriate lenders. There can be no assurances that this transaction will be consummated. Revlon, Inc. (NYSE:REV) -- http://www.revloninc.com/-- is a worldwide cosmetics, skin care, fragrance, and personal care products company. The Company's vision is to deliver the promise of beauty through creating and developing the most consumer preferred brands. The Company's brands include Revlon(R), Almay(R), Vital Radiance(R), Ultima(R), Charlie(R), Flex(R), and Mitchum(R). Revlon Consumer Products Corporation is Revlon, Inc.'s wholly-owned operating subsidiary. As reported in the Troubled Company Reporter on July 14, 2006, Standard & Poor's Ratings Services revised its outlook on New York-based Revlon Consumer Products Corp. to negative from stable, following its proposed $75 million add-on term loan, and affirmed its 'B-' rating and its recovery rating of '2' on Revlon's existing senior secured term loan facilities that will now total $775 million. The 'B-' bank loan rating remains at the same level as the corporate credit rating; this and the '2' recovery rating indicate that the secured lenders can expect substantial (80%- 100%) recovery of principal in the event of default. Net proceeds from the $75 million add-on term loan will be used for general corporate purposes. The bank loan rating and accompanying analysis are based on preliminary documentation and are subject to review once final documentation has been received. RIVERSTONE: Equity Panel Hires Poovayya as Special Counsel ---------------------------------------------------------- The Honorable Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware gave the Official Committee of Equity Security Holders of Riverstone Networks, Inc., and its debtor- affiliates, authority to retain Poovayya & Co., as its special counsel. The Equity Committee tells the Court that the services of Poovayya is necessary in order for the Equity Committee to adequately monitor and assist with matters concerning the Debtors' business and transfer of business in India. Poovayya is expected to: a. review and analyze documents and issues concerning Indian legal matters, b. assist in expediting Indian matters, and c. provide advice to the Equity Committee concerning all issues relating to Indian law. The Equity Committee says that Anindita Phukan, Esq., a member of Poovayya, will be the lead counsel and bills $150 per hour. The Equity Committee assures the Court that Poovayya does not hold or represent interest adverse to the Debtors' estates. Based in Santa Clara, California, Riverstone Networks, Inc. -- http://www.riverstonenet.com/-- provides carrier Ethernet infrastructure solutions for business and residential communications services. The company and four of its affiliates filed for chapter 11 protection on Feb. 7, 2006 (Bankr. D. Del. Case Nos. 06-10110 through 06-10114). Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, represent the Debtors. Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP, represents the Official Committee of Unsecured Creditors. The firm Brown Rudnick Berlack Israels LLP serves as counsel to the Official Committee of Equity Security Holders. As of Dec. 24, 2005, the Debtors reported assets totaling $98,341,134 and debts totaling $130,071,947. The Plan is scheduled for review by the Bankruptcy Court in mid-September and distributions to creditors and stockholders are expected to be made by the end of September. SAINT VINCENTS: Aptium Can File Claims Until August 31 ------------------------------------------------------ In a stipulation approved by the U.S. Bankruptcy Court for the Southern District of New York, Aptium W. New York, Inc., Saint Vincents Catholic Medical Centers of New York and its debtor- affiliates agree to further extend Aptium's time to file a claim against the Debtors through Aug. 31, 2006. Aptium, formerly known as Comprehensive Cancer Care Corporation of New York, Inc., and Saint Vincent Catholic Medical Centers entered into a Second Amended and Restated Consulting and Administrative Services Agreement dated as of April 11, 1996, whereby Aptium provides development, consulting, and administrative and other services to SVCMC with respect to the operation of SVCMC's outpatient cancer center. The parties further entered into an integrated sublease dated Jan. 27, 1997, whereby Aptium subleases space for the cancer center to SVCMC. To secure the payment of fees due to Aptium under the Services Agreement, SVCMC granted to Aptium a security interest in these collateral: (i) all Program Revenue; (ii) accounts receivable, contract rights, rights to receive payment, claims, entitlements, and other rights which are a part of, which arise out of, or which result from the Program Revenue; and (iii) any related proceeds. Aptium filed a UCC-1 Financing Statement with the New York Department of State on June 12, 2003, to evidence its liens and security interests in the Aptium Prepetition Collateral. As of July 5, 2005, Aptium's Prepetition Liens extended to, and covered, the Aptium Prepetition Collateral. The actual value of Aptium's Prepetition Lien will depend on the extent to which the Aptium Prepetition Collateral is actually collected postpetition. The parties are in negotiations concerning an amendment of the Services Agreement and changes in its interpretation and Implementation. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 29 Bankruptcy Creditors' Service, Inc., 215/945-7000) SEA CONTAINERS: Closes $585 Million Silja Sale to Tallink Grupp --------------------------------------------------------------- Sea Containers Ltd. has completed the sale of its Baltic ferry subsidiary Silja Oy Ab to Estonian ferry operator AS Tallink Grupp. The sale was subject to receipt of regulatory approvals from Finnish, Swedish and Estonian competition authorities, all of which have been granted. The consideration for the sale of Silja's core business is $563 million and five million ordinary shares in Tallink, equivalent to $22 million. Corporate approval was given by Tallink shareholders at an EGM on June 22, 2006. The transaction does not include Silja's fast ferry services from Helsinki, Finland to Tallinn, Estonia and the two SuperSeaCat ferries, which will be retained by Sea Containers and operated as a stand-alone business under the SuperSeaCat brand name. The sale of Silja will be used to pay approximately $503 million related bank debt. About Sea Containers London-based Sea Containers -- http://www.seacontainers.com/-- engages in passenger and freight transport and marine container leasing. The Bermuda registered company is primarily owned by U.S. shareholders and its common shares have been listed on the New York Stock Exchange (SCRA and SCRB) since 1974. * * * In June 2006, Moody's Investors Service downgraded the senior unsecured ratings and confirmed the senior secured rating of Sea Containers -- Senior Unsecured to Caa3, Senior Secured at B3. The outlook is negative. The downgrades were due to the increased probability of a payment default following Sea Containers' disclosure that it is unable to confirm whether it will pay the $115 million principal amount of 10-3/4% senior unsecured notes due October 2006. As reported in the Troubled Company Reporter on May 4, 2006, Standard & Poor's Ratings Services lowered its ratings