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/raid1/www/Hosts/bankrupt/TCR_Public/060821.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, August 21, 2006, Vol. 10, No. 198 Headlines 15375 MEMORIAL: Santa Fe Files Chapter 11 Petition in Delaware 15375 MEMORIAL: Voluntary Chapter 11 Case Summary ADELPHIA COMMS: Files Fifth Amended Plan of Reorganization AMERICAN CELLULAR: Accumulated Deficit Tops $54.7 Mil. at June 30 AMKOR TECH: Financial Restatement Cues Moody's to Review Ratings ATMEL CORPORATION: Wants Panel to Review NASDAQ Staff Notice AUSTIN CO: Disclosure Statement Hearing Postponed to October 19 BEARD COMPANY: June 30 Balance Sheet Upside-Down by $7.1 Million BMC INDUSTRIES: Court Confirms 2nd Amended Plan of Reorganization CALPINE CORP: Court Approves $90.1 Million Dighton Project Sale CALPINE CORP: Postpones Auction for Firm Transportation Contract CARLTON COVE: Wants Residents' Panel In Lieu of Patient Ombudsman CENTRAL FREIGHT: Plans to Solicit Merger Proxies in September CHARTERMAC: Completes Acquisition of ARCap Investors CITGO PETROLEUM: Sells Texas Refinery to Lyondell for $2.1 Billion CLEAN EARTH: Court Converts Ch. 11 Cases to Ch. 7 Liquidation CONSOLIDATED GOLD: Defaults on $1.25MM Snowfield Dev't Payments CONSTELLATION BRANDS: Completes $700 Million Debt Offering CORPORATE AND LEISURE: Section 341(a) Meeting Continued to Aug. 24 CSC HOLDINGS: Extends Offer for 6-3/4% Senior Notes Until Sept. 8 D&M FINANCIAL: Ch. 7 Trustee Hires Bederson & Co. as Accountant DEL MONTE: Subsidiary Replaces $100 Million Credit Facility DELPHI CORP: About 83% of IUE-CWA Workers Accept Buyouts EARNED CAPITAL: District Court Dismisses E&Y Malpractice Suit ECHOSTAR COMMS: Appeals Court Blocks Permanent Injunction ECHOSTAR COMMS: Earns $169 Million in 2006 Second Quarter EROOMSYSTEM TECHNOLOGIES: Earns $67,077 in Quarter Ended June 30 FISHER SCIENTIFIC: Thermo Merger Cues Moody's to Review Rating FOAMEX INT'L: Delays Filing of 2nd Quarter 2006 Financial Report FOAMEX INTERNATIONAL: Wants to Enter into Prologis Warehouse Lease FORD MOTOR: Cuts North American Output by 21% to Hasten Turnaround FUNCTIONAL RESTORATION: U.S. Trustee Picks 5-Member Creditors Team GENEVA STEEL: Chapter 11 Trustee Taps Wikstrom Economic as Experts GLOBAL DOCUGRAPHIX: Sells Some Assets to 9 Entities for $9.1 Mil. GOLD KIST: Receives $1 Billion Cash Offer from Pilgrim's Pride GOODING'S SUPERMARKETS: First National & Panel Resolve Lien Spat HEALTHSOUTH CORP: Keeps Name as Restructuring Goes Underway HEXION SPECIALTY: Earns $59 Million in 2006 Second Quarter INLAND FIBER: Files Chapter 11 Petition and Pre-Packaged Plan INLAND FIBER: Case Summary & 9 Largest Unsecured Creditors KINETIC CONCEPTS: Debt Reduction Spurs Moody's to Upgrade Ratings KULLMAN INDUSTRIES: CEO Agrees to Aid Panel in Tajikistan Action LEE'S TRUCKING: Inks New Premium Financing Pact with FIFC LEVITZ HOME: Wants to Walk Away from Woodbury HQ Lease LIQUIDMETAL TECH: June 30 Balance Sheet Upside-Down by $10.8 Mil. LIQUIDMETAL TECH: Receives Federal Grand Jury Subpoena MASSEY ENERGY: Can Access up to $175MM Under Amended Debt Facility MORGAN STANLEY: Fitch Affirms Two Certificates' Junk Ratings NEIMAN MARCUS: Completes 7.125% Debentures Consent Solicitation PERFORMANCE TRANSPORTATION: Seeks Nov. 30 Plan-Filing Extension PERFORMANCE TRANSPORTATION: Wants to Assume Bandag Contract PILGRIM'S PRIDE: Proposes to Buy Gold Kist for $1 Billion in Cash PREDIWAVE CORP: New World Agrees to Defer Discovery Period PUREBEAUTY INC: Court Approves Davis Wright as Special Counsel PUREBEAUTY INC: Wants Until Dec. 14 to File Chapter 11 Plan RIVERSTONE NETWORKS: Third Party Claims Due by September 1 SATELITES MEXICANOS: Asks Bankr. Court to Set Confirmation Hearing SATELITES MEXICANOS: Gets Extension of Schedules Filing Deadline STANADYNE HOLDINGS: Moody's Lowers Sr. Notes' Rating to Caa2 STATER BROTHERS: Reports $5.7 Million Net Income in Second Quarter SOUTHAVEN POWER: Inks New Power Deal with Tenn. Valley Authority TEC FOODS: Wants Sohlen as Franchise and Restructuring Advisor TELTRONICS INC: Equity Deficit Widens to $2.7 Million at June 30 THOMAS EQUIPMENT: To File Court-Supervised Restructuring of Unit TODD MCFARLANE: Creditor Wants Case Converted to Chapter 7 TRM CORPORATION: Incurs $4.5 Million Net Loss in Second Quarter U.S. CONCRETE: Earns $7.2 Million in Second Quarter Ended June 30 UNITED COMPONENTS: Posts $19.1 Mil. 2006 Second Quarter Net Loss WATTSHEALTH FOUNDATION: Claims Administration Pact Gets Court OK WBSS LP: Case Summary & Largest Unsecured Creditor WELD WHEEL: Seeks Chapter 11 Protection, Plans to Sell Assets WELD WHEEL: Case Summary & 49 Largest Unsecured Creditors WERNER LADDER: Committee Hires Greenberg Traurig as Co-Counsel WERNER LADDER: Creditors' Panel Wants Jefferies as Fin'l Advisor WERNER LADDER: Wants Removal Period Stretched to December 7 WHITING PETROLEUM: Expands Reserves with $26MM Michigan Purchase WHITNEY INFORMATION: Board Confirms Cash Dividend of $1 Per Share WINDOW ROCK: Final DIP Hearing Scheduled on August 22 WYNN RESORTS: Las Vegas Subsidiary Refinances Credit Facilities YUKOS OIL: Foreign Executives Faces Russian Criminal Probe * BOND PRICING: For the week of August 14 -- August 18, 2006 ********* 15375 MEMORIAL: Santa Fe Files Chapter 11 Petition in Delaware -------------------------------------------------------------- Santa Fe Minerals, Inc., and its sole shareholder, 15375 Memorial Corp., have sought Chapter 11 protection from their creditors. Santa Fe and 15375 Memorial filed separate Chapter 11 petitions with the U.S. Bankruptcy Court for the District of Delaware on Aug. 16, 2006. Patrick Fitzgerald, writing for Dow Jones Newswires, says that Santa Fe's parent, GlobalSantaFe Corp., placed the oil-drilling company in bankruptcy in an attempt to hold off a $300 million environmental lawsuit filed last year. Mr. Fitzgerald says that the three Louisiana landowners who filed the suit are alleging that around 95 wells drilled by Santa Fe and another defendant damaged their property. Wyoming-based Santa Fe shut down 10 years ago and was dissolved in 2000. Under Wyoming law, creditors of a dissolved corporation can recover their debts from the dissolved firm's shareholders. David E. Faure, GlobalSantaFe Corp.'s attorney, said that with Santa Fe's Chapter 11 filing, the Company plans to file a motion to dismiss the Louisiana action. 15375 MEMORIAL: Voluntary Chapter 11 Case Summary ------------------------------------------------- Lead Debtor: 15375 Memorial Corporation 15375 Memorial Drive Houston, TX 77079 Bankruptcy Case No.: 06-10859 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Santa Fe Minerals, Inc. 06-10860 Type of Business: The Debtor is an oil-drilling company. Chapter 11 Petition Date: August 16, 2006 Court: District of Delaware Judge: Kevin Gross Debtor's Counsel: John D. Demmy, Esq. Stevens & Lee, P.C. 1105 North Market St., 7th Fl. Wilmington, DE 19801 Tel: (302) 425-3309 Fax: (610) 371-8515 Estimated Assets: $100,000 to $500,000 Estimated Debts: More than $100 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. ADELPHIA COMMS: Files Fifth Amended Plan of Reorganization ---------------------------------------------------------- Adelphia Communications Corporation filed drafts of its Fifth Amended Joint Chapter 11 Plan of Reorganization and the related Supplement to its Fourth Amended Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York. Adelphia and the Official Committee of Unsecured Creditors are co- proponents of the Fifth Amended Plan, which embodies the framework agreed upon by Adelphia, its Official Committee of Unsecured Creditors, and certain ad hoc committees representing most of Adelphia's major bondholders and trade creditors, as well as significant individual bond funds, and reflects the compromise among these important creditor groups pursuant to which approximately $1.08 billion in value will be transferred from certain unsecured creditors of various Adelphia subsidiaries to certain unsecured senior and trade creditors of the Adelphia Communications parent corporation, subject, in some cases, to reimbursement from contingent sources of value, including the proceeds of a litigation trust to be established under the plan to pursue claims against third-parties that are alleged to have damaged Adelphia. Adelphia and the Official Committee of Unsecured Creditors are seeking an order of the Bankruptcy Court approving the Supplement to the Disclosure Statement as containing "adequate information" to enable Adelphia's Chapter 11 bankruptcy creditors and equity holders to make an informed judgment about the Fifth Amended Plan. Adelphia's proposal and prosecution of confirmation of the Fifth Amended Plan is subject in all respects to entry of such an order, as well as Bankruptcy Court authorization for Adelphia to propose and seek votes in respect of the Fifth Amended Plan. Absent entry of such an order and authorization, Adelphia's filing of the Fifth Amended Plan and related Supplement to the Disclosure Statement shall not be deemed to be a proposal by the Debtors with respect to the proposed treatment of any claims against equity interests in Adelphia or its subsidiaries. If this order is entered and such authorization is granted, Adelphia and the Official Committee of Unsecured Creditors will begin the process of soliciting creditors and equity holders to vote on the Fifth Amended Plan. A full-text copy of Fifth Amended Joint Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?ff8 A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?ff9 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 administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. AMERICAN CELLULAR: Accumulated Deficit Tops $54.7 Mil. at June 30 ----------------------------------------------------------------- American Cellular Corporation filed its financial results for the second quarter ended June 30, 2006, with the Securities and Exchange Commission on Aug. 9, 2006. For the three months ended June 30, 2006, the Company incurred a $99,749 net loss on $125 million of net revenues, compared to $480,810 million of net income on $122.9 million of net revenues in 2005. As of June 30, 2006, the Company's accumulated deficit widened to $54.7 million from $49.6 million at Dec. 31, 2005. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?fe7 American Cellular Corporation is a rural and suburban provider of wireless communications services in the United States. American Cellular Corporation provides wireless telephone service in portions of Illinois, Kansas, Kentucky, Michigan, Minnesota, New York, Ohio, Oklahoma, Pennsylvania, West Virginia and Wisconsin. American Cellular Corporation and ACC Holdings, LLC are owned by Dobson Communications. * * * As reported in the Troubled Company Reporter on July 25, 2006, Moody's Investors Service assigned a B1 rating to American Cellular Corporations' proposed senior secured bank facility. At the same time, Moody's affirmed all existing ratings of ACC, Dobson Cellular Systems, Inc., and their parent company, Dobson Communications Corporation, including Dobson's B3 Corporate Family Rating and SGL-2 speculative grade liquidity rating. The outlook is stable. AMKOR TECH: Financial Restatement Cues Moody's to Review Ratings ---------------------------------------------------------------- Moody's Investors Service lowered the corporate family and long- term debt ratings of Amkor Technology, Inc. and maintained the ratings on review for possible downgrade. The speculative grade liquidity rating was downgraded to SGL-4. The ratings downgrade was prompted by the company's Form 8-K announcement late yesterday of non-reliance on past financial statements and intent to materially restate its financial reports for fiscal years 1998 through 2005 and the March quarter of 2006, which indicates material weaknesses in the company's disclosure and internal controls. The restatements are due to inaccurate accounting treatment for stock-based compensation expense related to options granted during these time periods and increased tax liabilities associated with the adjustments. Additionally, the downgrade reflects Amkor's delayed filing of its financial statements, pending the resolution of an internal investigation into the timing of these past stock option awards, which triggered a technical default under the company's note indentures and the restatement notice. At present, there is increased uncertainty surrounding the company's potential liquidity situation given the recent technical default and possible cross-default under the bank credit agreements. Finally, the downgrade also reflects higher than anticipated operating expenses arising from the restatements and ongoing internal investigation. The downgrade stems from Amkor's recent disclosure that it does not expect to timely file its Form 10-Q within the 45-day period following the end of the June 2006 quarter as required under the Rules and Regulations of the Securities and Exchange Act of 1934. The late filing is due to a voluntary internal examination commenced by the company, first disclosed on July 26, 2006, to review its historical stock option practices. The company's initial review suggests the accounting measurement dates for certain option grants may have differed from their actual grant dates. On July 24, 2006, Amkor's board of directors created a special committee consisting of independent directors and engaged independent outside legal counsel to conduct an in-depth review. Given the early stage of this process, the committee has not yet concluded its review or reached any preliminary findings, delaying the quarterly filing and triggering a technical default. The company has 60 days in which to cure the technical default under its note indentures. It is Moody's understanding that the company has been notified of a technical default by two trustees. The downgrade and review for possible downgrade incorporate the possibility that Amkor may not be able to file its Form 10-Q within the two-month cure period, which would likely result in a breach of a covenant under the note indentures. This could prompt acceleration of the notes and other debt instruments with cross- acceleration provisions, heightening liquidity concerns. Under the note indentures, noteholders representing at least 25% of the outstanding notes can accelerate if there is an event of default. In its ongoing review, Moody's will continue to assess the progress of Amkor's internal investigation of its past stock option practices, potential liquidity issues, materiality of financial charges and degree of higher operating costs. The ratings could decline further if Amkor's internal review is not completed within the two-month cure period or there is a finding of misconduct, resulting in further delay of the company's June 2006 Form 10-Q and restated historical financial reports. Further concerns regarding weaknesses in disclosure and internal controls, systems and procedures could also prompt a ratings downgrade. The company is already subject to an ongoing investigation by the SEC into an unrelated matter to determine whether there was improper trading in the company's securities by certain individuals. Conversely, upon a favorable resolution of the internal investigation and satisfactory liquidity coupled with the filing of the June 2006 quarterly report with non-material restatements within the cure period, the ratings could be confirmed and the outlook stabilized. These ratings were lowered and kept on review for possible downgrade: * Corporate Family Rating to Caa1 from B3 * $300 million Senior Secured (2nd lien) Term Loan due October 2010 to B3 from B2 * Senior Unsecured Notes with various maturities totaling $1.162 billion to Caa3 from Caa1 * Subordinated Notes with various maturities totaling $354.4 million to Ca from Caa3 These rating was downgraded: * Speculative Grade Liquidity Rating to SGL-4 from SGL-3 Chandler, Arizona based Amkor Technology, Inc. is one of the largest providers of contract semiconductor assembly and test services for integrated semiconductor device manufacturers as well as fabless semiconductor operators. ATMEL CORPORATION: Wants Panel to Review NASDAQ Staff Notice ------------------------------------------------------------ Atmel Corporation will request a hearing before the NASDAQ Listing Qualifications Panel to review a NASDAQ Staff Determination notice stating that the Company is not in compliance with NASDAQ Marketplace Rule 4310(c)(14), and that the Company's common stock is subject to delisting, because the Company has not timely filed its second quarter Form 10-Q for the period ended June 30, 2006. The hearing request will automatically stay the delisting of Atmel's common stock, and shares of Atmel common stock will continue trading on the NASDAQ, pending the outcome of the Panel's decision. There can be no assurance that the Panel will grant a request for continued listing. Atmel also had received an informal request for information from the San Francisco District Office of the Securities and Exchange Commission relating to the Company's past granting of stock options. The Company intends to cooperate fully with all matters related to this request. On July 25, 2006, Atmel disclosed that the Audit Committee of the Company's Board of Directors had initiated an independent investigation regarding timing of past stock option grants and other potentially related issues. As a result of the continuing investigation, the Company did not file its second quarter Form 10-Q by the extended due date of Aug. 14, 2006. The Audit Committee, assisted by independent legal counsel and independent accounting consultants, will make every effort to complete the investigation and file its Form 10-Q as soon as practicable. About Atmel Based in San Jose, California, Atmel Corporation (Nasdaq: ATML) -- http://www.atmel.com-- designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency components. Leveraging one of the industry's broadest intellectual property technology portfolios, Atmel is able to provide the electronics industry with complete system solutions. It is focused on consumer, industrial, security, communications, computing and automotive markets. * * * Standard & Poor's Rating Services assigned its single-B long-term foreign issuer and long-term local issuer credit ratings to Atmel Corp. on Oct. 24, 2001, and said the outlook, at that time, was negative. AUSTIN CO: Disclosure Statement Hearing Postponed to October 19 --------------------------------------------------------------- The Honorable Pat E. Morgenstern-Clarren of the U.S. Bankruptcy Court for the Northern District of Ohio postponed the hearing on the Disclosure Statement explaining the Joint Plan of Liquidation of The Austin Company and its debtor-affiliates to Oct. 19, 2006. The extension will allow the Official Committee of Unsecured Creditors more time to examine and object to the Disclosure Statement. The Committee has until Oct. 6, 2006, to file its objections. Overview of the Plan The Plan provides for the liquidation of the Debtors assets for the distribution to holders of allowed claims. On the effective date of the Plan, all of the Debtors' estates will be substantively consolidated for distribution and all assets will be transferred to, and will vest in, a Liquidating Trust. Under the Plan, a Liquidating Trustee will be appointed and will continue to liquidate all assets, reconcile claims and make distributions to the creditors holding Allowed Claims. Treatment of Claims Under the Plan, all administrative claims will be paid in full on the later to occur of: a) the Effective Date or; b) 11 days after the date upon which administrative claim is allowed. Holders of allowed tax priority claims with an estimated amount of $350,000 will receive, in full satisfaction of its allowed claim, cash equally to the amount of the allowed claim after the Effective Date. St. Paul holding's secured claims of up to $14 million will be paid in full on: a) the Initial Distribution Date; or b) as soon as possible after that claim is allowed by final Court-order, subject to any applicable reduction or surcharge pursuant to section 506(c) of the Bankruptcy Code. Each holder of Priority Unsecured Claims totaling $480,000 will be paid in full without interest on the Effective Date or 30 days after the priority claim is allowed. Holders of the Allowed General Unsecured Claims will receive, in full and final satisfaction and release of their claims. The Plan also provides for the pro rata distributions to holders of Allowed General Unsecured Claims. Interest Holders will receive no distribution under the Plan. A full-text copy of the Debtors' Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060608060122 Headquartered in Cleveland, Ohio, The Austin Company is an international firm offering a comprehensive portfolio of in-house architectural, engineering, design-build, construction management and consulting services. The Company also offers value-added strategic planning services including site location, transportation and distribution consulting, and facility and process audits. The Company and two affiliates filed for chapter 11 protection on Oct. 14, 2005 (Bankr. N.D. Ohio Lead Case No. 05-93363). Christine M. Pierpont, Esq., at Squire, Sanders & Dempsey, LLP, represents the Debtors in their restructuring efforts. M. Colette Gibbons, Esq., and Victoria E. Powers, Esq., at Schottenstein Zox & Dunn Co., LPA, represent 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. BEARD COMPANY: June 30 Balance Sheet Upside-Down by $7.1 Million ---------------------------------------------------------------- The Beard Company filed its financial results for the second quarter ended June 30, 2006, with the Securities and Exchange Commission on Aug. 14, 2006. For the three months ended June 30, 2006, the Company incurred a $665,000 net loss on $509,000 of net revenues, compared to a $375,000 net loss on $327,000 of net revenues for the same period in 2005. At June 30, the Company's balance sheet showed $11.4 million in total assets and $18.6 million in total liabilities, resulting in a $7.1 million stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $600,000 in total current assets available to pay $10.7 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?feb Based in Oklahoma City, Oklahoma, The Beard Company -- http://www.beardco.com/home.htm-- focuses on fuel and chemical production. It operates coal fines reclamation facilities in the U.S., has produced carbon dioxide gas since the early 1980's, and operates organic chemical compound fertilizer plants in China. The Company also operates its e-Commerce segment, which develops business opportunities to leverage Starpay's(TM) intellectual property portfolio of Internet payment methods and security technologies. Going Concern Doubt As reported in the Troubled Company Reporter on June 19, 2006, Cole & Reed, P.C., in Oklahoma City, Oklahoma, raised substantial doubt about Beard Company's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring losses and negative cash flows from operations. BMC INDUSTRIES: Court Confirms 2nd Amended Plan of Reorganization ----------------------------------------------------------------- The Honorable Robert J. Kressel of the U.S. Bankruptcy Court for the District of Minnesota confirmed the Second Amended Plan of Reorganization filed in the chapter 11 cases of BMC Industries Inc. and its debtor-affiliates. The Court determined that the Plan satisfies the 13 requirements stated in Section 1129(a) of the Bankruptcy Code. The Plan provides for the substantive consolidation of the Debtors' estates. All debtor-affiliates will be deemed merged with BMC Industries, canceling inter-company claims. The Plan provides for: (1) the distribution in cash on the plan's effective date to the holders of: -- allowed administrative expense claims, aggregating $2,469,000, and -- allowed priority non-tax claims, totaling $4,500; (2) the distribution in cash, in equal annual installments of principal and interest, to holders of allowed priority tax claims, amounting to $166,000 beginning six months following full payment of a working capital adjustment and with the final installment payable no later than the fifth anniversary of the Effective Date; (3) the distribution on the Effective Date to the holders of allowed other secured claims, at the option of the liquidating trustee, either: (a) the proceeds of the sale or disposition of the collateral securing the allowed secured claim to the extent of the value of the holder's secured interest in the allowed secured claim, net of the costs of disposition of the collateral; (b) the collateral securing the allowed secured claim; (c) other treatment that leaves unaltered the legal, equitable, and contractual rights to which the holder of the allowed other secured claim is entitled; or (d) other distribution as necessary to satisfy the requirements of the Bankruptcy Code; (4) the creation of a Liquidating Trust for the benefit of general unsecured creditors of the Debtors and through the distribution on the Effective Date to the holders of allowed general unsecured claims amounting to $55.65 million and to the holders of allowed prepetition lender claims, totaling $70.6 million, of interests in the Liquidating Trust; and (5) cancellation of equity interests. Headquartered in Ramsey, Minnesota, BMC Industries Inc. -- http://www.bmcind.com/-- is a multinational manufacturer and distributor of high-volume precision products in two business segments, Optical Products and Buckbee Mears. The Company, along with its affiliates, filed for chapter 11 protection (Bankr. D. Minn. Case No. 04-43515) on June 23, 2004. Jeff J. Friedman, Esq., at Katten Muchin Zavis Rosenman, and Clinton E. Cutler, Esq., at Fredrikson & Byron, P.A., represent the Debtors in there restructuring efforts. Thomas J. Flynn, Esq., at Larkin, Hoffman, Daly & Lindgren, Ltd., represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from its creditors, it listed $105,253,000 in assets and $164,751,000 in liabilities. CALPINE CORP: Court Approves $90.1 Million Dighton Project Sale --------------------------------------------------------------- Calpine Corp. