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/raid1/www/Hosts/bankrupt/TCR_Public/060901.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, September 1, 2006, Vol. 10, No. 208 Headlines ADELPHIA COMMS: Ronald Cooper Resigns as President & COO ADELPHIA COMMS: Boies Schiller Can't Examine Fee Committee For Now AMERICAN HOMEPATIENT: June 30 Balance Sheet Upside Down by $14MM AMPRO ENERGY: Voluntary Chapter 11 Case Summary ANADARKO PETROLEUM: High Debt Level Cues Moody's to Lower Ratings ANCHOR GLASS: Alphas Trustee Says No to 37 Critical Vendor Claims ANCHOR GLASS: Asks Court to Disallow Several Governmental Claims AZTEC METAL: Case Summary & 40 Largest Unsecured Creditors BAYOU GROUP: Wants Open-Ended Deadline to File Notices of Removal BAYOU GROUP: Court Issues Protective Order on Classified Data Use BELDEN CDT: Reports Revenue Increase of 31.5% in Second Quarter BOMBARDIER INC: Gets GBP223MM Car Order from Transport For London BOYDS COLLECTION: Will Close Pigeon Forge Store in October BREAKAWAY SOLUTIONS: Wants Case Dismissed Due to Funding Shortage BURTON ODOM: Case Summary & Five Largest Unsecured Creditors CABLEVISION SYSTEM: Likely Default Cues Moody's to Review Ratings CABLEVISION SYSTEMS: S&P Holds BB Corporate Credit Rating on Watch CALPINE CORP: To Sell Russell City Project Assets CALPINE CORP: Unit Inks Energy Agreement with Epcor Merchant CENTRAL GARDEN: Earns $30.7 Mil. in 3rd Fiscal Qtr. Ended June 24 CHARLES STAPLES: Case Summary & Six Largest Unsecured Creditors CLOROX CO: Appoints Don Knauss as Chairman and CEO COLLINS & AIKMAN: Files Reorganization Plan to Emerge from Ch. 11 COLLINS & AIKMAN: Court OKs Settlement Pact with Valiant and MOBIS COLLINS & AIKMAN: Argues ACT Received Proper Bar Date Notice COPELANDS' ENTERPRISES: U.S. Trustee Appoints Five Panel Members COPELANDS' ENTERPRISES: Wants to Hold GOB Sales Auction on Sept. 7 CYTOCORE INC: Balance Sheet Upside-Down by $4.6 Million at June 30 DANA CORP: Smith Withdraws Lift Stay Motion to Pursue PI Lawsuit DANA CORP: Watson Withdraws Lift Stay Motion to Recoup $492K Debt DAVID HUMPHERYS: Voluntary Chapter 11 Case Summary DELPHI CORP: Court Allows Equity Panel to Retain Financial Advisor DELPHI CORP: Delphi Medical Seeks $4 Million Payment from Aksys DELTA AIR: Wants to Amend and Assume Denver Airport Lease DELTA AIR: Inks Stipulation for FCI to File Consolidated Claims EMMIS COMMUNICATIONS: Employs Patrick Walsh as Executive VP, CFO ENERGY PARTNERS: Woodside Merger Cues Moody's to Review Ratings ENTERGY NEW ORLEANS: DIP Pact Maturity Stretched to August 2006 ENTERGY NEW ORLEANS: United States Wants Claims Objection Denied EPIXTAR CORP: Court Moves Exclusive Plan Filing Deadline to Oct. 1 EUROFRESH INC: S&P Junks Rating Due to Poor First Qtr. Performance EXABYTE CORP: Selling Assets to Tandberg Data for $28 Million EXIDE TECHNOLOGIES: Board OKs Revised Director Compensation Terms EXIDE TECHNOLOGIES: Shareholders Sue Directors and Officers FORD MOTOR: May Sell Aston Martin Sports Car Unit to Raise Capital FORD MOTOR: Mulls Doubling Russian Car Sales in 2006 FUTURE MEDIA: Court Okays Silver & Freedman as Special Counsel FUTURE MEDIA: Wants Excl. Solicitation Period Stretched to Nov. 9 GENESIS BIOVENTURES: Hires Mark Franzen as Chief Financial Officer GREAT PLAINS: Earns $37.2 Million in Second Quarter of 2006 GRUPO IUSACELL: Debt Restructuring Program Close to Completion GUARDIAN TECHNOLOGIES: Incurs $2,195,406 Net Loss in 2nd Quarter HANDMAKER JEWISH: Hires KSR Capital as Investment Banker HANDMAKER JEWISH: HME Will Manage Facility Until December 31 HEALTHTRONICS INC: Moody's Lowers Rating on $50 Mil. Loan to B1 IAP WORLDWIDE: S&P Lowers Corporate Credit Rating to B from B+ INLAND FIBER: Wants Court Okay on Dechert as Bankruptcy Counsel INLAND FIBER: Court Sets September 22 as Claims Bar Date ITRON INC: S&P Rates $345 Million Senior Subordinated Notes at B JAMES EDMONDS: Case Summary & Eight Largest Unsecured Creditors JERRY SMITH: Case Summary & 19 Largest Unsecured Creditors LEGACY ESTATE: Sells Substantially all Assets to FAB for $90MM LENNOX INTERNATIONAL: Earns $64 Million in Quarter Ended June 30 MICRO COMPONENT: July 1 Balance Sheet Upside-Down by $7 Million MILLENIUM ASSISTED: Unsecured Claim Holders to Share $50,000 Fund MIRANT: Class 3 Claim Holders to Appeal PEPCO Settlement Order MIRANT CORP: Buys Back 43 Mil. Common Stock at $28.50 Per Share MYLAN LABS: Moody's Holds Ba1 Rating on $700 Million Senior Notes NATIONAL CONSUMER: Trustee Asks Ct. to Set Oct. 6 Claims Bar Date NEOPLAN USA: Court Approves DCA as Claims and Noticing Agent NJ AFFORDABLE: Hires Sheldon & DJM as Ch. 7 Trustee's Auctioneers NORTHWEST AIRLINES: Court Allows FCI to File Consolidated Claims NORTHWEST AIRLINES: Wants Claim Objection Protocol Established NOVELIS INC: Reviews Strategic Options for European Subsidiaries ONEIDA LTD: NY Bankruptcy Court Confirms Plan of Reorganization ORTHOFIX INT'L: Blackstone Merger Cues Moody's to Lower Ratings OWENS CORNING: Can Sell Modulo(TM)/ParMur Group for $32 Million OWENS CORNING: Reorganized Company Registers New Common Stock PARMALAT USA: Enrico Bondi, et al., Want Injunction Imposed PARMALAT USA: Administrator Sues BofA Corp. et al. for Collusion PLATFORM LEARNING: Wants to Use Cash Collateral Until Sept. 15 PLIANT CORPORATION: Reports Second Quarter Financial Results PORTRAIT CORP: Files Chapter 11 Petition in New York PORTRAIT CORP: Case Summary & 29 Largest Unsecured Creditors R&G FINANCIAL: Hires Andres I. Perez as Chief Financial Officer RADIOSHACK CORP: Lays Off 400 Workers to Reduce Costs REAL ESTATE: Has Until Sept. 13 to File Schedules & Statements REFCO INC: Chap. 7 Trustee Objects to West Loop's $10.6 Mil. Claim REFCO INC: Chapter 7 Trustee Says Goodman's Claim Has No Merit RIVERSTONE NETWORKS: U.S. Trustee Wants Ch. 11 Trustee Appointed SAINT VINCENTS: Has Until October 20 to File Reorganization Plan SAINT VINCENTS: Taps Massey Knakal Realty as Broker SALLY WRIGHT: Case Summary & 14 Largest Unsecured Creditors SIMON WORLDWIDE: Equity Deficit Triples to $2.59MM at June 30 SYMBOLLON PHARMACEUTICALS: Incurs $645,770 Net Loss in 2nd Quarter TECH DATA: Posts $155 Million Net Loss in Quarter Ended July 31 TITANIUM METALS: Board Declares Dividend on 6-3/4% Preferred Stock TIX CORP: Balance Sheet Upside-Down by $1,631,570 as of June 30 TOWER RECORDS: Wants Court Nod on Akin Gump as Special Counsel TURNING STONE: Moody's Rates Proposed $160 Mil. Sr. Notes at Ba3 TURNING STONE: S&P Downgrades Issuer Credit Rating to B+ from BB- TXU CORP: Sees Over $10 Billion Investment in Texas USA COMMERCIAL: Creditors Panel Taps Sierra as Financial Advisor USG CORP: 38.7 Million Rights Exercised at Recent Offering WERNER LADDER: Court Okays Rothschild Inc. as Financial Advisor WERNER LADDER: Court Authorizes BOB Plan Payments due July 31 WEST HILLS: Case Summary & 23 Largest Unsecured Creditors WHITE ROCK: Case Summary & 20 Largest Unsecured Creditors * BOOK REVIEW: OIL & HONOR: The Texaco Pennzoil Wars ********* ADELPHIA COMMS: Ronald Cooper Resigns as President & COO -------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission, Adelphia Communications Corporation discloses that on Aug. 17, 2006, Ronald Cooper, ACOM's president and chief operating officer, resigned for "Good Reason," as defined in his Employment Agreement with ACOM. ACOM waived the requirement under the Employment Agreement that Mr. Cooper should provide a 30 days' notice of termination for Good Reason because substantially all of the cable operations that he had previously overseen had been sold. Immediate resignation conferred a financial benefit on ACOM, Brad M. Sonnenberg, ACOM's executive vice president, general counsel and secretary, says. As a result of the termination for Good Reason, Mr. Cooper is entitled to receive: * a lump sum payment of $5,100,000 -- an amount equal to three times his base salary and target bonus -- no later than Sept. 16, 2006; and * a continued health coverage at employee rates at his sole cost for 18 months, until Feb. 17, 2008. 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. (Adelphia Bankruptcy News, Issue Nos. 146; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADELPHIA COMMS: Boies Schiller Can't Examine Fee Committee For Now ------------------------------------------------------------------ The Honorable Robert D. Gerber of the U.S. Bankruptcy Court for the Southern District of New York grants the request of the Fee Committee of Adelphia Communications Corp. and its debtor- affiliates for a protective order precluding Boies, Schiller & Flexner, LLP, from further pursuit of the Discovery Requests, insofar as the Fee Committee seeks protection from the discovery requests now. However, Judge Gerber denies the Fee Committee's request to preclude Boies Schiller from ever pursuing the Discovery Requests. The Court also denies the Fee Committee's request for a protective order precluding Boies Schiller from pursuing further discovery requests of the Fee Committee and its agents, without prejudice to any rights to relief on more particularized grounds, including work product, attorney mental impressions, or attorney-client privilege. No Absolute Immunity from Discovery Judge Gerber agrees with Boies Schiller's contention that no case has ever been held that a fee committee has "discovery immunity," and notes that the Fee Committee has cited none in its request. "Nevertheless, the issue warrants further analysis," he says. Judge Gerber further notes that the Court appointed the Fee Committee as an "officer[] of the Court," and "provided the maximum immunity permitted by law from civil actions. . . ." He contends that the two clauses should be considered separately, although they are related. Judge Gerber emphasizes that the Fee Committee is provided the maximum immunity permitted by law from civil actions, and not from discovery requests. "That has a clear meaning in the free- standing sense, and particularly since the clause applies not just to the Fee Committee but also to its members, it has a clear meaning in context as well," he explains. The Fee Committee's designation as an "officer of the Court" requires consideration of what "officer of the Court" means, in the context of the appointment of a fee committee, Judge Gerber states. It is not defined by statute or any expressly stated definition or cross-reference, and is used in a variety of ways in everyday legal life, he continues. While Judge Gerber does not agree with Boies Schiller's contention that the Fee Committee is no more of an "officer of the Court" than a lawyer is, he agrees with Boies Schiller that the Fee Committee is not a judicial officer, or close to one, either. The Fee Committee plainly performs its function with the authority of the Court but does not make judicial or quasi-judicial determinations, he notes. Accordingly, Judge Gerber finds that the Court-approved Fee Committee Protocol does not grant the Fee Committee immunity from discovery, and neither the designation of the Fee Committee as an "officer of the Court," nor its inherent nature, makes it wholly immune from otherwise proper discovery requests. Discovery Available from Parties and Nonparties Judge Gerber notes that the Fee Committee argues that it is "not a party" to the contested matter relating to Boies Schiller's final fee application, and implies, though it does not expressly state, that it provides a second basis for a protective order. According to Judge Gerber, assuming that the Fee Committee's contention has in fact been made, he cannot agree with it. "At least in the federal courts, discovery is available from parties and nonparties alike." Protective Order from Discover Requests Granted "Now" but Not "Ever" According to Judge Gerber, even though fee committees are not immune from discovery, care must be taken to protect their legitimate rights to the protection of work product, attorney mental impressions, and the attorney-client privilege. He states that courts should be wary of efforts to use discovery from fee committees as a tactical measure. Judge Gerber notes that in many cases, much of the work of any fee committee may have most, if not all, of the trappings of work product. Consistent with any work product analysis, Judge Gerber says he believes that courts should direct discovery of fee committees only as a last resort, to ensure that the discovery is really necessary, both: -- temporally to await the filing of an objection that makes the desired discovery necessary or appropriate; and -- substantively to see if the relevant information can be obtained from other sources. "While I am saying 'not now' with respect to the Discovery Requests that [Boies Schiller] has propounded to the Fee Committee and against which the Fee Committee has moved, I am not saying 'never'," Judge Gerber states. 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. (Adelphia Bankruptcy News, Issue Nos. 146; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN HOMEPATIENT: June 30 Balance Sheet Upside Down by $14MM ---------------------------------------------------------------- American HomePatient, Inc.'s balance sheet at June 30, 2006, showed $279.97 million in total assets, $293.69 million in liabilities and $653,000 in minority interests, resulting in a $14.38 million shareholders' deficit. Net loss for the second quarter ended June 30, 2006 was $1.8 million compared to $2.4 million of net income for the second quarter of 2005, representing a decrease of $4.2 million. The Medicare reimbursement changes associated with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 decreased net income by approximately $3.3 million in the second quarter of 2006 compared to the same quarter of 2005. This $3.3 million net income impact is comprised of a decrease in net revenue of approximately $1.6 million and an increase in cost of sales of approximately $1.7 million. The reduced revenues of approximately $1.6 million are due to a reduction in inhalation drug reimbursement. Cost of sales increased approximately $1.7 million due to a shift in product mix related to changes in inhalation drug reimbursement. Net loss for the six months ended June 30, 2006 was $2.6 million compared to $3.7 million net income for the same six-month period in 2005, representing a decrease of $6.3 million. Revenues for the second quarter of 2006 were $81 million compared to $81.6 million for the second quarter of 2005, representing a decrease of $600,000. Compared to the second quarter of 2005, revenues in the current quarter were negatively impacted by Medicare reimbursement reductions totaling approximately $1.6 million associated with the MMA. Revenues for the six months ended 2006 were $161.6 million compared to $163.1 million for the same six-month period in 2005, representing a decrease of $1.5 million, or 0.9%. About American HomePatient American HomePatient, Inc., is one of the United States' largest home health care providers with 274 centers in 35 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. American HomePatient and its debtor-affiliates filed for chapter 11 protection on August 5, 2002 (Bankr. M.D. Tenn. Case No. 02-08915). Glenn B. Rose, Esq., at Harwell Howard Hyne Gabbert & Manner, PC, represents the Debtors. Houlihan Lokey Howard & Zukin Capital served as the Company's Financial Advisors. American HomePatient sought and obtained confirmation of a chapter 11 plan in May 2003 that forced a restructuring its long-term debt obligations to its secured lenders, promised to full payment to unsecured creditors with interest, and left shareholders unimpaired. The plan took effect in July 2003. AMPRO ENERGY: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: AmPro Energy L.P. 19747 Highway 59N, Suite 250 Humble, TX 77338-3525 Bankruptcy Case No.: 06-34291 Type of Business: The Debtor is an energy consultant, and is engaged in electrical energy distribution and sales. Chapter 11 Petition Date: August 31, 2006 Court: Southern District of Texas (Houston) Judge: Letitia Z. Clark Debtor's Counsel: Kelly D. Stephens, Esq. Sydow & McDonald 4900 Woodway, Suite 900 Houston, TX 77056 Tel: (713) 622-9700 Estimated Assets: $1 Million to $10 Million Estimated Debts: $100,000 to $500,000 The Debtor did not file a list of its 20 largest unsecured creditors. ANADARKO PETROLEUM: High Debt Level Cues Moody's to Lower Ratings ----------------------------------------------------------------- Moody's Investors Service downgraded the senior unsecured debt of Anadarko Petroleum Corporation to Baa2 from Baa1 and assigned a negative outlook on the rating. The Prime-2 commercial paper rating is confirmed. The Ba2 securities ratings of Kerr-McGee Corporation remain under review pending clarification of whether Anadarko intends to support the debt, and the Ba2 CFR rating is withdrawn. Concurrently, Moody's also withdrew the Ba1 CFR and debt ratings for Western Gas Resources in line with their retirement. Both the Kerr-McGee and Western Gas Resource acquisitions were approved by shareholders and closed in August 2006 at a total cost of approximately $22.5 billion including debt assumption. The downgrade of Anadarko's senior unsecured ratings to Baa2 and negative outlook reflect the high level of debt incurred and a view that that post-acquisition leverage could remain elevated even after the company proceeds with its de-leveraging strategy. The plan includes a combination of $15 billion of asset sales and common equity issuance and over $7 billion of debt issuance to re- finance its bridge bank facility. With the high level of debt incurred, Anadarko's leverage, as measured by Total Debt Developed Reserves, exceeded $12 at closing and Moody's estimates the measure could exceed $5 per PD BOE in the next year after the principal parts of the plan are completed. In addition, with the reserve acquisition cost at over $18 per proved BOE, Anadarko's cost structure will have high embedded finding and development costs in the future that will increase its full cycle costs and only gradually decline as Anadarko undertakes development spending and taps into the unbooked resource potential of the newly acquired assets. Moody's estimates that for the next few years Anadarko could demonstrate full cycle costs in the area of $30 per BOE both as a result of the acquisition cost and industry inflationary pressures in the services sector. Strong mitigating factors that support the eventual stabilization of the Baa2 long-term rating include the size and diversity of Anadarko's newly combined operations; and the good strategic fit, asset durability, and production growth potential of key acquired assets from both Kerr-McGee and Western Gas, such as long-lived lower risk Rocky Mountain gas reserves and resources, and the higher-risk longer cycle potential of the Deepwater Gulf of Mexico, where Kerr-McGee was an industry leader and Anadarko also had some success. In addition, a robust near-term outlook for oil and natural gas prices should support an annual capital budget in excess of $6 billion and free cash flow to support the debt reduction effort. Finally, Moody's believes that management is committed to seeing through its leverage reduction program and remains committed to achieving the solid leverage and operating metrics that will support a solid Baa2 long-term rating. In Moody's view, Anadarko is likely to be able to sell assets and access equity in the near-term to proceed with its de-leveraging. Large assets have been identified for sale, including Anadarko's Canadian reserves. However, the timing and balance between asset sales, debt, and equity issuance remain uncertain and timely delivery on the plan will be critical to maintaining the Baa2 and Prime-2 ratings and to stabilizing the rating outlook. Over the next year, Moody's will monitor Anadarko's progress on the de- leveraging plan, as well as the free cash generation and reserve replacement coming out of the acquisition, with clear indications that financial leverage is moving to a sustainable lower level. Anadarko Petroleum Company is headquartered in The Woodlands, Texas. ANCHOR GLASS: Alphas Trustee Says No to 37 Critical Vendor Claims ----------------------------------------------------------------- Several participants of Anchor Glass Container Corporation's Critical Vendor Program filed claims against the Debtor. Edward J. Peterson, Esq., at Stichter Riedel Blain & Prosser, P.A., in Tampa, Florida, relates that in exchange for treatment as a critical vendor, the participants waived any general unsecured claim they may have in the Debtor's Chapter 11 case. Some of the Critical Vendors filed Scheduled Claims aside from their general unsecured claims, Mr. Peterson says. The Critical Vendors also filed multiple claims, which are duplicative. Thus, Samuel M. Stricklin, the Alpha Resolution Trustee appointed pursuant to Anchor Glass' Second Amended Plan of Reorganization, asserts that these creditors are not entitled to distribution. Accordingly, the Alpha Resolution Trustee asks the U.S. Bankruptcy Court for the Middle District of Florida to disallow 37 Claims. Among the largest Claims are: Claimant Claim No. Claim Amount -------- --------- ------------ BL Intermodal, Inc. 1310 $1,276,037 Packaging Dimensions - Corr 524 1,200,574 Ultra Logistics 1116 899,200 FMC Wyoming Corporation 1469 522,666 Strategic Materials, Inc. 831 485,224 Modern Transportation Scheduled 386,734 Terlyn Industries Limited 237 384,498 Dart Transit Company 1534 365,815 U.S. Silica 554 331,260 Bearing Headquarters Co. 176 174,771 National Packaging Specialists 290 134,107 Bostik Findley 225 132,571 Calumite Co., L.L.C. 502 130,113 Nutmeg Recycling 801 126,298 Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents Anchor Glass in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When Anchor Glass filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. The Court confirmed Anchor Glass' second Amended Plan of Reorganization on April 18, 2006. Anchor Glass emerged from Chapter 11 protection on May 3, 2006. (Anchor Glass Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ANCHOR GLASS: Asks Court to Disallow Several Governmental Claims ---------------------------------------------------------------- The Commonwealth of Pennsylvania filed two identical priority claims for $38,352, asserting environmental fees related to Anchor Glass Container Corporation's Connellsville, Pennsylvania facility. Robert A. Soriano, Esq., at Shutts & Bowen LLP, in Tampa, Florida, argues that the environmental fees are based on emissions from 2004. Therefore, Pennsylvania's claims are not entitled to priority status, Mr. Soriano maintains. Reorganized Anchor Glass asks the U.S. Bankruptcy Court for the Middle District of Florida to allow Pennsylvania a general unsecured claim for $38,352. The Reorganized Debtor further asks the Court to disallow these claims: Claimant Claim No. Claim Amount Reason -------- -------- ------------ ------ Houston ISD 1042 $1,999 Duplicative to Claim No. 697, which was withdrawn Tennessee Dept. 493 1,000 Reorganized Debtor of Revenue 493.1 179 has no liability. 493.2 5,157 493.3 925 City of Warner 1586 351,423 Claim was filed late Robins and is a prepetition unsecured claim. U.S. Customs and 1528 - Reorganized Debtor Border Protection has no liability. Headquartered in Tampa, Florida, Anchor Glass Container Corporation is the third-largest manufacturer of glass containers in the United States. Anchor manufactures a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. The Company filed for chapter 11 protection on Aug. 8, 2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano, Esq., at Carlton Fields PA, represents Anchor Glass in its restructuring efforts. Edward J. Peterson, III, Esq., at Bracewell & Guiliani, represents the Official Committee of Unsecured Creditors. When Anchor Glass filed for protection from its creditors, it listed $661.5 million in assets and $666.6 million in debts. The Court confirmed Anchor Glass' second Amended Plan of Reorganization on April 18, 2006. Anchor Glass emerged from Chapter 11 protection on May 3, 2006. (Anchor Glass Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) AZTEC METAL: Case Summary & 40 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Aztec Metal Maintenance Corp. 791 East 132 Street Bronx, NY 10454 Bankruptcy Case No.: 06-12050 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Aztec Wood Restoration & Maintenance, Inc. 06-12051 Aztec Door Specialists, Inc. 06-12052 Type of Business: The Debtors are engaged in the business of restoration, refinishing & maintenance of metal, marble, masonry & wood surfaces, and installation, facade & construction cleaning. Chapter 11 Petition Date: August 31, 2006 Court: Southern District of New York (Manhattan) Judge: Robert E. Gerber Debtors' Counsel: Alan D. Halperin, Esq. Halperin Battaglia Raicht LLP 555 Madison Avenue, 9th Floor New York, NY 10022 Tel: (212) 765-9100 Fax: (212) 765-0964 Total Assets Total Debts ------------ ----------- Aztec Metal Maintenance Corp. $3,595,188 $12,480,942 Aztec Wood Restoration and $481,783 $681,799 Maintenance, Inc. Aztec Door Specialists, Inc. $279,925 $660,021 A. Aztec Metal Maintenance Corp.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service $6,815,641 John Fulgione, Revenue Officer 1200 Waters Place, Suite 108 Bronx, NY 10461 NYS Department of Sales Tax $265,708 Bankruptcy Section P.O. Box 5300 Albany, NY 12205-0300 PC&C Department of Taxation & Finance $233,490 66-05 Woodhaven Boulevard Rego Park, NY 11374 NYS Department of Taxation & Finance $198,670 80-02 Kew Gardens Road, 5th Floor Kew Gardens, NY 11415 Boston Valley Terracotta $134,828 6860 South Abbot Road Orchard Park, NY 14127 First Insurance Funding Corp. $119,856 Carabba Locke LLP $85,417 Swing Staging, Inc. $83,448 NYS Insurance Fund $82,744 Twin & Swing Scaffolding Inc. $79,710 Safeway Services, Inc. $73,315 District Council Ironwork $65,176 The City of New York $47,246 Towne House Restorations, Inc. $39,241 Local 8A 28A Welfare Fund $34,124 Mac Sales, Inc. $30,000 Innovative Risk Concepts, Inc. $29,427 Sculpture House Casting, Inc. $29,245 All Safe-Height Contracting $26,322 NJ Building Laborers $21,485 B. Aztec Wood Restoration and Maintenance, Inc.'s 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service $374,041 John Fulgione, Revenue Officer 1200 Waters Place, Suite 108 Bronx, NY 10461 NYS Department of Taxation & Finance $91,304 80-02 Kew Gardens Road, 5th Floor Kew Gardens, NY 11415 Schiff Hardin LLP $77,422 Robert J.A. Zito 623 Fifth Avenue, 28th Floor New York, NY 10022 NYS Department of Sales Tax $37,071 Bankruptcy Section P.O. Box 5300 Albany, NY 12205-0300 Milman & Heidecker $32,818 3000 Marcus Avenue, Suite 3W3 New Hyde Park, NY 11042 Mohawk Finishing Products $3,134 Industrial Finishing $848 New Jersey Sales Tax $297 American Locksmiths $216 Wood Magazine $14 C. Aztec Door Specialists, Inc.'s 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service $546,029 John Fulgione, Revenue Officer 1200 Waters Place, Suite 108 Bronx, NY 10461 NYS Department of Taxation & Finance $53,973 80-02 Kew Gardens Road, 5th Floor Kew Gardens, NY 11415 NYS Department of Sales Tax $39,931 Bankruptcy Section P.O. Box 5300 Albany, NY 10454 B&S Iron Works, Inc. $2,653 885E 134th Street Bronx, NY 10454 International Revolving Door $1,256 2124 North Sixth Avenue Evansville, IN 47710 Mayflower $668 American Locksmiths $244 Fastenal $71 Karpen Steel Custom Doors $46 NYS Department of State $9 BAYOU GROUP: Wants Open-Ended Deadline to File Notices of Removal ----------------------------------------------------------------- Bayou Group, LLC, and its debtor-affiliates ask the Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York in White Plains to extend the filing of notices of removal of related proceedings under Bankruptcy Rule 9027(a), until: a. November 30, 2006, or b. the day which is 30 days after entry of an order terminating the automatic stay with respect to a particular action sought to be removed. Recently, the Debtors have been focused on various matters, including: -- reviewing and analyzing their financial operational history, -- devising a litigation and business strategy, and -- investigating possible causes of action on their behalf. Because of those factors, the Debtors have not had an opportunity to fully investigate and determine whether any pending matters should be removed. The Debtors believe that it is prudent to seek an extension to protect their rights to remove any such actions. Headquartered in Chicago, Illinois, Bayou Group, LLC, operates and manages hedge funds. The company and its affiliates filed for chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No. 06-22306). Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BAYOU GROUP: Court Issues Protective Order on Classified Data Use ----------------------------------------------------------------- The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York in White Plains issued a protective order governing the production and use of confidential materials in Bayou Group, LLC, and its debtor-affiliates' bankruptcy cases. Judge Adlai said materials produced prior to the entry of the protective order and in reliance on its anticipated entry will be subject to the terms of the Order. Full-text copies of the protective order are available for free at http://ResearchArchives.com/t/s?10be Headquartered in Chicago, Illinois, Bayou Group, LLC, operates and manages hedge funds. The company and its affiliates filed for chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No. 06-22306). Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BELDEN CDT: Reports Revenue Increase of 31.5% in Second Quarter --------------------------------------------------------------- Belden CDT Inc. generated revenue for the quarter ended June 26, 2006 of $409.6 million. In the 2006 second quarter, operating income was $36.8 million and income from continuing operations was $21.5 million. The quarterly revenue increase of 31.5% from the prior year included favorable currency translation of 1.3% or $4 million. During the second quarter of 2006, the Company recorded pretax charges of $4.3 million for asset impairment and severance associated with its previously communicated restructuring actions in Europe and North America. Second-quarter 2005 results included pretax charges of $6.5 million for executive succession, severance, and merger-related costs. Operating income, adjusted for these charges, increased 79.7% from $22.9 million to $41.1 million, and the operating margin rose 270 basis points to 10.0% of revenue. Year-to-date, operating income was $63.8 million and income from continuing operations was $36.5 million. Year-to-date revenue increased 22.4 percent from the prior year, with negligible effects from currency translation. "Approximately one-third of our year-over-year revenue improvement came from higher volume, especially in our industrial markets. This increase in volume and the accompanying operating leverage it provides, coupled with cost reductions we made in 2005 and the effective hard work of our associates, were the primary reasons for the year-over-year expansion in our operating income. Pricing contributed the remaining two-thirds of our 30 percent organic revenue growth in the second quarter, as we employed our new pricing process across all our markets in response to unprecedented raw material volatility," said John Stroup, President and Chief Executive Officer. Headquartered in St. Louis, Missouri, Belden CDT Inc. (NYSE: BDC) -- http://www.belden.com/-- is a U.S.-based manufacturer of high- speed electronic cables and focuses on products for specialty electronics and data networking, including connectivity. * * * As reported in the Troubled Company Reporter on May 4, 2006, Standard & Poor's Rating Services revised its outlook on Belden CDT Inc. to positive from stable, and affirmed its 'BB-' corporate credit rating, and 'B' subordinated debt rating. The revised outlook reflects reduced financial leverage stemming from improved profitability. BOMBARDIER INC: Gets GBP223MM Car Order from Transport For London ----------------------------------------------------------------- Bombardier Inc. has been awarded a significant contract for the provision of 152 Electrostar electric multiple unit cars plus an associated Train Services Agreement from Transport for London to be operated on the East London Line and North London Railway. The contract value is GBP223 million (EUR331 million/ US$425 million) which includes vehicle manufacture and the first 7.5 years of a Train Services Agreement for the new vehicles which may extend for up to 30 years. Delivery of the new units will commence in July 2008 with the last unit delivered in May 2009. Included within the contract are options for the manufacture of up to 196 additional cars. The 100mph Class 376 units are specially designed for suburban operations and are part of the proven and reliable Electrostar family of products. 1,614 Electrostar cars are already in daily passenger service with three UK operators, c2c, South East Trains and Southern Railways. The new vehicles will be manufactured at Bombardier's production site at Derby and the servicing will be primarily delivered out of a new purpose-built maintenance facility situated at New Cross Gate in East London. "Our award winning Electrostar trains are the most reliable new generation EMUs on the UK network and the Class 376 suburban vehicles have already proven themselves in the London area," Colin S Walton, Chief Country Representative UK said. "The vehicle supply will be complimented by our excellent services provision, which has proved highly successful with other UK operators, winning a number of awards over the past year. This order will help secure employment for our highly specialized workforce at Derby." "This important order from TfL further demonstrates the benefits and flexibility of the Electrostar family of trains," Bombardier Transportation UK Sales Director, Matt Beeton, commented. "The trains' modular design allows us to retain the longevity of the Electrostar platform for both suburban and intercity applications alike". In the UK's rail transportation industry, Bombardier is the leader in the manufacture, refurbishment and maintenance of rolling stock. Bombardier Transportation employs over 4,000 people at production facilities in Derby and Plymouth and 24 maintenance, refurbishment and overhaul centres across the UK. The company maintains approximately 2500 vehicles. Bombardier Transportation has its global headquarters in Berlin, Germany with a presence in over 60 countries. It has an installed base of approximately 97,000 cars and locomotives, primarily in Europe, the world's largest rail market. The company offers the broadest product portfolio and is recognized as the leader in the global rail sector. About Bombardier Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) -- http://www.bombardier.com/-- manufactures innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment. * * * As reported in the Troubled Company Reporter on May 25, 2006, Moody's Investors Service assigned a Ba2 rating to Bombardier Recreational Products' CDN$250 million senior secured revolver and a B1 rating to BRP's CDN$880 million senior secured term loan. At the same time, Moody's affirmed BRP's B1 corporate family rating and revised the ratings outlook to negative from stable. BOYDS COLLECTION: Will Close Pigeon Forge Store in October ---------------------------------------------------------- Boyds Collection Ltd. will be closing its Pigeon Forge store at the end of October, The Mountain Press reports. The store is located at 149 Cates Lane in Pigeon Forge, Tennessee. Boyds CEO Bob Coccoluto, in an interview with Mountain Press, commented that the decision to shutdown the store is the result of a thorough evaluation of the Company's direction and resources. "We need to continue to focus attention on our core business of creating and delivering quality products and strengthening our wholesale business." Mr. Coccoluto said. MP staff writer Derek Hodges says the Company will continue to operate its store in Gettysburg, Pennsylvania, as well as its wholesale business. Pigeon Forge Special Events Director Lila Wilson said that 115 workers would be unemployed at the closing of the sale but assured that other local industries might show interest to hire them because of their skills. Headquartered in McSherrystown, Pennsylvania, The Boyds Collection, Ltd. -- http://www.boydsstuff.com/-- designs and manufactures unique, whimsical and "Folksy with Attitude(SM)" gifts and collectibles, known for their high quality and affordable pricing. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 16, 2005 (Bankr. Md. Lead Case No. 05-43793). Matthew A. Cantor, Esq., at Kirkland & Ellis LLP represents the Debtors in their restructuring efforts. Houlihan Lokey Howard & Zukin Capital, Inc. serves as the Debtor's financial advisors. The law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, represents the Official Committee of Unsecured Creditors. FTI Consulting serves as the Committee's financial advisors. On June 13, 2006, the Court confirmed Boyd's Chapter 11 Plan and the Company emerged on June 28, 2006. When Boyds filed for bankruptcy, it reported $66.9 million in total assets and $101.7 million in total debts as of June 30, 2005. BREAKAWAY SOLUTIONS: Wants Case Dismissed Due to Funding Shortage ----------------------------------------------------------------- Breakaway Solutions, Inc., asks the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to dismiss its Chapter 11 case. Currently, the Debtor has no money and cannot propose a confirmable plan of reorganization. The Debtor believes that it would be in the best interest of creditors to dismiss its bankruptcy case, as long as it will provide a means for distribution to creditors if it succeeds in a lawsuit it filed against certain underwriters. The underwriters' litigation arose from alleged manipulation of the pricing of the Debtor's initial public offering. The Debtor has agreed to continue the employment of E. Talbot Briddell as its president. Mr. Briddell's post dismissal duties will include a distribution to creditors of any money realized from the Debtor's litigation claims. The Debtor informs the Court that provisions have been made to pursue litigation claims and distribute any resulting proceeds to creditors without incurring the costs and fees, which would be charged by a Chapter 7 Trustee. The Debtor explained that conversion of its Chapter 11 case to a Chapter 7 liquidation proceeding would not be in the best interests of creditors because the Chapter 7 Trustee would have no assets to administer. Breakaway Solutions, Inc., which provided collaborative business solutions to its clients, filed for Chapter 11 bankruptcy protection on Sept. 5, 2001 (Bankr. Del. Case No. 01-10323). Gary M. Schildhorn, Esq., and Leon R. Barson, Esq., at Adelman Lavine Gold and Levin and Neil B. Glassman, Esq., and Steven M. Yoder, Esq., at The Bayard Firm represent the Debtor. When it filed for protection from its creditors, it listed $45,319,579 in assets and $25,877,720 in debts. BURTON ODOM: Case Summary & Five Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Burton Robert Odom 2193 Tanglewood Trail Conyers, GA 30013 Bankruptcy Case No.: 06-70502 Chapter 11 Petition Date: August 31, 2006 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Joel M. Haber, Esq. 2365 Wall Street, Suite 120 Conyers, GA 30013 Tel: (770) 922-9080 Fax: (770) 922-4647 Estimated Assets: Unknown Estimated Debts: $1 Million to $10 Million Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kennedy Funding Guarantee of Debt $2,500,000 Two University Plaza Suite 402 Hackensack, NJ 07601 Ramkisoon (Roy) Singh Guarantee of Debt $689,497 c/o Henry W. Johnson, Esq. Hume & Johnson, P.A. 1401 University Drive, Suite 301 Coral Springs, FL 33071 Chase Credit Card Credit Card $16,290 Cardmember Services P.O. Box 15153 Wilmington, DE 19886-5153 Citi Bank Credit Card $2,557 Home Depot Credit Services Processing Center Des Moines, IA 50364-0500 Cardmember Services Credit Card $1,336 Department 9600 Carol Stream, IL 60128-9600 CABLEVISION SYSTEM: Likely Default Cues Moody's to Review Ratings ----------------------------------------------------------------- Moody's Investor Service placed Cablevision's B1 corporate family and other long term ratings on review for downgrade following the announcement of noncompliance and the potential for default on its Term Loan B. While in management's view, it is highly unlikely that the company will not file by October 25; failure would give its lenders the right to accelerate loans and permit bondholders to cross accelerate. Should the company file its statements within the cure period, Moody's is likely to confirm ratings and return to a stable outlook. Notably, the ratings continue to incorporate management's high risk tolerance offset by the company's strong asset value. Ratings also reflect high financial risk, heightened competitive pressure from Verizon and direct broadcast satellite providers, as well as strong cash flow margins, the prospect of cash flow growth from increased penetration of advanced services, and high loan-to-value coverage. Separately, Moody's Investors Service downgraded the speculative grade liquidity rating of Cablevision Systems Corporation to SGL-4 from SGL-2 following the potential default on its Term B Loan. Moody's does not believe that the company would be able to repay all of its outstanding debt from the internal sources. On Review for Possible Downgrade: Cablevision Systems Corporation * Corporate Family Rating, currently B1 * Senior Unsecured Notes, currently B3 CSC Holdings, Inc. * Senior Secured Bank Credit Facility, currently Ba3 * Senior Unsecured Notes, currently B2 Headquartered in Bethpage, New York, Cablevision Systems is a domestic cable multiple system operator serving approximately 3 million subscribers in and around the metropolitan New York area. CABLEVISION SYSTEMS: S&P Holds BB Corporate Credit Rating on Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services' ratings on Bethpage, New York- based cable TV operator Cablevision Systems Corp., including the 'BB' corporate credit rating and the ratings for its related entities, remained on CreditWatch with negative implications, except for the '2' and '1' recovery ratings of secured debt at CSC Holdings Inc. and Rainbow National Services LLC, respectively. This follows Cablevision's Aug. 29, 2006, 8-K filing indicating that it is out of compliance with its financial filing requirements under its $3.5 billion term loan B loan agreement at intermediate holding company CSC Holdings Inc. Cablevision failed to deliver its second-quarter financial statements by the Aug. 29 deadline required under the CSC bank loan and has not obtained waivers similar to those obtained from the revolving credit and term loan A lenders at CSC Holdings Inc. that are effective until Sept. 25, 2006. However, it does have 60 days to cure the technical default on term loan B upon notice by either the administrative agent or lenders (term loan A and the revolving credit have a 30-day cure period once their waivers expire and similar notice is given). "We note that debt at both CSC Holdings and parent Cablevision Systems have cross-acceleration provisions that could be problematic if there is a protracted delay in the filing of the financial statements," said Standard & Poor's credit analyst Catherine Cosentino. Standard & Poor's will closely monitor Cablevision's progress over the next few weeks in filing its second-quarter 10-Q. If, during this time the rating agency determines that the company is not likely to meet either the Oct. 25 initial cutoff under the term loan A and revolving credit, or the Oct. 30 initial cutoff under the term loan B (if notice were to be given immediately) and has not obtained additional waivers to remedy these defaults, the ratings would be lowered significantly. Ratings were originally placed on CreditWatch on Aug. 8, 2006, due to the company's announcement in its second-quarter earnings release that it undertook a voluntary review of past practices in connection with grants of stock options and stock appreciation rights. As a result of the review, Cablevision determined that the date and exercise price assigned to a number of its stock option and SAR grants during 1997 to 2002 did not correspond to the actual grant date and closing price of Cablevision common stock on that day. Cablevision expects to restate previously issued annual and interim financial statements to record adjustments relating to stock option and SAR matters. Cablevision's review is being conducted with outside legal counsel that had not previously been involved with the company's stock option plans. The company has also contacted the SEC and the U.S. Attorney's Office to advise them about these matters, and has been informed that both organizations are investigating these matters. Most recently, shareholder derivative lawsuits have been filed against certain present and former members of the company's board of directors and executive officers, alleging breach of fiduciary duty and unjust enrichment. CALPINE CORP: To Sell Russell City Project Assets ------------------------------------------------- Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to: (a) approve the Master Transfer Agreements between Russell and its three affiliates, Lone Oak, CPC and Anacapa; (b) approve the Asset Purchase Agreement between Russell and RCE and all other ancillary agreements contemplated to be entered into by the parties and Aircraft Services; (c) authorize the assumption and assignment of the Assigned Contracts, which include the Eash Option Agreement, the Alladin Depot Option Agreement, the Hayward Option Agreement and the PG&E LOI; and (d) determine that the Sales are exempt from any stamp tax or similar tax. Debtor Russell City Energy Center, LLC, owns and develops a 230- kilovolt transmission system that serves the power needs of the San Francisco Bay Area. The Russell City Project is operated by Pacific Gas & Electric Company and is scheduled to commence operations in 2010. For the ultimate viability and timely commencement of the Project, Russell agrees to enter into a 10-year Power Purchase Agreement with PG&E, whereby PG&E will provide fuel, have full dispatch rights and own all of the Project's capacity, energy and ancillary service products. Consequently, Russell and PG&E signed a Letter of Intent, which provides that: (a) PG&E will not enter into the proposed PPA unless Russell transfers all of its assets to a special purpose entity that is not subject to any bankruptcy or insolvency proceedings and is bankruptcy-remote; and (b) at least 35% of the equity interest in the special purpose entity must be owned by a third-party investor unrelated to the Debtors. Bennett L. Spiegel, Esq., at Kirkland & Ellis LLP, in New York, relates that in July 2006, Russell recommended to the Official Committee of Unsecured Creditors and the Unofficial Committee of Second Lien Debtholders that it proceed with negotiating definitive documents with Aircraft Services Corporation because it offered the most attractive terms and pricing. On Aug. 10, 2006, Russell and Aircraft Services formed the Purchaser Russell City Energy Company, LLC. RCE is being operated pursuant to the terms of an interim Limited Liability Company Agreement, pursuant to which Russell will own 65% of RCE's equity and Aircraft Services will own the remaining 35%. Russell's 65% equity interest in RCE is subject to an Escrow Agreement, dated June 22, 2006, between Union Bank of California, N.A., and Calpine Corporation. The Russell Project APA Russell and RCE then entered into an Asset Purchase Agreement, wherein RCE will: (a) acquire the assets and properties that will comprise the Russell City Project; (b) assume certain liabilities; and (c) assume certain executory contracts. The Acquired Assets will be transferred to RCE, free and clear of all liens, claims, encumbrances and other interests. The Acquired Assets include: * the Runnels Property in 3590 Enterprise Avenue, Hayward, California; * all of Russell's rights in these real property options agreements: -- Option Agreement between Jon and Margaret Eash and Debtor Anacapa Land Company, LLC, dated March 4, 2004; -- Option Agreement between Alladin Depot Partnership and Anacapa, dated June 15, 2006; and -- Cooperation and Option Agreement between the city of Hayward and Russell, dated Oct. 21, 2005; -- all of Russell's rights and rights to warranties and licenses in the equipment, spare parts, machinery, furniture and fixtures in Combustion Turbine Generator Package No.1, Combustion Turbine Generator Package No. 2, and Steam Turbine Generator Package; -- all of Russell's rights under the LOI with PG&E; -- all of Russell's rights under the Certification issued by the California Energy Commission, and the Authority to Construct issued by the Bay Area Air Quality Management District; -- copies of all Business Records; -- all of Russell's rights to and goodwill represented by the name "Russell City Energy Center," provided that nothing will give RCE any right to any name that includes Calpine Mark; and -- proceeds of any disposed Acquired Asset. The Excluded Assets includes, among others: * all of Russell'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; * all of Russell's accounts and notes receivables as of 11:59 p.m. on the Closing Date; * all membership interests or other equity interests of Russell City Energy and its affiliates; and * all of Russell's rights to recovery of collateral given to obtain letters of credit and rights to recover amounts drawn on letters of credit. The Assumed Liabilities include all of Russell's liabilities under the Assumed Contracts, the Permits, the Transaction Documents, transaction and real property Taxes, environmental, health and safety matters relating to the Acquired Assets, and preliminary development expenses relating to the Project incurred after May 1, 2006, through the Closing Date. Russell will retain liabilities arising out of the Excluded Assets, taxes before the Closing Date, the Acquired Assets before the Closing Date, accounts existing on the Closing Date, and intercompany obligations. General Electric Capital Corporation will guarantee Aircraft Service's obligations under the Amended Limited Liability Company Agreement. A full-text copy of the 70-page Russell Project APA is available for free at http://ResearchArchives.com/t/s?10b3 Master Transfer Agreements Before the consummation of the transactions contemplated by the APA, Russell and certain of its affiliates will enter into a Master Transfer Agreement. The salient terms of the Master Transfer Agreement are: (a) Debtor Lone Oak Energy Center will transfer all of its right, title and interest in and to a steam turbine generator to Russell. As consideration for the transfer, Russell will provide an intercompany payable to Lone Oak aggregating $21,000,000; (b) Debtor Calpine Power Company will transfer all of its right, title and interest in and to two combustion gas turbines to Russell. As consideration for the transfer, Russell will provide an intercompany payable to CPC aggregating $38,241,000; and (c) Anacapa will transfer all of its right, title and interest in and to certain real property in Hayward, California, and will assume and assign certain option agreements relating to the Property to Russell. As consideration for the transfer, Russell will provide an intercompany payable to Anacapa aggregating $3,000,000. A full-text copy of the Master Transfer Agreement is available for free at http://ResearchArchives.com/t/s?10b4 Amended LLC Agreement At the closing of the transactions contemplated by the APA, Russell and Aircraft Services will enter into an Amended LLC Agreement. The salient terms of the Amended LLC Agreement are: (a) Upon execution of the Amended LLC Agreement, RCE will issue 650 shares of common stock to Russell and 350 shares of common stock to Aircraft Services; (b) RCE will establish and maintain a Capital Account for each member. Russell's initial Capital Account will equal $80,000,000; (c) No Member will be required to make any Capital Contribution or lend money to RCE, provided that: i. Aircraft Services commits to contribute the next $43,000,000 as capital to RCE; ii. Aircraft Services commits to provide PG&E $37,000,000 as required by the PPA; or iii. If the credit support required by the PPA has not been obtained from the Project Lenders, the PPA Subsequent Security may be provided by Aircraft Services; (d) The terms and conditions pursuant to which Aircraft Services will provide any PPA Security will be pursuant to definitive documents among RCE, Russell, and Aircraft Services and will consist of these terms: Letter of Credit 3.0% per annum on the stated amount of the LOC Up-Front Fee 1.25% on the stated amount of the LOC LOC Interest Rate 3.5% plus LIBOR rate per annum, to the extent the Borrower does not reimburse the Lender for a draw on the LOC (e) Russell will have a one-time right to purchase Aircraft Services' shares at any time during the time period beginning on the second anniversary of the Project Operation Date until the fifth anniversary of the Project Operation Date. A full-text copy of the Amended LLC Agreement is available for free at http://ResearchArchives.com/t/s?10b6 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. 25; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CALPINE CORP: Unit Inks Energy Agreement with Epcor Merchant ------------------------------------------------------------ Calpine Power Company has entered into an agreement with EPCOR Merchant Capital to toll the capacity from the Calgary Energy Centre, Trading Markets.com reports. The Agreement will commence on today, and end on Sept. 30, 2006. According to Trading Markets.com, Calpine Power has stated that the Agreement would replace an earlier short-term toll arrangement with TransAlta Energy Marketing Corporation, which expired on Aug. 31, 2006. 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. 25; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CENTRAL GARDEN: Earns $30.7 Mil. in 3rd Fiscal Qtr. Ended June 24 ----------------------------------------------------------------- Central Garden & Pet Company filed its third fiscal quarter results for the three months ended June 24, 2006, with the Securities and Exchange Commission. For the third quarter of fiscal 2006, the Company reported net sales of $507 million, an increase of 23% over the comparable 2005 period. Income from operations for the quarter increased 57% to $59,869,000. Net income for the third fiscal quarter increased 39% to $30,730,000 over the year ago period. The Company had a net pre-tax gain of $9 million in the quarter comprised of a $9.9 million gain from the Axelrod litigation settlement less expenses of approximately $900,000 associated with accelerated brand-building and other strategic opportunities. Branded product sales increased 30% while sales of other manufacturers' products, as planned, declined 3%. Depreciation and amortization for the quarter was $7.5 million compared to $5.1 million in the year ago period. Net sales for the Garden Products segment were $279 million, an increase of 12% compared to the third quarter of fiscal 2005. Garden branded products sales increased $33 million or 17% while sales of other manufacturers' products, as planned, declined 6%. The Garden Products segment operating income was $27 million in the quarter, an increase of 28% when compared to the third quarter of fiscal 2005. Net sales for the Pet Products segment were $228 million, an increase of 39% compared to the third quarter of fiscal 2005. Pet branded products sales increased $64 million or 51% and sales of other manufacturers' products increased 1%. Operating income for the Pet Products segment was $30 million in the quarter, an increase of 26%, when compared to the third quarter of fiscal 2005. The Company repurchased in its fourth quarter approximately 240,000 shares, or approximately 10% of its current $100 million authorization. The Company intends to continue its repurchases from time to time through 2006 depending on market conditions. "Strong performance in our Garden segment, the continued emphasis on branded products, and contribution from acquisitions produced solid results," Glenn Novotny, president and chief executive officer, commented. "We believe we are building a stronger, more effective company through our continued dedication to new product innovation and increased brand awareness initiatives. In light of the gain from the litigation settlement, we have elected to accelerate our brand building activities above our original budgets and retained external consultants to pursue strategic opportunities. We expect to invest most, if not all, of the remaining $9 million net gain to create long-term shareholder value. We see great value in expanding our brand building activities and expect to see meaningful returns in fiscal 2007 and beyond." For the nine months ending June 24, 2006, the Company reported net sales of $1.201 billion, an increase of 14% from $1.058 billion in the comparable 2005 period. Income from operations for the period increased 32% to $115.4 million. Net income for the nine-month period increased 26% to $59.5 million from $47.1 million in the year ago period. Branded product sales increased 18% while sales of other manufacturers' products declined 2%. Depreciation and amortization for the first nine month period was $18.6 million compared to $14.2 million in the year ago period. Results for the first nine month period of fiscal 2006 include a $9.9 million benefit to operations relating to the settlement of outstanding litigation and expenses of approximately $900,000 associated with accelerated brand-building and other strategic opportunities. At June 24, 2006, the Company's balance sheet showed $1,543,259,000 in total assets, $817,893,000 in total liabilities, $1,887,000 in minority interests, and $723,749,000 in total stockholders' equity. Full-text copies of the Company's third quarter financials are available for free at http://ResearchArchives.com/t/s?10c8 Based in Walnut Creek, California, Central Garden & Pet Company (NASDAQ:CENT) -- http://www.central.com/-- is an innovator, marketer and producer of quality branded products for the pet, lawn, and garden supplies markets. The Company's pet products include pet bird and small animal food, aquarium products, flea, tick, mosquito, and other pest control products, edible bones, cages, carriers, pet books, and other dog, cat, reptile and small animal products. * * * Moody's Investors Service has assigned a Ba2 rating to Central Garden & Pet Company's $650 million senior secured credit facility. Standard & Poor's Ratings Services has assigned its 'BB' bank loan rating and '1' recovery rating to Central Garden & Pet Co.'s $650 million bank facility. CHARLES STAPLES: Case Summary & Six Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Charles Powell Staples 2327 Ettas Circle Conyers, GA 30013 Bankruptcy Case No.: 06-70499 Chapter 11 Petition Date: August 31, 2006 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Joel M. Haber, Esq. 2365 Wall Street, Suite 120 Conyers, GA 30013 Tel: (770) 922-9080 Fax: (770) 922-4647 Estimated Assets: Unknown Estimated Debts: $1 Million to $10 Million Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kennedy Funding Guarantee of Debt $2,500,000 Two University Plaza Suite 402 Hackensack, NJ 07601 Ramkisoon (Roy) Singh Guarantee of Debt $689,497 c/o Henry W. Johnson, Esq. Hume & Johnson, P.A. 1401 University Drive, Suite 301 Coral Springs, FL 33071 Al Beale Note $154,954 HC 53 P.O. Box 32603 Hemphill, TX 75948 Bud & Kay Pass Note $152,500 1454 Latta Drive Conyers, GA 30012 Chase Card Service Credit Card $22,838 P.O. Box 15153 Wilmington, DE 19886-5153 Chase Credit Card $22,157 P.O. Box 15153 Wilmington, DE 19886-5153 CLOROX CO: Appoints Don Knauss as Chairman and CEO -------------------------------------------------- Donald R. Knauss has been named chairman and chief executive officer of The Clorox Company, effective early October 2006. Mr. Knauss, 55, is currently president and chief operating officer for Coca-Cola North America. He succeeds Robert W. Matschullat, 58, who has served as Clorox's interim chairman and interim CEO since March 2006, when Gerald E. Johnston stepped down from those positions due to illness. "Don has a depth of experience in the consumer products industry, and he is perfectly suited for Clorox in our drive to grow our business," said Mr. Matschullat. "Throughout his career, he has established himself as a change agent. Businesses have grown and flourished under his leadership, and he achieves results in a way that engages and brings the entire organization along with him. Don knows how to lead customer- and consumer-focused organizations. He has a great, no-nonsense style that's well suited to the Clorox culture." As president and COO for the $7 billion Coca-Cola North America division since 2004, Mr. Knauss was responsible for marketing, supply-chain operations, brand and new-product development and sales. During his tenure, he significantly increased the quantity and quality of marketing, helped revitalize the innovation pipeline across beverage categories and made diversity a business imperative. He came to Coke's North America division from Minute Maid North America, where he was president and CEO for three years. "It's an honor to take the helm at Clorox," Mr. Knauss said of his appointment. "Clorox has a legacy of strong leading brands, great marketing and smart, passionate people. The organization has done an extraordinary job building operational excellence. It has established seamless business processes and truly understands consumers, qualities that have been demonstrated by its innovation and brand-building record. Clorox is strongly positioned to grow, which I find very exciting. It is also very important to me that Clorox has a corporate culture of driving results while respecting others. It's a culture steeped in core values with a deep commitment to community involvement. I'm proud to be joining a company of people that have always placed the highest importance on acting with integrity in all they do." Mr. Knauss started his career at Coca-Cola in 1994 as senior vice president of marketing for Minute Maid. In 1996, he was promoted to senior vice president and general manager for Minute Maid's U.S. retail operations. He next served as president for Coca-Cola in Southern Africa. Prior to joining Coca-Cola, Mr. Knauss held various positions in marketing and sales with PepsiCo, Inc. and Procter & Gamble. Prior to launching his business career, Mr. Knauss served as an officer in the United States Marine Corps. In March 2006, Mr. Matschullat, then presiding director of the board of directors, was appointed interim chairman and interim CEO of Clorox after Gerald E. Johnston suffered a heart attack and subsequently retired from his positions. Mr. Matschullat will return to serve on the company's board of directors. Headquartered in Oakland, California, The Clorox Company -- http://www.thecloroxcompany.com/-- provides household cleaning products and reaches beyond bleach. Although best known for bleach (leader worldwide), Clorox makes laundry and cleaning items (Formula 409, Pine-Sol, Tilex), cat litter (Fresh Step), car care products (Armor All, STP), the Brita water-filtration system (in North America), and charcoal briquettes (Kingsford). The Company's balance sheet at June 30, 2006 showed total assets of 3,616 million and total liabilities of $3,772 million resulting in a stockholders' deficit of $156 million. The Company's stockholders' deficit at June 30, 2005 stood at $553 million. COLLINS & AIKMAN: Files Reorganization Plan to Emerge from Ch. 11 ----------------------------------------------------------------- Collins & Aikman Corporation filed, on Aug. 30, 2006, with the Bankruptcy Court in Detroit a stand-alone Plan of Reorganization and an accompanying Disclosure Statement. Collins & Aikman will now work expeditiously toward satisfying various conditions to obtain approval of the Disclosure Statement and Plan, and ultimately exit Chapter 11. "While we still have more to accomplish to complete our reorganization, filing our Plan brings us significantly closer to successfully reorganizing C&A for the benefit of our more than 12,000 employees, as well as our stakeholders and valued customers," said Frank Macher, president and chief executive officer. "This Plan will enable us to emerge from Chapter 11 early next year in a much improved competitive position that is able to fully support our customers." Under the Plan, Collins & Aikman will emerge with a significantly de-levered balance sheet. The Company's secured debt under its Prepetition Credit Agreement will be converted into common stock in reorganized Collins & Aikman. Under the Plan, unsecured creditors who vote in favor of the Plan will receive their share of warrants and interests in a litigation trust. All existing equity interests in Collins & Aikman Corporation will be canceled with no distribution. "After months of complex negotiations and a comprehensive M&A process, we have filed a Plan with the support of the steering committee of our senior lenders," said Mr. Macher. "Through contributions from our creditors, customers and employees, we will improve our cost structure, strengthen our balance sheet and position C&A for long-term success. The Plan also provides us the flexibility to continue the M&A process as an alternative exit strategy." Confirmation of the Plan is subject to a number of conditions, which include entering into certain agreements with Collins & Aikman's customers, modification of certain labor-related obligations and resolution of ongoing government investigations. The Disclosure Statement and Plan have not been approved by the Bankruptcy Court, and may be materially modified before approval. Full-text copies of the Company's Plan of Reorganization and Disclosure Statement are available for free at: http://ResearchArchives.com/t/s?10f2 Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. COLLINS & AIKMAN: Court OKs Settlement Pact with Valiant and MOBIS ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Michigan approved a stipulation resolving disputes over a claim asserted by Valiant Tool & Mold, Inc., against Collins & Aikman Corporation and its debtor-affiliates. As reported in the Troubled Company Reporter on Aug. 16, 2006, MOBIS Alabama, LLC, ordered various tooling, molds and other personal property from the Debtors pursuant to certain purchase orders. The Debtors out-sourced the manufacture of the Mold to Valiant Tool & Mold, Inc., and Valiant manufactured and delivered the Mold to the Debtors prepetition. Valiant said that $64,780 remains due and owing from the Debtors for the Mold. Valiant also said that it holds valid and perfected liens in the Mold. The Debtors also possessed certain other Tooling that is separate and distinct from the Mold. The Debtors believe that $2,318,843 remains due and owing from MOBIS for receivables related to the Tooling. Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, related that MOBIS wants to assume ownership of the Tooling and related data, drawings, specifications and other information. MOBIS also wants the right to demand and take possession of the Tooling and copies of the Debtors' maintenance, repair and engineering change records. Moreover, General Electric Capital Corporation asserted that it has a perfected first priority lien in all of the Debtors' prepetition receivables until it is paid for all amounts outstanding under an Amended and Restated Receivables Purchase Agreement dated as of Dec. 20, 2001. After conducting extensive arm's-length negotiations, the Parties agreed to enter a Stipulation, which provides that: (a) In full satisfaction of Valiant's $64,780 claim for the Mold, MOBIS will pay to Valiant, on the Debtors' behalf, $57,280 and Valiant will repay to the Debtors all amounts that they have already paid; (b) In satisfaction of GECC's receivable from the Debtors under the Receivables Purchase Agreement, MOBIS will pay, on the Debtors' behalf, $2,261,563 to GECC; (c) The Mold Payment and the Receivable Payment are in full, final and complete satisfaction of the Debtors' claim that $2,318,843 remains due and owing from MOBIS to the Debtors for the Receivable; (d) The Debtors will waive their right to (i) commence avoidance actions against Valiant solely on account of the alleged Valiant Liens in the Mold or the Mold Payment and (ii) challenge the perfection of the Valiant Liens; and (e) MOBIS will take title to the Tooling and related data, drawings, specifications and other information, free and clear of all liens, claims, encumbrances and other interests. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COLLINS & AIKMAN: Argues ACT Received Proper Bar Date Notice ------------------------------------------------------------ Collins & Aikman Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan to deny ACT Laboratories, Inc.'s request to deem its $320,654 claim timely filed. ACT is a multimillion-dollar supplier to Collins & Aikman Corporation under a Strategic Supply Agreement. ACT sought to allow its late claim on the assertion that it did not receive proper notice of the claims bar date in the Debtors' Chapter 11 cases and was not scheduled by the Debtors as a creditor. ACT argues that as a result of this lack of notice, its failure to file a proof of claim by the bar date was excusable neglect. Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, contends that ACT was served at multiple addresses with Bar Date Notices and proof of claim forms. Mr. Carmel further contends that ACT was listed several times in the Debtors' Schedules of Assets and Liabilities and Statements of Financial Affairs. Thus, ACT's request is completely unwarranted and should be denied, Mr. Carmel argues. Citing In re Best Products Co., Inc., 140 B.R. 353, 359 (Bankr. S.D.N.Y. 1992), Mr. Carmel points out that a creditor who has adequate notice of bar date has burden of demonstrating "unique and extraordinary circumstances" to justify extension of time to file a claim. Furthermore, Mr. Carmel argues that even assuming ACT was not actually served with the Bar Date Notice, ACT's failure to timely file a proof of claim would not be considered excusable neglect. Mr. Carmel notes that a review of the excusable neglect criteria in Pioneer Investment Services Co. v. Brunswick Associates Limited Partnership, 507 U.S. 380, 395, 113 S.Ct. 1489, 1498 (1993), shows that ACT failed to meet the standard. Among other things, Mr. Carmel maintains, the delay in filing was lengthy -- six months after the Bar Date. Moreover, ACT suggests that it has acted in good faith, but, at the very least, ACT did not make a careful review of the Debtors' dockets prior to filing its request, notes Mr. Carmel. "Despite the repeated assertions to the contrary . . . ACT appears several times in the Debtors' schedules," Mr. Carmel says. The Official Committee of Unsecured Creditors supports the Debtors' arguments. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COPELANDS' ENTERPRISES: U.S. Trustee Appoints Five Panel Members ---------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, appointed five creditors to serve on an Official Committee of Unsecured Creditors in Copelands' Enterprises, Inc.'s chapter 11 case: a. Nike USA, Inc. Attn: Thomas A. Puella 1 Bowerman Drive Beaverton, OR 97005 Tel: (503) 671-4862 Fax: (503) 532-2613 b. Callaway Golf Sales Co. Attn: Michael J. Rider 2180 Rutherford Road Carlsbad, CA 92008 Tel: (760) 930-5849 Fax: (760) 930-5022 c. TaylorMade Adidas Golf Co. Attn: Lawrence J. Kustra 5545 Fermi Court Carlsbad, CA 92008 Tel: (760) 918-6124 Fax: (760) 918-2134 d. New Balance Athletic Shoe, Inc. Attn: Michael Levesque 20 Guest Street Boston, MA 02135 Tel: (617) 746-2287 Fax: (617) 746-6287 e. General Growth Properties, Inc. Attn: Samuel B. Garber Assistant General Counsel 110 North Wacker Drive Chicago, IL 60606 Tel: (312) 960-5079 Fax: (312) 442-6373 The Official Creditors' Committee has the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. It may investigate the Debtor's business and financial affairs. Importantly, an official committee serves as a fiduciary to the general population of creditors it represent. This committee 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 Debtor 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 Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 case to a liquidation proceeding. Based in San Luis Obispo, California, Copelands' Enterprises, Inc., dba Copelands' Sports -- http://www.copelandsports.com/-- operates specialty sporting goods stores. The Company filed for chapter 11 protection on Aug. 14, 2006 (Bankr. D. Del. Case No. 06-10853). Laura Davis Jones, Esq., Marc A. Berlinson, Esq., and Ira A. Kharasch, Esq., at Pachulski, Stang, Ziehl, Young, Jones, & Weintraub, in Los Angeles, California, represent the Debtor. Clear Thinking Group serves as the Debtor's financial advisor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $50 million and $100 million. COPELANDS' ENTERPRISES: Wants to Hold GOB Sales Auction on Sept. 7 ------------------------------------------------------------------ Copelands' Enterprises, Inc., asks the Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware for: -- authority to close 11 of their retail store locations; -- authority to conduct going-out-of-business sales free and clear of liens pursuant to Sections 363(b) and (f) of the U.S. Bankruptcy Code; -- approval of terms and conditions of the auction; -- authority to select a Liquidator firm; and -- authority to enter into an agency agreement for liquidation of merchandise, which grants the Liquidator a first priority lien in the merchandise pursuant to Section 364(d). GOB Stores Sales The Debtor currently owns and operates 31 stores. The Debtor leases all of its store locations. The GOB Stores are: a. Store # 2 Santa Barbara # 2 1137 State Street Santa Barbara, CA 93102 b. Store # 4 Santa Barbara # 4 1230 State Street Santa Barbara, CA 93102 c. Store # 13 Carmichael 6404 Fair Oaks Boulevard Carmichael, CA 95608 d. Store # 23 Sacramento 643 Downtown Plaza, #1-C-100 Sacramento, CA 95814 e. Store # 33 Clackamas 12200 SE 82nd Avenue, Suite 100 Portland, OR 97266 f. Store # 41 Beaverton 11959 SW Canyon Road Beaverton, OR 97005 g. Store # 58 Las Vegas (BOB 3860 S Maryland Parkway Las Vegas, NV 89119 h. Store # 60 Henderson 579 N Stephanie Street Henderson, NV 89014 i. Store # 61 Provo 4801 N University, Suite 210 Provo, UT 84604 j. Store # 65 El Cerrito 300 El Cerrito Plaza El Cerrito, CA 94530 k. Store # 67 Walnut Creek 1330 S California Boulevard Walnut Creek, CA 94596 The Debtor wants to conduct the GOB Sales in order to liquidate its merchandise inventory, furniture, equipment, trade fixtures, and other assets located at, or which may be transferred to, each of the GOB Stores. The Debtor also asks the Court for authority to conduct the GOB Sales consistent with its store closing and GOB Guidelines, and: a. to administer the GOB Sales without complying with: 1. any applicable state and local statutes, rules, or ordinances governing liquidation; provided that the Debtor and the Liquidator will: i. continue to comply with state and local public health and safety laws, and tax, labor, employment, environmental, and consumer protections laws; and ii. comply with the GOB Guidelines 2. any court order or other decree of any federal, state, or local governmental authority that would impair, or is required for the Debtor's consummation of the contemplated transactions; 3. any contract or agreement to which the Debtor is a party by which the Debtor may be bound that would prevent or impair the consummation of the GOB Sales and other contemplated transactions; and b. to sell or transfer the assets at the GOB Sales: 1. free and clear of all liens, claims, and interests pursuant to Section 363(f) of the U.S. Bankruptcy Code, with any liens to attach to the sale proceeds in the same priority as those liens had against the property sold; and 2. free from any warranties, except that the Debtor and the Liquidator will pass on all manufacturers' warranties to customers. The Debtor want to conduct the GOB Sales despite any provisions in the Debtor's non-residential leases with third parties, which purport to restrict its ability to do so, including any "going dark" provisions. The Debtors also want to abandon any inconsequential fixtures, equipment, or other items remaining in the leased GOB Stores as of the effective date of the rejection of those leases. The Debtor asks the Court to set the GOB Sale Hearing at 2:00 p.m. on Sept. 8, 2006. Objections to the GOB Sales, if any, must be received by 4:00 p.m. on Sept. 5, 2006. GOB Auction The auction will be held at the offices of: Pachulski, Stang, Ziehl, Young, Jones & Weintrab LLP 919 North Market Street, 17th Floor Wilmington, DE 19801 The Debtor asks the Court to set the auction at 10:00 a.m. on Sept. 7, 2006. The Debtor also wants the Court to approve its bidding procedures to be used in the auction to determine the Liquidator to conduct the GOB Sales. The stalking horse bidder is a joint venture of Hilco Merchant Resources, LLC, and Hudson Capital Partners, LLP. The Debtor wants to enter into an agency agreement with the successful bidder at the auction and to pay a termination fee to the stalking horse bidder in the event of a successful overbid. The Debtor's DIP lender, Wells Fargo Retail Finance, LLC, consents to the GOB Sales. A full-text copy of the agency agreement is available for a free at http://ResearchArchives.com/t/s?10f3 Based in San Luis Obispo, California, Copelands' Enterprises, Inc., dba Copelands' Sports -- http://www.copelandsports.com/-- operates specialty sporting goods stores. The Company filed for chapter 11 protection on Aug. 14, 2006 (Bankr. D. Del. Case No. 06-10853). Laura Davis Jones, Esq., Marc A. Berlinson, Esq., and Ira A. Kharasch, Esq., at Pachulski, Stang, Ziehl, Young, Jones, & Weintraub, in Los Angeles, California, represent the Debtor. Clear Thinking Group serves as the Debtor's financial advisor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $50 million and $100 million. CYTOCORE INC: Balance Sheet Upside-Down by $4.6 Million at June 30 ------------------------------------------------------------------ Cytocore Inc. filed its financial report for the quarter ended June 30, 2006 with the Securities and Exchange Commission on Aug. 21, 2006. Revenues for the three months ended June 30, 2006, decreased by about 10%, from $29,000 for the three months ended June 30, 2005, to $26,000. The decrease was the result of a reduction in revenue from the sale of its slide-based installed systems. The net loss for the three-months ended June 30, 2006 increased of $1.7 million or 219% to $2.5 million, compared with $791,000 for the same period in 2005. The increase resulted primarily from the non-cash charge to interest expense for the beneficial conversion of debt to equity and an increase in R&D and SG&A expenses due to the Company resuming operations. The Company's balance sheet at June 30, 2006 showed total assets of $2.3 million and total liabilities of $6.9 million resulting in a total stockholders' deficit of $4.6 million. Its total stockholders' deficit at Dec. 31, 2005 stood at $10 million with total assets at $390,000. Revenues for the six months ended June 30, 2006, decreased $20,000, or 29%, to $49,000 from $69,000 for the six months ended June 30, 2005. The net loss the six months ended June 30, 2006, was $3.7 million compared to $1.9 million for the same period in 2005. The Company further disclosed that it raised $4.88 million from the sale of common stock during the six months ended June 30, 2006, compared to $643,000 for the same period in 2005. The proceeds of the common stock offerings were used to resume clinical operations, satisfy certain present and past obligations, as well as pay current operational expenses. Convertible Promissory Notes During the six months ending June 30, 2006, noteholders of certain convertible promissory notes elected to convert an aggregate $745,000 of principal and $206,300 accrued interest for 7,266,617 unregistered shares of the Company's common stock. The Company also settled other notes payable to related parties in principal amounts of $40,000 and $28,100 of accrued interest for 453,869 unregistered shares of the Company's common stock. In May 2006, Monsun converted its convertible promissory note in the principal amount of $500,000 and $519,000 of accrued interest into 7,624,327 unregistered shares of the Company's common stock. Since the actual conversion rate was less than the rate specified in the note, the Company recorded an additional non-cash charge to interest expense of $1,321,000 on the beneficial conversion of the Monsun note during the second quarter of 2006. Defaults on Senior Securities The Company, as of June 30, 2006, had failed to make the required principal and interest payments, constituting events of default, on the following notes payable: -- $75,000 in Bridge I convertible promissory notes; -- $1,225,000 in Bridge II convertible promissory notes; -- $305,000 MonoGen, Inc. promissory note; and -- $21,000 Ventana Medical Systems, Inc. promissory note Other than the MonoGen note payable, the Company disclosed that it has not received any written declarations of default from holders of outstanding notes payable. The Company is currently in negotiations with MonoGen and its counsel regarding the note payable. A full-text of the Company's financial report may be viewed at no charge at http://ResearchArchives.com/t/s?10ba CytoCore, Inc., (fka Molecular Diagnostics, Inc.) (OTC Bulletin Board: CYCR) -- http://www.cytocoreinc.com/-- develops cost-effective cancer screening systems, which can be utilized in a laboratory or at the point-of-care, to assist in the early detection of cervical, endometrial, and other cancers. The InPath(TM) System is being developed to provide medical practitioners with a highly accurate, low-cost, cervical cancer screening and treatment system that can be integrated into existing medical models or at the point-of-care. DANA CORP: Smith Withdraws Lift Stay Motion to Pursue PI Lawsuit ---------------------------------------------------------------- Tonie Smith withdrew her request, with prejudice, to lift the stay to permit prosecution of the personal injury lawsuit she filed against Dana Corporation and its debtor-affiliates in the U.S. District Court for the Northern District of Mississippi, Oxford Division. Ms. Smith also dismissed the Debtors, with prejudice, from the Mississippi Lawsuit. Accordingly, the Honorable Burton R. Lifland modified the automatic stay to permit Ms. Smith to promptly dismiss the Debtors from the Lawsuit. The Court deemed Ms. Smith's request resolved and withdrawn, with prejudice. Ms. Smith's action dates back to a Feb. 14, 2001 accident, which resulted in injuries, damages and death to Garry Smith, Ms. Smith's spouse. The Mississippi Action has been stayed pursuant to the Debtors' bankruptcy filing. About Dana Corporation Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DANA CORP: Watson Withdraws Lift Stay Motion to Recoup $492K Debt ----------------------------------------------------------------- Daniel B. Jones, Esq., in Plano, Texas, informs the U.S. Bankruptcy Court for the Southern District of New York that Watson & Chalin Manufacturing, Inc., has withdrawn its request to lift the automatic stay. Watson previously sought to have the automatic stay lifted to allow it to offset, or in the alternative recoup, its $492,497 debt to Dana Corporation against Dana's $312,782 debt to Watson. Watson's debt relates to its obligations under its business transactions with Dana. Before the Debtors filed for bankruptcy, Watson was engaged in mutual purchasing and selling of products and materials with Dana. At Dana's request, Watson has continued its relationship with Dana postpetition to aid in its efforts to reorganize and continued both buying from and selling to the Debtor on credit. About Dana Corporation Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DAVID HUMPHERYS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: David Brian Humpherys fdba Partner Homes, LLC fdba Truss Partners, LLC fdba Veranix 4576 Bowers Vista Circle Murray, UT 84107 Bankruptcy Case No.: 06-23075 Chapter 11 Petition Date: August 21, 2006 Court: District of Utah (Salt Lake City) Judge: Judith A. Boulden Debtor's Counsel: Anna W. Drake, Esq. Anna W. Drake, P.C. 215 South State Street, Suite 500 Salt Lake City, UT 84111 Tel: (801) 328-9792 Fax: (801) 364-3756 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. DELPHI CORP: Court Allows Equity Panel to Retain Financial Advisor ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized the Official Committee of Equity Security Holders appointed in Delphi Corporation and its debtor-affiliates' Chapter 11 cases to retain a financial advisor. As reported in the Troubled Company Reporter on Aug. 16, 2006, the Equity Committee discussed its potential retention of a financial advisor with the Debtors, the United States Trustee and the Official Committee of Unsecured Creditors. These discussions led to lengthy negotiations that resulted in a term sheet setting forth a proposed payment structure and scope of services for a financial advisor that has been agreed to by the Debtors and the Equity Committee. Pursuant to the Term Sheet, the Equity Committee's financial advisor will not: 1) determine or evaluate the Debtors' enterprise value, on a consolidated and division basis; 2) monitor or review the business, management, operations, properties, financial condition and prospects of the Debtors; 3) analyze or review the Debtors' claims process, including plan classification modeling, negotiation, and claim estimation -- except for claims of General Motors and the unions arising out of Delphi's transformation or those arising out of divestitures and closings; and 4) participate in negotiations on the Equity Committee's behalf other than with the Debtors. The compensation structure for the financial advisor to the Equity Committee will be $175,000 per month with no success fee. This is consistent with those that the Debtors are currently paying to Lazard Freres, on behalf of the United Auto Workers union, and Chanin Capital, on behalf of the IUE-CWA, for roles which are not as limited as those of the Equity Committee's advisors. Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/ -- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Delphi Medical Seeks $4 Million Payment from Aksys --------------------------------------------------------------- Delphi Medical Systems Colorado Corporation, pursuant to a Contract Manufacturing Agreement, provided $2,420,487 in goods and services to Aksys, Ltd. According to Delphi Medical, Aksys failed to pay for the invoiced goods and services. Furthermore, pursuant to the Contract, Delphi Medical purchased and stored certain goods for Aksys. Aksys had deposited $3,408,813 with Delphi Medical to secure payment for the Stored Materials. In July 2006, Delphi Medical notified Aksys that the Materials Deposit had been fully depleted and that the Contract had been terminated based Aksys' violation of the contract terms. Delphi Medical points out that Aksys continues to be liable for $1,588,089 on account of the Stored Materials. Delphi Medical made a written demand on Aksys for payment of the Invoices and the Stored Materials Balance aggregating $4,008,576. Accordingly, Delphi Medical asks the U.S. Bankruptcy Court for the Southern District of New York to: (a) compel Aksys to pay the Receivable, plus interest and the costs and expenses; and (b) disallow any of Aksys' claims against the Debtors unless it pays all sums that are due and payable. Based in Troy, Mich., Delphi Corporation -- http://www.delphi.com/ -- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Wants to Amend and Assume Denver Airport Lease --------------------------------------------------------- Delta Air Lines, Inc., and the City and County of Denver, Colorado, are parties to an Airport Use and Facilities Lease Agreement dated May 17, 2005, governing Delta's use of four gates and certain other operational space at the Denver International Airport. The Debtors have determined that certain leased space at the Airport, including one gate and certain related operational space, is not required for their current operations at the Airport. Following negotiations, the Debtors and Denver, agreed to the principal terms of an amended lease so that Delta leases three gates and a reduced amount of operational space at the Airport provided that Delta contemporaneously assumes the Amended Lease under Section 365 of the Bankruptcy Court. The Debtors seek the U.S. Bankruptcy Court for the Southern District of New York's authority to amend and assume the Lease Agreement. Delta expects that the terms of the Amended Lease will be effective on September 1, 2006. Sharon Katz, Esq., at Davis Polk & Wardwell, in New York, contends that by amending and assuming the Lease at this time, Delta will immediately obtain approximately $1,000,000 in annual savings on the Lease and will avoid making payments for premises that provide no tangible benefit to the Debtors' estates. The Debtors have examined the costs associated with their obligations under the Lease and have determined in their business judgment that the savings from the amendment and assumption will favorably affect their cash flow and assist them in managing their future operations. As part of the assumption and as required by Section 365(b)(1)(A), Delta intends to make certain tax payments to the City, which will be memorialized in the Amended Lease. About Delta Air Lines Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Inks Stipulation for FCI to File Consolidated Claims --------------------------------------------------------------- Fiduciary Counselors Inc. is the independent fiduciary for certain specified purposes for three defined benefit plans sponsored by Delta Air Lines, Inc.: -- the Delta Retirement Plan, -- the Delta Pilots Retirement Plan, and -- the Western Air Lines, Inc. Pilots Defined Benefit Plan. FCI believes that it must file multiple proofs of claim against each of the Debtors, representing claims for which FCI believes the Debtors are jointly and severally liable to the Plans under 29 U.S.C. Section 1082(c)(11)(B) and 26 U.S.C. Section 412(c)(11)(B). Pursuant to a stipulation, the parties agree that: (1) Any proof of claim or amendment thereto filed in Case No. 05-17923-ASH by FCI on its own behalf or on behalf of the Plans will be deemed to be filed in each of the cases of the Debtors; (2) FCI will not be required at this point in time to file any claims with respect to the Delta Retirement Plan or Western Air Lines, Inc. Pilots Defined Benefit Plan. Rather, FCI will have 45 days from the date, if any, on which: (i) Delta files a PBGC Form 600 Distress Termination Notice of Intent to Terminate seeking a distress termination of Delta Retirement Plan or Western Air Lines, Inc. Pilots Defined Benefit Plan; or (ii) the Pension Benefit Guaranty Corporation commences judicial action to terminate the Delta Retirement Plan or Western Air Lines, Inc. Pilots Defined Benefit Plan pursuant to 29 U.S.C. Section 4042. At that point in time or before, FCI may file additional claims with respect to the Delta Retirement Plan, each of which claims will be filed only in Case No. 17923-ASH but deemed filed against all of the Debtors; and (3) If FCI determines that it must file a proof of claim against any Delta affiliate that files for Chapter 11 relief in the Southern District of New York subsequent to August 7, 2006, the Debtors and FCI may enter into an agreement under which any proof of claim or amendment that FCI files in Case No. 05-17923-ASH will be deemed to be filed in the Delta affiliate's case. Because there are 19 Debtors, FCI, absent the Stipulation, would likely file a great number of separate proofs of claim. The parties believe that these multiple claims would impose a significant and unnecessary administrative burden on them, the claims agent, and the Court. About Delta Air Lines Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) EMMIS COMMUNICATIONS: Employs Patrick Walsh as Executive VP, CFO ---------------------------------------------------------------- Emmis Communications Corporation entered into a three-year employment agreement with Patrick Walsh, effective Sept. 4, 2006, who will serve as Executive Vice President, Chief Financial Officer and Treasurer. Mr. Walsh's annual base compensation is $400,000 and his annual incentive compensation target is $200,000. The company retains the right to pay any annual incentive compensation in cash or shares of our common stock. Additionally, the award of annual incentive compensation is based upon achievement of certain performance goals to be determined each year by the Company's Compensation Committee. Mr. Walsh will receive an automobile allowance and will be reimbursed for up to $5,000 per year in premiums for life and disability insurance and retains the right to participate in all of the Company's employee benefit plans for which he is otherwise eligible. The agreement remains subject to termination by our board of directors for cause, and by Mr. Walsh for good reason upon written notice. Mr. Walsh is also entitled to certain termination benefits upon disability or death, and certain severance benefits. Mr. Walsh joins the Company from Ibiquity Digital Corporation, the developer and licensor of HD Radio technology, where he served as chief financial officer and senior vice president since 2002. Prior to joining iBiquity, Walsh was a management consultant for McKinsey & Company, a management consulting firm. His previous management experience includes positions at General Motors Acceptance Corporation and Deloitte & Touche, LLP. He earned a Bachelor of Business Administration degree in accounting and finance from the University of Michigan and an MBA from Harvard Business School. The Company also disclosed that David Newcomer, vice president of finance, assistant secretary and interim chief financial officer was being promoted to senior vice president of finance and assistant secretary. He will no longer serve as interim chief financial officer. Based in Indianapolis, Indiana, Emmis Communications Corporation (NASDAQ: EMMS) -- http://www.emmis.com/-- is a diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. Emmis owns 22 FM and 2 AM domestic radio stations serving New York, Los Angeles and Chicago as well as St. Louis, Austin, Indianapolis and Terre Haute, Ind. In addition, Emmis owns a radio network, international radio interests, two television stations, regional and specialty magazines, and ancillary businesses in broadcast sales and publishing. * * * As reported in the Troubled Company Reporter on Aug. 24, 2006 Standard & Poor's Ratings Services' ratings on Emmis Communications Corp., including the 'B+' corporate credit rating, remained on CreditWatch with negative implications, where they were placed on May 11, 2005. In August 2005, Moody's placed the Company's long-term corporate family rating at Ba3 with a negative outlook. ENERGY PARTNERS: Woodside Merger Cues Moody's to Review Ratings --------------------------------------------------------------- Moody's Investors Service changed Energy Partners, Ltd.'s ratings review for possible downgrade to review direction uncertain -- B2 Corporate Family Rating; B2 senior unsecured note rating. This action follows Woodside Petroleum Ltd.'s Baa1 senior unsecured rating, at Woodside Finance Ltd., stable outlook, announcement that it has made, through its US wholly-owned subsidiary ATS Inc., an unsolicited offer to acquire EPL for $1.18 billion, including assumed debt. The proposed acquisition is subject to the approval of EPL's shareholders and is conditional on EPL's shareholders voting down the company's pending merger with Stone Energy Corporation. Stone Energy's B2 Corporate Family Rating, B3 senior unsecured note rating, and Caa1 senior subordinated note ratings remain on review for possible downgrade. EPL's rating review direction uncertain reflects the possibility that its ratings could be downgraded, upgraded, or confirmed. If Woodside's offer to acquire EPL is unsuccessful and the Stone acquisition proceeds as currently structured, EPL's ratings could either be downgraded or confirmed, depending on Moody's assessment of EPL's ability to reduce its substantial debt burden in a timely manner given our current operating performance and sector outlook, the ability of the company to successfully mitigate the performance challenges facing the merged business, and the anticipated benefits of the acquisition. However, if Woodside is successful in acquiring EPL, an upgrade of EPL's ratings is likely, reflecting EPL's currently low rating relative to the stronger credit profile of Woodside. If neither transaction is successful, EPL's ratings would likely be confirmed. Energy Partners, Ltd. is headquartered in New Orleans, Louisiana. ENTERGY NEW ORLEANS: DIP Pact Maturity Stretched to August 2006 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Louisiana authorizes Entergy New Orleans, Inc., to execute Amendment No. 1 to the DIP Credit Agreement, which extends the maturity of the $200,000,000 DIP financing provided by Entergy Corp. from Aug. 23, 2006 to Aug. 23, 2007. ENOI represents that no event has occurred or would result from the execution and delivery of Amendment No. 1 that constitutes an event of default under the DIP Credit Agreement. Judge Brown also authorizes ENOI to execute an amendment to the promissory note of up to $200,000,000, it issued in favor of Entergy Corp., to extend the maturity of the Note to August 23, 2007. The execution, delivery and effectiveness of the Amendments will not operate as a waiver of any right, power or remedy of Entergy Corp. under the DIP Agreement and the Promissory Note, nor constitute a waiver of any provision of the Agreement and the Note. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW ORLEANS: United States Wants Claims Objection Denied ---------------------------------------------------------------- The United States of America asks the U.S. Bankruptcy Court for the Eastern District of Louisiana to dismiss Entergy New Orleans, Inc.'s objection for failure of service. As reported in the Troubled Company Reporter on August 11, 2006, ENOI objected to various claims filed by the Internal Revenue Service on behalf of the United States. The Debtor's objection states that notice of the objection has been sent to the IRS at the "address shown on the IRS Claims." John M. Bilheimer, Esq., at the Tax Division of the United States Department of Justice in Washington, D.C., notes that an objection to a proof of claim is a contested matter. Where an objection has been made to claims filed by the IRS, the United States is the proper party respondent in the matter, Mr. Bilheimer clarifies. Under Rules 7004(b)(4) and 9014 of the Federal Rules of Bankruptcy Procedure, the United States must be served with an objection to a claim by serving the Attorney General of the United States and the United States Attorney for the judicial district in which the case is pending, Mr. Bilheimer asserts. A notice to the IRS alone is insufficient, he says. Mr. Bilheimer notes that neither the Attorney General of the United States nor the United States Attorney for the Eastern District of Louisiana has been served with the objection. Parties Negotiate Representing ENOI, Elizabeth J. Futrell, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., in New Orleans, Louisiana, tells Judge Brown that ENOI has begun negotiations with the IRS concerning the tax claims. The continuance of the hearing would give the Debtor and the IRS an opportunity to amicably resolve the objection, she says. At ENOI's request, the Court continues the hearing on the objection to Oct. 18, 2006, at 2:00 p.m. Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) EPIXTAR CORP: Court Moves Exclusive Plan Filing Deadline to Oct. 1 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Florida in Miami gave Epixtar Corp. and its debtor-affiliates until: a) Oct. 1, 2006, to file a chapter 11 reorganization plan; and b) Nov. 30, 2006, to solicit acceptances of that plan. In their request, the Debtors told the Court that the size and complexity of their cases warrant extension of their exclusive periods. The Debtors are in negotiations with the Official Committee of Unsecured Creditors regarding treatment that could be afforded to the Committee under a proposed plan of reorganization. In addition, the Debtors' affiliate in the Philippines is in the process of filing the equivalent of a plan of reorganization, which will contribute to their reorganization efforts. Based in Miami, Florida, Epixtar Corp. fdba Global Assets Holding Inc. -- http://www.epixtar.com/-- acquires or establishes companies specialized in mass-market communication products. Epixtar operates through its subsidiaries, National Online Services Inc. and One World Public. The Company and its debtor- affiliates filed for chapter 11 protection on Oct. 6, 2005 (Bank. S.D. Fla. Case No. 05-42040). Michael D. Seese, Esq., at Kluger, Peretz, Kaplan & Berlin, P.L., represents the Debtors in their restructuring efforts. Glenn D. Moses, Esq., at Genovese Joblove & Battista, P.A., represents the Company's Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $30,376,521 and total debts of $39,158,724. EUROFRESH INC: S&P Junks Rating Due to Poor First Qtr. Performance ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered all of its ratings on Willcox, Arizona-based EuroFresh, Inc., including its corporate credit rating, to 'CCC+' from 'B'. The ratings were removed from CreditWatch, where they placed on May 22, 2006, with negative implications, following the company's materially weaker-than-expected financial performance in the first fiscal quarter of 2006. The outlook is developing. About $229 million total debt was outstanding at June 30, 2006. "The downgrade reflects the company's continued weak operating performance during the quarter ended June 2006 and our concerns about ongoing operating challenges," said Standard & Poor's credit analyst Alison Sullivan. EBITDA declined about 10% for the six months ending June 30, 2006, because of increased energy costs resulting in: * higher expenses for natural gas to heat greenhouses; * higher transportation costs; and * higher costs of packaging materials. This decline, coupled with higher debt levels following a leveraged dividend in December 2005, significantly weakened credit measures. Additionally, the company suffered labor shortages that reduced its output and will continue to negatively impact the company in the third quarter. The company was in compliance with covenants at June 30, 2006, although covenant cushion was very limited. Standard & Poor's is concerned about the company's ability to meet future covenants in the absence of an amendment. The ratings on EuroFresh reflect its: * narrow business focus, * limited size, * customer concentration, and * leveraged financial profile. EXABYTE CORP: Selling Assets to Tandberg Data for $28 Million ------------------------------------------------------------- Exabyte Corporation has entered into an Asset Purchase Agreement with Tandberg Data Corp., a Delaware corporation and wholly-owned subsidiary of Tandberg Data ASA, a company organized under the laws of Norway and headquartered in Oslo, Norway, whereby Tandberg will purchase substantially all of the assets of the Company in exchange for cash and the assumption of certain liabilities. The Agreement was approved by the Company's Independent Committee and ratified by its Board of Directors. The closing of the transaction is subject to the approval of Exabyte common shareholders at a shareholders' meeting that is expected to occur in October or November 2006. Under the terms of the Agreement, the total consideration is expected to be approximately $28,000,000, plus certain transaction fees. This amount will fluctuate based on the actual balance outstanding under the Company's loan agreement with Wells Fargo Business Credit, Inc., which will be paid in full at closing. The cash payment to Exabyte at closing will be approximately $22,500,000, and will generally be equal to 1) the balance outstanding on the Wells Fargo loan, which holds a first priority security interest in the Company's assets; 2) the repayment obligations, as restructured, under the Company's 10% Secured Convertible Subordinated Notes, and notes payable to Imation Corp., Hitachi, Ltd. and Solectron Corporation; and 3) Exabyte's transaction fees. It is a condition to the Agreement that the cash purchase proceeds to the Company be used to make these payments. In addition, Tandberg will assume certain liabilities of the Company, consisting of substantially all accounts payable and accrued expenses, warranty obligations and obligations under purchased contracts, and new or restructured notes payable issued to Imation Corp. and Hitachi, Ltd., among others. In connection with the Agreement, Tandberg required the Company to enter into Restructuring Agreements or Amendments with the holders of its Convertible Notes, Hitachi, Ltd., Solectron Corporation and Imation Corp. that provide for reductions in the amounts currently due under various debt instruments, the issuance of new or restructured notes payable in certain circumstances, and the waiver of existing and future events of default, if any. Following the closing of the acquisition, the Company will retain certain liabilities owed to creditors; however, Exabyte is not expected to have any significant assets remaining for the payment of these obligations. In addition, subsequent to closing there will be no assets available for distribution to holders of the Company's Series AA preferred stock or its common stock. Exabyte intends to liquidate and dissolve immediately after the closing of the transaction. "We are pleased to have reached an agreement for the combination of Exabyte and Tandberg Data," noted Tom Ward, CEO of Exabyte. "The complimentary strengths of the two companies in the various geographic markets around the world will result in a truly global competitor in the storage industry. In addition, the combined product portfolios of the two companies will provide our customers with the full range of state-of-the-art, cost effective products and technologies to meet their needs. Finally, the operational synergies resulting from the combination will allow the new company to operate from an improved position of financial strength and stability in the future." It is expected that Exabyte management will continue with Tandberg and will focus on capitalizing on the opportunity for Exabyte's VXA and LTO technologies and products, as well as the integration of the two companies' operations and products. All employees of Exabyte will be offered positions with Tandberg. About Exabyte Corporation Exabyte Corporation -- http://www.exabyte.com/-- manufactures tape storage products. The Company's products back up and restore critical business information. The Company's balance sheet at Dec 31, 2005, showed total assets of $34,715,000, total liabilities $66,675,000 and Series AA Convertible preferred stock of 38,931,000, resulting in a $70,891,000 stockholders' deficit. EXIDE TECHNOLOGIES: Board OKs Revised Director Compensation Terms ----------------------------------------------------------------- Exide Technologies' Board of Directors has approved changes to the Company's director compensation program set in 2004. Specifically, the Board increased the annual cash retainer for: * the Chair of the Compensation Committee from $10,000 to $15,000; * the Chair of the Nominating and Corporate Governance Committee from $3,000 to $10,000; and * the non-executive Chairman of the Board from $50,000 to $90,000. The annual cash retainers for the directors and the Chair of the Audit Committee remain unchanged. Francis M. Corby, Jr., the Company's executive vice president and chief financial officer, said in a regulatory filing with the Securities and Exchange Commission dated Aug. 23, 2006, that the Board also approved amendments to the Oct. 13, 2005 Stock Option and Restricted Shares Award Agreements for Mark C. Demetree and Phillip M. Martineau. The amendments provide for acceleration of vesting of each of their 4,036 restricted shares and 5,673 stock options. Under the revisions, the shares vested on the date their term as directors expired, which is Aug. 22, 2006. Mr. Corby also said that Exide filed a further amendment to its Amended and Restated Certificate of Incorporation on Aug. 23, 2006. The amendment increases the total number of shares of all classes of capital stock that the Company will have authority to issue to 101,000,000 shares, of which 100,000,000 shares will be common stock and 1,000,000 shares will be preferred stock. About Exide Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represented the Debtors in their successful restructuring. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 90; Bankruptcy Creditors' Service, Inc., 215/945-7000, http://bankrupt.com/newsstand/) EXIDE TECHNOLOGIES: Shareholders Sue Directors and Officers ----------------------------------------------------------- A shareholder derivative complaint has been filed in the U.S. District Court for the District of New Jersey against certain officers and directors of Exide Technologies, Francis M. Corby, Jr., the Company's executive vice president and chief financial officer, disclosed in an August 23 filing with the Securities and Exchange Commission. According to Mr. Corby, the suit alleges that named parties breached their fiduciary duties to the Company by, among other things: (a) making false and misleading statements between November 2004, and July 2005, and by allegedly failing to implement adequate internal controls and means of supervision at the Company; (b) giving misleading statements and assurances to the public and shareholders between November 2004 and the present when they knew that material facts were concealed from shareholders and the public, including the alleged facts that: * information presented in financial statements and related press releases during the Relevant Period was inaccurate; * no, or insufficient, internal controls existed, with the result that actual and forecasted inventories, sales, and related financial results were not accurately reported; * from November 2004 forward, the defendants knew or should have known that the Company would violate the Leveraged Ratio and earnings before interest, taxes, depreciation and Amortization Covenants of its senior secured credit facility for fiscal year 2005; * Exide presented its financial results and statements in a manner that violated generally accepted accounting principles; * Exide's restructuring had not reduced costs; * Exide did not adequately hedge against the sharp price increases in lead and other commodities and falsely assured investors; * Exide was not able to properly forecast its inventory requirements and failed to timely write down the value of obsolete inventory, hence, overstating net income; and * Exide violated the terms of a contract with a large customer. "The suit seeks an unspecified amount of damages from the named parties and modifications to the Company's corporate governance policies," Mr. Corby said. "The individual defendants intend to vigorously defend the suit," he added. About Exide Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on Apr. 