on Sea Containers, including lowering the corporate credit rating to 'CCC-' from 'CCC+'. All ratings remain on CreditWatch with negative implications. The rating action followed the company's announcement that it is continuing to evaluate a range of strategic and financial alternatives, including the "appropriate level of debt capacity, with the intent to engage the public note holders and other stakeholders." SECUNDA INT'L: Prices $125 Million Senior Notes Tender Offer ------------------------------------------------------------ Secunda International Limited declares certain pricing terms of its tender offer and consent solicitation for any and all of its Senior Secured Floating Rate Notes due 2012 (CUSIP No. 81370FAB4) under the Offer to Purchase and Consent Solicitation Statement dated June 27, 2006. As of 5:00 p.m., New York City time, on July 12, 2006, tenders and consents had been received from holders of $125 million in aggregate principal amount of the Notes, representing 100% of the outstanding Notes. The "Tender Offer Yield" is 5.658%, which was determined by reference to a fixed spread of 50 basis points over the yield of the 2-3/8% U.S. Treasury Note due Aug. 31, 2006, calculated at 2:00 p.m., New York City time, on July 14, 2006. Based on the currently estimated initial settlement date, which is July 20, 2006, and the interest rate for the next interest period, which is 13.50688%, the total consideration for each $1,000 principal amount of Notes validly tendered and not withdrawn prior to the Consent Time of July 12, 2006 would be $1,048.64, which includes a consent payment of $30 per $1,000 principal amount of Notes. Holders whose Notes were validly tendered and not withdrawn on or before the Consent Time and are accepted for purchase by Secunda International will receive accrued and unpaid interest on the Notes up to, but not including, the initial settlement date for the Offer, which will be after the Consent Time but no earlier than July 20, 2006, as specified by the company. The tender offer remains open and is scheduled to expire at 5:00 p.m., New York City time, on July 28, 2006, unless extended or earlier terminated. The Offer is subject to the satisfaction of certain conditions, including: -- the receipt of tenders from holders of a majority in principal amount of the outstanding Notes; -- entering into a new credit facility or another financing vehicle that provides the company with sufficient cash to fund the tender offer and consent solicitation; -- the successful pricing of the initial public offering of the company's common shares in Canada; and -- satisfaction of customary conditions. The complete terms and conditions of the Offer are described in the Offer to Purchase, copies of which may be obtained by contacting the information agent for the offer at: D.F. King and Co., Inc., Tel: (212) 269-5550 (collect) (800) 758-5378 (U.S. toll-free) Additional information concerning the tender offer and consent solicitation may be obtained by contacting the exclusive dealer manager and solicitation agent for the tender offer and consent solicitation at: Banc of America Securities LLC High Yield Special Products Tel: (212) 847-5836 (collect) (888) 292- 0070 (U.S. toll-free) The supplemental indenture effecting the proposed amendments to the indenture governing the Notes will be executed promptly. The proposed amendments, however, will become operative only when the Company pursuant to the terms of the Offer accepts the validly tendered Notes for purchase. In accordance with the terms of the Offer, tendered Notes may no longer be withdrawn and delivered consents may not be revoked, unless the company makes a material change to the terms of the Offer or is otherwise required by law to permit withdrawal or revocation. About Secunda International Based in Nova Scotia, Canada, Secunda International Limited -- http://www.secunda.com/--provides supply and support services to the offshore oil and gas industry internationally. The Company currently owns and operates a fleet of 14 harsh-weather, multifunctional marine vessels that provide supply, support and safety services to offshore exploration, development, production and subsea construction projects. * * * As reported in the Troubled Company Reporter on June 29, 2006, Standard & Poor's Ratings Services held its 'B-' long-term corporate credit and senior secured debt ratings on offshore support vessel provider Secunda International Inc. on CreditWatch with positive implications, where they were placed Sept. 29, 2005. SILICON GRAPHICS: Court Approves Stipulation Modifying Stay ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approves the stipulation between Silicon Graphics, Inc., its debtor-affiliates and Christie Digital Systems USA, Inc. As reported in the Troubled Company Reporter on July 13, 2006, the Parties stipulated that: -- the automatic stay was modified solely to permit Christie Digital to serve a notice of non-renewal of the Master Subcontract Agreement. The provisions prohibiting Christie Digital to collect, assess, or recover any prepetition claim from the Debtors or the Debtors' estates will remain in full force and effect; -- the terms of the Subcontracts remained in full force and\ each party remains fully obligated to complete all of its obligations as and when due under the Subcontracts and obligations under the Master Agreement that survive its expiration; -- notwithstanding the date on which the stipulation became a final order: (a) Christie Digital's Motion will be deemed a timely, sufficient and proper notice to the Debtors of its intention not to extend the Master Agreement beyond the July 31, 2006 expiration date; and (b) the Master Agreement will not be, and is not, extended past the Expiration Date. As reported in the Troubled Company Reporter on June 26, 2006, Christie Digital asked the Court to lift the automatic stay to exercise its contractually protected right to confirm that it has elected not to renew the Master Agreement by providing a written notice required by the Master Agreement. In March 2005, Christie Digital and the Debtors entered into a Master Subcontract Agreement, which provides basic, general terms for future projects that the parties might, in the future, consider entering into together. Under the projects, the Debtors were the prime subcontractor and Christie Digital was a secondary subcontractor. Edward H. Tillinghast, III, Esq., at Sheppard, Mullin, Richter & Hampton LLP, in New York, related that the Master Agreement did not require Christie Digital or the Debtors to enter into any subcontracts with each other. The Master Agreement itself was not a contract for any specific project. 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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) SILICON GRAPHICS: LSI Logic, et al.'s Demands Return of All Goods ----------------------------------------------------------------- LSI Logic Corporation, Engenio Information Technologies, Inc., Engenio Information Technologies Europe Limited, and their subsidiaries and affiliated entities, delivered goods to Silicon Graphics, Inc. In accordance with the Uniform Commercial Code and Section 546(c) of the Bankruptcy Code, LSI demands immediate return of all goods received by Silicon Graphics, Inc., and its debtor-affiliates within the 45 days preceding the bankruptcy filing. According to Thomas M. Gaa, Esq., at Balson, Bergen & Schwab, in Palo Alto, California, the Debtors are: -- instructed to immediately make an inventory of the Goods; -- keep the Goods segregated from all other inventory, machinery and equipment; and -- not permitted to use, sell, encumber or transfer the Goods to any other party. 