/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060905.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, September 5, 2006, Vol. 10, No. 211 Headlines 655 CORP: Case Summary & 19 Largest Unsecured Creditors 2000 AD: Case Summary & 19 Largest Unsecured Creditors ADELPHIA COMMS: Court Approves $15.86MM Settlement with iN DEMAND ADS LLC: Case Summary & 20 Largest Unsecured Creditors ALLIED HOLDINGS: Wants December 23 as Lease Rejection Deadline ALLIED HOLDINGS: Intends to Sign New Brokerage Pact with USI AMERICAN MEDIA: Names Jack Craven as Chief Financial Officer ANCHOR GLASS: Argues 33 Retiree Claims are Invalid ASARCO LLC: Proposes Uniform Procedures for Settling Tax Claims ASARCO LLC: Wants to Assume CBRY Stockholders Agreement ATARI INC: Receives Notice of Delisting From Nasdaq Global Market AURIGA LABORATORIES: June 30 Working Capital Deficit Tops $1.7MM BEISWENGER HOCH: Case Summary & 20 Largest Unsecured Creditors CALBATECH INC: Balance Sheet Upside-Down by $5.26M at June 30 CLARION TECH: Shareholders' Deficit Tops $97.5 Mil. at July 1 COLLINS & AIKMAN: Exchanging Secured Debt for Stock Under Plan COLLINS & AIKMAN: Outlines Business Plan in Disclosure Statement DANA CORP: U.S. Trustee Appoints 7-Member Non-Union Retiree Panel DANA CORP: Equity Committee Retains Fried Frank as Counsel DANA CORPORATION: Selects Skadden Arps as Special Counsel DATALOGIC INT'L: Receives $550,000 Deposits in Bank Account DEAN SHIDELER: Case Summary & 13 Largest Unsecured Creditors DELPHI CORP: Judge Drain Rules on NuTech's Lift-Stay Request DELTA AIR: Seeks Court Approval for 2001-1 EETC Stipulation DELTA AIR: Wants to Walk Away from Aero Newark Sublease Agreement EMMIS COMMS: Sells WKCF-TV to Hearst-Argyle for $217.5 Million ENTERGY NEW: Court Approves United National & NORCO Settlement FAIRFAX FINANCIAL: Restates Annual Financials from 2001 to 2005 FAMILYMEDS GROUP: July 1 Stockholders' Deficit Narrows to $4 Mil. FLAG RESOURCES: Appeals Sanctions Imposed by TSX FLAMINGO TERRACE: Case Summary & 13 Largest Unsecured Creditors GARY KINDER: Case Summary & 20 Largest Unsecured Creditors GENERAL MOTORS: Retail Sales Up 8% in August 2006 GENESIS BIOVENTURES: Relocates to California from Canada GILBERT ELES: Voluntary Chapter 11 Case Summary IELEMENT CORP: 2003 Recapitalization Cues Financials Restatement INCO LTD: CVRD Gets Canadian & U.S. Antitrust OK for Inco Offer INEX PHARMA: Gets $1 Mil. Licensing Payment from Hana Biosciences INEX PHARMA: Protiva Wants Involvement in Tekmira Spinout Deals JOCELYN WHITE: Case Summary & 40 Largest Unsecured Creditors KAISER ALUMINUM: Court Approves Royal Settlement Agreement KAISER ALUMINUM: Reports Class Settlement Fund in Second Quarter KL INDUSTRIES: Wants Exclusive-Filing Period Stretched to Oct. 6 KL INDUSTRIES: Has Until November 28 to Decide on Two Leases KRISPY KREME: Settles Suit with Sweet Traditions LE GOURMET: U.S. Trustee Appoints Five-Member Creditors Committee LE GOURMET: Creditors Committee Taps Lowenstein Sandler as Counsel LE GOURMET: Creditors Committee Taps Traxi as Financial Advisors LEGACY COMMS: June 30 Balance Sheet Upside-Down by $3.5 Million LEVITZ HOME: Expands Merchandising Team to Revitalize Brand LEVITZ HOME: Landlords Supplement Objection to Lease Assignment MED DIVERSIFIED: 2nd Cir. Subordinates Ex-Employee's Stock Claim MEDAREX INC: Gets Default Notice Due to Late Form 10-Q Filing METALDYNE CORP: Consents to $2 Billion Asahi Tec Acquisition METALDYNE CORP: Asahi Purchase Cues Moody's to Review Ratings METALDYNE CORP: S&P Holds B Corporate Credit Rating on Watch METSO PAPER: Completes Purchase of Paper Machine Maker in China MHARAS CORP: Case Summary & Largest Unsecured Creditor MILLENIUM ASSISTED: Amended Disclosure Statement Gets Interim Okay MILLENIUM BIOLOGIX: Provides Details on Proposed Financing MIRANT CORP: Americas Energy Unit Resolving Bonneville Dispute NBC/AUSTIN: U.S. Trustee Wants Cases Dismissed or Converted NBC/AUSTIN WINDRIDGE: Court Okays Capstone as Management Company NBO SYSTEMS: Balance Sheet Upside-Down by $11.68MM at June 30 NMC PROPERTIES: Case Summary & Two Largest Unsecured Creditors NORTEL NETWORKS: Selling UMTS Business to Alcatel for $320 Million ONEIDA LTD: Court Approves Northpoint Industrial Lease Agreement ORIS AUTOMOTIVE: Court Okays Heninger as Panel's Special Counsel OWENS CORNING: Court Grants Bondholders Protective Order Plea OWENS CORNING: Court Approves 7-Eleven's $1.5-Mil. Settlement PARMALAT USA: Court Approves Pact Resolving Two New Jersey Claims PARMALAT USA: Farmland, et al. OKs Arthur George's Suit to Proceed PETER FALTINGS: Case Summary & 14 Largest Unsecured Creditors PHOTOCIRCUITS CORP: Files Third Amended Disclosure Statement PLAYLOGIC ENT: Balance Sheet Upside-Down by $2.66 Mil. at June 30 RAMESH PATEL: Case Summary & 15 Largest Unsecured Creditors RECORP GROUP: Case Summary & Six Largest Unsecured Creditors REFCO INC: Committee Wants Houlihan Lokey's Fees Increased REFCO INC: Panel Inks Stipulation with E&Y on Document Production REMEDIATION FINANCIAL: Must File Disclosure Statement by Sept. 14 ROGER CARTER: Case Summary & 20 Largest Unsecured Creditors SAINT VINCENTS: Court Approves Amended Labor Pacts with Unions SAINT VINCENTS: Court Approves DMC Contract Rejection SILICON GRAPHICS: Files Supplements to First Amended Plan SILICON GRAPHICS: Storage Technology Objects to Plan Confirmation SMARTVIDEO TECH: Posts $6.2 Million Net Loss in Second Quarter SOLVIT GROUP: Case Summary & 12 Largest Unsecured Creditors SPEEDEMISSIONS INC: Has $538K Working Capital Deficit at June 30 SPORTS ENTERTAINMENT: Case Summary & 19 Largest Unsec. Creditors TEEKAY SHIPPING: S&P Puts BB+ Corp. Credit Rating on Neg. Watch TERAFORCE TECH: Lawyers Can't Bill for Defending Final Fee App. TITAN FINANCIAL: Case Summary & 20 Largest Unsecured Creditors ULTRACHIP SYSTEMS: June 30 Balance Sheet Upside-Down by $8.5 Mil. VITAL LIVING: Earns $401,000 in Quarter Ended June 30 WELD WHEEL: Asset Sale Hearing Set for September 25 WHERIFY WIRELESS: Expands Brazilian Distribution with Delphi WINN-DIXIE: Court Extends Exclusive Solicitation Period to Oct. 31 WINN-DIXIE: Wants to Assume 62 Agreements With IBM Entities YOUTHSTREAM MEDIA: Appoints John Scheel as President and CEO ZALE CORP: Incurs $26.4 Million Net Loss for Quarter ended July 31 * Large Companies with Insolvent Balance Sheets ********* 655 CORP: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------- Debtor: 655 Corporation c/o Vincent J. DiMento 7 Faneuil Hall Marketplace Boston, MA 02109 Bankruptcy Case No.: 06-13020 Type of Business: The Debtor's affiliate, The Geneva LLC, filed for chapter 11 protection on June 15, 2006 (Bankr. D. Mass. Case No. 06-11854). SOS Realty LLC, another affiliate of the Debtor, also filed for chapter 11 protection on May 11, 2006 (Bankr. D. Mass. Case No. 06-11381). Chapter 11 Petition Date: September 1, 2006 Court: District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: Kathleen Rahbany, Esq. Craig and Macauley, P.C. Federal Reserve Plaza 600 Atlantic Avenue Boston, MA 02210 Tel: (617) 367-9500 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 ------ --------------- ------------ National Lumber Trade Debt $75,000 Rocky Carlino 71 Maple Street P.O. Box 9032 Mansfield, MA 02048 Tudor Plastering Trade Debt $60,000 Fintan Murtagh 50 Bellevue Road Quincy, MA 02171 Tristate Stone, Inc. Trade Debt $48,500 120 Southbridge Road P.O. Box 762 North Oxford, MA 01537 Learnar Industries Trade Debt $42,185 171 Locke Drive Marlborough, MA 01752 R & R Sales, Inc. Trade Debt $27,500 174 Hampton Street Boston, MA 02119 Richie's Insulation, Inc. Trade Debt $18,400 Allstate Painting Co., Inc. Trade Debt $15,958 Lynco Fire Protection Inc. Trade Debt $15,800 C & C Tilin Trade Debt $14,600 Curragh Construction Trade Debt $11,400 MA Waste Systems, LLC Trade Debt $3,922 Door Systems, Inc. Trade Debt $3,446 Buonasaro Construction Trade Debt $2,100 Sani-kan Portable Sanitation Trade Debt $1,963 Colony Hardware Supply Trade Debt $1,847 Boston Police Services Provided $313 Detail Billing Unit Extreme Plumbing Trade Debt $100 Boston Water & Sewer Commission Services Provided $75 Marr Scaffolding Trade Debt $75 2000 AD: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------ Debtor: 2000 AD, Inc. 819 South El Paso El Paso, TX 79901 Bankruptcy Case No.: 06-30929 Chapter 11 Petition Date: August 31, 2006 Court: Western District of Texas (El Paso) Judge: Larry E. Kelly Debtor's Counsel: Corey W. Haugland, Esq. James & Haugland, P.C. P.O. Box 1770 El Paso, TX 79949-1770 Tel: (915) 532-3911 Total Assets: $615,108 Total Debts: $1,171,171 Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ CBB Group, Inc. Other $265,542 440 Seaton Street Los Angeles, CA 90013 Volume Distributors Other $156,214 4199 Bandini Boulevard Vernon, CA 90023 Kole Imports Other $112,190 24600 South Main Street Carson, CA 90745 Concord Enterprises, Inc. Other $90,761 2957 East 46th Street Vernon, CA 90058 New Crown Wholesale Other $75,838 2455 East Vernon Avenue Vernon, CA 90058 Korotkin Property Management Other $43,887 STK International Other $38,270 Advanta Bank Corp. Credit Card $34,845 Wells Fargo Bank, N.A. Line of Credit $32,000 Wells Fargo Business Mastercard Credit Card $25,750 Sun Vista International, Inc. Other $14,598 El Diario Other $1,028 Recal/Mercado Fox Plaza, Ltd. Contract/Lease $0 Korotkin Property Management Contract/Lease $0 IRS - Special Procedures Staff Notice Only $0 GSJ Fam, L.P. Contract/Lease $0 EPTEX Real Estate Contract/Lease $0 D.A.J.A.C., L.P. Contract/Lease $0 Best Asset Management Contract/Lease $0 ADELPHIA COMMS: Court Approves $15.86MM Settlement with iN DEMAND ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved a settlement agreement between Adelphia Communications Corp. and its debtor-affiliates and iN DEMAND iN DEMAND filed multiple proofs of claim against the Debtors in connection with prepetition amounts due to iN DEMAND. Each of the Claims was filed for $16,806,524, with the exception of Claim No. 17716, which was filed for $17,886,995. The Debtors disputed certain fees included in the Claims. Pursuant to a settlement between the ACOM Debtors and Viacom, Inc., and certain of its subsidiaries and affiliates, including Paramount Pictures Corporation: -- the ACOM Debtors assert that they have paid $836,611 to Viacom in satisfaction of a portion of the Disputed Claim Amount, and that the amount is no longer owed by the ACOM Debtors to iN DEMAND or to Paramount Pictures Corporation; and -- iN DEMAND asserts that it no longer owed $836,611 to Paramount. Pursuant to the Settlement Agreement, the ACOM Debtors and iN DEMAND mutually agreed that: a. Claim No. 17716 will be allowed as an unsecured claim for $15,865,161 against the ACOM Debtors; b. the rest of the claims will be disallowed; c. iN DEMAND is authorized to file one master proof of claim -- the Additional Claim -- against the ACOM Debtors in the event Paramount seeks and obtains recovery of $836,611 from iN DEMAND; and d. they will mutually release each other from any and all claims provided that the release will not apply to the Additional Claim. The ACOM Debtors will provide notice of the Settlement Agreement to both Viacom and Paramount. 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. 147; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADS LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: ADS LLC 2510 Commercial Park Drive Mobile, AL 36606 Bankruptcy Case No.: 06-11573 Type of Business: The Debtor provides concrete works and services. Chapter 11 Petition Date: September 1, 2006 Court: Southern District of Alabama (Mobile) Judge: Margaret A. Mahoney Debtor's Counsel: Stephen L. Klimjack, Esq. Stephen L. Klimjack, LLC One South Royal Street, 2nd Floor Mobile, AL 36602-3247 Tel: (251) 694-0600 Fax: (251) 694-0611 Estimated Assets: Less than $5,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Merrill Lynch Business Financial Account $530,872 Martin Aguilera 222 North LaSalle Street 17th Floor Chicago, IL 60601 Attorney Chambless Math Carr P.C. Account $160,672 c/o American Home Assurance Co. P.O. Box 230759 Montgomery, AL 36123-0759 Delta Industries Account $110,077 10121 Southpark Drive Gulfport, MS 39503 Reynolds Ready Mix dba Account $42,393 Atmore Ready P.O. Box 200 Atmore, AL 36504 Mississippi Tax Comm. Taxes $35,204 P.O. Box 960 Jackson, MS 39205-0960 Credit Collection Services Account $31,081 RMS c/o Companion Property and Account $31,050 Casualty RMS c/o St. Paul's Travelers Account $10,328 State of Alabama Taxes $26,298 Bayside Lumber & Supply Inc. Account $23,614 Putzmeister, Inc. Account $13,413 Windham Professionals Account $8,677 Bush & Kennedy Account $8,255 ICM Account $6,965 Nathan & Nathan, P.C. Account $6,423 Gregory McAtee Account $6,093 John R. Frawley Account $5,691 Blue Rents Account $5,616 Hudson & Keyse, LLC Account $5,181 McKay, Simpson, Lawler, Account $4,656 Franklin, & Foreman, PLLC ALLIED HOLDINGS: Wants December 23 as Lease Rejection Deadline -------------------------------------------------------------- Pursuant to Section 365(d)(4) of the Bankruptcy Code, Allied Holdings, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Georgia to extend their deadline to assume or reject their non-residential real property leases through and including Dec. 23, 2006. Thomas R. Walker, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, relates that the Debtors continue to be lessees to 51 non-residential real property leases. Mr. Walker notes that cause exists for the Court to grant the extension because: * given the large number of Leases, the Debtors need additional time to determine whether the Leases should be assumed or rejected; * the Debtors have paid and will continue to pay all postpetition lease obligations under the Leases; * no harm to the landlords and to the Leases will result from an extension of time because all lease obligations will continue to be paid; * the Debtors have been diligent in their efforts to reject and assume nonresidential real property leases which, in the Debtors' business judgment, needed to be rejected or Assumed; and * none of the 51 Leases should be rejected or assumed at this point. A list of the 51 Leases is available for free at: http://researcharchives.com/t/s?1105 Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ALLIED HOLDINGS: Intends to Sign New Brokerage Pact with USI ------------------------------------------------------------ Allied Holdings, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Northern District of Georgia to reject their present Claims Administration Agreement with USI of Georgia, Inc., and to enter into a brokerage services agreement with the company. In August 2005, the Court authorized the Debtors to maintain and continue their insurance programs. Since 2002, USI has provided claims administration and brokerage services to the Debtors in connection with the Debtors' insurance coverage. Pursuant to a claims administration and brokerage services agreement dated May 1, 2002, USI agreed to perform for Allied Holdings, Inc., and its subsidiaries brokerage services and claims administration services related to certain insurance programs. Allied, in turn, pays administrative fees and costs to USI. The initial term of the Claims Administration Agreement was through April 30, 2007, subject to automatic renewal for successive two-year periods. On September 30, 2004, the Debtors and USI agreed to an extension of the Claims Administration Agreement through Oct. 31, 2009, subject to termination rights. Harris B. Winsberg, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, relates that the Debtors now want to use a different company for their claims administration needs. However, the Debtors wish to continue using USI's brokerage services, and have negotiated a new agreement with USI for that purpose. The proposed Brokerage Services Agreement provides that: -- USI will be the Debtors' exclusive record broker for: (1) auto, property and general liability insurance coverage for all of the Debtors' operations in the U.S.; and (2) excess liability, directors and officers liability, employment practices liability, fiduciary, crime, kidnap and ransom, chaplain's professional liability, workers' compensation, excess workers' compensation, and all other coverages for all Allied operations; -- the Debtors will pay a monthly fee of $48,333 for the services from the date of the Court's approval of the Brokerage Services Agreement through October 31, 2009. The new Brokerage Services Agreement also provides for additional compensation to USI with regard to other coverages and products, as well as for other services, through commissions and other compensation as is customary in the insurance brokerage industry. Mr. Winsberg tells the Court that USI has proven to be a reliable and capable broker for the Debtors over the past four years. The Brokerage Services Agreement provides for the continuation of brokerage services by USI through the same terms originally contemplated by the Claims Administration Agreement with a comparable pricing structure. USI has agreed to the arrangement, and has agreed to waive any pre- or postpetition claims it may have against the Debtors under the Claims Administration Agreement except claims for payment for services rendered under the Claims Administration Agreement. Mr. Winsberg says the Claims Administration Agreement is a burden to the Debtors' bankruptcy estates and should be rejected because the Debtors' claims administration needs will be better served by a different company. No downside to rejecting the Claims Administration Agreement exists, Mr. Winsberg adds. A full-text copy of the Brokerage Services Agreement is available for free at http://researcharchives.com/t/s?1106 Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) AMERICAN MEDIA: Names Jack Craven as Chief Financial Officer ------------------------------------------------------------ American Media, Inc., has named Jack Craven as executive vice president and chief financial officer. The Company disclosed that Mr. Craven brings more than 30 years of financial, media, and news industry experience. Mr. Craven succeeds Carlos Abaunza, who has agreed to serve as a consultant to the company. As the Company's executive vice president and chief financial officer, Mr. Craven will be responsible for the company's finances, accounting, financial reporting, information technology and planning functions. He will oversee the completion of the Company's restatement of its financial statements. Mr. Craven also will play a significant role in the Company's business development activities, and be involved with investor relations. The Company also disclosed that Mr. Craven is a senior publishing executive with an excellent track record of growing publishing operations. Prior to forming his own CPA practice, he was executive vice president and chief financial officer of Time Inc.'s Retail Marketing and Sales organization. He also served as deputy director of Strategic Planning at Time Inc. Mr. Craven's experience also includes directing the world-wide operations of Jobson Publishing, where he served as senior vice president operations and chief financial officer. Mr. Craven was the senior vice president and chief financial officer for Lear's and McCall's publishing companies. He is the former chairman of the New York State Society of CPAs Publishing & Printing Committee, and a member of the American Institute of Certified Public Accountants. Mr. Craven has been licensed as a CPA since 1974. "The company's hiring of Jack Craven represents a significant addition to our company's accounting and finance capabilities," David Pecker, chairman and chief executive officer, said. "As Jack has been a consultant to AMI on the restatement process, he comes in with the ability to hit the ground running." "American Media remains focused on the completion of the restatement of its financial statements," Mr. Pecker, said. "Mr. Craven's experience and expertise will greatly aid in the completion of this process." The Company further disclosed that Willkie Farr & Gallagher LLP, advises its Audit Committee on the restatement process. PricewaterhouseCoopers has aided Willkie Farr in their review. Headquartered in Boca Raton, Florida, American Media Operations Inc. is the United States' largest publisher of celebrity, health and fitness, and Spanish language magazines. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. AMI also owns Distribution Services, Inc. * * * As reported in the Troubled Company Reporter on Jan. 19, 2006, Standard & Poor's Ratings Services lowered the corporate credit rating on American Media Operations Inc. to 'B-' from 'B', and the subordinated debt rating to 'CCC' from 'CCC+'. S&P affirmed the 'B' rating on the company's senior secured bank loan at that time. As reported in the Troubled Company Reporter on Sept. 4, 2006 Moody's Investors Service downgraded all ratings of American Media Operations, Inc.: -- $60 million senior secured revolving credit facility, due 2012 -- to B2 from B1 -- $450 million senior secured term loan, due 2013 -- to B2 from B1 -- $150 million 8.875% senior subordinated notes, due 2011 - to Caa3 from Caa1 -- $400 million 10.25% senior subordinated notes, due 2009 -- to Caa3 from Caa1 -- Corporate Family rating -- to Caa1 from B2 The rating outlook is negative. ANCHOR GLASS: Argues 33 Retiree Claims are Invalid -------------------------------------------------- Certain retirees and beneficiaries filed 33 claims arising from Anchor Glass Container Corporation's life insurance policy, medical insurance premium, pension payments and salaried employees' savings plan. Reorganized Anchor Glass asserts that the Retiree Claims are invalid for one or more of these reasons: (a) The 2nd Amended Plan of Reorganization did not affect the life insurance policy, the medical premium payments and the salaried employees' savings plan; (b) The claimants receive pension payments from Pension Benefit Guaranty Corporation; or (c) The retirement benefits agreements with some claimants were rejected or modified by the company. Most of the claimants filed no claim amounts. Thus, the claims were deemed invalid, Robert A. Soriano, Esq., at Shutts & Bowen LLP, in Tampa, Florida, tells the U.S. Bankruptcy Court for the Middle District of Florida. Mr. Soriano adds that several claimants filed multiple claims, asserting different statuses. Accordingly, Reorganized Anchor Glass asks the Court to disallow 30 Retiree Claims. Among the largest of the claims are: Claimant Claim No. Claim Amount -------- --------- ------------ Darell Murphy, Sr. 543.1 $125,000 Faye Kennedy 666 50,117 Viola Smith 1075 25,917 Karl Smith 164 2,250 Karl Smith 164.1 60,000 Valerio Spogli 1056 593 Valerio Spogli 1056.1 593 Julia DiMuro filed Claim Nos. 670 for $420,223, asserting an undefined status, and Claim No. 670.1 for $420,223, asserting a priority status. Ms. DiMuro received pension payment under the Diamond Bathurst Preferred Compensation Plan. Anchor Glass has rejected the Diamond Bathurst Plan. Beverly Meierbachtol filed Claim No. 798, asserting an unliquidated priority claim relating to loss of post-retirement health benefits under Anthem Blue Cross. Anthem Blue Cross is provided by third-party insurers, hence, the Debtors assert that Ms. Meierbachtol has no valid claim. Accordingly, the Reorganized Debtor further asks the Court to disallow Claim Nos. 670, 670.1 and 798. 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) ASARCO LLC: Proposes Uniform Procedures for Settling Tax Claims --------------------------------------------------------------- ASARCO LLC and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to pay their Ad Valorem Taxes according to proposed payment procedures. The Debtors estimate that they owe approximately $4,200,000 ad valorem taxes to 40 different taxing authorities, representing more than 700 distinct properties. The Debtors intend to pay the Ad Valoram Taxes to minimize the ongoing expense to their estates. By their nature, the Ad Valorem Taxes are secured by certain real property, Judith W. Ross, Esq., at Baker Botts L.L.P., in Dallas, Texas, points out. In addition, the Ad Valorem Taxes are entitled to priority treatment under Section 507(a)(8)(B) of the Bankruptcy Code. As each day passes, the Ad Valorem Taxes increase due to postpetition interest. In light of the current copper market and the Debtors' current cash position, the Debtors believe that it is in their best interest to pay the Ad Valorem Taxes now and stop the accrual of postpetition interest. Furthermore, Ms. Ross asserts, paying the Ad Valorem Taxes now will avoid improper claims for attorneys' fees. Payment of the Ad Valorem Taxes will also help local school districts and counties with their funding and budget requirements. To reduce the burden of seeking Court approval for every payment the Debtors may make for their Ad Valorem Taxes, they propose to establish uniform procedures for settling the tax claims: (a) If the applicable taxing authority will waive all attorneys' fees, penalties, and interest, the Debtors will pay the Ad Valorem Taxes without further notice. (b) If the applicable taxing authority will not waive all attorneys' fees, penalties, and interest, the Debtors will pay both the Ad Valorem Taxes and the accrued interest and attorneys' fees without further Court order, provided that the Debtors will notify: * counsel for the Official Committee of Unsecured Creditors of ASARCO LLC; * counsel for the Official Committee of Unsecured Creditors of the Asbestos Subsidiary Debtors; * counsel for Robert C. Pate, the future claimants representative; * counsel to The CIT Group/Business Credit, Inc.; and * the United States Trustee. (c) The Notice for the Proposed Tax Payment will: * identify the Taxes being paid; * identify the amount of interest, penalties, and attorneys' fees being paid; * note the significant terms of any settlement with the relevant taxing authority; and * note any evidence that the relevant taxing authority consents to waive any portion of owed interest or attorneys' fees. (d) If no written objections are filed with the Court by any of the Notice Parties, the Debtors will immediately consummate the payment without further Court order. (e) If a written objection filed with the Court by a Notice Party cannot be resolved, the relevant payment will only be made upon further Court order or resolution of the objection by the parties in question. About ASARCO LLC Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). ASARCO LLC: Wants to Assume CBRY Stockholders Agreement ------------------------------------------------------- ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to; (a) assume the Stockholders' Agreement and the related contracts for the sale of Rail Partners II, LLC' shares in Copper Basin Railway, Inc.; (b) pay $11,300,000 to cure all defaults; and (c) purchase Rail Partners' 55% equity interest in Copper Basin Railway, Inc. Copper Basin Railway, Inc., is a Class III short-line freight railroad located in South Central Arizona. Its primary business is transporting minerals to and from ASARCO LLC's Ray Mine and Hayden, Arizona smelter. ASARCO owns 45% of the outstanding capital stock of CBRY. Rail Partners II, LLC, owns the remaining 55% of the CBRY stock. Rail Partners is currently controlled by K. Earl Durden. Rail Partners and ASARCO's relationship was established in 1986, as memorialized in four agreements: 1. a Stockholders' Agreement, 2. an ore car Lease Agreement, 3. a Rail Transportation Agreement, and 4. a Compensation Agreement for the management of CBRY. The Stockholders' Agreement provides a "put" right in favor of Rail Partners, pursuant to which Rail Partners may sell its capital stock to ASARCO for the fair market value of the shares. The Stockholders' Agreement also provides "call" rights in favor of ASARCO, pursuant to which ASARCO may purchase either: (a) the 45% of Rail Partners' capital stock formerly held by Green Bay Packaging, Inc.; (b) the 10% of Rail Partners' capital stock formerly owned by Mr. Durden; or (c) both capital stocks either at the same time or different times. In February 2004, Mr. Durden notified ASARCO of his intent to sell his 2,200 shares of CBRY stock to ASARCO. Mr. Durden has made clear that he no longer wishes to be co-owner of the CBRY with ASARCO. Rail Partners and ASARCO, however, were unable to agree on the fair market value of the stock. In January 2005, Ernst & Young appraised Rail Partners' shares at $11,300,000. ASARCO raised various objections to E&Y's valuation. In March 2005, Rail Partners sued ASARCO in the Arizona state court for breach of the "put" provision and sought specific enforcement or in the alternative, damages totaling $11,300,000. The litigation was automatically stayed upon ASARCO's bankruptcy filing. In July 2006, ASARCO sought and obtained the Court's permission to employ Mercer Management Consulting, Inc., as special purpose financial advisors, to provide an independent valuation of CBRY. James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas, relates that on Aug. 25, 2006, Mr. Durden notified ASARCO that he is in the process of selling Rail Partners to an affiliate of Washington Corporation, a company that is also aggressively seeking to buy ASARCO or its assets. Mr. Durden says Rail Partners' sale to Washington will likely close soon. Mr. Durden also informed ASARCO that he has received letters of intent from Patriot Rail and Genesee & Wyoming for the purchase of CBRY. Mr. Prince asserts that the railway is crucial to ASARCO's business. Any disruption in the railway will cause a disruption in ASARCO's copper production and in turn, will damage its cash flow and critical relationships with its customers. If ASARCO does not assume and purchase the shares, control of the railroad is at imminent risk of being transferred to a third party, Mr. Prince notes. Given the importance of CBRY to ASARCO's business operations and ability to generate revenue, Mr. Prince contends, the company cannot afford any disruption whatsoever in rail service or risk another round of freight rate increases that may result if control of the railway is transferred to a third party. About ASARCO LLC Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). ATARI INC: Receives Notice of Delisting From Nasdaq Global Market ----------------------------------------------------------------- Atari, Inc., has received a Nasdaq Staff Determination Letter stating that it failed to regain compliance with the Rule during the 180 day cure period and its securities are subject to delisting from the Nasdaq Global Market. The Company previously received a notice from The Nasdaq Stock Market advising that it was not in compliance with Nasdaq Marketplace Rule 4450(a)(5), which requires the Company to maintain a $1 minimum bid price for its Common Stock. Nasdaq gave the Company 180 calendar days, or until Aug. 30, 2006, to regain compliance with the Rule. The Company intends to request an appeal hearing before the Nasdaq Listing Qualifications Panel and present its plan of compliance. The request for an appeal will stay the Staff's Determination and its securities will remain listed on the Nasdaq Global Market until the Panel issues its decision following the hearing. New York-based Atari, Inc. (Nasdaq: ATAR) -- http://www.atari.com/-- develops interactive games for all platforms and is one of the largest third-party publishers of interactive entertainment software in the U.S. The Company's 1,000+ titles include franchises such as The Matrix(TM) (Enter The Matrix and The Matrix: Path of Neo), and Test Drive(R); and mass- market and children's franchises such as Nickelodeon's Blue's Clues(TM) and Dora the Explorer(TM), and Dragon Ball Z(R). Atari, Inc. is a majority-owned subsidiary of France-based Infogrames Entertainment SA (Euronext - ISIN: FR-0000052573), the largest interactive games publisher in Europe. Going Concern Doubt As reported in the Troubled Company Reporter on July 3, 2006, Deloitte & Touche LLP expressed substantial doubt about Atari, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the for the fiscal years ended March 31, 2006 and 2005. The auditing firm pointed to Atari's significant operating losses and the expiration of its line of credit facility. AURIGA LABORATORIES: June 30 Working Capital Deficit Tops $1.7MM ---------------------------------------------------------------- Auriga Laboratories, Inc., incurred a $3,702,787 net loss on $506,995 of net revenues for the three months ended June 30, 2006, the Company disclosed on a Form 10-QSB filed with the Securities and Exchange Commission on Aug. 10, 2006. At June 30, 2006, the Company's balance sheet showed $1,873,004 in total assets and $4,589,818 in total liabilities, resulting in a $2,716,814 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $1,399,504 in total current assets available to pay $3,158,087 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?1102 Going Concern Doubt Jaspers + Hall, PC, in Denver, Colorado, raised substantial doubt about Auriga Laboratories' ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Sept. 30, 2005. The auditor pointed to the Company's operating losses, has minimal working capital as of Sept. 30, 2005, and no ongoing source of income. About Auriga Laboratories Headquartered in Norcross, Georgia, Auriga Laboratories(TM), Inc. -- http://www.aurigalabs.com/-- is a pharmaceutical company capitalizing on high-revenue markets and opportunities in the pharmaceutical industry through aggressive sales, integrated marketing and advanced in-house drug development capabilities. BEISWENGER HOCH: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Beiswenger, Hoch & Associates, Inc. 510 Shotgun Road, Suite 400 Sunrise, FL 33326 Bankruptcy Case No.: 06-14264 Type of Business: The Debtor provides engineering services for roadways and bridges. See http://www.bhaengineers.com/ Chapter 11 Petition Date: September 1, 2006 Court: Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: Mark S. Roher, Esq. Arthur H. Rice, Esq. Rice Pugatch Robinson & Schiller, P.A. 101 Northeast 3rd Avenue, Suite 1800 Fort Lauderdale, FL 33301 Tel: (954) 462-8000 Fax: (954) 462-4300 Total Assets: $4,828,452 Total Debts: $3,520,151 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ 190 Building Company $343,755 O Box 1368 Miami Beach, FL 33160 Tel: (305) 944-5151 Norona Ltd. LLC $312,258 510 Shotgun Road, Suite 400 Sunrise, FL 33326 Tel: (954) 334-2754 Plantation Leasing $210,849 510 Shotgun Road, Suite 400 Sunrise, FL 33326 Tel: (954) 334-2754 Florida Turnpike $76,830 FL Department of Transportation P.O. Box 613069 Ocoee, FL 34761 Global Leasing $40,046 510 Shotgun Road, Suite 400 Sunrise, FL 33326 Tel: (954) 334-2754 Blue Cross Blue Shield of Florida $37,497 Eric Jospeh $34,000 Mehta & Assoc., Inc. $33,019 National Highway Institute $26,600 C&M Environmental & Geotech Services $14,089 MEP Structural $7,261 Guardian Life Insurance Co. $4,230 Marlin Engineering, Inc. $3,786 MAK Hotel Associates, Ltd. $3,489 TotalBank $3,339 Ardaman & Associates, Inc. $734 City of Sunrise $420 Luis S. Noble, PE $400 Quill Corp. $334 Konica Minolta Business Solution $291 CALBATECH INC: Balance Sheet Upside-Down by $5.26M at June 30 ------------------------------------------------------------- CalbaTech, Inc., incurred a $1,164,176 net loss on $242,555 of revenue during the second quarter ending June 30, 2006, the Company disclosed on a Form 10QSB report filed with the Securities and Exchange Commission. As of June 30, 2006, the Company's balance sheet showed $553,574 in assets and $5,823,436 in liabilities. The Company's equity deficit narrowed to $5,269,862 as of June 30, 2006, from a $5,651,861 deficit at Dec. 31, 2005. James DeOlden, the Company's chief executive officer, said, the Company's success and ongoing financial viability is contingent upon its selling of its products and the related generation of cash flows. However, should it be necessary, management believes it would be able to meet its cash flow requirements through additional debt or equity financing. He said both the management of the Company's current growth and the expansion of the Company's current business involve significant financial risk and require significant capital investment. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?110e Going Concern Doubt De Joya Griffith & Company, LLC, expressed substantial doubt about Calbatech, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's recurring losses from operations, negative working capital, and negative cash flows from operations. About CalbaTech CalbaTech, Inc. (OTCBB: CLBE) -- http://www.CalbaTech.com/-- is an emerging life sciences company concentrating on providing products and platforms to the research market for biotech and pharmaceutical companies and academic institutions. CLARION TECH: Shareholders' Deficit Tops $97.5 Mil. at July 1 ------------------------------------------------------------- Clarion Technologies, Inc., filed its financial statements for the second quarter ended July 1, 2006, with the Securities and Exchange Commission on Aug. 15, 2006. The Company recorded net loss of $2,268,000 for the second quarter of 2006 and net loss of $4,643,000 for the first six months of 2006, compared with net loss of $640,000 and $3,489,000 in the corresponding periods of 2005, respectively. This decrease is a result of lower gross profit from the increased cost of sales and the Company's slightly higher interest expense. Net sales of $29,197,000 in the second quarter of 2006 were $9,783,000 or 25.1% lower than net sales of $38,980,000 in the second quarter of 2005. Net sales of $65,033,000 for the first six months of 2006 were $6,221,000 or 8.7% lower than the comparable period of 2005. At July 1, 2006, the Company's balance sheet showed $70,041,000 in total assets, $108,120,000 in total liabilities, $37,664,000 in redeemable series A preferred stock, and $19,301,000 in redeemable series B preferred stock, resulting in a $97,594,000 shareholders' deficit. The Company had an $85,923,000 deficit at Dec. 31, 2005. The Company expects total revenue levels for fiscal 2006 to decrease compared with fiscal 2005. This is primarily due to the elimination of electronics content on an existing program that began in 2005. The Company has retained the program and continue to supply the injection-molded product. However, the electronics content is now assembled and applied by the customer instead of the Company. This change was effective in March 2006 and will cause total revenues to decline from fiscal 2005 levels. The impact of this change in the second quarter of 2006 versus the second quarter of 2005 is a $3,000,000 reduction in sales. In the second quarter of 2006, the Company experienced lower sales from a major customer in the appliance market due to softer demand for its products. Sales to this customer in the second quarter of 2006 were $2,345,000 less than the same period in 2005. Excluding the circumstance involving the electronics content elimination, the Company expects revenues to increase. A major customer is in the latter stages of transitioning its production from Greenville, Mich., to Juarez, Mexico. The Company has opened a facility in Juarez to meet the needs of its customer and it expects to obtain additional business once the transition period is complete due to a long-term supply agreement with that customer. In addition, the Company will begin a new program with a core automotive customer during fiscal 2006. This new program is expected to generate revenues in excess of normal automotive program expiration. Default On March 31, 2006, the Company defaulted on certain financial covenants contained in the Company's Senior Loan Agreement as well as certain financial covenants contained in the Company's Senior Subordinated Loan Agreement. Those defaults and subsequent defaults are ongoing. The Company's debt has not been accelerated but substantially all of it, including accrued interest, is classified as current due to the covenant violations. The Company continues to negotiate with its lenders to obtain default waivers and amendments to both credit facilities. The Company believes it will reach a solution acceptable to all parties. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?1107 Going Concern Doubt As reported in the Troubled Company Reporter on April 27, 2006, BDO Seidman, LLP, raised substantial doubt about Clarion Technologies, Inc.'s ability to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's recurring losses from operations, working capital deficit, accumulated deficit and violation of certain covenants in its loan agreements. About Clarion Technologies Headquartered in Grand Rapids, Michigan, Clarion Technologies, Inc. -- http://www.clariontechnologies.com/-- creates products and parts for the automotive, furniture and consumer goods industry. The Company makes plastic injection molding, and offers post-molding assembly and finishing operations. COLLINS & AIKMAN: Exchanging Secured Debt for Stock Under Plan -------------------------------------------------------------- After a review of their current business operations, Collins & Aikman Corporation and its debtor-affiliates concluded that continuing to operate as a going concern would maximize creditors' recovery. The Debtors believe that their businesses and assets have significant value that would not be realized in liquidation. The Debtors' Plan of Reorganization provides for cancellation of claims under their senior secured credit facility in exchange for: (1) new common stock; (2) replacement of all undrawn letters of credit under the Prepetition Facility; (3) retention of adequate protection payments; (4) payment of reasonable fees and expenses of attorneys and financial advisor of JPMorgan Chase Bank, N.A., as administrative agent under the Prepetition Credit Agreement, in connection with consummation, administration and enforcement of Plan; and (5) certain releases and exculpation. John R. Boken, chief restructuring officer for Collins & Aikman Corporation, explains that the Debtors, as Reorganized Debtors, will continue to exist after the Effective Date as separate corporate entities, with all the powers of a corporation under applicable law. The Plan allows the Reorganized Debtors to enter into certain transactions to effect a corporate restructuring of their businesses, including mergers, consolidations, dispositions, liquidations or dissolutions. The initial board of directors of Reorganized Collins & Aikman Corporation will comprise the chief executive officer of Reorganized C&A Corporation and six other members selected by the Steering Committee of secured lenders. Exit Financing To obtain funds necessary to make payments required on the Effective Date and conduct post-reorganization operations, the Reorganized Debtors expect to enter into a New Bank Facility upon emergence from their Chapter 11 Cases. The Debtors are in discussions with several lenders to arrange this facility and have already received preliminary exit financing proposals. The New Bank Facility will likely be secured by substantially all of the real and personal property of the Reorganized Debtors. Litigation Trust On the Effective Date, a Litigation Trust will be established pursuant to the terms of a Litigation Trust Agreement. The Litigation Trust will initially be funded with $3,000,000, which will be repaid to the Reorganized Debtors from the first proceeds received by the Litigation Trust. The Litigation Trust will have the authority to file, settle, compromise, withdraw or litigate to judgment objections to general unsecured claims, senior note claims, and senior subordinated note claims. Treatment of Claims Under the Plan of Reorganization, the Debtors group claims and interests into 11 classes: Class Designation Status/Recovery Voting Rights ----- ----------- --------------- ------------- n/a Administrative Claims 100% Recovery - n/a Priority Tax Claims 100% Recovery - 1 Other Secured Claims Unimpaired deemed to accept 100% Recovery 2 Other Priority Claims Unimpaired deemed to accept 100% Recovery 3 Prepetition Facility Impaired entitled to vote Claims 4 OEM Junior Secured Impaired entitled to vote DIP Claims 5 General Unsecured Impaired entitled to vote Claims 6 Senior Note Claims Impaired entitled to vote 7 PBGC Claims Impaired entitled to vote 8 Senior Subordinated Impaired entitled to vote Note Claims 9 Equity Interests Impaired deemed to reject 0% Recovery 10 Subordinated Impaired deemed to reject Securities Claims 0% Recovery 11 Intercompany Claims Impaired deemed to reject 0% Recovery Kurtzman Carson Consultants, LLC, the Debtors' claims and solicitations agent, will: -- answer questions regarding the procedures and requirements for voting to accept or reject the Plan and for objecting to the Plan; -- provide additional copies of all materials; -- oversee the voting tabulation; and -- process and tabulate ballots for each Class entitled to vote to accept or reject the Plan. Parties-in-interest may contact KCC at: Collins & Aikman Solicitation c/o Kurtzman Carson Consultants L.L.C. 12910 Culver Boulevard, Suite I Los Angeles, California 90066 As of Aug. 25, 2006, KCC had received about 9,005 proofs of claim in the Debtors' Chapter 11 cases: (a) 1,024 secured claims for $3,091,210,506; (b) 40 administrative claims for $2,195,440; (c) 898 priority claims for $7,495,495,767; and (d) 7,043 unsecured claims for $42,639,506,934. The Debtors believe that many of the claims are invalid, untimely, duplicative or overstated. The Debtors are in the process of objecting to those claims. Through objections, the Court has disallowed 227 claims for $4,342,718,570. At the conclusion of the Claims objection, reconciliation and resolution process, the Debtors estimate that the aggregate amount of claims for each class will be: Class Estimated Amounts ----- ----------------- Allowed Administrative Claims $95,000,000 Allowed Secured Claims $940,000,000 Allowed Priority Claims $12,000,000 Allowed Senior Note Claims $521,000,000 Allowed Senior Subordinated Note Claims $414,000,000 Allowed General Unsecured Claims $540,000,000 Liquidation & Valuation Analyses The Debtors' management, together with KZC Services, LLC, their restructuring consultants, and Lazard Freres & Co. LLC, their financial advisors, prepared a Liquidation Analysis and Valuation Analysis, which describe the proceeds to be realized under the Plan as currently proposed, versus the distributions that would be realized by holders of claims and equity interests if the Debtors were liquidated in a case under Chapter 7 of the Bankruptcy Code. The Debtors believe that the Plan will produce a greater recovery for creditors than would be achieved in a Chapter 7 liquidation because, among other things: -- proceeds available for distribution in a liquidation under Chapter 7 would not include the Debtors' going concern value; -- the administrative and postpetition claims generated by a conversion to a Chapter 7 and the administrative costs of liquidation and associated delays would likely diminish the assets available for distribution to creditors. The value of the equity in the Reorganized Debtors on their exit from bankruptcy as a going concern is projected to be greater than the recovery realized from a liquidation of the Debtors' assets, Mr. Boken relates. Attempts to Sell the Business The Debtors had initiated a process to sell the company "in whole or in part" as part of its dual-track strategy. As of August 30, 2006, the Debtors report that they have been unable to reach an agreement with the interested parties that they believe would be acceptable to creditors. However, the Debtors continue to have discussions and provide due diligence information to certain parties. The Plan preserves the Debtors' enterprise value for holders of allowed claims while leaving open the possibilities of sale of some or all of their businesses should a suitable opportunity arise. A full-text copy of Collins & Aikman's Plan and Disclosure Statement is available for free at: http://researcharchives.com/t/s?10f2 The exhibits and appendices to the Plan and Disclosure Statement will be filed in pieces and will be posted in the same link as soon as they become available. The Debtors say they will file the Plan exhibits no later than 10 days before the hearing on the Disclosure Statement. The Court has yet to schedule the Disclosure Statement Hearing. 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. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COLLINS & AIKMAN: Outlines Business Plan in Disclosure Statement ---------------------------------------------------------------- In the Disclosure Statement accompanying the Plan of Reorganization, Collins & Aikman Corporation and its debtor- affiliates note that while they intend to maintain the relationships currently enjoyed with the Big 3 automakers -- DaimlerChrysler, Ford, and General Motors -- the Debtors intend to enhance business relations with new domestic customers, including Toyota, Nissan, Honda and Hyundai. John R. Boken, chief restructuring officer for the Debtors, relates that key initiatives include: -- repairing relationships with existing customers; -- expanding the scope of business opportunities with new domestic customers; -- addressing 2007 and 2008 revenue declines due to loss of quoting activity while in bankruptcy; -- attracting certain targeted short lead-time new awards; and -- winning back certain programs lost in 2004 and 2005. Longer term, the Debtors believe they are well positioned to win new awards for major programs with all customers in 2009 and beyond. According to Mr. Boken, the Debtors' strategy to expand the scope of business opportunities with new domestic customers includes levering existing relationships with the new domestic customers in the carpet & acoustics business to develop similar relationships in the plastics segment. In addition, the Debtors are reviewing alternatives to utilize joint ventures and keiretsu and to establish an engineering sales and marketing presence in Asia to broaden the scope of business opportunities. Furthermore, the Debtors have identified opportunities to improve manufacturing efficiency and right size the cost infrastructure by incorporating best practices for processes, procedures and technologies across their operations, Mr. Boken relates. Moreover, the Debtors are negotiating with numerous contract and lease counterparties to reduce costs. Potential Recoveries The Debtors expect to recover certain amounts from various entities. (1) European Operations The Debtors had asserted claims for $338,733,078 against 19 of their foreign subsidiaries and affiliates in Europe: European Debtor Claim Amount --------------- ------------ C&A Automotive Company Italia, S.r.l. $252,567 C&A Automotive Fabrics Limited 87,899 C&A Automotive Floormats Europe B.V. 25,420 C&A Automotive Holding Gmbh 233,758 C&A Automotive Limited 496,185 C&A Automotive s.r.o. 1,654,506 C&A Automotive Systems AB 1,018,431 C&A Automotive Systems S.L. 5,786,358 C&A Automotive Systems, GmbH 3,734,426 C&A Automotive Trim B.V. 11,331,556 C&A Automotive Trim B.V.B.A. 1,213,731 C&A Automotive Trim GmbH 1,872,505 C&A Automotive Trim Limited 219,808 C&A Europe B.V. 7,579,940 C&A Europe S.A. 233,253,012 C&A Holding AB 229 C&A Holdings B.V. 67,510,279 C&A Products, GmbH 2,356,111 Dura Convertible Systems GmbH 106,357 The Debtors estimate a $50 million to $70 million recovery from the European Debtors, with over 90% of that amount coming from Collins & Aikman Europe S.A., Collins & Aikman Holdings B.V., and Collins & Aikman Automotive Trim B.V. The Debtors anticipate that an initial distribution will be made by December 31, 2006, with the final distribution being made by March 31, 2007. As previously reported, the European Debtors commenced administration proceedings pursuant to the English insolvency law. IAC Acquisition Corporation Limited -- an entity funded by WL Ross & Co. LLC and Franklin Mutual Advisors LLC -- purchased substantially all assets of the European Debtors for over $100,000,000. As part of the sale, the Debtors agreed to transfer and license certain intellectual property to IAC for $12,500,000. (2) Avoidance Actions The Debtors are currently investigating prepetition transfers that may be avoided under Chapter 5 of the Bankruptcy Code as fraudulent or otherwise. With respect to potential actions under Section 547 of the Bankruptcy Code, in the 90 days before the Petition Date, the Debtors made 96,000 payments aggregating $618,000,000 to 3,900 different parties, Mr. Boken relates. About 210 of the 3,900 parties received payments in excess of $500,000 during that period, amounting to $486,000,000, Mr. Boken says. Mr. Boken maintains that with respect to payments to insiders during the one-year period before the Petition Date, the Debtors made $7,400,000 in payments to 32 entities. Also during the one- year period, the Debtors transferred $244,000,000 among various affiliates, he adds. The Debtors are continuing to investigate the facts and circumstances of each of these transfers. 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. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DANA CORP: U.S. Trustee Appoints 7-Member Non-Union Retiree Panel ----------------------------------------------------------------- Diana G. Adams, the acting U.S. Trustee for Region 2, appointed seven retirees to serve in the Official Committee of Non-Union Retirees in Dana Corporation and its debtor-affiliates' Chapter 11 cases: 1. Robert Fitzmorris 1176 Harbor Town Way Venice, FL 34292 Tel. No.: (941) 493-2178 2. Michael R. Carrigan 926 Emerald Bay Drive Destin, FL 32541 Tel. No.: (850) 269-2003 3. Claudia J. Holstein 428 Rosedale Terrace Winchester, MO 63021 Tel. No.: (636) 394-6236 4. Edward Balcar 1827 Glen Ellyn Drive Toledo, OH 43614 Tel No.: (419) 382-7634 5. Donna R. Doyle 282 South Hampton Drive Bristol, TN 37620 Tel. No.: (432) 764-4010 6. Melvin H. Rothlisberger 5236 Spring Creek Lane Sylvania, OH 43560 Tel. No.: (419) 824-2456 7. Edward Cole 1711 Woodland Lake Pass Fort Wayne, IN 46825 Tel. No.: (260) 489-2279 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. 20; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Equity Committee Retains Fried Frank as Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave the Official Committee of Equity Security Holders in Dana Corporation and its debtor-affiliates' chapter 11 cases permission to employ Fried, Frank, Harris, Shriver & Jacobson, LLP, as its counsel, nunc pro tunc to June 30, 2006. As the Equity Committee's counsel, Fried Frank will: (a) provide legal advice with respect to the Equity Committee's rights, powers and duties in the Chapter 11 cases; (b) assist the Equity Committee in its analysis and negotiation of any plan of reorganization and related corporate documents; (c) assist and advise the Equity Committee with respect to its communications with the general equity body regarding significant matters in the Chapter 11 cases; (d) review, analyze, and advise the Equity Committee with respect to documents filed with the Court and respond on behalf of the Equity Committee to all applications, motions, answers, orders, reports, and other pleadings in connection with the administration of the Debtors' estates in the Chapter 11 cases; and (e) perform any other legal services requested by the Equity Committee in connection with the Chapter 11 Cases and the confirmation and implementation of a plan in the Chapter 11 cases. Fried Frank will be paid based on its customary hourly rates: Professional Hourly Rate ------------ ----------- Partners $650 to $995 Counsel $550 to $850 Special Counsel $595 to $620 Associates $315 to $540 Legal Assistants $170 to $235 These professionals will have primary responsibility of providing services to the Debtors: Professional Hourly Rate ------------ ----------- Brad Eric Scheler, Esq. $995 Gregg Weiner, Esq. $750 Gary Kaplan $650 Brian Pfeiffer $525 Julia Smolyanskiy $470 Joanna Palacios $370 Fried Frank will also be reimbursed for all necessary expenses it will incur in providing services to the Equity Committee. Brad Eric Scheler, Esq., a member at Fried, Frank, assures the Court that his firm does not represent any interest adverse to the Equity Committee or the Debtors. Fried Frank is also a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. 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. 20; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORPORATION: Selects Skadden Arps as Special Counsel --------------------------------------------------------- Dana Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Skadden Arps as their special counsel, nunc pro tunc to Mar. 3, 2006. As of Mar. 3, 2006, the Debtors employed Skadden, Arps, Slate, Meagher & Flom LLP, as an ordinary course professional. However, the Debtors have determined that Skadden Arps' work would now be more significant than originally anticipated. As special counsel, Skadden Arps will: (a) advise the Debtors' Audit Committee and their independent directors in connection with matters relating to the independent investigation and the restatement of the company's earnings, including responding on behalf of the company to information requests and subpoenas issued by the Securities and Exchange Commission and other federal and state agencies; and (b) advise the Debtors with respect to employee benefit and executive compensation matters, including with respect to compliance with Section 409A of the Internal Revenue Code. The Debtors will pay Skadden Arps its customary hourly rates: Professional Hourly Rates ------------ ------------ Partners and Counsel $585 to $835 Special Counsel $560 to $640 Associates $295 to $540 Legal Assistants $90 to $230 In addition, the Debtors will reimburse the necessary expenses Skadden Arps incurs while providing services on their behalf. D.J. Baker, Esq., a member at Skadden Arps Slate Meagher & Flom LLP, in New York, assures the Court that his firm does not hold any interest adverse to the Debtors and their estates, and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. 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. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. 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. 20; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DATALOGIC INT'L: Receives $550,000 Deposits in Bank Account ----------------------------------------------------------- DataLogic International, Inc., through it's wholly owned subsidiary, DataLogic Consulting, Inc., has received deposits totaling $550,000 into its bank account on terms and conditions that cannot be fully determined due to its failure to maintain an effective system of internal controls. The Company disclosed that some of the funds have been received from individuals who may be affiliated with the Company. The deposits were made into the Company's account on different dates: Date Amount of Deposit ---- ----------------- Aug. 8, 2006 $200,000 Aug. 17, 2006 $150,000 Aug. 18, 2006 $150,000 Aug. 21, 2006 $50,000 -------- Total $550,000 The Company also disclosed that the funds may represent a debt or other financial obligation of the Company to repay the funds and that it is investigating the matter further with the assistance of its outside counsel. The Company further disclosed that it does not currently have sufficient funds to repay the deposits, if such deposits are determined to constitute a debt, or to make the payments on its other indebtedness that will become due in the next thirty days. Irvine, Calif.-based DataLogic International, Inc. (OTCBB: DLGI) -- http://www.dlgi.com/-- is a technology and professional services company providing a wide range of consulting services and communication solutions like GPS based mobile asset tracking, secured mobile communications and VoIP. The Company also provides Information Technology outsourcing and private label communication solutions. DataLogic's customers include U.S. and international governmental agencies as well as a variety of international commercial organizations. Going Concern Doubt As reported in the Troubled Company Reporter on May 17, 2006, Corbin & Company, LLP, raised substantial doubt about DataLogic International, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's recurring losses and need to establish profitable operations. DEAN SHIDELER: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Dean Sanford Shideler 3539 Rolston Drive Fort Wayne, IN 46805 Bankruptcy Case No.: 06-11474 Type of Business: The Debtor filed for chapter 11 protection on August 25, 2006 (Bankr. N.D. Ind. Case No. 06- 11407). Chapter 11 Petition Date: September 1, 2006 Court: Northern District of Indiana (Fort Wayne Division) Judge: Robert E. Grant Debtor's Counsel: Douglas E. Johnston, Esq. Tourkow, Crell, Rasenblatt & Johnston 203 East Berry Street, Suite 814 Fort Wayne, IN 46802 Tel: (260) 426-0545 Fax: (260) 422-9991 Total Assets: $2,003,530 Total Debts: $1,572,507 Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cap 1 Bank Charge Account $20,230 P.O. Box 85015 Richmond, VA 23285-5075 Wamu/Prvdn Charge Account $12,553 P.O. Box 9007 Pleasanton, CA 94566 Amex Charge Account $9,248 P.O. Box 297871 Fort Lauderdale, FL 33329-7871 Pro Fed Cu Charge Account $4,950 1710 St. Joe River Drive Fort Wayne, IN 46805-1446 Cap 1 FSB Charge Account $4,504 P.O. Box 26030 Richmond, VA 23260-6030 AllianceOne Collection $1,271 Marathon O $1,005 Verizon North $929 Verizon Charge Account $595 Verizon In $358 Comprehensive Collection Collection $154 3 Rivers FCU Unknown Allen County Treasurer Real Estate Taxes Unknown DELPHI CORP: Judge Drain Rules on NuTech's Lift-Stay Request ------------------------------------------------------------ The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York rules that nothing in the automatic stay prevents NuTech Plastics Engineering, Inc., from proceeding with its action against General Motors Corp. However, any claim by NuTech against debtor Delphi Automotive Systems USA, LLC, will be liquidated or otherwise determined by the Bankruptcy Court, Judge Drain says. NuTech sought to lift the automatic stay to allow its prepetition breach-of-contract case against DAS LLC, and GM to proceed. The case is pending in the Circuit Court for Genesee County, in Michigan. NuTech had argued that Delphi and GM breached their contract by failing to purchase parts as agreed. Delphi and GM also failed to remove equipment from NuTech necessary for to produce the parts. NuTech had increased its manufacturing capability to satisfy Delphi and GM's an anticipated production demands. Judge Drain allows parties to take depositions of John Mailey by oral examination or written interrogatories on matters relating to Claim Nos. 871 and 1279 filed by NuTech. Judge Drain lifts the automatic stay to permit the preservation of testimony of Mr. Mailey. Mr. Mailey was one of NuTech's former owners and a likely witness. Mr. Mailey has medical problems that are so serious that trial had to be adjourned once already because he had suffered a stroke, NuTech reported. According to Jay Schwartz, Esq., the Michigan Supreme Court requires each trial court judge to report on a quarterly basis all civil cases that are more than two years old and the reasons why they remain pending. In practice, these reporting requirements cause trial courts to prioritize the trial of those cases that have been pending the longest. Mr. Schwartz relates that since the Bankruptcy Court did not lift the automatic stay during the omnibus hearing in July 2006, the case will be delayed further. "I believe that, even with the priority that the Genesee county Circuit Court will give to NuTech's case, the [Bankruptcy] Court's docket will prevent NuTech from obtaining a trial date before January 2007." 