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to: (a) enter into the Dighton Project Asset Purchase Agreement; and (b) assume and assign the Assigned Contracts. The Court exempted the Sale of the Dighton Project from any stamp tax. Debtor Dighton Power Associates Limited Partnership owns a 170- megawatt gas-fired combined cycle electric generating facility in Dighton, Massachusetts. The Dighton Project is comprised of nearly 60 acres of land, with the main facility site occupying approximately six acres. Currently, there are 15 full-time employees assigned to the Dighton Project, all of whom are non- union employees. The Debtors, the Official Committee of Unsecured Creditors, and the Unofficial Committee of Second Lien Debtholders, in consultation with Law Debenture Trust Company of New York, as Indenture Trustee for the First Lien Noteholders, determined that the Dighton Project would not maximize nor sustain Calpine Corporation's overall enterprise value. The Committees have agreed that the Debtors may use up to $600,000 of the DIP Facility proceeds to fund operations and expenses at the Dighton Project. During the peak summer season, the Dighton Project is cash flow positive. However, in the fall, the Dighton Project may experience a liquidity crisis, Bennett L. Spiegel, Esq., at Kirkland & Ellis LLP, in Los Angeles, California, tells the Court. Because of the impending liquidity crisis, the Debtors agree to sell substantially all of the assets in the Dighton Project. As a result, the Debtors executed an Asset Purchase Agreement for the sale of the Dighton Project to BG North America LLC. The salient terms of the Asset Purchase Agreement are: (1) BG North America will pay to Dighton Power: -- $89,815,600 in cash on Closing Date; and -- $370,000 as cure payment for the Assigned Contracts; (2) The Acquired Assets will be transferred free and clear of all liens, claims, encumbrances and other interests other than any Permitted Liens and Assumed Liabilities. The Acquired Assets include: (a) all real property owned by Dighton Power, and all improvements, structures and fixtures on the real property; (b) all of Dighton Power's rights under the leased real property; (c) all of Dighton Power's rights under the easements, rights of way, real property licenses, and other real property entitlements related to its Owned and Leased Real Property; (d) all of Dighton Power's owned equipment, spare parts, machinery, furniture, fixtures, and other personal property used exclusively in the Dighton Project, and Dighton's rights to the warranties and Licenses for the Equipment; (e) all of Dighton Power's rights under sales orders, service agreements and customer contracts; (f) all of Dighton Power's rights under these supplier contracts: * Interconnection Agreement with Montaup Electric Company, dated April 10, 1997, * Operational Balancing Agreement with Algonquin Gas Transmission Company, dated March 15, 2000, * Water Agreement with Dighton Water District, dated March 27, 1997, * Parts Sales and Maintenance Service Agreement with ALSTOM Power, Inc., dated Aug. 20, 1997, and * Blanket Terms and Conditions for Renewal Parts, Equipment and Services with ALSTOM Power, Inc., dated Feb. 29, 2000; (g) all of Dighton Power's rights under the: * Tax Increment Financing Agreement with the town of Dighton, dated Oct. 30, 1995, and * Dighton Charitable Fund Advisory Committee Agreement with the town of Dighton, dated Oct. 7, 1999; (h) all inventories of fuel, chemical and gas supplies, materials and critical spares located at or in transit to the Dighton Project on the Closing Date, and the rights associated with each inventory; (i) any computer software or systems owned exclusively by Dighton Power, and the licenses for each computer software or system; (j) all rights of Dighton Power under permits, authorizations, approvals, registrations, Emission Allowances and licenses issued by government agencies related exclusively to the operation of the Dighton Project; (k) copies of all Business Records; (l) the Dighton Plant; (m) rights to and goodwill represented by the names "Dighton Plant," "Dighton" and "Dighton Power Project"; provided that BG North America cannot use a name that includes a Calpine Mark; and (n) all assets relating to Employee and Benefit Matters; (3) The Excluded Assets consist of: (a) all of Dighton Power's cash and cash equivalents, marketable securities, prepaid expenses, advance payments, surety accounts, deposits and other similar prepaid items, checks in transit and undeposited checks; (b) all of Dighton Power's accounts and notes receivable as of 11:59 p.m., on the Closing Date; (c) assets, property and other rights held or owned by the Debtors not used exclusively by Dighton Power in the operation of the Dighton Project; (d) forecasts, financial statements and proprietary manuals prepared by or used by Dighton Power to the extent not relating exclusively to the Dighton Project; (e) all of Dighton Power's rights under Contracts that are not Assigned Contracts; (f) all assets to be retained by Dighton Power relating to Employee and Benefit Matters; (g) all rights to claims, refunds or adjustments with respect to Excluded Assets, all other refunds or adjustments relating to any proceeding before any government agency relating to the period before the closing date, and all rights to insurance proceeds; (h) any of Dighton Power's asset that would constitute an Acquired Asset that is conveyed or otherwise disposed of from July 6, 2006, until the closing date; (i) all losses, loss carry forwards and rights to receive refunds, credits and loss carry forwards with respect to all of Dighton Power's taxes incurred on or before the Closing Date, including interest receivable; (j) all rights and claims of Dighton Power arising out of events before the Closing Date; (k) all shares of capital stock, partnership interests or other equity interests of Dighton Power and all of its affiliates; (l) all of Dighton Power's rights under the APA and under any other agreement between Dighton Power and BG North America; (m) all rights to or goodwill pertaining to all names, marks, trade names, trademarks and service marks incorporating the name Calpine; (n) all rights under any contract that has been guaranteed by Calpine or to which Calpine is a party; (o) all Retained Books and Records; (p) all of Dighton Power's rights to recovery of collateral given to obtain letters of credit and rights to recover amounts drawn or paid on letters of credit; (q) all accounts receivable and other amounts due to Dighton Power from any of its affiliates and all of Dighton Power's rights and claims against any of its affiliates, including all of Dighton Power's claims against Calpine; and (r) the MAXIMO computerized maintenance information software, the PI server software, certain IT equipment, other proprietary Calpine data, and certain rented cylinders for gas inventories. (4) Dighton will assume and assign these Agreements to BG North America: (a) Tax Increment Financing Agreement with the town of Dighton, dated Oct. 30, 1995, and (b) Dighton Charitable Fund Advisory Committee Agreement with the town of Dighton, dated Oct. 7, 1999; (5) The Assumed Liabilities include all of Dighton Power's liabilities under the Assigned Contracts, the Acquired Assets, the Permits, the Employees' Benefits, Transaction Taxes, and personal property taxes; (6) Dighton Power will retain liabilities with respect to accounts payable other than those under Assigned Contracts and all liabilities arising in connection with the Excluded Assets. Dighton Power will also retain any credit that is not an Assumed Liability and any claim relating to the Open-End Mortgage, Security Agreement, Assignment of Rents and Leases, Fixture Filing and Financing Statement, dated Sept. 15, 1997, in favor of Toronto Dominion (Texas), Inc., as collateral agent; (7) BG North America will deposit in an Escrow Account: -- $4,490,780 on Calpine's approval of the Purchase Notice, and -- $4,490,780 on the Court's entry of the Sale Order; and (8) BG North America is entitled to payment of a break-up fee and expense reimbursement. A full-text copy of the 128-page Dighton Project APA is available for free at http://ResearchArchives.com/t/s?de3 Mr. Spiegel tells the Court that the value the Debtors will receive from the sale exceeds any value the Debtors could get for the Acquired Assets if they are required to liquidate their assets. The Debtors' professionals have assessed that the Debtors would be unlikely to obtain more than $20,000,000 if the Dighton Facility was shut down and sold piecemeal. According to Mr. Spiegel, no other entity has offered to purchase the Dighton Project Assets for greater economic value than BG North America. The Debtors believe that the proposed sale to BG North America, subject to a market test through an auction, will serve to maximize the value received for the Dighton Project. If no timely, conforming Qualifying Bids are submitted by Aug. 30, 2006, Dighton Power will seek a sale hearing to take place on Sept. 13, 2006, to consider the APA with BG North America. If two or more competing bids are received, the Auction will be held on Sept. 11, 2006, at Kirkland & Ellis LLP, Citigroup Center in New York. Judge Lifland makes it clear that the Order is without prejudice to ISO-New England, Inc.'s rights to assert claims it may have arising from the Transmission, Market and Services Tariff and the Market Participant Service Agreement. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CALPINE CORP: Postpones Auction for Firm Transportation Contract ---------------------------------------------------------------- Roger J. Higgins, Esq., at Kirkland & Ellis LLP, in New York, counsel for Calpine Corp. and its debtor-affiliates, informs the U.S. Bankruptcy Court for the Southern District of New York that the Auction to determine the highest bidder for the sale of the Firm Transportation Service Contract is adjourned to a later date yet to be determined. A hearing to consider the proposed sale will be held at 10:00 a.m., on Sept. 13, 2006. As reported in the Troubled Company Reporter on Aug. 11, 2006, the Hon. Burton R. Lifland approved the proposed Bidding Procedures for the sale of the Firm Transportation Service Contract between Debtor Rumford Power Associates Limited, Calpine Corp. and its debtor-affiliates, and TransCanada Pipelines Limited. The judge ordered that if two or more bids are received, an Auction will be held on Aug. 14, 2006, at Calpine Corporation's offices at 717 Texas Avenue, Suite 1000, in Houston, Texas. If no competing bids are submitted, a sale hearing will be conducted on Aug. 15, 2006, at 10:00 a.m. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CARLTON COVE: Wants Residents' Panel In Lieu of Patient Ombudsman ----------------------------------------------------------------- Carlton Cove, Inc., asks the U.S. Bankruptcy Court for the Northern District of Alabama to dispense with the appointment of a patient care ombudsman in its chapter 11 case and, in the alternative, authorize the formation of a Committee of Residents of the Carlton Cove community. The Debtor tells the Court that the Residents' Committee will ensure that the needs and interests of all residents, including without limitation the patients of Debtor's skilled nursing facility, are adequately represented. Patient Care Ombudsman The Debtor relates that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 implemented a number of changes to the administration of cases involving health care businesses. New Code Section 101(27A) defines a "health care business" broadly as "any public or private entity that is primarily engaged in offering to the general public facilities and services for (i) the diagnosis or treatment of injury, deformity, or disease; and (ii) surgical, drug treatment, psychiatric or obstetric care." The definition also expressly states that a "health care business" includes skilled nursing facilities, intermediate care facilities, assisted living facilities, homes for the aged, domiciliary care facilities, and any other long-term care facility as well as any "health care institution" related to such long-term care facilities that "is primarily engaged in offering room, board, laundry, or personal assistance with activities of daily living and incidentals to activities of daily living." The Debtor says that although the Skilled Nursing Facility is only a portion of Debtor's facilities, under the broad new definition, Debtor is likely a "health care business." In a Chapter 7, 9 or 11 case where the debtor is a "health care business," new Code Section 333 requires the Court to order the appointment of a patient care ombudsman not later that 30 days after commencement of the case unless "the court finds that the appointment of the ombudsman is not necessary for the protection of patients under the specific facts of the case." If appointed, the patient care ombudsman is to (a) monitor the quality of patient care provided to patients of the debtor and (b) report to the court in writing, or at a hearing, on not less than 60-day intervals after notice to the parties in interest his or her observations about patient care. The Residents' Council of Carlton Cove The Debtor relates that on April 2003, the Residents' Council of Carlton Cove was established to promote the general well-being, and enhance the quality of life of the residents as a whole by acting as a close liaison between the residents and the Board of Directors and the Executive Director of Debtor. The Residents' Council consists of nine members elected by the residents at large during an annual meeting held each April. The Debtor discloses that before it filed for bankruptcy, it worked with the Residents' Council, as well as conducted several town meetings with residents, to provide up-to-date information to residents about Debtor's intentions regarding financial restructuring. Residents' Committee vs. Patient Ombudsman The Debtor contends that its case is one where the appointment of a patient care ombudsman is not necessary for the protection of patients. The Debtor says that the Skilled Nursing Facility is but one component of the services it offers to the community and although quality skilled nursing care is a key amenity offered at Carlton Cove, and a service that receives much attention and focus from Debtor's management, it represents only a portion of the overall average annual revenues for the Debtor. The Debtor argues that its management is fully capable of continuing to monitor patient care as carefully as it has since the first patients were admitted to the facility, without the additional administrative cost of an ombudsman. Furthermore, the Debtor has, to date, operated its Skilled Nursing Facility diligently and in full compliance with all regulatory requirements. The Debtor further argues that in the unlikely event that patient care issues do arise, the Residents' Committee -- if allowed -- will be in existence and fully capable of receiving input and information from patients and families. The Debtor tells the Court that while it is not its intent that the Residents' Committee and its counsel assume the duties of an ombudsman under Section 333 of Title 11 of the U.S. Code, it certainly seems that the very existence of the Residents' Committee, along with the Carington Health Center, a skilled- nursing facility inside its campus, form sufficient basis for the Court to find that it is unnecessary, at this time, to appoint a patient care ombudsman. Headquartered in Huntsville, Alabama, Carlton Cove, Inc. -- http://carltoncove.org/-- offers independent living homes and apartments, assistance with daily living activities, dementia care and skilled nursing care. The Company filed for chapter 11 protection on Aug. 9, 2006 (Bankr. N.D. Ala. Case No. 06-81553). Robert H. Adams, Esq., at Maynard Cooper & Gale PC, represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $41,992,164 and total debts of $78,615,718. CENTRAL FREIGHT: Plans to Solicit Merger Proxies in September ------------------------------------------------------------- Central Freight Lines, Inc. expects to move towards completion of its merger transaction by responding within the next week to a second set of comments from the Securities and Exchange Commission. The Merger Agreement provides that a company controlled by Jerry Moyes and certain related parties would become the owners of Central, and Central would cease to be a publicly traded company. "We now expect to mail the finalized definitive proxy statement to stockholders in September," Bob Fasso, Central's Chief Executive Officer and President, stated. "The proxy statement will solicit proxies for voting on the Merger transaction at our Annual Meeting, which will be held approximately 30 days from the date the proxy statements are mailed to our stockholders." "I am pleased with the continued progress made on the Merger and look forward to closing the transaction as soon after the Annual Meeting as possible," Jerry Moyes added. In addition, Central reached oral agreements in principle with the plaintiffs to settle all outstanding securities class action litigation, two purported derivative actions related to the period between the date of Central's initial public offering and August 2004, and a third derivative action related to the merger transaction. The agreements do not contain any admission of fault or wrongdoing on the part of Central or any of the individual defendants in such litigation. The agreements are subject to the completion of the usual and customary documentation for such settlements, and are subject to, and conditioned upon, final court approval. The settlements will be funded from the proceeds of Central's directors' and officers' liability insurance policy. It is a condition to the consummation of the Merger that this litigation be settled within Central's limits of coverage under the applicable insurance policies. On Jan. 30, 2006, Central entered into an Agreement and Plan of Merger, with North American Truck Lines, LLC and Green Acquisition Company. Under the Merger Agreement, Green will merge with and into Central, with Central continuing as the surviving corporation. Both NATL and Green are controlled by Mr. Moyes, with Green being a wholly owned subsidiary of NATL. On April 17, 2006, Central filed a preliminary proxy statement with the EC for its 2006 Annual Meeting of Stockholders. On May 16, 2006, Central received comments from the SEC, which were answered by Central on June 19, 2006. On July 5, 2006, the SEC issued a second set of comments, which Central expects to address in a filing within the next week. Once the SEC's review of the proxy statement is finalized, the definitive proxy statement will be mailed to Central's stockholders to solicit proxies for voting on the merger and other matters presented at the Annual Meeting. Based in Waco, Texas, Central Freight Lines, Inc. (Nasdaq: CENF) -- http://www.centralfreight.com/-- is a regional less-than- truckload trucking company that has operations in the Southwest, Midwest, and Northwest regions of the United States. The Company offers inter-regional service between operating regions and maintain alliances with other similar companies to complete transportation of shipments outside the Company's operating territory. Going Concern Doubt As reported in the Troubled Company Reporter on May 17, 2006, McGladrey & Pullen, LLP, in Dallas, Texas, raised substantial doubt about Central Freight Lines, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations and negative working capital. CHARTERMAC: Completes Acquisition of ARCap Investors ---------------------------------------------------- CharterMac, with its subsidiaries, completed the acquisition of ARCap Investors, LLC. The Company disclosed that ARCap is a fund manager specializing in the acquisition, management and servicing of high-yield commercial mortgage-backed securities and high-yield direct real estate loans. The Irving, Texas-based company, manages a portfolio of over $2 billion of CMBS for its institutional clients and for its own account. "We are thrilled to announce the closing of the ARCap acquisition and we welcome ARCap's employees to the CharterMac team," Marc D. Schnitzer, chief executive officer and president, said. "With the completion of this transaction, CharterMac has over $28 billion of real estate assets under management. In addition, we are on schedule to transfer our loan servicing operation to ARCap by early 2007, which we expect to provide $2.5 million to $3 million in annual cost savings to CharterMac. We look forward to working with our colleagues at ARCap to grow our existing businesses and to develop new products and strategies that will build shareholder value." The Company entered into a $250 million, six-year term loan, the proceeds of which will be used to pay the cash portion of the transaction consideration and to retire existing Company debt. The Company also entered into a $250 million revolving credit facility that will be used to retire existing debt, to replace an existing tax credit warehouse facility and for general corporate purposes. The Term Loan and the Revolver will simplify the Company's capital sources, provide additional liquidity and eliminate costs associated with maintaining the existing debt facilities. Headquartered in New York City, CharterMac (NYSE: CHC) -- http://www.chartermac.com/-- through its subsidiaries, CharterMac is a full-service real estate finance company, with focus on the multifamily industry. CharterMac offers capital solutions to developers and owners of multifamily and commercial real estate throughout the country and quality investment products to institutional and retail investors. * * * As reported in the Troubled Company Reporter on July 18, 2006, Moody's Investors Service assigned a rating of Ba3 to the $500 million CharterMac guaranteed senior credit facility which the company is issuing to acquire ARCap Investors, LLC, a private real estate finance company specializing in high yield CMBS. In addition, Moody's assigned CharterMac a corporate family rating of Ba3. The outlook is stable. The credit facility consists of a three-year $150 million revolver and a six-year $350 million term loan. CITGO PETROLEUM: Sells Texas Refinery to Lyondell for $2.1 Billion ------------------------------------------------------------------ Rafael Ramirez, Venezuela's energy and petroleum minister, said in published reports, that Petroleos de Venezuela has agreed to sell Citgo Petroleum Corp.'s 41.25% stake in Lyondell-Citgo Refining L.P. -- a plant based in Houston, Texas -- to co-owner Lyondell Chemical Co. for about $2.1 billion. After two years of study and negotiation, the sale of the stake was approved, Minister Ramirez, who is also the president of Petroleos de Venezuela, said. The negotiation for the Lyondell-Citgo plant has been concluded, Minister Ramirez told the press at the headquarters of Petroleos de Venezuela. "It's being sold to Lyondell," he said. The sale was expected to be $2.1 billion, but due to debt and taxes, Petroleos de Venezuela would net about $1.3 billion. Proceeds from the sale would be deposited in Fondem -- a fund that uses Petroleos de Venezuela's money to support development projects in Venezuela. Minister Ramirez said that the sale could be finalized in a few days. Petroleos de Venezuela decided to sell the Lyondell-Citgo stake to cancel a 25-year contract. Under this contract, the company supplied crude at a discount of $2 per barrel. The contract was at its eighth year. Minister Ramirez said, "The contract has been replaced with a new five-year one." Venezuela would continue to supply crude to the Lyondell-Citgo plant under the new terms of the five-year supply contract. The nation would receive: -- $1.3 billion in earnings on the deal, after discounting debt payments, and -- $1 billion in taxes. Patrick Esteruelas, an Eurasia Group analyst, told the Associated Press that the sale of Citgo's stake in the Lyondell-Citgo refinery is part of a plan to drop off some US refinery assets to invest more in oil exploration and production in Venezuela. "Venezuela can afford to divest some of its refining assets. The overall operations of the (Lyondell) refinery certainly haven't changed in any significant or material way," Mr. Esteruelas was quoted by AP as saying. The acquisition gives Lyondell sole ownership of the 268,000- barrel-per-day Houston refinery, which is strategically located on the U.S. Gulf Coast with access to interstate pipelines and the Port of Houston. The facility refines very heavy high-sulfur crude oil into clean fuels including reformulated gasoline and low-sulfur diesel, as well as other high- value products such as jet fuel and aromatics. With the completion of the transaction, the refining operation will become a wholly owned subsidiary of Lyondell. About Lyondell Lyondell Chemical Company, headquartered in Houston, Texas, is North America's third-largest independent, publicly traded chemical company. Lyondell manufactures basic chemicals and derivatives including ethylene, propylene, titanium dioxide, styrene, polyethylene, propylene oxide and acetyls. It also is a refiner of heavy, high-sulfur crude oil and a significant producer of gasoline-blending components. About Citgo Headquartered in Houston, Texas, CITGO Petroleum Corporation -- http://www.citgo.com/-- is owned by PDV America, an indirect, wholly owned subsidiary of Petroleos de Venezuela S.A., the state- owned oil company of Venezuela. PDVSA is Venezuela's state oil company in charge of the development of the petroleum, petrochemical and coal industry, as well as planning, coordinating, supervising and controlling the operational activities of its divisions, both in Venezuela and abroad. * * * As reported at the Troubled Company Reporter on Feb. 16, 2006, Standard and Poor's Ratings Services assigned a 'BB' rating on CITGO Petroleum Corp. Citgo carries Fitch's BB- Issuer Default Rating. Fitch also rates the Company's $1.15 billion senior secured revolving credit facility maturing in 2010 at 'BB+', its $700 million secured term- loan B maturing in 2012 at 'BB+', and its senior secured notes at 'BB+'. CLEAN EARTH: Court Converts Ch. 11 Cases to Ch. 7 Liquidation ------------------------------------------------------------- The Honorable Joseph M. Scott of the U.S. Bankruptcy Court for the Eastern District of Kentucky in Lexington, converted the chapter 11 cases of Clean Earth Kentucky, LLC, and its debtor-affiliates to chapter 7 liquidation proceedings on Aug. 14, 2006, at the Debtors' request. Laura Day DelCotto, Esq., at Wise Delcotto PLLC, in Lexington, Kentucky, told the Court that substantially all of the Debtors' assets have now been sold. Debtor Clean Earth Kentucky can pay all its administrative expenses but is unable to have a plan confirmed. In conjunction with the sale of Debtor CEK's assets, the Court also approved a settlement between Debtor CEK and US Acquisition pursuant to which: (1) US Acquisition agreed to a carve-out from its cash collateral and its Debtor-in-Possession Financing Lien, either from operating funds, cash on hand and collections, sale proceeds, or otherwise, for certain costs of administration of Debtor CEK as follows: (a) an additional carve-out for Debtors' professionals of up to $75,000; and (b) up to $60,000 for broker General Capital Partners for amounts to be paid under that Agreement between Debtor Clean Earth Kentucky and General Capital Partners, LLC dated June 22, 2006. These carve-outs have been exhausted. (2) US Acquisition agreed that it will not share in any future distribution from the estate that might arise from recoveries from actions brought pursuant to Sections 546 and 550 of the Bankruptcy Code; and (3) U.S. Acquisition agreed to pay trust fund taxes up to $279,817. Trust Fund Taxes include all federal, state and local income taxes and Federal Insurance Contributions Act and Medicare taxes withheld by the Debtor CEK from its employees compensation during the period beginning on the Debtors' bankruptcy petition date and ending on the date of the Closing of the Sale and not paid by the Debtor CEK to the applicable taxing authority; As part of the purchase price in the asset purchase agreement between US Acquisition and Debtor CEK, US Acquisition also agreed to pay an additional $100,000 in cash at closing. In addition, Debtor Clean Earth Environmental Group, LLC, agreed to pay $50,000 at closing to Debtor CEK in exchange for the release by Debtor CEK and the Secured Lender of any liability Debtor CEEG may have in connection with postpetition accounts receivable owed by Debtor CEEG to Debtor CEK. As a result of the sale and the settlement, Debtor CEK is currently holding around $150,000 in funds which will be distributed on a pro rata basis to pay its administrative claimants (which sum does not include amounts specifically set aside to pay Trust Fund Taxes or the specified carve-outs). In addition, Debtor CEK is currently investigating the potential value of its remaining assets, including, but not limited to its chapter 5 avoidance claims. While it is anticipated that the proceeds generated from the sale of Debtor CEK's assets and the recovery from any avoidance actions will not be sufficient to pay the administrative claims of Debtor CEK in full, Debtor CEK believes that it will be able to make a significant distribution to its administrative claimants. Headquartered in Cynthiana, Kentucky, Clean Earth Kentucky, LLC -- http://www.cleanearthllc.com/-- manufactures specialized sewer machines, street sweepers, and refuse trucks. The Company and its affiliate, Clean Earth Environmental Group, LLC, filed for chapter 11 protection on Jan. 24, 2006. (Bankr. E.D. Ky. Case No. 06-50052). Laura Day DelCotto, Esq., at Wise DelCotto PLLC, represents the Debtors in their restructuring efforts. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from its creditors, they estimated individual assets and debts between $10 million to $50 million. CONSOLIDATED GOLD: Defaults on $1.25MM Snowfield Dev't Payments --------------------------------------------------------------- Snowfield Development Corp. clarifies the status of the Ticho Diamond Project located near Drybones Bay, Great Slave Lake, Nortwest Territories. The Ticho Project, encompassing approximately 40,000 acres of mineral claims, hosts the Mud Lake kimberlite sill discovered by Snowfield in early 2003. The Mud Lake Kimberlite is located on the Drybones No. 4 Mineral Claim. The Claim is the subject of an Option Agreement with Consolidated Gold Win Ventures Inc., which granted Gold Win an option to earn a 39.6% interest in the Drybones No. 4 Mineral Claim. Terms of the Option Agreement The essence of the Option Agreement obligated Gold Win to pay Snowfield an aggregate of $1,250,000 in cash payments, issue to Snowfield 5,000,000 common shares of its capital stock and fund an aggregate of $2,500,000 in exploration and development work on the Drybones 4 Mineral Claim. The cash payments, share issuances and exploration funding payments were spaced in tranches over a 12-month period. Default on Funding Tranches On July 19, 2006, Gold Win defaulted on their first exploration funding payment and was deemed to be in default of the Option Agreement. The second exploration funding tranche, due July 31, 2006, has also now been defaulted by Gold Win and Snowfield has accepted a Notice of Abandonment of the Option Agreement from Gold Win. Despite Gold Win's failure to meet its option agreement obligations, Snowfield has continued to move ahead with all of the exploration programs scheduled for the 2006 summer season. During the current year, Snowfield has expended in excess of $750,000 on exploration expenditures on its Ticho Diamond Project. These expenditures have been fully funded by Snowfield with no exploration funding payments having been received from Gold Win. About Snowfield Based in Vancouver, British Columbia, Snowfield Development Corp. (TSX:SNO) -- http://www.snowfield.com/-- is in the business of acquiring, exploring and developing natural resource properties. The Company is active in diamond and gold exploration and development in a number of areas. About Gold Win Based in Vancouver, British Columbia, Consolidated Gold Win Ventures Inc. -- http://www.v-cgw.com/-- is a mineral exploration company, specializing in gold, diamonds, and platinum. CONSTELLATION BRANDS: Completes $700 Million Debt Offering ---------------------------------------------------------- Constellation Brands, Inc., completed the sale of $700 million aggregate principal amount of Senior Notes, due 2016, with a 7.25% coupon at a price of 99.02% of the principal amount of the Senior Notes. The notes are senior obligations that rank equally with all of the Company's other senior unsecured indebtedness. The notes will be fully and unconditionally guaranteed by the subsidiaries that are guarantors under Constellation Brands' senior bank credit facility. Constellation Brands is using the $685 million in net proceeds (after estimated expenses of the offering and underwriters discounts) from the sale of the notes to reduce a corresponding amount of borrowings under its senior bank credit facility. The offering was made only by means of a prospectus supplement and the accompanying prospectus, copies of which may be obtained by contacting: Kim Bruzzese Citigroup Global Markets Inc. Telephone (212) 723-6046 About Constellation Brands Based in Fairport, New York, Constellation Brands, Inc. (NYSE:STZ, ASX:CBR) -- http://www.cbrands.com/-- produces and markets beverage alcohol brands with a broad portfolio across the wine, spirits and imported beer categories. Well-known brands in Constellation's portfolio include: Almaden, Arbor Mist, Vendange, Woodbridge by Robert Mondavi, Hardys, Nobilo, Kim Crawford, Alice White, Ruffino, Kumala, Robert Mondavi Private Selection, Rex Goliath, Toasted Head, Blackstone, Ravenswood, Estancia, Franciscan Oakville Estate, Inniskillin, Jackson-Triggs, Simi, Robert Mondavi Winery, Stowells, Blackthorn, Black Velvet, Mr. Boston, Fleischmann's, Paul Masson Grande Amber Brandy, Chi-Chi's, 99 Schnapps, Ridgemont Reserve 1792, Effen Vodka, Corona Extra, Corona Light, Pacifico, Modelo Especial, Negra Modelo, St. Pauli Girl, Tsingtao. * * * As reported in the Troubled Company Reporter on Aug. 14, 2006, Moody's Investors Service assigned a (P)Ba2 rating to Constellation Brands, Inc.'s new shelf and concurrently, a Ba2 rating to Constellation's new $500 million senior unsecured note, due 2016. Constellation's existing ratings are not affected by these actions, and have been affirmed. The ratings outlook remains negative. CORPORATE AND LEISURE: Section 341(a) Meeting Continued to Aug. 24 ------------------------------------------------------------------ Ilene J. Lashinsky, the U.S. Trustee for Region 14 will continue the meeting of Corporate and Leisure Event Productions, Inc.'s creditors at 4:30 p.m., on Aug. 24, 2006, at 230 N. First Avenue, Room 102, 341 Meeting Room in Phoenix, Arizona. 