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represented the Debtors in their successful restructuring. Exide's confirmed chapter 11 Plan took effect on May 5, 2004. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 90; Bankruptcy Creditors' Service, Inc., 215/945-7000, http://bankrupt.com/newsstand/) FORD MOTOR: May Sell Aston Martin Sports Car Unit to Raise Capital ------------------------------------------------------------------ Ford Motor Company has begun the process of exploring strategic options for Aston Martin sports-car unit, with particular emphasis on a potential sale of all or a portion of the unit. "As part of our ongoing strategic review, we have determined that Aston Martin may be an attractive opportunity to raise capital and generate value," said Chairman and Chief Executive Officer Bill Ford. "Aston Martin Lagonda has flourished under Ford ownership, which is why we believe it is prudent to consider a sale of all or part of this prized brand. Since Aston Martin's dealer network, product architecture and size are distinctly different from other Ford brands, it is the most logical and capital-smart divestiture choice. The objective of any sale would be to position Aston Martin within a structure and resource base sufficient to allow it to reach its full potential, while enabling Ford to efficiently raise capital for its other brands." Mr. Ford added, "Regarding our other Premier Automotive Group brands, we've made no decisions, as our review of strategic alternatives continues. However, we continue to be encouraged by Jaguar's progress and by the strength and consumer appeal of the Jaguar, Land Rover and Volvo product lineups." The company said there can be no assurance that the decision to explore strategic options for Aston Martin will result in any transaction, which would be subject to Board approval. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- 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 Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS 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). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB- /RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long-term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. 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. FORD MOTOR: Mulls Doubling Russian Car Sales in 2006 ---------------------------------------------------- Ford Motor Co. is planning to nearly double its Russian sales from 60,654 vehicles to 120,000 cars this year, RIA Novosti says. Ford President Henrik Nenzen is optimistic that the company would improve its position in the Russian car market, the Russian news agency relates. Mr. Nenzen noted that Ford has doubled its first- half sales to 48,840 cars and expected the trend to continue for the whole year. Ford entered the Russian market in July 2002 when it opened its Vsevolozhsk site, with a US$150 million investment. The company is planning a $250-million upgrade of the Vsevolozhsk site, increasing the site's annual production to 30,000 Ford Mondeos, 20,000 Ford Mavericks and 100,000 Ford Focus models. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- 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 Aug. 22, 2006, Dominion Bond Rating Service placed long-term debt rating of Ford Motor Company Under Review with Negative Implications following announcement that Ford will sharply reduce its North American vehicle production in 2006. DBRS 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). Fitch Ratings also downgraded the Issuer Default Rating of Ford Motor Company and Ford Motor Credit Company to 'B' from 'B+'. Fitch also lowered the Ford's senior unsecured rating to 'B+/RR3' from 'BB-/RR3' and Ford Credit's senior unsecured rating to 'BB- /RR2' from 'BB/RR2'. The Rating Outlook remains Negative. Standard & Poor's Ratings Services also placed its 'B+' long-term and 'B-2' short-term ratings on Ford Motor Co., Ford Motor Credit Co., and related entities on CreditWatch with negative implications. 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. FUTURE MEDIA: Court Okays Silver & Freedman as Special Counsel -------------------------------------------------------------- The Honorable Geraldine Mund of the U.S. Bankruptcy Court for the Central District of California in San Fernando Valley authorized Future Media Productions, Inc., to employ Silver & Freedman, PLC, as its special employment and labor law counsel. As reported in the Troubled Company Reporter on Aug. 18, 2006, Daniel Dealba filed a complaint against the Debtor, David L. Neale, Esq., at Levene, Neale, Bender, Rankin & Brill, LLP, told the Court. The Alleged Class Action results from the Debtor's alleged failure to give requisite notice in conjunction with the termination of the employment of the Class Members. The Debtor selected Silver & Freedman's services for the purpose of responding to and dealing with the Alleged Class Action. Silver & Freedman will: a) advise the Debtor and Levene Neale with regard to the Alleged Class Action and the issues raised; b) advise the Debtor and Levene Neale in connection with any proofs of claim filed by putative Class Members or former employees of the Debtor; c) repond to the complaint that initiated the Alleged Class Action and any amendments; d) assist the Debtor and Levene Neale in preparing objections to proofs of claim filed by putative Class Members or former employees of the Debtor; e) advise the Debtor and Levene Neale with regard to any proposed settlements of the Alleged Class Action or proofs of claim filed by putative Class Members or former employees of the Debtor; f) represent the Debtor in all aspects of litigation related to the Alleged Class Action or objections to proofs of claim filed by putative Class Members or former employees of the Debtor; g) prepare all pleadings, correspondence, discovery and documents related to a settlement or litigation of the Alleged Class Action or objections to proofs of claim filed by putative Class Members or former employees of the Debtor; and h) perform any other services which may be appropriate in Silver & Freedman's representation of the Debtor in the Alleged Class Action or in regard to objections to proofs of claim filed by putative Class Members or former employees of the Debtor. The Firm's professionals bill: Professional Hourly Rate ------------ ----------- Maria C. Rodriguez, Esq. $365 Allison M. Holtzman, Esq. $260 Michelle C. Cuena, Esq. $240 Ms. Rodriguez assured the Court that her firm does not represent any interest adverse to the Debtor or its estate. Headquartered in Valencia, California, Future Media Productions, Inc. -- http://www.fmpi.com/-- provides CD and DVD replication and packaging services on the West Coast. The Company filed for chapter 11 protection on Feb. 14, 2006 (Bankr. C.D. Calif. Case No. 06-10170). David I. Neale, Esq. at Levene, Neale, Bender, Rankin & Brill, LLP, represent the Debtor in its restructuring efforts. Jeremy V. Richards, Esq., and Hamid R. Rafatjoo, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $12,370,783 in total assets and $30,650,669 in total debts. FUTURE MEDIA: Wants Excl. Solicitation Period Stretched to Nov. 9 ----------------------------------------------------------------- Future Media Productions, Inc., asks the Honorable Geraldine Mund of the U.S. Bankruptcy Court for the Central District of California in San Fernando Valley to extend its exclusivity period until Nov. 9, 2006, to gain acceptance of its amended liquidating plan. The Debtor's liquidating plan calls for the creation of a liquidating trust that will distribute payments to creditors holding allowed claims from the proceeds of the liquidation of its property, claims, rights and causes of action. A full-text copy of the Disclosure Statement explaining the Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060830230249 Headquartered in Valencia, California, Future Media Productions, Inc. -- http://www.fmpi.com/-- provides CD and DVD replication and packaging services on the West Coast. The Company filed for chapter 11 protection on Feb. 14, 2006 (Bankr. C.D. Calif. Case No. 06-10170). David I. Neale, Esq. at Levene, Neale, Bender, Rankin & Brill, LLP, represent the Debtor in its restructuring efforts. Jeremy V. Richards, Esq., and Hamid R. Rafatjoo, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed $12,370,783 in total assets and $30,650,669 in total debts. GENESIS BIOVENTURES: Hires Mark Franzen as Chief Financial Officer ------------------------------------------------------------------ Genesis Bioventures, Inc., disclosed that Mark A. Franzen, CPA, has joined the Company, fulfilling the role of chief financial officer. Mr. Franzen is an experienced executive with more than thirty years of top level accounting and corporate finance assignments for a wide variety of companies. He has been instrumental in the success of Initial Public Offerings, multi-million dollar financings, corporate registration statements and SEC filings in a number of different industries. Mr. Franzen served as the chief financial officer of MTI Technology where he restructured the company that, within three quarters, achieved positive cash flow, profitability, and the 36th largest stock price increase of 3,800 Micro Cap companies. Mr. Franzen has held a position as chief financial officer with several venture-backed companies including Y Media, Evolve Products, Storage Concepts, Calios, UniStructure, Digital Sound and Computers International during which time he managed equity infusions in excess of $100 million and established bank and capital lease lines in excess of $80 million. Mr. Franzen was chief financial officer for Level One Communications, where he managed and completed a $45 million IPO in Aug. 1993. From 1980 to 1983 he was executive vice president of finance at Micro Peripherals where he managed equity infusions of $24 million and negotiated the $95 million sale of the company. From 1967 to 1975 he served as senior audit manager of Price Waterhouse. Mr. Franzen earned his Bachelor's of Science Degree in Business Administration and Accounting in 1967 from California State University at Northridge. Genesis Bioventures, Inc. (OTC BB: GBIW) -- http://www.gnsbio.com/ -- is a biomedical development corporation focusing on the development and commercialization of novel diagnostics and therapeutics in oncology and neurodegenerative diseases. Going Concern Doubt De Joya Griffith & Company, LLC, expressed substantial doubt about Genesis Bioventures, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company 's recurring losses from operations, negative working capital, and negative cash flows from operations. GREAT PLAINS: Earns $37.2 Million in Second Quarter of 2006 ----------------------------------------------------------- Great Plains Energy Incorporated announced core earnings of $41.7 million in the second quarter of 2006, compared with $23.6 million in the second quarter of 2005. Reported earnings were $37,245,000 compared with second quarter 2005 earnings of $21,489,000. Core earnings exclude net mark-to- market gains and losses on energy contracts and other items. Strategic Energy's core earnings in the second quarter of 2006 were higher than last year, with improved gross margins more than offsetting lower delivered volumes. Higher core earnings in the second quarter of 2006 compared to the same quarter last year were also driven by weather-driven retail revenue, higher wholesale prices and lower purchased power expense that more than offset higher fuel costs at Kansas City Power & Light. For the first six months of 2006, core earnings were $66.1 million compared with $40.5 million for the same period last year. Reported earnings for the first six months were $34.7 million compared with $41.3 million for the same period last year. Year to date core earnings growth was largely driven by the same factors that drove increased earnings in the second quarter, including gross margin improvements at Strategic Energy, and favorable weather, higher wholesale prices and lower purchased power expense at KCP&L. "Great Plains Energy's operating performance in the first half of 2006, particularly at Strategic Energy, has led to an increase in our core earning guidance for the year by $0.10 cents per share," Chairman Mike Chesser said. Chesser continued, "KCP&L has experienced new winter and summer peaks in the last few quarters, underscoring the growing demand for electricity and need for our Comprehensive Energy Plan." Kansas City Power & Light KCP&L core earnings were $38.9 million in the second quarter of 2006, compared to $29.1 million last year. Reported earnings were $35.8 million, compared with second quarter 2005 reported earnings of $29.1 million. Revenues for the second quarter of 2006 were $290.9 million, compared with $272.1 million for the second quarter last year. Retail revenue increased by $9.9 million to $241.8 compared with last year due primarily to 53% warmer than normal weather. Wholesale revenues in the second quarter 2006 also increased to $46.2 million, up $8.9 million compared with the second quarter last year. The increase in wholesale revenues was driven by a 23% increase in average wholesale prices. Wholesale volumes rose slightly as the absence of last year's Wolf Creek refueling outage was largely offset by higher retail usage and coal conservation measures, as well as planned and unplanned outages. Included among these outages was the planned installation of the new Hawthorn 5 transformer in late June, which returned the unit to its full 563MW net capacity. Higher fuel prices, increased fuel usage and an unfavorable fuel mix compared to last year led to a 25% increase in fuel costs in the second quarter of 2006. The higher fuel costs more than offset the benefit of lower purchased power expense. The regulatory accounting treatment of pension costs, which was implemented retroactively in the third quarter of 2005, positively impacted earnings, excluding the pension settlement charges related to the skill set realignment, by $1.6 million for the three months ended June 30, 2006, compared with the same period last year. Year to date June 30, 2006, KCP&L's core earnings were $56.7 million compared with $39.9 million in the first half of 2005. Reported year to date earnings were $47.8 million, compared with $39.9 million last year. The increase in core earnings during the first half of 2006 was largely attributable to the same factors that drove the core earnings increase in the second quarter, as well as the absence of costs resulting from the 2005 ice storm. During the second quarter of 2006, progress on KCP&L's Comprehensive Energy Plan projects continued. The remaining permits required for construction of Iatan 2 were issued, and the co-owners signed the co-ownership agreement. Construction is anticipated to begin later this year. The 100MW wind facility is currently under construction and remains on schedule for completion in Fall 2006. The LaCygne 1 environmental retrofit project is on track for completion in the first half of 2007. Strategic Energy Strategic Energy core earnings, which exclude net mark-to-market gains and losses on energy contracts, were $5.4 million in the second quarter, compared to $2.2 million in the same period last year. Reported earnings were $4.2 million compared with earnings of $3.7 million in the second quarter of 2005. The increase in core earnings was driven by improved average retail gross margins, primarily due to the absence of transitional SECA charges, which more than offset lower delivered volumes compared to the second quarter last year. Strategic Energy's delivered volumes decreased to 3.9 million MWhs during the second quarter, compared to 5.2 million MWhs last year, reflecting the challenging sales environment experienced during much of 2004 and 2005. Strategic Energy continues to benefit from successful marketing efforts and a more favorable sales environment in several states. Total backlog at Strategic Energy continued to increase, growing 40% in the second quarter of 2006 compared to the same period last year to 25.7 million MWhs. New sales volume rose to 7.6 million MWhs in the second quarter of 2006, compared with 3.9 million MWhs in the same period in 2005. Delivered volume during the first six months, combined with 2006 backlog, totaled 16.1 million MWhs at the end of the second quarter, compared with 13.8 million MWhs at the end of first quarter. Average contract durations of 16 months in the second quarter of 2006 compared favorably to 14 months in the same quarter last year, but were slightly lower than the 18 months reported in the first quarter of 2006. Average retail gross margin per MWh in the second quarter of 2006 was $5.32. Excluding $2.0 million in net mark-to-market losses on energy contracts, average retail gross margin per MWh was $5.84, compared to an average retail gross margin per MWh, excluding net mark-to-market gains on energy contracts, of $3.33 last year. The year over year difference in gross margin per MWh reflects a $2.22 net SECA impact. Average retail gross margin on new sales during the second quarter of 2006 was $3.74, which excludes potential portfolio optimization benefits. KLT Investments Second quarter 2006 core earnings from KLT Investments were $1.4 million compared with a loss of $2.5 million in the second quarter of 2005. In the first six months of 2006, core earnings were $2.1 million compared with $500,000 last year. For both the quarter and year to date periods, the increases are attributable to the timing of reductions in affordable housing investments partially offset by a decline in available tax credits from the investments. At June 30, 2006, the Company's balance sheet showed $4,021,175,000 in total assets, $1,044,237,000 in total liabilities, and $2,094,523,000 in total stockholders' equity. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?10c6 Headquartered in Kansas City, Missouri, Great Plains Energy Incorporated (NYSE:GXP) -- http://www.greatplainsenergy.com/-- is the holding company for Kansas City Power & Light Company, a leading regulated provider of electricity in the Midwest, and Strategic Energy L.L.C., a competitive electricity supplier. * * * Moody's Investors Service rates the Company's preferred stock at Ba1. GRUPO IUSACELL: Debt Restructuring Program Close to Completion -------------------------------------------------------------- Grupo Iusacell SA de CV said in a statement that it is close to completing a $350 million debt restructuring program negotiated under Mexican bankruptcy laws. Business News Americas reports that Grupo Iusacell has entered an agreement -- Convenio Concursal -- with creditors representing 90% of the firm's total debt. According to the report, Grupo Iusacell is waiting for the consent of the conciliator local bankruptcy-monitoring agency Ifecom appointed to submit the agreement for approval by a Mexican judge. BNamericas notes that once the judge ratifies the agreement, Grupo Iusacell's restructuring process will be complete. The agreement, says BNamericas, is based on a previously disclosed restructuring agreement that will allow Grupo Iusacell to exchange $350 million in 14.25% notes due 2006 for $175 million of new notes due 2013, bearing interest of 10% per annum. The agreement also includes the cancellation of any default interest due and payable under the 2006 notes. Grupo Iusacell owes its creditors a total of MXN5.93 billion, mostly in the form of bonds issued in the United States. BNamericas underscores that Grupo Iusacell is also negotiating an exchange offer for notes and loans worth US$416 million, consisting of: -- bank loans worth $190 million and $76 million, and -- senior notes worth $150 million. Grupo Iusacell's investor relations office said that the debt requires separate negotiation. It is taking longer than the $350 million exchange, BNamericas relates. Headquartered in Mexico City, Mexico, Grupo Iusacell, S.A. de C.V. (BMV: CEL) -- http://www.iusacell.com-- is a wireless cellular and PCS service provider in Mexico with a national footprint. Independent of the negotiations towards the restructuring of its debt, Grupo Iusacell reinforces its commitment with customers, employees and suppliers and guarantees the highest quality standards in its daily operations offering more and better voice communication and data services through state-of-the-art technology, including its new 3G network, throughout all of the regions in which it operate. As of Dec. 31, 2005, Grupo Iusacell's stockholders' deficit widened to MXN2,076,000,000 from a deficit of MXN1,187,000,000 at Dec. 31, 2004. Grupo Iusacell filed for bankruptcy protection on June 18 under Mexican Law to prevent creditors from disrupting its debt restructuring talks. On July 14, 2006, Gramercy Emerging Markets Fund, Pallmall LLC and Kapali LLC, owed an aggregate amount of $55,878,000 filed an Involuntary Chapter 11 Case against Grupo Iusacell's operating subsidiary, Grupo Iusacell Celular, S.A. de C.V. (Bankr. S.D.N.Y. Case No. 06-11599). Alan M. Field, Esq., at Manatt, Phelps & Phillips, LLP, represents the petitioners. Iusacell Celular then filed for bankruptcy protection under Mexican Law on July 18. GUARDIAN TECHNOLOGIES: Incurs $2,195,406 Net Loss in 2nd Quarter ---------------------------------------------------------------- Guardian Technologies International, Inc., incurred a $2,195,406 net loss on $74,856 of revenues during the second quarter ending June 30, 2006. As of June 30, 2005, the Company's balance sheet showed $3,209,588 in assets and $630,784 in equity. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?10bc Going Concern Doubt Goodman & Company, L.L.P., in Norfolk, Virginia, raised substantial doubt about Guardian Technologies International, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the Company's significant operating losses since inception and need for additional financing. Based in Dulles, Virginia, Guardian Technologies International, Inc. -- http://www.guardiantechintl.com/-- designs and develops imaging informatics solutions for the healthcare, aviation and homeland security industries. The Company utilizes high- performance imaging technologies and advanced analytics to create integrated information management technology products and services that address critical problems in healthcare and homeland security for corporations and governmental agencies. HANDMAKER JEWISH: Hires KSR Capital as Investment Banker -------------------------------------------------------- The Honorable Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona in Tucson authorized Handmaker Jewish Services for the Aging to employ KSR Capital Advisors, Inc., as its investment banker. Individuals in Tucson, who wished to assist the Debtor so it could reorganize and maintain its current mission, previously employed KSR as a consultant. In this engagement, KSR Capital will: a. provide consultation and advice in connection with the market for senior living facilities, financing, interest rates, and other related topics for the Debtor's long-term goals; b. evaluate strategic alliances with the Debtor to accommodate short- and long-term goals; c. assist in securing strategic alliances, as needed; and d. work with current and future legal and professional consultants in the reorganization efforts. Michael J. Kane, Sr., a senior managing director at KSR, disclosed that the Firm will receive a $5,000 retainer, of which $2,500 will be non-refundable. Mr. Kane will bill at $400 per hour for his services. Mr. Kane assured the Court that the Firm has no connection with the creditors or any parties-in-interest in the Debtor's bankruptcy case. Headquartered in Tucson, Arizona, Handmaker Jewish Services for the Aging owns and operates a multiple residence-retirement community complex facility. The Company filed for chapter 11 protection on Sept. 30, 2005 (Bankr. D. Ariz. Case No. 05-05924). Michael W. McGrath, Esq., at Mesch Clark & Rothschild, represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it listed $10,384,351 in assets and $21,625,125 in debts. HANDMAKER JEWISH: HME Will Manage Facility Until December 31 ------------------------------------------------------------ Handmaker Jewish Services for the Aging obtained from the Honorable Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona in Tucson an extension of a previously Court- approved Management Service Agreement with HME, Inc., until Dec. 31, 2006. HME manages the Debtor's facility on a day-to-day basis. The Agreement provides that HME's employment started on Sept. 1, 2005, and is renewable after one year. HME agreed to an additional four-month period extension. Headquartered in Tucson, Arizona, Handmaker Jewish Services for the Aging owns and operates a multiple residence-retirement community complex facility. The Company filed for chapter 11 protection on Sept. 30, 2005 (Bankr. D. Ariz. Case No. 05-05924). Michael W. McGrath, Esq., at Mesch Clark & Rothschild, represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it listed $10,384,351 in assets and $21,625,125 in debts. HEALTHTRONICS INC: Moody's Lowers Rating on $50 Mil. Loan to B1 --------------------------------------------------------------- Moody's Investors Service downgraded the Ba3 corporate family rating and the Ba3 rating on the $50 million senior secured revolving credit facility of HealthTronics, Inc. to B1. The outlook is changed to negative, concluding a review of the company's ratings for possible downgrade initiated on April 3, 2006. Moody's took these rating actions: Ratings downgraded: * $50 million senior secured revolving credit facility, to B1 from Ba3 * Corporate Family Rating, to B1 from Ba3 Ratings withdrawn: * $125 million senior secured term loan B, rated Ba3 The ratings outlook is negative. The downgrade of the corporate family rating to B1 from Ba3 reflects a spate of negative corporate developments, culminating in the recent announcement of a major reorganization effort. These developments, coupled with the company's failure to meet its 2005 free cash flow projections and the recent weakness in top- line revenues have served to substantially offset the positive effects of the sale of the Specialty Vehicle division and concomitant repayment of the bulk of the company's outstanding debt, the combined effects of which have resulted in a corporate balance sheet that is relatively debt-free. Factors that provide positive support to the rating at the B1 level include: (1) the company's leading market position in the urology sub- segment of the healthcare industry with an approximate 27% share; (2) the company's stable, broad-based provider network of roughly 3,000 urologists, representing coverage of approximately one-third of the total urologists in the U.S.; (3) the sound geographical dispersion of its operations; and (4) the adequateness of the company's liquidity position with cash on hand of $13 million as of June 30, 2006 plus an unused revolver of $50 million. Despite a strong balance sheet, the corporate family rating continues to be constrained by the company's size and scale of operations within the highly fragmented and competitive urology segment and the even higher reliance on potential acquisitions to support future growth, post-divestiture of the Specialty Vehicles division. The risks inherent in commercializing new products and therapies also constrain the ratings. Additional pressure on the ratings are imposed by the monoline nature of the remaining revenue stream, the technology risk inherent in the company's business, potential liability issues and possible adverse changes in the regulatory environment. The negative rating outlook reflects Moody's immediate concerns with recent, negative top-line growth as well as lingering concerns with respect to the substantial turnover that has occurred with regard to the company's executive team, apparent weaknesses in internal controls plus the recent announcement of significant restructuring initiatives that will apparently be ongoing for some time. HealthTronics, Inc. provides lithotripsy services through partnerships with urology physicians and manufacturers a line of specialty medical devices primarily for the urology industry. IAP WORLDWIDE: S&P Lowers Corporate Credit Rating to B from B+ -------------------------------------------------------------- Standard & Poor's Rating Services lowered the ratings on Cape Canaveral, Florida-based IAP Worldwide Services Inc. including its corporate credit rating to 'B' from 'B+'. The outlook is stable. As of June 30, 2006, the company had total balance sheet debt of over $500 million. "The downgrade reflects weakened credit metrics as delayed government appropriations have challenged the business environment," said Standard & Poor's credit analyst Dan Picciotto. Consequently, revenues and earnings have declined. Still, a rising backlog suggests that operations are set to recover. The ratings on IAP continue to reflect the company's highly leveraged financial risk profile, taking into consideration the recapitalization of the company's balance sheet and related dividend payment at the end of 2005. The ratings also reflect the company's vulnerable business risk profile as a provider of logistics services, marked by revenue concentration from a few large contracts and the less-predictable nature of contingency operations, which contribute a majority of revenues and profits. These weaknesses are partially mitigated by the company's strong rebid record on contracts and the low fixed-capital intensiveness of operations. INLAND FIBER: Wants Court Okay on Dechert as Bankruptcy Counsel --------------------------------------------------------------- Inland Fiber Group, LLC, and its debtor-affiliate, Fiber Finance Corp., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Dechert LLP as their bankruptcy counsel. Dechert will: a. provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business and management of their properties; b. take all necessary action to protect and preserve the estates of the Debtors, including prosecuting actions on the Debtors' behalf, defending any actions commenced against the Debtors, negotiating disputes in which the Debtors are involved, and preparing objection to claims filed against the Debtors' estates; c. prepare on behalf of the Debtors, as debtors-in-possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; d. negotiate and draft any agreements for the sale or purchase of any assets of the Debtors, if appropriate; e. negotiate and draft a plan of reorganization and all documents related thereto, including, but not limited to, disclosure statements and related solicitation papers; f. take all steps necessary to confirm and implement a plan of reorganization, including, if necessary, modifications thereof and negotiate financing therefor; and g. perform all other necessary and appropriate legal services in connection with the prosecution of the Debtors' chapter 11 cases. The Debtors disclose that attorneys at Dechert bill between $250 to $875 per hour while paralegals bill between $145 to $220 per hour. Glenn E. Siegel, Esq., a partner at Dechert, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Siegel can be reached at: Glenn E. Siegel, Esq. Dechert LLP 30 Rockefeller Plaza New York, NY 10112-2200 Tel: (212) 698-3500 Fax: (212) 698-3599 http://www.dechert.com/ Headquartered in Klamath Falls, Oregon, Inland Fiber Group LLC, aka U.S. Timberlands Klamath Falls LLC, and its affiliate Fiber Finance Corp., grow trees and sell logs, standing timber, and timberland. The Debtors filed a chapter 11 petition on Aug. 18, 2006 (Bankr. D. Del. Case Nos. 06-10884 & 06-10885). William P. Bowden, Esq. at Ashby & Geddes P. A. and Glenn E. Siegal, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, Inland Fiber reported $81,890,311 in total assets and $264,433,754 in total liabilities while its debtor-affiliate, Fiber Finance, disclosed $1,048 in total assets and $263,074,983 in total debts. INLAND FIBER: Court Sets September 22 as Claims Bar Date -------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware set 5:00 p.m. Eastern Time, on Sept. 22, 2006, as the deadline for Inland Fiber Group, LLC, and its debtor- affiliate, Fiber Finance Corp.'s creditors to file proofs of claim. The proofs of claim must be filed with the Clerk of Court at: Clerk of Court U.S. Bankruptcy Court District of Delaware Attn: Inland Fiber Group Claims Processing 824 North Market Street, 3rd Floor Wilmington, DE 19801 Creditors who fail to have their proofs of claim received on or before the bar date are forever barred from asserting their claims. Headquartered in Klamath Falls, Oregon, Inland Fiber Group LLC, aka U.S. Timberlands Klamath Falls LLC, and its affiliate Fiber Finance Corp., grow trees and sell logs, standing timber, and timberland. The Debtors filed a chapter 11 petition on Aug. 18, 2006 (Bankr. D. Del. Case Nos. 06-10884 & 06-10885). William P. Bowden, Esq. at Ashby & Geddes P. A. and Glenn E. Siegal, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, Inland Fiber reported $81,890,311 in total assets and $264,433,754 in total liabilities while its debtor-affiliate, Fiber Finance, disclosed $1,048 in total assets and $263,074,983 in total debts. ITRON INC: S&P Rates $345 Million Senior Subordinated Notes at B ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating to Itron Inc.'s $345 million convertible senior subordinated notes due Aug. 1, 2026. At the same time, Standard & Poor's affirmed all of its other ratings, including its 'BB-' corporate credit rating, on the meter data technology provider. The notes are rated two notches below the corporate credit rating and are pari passu in terms of payment with the company's existing subordinated notes, which are also rated 'B'. Itron intends to use the proceeds for future acquisitions and/or general corporate purposes. "The ratings on Itron reflect the company's aggressive financial risk profile, as well as its moderate size," said Standard & Poor's credit analyst James Siahaan. The risk factors are tempered to some extent: * by Itron's leading market positions in meter-data collection and electricity-metering sales; * by expectations that the company will generate some free cash flow; and * by the favorable growth characteristics of the automatic meter-reading market. JAMES EDMONDS: Case Summary & Eight Largest Unsecured Creditors --------------------------------------------------------------- Debtor: James L. Edmonds, Jr. 4506 Javins Place Woodbridge, VA 22192 Bankruptcy Case No.: 06-11004 Chapter 11 Petition Date: August 23, 2006 Court: Eastern District of Virginia (Alexandria) Judge: Stephen S. Mitchell Debtor's Counsel: Richard B. Rosenblatt, Esq. Richard B. Rosenblatt, P.C. 30 Courthouse Square, Suite 302 Rockville, MD 20850-2378 Tel: (301) 838-0098 Fax: (301) 838-3498 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ EMC Mortgage Corp. Single Family House $470,000 P.O. Box 141358 Located at - 41757 Irving, TX 75014-1358 Eloquence Terrace Aldie, Virginia 20105 American Express Blue Credit Card Purchases $8,091 P.O. Box 360002 Fort Lauderdale, FL 33336 Bank of America Credit Card Purchases $8,149 P.O. Box 1758 Newark, NJ 07101 Discover Card Credit Card Purchases $4,095 P.O. Box 15153 Wilmington, DE 19886-5153 Jared Credit Card Purchases $3,574 P.O. Box 740425 Cincinnati, OH 45274 GMAC Credit Card Purchases $2,432 Citi Bank Dividend Platinum Credit Card Purchases $2,256 First USA Credit Card Purchases $2,232 JERRY SMITH: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Jerry Donnell Smith 3100 Hemlock Point Court Triangle, VA 22172 Bankruptcy Case No.: 06-11011 Chapter 11 Petition Date: August 24, 2006 Court: Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: Raymond R. Pring, Jr. Vanderpool, Frostick & Nishanian, P.C. 9200 Church Street, Suite 400 Manassas, VA 20110 Tel: (703) 369-4738 Fax: (703) 369-3653 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wilshire Financial Services $62,461 P.O. Box 8517 Portland, OR 97207-8517 EMC Mortgage Corporation $56,100 