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: Seeks Court Approval for 2001-1 EETC Stipulation ----------------------------------------------------------- In September 2001, Delta Air Lines, Inc., U.S. Bank Trust National Association, and certain other parties entered into a pass through financing arrangement -- the 2001-1 Enhanced Equipment Trust Certificate -- in which Delta financed 36 Boeing aircraft. As part of the 2001-1 EETC, Delta entered into 36 separate Indenture and Security Agreements, one per aircraft, with respect to which U.S. Bank currently acts as Loan Trustee. Delta has issued five series of Equipment Notes -- A-1, A-2, B, C, and D -- under each Indenture, the payment of which is secured by a mortgage on, and security interest in, among other things, all of Delta's right, title and interest in and to the corresponding aircraft. Each Equipment Note was purchased by one of five corresponding Delta Air Lines Pass Through Trusts, known as the Delta Air Lines Pass Through Trusts "2001-1A-1," "2001-1A-2," "2001-1B," "2001- 1C," and "2001-1D", for each of which U.S. Bank currently is Trustee. Each Pass Through Trust purchased all of the Equipment Notes of a specific series using proceeds from the sale of corresponding classes of enhanced equipment trust certificates -- the "Class A-1," "Class A-2," "Class B," "Class C," and "Class D Certificates". The Equipment Notes are registered in the name of U.S. Bank in its capacity as Subordination Agent under an Intercreditor Agreement dated September 17, 2001, as amended, originally entered into by and among: (a) State Street Bank and Trust Company of Connecticut, National Association, not in its individual capacity, but solely as Pass Through Trustee of each of the Delta Air Lines Pass Through Trusts 2001-1A-1, 2001-1A-2, 2001-1B, 2001-1C, and 2001-1D; (b) Landesbank Hessen-Thuringen Girozentrale as Class A-1, Class A-2, Class B and Class C Liquidity Provider; and (c) State Street in its capacity as Subordination Agent. The Intercreditor Agreement controls the distribution of funds among the parties. Under the Indentures, Delta makes payments on the Equipment Notes semi-annually on each March 18 and September 18. Those payments are received and allocated by the Subordination Agent in accordance with the applicable provisions of the Intercreditor Agreement, and, to the extent of sufficient funds, are distributed to the Pass Through Trustees to make semi-annual payments on the Certificates. Payments of up to three semi-annual installments of interest allocable to the holders of Class A-1, A-2, B and C Certificates are supported by four separate liquidity facilities with the Landesbank. If for any reason the amount distributable to the holders of Certificates of a supported Class is less than the scheduled interest payment on the related Series of Equipment Notes, the Subordination Agent is required to draw on the Liquidity Facilities to the extent necessary to enable the relevant Pass Through Trustee to distribute the full amount of that interest. Delta's filing of a voluntary petition under Chapter 11 of the Bankruptcy Code constitutes a "Triggering Event" under the Intercreditor Agreement. Once a Triggering Event occurs, all distributions under the Intercreditor Agreement are to be made pursuant to Section 3.03 of the Agreement, which provides: -- for the payment of certain fees, expenses and other amounts, including, without limitation, the fees and expenses of U.S. Bank, Liquidity Expenses and Liquidity Obligations prior to payments to the Pass Through Trustees for further distribution on the Certificates; and -- that State Street, as subordination agent, is required to distribute to the Pass Through Trustees, to the extent o sufficient funds, the Adjusted Expected Distribution for their respective Class of Certificates in this order of priority: (i) the Class A-1 and A-2 Trustees, pro rata; (ii) the Class B Trustee, (iii) the Class C Trustee, and (iv) the Class D Trustee. The next scheduled semi-annual payment due on the Equipment Notes, totaling $363,783,038 in principal and accrued interest, is due on September 18, 2006. The Adjusted Expected Distribution for each Class of Certificates on September 18, 2006, is: Class Principal Interest Total ----- --------- -------- ----- A-1 -- $4,301,593 $4,301,593 A-2 -- 20,307,167 20,307,167 B -- 7,983,584 7,983,584 C $169,782,000 6,196,194 175,978,194 D 150,000,000 5,212,500 155,212,500 ---------------------------------------------- Totals $319,782,000 $44,001,038 $363,783,038 ============================================== Michael E. Wiles, Esq., at Debevoise & Plimpton LLP, in New York, relates that the Adjusted Expected Distributions for the Class C and Class D Certificates represent final distributions, as the principal amount of the related Equipment Notes matures on September 18, 2006. Delta warrants that it currently holds a beneficial interest in $110,392,256 in principal amount of the Class C Certificates, about 65.02% of the total outstanding principal amount, and also owns directly 100% of the principal amount of the outstanding Class D Certificates. Delta acknowledges that each of the aircraft included in the 2001-1 EETC is subject to the provisions of Section 1110 of the Bankruptcy Code. Delta has previously agreed, pursuant to Section 1110(a)(2) and within the time period specified in Section 1110, to: -- perform all obligations of Delta under the Indentures and those other agreements as may be determined to constitute the applicable security agreements under Section 1110; and -- cure defaults, if any, under the 1110 Documents, except to the extent that those defaults do not need to be cured under the terms of Section 1110(a)(2), and to do so within the time periods specified in Section 1110(a)(2). In light of the size of the September 18, 2006 Payment, however, Delta intends to have confirmation that if the Section 3.03 Amounts and the September 18, 2006 Payment are both timely paid, then these payments will be applied in accordance with the terms of the Intercreditor Agreement. In a stipulation, Delta and U.S. Bank agree that, assuming that Delta pays in full on September 18, 2006, an amount equal to: (i) Intercreditor Agreement's Section 3.03 Amount; and (ii) all payments of principal and interest due with respect to the Equipment Notes as of September 18 2006, which is $363,783,038, then the Subordination Agent will distribute to each Pass Through Trustee, and each Pass Through Trustee will promptly distribute to the holders as of the relevant record date of its Class of Certificates the Adjusted Expected Distribution for each Class of Certificates. The parties agree that, once U.S. Bank, in its capacity as both the Subordination Agent and the Pass Through Trustee, distributes the September 18, 2006 Payment, any liability it may have had with respect to the making of those payment will cease to exist. U.S. Bank will not be responsible if any Certificate holders fail to receive their respective portions of the September 18, 2006 Payment as long as it made distributions in accordance with the Stipulation and the applicable provisions of the Pass Through Trust Agreements. Delta asks the U.S. Bankruptcy Court for the Southern District of New York to approve the Stipulation. About Delta Air Lines Headquartered in Atlanta, Georgia, Delta Air Lines (Other OTC: DALRQ) -- 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: Wants to Walk Away from Aero Newark Sublease Agreement ----------------------------------------------------------------- Delta Air Lines, Inc., is a party to: -- a Sub-Lease Agreement dated February 27, 1998, with Aero Newark, LLC, the successor-in-interest to Airis Newark, L.L.C.; and -- a related Consent to Sublease Agreement dated December 13, 2000, and effective as of February 27, 1998, with the Port Authority of New York and New Jersey, and Aero Newark. Delta subleases and has the right to use and occupy certain cargo operations space, office space, and a ground service equipment area as an air cargo handling facility, at the Newark International Airport. The Debtors have determined that certain facilities at the Airport, including, without limitation, facilities used in Delta's cargo operations, are uneconomical for their current operations at the Airport and will therefore be vacated on September 1, 2006. Sharon Katz, Esq., at Davis Polk & Wardwell, in New York, relates that Delta has made more economical arrangements for its cargo operations at the Airport. Delta intends to enter into a new sublease agreement with Aero Newark to occupy reduced facilities for Delta's unit load device repair shop on September 1, 2006. Accordingly, the Debtors seek the U.S. Bankruptcy Court for the Southern District of New York's authorization to reject the Sublease Agreement and the Consent to the Sublease, effective Sept. 1, 2006. By rejecting the Agreements now, Delta will avoid incurring unnecessary administrative charges for leased premises that are not needed for its current operations at the Airport and that provide no tangible benefit to the Debtors' estates, Ms. Katz contends. The Debtors also seek the Court's approval to abandon the property related to the Sublease Agreement. The Debtors propose that the holder of any claim for damages arising from the rejected agreements should file a proof of claim against the Debtors by the later of: (i) August 21, 2006; and (ii) 30 days after the effective date of the rejection or abandonment to which the claim relates. About Delta Air Lines Headquartered in Atlanta, Georgia, Delta Air Lines (Other OTC: DALRQ) -- 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 COMMS: Sells WKCF-TV to Hearst-Argyle for $217.5 Million -------------------------------------------------------------- Hearst-Argyle Television, Inc., has completed its acquisition of the assets of WKCF-TV in Orlando, Florida, from Emmis Communications for $217.5 million in cash. The acquisition adds a television duopoly in the Orlando/Daytona/Melbourne television market, where Hearst-Argyle also owns WESH-TV, the market's NBC affiliate. WKCF, formerly affiliated with The WB Network, becomes a CW Network affiliate next month. It will be operated from the WESH facility. The transaction was funded with cash on hand and an advance under the Hearst-Argyle's unused $250 million credit facility. With the WKCF acquisition, Hearst-Argyle now has duopolies in five of its seven largest markets: Boston, Sacramento, Kansas City, MO; Orlando and Baltimore, where the company has a radio/television combination. "We are pleased to conclude our acquisition of WKCF and we welcome the staff of WKCF to the Hearst-Argyle family of stations," David Barrett, Hearst-Argyle president and chief executive officer, said. "The combination of WESH with WKCF will enhance the local television service of each station and enable us to better serve the interests and needs of our audiences, advertisers and the entire Orlando community. WKCF will benefit from WESH's extensive newsgathering resources and, together, our stations will provide viewers of all ages with the very best in entertainment, news and information programming, and community service. "As our industry moves forward into the new era of digital television, video multicasting and web-based video services, the duopoly at WESH and WKCF will be extraordinarily well positioned to compete in one of America's most dynamic markets. The formation of this powerful TV duopoly is an important strategic step for our company," Mr. Barrett added. About Hearst-Argyle Hearst-Argyle Television, Inc. (NYSE: HTV) -- http://www.hearstargyle.com/-- owns 26 television stations, and manages an additional three television and two radio stations, in geographically diverse U.S. markets. The Company's television stations reach approximately 18% of U.S. TV households. Hearst- Argyle owns 12 ABC-affiliated stations, and manages an additional ABC station owned by Hearst Corporation, and is the largest ABC affiliate group. The Company also owns 10 NBC affiliates, and is the second-largest NBC affiliate owner, and owns two CBS affiliates. About Emmis Communications 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. ENTERGY NEW: Court Approves United National & NORCO Settlement -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Louisiana approves the settlement agreement among Entergy New Orleans, Inc., Norco Construction, Inc., and United National Insurance Company. Pursuant to the settlement, United National, as Norco's insurer, will pay $162,500 to settle the lawsuit filed by State Farm Fire & Casualty Company against the three parties before the Civil District Court for the Parish of Orleans, State of Louisiana. In consideration of the cash payment made by Norco, State Farm releases and dismisses the settlement parties from any claims and damages arising from the December 20, 1993 gas explosion and fire at a duplex residence at 334 West Robert E. Lee Boulevard in New Orleans, Louisiana. 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) FAIRFAX FINANCIAL: Restates Annual Financials from 2001 to 2005 --------------------------------------------------------------- Fairfax Financial Holdings Limited filed its interim report for the six months ended June 30, 2006, and its restated consolidated financial statements and related disclosures pursuant to the restatement previously announced on July 27, 2006. As a result of the restatement, shareholders' equity decreased $235.3 million as at March 31, 2006, within the estimated range of $225 to $240 million announced on July 27, 2006. Due to corrections reflected in the restatement, Fairfax's net earnings for the three and six months ended June 30, 2006, were slightly higher at $229.2 million and $427.6 million respectively than the $223.6 million and $421.7 million for those periods respectively announced on July 27, 2006. Restatement of Consolidated Financial Statements The company has completed the restatement of its previously reported consolidated financial statements as at and for the years ended Dec. 31, 2001 through 2005 and all related disclosures, as well as its unaudited consolidated financial statements as at and for the three months ended March 31, 2006, and 2005. The company has filed audited restated consolidated financial statements comprising the consolidated balance sheets as at Dec. 31, 2005, and 2004, the restated consolidated statements of earnings, shareholders' equity and cash flows for each of the years in the three year period ended Dec. 31, 2005, and all related disclosures, as well as unaudited consolidated financial statements as at and for the six months ended June 30, 2006, and 2005. These unaudited consolidated financial statements reflect the restatement of the unaudited consolidated financial statements as at and for the six months ended June 30, 2005, and the three months ended March 31, 2006 and June 30, 2005. The restatement of the company's consolidated financial statements resulted from management's identification of various non-cash accounting errors arising primarily in 2001 and prior. The restatement followed an internal review of the company's consolidated financial statements and accounting records that was undertaken in contemplation of the commutation of the Swiss Re Cover (which was ultimately completed on Aug. 3, 2006) and that identified an overstatement of the consolidated net assets of the company and errors in accounting for the periodic consolidated earnings. The effects of the restatement are reflected in the company's audited restated consolidated 2005 financial statements and accompanying notes and disclosures, and in the unaudited consolidated financial statements and accompanying notes contained in the company's interim report for the six months ended June 30, 2006. On July 27, 2006, Fairfax had estimated that the impact of the restatement would be a decrease in shareholders' equity as at March 31, 2006 in a range of $225 million to $240 million. The total cumulative impact of the finalized restatement through March 31, 2006 is to decrease shareholders' equity as at March 31, 2006, by $235.3 million. The $235.3 million total cumulative impact on shareholders' equity comprises a decrease in the currency translation account in the amount of $123.7 million, a decrease in retained earnings in the amount of $99.5 million, a decrease in share capital (by way of an increase in treasury stock) of $17.2 million, and an increase in common stock of $5.1 million. Of the $99.5 million cumulative decrease in retained earnings, the net effect of the restatement on earnings for each period is to increase net earnings for the three months ended March 31, 2006, by $26.3 million, decrease the 2005 net loss by $51.3 million, decrease the 2004 net loss by $72.9 million, increase 2003 net earnings by $18.6 million, decrease 2002 net earnings by $10.1 million, increase the 2001 net loss by $182.7 million, and decrease the net earnings of 2000 and prior years by $75.8 million. As part of the restatement process, Fairfax evaluated the impact of the accounting errors in its assessment of internal control over financial reporting under section 404 of the Sarbanes-Oxley Act of 2002 as at Dec. 31, 2005. In its assessment of internal control over financial reporting, management identified four material weaknesses. As a result, management has concluded that it did not maintain effective internal control over financial reporting as of Dec. 31, 2005, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. To address the material weaknesses, management will implement a remediation plan, which will supplement the existing controls of the company. The material weaknesses will be fully remediated when, in the opinion of the company's management, the revised control processes have been operating for a sufficient period of time to provide reasonable assurance as to their effectiveness. The Audit Committee of the company's Board of Directors will review the remediation and ultimate resolution of the company's material weaknesses. Fairfax's Chief Executive Officer, Prem Watsa, reiterated his comment of July 27, 2006, stating, "Our operating and investment performance continues to be strong. The restatement has not impacted Fairfax's cash flows or the fundamental strength of our business. "Cash and marketable securities at the holding company at quarter- end exceeded $500 million, the regulatory capital at our operating subsidiaries remains strong and, with the commutation of the Swiss Re Cover, we do not expect to have any cash costs at the holding company to fund European runoff through 2007. That said, we take very seriously our obligation to provide accurate financial results, and our management team, having identified the accounting errors, acted diligently to correct the errors and disclose our restated results." Second Quarter Earnings Fairfax had net earnings of $229.2 million in the second quarter of 2006 and $427.6 million in the first six months of 2006 (compared to $223.6 million and $421.7 million for those periods respectively announced on July 27, 2006). Net earnings per diluted share were $12.14 for the second quarter and $22.65 for the six months ended June 30, 2006. At June 30, 2006, common shareholders' equity was $2.885 billion. A full-text copy of Fairfax's Second Quarter 2006 Interim Report is available for free at http://ResearchArchives.com/t/s?1108 Based in Toronto, Ontario, Fairfax Financial Holdings Limited (TSX: FFH)(NYSE: FFH) -- http://www.fairfax.ca/-- is a financial services holding company, which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance, investment management and insurance claims management. * * * As reported in the Troubled Company Reporter on Aug. 3, 2006, Fitch Ratings did not change the ratings for Fairfax Financial Holdings Limited following the company's disclosure that it will commute a reinsurance contract and restate its financial results. Fairfax Financial Holdings Limited's ratings that remain on Rating Watch Negative include BB- Issuer Default Rating; B+ rating on $62 million unsecured due April 15, 2008; B+ rating on $466 million unsecured due April 15, 2012; B+ rating on $100 million unsecured due Oct 1, 2015; B+ rating on $184 million unsecured due April 15, 2018; B+ rating on $98 million unsecured due April 15, 2026; B+ rating on $91 million unsecured due July 15, 2037; and B+ rating on $137 million convertible due July 15, 2023. As reported in the Troubled Company Reporter on Aug. 2, 2006, Moody's Investors Service maintained the negative outlook on Fairfax Financial Holdings and affirmed the company's Ba3 rating on senior unsecured debt. This follows Fairfax's announced restatement of the company's financials and the consequent reduction in its common equity base. FFH has also delayed the release of its second quarter 2006 financial statements. As reported in the Troubled Company Reporter on Aug. 1, 2006, Standard & Poor's Ratings Services placed a number of its ratings on CreditWatch with negative implications, including its 'BB' counterparty credit ratings on Fairfax Financial Holdings Ltd. and Crum & Forster Holdings Corp.; 'BB-' counterparty credit rating on TIG Holdings Inc.; various counterparty credit and financial strength ratings on Fairfax's operating insurance company subsidiaries; 'BBB-' counterparty credit rating on Odyssey Re Holdings Corp.; and 'A-' counterparty credit and financial strength ratings on Odyssey America Reinsurance Corp., Clearwater Insurance Co., and Hudson Specialty Insurance Co. and 'A-' financial strength rating on Falcon Insurance Co. (Hong Kong) Ltd. FAMILYMEDS GROUP: July 1 Stockholders' Deficit Narrows to $4 Mil. ----------------------------------------------------------------- Familymeds Group, Inc., filed its financial statements for the second quarter ended July 1, 2006, with the Securities and Exchange Commission on Aug. 15, 2006. At July 1, 2006, the Company's balance sheet showed $60.454 million in total assets and $64.918 million in total liabilities, resulting in a $4.464 million stockholders' deficit. The Company had an $11.293 deficit at Dec. 31, 2005. The Company's July 1 balance sheet also showed strained liquidity with $47.666 million in total current assets available to pay $59.349 million in total current liabilities coming due within the next 12 months. Revenues were $60.7 million for the second quarter 2006 compared with $56 million in the prior quarter of 2006 and $54.7 million in the second quarter of 2005. Comparative sales for the same locations, including the medical supply distribution businesses for the second quarter of 2006 increased 9.5% to $59.9 million compared with $54.7 million for the second quarter of 2005. Overall gross margin was $11.9 million or 19.6% in second quarter 2006, compared with $10.9 million or 19.5% in the first quarter of 2006 and $11 million or 20.1% in second quarter 2005. The comparable gross margins as a percentage of revenues reflect the Company's growing proportion of sales associated with Medicare Part D and its direct-to-provider medical supply operations, both of which have lower gross margins than those of the Company's other pharmacy operations. Selling, general and administrative expenses in the second quarter 2006 were $14.5 million, or 23.7% of revenues, compared with SG&A expenses of $13.0 million, or 23.2% of revenues for the first quarter 2006 and $14.0 million, or 25.6% of net revenues for second quarter 2005. The increase in SG&A expenses for the second quarter of 2006 reflects additional selling and marketing expenses associated with the growth of the Company's direct-to-provider medical supply operations and the associated expansion of sales and marketing staff in both the pharmacy and medical supply components of the business. Familymeds has implemented aggressive cost control initiatives aimed at reducing its SG&A expenses at the Farmington, Conn.- headquarters and non-customer service related expenses at the pharmacies. These expense control initiatives are expected to result in an estimated decrease in total operating costs of approximately 10%, or $2.8 million for the second half of fiscal 2006, and are based on operating expenses for the first half of 2006 of $27.4 million. Total annualized operating expense reductions are expected to be approximately $5.5 million or 11% of overall estimated operating expenses. Operating loss improved by $600,000 when compared to the second quarter of 2005. Operating loss was $3.5 million for the second quarter 2006, compared with the operating loss of $4.1 million for the second quarter of 2005. The operating loss for the first quarter of 2006 was $2.9 million. Overall gross margin was $11.9 million or 19.6% in second quarter 2006, compared with $10.9 million or 19.5% in the first quarter of 2006 and $11.0 million or 20.1% in second quarter 2005. The comparable gross margins as a percentage of revenues reflect the Company's growing proportion of sales associated with Medicare Part D and its direct-to-provider medical supply operations, both of which have lower gross margins than those of the Company's other pharmacy operations. Net income available to common stockholders was $7.8 million, which includes a $13.1 million gain on the early extinguishment of subordinated and convertible debt. This compares to a net loss available to common stockholders of $8.8 million for the second quarter 2005 and a net loss of $4.1 million for the first quarter 2006. "During the second quarter, our continuing focus on accelerating organic growth delivered strong top line performance through an improving mix of specialty medical products and pharmacy services and our expanding population of patients to whom we provide prescriptions," Ed Mercadante, R.Ph., chairman, and chief executive officer of Familymeds, stated. "Gross margin continues to move in the right direction as we approach our overall target of 20% for fiscal 2006. We are also delivering on our sales channel expansion strategies, with plans to open two new pharmacies in leading medical office buildings during the second half of this year and a strong pipeline in place for additional Worksite Pharmacy locations. "While second quarter operating expenses increased over the prior quarter, but improved as a percentage of revenue over last year, we have recently taken prudent steps to substantially improve our cost structure and prepare our business for profitable growth. "We have effectively streamlined our operating model while maintaining an optimal sales structure to facilitate continuing sales momentum. "We expect that our improved cost structure will drive an operating expense reduction of 10% in the second half of 2006 which is based on operating expenses of $27.4 million for the first half of 2006, and materially improve our financial results this year." Familymeds reduced its outstanding debt by $13 million during the second quarter through its early retirement of $23 million in outstanding subordinated debt with a former supplier. Funds for the repayment came from a new debt instrument that will facilitate improved cash flow over the next several years through lower interest payments. At July 1, 2006, cash and cash equivalents and bank availability totaled approximately $5.6 million. During the second quarter 2006, the Company's capital expenditures were $900,000. Mr. Mercadante continued, "We will continue to execute against our strategic plan by pursuing our organic growth plans for this year as our primary vehicle for business expansion, with two to four new pharmacy openings planned before year-end. "During the first half of this year, we focused on increasing comparatives, expanding revenues sequentially and improving our capital structure by reducing debt and associated interest. All of these accomplishments are key indicators vital to our long-term success. "Overall, we were pleased with our top-line momentum in the first half of the year and believe we have achieved a meaningful milestone by improving our debt and capital structure. "During the second half of 2006, we believe we can sustain our positive revenue momentum as we remain intensely focused on improving profitability and overall cash liquidity. "Based on our forecasted sales growth, expense reductions and incremental improvement to gross margin, we expect to be breakeven to modestly EBITDA positive in the third quarter of 2006, with increased positive cash flow during the fourth quarter of this year." Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?110a Farmington, Conn.-based Familymeds Group, Inc. (Nasdaq: FMRX) -- http://www.familymeds.com/-- is a pharmacy and medical specialty product provider formed by the merger on Nov. 12, 2004, of DrugMax, Inc., and Familymeds Group, Inc. Familymeds operates 86 locations, including 7 franchised locations in 14 states under the Familymeds Pharmacy and Arrow Pharmacy & Nutrition Center brand names. Familymeds offers a comprehensive selection of brand name and generic pharmaceuticals, non-prescription healthcare-related products, and diagnostic supplies to its patients, physicians, clinics, long- term care and assisted living centers. FLAG RESOURCES: Appeals Sanctions Imposed by TSX ------------------------------------------------ The Court of Appeals of Alberta suggested that there were some procedural unfairness by the TSX Venture Exchange and the and Alberta Securities Commission with regard to sanctions imposed against Flag Resources (1985) Limited, including the delisting of its shares and demands for the resignation of certain Flag directors. Flag is proposing to ask the Supreme Court of Canada to hear its appeal against the sanctions issued by the Exchange. Flag will ask the Supreme Court to rule on whether the Exchange has the legal right to demand the resignation of Directors. Flag recognizes the right of the Exchange in prohibiting an individual from being a Director of a listed company, but questions their right to demand that the individuals resign from a company, believing that only shareholders or perhaps the courts have that right. At a May 11 hearing, the Court suggested that the Exchange should have given Flag a choice, before deciding on its sanctions, suggesting perhaps a $25,000 fine or a 30-day suspension. The Court suggested that the Exchange should have allowed Flag to respond before and after the imposition of sanctions against it. The Court suggested that the Alberta Securities Commission should have allowed Flag to call witnesses, in addition to its Chairman and President. The Commission had allowed the Exchange to cross- examine, in detail, Flag's Chairman and President, but refused to allow Flag to cross-examine Exchange personnel. However, in its Memorandum of Judgment, on July 31, 2006, the Court, citing legal precedence, stated that there had been no procedural unfairness by the Exchange. The two main allegations of non-compliance against Flag, by the Exchange, were that the Settlement Agreement with Canada Customs and Revenue (Revenue Canada) resulted in Flag paying $150,000 of its President's personal tax liability. The second allegation of non-compliance was the late payment by Flag's President on his exercise of stock options. A. Alleged Payment by Flag of $150,000 of Flag's President's Personal Tax The Exchange's allegation that Flag paid $150,000 of its President's tax liability was accepted by the Alberta Securities Commission and the Court of Appeal of Alberta, although it was denied by Revenue Canada, stating that settlement by Flag of its tax liabilities would not be assessed as a benefit to Mr. McLeod, Flag's President. The effect of the settlement was not to settle taxes payable, but to hold collection proceedings (Requirement to Pay) in permanent abeyance. It was confirmed again in an Oct. 2, 2004 letter from Revenue Canada: "this letter is to confirm that Flag's tax liability has arisen directly under subsections 224(1) and (4) of the Act, provision wholly inapplicable to Mr. McLeod, in the circumstance, and that the settled liability is that of Flag's." The Exchange assumed that there had been a single Requirement to Pay, when there were several, with which Flag had to deal, not just one. A Requirement to Pay served on Flag's banker resulted in the seizure of $194,000 by Revenue Canada. Flag's legal council had the seized funds paid into court. At a hearing on Aug. 23, 2001, a Master, Alberta Supreme Court, returned the funds to Flag. The Revenue Canada official involved endeavored to have the Justice Department appeal the decision, but the time for appeal had lapsed. The same Revenue Canada official, six months later, in March 2002, in the Settlement Agreement with Revenue Canada, levied the tax liability of $150,000 against Flag, under 224(1) and (4) of the Act. At the time, Revenue Canada was issuing requirements to Pay, their legal right to issue them was being challenged by legal proceedings against them, stating that under terms of the March 22, 1992 Security Agreement, between Murdo McLeod and Revenue Canada, it was believed that the requirements to pay were improper and requested that they be withdrawn. Although legal counsel's recommendation to approve the settlement was accepted by Flag, Flag's President, in retrospect, thought Flag's $150,000 tax liability was excessive, and reached agreement with Revenue Canada to pay $100,000 of the tax liability. The Court of Appeal of Alberta, in its Memorandum of Judgment, erred in stating that Flag's President received a benefit to the detriment of Flag, as it was Flag that received a benefit from Flag's President. B. Late Payment of Stock Option In March 2003, Flag filed a Debt Conversion Agreement with the Exchange, for approval. Under the terms of the agreement, Flag agreed to accept ten million shares of associated Golden Briar's stock, valued at $0.l0 a share, for payment of indebtedness of $1,151,000. After considerable delay, the Exchange analyst, on July 17, 2003, conditionally approved the filed agreement, subject to certain conditions, including a referral to the S.E.C. for the proposed amalgamation between Flag and Golden Briar, which had never been proposed. The conditions set forth in the July 17 letter were answered by Flag's legal counsel, by letter, on Aug. 27, 2003, with no response from the Exchange analyst. In January 2004, the Exchange Analyst submitted an additional set of conditions to Flag that were not relevant to the Debt Conversion Agreement, asking for extensive geological information on Flag's properties, for whatever reason. The Debt Conversion Agreement was continually deferred for 15 months, along with three other filings, and is still in abeyance. With the deferral, denying Flag the benefit of a $1,000,000 share equity, Flag's President, to provide Flag with interim financing, exercised options on 1,810,000 shares. The shares were sold at a substantial loss to Flag's President. The failure of the Exchange to approve the Debt Conversion Agreement, within a reasonable time frame, seriously diluted Flag's shareholder value, by causing 1,810,000 share options to be exercised and sold, to fill the vacuum caused by the Exchange's failure to approve the Debt Transaction. Other procedural unfairness, by the Exchange, noted by Flag, included a letter dated Jan. 12, 2005, from the Exchange's Director, Compliance and Disclosure, stating that Flag had failed to disclose the resignation of Richard Dye as a director. Flag had not announced his resignation, as he had not resigned. The Exchange then communicated with Mr. Dye and got him to resign three days later. Mr. Dye's son wrote a letter to Flag about his Father's major heart and diabetic problems and having trouble remembering things. Because of his physical and mental health problems, the 80 odd years old Mr. Dye was not going to be reappointed at the next annual meeting. Flag questions the ethics of the Exchange officials, under the circumstances, in going after Mr. Dye to secure his resignation. Another procedural unfairness was the Exchange's refusal to hold discussions on any of the responses made by Flag, under questions raised by the Exchange in its Compliance Review. Every response was met with a "Not Satisfactory" notation. Flag believes the sanctions imposed by the Exchange against Flag were excessive. The Exchange did not attempt to abide by the factors set down by the Supreme Court of Canada in determining the extent and degree of sanctions that should be imposed. Flag had been listed on the Exchange for 28 years, without ever having any sanctions imposed by the Exchange. With the delisting of Flag's shares by the Exchange, Flag's Chairman, Sydney Miszchuk, to whom Flag had indebtedness in excess of $7,000,000, could have seized all of Flag's assets. He elected instead to make the welfare of Flag's shareholders his prime concern, advancing in excess of $800,000 from December 2004, to Flag, to fulfill all its obligations and operating requirements. About Flag Resources Headquartered in Calgary, Alberta, Flag Resources (1985) Limited is a mineral exploration company. At March 31, 2006, the Company's balance sheet a stockholders' deficit of $6,239,546, compared to a deficit of $6,170,949 at Dec. 31, 2005. FLAMINGO TERRACE: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Flamingo Terrace Apartments, LLC 1401 Elm Street, Suite 3800 Dallas, TX 75202 Bankruptcy Case No.: 06-33749 Type of Business: The Debtor operates an apartment complex. Chapter 11 Petition Date: September 4, 2006 Court: Northern District of Texas (Dallas) Debtor's Counsel: N. Alex Bickley, Esq. N. Alex Bickley & Associates, P.C. 1401 Elm Street, Suite 3800 Dallas, TX 75202 Tel: (214) 515-9685 Fax: (214) 515-9683 