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 officer 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 Tucson, Arizona, Corporate and Leisure Event Productions, Inc., and four of its affiliates filed for chapter 11 protection on June 16, 2006 (Bankr. D. Ariz. Case No. 06-01797). Michael W. Carmel, Esq., at Michael W. Carmel, Ltd., represents the Debtors. When the Debtors filed for protection from their creditors, they estimated consolidated assets and liabilities between $10 million and $50 million. CSC HOLDINGS: Extends Offer for 6-3/4% Senior Notes Until Sept. 8 ----------------------------------------------------------------- CSC Holdings, Inc., extended until Sept. 8, 2006 its offer to exchange up to $500 million aggregate principal amount of its 6-3/4% Senior Notes due 2012. The notes were initially issued and sold in a private placement in April 2004, for an equal aggregate amount of its registered 6-3/4% Senior Notes due 2012. Except for the extension of the expiration date, all of the other terms of the exchange offer remain as set forth in the exchange offer prospectus dated July 18, 2006. The Company disclosed that the extension is due to its voluntary and ongoing review of its stock options and SAR grants. It had determined that the date and exercise price assigned to a number of its stock options and SAR grants during the 1997 to 2002 period did not correspond to the actual grant date and the closing price of the Company's common stock on that day. Shareholder derivative lawsuits have been filed in New York State Supreme Court, Nassau County, by parties identifying themselves as shareholders of the Company purporting to act on behalf of the Company against certain present and former members of the Company's board of directors and certain present and former executive officers. The lawsuits allege breaches of fiduciary duty and unjust enrichment relating to practices with respect to the dating of stock options, recordation and accounting for stock options, and financial statements and SEC filings. The lawsuits seek damages from all defendants and disgorgement from the officer defendants. The Company had contacted the Securities and Exchange Commission and the U.S. Attorney's Office for the Eastern District of New York concerning the option and SAR review. The Company has since been informed that the SEC and the U.S. Attorney's Office are each conducting an investigation into these matters. The Company intends to fully cooperate with the investigations. RNS Financial Information The Company's subsidiary, Rainbow National Services LLC, advised the trustee for its outstanding notes that, in light of the option and SAR review, RNS would not deliver financial information under the RNS indentures by August 14, 2006 but expected to be able to deliver that information by August 21, 2006. About CSC Holdings Based in Bethpage, New York, CSC Holdings is the operating company of Cablevision Systems Corporation -- http://www.cablevision.com/ -- is a cable and entertainment firms in the US. Its operations include a cable television system serving about 2.9 million customers in the New York City area; Madison Square Garden, owner of the famous sports arena and its teams, the New York Knicks and Rangers; as well as Rainbow Media, a cable television network holding company with such assets as American Movie Classics and the Independent Film Channel. Cablevision also operates New York's famed Radio City Music Hall. Chairman Charles Dolan and his family control Cablevision. * * * As reported in the Troubled Company Reporter on July 4, 2006 Standard & Poor's Ratings Services affirmed its 'BB' bank loan rating and '2' recovery rating on CSC Holdings Inc.'s $5.5 billion of secured bank facilities. D&M FINANCIAL: Ch. 7 Trustee Hires Bederson & Co. as Accountant --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey allowed Jonathan Kohn, Esq., the chapter 7 Trustee overseeing the liquidation of D&M Financial Corp., to employ Bederson & Company, LLP, as his accountant. Bederson & Company is expected to: a) review and update debtor's records for preferences and improprieties; and b) prepare and file tax returns for the estate as well as such other functions as may be determined by the trustee. Timothy J. King, a Bederson & Company member, discloses that the firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Edward P. Bond Senior Partner $410 Timothy J. King Partner $360 Matthew Schwartz Partner $360 P. Dermott O'Neill Partner $360 Charles Lunden Partner $360 Kimberly Sevonty Manager $265 Shari Hartstein Manager $255 Sean Raquet Manager $255 Joseph Puskas Manager $215 Robert Pieloch Senior Accountant $185 Harold Parnes Senior Accountant $185 Joseph Sullivan Senior Accountant $185 Eugene Boohoff Senior Accountant $185 Christopher Phillips Senior Accountant $185 Aaron Todoroff Senior Accountant $185 Lionel Parnes Staff Accountant $120 Carol Galante Paraprofessional $105 Mr. King assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Belleville, New Jersey, D&M Financial Corp. -- http://www.dnmfc.com/-- is a full-service mortgage company that offers home loan products. The company filed for chapter 11 protection on Feb. 14, 2006 (Bankr. D. N.J. Case No. 06-11040). Saul A. Berkman, Esq., represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets between $100,000 to $500,000 and debts between $10 million to $50 million. The Debtor's chapter 11 case was converted to a chapter 7 liquidation on Mar. 28, 2006. Jonathan Kohn, Esq., was appointed as the chapter 7 trustee. DEL MONTE: Subsidiary Replaces $100 Million Credit Facility ----------------------------------------------------------- Del Monte Foods Company's wholly owned subsidiary, Del Monte Corporation, replaced a portion of its then-outstanding revolving credit facility balance by exercising a portion of the accordion feature that permits additional Term Loans, in its existing senior credit facility. Del Monte replaced $100 million of such revolving balance with proceeds from the additional Term B loan. As a result, total debt outstanding was not impacted by the net additional Term B loan. Banc of America Securities LLC acted as sole lead arranger and sole book running manager in connection with the new Term B loan. Bank of America, N.A. is administrative agent for the Del Monte credit facility. About Del Monte Del Monte Foods Company (NYSE: DLM) -- http://www.delmonte.com/-- produces, distributes and markets food and pet products for the U.S. retail market. A portfolio of brands include Del Monte(R), Contadina(R), StarKist(R), S&W(R), Nature's Goodness(TM), College Inn(R), 9Lives(R), Kibbles 'n Bits(R), Pup-Peroni(R), Snausages(R), Pounce(R) and Meaty Bone(R). * * * The Company's $250 million 6-3/4% senior subordinated notes due 2015 and $450 million 8-5/8% senior subordinated notes due 2012 carry Moody's Investors Service's B2 rating, Standard & Poor's B rating, and Fitch's BB- rating. DELPHI CORP: About 83% of IUE-CWA Workers Accept Buyouts -------------------------------------------------------- Delphi Corp. reported results of the special hourly attrition plan reached on June 16, 2006, between the company, the IUE-CWA and General Motors. Approximately 6,300 Delphi employees, representing roughly 83% of the eligible IUE-CWA workforce, elected an attrition option within the program provisions. The program included incentivized and early retirements along with pre-retirement opportunities and certain buyouts for eligible employees. GM has agreed to provide financial support under the plan. The program further enables the transformation of Delphi's U.S. manufacturing operations to a reduced labor cost structure. "The IUE-CWA leadership is to be commended for their efforts to provide options for their membership as Delphi aligns its staffing levels to provide a stronger framework for successful emergence from Chapter 11," said Delphi President and Chief Operating Officer Rodney O'Neal. "The strong participation in the attrition program strengthens our ability to more rapidly transform our U.S. manufacturing operations." Approximately 7,500 U.S. hourly employees represented by the IUE- CWA were eligible for the buyout program, with approximately 3,200 of those employees eligible to participate in the retirement and pre-retirement program. Certain eligible U.S. hourly employees accepted a lump sum incentive of $35,000 to retire while other eligible employees under the program elected buyout packages ranging from $40,000 to $140,000. Under the proposed program, GM has agreed to assume the financial obligations related to the lump sum payments to be made to eligible Delphi U.S. hourly employees accepting normal or voluntary retirement incentives. Additionally, GM will fund certain post-retirement employee benefit obligations related to Delphi employees who transition to GM under the plan for purposes of retirement as well as half of employee buyout costs. Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/ -- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. EARNED CAPITAL: District Court Dismisses E&Y Malpractice Suit ------------------------------------------------------------- The Honorable Gary L. Lancaster of the U.S. District Court for the Western District of Pennsylvania affirmed a jurisdictional decision by the U.S. Bankruptcy Court for the Western District of Pennsylvania in connection with a lawsuit filed by investors of Earned Capital Corporation against the Debtor's court-appointed accountants, Charles Modispacher and Ernst & Young LLP. The investors sued Ernst & Young in state court for malpractice roughly eight years after Earned Capital's bankruptcy case closed and nearly 19 years after confirmation of Earned Capital's chapter 11 plan. The investors complain that the accounting firm incorrectly assessed the value of certain real property owned by the Debtor. Because of the erroneous valuation, the investors say, the property was sold too quickly at an unfavorable price and an eventual loss. Ernst & Young removed the investors' complaint to the Bankruptcy Court and then filed a motion to dismiss. The investors challenged the Bankruptcy Court's jurisdiction and sought to remand the proceedings back to state court. In an Opinion dated September 2, 2005, and published at 331 B.R. 208, Bankruptcy Judge Warren W. Bentz: -- rejected the investors' motion to strike Ernst & Young's removal notice; -- refused the investors' request to remand their lawsuit back to state court; and -- granted Ernst & Young's motion to dismiss the investors' complaint. Claiming that the Bankruptcy Court committed numerous errors in making its rulings, the Investors appealed the decision to the U.S. District Court. In a decision published at 2006 WL 1997400, Judge Lancaster held that: a) the state court malpractice lawsuit filed by the investors against Ernst & Young could be removed directly to the Bankruptcy Court; b) the proceeding was within the Bankruptcy Court's core jurisdiction; and c) the proceeding was time-barred. According to Judge Lancaster, claims of professional negligence against Ernst & Young, based upon services that the accountants provided during Earned Capital's bankruptcy case implicated the integrity of the bankruptcy process, and were claims over which the bankruptcy court could exercise core jurisdiction. Judge Lancaster also explained that the investors' complaint, filed more than a decade after the property sale, was barred by applicable statutes of limitation. Judge Lancaster reminded the investors that they were in the best position to independently assess the value of the property and should have done so before the alleged below-market sale. Judge Lancaster said that if the investors had done this instead of relying solely on the accountants' valuation, they would have discovered their alleged injury at that time. Christopher P. Schuller, Esq., in Pittsburgh, Pa., represented Ernst & Young in this proceeding, and Victor H. Pribonic, Esq., in White Oak, Pa., represented the investor group led by Mary Geruschat. Earned Capital Corporation was engaged in the business of selling fractional ownership interests in a real estate development in Butler County, Pa., where investors were promised a certain annual return on investment. The Ponzi-type scheme collapsed, and on June 3, 1986, Earned Capital Corporation and its affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 86-21474). The Court confirmed the Debtors' Amended Plan of Reorganization on Oct. 21, 1987. A final decree closing the Debtors' case was entered on May 14, 1996. ECHOSTAR COMMS: Appeals Court Blocks Permanent Injunction --------------------------------------------------------- The Federal Circuit Court of Appeals in Washington, D.C., has temporarily blocked an injunction issued by U.S. District Court Judge David Folsom in connection with the Tivo Inc. v. EchoStar Communications Corp. lawsuit. As a result of the stay, EchoStar can continue to sell, and provide to consumers, all of its digital video recorder models. TiVo sued EchoStar in Federal District Court on Jan. 5, 2004, alleging that EchoStar and certain subsidiaries are violating U.S. Patent No. 6,233,389 issued to TiVo in May 2001, known as the "Time Warp" patent. The Time Warp patent discloses systems and methods for the simultaneous storage and playback of programs, supporting advanced capabilities such as pausing live television, fast-forwarding, rewinding, instant replays, and slow motion. On April 13, 2006, a Marshall, Texas jury concluded that EchoStar had willfully infringed TiVo's Time Warp patent. On August 18, Judge Folsom granted TiVo's motion for permanent injunction to prevent EchoStar from making, using, offering for sale or selling in the United States their DVR products at issue in the case (DP-501, DP-508, DP-510, DP-721, DP-921, DP-522, DP- 625, DP-942, and all EchoStar DVRs that are not more than colorably different from any of these products). Judge Folsom also ordered EchoStar to pay TiVo approximately $73.992 million in damages as awarded by the jury, prejudgment interest at the prime rate through July 31, 2006, of approximately $5.638 million, and supplemental damages for infringement through July 31, 2006 in the amount of approximately $10.317 million. Judge Folsom denied EchoStar's request to stay the injunction pending appeal. The injunction extends to all of EchoStar's affiliates, employees, agents and representatives, and any persons in active concert or participation with them who have notice of the order. The Judge's ruling is final and is appealable. EchoStar said in a press statement "We continue to believe the Texas decision was wrong, and should be reversed on appeal. We also continue to work on modifications to our new DVRs, and to our DVRs in the field, intended to avoid future alleged infringement." TiVo responded, "We are very pleased by recent developments involving the issuance of a permanent injunction in our patent case against EchoStar by the United States District Court, Eastern District of Texas. The court of appeals temporarily stayed the district court injunction until it reviews the papers submitted by the parties and decides whether a stay should or should not be in effect for the duration of the appeals process. The court stated that the temporary stay is not based on a consideration of the merits of EchoStar's request, and is entered to preserve the status quo while the court considers the parties' papers." About TiVo Based in Alviso, California, TiVo -- http://www.tivo.com/-- pioneered a brand new category of products with the development of the first commercially available digital video recorder. About EchoStar Headquartered in Englewood, Colorado, EchoStar Communications Corporation (NASDAQ: DISH) -- http://www.dishnetwork.com/-- serves more than 12.2 million satellite TV customers through its DISH Network(TM), a growing U.S. provider of advanced digital television services. DISH Network offers hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. At June 30, 2006, EchoStar's balance sheet showed $9.1 billion in total assets and $9.6 billion in total liabilities, resulting in a $511 million stockholders' deficit. * * * As reported in the Troubled Company Reporter on Aug. 1, 2006, Dominion Bond Rating Service confirmed the ratings of EchoStar Communications Corporation and EchoStar DBS Corporation at BB (low) and BB. The trend is Stable. On January 2006, Moody's assigned a stable outlook to Echostar's Ba3 long term corporate family rating. In the same month, Standard & Poor's also assigned a stable outlook to the Company's BB long term foreign and local issuer credit ratings. Fitch placed the Company's subordinated debt rating at B on Oct. 28, 2004 and assigned a stable outlook to the rating on January 2006. ECHOSTAR COMMS: Earns $169 Million in 2006 Second Quarter --------------------------------------------------------- EchoStar Communications Corporation reported total revenue of $2.46 billion for the quarter ended June 30, 2006, a 17%increase compared with $2.10 billion for the corresponding period in 2005. Net income totaled $169 million for the quarter ended June 30, 2006, compared with net income of $856 million during the corresponding period in 2005. Net income for the quarter ended June 30, 2005, included a non-recurring, non-cash benefit of approximately $593 million to recognize the tax benefits of previously reported tax losses. DISH Network(TM) added approximately 195,000 net new subscribers during the second quarter of 2006, ending the quarter with approximately 12.46 million subscribers. At June 30, 2006, EchoStar's balance sheet showed $9.1 billion in total assets and $9.6 billion in total liabilities, resulting in a $511 million stockholders' deficit. Detailed financial data and other information are available in EchoStar's Form 10-Q for the quarterly period ended June 30, 2006, at http://researcharchives.com/t/s?ff4 About EchoStar Headquartered in Englewood, Colorado, EchoStar Communications Corporation (NASDAQ: DISH) -- http://www.dishnetwork.com/-- serves more than 12.2 million satellite TV customers through its DISH Network(TM), a growing U.S. provider of advanced digital television services. DISH Network offers hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. * * * As reported in the Troubled Company Reporter on Aug. 1, 2006, Dominion Bond Rating Service confirmed the ratings of EchoStar Communications Corporation and EchoStar DBS Corporation at BB (low) and BB. The trend is Stable. On January 2006, Moody's assigned a stable outlook to Echostar's Ba3 long term corporate family rating. In the same month, Standard & Poor's also assigned a stable outlook to the Company's BB long term foreign and local issuer credit ratings. Fitch placed the Company's subordinated debt rating at B on Oct. 28, 2004 and assigned a stable outlook to the rating on January 2006. EROOMSYSTEM TECHNOLOGIES: Earns $67,077 in Quarter Ended June 30 ---------------------------------------------------------------- eRoomSystem Technologies, Inc., realized net income of $67,077 during the three months ended June 30, 2006, as compared to $69,912 during the three months ended June 30, 2005. Revenue from revenue sharing arrangements was $240,873 for the three months ended June 30, 2006, compared to $306,407 for the three months ended June 30, 2005, representing a decrease of $65,534, or 21.4%. The decrease in revenue from revenue sharing arrangements was due to a decrease in revenue sharing units in service during the three months ended June 30, 2006 as compared to the three months ended June 30, 2005. The decrease in revenue sharing units in service relates to certain revenue sharing agreements reaching the conclusion of the seven-year term. The Company's maintenance fee revenues were $66,080 for the three months ended June 30, 2006, compared to $81,756 for the three months ended June 30, 2005, representing a decrease of $15,676, or 19.2%. The decrease was due to a decreased number of units in service. Revenues from product sales were $1,469 for the three months ended June 30, 2006, compared to $2,336 for the three months ended June 30, 2005, representing a decrease of $867, or 37.1%. eRoomSystem says the decrease, while significant in percentage terms, was not otherwise material given the extremely limited sales volume. At June 30, 2006, the Company's balance sheet showed $3,225,838 in total assets, 640,004 in total liabilities and stockholders' equity of $2,585,834. The Company's at June 30 consisted of $1,524,467 of cash and $1,425,636 of working capital, as compared to $1,316,515 of cash and $1,211,956 of working capital at Dec. 31, 2005. Accumulated deficit decreased from $31,646,931 at Dec. 31, 2005 to $31,562,159 at June 30, 2006. The decrease in accumulated deficit resulted directly from the net income realized for the six months ended June 30, 2006. On July 14, 2006, eRoomSystem repaid its outstanding loan payable to Amresco Commercial Finance in the original principal amount of $553,542 plus accrued interest of $2,217. The unamortized discount on the note of $49,414 was recognized as interest expense. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?fe6 Going Concern Doubt Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, raised substantial doubt about eRoomSystem's ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations, and that the net income earned for the years ended Dec. 31, 2005 and 2004 was derived primarily from non-recurring items consisting of the sale of assets and proceeds from insurance. About eRoomSystem Based in Lakewood, New Jersey, eRoomSystem Technologies, Inc. (OTCB: ERMS) -- http://www.eroomsystem.com/-- is a full service in-room provider for the lodging and travel industry. Its intelligent in-room computer platform and communications network supports eRoomSystem's line of fully automated and interactive refreshment centers, room safes and other applications. eRoomSystem's products are installed in major hotel chains both domestically and internationally. FISHER SCIENTIFIC: Thermo Merger Cues Moody's to Review Rating -------------------------------------------------------------- Moody's Investors Service anticipates to assign a Baa2 senior unsecured debt rating to the combined entity, Thermo Fisher Scientific Inc., after the proposed merger between Thermo Electron Corporation and Fisher Scientific International Inc. is completed. Thermo Electron Corporation's senior unsecured debt rating remains under review for possible downgrade and Fisher Scientific International Inc.'s Corporate Family Rating at Ba1 remains under review for possible upgrade. The merger is expected to be completed in the fourth quarter of 2006 and is yet to be approved by shareholders and industry regulators. The Baa2 senior unsecured debt rating for the combined entity reflects what Moody's believes is a capital structure, financial leverage and cash flow coverage of debt indicative of an investment grade issuer. Moody's projects that the combined entity will generate cash flow of approximately $900 million to $1 billion and free cash flow of $700 million to $800 million in both 2006 and 2007. Moody's also expects that the company will pay down debt over the same time period, from approximately $3 billion pro-forma as of Dec. 31, 2005, to $2.6 billion and $2.3 billion at the end of 2006 and 2007. Further, on a pro-forma basis for 2006, Moody's expects the company will have a debt to book capitalization ratio of 13% to 15%, after adjusting for operating leases. Moody's believes that the merger between the two companies will offer these benefits: a) greater scale and a broader portfolio of products and services; b) the ability to offer an end-to-end solution for laboratory customers, including equipment, software, re-agents, consumables and services; and c) a more diverse geographic, product and customer mix. Moody's also expects that the combination will result in cost synergies and revenue synergies of approximately $150 million and $50 million, respectively, over the next few years. Moody's also views the two companies as highly complimentary. Fisher has a strong supply chain management with distribution capabilities, multiple sales channels, as well as significant sales and marketing resources. On the other hand, Thermo has strong production innovation, intellectual property, research and development, as well as a solid global manufacturing footprint and expertise. Thermo Electron has also been quite successful in penetrating Asia and other emerging markets, offering potentially greater access for Fisher Scientific. Moody's believes that the current unsecured senior debt of Thermo Electron will be structurally subordinated to the current debt at Fisher Scientific International Inc., as well as the proposed $1 billion senior unsecured guaranteed credit facility for the combined entity. Moody's assessment reflects the fact that the proposed credit facility will benefit from a guarantee from Fisher Scientific International Inc. and we expect the existing debt at Fisher Scientific International will benefit from either a guaranty or a co-obligation from the parent. Moody's, however, did not view technical structural subordination as a major constraint to Thermo Electron's current senior unsecured notes and bonds at the proposed Baa2 senior unsecured rating for the combined company. Moody's notes that this subordination issue could become more material if the combined company's rating were at a lower level. Moody's also commented that the major risks in combining both companies focus largely on the integration of the two company's systems, operations and cultures. While Moody's notes that both companies have acquired other life science firms in the past few years, Moody's expects the combined company to focus on internal growth and cost synergies in the short-term. Moody's also cited the additional potential risks inherent in the merger: a) disruptions caused by consolidation in the pharmaceutical and biotechnology industries; b) lower government funding for academic and research institutions; continued inflation in raw material prices; and c) a potential conflict between the distribution of competitor's products and the manufacturing and sale of internally developed products. Based in Waltham, Massachusetts, Thermo Electron Corporation provides scientific equipment and services, supporting life sciences, environmental and industrial process industries worldwide. The company reported $2.6 billion in revenue for the fiscal year ended Dec. 31, 2005. Fisher Scientific International Inc., based in Hampton, New Hampshire, distributes and manufactures an array of products to the scientific research, clinical laboratory and industrial safety markets, both domestic and international. Revenues in 2005 were approximately $5.6 billion. FOAMEX INT'L: Delays Filing of 2nd Quarter 2006 Financial Report ---------------------------------------------------------------- Foamex International, Inc., disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that it is unable to timely file its financial report for the fiscal quarter ended July 2, 2006. As reported in the Troubled Company Reporter on July 7, 2006, Foamex has received an extension of the period within which it may file its Plan of Reorganization through Sept. 14, 2006. In its Form NT10-Q filed on Aug. 18, 2006, Foamex says that its quarterly report could not be filed within the prescribed time period without unreasonable effort or expense. The company's management has had to devote substantial time and effort in connection with the amended Plan and, as a result, has been unable to give adequate time to the completion of the Form 10-Q. Gregory J. Christian, the company's executive vice president and general counsel, explains that the filing delay is necessary for Foamex to appropriately consider the disclosures required in the Form 10-Q in connection with the amended Plan. According to Mr. Christian, Foamex has not yet finalized its operating results but expects to report operating income of about $28,000,000 and $65,000,000 for the quarter and six months ended July 2, 2006. The company posted operating income of $5,000,000 and $16,000,000 for the quarter and two quarters ended July 3, 2005. The fiscal 2005 periods included a gain of around $30,000,000 from the sale of Foamex's rubber and felt carpet cushion businesses, partially set off by a goodwill impairment charge of $17,000,000, Mr. Christian says. Foamex attributes the improvement in its operating income to increases in gross profit due to higher selling prices. 