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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) SPECIALTYCHEM PRODUCTS: Committee Wants Brennan Steil as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of SpecialtyChem Products, Corp., asks from the U.S Bankruptcy Court for the Eastern District of Wisconsin to employ Brennan, Steil and Basting, S.C., as its bankruptcy counsel, nunc pro tunc to June 12, 2006 Brennan Steil will: a) consult with the Debtor's professionals concerning the administration of this Case; b) prepare and review pleadings, motions and correspondence; c) appear and involve in proceedings before the Court; d) provide legal counsel to the Committed in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's business, and any other matters relevant to this Case; e) analyze the Debtor's proposed use of cash collateral and debtor-in-possession financing; f) advise the Committee with respect to its rights, duties and powers in this Case; g) assist the Committee in analyzing the claims of the Debtor's creditors and in negotiating with creditors; h) assist with the Committee's investigation of the acts, conduct assets, liabilities and financial condition of the Debtor and of the operation of the Debtor's business and any other matters relevant to this Case; i) assist and advise the Committee in its analysis of and negotiations with the Debtor or any third party concerning matters related to, among other things, the terms of a sale, plan of reorganization of other conclusion of this Case; j) assist and advise the Committee as to its communications to the general creditor body regarding significant matters in this Case; k) assist the Committee in determining a course of action that best serves the interest of the unsecured creditors; and l) perform other legal services as may be required under the circumstances of this Case and are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code. The Committee discloses that it has also filed a request to retain Greenberg Traurig, L.L.P., as co-counsel. Claire Ann Resop, Esq., a shareholder at Brennan Steil, tells the Court that she will bill $250 per hour for this engagement. Ms. Resop discloses that the other professionals who will render services bill: Professional Hourly Rate ------------- ----------- Matthew M. Beier, Esq. $230 Eliza M. Reyes, Esq. $200 Jean M. Steele $110 Ms. Besop assures the Court that the Firm does not hold any interest adverse to the Debtors, its creditors or estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Resop can be reached at: Claire Ann Resop, Esq. Brennan, Steil & Basting, S.C. One E. Milwaukee Street P.O. Box 1148 Janesville, Wisconsin 53547-1148 Tel: (608) 756-4141 Fax: (608)756-9000 http://www.brennansteil.com/ Headquartered in Marinette, Wisconsin, SpecilatyChem Products, Corp., manufactures various organic chemicals for paper products, electronics, agricultural products and other materials. The company filed for chapter 11 protection on June 12, 2006 (Bankr. E.D. Wis. Case No. 06-23131). Christopher J. Stroebel, Esq., Timothy F. Nixon and Marie L. Nienhuis, Esq., at Godfrey & Kahn, S.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of 10 million to $50 million. SPECIALTYCHEM: Has Until Today to File Statements and Schedules --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Wisconsin gave SpecialtyChem Products Corp., until, July 21, 2006, to file its Statement of Financial Affairs and Schedules of Assets and Liabilities. The Debtor and its professional advisors are working to prepare the Statements and Schedules to accurately reflect the financial circumstances of the Debtor when it filed for bankruptcy. The Debtor says that its management and other personnel spent some time preparing for the filing of this case, other vital concerns, such as engaging in negotiations with lenders, exploring long term strategic alternatives to restructuring and attending to the demanding daily duties of conducting business, have engulfed the Debtor's employees and resources. According to the Debtor, the information needed to complete the statements and schedules have to be gathered from operations located in Marinette, Wisconsin and must be reviewed by its professionals prior to completion. About SpecialtyChem Headquartered in Marinette, Wisconsin, SpecilatyChem Products, Corp., manufactures various organic chemicals for paper products, electronics, agricultural products and other materials. The company filed for chapter 11 protection on June 12, 2006 (Bankr. E.D. Wis. Case No. 06-23131). Christopher J. Stroebel, Esq., Timothy F. Nixon and Marie L. Nienhuis, Esq., at Godfrey & Kahn, S.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of 10 million to $50 million. STEELCASE INC: Moody's Affirms Ba1 Rating with Positive Outlook --------------------------------------------------------------- Moody's Investors Service affirmed Steelcase's Ba1 rating with a positive outlook. Steelcase's ratings reflect Steelcase's * vulnerability to cyclical end-markets, particularly the financial sector; * excess manufacturing overhead; * lack of consistent profitability, especially in its International segment; and * exposure to volatile input costs. Steelcase's ratings also reflect its widely recognized brand name and reputation for quality office furnishings in an industry with considerable barriers to entry, the company's highly diversified installed customer base of major national and multinational corporations, progress in reducing its cost structure, and its significant free cash flow generating capability. Over the next 12-18 months, Moody's could upgrade Steelcase's Ba1 rating if it becomes evident the company will achieve and sustain operating margins in the high single digits, maintain debt-to- EBITDA of under 2 times, 25% retained cash flow to total debt, 15% free cash flow-to-total debt and 5 times EBIT interest coverage. Moody's previous rating action on Steelcase was on Jan. 26, 2006 when the company's rating outlook was changed to positive from stable. Steelcase Inc., based in Grand Rapids, Michigan, is the world's largest supplier of office furniture with LTM May 2006 revenues of $2.9 billion. TD AMERITRADE: Earns $140 Million in Third Quarter of 2006 ---------------------------------------------------------- Increased interest rates, spreads and client cash balances have helped TD AMERITRADE Holding Corporation close the books on a record third quarter, furthering its long-term growth strategy as asset-based revenues close in on 60% for the first time. Results for the quarter ended June 30, 2006, are further illustrated by: -- Record net income of $140 million; -- Record pre-tax income of $233 million; -- Record operating margin of $288 million, or 53%; -- Record EBITDA of $287 million, or 53%; -- Record net revenues of $540 million; -- Average client trades per day of