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gexa Energy Utility Bill $19,647 P.O. Box 659410 San Antonio, TX 78265 Center Point Energy Utility $12,175 P.O. Box 2628 Houston, TX 77252 RASA Floors Improvements $6,476 P.O. Box 619130 Dallas, TX 75261 Allied Waste Services Utility $5,639 8101 Little Yourk Road Houston, TX 77016 City of Houston - Water Dept. Utility $4,532 P.O. Box 1560 Houston, TX 77251 Presto Improvements $3,900 Fantastic Floors Improvements $3,133 Affordable Quality Electric Improvements $2,256 Houston Cable & Drain Supply $1,580 Kwal Paint Improvements $1,102 Roberto Compean Improvements $1,270 Paul Bettencourt - Tax Assessor Property Taxes $188 Houston ISD Property Taxes $111 GARY KINDER: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Gary D. Kinder Rebecca R. Kinder 35 Commanders Cove Missouri City, TX 77459 Bankruptcy Case No.: 06-34487 Chapter 11 Petition Date: September 2, 2006 Court: Southern District of Texas (Houston) Judge: Jeff Bohm Debtors' Counsel: William G. Harris, Esq. William G. Harris & Associates, P.C. One Sugar Creek Center Boulevard, Suite 300 Sugar Land, TX 77478 Tel: (281) 243-2360 Fax: (281) 243-2326 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Guardian Life Insurance Suite for alleged $1,251,108 Company of America breach of contract 7 Hanover Square New York, NY 10004 Crescent Real Estate Judgment $83,000 Funding, III, LP c/o Randall C. Owens Golden & Owens, LLP 1221 McKinney Street, Suite 3150 Houston, TX 77010 Amegy Bank Commercial Loan $33,413 P.O. Box 27459 Houston, TX 77227-7459 MBNA America Credit Card $26,420 P.O. Box 15137 Wilmington, DE 19886-5137 CitiCards Credit Card $18,066 P.O. Box 660370 Dallas, TX 75266-0370 Chase Visa Credit Card $13,261 BMW Financial Services Credit Card $12,730 Chase Visa Credit Card $10,904 Direct Merchants Bank Credit Card $10,487 Home Depot Credit Card $4,073 GE Money Bank Credit Card $2,634 Allstate Property and Insurance Services $2,590 Casualty Insurance Co. Office Depot Credit Card $2,200 Sam's Club Credit Card $822 JC Penney Credit Card $695 Garden Ridge Credit Card $354 Victoria's Secret Credit Card $254 Lawnology Vendor $246 Parkway Properties, LP Lease $0 GEMB Lending Foreclosure Deficiency $0 GENERAL MOTORS: Retail Sales Up 8% in August 2006 ------------------------------------------------- General Motors Corp.'s dealers in the United States sold 368,776 new cars and trucks in August. Retail sales were up 8% on a sales day adjusted basis, compared with August 2005. "August retail sales were up almost 30,000 units compared to last year. That's great news. This was one of the stronger retail months of 2006, with our performance led by such launch vehicles as the Pontiac Torrent and G6, Saturn Sky, Chevrolet Cobalt, Impala and Buick Lucerne," Mark LaNeve, General Motors North America vice president, Vehicle Sales, Service and Marketing, said. "Importantly, we're capitalizing on the sale of fuel-efficient cars and trucks including such "30 mpg and Above Club" members as Pontiac G6 coupe and G5, Chevy HHR, Cobalt, Malibu and Impala, and Saab 9-3. Our large pickup retail sales for Chevrolet Silverado, Avalanche and GMC Sierra were up 27% compared with a year ago. Customers clearly are responding to the quality, value, versatility and fuel efficiency of our cars and trucks. We encourage everyone in the new-vehicle market to take advantage of our Final Summer Bonus Cash sales event that runs through September 5." Due to the success of new products, GM has seen sales strengthen over the last few months. GM market share on a retail basis has improved significantly in the last 90 days due to great launch vehicle performance and a broad-range of fuel-efficient vehicles. Consistent with our North America turnaround plan, GM continues to run above 3 million retail units on an annualized basis. GM also continues to reduce its reliance on low-margin daily rental sales. Daily rental sales were down 20% compared to year- ago levels, and were down 23% compared to July 2006. Total fleet sales (including daily rentals) were down 15% (14,112 vehicles) compared to year-ago levels. Total GM U.S. retail passenger car sales are up 5% versus August last year, demonstrating that GM can compete in all product categories and take advantage of shifting consumer preferences. In August, GM North America produced 465,000 vehicles (179,000 cars and 286,000 trucks). This is down 25,000 units or 5% compared to August 2005 when the region produced 490,000 vehicles (181,000 cars and 309,000 trucks). (Production totals include joint venture production of 26,000 vehicles in August 2006 and 28,000 vehicles in August 2005.) The region's 2006 third quarter production forecast remains unchanged at 1.050 million vehicles (405,000 cars and 645,000 trucks). In the third quarter of 2005 the region produced 1.146 million vehicles (423,000 cars and 723,000 trucks). Additionally, the region's initial 2006 fourth quarter production forecast is set at 1.130 million vehicles (455,000 cars and 675,000 trucks), down approximately 12%, or 150,000 units, compared to 2005 fourth quarter actuals. This production adjustment does not reflect a reduction in GM's sales outlook, but is consistent with our strategy to reduce low-margin daily rentals, and takes into account the plan to shift production of pick-ups to the next generation pick-ups during the fourth quarter. GM also announced 2006 revised third quarter and initial fourth quarter production forecasts for its international regions. GM Europe - GM Europe's 2006 third quarter production forecast remains unchanged at 372,000 vehicles. In the third quarter of 2005 the region built 412,000 vehicles. The region's 2006 initial fourth quarter production forecast is set at 451,000 units, up 2% from 2005 fourth quarter actuals. GM Asia Pacific -GM Asia Pacific's 2006 third quarter production forecast is revised at 425,000 vehicles, down 13% from last month's guidance. In the third quarter of 2005 the region built 409,000 vehicles. The region's 2006 initial fourth quarter production forecast is set at 524,000 units, up 25% from 2005 fourth quarter actuals. GM Latin America, Africa and the Middle East -The region's 2006 third quarter production forecast remains unchanged at 217,000 vehicles. In the third quarter of 2005 the region built 207,000 vehicles. The region's 2006 initial fourth quarter production forecast is set at 211,000 units, up 12% from 2005 fourth quarter actuals. About General Motors General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on July 28, 2006, Standard & Poor's Ratings Services held all of its ratings on General Motors Corp. -- including the 'B' corporate credit rating, but excluding the '1' recovery rating -- on CreditWatch with negative implications, where they were placed March 29, 2006. The CreditWatch update followed GM's announcement of second quarter results and other recent developments involving its bank facility and progress on the GMAC sale. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new $4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GENESIS BIOVENTURES: Relocates to California from Canada -------------------------------------------------------- Genesis Bioventures, Inc., has opened its new corporate headquarters in Los Angeles, completing its planned relocation to California from Vancouver, Canada. The Company disclosed that moving the Company to California, the world's leading center of biomedicine, biotechnology and high technology, was a key milestone in the Company's reorganization. Douglas Lane, chief executive officer and chairman, said, "Establishing Genesis Bioventures in California is a key step in our planned reorganization, restructuring and turn-around of the Company and marks the beginning of our new company. The office location we selected is in the heart of one of California's top finance, business, research, and technology centers, and gives us immediate high-level access to key business, commercial and science resources that we intend to fully utilize to grow our company," Mr. Lane further said, "The relocation to Los Angeles completes our reorganization and enables us to focus our management and capital resources on our external commercial objectives." Mr. Lane stated, "Genesis Bioventures is developing substantial commercial opportunities. Most importantly, the focus of our new company has changed substantially and is now keenly focused on the commercialization of the Mammastatin Serum Assay and PDL's BSE Rapid Assay for Mad Cow Disease." He also said, "The reorganization, corporate development and management infrastructure is now in place. As part of our growth plan, we intend to add additional world class partners and individuals to achieve our commercial objectives." About Genesis Bioventures Headquartered in Los Angeles, Calif., 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. GILBERT ELES: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Gilbert R. Eles, Sr. 4130 Bakerstown Road Gibsonia, PA 15044 Bankruptcy Case No.: 06-24317 Type of Business: The Debtor filed for chapter 11 protection on March 31, 2006 (Bankr. W.D. Pa. Case No. 06- 21364). Chapter 11 Petition Date: September 4, 2006 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: James A. Prostko, Esq. U.S. Steel Tower, Suite 660 600 Grant Street Pittsburgh, PA 15219 Tel: (412) 261-2755 Fax: (412) 261-2760 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. IELEMENT CORP: 2003 Recapitalization Cues Financials Restatement ---------------------------------------------------------------- iElement Corporation filed amended financial statements for the fiscal years March 31, 2006, Dec. 31, 2004, and 2003, and the quarter ended March 31, 2004, with the Securities and Exchange Commission on Aug. 31, 2006. The amendment relates to the recapitalization of the Company by Integrated Communications Consultants Corporation on March 1, 2003. In a recapitalization, fair value adjustments and goodwill are not recognized. The restatement corrects the reporting of this transaction by removing those adjustments relating to fair value and goodwill. The Company reported a restated net loss of 1,426,084 on $4,550,092 of service revenue for the year ended March 31, 2006, compared to a $295,041 net loss on $5,954,772 of service revenue for the same period in 2005. At March 31, 2006, the Company's balance sheet showed $2,049,815 in total assets and $3,067,219 in total liabilities, resulting in a $1,017,404 stockholders' deficit. The company's Statement of Operations showed: For the period ended ------------------------------------ Year Year Quarter 12/31/04 12/31/04 03/31/04 ---------- ---------- ---------- Revenue $5,954,772 $4,552,436 $1,530,427 Net (Loss) ($295,041) ($265,056) ($68,280) Full-text copy of the Company's restated second quarter financials is available for free at http://researcharchives.com/t/s?1100 Going Concern Doubt Bagell, Josephs Levine & Company, L.L.C., in Gibbsboro, New Jersey, raised substantial doubt about IElement Corporation, fka Mailkey Corporation's ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended March 31, 2006, Dec. 31, 2004 and 2003. The auditor pointed to the Company's operating losses and capital deficits. About iElement Corporation iElement Corporation fka Mailkey Corporation (OTCBB: IELM) -- http://www.ielement.com/-- provides telecommunications services to small and medium sized businesses. IElement provides broadband data, voice and wireless services by offering integrated T-1 lines as well as a Layer 2 Private Network and VOIP solutions. IElement has a network presence in 18 major markets in the United States, including facilities in Los Angeles, Dallas, and Chicago. INCO LTD: CVRD Gets Canadian & U.S. Antitrust OK for Inco Offer --------------------------------------------------------------- Companhia Vale do Rio Doce has obtained antitrust clearances from the Canadian Competition Bureau and the United States competition authorities with respect to its offer to acquire all the outstanding shares of Inco Limited if the Brazil mining company can win shareholder support for its $17 billion cash bid, reports Associate Press Business Writer Alan Clendenning. As reported in the Troubled Company Reporter on Aug. 30, 2006, Inco's Board of Directors continues to recommend that shareholders vote in favor of the proposed combination between Inco and Phelps Dodge Corp. at the special meeting of Inco shareholders on Sept. 7, 2006. Accordingly, the Board has recommended that Inco shareholders reject CVRD's offer to purchase for cash all of the outstanding common shares of Inco. Inco has been negotiating with CVRD to increase the bid, but CVRD has no plans on improving the offer. Phelps Dodge hasn't increased its offer either after an initial raise. Phelps Dodge's shareholders are concerned over the level of debt the Company would incur to complete the merger, Mr. Clendenning relates. Analysts have said that investors might support the CVRD offer after Teck Cominco Limited withdrew from the bidding, and Inco's stock settled at about $77 -- the value of CVRD's bid -- because it is all cash, writes Mr. Clendenning. About Phelps Dodge Headquartered in Phoenix, Arizona, Phelps Dodge Corp. (NYSE: PD) -- http://www.phelpsdodge.com/-- produces copper and molybdenum and is the largest producer of molybdenum-based chemicals and continuous-cast copper rod. The company and its two divisions, Phelps Dodge Mining Co. and Phelps Dodge Industries, employ approximately 13,500 people worldwide. About CVRD Headquartered in Rio de Janeiro, Brazil, Companhia Vale do Rio Doce -- http://www.cvrd.com.br/-- engages primarily in mining and logistics businesses. It engages in iron ore mining, pellet production, manganese ore mining, and ferroalloy production, as well as in the production of nonferrous minerals, such as kaolin, potash, copper, and gold. About Inco Ltd. Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) -- http://www.inco.com/-- produces nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the U.K. * * * Inco Limited's 3-1/2% Subordinated Convertible Debentures due 2052 carry Moody's Investors Service's Ba1 rating. INEX PHARMA: Gets $1 Mil. Licensing Payment from Hana Biosciences ----------------------------------------------------------------- Inex Pharmaceuticals Corporation's partner Hana Biosciences has enrolled the first patient in a Phase 1 human clinical trial evaluating the safety, tolerability and preliminary efficacy of INX-0125 (sphingosomal vinorelbine) as a treatment for advanced solid tumors. Commencement of patient dosing for this trial triggers a $1 million milestone payment from Hana to INEX as part of the agreement announced May 8, 2006, in which Hana licensed three products from INEX's Targeted Chemotherapy pipeline, including INX-0125. Timothy M. Ruane, President and Chief Executive Officer of INEX, said Hana's progress on INX-0125 in the three months since the licensing agreement was announced is a positive indication for the future of the relationship. "We're pleased that Hana has been able to advance INX-0125 to a phase 1 clinical trial as quickly as they have. We will continue to support them as they move our products through development." After INEX pays third-party obligations of $200,000, the Company will forward the remainder of the Hana milestone payment to former INEX noteholders as provided in the agreement with noteholders announced June 20, 2006. This payment will reduce INEX's future contingent payments to the noteholders from $24.4 million to $23.6 million. In a June 20, 2006, announcement, INEX reported that it had signed a definitive note purchase and settlement agreement with all of the holders of certain convertible promissory notes issued by a wholly-owned subsidiary of INEX and guaranteed by INEX. The notes were owned by institutional investors. Future payments to the former noteholders are contingent on INEX receiving milestone or royalty payments from Hana and other consideration received by INEX should it complete the corporate reorganization that will be voted upon by INEX shareholders Sept. 20, 2006. The form of corporate reorganization contemplated in the note purchase agreement would transfer all of INEX's pharmaceutical assets to its subsidiary, Tekmira Pharmaceuticals Corporation. All of the shares in Tekmira would be distributed pro rata to INEX shareholders allowing INEX to raise additional capital in connection with the acquisition of a new business and this capital would be transferred to the noteholders. If INEX does not receive any future proceeds from Hana or from the contemplated corporate reorganization then it will not owe the noteholders any additional consideration or payments. No interest will accrue on the amount owed to the noteholders. About INEX Based in Vancouver, Canada, Inex Pharmaceuticals Corporation (NASDAQ: HNAB) -- http://www.inexpharma.com/-- is a biopharmaceutical company developing and commercializing proprietary drugs and drug delivery systems to improve the treatment of cancer. At June 30, 2006, the Company's balance sheet showed a stockholders' deficit of CDN$3,878,468, compared to a deficit of CDN$21,478,441 at Dec. 31, 2005. INEX PHARMA: Protiva Wants Involvement in Tekmira Spinout Deals --------------------------------------------------------------- Protiva Biotherapeutics Inc. filed a motion, on Sept. 1, 2006, with the Supreme Court of British Columbia seeking a declaration and order preventing the assignment of agreements and intellectual property from Inex Pharmaceuticals Corporation to Tekmira Pharmaceuticals Corporation without prior consent from Protiva. The filing includes an amendment to the March 23, 2006 statement of claim filed by Protiva against Inex; Inex's CEO, Timothy Ruane; and three Inex directors: David Main, Dr. Pieter Cullis and Darrell Elliot. Protiva is seeking a hearing on the matter on or before September 20, 2006. Inex currently has a special meeting of shareholders scheduled for September 20, 2006, at which time Inex will seek approval to spinout the company's assets into Tekmira. About Protiva Based in Vancouver, British Columbia, Protiva Biotherapeutics Inc. -- http://www.protivabio.com/-- is focused on the development of nucleic acid based pharmaceutical products to fight serious human diseases, such as cancer, influenza (including H5N1), Ebola, inflammatory diseases and other chronic viral infections. Validated in human clinical trials, Protiva's proprietary Stable Nucleic-Acid Lipid Particle technology is an encapsulation and delivery system for nucleic acid payloads, such as short interfering RNA, aptamers, and plasmid DNA, to target cells. It represents a breakthrough in the field of RNA interference. About INEX Based in Vancouver, Canada, Inex Pharmaceuticals Corporation (NASDAQ: HNAB) -- http://www.inexpharma.com/-- is a biopharmaceutical company developing and commercializing proprietary drugs and drug delivery systems to improve the treatment of cancer. At June 30, 2006, the Company's balance sheet showed a stockholders' deficit of CDN$3,878,468, compared to a deficit of CDN$21,478,441 at Dec. 31, 2005. JOCELYN WHITE: Case Summary & 40 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Jocelyn White Productions, Inc. 2655 Villa Creek Drive, Suite 299 Dallas, TX 75234 Tel: (972) 243-2270 Bankruptcy Case No.: 06-33670 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Designing Texas Catalog, LLC 06-33675 Type of Business: The Debtor produces an upscale regional home and garden show called "Designing Texas". The program offers segments on custom home builders, architects, and interior designers showcasing their projects, as well as tours of celebrity homes. See http://www.designingtexas.com/ Chapter 11 Petition Date: September 1, 2006 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Frank Jennings Wright, Esq. Hance, Scarborough, Wright, Ginsberg and Brusilow, LLP 14755 Preston Road, Suite 600 Dallas, TX 75254 Tel: (972) 419-4726 Fax: (972) 239-0138 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million A. Jocelyn White Productions, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Thomas Musick $1,900,000 5949 Sherry Lane Dallas, TX 75225 Emmis Texas Monthly $64,000 Louis Flaig P.O. Box 1569 Austin, TX 78767-1569 Nicole Brende $28,228 2700 Albany Street Houston, TX 77006 InterNetwork Experts Inc. $15,000 Department 523 P.O. Box 4346 Houston, TX 77210-4346 Steven C. Hastings $9,145 1020 Alamo Drive Southlake, TX 76092 Media Savvy $6,000 Compass Bank $4,831 PixelCuts, LLC $3,288 Blue Cross Blue Shield $3,241 Golden, Dellinges & Redd, LP $3,025 Southwest Captioning Service $2,120 Comtel Pro Media LLC dba DirectTape.com $1,669 Cedar Creek Technologies $1,521 Carrington Coleman $1,397 Farmers Insurance Group $554 TexPrompt, Inc. $495 Fox Byrd & Golden $320 Stocks Insurance Agency $262 Preferred Group $208 Kennedy's ENG $145 B. Designing Texas Catalog, LLC's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Emmis Texas Monthly $64,000 Louis Flaig P.O. Box 1569 Austin, TX 78767-1569 Carrington Coleman $54,009 Craig Weinlein 901 Main Street, Suite 5500 Dallas, TX 75202 Andrews, Kurth LLP $50,700 1717 Main Street, Suite 3700 Dallas, TX 75201 Segnant Technologies $38,760 Raj Oberoi 1431 Greenway Drive, Suite 230 Irving, TX 75038 Search Financial Services, LP $11,616 Donald Braun 6801 Gaylord Parkway, Suite 100 Frisco, TX 75034 Buckley Teleen $7,109 Personalized Communications $5,456 Rustic Elegance $4,032 Catstudio $3,845 Conifer Creations $3,128 Kid Kraft $2,635 Buffalo Specialty, Inc. $2,095 Groovy Stuff $2,000 Golden, Dellinges & Redd, LP $1,625 VBC Distribution $1,420 Zone Denmark $1,406 Santa's Workshop $1,405 Wine Enthusiast $1,362 Out on a Limb $1,325 La Di Da $1,019 KAISER ALUMINUM: Court Approves Royal Settlement Agreement ---------------------------------------------------------- The Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware grants Kaiser Aluminum & Chemical Corp.'s request and directs the company to dismiss, without prejudice, its claims, counterclaims or cross-claims against Royal Indemnity Company in the Products Coverage Action. As reported in the Troubled Company Reporter on July 12, 2006, the Debtors asked the Court to approve their settlement agreement with Royal Indemnity relating to asbestos and other liability coverage disputes. The parties will bear their own costs, expenses and counsel fees in the Products Coverage Action. Judge Fitzgerald does not prohibit KACC from recovering its costs, expenses and counsel fees in the Products Action from any entity other than Royal Indemnity. Judge Fitzgerald notes that Royal Indemnity's full payment of the $4,500,000 settlement amount will satisfy and extinguish in full its obligations under the insurance policies it issued to KACC. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 609/392-0900) KAISER ALUMINUM: Reports Class Settlement Fund in Second Quarter ---------------------------------------------------------------- Kaiser Aluminum & Chemical Corporation's Tort Claims Settlement Fund reports $15,347,686 in total investments for the quarter ending June 30, 2006. For the period April 1 through June 30, 2006, the Tort Claims Settlement Fund made cash disbursements totaling $12,844,714. It held $15,248,306 in principal cash as of June 30. Kaiser's Asbestos Claims Settlement Escrow reports $17,037,946 in total investments for the quarter ending June 30, 2006. The Asbestos Claims Settlement Escrow made cash disbursements totaling $1,664,844 in the second quarter, and held $16,335,299 in principal cash as of June 30, 2006. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 609/392-0900) KL INDUSTRIES: Wants Exclusive-Filing Period Stretched to Oct. 6 ---------------------------------------------------------------- KL Industries, Inc., asks the Honorable Carol A. Doyle of the U.S. Bankruptcy Court for the Northern District of Illinois in Chicago to extend until Oct. 6, 2006, the period within which it has the exclusive right to file a plan of reorganization and disclosure statement. The Debtor will sell its remaining assets on a going concern basis. The Debtor retained CM&D Capital Advisors LLC to facilitate the sale of its assets. At present, CM&D is actively soliciting interest in the Debtor's business. The Debtor also continues to analyze and pursue recovery of over $4.8 million in transfers that may be avoidable under Section 547 of the Bankruptcy Code. The Debtor believes that the results of these efforts will impact the plan process. Headquartered in Addison, Illinois, KL Industries, Inc., manufactures springs, assemblies and other products for the automotive and electronic markets. The Company does business as KL Spring & Stamping Division, KL Spring Division, KL Stamping Division, KL Assembly Division and American Metal Forming Division. The Company filed for bankruptcy protection on May 2, 2006 (Bankr. N.D. Ill. Case No. 06-04882). Peter J. Roberts, Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has retained Winston & Strawn LLP, to represent it in the Debtor's case. CM&D Capital Advisors LLC is the Debtor's financial Advisor. In its schedules of assets and liabilities, the Debtor listed $10,462,451 in total assets and $11,898,913 in total liabilities. The Debtor wants its exclusive-filing period extended to Oct. 6, 2006. KL INDUSTRIES: Has Until November 28 to Decide on Two Leases ------------------------------------------------------------ The Honorable Judge Carol A. Doyle of the U.S. Bankruptcy Court for the Northern District of Illinois in Chicago extended, until Nov. 28, 2006, KL Industries, Inc.'s period to assume, assume and assign, or reject unexpired leases of two nonresidential real property. The Debtor leases space at 787 Belden Avenue in Addison, Illinois, from Prairie Dog General Partnership. The Addison Lease is a 10-year lease that terminates on Dec. 31, 2014, with a $35,247 monthly rent. The Debtor also leases approximately 9,000 square feet of an industrial facility in Marion, South Carolina, with H.C. Graham Trust. The Marion Lease is a five-year lease with two-, three- year options. Before filing for bankruptcy, the Debtor exercised both options. The Marion Lease will expire on Nov. 30, 2006, and costs $1,631.30 per month. The Debtor will sell its remaining assets on a going concern basis. The Debtor retained CM&D Capital Advisors LLC to facilitate the sale of its assets. At present, CM&D is actively soliciting interest in the Debtor's business. Until the sale process is complete, the Debtor requires the continued use of its leased facilities in Addison, Illinois, and Marion, South Carolina. The Debtor's secured lender has recently agreed to continue to fund the Debtor's operations through October 2006. Headquartered in Addison, Illinois, KL Industries, Inc., manufactures springs, assemblies and other products for the automotive and electronic markets. The Company does business as KL Spring & Stamping Division, KL Spring Division, KL Stamping Division, KL Assembly Division and American Metal Forming Division. The Company filed for bankruptcy protection on May 2, 2006 (Bankr. N.D. Ill. Case No. 06-04882). Peter J. Roberts, Esq., and Steven B. Towbin, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has retained Winston & Strawn LLP, to represent it in the Debtor's case. CM&D Capital Advisors LLC is the Debtor's financial Advisor. In its schedules of assets and liabilities, the Debtor listed $10,462,451 in total assets and $11,898,913 in total liabilities. The Debtor wants its exclusive-filing period extended to Oct. 6, 2006. KRISPY KREME: Settles Suit with Sweet Traditions ------------------------------------------------ Krispy Kreme Doughnut Corporation, a wholly-owned subsidiary of Krispy Kreme Doughnuts, Inc., has reached litigation settlement with Sweet Traditions, LLC and Sweet Traditions of Illinois, LLC. The Company, in July 2005, was sued by one of its area developers, Sweet Traditions, LLC, and its Illinois corporate entity, Sweet Traditions of Illinois, LLC, in the Circuit Court for St. Clair County, Illinois. The case was subsequently removed to the United States District Court for the Southern District of Illinois. The Company disclosed that parties filed a joint stipulation for dismissal of the litigation with prejudice with the Court and the case was dismissed on Aug. 28, 2006. The resolution of the matter will not result in any accounting charge to the Company. About Krispy Kreme Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme (NYSE: KKD) -- http://www.krispykreme.com/-- is a branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. There are currently approximately 320 Krispy Kreme stores and 80 satellites operating systemwide in 43 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United Kingdom. Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC is a majority-owned subsidiary and franchisee partner of Krispy Kreme Doughnuts, Inc., in the Philadelphia region. The Debtor operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268). M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated $10 million to $50 million in assets and debts. Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). The bankruptcy filing will facilitate the sale of 12 Krispy Kreme stores, as well as the franchise development rights for Colorado, Minnesota and Wisconsin, for approximately $10 million to Westward Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho, Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP represents Glazed in its restructuring efforts. When Glazed filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. KremeKo, Inc., Krispy Kreme's Canadian franchisee, is currently restructuring under the Companies' Creditors Arrangement Act. Pursuant to the Court's Initial Order, Ernst & Young Inc. was appointed as Monitor in KremeKo's CCAA proceedings. The Monitor is attempting to sell the KremeKo business. LE GOURMET: U.S. Trustee Appoints Five-Member Creditors Committee ----------------------------------------------------------------- The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors in Le Gourmet Chef, Inc.'s chapter 11 case: 1. TBB Global Logistics, Inc. Attn: Pam Prakke 802 Far Hills Drive New Freedom, PA 17349 Tel: (717) 227-5577 Fax: (717) 227-5077 2. Robert Rothschild Farm, LLC Attn: Dominic Maxwell 3143 East U.S. Highway 36 Urbana, OH 43078 Tel: (937) 653-7397 Fax: (937) 652-1044 3. Simon Property Group, LP Attn: Ronald M. Tucker 225 W. Washington Street Indianapolis, IN 46204 Tel: (317) 263-2346 Fax: (317) 263-7901 4. Xcell International Attn: Dean J. Henning 181 Shore Court Burr Ridge, IL 60527 Tel: (630) 323-0107 Fax: (630) 3230217 5. TLC Candle Corp. Attn: John Copeland 1031 Le Grand Blvd. Charleston, SC 29492 Tel: (843) 216-8380 Fax: (843) 216-8386 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Shrewsbury, New Jersey, Le Gourmet Chef, Inc., -- http://www.legourmetchef.com/-- is a retailer specializing in solutions for entertaining and gift giving. The Company filed for bankruptcy on Aug. 8, 2006 (Bankr. D. N.J. Case No. 06-17364). John DiIorio, Esq., at Shapiro & Croland, and Wendy G. Marcari, Esq., at Traub, Bonacquist, & Fox, LLP, represent the Debtor. When the Debtor filed for bankruptcy, the Debtor estimated its assets and debts at $10 million to $50 million. LE GOURMET: Creditors Committee Taps Lowenstein Sandler as Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Creditors of Le Gourmet Chef, Inc., asks the U.S. Bankruptcy Court for the District of New Jersey, for the authority to retain Lowenstein Sandler, PC, as its Counsel, effective Aug. 16, 2006. Lowenstein Sandler will: (a) provide legal advice with respect to the Creditors Committee's powers and duties as an official committee appointed under 11 U.S.C. 1102; (b) assist the Creditors Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's business, potential claims, and any other matters relevant to the case or to the formulation of a plan of reorganization; (c) participate in the formulation of a plan; (d) provide legal advice with respect to any disclosure statement and plan filed relative to the case and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a plan; (e) prepare on behalf of the Creditors Committee applications, motions, complaints, answers, orders, agreements and other legal papers; (f) appear in Court to present necessary motions, applications, and pleadings, and otherwise protect the interests of those represented by the Creditors Committee; (g) assist the Creditors Committee in requesting the appointment of a trustee or examiner, should such action be necessary; and (h) perform such other legal services as may be required and be in the interest of the Creditors Committee and creditors. John k. Sherwood, Esq., a member at Lowenstein Sandler, tells the Court that the hourly rates for the firm's professionals are: Classification/Experience Hourly Rate ------------------------- ------------ Members (principals) of the Firm $335 to $645 Senior Counsel (generally 10 or $315 to $425 more years experience) Counsel $265 to $375 Associates (generally less than $185 to $310 6 years experience) Legal Assistants $75 to $175 Mr. Sherwood assures the Court that the Firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Shrewsbury, New Jersey, Le Gourmet Chef, Inc., -- http://www.legourmetchef.com/-- is a retailer specializing in solutions for entertaining and gift giving. The Company filed for bankruptcy on Aug. 8, 2006 (Bankr. D. N.J. Case No. 06-17364). John DiIorio, Esq., at Shapiro & Croland, and Wendy G. Marcari, Esq., at Traub, Bonacquist, & Fox, LLP, represent the Debtor. When the Debtor filed for bankruptcy, the Debtor estimated its assets and debts at $10 million to $50 million. LE GOURMET: Creditors Committee Taps Traxi as Financial Advisors ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Le Gourmet Chef, Inc., asks the U.S. Bankruptcy Court for the District of New Jersey, for the authority to retain Traxi, LLC, as its financial advisors effective Aug. 16, 2006. Traxi will: (a) review all financial information prepared by the Debtor or its consultants as requested by the Creditors Commitee including a review of the Debtor's financial statements as of the Debtor's filing for chapter protection, showing in detail all assets and lisbilities and priority and secured creditors; (b) monitor the Debtor's activities regarding cash expenditures, receivable collections, asset sales and projected cash requirements; (c) attend required meetings with the Creditors Committee, the Debtor, creditors, their attorneys and consultants, federal and state authorities; (d) review Debtor's periodic operating and cash flow statements; (e) review Debtor's books and records for related party transactions, potential preferences, fraudulent conveyances and other potential investigations, prior to the Debtor's filing for chapter 11 protection; (f) undertake investigation with respect to the acts, conduct, property, liabilities and financial condition of the Debtor, its management, creditors including the operation of its businesses, and avoidance actions, prior to the Debtor's filing for chapter 11 protection; (g) review any business plan prepared by the Debtor or their consultants; (h) review and analyze proposed transactions for which the Debtor seeks Court approval; (i) assist in any sale process of the Debtor collectively or in segments, parts or other delineations; (j) assist the Creditors Committee in developing, evaluating, structuring and negotiating the terms and conditions of all potential plans of liquidation; (k) provide expert testimony on the results of its findings; (l) analyze potential divestitures of the Debtor's operations; (m) assist the Creditors Committee in developing alternative plans including contacting potential plan sponsors; and (n) provide the Creditors Committee with other and further financial advisory with respect to the Debtor, including valuation, and advice with respect to financial, business and economic issues, as may arise during the course of the restructuring as requested by the Creditors Committee. Perry M. Mandarino, a Senior Managing Director and Unit Holder at Traxi, tells the Court that the Firm will bill: Professionals Hourly Rate ------------- ----------- Partners/managing Directors $450 to $525 Managers/Directors $275 to $425 Associates/Analyst $125 to $275 Mr. Mandarino also tells the Court that the Firm is a "disinterested person" as the term is defined in Section 101(14) of the U.S. Bankruptcy Code. Headquartered in Shrewsbury, New Jersey, Le Gourmet Chef, Inc., -- http://www.legourmetchef.com/-- is a retailer specializing in solutions for entertaining and gift giving. The Company filed for bankruptcy on Aug. 8, 2006 (Bankr. D. N.J. Case No. 06-17364). John DiIorio, Esq., at Shapiro & Croland, and Wendy G. Marcari, Esq., at Traub, Bonacquist, & Fox, LLP, represent the Debtor. When the Debtor filed for bankruptcy, the Debtor estimated its assets and debts at $10 million to $50 million. LEGACY COMMS: June 30 Balance Sheet Upside-Down by $3.5 Million --------------------------------------------------------------- Legacy Communications Corp. earned $536,908 of net income on $860,276 of net revenues for the three months ended June 30, 2006, compared to a $488,975 net loss on $24,000 of net revenues in 2005. At June 30, 2006, the Company's balance sheet showed $2.9 million in total assets and $6.5 million in total liabilities, resulting in a $3.5 million stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $252,605 in total current assets available to pay $6.5 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?1104 Going Concern Doubt As reported in the Troubled Company Reporter on June 16, 2006, HJ & Associates, LLC, expressed substantial doubt about Legacy Communications' ability to continue as a going concern after auditing the Company's 2005 financial statements. The auditing firm pointed to the Company's working capital deficit and stockholders' equity deficit at Dec. 31, 2005. About Legacy Communications Corp. Headquartered in St. George, Utah, Legacy Communications Corp. develops, buys, operates and sells radio stations and auxiliary services. LEVITZ HOME: Expands Merchandising Team to Revitalize Brand ----------------------------------------------------------- Levitz Furniture has added two new Vice Presidents and one Buyer to the company's growing merchandising team. The Company also announced that Divisional Merchandise Manager Carol Glaser has been promoted to Vice President, Merchandising. The announcements are part of Levitz Furniture's ongoing commitment to revitalizing its brand and strengthening its merchandise assortment. Joining Levitz Furniture's Merchandising team are: * Joanne Jacobs, Vice President, Merchandising, previously a Divisional Merchandise Manager for Furniture, Lighting, Frames, Wall Art and Home Decor at Bed, Bath and Beyond; * Patricia Dove, who has been named to the newly created position of Vice President, Merchandising and Visual Presentation, formerly General Merchandise Manager, Divisional Vice President at Linens 'n Things; and * Kelly Lobdell, Buyer, Fashion Accessories and Children's Bedrooms who was previously a Buyer at Ross Stores. "The addition of these extremely talented individuals to our Merchandising team continues the significant progress we've begun in revitalizing the Levitz Furniture brand," said Tom Baumlin, CEO of Levitz Furniture. "This team and their dynamic backgrounds will play a critical role in helping us deliver the most compelling merchandise assortment possible to our customers." In her new position, Ms. Jacobs will be responsible for Occasional Tables, Office, Walls, Dining and Outdoor Furniture. Ms. Jacobs previously held positions with Fortunoff, Lechter's, Associated Merchandising Corporation, Bath and Body Works, Cost Plus World Market and Bed, Bath and Beyond. At Bed, Bath and Beyond, Ms. Jacobs developed business strategies and seasonal assortments to maximize sales and profits to generate over $500,000,000 in annual revenue. Ms. Dove comes to Levitz Furniture with extensive Home Furnishings experience. Ms. Dove previously held buying positions with Alexander's, M. Fortunoff, Frankel's Home Furnishings and Linens 'n Things. While at Linens 'n Things, Ms. Dove renewed the emphasis on being first to market on new product and increased newness to 40% of the Fall assortments vs. 20% the previous year. Ms. Dove also executed a focused key item strategy to drive business while defining and delivering new core assortments. In Ms. Glaser's new capacity, she will be responsible for Master Bedrooms and Living Rooms. Prior to joining Levitz, Ms. Glaser served as Buyer, Comforters, Sheets and Decorative Pillows at Fortunoff where she managed inventory flow, negotiated seasonal advertising agreements and strategically planned advertising events, vehicles and promotions. Ms. Lobdell began her career with Frankel's Home Furnishings, progressing to Buyer, Bedding and Soft Window Treatments before leaving in 1999 to join Bed, Bath and Beyond. There, Ms. Lobdell's responsibilities included all product development, inventory control, vendor management, store communications and implementation guidelines. Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP represents the Official Committee of Unsecured Creditors. Levitz sold substantially all of its assets to Prentice Capital on Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) LEVITZ HOME: Landlords Supplement Objection to Lease Assignment --------------------------------------------------------------- Landlords opposing the joint request for Levitz Home Furnishings, Inc. and its debtor-affiliates' assumption and assignment of the Seaman Leases presented more arguments to support their position. According to Remy J. Ferrario, Esq., at Golub & Golub, LLP, in New York, to argue that (i) the Remaining Seaman Leases and the Joint Agreement can be separated, (ii) the Joint Agreement can rejected and (iii) the L/C Proceeds can be used to pay Cure Amounts and other damages -- would be nonsense, would result in an absurd interpretation of the documents, and would require the Court to re-write the Joint Agreement, which it cannot do. Mr. Ferrario argues that the Joint Agreement is not an executory contract, cannot be assumed or rejected under Section 365(a) of the Bankruptcy Code, and "rides through" the Chapter 11 cases unaffected by the filing of the Chapter 11 cases. The Joint Agreement is the agreement under which the Seaman letter of credit was established to provide a security deposit for a number of leases with Seaman Furniture Company, Inc., including the Remaining Seaman Leases, Mr. Ferrario clarifies. Provided all defaults are cured and adequate assurance of performance provided, any of the Remaining Seaman Leases which may be assumed and assigned to the Purchaser will be subject to the terms and conditions of the Joint Agreement which will pass through the proceedings unaffected by the filing of the Chapter 11 petitions, Mr. Ferrario adds. "The Remaining Seaman Leases were modified to extend their terms and to eliminate the security deposits previously provided for under the provisions of the Remaining Seaman Leases simultaneously with the entry by Seaman Furniture into the Joint Agreement which governs the use of the Seaman L/C as the security deposit under the Remaining Seaman Leases," Mr. Ferrario says. Under the Joint Agreement, Mr. Ferrario continues, only the Seaman Landlords -- MS Elmhurst, LLC, CS Elmhurst, LLC, MS Paramus, LLC, CLS Diversified, LLC, Sea Plan, LLC and J.J.J.D. Associates, L.L.C. -- have the right to declare a default and to instruct their agent to draw on the Seaman L/C to cure the default. The Landlords have not directed their agent, Leasehold Agency Associates, Inc., to draw on the Seaman L/C because the Debtors and PLVTZ, LLC, have moved to assume and assign the Remaining Seaman Leases to the Purchasers, Mr. Ferrario reasons. As a condition to assume the Remaining Seaman Leases, Section 365 requires the Debtors and PLVTZ, not the Seaman Landlords, to cure all existing rent, additional rent, and mechanic lien defaults for $1,756,394, including the "replenishment amount" and the unpaid postpetition rent and rent due under the rejected Smithtown Lease. Mr. Ferrario notes that the Debtors and PLVTZ failed to cure their defaults under the Joint Agreement by failing to take the actions required to replenish the Seaman L/C by either replacing the Seaman L/C or causing the amount of the Seaman L/C to be increased by $879,522 back to the Seaman L/C amount of $2,050,000. Unless the Purchasers have assumed the Joint Agreement as they assume the Remaining Seaman Leases, the Purchasers are not entitled to receive any remaining L/C Proceeds, Mr. Ferrario maintains. The Seaman L/C Proceeds are not property of the estate. The terms of the Sale Order specifically excludes from the assets purchased by the Purchasers those assets which are not property of the Debtors' estate. "Moreover, the return of any portion of the Seaman Proceeds to Seaman Furniture can only be made within 90 days after the latter of the expiration date of the last of the Seaman Leases that remains in the effect the expiration of the term of the Remaining Seaman Leases," Mr. Ferrario explains. The Landlords and the Agent, hence, ask the Court to: * condition any assumption and assignment of the Remaining Seaman Leases on the Debtors' and PLVTZ's immediate payment of the $1,756,394 full cure amount, which includes the $879,522 Replenishment Amount; * hold that the Joint Agreement: -- is not an executory agreement; and -- rides through the Chapter 11 cases unaffected by the filing of the bankruptcy cases; * deny the assumption or rejection of the Joint Agreement; * find that the Joint Agreement is not ambiguous and not re- write the Joint Agreement to authorize the use of L/C Proceeds, or any draw on the Seaman L/C, to pay any portion of any cure which must be paid in connection with the assumption of the Remaining Seaman Leases or for any purpose not specifically authorized by the terms of the Joint Agreement; * prevent the turnover of any remaining L/C Proceeds to the Purchasers; and * grant them their reasonable legal costs and expenses. Headquartered in Woodbury, New York, Levitz Home Furnishings, Inc. -- http://www.levitz.com/-- is a leading specialty retailer of furniture in the United States with 121 locations in major metropolitan areas principally the Northeast and on the West Coast of the United States. The Company and its 12 affiliates filed for chapter 11 protection on Oct. 11, 2005 (Bank. S.D.N.Y. Lead Case No. 05-45189). David G. Heiman, Esq., and Richard Engman, Esq., at Jones Day, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported $245 million in assets and $456 million in debts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP represents the Official Committee of Unsecured Creditors. Levitz sold substantially all of its assets to Prentice Capital on Dec. 19, 2005. (Levitz Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MED DIVERSIFIED: 2nd Cir. Subordinates Ex-Employee's Stock Claim ---------------------------------------------------------------- Addressing an issue of apparent first impression, the United States Court of Appeals for the Second Circuit holds that the scope of 11 U.S.C. Sec. 510(b) -- the Bankruptcy Code's subordination provision -- requires a former executive employee's claim against Med Diversified, Inc., based on the debtor's failure to issue its common stock to the employee in exchange for his stock in another company, allegedly in violation of the parties' termination agreement, was a claim "arising from" the purchase of the debtor's stock, within the meaning and purpose of Sec. 510(b). In its decision published at 2006 WL 2458760, the Second Circuit says the employee took on the risk and return expectations of a shareholder when he agreed to exchange his securities in the other company and his employment claims for the shares of the debtor, regardless of the fact that the employee never received the shares he was due by the agreed-upon date. Other federal appellate court decisions, as well as the holdings of most prominent decisions of local bankruptcy courts, supported a broad interpretation of Sec. 510(b). Headquartered in Handover, Massachusetts, Med Diversified, Inc. -- http://www.meddiversified.com/-- operates companies in various segments in the health care industry, including pharmacy, home infusion, multi- media, management, clinical respiratory services, home medical equipment, home health services and other functions. The Company and its affiliates filed for bankruptcy protection on November 27, 2002 (Bankr. E.D.N.Y. Case No. 02-88564). Toni Marie McPhillips, Esq., at Duane Morris LLP, represents the Debtors. When the Debtors filed for chapter 11 protection, they listed total assets of $196,323,000 and total debts of $143,005,000. MEDAREX INC: Gets Default Notice Due to Late Form 10-Q Filing ------------------------------------------------------------- Medarex, Inc. reported that on Aug. 25, 2006, it received a notice of default from Citadel Equity Fund Ltd. relating to its 2.25% Convertible Senior Notes in the aggregate principal amount of $150 million due May 15, 2011. Citadel, a reported holder of more than 25% in principal amount of the outstanding Notes, provided the notice of default under the Indenture governing the Notes and cites Medarex's failure to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, as the basis for the notice of default. The notice of default further provides that if Medarex does not file its Form 10-Q by Oct. 24, 2006, an event of default under the Indenture will exist. Under the terms of the Indenture, Medarex has 60 days after such a notice of default has been given to cure any such default. If an event of default shall be deemed to have occurred, Medarex intends to use its best efforts to cure any such default within the required cure period. If such an event of default occurs and is continuing, the Trustee for the Notes or the holders of not less than 25% in principal amount of the Notes may declare the principal of all the Notes to be due and payable immediately. As of June 30, 2006, Medarex held approximately $424.4 million in cash, cash equivalents, marketable securities and segregated cash (approximately $19.5 million of which relates to Celldex Therapeutics, Inc., a majority-owned subsidiary), and the Notes currently have an aggregate outstanding principal amount of $150 million. Medarex believes that after any required repayment of the Notes, its existing resources will be adequate to fund its currently planned working capital requirements for both the short and long term. As previously reported, the Board of Directors of Medarex has appointed one of its outside directors to oversee an investigation of its historical stock option practices and related accounting treatment. The outside director has not completed the work or reached final conclusions and is continuing the investigation. Accordingly, Medarex was not able to file its Form 10-Q on the prescribed filing date and will not be able to file its Form 10-Q until the investigation has been completed. Medarex also previously announced that it will restate its annual financial statements for the periods from 2000 through 2005 and its interim financial statement for the quarter ended March 31, 2006. Headquartered in Princeton, New Jersey, Medarex Inc. (Nasdaq: MEDX) -- http://www.medarex.com/-- is a biopharmaceutical company focused on the discovery, development and potential commercialization of fully human antibody-based therapeutics to treat life-threatening and debilitating diseases, including cancer, inflammation, autoimmune disorders and infectious diseases. METALDYNE CORP: Consents to $2 Billion Asahi Tec Acquisition ------------------------------------------------------------ Metaldyne Corporation has agreed to be acquired by Asahi Tec Corporation, a Shizuoka, Japan-based chassis and powertrain component supplier in the passenger car/light truck and medium/heavy truck segments. The total value of the transaction, which has been approved by both the Asahi Tec and Metaldyne Boards of Directors, will be approximately $1.2 billion, including Metaldyne's debt. The transaction is targeted to be completed in the fourth quarter of 2006. The deal has been negotiated with the full support of Asahi Tec's major investor RHJ International. RHJI is a diversified holding company focused on creating long-term value for its shareholders and building on its existing businesses in Japan and elsewhere. "Our customers are expanding their operations globally, increasingly outsourcing higher, value added manufacturing processes and developing strategies that address these changes," said Tim Leuliette, Metaldyne chairman, president and CEO. "One of the most dramatic changes is where vehicles will be developed in the future. According to CSM Worldwide, by 2012, half of all vehicle development worldwide is expected to be done in the Asia Pacific region. Suppliers that will be successful and competitive in the future must be ready to rapidly respond to customers as they execute these changes." Acquiring Metaldyne will expand Asahi Tec's geographic footprint and product portfolio and create a powerful global automotive supplier of highly engineered, precision modules and components for powertrain and chassis that can better serve its global customers on a local basis. Asahi Tec has a significant presence in Japan, with additional operations in Thailand and China. Metaldyne has significant operations in North America, Europe, Korea and China and is growing in India and Brazil. After the transaction, both companies will be well positioned to benefit from growth in emerging markets in Asia as well as the success of transplants in North America and Europe. "This acquisition will increase Asahi Tec's customer base, geographic footprint and product portfolio," said Shoichiro Irimajiri, chairman of Asahi Tec. "We will be able to bring new products and services to market more rapidly and more efficiently thanks to the increased scale of Metaldyne's operations and a strong and widely recognized management team." The transaction offers both companies synergies. Specifically, it is expected to: -- Expand the global footprint and customer base; -- Create a strong, experienced combined Asahi Tec and Metaldyne management team; -- Enhance engineering capabilities and technology leadership in powertrain and chassis; -- Expand R&D capabilities; -- Broaden manufacturing capabilities, including aluminum castings, ductile iron castings, powdered metals and precision machining; -- Strengthen the product portfolio; -- Reduce costs through joint procurement; -- Improve facility utilization; and -- Expand the market opportunity for light vehicles (Metaldyne) and heavy trucks (Asahi Tec). "Metaldyne and Asahi Tec have come together to create a stronger, more globally competitive company," said Mr. Leuliette. "All our customers, employees and investors are better served by a stronger, better capitalized, more globally capable company." In addition, Metaldyne will continue to operate independently and will keep its name. Mr. Leuliette will continue to oversee day- to-day operations as chairman and CEO of Metaldyne. Under the new organizational structure Mr. Leuliette and Mr. Irimajiri will serve as co chairmen of Asahi Tec. Mr. Irimajiri also will be chief technical officer. Leuliette will focus on operations and also hold the position of co-CEO, which he will share with Akira Nakamura, who continues his role as president of Asahi Tec. Mr. Leuliette also will become an industrial partner in RHJI. Transaction Details The transaction will be effected through a cash out merger in which Metaldyne will become a wholly owned subsidiary of Asahi Tec. Holders of 97% of Metaldyne's common stock will receive $2.18 for each share of Metaldyne's common stock. The balance of the common stockholders will receive at least $2.40 for each share of Metaldyne common stock, and may receive a higher price if Asahi Tec's average stock price increases over a specified period prior to closing. Holders of 97% of Metaldyne's common stock and certain of its preferred stockholders have agreed to reinvest their proceeds in a private placement of Asahi Tec common stock. The remaining Metaldyne preferred stockholders are reinvesting their proceeds in Asahi Tec convertible preferred stock to be issued in a private placement. RHJI and co-investors, Mitsui & Co. Ltd. and CHUO MITSUI Growth Capital Investment Limited Partnership II, have agreed to invest $188 million in Asahi Tec, between $150 million and $175 million of which will be contributed to Metaldyne for debt reduction. RHJI will remain the largest stockholder of Asahi Tec. Metaldyne's Board of Directors declared a distribution of all the common stock and common stock equivalents of TriMas Corporation that are currently owned by Metaldyne to Metaldyne's common stockholders of record on the business day prior to the merger. This distribution is conditioned upon, among other things, the occurrence of the merger and the receipt of certain consents and approvals. Closing of the merger is subject to customary conditions, including U.S. and Japanese regulatory approvals, the closing of the private placement to Metaldyne's reinvesting stockholders and stockholder approvals at Asahi Tec and Metaldyne. The merger has already been approved by the holders of a majority of Metaldyne's common stock and its preferred stockholders. In addition, the closing of the merger is subject to the refinancing of Metaldyne's senior bank debt, the receipt of certain consents and waivers from Metaldyne's bondholders and the completion of a tender for a minimum of $225 million aggregate principal amount of Metaldyne's 11% senior subordinated notes due 2012 and 10% senior subordinated notes due 2014 at a tender price reflecting the price of the 11% notes during the recent pre- announcement period. All $31.7 million in outstanding principal amount of the 10% senior subordinated notes are currently held by DaimlerChrysler Corporation. A condition of the tender offer also includes seeking a waiver of the bonds' change of control provisions. The notes that remain outstanding after completion of the tender and consents will not benefit from any new guarantees or other credit support from Asahi Tec or any of its current subsidiaries. Further, Asahi Tec may elect not to close if Metaldyne's rating for senior term debt is lowered below certain levels and its interest cost for that debt exceeds certain levels. Metaldyne was advised by Lazard Freres & Co. on this transaction. Asahi Tec was advised by Deutsche Bank Securities Inc., NikkoCitigroup Ltd. and Mizuho Corporate Advisory Co., Ltd. About Asahi Tec Headquartered in Shizuoka, Japan, Asahi Tec -- http://www.asahitec.co.jp/-- primarily designs, manufactures and sells ductile iron cast auto parts for truck and construction machinery OEMs, aluminum casting parts for truck and passenger car OEMs and aluminum wheels for automobile OEMs. Asahi Tec also designs, manufactures and sells environmental systems, equipment and development technologies used by local governments and municipalities and electrical hardware and equipment used by electricity generators. The company employs more than 3,500 employees at facilities in Japan, Thailand and China. About RHJ International RHJ International is a limited liability company organized under the laws of Belgium. It is a diversified holding company focused on creating long-term value for its shareholders by acquiring and operating businesses in attractive industries in Japan and elsewhere. About Metaldyne Headquartered in Plymouth, Mich., Metaldyne Corp -- http://www.metaldyne.com/-- is a leading global designer and supplier of metal-based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel end and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry. METALDYNE CORP: Asahi Purchase Cues Moody's to Review Ratings ------------------------------------------------------------- Moody's Investors Service placed the ratings of Metaldyne Corporation and its wholly owned subsidiary Metaldyne Company LLC under review for possible upgrade. The review is prompted by Metaldyne's announcement that it has signed a definitive agreement to be purchased by Asahi Tec Corp. in a transaction valued at approximately $1.2 billion. Asahi Tec designs, manufactures and sells iron cast auto parts for truck and construction machinery OEMs as well as aluminum casting parts and aluminum wheels for truck and automotive OEMs. Asahi Tec's revenues for the fiscal year ended March 31, 2006 were approximately 58 billion Yen. Asahi Tec is approximately 63% owned by RHJ International, a New York buyout firm. The ratings under review for possible upgrade are: Metaldyne Corporation: * Corporate Family Rating, Caa1; * $150 million of 10% guaranteed senior unsecured notes due November 2013, Caa2; * $250 million of 11% guaranteed senior subordinated notes due June 2012, Caa3; Metaldyne Company LLC: * B3 rating for Metaldyne LLC's guaranteed senior secured credit facilities, consisting of: * $400 million guaranteed senior secured tranche D term loans due December 2009; * $50 million guaranteed senior secured revolving credit facility due August 2011; * $150 million Synthetic L/C Facility due August 2011; The last rating action was on August 14, 2006 when the ratings were lowered. Moody's review will consider the financial benefits and strategic business opportunities which could come to Metaldyne under a business combination with Asahi Tec. During August 2006, Moody's downgraded Metaldyne's ratings reflecting concerns about the company's weak financial performance and a continuing challenging business environment for auto part suppliers. Initial statements indicate that the proposed transaction will involve a $300 million debt reduction by Metaldyne and a refinancing of the company's bank credit facility. These actions could improve Metaldyne's financial metrics and available liquidity, giving it more flexibility to address the challenging business environment. Moreover, the combination with Asahi Tec could offer new business opportunities for Metadyne with non-US auto makers. The review will consider any change in the capital structure of Metaldyne and the resulting impact on the company's financial metrics and liquidity profile. The review will also consider the effects of the current adverse business environment in the auto components sector on Metaldyne's earnings and cash flow, and the strategies the business combination would pursue to enhance performance and reduce debt. Moody's noted that the transaction is subject to certain conditions including the successful tender of a portion of the company's existing public debt and the granting of waivers for the change of control language in the bond indentures. Consequently, the review will also consider the degree to which the level of asset coverage and indenture protections afforded to public debt holders are maintained. Metaldyne Corporation, headquartered in Plymouth, Michigan, is a manufacturer of highly engineered products for the global light vehicle market. Metaldyne designs, engineers and assembles metal- formed and engineered products used in transmissions, engines and chassis of vehicles. The company's annual revenues currently approximate $1.9 billion. Ownership of Metaldyne is controlled by private equity sponsor Heartland Industrial Partners LP. METALDYNE CORP: S&P Holds B Corporate Credit Rating on Watch ------------------------------------------------------------ Standard & Poor's Ratings Services' 'B' corporate credit rating and other ratings on Metaldyne Corp. remained on CreditWatch, but the implications have been revised to developing from negative following the company's announcement that it has agreed to be acquired by unrated Asahi Tec Corp. Developing implications mean that the ratings could be lowered, raised, or affirmed following our review of the terms of the proposed transaction. The Plymouth, Michigan-based auto supplier has total debt of about $860 million. The boards of both Metaldyne and Asahi Tec have approved the $1.2 billion transaction, which includes Metaldyne's debt. Metaldyne will become a wholly-owned subsidiary of Asahi Tec through a cash- out merger, but will continue to operate independently. Metaldyne's stockholders will receive cash for their shares, but have agreed to reinvest the proceeds in a private placement of Asahi Tec common and preferred stock. Asahi Tec's major investor, RHJ International, along with two co- investors, will invest $188 million in Asahi Tec, with $150 million - $175 million targeted for debt reduction at Metaldyne. The acquisition is subject to the refinancing of: * Metaldyne's senior bank debt; * the receipt of consents and waivers from its bondholders; and * the completion of a tender for a portion of its public bonds. "If completed as planned, the transaction will improve Metaldyne's credit metrics, but they will remain weak. The company will continue to have a heavy debt load and suffer from weak earnings and cash flow resulting from the tough business conditions facing U.S. automotive suppliers, including customer production cuts, pricing pressure, intense competition, and raw material cost exposure," said Standard & Poor's credit analyst Robert Schulz. Asahi Tec will not guarantee or provide other credit support for Metaldyne's debt. Potential benefits from the combination include: * an expanded global footprint and customer base; * engineering and technology sharing opportunities; * a broader product portfolio; and * potential cost savings through joint procurement and improved facility utilization. But the combination could be challenged by integration issues resulting from the unique corporate cultures of the two companies, and the fallout from the ongoing business challenges facing Metaldyne's mostly U.S.