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. 24; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FOAMEX INTERNATIONAL: Wants to Enter into Prologis Warehouse Lease ------------------------------------------------------------------ Foamex International Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to authorize Foamex L.P. to enter into a lease with ProLogis for warehouse space located in Denver, Colorado, pursuant to Section 363(b) of the Bankruptcy Code. The premises under the proposed Lease relates to 25,862 square feet of space located in the Upland Distribution Center II, Building No. 3, in Denver. The facility is used for storage of finished goods inventory. The term of the Lease will run from May 1, 2006 through April 30, 2008, with one three-year option to renew. Base rent will be $7,263 with a security payment of $6,351. The Debtors believe that Foamex's entry into the Lease is a transaction in the ordinary course of business. However, out of an abundance of caution, ProLogis has conditioned Foamex's permanent occupancy of the Premises on Court approval of the Lease, Sean T. Greecher, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates. Mr. Greecher asserts that, absent entry into the Lease, the Debtors would be holdover tenants on a month-to-month basis, which would authorize ProLogis to charge 200% of the monthly rate under the previous lease, and would jeopardize Foamex's continued occupancy of the property. The Debtors say that the Lease is necessary because it provides them with the security of a contractual commitment that is more accommodating to their business needs. 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. 24; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FORD MOTOR: Cuts North American Output by 21% to Hasten Turnaround ------------------------------------------------------------------ Ford Motor Company reported an aggressive reduction of North American production as part of its broader efforts to accelerate the pace of its Way Forward turnaround. The Company is reducing North American fourth-quarter production by 21% -- or 168,000 units -- compared with the fourth quarter a year ago. The revised plan also reduces the company's third- quarter plan by 20,000 units. Bill Ford, the company's chairman and CEO, outlined the decision to cut production in a note to employees, explaining the decision is part of broader efforts to accelerate the Company's North American turnaround and saying full details of additional actions will be disclosed in September. "We know this decision will have a dramatic impact on our employees, as well as our suppliers," Bill Ford told employees. "This is, however, the right call for our customers, our dealers and our long-term future." For full-year 2006, Ford now plans to produce 3.048 million vehicles at its North American assembly plants -- 1.134 million cars and 1.914 million trucks -- a 9% reduction from 2005. The revised production plan is expected to sharply reduce the supply of several models and reduce pressure on sales incentives and dealer inventory carrying costs. The plan also reflects expectations for lower industry sales of light trucks and truck- based sport utility vehicles, as high gasoline prices are expected to continue to encourage demand for more fuel-efficient passenger cars and crossovers. Mark Fields, executive vice president and Ford's president of The Americas, said the "tough-but-important" reduction in production plans underscores the seriousness with which the company is approaching its North American turnaround. "We are basing our business plans on the customer, and we are determined to match production and inventories with consumer demand," Mr. Fields said. "In doing so, we'll reduce incentive spending and inventory carrying costs for our dealers -- with the intent to improve residual values for our customers and stabilize operating patterns for our plants and our suppliers." The new production plan will result in downtime at several assembly plants between now and the end of the year, including: St. Thomas, Ontario (Ford Crown Victoria and Mercury Grand Marquis), Chicago (Ford Five Hundred and Freestyle and Mercury Montego), Wixom, Michigan (Lincoln Town Car), Louisville, Kentucky (Ford Explorer and Mercury Mountaineer), Michigan Truck in Wayne, Michigan (Ford Expedition and Lincoln Navigator), Twin Cities, Minnesota (Ford Ranger) and all F-Series truck plants (Kansas City, Missouri; Norfolk, Virginia, Dearborn and Kentucky Truck in Louisville). These plants are expected to operate on straight time or overtime based on consumer demand: Hermosillo, Mexico (Ford Fusion, Mercury Milan and Lincoln MKZ), AutoAlliance International in Flat Rock, Michigan (Ford Mustang), Oakville, Ontario (Ford Edge, Lincoln MKX and Ford Freestar), Wayne, Michigan (Ford Focus), Kansas City, Missouri (Ford Escape and Mercury Mariner), Ohio Assembly in Avon Lake, Ohio (Ford Econoline) and Atlanta (Ford Taurus). About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on July 31, 2006, Dominion Bond Rating Service lowered on July 21, 2006, Ford Motor Company's long-term debt rating to B from BB, and lowered its short-term debt rating to R-3 middle from R-3 high. DBRS also lowered Ford Motor Credit Company's long-term debt rating to BB(low) from BB, and confirmed Ford Credit's short-term debt rating at R-3(high). DBRS maintained a negative outlook for Ford Motor Company and Ford Credit. As reported in the Troubled Company Reporter on July 24, 2006, Moody's Investors Service lowered the Corporate Family and senior unsecured ratings of Ford Motor Company to B2 from Ba3 and the senior unsecured rating of Ford Motor Credit Company to Ba3 from Ba2. The Speculative Grade Liquidity rating of Ford has been confirmed at SGL-1, indicating very good liquidity over the coming 12 month period. The outlook for the ratings is negative. As reported in the Troubled Company Reporter on June 12, 2006, Fitch downgraded long-term ratings for both Ford Motor Company and Ford Motor Credit Company with a Negative Rating Outlook, and Assigned an Issuer Default Rating of 'B+' from 'BB' and a Senior unsecured rating of 'BB-/RR3' from 'BB'. Fitch also lowered FMCC's Issuer Default Rating to 'B+' from 'BB'. As reported in the Troubled Company Reporter on July 3, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Ford Motor Co. and related units to 'B+' from 'BB-' and affirmed its 'B-2' short-term rating. The ratings were removed from CreditWatch, where they were placed on May 25, 2006, with negative implications. The outlook is negative. FUNCTIONAL RESTORATION: U.S. Trustee Picks 5-Member Creditors Team ------------------------------------------------------------------ The U.S. Trustee for Region 16, appointed five creditors to serve on an Official Committee of Unsecured Creditors in Functional Restoration Medical Center, Inc.'s chapter 11 case: 1. Yassi, LLC Attn: Tara Pajoum P.O. Box 413 Pacific Palisades, CA 90272 Tel: (310) 454-9204 Fax: (310) 600-6043 2. Hitachi Medical Systems America, Inc. Attn: Richard S. Katz 1959 Summit Commerce Park Twinsburg, OH 44087 Tel: (330) 425-1313 ext. 4100 Fax: (800) 800-3106 ext. 4100 3. Jimliz Medical Services, Inc. Attn: Jimmy O. Naval 12926 Cranleigh St. Cerritos, CA 90703 Tel: (323) 864-3741 4. Spectrum Medical X-Ray Co. Attn: Frank Bardi 1721 Stewart St. Santa Monica, CA 90404 Tel: (310) 828-6161 5. Simin Nabardani 16132 Moorpark St. Encino, CA 91436 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 Encino, California, Functional Restoration Medical Center, Inc., is the second largest owner and operator of MRI centers in Southern California. The Debtor filed for chapter 11 protection on Mar. 9, 2006 (Bankr. C.D. Calif. Case No. 06- 10306). Daniel A. Lev, Esq., at SulmeyerKupetz, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, its estimated assets and debts between $10 million and $50 million. GENEVA STEEL: Chapter 11 Trustee Taps Wikstrom Economic as Experts ------------------------------------------------------------------ James T. Markus, the Chapter 11 Trustee appointed for the estate of Geneva Steel LLC, asks the U.S. Bankruptcy Court for the District of Utah, Central Division, for permission to retain Wikstrom Economic & Planning Consultants as his expert witness in these proceedings: -- Markus v. Johnsen, Adversary Proceeding No. 05-2481; and -- Markus v. Fried, et. al, Adversary Proceeding No. 05-2578. Wikstrom Economic will: a) prepare expert opinions and reports regarding market analysis of the real estate market of Utah County, Utah to be used in the Johnsen or Fried adversary proceedings; and b) assist the Trustee, at his request, in providing additional expert services that may be needed in connection with the liquidation of assets of the estates or the administration of the estates. Karen Wikstrom, a Wikstrom Economic member, discloses that her firm's hourly rates currently range between $35 and $250 per hour, depending upon the professionals' skills and experience. Ms. Wikstrom assures the Court that her firm does not represent nor hold any interest adverse to the Debtor or the estate. Headquartered in Provo, Utah, Geneva Steel LLC owns and operates an integrated steel mill. The Company filed for chapter 11 protection on January 25, 2002 (Bankr. Utah Case No. 02-21455). Andrew A. Kress, Esq., Keith R. Murphy, Esq., and Stephen E. Garcia, Esq., at Kaye Scholer LLP, represent the Debtor in its chapter 11 proceeding. James T. Markus was appointed as the chapter 11 Trustee for the Debtor's estate on June 22, 2005. John F. Young, Esq., at Block Markus & Williams, LLC represents the chapter 11 Trustee. Dianna M. Gibson, Esq., and J. Thomas Beckett, Esq., at Parsons Behle & Latimer, represent the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it listed $262 million in total assets and $192 million in total debts. GLOBAL DOCUGRAPHIX: Sells Some Assets to 9 Entities for $9.1 Mil. ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas allowed Global Docugraphix USA, Inc., and Global Docugraphix, Inc., to sell some of their assets -- inventories, receivables, furniture, fixtures and equipment -- to these entities for $9.1 million: Purchaser Cluster of Assets --------- ----------------- Clyde W. White Division 48 Reliance Business Products, LLC Division 14 Webb Mason Inc. Division 27 Stake in TopForm Software Inc. Incentrix software CorpLogoWare, LLC Division 50 APTCO, Inc. Division 49 BNBS, Inc. Division 15 Division 17 Division 9 Division 10 Division 11 Division 12 Division 26 Better Business Forms and Products, Inc. Division 38 Division 65 American Business Forms, Inc. Division 15 Division 25 Division 30 Division 32 Division 36 Division 43 Division 44 Division 45 Division 51 Division 60 Division 62 Headquartered in Plano, Texas, Global DocuGraphix, Inc. -- http://www.gdxinc.com/-- is a commercial printing company offering products and solutions for printing, advertising, marketing, office, and document management. The Company and its subsidiary, Global DocuGraphix USA, Inc., filed for chapter 11 protection on July 18, 2006 (Bankr. N.D. Tex. Case No. 06-32889) Holland N. O'Neil, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne and Sewell LLP represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they reported assets and debts totaling between $10 million and $50 million. GOLD KIST: Receives $1 Billion Cash Offer from Pilgrim's Pride -------------------------------------------------------------- Pilgrim's Pride Corporation sent a proposal to Gold Kist, Inc. offering to purchase all of the outstanding shares of Gold Kist common stock for $20 per share in cash. The transaction is valued at approximately $1 billion, plus the assumption of Gold Kist's debt of $144 million. Pilgrim's Pride's offer represents a premium of approximately 55% over Gold Kist's closing stock price of $12.93 on Friday, Aug. 18, 2006. Using consensus earnings estimates for fiscal 2007, Pilgrim's Pride expects that the transaction will be accretive to earnings per share in the first full year after the completion of the transaction, including approximately $50 million of anticipated synergies expected to come primarily from the optimization of production and distribution facilities and cost savings in purchasing, production, logistics and SG&A. "We believe the combination of Pilgrim's Pride and Gold Kist will create the world's leading chicken producer and result in substantial value creation for our respective shareholders, employees, business partners and other constituencies," O.B. Goolsby, Jr., President and Chief Executive Officer of Pilgrim's Pride, said. "The combined company will maintain a balanced portfolio of fresh chicken and value-added products and expand its geographic reach and customer base, enabling it to compete more efficiently in the industry and provide even better service to its customers. "Our proposal provides Gold Kist's shareholders with a substantial approximately 55% premium for their shares in cash. We look forward to sitting down with the members of Gold Kist's Board of Directors as soon as possible to work jointly with them to quickly close this transaction," added Mr. Goolsby. Pilgrim's Pride noted that it has substantial current liquidity and has received further assurances from its financial advisors that it has the ability to finance the transaction. Pilgrim's Pride believes that the combined company will have a strong financial position and substantial cash flow, enabling it to consistently reduce debt and return to historical debt levels. Baker & McKenzie LLP and Morris, Nichols, Arsht & Tunnell, LLP are acting as legal counsel to Pilgrim's Pride. Credit Suisse and Legacy Partners Group LLC are acting as financial advisors to Pilgrim's Pride. About Pilgrim's Pride Headquartered in Pittsburg, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the United States, Mexico and in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. About Gold Kist Based in Atlanta, Georgia, Gold Kist Incorporated (NASDAQ: GKIS) -- http://www.goldkist.com/-- operates a fully integrated chicken production, processing and marketing business. Gold Kist's production operations include nine divisions located in Alabama, Florida, Georgia, North Carolina and South Carolina. * * * Moody's Investors Service changed the ratings outlook for Gold Kist Inc., on March 27, 2006, to stable from positive, downgraded its speculative liquidity rating to SGL-2 from SGL-1, and affirmed its B2 $130 million senior unsecured note rating and its B1 corporate family rating. Standard & Poor's Ratings Services affirmed its 'B+' long-term corporate credit and other ratings on poultry processor Gold Kist Inc., on March 6, 2006. In addition, the ratings were removed from CreditWatch with positive implications where they were originally placed on Oct. 11, 2005. About $190.7 million of debt (adjusted for capitalized operating leases) of Gold Kist was outstanding at Dec. 31, 2005. The outlook is stable. GOODING'S SUPERMARKETS: First National & Panel Resolve Lien Spat --------------------------------------------------------------- Gooding's Supermarkets, Inc., asks the U.S. Bankruptcy Court for the Middle District of Florida to approve its settlement agreement with First National Bank of Central Florida and the Official Committee of Unsecured Creditors. The settlement resolves a dispute on First National's lien on certain of the Debtor's assets. R. Scott Shuker, Esq., at Gronek & Latham, LLP, in Orlando, Florida, tells the Court that on April 11, 2004, the Debtor executed a leasehold mortgage deed and security agreement with First National for $2.56 million with respect to the retail supermarket operation located in Celebration, Florida. Under the loan, First National has a mortgage on the leasehold interest in the Celebration Store and an interest in all the Debtor's interest in all leases, sale agreements and other agreement in connection with the Celebration Store. To perfect the security interest granted to First National under the loan, First National recorded the loan documents in Osceola County, Florida. To further protect its security interest, First National filed with the Secretary of State a Florida Uniform Commercial Code financing statement on Sept. 8, 2004. According to Mr. Shuker, the Celebration Store is now closed and is the subject of ongoing litigation styled Gooding's Supermarkets, Inc., v. Water Tower Retail, LLC, (Case No. 05-CI- 2332) and Water Tower Retail, LLC, v. Gooding's Supermarkets, Inc., (Case No. 05-CI-2510), which were filed in the Circuit Court of the 8th Judicial Circuit of Osceola, County, Florida. In this litigation, the Debtor is asserting claims against Water Tower and Unicorp for breach of contract, libel, and intentional and negligent misrepresentation in the inducement. The Debtor is seeking damages. First National claims a lien on any litigation proceeds that may arise out of this litigation. On March 10, 2006, the Debtor asked the Court to approve a stipulation providing adequate protection to First National. The Committee objected and asserted that First National lien's does not extend to the Celebration litigation or any proceeds from it. On June 21, 2006, the Debtor, Water Tower, Orland Hotel International II, and Unicorp entered into a settlement agreement resolving the litigation. To avoid risks, delay and expense of litigating the Committee's objection, the parties agreed that: (a) First National's secured claim will be paid by a modification of the existing loan documents to provide for monthly payments at the interest rate provided in the loan documents based on a 15-year amortization and maturity. Monthly payments will be $24,000; (2) First National will receive 75% of the net recovery from the litigation up to the first $2 million and then 80% of any net recovery above $2 million until the claim is paid in full; and (3) the Gooding's Creditor Trust will receive a 25% of the first $2 million of the net recovery. If the net recovery is above $2 million, the Trust will get 20%. In the alternative, in the event the conditional settlement is consummated: (1) First National will receive $2 million from Water Tower, Unicorp, or OHI; (2) after the payment, the Debtor will pay First National a total of $300,000 in three years with a 7.32% annual interest; and (3) the Committee will receive, for the benefit of the unsecured creditors, $500,000 from Water Tower, Unicorp or OHI. Headquartered in Orlando, Florida, Gooding's Supermarkets, Inc., dba Gooding's, offers catering services and operates a chain of supermarkets in Central Florida. The Company filed for chapter 11 protection on Dec. 30, 2005 (Bankr. M.D. Fla. Case No. 05-17769). R. Scott Shuker, Esq., at Gronek & Latham LLP represents the Debtor. W. Glenn Jensen, Esq., at Akerman Senterfitt represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets of $1 million to $10 million and debts of $10 million to $50 million. HEALTHSOUTH CORP: Keeps Name as Restructuring Goes Underway ----------------------------------------------------------- HealthSouth Corporation disclosed that it would explore a range of strategic alternatives to enhance stockholder value and reposition the Company's primary focus on the post-acute care sector. The Company is evaluating strategic alternatives that include, but are not limited to, the spin-off, sale or other disposition of the Company's surgery center and outpatient rehabilitation divisions, together with the Company's previously announced determination related to its diagnostic division. HealthSouth intends to use a substantial portion of the proceeds to deleverage the Company. HealthSouth's Inpatient Division accounted for 57.9% of the company's consolidated net operating revenues and 86.0% of the Company's operating earnings from its four primary operating divisions for the three months ended June 30, 2006. For the same period, the Surgery Division accounted for 24.5% of consolidated net operating revenues and 18.1% of operating earnings, the Outpatient Division accounted for 11.0% of consolidated net operating revenues and 6.8% of operating earnings, and the Diagnostic Division accounted for 6.6% of consolidated net operating revenues and -10.9% of operating earnings. "HealthSouth has long been known for the quality of its inpatient rehabilitation services," said Jay Grinney, HealthSouth President and CEO. "With the aging of our nation's population and the highly fragmented nature of the $125 billion post-acute market, we recognize there are significant growth and consolidation opportunities in the post-acute sector. We intend to focus HealthSouth's resources on establishing a "pure play," post-acute company that builds on our core competencies, permits us to pursue these growth opportunities, and allows us to expand into complementary post-acute businesses. "At the same time, we believe our Outpatient, Surgery and Diagnostic Divisions will be well-positioned to succeed under new owners who will place strategic priority on strengthening each individual business," Mr. Grinney added. "These divisions compete in sectors with good growth potential. However, we have concluded there are very few strategic or financial synergies in operating these divisions as one company. We are committed to seeking buyers whose values are consistent with HealthSouth's heritage of outstanding patient care." Mr. Grinney concluded by adding, "A substantial portion of the expected proceeds will be used to deleverage the Company, creating a balance sheet that will allow us to capitalize on growth opportunities in the post-acute segment." HealthSouth has engaged Goldman, Sachs & Co. to assist in the process of evaluating strategic alternatives for the divisions to be divested, which is expected to take approximately twelve months to complete. NYSE Listing Application Clearance In addition, HealthSouth has been cleared to submit an application for the listing of its common stock on the New York Stock Exchange, Inc., and anticipates that it will begin trading on the NYSE by the end of October under the ticker symbol "HLS." Coincident with this relisting, HealthSouth will seek stockholder approval for a one-for-five reverse stock split whereby every five shares of common stock issued and outstanding will become one share of common stock. HealthSouth currently has approximately 398.24 million shares outstanding. As a result of the reverse stock split, outstanding shares will be reduced to approximately 80 million. The Company's primary purpose for the reverse stock split is to increase the per-share trading price of its common stock and decrease the number of outstanding shares of its common stock so as to: -- bring the share price of its common stock, along with the number of shares of its common stock outstanding, to a range more in line with other healthcare companies with comparable market capitalization; -- broaden the pool of investors that are interested in investing in HealthSouth by attracting new investors who would prefer not to invest in shares that trade at low, single-digit share prices; -- make the Company's common stock a more attractive investment to institutional investors; -- reduce the relatively high transaction costs and commissions incurred by its stockholders due to the Company's currently low per share trading price and high number of shares outstanding; and -- illustrate more effectively the impact of the Company's operational improvements and cost reductions by enhancing the visibility of any changes of its reported earnings per share. Mr. Grinney said that the reverse split will affect all of the Company's stockholders uniformly and will not change the proportionate equity interests of any of the Company's stockholders. HealthSouth will soon file a preliminary proxy statement with the Securities and Exchange Commission with respect to the stockholders meeting to approve such reverse stock split and anticipates completing the reverse stock split prior to the time its common stock begins trading on the NYSE by the end of October. Mr. Grinney also said that the Company will retain the HealthSouth name. "The market research we conducted overwhelmingly indicated that the name HealthSouth is synonymous with high quality rehabilitative care. As we reposition HealthSouth as a pure-play, post-acute healthcare provider, this valuable brand equity is part of our heritage that we're holding onto." Mr. Grinney also indicated HealthSouth will maintain its headquarters in Birmingham, Alabama. About HealthSouth Headquartered in Birmingham, Alabama, HealthSouth Corporation (OTC Pink Sheets: HLSH) -- http://www.healthsouth.com/-- provides outpatient surgery, diagnostic imaging and rehabilitative healthcare services, operating facilities nationwide. * * * As reported in the Troubled Company Reporter on May 30, 2006, Standard & Poor's Ratings Services assigned its 'CCC+' rating to HealthSouth Corp.'s $1 billion of floating-rate senior unsecured notes due 2014 and fixed-rate senior unsecured notes due 2016. At the same time, existing ratings on HealthSouth, including the 'B' corporate credit rating, were affirmed. The rating outlook is stable. Moody's placed HealthSouth's debt and corporate family ratings at B2 and B3 respectively. The ratings were placed on April 18, 2006, with a stable outlook. HEXION SPECIALTY: Earns $59 Million in 2006 Second Quarter ----------------------------------------------------------- Hexion Specialty Chemicals reported revenues for the second quarter period ended June 30, 2006 of $1.3 billion, compared to $1.2 billion during the prior year period. The Company's operating income of $59 million for the 2006 second quarter versus operating income of $51 million in the prior year period. The income for the second quarter of 2006 was affected by the negative timing impact of contractual pass through of certain raw material price increases to customers of $13 million, the write-off of deferred costs of $15 million associated with a planned initial public offering of common stock, and transaction and integration expenses of $18 million. The Company also disclosed net loss from continuing operations of $62 million for the 2006 quarter versus a net loss from continuing operations of $47 million in the prior year period. The second quarter 2006 net loss includes $51 million related to the extinguishment of debt. Net loss from discontinued operations totaled $13 million for the second quarter 2006 compared to a net loss from discontinued operations of $10 million in the prior year period. "We continue to successfully execute our plans for growing and integrating Hexion's operations," Craig O. Morrison, chairman and chief executive officer, said. "However, our second quarter 2006 results were impacted by dramatic increases in the cost of several raw materials, particularly phenol. Hexion announced several price increases during the quarter, which we are working to fully implement, to help offset these costs and improve product margins. In addition, we are on track relative to our synergy commitments and the integration of our recent acquisitions." Credit Facilities During the quarter, the Company amended and restated its senior secured credit facilities. The seven-year $1.625 billion term loan facility, seven-year $50 million synthetic letter of credit, and five-year $225 million revolving credit facility are each subject to an earlier maturity date. The Company also repurchased or redeemed all of its outstanding 8% Senior Secured Notes, 9-1/2% Senior Second Secured Notes, and 13-1/2% Senior Subordinated Notes, as well as Series A Preferred Stock. The Company's Acquisitions The Company also completed the acquisition of the global ink and adhesive resins business of Akzo Nobel during the second quarter of 2006. The acquired business includes 10 manufacturing facilities and had annual sales of approximately EUR166 million in 2005. The Company is integrating the Akzo Nobel business, along with the decorative coatings and adhesives business of the Rhodia Group and the global wax compounds business of Rohm and Haas Company, into its existing global operations. About the Company's IPO The Company, on June 19, 2006, filed an amendment to its registration statement on Form S-1 for an initial public offering of equity securities, which is not yet effective. In addition, on Aug. 1, 2006, Hexion U.S. Finance Corp. filed an amendment to its registration statement on Form S-4. The securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. On June 21, 2006, the Company announced it suspended its IPO of common stock due to adverse market conditions. About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://hexionchem.com/-- makes thermosetting resins (or thermosets). Thermosets add a desired quality (heat resistance, gloss, adhesion) to a number of different paints and adhesives. Hexion also makes formaldehyde and other forest product resins, epoxy resins, and raw materials for coatings and inks. The Company has 86 manufacturing and distribution facilities in 18 countries. * * * As reported in the Troubled Company Reporter on May 4, 2006, Standard & Poor's Ratings Services assigned its 'B+' rating and its recovery rating of '3' to Hexion Specialty's $1.675 billion senior secured term loan and synthetic letter of credit facilities. The rating on the existing $225 million revolving credit facility was lowered to 'B+' with a recovery rating of '3', from 'BB-' with a recovery rating of '1', to reflect the similar security package as the new term loan and synthetic letter of credit facility. The ratings on the existing senior second secured notes were raised to 'B', with a recovery rating of '3', from 'B-' with a recovery rating of '5'. The ratings on the senior second secured notes reflect the amount of priority claims of the revolving facility and the first-lien term loan lenders. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on Hexion and revised the outlook to stable from negative. INLAND FIBER: Files Chapter 11 Petition and Pre-Packaged Plan ------------------------------------------------------------- Inland Fiber Group, LLC and Fiber Finance Corp. reached a final settlement, on Aug. 18, 2006, resolving all of the outstanding claims in the litigation between the Companies and certain other defendants, and the trustee under the indenture governing the $225 million principal amount of 9-5/8% senior notes due 2007 issued by the Companies. In accordance with the settlement agreement, the Companies have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the District of Delaware and a pre-negotiated plan of reorganization, and will seek approval of that plan by the end of the year. Under the settlement and plan of reorganization, the holders of the notes will receive 68.57% of the principal amount of the notes. Holders of notes, or their respective affiliates, that collectively own or manage $158.3 million (or approximately 70.4%) of the outstanding principal amount of the notes have executed a support and lock-up agreement pursuant to which they have agreed to vote in favor of the plan. These noteholders and the indenture trustee have also agreed to forbear from exercising any rights and remedies under the indenture, or from pursuing any claim pertaining to the notes or the subject matter of the litigation. As part of the settlement agreement and plan of reorganization, IFG has reached an agreement to sell certain of its assets, including its seed orchard, to a third party. The purchase price for these assets is $83 million. This agreement is subject to certain limited conditions for purchase by the third party purchaser. The Companies have also entered into an agreement with their insurance carriers to contribute a total of $8.3 million towards payment under the plan of reorganization. In order to effectuate the settlement agreement and plan of reorganization, affiliates of IFG have agreed to sell certain of their Oregon assets to such third party purchaser and certain of their assets in the State of Washington to a related party of the Companies. The proceeds of those sales will be sufficient to fund the remaining amounts payable pursuant to the settlement agreement and plan of reorganization. About Inland Fiber Inland Fiber Group, LLC, fka U.S. Timberlands Klamath Falls, LLC, grows trees, and sells logs, standing timber and timberland. The Company owns approximately 162,000 fee acres of timberland and cutting rights on approximately 64,000 acres of timberland in Oregon east of the Cascade Range. These logs are processed for sale as lumber, plywood and other wood products, primarily for use in new residential home construction, home remodeling and repair and general industrial applications. The Company also owns and operates its own seed orchard and produces approximately 3,000,000 conifer seedlings annually from its nursery, approximately 50% of which are used for its own internal reforestation programs, 20% are sold to affiliates, with the balance sold to other forest products companies. Fiber Finance Corp., a Delaware corporation, is an affiliate of IFG without any operations or significant assets. At March 31, 2006, the Company's balance sheet showed a stockholders' deficit of $173,745,000, compared to a deficit of $168,696,000 at Dec. 31, 2006. Notices of Default The Trustee for the Company's $225 million 9-5/8% Senior Notes due 2007 under the Indenture alleged and the Court of Chancery of the State of Delaware determined that the Company violated certain covenants contained in the Indenture. The Trustee is not named in the Company's SEC filing. In January 2005 and July 2005, the Trustee sent the Company Notices of Default and Acceleration declaring the unpaid principal and any accrued interest on the Notes to be immediately due and payable. Accordingly, the Notes have been classified as a current liability in the accompanying balance sheet at Dec. 31, 2005, and 2004. The Company timely paid to the Trustee the semi-annual interest payment on the Notes due Nov. 15, 2004. The Company said that the Trustee subsequently withheld approximately $4.8 million, which was reduced to approximately $2.8 million, from that payment to fund its cost of litigation against the Company and paid the noteholders a corresponding reduced amount of interest. The Company believes the Trustee did not have the right to withhold that amount and is responsible to pay those interests to the noteholders. In December 2004, the Company commenced litigation against the Trustee. As of Dec. 31, 2005, the Company has not made its semi-annual interest payments on the Notes, due on May 15 and Nov. 15, 2005, which amounted to $21,656. The non-payment constitutes an event of default under the Indenture. INLAND FIBER: Case Summary & 9 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: Inland Fiber Group, LLC aka U.S. Timberlands Klamath Falls, LLC 6400 Highway 66 Klamath Falls, OR 97601 Bankruptcy Case No.: 06-10884 Debtor affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Fiber Finance Corp. 06-10885 Type of Business: The Debtor grows trees and sells logs, standing timber, and timberland. Chapter 11 Petition Date: August 18, 2006 Court: District of Delaware (Delaware) Debtor's Counsel: William P. Bowden, Esq. Don A. Beskrone, Esq. Ricardo Palacio, Esq. Amanda M. Winfree, Esq. Ashby & Geddes, P. A. 222 Delaware Avenue, 17th Floor Wilmington, DE 19899 Tel: (302) 654-1888 Fax: (302) 654-2067 - and - Glenn E. Siegal, Esq. Scott M. Zimmerman, Esq. David C. McGrail, Esq. Davin J. Hall, Esq. Dechert LLP 30 Rockefeller Center New York, NY 10112 Tel: (212) 698-3660 Fax: (212) 698-3599 Total Assets Total Debts ------------ ----------- Inland Fiber Group, LLC $81,890,311 $264,433,754 Fiber Finance Corp. $1,048 $263,074,983 A. Inland Fiber Group, LLC's 8 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank National Bond Debt $263,074,983 Association, as Indenture Trustee 60 Livingston Avenue St. Paul, MN 55107 Confederated Tribes of Deposit $20,868 Warm Springs P.O. Box C Warm Springs, OR 97761 Bureau of Land Management, Government Contract $7,500 Department of the Interior 3040 Biddle Road Medford, OR 97501 Fruit Growers Supply Company Deposit $7,372 Collins Timber Company Deposit $5,099 Jeld Wen Deposit $2,080 Brooks Walker Deposit $427 Forest Service, Department Government Contract Unknown of Agriculture B. Fiber Finance Corp.'s Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank National Bond Debt $263,074,983 Association, as Indenture Trustee 60 Livingston Avenue St. Paul, MN 55107 KINETIC CONCEPTS: Debt Reduction Spurs Moody's to Upgrade Ratings ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of Kinetic Concepts, Inc. The ratings upgrade reflects primarily a continued reduction in outstanding debt and growing cash flow, despite an unfavorable court decision on its patent infringement trial with BlueSky, as well as the potential for greater competition in its core wound pressure market. The ratings outlook is stable. Moody's believes that the company can continue to maintain a strong liquidity position while continuing to generate significant cash flow. The stable outlook assumes that revenues will grow between 2% to 4% in 2007 and will drop slightly in 2008 while margins will contract during this time period due to increased competition and continued reimbursement pressure. Due to expected stable cash flow and further reductions in outstanding debt, the company will continue to maintain its financial strength, as measured by cash flow to debt and free cash flow to debt, which are indicative of a company in the Aa to Aaa category, as determined by Moody's recently published rating methodology for medical device companies. The ratings could be downgraded if the company pursues a debt financed, transforming acquisition, which would result in substantially less financial flexibility and a deterioration of credit metrics. The ratings could be upgraded if the company continues to expand its cash flow, reduce debt and does not pursue material shareholder initiatives or acquisitions. These ratings were upgraded with a stable outlook: * Guaranteed senior secured revolving credit facility, due 2009, upgraded to Ba2 from Ba3 * Guaranteed senior secured term loan B, due 2010, upgraded to Ba2 from Ba3 * Guaranteed unsecured subordinated notes, due 2013, upgraded to B1 from B2 * Corporate Family Rating, upgraded to Ba2 from Ba3 Kinetic Concepts, Inc., headquartered in San Antonio, Texas, provides therapies for advanced wound healing and for the treatment and prevention of complications suffered by patients as a result of immobility. Revenues for the year ended December 31, 2005 were approximately $1.2 billion. KULLMAN INDUSTRIES: CEO Agrees to Aid Panel in Tajikistan Action ---------------------------------------------------------------- The Honorable Kathryn C. Ferguson of the U.S. Bankruptcy Court for the District of New Jersey approved a settlement agreement between the Official Committee of Unsecured Creditors and Robert Kullman, president and chief executive officer of Kullman Industries, Inc. Under the agreement, Mr. Kullman agrees to fully cooperate with the Committee in connection with the pursuit by the Debtor's bankruptcy estate of recovery on the Tajikistan Claims. Before it filed for Bankruptcy, the Debtor contracted with the U.S. government to act as the general contractor in the construction of an embassy in Tajikistan. The Committee intends to bring an action against the U.S. government to recover damages resulting from the government's alleged breaches of the terms of the Tajikistan contract. The settlement also provides for the distribution of any recovery from the Tajikistan action in this order: a) to the Committee's counsel pursuing the Tajikistan claims for an agreed upon contingency fee and expenses; b) to Mr. Kullman for travel and legal expenses incurred in connection with his assistance in the pursuit of the Tajikistan Claims. c) the next $1,500,000 of proceeds will be paid to the Debtor's estate for distribution to creditors of the estate; d) the next $1,000,000 of proceeds will be paid sixty 60% percent to the Debtor's estate for distribution to creditors of the estate and 40% percent to Mr. Kullman; and e) all additional proceeds will be divided evenly between the creditors and Mr. Kullman. About Kullman Industries Headquartered in Lebanon, New Jersey, Kullman Industries, Inc. -- http://www.kullman.com/-- is a modular construction builder. The company filed for chapter 11 protection on Oct. 17, 2005 (Bankr. D. N.J. Case No. 05-60002). James N. Lawlor, Esq., at Wollmuth, Maher & Duetsch, LLP represents the Debtor in its restructuring efforts. Bruce D. Buechler, Esq., Peter J. D'Auria, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million to $50 million. LEE'S TRUCKING: Inks New Premium Financing Pact with FIFC --------------------------------------------------------- Lee's Trucking, Inc., asks the U.S. Bankruptcy Court for the Western District of Arkansas in El Dorado for authority to execute an insurance premium financing agreement with First Insurance Funding Corporation. The Debtor needs to secure insurance coverage for its freight hauling services including general liability, POLL, EXLB, Workers Compensation, and Automobile insurance. The amount financed under the premium financing agreement will total approximately $737,947. The Debtor will become obligated to pay to FIFC the sum in nine monthly installments of $84,189.23 each. The first payment under the Insurance Premium Finance Agreement is due on Sept. 1, 2006. As collateral to secure repayment of the indebtedness, the Debtor is granting FIFC a security interest in the unearned premiums of the Policies. The Debtor had previously obtained court-approval for a similar premium financing scheme with FIFC. In June 2006, the Court authorized the Debtor to obtain approximately $85,894 of financing for its cargo, freight damage and property coverage insurance. Under their first agreement, the Debtor is required to pay FIFC in 10 monthly installments of $8,589 each. The Debtor also granted FIFC a security interest in the unearned premiums of the Policies. Headquartered in El Dorado, Arkansas, Lee's Trucking, Inc. -- http://www.leestrucking.com/-- transports bulk chemicals, non- hazardous materials, hazardous materials, and hazardous waste. The Company filed for chapter 11 protection on May 13, 2005 (Bankr. W.D. Ark. Case No. 05-73565). Robert L. Depper, Jr., Esq., at Depper Law Firm represents the Debtor on its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. LEVITZ HOME: Wants to Walk Away from Woodbury HQ Lease ------------------------------------------------------ Levitz Home Furnishings, Inc., and its debtor-affiliates want to walk away from a lease of nonresidential property located in Woodbury, New York, that serves as their corporate headquarters, Nicholas M. Miller, Esq., at Jones Day, in New York, tells the U.S. Bankruptcy Court for the Southern District of New York. The Debtors will abandon their interest in any personal property located at the premises, Mr. Miller says. Lake Park 300 Crossways Park Drive, LLC, and CLK-HP 300 Crossways Park Drive, LLC, are the landlords for the Woodbury Lease. According to Mr. Miller, pursuant to a June 8, 2006, stipulation between the Debtors and PLVTZ, LLC, on the one hand, and Crossways, on the other hand, if the Woodbury Lease is rejected, the Debtors or PLVTZ will, under any circumstances, be entitled to occupy the premises through and including Dec. 31, 2006, provided that the Debtors or PLVTZ will provide Crossways with 60 days' notice of intent to actually vacate the premises. The Debtor is also rejecting the lease for Store No. 20509 located in Nanuet, New York, effective as of Aug. 2, 2006. The Debtors will abandon their interest in any personal property located at the premises. Josephine Tritt and Dorothy Altman are the landlords for Store No. 20509. Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP represents the Official Committee of Unsecured Creditors. Levitz sold substantially all of its assets to Prentice Capital on Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) LIQUIDMETAL TECH: June 30 Balance Sheet Upside-Down by $10.8 Mil. ----------------------------------------------------------------- Liquidmetal Technologies, Inc., incurred a $7,864,000 net loss for the three months ended June 30, 2006, compared to a $5,522,000 net loss for the same period in 2004. Revenue increased $3.4 million to $7.1 million for the three months ended June 30, 2006 from $3.7 million for the three months ended June 30, 2005. The increase consisted of an increase of $2.9 million from the sales and prototyping of parts manufactured from bulk Liquidmetal alloys to consumer electronics customers as a result of increased demand from electronic casings applications, an increase of $100,000 from research and development contracts, and an increase of $400,000 from sales of coatings products as a result of increase in demand from oil drilling applications. At June 30, 2006, the Company's balance sheet showed $24,986,000 in total assets and $35,878,000 in total liabilities, resulting in a $10,892,000 shareholders' deficiency. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?fea Going Concern Doubt Choi, Kim & Park LLP expressed substantial doubt about Liquidmetal Technologies, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's significant operating losses and working capital deficit. About Liquidmetal Liquidmetal Technologies -- http://www.liquidmetal.com/-- is the leading developer, manufacturer, and marketer of products made from amorphous alloys. Amorphous alloys are unique materials that are characterized by a random atomic structure, in contrast to the crystalline atomic structure possessed by ordinary metals and alloys. Liquidmetal Technologies is the first company to produce amorphous alloys in commercially viable bulk form, enabling significant improvements in products across a wide array of industries. The combination of a super alloy's performance coupled with unique processing advantages positions Liquidmetal alloys for what the company believes will be The Third Revolution(TM) in material science. LIQUIDMETAL TECH: Receives Federal Grand Jury Subpoena ------------------------------------------------------ Liquidmetal Technologies, Inc. has received a federal grand jury subpoena for the production of certain documents relating to the period Jan. 1, 1999 through the present. The documents being sought include accounting records, documents relating to the Company's relationship with Growell Metal of Korea, and documents and records relating to transactions in Company stock by officers and directors. The Company has been advised that the materials sought are pertinent to a grand jury investigation recently initiated in the Middle District of Florida by the U.S. Department of Justice, Criminal Division, Fraud Section concerning alleged accounting improprieties by the Company, among other things. The Company believes the subject matter of the investigation is largely similar to the subject matter of the previously disclosed consolidated securities class action and shareholder derivative actions that the Company reached agreements in principle to settle in April 2006. Liquidmetal says it will fully cooperate with the authorities in connection with this subpoena and investigation. Going Concern Doubt Choi, Kim & Park LLP expressed substantial doubt about Liquidmetal Technologies, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's significant operating losses and working capital deficit. About Liquidmetal Liquidmetal Technologies -- http://www.liquidmetal.com/-- is the leading developer, manufacturer, and marketer of products made from amorphous alloys. Amorphous alloys are unique materials that are characterized by a random atomic structure, in contrast to the crystalline atomic structure possessed by ordinary metals and alloys. Liquidmetal Technologies is the first company to produce amorphous alloys in commercially viable bulk form, enabling significant improvements in products across a wide array of industries. The combination of a super alloy's performance coupled with unique processing advantages positions Liquidmetal alloys for what the company believes will be The Third Revolution(TM) in material science. MASSEY ENERGY: Can Access up to $175MM Under Amended Debt Facility ------------------------------------------------------------------ Massey Energy Company entered into an amended and restated asset- based revolving credit agreement, which provides for available borrowings, including letters of credit, of up to $175 million, depending on the level of eligible inventory and accounts receivable. The previous credit limit was $130 million, including a $100 million sublimit for letters of credit. In addition, the Company achieved improved pricing and extended the facility's maturity to August 2011. Currently there are $60.5 million of letters of credit issued and there are no outstanding borrowings under this facility. Based in Richmond, Virginia, Massey Energy Company (NYSE: MEE) -- http://www.masseyenergyco.com/-- produces Central Appalachian coal, with subsidiaries serving more than 125 utility, industrial and metallurgical customers around the world. * * * As reported on the Troubled Company Reporter on Aug. 2, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Richmond, Virginia-based Massey Energy Co. to 'B+' from 'BB-', reflecting its expectation of weaker-than-anticipated financial performance; increased debt leverage; and concerns about aggressive shareholders. The outlook is stable. MORGAN STANLEY: Fitch Affirms Two Certificates' Junk Ratings ------------------------------------------------------------ Fitch Ratings upgraded Morgan Stanley Capital I Inc. commercial mortgage-backed securities pass-through certificates, series 1997-RR: -- $83.7 million class D to 'AAA' from 'AA+' -- $30.2 million class E to 'AAA' from 'A' These classes are affirmed: -- Interest only class IO at 'AAA' -- $98.2 million class F at 'BB-' -- Classes G-1 and G-2 remain at 'C/Distressed Rating 6' and 'CCC/DR4' respectively Classes A, B, and C have paid in full and classes H-1 and H-2 have been reduced to zero due to realized losses. The upgrades were the result of increased credit enhancement due to paydown, as well as the positive rating migration in the underlying collateral. As of the July 2006 distribution date, the transaction has paid down 50.1%, to $247.4 million from $503.7 million at issuance. The certificates are collateralized by all or a portion of 32 classes of fixed-rate CMBS in 15 separate transactions. The current weighted average rating factor of the underlying bonds is 21.25, corresponding to an average rating of 'BB-/B+'. The classes' ratings are based on Fitch's actual rating, or on Fitch's internal credit assessment for those classes not rated by Fitch. Delinquencies in the underlying transaction are: * 30 days: 0.6%; * 60 days: 0.0%; * 90+ days: 0.3%; * foreclosure: 0.7%; and * real estate owned: 1.0%. NEIMAN MARCUS: Completes 7.125% Debentures Consent Solicitation --------------------------------------------------------------- The Neiman Marcus Group, Inc., completed the consent solicitation relating to its 7.125% Senior Debentures due 2028. A supplemental indenture implementing the amendment approved by the consent solicitation was executed on Aug. 14, 2006. The supplemental indenture amends the reporting covenant in the indenture to make it consistent with the reporting covenant in the Company's other outstanding public debt indentures. Under the amendment, where Neiman Marcus, Inc., continues to be a guarantor, the Company's reporting obligations under the indenture will be satisfied, provided that NMI files specified reports with the SEC and NMI's filings include specified financial information concerning the Company. Goldman, Sachs & Co. acted as Solicitation Agent for the consent solicitation and Global Bondholder Services Corporation acted as the Information Agent. Headquartered in Dallas, Texas, The Neiman Marcus Group, Inc. -- http://www.neimanmarcusgroup.com/-- operates Neiman Marcus and Bergdorf Goodman stores, in addition to both print and online retail businesses. * * * As reported on the Troubled Company Reporter on March 31, 2006, Fitch Ratings revised the Rating Outlook on The Neiman Marcus Group, Inc., to Positive from Stable. Fitch affirmed the B- Issuer Default Rating of the Company, the 'BB-/RR1' rating on its $600 million secured revolving credit facility, 'B/RR3' rating on the $1.875 billion secured term loan facility, 'B/RR3' rating on the $121 million secured debentures, 'CCC+/RR5' rating on the $700 million senior unsecured notes and 'CCC/RR6' rating on the $500 million senior subordinated notes. PERFORMANCE TRANSPORTATION: Seeks Nov. 30 Plan-Filing Extension --------------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates ask the Honorable Michael J. Kaplan of the U.S. Bankruptcy Court for the Western District of New York to extend the period within which they have the exclusive right to: (a) file a plan, through and including Nov. 30, 2006; and (b) solicit and obtain acceptances of that plan, through Jan. 29, 2007. Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York, explains that an extension of the exclusive periods will foster the Debtors' efforts to engage in discussions with their customers, labor unions and certain debt holders. The Debtors, Mr. Graber says, are negotiating with their customers and labor unions concerning concessions that will help strengthen the estate's financial and operational viability. The negotiations constitute unresolved contingencies to the Debtors' potential reorganization and represent a key step towards development of a viable exit strategy. The outcome of these negotiations, Mr. Graber says, will help increase profitability, maximize the value of the Debtors' estates and creditor recovery, and develop and confirm a plan of reorganization. The Debtors will not be in a position to accurately evaluate their assets and liabilities and determine an appropriate post-confirmation capital structure prior to reaching a better understanding of the outcome of those negotiations, Mr. Graber notes. Moreover, PTS has recently started discussions with affiliates of The Yupaica Companies LLC, new holders of the Debtors' prepetition secured debt, with respect to restructuring alternatives and maximizing the Debtors' viability. Mr. Graber notes that Yucaipa has initiated a due diligence review of the Debtors' business. The Debtors intend to engage in further discussions with Yucaipa once the review is complete. Yucaipa American Alliance Fund I, LP and Yucaipa American (Parallel) Fund I, L.P., inform the Court of their support to the Debtors' request for extension. Yucaipa is represented in the Debtors' cases by John W. Weiss, Esq., and Robert A. Klyman, Esq., at Latham & Watkins LLP, in New York. Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PERFORMANCE TRANSPORTATION: Wants to Assume Bandag Contract ----------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates seek authority from the U.S. Bankruptcy Court for the Western District of New York to assume a modified contract with Bandag, Inc. Garry M. Graber, Esq., at Hodgson Russ LLP, in Buffalo, New York, notes that the Debtors' vehicle hauling business is entirely dependent on the operation of rigs used to transport vehicles to vehicle dealerships. The Debtors have determined that the combination of new purchased tires, new leased tires and retreaded tires is the most desirable method of maintaining a cost-efficient and appropriate supply of specialized tires needed to operate their Rigs. Thus, the Debtors entered into a contract for tire-related services with Bandag, Inc., on October 6, 2005. Bandag provided standard tire repair and retreading services including casing inspection and repair, casing retreading, tire mounts and dismounts, tire repair, and emergency tire assistance. Mr. Graber says the Debtors chose Bandag as their tire retreading service provider because it is the only retread vendor that was able to offer the services on a national level and at the capacity and pricing levels necessary to serve the Debtors' needs. The Contract provides that either party may terminate it, without cause, by giving at least 90 days prior written notice. On April 11, 2006, Bandag notified the Debtors of its intent to terminate the Contract, effective July 15, 2006. Without Bandag's services, the Debtors will not have access to the significant advantages offered by a national retread vendor. Hence, the Debtors convinced Bandag to continue providing tire- related services to ensure a continued supply of useable tires. The Debtors and Bandag consequently agreed to amend the Contract. The Amendment allows either party to terminate the Contract prior to Oct. 24, 2007, at the option of the non-defaulting party. Termination without cause is no longer permitted. The Debtors believe that the terms of the Amendment are reasonable and provide benefits that are in the best interests of their estates. Pursuant to the Amendment, the Debtors will pay to Bandag $113,975 for the prepetition debt owed. About Performance Transportation Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PILGRIM'S PRIDE: Proposes to Buy Gold Kist for $1 Billion in Cash ----------------------------------------------------------------- Pilgrim's Pride Corporation sent a proposal to Gold Kist, Inc., offering to purchase all of the outstanding shares of Gold Kist common stock for $20 per share in cash. The transaction is valued at approximately $1 billion, plus the assumption of Gold Kist's debt of $144 million. Pilgrim's Pride's offer represents a premium of approximately 55% over Gold Kist's closing stock price of $12.93 on Friday, Aug. 18, 2006. Using consensus earnings estimates for fiscal 2007, Pilgrim's Pride expects that the transaction will be accretive to earnings per share in the first full year after the completion of the transaction, including approximately $50 million of anticipated synergies expected to come primarily from the optimization of production and distribution facilities and cost savings in purchasing, production, logistics and SG&A. "We believe the combination of Pilgrim's Pride and Gold Kist will create the world's leading chicken producer and result in substantial value creation for our respective shareholders, employees, business partners and other constituencies," O.B. Goolsby, Jr., President and Chief Executive Officer of Pilgrim's Pride, said. "The combined company will maintain a balanced portfolio of fresh chicken and value-added products and expand its geographic reach and customer base, enabling it to compete more efficiently in the industry and provide even better service to its customers. "Our proposal provides Gold Kist's shareholders with a substantial approximately 55% premium for their shares in cash. We look forward to sitting down with the members of Gold Kist's Board of Directors as soon as possible to work jointly with them to quickly close this transaction," added Mr. Goolsby. Pilgrim's Pride noted that it has substantial current liquidity and has received further assurances from its financial advisors that it has the ability to finance the transaction. Pilgrim's Pride believes that the combined company will have a strong financial position and substantial cash flow, enabling it to consistently reduce debt and return to historical debt levels. Baker & McKenzie LLP and Morris, Nichols, Arsht & Tunnell, LLP are acting as legal counsel to Pilgrim's Pride. Credit Suisse and Legacy Partners Group LLC are acting as financial advisors to Pilgrim's Pride. About Gold Kist Based in Atlanta, Georgia, Gold Kist Incorporated (NASDAQ: GKIS) -- http://www.goldkist.com/-- operates a fully integrated chicken production, processing and marketing business. Gold Kist's production operations include nine divisions located in Alabama, Florida, Georgia, North Carolina and South Carolina. About Pilgrim's Pride Headquartered in Pittsburg, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the United States, Mexico and in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * Standard & Poor's Ratings Services affirmed its 'BB' long-term corporate credit and senior secured debt ratings on Pilgrim's Pride Inc., on March 6, 2006. In addition, the ratings were removed from CreditWatch with positive implications where they were originally placed on Oct. 11, 2005. About $595 million of debt (adjusted for capitalized operating leases) of Pilgrim's Pride was outstanding at Dec. 31, 2005. The outlook is stable. PREDIWAVE CORP: New World Agrees to Defer Discovery Period ---------------------------------------------------------- New World TMT Limited has agreed to stay the Briefing Deadline and Discovery Period related to its request for the appointment of a Chapter 11 Trustee or an Examiner in PrediWave Corporation's bankruptcy case. Pursuant to a stipulation approved by the Honorable Randall J. Newsome of the U.S. Bankruptcy Court for the Northern District of California in Oakland, New World agreed to the stay following the Debtor's retention of XRoads Solutions Group, LLC, as its financial and restructuring advisor. The stay of the discovery proceedings will: a) allow time for XRoads to gather current information regarding the Debtor's business operations and financial condition; and b) allow time for the Debtor, upon XRoads' completion of its initial information gathering, to communicate to New World and the Official Committee of Unsecured Creditors, current information regarding its business operations and financial condition. New World anticipates to obtain sufficient information regarding the bankruptcy estate to determine whether it is appropriate to continue further or withdraw its motion to appoint a trustee or examiner. New World asserts approximately $380 million of contingent, unliquidated claim against PrediWave arising from the Debtor's alleged sale of non-conforming goods to New World. Headquartered in Fremont, Calif., PrediWave Corporation -- http://www.prediwave.com/-- provides cable and satellite operators with end-to-end digital broadcast platforms, and offers products like Video On Demand, Digital Video Recording, interactive video shopping, and subscription services. The Debtor filed for chapter 11 protection on April 14, 2006 (Bankr. N.D. California Case No. 06-40547). Robert A. Klyman, Esq., at Latham & Watkins, LLP, and Jonathan S. Shenson, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP represent the Debtor in its restructuring efforts. John D. Fiero, Esq., at Pachulski, Stang, Ziehl, Young and Jones represents the Official Committee Of Unsecured Creditors. The Debtor's Schedules of Assets and Liabilities showed $145,282,246 in total assets and $773,033,371 in total liabilities. PUREBEAUTY INC: Court Approves Davis Wright as Special Counsel -------------------------------------------------------------- The Honorable Kathleen Thompson of the U.S. Bankruptcy Court for the Central District of California in San Fernando Valley authorized PB Estate Inc., fka PureBeauty Inc., and PS Estate Inc., fka Pure Salons, Inc., to employ Davis Wright Tremaine LLP as their special counsel, nunc pro tunc to April 18, 2006. Before filing for bankruptcy, the Debtors already hired Davis Wright to provide them with general legal business services. The Debtors believe that the Firm's retention is in their best interest because Davis Wright already has the knowledge, expertise, and experience to effectively and efficiently represent the Debtors. Davis Wright will work on legal matters that arise in the ordinary course of the Debtors' operations, including: -- contract preparation and review; -- general corporate and business matters; -- trademark prosecution; -- real estate matters; -- employment advice; and -- general business litigation. The Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $340 - $525 Associates $235 - $335 Paralegals $100 - $195 The Firm's partners expected to have active interest in this engagement are: Professional Hourly Rate ------------ ----------- Marc Jacobwitz, Esq. $445 Andrew Thomas, Esq. $420 John P. LeCrone, Esq. $420 Deidre Davis, Esq. $360 John P. LeCrone, Esq., a partner at Davis Wright, disclosed that from April 2005 to April 18, 2006, the Firm billed $483,170.66. Of this amount, Davis Wright has received $356,206.50. Thus, the Firm is a general unsecured creditor of the Debtors for $126,964.16. Mr. LeCrone assures the Court that the Firm does not hold nor represent any interest adverse to the Debtors, their estates, and their creditors, and is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. PureBeauty, Inc. -- http://www.purebeauty.com/-- operated 48 retail stores and salons offering professional hair care and skincare services, featuring a leading assortment of professional and prestige personal care products. PureBeauty also operated six "brand" stores, providing customers with a variety of aspirational products and services. PureBeauty Inc. and Pure Salons, Inc., an affiliate, filed for chapter 11 protection on April 18, 2006 (Bankr. C.D. Calif. Case No. 06-10545). Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP represent the Debtors. The Debtors' Official Committee of Unsecured Creditors selected Eric E. Sagerman, Esq., and David J. Richardson, Esq., at Winston & Strawn, LLP, as its counsel. When the Debtors filed for protection from their creditors, they estimated $14 million in assets and $82 million in debts. PUREBEAUTY INC: Wants Until Dec. 14 to File Chapter 11 Plan ----------------------------------------------------------- PB Estate Inc., fka PureBeauty Inc., and PS Estate Inc., fka Pure Salons, Inc., ask the Honorable Kathleen Thompson of the U.S. Bankruptcy Court for the Central District of California in San Fernando Valley to extend, until Dec. 14, 2006, their time to exclusively file a chapter 11 plan. The Debtors also want their exclusive period to solicit acceptances of that plan extended until Feb. 12, 2007. The Debtors and their professionals were involved in the process of consummating the sale of substantially all of their assets to Cameron Capital Corporation. After the sale, the Debtors ceased operations and are now in the phase of conducting an orderly liquidation of their remaining assets to maximize value for all creditors under a contemplated chapter 11 plan of liquidation. The Debtors said they have been paying all their postpetition liabilities as they become due in the ordinary course of business. PureBeauty, Inc. -- http://www.purebeauty.com/-- operated 48 retail stores and salons offering professional hair care and skincare services, featuring a leading assortment of professional and prestige personal care products. PureBeauty also operated six "brand" stores, providing customers with a variety of aspirational products and services. PureBeauty Inc. and Pure Salons, Inc., an affiliate, filed for chapter 11 protection on April 18, 2006 (Bankr. C.D. Calif. Case No. 06-10545). Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP represented the Debtors. The Debtors' Official Committee of Unsecured Creditors selected Eric E. Sagerman, Esq., and David J. Richardson, Esq., at Winston & Strawn, LLP, as its counsel. When the Debtors filed for protection from their creditors, they estimated $14 million in assets and $82 million in debts. RIVERSTONE NETWORKS: Third Party Claims Due by September 1 ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has set Sept. 1, 2006, at 4:00 p.m., as the final date for any stockholder, former stockholder, creditor or other third party to file a cause of action against an individual officer or director of Riverstone Networks, Inc., and its debtor-affiliates as of Feb. 7, 2006. The causes of action must be filed in the appropriate court and copies of the action must be sent to JP Morgan Trust Company NA, the Court approved Claims, Noticing and Solicitation Agent. Causes of Action sent by first class mail must be sent to: RNI Wind Down Corporation c/o JP Morgan Trust Company, NA P.O. Box 56636 Jacksonville, Fla. 32241-6636 Causes of Action sent by messenger or overnight carrier must be sent to: RNI Wind Down Corporation c/o JP Morgan Trust Company, NA 8475 Western Way, Suite 110 Jacksonville, Fla. 32256 Based in Santa Clara, California, Riverstone Networks, Inc., nka Wind Down Corporation -- 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. SATELITES MEXICANOS: Asks Bankr. Court to Set Confirmation Hearing ------------------------------------------------------------------ Satelites Mexicanos, S.A. de C.V., asks the Honorable Robert D. Drain, of the U.S. Bankruptcy Court for the Southern District of New York to convene a hearing to consider confirmation of its Chapter 11 Plan of Reorganization seven days after the Voting Deadline. The Debtor proposes that, the Confirmation Hearing may be continued from time to time by the Court or the Debtor without further notice other than adjournments announced in open Court or as indicated in any notice of agenda of matters scheduled for hearing filed with the Court. The Debtor will provide notice of any continuance of the Confirmation Hearing to counsel for the Ad Hoc Existing Bondholders' Committee, and the Ad Hoc Senior Secured Noteholders' Committee. In accordance with the terms of the Restructuring Agreement, the Debtor notes, confirmation of the Chapter 11 Plan will not occur more than 120 days from the Petition Date without the consent of the Ad Hoc Committees. The Debtor also asks the Court to direct that objections, if any, to the Plan must be filed seven days before the Confirmation Hearing. Confirmation objections must: (a) be in writing; (b) state the name and address of the objecting party and the amount and nature of the claim or interest of the party; and (c) state with particularity the basis and nature of any objection. The Debtor also seeks permission to publish the Confirmation Hearing Notice once in The New York Times (National Edition) and Reforma, a Mexican newspaper, on or within three days after it commences solicitation of Plan votes. The Court will convene a hearing to consider the Debtor's request on September 6, 2006, at 10:00 a.m. Objections, if any, must be filed by Aug. 31, 2006. About Satelites Mexicanos Satelites Mexicanos, S.A. de C.V., provides fixed satellite services in Mexico. Satmex provides transponder capacity via its satellites to customers for distribution of network and cable television programming, direct-to-home television service, on-site transmission of live news reports, sporting events and other video feeds. Satmex also provides satellite transmission capacity to telecommunications service providers for public telephone networks in Mexico and elsewhere and to corporate customers for their private business networks with data, voice and video applications. Satmex also provides the government of the United Mexican States with approximately 7% of its satellite capacity for national security and public purposes without charge, under the terms of the Orbital Concessions. The Debtor filed for chapter 11 petition on August 11, 2006 (Bankr. S.D.N.Y. Case No. 06-11868). Luc A. Despins, Esq., at Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the U.S. Bankruptcy proceedings. Attorneys from Galicia y Robles, S.C., and Quijano Cortina Lopez y de la Torre give legal advice in the Debtor's Mexican Bankrutpcy proceedings. UBS Securities LLC and Valor Consultores, S.A. de C.V., give financial advice to the Debtor. Steven Scheinman, Esq., Michael S. Stamer, Esq., and Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP give legal advice to the Ad Hoc Existing Bondholders' Committee. Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc Senior Secured Noteholders' Committee. As of July 24, 2006, the Debtor has $905,953,928 in total assets and $743,473,721 in total liabilities. On May 25, 2005, certain holders of Satmex's Existing Bonds and Senior Secured Notes filed an involuntary chapter 11 petition against the Company (Bankr. S.D.N.Y. Case No. 05-13862). On June 29, 2005, Satmex filed a voluntary petition for a Mexican reorganization, known as a Concurso Mercantil, which was assigned to the Second Federal District Court for Civil Matters for the Federal District in Mexico City. On August 4, 2005, Satmex filed a petition, pursuant to Section 304 of the Bankruptcy Code to commence a case ancillary to the Concurso Proceeding and a motion for injunctive relief seeking, among other things, to enjoin actions against Satmex or its assets (Bankr. S.D.N.Y. Case No. 05-16103). (Satmex Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SATELITES MEXICANOS: Gets Extension of Schedules Filing Deadline ---------------------------------------------------------------- The Honorable Robert D. Drain, of the U.S. Bankruptcy Court for the Southern District of New York, granted the request of Satelites Mexicanos, S.A. de C.V., to extend the deadline to file its Schedules and Statement to Oct. 25, 2006. Pursuant to Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure, the Debtor is required to file within 15 days of the filing for chapter 11 protection, a statement of financial affairs as well as schedules of (i) assets and liabilities, (ii) current income and expenditures and (iii) executory contracts and unexpired leases. Rule 1007(c) further provides that "Any extension of the time for the filing of schedules [and] statements" may be granted "on motion for cause shown." On the date of filing for chapter 11 protection, in partial satisfaction of requirements of Rule 1007, the Debtor filed with the Court lists of all: (i) creditors holding claims against its estate and (ii) equity holders. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, relates that given the size and complexity of its business, the Debtor has a significant amount of information to accumulate to prepare its Schedules and Statement. While the Debtor, with the help of its professional advisors, is mobilizing its employees to work diligently and expeditiously on the preparation of the Schedules and Statement, resources are strained and the Debtor has not had ample time to gather and analyze the necessary information to prepare and file its Schedules and Statement, Mr. Despins explains. Unavoidably, the Debtor's primary focus thus far has been negotiating the terms of the Chapter 11 Plan and the Disclosure Statement, and preparing for the filing of its Chapter 11 case, Mr. Despins avers. In view of the amount of work entailed in completing the Schedules and Statement, and the competing demands upon the Debtor's employees and professionals to assist in efforts to stabilize business operations during the initial postpetition period, the Debtor will likely not be able to properly and accurately complete the Schedules and Statement within the required 15-day time period, Mr. Despins tells Judge Drain. The Debtor estimates that an extension of the filing deadline to 75 days, from the filing for chapter 11 protection, is necessary for it to prepare and file the Schedules and Statement, if necessary, while focusing on the filing of the Chapter 11 Plan and related Disclosure Statement, and solicitation of votes to accept or reject the Plan. About Satelites Mexicanos Satelites Mexicanos, S.A. de C.V., provides fixed satellite services in Mexico. Satmex provides transponder capacity via its satellites to customers for distribution of network and cable television programming, direct-to-home television service, on-site transmission of live news reports, sporting events and other video feeds. Satmex also provides satellite transmission capacity to telecommunications service providers for public telephone networks in Mexico and elsewhere and to corporate customers for their private business networks with data, voice and video applications. Satmex also provides the government of the United Mexican States with approximately 7% of its satellite capacity for national security and public purposes without charge, under the terms of the Orbital Concessions. The Debtor filed for chapter 11 petition on August 11, 2006 (Bankr. S.D.N.Y. Case No. 06-11868). Luc A. Despins, Esq., at Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the U.S. Bankruptcy proceedings. Attorneys from Galicia y Robles, S.C., and Quijano Cortina Lopez y de la Torre give legal advice in the Debtor's Mexican Bankrutpcy proceedings. UBS Securities LLC and Valor Consultores, S.A. de C.V., give financial advice to the Debtor. Steven Scheinman, Esq., Michael S. Stamer, Esq., and Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP give legal advice to the Ad Hoc Existing Bondholders' Committee. Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc Senior Secured Noteholders' Committee. As of July 24, 2006, the Debtor has $905,953,928 in total assets and $743,473,721 in total liabilities. On May 25, 2005, certain holders of Satmex's Existing Bonds and Senior Secured Notes filed an involuntary chapter 11 petition against the Company (Bankr. S.D.N.Y. Case No. 05-13862). On June 29, 2005, Satmex filed a voluntary petition for a Mexican reorganization, known as a Concurso Mercantil, which was assigned to the Second Federal District Court for Civil Matters for the Federal District in Mexico City. On August 4, 2005, Satmex filed a petition, pursuant to Section 304 of the Bankruptcy Code to commence a case ancillary to the Concurso Proceeding and a motion for injunctive relief seeking, among other things, to enjoin actions against Satmex or its assets (Bankr. S.D.N.Y. Case No. 05-16103). (Satmex Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). STANADYNE HOLDINGS: Moody's Lowers Sr. Notes' Rating to Caa2 ------------------------------------------------------------ Moody's Investors Service lowered the ratings of Stanadyne Holdings, Inc. -- Corporate Family Rating at B3 and senior discount notes to Caa3 from Caa2; and lowered the senior subordinated note rating of its wholly owned subsidiary, Stanadyne Corporation, to Caa2 from Caa1. At the same time Moody's affirmed the ratings on Stanadyne Corporation's senior secured asset based revolving credit facility at B1; and raised the rating of Stanadyne Corporation's senior secured term loan to B1 from B2. The downgrade of the Corporate Family Rating reflects the company's weakened credit metrics which result from poor operating performance of its core businesses and continuing high financial leverage despite the recent application of proceeds from a business unit sale to reduce outstandings under the company's term loan. Stanadyne's core businesses, which produce precision-manufactured engine components used in passenger vehicles and off road equipment, have experienced weak operating performance due to higher raw material costs, and higher operating costs resulting from an inefficient supplier transition combined with higher customer demand in the Precision Engine business. For the LTM period ending June 30, 2006 interest coverage was 0.8x and leverage measured by debt to EBITDA was approximately 6.4x. These metrics are consistent with a low speculative grade rating under Moody's rating methodology for auto parts suppliers. Moreover, the company exhibits a relatively high concentration of sales with individual customers, which also weighs negatively under the rating methodology. Recent statements by agricultural equipment manufacturers that their production volumes will be reduced to accommodate lower market demand, coupled with a limited exposure to weaker demand from auto manufacturers, suggests that Stanadyne's operating results could experience further pressure during the near term. The rating agency noted that Stanadyne maintains a good liquidity profile which provides an important element of flexibility considered in the rating. With $31.2 million of available cash and $28.8 million of availability under its bank credit facility at June 30, 2006, the company's Speculative Grade Liquidity rating has been affirmed at SGL-2. Nevertheless, the company's performance is expected to be at levels more consistent with the B3 long term rating over the intermediate term. The stable outlook reflects Moody's expectation that, despite business pressures, Stanadyne's current liquidity provides flexibility for the company to pursue restructuring initiatives that could help to stabilize financial performance. The recent sale of the company's Precision Engine Products Corp subsidiary has eliminated a loss making business unit and should contribute to some near term improvement. These ratings were lowered: * Corporate Family Rating, to B3 from B2; * Stanadyne's $160 million of guaranteed senior subordinated notes due 2014, to Caa2 from Caa1; * Stanadyne Holdings' $100 million (face amount) of 12% unguaranteed senior discount notes due 2015, to Caa3 from Caa2; Ratings affirmed: * B1 rating of Stanadyne's $35 million asset-based guaranteed senior secured revolving credit facility due 2009; * SGL-2 speculative grade liquidity rating at Stanadyne Holdings Ratings raised: * Stanadyne's $65 million guaranteed senior secured term loan due 2010, to B1 from B2 The last rating action for Stanadyne was on Dec. 15, 2004, in which the ratings were affirmed. The affirmation of the B1 rating on Stanadyne's senior secured asset based revolving credit facility and the upgrade of the rating for the company's senior secured term loan to B1 recognize the reduced share that these facilities represent of the company's overall debt structure, particularly after considering recent term loan paydowns. These facilities benefit from a security interest in the company's principal assets and the recent application of proceeds from the sale of Precision Engine Products to permanently reduce the term loan outstandings provides improved asset protection for both facilities, reflected in the current notching of the ratings above the company's Corporate Family Rating. Future developments that could adversely impact the company's rating or rating outlook include evidence of market share losses due to technology, regulatory, or competitive market factors; deterioration in end market demand from anticipated levels; loss of major contracts; continued increases in raw materials costs; a material debt-financed acquisition or distribution to shareholders; failure to steadily reduce leverage; declining liquidity; or deterioration of the company's margins to the 7-8% range, so that Debt is sustained above 7x, and EBIT coverage sustained below 1x. Future developments that could favorably impact the company's rating or rating outlook include profitable expansion of the aftermarket business; or greater diversification along product, geographic, and customer lines, so that Debt is sustained below 4.5x, and EBIT improves to above 1.5x. Stanadyne Corporation, headquartered in Windsor, Connecticut, is a leading designer and manufacturer of highly-engineered precision- manufactured engine components, including fuel injection equipment for diesel engines and hydraulic lash compensating devices for gasoline engines. Annual revenues are approximately $359 million. STATER BROTHERS: Reports $5.7 Million Net Income in Second Quarter ------------------------------------------------------------------ Stater Brothers Holdings Inc. filed its financial results for the second quarter ended June 25, 2006, with the Securities and Exchange Commission on Aug. 9, 2006. For the three months ended June 25, 2006, the Company reported $5.7 million of net income on $885.9 million of net revenues, compared to $7.3 million of net income on $840.4 million of net revenues in 2005. At June 25, 2006, the Company's balance sheet showed $1,040,383 in total assets and $1,057,278 in total liabilities, resulting in a $16,895 stockholders' deficit. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?fed Based in Colton, California, Stater Brothers Holdings Inc. -- http://www.staterbros.com/-- operates more than 160 full service Stater Bros. Markets in the United States. The grocery chain also owns and operates milk and juice processor Santee Dairies aka Heartland Farms. Founded in 1936 by twin brothers Leo and Cleo Stater, Stater Bros. is owned by La Cadena Investments, a general partnership consisting of Stater Bros. chairman and CEO Jack Brown. * * * Stater Brothers Holdings' long-term local and foreign issuer credits carry Standard & Poor's B+ ratings. The ratings were placed on June 20, 2006, with a stable outlook. As reported in the Troubled Company Reporter on June 22, 2006, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Colton, California-based Stater Bros Holdings Inc. to 'B+' from 'BB-'. The outlook is stable. "The downgrade reflects a steady decline in credit metrics following the peak levels experienced during the 2003/2004 labor strike and our belief that these measures are not likely to materially improve from current levels," said Standard & Poor's credit analyst Stella Kapur. SOUTHAVEN POWER: Inks New Power Deal with Tenn. Valley Authority ---------------------------------------------------------------- The Honorable George R. Hodges of the U.S. Bankruptcy Court for the Western District of North Carolina, Charlotte Division, authorized Southaven Power, LLC, to enter into a Master Power Purchase & Sale Agreement with the Tennessee Valley Authority. Judge Hodges also allowed the Debtor to issue a $2.5 million letter of credit in favor of the TVA, to secure the Debtor's performance under the agreement. Tenaska Agreement The Debtor historically sold power through a Commodity Management Agreement with Tenaska Marketing Ventures. Tenaska managed and provided power marketing, fuel procurement, and related services for the Debtor's power plant. Pursuant to the Tenaska agreement, the Debtor, through Tenaska, was able to benefit from a longer-term power supply agreement and to lock in revenues because of Tenaska's dispatchable capacity tolling agreement with the TVA. The dispatchable capacity tolling agreement provides that that the TVA will pay Tenaska, who in turn will pay to the Debtor, fixed capacity, variable energy, and start payments. In exchange for the capacity payments, TVA obtained the right to purchase, at a fixed per-unit price, all of the plant's capacity. TVA also purchased all of the fuel necessary for the plant to provide the capacity that the TVA requires. The Debtor's Commodity Management Agreement with Tenaska expires on Aug. 31, 2006. Through the Master Power Purchase & Sale Agreement with the TVA, the Debtor will be able to deal directly with the TVA and reap the benefits of their relationship without incurring any additional obligations to Tenaska. TVA Agreement The new direct agreement with the TVA would have a 12-month term (commencing on Sept. 1, 2006) and would require the TVA to pay the Debtor fixed capacity, variable energy, and fixed start payments aggregating approximately $16.9 million. In exchange for the capacity payments, TVA would have the right to purchase, at a fixed per-unit price, all of the plant's capacity. The new TVA agreement further provides that TVA would be required to purchase all of the fuel necessary for the plant to provide any capacity that TVA purchases. Under the new agreement, the Debtor is obliged to provide credit support to the TVA in the form of a $2,500,000 Performance Assurance letter of credit. Headquartered in Charlotte, North Carolina, Southaven Power, LLC, operates an 810-megawatt, natural gas-fired electric power plant located in Southaven, Mississippi. The Company filed for chapter 11 protection on May 20, 2005 (Bankr. W.D.N.C. Case No. 05-32141). Mark A. Broude, Esq., at Latham & Watkins LLP represents the Debtor in its restructuring efforts, and Hillary B. Crabtree, Esq., at Moore & Van Allen, PLLC, represents the Debtor in litigation against PG&E Energy Trading-Power, L.P. To date, no official committee of unsecured creditors has been appointed in the Debtor's case. Erie Power Technologies, Inc. and Centro Inc., have expressed interest in serving on an official committee. No other creditors have indicated their interest or willingness, and the U.S. Bankruptcy Administrator for the Western District of North Carolina won't appoint a two-member committee. When the Debtor filed for protection from its creditors, it estimated assets and debts of more than $100 million. TEC FOODS: Wants Sohlen as Franchise and Restructuring Advisor -------------------------------------------------------------- TEC Foods, Inc., asks the Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit for authority to employ Sohlen Franchise Advisors, LLC, as its franchise and restructuring advisor, nunc pro tunc to June 24, 2006. The Debtor is a minority-owned franchisee of 12 Taco Bell restaurants in Southeastern, Central, and Northern Michigan. The Debtor owns eight of the 12 restaurant locations and leases the other four. It employs over 300 people to conduct its operations. Sohlen will: (a) review the Debtor's financial statements and its existing relationships with its lender, landlords, franchisor, and other third parties; (b) prepare valuation analyses and financial forecasts; and (c) assist the Debtor in restructuring its business and in formulating a plan of reorganization. Hans Sohlen, the president of Sohlen Franchise Advisors, LLC, disclosed that the Debtor will pay a $15,000 retainer. Mr. Sohlen will bill $275 per hour. The Debtor forwarded a copy of this application, the declaration of Mr. Sohlen, and the agreement to the U.S. Trustee for review. Because the Trustee had some concerns regarding the indemnification language contained in the agreement, this application was delayed. Mr. Sohlen assures the Court that the Firm holds no adverse interest to the estate and is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Pontiac, Michigan, TEC Foods, Inc., is a Taco Bell franchisee. The company filed for chapter 11 protection on Nov. 3, 2005 (Bankr. E.D. Mich. Case No. 05-89154). Paula A. Hall, Esq., at Butzel Long, P.C., represents the Debtor in its restructuring efforts. When the Debtor filed for protection form its creditors, it estimated assets and debts between $10 million and $50 million. TELTRONICS INC: Equity Deficit Widens to $2.7 Million at June 30 ---------------------------------------------------------------- Teltronics Inc.'s balance sheet at June 30, 2006 showed total assets of $14.9 million and total liabilities of $17.6 million resulting in a total shareholders' deficit of $2.7 million. The Company's shareholders' deficit stood at $2.6 million as of Dec. 31, 2005. The Company disclosed that sales for the three months ended June 30, 2006 were $11.5 million as compared to $12.97 million reported for the same period in 2005. Sales for the six months ended June 30, 2006 were $21.79 million, as compared to $22.74 million, reported for the same period in 2005. Gross profit margin for the three months ended June 30, 2006 was 44%, as compared to 43.2% for the same period in 2005. Gross profit margin for the six months ended June 30, 2006 was 41.6%, as compared to 43.4% for the same period in 2005. The Company also disclosed that net income for the three months ended June 30, 2006 was $755,000 as compared to net income of $1.19 million for the same period in 2005. The net income for the six months ended June 30, 2006 was $195,000, as compared to a net income of $955,000 for the same period in 2005. The net income available to common shareholders for the three months ended June 30, 2006 was $592,000, as compared to net income of $1.03 million for same period in 2005. The net loss available to common shareholders for the six months ended June 30, 2006 was $131,000, as compared to net income of $633,000 for the same period in 2005. Headquartered in Sarasota, Florida, Teltronics, Inc. (OTCBB: TELT) -- http://www.teltronics.com/-- provides communications solutions and services for businesses. The Company manufactures telephone switching systems and software for small-to-large size businesses and government facilities. Teltronics offers a full suite of Contact Center solutions -- software, services and support -- to help their clients satisfy customer interactions. Teltronics also provides remote maintenance hardware and software solutions to help large organizations and regional telephone companies effectively monitor and maintain their voice and data networks. The Company serves as an electronic contract manufacturing partner to customers in the U.S. and overseas. THOMAS EQUIPMENT: To File Court-Supervised Restructuring of Unit ---------------------------------------------------------------- Thomas Equipment Inc. reported that its wholly owned subsidiary Thomas Equipment 2004, Inc. intends to initiate court-supervised restructurings and has laid off 141 employees. The parent company, Thomas Equipment, Inc., and its other subsidiaries domiciled in other countries are not subject to the intended Canadian court-supervised restructuring nor does Thomas have any present intention to file any other similar proceedings for the parent company or any other subsidiary in the United States. The restructuring is designed to provide Thomas Equipment with appropriate financial resources to address short-term needs and successfully execute on longer-term strategic opportunities. Thomas continues to evaluate all options with respect to its subsidiary companies. Thomas 2004 intends to file a notice of intention to make a proposal pursuant to the Bankruptcy and Insolvency Act (Canada). Once filed, the obligations of Thomas 2004 to creditors are stayed for an initial period of 30 days and may be extended upon subsequent applications to the Court or by the filing of a proposal to creditors. Thomas has engaged Carl Marks Advisory Group, LLC to provide financial advisory services during the restructuring. Pursuant to the engagement, CMAG will work towards generating interest among prospective investors, acquirers or merger candidates and advise the company through all future negotiations and proposed transactions. About Thomas Equipment Headquartered in Milwaukee, Wisconsin, Thomas Equipment, Inc. (AMEX: THM) -- http://www.thomas-equipment.com/-- is a technologically advanced global manufacturer of a full line of skid steer and mini skid steer loaders as well as attachments, mobile screening plants and six models of mini excavators. The Company distributes its products through a worldwide network of distributors and wholesalers. In addition, the Company's wholly owned subsidiaries manufacture specialty industrial and construction products, a complete line of potato harvesting and handling equipment, fluid power components, pneumatic and hydraulic systems, spiral wound metal gaskets, and packing material. At March 31, 2006, Thomas Equipment Inc.'s balance sheet showed a stockholders' deficit of $31,289,000, compared to a $67,129,000 at June 30, 2005. TODD MCFARLANE: Creditor Wants Case Converted to Chapter 7 ---------------------------------------------------------- Tony Twist, a creditor of Todd McFarlane Productions, Inc., asks the Honorable Charles G. Case II of the U.S. Bankruptcy Court for the District of Arizona in Phoenix to convert the Debtor's chapter 11 case to a chapter 7 liquidation proceeding. Before the Debtor filed for bankruptcy, Mr. Twist had obtained a jury verdict against the Debtor and Todd McFarlane, the Debtor's owner, for $15 million. The Debtor and Mr. McFarlane appealed the judgment and on June 20, 2006, the Missouri Court of Appeals issued a slip opinion unanimously affirming the jury verdict in favor of Mr. Twist. Under the Debtor's Monthly Operating Reports from December 2004 to May 2006, Mr. Twist said the Debtor's total cash sales were $460,158. In the Debtor's May 2006 MOR, the total professional fees to date are $1,077,866 with $560,504 still unpaid. Mr. Twist said there is: -- a continuing loss to the Debtor's estate, -- the absence of a reasonable likelihood of rehabilitation, -- an inability to effectuate a plan, and -- an unreasonable delay by the Debtor that is prejudicial to the creditors. Since the judgment in July 2004, Mr. Twist said the Debtor has: -- paid $276,257 to an affiliate, prepetition; -- paid $422,779 to two law firms, prepetition; -- given a $500,000 lien on its assets; -- paid $517,362 to professionals, postpetition; -- a total net loss of $1,382,797 after reorganization expenses, postpetition; -- not filed a plan in 19 months; -- requested to extend filing a plan until Sept. 29; and -- proposed to settle with Travelers Indemnity Company of America wherein only professionals would receive payment. Donald W. Powell, Esq., at Carmichael & Powell, P.C., represents Mr. Twist. Headquartered in Tempe, Arizona, Todd McFarlane Productions, Inc. -- http://www.spawn.com/-- publishes comic books including Spawn, Hellspawn, and Sam and Twitch. The Company filed for chapter 11 protection on Dec. 17, 2004 (Bankr. D. Ariz. Case No. 04-21755). Kelly Singer, Esq., at Squire Sanders & Dempsey, LLP, represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Company filed for protection from its creditors, it listed more than $10 million in assets and more than $50 million in debts. TRM CORPORATION: Incurs $4.5 Million Net Loss in Second Quarter --------------------------------------------------------------- TRM Corporation filed its financial results for the second quarter ended June 30, 2006, with the Securities and Exchange Commission on Aug. 9, 2006. For the three months ended June 30, 2006, the Company incurred a $4.5 million net loss on $27.5 million of net revenues, compared to $2.9 million of net income on $32 million of net revenues in 2005. The Company had cash and cash equivalents of $10.5 million at June 30, 2006, compared to $9.7 million at Dec. 31, 2005, and net working capital of $7.8 million at June 30, 2006, compared to a net working capital deficit of $89.2 million at Dec. 31, 2005. The working capital deficit as of Dec. 31, 2005, was principally caused by the classification of all of our former debt facility as a current liability due to the Company's default. Restricted cash at June 30, 2006, includes $4.5 million held by Bank of America as collateral for cash obligations under a treasury management program. The Company believes that as of June 30, 2006, the remaining cost of upgrading the ATMs it owns to comply with new industry standards known as triple DES will be approximately $2.4 million. These costs will be capitalized and depreciated over the remaining life of each asset. As of June 30, 2006, approximately 40% of the Company's ATMs in the United States were compliant with triple DES. The Company has received an extension of the deadline to upgrade its ATMs to comply with these new standards to Dec. 31, 2007. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?fe4 About TRM Corp Headquartered in Portland, Oregon, TRM Corporation (NASDAQ: TRMM) -- http://www.trm.com/-- is a consumer services company that provides convenience ATM and photocopying services in high-traffic consumer environments. TRM's ATM and copier customer base has grown to over 35,000 retailers throughout the United States and over 46,200 locations worldwide, including 6,400 locations across the United Kingdom and over 4,900 locations in Canada. TRM operates one of the largest multi-national ATM networks in the world, with over 22,000 locations deployed throughout the United States, Canada, Great Britain, including Northern Ireland and Germany. * * * Standard & Poor's Ratings Services lowered its corporate credit rating on TRM Corporation to 'CCC' from 'B+' and revised its CreditWatch placement to developing from negative. The downgrade reflected the weakened status of the company's loan agreement. Moody's Investors Service downgraded the corporate family rating of TRM Corporation to Caa1 from B2 and assigned a negative outlook. U.S. CONCRETE: Earns $7.2 Million in Second Quarter Ended June 30 ----------------------------------------------------------------- U.S. Concrete Inc. filed its financial results for the second quarter ended June 30, 2006, with the Securities and Exchange Commission on Aug. 9, 2006. For the three months ended June 30, 2006, the Company reported $7.2 million of net income on $188.8 million of net revenues, compared to $6 million of net income on $153.2 million of net revenues in 2005. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?fe5 Headquartered in Houston, Texas, U.S. Concrete Inc. (NASDAQ: RMIX) -- http://www.us-concrete.com/-- provides ready-mixed concrete and related concrete products and services to the construction industry in several major markets in the United States. The Company has 106 fixed and seven portable ready-mixed concrete plants, 10 pre-cast concrete plants, three concrete block plants and three aggregates quarries. During 2005, these facilities produced approximately 6.6 million cubic yards of ready-mixed concrete, 5.3 million eight-inch equivalent block units and 1.9 million tons of aggregates. * * * As reported in the Troubled Company Reporter on June 20, 2006, Standard & Poor's Ratings Services revised its outlook on U.S. Concrete Inc. to positive from stable and affirmed its 'B+' corporate credit rating. UNITED COMPONENTS: Posts $19.1 Mil. 2006 Second Quarter Net Loss ---------------------------------------------------------------- United Components, Inc. reported revenue for the second quarter ended June 30, 2006 of $245.8 million, a $13.8 million increase compared to the year-ago quarter. The quarter also included $10.3 million in sales by water pump manufacturer ASC Industries, acquired by the Company during the quarter. Also, on June 30, the company completed the sale of its Neapco driveline components and Pioneer specialty distribution operations, for about $36 million in cash. Both are accounted for as discontinued operations. The Company disclosed that net loss for the quarter was $19.1 million, including a loss of $17.3 million related to the discontinued operations and their sale, as well as $14.1 million in one time charges, primarily costs related to the acquisition of ASC and facilities consolidation costs. Net income for the second quarter of 2005 was $4.4 million. Earnings before interest, taxes, depreciation and amortization for the Company's continuing operations was $33.3 million for the second quarter, compared with $30.5 million for the year-ago quarter. "The acquisition of ASC Industries during the second quarter has dramatically expanded our global manufacturing and procurement platform," Bruce Zorich, chief executive efficer, said. "ASC was a first mover within the aftermarket supplier community in establishing manufacturing and sourcing operations in China, having operated multiple manufacturing and procurement facilities in China for more than ten years. We believe that this base of operations and skilled management team will lead to improved product quality and lower costs across the company." During the second quarter, the Company also continued to streamline its manufacturing footprint, with the closure of a Mexican filter manufacturing plant and a Canadian pump manufacturing facility. In both cases, operations were consolidated into larger, more efficient facilities to reduce future costs. In connection with the acquisition of ASC, the Company amended and restated the credit agreement for its senior credit facility and borrowed an additional $113 million. As of June 30, the company's debt stood at $567 million. The Company ended the quarter with $57 million in cash. In addition, on July 6, 2006, following the sale of Neapco and Pioneer, the Company repaid $35 million of its senior credit facility borrowings. United Components, Inc. -- http://www.ucinc.com/-- is among North America's largest and most diversified companies servicing the vehicle replacement parts market. The company supplies a broad range of products to the automotive, trucking, marine, mining, construction, agricultural and industrial vehicle markets. The company's customer base includes leading aftermarket companies as well as a diverse group of original equipment manufacturers. * * * As reported in the Troubled Company Reporter on April 26, 2006, Moody's Investors Service lowered the ratings of United Components, Inc. -- Corporate Family, to B2 from B1; senior secured revolving credit to B2 from B1, and senior subordinated notes, to Caa1 from B3. Moody's also assigned a B2 rating to the company's new $330 million senior secured term loan D. The downgrade reflected Moody's expectation that UCI's credit metrics, which eroded during 2005 as a result of higher raw material costs, lower production volumes, other product mix issues will come under further pressure with the acquisition of water pump manufacturer ASC Industries, Inc. As reported in the Troubled Company Reporter on April 24, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on United Components Inc. to 'B+' from 'BB-' and its rating on UCI's $230 million senior subordinated notes to 'B-' from 'B'. Standard & Poor's also assigned its 'BB-' rating to UCI's proposed $330 million term loan D senior secured credit facility and assigned a recovery rating of '1'. WATTSHEALTH FOUNDATION: Claims Administration Pact Gets Court OK ---------------------------------------------------------------- The Honorable Thomas B. Donovan of the U.S. Bankruptcy Court for the Central District of California in Los Angeles has approved a Claims Administration Agreement between WATTSHealth Foundation, Inc., and Care 1st Health Plan. Care 1st will function as a third-party claims processor for the Debtor's fee-for-service medical claims business. The Bankruptcy Court had previously approved the sale of the Debtor's lines of business to Care 1st. The sale is expected to close by the end of this month. The Debtor told the Bankruptcy Court that the transfer to Care 1st is the most economical and efficient way for the Debtor to transition its claims processing function prior to the sale closing. Need for the Transfer One of the key function required in connection with the Debtor's business operations is the processing and payment of fee-for- service medical claims asserted by the various physicians, hospitals and other entities that provide health care services to the Debtor's members. The Debtor had outsourced this function to Meridian Health Care Management, Inc. When Meridian fell into financial trouble, the Debtor decided to assign the collection function to Care 1st. At that point, the Debtor was already in the process of finalizing its asset purchase agreement with Care 1st. Under the Claims Administration Agreement, the services Care 1st will provide fall into four categories: -- the Management Information System Administrative Services consist of Care 1st receiving, integrating, processing and generating reports regarding claims, enrollment, and contract data and information, through which the Debtor is to continuously monitor its operations; -- the Claims Management and Adjudication Services consist of Care 1st adjudicating and processing for payment the Debtor's postpetition fee-for-service medical claims; -- the Utilization Management Services consist of Care 1st monitoring and managing the utilization of medical services by the Debtor's members; and -- the UHP Liaison Services consist of Care 1st providing personnel and resources to facilitate communication with the Debtor and with the Debtor's regulators and other parties on the Debtors' behalf. The Debtors said the agreement with Care 1st will ensure that the timely and accurate processing and payment of the Debtor's claims will continue through the closing of the sale. Service Fees due to Care 1st for the Claims Management/Adjudication Services and the Utilization Management Services are: Type of Service Monthly Fee per Member --------------- ---------------------- Claims Processing Medi-Cal $0.60 Medicare Advantage $2.15 Utilization Management Medi-Cal $0.65 Medicare Advantage $3.50 A copy of the Claims Administration Agreement is available for free at http://researcharchives.com/t/s?ff0 Headquartered in Inglewood, California, WATTSHealth Foundation, Inc., dba UHP Healthcare, provides comprehensive medical and dental services for Commercial, Medi-Cal and Medicare members in the Greater Southern California area. The Company filed for chapter 11 protection on May 31, 2005 (Bankr. C.D. Calif. Case No. 05-22627). Gary E. Klausner, Esq., at Stutman Treister & Glatt represents the Debtor in its restructuring efforts. Richard K. Diamond, Esq., at Danning, Gill, Diamond & Kollitz, LLP, represents the Official Committee of Unsecured Creditors, and Ronald F. Greenspan and Matthew Pakkala at FTI Consulting, Inc., serve as the Committee's financial advisors. When the Debtor filed for protection from its creditors, it estimated assets and debts of $50 million to $100 million. WBSS LP: Case Summary & Largest Unsecured Creditor -------------------------------------------------- Debtor: W.B.S.S., L.P. aka Wright Brothers Specialty Sands P.O. Box 1180 Big Sandy, TX 75755 Bankruptcy Case No.: 06-60464 Type of Business: The Debtor is a sand and gravel dealer. Chapter 11 Petition Date: August 14, 2006 Court: Eastern District of Texas (Tyler) Debtor's Counsel: Jason R. Searcy, Esq. Jason R. Searcy, P.C. P.O. Box 3929 Longview, TX 75606 Tel: (903) 757-3399 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's -Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Lewie Byers Judgment $1,900,000 P.O. Box 349 Rusk, TX 75785 WELD WHEEL: Seeks Chapter 11 Protection, Plans to Sell Assets ------------------------------------------------------------- Weld Wheel Industries, Inc., filed for chapter 11 bankruptcy protection from its creditors on Aug. 17, 2006, with the U.S. Bankruptcy Court for the Western District of Missouri. Dan Margolies, writing for the Kansas City Star, says the Debtor plans to sell its assets to California-based American Racing Equipment Inc. for $17 million. Mr. Margolies adds that American Racing will also assume the Debtor's debt and lease obligations. The Debtor reportedly lost $1.1 million in the first six months of this year on net sales of $21.8 million. The Debtor's chapter 11 petition did not break down its debts, but other court documents stated the Debtor has total assets of $31.6 million, Mr. Margolies adds. Mark Barnhill, a spokesman for American Racing's parent company, Platinum Equity, refused to comment on the deal until after it is completed six to eight weeks from now. According to Kansas City Business Journal, Weld Industries stated that the asset purchase agreement provides going concern value for its assets and the opportunity for continued employment for most or all employees as well as the preservation of the business in Kansas City, Missouri, and other distribution centers. In addition, the Debtor told its customers that the bankruptcy filing was triggered by three factors: * An "ill-advised" expansion into importing cast aluminum wheels from China; * A 40% increase in raw aluminum costs; and * A "significant" slowdown in sales of wheels for trucks and SUVs, which was driven mainly by the recent spike in gasoline prices. Weld Wheel has secured up to $20.5 million in post-bankruptcy financing from its lender, PNC Bank, its biggest creditor. As of April 16, Weld Wheel owed the bank $16.4 million, according to court documents. WELD WHEEL: Case Summary & 49 Largest Unsecured Creditors --------------------------------------------------------- Lead Debtor: Weld Wheel Industries, Inc. dba Weld Motorcycle dba Weld Wheel, Inc. dba Sport Forged Division 6600 Stadium Drive Kansas City, MO 64129 Bankruptcy Case No.: 06-42105 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Weld Racing, Inc. 06-42106 Weld Distribution, Inc. 06-42107 Type of Business: The Debtor manufactures forged alloy wheels to enhance the performance and appearance of race cars, off-road trucks, luxury pickups, SUV's, premium motor cars, customs, hot rods, and motorcycles. See http://www.weldracing.com/ Chapter 11 Petition Date: August 17, 2006 Court: Western District of Missouri (Kansas City) Judge: Jerry W. Venters Debtors' Counsel: Cynthia Dillard Parres, Esq. Laurence M. Frazen, Esq. Bryan Cave LLP 1200 Main St., Ste. 3500 Kansas City, MO 64105 Tel: (816) 374-3200 Fax: (816) 374-3300 -- and -- John Joseph Cruciani, Esq. Kathryn B. Bussing, Esq. Blackwell Sanders Peper Martin LLP 4801 Main Street, Suite 1000 Kansas City, MO 64112 Tel: (816) 983-8000 Fax: (816) 983-8080 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million A. Weld Wheel Industries, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Aleris Specialty Blanks, Trade Debt $827,879 Inc. Department 6045 Carol Stream, IL 60122-6045 Pirelli Tire LLC, d/b/a Trade Debt $401,464 Pirelli Tire North America 100 Pirelli Drive Rome, GA 30161 Jackson Lea Trade Debt $317,183 3440 Symmes Rd. Hamilton, OH 45015 AFX Group Trade Debt $220,334 Re: AFX Alloy Wheels 7541 Warner Ave., Ste E-108 Huntington Beach, CA 92647 Primedia Specialty Group Trade Debt $155,331 13266 Collections Center Dr. Chicago, IL 60693 AFCO Trade Debt $149,422 4501 College Blvd. Suite 320 Leawood, KS 66211 Plante & Moran, AFME LLC Trade Debt $120,000 26 Century Blvd., Suite 701 Nashville, TN 37214 Guardsmark Trade Debt $117,109 PO Box 11407 Birmingham, AL 35246 UPS Consolidated Billing Trade Debt $115,454 PO Box 650580 Dallas, TX 752265 DNA Specialty, Inc. Trade Debt $91,898 Alro Steel Corporation Trade Debt $58,341 Central Packaging Trade Debt $53,078 Interstate Tooling & Trade Debt $41,386 Machining Kansas Speedway Corp. Trade Debt $39,000 Metal Exchange Corporation Trade Debt $37,027 Grainger Trade Debt $33,729 John Force Racing, Inc. Trade Debt $32,039 USF Holland (HMES) Trade Debt $30,641 Tri State Tire Trade Debt $29,833 Seminole Energy Services LLC Trade Debt $27,984 B. Weld Racing, Inc.'s 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ormet Primary Trade Debt $2,155,995 Aluminum Corporation PO Box 176 State Route 7 Hannibal, OH 43931 Richard G. Weld Lease $1,878,729 6600 Stadium Drive Kansas City, MO 64129 Invader Specialties Trade Debt $680,791 No. 66, Lane 22 Dawan East Rd. Yongkang City Tainan Country 710, Taiwan Watkins Motor Lines Trade Debt $116,455 Corporate Headquarters P.O. Box 95001 Lakeland, FL 33804 City of Kansas City, Personal property $100,440 Missouri taxes Manager of Finance PO Box 219747 Kansas City, MO 64121 International Paper Trade Debt $85,925 Interstate Carrier Express Trade Debt $81,953 Infor Global Solutions, Inc. Trade Debt $69,587 Advanced Metalforming Tech Trade Debt $65,430 Inc. International Nickel Inc. Trade Debt $60,033 Toyo Tires (USA Corp) Trade Debt $57,851 Color FX Trade Debt $54,678 Caroll Tire Trade Debt $48,990 AAI (American Asian Imports) Trade Debt $48,945 Deco Tool Supply Company Trade Debt $48,014 American Tire Distributors Trade Debt $44,916 Deloitte & Touche LLP Tax Services $40,755 AAA Uniform & Linen Supply Trade Debt $37,458 Buckaroo Communications Trade Debt $36,458 Ward Machine Tool, Inc. Trade Debt $35,359 Innovative Engineering Trade Debt $33,196 Solutions C. Weld Distribution, Inc.'s 8 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Friend Tire Company Trade Debt $38,043 Kauffman Tire Trade Debt $32,610 Crown Associates Realty Lease $13,637 Schaefer Industries, Inc. Lease $10,603 DP Industrial, LLC Lease $9,165 Color FX Trade Debt $7,811 Dell Financial Services Trade Debt $3,750 Carolina Handling Corporate Trade Debt $594 WERNER LADDER: Committee Hires Greenberg Traurig as Co-Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the chapter 11 cases of Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to retain Greenberg Traurig, LLP as its co-counsel, effective as of June 28, 2006. The Creditors Committee selected Greenberg Traurig because it has the resources and experience necessary to the represent the Committee. The firm has substantial experience in representing creditors committees and is familiar with complex reorganization cases. Greenberg Traurig will coordinate any services performed with Winston & Strawn LLP, the Committee's proposed lead counsel, to minimize duplication of duties and responsibilities. Greenberg Traurig is expected to: (1) consult with the Debtors' professionals or representatives concerning the administration of their Chapter 11 cases; (2) prepare and review, on the Committee's behalf, all pleadings, motions and correspondence and appear and be involved in proceedings before the Court; (3) provide legal counsel to the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of their businesses and any other relevant matters in their Chapter 11 cases; (4) analyze the Debtors' proposed use of cash collateral and debtor-in-possession financing; (5) advise the Committee with respect to its rights, duties and powers in the Debtors' Chapter 11 cases; (6) assist the Committee in analyzing the claims of the Debtors' creditors and in negotiations with the creditors; (7) assist the Committee in its analysis and negotiations with the Debtors or any third party concerning matters related to the terms of an asset sale, plan of reorganization or other conclusion of the case; (8) assist and advise the Committee in communicating with the general creditor body regarding significant matters in the Debtors' Chapter 11 cases and in determining a course of action that best serves the interests of the unsecured creditors; and (9) perform all other legal services to the Committee that are required in the Debtors' chapter 11 cases. The firm's principal attorneys and paralegals proposed to represent the Committee are: Professional Hourly Rate ----------- ----------- Monica L. Loftin $470 Diane E. Vuocolo $390 Dennis Meloro $300 Elizabeth Thomas $170 Other professionals of Greenberg Traurig who will provide services to the Committee will be paid at these hourly rates: Designation Hourly Rate ----------- ----------- Shareholders $235 - $750 Associates $130 - $480 Legal Assistants $65 - $230 Paralegals $65 - $230 Greenberg Traurig will also seek reimbursement of actual, necessary expenses and other charges incurred in connection with the Committee's representation. Diane E. Vuocolo, Esq., a shareholder of Greenberg Traurig, assured the Court that the firm is a disinterested person as that term is defined Section 101(14) of the Bankruptcy Code, and that the firm represents no interest adverse to the Debtors and their estates. About Werner Ladder Headquartered in Greenville, Pennsylvania, Werner Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The firm of Willkie Farr & Gallagher LLP serves as the Debtors' counsel. Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors as its co-counsel. The Debtors have retained Rothschild Inc. as their financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WERNER LADDER: Creditors' Panel Wants Jefferies as Fin'l Advisor ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the chapter 11 cases of Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates, asks permission from the U.S. Bankruptcy Court for the District of Delaware to employ Jefferies & Company, Inc., as its financial advisor, effective as of June 29, 2006. The Committee selected Jefferies because of its expertise in providing financial advisory services to debtors and creditors in restructurings and distressed situations. Since 1990, Jefferies' professionals have been involved in over 125 restructurings representing over $125,000,000,000 in restructured debt. Pursuant to an engagement letter dated July 21, 2006, with the Committee, Jefferies agrees to: (1) analyze the Debtors' businesses, operations, assets, financial condition and their prospects and advise the Committee on the state of the restructuring market; (2) assist and advise the Committee in examining and analyzing any proposed strategy for restructuring or adjusting the Debtors' outstanding indebtedness or overall capital structure, whether pursuant to a plan of reorganization, a sale of assets or equity under Section 363 of the Bankruptcy Code and a liquidation, or otherwise, including, assisting the Committee in developing its own strategy for accomplishing a restructuring; (3) assist and advise the Committee in evaluating and analyzing the proposed implementation of any restructuring, including the value of the securities that may be issues under any plan of reorganization; (4) provide expert testimony and other expert and financial advisory support related to any threatened, expected or initiated litigation; and (5) render all other financial advisory services to the Committee that it may require in the Debtors' bankruptcy cases. In exchange for its services, Jefferies will be paid: (a) a $100,000 monthly fee until the termination of the Engagement Letter. A credit equal to: -- 25% of all monthly fees paid to the firm from six months until nine months from the date of the Engagement Letter will be applied against the $750,000 performance fee; and -- 50% of all monthly fees paid to the firm after nine months from the date of the Engagement Letter will be applied against the performance fee; and (b) performance fees equal to the sum of: (i) $750,000 plus (ii) $500,000, which will be earned in full provided that 50% or more of the unsecured classes, including at least one impaired unsecured class, votes in favor of any plan of reorganization. The performance fees will have a $1,000,000 cap and are due upon the consummation of a restructuring, including upon the effective date of a confirmed plan of reorganization. Jefferies will also seek reimbursement of all out-of-pocket expenses. The Committee requests that the Debtors indemnify Jefferies and its professionals from and against any claims, liabilities, and expenses related to or arising out of the firm's provision of services to the Committee, except in the event that any losses are determined by a final, non-appealable judgment by a court, or arbitral tribunal, to have resulted solely from the firm's gross negligence or will full misconduct. Steven R. Strom, a member of Jefferies, assures the Court that Jefferies is a disinterested person pursuant to Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). The firm represents no interest adverse to the Committee or the Debtors' estates, Mr. Strom says. About Werner Ladder Headquartered in Greenville, Pennsylvania, Werner Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The firm of Willkie Farr & Gallagher LLP serves as the Debtors' counsel. Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors as its co-counsel. The Debtors have retained Rothschild Inc. as their financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WERNER LADDER: Wants Removal Period Stretched to December 7 ----------------------------------------------------------- Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend until Dec. 7, 2006, their deadline to file notices of removal with regards to various actions that are pending in multiple state courts. Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP in Wilmington, Delaware, relates that various challenges the Debtors encountered require a 90-day extension of the Sept. 8, 2006 deadline to file notices of removal. Mr. Brady explains that the late formation of the Official Committee of Unsecured Creditors have required the Debtors to respond on an expedited basis to extensive litigation and significant discovery demands of the Committee. Mr. Brady adds that the Debtors' efforts with their employees have led to further evidentiary hearings and discovery requests. Moreover, the Debtors had to devote substantial time and effort in producing monthly operating reports and other reports as part of their Chapter 11 reporting obligations. The requested extension will assure that the Debtors will have all the opportunity to fully investigate all the state court actions to determine whether removal is appropriate, Mr. Brady contends. Mr. Brady assures the Court that the extension would not prejudice the rights of the Debtors' adversaries in the actions because any party to an action that is removed may have to seek it remanded at an appropriate time. About Werner Ladder Headquartered in Greenville, Pennsylvania, Werner Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The Company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The firm of Willkie Farr & Gallagher LLP serves as the Debtors' counsel. Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors as its co-counsel. The Debtors have retained Rothschild Inc. as their financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WHITING PETROLEUM: Expands Reserves with $26MM Michigan Purchase ---------------------------------------------------------------- Whiting Petroleum Corporation acquired 1.4 million barrels of oil equivalent (MMBOE) in Michigan from a privately held seller for $26 million. The reserves are 99% proved producing reserves primarily contained in the Niagaran and Prairie du Chien formations. The acquisition includes 65 producing properties, a gathering line, gas processing plant and 30,437 net acres of leasehold held by production. "This acquisition strengthens our proved reserves in the Company's existing Michigan Basin core area," President and CEO James J. Volker commented. "Based on our operating experience in this area, we will study these properties to identify additional pay zones." The net proved reserves are composed of 702,000 barrels of oil and natural gas liquids and 4.2 billion cubic feet of natural gas. Current net production is 355 barrels of oil and NGL's and 1.7 million cubic feet of gas per day. Whiting will operate 85% of the acquired properties. Acquisition metrics are $18.55 per BOE of proved producing reserves and $40,750 per net daily barrel. The purchase was funded using $26 million of the $490 million available under Whiting's bank credit agreement. Based in Denver, Colorado, Whiting Petroleum Corporation (NYSE: WLL) -- http://www.whiting.com/-- is a holding company engaged in oil and natural gas acquisition, exploitation, exploration and production activities primarily in the Rocky Mountains, Permian Basin, Gulf Coast, Michigan and Mid-Continent regions of the United States. * * * As reported on the Troubled Company Reporter on May 11, 2006, Standard & Poor's Rating Services placed its 'B+' corporate credit rating on oil and gas exploration and production company Whiting Petroleum Corp. on CreditWatch with positive implications. The ratings action follows the recent change in Standard & Poor's oil pricing assumptions. In 2006, 2007, and 2008, S&P raised its pricing assumptions for West Texas Intermediate oil by $10 to $60, $50 and $40 per barrel, respectively. These changes positively affect the calculation of Whiting's credit measures for these years under our pricing assumptions and could, on further examination, be sufficient to warrant upgrading the corporate credit rating by one notch. WHITNEY INFORMATION: Board Confirms Cash Dividend of $1 Per Share ----------------------------------------------------------------- The Board of Directors of Whitney Information Network, Inc., had declared a cash dividend of $1 per share. The special cash dividend of $1.00 per share will be payable on or after Oct. 2, 2006, to shareholders of record on Sept. 15, 2006. The Company stated that the special cash dividend reflects the confidence by the Board in its ability to continue to grow the business, increase free cash flow and build shareholder value. After reflecting payment of the approximately $11 million cash dividend, the Company has retained approximately $39 million of cash, cash equivalents and restricted cash at June 30 to continue to fund organic growth, future strategic acquisitions, technology development and improvements to our infrastructure. Consideration of future dividends will be based upon periodic analysis of the Company's cash position as it relates to the cash requirements necessary to support growth strategies. The Company completed the restatement of its Consolidated Financial Statements for the years 2001 through 2005, the quarters 2004 and 2005 and the first quarter of 2006. The Company filed an Amendment to Form S-1 and a Form 10-Q/A for Q1 2006 with the Securities and Exchange Commission reflecting the restatement, along with our Form 10-Q for Q2 2006. Second Quarter Highlights -- Paid student attendance increased 25.6% over the same period in 2005 -- Cash received from course and product sales totaled a record $59.7 million, a 17.1% increase vs. Q2 2005 -- Cash flows provided by operations amounted to $5.5 million vs. $2.2 million, a 153% increase over the same period in 2005 -- Cash, cash equivalents and restricted cash totaled $49.9 million at June 30, 2006 vs. $21.4 million at June 30, 2005, a $28.5 million increase For the three months ended June 30, 2006, the Company reported record revenue of $47.5 million, an increase of 16.1% over the restated prior year amount of $40.9 million, and a net loss of $4.6 million against a restated net loss of $2.1 million in the comparable 2005 period. For the second quarter ended June 30, 2006, the Company recorded Adjusted EBITDA of $6.9 million, essentially the same as in the comparable 2005 period. During the first half of 2006, the Company recorded revenue of $92.4 million, a 16.4% increase over the restated $79.3 million in the first half of 2005, and a net loss of $8.4 million against a restated net loss of $1.3 million for 2005. Adjusted EBITDA for the first half of 2006 was $15.5 million compared to $16.2 million for the same period in 2005. Headquartered in Cape Coral, Florida, Whitney Information Network, Inc. (OTCBB: RUSSE) -- http://www.russwhitney.com/-- provides financial education and training services through seminars, workshops and publications. The educational and training services are concentrated in the area of financial management and real estate investment. The Company markets its services and products primarily through periodic publications, telemarketing, television and radio. The Company also develops and markets educational resource materials which are prepared to support course offerings and for sale to the general public. The courses are provided in the United States, Canada and the United Kingdom. At June 30, 2006, the Company's balance sheet showed a stockholder's deficit of $46,273,000, compared to a deficit of $40,486,000 at Dec. 31, 2005. WINDOW ROCK: Final DIP Hearing Scheduled on August 22 ----------------------------------------------------- The Hon. John E. Ryan of the U.S. Bankruptcy Court for the Northern District of California gave Window Rock Enterprises Inc. permission, on an interim basis, to borrow around $1 million from Prestige Capital Corporation under a debtor-in-financing agreement. The Court will convene a final hearing at 2:30 p.m., on Aug. 22, 2006, Courtroom 5A, 411 West Fourth St., in Santa Ana, California 92701, to consider final approval of the Debtor's request. As reported in the Troubled Company Reporter on July 26, 2006, The proposed financing will enable the Debtor to generate around $4 million in sales, with substantial profits, net of anticipated financing costs. The Debtor proposes to grant Prestige a security interest encumbering the Debtor's accounts receivable, inventory and other assets to secure repayment of its obligations to Prestige. The Debtor will incur these fees in connection with the sale of its receivables to Prestige: Discount Fee No. of Days to Collect ------------ ---------------------- 2% < 15 days 3% 16 to 30 days 4% 31 to 45 days 5% 46 to 60 days 6% 61 to 75 days 1% for each 15 days thereafter Headquartered in Brea, California, Window Rock Enterprises Inc. -- http://windowrock.net/-- manufactures and sells all-natural dietary and nutritional supplements. The Debtor is also producing its own TV, radio and print advertising campaigns for nutritional and dietary supplements and has distribution in over 40,000 Food Drug Mass Clubs as well as Health and Fitness Channels. The Company filed for chapter 11 protection on Nov. 23, 2005 (Bankr. C.D. Calif. Case No. 05-50048). Robert E. Opera, Esq., Winthrop Couchot, PC represents the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors selected Peiztman, Weg & Kempinsky, LLP, as its counsel. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of more than $100 million. WYNN RESORTS: Las Vegas Subsidiary Refinances Credit Facilities --------------------------------------------------------------- Wynn Las Vegas, LLC, a subsidiary of Wynn Resorts, Limited, (Nasdaq: WYNN) entered into an amended and restated credit agreement with Deutsche Bank, Banc of America, Bear, Stearns, J.P. Morgan, Societe Generale and various other lenders to refinance Wynn Las Vegas' existing credit facilities. The refinancing, among other things: (a) increases the credit facilities from $1 billion to $1.125 billion by increasing the revolver from $600 million to $900 million and reducing the term loan from $400 million to $225 million; (b) reduces the LIBOR spread on the revolver and term loan by 0.625% and 0.250%, respectively; and (c) extends the maturity dates for the revolver and the term loan to 2011 and 2013, respectively. Wynn Resorts, Limited (Nasdaq: WYNN), owns and operates Wynn Las Vegas, a luxury hotel and destination casino resort located on the Las Vegas Strip. * * * As reported in the Troubled Company Reporter on June 30, 2006 Standard & Poor's Ratings Services held its ratings on Wynn Resorts Ltd. and its wholly owned subsidiary Wynn Las Vegas LLC, including their 'B+' corporate credit ratings, on CreditWatch with positive implications. YUKOS OIL: Foreign Executives Faces Russian Criminal Probe ---------------------------------------------------------- The Russian Prosecutor General's Office has launched a criminal case against former OAO Yukos Oil Co. President Steven Theede and three other executives, accusing them of money laundering and embezzlement, according to published reports. The Russian authorities allege that Mr. Theede, along with: -- Bruce Misamore, former manager of Yukos Finance BV; -- David Godfrey, Yukos's former managing adviser; and -- Tim Osborne, a director of Group Menatep, Yukos's largest shareholder, used a Dutch-based foundation to illegally gain control of $10 billion in company assets beyond the reach of liquidation proceedings, the Washington Post relates. In a statement posted in its Web site, the prosecutors said the four "took advantage of their official positions to steal and legalize property that had been trusted to them, which caused considerable damage to the owner." Claire Davidson, a spokeswoman for Yukos's former management, said that overseas assets were placed in a Netherlands foundation in accordance with Dutch law, to ensure that proceeds from their sale would be distributed only to creditors recognized in Dutch court, Andrew E. Kramer writes for The New York Times. Ms. Davidson said Yukos has registered its overseas assets in the Netherlands, which amounted to roughly $2 billion, Mr. Kramer reports. According to BBC News, the investigation was announced after a Dutch court refused to grant Russian liquidators full control over Yukos's Dutch subsidiary. It also refused to allow Eduard Rebgun, appointed by a Moscow bankruptcy court to handle the Debtor's liquidation, the right to veto more than $1.3 million in deals, BBC relates. The Moscow Arbitration Court has recognized a combined $16.2 billion in claims from the tax authorities and state-owned OAO Rosneft Oil Co. while Dutch courts have recognized a $750 million claim by a GML subsidiary (formerly Menatep) and a $482 million claim by Rosneft, the Times reports. About Yukos Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for Chapter 11 protection Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A few days later, the Government sold its main production unit Yugansk, to a little- known firm Baikalfinansgroup for $9.35 billion, as payment for $27.5 billion in tax arrears for 2000- 2003. Yugansk eventually was bought by state-owned Rosneft, which is now claiming more than $12 billion from Yukos. On March 10, a 14-bank consortium led by Societe Generale filed a bankruptcy suit in the Moscow Arbitration Court in an attempt to recover the remainder of a $1 billion debt under outstanding loan agreements. The banks, however, sold the claim to Rosneft, prompting the Court to replace them with the state-owned oil company as plaintiff. On April 13, court-appointed external manager Eduard Rebgun filed a chapter 15 petition in the U.S. Bankruptcy Court for the Southern District of New York (Bankr. S.D.N.Y. Case No. 06- 0775), in an attempt to halt the sale of Yukos' 53.7% ownership interest in Lithuanian AB Mazeikiu Nafta. On May 26, Yukos signed a $1.49 billion Share Sale and Purchase Agreement with PKN Orlen S.A., Poland's largest oil refiner, for its Mazeikiu ownership stake. The move was made a day after the Manhattan Court lifted an order barring Yukos from selling its controlling stake in the Lithuanian oil refinery. On July 25, Yukos creditors voted to liquidate the oil firm after rejecting a management rescue plan, which valued the company's assets at about $30 billion. This would have permitted Yukos to continue its operations and attempt to pay off $18 billion in debts through asset sales. The Hon. Pavel Markov of the Moscow Arbitration Court upheld creditors' vote to liquidate Yukos Oil and declared what was once Russia's biggest oil firm bankrupt on Aug. 1. The expected court ruling paves the way for the company's liquidation and auction. * BOND PRICING: For the week of August 14 -- August 18, 2006 ------------------------------------------------------------ Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 01/15/04 1 ABC Rail Product 10.500% 12/31/04 1 Adelphia Comm. 3.250% 05/01/21 1 Adelphia Comm. 6.000% 02/15/06 0 Adelphia Comm. 7.500% 01/15/04 58 Adelphia Comm. 7.750% 01/15/09 59 Adelphia Comm. 7.875% 05/01/09 58 Adelphia Comm. 8.125% 07/15/03 58 Adelphia Comm. 8.375% 02/01/08 59 Adelphia Comm. 9.250% 10/01/02 58 Adelphia Comm. 9.375% 11/15/09 61 Adelphia Comm. 9.500% 02/15/04 54 Adelphia Comm. 9.875% 03/01/05 58 Adelphia Comm. 9.875% 03/01/07 59 Adelphia Comm. 10.250% 06/15/11 62 Adelphia Comm. 10.250% 11/01/06 58 Adelphia Comm. 10.500% 07/15/04 58 Adelphia Comm. 10.875% 10/01/10 59 Allegiance Tel. 11.750% 02/15/08 47 Allegiance Tel. 12.875% 05/15/08 44 Amer & Forgn Pwr 5.000% 03/01/30 66 Amer Color Graph 10.000% 06/15/10 70 Ames Dept. Stores 10.000% 04/15/06 0 Antigenics 5.250% 02/01/25 64 Anvil Knitwear 10.875% 03/15/07 61 Armstrong World 6.350% 08/15/03 66 Armstrong World 6.500% 08/15/05 67 Armstrong World 7.450% 05/15/29 68 Armstrong World 9.000% 06/15/04 66 At Home Corp. 4.750% 12/15/06 0 ATA Holdings 12.125% 06/15/10 2 Autocam Corp. 10.875% 06/15/14 61 Avado Brands Inc 11.720% 06/15/09 1 Bank New England 8.750% 04/01/99 5 Bank New England 9.500% 02/15/96 10 BBN Corp 6.000% 04/01/12 0 Big V Supermarkets 11.000% 02/15/04 0 Budget Group Inc 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 55 Calpine Corp 4.000% 12/26/06 25 Calpine Corp 4.750% 11/15/23 49 Calpine Corp 4.750% 11/15/23 50 Calpine Corp 6.000% 09/30/14 39 Calpine Corp 7.750% 04/15/09 74 Calpine Corp 7.750% 06/01/15 38 Calpine Corp 7.875% 04/01/08 74 Calpine Corp 8.500% 02/15/11 51 Calpine Corp 8.625% 08/15/10 51 Calpine Corp 8.750% 07/15/07 74 Calpine Corp 10.500% 05/15/06 73 Cell Therapeutic 5.750% 06/15/08 58 Charter Comm Hld 10.000% 05/15/11 71 CIH 9.920% 04/01/14 65 CIH 10.000% 05/15/14 64 CIH 11.125% 01/15/14 66 Collins & Aikman 10.750% 12/31/11 10 Color Tile Inc 10.750% 12/15/01 0 Columbia/HCA 7.500% 11/15/95 69 Columbia/HCA 7.750% 07/15/36 73 Comcast Corp 2.000% 10/15/29 40 Cray Research 6.125% 02/01/11 12 Curagen Corp 4.000% 02/15/11 74 Dal-Dflt09/05 9.000% 05/15/16 25 Dana Corp 5.850% 01/15/15 74 Decode Genetics 3.500% 04/15/11 74 Delco Remy Intl 9.375% 04/15/12 60 Delco Remy Intl 11.000% 05/01/09 61 Delphi Trust II 6.197% 11/15/33 67 Delta Air Lines 2.875% 02/18/24 24 Delta Air Lines 7.541% 10/11/11 38 Delta Air Lines 7.700% 12/15/05 24 Delta Air Lines 7.900% 12/15/09 26 Delta Air Lines 8.000% 06/03/23 25 Delta Air Lines 8.270% 09/23/07 75 Delta Air Lines 8.300% 12/15/29 26 Delta Air Lines 8.540% 01/02/07 73 Delta Air Lines 9.200% 09/23/14 73 Delta Air Lines 9.250% 03/15/22 24 Delta Air Lines 9.375% 09/11/07 63 Delta Air Lines 9.480% 06/05/06 58 Delta Air Lines 9.750% 05/15/21 24 Delta Air Lines 10.000% 06/01/11 58 Delta Air Lines 10.000% 06/05/13 74 Delta Air Lines 10.000% 08/15/08 23 Delta Air Lines 10.060% 01/02/16 73 Delta Air Lines 10.080% 06/16/07 65 Delta Air Lines 10.125% 05/15/10 25 Delta Air Lines 10.375% 02/01/11 25 Delta Air Lines 10.375% 12/15/22 25 Deutsche Bank NY 8.500% 11/15/16 68 Dov Pharmaceutic 2.500% 01/15/25 58 Dov Pharmaceutic 2.500% 01/15/25 60 Dura Operating 9.000% 05/01/09 19 Dura Operating 9.000% 05/01/09 59 Eagle-Picher Inc 9.750% 09/01/13 74 Encysive Pharmac 2.500% 03/15/12 73 Epix Medical Inc. 3.000% 06/15/24 70 Fedders North AM 9.875% 03/01/14 67 Federal-Mogul Co. 7.375% 01/15/06 57 Federal-Mogul Co. 7.500% 01/15/09 57 Federal-Mogul Co. 8.160% 03/06/03 51 Federal-Mogul Co. 8.330% 11/15/01 58 Federal-Mogul Co. 8.370% 11/15/01 53 Federal-Mogul Co. 8.800% 04/15/07 56 Finova Group 7.500% 11/15/09 31 Ford Motor Co 6.625% 02/15/28 74 Ford Motor Co 7.125% 11/15/25 74 Ford Motor Co 7.400% 11/01/46 74 Ford Motor Co 7.700% 05/15/97 71 Ford Motor Co 7.750% 06/15/43 75 Ford Motor Cred 6.200% 03/20/15 75 Gateway Inc. 2.000% 12/31/11 72 GB Property Fndg 11.000% 09/29/05 51 Graftech Intl 1.625% 01/15/24 73 Gulf Mobile Ohio 5.000% 12/01/56 73 Gulf States Stl 13.500% 04/15/03 0 HNG Internorth 9.625% 03/15/06 36 Home Prod Intl 9.625% 05/15/08 67 Inland Fiber 9.625% 11/15/07 63 Insight Health 9.875% 11/01/11 48 Iridium LLC/CAP 10.875% 07/15/05 25 Iridium LLC/CAP 11.250% 07/15/05 24 Iridium LLC/CAP 13.000% 07/15/05 26 Iridium LLC/CAP 14.000% 07/15/05 26 Isolagen Inc. 3.500% 11/01/24 74 K&F Industries 9.625% 12/15/10 70 Kaiser Aluminum 9.875% 02/15/02 49 Kaiser Aluminum 12.750% 02/01/03 12 Kellstrom Inds 5.500% 06/15/03 0 Kitty Hawk Inc 9.950% 11/15/04 2 Kmart Corp 8.540% 01/02/15 23 Kmart Corp 8.990% 07/05/10 4 Kmart Funding 8.800% 07/01/10 30 Lehman Bros Hldg 11.000% 10/25/17 70 Liberty Media 3.750% 02/15/30 59 Liberty Media 4.000% 11/15/29 64 Lifecare Holding 9.250% 08/15/13 73 Macsaver Financl 7.600% 08/01/07 3 Merisant Co 9.500% 07/15/13 63 Merrill Lynch 10.000% 08/15/12 72 MHS Holdings Co 16.875% 09/22/04 0 Movie Gallery 11.000% 05/01/12 62 MSX Int'l Inc. 11.375% 01/15/08 70 Muzak LLC 9.875% 03/15/09 56 New Orl Grt N RR 5.000% 07/01/32 67 Northern Pacific RY 3.000% 01/01/47 56 Northern Pacific RY 3.000% 01/01/47 56 Northwest Airlines 6.625% 05/15/23 47 Northwest Airlines 7.248% 01/02/12 21 Northwest Airlines 7.625% 11/15/23 46 Northwest Airlines 7.875% 03/15/08 46 Northwest Airlines 8.700% 03/15/07 43 Northwest Airlines 8.875% 06/01/06 47 Northwest Airlines 9.179% 04/01/10 23 Northwest Airlines 9.875% 03/15/07 49 Northwest Airlines 10.000% 02/01/09 46 Northwest Airlines 10.500% 04/01/09 48 Northwest Stl&Wir 9.500% 06/15/01 0 NTK Holdings Inc 10.750% 03/01/14 67 NWA Trust 11.300% 12/21/12 72 Oakwood Homes 8.125% 03/01/09 7 Oscient Pharm 3.500% 04/15/11 64 Osu-Dflt10/05 13.375% 10/15/09 0 Outboard Marine 7.000% 07/01/02 0 Outboard Marine 10.750% 06/01/08 4 Overstock.com 3.750% 12/01/11 73 Owens Corning 7.000% 03/15/09 60 Owens Corning 7.500% 05/01/05 57 Owens Corning 7.500% 08/01/18 58 Owens Corning 7.700% 05/01/08 58 Owens-Corning Fiber 9.375% 06/01/12 75 PCA LLC/PCA Fin 11.875% 08/01/09 21 Pegasus Satellite 9.625% 10/15/49 11 Pegasus Satellite 9.750% 12/01/06 12 Pegasus Satellite 12.375% 08/01/06 9 Pegasus Satellite 12.500% 08/01/07 12 Phar-mor Inc 11.720% 09/11/02 0 Piedmont Aviat 10.250% 01/15/49 1 Pixelworks Inc 1.750% 05/15/24 70 Pliant Corp 13.000% 06/01/10 43 Pliant Corp 13.000% 06/01/10 45 Polaroid Corp. 6.750% 01/15/02 0 Polaroid Corp. 7.250% 01/15/07 0 Polaroid Corp. 11.500% 02/15/06 0 Primus Telecom 3.750% 09/15/10 48 Primus Telecom 8.000% 01/15/14 63 Primus Telecom 12.750% 10/15/09 73 PSINET Inc 10.500% 12/01/06 0 Radnor Holdings 11.000% 03/15/10 32 Railworks Corp 11.500% 04/15/09 0 Read-Rite Corp. 6.500% 09/01/04 18 RJ Tower Corp. 12.000% 06/01/13 52 Rotech Healthcare 9.500% 04/01/12 68 Silicon Graphics 6.500% 06/01/09 70 Solectron Corp 1.000% 02/15/34 73 Tekni-Plex Inc. 12.750% 06/15/10 73 Tom's Foods Inc 10.500% 11/01/04 9 Toys R Us 7.375% 10/15/18 71 Tribune Co 2.000% 05/15/29 66 Triton Pcs Inc. 8.750% 11/15/11 71 Triton Pcs Inc. 9.375% 02/01/11 70 Twin Labs Inc. 10.250% 05/15/06 2 United Air Lines 7.270% 01/30/13 56 United Air Lines 7.870% 01/30/19 54 United Air Lines 9.020% 04/19/12 53 United Air Lines 9.350% 04/07/16 30 United Air Lines 10.020% 03/22/14 45 United Air Lines 10.125% 03/22/15 50 United Homes Inc 11.000% 03/15/05 0 US Air Inc. 10.250% 01/15/49 5 US Air Inc. 10.250% 01/15/49 11 US Air Inc. 10.300% 07/15/49 6 US Air Inc. 10.550% 01/15/49 45 US Air Inc. 10.680% 06/27/08 2 US Air Inc. 10.700% 01/01/49 22 US Air Inc. 10.700% 01/15/49 23 US Air Inc. 10.700% 01/15/49 44 US Air Inc. 10.700% 01/15/49 45 US Air Inc. 10.700% 01/15/49 45 US Air Inc. 10.700% 01/15/49 45 US Air Inc. 10.750% 01/01/49 0 US Air Inc. 10.750% 01/15/49 25 Venture Holdings 9.500% 07/01/05 1 Venture Holdings 11.000% 06/01/07 1 Vesta Insurance Group 8.750% 07/15/25 10 Werner Holdings 10.000% 11/15/07 24 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Wheeling-Pitt St 6.000% 08/01/10 69 Winsloew Furniture 12.750% 08/15/07 26 Winstar Comm 14.000% 10/15/05 0 Wise Metals Grp 10.250% 05/15/12 72 World Access Inc. 13.250% 01/15/08 4 Xerox Corp. 0.570% 04/21/18 34 Ziff Davis Media 12.000% 07/15/10 40 ********* 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 ***