approximately 253,000; -- Annualized return on equity of 36% for the quarter; -- Client assets of approximately $255.3 billion, including $37.5 billion of client cash and money market funds; -- Liquid assets of $421 million; cash and cash equivalents of $395 million; -- 128,000 new accounts at an average cost of $432 per account, 59,000 closed accounts, 6,139,000 Total Accounts, 3,260,000 Qualified Accounts; and -- Average client margin balances of approximately $7.9 billion. On June 30, 2006, client margin balances were approximately $7.8 billion. "Despite a decline in investor activity in June, we realized a record quarter, thanks in part to an increase in asset-based revenues," Joe Moglia, chief executive officer, said. "We continue to focus on completing the TD Waterhouse integration and positioning TD AMERITRADE for growth in the long-term investor segment," Moglia continued. "Over the next year, we expect the investments we are making in our technology, value propositions and brand to deliver results that will enhance our growth and strengthen our market position going into 2008." TD AMERITRADE Holding Corporation (NASDAQ:AMTD) -- http://www.amtd.com/-- through its brokerage subsidiaries, provides a dynamic balance of investment products and services that furthers the Independent Spirit of individual investors. The Company's full spectrum of services include a leading active trader program and long-term investor solutions, including a national branch system, as well as relationships with one of the largest networks of independent registered investment advisors. * * * TD AMERITRADE Holding Corporation's bank loan carries Moody's Ba1 rating and Fitch's BB rating. Standard and Poor's also rated the Company's long-term issuer credit at BB. TITAN GLOBAL: Losses Continue in Quarter Ended May 31 ----------------------------------------------------- Titan Global Holdings, Inc.'s net loss increased by $634,000 from a net loss of $3,570,000 in the three months ended May 31, 2005, to a net loss of $4,204,000 in the three months ended May 31, 2006. The increase in the net loss resulted primarily from interest expense in the Company's printed circuit board division and the acquisition of Oblio Telecom Inc. Net sales increased by $24,298,000 or 532% from $4,571,000 in the three months ended May 31, 2005 to $28,869,000 in the three months ended May 31, 2006. This increase resulted primarily from revenues of $23,416,000 generated by the newly acquired Oblio division. At May 31, 2006, the Company's balance sheet showed total assets of $46,945,000 and total liabilities of $54,586,000, resulting in a stockholders' deficit of $7,641,000. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?e03 Laurus Technical Default As of May 31, 2006, Titan Global had $3,066,000 in term notes payable classified as current liabilities, and $4,000,000 in a revolving credit facility with Laurus Master Funds. Additionally, the Company has recorded beneficial conversion features of $2,283,000 as of May 31, 2006 associated with the term notes payable and revolving credit facility. The Company was in technical default of its Laurus agreement during the quarter ended Feb. 28, 2006 due to the untimely filing of registration statements. The Company has not received a notice of default from Laurus and Laurus has chosen not to assess liquidated damages penalties. The Company expects to rectify this technical default by filing a registration statement. Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 5, 2006, Wolf & Company, P.C., in Boston, Massachusetts, raised substantial doubt about Titan Global Holdings, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the fiscal year ended Aug. 31, 2005. The auditor pointed to the Company's significant operating losses, high debt levels, defaults on debt covenants, and negative working capital. Headquartered in Salt Lake City, Utah, Titan Global Holdings, Inc. (OTCBB: TTGL) -- http://www.titanglobalholdings.com/-- operates through three divisions: Oblio Telecom, Inc., Titan PCB East, Inc. and Titan PCB West, Inc. Oblio is engaged in the creation, marketing, and distribution of prepaid telephone products for the wire line and wireless markets and other related activities. Titan PCB is a printed circuit board manufacturer providing competitively priced time-sensitive, quality products to the commercial and military electronics markets. Titan PCB offers high layer count, fine line production of rigid, rigid-flex and flex PCBs. TOWER AUTOMOTIVE: Inks Tentative Contract Agreements with Unions ---------------------------------------------------------------- Tower Automotive disclosed tentative contract agreements with the United Auto Workers union and the United Steelworkers union covering approximately 2,100 Tower employees. The agreements are subject to ratification by both unions' affected memberships, and they also must be approved by the U.S. Bankruptcy Court overseeing Tower's Chapter 11 case. Details of the agreements will be released after the ratification process is completed. "These agreements are a major step toward assuring Tower's future as a profitable, competitive automotive supplier," Kathleen Ligocki, president and chief executive officer of Tower, said. "While the issues addressed in the negotiations were challenging, all parties worked hard to achieve a negotiated settlement that provides cost savings critical to Tower's reorganization plan. These agreements with the United Auto Workers and the United Steelworkers of America demonstrate the commitment of our active union membership to Tower's future and complement agreements already reached with our Milwaukee unions and retirees. Assuming these agreements are ratified by the union memberships and approved by the Bankruptcy Court, we will be one major step closer to the completion of our reorganization plan and our emergence from Chapter 11 later this year. I want to thank our Tower colleagues for all their hard work and dedication that have been so important to our reorganization process." Bill Pumphrey, Tower's president of North American Operations, welcomed the tentative agreements as a key step in finalizing Tower's post-bankruptcy manufacturing structure. "Achieving settlements with the UAW and USW means that our labor costs going forward are clearly defined. This is an important factor in serving our current customers and planning for new business, and it also assures our customers that we will be able to meet their needs by delivering quality products on time, now and in the future." About Tower Automotive Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc. (OTC Bulletin Board: TWRAQ.PK) -- http://www.towerautomotive.com/ -- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor- affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. TRI-CONTINENTAL EXCHANGE: Chapter 15 Petition Summary ----------------------------------------------------- Petitioner: Malcolm Butterfield Saint Vincent and the Grenadines Debtors Case No. Judge ------- -------- ----- Tri-Continental 06-22652 Christopher M. Klein Exchange Ltd. c/o Michael Tagg KPMG Financial Adv. Services Crown House 4, Par la Ville Road Hamilton, Bermuda Combined Services Ltd. 06-22655 Thomas Holman Alternative Market 06-22657 Michael S. McManus Exchange Ltd. Type