P.O. Box 225749 Dallas, TX 75222-5749 Porsche Financial Services 2004 Cayenne $54,891 4343 Commerce Court, Suite 300 Lisle, IL 60532 GMAC Vehicle $15,306 P.O. Box 3100 Midland, TX 79702 FIA Card Services MBNA Account $13,645 P.O. Box 15672 Wilmington, DE 19850-5672 Citifinancial $7,852 Beneficial Finance $5,050 Christian Bernard Jewelers $3,767 Prince William County Personal Property $3,000 Taxes HSBC/Best Buy $2,484 David and Allison Chisley $1,400 City of Manassas Unpaid Utility Bills $757 Mid Atlantic Real Estate Utilities $173 First Premier $110 American Home Mrtg. Servicing Unknown Commonwealth of Virginia Unknown Countrywide Home Loan Unknown Evans Leasing Services, Inc. Equipment Unknown Internal Revenue Service Unknown LEGACY ESTATE: Sells Substantially all Assets to FAB for $90MM -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California in Santa approved the sale of substantially all of The Legacy Estate Group LLC's assets to FAB Acquisition Company LLC. The assets sold will be free and clear of any liens. As reported in the Troubled Company Reporter on July 28, 2006, FAB Acquisition is an organization founded by winery owner William S. Price and Huneeus Vinters LLC. FAB Acquisition proposes to purchase the Debtor's assets, including the Freemark Abbey winery in Napa Valley, the Arrowood winery in Sonoma and the Byron winery in Santa Maria, for $90 million in cash. Headquartered in Saint Helena, California, The Legacy Estate Group LLC -- http://www.freemarkabbey.com/-- owns Freemark Abbey Winery, which produces a range of red, white, and dessert wines. Legacy Estate and Connaught Capital Partners, LLC, filed for chapter 11 protection on November 18, 2005 (Bankr. N.D. Calif. Case No. 05-14659). John Walshe Murray, Esq., Lovee Sarenas, Esq., and Robert A. Franklin, Esq., at the Law Offices of Murray and Murray represent the Debtors in their restructuring efforts. Lawyers at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts between $50 million and $100 million. LENNOX INTERNATIONAL: Earns $64 Million in Quarter Ended June 30 ---------------------------------------------------------------- Lennox International Inc. earned second quarter net income of $64 million compared to $41 million of net income in 2005. Total company sales in the second quarter increased 15% to a record $1 billion. Adjusted income from continuing operations, a non-GAAP measure, was $54 million compared with $39 million in the second quarter for 2005. "We are very pleased with our record results in the second quarter," said Bob Schjerven, chief executive officer. "Favorable cooling season weather supported our residential businesses, while domestic and international demand for commercial equipment continues to improve. Our new lines of 13 and higher SEER cooling equipment have been well received by our customers, and we were well-positioned to meet their needs. The futures contracts we had in place and the price increases we implemented in response to rising commodities costs allowed us to cover those increases in the quarter. Our strong balance sheet is allowing us to continue to invest in our core businesses for continued growth." Second quarter results reflect a pre-tax gain of $27 million, which includes $23 million in gains on futures contracts for copper and aluminum that settled in the quarter, as these contracts were marked to higher market prices for copper and aluminum. The remaining $4 million represents net unrealized gains on open futures contracts and reflects the expectation of higher commodity prices that will be realized when those contracts settle. In addition, the company incurred pre-tax restructuring charges of $2 million, relating to the consolidation of operations into South Carolina, as well as a non-recurring $9 million benefit from the reversal of a valuation allowance on deferred tax assets, offset by other related charges. In line with expectations, the company generated $14 million in cash from operations in the second quarter and invested $17 million in capital expenditures, resulting in a free cash outflow of $3 million. Total debt at June 30, 2006 was $136 million, down from $275 million from the same time a year ago. Debt-to-total capital ratio was 14%, a dramatic improvement over 35% a year ago. The company used $46 million to repurchase 1.5 million shares of its common stock in the second quarter. "We had very solid results in the first half of 2006 and are reaffirming our expectation of full-year diluted earnings per share in the range of $2.00 to $2.10," Mr. Schjerven said. "This range assumes gains and other positive non- operating items during the year offset restructuring charges for the South Carolina consolidation project. Also, based on our performance in the first half, we now expect revenue growth of approximately 10% in each of our equipment businesses and mid-single digit top-line growth for our Service Experts business segment." Business segment highlights Heating & Cooling: LII's Residential Heating & Cooling revenue rose 24% to $539 million. Adjusting for fluctuations in exchange rates, sales increased 23%. Segment profit of $52.4 million was down slightly from $55.7 million last year. Higher volume, mix benefits and improved pricing were offset by higher input costs and $6 million in additional warranty expense for a heating product no longer in production. Thirteen and higher SEER products accounted for 98% of cooling equipment sales. Commercial Heating & Cooling revenue rose 6% to $181 million, an increase of 5% when adjusted for currency fluctuations, driven by North American growth. The segment added 19 new national accounts so far this year, and has increased replacement sales through regional distribution centers. Segment operating profit declined slightly to $14.1 million from $14.7 million in 2005. Higher commodity and freight costs more than offset volume and price improvement. Despite a sales decline in Europe, profitability in that region improved, driven by product mix benefits. Service Experts: Benefiting from a good start to the cooling season, segment sales increased 6%, or 4% when adjusted for currency fluctuations, to $178 million. Segment profit was $9.5 million, an increase of 3% from the prior year. Higher volumes and vendor rebates offset lower margins, higher advertising and promotion charges, and higher fuel costs. Refrigeration: Revenue rose 11% and was not meaningfully impacted by foreign exchange. The segment's domestic business performed well in the quarter, with strong sales increases to supermarket, OEM, and cold storage customers. Segment profit increased to $10.6 million from $9.5 million last year, driven by higher volumes in domestic and European markets. About Lennox Based in Richardson, Texas, Lennox International, Inc. (NYSE: LII) -- http://www.lennoxinternational.com/-- manufactures and markets a broad range of products for heating, ventilation, air conditioning, and refrigeration (HVACR) markets, including residential and commercial air conditioners, heat pumps, heating and cooling systems, furnaces, prefabricated fireplaces, chillers, condensing units, and coolers. Lennox has solid positions in its equipment markets, with well-established brand names, as well as products spanning all price points. * * * Moody's Investors Service affirmed Lennox International Inc.'s corporate family rating at Ba2 and changed the outlook to positive from stable. MICRO COMPONENT: July 1 Balance Sheet Upside-Down by $7 Million --------------------------------------------------------------- Micro Component Technology, Inc., reported profitable results for its second quarter ended July 1, 2006. Net sales for the second quarter of 2006 were $3.7 million, an increase of 178% from net sales of $1.3 million for the second quarter of 2005, and additionally up 55% from the first quarter of 2006. Net income was $7,000 in the second quarter of 2006, compared to net loss of $1.6 million in the comparable prior year period. Net sales for the six-months ended July 1, 2006 were $6.1 million, an increase of 84.4% from net sales of $3.3 million in the prior year. The net loss for the six-month period of 2006 was $1.1 million, compared to a net loss of $2.6 million in the prior year. At July 1, 2006, the Company's balance sheet showed $7.02 million in total assets and $14.03 in total liabilities, resulting in a $7.01 stockholders' deficit. MCT's President, Chairman and Chief Executive Officer, Roger E. Gower, commented, "This quarter was a significant achievement for all of the MCT employees worldwide. We not only shipped twice as many systems in Q2 as in Q1 of 2006 but also received orders within Q2 that exceeded the Q2 shipments. It appears that this growth is not only associated with the increased capacity requirements of our marketplace, but also from existing customers who have identified the cost savings associated with strip test solutions and are now replacing existing capacity to allow them to further reduce their cost of test. Our commitment to rapid product development over the past 10 years appears to be achieving its goals as desired," concluded Gower. Going Concern Doubt Virchow, Krause & Company, LLP, expressed substantial doubt about Micro Component's ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2005, 2004 and 2003. The auditing firm pointed to the Company's recurring losses from operations and has a stockholders' deficit About Micro Component Micro Component Technology, Inc. -- at http://www.mct.com-- supplies integrated automation solutions for the global semiconductor test and assembly industry. MCT offers complete and comprehensive equipment automation solutions for the test, laser mark handling equipment, mark inspect, singulation, sort, and packaging for shipment portions of the back-end of the semiconductor manufacturing process that significantly improve our customers' productivity, yield and throughput. MILLENIUM ASSISTED: Unsecured Claim Holders to Share $50,000 Fund ----------------------------------------------------------------- Millenium Assisted Living Residence at Freehold LLC delivered to the U.S. Bankruptcy Court for the District of New Jersey an amended disclosure statement explaining its first amended Chapter 11 Plan of Orderly Liquidation. Distributions under the Amended Plan will be funded by proceeds remaining from the sale of the Debtor's assets on Nov. 10, 2005 and by net preference recoveries from the Debtor's prosecution of avoidance actions. The Debtor's existing cash -- less $50,000 reserved for general unsecured claims -- will be paid to professionals retained in the Debtor's case. Under the Amended Plan, holders of General Unsecured Claims will receive pro rata payments of their allowed amounts from the $50,000 cash reserve. The interests of the Debtor's equity interest will be extinguished on confirmation of the Amended Plan. Ravin Greenberg PC will serve as disbursing agent for the distributions contemplated under the Plan. A full-text copy of the first amended disclosure statement on the Debtor's first amended chapter 11 liquidation plan is available for a fee at: http://www.researcharchives.com/bin/download?id=060831201939 Headquartered in Freehold, New Jersey, Millenium Assisted Living Residence at Freehold, LLC, filed for chapter 11 protection on June 7, 2004 (Bankr. N.J. Case No. 04-29097). Chad Brian Friedman, Esq., and Howard S. Greenberg, Esq., at Ravin Greenberg PC represent the Debtor in its restructuring efforts. Scott Cargill, Esq., at Lowenstein & Sandler PC represents the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it estimated over $10 million in debts and assets. MIRANT: Class 3 Claim Holders to Appeal PEPCO Settlement Order -------------------------------------------------------------- Certain holders of Class 3 Claims against Mirant Corporation and its debtor-affiliates notify the U.S. Bankruptcy Court for the Northern District of Texas that they will take an appeal from Judge Lynn's Memorandum Opinion and Order dated Aug. 9, 2006, approving a settlement agreement with Potomac Electric Power Company and Southern Maryland Electric Cooperative, Inc., to the U.S. District Court for the Northern District of Texas. The Class 3 Claim Holders are investment funds managed or co- managed by: (1) Basso Capital Management, L.P. (2) Cadence Master, Ltd. (3) Caspian Capital Advisors (4) D.E. Shaw Laminar Portfolios, L.L.C. (5) Highland Capital Management, L.P. (6) Highland Floating Rate Fund (7) Highland Floating Rate Advantage (8) ING Capital LLC (9) ING Middenbank Curacao N.V. (10) Ivy MA Holdings Cayman 8, Ltd. (11) King Street Capital Management, L.L.C. (12) Longacre Fund Management, LLC (13) Luxor Capital Group (14) Man Mac Gemstock 9B, Ltd. (15) Pirate Capital LLC (16) Quadrangle Master Funding LTD (17) Resurgence Asset Management, L.L.C. (18) Longacre Fund Management, LLC As reported in the Troubled Company Reporter on Aug. 16, 2006, the Court approved the settlement agreements among the Reorganized Debtors, Potomac Electric and Southern Maryland and overruled the objection filed by the Class 3 Claim Holders. In a 30-page Memorandum Opinion, Judge Lynn said he finds the $520,000,000 settlement amount to be reasonable given: * the potential magnitude of claim underlying the Back-to-Back Agreement; * the uncertainties that could arise from further litigation over rejection of the BTB or the Asset Purchase and Sale Agreement; and * the facial appeal of the additional claims asserted by PEPCO. It is not true that PEPCO's treatment is better, the Court added. If PEPCO were to receive treatment as provided in the Plan, Mirant would: -- have distributed to it 22,297,600 of common shares; and -- be entitled to a share in litigation proceeds pursuant to Plan. Under the Settlement, however, PEPCO will receive no distributions pursuant to Plan, the Court notes. As of July 19, 2006, Mirant's stock is trading at $26.64 per share. Hence, Judge Lynn said, far fewer shares, less than 20,000,000, are necessary to satisfy PEPCO's $450,000,000 claim under the Settlement. About Mirant Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. (Mirant Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on July 17, 2006, Moody's Investors Service downgraded the ratings of Mirant Corporation and its subsidiaries Mirant North America, LLC and Mirant Americas Generation, LLC. The Ba2 rating for Mirant Mid- Atlantic, LLC's secured pass through trust certificates was affirmed. The rating outlook is stable for Mirant, MNA, MAG, and MIRMA. Moody's downgraded Mirant Americas Generation, LLC's Senior Unsecured Regular Bond/Debenture, to B3 from B2. Moody's also downgraded Mirant Corporation's Corporate Family Rating, to B2 from B1, and Speculative Grade Liquidity Rating, to SGL-2 from SGL-1. Mirant North America, LLC's Senior Secured Bank Credit Facility, was also downgraded to B1 from Ba3 and its Senior Unsecured Regular Bond/Debenture, to B2 from B1. As reported in the Troubled Company Reporter on July 13, 2006, Fitch Ratings placed the ratings of Mirant Corp., including the Issuer Default Rating of 'B+', and its subsidiaries on Rating Watch Negative following its announced plans to buy back stock and sell its Philippine and Caribbean assets. Ratings affected are Mirant Corp.'s 'B+' Issuer Default Rating and Mirant Mid-Atlantic LLC's 'B+' Issuer Default Rating and the Pass- through certificates' 'BB+/Recovery Rating RR1'. Fitch also placed Mirant North America, Inc.'s Issuer Default Rating of 'B+', Senior secured bank debt's 'BB/RR1' rating, Senior secured term loan's 'BB/RR1' rating, and Senior unsecured notes' 'BB-/RR1' rating on Rating Watch Negative. Mirant Americas Generation, LLC's Issuer Default Rating of 'B+' and Senior unsecured notes' 'B/RR5' rating was included as well. Standard & Poor's Ratings Services also placed the 'B+' corporate credit ratings on Mirant Corp. and its subsidiaries, Mirant North American LLC, Mirant Americas Generating LLC, and Mirant Mid- Atlantic LLC, on CreditWatch with negative implications. MIRANT CORP: Buys Back 43 Mil. Common Stock at $28.50 Per Share --------------------------------------------------------------- Mirant Corporation reported the final results of its modified "Dutch auction" tender offer to purchase up to 43,000,000 shares of the company's common stock, which expired at 5:00 p.m., New York City time, on Aug. 21, 2006. Mirant has accepted for payment an aggregate of 43,000,000 shares of its common stock at a purchase price of $28.50 per share. These shares represent approximately 14% of the shares outstanding as of June 30, 2006. Mirant has been informed by Mellon Investor Services, the depositary for the tender offer, that the final proration factor for the tender offer is approximately 85.6%. Based on the final count by the depositary (and excluding any conditional tenders that were not accepted due to the specified condition not being satisfied), 50,218,254 shares were properly tendered and not withdrawn at or below a price of $28.50 per share. Payment for the shares accepted for purchase, and return of all shares tendered and delivered and not accepted for purchase, will be carried out promptly by the depositary. As a result of the completion of the tender offer, Mirant has 257,068,663 shares of common stock outstanding (basic). Any questions with regard to the tender offer may be directed to Innisfree M&A Incorporated, the Information Agent for the Offer, at 1-877-750-5836, or J.P. Morgan Securities Inc., the Dealer Manager for the Offer, at 1-877-371-5947. About Mirant Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. MYLAN LABS: Moody's Holds Ba1 Rating on $700 Million Senior Notes ----------------------------------------------------------------- Moody's Investors Service affirmed all existing ratings, including the Ba1 corporate family rating and SGL-1 speculative grade liquidity rating, of Mylan Laboratories Inc. The rating outlook is stable. On Aug. 28, 2006, Mylan announced its intention to acquire a controlling stake in Matrix Laboratories Ltd., an Indian pharmaceutical company specializing in the manufacturing of Active Pharmaceutical Ingredients and finished dose forms. The affirmation of Mylan's Ba1 Corporate Family Rating reflects: (1) strategic benefits of the Matrix transaction, including access to a strong API business, global expansion, and opportunities to cross sell products in Europe; (2) Moody's prior expectation that Mylan was contemplating acquisitions that could employ debt financing; and (3) Moody's belief that Mylan is more likely than not to sustain the ratios of cash flow from operations to debt near 25% and free cash flow to debt near 15% over the medium term. These are the high ends of the "Ba" ranges indicated in Moody's Global Pharmaceutical Rating Methodology. The rating outlook is stable. However Mylan remains more weakly positioned within the Ba1 rating category for the following reasons: (1) in the near term, incremental debt will pressure the cash flow ratios discussed above; (2) the cash flow from the Matrix acquisition is highly variable depending on the costs associated with its rapid expansion; and (3) there is some uncertainty as to the sustainability of Mylan's own cash flow, depending on the introduction of transdermal fentanyl from any competing generic companies. Ratings affirmed: * Ba1 Corporate Family Rating * Ba1 sr. unsecured revolving credit facility of $700 million due 2011 * Ba1 sr. unsecured notes of $150 million due 2010 * Ba1 sr. unsecured notes of $350 million due 2015 * SGL-1 speculative grade liquidity rating Headquartered in Canonsburg, Pennsylvania, Mylan Laboratories Inc. is a pharmaceutical company with three principal subsidiaries: Mylan Pharmaceuticals Inc., Mylan Technologies Inc., and UDL Laboratories, Inc. During the fiscal year ended March 31, 2006, Mylan reported total revenue of approximately $1.26 billion. NATIONAL CONSUMER: Trustee Asks Ct. to Set Oct. 6 Claims Bar Date ----------------------------------------------------------------- John Brinco, the Chapter 11 Trustee appointed in National Consumer Mortgage, LLC's chapter 11 case, asks the U.S. Bankruptcy Court for the Central District of California to fix Oct. 6, 2006, at 5:00 p.m., as the deadline for all creditors and holders of ownership interests to file their proofs of claim against the Debtor's estate. Any objection to the motion must be served in accordance with Local Rule 9013-1 upon: i) Counsel to the Chapter 11 Trustee Attn: Christine E. Baur Baker & McKenzie LLP 101 West Broadway, 12th Fl. San Diego, CA 92101 ii) Counsel to the Official Creditors' Committee Attn: Daniel H. Reiss Levene, Neale, Bender, Rankin & Brill L.L.P. 10250 Constellation Blvd., Ste. 1700 Los Angeles, CA 90067 iii) Office of the U.S. Trustee Attn: Michael Hauser 411 West Fourth Street, Ste. 9041 Santa Ana, CA 92701 iv) Other parties requesting notice pursuant to Rule 2002. The Court will convene a hearing on Sept. 6, 2006, at 10:00 a.m., in Courtroom 5B, 411 W Fourth St., in Santa Ana, California, to consider the Chapter 11 Trustee's request. Headquartered in Orange, California, National Consumer Mortgage LLC -- http://www.nationalconsumermortgage.com/-- is an independent mortgage brokerage that creates and processes home loans. The Debtor filed for chapter 11 protection on Apr. 3, 2006 (Bankr. C.D. Calif. Case No. 06-10429). Lorraine L. Loder, in Los Angeles, California, represents the Debtor. David L. Neale, Esq., at Levene, Neale, Bender, Rankin & Brill L.L.P., represents the Official Committee of Unsecured Creditors. John Brinco was appointed as the Debtor's Chapter 11 Trustee appointed When the Debtor filed for protection from its creditors, it listed total assets of $1,102,135 and total debts of $32,846,858. NEOPLAN USA: Court Approves DCA as Claims and Noticing Agent ------------------------------------------------------------ Neoplan USA Corporation and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Delaware Claims Agency, LLC, as their claims, noticing, and balloting agent. DCA will: a) prepare and serve required notices in the Debtors' chapter 11 cases, including: 1. notice of commencement of the cases and the initial meetings of creditors under Section 341(a) of the Bankruptcy Code; 2. notice of the claims bar date; 3. notice of objections to claims; 4. notice of any hearing on a disclosure statement and confirmation of a plan of reorganization; and 5. other miscellaneous notices to any entities, as the Debtors or the Court deem necessary or appropriate for an orderly administration of the Debtors' chapter 11 cases; b) within five days after the mailing of a particular notice, file with the Clerk's Office a certificate or affidavit of services that includes a copy of the notice involved, an alphabetical list of persons to whom the notice was mailed and the date of mailing; c) docket all claims received by the Clerk, maintain the official claims registers for the Debtors on behalf of the Clerk, and provide the Clerk with a certified duplicate unofficial Claims Registers on a monthly basis, unless otherwise directed; d) specify in the Claims Registers these information for each claim docketed: 1. claim number assigned; 2. date received; 3. name and address of the claimant who filed the claim; 4. classification of the claim asserted in the claim; e) record all transfers of claims and provide any notices of transfers required by Rule 3001(e) of the Federal Rules of Bankruptcy Procedure; f) make changes to the Claims Registers pursuant to Court order; g) maintain the official mailing lists of all entities that have filed proofs of claim, which list will be available upon request by the Clerk or upon request and payment of an appropriate copying charge by a party-in-interest; h) assist the Debtors, if necessary, in the clerical preparation of their schedules, and statement of financial affairs and any amendments or supplements thereto, and maintain a mailing list of the parties included; i) perform all balloting services that may be required in the Debtors' chapter 11 cases, including, to the extent necessary, identifying voting and nonvoting creditors, preparing class-specific ballots, distributing ballots and accompanying documents, serving as balloting agent to receive and tabulate voting results, and providing other ballot related services requested by the Debtors; and j) at the close of the cases, box all original documents in the proper format, as determined by the Clerk, make arrangements for the long-term storage as instructed by the Clerk; and k) promptly comply with further services as the Debtors or the Clerk will request. The Debtors tell the Court that DCA will bill in accordance with its standard hourly rates. Documents filed with the Court did not disclose those rates. Joseph L. King, vice president of DCA, assures the Court that his firm does not represents any interest adverse to the Debtors or their estates. Headquartered in Denver, Colorado, Neoplan USA manufactures standard floor buses, low floor buses, and articulated buses. Neoplan USA licenses its designs from the German corporation, Neoplan. Neoplan USA is entirely separate from Neoplan in Germany. The Company, its parent, IAP Acquisition Corporation, and two affiliates, filed for chapter 11 protection on Aug. 17, 2006 (Bankr. D. Del. Lead Case No. 06-10872). Tobey M. Daluz, Esq., at Ballard Spahr Andrews & Ingersoll LLP, represents the Debtors. When Neoplan USA filed for protection from its creditors, it listed $13,696,911 in total assets and $59,009,471 in total debts. NJ AFFORDABLE: Hires Sheldon & DJM as Ch. 7 Trustee's Auctioneers ----------------------------------------------------------------- Charles M. Forman, the chapter 7 trustee appointed for NJ Affordable Homes Corp.'s bankruptcy case, engaged Sheldon Good & Company Auctions NorthEast and DJM Realty, LLC, to sell 340 properties owned and controlled by NJAH from Sept. 29 through Oct. 1 at the Meadowlands Convention Center in Secaucus, New Jersey. "The auction sale of the NJAH portfolio is the most efficient and cost-effective method of generating a substantial pool of funds from which those who were hurt by this massive fraud can be compensated," Mr. Forman, of the law firm of Forman, Holt & Eliades, LLC, said. "Private investors, conventional lenders, other parties and the community as a whole have been victimized by the scheme," Mr. Forman added. "We believe that the auction method devised by this real estate team will result in the expeditious sale of these properties thereby ultimately benefiting all concerned, including the investors, lenders, tenants and their neighborhoods." "We appreciate the confidence placed in us and in DJM Realty by the trustee and the court," Steven L. Good, Chairman and CEO of Sheldon Good & Company Auctions, Inc. said. "Our auction will be an important step forward in correcting the alleged injustices conducted by the debtor." "We were brought in based on our experience in helping troubled companies fund operating cash so as to allow for an orderly disposition of the portfolio properties," Andrew Graiser, Co-CEO and Founder of DJM Realty, said. "We teamed up with Sheldon Good & Company because we felt that they were by far the most experienced auction company to handle a portfolio of properties this size." Jeffrey Hubbard, Executive Managing Director for Sheldon Good & Company Auctions NorthEast, LLC, said: "This will be the largest residential auction thus far to be conducted in New Jersey, and most likely, in the United States. This auction will have something for everyone: the builder, homeowner, developer and investor. The portfolio of properties includes 80 single-family homes, 78 two-family homes, 96 three-family homes, 19 four-family homes, 2 six-family residences, 57 parcels of land, and 8 commercial properties. This extensive portfolio includes property in every county in New Jersey except two. 195 properties are located in the Essex County area." Mr. Hubbard said that all properties would be sold absolute regardless of price, free and clear of liens, subject to the approval of the United States Bankruptcy Court District of New Jersey presiding over NJAH's bankruptcy case. Background On Sept. 12, 2005, the U.S. Securities and Exchange Commission sought and obtained from the District Court a temporary restraining order that, among other things, froze the assets of NJ Affordable Homes Corp. and Wayne Puff and appointed a temporary receiver over the assets of NJAH. The SEC alleged that "from at least 1999 to the present, the defendants sold, in unregistered offerings, at least $40 million in notes to more than 490 investors located throughout the United States in connection with their participation in a Ponzi scheme." The District Court appointed Nicholas H. Politan, a former federal judge, as the receiver for NJAH. On Nov. 17, 2005, the Court authorized the receiver to file a chapter 7 petition under the Bankruptcy Code on behalf of NJAH. Mr. Forman was then appointed by the United States Trustees Office, a branch of the U.S. Department of Justice, as the chapter 7 Trustee for NJAH's bankruptcy estate. The U.S. Bankruptcy Court granted the Trustee's motion to sell all 340 properties owned and controlled by NJAH in a real estate auction to be conduced by Sheldon Good & Company Auctions NorthEast in conjunction with DJM Realty. Headquartered in Woodbridge, New Jersey, NJ Affordable Homes Corp. is a real estate investment company that purports to use investors' monies to purchase residential and commercial property, renovate the property, and sell the property at a profit. NORTHWEST AIRLINES: Court Allows FCI to File Consolidated Claims ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the stipulation entered into by Northwest Airlines, Inc., and its debtor-affiliates and Fiduciary Counselors Inc. On September 14, 2005, Northwest Airlines, and FCI, entered into an agreement in which FCI would serve as independent fiduciary for these pension plans: -- Northwest Airlines Pension Plan for Contract Employees, -- Northwest Airlines Pension Plan for Pilot Employees, and -- Northwest Airlines Pension Plan for Salaried Employees. FCI believes that it must file multiple proofs of claim against each Debtor, representing claims for which the Debtors are jointly and severally liable to the Plans under 29 U.S.C. Section 1082(c)(11)(B) and 26 U.S.C. Section 412(c)(11)(B). Pursuant to the stipulation, the parties agree that: (1) any proof of claim or amendment thereto filed in Case No. 05-17930-ALG by FCI on its own behalf or on behalf of the Plans will be deemed to be filed in each of the cases of the Debtors; and (2) unless the parties expressly agree otherwise, the Stipulation will also apply to any amended proofs of claim that FCI may file with respect to the Plans. Because there are 14 Debtors, FCI, absent the Stipulation, would likely file a great number of separate proofs of claim. The parties believe that these multiple claims would impose a significant and unnecessary administrative burden on them, the claims agent and the Court. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NORTHWEST AIRLINES: Wants Claim Objection Protocol Established -------------------------------------------------------------- Northwest Airlines, Inc., and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of New York establish procedures for filing omnibus objections to proofs of claim filed in their Chapter 11 cases. Since filing for bankruptcy, over 11,500 proofs of claim have been filed against the Debtors. Based on the large number of proofs of claim, the Debtors expect to file a substantial number of objections, Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, relates. Through the Objection Procedures, the Debtors seek to establish a uniform process for the resolution claim objections that will minimize the administrative burdens on the estates and the Court while protecting the due process rights of all parties-in- interest. Proposed Objection Procedures The Debtors' Objection Procedures divide their objections to the claims into several tiers: (a) Tier I objections deal with: * two or more proofs of claim asserting the same liability against the same Debtor; or * proofs of claim that were amended or superseded by later filed proofs of claim. (b) Tier II objections fall within two general subcategories: * Tier II(A) includes objections that seek to: -- disallow a proof of claim based on the claimant's failure to attach sufficient documentation providing a basis for the claim asserted; -- reclassify the priority of a proof of claim where the claimant failed to provide sufficient documentation providing a basis for the asserted priority; -- identify the Debtor allegedly liable for the claim asserted in the proof of claim; and -- disallow late-filed proofs of claim; and * Tier II(B) includes objections that seek to resolve claims that are inconsistent with the Debtors' books and records; and (c) Tier III includes substantive objections that do not fall within Tiers I and II. Tier III Objections are further divided into two sub-tiers: * Tier III(A) Objections are those objections that may raise factual issues for which discovery may be appropriate; and * Tier III(B) Objections are those objections that the Debtors believe raise only legal issues. Mr. Ellenberg tells the Court that the Objection Procedures also: -- provide a detailed framework for the litigation and resolution of each type of Objection; -- establish, inter alia, the timeframes for the filing of responses to Objections and the Debtors' replies to those responses; -- detail the information that claimants must include in responses to the Objections; and -- establish procedures for the scheduling of discovery, if necessary, and hearings on the Objections. Claim Settlement Procedures The Debtors also ask the Court to establish procedures streamlining the settlement process of the disputed claims for the efficient resolution of the thousands of claims filed in their Chapter 11 cases. The Debtors believe that settlement of objectionable proofs of claim constitutes a cost-effective method of resolving those claims and avoids the expense and risk inherent in litigating the claims. Given the magnitude of the proofs of claim filed against the Debtors, Mr. Ellenberg contends, it would be expensive, cumbersome, and highly inefficient to resolve objectionable claims by holding individual hearings and filing individual pleadings with respect to each proposed settlement. The Settlement Procedures promote judicial economy, he asserts. Specifically, the Settlement Procedures provide that: (a) the Debtors may negotiate and settle disputed proofs of claim regardless of its amount or nature; (b) Except for those claims with a disputed amount of $50,000 or less, the Debtors will give notice of each proposed settlement to the attorneys for the Official Committee of Unsecured Creditors. The notice should specify the amount and grounds of the claim asserted against the estates, and the proposed settlement; (c) The Committee will have five business days after the notice is sent to object to the proposed settlement or request for additional five days to evaluate the settlement. Absent a timely objection, or upon obtaining approval of the Committee, the Debtors will be authorized to enter into the proposed settlement; (d) If the Committee timely objects to a proposed settlement, the Debtors and the Committee will use good faith efforts to consensually resolve the objection. If the objection is resolved, the Debtors may enter into the proposed settlement, as and to the extent modified by the resolution of the Committee's objection, otherwise, the Debtors may seek Court approval of the proposed settlement upon an expedited notice and hearing, subject to the Court's availability; (e) For claims with a disputed amount of $50,000 or less, the Debtors will be permitted to settle the disputed Claim without the necessity of Committee or Court approval; and (f) The Settlement Procedures will not prevent the Debtors, in their sole discretion, from seeking Court approval at any time of any proposed settlement upon notice and a hearing. Pursuant to Rule 2002(a)(3) of the Federal Rules of Bankruptcy Procedure, the Debtors seek the Court's permission to limit notice of any settlements entered into pursuant to Claim Settlement Procedures. Limiting notice will enable the Debtors to promptly and efficiently enter into the settlements, Mr. Ellenberg contends. Mr. Ellenberg adds that it would be detrimental for the Debtors to provide notice of settlements with particular Claimants to all parties on the Master Service List, which would include numerous other Claimants. In that situation, Claimants would undoubtedly rely upon the dollar amounts of previous settlements of similar claims by the Debtors as the basis for their settlement demands, irrespective of the merit of their particular claim. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NOVELIS INC: Reviews Strategic Options for European Subsidiaries ---------------------------------------------------------------- Novelis Inc. disclosed additional steps in its ongoing initiative to improve its business in Europe, including a review of strategic alternatives for its Foil and Technical Products business unit. Novelis also reported the proposed restructuring of its European central management and administration activities in Zurich to reduce overhead costs and streamline support functions. In addition, the Company is proposing to exit the Neuhausen Technology Center in Switzerland. The Company would expect to incur $6 million of costs associated with the proposed restructuring of the management and administration activities and exiting the R&D center. Expected savings from these actions approximate $10 million per year. The Company stated that all the elements of the proposed restructuring will be conducted in full compliance with work rules and labor laws pertinent to the regions in which the facilities are located. "The initiatives we are announcing support Novelis' corporate strategy of enhancing our high-end product portfolio and improving our cost position," stated William T. Monahan, Chairman and Interim Chief Executive Officer. "While our Foil and Technical Products unit in Europe is a strong business, we have decided to explore all strategic alternatives, including divestment of the business." The Foil and Technical Products business comprises six plants -- one in France, three in Germany, one in Luxembourg, and one in the United Kingdom -- that produce aluminum foil used primarily in packaging and industrial markets. Together these plants employ 2,100 people. "The proposed steps to simplify our central management and administration in Europe involve reducing overhead and shifting some of these activities into our market- oriented business units and plants," Arnaud de Weert, President of Novelis Europe, stated. "These facilities will become the focal point of the Company's business activities and will allow us to move even closer to the customer. This, in turn, will enable us to make our European footprint more efficient and more competitive." Novelis' proposed administrative reorganization includes significantly streamlining the central team that leads overall strategy, coordination and compliance from Novelis Europe's corporate office in Zurich and transferring support functions -- including Research and Technology, Continuous Improvement and most Human Resources and Planning and Purchasing activities -- into the respective business units. These proposed actions will facilitate a more efficient regional system and an even greater focus on customers. As part of this effort and to promote closer involvement of the operations in the development of new product innovations, Novelis is proposing to exit the Neuhausen technology lab and concentrate key resources in technology market centers of excellence in Europe and in the Novelis Global Technology Center located in Kingston, Ontario, Canada. Novelis began to restructure its European operations in 2005. That year the Company closed two facilities -- one in Flemalle, Belgium, and one in Falkirk, Scotland. To date in 2006 it has sold a rolling mill in Annecy, France, closed its Borgofranco casting alloys site in Italy, and reorganized its Ohle and Ludenscheid foil operations in Germany. About Novelis Inc. Based in Atlanta, Georgia, Novelis Inc. (NYSE: NVL) (TSX: NVL) -- http://www.novelis.com/-- provides customers with a regional supply of technologically sophisticated rolled aluminum products throughout Asia, Europe, North America, and South America. The company operates in 11 countries and has approximately 13,000 employees. Through its advanced production capabilities, the company supplies aluminum sheet and foil to the automotive and transportation, beverage and food packaging, construction and industrial, and printing markets. * * * As reported in the Troubled Company Reporter on May 18, 2006, Moody's Investors Service placed the ratings of Novelis Inc., and its subsidiary, Novelis Corp., under review for possible downgrade. Novelis Corporation's Ba2 senior secured bank credit facility rating was placed on review for possible downgrade. Novelis Inc.'s Ba3 corporate family rating; Ba2 senior secured bank credit facility and B1 senior unsecured regular bond/debenture were placed on review for possible downgrade. ONEIDA LTD: NY Bankruptcy Court Confirms Plan of Reorganization --------------------------------------------------------------- The prenegotiated plan of reorganization of Oneida Ltd. was confirmed, on Aug. 31, 2006, by the U.S. Bankruptcy Court for the Southern District of New York, setting the stage for Oneida's emergence from Chapter 11 as a privately held company. The Plan will significantly reduce the company's debt and open the way for renewed investment and growth. The company is expected to emerge from Chapter 11 on or about Sept. 12, 2006. "We are extremely pleased that the Court has approved our recapitalization," said James E. Joseph, President of Oneida. "We are grateful to our customers, suppliers, partners and employees for their commitment during this process. The successful recapitalization is the culmination of a revitalization process we began more than 18 months ago and marks a new beginning for Oneida. We are looking forward to building on our strong brand and outstanding customer relationships to continue Oneida's growth into its second century." Terms of the Plan Oneida's plan of reorganization provides for the conversion of 100% of its Tranche B loan, representing approximately $100 million, into 100% of the equity of the newly reorganized company. The plan also includes $170 million in senior secured long-term credit facilities, consisting of an $80 million asset based revolving credit facility and a $90 million term loan that will refinance Oneida's Tranche A debt and provide the company with additional liquidity to continue to grow its business. Oneida's general unsecured creditors will not be impaired under the plan; however, existing common and preferred stockholders will not receive any distributions under the plan and their equity will be cancelled on the effective date of the plan. About Oneida Ltd. Headquartered in Oneida, New York, Oneida Ltd. (Pink Sheets:ONEI) -- http://www.oneida.com/-- manufactures stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and supplies dinnerware to the foodservice industry. Oneida also supplies a variety of crystal, glassware and metal serveware for the tabletop industries. The Company and its 8 debtor-affiliates filed for Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case Nos. 06-10489 through 06-10496). Douglas P. Bartner, Esq., at Shearman & Sterling LLP represents the Debtors. Credit Suisse Securities (USA) LLC is the Debtors' financial advisor. Scott L. Hazan, Esq., and Lorenzo Marinuzzi, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represent the Official Committee of Unsecured Creditors. Robert J. Stark, Esq., at Brown Rudnick Berlack Israels LLP represents the Official Committee of Equity Security Holders. When the Debtors filed for protection from their creditors, they listed $305,329,000 in total assets and $332,227,000 in total debts. On May 12, 2006, Judge Gropper approved the Debtors' disclosure statement. ORTHOFIX INT'L: Blackstone Merger Cues Moody's to Lower Ratings --------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of Orthofix International N.V. to Ba3 from Ba2. The outlook remains stable. Moody's also assigned a Ba3 rating to the proposed $375 million senior secured credit facilities of Orthofix Holdings Inc., a subsidiary of Orthofix International N.V. These rating actions follow the August 7, 2006 announcement that Orthofix announced that it signed a definitive agreement to acquire Blackstone Medical Inc. for a total transaction value of $345 million, including fees and expenses. Moody's anticipates the transaction will be financed with a proposed $330 million term loan and $15 million cash. Moody's expects the company will have no borrowings under its proposed $45 million senior secured revolving credit facility. Blackstone, with its headquarters in Springfield, Massachusetts, is a privately owned U.S. company that designs, develops and markets spinal implants and instruments used in spinal surgery. For the 12 months ended June 30, 2006, Blackstone generated over $70 million in revenue. The downgrade primarily reflects a significant increase in the company's debt leverage, as measured primarily by its cash flow coverage of debt and EBIT coverage of interest expense, because the transaction is predominantly financed with the issuance of debt. At the same time, Moody's believes that the company's credit profile will be negatively affected by Blackstone's negative operating cash flow. These ratings were assigned to Orthofix Holdings Inc., a subsidiary of Orthofix International N.V, in conjunction with the proposed Blackstone acquisition: * $45 million Senior Secured Revolver, due 2012, rated Ba3 * $330 million Senior Secured Term Loan B, due 2013, rated Ba3 Moody's downgraed the Corporate Family Rating of Orthofix International N.V. to Ba3, from Ba2 Moody's will also withdraw the following ratings assigned to Colgate Medical, Ltd., a subsidiary of Orthofix International, Inc., as all debt has been paid: * Colgate Medical, Ltd. Ba2 $110 million five-year term loan * Colgate Medical, Ltd. Ba2 $15 million five-year revolver Orthofix International N.V., a limited liability company, organized under the laws of the Netherlands Antilles, is a provider of pre and post operative products to the orthopedic market place. The company reported $313 million in net sales during 2005. OWENS CORNING: Can Sell Modulo(TM)/ParMur Group for $32 Million --------------------------------------------------------------- Owens Corning has signed a purchase agreement to acquire The Modulo(TM)/ParMur Group for $32 million (EUR25.5 million), as reported in the Troubled Company Reporter on July 31, 2006. The U.S. Bankruptcy Court for the District of Delaware approved the share purchase and warranty agreement dated July 17, 2006, between Owens Corning, as purchaser, and Modalis Holdings, Einar Hafstad and Christian Roggeman, as sellers. Owens Corning will acquire the issued and outstanding shares of ParMur SRL, Modulo USA L.L.X., Modalis S.A. The Target Companies are part of a group of companies that specialize in the design, manufacture and marketing of various types of manufactured stone veneer in France and Romania, as well as in other foreign countries, principally Italy, Germany, Spain, Scandinavia and Japan. The purchase of the Target Companies is in line with the Debtors' strategic plans to expand the geographic reach of their cultured stone business to become the market share leader, not only in the United States and Canada, but also in Europe and the Asia Pacific market by 2010, MaryJo Bellew, Esq., at Saul Ewing LLP, in Wilmington, Delaware, says. The Debtors provide a summary of the Group's corporate structure: A. Modalis Holdings, a holding company organized under the laws of the state of Delaware, holds 95% of the shares of Modalis S.A. Modalis Holdings is wholly owned by Valhall Investment Management LLC, which is in turn wholly owned by Einar Hafstad. B. Modalis S.A., a holding company organized under the laws of France, holds 100% of the shares of Modulo S.A. Mr. Roggeman owns 5% of Modalis S.A. C. Modulo S.A., an operating company organized under the laws of France, carries out production, marketing and distribution in France and other countries. D. ParMur SRL, an operating company organized under the laws of Romania, carries out manufacturing and sales activities in Romania and other foreign countries. Mr. Hafstad directly owns 95% of ParMur SRL, while the balance is owned by Mr. Roggeman. E. Modulo USA L.L.C. is organized under the laws of the state of Delaware. It has offices located in Maple Grove, Minnesota, and distributes the Group's products within North and South America. Modulo USA L.L.C. is wholly owned by Mr. Hafstad. F. Mr. Hafstad is the president and chairman of the Board of Directors of Modalis S.A. and Modulo S.A., and is the president of Modulo USA L.L.C. Mr. Hafstad controls 95% of ParMur SRL and Modalis S.A., and 100% of the other companies in the Group. G. Mr. Roggeman is the chief operating officer of Modulo S.A. and holds a 5% interest in ParMur SRL and a 5% interest in Modalis S.A. In sum, Modalis Holdings, Messrs. Hafstad and Roggeman own or control 100% of ParMur SRL, Modulo USA L.L.C. and Modalis S.A. The principal terms of the Purchase Agreement are: a. Owens Corning or its designee will pay EUR25,500,000 for the Shares, subject to certain increases or decreases, which will not exceed EUR4,700,000, to the extent there is an excess or shortfall between the "closing net assets" and the "target net assets" as of the closing date. If Modulo S.A. completes its acquisition of the full title to a building in Bray-sur-Seine, France, prior to closing, then, at closing, Owens Corning will: * pay EUR20,800,000 directly to the Sellers; and * deposit EUR4,700,000 into an escrow account to be reserved as a holdback to secure any shortfall in the "target net assets" and any claims for indemnification under the Share Purchase Agreement. If the Bray Acquisition is not completed prior to closing, then, at closing, Owens Corning will: * pay EUR20,000,000 directly to the Sellers; and * deposit the Holdback Amount into an escrow account, plus an additional EUR800,000 to secure payment of the estimated loss if the Bray Acquisition is not completed before the first anniversary of the closing date . b. The Sellers are bound by certain non-competition provisions for a period of three years after the closing and by certain confidentiality provisions. c. Prior to closing, Einar Hafstad will transfer: * his "community trademark rights" in the trademarks "ParMur" and "Madrague" to ParMur SRL; * his "community trademark rights" and French trademark rights in the trademark "Cote Mur" to ParMur SRL; and * any other intellectual property rights used by the Target Companies or Modulo S.A., or related to the business of these companies, to the relevant company. d. For a period of six months from the closing date, Einar Hafstad and Christelle Hafstad will make themselves available to the Target Companies and Modulo S.A., for up to 10 hours per month, to answer questions and provide information in connection with various accounting procedures. e. On or before the closing date, the Sellers will: * repay or cause the repayment to each of the Target Companies and Modulo S.A. any debt owed to that company by the Sellers or any related person, including interest; * terminate or cause the termination of all contracts between any Seller or any Related Person, on the one hand, and any of the Target Companies or Modulo S.A., on the other hand, without any penalty or liability to any of the companies, with certain exceptions; and * obtain the full release of all past, present or future guarantor obligations of any of the Target Companies or Modulo S.A. that benefit any Seller or Related Person. f. The Sellers will take, or cause Modulo S.A. to take, all actions required to legally liquidate Modulo Dekorative Steine GmbH, a subsidiary of Modulo S.A., prior to closing, without any liability to the Group. g. The Parties' obligations to be performed on the closing date are conditioned on, among other things: * the entry by the Bankruptcy Court of a final order approving the Share Purchase Agreement; and * expiration or termination of the waiting period under the Merger Notification, as required under German law, or the transaction having been approved by the relevant governmental authority. h. Owens Corning's obligation to consummate the transactions contemplated by the Share Purchase Agreement is subject to fulfillment of these conditions: * Owens Corning engaging in continued customer due diligence; * each Seller, each Target Company and Modulo S.A. performing each covenant or condition set forth in the Share Purchase Agreement; and * Mr. Roggeman and Mihai Gavris, key employees of the Target Companies, each entering into a new, indefinite term employment contract on terms reasonably acceptable to Owens Corning. i. Subject to certain conditions, the Sellers will indemnify Owens Corning from any damages suffered by the Target Companies, Modulo S.A. or Owens Corning as a result of any: * inaccuracy or breach of any representations and warranties in the Share Purchase Agreement; * breach of the covenants set forth in the Share Purchase Agreement; or * tax liability relating to any period closed on or prior to December 31, 2005, and any liability for environmental matters related to events occurring or circumstances existing on or prior to the closing date. Owens Corning will indemnify the Sellers from any damages suffered by the Sellers as a result of any breach of the representations and warranties set forth in the Share Purchase Agreement. j. The Share Purchase Agreement is to be governed by French law. Any dispute that arises in connection with the Share Purchase Agreement will be finally settled by an arbitral panel as described in the Share Purchase Agreement. A full-text copy of the Share Purchase Agreement is available for free at http://ResearchArchives.com/t/s?ee4 Owens Corning will deposit EUR4,700,000 of the Purchase Price, designated as the "Holdback Amount", into an escrow account on the closing date to secure the payment by the Sellers of any amounts that become due under the Share Purchase Agreement, with: -- the EUR1,000,000 designated as the "closing adjustment holdback" and will secure any shortfall between the "target net assets" and the "closing net assets"; and -- the EUR3,700,000 to secure indemnification payments due to Owens Corning in accordance with the Share Purchase Agreement. The Escrow Agreement generally contemplates that the escrowed funds will be used to satisfy claims by either Owens Corning or the Sellers relating to the final determination of the Purchase Price, or claims by Owens Coming relating to certain indemnification claims. The EUR1,000,000 will be released from the escrow agent upon the final determination of the Purchase Price, which will be approximately 120 days after closing. Eighteen months after the date of the Escrow Agreement, the escrow agent is to release to the Sellers' agent EUR2,775,000 of the escrowed funds, less any previous payment or amounts in dispute. The escrow agent is to release the remaining balance of the escrowed funds to the Sellers' agent 30 months after the date of closing, subject to certain conditions. In addition, if the Bray Acquisition is not completed prior to closing, the Bray Holdback also will be deposited into the escrow account at closing. In that circumstance, the Escrow Agreement will be modified prior to closing to reflect the Bray Holdback in this manner: -- If the Bray Acquisition is completed by the first anniversary of the closing date, the escrow agent will release the Bray Holdback, plus interest, to the Sellers within five business days of the Bray Acquisition. -- If the Bray Acquisition is not completed by the first anniversary of the closing date, the escrow agent will release the Bray Holdback to Owens Corning within five business days of the first anniversary of the closing date, provided that Modulo S.A. assigns any rights or claims it has to Einar Hafstad, subject to the consent of the lessor, for a consideration equal to the Bray Holdback. The Escrow Agreement will also be governed by the laws of France. About Modulo/ParMur The Modulo/ParMur Group, based in Bray-sur-Seine, France, designs, manufactures and markets manufactured stone veneer wall and floor products under the Modulo and ParMur brands. Modulo and ParMur are plaster-based interior wall and cement-based exterior wall- cladding products, which are distributed primarily through the Do- It-Yourself market in Europe. In addition to Bray-sur-Seine, the company operates two additional manufacturing sites in Forbach, France, and Turda, Romania. Modulo/ParMur has nearly 150 employees. Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 139; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) OWENS CORNING: Reorganized Company Registers New Common Stock ------------------------------------------------------------- Pursuant to the Sixth Amended Plan of Reorganization of Owens Corning and its debtor-affiliates, certain creditors will receive common stock, or rights to purchase common stock, of Owens Corning (Reorganized) Inc. Reorganized Owens Corning expects that some creditors may sell some or all of the securities they will receive. Reorganized Owens Corning filed a registration statement on Form S-1 with the Securities and Exchange Commission to register its new common stock, at $0.01 par value per share, which may be offered for sale from time to time by the shareholders. For purposes of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, Reorganized Owens Corning estimates the maximum aggregate offering price of the new stock at $3,843,000,000. Since Reorganized Owens Corning will seek to have the registration statement become effective concurrently with the effectiveness of the Sixth Amended Plan, the registration statement is drafted in many respects as though the restructuring has already taken place, David T. Brown, Chief Executive Officer of Reorganized Owens Corning, says. A full-text copy of Reorganized Owens Corning's Registration Statement filed with the SEC is available at no charge at: http://researcharchives.com/t/s?10c0 Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 139; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PARMALAT USA: Enrico Bondi, et al., Want Injunction Imposed ----------------------------------------------------------- Dr. Enrico Bondi, in his capacity as Extraordinary Administrator of the Foreign Debtors; the Foreign Debtors; and Reorganized Parmalat inform the U.S. District Court for the Southern District of New York that they will take an appeal from the District Court order permitting plaintiffs in the securities fraud action to name Reorganized Parmalat as defendant. The Appellants will ask the U.S. Court of Appeals for the Second Circuit to review the District Court's order, dated July 26, 2006, insofar as the order: -- modified or dissolved the injunctive relief that had been granted pursuant to Section 304 of the Bankruptcy Code; or -- denied injunctive relief pursuant to Section 304. In July 2006, the District Court allowed class plaintiffs of the "Parmalat Securities Litigation" to file a third amended complaint, which includes [the new] Parmalat SpA among the defendants. Said class action is pending in the District Court. Other defendants in the class action are Deloitte & Touche (and, as an individual, Mr. James Copeland), Grant Thornton, Citigroup (including Buconero, Vialattea, Eureka Securitization), Bank of America, Credit Suisse, Banca Nazionale del Lavoro, Banca Intesa, Morgan Stanley, the law offices of Pavia Ansaldo and of Zini Associates, and number of individuals. The defendants were allowed to conduct discovery with respect to the class certification until Sept. 21, 2006. A full-text copy of the District Court Order is available for free at http://researcharchives.com/t/s?f6c About Parmalat Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000, http://bankrupt.com/newsstand/) PARMALAT USA: Administrator Sues BofA Corp. et al. for Collusion ---------------------------------------------------------------- G. Peter Pappas, administrator of Parmalat USA Corp.'s Plan of Liquidation, filed in April 2006 a lawsuit before the U.S. District Court for the Southern District of New York against: * Bank of America Corporation; * Bank of America, N.A.; * Bank of America National Trust & Savings Association; * Banc of America Securities LLC; * Banc of America Securities Limited; * BankAmerica International Limited; * Grant Thornton International; * Grant Thornton, LLP; * Italaudit SpA, In Liquidizacione; * Deloitte & Touche USA, LLP; * Deloitte & Touche, LLP; * Deloitte & Touche, SpA; * Deloitte Touche Tohmatsu; * Credit Suisse; * Credit Suisse International; * Credit Suisse Securities (Europe) Limited; and * Banca Nazionale del Lavoro, SpA Mr. Pappas delivered to the District Court an amended complaint in July 2006. A full-text copy of the 340-page Amended Complaint is available at no charge at: http://researcharchives.com/t/s?10c5 Mr. Pappas asserts claims against the banks and auditors for helping Parmalat insiders artificially inflate the company and its subsidiaries' financial health. According to Mr. Pappas, the conspiracy allowed the insiders to hide substantial operating losses for over a decade, misstate Parmalat's debt by nearly $10 billion, and misstate total net assets by $16.4 billion. Mr. Pappas tells Judge Kaplan that Parmalat USA was a victim of the fraudulent scheme. From 1999 through 2003, Parmalat USA accumulated substantial and material debt -- eventually reaching in excess of $20,000,000 at the time of Parmalat USA's bankruptcy filing -- to certain banks. But for the false portrayal of Parmalat as a thriving, financially sound company, which each of the Defendants aided and abetted, Mr. Pappas says, Parmalat USA would not have or could not have incurred tens of millions of dollars of debt which it could not repay on its own and which drove it deeper into insolvency. The Plan Administrator seeks unspecified damages on account of his claims for aiding and abetting, breach of fiduciary duty, and civil conspiracy. According to Mr. Pappas, Bank of America structured transactions that allowed for the manipulation and falsification of Parmalat's financial statements, and sold more than $1 billion of Parmalat's private placements to U.S. investors based on what Bank of America knew were materially false and misleading statements about Parmalat. To sell the Parmalat securities in the U.S., Bank of America representatives arranged "road show" meetings with major U.S. institutional investors during which Bank of America representatives, together with culpable Parmalat insiders, distributed false and misleading information about Parmalat that was reviewed and approved by Bank of America. Bank of America also helped disguise loans as equity, thereby concealing Parmalat's disastrous financial condition. Mr. Pappas notes that, as Parmalat's culpable insiders have testified, far from providing mere banking services, Bank of America conceived, proposed, and carried out numerous deceptive transactions in concert with the insiders that generated enormous commissions, concealed Parmalat's mounting debt and which caused Parmalat's financial statements to be misstated. The Parmalat insiders could not have concealed the fraud absent the active participation of the Grant Thornton entities, Mr. Pappas asserts. Among others, Mr. Pappas relates that Grant Thornton had direct knowledge of the role of the offshore entities used to allow Parmalat to conceal the ever-growing debt generated from its fraudulent sales. In 1999, under Italian law, Parmalat was forced to retain Deloitte & Touche as new auditor. However, Grant Thornton continued to manage and conceal the true financial status of offshore entities when Deloitte took over. Mr. Pappas says that Deloitte certified the financial statements of Parmalat USA that materially overstated assets from 2000 through 2002, and failed to report, despite knowledge to the contrary, that Parmalat USA was not a going concern. Deloitte also knew that Parmalat USA's ability to continue as a going concern depended upon the ongoing financial support of Parmalat SpA and, therefore, Deloitte was required by generally accepted auditing standards to inquire into the financial condition of Parmalat SpA. According to Mr. Pappas, the Deloitte entities negligently, recklessly, or fraudulently combined to prepare the component parts that were then consolidated into Parmalat SpA's certified financial statements to perpetuate the fraud. The Credit Suisse Defendants, Mr. Pappas continues, joined the conspiracy by helping to hide Parmalat's growing debt. The Credit Suisse Entities acted as an underwriter for Parmalat securities and directly participated in a complex financial transaction with Parmalat -- through Parmalat Brasil -- which was designed to artificially inflate Parmalat's assets, while appearing to provide Parmalat with financing through the issuance of bonds by Parmalat Brasil. Banca Nazionale del Lavoro participated in the factoring scheme whereby Parmalat's culpable insiders used previously paid invoices to raise additional capital. About Parmalat Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. (Parmalat Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000, http://bankrupt.com/newsstand/) PLATFORM LEARNING: Wants to Use Cash Collateral Until Sept. 15 -------------------------------------------------------------- Platform Learning Inc. asks the U.S. Bankruptcy Court for the Southern District of New York for authority to renew access to the cash collateral securing its obligations to Silicon Valley Bank until Sept. 15, 2006. The Debtor proposes to use the Cash Collateral based on this five- week budget: http://researcharchives.com/t/s?10c1 Silicon Valley and subordinated creditors Capital Resource Partners V, L.P., Stichting Pensioenfonds ABP, and Stichting Pensioenfonds Voor de Gezondheid, Geestelijke En Maatschappelijke Belangen consented to the Debtor's continued use of the cash collateral pursuant to the Court's July 21, 2006 final order. The Final Order terminated the Debtor's access to the cash collateral on Aug. 25, 2006. The Debtor tells the Court that it would be unable to continue its business without continued use of the Cash Collateral. About Platform Learning Based in Broad Street, New York, Platform Learning Inc. -- http://www.platformlearning.com/-- provides supplemental educational services through its Learn-to-Succeed tutoring program to students attending public schools. The Company filed for chapter 11 protection on June 21, 2006 (Bankr. S.D.N.Y. Case No. 06-11391). David M. Bass, Esq., and Eric W. Sleeper, Esq., at Herrick Feinstein LLP represent the Debtor in its restructuring efforts. Edward Joseph LoBello, Esq., at Blank Rome LLP represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $21,026,148, and total debts of $36,933,490. PLIANT CORPORATION: Reports Second Quarter Financial Results ------------------------------------------------------------ Pliant Corp's second quarter sales were $289 million. This represents a $30 million increase over the second quarter of 2005 -- an 11.5% increase. The company grew sales in each of its operating units -- Engineered Films, Industrial Films and the Specialty Products Group. The company grew sales in each geography -- US, Canada, Mexico, Germany and Australia. Included in this sales growth was a 3.9% increase in volume, measured in pounds. Sales in the first half were a record at $587 million. This represents a 12.4% increase over the first half of 2005. Every division of the company reported increased sales. Included in this sales growth was a 2.6% increase in volume, measured in pounds. EBITDA(R) Continues to Improve Second quarter EBITDA(R) was $26.8 million. This represents a 6.5% increase over the second quarter of 2005. This is also a sequential increase of 11.5% versus the 1st quarter of 2006. The company remains focused on increasing EBITDA(R) via accretive sales growth, lean business practices, cost reduction and innovation programs. EBITDA(R) is defined as EBITDA with the company's restructuring expenses added back. During the second quarter of 2006, these restructuring expenses were mostly legal fees and financial advisor fees. EBITDA(R) in the first half was $50.9 million. This represents an 8.4% increase over the first half of 2005. Pliant Reduces Debt and Strengthens Balance Sheet The company implemented its financial restructuring program on schedule and emerged from Chapter 11 on July 18, 2006. The centerpiece of the restructuring was a debt-for-equity swap which significantly reduced its debt, eliminated its mandatorily redeemable preferred stock, substantially reduced its interest expenses and improved its credit statistics. This better positions the company to more actively pursue its objectives. Operational Performance Continues to Improve The company's continuous improvement programs in its plants advanced again in the 2nd quarter of 2006. Gross waste was 9.2% versus 10.5% in the second quarter of 2005. This calculation is the inverse of first pass yield and reductions in this number free up capacity and lower conversion costs. Net waste was 4.0% versus 5.7% in the second quarter of 2005. This is the amount of resin that can not be reused back into the company's film-making operations. Reductions in this number translate into higher EBITDA(R) and lower the company's resin purchase requirements. The company has a long-term goal to have net waste rates that approach zero. Innovation & Marketing Programs Advanced Pliant continued its focus on innovation programs in the 2nd quarter of 2006. Pliant's Sales, Marketing and Technical groups are working together to strike the right balance to drive focused applications for our customers, drive new growth programs for our Marquee Accounts and leverage our R&D resources to develop product and service offerings. With over 100 Technical and Marketing personnel working on innovation programs, Pliant is well positioned for growth now and in the future. Pliant was awarded 4 additional multi-year R&D contracts from the U.S. Government in the second quarter of 2006. The focus of the R&D on these new contracts is improved food shelf life, enhanced food quality, and securing the safety and well being of soldiers in the field. The contract year on these contracts is July 1 to June 30 and the first year value of these contracts is $6.5 million. These contracts contribute to Pliant's goal of being on the leading edge of packaging technology. Completed a Small Acquisition The company bought highly desirable select assets from a flexible packaging operation during the second quarter and is installing this equipment into its plants in Langley, British Columbia; Macedon, NY; Bloomington, Indiana; and Naucalpan, Mexico facilities. Key assets are: * 8-color press * 3-layer blown extrusion line * Bag machine, slitters, ancillary equipment The company has a balanced program to invest in cost reduction, accretive growth capacity and innovation projects. 