-based customers. METSO PAPER: Completes Purchase of Paper Machine Maker in China --------------------------------------------------------------- Metso Paper has received relevant regulatory approvals from the Chinese authorities for the acquisition of Shanghai-Chenming Paper Machinery Co. Ltd agreed in February 2006. The entire share capital of the company was transferred to Metso as of Aug. 31, 2006. The debt-free purchase price and the investments related to the development of the unit total about EUR35 million. The company was previously owned by Shandong Chenming and Shanghai Heavy Machinery. The acquired company, operating from now on under the name of Metso Paper Technology (Shanghai) Co. Ltd., comprises a workshop, a foundry and a design department. The unit is located in the Shanghai area in Jiading and it employs around 550 people. The unit will mainly concentrate on manufacturing paper and board machine sections for Metso Paper's delivery projects in China. However, the plant already has the capability to manufacture a major part of a conventional linerboard machine for the Chinese market. The unit can also supply some components for projects outside of China, which will strengthen Metso's global sourcing. The Shanghai unit will further strengthen Metso Paper's capabilities to serve the fast growing Chinese paper industry and will simultaneously open new opportunities to serve also markets outside of China. Metso Paper also has a joint venture company, Valmet-Xian Machinery Co. Ltd. in China. Valmet-Xian employs approximately 1,110 people and focuses on small and medium size paper and board machines. Metso owns 48.3% of the joint venture. Headquartered in Helsinki, Finland, Metso Corporation -- http://www.metso.com/-- is a global engineering and technology corporation with 2005 net sales of approximately EUR4.2 billion. Its 22,000 employees in more than 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry and selected other industries. The Company's 5-1/8% Senior Notes due 2009 carry Moody's Investors Service's Ba1 rating and Standard & Poor's BB rating. MHARAS CORP: Case Summary & Largest Unsecured Creditor ------------------------------------------------------ Debtor: Mharas Corporation 2001 Murphy Drive Bedford, TX 76021 Bankruptcy Case No.: 06-42851 Chapter 11 Petition Date: September 1, 2006 Court: Northern District of Texas (Fort Worth) Judge: D. Michael Lynn Debtor's Counsel: Areya Holder Pronske, Esq. Areya Holder Pronske, P.C. 800 West Airport Freeway, Suite 540 Irving, TX 75062 Tel: (972) 438-8800 Fax: (972) 438-8825 Total Assets: $2,908,180 Total Debts: $2,350,000 Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ AM & AM Corporation Purchase Money $450,000 14335 Haymeadow Circle Dallas, TX 76524 MILLENIUM ASSISTED: Amended Disclosure Statement Gets Interim Okay ------------------------------------------------------------------ The Honorable Raymond T. Lyons of the U.S. Bankruptcy Court for the District of New Jersey approved, on a conditional basis, the amended disclosure statement explaining Millenium Assisted Living Residence at Freehold LLC's first amended Chapter 11 Plan of Orderly Liquidation. The Court set Oct. 5, 2006, as the last day for interested parties to: -- file objections to the Disclosure Statement and confirmation of the Plan; and -- file written acceptances or rejections of the Plan. A hearing to consider final approval of the Disclosure Statement will be on Oct. 12, 2006. As reported in the Troubled Company Reporter on Sept. 1, 2006, distributions under the Debtor's 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. MILLENIUM BIOLOGIX: Provides Details on Proposed Financing ---------------------------------------------------------- Millenium Biologix Corporation has received a demand loan in the amount of $500,000 from BML Capital I, LLP. Both BML Capital and its affiliate, BML International Maple Leaf Fund I Inc. are existing shareholders of the Company. BML Capital has agreed to convert the demand loan into a longer term financing which will be in the form of convertible debentures. The Company has also received a commitment for a further $500,000 investment in Debentures from a second existing shareholder, New Generation Biotech Equity Fund. The Company is continuing its efforts to obtain commitments from other investors for up to an additional $2 million of Debentures. These efforts, together with other initiatives being pursued by the Company, are intended to provide it with further financial resources to continue to develop its core technologies and more time to attempt to address its longer term financial needs. The Debentures would mature and become due and payable on the second anniversary of closing. The Debentures would carry an interest rate of 25% per annum payable in cash or common shares (at a rate of $0.03 per common share) at the option of the Company semiannually on June 30 and December 31 in each year until maturity. The Debentures would convert into common shares of the Company at the option of the holder at any time prior to the maturity date at a price per share of $0.03. Conversion would be mandatory in the event the Company completes a financing with gross proceeds in excess of $5 million. An investor in Debentures would also receive warrants equal to the quotient obtained by dividing the aggregate principal amount of Debentures subscribed for by the conversion price, and each entitling the holder to purchase one common share of the Company at a price per common share equal to the 10-day volume weighted average price of the Company's common shares on the Toronto Stock Exchange immediately preceding closing for a period of three years from closing. "The willingness of two of our existing investors to provide financing is a testament to the inherent value and long-term potential of our core technologies," said Brian Fielding, President CEO of Millenium Biologix. "In addition to providing us with the necessary capital to continue advancing our programs, this demand loan and commitment provide us with the means and flexibility to address our longer term financial needs." TSX Financial Hardship Exemption BML Capital subscribed for approximately $500,000 of the Debentures; BML currently holds 20,000,000 or 15.2% of the outstanding common shares of the Company. One member of the Company's Board currently represents BML. An additional $500,000 of the Debentures have been subscribed for by New Gen, which currently holds 27,816,909 or 21.2% of the outstanding common shares of the Company. New Gen currently does not have any representative on the Company's Board. Although the nature of the two financing transactions would normally trigger security holder approval under the rules of the Toronto Stock Exchange, the Company intends to rely on an exemption from the security holder approval requirements of the TSX Company Manual on the basis of its serious financial difficulty. A special committee of independent directors of the Company has considered the transactions. On the basis of the recommendations of the Special Committee, the board of directors of the Company has determined that the Company is in serious financial difficulty, that the transactions are designed to improve the Company's financial situation and are reasonable in the circumstances of the Company, and has authorized the Company to make the application to the TSX. About Millenium Biologix Headquartered in Ontario, Canada, Millenium Biologix Corporation (TSX: MBC) -- http://www.millenium-biologix.com/-- is focused on the development and commercialization of next generation cell culture and tissue engineering systems that will drive change from synthetic implants to more effective biologics-based solutions. * * * As of April 30, 2006, the Company had cash of $3.2 million. The Company continues to review various strategic options, including seeking investors for a private placement financing to obtain the resources necessary to continue execution of the business plan. The implementation of the Company's strategy is dependent on successfully securing these necessary resources in the very near term. In the event the Company is unable to raise financing within the next two months, there is substantial doubt as to the Company's ability to continue as a going concern, which could require the partial or complete divestiture of one or more of its core technologies. MIRANT CORP: Americas Energy Unit Resolving Bonneville Dispute -------------------------------------------------------------- Mirant Americas Energy Marketing, LP, and the Bonneville Power Administration are parties to three interrelated agreements: (1) a Western Systems Power Pool Agreement; (2) an Agreement to Enable Future Purchases, Sales and Exchanges of Power and Other Services; and (3) a Confirmation Agreement. In 2003, the BPA asked MAEM to provide it $1,647,000 as adequate assurance of its ability to perform under the Confirmation Agreement. MAEM objected to the amount but wire transferred $523,389 as adequate assurance. Because of MAEM's Chapter 11 filing, the BPA, in a letter, terminated all its transactions with the Debtor under the Enabling Agreement and the Confirmation Agreement. The BPA: * assessed a termination payment against MAEM totaling $1,085,040; * withheld the payment of $552,014 that the BPA owed to MAEM for certain energy purchases; and * requested MAEM to pay $533,026 as the net amount of the Termination Payment. The BPA told MAEM that it would release the $523,389 adequate assurance if the Debtor will pay the net amount of the Termination Payment. The BPA subsequently withdrew the termination letter pursuant to a Court order. The BPA also reinstated the Confirmation Agreement and returned the $552,014 withheld payment. Pursuant to the Plan of Reorganization, MAEM's assets, rights and claims against the BPA were transferred to Mirant Energy Trading, LLC. MET demanded the BPA to pay: * $632,088 on account of the adequate assurance plus interest; * $44,624 as interest on the $552,014 withheld payment; and * $274,466 for attorney's fees. The BPA returned the $523,389 adequate assurance but did not concede as to the payment of interest and attorney's fees. Subsequently, the parties agreed to settle. Pursuant to a Court- approved stipulation, the BPA will pay MET: (a) $114,771 as interest on the adequate assurance amount; and (b) $10,400 as interest on the $552,014 withheld payment. 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. NBC/AUSTIN: U.S. Trustee Wants Cases Dismissed or Converted ----------------------------------------------------------- Charles F. McVay, the U.S. Trustee for Region 7, asks the Honorable Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas in Houston for the dismissal, conversion to chapter 7 proceedings, or appointment of a Chapter 11 Trustee in NBC/Austin Windridge, Ltd., and NBC Las Brisas, Ltd.'s Chapter 11 cases. Austin Windridge and Las Brisas are each single-asset real estate debtors, each owning one apartment complex cross-collateralized to KeyBank National Association. The Windridge Apartment complex is an operating complex that is 85% occupied in Austin, Texas. The Las Brisas Apartment complex is a non-operating complex in Port Neches, Texas, due to damage sustained by Hurricane Rita. The U.S. Trustee said the Debtors filed voluntary petitions on May 2, 2006, to avoid foreclosure on the properties. The U.S. Trustee said that: -- failing to insure the property of these estates as required by the U.S. Trustee, by the terms of the security agreement, and by common sense for the protection of the Debtors' assets for the benefit of creditors, the Debtors have violated Sections 1112(A), (B), and (C) of the U.S. Bankruptcy Code. That failure is cause for dismissal, conversion, or appointment of a Chapter 11 Trustee; -- providing false insurance documentation to the U.S. Trustee is cause for dismissal, conversion, or appointment of a Chapter 11 Trustee; and -- failing to file monthly operating reports, failing to pay quarterly fees to the U.S. Trustee, and failing to timely file and diligently prosecute the filing of documents required by the Bankruptcy Code are causes for dismissal under Sections 1112(F) and (K) and Bankruptcy Local Rule 1017(a)(7) for "want of prosecution." Judge Isgur will convene a hearing at 1:30 p.m. on Sept. 13, 2006, to consider the U.S. Trustee's request. Nancy L. Holley, Esq., represents the U.S. Trustee. Headquartered in Houston, Texas, NBC/Austin Windridge, Ltd., and its debtor-affiliate, NBC Las Brisas, Ltd., filed for chapter 11 protection on May 2, 2006 (Bankr. S.D. Tex. Case Nos. 06-31901 & 06-80154). Richard L. Fuqua, II, Esq., at Fuqua & Keim, LLP, represents the Debtors. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million NBC/AUSTIN WINDRIDGE: Court Okays Capstone as Management Company ---------------------------------------------------------------- The Honorable Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas in Houston authorized NBC/Austin Windridge, Ltd., and NBC Las Brisas, Ltd., to employ Capstone Real Estate Service, Inc., as their Management Company, pursuant to Section 327 of the Bankruptcy Code. As reported in the Troubled Company Reporter on July 20, 2006, Capstone will assist the Debtors in the accounting and management functions required under their bankruptcy cases. The Debtors will employ Capstone on the fee basis set out in Schedule A of the Management Agreement currently in place between them. The Debtor did not submit a copy of the Management Agreement to the Court. To the best of Debtors' knowledge, Capstone holds no interest adverse to their estates. Headquartered in Houston, Texas, NBC/Austin Windridge, Ltd., and its debtor-affiliate, NBC Las Brisas, Ltd., filed for chapter 11 protection on May 2, 2006 (Bankr. S.D. Tex. Case Nos. 06-31901 & 06-80154). Richard L. Fuqua, II, Esq., at Fuqua & Keim, LLP, represents the Debtors. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million NBO SYSTEMS: Balance Sheet Upside-Down by $11.68MM at June 30 ------------------------------------------------------------- NBO Systems, Inc., incurred a $1,708,780 net loss on $2,154,921 of revenues during the 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's balance sheet showed $6,523,248 in assets and $18,203,342 in liabilities, all of which are current. $6,004,088 of the Company's assets is current. The Company's equity deficit widened to $11,680,094 as of June 30, 2006, from a $9,500,088 deficit at Dec. 31, 2005. Christopher Foley, the Company's Chief Financial Officer, disclosed that the Company's operating activities have used cash rather than provided cash. The Company has had a history of losses and the Company's accumulated deficit (since inception June 23, 1994 through June 30, 2006) was approximately $43.2 million. During the six months ended June 30, 2006, the Company utilized approximately $3.7 million in cash from operating activities. At June 30, 2006, the Company had a deficit in working capital of approximately $12.2 million. The Company's ability to meet its obligations as they come due is dependent upon obtaining additional financing, as may be required and ultimately attaining sustained profitability, Mr. Foley said. According to Mr. Foley, the Company continues to attempt to raise capital through private equity or debt offerings, as well as institutional investors until its operations provide sufficient cash to meet its needs. The Company also Defaulted on a note to a stockholder whereby warrants to purchase 30,000 shares of common stock at $2.50 were issued, resulting in deferred financing costs of $9,846. A full-text copy of the Company's regulatory filing is available for free at http://ResearchArchives.com/t/s?110d Going Concern Doubt Tanner LC recurring losses, has a working capital deficit of $10,323,825 and an accumulated deficit of $40,148,750 as of December 31, 2005, and had negative cash flows from operating activities of $1,792,008 for the year ended December 31, 2005. About NBO Systems NBO Systems, Inc. -- http://www.nbo.com/-- develops and markets prepaid stored-value card programs that operate on the established payment systems operated by Visa and MasterCard (open networks) or on Discover (private dedicated networks). NMC PROPERTIES: Case Summary & Two Largest Unsecured Creditors -------------------------------------------------------------- Debtor: NMC Properties, Inc. 3525 Hickory Branch Trail Suwanee, GA 30024 Bankruptcy Case No.: 06-70647 Chapter 11 Petition Date: September 1, 2006 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: M. Denise Dotson, Esq. Jones & Walden, LLC 21 Eighth Street, Northeast Atlanta, GA 30309 Tel: (404) 564-9300 Fax: (404) 564-9301 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ City of Suwanee Property Taxes $1,004 373 Highway 23 3525 Hickory Suwanee, GA 30024 Branch Trail County of Gwinnett 2985 Ivy Plantation $5,200 P.O. Box 372 Lawrenceville, GA 30046 3982 Cherokee Trail $3,500 3525 Hickory Branch $3,500 Trail NORTEL NETWORKS: Selling UMTS Business to Alcatel for $320 Million ------------------------------------------------------------------ Nortel has signed a non-binding Memorandum of Understanding for the sale of its UMTS access business to Alcatel for $320 million. The move will enable the Company to simplify its business and strategically focus its investments for leadership in key markets while ensuring its customers' UMTS access requirements will continue to be met. The Company disclosed that as part of its business strategy, it is executing on plans to increase investment in key areas, partner in others, and divest where there is no path for it to lead or realize attractive returns. Mike Zafirovski, president and chief executive officer, said, "Nortel is sharpening its focus on the markets in which we intend to lead. Our UMTS access business lacks the scale and momentum needed to become profitable," "With next-generation mobility, we see an opportunity to change the game by applying our networking expertise and technology innovation to significantly alter the economic paradigm of mobility solutions in the future," Mr. Zafirovski said. "We are absolutely committed to mobility and plan to lead the 4G evolution and play a key role in the mass market adoption of mobile video and multimedia services." Richard Lowe, president, Mobility and Converged Core Networks, said. "With a strong position in GSM and CDMA, an established service provider customer base, and technology leadership in key areas like OFDM-MIMO, we have a solid foundation for success going forward." The proposed sale includes the Company's UMTS access product portfolio made up of the Radio Network Controller and Node B products and OAM solutions, related services and associated assets. Completion of the transaction is subject to the negotiation and execution of a definitive agreement between the Company and Alcatel, completion of consultations with work councils and other employee representatives, and customary closing conditions including regulatory approvals. The transaction is targeted for completion in the fourth quarter of 2006. Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. * * * As reported in the Troubled Company Reporter on July 10, 2006, Dominion Bond Rating Service confirmed the long-term ratings of Nortel Networks Capital Corporation, Nortel Networks Corporation, and Nortel Networks Limited at B (low) along with the preferred share ratings of Nortel Networks Limited at Pfd-5 (low). All trends are Stable. DBRS confirmed B (low) Stb Senior Unsecured Notes; B (low) Stb Convertible Notes; B (low) Stb Notes & Long-Term Senior Debt; Pfd-5 (low) Stb Class A, Redeemable Preferred Shares; and Pfd-5 (low) Stb Class A, Non-Cumulative Redeemable Preferred Shares. As reported in the Troubled Company Reporter on June 20, 2006, Moody's Investors Service affirmed the B3 corporate family rating of Nortel; assigned a B3 rating to the proposed $2 billion senior note issue; downgraded the $200 million 6.875% Senior Notes due 2023 and revised the outlook to stable from negative. Standard & Poor's also affirmed its 'B-' long-term and 'B-2' short-term corporate credit ratings on the company, and assigned its 'B-' senior unsecured debt rating to the company's proposed $2 billion notes. The outlook is stable. ONEIDA LTD: Court Approves Northpoint Industrial Lease Agreement ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved Oneida Ltd. and its debtor-affiliates' lease agreement with Northpoint Industrial III, LLC, On July 19, 2006, the Debtors agreed to lease a 504,200 sq. ft. warehouse distribution and office facility located in Bryan County, Georgia. Northpoint Industrial also agreed to construct the warehouse facility. The lease agreement is integral to the Debtors' restructuring efforts, as the warehouse, in part because of its proximity to the Port of Savannah, will provide substantial savings over the Debtors' current east coast warehouse in Sherrill, New York. The agreement, with a seven-year lease term and a minimum monthly rental of $117,646.57, will become effective on Nov. 1, 2006. Possession of the premises and warehouse will be delivered to the Debtors no later than Dec. 15, 2006. Headquartered in Oneida, New York, Oneida Ltd. (OTC: 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. The pre-negotiated plan of reorganization of Oneida Ltd. was confirmed, on Aug. 31, 2006. ORIS AUTOMOTIVE: Court Okays Heninger as Panel's Special Counsel ---------------------------------------------------------------- The Honorable Tamara O'Mitchell of the U.S. Bankruptcy Court for Northern District of Alabama in Birmingham authorized the Official Committee of Unsecured Creditors of Oris Automotive Parts Alabama, Ltd., to retain Heninger Garrison & Davis as its special counsel. The Committee needs Heninger Garrison to perform discovery and investigate if there are claims and causes of action against BBK, Ltd., Mercedes, Oris-Germany, among others, as to their acts and conduct in controlling the Debtor that resulted in: -- the Debtor's deepening insolvency, -- breach of fiduciary duties to the Debtor, and -- other causes pf action that may be uncovered through discovery. Heninger Garrison will assist the Committee in discovery through depositions and requests for production of documents and investigate a cause of action that may ultimately result in a recovery of funds to pay creditors in the Debtor's bankruptcy case. The Committee said that the Firm's professionals will bill: Professional Hourly Rate ------------ ----------- Stephen D. Heninger, Esq. $250 Erik Heninger, Esq. $150 Paralegals $75 The Committee assures the Court that the Firm does not hold nor represent any interest adverse to the Debtor's estate. Headquartered in McCalla, Alabama, Oris Automotive Parts Alabama, Ltd. -- http://www.oris-gmbh.de/-- manufactures automotive parts. The company filed for chapter 11 protection on March 16, 2006 (Bankr. N.D. Ala. Case No. 06-00813). Clark R. Hammond, Esq., at Johnston, Barton, Proctor & Powell LLP, represents the Debtor in its restructuring efforts. Charles L. Denaburg, Esq., and Marvin E. Franklin, Esq., at Najjar Denaburg, P.C., represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $1 million to $10 million and debts between $10 million to $50 million. OWENS CORNING: Court Grants Bondholders Protective Order Plea ------------------------------------------------------------- The Honorable Judith Fitzgerald the U.S. Bankruptcy Court for the District of Delaware grants the request of a group of Bondholders for a Protective Order, for reasons stated in open court. Fifteen bondholders, all signatories to Owens Corning and its debtor-affiliates' Plan Support Agreement, asked the Court to immediately enter a protective order against discovery requests made by Schultze Asset Management LLC. The Bondholders are: 1. King Street Capital, Ltd.; 2. King Street Institutional, Ltd.; 3. King Street Capital L.P.; 4. MA Deep Event Ltd.; 5. Deephaven Distressed Opportunities Trading Ltd.; 6. Deephaven Event Trading Ltd.; 7. D.E. Shaw Laminar Portfolios, L.L.C.; 8. Plainfield Special Situations Master Fund Limited; 9. BlueBay Asset Management; 10. Quadrangle Debt Opportunities Fund Master Ltd.; 11. QDRF Master Ltd.; 12. Citadel Equity Fund, Ltd.; 13. Davidson Kempner Capital Management, LLC; 14. Lehman Brothers, Inc.; and 15. J.P. Morgan Securities, Inc. As previously reported, Schultze objected to the Disclosure Statement attached to the Debtors' Sixth Amended Plan or Reorganization. Among others, Schultze complained that the sixth Amended Plan has not been proposed in good faith. Richard W. Riley, Esq., at Duane Morris LLP, in Wilmington, Delaware, said Schultze's lack-of-faith objection stems from the belief that certain of the Bondholders participating in the Plan negotiations also held bank debt or equity interests, creating a supposed conflict of interest. Mr. Riley noted that the Court already overruled Schultze's objection. However, Schultze continues to pursue the same concerns as an objection to confirmation of the Sixth Amended Plan. Hence, Schultze propounded a host of discovery requests directed to the Bondholders. Schultze's discovery requests, among others, seek: -- all documents concerning a request to deem bank claims unimpaired and the Plan Support Agreement; -- testimony from each Bondholder; -- proprietary information as to each Bondholders' claims or interest in the Debtors and information concerning their alleged "conflicts of interest." "Responding to the Discovery Requests will require each of the Bondholders to expend considerable resources and time to produce what would obviously be redundant . . . information," Mr. Riley told the Court. Schultze, Mr. Riley pointed out, seeks discovery not only as to the plan negotiations but also as to negotiations surrounding the Unimpairment Motion, Settlement Term Sheet and Plan Support Agreement, all of which are already approved by the Court. By failing to object to the Unimpairment Motion and the Plan Support Agreement, Schultze, like all other parties, is bound by the Court's orders that approved those matters. Hence, Mr. Riley contended that Schultze should not now be permitted discovery. The Bondholders find Schultze's discovery requests a fishing expedition into plan negotiations underlying the Sixth Amended Plan. Mr. Riley further noted that none of the discovery pertains in any legitimate way to the issues Schultze will presumably raise in its confirmation objection -- absolute priority, impermissible classification, compliance with applicable laws, and best interest of creditors. Accordingly, the Bondholders ask the Court to see Schultze's discovery plan as an intrusive and unwarranted effort to delve into obviously collateral matters, designed to harass and to divert the parties' and the Court's attention from an orderly and timely consideration of the Sixth Amended Plan. The Bondholders want the immediate entry of the Protective Order because of the short time frame within which discovery for the confirmation hearing must be completed. The Debtors support the Bondholders' request, asserting that: -- the terms of the Sixth Amended Plan, not the negotiation pertaining to those terms, are the only relevant subject of inquiry; and -- permitting Schultze to invade the plan negotiations to attack a substantive element of the Debtors' proof at confirmation would violate the prohibition contained in Rule 408 of Federal Rules of Evidence and weaken the willingness of debtors and creditors to negotiate candidly in future cases. Schultze's Response Through their joint efforts, if successful, the Debtors and the Bondholders would deny Schultze a fair opportunity to conduct reasonable discovery, and to develop a record regarding its concens with respect to the Sixth Amended Plan, J. Cory Falgowski, Esq., at Reed Smith LLP, in Wilmington, Delaware, asserted. Contrary to the Debtors' and the Bondholders' assertions, Mr. Falgowski contended that Schultze's requests are narrowly tailored to obtain production of documents that are directly relevant to the confirmability of the Plan. "In the interest of judicial economy and to permit the Court to avoid delving further into sophomoric discovery squabbling," Schultze propounds a blacklined document requests directed to the Debtors and the Bondholders, which reflects changes from the original document requests. Schultze asserted that the blacklined request are narrowly tailored to be no more burdensome than is absolutely necessary to obtain evidence that is directly relevant to confirmability of the Plan. Schultze asked the Court to direct the Debtors and the Bondholders to immediately respond to their blacklined document requests and to produce witnesses for depositions previously noticed. About Owens Corning 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: Court Approves 7-Eleven's $1.5-Mil. Settlement ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved an agreement between Owens Corning and its debtor-affiliates and 7-Eleven, Inc., settling claims related to underground storage tanks. Between 1965 and 1995, Owens Corning manufactured and sold fiberglass tanks for the underground storage of petroleum and water, Kathleen P. Makowsky, Esq., at Saul Ewing LLP, in Wilmington, Delaware, relates. In 1995, Owens Corning sold its storage tank business to Fluid Containment, Inc., now known as Containment Solutions, Inc. The Debtor retained certain liability for warranty and product-related claims with respect to the tanks it had manufactured. Owens Corning manufactured and sold the tanks with a limited 30-year warranty against structural failure. Recovery under the Warranty was subject to certain conditions and was limited, at Owens Corning's option, to: -- repair of a defective tank; -- delivery of a replacement tank to the point of original delivery; or -- refund of the original purchase price. The Debtors expressly disclaimed any other warranty or other obligation. Because the Debtors sold the storage tank business prepetition and have no ongoing tank product line, the Debtors, as part of their Plan of Reorganization, elected to discharge their legal obligations under the Warranty pursuant to Section 1141(d) of the Bankruptcy Code. 7-Eleven's Claim Before the Debtors filed for bankruptcy, 7-Eleven acquired some storage tanks that Owens Corning manufactured and sold. On April 10, 2002, 7-Eleven filed Claim No. 6803 for damages that arose out of its acquisition of the tanks, including: -- breach of the Warranties; -- breach of implied warranties; -- contractual indemnification; -- common law indemnification and contribution; -- claims for strict liability for allegedly defective products; and -- citizen suit rights under the Resource Conservation and Recovery Act, as amended. The Claim asserts damages including: -- $423,802 for actual damages suffered; -- anticipatory damages in an unspecified amount based on the potential failure of the storage tanks; and -- unspecified damages for consulting, expert and attorneys' fees. The Claimant has not formally amended the Claim. However, through communications with counsel to the Debtors during which the parties explored resolution of 7-Eleven's claims, 7-Eleven told the Debtors' counsel that it will increase the amount asserted in the Claim to reflect damages in excess of $6,000,000. The Claimant provided documentation to support the Claim. Settlement Agreement After more than several months of negotiations, the Debtors and 7-Eleven agreed resolve the Claim, pursuant to the terms of the Settlement Agreement. The principal terms of the Settlement are: a. The Claim will be allowed against Owens Corning as a general unsecured, non-priority claim for $1,511,903; b. The Allowed Claim is in full and final satisfaction of any and all claims, liabilities or demands arising from to the storage tanks and the related Warranties including those that arose postpetition; and c. Except as to the Allowed Claim, 7-Eleven waives, releases and forever discharges the Debtors from all claims, obligations or causes of action relating to the storage tanks the Warranties. About Owens Corning 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: Court Approves Pact Resolving Two New Jersey Claims ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved the stipulation between Parmalat USA Corp., Farmland Dairies LLC, and the State of New Jersey, Department of Treasury, Division of Taxation, resolving New Jersey's claims against the Debtors. In the stipulation, the parties agree that: -- New Jersey's Claim Nos. 1041 and 1042 are disallowed in their entirety as against Parmalat USA; -- the parties consent to the jurisdiction of the Bankruptcy Court for all matters concerning the Stipulation; and -- the Stipulation does not resolve Farmland's objection to Claim No. 1042 under Section 502(d) of the Bankruptcy Code. New Jersey is represented in the U.S. Debtors' cases by Tracy E. Richardson, Esq., Deputy Attorney General at the New Jersey Attorney General's Office, Division of Law, in Trenton, New Jersey. On Aug. 11, 2004, New Jersey filed Claim No. 876 for $1,746,730 against Parmalat USA and Farmland Dairies. New Jersey later filed Claim No. 1003 amending Claim No. 876. New Jersey asserted a $458,0798 unsecured priority claim against both Debtors. At the U.S. Debtors' request, the Court disallowed Claim No. 876 in its entirety and deemed Claim No. 1003 as an unsecured priority claim for $458,079 against Farmland. Subsequently, New Jersey filed two unsecured priority claims, each against Farmland and Parmalat USA: 1. Claim No. 1035, amending Claim No. 1003, for $373,707; and 2. Claim No. 1034, amending Claim No. 1035, for $429,341. On Feb. 14, 2006, New Jersey filed Claim No. 1041 as a general unsecured claim for $115,117 against Farmland and Parmalat USA. New Jersey also filed Claim No. 1042, amending Claim No. 1034, as an unsecured priority claim for $306,522 against both of the U.S. Debtors. On Apr. 17, 2006, the Debtors and New Jersey entered into a stipulation, which the Court later approved, agreeing that Claim Nos. 876, 1003, 1034 and 1035 are to be disallowed in their entirety. Against this backdrop, the U.S. Debtors sought disallowance of Claim Nos. 1041 and 1042 against Parmalat USA, contending that Parmalat USA is not liable for the two Claims and that the Claims should have been asserted against Farmland only. The U.S. Debtors also asked the Court to disallow Claim No. 1042 against Farmland. 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., http://bankrupt.com/newsstand/or 215/945-7000,) PARMALAT USA: Farmland, et al. OKs Arthur George's Suit to Proceed ------------------------------------------------------------------ Farmland Dairies LLC, the Farmland Dairies LLC Unsecured Creditors' Trust, and Arthur George agree to the modification of the Plan injunction to allow the parties to prosecute and defend against Mr. George's personal injury suit pending before the Supreme Court of the State of New York, County of Bronx. However, Mr. George will in no event be entitled to recover any property of or from the Debtors or their estates, Reorganized Farmland, or the Trust. He will have recourse solely against any available insurance proceeds. Mr. George's suit relates to the injuries he sustained while unloading milk crates inside a truck owned and maintained by Sunnydale Farms, Inc., a business unit of Farmland. Mr. George seeks $900,000 in damages in the Action. At the time of the accident, Farmland maintained a general liability insurance policy with Royal & SunAlliance. Mr. George agrees that payment of any judgment awarded against the U.S. Debtors' insurers, if any, will be reduced by the lesser of the payment or the amount of the Policy's deductible that the U.S. Debtors, Reorganized Farmland or the Trust might otherwise be liable for. Mr. George's Lift Stay Motion is withdrawn, with prejudice. Mr. George releases the U.S. Debtors, Reorganized Farmland and the Trust from all claims and causes of action. 