of Business: The Debtors sell auto insurance policies and underwrites related insurance products. In January 2006, Nationwide Mutual Insurance Company sued the Debtors for trademark infringement and dilution. The U.S. District Court for the Central District of California found out that the Debtors were using the Nationwide name to sell insurance policies to customers. None of the Debtors were affiliated with the company. Nationwide asserts that the Debtors claimed to be "administrators of a pool of insurers", of which Nationwide is a member. Subsequently, the Court granted Nationwide a preliminary injunction against the Debtors. Furthermore, the company and several state authorities have issued cease and desist orders against the Debtors. Chapter 15 Petition Date: July 20, 2006 Court: Eastern District of California (Sacramento) Petitioner's Counsel: Forrest B. Lammiman, Esq. Lord Bissell & Brook LLP 111 South Wacker Drive Chicago, Illinois 60606-4410 Tel: (312) 443-0700 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million TRISTAR HOTELS: Section 341(a) Meeting Scheduled for July 25 ------------------------------------------------------------ The United States Trustee for Region 17 rescheduled the meeting of Tristar Hotels and Investments, LLC's creditors to 11:30 a.m., on July 25, 2006, at Room 130 of the U.S. Federal Building, 280 South First Street, in San Jose, California. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases after a debtor is converted to a chapter 7 proceeding. A meeting of creditors was held at 10:00 a.m. on July 11, 2006, but the Debtor failed to attend. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Mountain View, California, Tristar Hotels and Investments, LLC, filed for chapter 11 protection on Sept. 13, 2005 (Bankr. N.D. Calif. Case No. 05-55789). Steven J. Sibley, Esq., at the Law Offices of DiNapoli and Sibley represented the Debtor. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. On May 16, 2006, the Court converted the Debtor's case to a chapter 7 proceeding and appointed Carol Wu as the Debtor's Chapter 7 Trustee. The law firm of Wendel, Rosen, Black & Dean LLP represents the Chapter 7 Trustee. USG CORP: Appellate Court Overturns Tort Suit Against US Gypsum --------------------------------------------------------------- The Court of Appeal of California, Second District, Division Eight, reversed a lower court decision dismissing a tort suit against United States Gypsum Company and certain employees. U.S. Gypsum Company is an USG Corporation debtor-affiliate. John Singleton, a maintenance mechanic at U.S. Gypsum's Torrance plant in California, filed an action before the Superior Court of Los Angeles, alleging sex discrimination and harassment in violation of the Fair Employment and Housing Act. Mr. Singleton was terminated in December 2002 for making threatening statements. According to written statements by his co-employees, Mr. Singleton said he would bring a gun and shoot people he did not like. Mr. Singleton had complained to his supervisors that two co- workers were attacking his sexual identity, calling him "Sing-a- ling" as reference to a homosexual character in a movie. Mr. Singleton said that, as a result of those comments and taunting, work became a "living hell," and his performance was adversely affected. In his suit, Mr. Singleton asserted that U.S. Gypsum failed to take reasonable steps to prevent sex discrimination and harassment. He said the company had unlawfully retaliated against him for his opposition to these acts. The trial court did not find merit in Mr. Singleton's arguments and granted U.S. Gypsum's motion for summary judgment. The trial court found that U.S. Gypsum had made a prima facie showing that Mr. Singleton's employment was terminated for a legitimate, non- discriminatory reason. The trial court also held that no sexual harassment had taken place. The Appellate Court, in setting aside the trial court ruling, holds that there are triable issues of material fact whether Mr. Singleton was subjected to sexual harassment in violation of FEHA. According to the Appellate Court, whether (i) Mr. Singleton was sexually harassed and (ii) his supervisors knew or should have known of the harassment and failed to take immediate and appropriate action depends on the resolution of multiple questions of fact. Mr. Singleton, the Appellate Court says, has shown that there are facts to support his claim that he was sexually harassed, that he reported the harassment to his supervisors, and that no action was taken to correct and eliminate the harassment. The trial court erred in disregarding the bulk of Mr. Singleton's testimony, the Appellate Court rules. About USG 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. The Debtors emerged from bankruptcy protection on June 20, 2006. (USG Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service, Inc., 215/945-7000) USP DOMESTIC: S&P Rates $400 Million Revolving Loan at BB- ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to USP Domestic Holdings Inc.'s bank facility, including the company's existing (but previously unrated) $200 million revolving credit facility and a new $200 million term loan. The 'BB-' loan rating is at the same level as the corporate credit rating on Dallas, Texas-based parent company United Surgical Partners International Inc. At the same time, Standard & Poor's affirmed its existing ratings on United Surgical, including the 'BB-' corporate credit rating. The rating outlook is stable. "The rating on United Surgical continues to reflect the company's narrow operating focus as an owner and operator of surgical facilities, and its aggressive growth strategy and third-party reimbursement risks," said Standard & Poor's credit analyst David Peknay. Its recent acquisition of Surgis Inc. indicates its aggressive growth strategy, which is still appropriate for the existing rating category. Attractive industry demand characteristics, disciplined operating performance, and a diverse payor base partially mitigate these risks. As of March 31, 2006, United Surgical operated or owned interests in 128 surgical facilities in the U.S. and the U.K. These facilities predominantly handle high volumes of profitable outpatient surgery, including high numbers of orthopedic and pain management cases. About 68 facilities are run in partnership with multiple health care system partners. The company has grown rapidly through acquisitions, new facilities, and joint ventures. Although United Surgical's growth prospects look favorable as a result of new partnerships, new centers, and higher same-facility volumes as centers mature, the 'BB-' rating is underpinned by the company's focus on a single business. The reliance on one area for its revenues leaves United Surgical exposed to potential regulatory, reimbursement, and technology changes in the outpatient surgery field. VARIG S.A.: Sold to Volo do Brasil for $600 Million --------------------------------------------------- VARIG S.A. was sold to Volo do Brasil for more than $600,000,000 at an auction Thursday, averting a liquidation of the airline's assets. Volo will pay in cash BRL277,000,000 -- $127,000,000 -- for VARIG's operating assets and invest up to $485,000,000 based on a timetable contained in a business plan. Volo