2006 Full Year On Track The company has solid momentum and a balanced plan for the second half of the year. The company is reconfirming its guidance of $107 million of EBITDA(R) for the year of 2006. Harold Bevis, president and CEO of Pliant Corporation said, "We were pleased with our performance in the 2nd quarter and in the first half of 2006. We are very excited about our future with our new capital structure. We intend to be a consistent and balanced investor in our company, our customer relationships and our employees. This is a big breath of fresh air for us and will enable us to pursue our plans even more aggressively. We remain firmly committed to our strategically sound business plan built on sales growth, lean business practices, cost reduction and innovation." About Pliant Corp. Headquartered in Schaumburg, Illinois, Pliant Corporation -- http://www.pliantcorp.com/-- produces value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Debtor and 10 of its affiliates filed for chapter 11 protection on Jan. 3, 2006 (Bankr. D. Del. Lead Case No. 06-10001). James F. Conlan, Esq., at Sidley Austin LLP, and Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors tapped McMillan Binch Mendelsohn LLP, as their Canadian bankruptcy counsel. The Ontario Superior Court of Justice named RSM Richter, Inc., as the Debtors' information officer in their restructuring proceeding under Companies Creditors Arrangement Act in Canada. Kenneth A. Rosen, Esq., at Lowenstein Sandler, P.C., serves as counsel to the Official Committee of Unsecured Creditors. Don A. Beskrone, Esq., at Ashby & Geddes, P.A., is local counsel to the Creditors' Committee. As of Sept. 30, 2005, the company had $604,275,000 in total assets and $1,197,438,000 in total debts. The Debtors emerged from chapter 11 protection on July 19, 2006 (Pliant Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PORTRAIT CORP: Files Chapter 11 Petition in New York ---------------------------------------------------- Portrait Corp. of America Inc., filed a Chapter 11 bankruptcy petition with Southern District of New York in White Plains after reaching an agreement with some of its bondholders, Charlotte Business Journal reports. The bondholders started to negotiate with the Company last spring on steps to avoid liquidation. Those bondholders would become the Company's equity holders if Judge Adlai S. Hardin Jr. approved a proposed restructuring plan. According to Business Journal, the Company expects to eliminate 75% of its debt and $30 million in annual interest payments. The Company has experienced financial problems for some time, including default on some notes and unpaid bills to vendors. It lost $34.4 million in 2005 and $29.7 million in 2004. Portrait Corp. Chief Executive David Alexander, in an interview with Business Journal, said: "After several months of productive dialogue between our major creditors and our equity holders, we have achieved an agreement that will make PCA a much stronger company." Mr. Alexander added: "We enter restructuring in a unique position in that our key lenders are already on board with our plan." In June, the Company reported it has hired separate restructuring teams to advise it and the holders of about $165 million of its bond debt. Portrait Corporation of America, Inc., provides professional portrait photography products and services to children, adults and families in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The Company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Going Concern Doubt Eisner LLP raised substantial doubt about Portrait Corporation of America, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Jan. 29, 2006. The auditor pointed to the Company's substantial net loss, negative working capital, stockholders' deficiency, default of certain obligations, which were due on June 15, 2006 and insufficient liquidity to meet those obligations. PORTRAIT CORP: Case Summary & 29 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Portrait Corporation of America, Inc. fka PCA International, Inc. 815 Matthews-Mint Hill Road Matthews, NC 28105 Bankruptcy Case No.: 06-22541 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- American Studios, Inc. 06-22542 Hometown Threads LLC 06-22543 PCA Photo Corporation of Canada, Inc. 06-22544 PCA Finance Corp. 06-22545 PCA LLC 06-22546 PCA National LLC 06-22547 PCA National of Texas LP 06-22548 Photo Corporation of America, Inc. 06-22549 Type of Business: The Debtors' core business is in retail portrait photography. Their automated film laboratory processes more than 130 million portraits annually for more than seven million customers. The Debtors are the exclusive portrait providers for Wal-Mart stores, and operate studios in more than 3,000 Wal-Mart store locations in the United States, Canada, Germany, United Kingdom and Mexico. See http://pcaintl.com/ Chapter 11 Petition Date: August 31, 2006 Court: Southern District of New York (White Plains) Judge: Adlai S. Hardin Jr. Debtors' Counsel: John H. Bae, Esq. Cadwalader Wickersham & Taft LLP One World Financial Center New York, NY 10281 Tel: (212) 504-6013 Fax: (212) 504-6666 http://www.cadwalader.com/ Counsel for Debtors' Outside Directors: Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Tel: (212) 446-4800 Fax: (212) 446-4900 http://www.kirkland.com/ Debtors' Restructuring Accountants: Mesirow Financial Consulting, LLC 350 North Clark Street Chicago, IL 60610 Tel: (312) 595-6000 Fax: (312) 595-4246 https://www.mesirowfinancial.com/ Debtors' Financial Advisor and Investment Banker: Berenson & Company LLC 667 Madison Avenue New York, NY 10021 Tel: (212) 935-7676 Fax: (212) 935-1499 http://www.berensonco.com/ Debtors' Claims, Noticing and Balloting Agent: Bankruptcy Services LLC 757 Third Avenue 3rd Floor New York, NY 10017 Tel: (646) 282-2500 Fax: (646) 282-2501 http://www.bsillc.com Debtors' financial condition as of July 30, 2006: Total Assets: $153,205,000 Total Debts: $372,124,000 Debtors' Consolidated List of its 29 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Bank of New York Trust Indenture Trustee $165,000,000 Company, N.A. Corporate Trust - Default Administration Group 101 Barclay Street - 8W New York, NY 10286 c/o Stuart Kratter Tel: (212) 815-5466 Fax: (212) 815-5131 Goldman Sachs & Co. Noteholder $42,475,000 85 Broad Street New York, NY 10004 c/o Matt Brenner Tel: (212) 902-8184 Whippoorwill Associates, Inc. Trade $22,782,655 Assignee of AgfaPhoto USA Corp. 11 Martine Avenue, 11th Floor White Plains, NY 10004 c/o Steven Gendal Tel: (914) 683-1002 Wal-Mart Stores, Inc. Rent/Royalty $5,078,952 702 Southwest 8th Street Bentonville, AR 72716 c/o Michael Li Tel: (479) 204-6574 Callisto Corporation Trade $681,291 182 West Central Street Suite 101 Natick, MA 01760 c/o Mike Barta Tel: (508) 655-3311 Fax: (508) 650-4626 PBM Graphics, Inc. Trade $429,871 3700 Miami Boulevard Durham, NC 27703 c/o Gary Pegram Tel: (919) 595-7611 Fax: (919) 595-7929 Travelers Indemnity Company Trade $413,664 P.O. Box 91287 Chicago, IL 60693-1287 c/o Brian Tanasi Tel: (860) 277-7932 Walsworth Publishing co. Trade $388,041 P.O. Box 412034 Kansas City, MO 64141-2034 c/o Rich Bond Tel: (866) 369-2646 Fax: (660) 376-3269 Eisner LLP Trade $355,000 750 Third Avenue New York NY 10017-2703 c/o Nicholas Tsafos Tel: (212) 891-4128 National Print Group Inc. Trade $334,427 P.O. Box 116424 Atlanta, GA 30368-6424 c/o Phillip L. Harris Tel: (423) 648-8803 Fax: (800) 624-0408 Photo Control Corp. Trade $280,483 4800 Quebec Avenue Minneapolis, MN 55428 c/o Doug Waldoch Tel: (763) 537-3601 Fax: (763) 537-2852 Global Crossing Telecom. Trade $225,724 Strategic Flooring Services Trade $168,656 Datamail Inc. Trade $156,073 Carolina Envelope Trade $137,645 Sony Electronics/B&P Trade $136,600 Dell Corporation Trade $117,412 Reliance Deductible Recovery Trade $114,098 Lee Wayne Corp. Trade $110,243 Denny Manufacturing Co., Inc. Trade $107,986 Robinson, Bradshaw & Hinson PA Trade $107,311 Dell Financial Services Inc. Trade $92,493 IBM Corporation Trade $89,715 C.L. Rabb, Inc. Trade $89,189 VAResources, Inc. Trade $88,810 Sunbelt Trade $83,369 Granite Trade $82,854 J L & S Woodworking Inc. Trade $82,132 Amglo Kemlite Trade $73,403 R&G FINANCIAL: Hires Andres I. Perez as Chief Financial Officer --------------------------------------------------------------- R&G Financial Corporation entered into an employment agreement with Andres I. Perez where, effective Oct. 1, 2006. Mr. Perez will serve as executive vice president until Nov. 1, 2006, after which he will assume the additional title of chief financial officer. Vicente Gregorio, presently an executive vice president and chief financial officer, will relinquish his chief financial officer role on Oct. 31, 2006, but will continue as executive vice president, assisting in the transition as requested by management and the board of directors, until Dec. 31, 2006. Mr. Perez has served as a Partner of KPMG LLP since 1998, most recently as Audit Partner in the South Florida Business Unit and industry sector leader of the Financial Services Practice, from which he worked in Miami and Puerto Rico. Previously, Mr. Perez served in various positions, including as a Senior Manager in KPMG LLP's U.S. Capital Markets Group in London, England and its Professional Practice Department in New York, New York. The Company noted that KPMG is one of the Company's consultants in its restatement process, and that Mr. Perez has had a very active involvement working with the Company on its restatement project. Mr. Perez is a Certified Public Accountant who is licensed in Puerto Rico and Florida and he received a Bachelor of Business Administration with distinction from Babson College. He is a member of the Puerto Rico College of Certified Public Accountants and the American Institute of Certified Public Accountants. Restatement of Financial Statements The Company disclosed that it is in the process of preparing restated consolidated financial statements for the years ended Dec. 31, 2002 through 2004 and anticipates finishing its work in the middle of the fourth quarter of 2006. The Company also will be concurrently working on its Annual Report on Form 10-K for the year ended December 31, 2005. The Company expects that if it fails to file its 2005 10-K, in satisfaction of the filing requirements of the New York Stock Exchange, its Common Stock will be de-listed by the Exchange. The Company intends to request an extension of the reports' filing dates. The Company also disclosed that it currently believes that the aggregate reductions required to its stockholders' equity are between $168 million and $183 million after taxes, of which $95 million relates to the adjustments for residual retained interests. Lifting of Memorandum of Understanding The Company further disclosed that it had been informed by the Federal Deposit Insurance Corporation that, based upon improved controls and procedures implemented by Premier Bank, the Memorandum of Understanding, dated Dec. 16, 2004, entered into between Premier Bank and the FDIC with respect to alleged violations of the Bank Secrecy Act, had been terminated. About R&G Financial Corporation Headquartered in Hato Rey, Puerto Rico, R&G Financial Corporation (NYSE: RGF) -- http://www.rgonline.com/-- is a diversified financial holding company with operations in Puerto Rico and the United States, providing banking, mortgage banking, investments, consumer finance and insurance through its wholly owned subsidiaries, R-G Premier Bank, R-G Crown Bank, R&G Mortgage Corporation, Puerto Rico's second largest mortgage banker, R-G Investments Corporation, the Company's Puerto Rico broker-dealer, and R-G Insurance Corporation, its Puerto Rico insurance agency. At June 30, 2006 the Company operated 37 bank branches in Puerto Rico, 35 bank branches in the Orlando, Tampa/St. Petersburg and Jacksonville, Florida and Augusta, Georgia markets, and 49 mortgage offices in Puerto Rico, including 37 facilities located within R-G Premier Bank's banking branches. * * * As reported by the Troubled Company Reporter on March 22, 2006, Fitch Ratings keeps R&G Financial Corporation's BB Preferred Stock rating on Negative Watch. RADIOSHACK CORP: Lays Off 400 Workers to Reduce Costs ----------------------------------------------------- RadioShack Corp. recently laid off around 400 workers via electronic messages, The Boston Globe reports. Due to certain negative trends in its business, the Company disclosed early this year a turnaround program with these goals: -- increase the average unit volume of RadioShack company- operated store base; -- rationalize cost structure; and -- grow profitable square footage in its store portfolio. The Company's turnaround program has two fundamental work streams: -- eliminating assets and activities which earn poor returns, distract from efforts to improve core RadioShack stores, or offer limited growth prospects going forward; and -- investing in assets and activities which have the opposite characteristics of those that it will eliminating. The Company is replacing slower-moving merchandise with new, faster-moving merchandise. During the fourth quarter of 2005 and the first quarter of 2006, the Company identified underperforming inventory for replacement and are liquidating these items. It is using the space freed up through this liquidation for other merchandise. The Company is also concentrating its efforts and investments on improving top-performing stores. To do so, as of July 31, 2006, it has identified and closed approximately 480 of RadioShack company-owned stores, based on criteria such as weak financial performance, poor real estate, subpar brand representation, and high likelihood to transfer sales to other RadioShack stores. The Company's decision to close these stores was made on a store- by-store basis, and there is no geographic concentration of closings for these stores. In addition, the Company will close two distribution centers in Charleston, South Carolina, and Southaven, Mississippi, and has closed or sold five service centers. The Company is reviewing overhead expenses to identify potential sources of cost reduction and to focus its resources. About RadioShack Fort Worth, Texas-based RadioShack Corporation -- http://www.RadioShackCorporation.com/-- is a consumer electronics specialty retailers and a growing provider of retail support services. The company operates a network of sales channels, including: more than 6,000 company and dealer stores; more than 100 RadioShack locations in Mexico and Canada; and nearly 800 wireless kiosks. * * * As reported in the Troubled Company Reporter on Aug. 25, 2006, Fitch Ratings downgraded these ratings for RadioShack Corporation: -- Issuer Default Rating to 'BB+' from 'BBB' -- Bank credit facility to 'BB+' from 'BBB' -- Senior unsecured notes to 'BB+' from 'BBB' -- Commercial paper to 'B' from 'F2' The Rating Outlook is Stable. REAL ESTATE: Has Until Sept. 13 to File Schedules & Statements -------------------------------------------------------------- The Hon. Mary P. Gorman of the U.S. Bankruptcy Court for the Central District of Illinois gave Real Estate Investors of Decatur until Sept. 13, 2006, to file its schedules of assets and liabilities and statements of financial affairs. The Court had required the Debtor to file missing documents and other information on or before Aug. 24, 2006. However, the Debtor asked for an extension saying it needed more time to file the required documents due to the complexity of its case. The Debtor said that it had been unable to submit the documents because it had devoted substantial time towards crafting a consensual resolution with its creditors. Headquartered in Decatur, Illinois, Real Estate Investors of Decatur, LLC, own four hotel in Illinois. The Company filed for chapter 11 protection on Aug. 9, 2006 (Bankr. C.D. Ill. Case No. 06-71033). John Barr, Esq., at Barr & Barr represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. REFCO INC: Chap. 7 Trustee Objects to West Loop's $10.6 Mil. Claim ------------------------------------------------------------------ Albert Togut, the Chapter 7 trustee overseeing the liquidation of Refco, LLC's estate, asks the United States Bankruptcy Court for the Southern District of New York to disallow and expunge Claim No. 269 filed by West Loop Associates, Inc., for $10,618,777. Mr. Togut contends that the Claim arises from a commercial office lease to which Refco LLC was never a party. The West Loop Claim lacks any legal or factual basis for Refco LLC's estate to be liable to West Loop. Mr. Togut explains that Refco Group Ltd., LLC and West Loop's predecessor-in-interest, 550 Jackson Associates Limited Liability Company, were parties to the lease dated as of April 24, 2001, for certain office space located at 550 West Jackson Boulevard in Chicago, Illinois. RGL rejected the Lease, effective Aug. 15, 2006. Refco LLC, Mr. Togut says, is merely a tenant under the RGL Lease. Refco Inc., and its debtor-affiliates sought extension of their deadline to make lease dispositions, West Loop objected and, among other things, represented to the Court that Refco LLC was an "additional lessee" on the RGL Lease because (i) second floor expansion rights were exercised pursuant to a writing executed by Refco LLC in April 2004; and (ii) Refco LLC entered into agreements with contractors to improve the space it was occupying. However, Mr. Togut tells Judge Drain that the Expansion Letter was erroneously printed on Refco LLC letterhead. Moreover, West Loop expressly acknowledged in a third amendment to the RGL Lease that RGL -- and not Refco LLC -- previously exercised its right to take additional space on the second floor. In support of its claim, West Loop: -- contends that Refco LLC "assumed" RGL's obligations under the RGL Lease; -- alleges that it incurred costs as a result of contractors' filing mechanics liens against the Premises and that Refco LLC is liable for the mechanics liens under the Bankruptcy Code; and -- makes an unsubstantiated and generalized allegation that Refco LLC has committed some sort of fraud. Mr. Togut points out that the RGL Lease clearly provides that RGL affiliates were permitted to occupy the Premises without incurring any direct liability under the Lease. Moreover, RGL, as tenant, is liable for costs incurred by the Landlord as a result of mechanic liens but that liability does not extend to RGL's affiliates. Mr. Togut also notes that West Loop's mechanics lien claims have been resolved consensually. The Refco LLC Trustee was able to broker an agreement with RGL and West Loop wherein RGL paid almost $750,000 to the holders of the mechanics liens to satisfy their claims and have the liens against the Premises removed. The Trustee agreed to reimburse RGL's estate for the payments made. West Loop received a release from liability from the contractors on account of those mechanics lien claims, Mr. Togut says. West Loop's allegation that Refco LLC committed fraud is a naked allegation, Mr. Togut tells the Court. Mr. Togut says he is unaware of the basis for West Loop's contention as it is a non- specific allegation without any evidence. Under Illinois law, as elsewhere, fraud must be pled with particularity and contain specific factual allegations, Mr. Togut reminds the Court, citing Board of Education v. A, C and S, Inc., et al., 131 Ill.2d 428, 137 Ill. Dec. 635, 546 N.E.2d 580 (Ill. Sup. Ct. 1989). Mr. Togut also asserts that West Loop's general averment of fraud does not satisfy the pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure and, therefore, must be rejected. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Chapter 7 Trustee Says Goodman's Claim Has No Merit -------------------------------------------------------------- Before Refco Inc., and its debtor-affiliates filed for bankruptcy, Richard Goodman filed a complaint against Refco, LLC, and Refco Group, Ltd., LLC, in the U.S. District Court for the Eastern District of Michigan. The Complaint sought to recover from the Chapter 7 Debtor $40,000,100: -- $35,000,000 for punitive damages that Mr. Goodman allegedly incurred as a result of his participation in a failed "Ponzi" scheme orchestrated by Charles Mady; and -- $5,100,000 for compensatory damages. Under the Complaint, Mr. Goodman asserted claims against Refco LLC for: * negligence, fraud, conspiracy, and aiding and abetting; * fraud, aiding and abetting under the Commodity Exchange Act; * violations of the Racketeer Influenced and Corrupt Organizations Act; * liability on certain accounts; and * vicarious liability. Vincent E. Lazar, Esq., at Jenner & Block LLP, in New York, relates that those claims -- collectively known as Claim No. 160 -- all share the same purported factual predicate: that the Debtor was complicit in a fraud perpetrated by Mr. Mady, and it somehow breached a duty of care allegedly owed to Mr. Goodman. Mr. Lazar asserts that Claim No. 160 is without merit. He tells Judge Drain that Mr. Goodman was not a customer of Refco LLC or Lind-Waldock & Company. Instead, Mr. Goodman voluntarily invested millions of dollars with his friend and business partner, Mr. Mady, who misrepresented himself to Mr. Goodman and others as a commodity pool operator. In reality, Mr. Mady was never registered as a commodity pool operator, and instead commingled the money from Mr. Goodman and other investors in Mr. Mady's personal accounts at Lind-Waldock, and provided Mr. Goodman and the other investors with false information regarding the status of their investments. After the scheme was exposed, Mr. Lazar continues, the Commodity Futures Trading Commission brought an action against Mr. Mady, charging him under the CEA with fraud, misappropriation, failure to register as a commodity pool operator, and improperly commingling funds. Mr. Mady has since been indicted. Against this backdrop, Albert Togut, the Court-appointed trustee overseeing Refco, LLC's liquidation, asks Judge Drain disallow and expunge, in its entirety, Mr. Goodman's Claim No. 160 because the Debtor was not in any way responsible for, or complicit in, the Ponzi scheme. Mr. Togut asserts that any alleged claims that Mr. Goodman may have as a result of his investment losses lies against Mr. Mady, and not against Refco LLC. To the extent Mr. Goodman contests the Objection, Mr. Togut asks the Court to establish a briefing, and, if necessary, a discovery schedule at a later date. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported $16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). (Refco Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) RIVERSTONE NETWORKS: U.S. Trustee Wants Ch. 11 Trustee Appointed ---------------------------------------------------------------- The Office of the U.S. Trustee for Region 3 has asked the U.S. Bankruptcy Court for the District of Delaware to appoint a Chapter 11 Trustee to take over Riverstone Networks, Inc.'s management, the Associated Press reports. Federal bankruptcy regulators believe that there has been fraud, dishonesty or criminal conduct in the management of the former Riverstone Networks. However, The Associated Press says that court documents filed by the arm of the Justice Department overseeing bankruptcies is not clear on whether the alleged fraud occurred prior to or after the Debtor's chapter 11 filing in February. The bankruptcy overseers also want the Debtor's corporate leaders to reveal details of the suspected misconduct, which are allegedly outlined in a secret report. Noah Mesel, the Debtor's general counsel resigned last week as the Company's post-interim president after Board members reviewed the secret report. Mr. Mesel is suspected of destroying evidence, including a computer's hard drive, according to documents filed by lawyers for shareholders in the bankruptcy case. Jerome Birn, Esq., Mr. Mesel's attorney, said his client would be filing a response to the U.S. Trustee's papers. The Court will convene a hearing on Sept. 7, 2006, to consider the U.S. Trustee's request for the appointment of a Chapter 11 Trustee. 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. SAINT VINCENTS: Has Until October 20 to File Reorganization Plan ---------------------------------------------------------------- The Honorable Adlai S. Hardin of the U.S. Bankruptcy Court for the Southern District of New York extends the periods within which Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates have the exclusive right to: * file a plan of reorganization through and including October 20, 2006; and * solicit acceptances of that plan through and including January 16, 2007. The extensions of the Exclusive Periods will automatically be extended for an additional 30 days if the Official Committee of Unsecured Creditors and the Debtors file a certification stating that certain conditions to further extend the Exclusive Periods have been satisfied. Judge Hardin rules that the extensions of the Exclusive Periods are without prejudice to any future requests by the Debtors or any party-in-interest. Any objection not otherwise settled, resolved, or withdrawn is overruled, Judge Hardin says. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 33 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAINT VINCENTS: Taps Massey Knakal Realty as Broker --------------------------------------------------- Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates have determined to dispose of certain parcels of real property that are unlikely to be a part of their reorganized structure. To maximize the value to be received, the Debtors require the services of an experienced real estate broker. The Debtors seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Massey Knakal Realty Services as their real estate brokers to assist in the disposition of marketed and potential properties pursuant to the terms of a brokerage agreement. Guy Sansone, chief executive officer and chief restructuring officer of Saint Vincent's Catholic Medical Centers, relates that Massey Knakal is well-qualified to find a buyer for the Properties in the most efficient and cost-effective manner because it has extensive experience with the real estate aspects of Chapter 11 cases, expertise in New York City real estate, and familiarity with the Debtors' businesses and real property. As broker for the Debtors, Massey Knakal will: * sell, net lease, or dispose of all or any portion of the Debtors' Properties at the Debtors' direction; * review all inquiries, proposals and offers received by the Debtors regarding the Properties; and * conduct all negotiations with respect to the sale, net leasing or other disposition of the Properties. Massey Knakal will be paid a commission of: -- 4% of the gross sales price for Properties with a gross sales price of $1,000,000 or less, if the firm is the only broker, or 5% if there is a co-broker; -- 3% of the gross sales price for Properties with a gross sales price between $1,000,000 and $10,000,000, if it is the only broker, or 4% if there is a co-broker; and -- 3% of the gross sales price for the St. Mary's Property, whether or not there is a co-broker. The Debtors ask the Court to allow Massey Knakal's Commission in lieu of periodic fee applications. The parties' Brokerage Agreement is effective until September 15, 2006, and will continue until a party gives a 20-day written notice of cancellation. Unless the termination is for cause, the Debtors will pay Massey Knakal's commission, if within 90 days after the termination of the Brokerage Agreement the Debtors will have: (a) secured a sale, net lease, or other disposition of a Property to a person or entity with whom Massey Knakal had engaged in active negotiations; or (b) entered into negotiations for the sale, net lease or other disposition of a Property, and will consummate the transaction with a designated purchaser. Timothy D. King, chief operating officer of Massey Knakal, assures the Court that his firm and all of its employees are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. Neither Massey Knakal nor any of its professionals holds any interest materially adverse to the Debtors' estate, according to Mr. King. Mr. King further relates that Massey Knakal has disclosed possible relationships with parties-in-interest in the Debtors' Chapter 11 cases. Wyckoff Heights Medical Center is permitted to retain Massey Knakal to broker various pieces of property to be transferred by the Debtors to Wyckoff. Massey Knakal has agreed to terminate all prior agreements with the Debtors, and forever release the Debtors from any claims related to Parsons Manor in Queens. Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 33 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SALLY WRIGHT: Case Summary & 14 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Sally Jean Lewis-Wright dba Lewis Rental Properties 1140 Nichols Lane Adams, TN 37010 Bankruptcy Case No.: 06-04739 Chapter 11 Petition Date: August 30, 2006 Court: Middle District of Tennessee - Nashville Judge: George C. Paine II Debtor's Counsel: Robert James Gonzales, Esq. Tara Lesley Kraemer, Esq. MGLAW PLLC 2525 West End Avenue, Suite 1475 Nashville, TN 37203 Tel: (615) 846-8000 Fax: (615) 846-9000 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 14 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dodson Parker & Behm $15,000 Donald Capparella P.O. Box 198806 Nashville, TN 37219-8806 Chase Visa $13,225 P.O. Bo 15298 Wilmington, DE 19850-5298 Bank of America $10,026 P.O. Box 1516 Newark, NJ 07101-1516 Farmers & Merchants Bank $10,000 322 Main Street Clarksville, TN 37040 Buddi Lewis Sueiro-Dean $9,874 1160 Nichols Lane Adams, TN 37010 Chase Mastercard $7,115 Sears Mastercard $6,062 Citi Premier Card $9,930 Discover Platinum $5,430 Lowes Business Account $2,370 Home Depot $2,176 Johnstone Supply $2,071 Orgain Building Supply $524 Hardware City $429 SIMON WORLDWIDE: Equity Deficit Triples to $2.59MM at June 30 ------------------------------------------------------------- Simon Worldwide Inc. incurred a $1,079,000 net loss for the second quarter ending June 30, 2006, the Company disclosed in a Form 10-Q report filed with the Securities and Exchange Commission. As of June 30, 2006, the Company's balance sheet showed $30,548,000 in assets. The Company's equity deficit tripled to $2,589,000 at June 30, 2006, from a $841,000 deficit at Dec. 31, 2006. Going Concern Doubt As reported in the Troubled Company Reporter on May 5, 2006, BDO Seidman, LLP, expressed substantial doubt about Simon Worldwide's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005. The auditing firm points to the Company's significant losses from operations, lack of operating revenue, and stockholders' deficit. As a result of the loss of its customers, the Company no longer has any operating business. Since August 2001, the Company has concentrated its efforts on reducing its costs and settling numerous claims, contractual obligations and pending litigation. As a result of these efforts, the Company has been able to resolve a significant number of outstanding liabilities that existed at December 31, 2001, or arose subsequent to that date. At June 30, 2006, the Company had reduced its workforce to 4 employees from 136 employees at December 31, 2001. The Company is currently managed by the Chief Executive Officer, together with a principal financial officer and an acting general counsel. Liquidity and Capital Resources By utilizing cash received pursuant to the settlement with McDonald's in 2004, the Company's management believes it has sufficient capital resources and liquidity to operate the Company for the foreseeable future. In connection with the Company's settlement of its litigation with McDonald's and related entities, the Company received net cash proceeds, after attorney's fees, of approximately $13 million and due to the elimination of liabilities associated with the settlement of approximately $12 million, the Company recorded a gain of approximately $25 million in 2004. The Board of Directors continues to consider various alternative courses of action for the Company, including possibly acquiring or combining with one or more operating businesses. The Board of Directors has reviewed and analyzed a number of proposed transactions and will continue to do so until it can determine a course of action going forward to best benefit all shareholders, including the holder of the Company's outstanding preferred stock. The Company cannot predict when the Directors will have developed a proposed course of action or whether any such course of action will be successful. Management believes it has sufficient capital resources and liquidity to operate the Company for the foreseeable future. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?10bb Headquartered in Los Angeles, California, Simon Worldwide Inc. is a diversified marketing and promotion agency with offices throughout North America, Europe and Asia. The Company has worked with some of the largest and best-known brands in the world and has been involved with some of the most successful consumer promotional campaigns in history. Through its wholly owned subsidiary, Simon Marketing, Inc., the Company provides promotional agency services and integrated marketing solutions including loyalty marketing, strategic and calendar planning, game design and execution, premium development and production management. SYMBOLLON PHARMACEUTICALS: Incurs $645,770 Net Loss in 2nd Quarter ------------------------------------------------------------------ Symbollon Pharmaceuticals, Inc., incurred a $645,770 net loss on $39,833 of revenues for the second quarter ending June 30, 2006, the Company disclosed on a Form 10-Q report filed with the Securities and Exchange Commission. As of June 30, 2006, the Company's balance sheet showed $1,404,029 in assets and $1,193,818 in equity. Going Concern Doubt Vitale, Caturano & Company, Ltd., the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ending Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations and accumulated deficit. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?10c3 Symbollon Pharmaceuticals, Inc. -- http://www.symbollon.com/-- develops and commercializes proprietary iodine-based pharmaceutical agents and antimicrobials. TECH DATA: Posts $155 Million Net Loss in Quarter Ended July 31 --------------------------------------------------------------- Tech Data Corporation generated $4.9 billion of net sales for the second quarter, an increase of 2.7% from $4.8 billion in the second quarter of fiscal 2006 and flat sequentially as compared to the first quarter of the current fiscal year. The company recorded a net loss of $155.5 million for the second quarter ended July 31, 2006. This compares to a net loss of $59.4 million, including income from discontinued operations of $0.7 million, for the prior-year period. Results for the second quarter of fiscal 2007 include a non-cash charge of $136.1 million for goodwill impairment as a result of the company's performance in the EMEA region (Europe, Middle East and export sales to Africa) and an $8.4 million non-cash charge to increase the valuation allowance for certain deferred tax assets related to the EMEA region. In addition, second-quarter results for fiscal 2007 include $11.2 million of restructuring charges and $1.6 million of consulting costs related to the company's EMEA restructuring program launched in May 2005. "The second quarter proved challenging, as difficult market conditions in EMEA coupled with distractions from our restructuring initiatives slowed our progress in delivering improved profitability," commented Steven A. Raymund, Tech Data's chairman and chief executive officer. "While it will take longer than previously anticipated to reach an acceptable level of profitability in EMEA, our efforts to date have been productive - strengthening our foundation for improvement. We will continue to invest in programs that optimize our sales, pricing and inventory management practices and support our long-term potential in both the Americas and EMEA." EMEA Restructuring Program The company recorded $11.2 million of charges during the second quarter of fiscal 2007 related to its EMEA restructuring program comprised of $10.3 million related to workforce reductions and $900,000 related to the write-off of fixed assets and facility consolidations. Since initiating the restructuring program in May 2005, the company has recorded $48.6 million in restructuring charges. The company has substantially completed the initiatives related to its restructuring program, and expects to complete the remaining tasks during the third quarter, bringing the total program costs to an estimated range $55 million to $57 million, slightly above the range provided last quarter. The program and related actions have been designed to better align the EMEA operating cost structure with the current business environment and improve overall operating efficiencies. Business Outlook For the third quarter ending October 31, 2006, the company anticipates net sales to be in the range of $5.10 billion to $5.25 billion. With respect to net income and net income per diluted share, the company does not currently believe that it would be appropriate to provide specific guidance primarily due to the challenging environment in EMEA. About Tech Data Founded in 1974, Tech Data Corporation (NASDAQ:TECD) -- http://www.techdata.com/-- is a distributor of IT products, with more than 90,000 customers in over 100 countries. The company's business model enables technology solution providers, manufacturers and publishers to cost-effectively sell to and support end users ranging from small-to-midsize businesses to large enterprises. * * * As reported in the Troubled Company Reporter on March 27, 2006, Fitch Ratings revised Tech Data Corp.'s Rating Outlook to Stable from Positive and affirmed the company's 'BB+' issuer default rating and 'BB+' senior unsecured bank credit facility. The 'BB' subordinated debt rating was withdrawn, following TECD's repurchase of the $290 million convertible subordinated debentures in December 2005. As reported in the Troubled Company on March 20, 2006, Moody's Investors Service affirmed Tech Data Corp.'s Ba1 corporate family rating and changed the outlook to negative from stable. Tech Data Corp.'s 2% Convertible Subordinated Debentures due 2021 also carry Standard & Poor's BB+ rating and Fitch Ratings' BB rating. TITANIUM METALS: Board Declares Dividend on 6-3/4% Preferred Stock ------------------------------------------------------------------ Titanium Metals Corporation's board of directors has declared a quarterly dividend of $0.84375 per share on its 6-3/4% Series A Preferred Stock. The dividends are payable on Sep. 15, 2006 to stockholders of record as of the close of business on Sept. 1, 2006. Headquartered in Denver, Colorado, Titanium Metals Corporation (NYSE: TIE) -- http://www.timet.com/-- is a worldwide producer of titanium metal products. * * * Moody's Investors Services placed a Caa1 issuer rating and B3 LT Corp Family Rating on Titanium Metals. TIX CORP: Balance Sheet Upside-Down by $1,631,570 as of June 30 --------------------------------------------------------------- Tix Corp. earned $40,257 on $1,292,497 of revenues for the second quarter ending June 30, 2006, the Company disclosed on a Form 10-QSB report filed with the Securities and Exchange Commission. As of June 30, 2006, the Company had $1,493,386 in assets. The Company's equity deficit narrowed to $1,631,570 at June 30, 2006, from a $2,399,569 deficit at Dec. 31, 2005. Going Concern Doubt Weinberg & Company, P.A., the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statements for the year ending Dec. 31, 2005. The auditor pointed to net loss, working capital deficiency stockholders' deficiency. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?10c4 Tix Corp. conducts the operations of Tix4Tonight at four locations in Las Vegas, Nevada: South Strip at the Hawaiian Marketplace Shopping Center (which commenced operations in November 2005 and replaced the location next to the Harley-Davidson Cafe at Harmon); the Fashion Show Mall Strip entrance in front of Neiman-Marcus (which commenced operations in February 2005); North Strip across from the Stardust Hotel and Casino; and in downtown Las Vegas at the Four Queens Hotel fronting onto the Fremont Street Experience (which commenced operations in December 2005). TOWER RECORDS: Wants Court Nod on Akin Gump as Special Counsel -------------------------------------------------------------- MTS, Inc., dba Tower Records, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Akin, Gump, Strauss, Hauer & Feld LLP as their special counsel, nunc pro tunc to Aug. 20, 2006. The Debtors tell the Court that Akin Gump will be their special counsel with regard to the sale of their assets. The Debtors remind the Court that following their 2004 Restructuring, they explored sale options. The Debtors relate that although a number of potential buyers participated in the process, no bid was received that was sufficient to pay their debts in full. The Debtors say that they filed their second chapter 11 petition after determining that non e of the potential offers could be successfully pursued other than under the provisions of Section 363 of the Bankruptcy Code. Peter Gurfein, Esq., a partner at Akin Gump, tells the Court the he bills $650 per hour. The firm's other professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- John Strickland, Esq. Partner $695 Steven H. Scheinman, Esq. Partner $650 Shahzad Malik, Esq. Partner $465 Alana Martell, Esq. Associate $350 Patrick J. Ivie, Esq. Associate $325 Mr. Gurfein assures the Court that his firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Gurfein can be reached at: Peter Gurfein, Esq. Akin, Gump, Strauss, Hauer & Feld LLP 2029 Century Park East, Suite 2400 Los Angeles, California 90067 Tel: (301) 229-1000 Fax: (301) 229-1001 http://www.akingump.com/ Headquartered in West Sacramento, California, MTS, Inc., dba Tower Records -- http://www.towerrecords.com/-- is a retailer of music in the U.S., with nearly 100 company-owned music, book, and video stores. The Company and seven of its affiliates filed for chapter 11 protection on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886 through 06-10893). Richards, Layton & Finger, P.A. and O'Melveny & Myers LLP represent the Debtors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. The Company and its affiliates previously filed for chapter 11 protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No. 04-10394). The Court confirmed the plan on March 15, 2004. TURNING STONE: Moody's Rates Proposed $160 Mil. Sr. Notes at Ba3 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 to Turning Stone Casino Resort Enterprise's proposed $160 million senior unsecured notes due 2014. At the same time, Turning Stone's Ba3 corporate family rating was affirmed and the company's existing B1 rated $160 million senior unsecured notes due 2010 were raised to Ba3 under the assumption that the new transaction will successfully close. If the new transaction does not occur as planned, the rating on Turning Stone's existing senior unsecured notes due 2010 could drop back down to B1. The ratings outlook is stable. Proceeds from the new senior unsecured note offering will be used to refinance $107 million of tax-exempt bonds, make a one-time $15 million distribution to the Oneida Indian Nation of New York, pay $4 million of related fees and expenses, and increase cash balances by $34 million. The ratings and stable outlook reflect Turning Stone's relatively low leverage, virtually unchallenged market position, and significant increases in gaming and non-gaming revenues and win- per-unit statistics following the substantial completion of its $343 million property expansion. Key credit concerns include Turning Stone's relatively small size and single asset profile, and acknowledges the longer-term risk that expanded tribal gaming in New York as well as the expansion of gaming in other neighboring jurisdictions could have a negative impact on the company's operating results. The timing and degree of competition from these sources, however, are still largely uncertain. The ratings also consider Turning Stone's ability to make substantial distributions. The Ba3 rating on the new senior notes, along with the upgrade of Turning Stone's existing senior notes to Ba3, considers that on a pro forma basis, there will be no material senior secured debt ahead of the notes. The new notes will rank pari passu with Turning Stone's existing $160 million senior unsecured notes which also benefit from the drop in outstanding senior secured debt obligations. The ratings and outlook also recognize that despite the fact that in 2004, a New York State court declared that the Oneida Nation's compact is invalid under state law, and that requests have been made by certain citizen groups to the National Indian Gaming Commission and United States Attorney, no action has been taken by either party. The Oneida Nation intends to petition the United States Supreme Court to review the state ruling, and the Supreme Court has granted the Oneida Nation an extension of time, to Oct. 2006, to file the petition. At this time, Moody's believes that a closure of Turning Stone's casino is unlikely to occur as a result of this litigation matter. In the event that the federal government chooses to take any action that would impair casino operations, ratings could be negatively impacted. This litigation matter, however, currently limits any ratings upside at this time. Moody's previous rating action on Turning Stone occurred on May 20, 2003 with the assignment of B1 to the company's $25 million add-on to its existing 9.125% senior unsecured notes. Turning Stone Casino Resort owns and operates a gaming, entertainment and hotel facility located approximately 30 miles east of Syracuse, New York. Turning Stone is a business enterprise of the Oneida Indian Nation which is located in New York. Net revenue for the latest 12-month period ended June 30, 2006 was close to $330 million. Pro forma for proposed senior note offering, total outstanding debt is $320 million. TURNING STONE: S&P Downgrades Issuer Credit Rating to B+ from BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Turning Stone Casino Resort Enterprise, including its issuer credit rating to 'B+' from 'BB-'. At the same time, Standard & Poor's assigned its 'B+' rating to the proposed $160 million senior unsecured notes due 2014. Net proceeds from this offering are expected: * to be used to refinance existing debt; * to pay a $15 million dividend to the Oneida Indian Nation; and * to provide $34 million of extra liquidity for casino operations. Standard & Poor's also affirmed its 'B+' rating on the existing senior unsecured notes. This affirmation assumes that the previously outlined refinancing transaction occurs as expected, which would eliminate the presence of meaningful priority debt ahead of the existing senior unsecured notes. In the event that the refinancing transaction does not occur as expected and the primarily obligation remains outstanding, the rating on the existing senior unsecured notes would be lowered by one notch. The outlook is developing. "The downgrade reflects our concerns associated with ongoing litigation pertaining to several issues that, if not resolved favorably, could meaningfully hurt the Nation's credit profile," said Standard & Poor's credit analyst Emile Courtney. These issues include: * the ruling by the New York State Supreme Court that the Nation's gaming compact with the state is invalid under state law; * the denial by the New York State Court of Appeals of the Nation's motion to appeal this ruling; * the state's efforts to end the use of multi-game machines at Turning Stone; and * the Nation's land claims against the state. While no new rulings have occurred, and the state has not made any attempts to interrupt business at the casino, in a worse case, these issues could meaningfully weaken business conditions at Turning Stone. While Standard & Poor's believes that these matters between the Nation and the State will most likely be resolved through negotiation, and will not result in a closure of the facility, currently there appears to be limited progress on this front. The new rating more appropriately reflects the continuing uncertainty as a result of these issues. The next development is expected to be a petition by the Nation to the U.S. Supreme Court for a writ of certiorari regarding the State of New York's claim that the Nation's compact is invalid under the state law. This is expected to occur in October. TXU CORP: Sees Over $10 Billion Investment in Texas --------------------------------------------------- Forty-five city councils, school boards, other community organizations and community leaders have publicly endorsed TXU Corp.'s Powering the Future of Texas initiative. This plan includes a more than $10 billion investment in Texas that adds much needed, reliable electric generating supplies, saves customers money, and creates jobs -- all while lowering key emissions. "While certain big city mayors have expressed opposition to TXU's plan, community leaders, elected officials and residents near the proposed locations are expressing their support," said Mike McCall, CEO of TXU Wholesale. "TXU's plan will meet the urgent power needs of Texas, lower wholesale power prices, create tens of thousands of jobs and improve air quality, and there is clear public support for that in these communities." "I understand Dallas and other big cities need to do things to clean up the air in their areas," said Sandra Hodges, Rusk County Judge. "TXU has taken a huge step to help the entire state, including the big cities, by committing to reduce emissions. But, the big cities need to focus on the real cause of their problems. They should stop trying to interfere in the progress this will bring to our communities." Endorsements and resolutions of support for TXU's plan include: Bremond Chamber of Commerce, Bremond City Council, Calvert City Council, City of Colorado City, Colorado City Commissioners Court, Colorado City Independent School District, Fairfield City Council, Fairfield Independent School District, Franklin Chamber of Commerce, Franklin City Council, Franklin Independent School District, Hallsburg Independent School District, Hearne Chamber of Commerce, Hearne Economic Development Corporation, Henderson City Council, Henderson Chamber of Commerce, Henderson Economic Development Corporation, Mitchell County Board of Economic Development, Mitchell County Commissioners Court, Mount Pleasant Chamber of Commerce, Mount Pleasant City Council, Mount Pleasant Independent School District, Northeast Texas Community College Board of Trustees, Robertson County Commissioners Court, Rusk County Commissioners Court, Savoy City Council, Savoy Independent School District, Tatum Independent School District, Titus County Chamber of Commerce, Titus County Commissioners Court, and Titus Regional Medical Center. Elected officials and other individual community leaders who have written letters supporting local projects within the TXU plan include: State Senator Robert Duncan (District 28), State Representative Scott Campbell (District 72), State Representative Byron Cook (District 8), Mayor Tex Hatley (Hallsville), Pat Adam (Titus County), Don and Darlene Kyser (McClennan County), Hudson Old (Titus County), Kathie Partain (Freestone County), Cappy Payne (Titus County), Mike Ratliff (Mitchell County), Charles Smith (Titus County), David Stubblefield (Mitchell County), and Michelle Wilson (Titus County). Over the next decade, Texas is expected to add six million new residents -- more than the entire population of Tennessee -- and the state's economy is rapidly expanding. Experts at the Electric Reliability Council of Texas warn that without new power generation the state's power reserves could drop below reliable levels by 2008. TXU's plan -- to invest more than $10 billion to build 11 new coal-fired power generation units at existing sites -- adds much needed power, lowers wholesale power costs by an estimated $1.7 billion annually and creates thousands of jobs and, according to the independent air modeling analysis requested by state and local officials and recently released by the Texas Environmental Research Consortium, improves air quality. The company plans to spend up to $2.5 billion of its investment to retrofit equipment and adjust the fuel mix at existing plants to reduce emissions, and to use the best available environmental control technology at the new plants. TXU has formally asked state regulators to make its emissions reduction commitments binding and legally enforceable. About TXU Corp. Based in Dallas, Texas, TXU Corp. -- http://www.txucorp.com/-- is an energy company that manages a portfolio of competitive and regulated energy businesses in North America. In TXU Corp.'s unregulated business, TXU Energy provides electricity and related services to 2.5 million competitive electricity customers in Texas, more customers than any other retail electric provider in the state. TXU Power has over 18,300 megawatts of generation in Texas, including 2,300 MW of nuclear and 5,837 MW of lignite/coal- fired generation capacity. The company is also one of the largest purchasers of wind-generated electricity in Texas and North America. TXU Corp.'s regulated electric distribution and transmission business, TXU Electric Delivery, complements the competitive operations, using asset management skills developed over more than one hundred years, to provide reliable electricity delivery to consumers. TXU Electric Delivery operates the largest distribution and transmission system in Texas, providing power to more than 2.9 million electric delivery points over more than 99,000 miles of distribution and 14,000 miles of transmission lines. TXU Corp.'s 6.55% Senior Notes due 2034 carry Moody's Investors Service's Ba1 rating and Standard & Poor's BB+ rating. USA COMMERCIAL: Creditors Panel Taps Sierra as Financial Advisor ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in USA Commercial Mortgage Company's Chapter 11 case asks the Honorable Linda B. Riegle of the U.S. Bankruptcy Court for the District of Nevada in Las Vegas for authority to retain Sierra Consulting Group, LLC, as its financial advisor. Sierra Consulting will: a. perform historic financial analyses and review of the USA Mortgage's books and records; b. assist in analyzing the loans, assets and other liabilities of USA Mortgage; c. develop recommendations on loans that may require additional funding or disposition; d. assist USA Mortgage and the Committee in identifying sources of capital, if necessary; e. assist the Committee and counsel in developing positions and strategies with respect to various facets of these proceedings; f. work with the Debtors' financial advisor and counsel in developing a plan of reorganization and perform feasibility, liquidation, and other analyses as may be required; g. prepare interim reporting packages to be distributed to Committee members and any other interested creditor of the Debtor; h. assist in determining the liabilities of the Debtor when it filed for bankruptcy; i. perform financial review of the proceeds that were distributed to the various parties, and assist in the development of a strategy to recoup those proceeds; j. assist in identifying and pursuing any other assets and potential causes of action that the Committee may seek to recover; and k. perform any other services that the Committee and Sierra mutually agree upon. Edward M. Burr, a principal at Sierra Consulting Group, LLC, disclosed the Firm's hourly rates: Designation Hourly Rate ----------- ----------- Principals $295 Directors $250 Associates $200 Paraprofessionals $100 Mr. Burr assured the Court that the Firm does not represent or has any connection with any other entity having an adverse interest in connection with these cases. USA Commercial Mortgage Company Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba USA Capital -- http://www.usacapitalcorp.com/-- provides more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide. The Company and its debtor-affiliates filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev. Case Nos. 06-10725 to 06-10729). Thomas J. Allison, a senior managing director at Mesirow Financial Interim Management LLC, has been employed as Chief Restructuring Officer for the Debtors. Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, and Annette W. Jarvis, Esq., at Ray Quinney & Nebeker, P.C., represent the Debtors in their restructuring efforts. Susan M. Freeman, Esq., and Rob Charles, Esq., at Lewis and Roca LLP represent the Official Committee of Unsecured Creditors of USA Commercial Mortgage Company. Edward M. Burr at Sierra Consulting Group, LLC, gives financial advice to the Creditors Committee of USA Mortgage. Marc A. Levinson, Esq., and Jeffery D. Hermann, Esq., at Orrick, Herrington & Sutcliffe LLP, and Bob L. Olson, Esq., and Anne M. Loraditch, Esq., at Beckley Singleton, Chartered, represent the Official Committee of Equity Security Holders of USA Capital Diversified Trust Deed Fund, LLC. FTI Consulting, Inc., gives financial advice to the Equity Committee of USA Diversified. Candace C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon, Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola, Esq., and Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC, represent the Official Committee of Equity Security Holders of USA Capital First Trust Deed Fund, LLC. Matthew A. Kvarda, at Alvarez & Marsal, LLC, gives financial advise to the Equity Committee of USA First. When the Debtors filed for protection from their creditors, they estimated assets of more than $100 million and debts between $10 million and $50 million. USG CORP: 38.7 Million Rights Exercised at Recent Offering ---------------------------------------------------------- USG Corporation reported that 37.95 million rights were exercised in the company's recently concluded rights offering. Berkshire Hathaway Inc. acquired 6.97 million shares in connection with its role as backstop purchaser for the rights offering. These shares include 6.5 million shares underlying rights distributed to Berkshire Hathaway in connection with the shares it owned on the record date for the rights offering and 0.47 million shares underlying rights distributed to other stockholders that were not exercised in the rights offering. As a result, Berkshire Hathaway now owns 13.47 million shares, or 15% of the company's outstanding common stock. "We are gratified to see the very high level of participation in the rights offering," said USG Corporation Chairman and CEO William C. Foote. "We appreciate the ongoing support of stockholders, including Berkshire Hathaway, which has been a significant USG stockholder for more than five years." The company used a portion of the $1.8 billion gross proceeds from the rights offering and the Berkshire Hathaway backstop commitment to repay prepetition bank debt and senior notes, plus accrued interest, as contemplated in USG's Plan of Reorganization. Remaining proceeds, together with other available funds, will be used as required to make the balance of the payments contemplated by USG's Plan of Reorganization and for general corporate purposes. The company also reported that its previously disclosed $2.8 billion credit facility is now effective. The credit facility, which is rated Baa3 by Moody's and BB+ by Standard and Poor's, consists of a $650 million revolving credit facility, a $1 billion term loan facility and a $1.15 billion tax bridge term loan facility. "he successful completion of the rights offering and the closing of the credit agreement put the company in a sound financial position," said Foote. "We are able to meet the financial obligations of the Plan of Reorganization while still continuing to implement our strategy to expand our distribution business, invest in our market-leading wallboard manufacturing operations and develop new building solutions for our customers." USG Deregisters Unexercised Rights Under the Securities Act of 1933, USG Corp. filed with the Securities and Exchange Commission on Aug. 15, 2006, a post- effective amendment to its registration statement to deregister: -- 318,985 Rights that were not distributed; -- 788,259 shares of common stock that would have been issuable upon exercise of those Rights; and -- additional 469,274 Rights that were distributed by USG but were not exercised. As previously reported, USG has registered 38,742,221 rights to purchase common stock, par value $0.10 per share, and 38,742,221 shares of common stock issuable upon exercise of the Rights. All the unexercised Rights have expired on July 27, 2006. About USG Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. The Debtors emerged from bankruptcy protection on June 20, 2006. (USG Bankruptcy News, Issue No. 120; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WERNER LADDER: Court Okays Rothschild Inc. as Financial Advisor --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted the request of Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates, to employ Rothschild, Inc., as their financial advisors and investment bankers. The Debtors and Rothschild, Inc., have resolved with Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, and its objection to the Application, leaving only the Official Committee of Unsecured Creditors' objection, relates Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP in Wilmington, Delaware. The Debtors maintain that the Transaction Fees and all other fees to be paid to Rothschild are fair and reasonable. Moreover, the non-economic terms of the Letter Agreement, including the indemnity provisions and the Section 328 of the Bankruptcy Code standard of review are frequently approved in other retention cases. The Debtors and Rothschild also assert that that indemnity provisions in the Letter Agreement are customary and within the realm of reasonableness because their standards are even higher that the indemnity provisions in the letter agreement between the Committee and Jefferies & Co., its financial advisors. Court Rulings The Court also orders that: (1) the U.S. Trustee will retain all rights to object to the Restructuring Fee and the M&A Fee on all grounds, including the reasonableness standard provided in Section 330 of the Bankruptcy Code, provided however, that the reasonableness will not be evaluated based on an hourly or length of case based criteria; (2) Rothschild will not be paid any Lien Fee or Notes Exchange Fee and the Restructuring Fee and the M&A Fee will be capped at the greater of $3,000,000 and the amount provided in the M&A Fee Schedule: Aggregate Consideration M&A Fee Percentage ----------------------- ------------------ $100,000,000 1.75% 200,000,000 1.50 300,000,000 1.25 400,000,000 1.00 500,000,000 .90 (3) the M&A Fee will be equal to the product of the applicable M&A Fee Percentage and the total Aggregate Consideration received from all M&A Transactions related to the Debtors; (4) the New Indebtedness Fee will be capped at $1,000,000 and will not be paid before December 31, 2006, and Section 5 of the Rothschild Agreement will be modified so that the 50% crediting will begin after Rothschild has been paid the Monthly Advisory Fees in excess of $900,000; (5) the Debtors are authorized to indemnify Rothschild pursuant to the Letter Agreement but not for any claims arising from Rothschild's postpetition performance of any services other than the services described under the Letter Agreement; (6) the Debtors have no obligations to indemnify or provide reimbursement to Rothschild for any claim or expense that is either: (a) judicially determined to have arisen primarily from Rothschild's gross negligence, willful misconduct or fraud, or (b) settled prior to a judicial determination as to Rothschild's gross negligence, willful misconduct or fraud, but determined by the Court to be a claim or expense for which Rothschild should not receive indemnity, contribution or reimbursement under the terms of the Application and the Letter Agreement; (7) if Rothschild is required to contribute to any losses, claims, liabilities or expenses, any limitation of the contributions in the Letter Agreement will not apply; and (8) if before the earlier of an order confirming a Chapter 11 plan in the Debtors' bankruptcy cases and an order closing the Chapter 11 cases, Rothschild believes that it is entitled to payments for the Debtors' indemnification, contribution and reimbursement obligations under the Letter Agreement and the Application, including the advancement of defense costs, Rothschild must file an application for payment with the Court and the Debtors will not pay any amount to Rothschild until the Court approves the payment. 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. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WERNER LADDER: Court Authorizes BOB Plan Payments due July 31 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorizes, but not directs, Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates, to make payments that are due as of July 31, 2006, under the Business Optimization Bonus Plan to the 10 participants that are members of the Debtors' executive leadership team and insiders, except that: (i) Steven R. Richman, Company president and CEO, will not receive his July Payment unless he is terminated without cause at which time the payment would become due and payable; (ii) Manufacturing Vice-President Steven R. Bentson's July Payment is subject to disgorgement if he will voluntarily terminate his employment before Dec. 31, 2006, and by accepting payment, he consents to the personal jurisdiction of the Court to enforce the disgorgement; and (iii) the Debtors will complete written evaluations, including a detailed basis and justification for the amount of the July Payments being awarded, of each ELT Members' entitlement to the July Payments, and provide copies of the evaluations to the counsel of the Official Committee of Unsecured Creditors no later than Sept. 1, 2006. The Court also rules that: (a) the Committee must deliver its objections, if any, to the July Payments of the ELT Members to the Debtors' counsel in writing no later than Sept. 11, 2006, by which time, the Debtors will be authorized to pay the undisputed portion of the July Payments; (b) the disputed portion of the July Payments will not be made and the Court will conduct a telephonic conference on Sept. 12, 2006, or any other time as maybe determined by the Court before any party takes any further action with respect to the disputed July Payments; and (c) the Chicago Transition Plan is approved on a final basis and the Debtors are authorized but not directed to make payments to effectuate the Plan, provided however, that prior to making payment of any Chicago Bonus to a participating employee under the Chicago Transition Plan, the participating employee will execute and deliver to the Debtors a release agreement, in which the employee will release, waive and discharge the Debtors from any claims relating to the Chicago Transition Plan. Judge Carey orders that the Debtors' other requests with respect to the BOB Plan, including its final approval, will be heard to a later date, provided however, that prior to the deferred hearing, the Debtors will: (i) retain an employee benefits consultant to evaluate and advise the Debtors as to the bonus and incentive program needs and market standards; and (ii) propose and negotiate a comprehensive compensation program for the ELT Members, which may or may not include provisions currently incorporated in the BOB Plan. 2nd Lien Committee Reaches Agreement with the Debtors After the Court issued the Interim Order on July 28, 2006, an ad hoc committee of holders of Second Lien Claims and the Debtors entered into an agreement regarding appropriate modifications to the BOB Plan so that incentive and bonus payments are tied to results of the Debtors' Chapter 11 operations and restructuring efforts and any BOP Plan disputes will not distract the Debtors' management, employees and their creditors, relates Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California. According to Mr. Moore, the parties agreed that: (1) the Debtors will not seek final approval of the BOB Plan now, but rather approval of the July 31, 2006 payments. In the near future, the Debtors will propose and negotiate a comprehensive bonus and retention program, which may or may not include provisions currently incorporated in the BOB Plan; and (2) the members of the executive leadership team will receive their July 31, 2006 BOB Plan payment with the exceptions of: (a) Mr. Richman who will not receive his payment unless he is terminated without cause at which time the payment would become due and payable, and (b) Mr. Bentson who will receive his payment but is subject to disgorgement if he will voluntarily terminate his employment before Dec. 31, 2006. The Second Lien Committee consists of holders of a majority in amount of the Second Lien Facility entered into by the Debtors in May 2005, as well as a minority in amount of the First Lien Credit Facility entered into by the Debtors in June 2003. 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. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WEST HILLS: Case Summary & 23 Largest Unsecured Creditors --------------------------------------------------------- Debtor: West Hills Park Joint Venture dba WLP Properties, L.C. 550 Club Drive Montgomery, TX 77316 Bankruptcy Case No.: 06-33996 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- JA Development, L.C. 06-33997 Chapter 11 Petition Date: August 17, 2006 Court: Southern District of Texas (Houston) Judge: Letitia Z. Clark Debtor's Counsel: Lawrence J. Maun, Esq. Lawrence J. Maun, P.C. 9800 Richmond Avenue, Suite 520 Houston, TX 77042 Tel: (713) 266-2560 Fax: (713) 266-2568 Estimated Assets: $10 Million to 50 Million Estimated Debts: $10 Million to 50 Million A. West Hills Park Joint Venture's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Entergy Business Debt $28,191 P.O. Box 8104 Baton Rouge, LA 70891-8104 Wave Media Communications Business Debt $11,691 4747 Research Forrest Drive Suite 180, #216 The Woodlands, TX 77381 Consolidated Business Debt $11,565 P.O. Box 660034 Dallas, TX 75266 AmeriMark, Industries Business Debt $6,567 11240 Brittmore Park Drive Houston, TX 77041 Interfacing Company of Texas Business Debt $6,053 P.O. Box 131835 The Woodlands, TX 77393-1835 Republic Waste Services Business Debt $4,469 Time Warner Telecom Business Debt $4,455 Thornton Plumbing Business Debt $4,448 SouthWay Acoustics Business Debt $4,184 Pleasing Plants Business Debt $3,640 Mesa Mechanical Business Debt $3,601 United Health Care Business Debt $2,622 Myriad Supply Business Debt $2,480 Verizon Wireless Business Debt $1,848 Burditt Business Debt $1,580 Town & Country Pools Business Debt $1,421 Chem Acqua Business Debt $1,347 Sherwin Williams Business Debt $1,267 Meriplex Business Debt $1,254 Snap ON Business Debt $1,077 B. JA Development, L.C.'s Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ USA Commercial Mortgage Company Real Estate Lien $13,415,197 Agent for Multiple Note - Montgomery Individual Lenders and Walker County 4484 South Pecos Road Las Vegas, NV 89121 Western United Life Real Estate Lien $10,045,106 Assurance Company Note - Montgomery c/o Midland Loan Services, Inc. County P.O. Box 25965 Shawnee Mission, KS 66225-5965 Boxcars Properties, Ltd. Judgment Lien on $2,754,091 c/o Joe Meyer, Esq. all Property Meyer, Knight & Williams 8100 Washington Avenue Suite 1000 Houston, TX 77007 WHITE ROCK: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: White Rock Networks, Inc. 1301 West President George Bush Freeway Richardson, TX 75080 Tel: (972) 543-6900 Bankruptcy Case No.: 06-41381 Type of Business: The Debtor is a networking and telecommunications company specializing in fiber optics. See http://www.whiterocknetworks.com/ Chapter 11 Petition Date: August 31, 2006 Court: Eastern District of Texas (Sherman) Debtor's Counsel: Raymond J. Urbanik, Esq. Munsch Hardt Kopf & Harr P.C. 500 North Akard Street, Suite 3800 Dallas, TX 75201-6659 Tel: (214) 855-7590 Fax: (214) 978-4374 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Granite Properties $2,280,448 17950 Preston Road, Suite 250 Dallas, TX 75252 Arrow Electronics, Inc. $113,487 6340 International Parkway, Suite 100 Plano, TX 75093 Opnext, Inc. $41,995 1 Christopher Way Eatontown, NJ 07724 Oracle Corp. $27,512 P.O. Box 71028 Chicago, IL 60694 Tyco Electronics Printed $24,859 Circuit Group LP Department LA Pasadena, CA 91185-1260 Salesquest LLC $20,700 Herold Precision Metals LLC $19,304 Avnet Electronics Marketing $12,162 Optical Communication Products, Inc. $15,845 Pinnacle Technology $10,635 Apex Systems, Inc. $8,715 Amphenol TCS $7,088 Charles Industries Ltd. $6,610 Future Electronics Corp. $6,507 Telcordia Technologies, Inc. $6,220 Nu Horizons Electronics $6,064 PSI Extrusions $5,993 Amphenol Corp. $5,947 TTI $5,452 Sunon, Inc. $4,919 * BOOK REVIEW: OIL & HONOR: The Texaco Pennzoil Wars ---------------------------------------------------- Author: Thomas Petzinger, Jr. Publisher: Beard Books Paperback: 495 Pages List Price: $34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1893122077/internetbankrupt This is a fun read. Fun enough to take the beach, although at 500 pages it's a bit hefty to hold up while you lounge in the sandy towel. It's got all the elements of great entertainment: a trainload of money, courtroom melodrama, and a host of extremely odd characters, including a couple of Texas state court judges who could make California's Judge Ito look like Justice Brandeis. You might even throw in a biblical analogy -- many pundits did -- although for my money Pennzoil chair J. Hugh Liedtke was a little too wily and a lot too flush to be David-with-a-slingshot. Everyone knows the story. In 1984 Texaco bought Getty Oil for $9.98 billion, days after the Getty board had made a handshake deal with Pennzoil to sell three-sevenths of its assets for a 10 percent lower price per share. Did Texaco tortuously interfere with Pennzoil's oral contract, or was Getty free (and in fact duty-bound) to accept Texaco's higher offer? I'll leave you there on the edge of your seat. Yes, the plot is familiar, but as they say, God is in the details, and the Pulitzer Prize-winning author, a professional journalist who covered the trial for the Wall Street Journal, gives us details aplenty. He's sieved the most intriguing and significant facts from a daunting amount of evidence: 50,000 pages of affidavits, hours of video testimony, and 250 interviews. You'll collect your favorite factoids as you go along. Mine have to do with the succession of judges, the first of who had a close relationship with Pennzoil attorney Joe Jamail, while the second hadn't read the trial record when he took over the gavel and made his ignorance of the governing New York law seem almost a point of pride. The flamboyant Jamail (who collected $400 million fee for his work, of which $50 million reportedly has been given to charities) was known previously, the author tells us, for such feats as convincing a jury that the City of Houston was negligent for planting a tree that his client ran into while drunk. Here, he won the verdict for his client, in part, by exploiting that shopworn cliche of trial practice -- the local good old boys versus the big city pinstripes. Is an oral agreement in principle a binding contract? Metaphorically shrugging, Mr. Jamail told the jury, "Sure looks like a deal to me." It worked like a charm. Engrossing as the deal, trial, and verdict are, the author offers more. His first 150 pages provide useful background on the respective oil empires, and chronicles Getty's history in detail. But don't take my word that this book is worth the money. Read what the white-shoe critics had to say when this book first came out in 1987. "A riveting drama," said the New York Times Book Review. "Pure excitement... More fun than flying on corporate jet," per the Dallas Times Herald, with presumably more experience in flying on corporate jets than I can claim. "A real-life script fit for TV's Dallas... Harold Robbins and Robert Ludlum let loose in the world of Texas good old boys and New York takeover specialists," opined the Washington times. So maybe you'll drop this one into your carry-on bag after all. ********* 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 ***