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., http://bankrupt.com/newsstand/or 215/945-7000,) PETER FALTINGS: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Peter F. Faltings 100 Conover Road Marlboro, NJ 07746 Bankruptcy Case No.: 06-18219 Chapter 11 Petition Date: September 1, 2006 Court: District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Joseph Albanese, Esq. 915 Lacey Road Forked River, NJ 08731 Tel: (609) 971-6200 Fax: (609) 971-6300 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Income Taxes $1,326,508 Cincinnati, OH 45999-0025 Abacus Capital Misc. Debt $850,000 9 Conifer Drive Mendham, NJ 07945 National Equity Corp. Misc. Debt $806,200 224 West 35th Street New York, NY Sherwin Williams Company Misc. Debt $225,000 c/o Stein, McGuire, Pantages, & Gigl LLP 354 Eisenhower Parkway Livingstone, NJ 07039 Berger and Borenstein Misc. Debt $145,000 237 South Street Morristown, NJ 07960 Law Office of Poe & Freireich Legal Fees $90,000 Oaktree Cleaners, Inc. Misc. Debt $25,000 GMAC Car Loan $22,400 Hartsko Financial Services, Inc. Misc. Debt $11,455 Citibank (South Dakota) N.A. Credit Card $6,838 One Source Landscaping Misc. Debt $776 The Jayson Company Misc. Debt $497 JC Penney Credit Card $443 State of New Jersey Taxes Unknown PHOTOCIRCUITS CORP: Files Third Amended Disclosure Statement ------------------------------------------------------------ Photocircuits Corporation delivered its Third Amended Disclosure Statement explaining its Chapter 11 Plan of Liquidation to the United States Bankruptcy Court for the Eastern District of New York. Overview of the Amended Plan The Debtor's Amended Plan incorporates settlements previously approved with the Debtor's senior and junior secured creditors and other insiders. The Debtor consummated a sale of substantially all of its operating business assets as a going concern for the benefit of its creditors with American Pacific Financial Corporation, which will require the transfer of title to the 45-A Property and 45-B Property. The sale closing was funded on March 31, 2006 and became effective on March 29, 2006. American Pacific's modified purchase offer consist of: a) cash of $35.5 million ($3.5 million of which will be applied to reimburse Stairway for the draw on the letter of credit); b) the assumption of $2.1 million of administrative obligations consisting primarily of outstanding checks and accounts payable to post-petition vendors; c) the assumption of $1.5 million of accrued but unpaid vacation pay to employees; and d) a series of non-interest bearing contingent promissory notes in favor of the estate in the aggregate amount of $5.5 million. The notes indicated in the Asset Purchase Agreement mature one each in years 2006, 2007, 2008, 2009, 2010, and 2011. The payment of the notes will be made from 50% of American Pacific's net operating income in excess of $1 million for the perspective note years. The Plan is subject to the Court's approval of two settlements reached with various parties. The first settlement is the Stairway/CMK Parties Settlement and the settlement with Messrs. Endee, Wohlgemuth and Robbins, the Debtor's shareholders. The Court approved these settlements on March 10, 2006. Following the settlement approval, the Debtor's debt structure before further reduction from objections to Claims is: a) Stairway (senior secured lender) -- approximately $23.3 million; b) CMK (junior secured creditor) -- $5.2 million; c) Other liens/cure costs -- $4.62 million; d) Administrative claims -- (Estimated) $5.4 million; and e) Unsecured creditors -- $50 million; The Amended Plan provides that the estates of Photocircuits, Alpha Forty-Five LLC and Beta Forty-Five LLC will be substantially consolidated. Plan Funding The Debtor tells the Court that the Plan will be funded from the proceeds from the sale of the assets after payment of the various classes of Allowed Secured Claims and all other assets recovered by the Litigation Trustee. The Restructuring Committee shall nominate an individual to act as Distributing Agent to make the Distributions under the Plan. Treatment of Claims Under the Amended Plan, all Allowed Administrative Expense Claims, estimated at $4.0 million, unless previously paid or assumed by American Pacific will be paid in full, in cash, as soon as practicable after the Effective Date but no later than within 30 days of the Effective Date of the Plan or within 10 days of entry of the Court's Final Order allowing that Claim. As of June 16, 2006, the Debtor's estate paid these amounts pursuant to the Fee Order: Professionals Amount ------------- ------ Silverman Perlstein & Acampora LLP $330,785.92 Triax Capital Advisors LLC $802,565 Morgan Lewis & Bockius, LLP $165,685.06 Farrell Fritz, P.C. $445,049.66 Deloitte Financial Advisory Services LLP $285,268.80 All Allowed Secured Claims, including City of Glen Cove but excluding claims held by Stairway or the CMK Parties will be paid in full from the sale proceeds on the Effective Date. Each holder of an Allowed Secured Claim not paid in connection with the closing of the sale will: (a) receive the Collateral securing such holder's Allowed Secured Claim upon abandonment by the Debtor, (b) have its Allowed Secured Claim reinstated as provided under Section 1124 of the Bankruptcy Code, or (c) retain the Liens securing such Claims, whether Collateral subject to such liens is retained by the Post-Confirmation Debtor or transferred to another entity, to the extent of the Allowed amount of such Claims; and receive on account of such Claim deferred cash payments totaling at least the Allowed amount of such Claim, of a value, as of the Effective Date of the Plan of such holder's interest in the Debtor's interest in such Collateral; or (d) have its liens attach to the proceeds of the Asset Purchase Agreement and have its Allowed Secured Claim paid after the Effective Date, but no later than 30 days after the Effective Date and 10 days after the date the Secured Claim becomes an Allowed Secured Claim; or (e) receive treatment as agreed by the Post-Confirmation Debtor and the holder; in full satisfaction, settlement, release and discharge of, and in exchange for, its allowed secured claim, in the sole discretion of the Post-Confirmation Debtor The Stairway Secured Claim consists of the First priority Secured Claim of Stairway in the aggregated amount of $24 million, which will be satisfied in the Allowed amount of $22.9 million at the Closing of the Debtors' sale of the assets to American Pacific or such other purchaser if the Debtors' proposed sale to American Pacific does not close. The CMK Secured Claim consists of the Junior Secured Claim of the CMK parties in the aggregate amount of approximately $32 million which claim, will be satisfied in the reduced and Allowed amount of $5.2 million at the closing of the sale of the Debtors' assets to American Pacific or such other purchaser if the Debtors' proposed sale to American Pacific does not close. Allowed Priority Claims related to employees shall be paid in full by assumption of certain obligations by the purchaser of the Debtor's assets. Each holder of an Allowed Unsecured Claim will not receive payment, in full, on the Effective Date of the Plan. The Debtor estimates that the Filed Unsecured Claims will be approximately $50,000,000. Holders of Shareholder Interests will not receive a distribution under the Plan and all Allowed Shareholder Interests shall be cancelled upon the Effective Date. A full-text copy of the Debtors' Third Amended Disclosure statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060904205330 Headquartered in Glen Cove, New York, Photocircuits Corporation -- http://www.photocircuits.com/-- was the first independent printed circuit board fabricator in the world. Its worldwide reach comprises facilities in Peachtree City, Georgia; Monterrey, Mexico; Heredia, Costa Rica; and Batangas, Philippines. The Company filed for chapter 11 protection on Oct. 14, 2005 (Bankr. E.D.N.Y. Case No. 05-89022). Gerard R. Luckman, Esq., at Silverman Perlstein & Acampora LLP, represents the Debtor in its restructuring efforts. Ted A. Berkowitz, Esq., and Louis A. Scarcella, Esq., at Farrell Fritz, P.C., represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated more than $100 million in assets and debts. PLAYLOGIC ENT: Balance Sheet Upside-Down by $2.66 Mil. at June 30 ----------------------------------------------------------------- Playlogic Entertainment, Inc., incurred a $3,965,285 net loss on $3,132,671 of revenues on the second quarter ending June 30, 2006, the Company disclosed in a Form 10-QSB report filed with the Securities and Exchange Commission. As of June 30, 2006, the Company's balance sheet showed assets amounting to $9,518,266 and liabilities aggregating $12,182,312. The Company's equity position slid from a $1,255,826 positive equity as of June 30, 2005, to a $2,664,046 equity deficit at June 30, 2006. As of June 30, 2006, the Company had $151,593 of cash on hand. Willem M. Smit, the Company's Chief Executive Officer, said that to cover the Company's working capital requirements through the third quarter of 2006, the Company needs to obtain additional financing from third parties. The cash flow from operating activities could not be sufficient to cover the existing commitments and the development costs for both externally and internally developed games. As of June 30, 2006, the Company had $3,905,993 in current assets to pay for $11,934,409 in current debts. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1109 Going Concern Doubt S. W. Hatfield, CPA, 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 net operating losses and reliance on outside sources of working capital to meet current obligations. About Playlogic Entertainment Playlogic Entertainment, Inc., publishes interactive entertainment products, such as video game software and other digital entertainment products. The Company publishes for most major interactive entertainment hardware platforms, like Sony's PlayStation2, Microsoft's Xbox and Nintendo's Game Cube, PCs, next generation consoles and handheld (such as Nintendo's Game Boy, Nintendo DS, and PSP) and mobile devices. RAMESH PATEL: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Ramesh Dahyabhai Patel dba Airport Inn fdba Travelodge fdba Super 8 Motel fdba Airport Super 8 Motel fdba Airport Travelodge 4620 Dorchester Road Charleston, SC 29405 Bankruptcy Case No.: 06-03873 Chapter 11 Petition Date: September 1, 2006 Court: District of South Carolina (Charleston) Debtor's Counsel: Kevin Campbell, Esq. Cambell Law Firm, P.A. P.O. Box 684 890 Jonnie Dodds Boulevard Mt. Pleasant, SC 29465 Tel: (843) 884-6874 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 15 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Community National Bank $1,500,000 P.O. Box 817 South Boston, VA 24592 G.E. Capital $1,435,734 44 Old Ridgebury Road Danbury, CT 06810 Certified Development Corporation $690,000 P.O. Box 21823 Columbia, SC 29221 Enterprise Bank of South Carolina $114,652 P.O. Box 8 Ehrhardt, SC 29081 SBA Disaster Relief $85,000 P.O. Box 740192 Atlanta, GA 30374-0192 Business Loan Advantage $70,000 G.E. Capital $40,000 SBA Disaster Relief $35,000 Charleston County Delinquent Tax Dept. $32,590 Financial MBNA $10,130 Internal Revenue Service $7,000 Porter Law Firm $7,000 South Carolina Department of Revenue $4,000 G. Simms McDowell, III $2,650 Bluestein & Johnson, LLC $2,448 RECORP GROUP: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Recorp Group, Inc. 920 Rockmoor Georgetown, TX 78628 Bankruptcy Case No.: 06-11369 Type of Business: The Debtor filed for chapter 11 protection on July 3, 2006 (Bankr. W.D. Tex. Case No. 06-33031). Chapter 11 Petition Date: September 1, 2006 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: John Charles Hampton, Esq. D. Matthew Freeman, Esq. D. Matthew Freeman & Associates, LLP 230 Westcott, Suite 202 Houston, TX 77007 Tel: (713) 255-7400 Total Assets: $2,574,600 Total Debts: $3,829,000 Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rodika Salkter Interlocutory $1,700,000 c/o Tom Fillion Judgments 7660 Woodway Drive, Suite 590 Houston, TX 77063 Brett Salter Advance for $182,000 c/o Sheldon Skryzlo Operations 481 University Avenue Suite 510 Toronto, Ontario M5G 2E9 James Fertsch Unknown Unknown P.O. Box 2035 Round Rock, TX 78680 Advanced Concrete Unknown Unknown Protection, Inc. 300 West 55th Street Austin, TX 78751 Tom Fillion Unknown Unknown 7660 Woodway Drive Suite 590 Houston, TX 77063 Jim Ewbank Unknown Unknown 221 West 6th Street, Suite 900 Austin, TX 78701 REFCO INC: Committee Wants Houlihan Lokey's Fees Increased ---------------------------------------------------------- The Official Committee of Unsecured Creditors of Refco Inc., and its debtor-affiliates tells the U.S. Bankruptcy Court for the Southern District of New York that as the Debtors' Chapter 11 cases have progressed, its need for Houlihan Lokey Howard & Zukin Capital, Inc.'s services, as investment banker, has increased. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & Mccloy LLP, in New York, explains that causes for this increased workload include: (i) the increasing difficulty of assisting the Official Committee in its investigation of the Debtors' financial Affairs, as growing numbers of employees have left the company; (ii) the demands of multiple parties on Houlihan in connection with attempts to reach a global Chapter 11 plan for the Debtors as well as a settlement for Refco Capital Markets, Ltd. estate; and (iii) the investigation of potential causes of action against third parties, including actions against SPhinX Managed Futures Fund and BAWAG P.S.K. Mr. Despins asserts that Houlihan's continued participation has been indispensable to the plan process as well as the Creditors Committee's ability to reach settlements favorable to the Debtors' estates like those in both the SPhinX and BAWAG litigations -- settlements that have the potential to add more than $1,000,000 in value to those estates. Accordingly, the Official Committee asks Judge Drain to amend Houlihan's engagement as investment bankers and financial advisors to provide that: -- Houlihan will be entitled to a $7,000,000 increase in its initial transaction fee, above and beyond the $2,000,000 that it has already earned but has not yet been paid; and -- $50,000, rather than 50%, of each monthly fee after the ninth Monthly Fee will be credited against the Transaction Fee. With respect to monitoring the BAWAG sale process, the Creditors Committee proposes that Houlihan be paid an additional $50,000 monthly fee beginning August 1, 2006, for acting as "Committee Banker" pursuant to the BAWAG Settlement. Houlihan will also receive 1% of a Contingent Payment received by the Refco, Inc. estates from specified BAWAG transactions. However, to the extent the BAWAG Transaction Fee exceeds $1,000,000, 50% of the BAWAG Monthly Fees will be credited against the BAWAG Transaction Fee. The Creditors Committee believes that the fees are reasonable and fair compensation for Houlihan, considering that the scope of engagement and the results the firm has achieved have significantly exceeded that contemplated when both the parties' Initial Engagement Letter and an amended Engagement Letter. In addition, the Creditors Committee contends that the amended retention: -- is consistent with the six-month review of compensation provision in the firm's Initial Retention Letter and statements of counsel; -- is contemplated by reservation of rights in the final order approving the firm's retention; and -- reflects the Committee's high degree of satisfaction with the services rendered by and extraordinary results achieved by Houlihan to 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) REFCO INC: Panel Inks Stipulation with E&Y on Document Production ----------------------------------------------------------------- Section 7216(a) of the Internal Revenue Code entitled "Disclosure or Use of Information by Preparers of Returns" and 26 C.F.R. Section 301.726-1 prohibit the disclosure of "tax return information," particularly certain information furnished by a taxpayer in connection with preparation of tax returns. Under Section 301.7216-2(c), the provisions of Section 7216(a) and Section 301.726-1 do not apply to any disclosure of tax return information where that disclosure is made pursuant to an order of any court of record. The Official Committee of Unsecured Creditors of Refco Inc., and its debtor-affiliates tells the U.S. Bankruptcy Court for the Southern District of New York that compliance by Ernst & Young LLP, with a subpoena directing production of documents contemplates the production to the Creditors Committee of tax return information furnished by Refco, Inc. In a Court-approved stipulation, the Creditors Committee and Ernst & Young agree that consistent with Section 301.7216-2, Ernst & Young's production of and the Committee's use of the tax return information will be governed by the terms of a protective order governing production and use of confidential material entered on April 26, 2006. As reported in the Troubled Company Reporter on July 6, 2006, the Creditors Committee asked the Court to compel 22 respondents to produce documents on or before the date that is 30 days after a corresponding subpoena is served. The Court had previously authorized the Committee to serve subpoenas calling for production of documents on 16 individuals and entities regarding Refco, Inc.'s operations. The Committee has been pursuing discovery from the subpoena recipients. Based on the Debtors' public statements, the criminal complaint for securities fraud filed against Phillip R. Bennett, and the Committee's preliminary investigation, the Committee has learned of additional persons and entities who likely have information relevant to: (i) the Debtors' property and its location; (ii) the assets, liabilities and financial condition of the Debtors; (iii) matters that may affect the administration of the Debtors' estates; and (iv) the identification and prosecution of certain potential claims against third parties by a representative of the Debtors' estates. Ernst & Young was listed as one of the 22 respondents. 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) REMEDIATION FINANCIAL: Must File Disclosure Statement by Sept. 14 ----------------------------------------------------------------- The Honorable Charles G. Case II of the U.S. Bankruptcy Court for the District of Arizona in Phoenix gave Remediation Financial, Inc., and its debtor-affiliates until Sept. 14, 2006, to file their Disclosure Statement. Judge Case also extended the Debtors' exclusive solicitation period to Oct. 5, 2006. Judge Case will convene a hearing on the Debtors' exclusive periods at 10:00 a.m. on Oct. 5, 2006. Objections to the Debtors' amended disclosure statement, if any, should be submitted by Oct. 12, 2006. Judge Case will convene a hearing on the Debtors' disclosure statement at 10:00 a.m. on Oct. 19, 2006. Headquartered in Phoenix, Arizona, Remediation Financial, Inc., is a real estate developer. Remediation Financial, Inc., and Santa Clarita, L.L.C. filed for chapter 11 protection on July 7, 2004 (Bankr. D. Ariz. Case No. 04-11910). RFI Realty, Inc., filed on June 15, 2004 (Bankr. D. Ariz. Case No. 04-10486) and Bermite Recovery, L.L.C., filed on September 30, 2004 (Bankr. D. Ariz. Case No. 04-17294). Alisa C. Lacey, Esq., at Stinson Morrison Hecker LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets of more than $100 million and estimated debts of $10 million to $50 million. The Debtors have until Sept. 14, 2006, to file their Disclosure Statement. Their exclusive solicitation period will expire on Oct. 5, 2006. ROGER CARTER: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Roger Carter Corp. P.O. Box 3129 Kinston, NC 28502 Bankruptcy Case No.: 06-02707 Type of Business: The Debtor manufactures commercial wooden modular buildings. Chapter 11 Petition Date: September 1, 2006 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Trawick H. Stubbs, Jr. Stubbs & Perdue, P.A. P.O. Box 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Total Assets: $3,998,419 Total Debts: $3,690,681 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Atex Distributing Inc. Trade Debt $90,830 2317 Griffin Road Lessburg, FL 32748 The Mega Force Staffing Trade Debt $76,812 P.O. Box, 53449 Fayetteville, NC 28305-3449 Bluelinx Corporation Trade Debt $67,916 P.O. Box 751692 Charlotte, NC 28275-1692 Shepherd Electric Supply Trade Debt $54,603 P.O. Box 58787 Raleigh, NC 27658 Nucor Steel Berkeley Trade Debt $51,284 P.O. Box 751412 Charlotte, NC 28275-1412 Patrick Industries Inc. Trade Debt $36,880 Godwin Door & Hardware Trade Debt $32,696 Hoyles Tire & Axle Trade Debt $27,615 Elixir Industries Trade Debt $27,113 ABC Supply Co. Trade Debt $26,400 East Carolina Labor LLC Trade Debt $20,899 East Coast Metal Dist. Trade Debt $17,810 I P Company Trade Debt $14,444 Noland Trade Debt $13,358 Maupin Taylor, PA Legal Services $12,000 G-P Gypsum Corp. Trade Debt $10,913 Amerimax Buidling Product Trade Debt $10,643 BBC Distribution LLC Trade Debt $10,013 Universal Forest Products Trade Debt $9,617 Wesco Distribution Inc. Trade Debt $8,319 SAINT VINCENTS: Court Approves Amended Labor Pacts with Unions -------------------------------------------------------------- The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York approves the proposed Labor Agreements between the Debtors and six separate collective bargaining units, and authorizes the Debtors to enter into and perform in accordance with the Labor Agreements, subject to, and effective immediately prior to, the closing of the sale of St. John's Hospital and Mary Immaculate Hospital at Queens and the assignment of the Labor Agreements to the purchaser of St. John's and Mary Immaculate. According to Judge Hardin, the approval of the Labor Agreements will not be effective if the sale of the Queens Hospitals does not close and the Labor Agreements are not assigned to the Purchaser. As reported in the Troubled Company Reporter on Aug. 25, 2006, the Debtors asked the Court for permission to enter into separate agreements that will govern their relationship with six collective bargaining units for varied periods, generally between one and two years, to ensure compliance, to the extent required, with Section 363(b) of the Bankruptcy Code: 1. The Master Clerical Agreement with the Teamsters Local 803 covers the full-time and regular part-time office clerical and professional employees who are regularly scheduled to work 14 hours or more per week at St. John's Hospital, Queens, and Mary Immaculate Hospital, Queens. The term of the agreement runs from Feb. 15, 2006, through June 30, 2007. The Local 803 Master Clerical Agreement supercedes all previously dated written agreements while maintaining the status quo with respect to the existing terms and conditions of employment for the Local 803 Employees. 2. The Transportation Personnel Agreement with the Teamsters Local 803 covers the full-time and regular part-time office paramedics, emergency medical technicians, chauffeurs, and vehicle maintenance employees who are regularly scheduled to work 16 hours or more per week at MIH. The term of the agreement runs from February 15, 2006, through June 30, 2007. The Local 803 Transportation Personnel Agreement supercedes all previously dated written agreements while maintaining the status quo with respect to the existing terms and conditions of employment for the Local 803 Transportation Personnel Employees. 3. The Memorandum of Agreement with the Special and Superior Officers Benevolent Association covers the security officers working at St. John's, MIH, St. Anthony's and St. Matthew's. The Agreement extends the parties' relationship through Sept. 30, 2006. The SSOBA Memorandum of Agreement makes changes to the vacation donation, meal break and training policies. Except for those changes, it maintains the status quo with respect to the existing terms and conditions of employment for the SSOBA Employees. 4. The Memorandum of Agreement with Building and Construction Trades Council covers the MIH engineering and maintenance employees. It runs through Oct. 15, 2007. The BCTC Memorandum of Agreement maintains the status quo with respect to the existing terms and conditions provided by the CBA. 5. The MIH Agreement and Monsignor Fitzpatrick Agreement with the New York State Nurses Association covers nurses working at MIH and Monsignor Fitzpatrick. The NYSNA Agreements provide for an extension retroactive to Feb. 1, 2006, and effective through Jan. 31, 2007. The NYSNA Agreements maintain the status quo except for these changes: (a) an increase in employer pension plan contributions for eligible employees retroactive to February 1, 2006, and applicable through Dec. 31, 2006, at the rate of $7,278; (b) effective Jan. 1, 2007, through Jan. 31, 2007, an increase in employer pension plan contribution for eligible employees at the rate of $7,866; and (c) for permanent full-time employees, retroactive to Feb. 1, 2006, and effective during the term of the NYSNA Agreements, the Debtors will make a prorated monthly premium contribution on behalf of each full- time employee to the NYSNA benefits fund. The premium that went into effect on Feb. 1, 2006, is $11,123 annually. 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: Court Approves DMC Contract Rejection ----------------------------------------------------- The Honorable Adlai S. Hardin, Jr., of the U.S. Bankruptcy Court for the Southern District of New York allows Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates to reject an MRI Contract with Diagnostic Medical Consultants, Inc., effective as of July 1, 2006. The Court rules that the rejection will not, directly or indirectly, prejudice (i) any rights and claims that DMC may have against the Debtors as a result of the rejection of the MRI Contract; and (ii) any rights, claims and defenses that the Debtors may have with respect thereto, including, without limitation, the right to object to the validity, enforceability and amount of any rights and claims asserted by DMC. DMC had filed a timely claim for rejection damages. DMC objects to the Debtors' characterization of the contract to be rejected and any potential attempt to use the description in the Rejection Motion for ultimate claim resolution purposes. As reported in the Troubled Company Reporter on Aug. 28, 2006, the Debtors sought to reject their executory contract with DMC. The Debtors believe that the contract with DMC was no longer beneficial to their estates. Under the Contract, DMC is obligated to provide to SVCMC: * a Modular MRI Unit for use at St. Vincent's Hospital, Staten Island; and * a Mobile MRI Unit for use at Mary Immaculate Hospital, Queens. DMC also provides various services in connection with Saint Vincent Catholic Medical Centers' use of the MRI Units. The term of the MRI Contract with respect to each MRI Unit is five years from the date a patient is first scanned on that MRI Unit. For its part, SVCMC remits a minimum monthly payment of $96,000 to DMC for use of the MRI Units, Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, relates. Due to an increase in the number of competing facilities offering MRI services, the demand for in-patient and out-patient MRI examinations has declined. The amount managed care providers reimburse hospitals for performing MRI examinations has also continued to decrease. As a result, the MRI Contract caused SVCMC to incur costs that significantly outweigh any benefits to the Debtors' estates. The Debtors have also recently sold Mary Immaculate and SVHSI as going concerns, and the purchasers have not identified the MRI Contract for assumption and assignment. 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) SILICON GRAPHICS: Files Supplements to First Amended Plan --------------------------------------------------------- Silicon Graphics, Inc., and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York additional supplements to their First Amended Joint Plan of Reorganization on August 29, 2006, which, among other things, disclose: -- the names of the initial members of the new board of directors of Reorganized Debtor Silicon Graphics, Inc.: * Dennis McKenna, * Eugene Davis, * Anthony Grillo, * Kevin Katari, * James Mesterharm, and * Chun Won Yi; -- Barry Weinert and Kathy Lanterman as the initial members of the new board of directors of 12 Reorganized Debtors, specifically: (1) Cray Asia/Pacific, Inc., (2) Cray Financial Corporation, (3) Cray Research America Latina, Ltd., (4) Cray Research Eastern Europe, Ltd., (5) Cray Research India, Ltd., (6) Cray Research International, Inc., (7) ParaGraph International, Inc., (8) Silicon Graphics Federal, Inc., (9) Silicon Graphics Real Estate, Inc., (10) Silicon Graphics World Trade Corporation, (11) Silicon Studio, Inc., and (12) WTI Development, Inc.; and -- Silicon Graphics, Inc., as the sole member of the new board of Reorganized Cray Research, LLC. The Plan Supplement also includes: (a) a new organizational documents form, (b) a registration rights agreement form, (c) a new management agreements form, (d) a management incentive plan form, (e) a liquidating trust agreement, (f) schedules 8.1 (A) and (B), (g) a list of customer support agreements, (h) schedule 12.9, (i) a subscription rights form, and (j) a new common stock form. A full-text copy of the Supplement to the Amended Plan is available for free at http://researcharchives.com/t/s?110c Debtors Will Assume Customer Support Agreements The Debtors notify the Court that they intend to assume and continue those agreements needed to provide customer support, maintenance, warranty service, or similar support to end-user customers. The Debtors also intend to assume: (i) the unexpired leases and executory contracts listed on Schedules 8.1(A) and (B) of the Plan Supplement; (ii) all agreements between the Debtors and any U.S. governmental entity; (iii) all agreements entered into by the Debtors for the primary purpose of governing the non-disclosure of confidential or sensitive information; and (iv) all agreements the primary purpose of which is the licensing of intellectual property rights by the Debtors from third parties. Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high-performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. The Debtor and 13 of its affiliates filed for chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. (Silicon Graphics Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SILICON GRAPHICS: Storage Technology Objects to Plan Confirmation ----------------------------------------------------------------- Storage Technology Corporation, a creditor and party-in-interest in Silicon Graphics, Inc., and its debtor-affiliates' Chapter 11 cases, objects to confirmation of the Debtors' First Amended Joint Plan of Reorganization to the extent that the Plan seeks to assume any executory contract between the Debtors and Storagetek without a full and immediate cure of defaults and adequate assurance of future performance. According to Patrick M. Costello, Esq., at Bialson, Bergen & Schwab, in Palo Alto, California, Storagetek and SGI are parties to executory contracts, particularly, a product sales Agreement, an umbrella services agreement, and customer support agreements. As of the Petition Date, SGI owed Storagetek: * $743,935 for data storage equipment and products delivered; and * $152,742 and $147,742 for support and maintenance services. Storagetek objects to any attempt by the Debtors to postpone the assumption of any Storagetek executory contract to a date after the confirmation, Mr. Costello says. If SGI is going to seek to assume any contract with Storagetek, it must do so as part of the Plan, and must demonstrate that it will cure all defaults and provide adequate assurance of future performance as part of Plan confirmation. Storagetek further requests that the Plan Confirmation Order provide that the full cure amount be paid no more than five business days after the Plan Effective Date. In the event of a dispute as to the precise dollar amount of any cure amount, the Debtors should be required to pay the undisputed portion within five business days of the Plan Effective Date and deposit a sum equal to the disputed portion in a segregated account, Mr. Costello explains. Headquartered in Mountain View, California, Silicon Graphics, Inc. (OTC: SGID) -- http://www.sgi.com/-- offers high-performance computing. SGI helps customers solve their computing challenges, whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate, providing technologies for homeland security and defense, enabling the transition from analog to digital broadcasting, or helping enterprises manage large data. The Debtor and 13 of its affiliates filed for chapter 11 protection on May 8, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10977 through 06-10990). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $369,416,815 and total debts of $664,268,602. (Silicon Graphics Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SMARTVIDEO TECH: Posts $6.2 Million Net Loss in Second Quarter -------------------------------------------------------------- SmartVideo Technologies, Inc., incurred a $6.2 million net loss on $166,432 of net revenues for the three months ended June 30, 2006, compared to a $4.4 million net loss on $38,360 of net revenues in 2005, the Company disclosed on Form 10-Q filed with the Securities and Exchange Commission. At June 30, 2006, the Company's balance sheet showed $12.3 million in total assets and $13.9 million in total liabilities, resulting in a $1.7 million stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $9 million in total current assets available to pay $11.7 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?1103 About SmartVideo Technologies Headquartered in Duluth, Georgia, SmartVideo Technologies, Inc. -- http://www.smartvideo.com/-- provides video content distribution services and technology to consumers connected to the Internet. The company offers its customers access to video programming that is transmitted directly to mobile display devices, cell phones, and personal digital assistant devices, which connect to the Internet through cellular data networks and wireless access. Going Concern Doubt As reported in the Troubled Company Reporter on June 12, 2006, Sherb & Co., LLP, expressed substantial doubt about the Company's ability to continue as a going concern pointing to the Company's recurring losses from operations, cash burn, working capital deficit, stockholders' deficit and accumulated deficit. SOLVIT GROUP: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: The Solvit Group, LLC 6531 Metropolitan Parkway Sterling Heights, MI 48312 Bankruptcy Case No.: 06-52199 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Martha C. Theis 06-52203 Chapter 11 Petition Date: September 1, 2006 Court: Eastern District of Michigan (Detroit) Judge: Thomas J. Tucker Debtor's Counsel: Todd M. Halbert, Esq. 24359 Northwestern Highway, Suite 250 Southfield, MI 48075 Tel: (248) 356-6204 Fax: (248) 304-1502 Estimated Assets Estimated Debts ---------------- --------------- The Solvit Group, LLC $1 Million to $500,000 to $10 Million $1 Million Martha C. Theis $500,000 to $1 Million to $1 Million $10 Million A. The Solvit Group, LLC's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Caligaro & Meyering P.C. Legal Services $476,708 20600 Eureka Road Suite 900 Taylor, MI 48180 The Allen Richmond Fund Loan $82,354 20600 Eureka Road, Suite 900 Taylor, MI 48180-0815 Louis Copciac Management Services $40,000 496 Park Street Deerfield, MI 49238 Darnell & Meyering Acctg. & Tax Services $2,724 20600 Eureka Road, Suite 900 Taylor, MI 48180 Guardian Automotive Trim, Inc. Jury Verdict of Unknown c/o Thomas F. Campbell $88,510, Oakland Fausone, Taylor & Bohn, LLP County, Circuit Court, 41820 West Six Mile Road Case No. 04-061318-CB Suite 103 Northville, MI 48168 B. Martha C. Theis' Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Caligaro & Meyering P.C. Legal Services $476,708 20600 Eureka Road Suite 900 Taylor, MI 48180 The Allen Richmond Fund Guaranteed Loan to $97,776 20600 Eureka Road, Suite 900 Can Do Mechanical, LLC Taylor, MI 48180-0815 Guaranteed Loan to $82,354 The Solvit Group, LLC Estate of James Gabbert Promissory Note $134,002 c/o Frank Gabbert 35773 Castlewood Court Westland, MI 48185 Huntington Bank Real Estate $80,000 P.O. Box 182387 Columbus, OH 43218-2387 Chrysler Financial 2005 Jeep Laredo $18,200 P.O. Box 5500 Detroit, MI 48255 Guardian Automotive Trim, Inc. Jury Verdict of Unknown $632,242 Michigan Tractor and Equipment Guaranty Unknown Machinery Co. SPEEDEMISSIONS INC: Has $538K Working Capital Deficit at June 30 ---------------------------------------------------------------- Speedemissions, Inc., earned a $79,104 net income on $2,375,261 of revenue during the second quarter ending June 30, 2006, the Company disclosed in a Form 10-QSB report filed with the Securities and Exchange Commission. As of June 30, 2006, the Company's balance sheet showed $10,051,121 in assets and $9,023,090 in liabilities. As of June 30, 2006, the Company has $489,873 in current assets to pay for $1,028,031 in current debts. Michael Shanahan, the Company's Chief Financial Officer, said that historically, the Company has not generated sufficient cash flow from operations to fund growth as it continued to acquire and open new emission testing stations. However, operations for the last six months have generated sufficient profits to cover operating expenses, and it used some of these profits to generate organic growth. If the Company can successfully complete one or more acquisitions of profitable businesses, then the Company anticipates that it may be able to operate at a profitable level on a consistent basis. Until that time, however, and to complete the acquisitions, the Company will need to raise additional capital through the sale of our equity securities and or through debt financing to continue implementation of our growth strategy. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1111 Going Concern Doubt Tauber & Balser, P. C., the Company's auditor, expressed substantial doubt about the Company's ability to continue as a going concern after auditing the Company's financial statement for the year ending Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations, operating cash flow deficiencies and limited capital resources. About Speedemissions Speedemissions, Inc. -- http://www.speedemissions.com/-- operates 34 vehicle emissions testing stations and four mobile units in three separate markets, greater Atlanta, Georgia Houston, Texas and greater Salt Lake City, Utah. It has a new store under construction in both the Atlanta and Houston markets. SPORTS ENTERTAINMENT: Case Summary & 19 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Sports Entertainment Centers, LLC 11432 Motor Yacht Circle North Jacksonville, FL 32225 Bankruptcy Case No.: 06-02689 Chapter 11 Petition Date: August 31, 2006 Court: Middle District of Florida (Jacksonville) Judge: Jerry A. Funk Debtor's Counsel: Robert D. Wilcox, Esq. Wilcox Law Firm 6817 Southpoint Parkway, Suite 1302 Jacksonville, FL 32216 Tel: (904) 281-0700 Fax: (904) 513-9201 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 ------ --------------- ------------ U.S. Department of Treasury Taxes $30,000 400 West Bay Street Jacksonville, FL 32202 Florida Department of Revenue Tax $28,000 921 North Davis Street, Suite 250A Jacksonville, FL 32209-6825 JEA Utility Service $25,000 21 West Church Street Jacksonville, FL 32202 Power Electric Construction Services $19,365 7300 Beach Boulevard Jacksonville, FL 32216 TECO Gas Utility Service $17,880 P.O. Box 31017 Tampa, FL 33631-3017 U.S. Foods Supplier $17,746 Ray Fox Uniform Services $16,011 Jacksonville Steel Products $12,500 RWP Engineering Engineering Services $10,367 Preston Napier Loan $10,000 B & B Restaurant Equipment Equipment $8,000 Florida Department of Revenue Unemployment Tax $7,881 Hartford Insurance $5,074 ALSCO Supplies $3,200 Four Seasons Air Conditioning $2,794 Department of Bus. & Prof. Reg. Alcohol Taxes $646 ASCAP Music Services $531 Atlantic Pest Solutions Pest Services $192 Advanced Disposal Systems Services Unknown TEEKAY SHIPPING: S&P Puts BB+ Corp. Credit Rating on Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'BB+' corporate credit rating, on Teekay Shipping Corp. on CreditWatch with negative implications. "The CreditWatch listing follows Teekay's announcement that it plans to make a tender offer for Petrojarl ASA, a Norwegian-based operator of floating production storage and offloading units," said Standard & Poor's credit analyst Eric Ballantine. The company has not yet announced how it intends to fund the transaction, but Teekay has significant availability under its revolving credit facility. The acquisition of Petrojarl would further expand Teekay's shipping business, which includes oil tankers, shuttle tankers, and LNG vessels. Petrojarl operates four FPSO's, two shuttle tankers, and one storage tanker. FPSO units engage in the production, processing, and storage of oil from sub-sea oilfields. Petrojarl's units operate in the North Sea. Petrojarl's annual revenue is around $300 million and its market capitalization is slightly more than $800 million. Although Teekay currently has around 40% of Petrojarl's stock, there are other major shareholders and a bidding war is possible. Ratings on Vancouver, B.C.-based Teekay reflect its participation in the competitive, volatile, highly fragmented, and fixed- capital-intensive bulk shipping industry, combined with an aggressive growth strategy, new vessel construction program, and an increasingly shareholder-friendly financial policy. Positive credit factors include: * the company's solid business position as the leading midsize Aframax crude-oil tanker operator; * strong market share in the shuttle tanker markets; and * a growing liquefied natural gas business. Teekay has been increasing its fixed-rate business and this acquisition should continue this trend. Standard & Poor's expects to meet with Teekay's management team to review the proposed transaction and funding requirements. Teekay has been acquisitive in the past, levering up the company; however, it has focused on debt reduction after significant acquisitions. Depending on how the transaction is funded, ratings outcomes could include an affirmation at the current rating and either a stable or negative outlook. However, if it appears that the transaction will weaken the company's financial profile materially a modest one-notch downgrade is possible. TERAFORCE TECH: Lawyers Can't Bill for Defending Final Fee App. --------------------------------------------------------------- In a decision published at 2006 WL 2403563, the Honorable Barbara J. Houser of the U.S. Bankruptcy Court for the Northern District of Texas says that counsel should not normally be able to recover fees for defending a fee application in the bankruptcy court, given that the American Rule applies absent explicit statutory or contractual authority, and that the Bankruptcy Code contains no statutory provision for the recovery of attorney fees for defending a fee application. Thus, Judge Houser ruled, Locke Liddell & Sapp LLP -- the law firm representing the unsecured creditors committee in Teraforce Technology Corporation's Chapter 11 cases -- can't recover the fees that it incurred in defending its final fee application. The Bankruptcy Court noted that the objections to Locke Liddell's application were filed in good faith, and were meritorious in significant part. Headquartered in Richardson, Texas, Teraforce Technology Corporation -- http://teraforcetechnology.com/-- markets the products and services of its affiliate, DNA Computing Solutions, Inc. DNA Computing -- http://www.dnacomputingsolutions.com/-- designs, produces and sells board-level products that deliver high performance computing capabilities for embedded applications in the military/aerospace, industrial, and commercial market sectors. Davor Rukavina, Esq., at Munsch, Hardt, Kopf & Harr, PC, represents the Debtors in their restructuring efforts. The Company and its affiliate filed for chapter 11 protection on Aug. 3, 2005 (Bankr. N.D. Tex. Case Nos. 05-38756 & 05-38757). When the Debtors filed for protection from their creditors, they listed assets totaling $4,338,000 and debts totaling $14,269,000. The Bankruptcy Court confirmed the Fourth Amended chapter 11 plan filed by Teraforce Technology Corporation and its wholly owned subsidiary, DNA Computing Solutions, Inc., along with their secured creditor, the Bean Group, in April 2006. TITAN FINANCIAL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Titan Financial Group II, LLC 303 Peachtree Street, Suite 4100 Atlanta, GA 30308 Tel: (404) 572-7200 Bankruptcy Case No.: 06-70852 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- III Creek Financial Group, Inc. 06-70854 Capital Loan Company of Gainesville, Inc. 06-70855 Delta Management of Aiken, Inc. 06-70856 Berrien Financial Services, Inc. 06-70858 Citizens Finance of Macon, Inc. 06-70859 Titan Financial Group, LLC 06-70861 Titan Financial Group Louisiana, LLC 06-70862 Titan Financial Group Texas I, LLC 06-70863 Titan Financial Group Texas II, L.P. 06-70866 Titan Financial Group Georgia, LLC 06-70867 Titan Financial Group South Carolina, LLC 06-70869 Type of Business: Titan Financial provides standard installment loans and serves approximately 80,000 customers through its 125 retail branches across Georgia, South Carolina and Texas. In addition to loans, Titan Financial provides credit insurance products, income tax preparation services, auto club memberships, direct deposit services for government assistance and payroll recipients, and prepaid communication services. Chapter 11 Petition Date: September 3, 2006 Court: Northern District of Georgia (Atlanta) Debtors' Counsel: Amy Edgy Ferber, Esq. Paul K. Ferdinands, Esq. Sarah R. Borders, Esq. King & Spalding, LLP 1180 Peachtree Street Atlanta, GA 30309 Tel: (404) 572-4600 Fax: (404) 572-5129 http://www.kslaw.com/ Debtors' Financial Advisors: Brookwood Associates, LLC 3525 Piedmont Road Northeast 5 Piedmont Center, Suite 415 Atlanta, GA 30305 Tel: (404) 874-7433 Fax: (404) 564-5101 http://www.brookwoodassociates.com/ Debtors' Claims and Balloting Agent: Administar Services Group, Inc. 8475 Western Way, Suite 110 Jacksonville, FL 32256 Tel: (904) 807-3000 Fax: (904) 807-3030 http://www.administar.net/ Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtors' Consolidated List of their 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Brad E. & Robin R. Bylenga Subordinated Debt $6,621,946 9 Longview Terrace Greenville, SC 29605 Tel: (864) 672-2787 Citizens Reinsurance Ltd. and Contract $1,919,705 Delta Boone Life Ins. Co. Ltd. P.O. Box 907670 Gainesville, GA 30501 c/o Bennie E. Hewett Tel: (770) 519-0082 Life of Georgia Reinsurance, Ltd. Contract $1,073,265 P.O. Box 907670 Gainesville, GA 30501 c/o Bennie E. Hewett Tel: (770) 519-0082 Life of the South Corporation Senior $1,000,000 100 West Bay Street Subordinated Jacksonville, FL 32202 Debt c/o W. Dale Bullard Tel: (904) 350-9660 Lyndon Financial Corporation Senior $983,165 100 West Bay Street Subordinated Jacksonville, FL 32202 Debt c/o W. Dale Bullard Tel: (904) 350-9660 Roy Merritt Subordinated Debt $384,254 Route 3, P.O. Box 95 Blakely Highway #27 Cuthbert, GA 39840 Tel: (229) 732-3193 Kenneth E. Hoerr Subordinated Debt $250,000 9619 North Route 91 Peoria, IL 61615 Tel: (309) 243-7750 Darlene Hoerr Subordinated Debt $250,000 9619 North Route 91 Peoria, IL 61615 Tel: (309) 243-7750 Life of the South $87,161 Rogers & Hardin $61,054 John Kinney Subordinated Debt $50,000 McGladrey & Pullen, LLP Trade $19,100 BellSouth Trade $10,424 Vertex Trade $8,126 Office Depot Trade $5,554 AT&T Trade $3,384 Windstream Trade $2,561 Georgia Power Company Trade $2,538 SCE&G Trade $2,298 TXU Energy Trade $1,134 ULTRACHIP SYSTEMS: June 30 Balance Sheet Upside-Down by $8.5 Mil. ----------------------------------------------------------------- UltraStrip Systems, Inc., incurred a $1,541,724 net loss on $13,640 of net revenues for the three months ended June 30, 2006, compared to a $1,531,342 net loss on $5,853 of net revenues in 2005. At June 30, 2006, the Company's balance sheet showed $1,818,542 in total assets and $10,342,019 in total liabilities, resulting in a $8,505,477 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $1,667,877 in total current assets available to pay $6,060,442 in total current liabilities coming due within the next 12 months. A full-text copy of the Company's financial statements for the three months ended June 30, 2006, is available for free At http://researcharchives.com/t/s?1101 Going Concern Doubt As reported in the Troubled Company Reporter on June 1, 2006, Tedder, James, Worden & Associates, P.A., in Orlando, Florida, raised substantial doubt about UltraStrip Systems, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's working capital deficit and losses from operations. About UltraStrip UltraStrip Systems, Inc. -- http://www.ultrastrip.com/-- is a water-engineering firm that develops and sells patented equipment to provide solutions to environmental problems. The Company's Mobile Water Filtration Systems, provided through its Ecosphere Technologies subsidiary -- http://www.ecospheretech.com/-- provides a solution to use its powerful water-filtration and purification technology in the world's most challenging applications, both in developing regions, and in areas hit by man- made or natural events that damage vital water resources. VITAL LIVING: Earns $401,000 in Quarter Ended June 30 ----------------------------------------------------- Vital Living Inc. earned $401,000 on $1,349,000 of net 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's balance sheet showed $4,975,000 in assets and $4,743,000 in liabilities. The Company's equity position went from a $495,000 deficit at Dec. 31, 2005, to a $232,000 positive equity at June 30, 2006. At June 30, 2006, the Company had $66,000 cash. Cash used in operating activities was $126,000. According to Gregg A. Linn, the Company's chief financial officer, the Company expects to fund its on-going business activities from the cash generated through continuing operations. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?110b Going Concern Doubt As reported in the Troubled Company Reporter on May 12, 2006, Epstein Weber & Conover, PLC, expressed substantial doubt about Vital Living, Inc.'s financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations, working capital deficit and dependence on funding sources other than operations. About Vital Living Headquartered in Phoenix, Arizona, Vital Living Inc. -- http://www.vitalliving.com/-- develops nutritional and nutraceutical products which are marketed for distribution through physicians and licensed or certified health care professionals. WELD WHEEL: Asset Sale Hearing Set for September 25 --------------------------------------------------- The Honorable Jerry W. Venters of the U.S. Bankruptcy Court for the Western District of Missouri in Kansas City has approved bidding procedures governing the proposed sale of Weld Wheel Industries, Inc., and its debtor-affiliates' assets to American Racing Equipment, Inc. American Racing is offering to buy substantially all of the Debtors' assets, free and clear of liens, for $17 million. The anticipated sale to American Racing is subject to higher and better offers at an auction scheduled at 10:00 a.m., on Sept. 25, 2006. The auction will be conducted at the offices of Bryan Cave LLP, One Kansas City Place, 1200 Main Street, Suite 3500 in Kansas City, Missouri. Objections to the proposed sale must be filed by 5:00 p.m., Central Daylight Time, on Sept. 13, 2006. Competing bids, which should at least be $18 million, will be accepted until 5:00 p.m. Central Daylight Time, on Sept. 20, 2006. All bids must be submitted to: Ralph Rice Weld Racing, Inc. 6600 Stadium Drive, Kansas City, MO 64129 with a copy to: Murray Lessinger White Oak Capital Advisors, LLC Two Northfield Plaza, Suite 215, Northfield, IL 60093. Potential bidders may obtain copies of the Purchase Agreement from: Cynthia Dillard Parres, Esq. Bryan Cave LLP, One Kansas City Place, 1200 Main Street, Suite 3500, Kansas City, MO 64105 Phone: 816-374-3274 American Racing is entitled to a $400,000 breakup fee if it fails to purchase the assets at the auction. In addition, American Racing is also entitled to reimbursement of expenses in the amount of $250,000. A copy of the Bid Procedures governing the sale of the Debtors' assets is available for free at: http://researcharchives.com/t/s?110f Weld Wheel Industries, Inc. -- http://www.weldracing.com/-- manufactures forged alloy wheels to enhance the performance and appearance of racecars, off-road trucks, luxury pickups, SUV's, premium motorcars, customs, hot rods, and motorcycles. Weld Wheel and its two debtor-affiliates filed for Chapter 11 protection on Aug. 17, 2006 (Bankr W.D. Mo. Case No. 06-42105). Cynthia Dillard Parres , Esq., and Laurence M. Frazen, Esq., at Bryan Cave LLP, represents the Debtors. The Official Committee of Unsecured Creditors is represented by Lisa A. Epps, Esq., at Spencer Fane Britt & Browne LLP. When the Debtor sought protection from its creditors, it estimated its assets and debts at $10 to $50 million. WHERIFY WIRELESS: Expands Brazilian Distribution with Delphi ------------------------------------------------------------ Wherify Wireless, Inc., reported the addition of Delphi Corp. to its Brazilian team to enhance and accelerate the deployment of Wherify-enabled personal communications and GPS location/safety services in Brazil. Delphi has assumed distribution rights for Wherify's Wherifone in Brazil from American Networks Computadores and has placed an order for initial units. American Network Computadores maintains its local service provider status while Wherify will provide the core location management and mapping support from its Global Location Services Center. Wherify will receive recurring revenue for each unit in service in Brazil. "We're very pleased to have Delphi's support in the deployment of Wherify-enabled location and communications services in Brazil," said Timothy Neher, Founder and CEO of Wherify. "Delphi is a well established player with major distribution resources. We anticipate that their expertise, experience and market reach will enhance our launch efforts and make Brazil a global leader in personal location services." "Delphi has extensive experience in taking mobile electronics products to market successfully, both at the enterprise and consumer level. The Wherifone is a natural fit for our portfolio and furthers our interests in providing cutting-edge mobile services to our customers," said Edson Brasil, Managing Director of Delphi Brazil. "The combination of voice and GPS-enabled location-based services presents us with a very interesting opportunity, and we're looking forward to working with American Networks and Wherify to bring the benefits of vehicle location and personal safety services to Brazil." "Delphi is a great addition to our team and will play a major role in our success," said Samir Couri, Director of Technologies of American Network. "Delphi has a supplier relationship with thousands of retailers in the mobile electronics and IT industries. As a major supplier of hospital and home medical equipment, they are also well positioned to bring the benefits of Wherify's technology to the Brazilian health care industry." About Wherify Based in Redwood Shores, California, Wherify Wireless, Inc., -- http://www.wherifywireless.com/-- develops patented wireless location products and services for family safety, communications, and law enforcement. The company's portfolio of intellectual property includes its proprietary integration of the US Government's Global Positioning System and wireless communication technologies; its patented back-end location service; the Wherifone(TM) GPS locator phone which provides real-time location information and lets families with pre-teens, seniors, or those with special needs, stay connected and in contact with each other; and its FACES(R) industry-leading facial composite technology, which is currently being used by thousands of public safety agencies worldwide. Going Concern Doubt Malone & Bailey, PC, expressed substantial doubt about Wherify's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended June 30, 2005. The auditing firm pointed to the Company's recurring losses from operations and insufficient working capital to meet its operating needs. WINN-DIXIE: Court Extends Exclusive Solicitation Period to Oct. 31 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida extended Winn-Dixie Stores, Inc., and its debtor-affiliates' exclusive period to solicit acceptance of their plan of reorganization to the earlier of: (a) the entry of an order confirming the Plan; or (b) October 31, 2006. As reported in the Troubled Company Reporter on Aug. 25, 2006, the Debtors sought an extension of their exclusive solicitation period to ensure that they are able to complete the solicitation process without the risk of distractions resulting from any party's efforts to take advantage of the termination of the exclusive solicitation period. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WINN-DIXIE: Wants to Assume 62 Agreements With IBM Entities ----------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to assume 62 leases and contracts with IBM Corporation, IBM Credit LLC, and Ascential Software Corporation. The Debtors lease computer hardware and obtain various software, maintenance, and support services vital to their information technology needs from the IBM Entities. According to Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, the Debtors have negotiated with the IBM Entities as to the terms of the assumption of the Leases and Contracts. The parties agree that: (1) The Debtors will move to assume the Leases and Contracts under Section 365 of the Bankruptcy Code; (2) If they have not done so, the Debtors will return to the IBM Entities 26 leased servers used in stores that have been closed by the Debtors. Any of the Leases and Contracts that separately govern the returned servers will be terminated by agreement of the parties. IBM Credit will be granted an unsecured claim for $66,883 on account of the servers; (3) Claim No. 13235 asserted by IBM Corp. for $2,535,561 against the Debtors for non-payment of prepetition sums due under the Leases and Contracts will be allowed, while Claim No. 2058, asserting $2,279,605, will be disallowed; (4) Claim No. 13245 filed by IBM Credit for $1,659,098 will be deemed amended to include the $66,883 account for the servers, and will be allowed in the increased amount of $1,725,981. Claim No. 4215, asserting $14,052,843, will be disallowed; (5) Claim No. 9926 filed by Ascential for $131,052 will be allowed in its Court-reduced amount of $48,158; (6) The Debtors will pay any delinquent postpetition amounts owed under the Leases and Contracts to the IBM Entities, as applicable, within 10 days following approval of the assumption; (7) The IBM Entities will facilitate assumption of the Leases and Contracts by agreeing that: (a) the Debtors will not be required to pay the prepetition claims as cure under Section 365(b)(1)(A) of the Bankruptcy Code; (b) the requirements of Section 365 as they relate to any prepetition defaults will be waived in full by the IBM Entities; (c) the prepetition claims will not have administrative expense status as a result of the assumption of the Leases and Contracts or for any other purpose; and (d) the prepetition claims will retain the status of prepetition unsecured non-priority claims; and (8) The waiver of cure payments will not negate the impact of assumption on any claims held by the Debtors against the IBM Entities. To avoid doubt, upon assumption of the Lease and Contracts, the Debtors will waive all rights they may otherwise have to preference claims or other claims or rights under Sections 544, 545, 547, 548 or 553 of the Bankruptcy Code against the IBM Entities. Contingent upon Court approval of the request, the parties are negotiating to replace two leased mainframes with one new mainframe that will increase operating capacity by up to 30% and reduce the Debtors' lease costs by nearly $93,000 per month. Headquartered in Jacksonville, Florida, Winn-Dixie Stores, Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. (Winn-Dixie Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). YOUTHSTREAM MEDIA: Appoints John Scheel as President and CEO ------------------------------------------------------------ YouthStream Media Networks, Inc., appointed John Scheel, the general manager of the Company's steel mini-mill in Ashland, Kentucky, as president and chief executive officer The Company disclosed that the resignations of Jonathan V. Diamond as president and chief executive officer, and Robert N. Weingarten as chief financial officer and secretary became effective Aug. 31, 2006. James M. Lane also resigned from the board of directors effective Aug. 31, 2006. Board Chairman and CFO Appointments Donald Reisenberg, the controller of the steel mini-mill, was appointed chief financial officer and secretary. Jess M. Ravich, a current director, was appointed chairman of the board of directors. The Company also disclosed that its board of directors expressed its appreciation to Mr. Diamond and Mr. Weingarten for their having successfully managed and orchestrated a complex turnaround and restructuring process since Jan. 2003, including the disposition of the Company's previous business operations in Feb. 2004 and the acquisition of the Company's controlling interest in a steel mini-mill in March 2005. In particular, its board of directors noted that, for the first time in the its history, the Company has recently reached profitability on a consolidated basis. About YouthStream Media Networks YouthStream Media Networks, Inc., (OTC: YSTM) owns and operates Kentucky Electric Steel. It is a steel mini-mill located in Ashland, Kentucky. Going Concern Doubt As reported in the Troubled Company Reporter on July 5, 2006 Weinberg & Company, P.A., in Los Angeles, Calif., raised substantial doubt about YouthStream Media Networks, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Sept. 30, 2005, and 2004. The auditor pointed to the Company's losses; negative cash flow from operations; negative working capital; and accumulated and stockholders' deficiencies. ZALE CORP: Incurs $26.4 Million Net Loss for Quarter ended July 31 ------------------------------------------------------------------ Zale Corporation reported a net loss of $26.4 million for the fourth fiscal quarter ended July 31, 2006. The loss includes a mostly non-cash after-tax charge of $23.9 million. For the same period last year, the Company reported net earnings of $4.1 million. Total revenues for the fourth quarter increased by 3.9% to $490.7 million compared to last year's total revenue of $472.3 million. "Our fourth quarter results, excluding the charges, were on plan," Betsy Burton, president and chief executive officer, commented. "We had better than expected top line growth in the Zales brand, offset by lower gross margins due to increased clearance." Net earnings for fiscal year 2006 were $54.5 million versus net earnings of $106.8 million for the same period last year. For the full fiscal year, total revenues increased 2.3% to $2.439 billion, compared to $2.383 billion for the prior fiscal year and includes $24.3 million and $49.8 million, respectively, from the closed Bailey Banks & Biddle stores. Headquartered in Irving, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is North America's largest specialty retailer of fine jewelry operating approximately 2,345 retail locations throughout the United States, Canada and Puerto Rico. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Bailey Banks & Biddle, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Through its ZLC Direct organization, Zale also operates online at http://www.zales.com/and http://www.baileybanksandbiddle.com/ * * * As reported in the Troubled Company Reporter on April 12, 2006, Zale Corporation reported that the Securities and Exchange Commission initiated a non-public investigation relating to various accounting and other matters related to the Company, including accounting for extended service agreements, leases, and accrued payroll. Subpoenas issued in connection with the SEC investigation ask for materials relating to these accounting matters as well as to executive compensation and severance, earnings guidance, stock trading, and the timing of certain vendor payments. Zale believes that its accounting complied with generally accepted accounting principles and is reviewing the matter. The Company will cooperate fully with the SEC's investigation. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Abraxas Petro ABP (21) 132 (6) AFC Enterprises AFCE (46) 172 5 Alaska Comm Sys ALSK (17) 565 24 Alliance Imaging AIQ (23) 682 26 AMR Corp. AMR (508) 30,752 (1,392) Atherogenics Inc. AGIX (124) 211 165 Biomarin Pharmac BMRN 49 469 307 Blount International BLT (123) 465 126 CableVision System CVC (2,468) 12,832 2,643 Centennial Comm CYCL (1,062) 1,436 23 Cenveo Inc CVO 24 941 128 Choice Hotels CHH (118) 280 (58) Cincinnati Bell CBB (705) 1,893 18 Clorox Co. CLX (156) 3,616 (123) Cogdell Spencer CSA 126 370 N.A. Columbia Laborat CBRX 10 29 23 Compass Minerals CMP (63) 664 161 Crown Holdings I CCK 144 7,287 174 Crown Media HL CRWN (393) 1,018 133 Deluxe Corp DLX (90) 1,330 (235) Denny's Corporation DENN (258) 500 (68) Domino's Pizza DPZ (609) 395 (4) Echostar Comm DISH (512) 9,105 1,589 Emeritus Corp. ESC (111) 721 (29) Emisphere Tech EMIS 2 43 19 Empire Resorts I NYNY (26) 62 (3) Encysive Pharm ENCY (64) 93 56 Foster Wheeler FWLT (38) 2,224 (93) Gencorp Inc. GY (88) 990 (28) Graftech International GTI (166) 900 250 H&E Equipment HEES 226 707 22 I2 Technologies ITWO (55) 211 (9) ICOS Corp ICOS (36) 266 116 IMAX Corp IMAX (21) 244 33 Incyte Corp. INCY (55) 375 155 Indevus Pharma IDEV (147) 79 35 J Crew Group Inc. JCG (83) 362 102 Koppers Holdings KOP (95) 625 140 Kulicke & Soffa KLIC 65 398 230 Labopharm Inc. DDS (92) 143 105 Level 3 Comm. Inc. LVLT (33) 9,751 1,333 Ligand Pharm LGND (238) 286 (155) Lodgenet Entertainment LNET (66) 262 15 Maytag Corp. MYG (187) 2,954 150 McDermott Int'l MDR 125 3,181 64 McMoran Exploration MMR (21) 434 (38) NPS Pharm Inc. NPSP (164) 248 168 New River Pharma NRPH 0 93 68 Omnova Solutions OMN (6) 366 67 ON Semiconductor ONNN (75) 1,423 279 Qwest Communication Q (2,826) 21,292 (2,542) Riviera Holdings RIV (29) 214 7 Rural/Metro Corp. RURL (93) 302 50 Sepracor Inc. SEPR (109) 1,277 363 St. John Knits Inc. SJKI (52) 213 80 Sulphco Inc. SUF 25 34 12 Sun Healthcare SUNH 10 523 (34) Sun-Times Media SVN (261) 965 (324) Tivo Inc. TIVO (33) 143 19 USG Corp. USG (313) 5,657 (1,763) Vertrue Inc. VTRU (16) 443 (72) Weight Watchers WTW (110) 857 (72) WR Grace & Co. GRA (515) 3,612 929 ********* 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 ***