must pay a $75,000,000 deposit by July 24, 2006, the Associated Press reports. Volo emerged the lone bidder at the auction scheduled by Judge Luiz Roberto Ayoub of the 8th District Bankruptcy Court in Brazil. According to AP, no other party was willing to advance $24,000,000 to take part in the auction. Volo will acquire, among others: -- the rights under VARIG's lease agreements for 30 aircraft; -- airport slots; -- certain receivables; -- property and rights related to VARIG's Smiles program; -- rights to software necessary to the airline's operation; -- VARIG's crew training center; -- the VARIG brand name; and -- other contracts necessary to the airline's operation. Volo will assume VARIG's obligations relating to the aircraft lease agreements; certain transportation; and the Smiles program. Volo will satisfy a portion of VARIG's more than BRL7 billion -- $3 billion -- of debt with BRL100,000,000 of 10-year bonds. Volo will give creditors an option to receive cash instead of bonds. Leasing companies and other key creditors of VARIG initially rejected Volo's offer at a creditors' meeting. The creditors said the proposal was not enough to pay for the airline's debts. Representatives of VARIG workers and pensioners, and principal government creditors have agreed to accept Volo's offer. Volo and the airline's unions challenged the voting results and asked the Brazilian Court for a recount. According to Reuters Marcelo Bottini, VARIG's chief executive officer, pointed out that creditors with "little financial stake" were given the same voting power as larger creditors. He noted that the larger creditors voted for Volo's offer. On Tuesday, Judge Ayoub invalidated votes cast by 17 parties, including 16 entities affiliated with General Electric Co. Judge Ayoub said those votes don't count because the parties sold their debt in June, Bloomberg News says. Bloomberg writer Romina Nicaretta relates that Volo has enhanced its offer after Deloitte Touche Tohmatsu, the Court-appointed judicial administrator of VARIG, reported to the Brazilian Court earlier this month that creditors would be better off if the airline is liquidated Volo, which recently purchased VARIG's cargo unit, VARIG Logistica S.A., is partially controlled by U.S. investment fund MatlinPatterson Global Advisors. 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. VENETO LLC: Inks Financing to Complete Condo Project in Calif. -------------------------------------------------------------- Veneto LLC will get the financing it needs within the next three weeks to complete a condominium project, David Elman of The Deal.com reports. The real estate company aims to develop the property with the feel of an Italian village, The Deal said, citing newspaper The Public Record. "Institutional funding will replace the mortgages on the [eight- acre property] in Rancho Mirage, California," the Debtor's counsel, Jack F. Fitzmaurice, Esq., at Fitzmaurice Demergian & Palaganas said in the report. The need to restructure the debt was what prompted the Debtor to file for Chapter 11 protection, Mr. Fitzmaurice noted. Details regarding Veneto's debtor-in-possession financing is not yet filed with the court. Rancho Mirage, CA-based real estate company Veneto LLC fka L'Veneto LLC filed for a chapter 11 petition on July 12, 2006 (U.S. Bankr. C.D. Cal. Case No. 06-11744) Jack F. Fitzmaurice, Esq., at Fitzmaurice, Demergian & Palaganas serves as the Debtor's counsel. When the Debtor sought protection from its creditors, it listed total assets of $23,499,000 and total debts of $11,443,889. VERTICAL HEALTH: Reports $715,088 Net Loss in Amended 2005 10-K --------------------------------------------------------------- Vertical Health Solutions, Inc., filed an amended annual report for the year ended Dec. 31, 2005, with the Securities and Exchange Commission on July 17, 2006. Brimmer, Burek & Keelan, LLP's audit report, included in the Company's amended Form 10-K, contained an expression of substantial doubt about the Company's ability to continue as a going concern. The auditing firm pointed to the Company's $715,088 net loss in 2005 and $978,897 working capital deficit at Dec. 31, 2005. The Company generated revenues of $4,447,291 for the year ended Dec. 31, 2005, an increase of $1,163,345 or 35.4 %, compared to $3,283,946 for the year ended Dec. 31, 2004. The increase in revenues was primarily attributable to increased marketing efforts, increased distribution and the addition of the operations of APS Pharmacy which resulted in increases in our customer base and related volume of recurring and new customer sales. At Dec. 31, 2005, the Company's balance sheet showed $1,585,886 in total assets and $2,440,672 in total liabilities, resulting in a stockholders' deficit of $854,786. A full-text copy of Vertical Health's amended 2005 annual report is available for free at http://researcharchives.com/t/s?e01 Headquartered in Oldsmar, Florida, Vertical Health Solutions, Inc., formerly known as LabelClick.com, Inc., engages in the development, marketing, and distribution of customized private label supplements and health products. It also engages in the wholesale distribution of veterinary pharmaceuticals to veterinary clinics. WESTERN APARTMENT: Taps Reinwald O'Connor as Special Counsel ------------------------------------------------------------ Western Apartment Supply & Maintenance Company asks the U.S. Bankruptcy Court for the District of Hawaii for permission to employ Reinwald O'Connor & Playdon as its special local counsel. The Debtor reminds the Court that Reinwald O'Connor was its counsel in its first bankruptcy proceeding. Reinwald O'Connor will: * render counsel to the Debtor with respect to the Debtor's financial affairs and status of the present petition; * render services as may be necessary for the proper administration of the Debtor's estate in the State of Hawaii, and * formulate a plan of reorganization with the Debtor's general counsel, Smaha & Daley. The Debtor tells the Court that it has not paid the firm any retainer. Documents available do not how much the firm will be paid for their services. Jerrold K. Guben, Esq., a partner at Reinwald O'Connor, discloses that the firm is a pre-petition creditor holding a $137,450 claim. Mr. Guben tells the COurt that as special counsel, the firm does not have to waive its pre-petition claim. Mr. Guben assures the Court that his firm does not represent any interest materially adverse to the Debtor or its estates. About Western Apartment Based in San Diego, California, Western Apartment Supply & Maintenance previously filed for chapter 11 protection on January 12, 2004 (Bankr. D. Hawaii Case NO. 04-00072). The case was dismissed on May 16, 2006. The Debtor filed its second chapter 11 petition on April 18, 2006 (Bankr. S.D. Calif. Case No. 06-00821). John L. Smaha, Esq., at Smaha and Daley, represents the Debtor in its second bankruptcy filings. When the Debtor filed for chapter 22, it listed total assets of $18,045,054 and total debts of $18,131,069. On June 30, 2006, at the request La Jolla Loans Inc., a secured creditor, the U.S. Bankruptcy Court for the Southern District of California transferred the Debtor's case to the U.S. Bankruptcy Court for the District of Hawaii. The case was transferred to the Hawaii Bankruptcy Court on July 1, 2006, and the Hawaii Bankruptcy Court established a docket on July 7, 2006. The Debtor's new chapter 11 case is indexed under Case No. 06-00459. WESTERN APARTMENT: Taps Thomas R. Cole as Counsel in Maui Dispute ----------------------------------------------------------------- Western Apartment Supply & Maintenance obtained authority from the U.S. Bankruptcy Court for the Southern District of California to employ Thomas R. Cole, Esq., as counsel in its ongoing land lease dispute with the County of Maui in Hawaii. This motion was approved prior to the Debtor's case being transferred to the U.S. Bankruptcy Court for the District of Hawaii. The Debtor tells the Court that it operates a hotel business in the County and in order to maintain its lease, the Debtor agreed with the County of Maui to arrange for a Community Plan Amendment and Special Management Area Permit for the land. The Debtor selected Mr. Cole because of his experience in dealing with Hawaiian Law and familiarity with working with state and local government units. As counsel, Mr. Cole is expected to: a) continue negotiations with the County of Maui with regards to certain time limits that the Settlement Agreement set for the Debtors to achieve reports and inspections of the property; b) coordinate and work with subcontractors in completing the work necessary to comply with the Settlement Agreement; and c) be involved in presenting amendments and certain documents to the County of Maui in relation to the Debtor's leases. The Debtor discloses that Mr. Cole was retained before it filed its second chapter 11 petition and currently holds an $89,066.81 pre-petition claim. Mr. Cole acknowledges that he will be compensated for post-petition services only after Court approval. Documents filed with the Court does not state how much Mr. Cole will be paid. About Western Apartment Based in San Diego, California, Western Apartment Supply & Maintenance previously filed for chapter 11 protection on January 12, 2004 (Bankr. D. Hawaii Case NO. 04-00072). The case was dismissed on May 16, 2006. The Debtor filed its second chapter 11 petition on April 18, 2006 (Bankr. S.D. Calif. Case No. 06-00821). John L. Smaha, Esq., at Smaha and Daley, represents the Debtor in its second bankruptcy filings. When the Debtor filed for chapter 22, it listed total assets of $18,045,054 and total debts of $18,131,069. On June 30, 2006, at the request La Jolla Loans Inc., a secured creditor, the U.S. Bankruptcy Court for the Southern District of California transferred the Debtor's case to the U.S. Bankruptcy Court for the District of Hawaii. The case was transferred to the Hawaii Bankruptcy Court on July 1, 2006, and the Hawaii Bankruptcy Court established a docket on July 7, 2006. The Debtor's new chapter 11 case is indexed under Case No. 06-00459. WORLDWATER & POWER: Mar. 31 Balance Sheet Upside-Down by $1.6 Mil. ------------------------------------------------------------------ Worldwater & Power, Corp., incurred $3,575,598 net loss on $1,956,949 of revenues for the three months ended March 31, 2006. At March 31, 2006, the Company's balance sheet showed $3,638,048 in total assets and $5,251,370 in total liabilities resulting in $1,613,322 stockholders' deficit. The Company's March 31 balance sheet also showed strained liquidity with $3,284,237 in total current assets available to pay $4,420,913 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?d88 Going Concern Doubt Amper, Politziner, Mattia, P.C., in Edison, New Jersey, raised substantial doubt about Worldwater & Power's Inability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's losses from operations and working capital deficit. About Worldwater & Power Headquartered in Pennington, New Jersey, WorldWater & Power Corp. (WWAT.OB) -- http://www.worldwater.com-- operates as a solar engineering and project managment company. It provides power through photovoltaic and hydroelectric technology. * Euler Sees Significant Increase In Global Business Failures ------------------------------------------------------------- After a substantial increase in 2005 and a decline in 2006, the number of business insolvencies in the U.S. is predicted to climb once again in 2007, according to global trade credit insurer Euler Hermes. Worldwide, the Index predicts that business failures will increase by 3% in 2007 on the heels of a global economic slowdown. The Global Business Failure Index -- created by Euler Hermes to compare business failures by country, going beyond the national definitions and taking into account the size of the respective global economies -- predicts an 8% increase in US corporate insolvencies for 2007. The Index has fluctuated quite a bit in the past two years, showing a 14% increase in 2005 and a 5% decrease for 2006. The 2005 hike was caused by an increased number of businesses insolvencies in advance of the new bankruptcy laws, which took effect on November 17, 2005. However, the revamped U.S. bankruptcy code has caused a notable decrease in the number of corporate insolvencies for 2006, with the Index predicting a slight decrease in the number of businesses that will declare bankruptcy. Dan North, Euler Hermes ACI Chief Economist, offered his view on the macroeconomic factors that can affect business failures: "The US economy turned in a very strong performance in the first quarter as real Gross Domestic Product grew at a 5.6% annualized rate. However, GDP growth is expected to slow during the rest of the year as a result of three factors. First, the housing market which has supported the US economy over the past few years is cooling off, providing less equity to finance consumer activity and reducing demand for household goods and services. Second, high energy prices, particularly for gasoline, are putting a drag on consumer activity. Third, and perhaps most importantly, the Federal Reserve may have tightened monetary policy too far as reflected in the inverted yield curve, a strong indicator of a future slowdown. The effects of Fed tightening take a year or more to be felt, meaning that the US economy will be experiencing a drag from rising interest rates for at least another 12 months. These three pressures on the US economy will certainly put pressure on business failures throughout the next year." Euler Hermes Global Business Failure Index forecasts these country-by-county changes in the number of business failures: Country 2007 2006 ------- ---- ---- USA 8% -5% France 0% 0% Spain 4% 10% Denmark 0% -8% Taiwan 4% 7% Luxembourg 0% -1% Greece 4% 5% Germany 0% -5% UK 3% 8% China 0% 0% Portugal 3% 5% Hungary -1% -1% Hong Kong -1% -11% Italy 3% 3% Netherlands -1% -2% Belgium 2% 0% Canada -3% -3% Ireland -3% -3% Norway 1% -10% Austria -3% -2% Japan 1% 2% Finland -3% -6% Czech Republic 1% -4% South Korea -4% -10% Switzerland 0% 0% Singapore -7% -6% Slovakia 0% 8% Sweden -7% -10% Poland 0% -1% Brazil -8% -15% Western Europe 1% 0% Global Index of insolvencies 3% -1% In the face of the changing domestic and global economic climate, recognizing and managing future risks becomes a priority for the nation's business leaders. The predicted rise in business failures highlights the important role that trade credit insurance can play within the business environment, said Euler Hermes ACI Vice President of Marketing Keith Sherman. "A Euler Hermes ACI credit insurance program provides a valuable extension to a company's credit management practices - a second pair of objective eyes when approving buyers, as well as an early warning system should things begin to decline so that exposure can be effectively managed," he said. "And, ultimately, should an unexpected loss occur, the trade credit insurance policy provides indemnification, thus protecting the policyholder's revenue and bottom line." Euler Hermes ACI utilizes a proprietary database that monitors the credit worthiness of more than 40 million companies worldwide; this provides advance warning for policyholders and allows losses to be minimized in the event of a large corporate insolvency. Further analysis of the Global Business Failure Index is available in the Euler Hermes Insolvency Outlook publication, which is available upon request. Headquartered in Owings Mills, Maryland, Euler Hermes ACI -- http://www.eulerhermes.com/usa-- is the US subsidiary of the Euler Hermes Group and the oldest and largest provider of trade credit insurance in North America. Euler Hermes is the worldwide leader in credit insurance and one of the leaders in bonding and guarantees. With 5,400 employees in 43 countries, Euler Hermes offers a complete range of services for the management of customer receivables. The group posted a 2 billion euro turnover in 2005. Euler Hermes, a subsidiary of AGF and a member of Allianz, is listed on Euronext Paris. Standard & Poor's rates the group and its principal credit insurance subsidiaries AA-. * Focus Management Group Opens New Chicago Office ------------------------------------------------- Focus Management Group, a leading national turnaround and restructuring firm, reported that effective July 1, 2006 its Chicago practice will be relocated to a newly acquired building on Avondale Avenue in Chicago, Illinois. The move into the new larger premises is in recognition of the firm's rapid expansion and is aimed to accommodate its future growth plans. All business from the firm's Rosemont, Illinois office will be transferred to the new Chicago location with immediate effect. The office will be led by J. Tim Pruban, President and Founder of Focus Management Group. Mr. Pruban is a turnaround management specialist with over 20 years of experience in turnaround consulting, asset recovery, liquidation management and asset sales. "Focus continues to see a strong growth in demand for its services nationwide," said Mr. Pruban. "Our new Chicago office represents an expanded, convenient location in this metropolitan area, and will provide our firm with additional resources to better service our increasing client base." The new office is located at 6585 N. Avondale Avenue. The main phone number is (773) 724-2082 and the fax number is (773) 724- 2083. Focus Management Group -- http://www.focusmg.com/-- offers nationwide capabilities in turnaround management, business restructuring and asset recovery. Headquartered in Tampa, Florida, with offices in Chicago, Greenwich, Los Angeles and Nashville, Focus provides turn-key support to stakeholders including secured lenders and equity sponsors. The Company provides an array of services including turnaround management, interim management, operational analysis and process improvement, case management services, bank and creditor negotiation, asset recovery, recapitalization services and special situation investment banking for distressed companies. * BOOK REVIEW: The Managerial Mystique: Restoring Leadership in Business --------------------------------------------------------------- Author: Abraham Zaleznik Publisher: Beard Books Paperback: 320 pages List Price: $34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587982811/internetbankrupt "Business in America has lost its way ... desperately needing leadership to face worldwide economic competition." Zaleznik wrote these words in 1989 when The Managerial Mystique was first published. But his observation remains as true today as it was then. In 1989, the problems included high debt and the decline of major industries such as steel and automobiles. To these problems can now be added outsourcing and the growing economic power of China and India. Zaleznik primarily attributes the weakened condition of American business to errors in business management. "The causes of this decline in competitiveness are complex, but at the forefront is the attitude of American management," he says. Mainly, management strayed from its critically important role of encouraging, nurturing, and recognizing initiative and creativity of individuals. Instead, management concentrated myopically on restructuring, lateral organization, communication, charismatic leadership, and mergers and acquisitions. While each of these strategies has a place in the corporate world, they are not the basis for a strong business that can compete effectively. Zaleznik contends that it is the relationship between management and employees that count the most in generating the ideas, goals, cooperation, and endurance that make a corporation competitive. Zaleznik puts to good use his background in social psychology and psychoanalysis to explore this essential, yet neglected, area of business management. Social psychology and psychoanalysis are not normally associated with business management. However, the author applies these so-called "soft sciences" to business organizational structures and processes. He critiques business organizations and their activities and management at all levels by looking at what has been excluded that really accounts for the quality of a business. Zaleznik points to some high-profile examples to illustrate what is wrong with American management. One is Harold Geneen, the former chief executive officer of ITT, who, the author says, epitomized a managerial approach that stifled company energy and potential. According to Zaleznik, Geneen is one of the many business managers who "have put their faith in numbers, managed by process, and formed elaborate structures to get people to do the predictable thing." Geneen's perspective fails to acknowledge that there are differences between one business and another. That such a belief -- easily disproved by experience -- has come to be the core principle of American business evidences, to Zaleznik's mind, just how far off course American business has strayed. Zaleznik offers a business approach that concentrates on nurturing creativity and moral connections among employees. He recognizes employees as individuals and as a corrective to business practices gone awry. The values advocated by Zaleznik should not be regarded as an alternative technique or peripheral considerations. They are the basis of a strategy that all businesses need to compete effectively. A professor emeritus of Harvard Business School and a certified psychoanalyst, Abraham Zaleznik has an international reputation for his studies and teaching on social psychology in the business setting and the characteristics of managers and leaders. ********* 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, Robert Max Victor M. Quiblat II, Shimero R. Jainga, Joel Anthony G. Lopez, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***