/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/060913.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, September 13, 2006, Vol. 10, No. 218 Headlines ACCESS WORLDWIDE: June 30 Balance Sheet Upside-Down by $7.6 Mil. ACE CASH: Moody's Assigns Junk Rating on Senior Unsecured Notes ADVOCACY & RESOURCES: Creditor Wants to Reclaim Unpaid Goods AEROSYSTEMS INC: Strong Performance Cues Moody's to Lift Ratings AES CORP: Selling 33% Stake in Eletropaulo Metropolitana AIRBASE SERVICES: Regent Aero Has Until Oct. 27 Decide on Leases ALLIED HOLDINGS: McConells Can Schedule Suit on Trial Calendar AMERIVISION COMMS: Dataprose Production Contract Deemed Rejected ARTIFICIAL LIFE: June 30 Balance Sheet Upside-Down by $4.2 Million ASARCO LLC: Wants AMC's Objection to Escrow Pact Overruled ASARCO LLC: Creditors' Panel Wants Tax Sharing Pact Decided Later ASSOCIATED MATERIALS: Earns $16.3 Mil. in Second Qtr. Ended July 1 AZUR HOLDINGS: Baum & Co. Expresses Going Concern Doubt BGF INDUSTRIES: June 30 Balance Sheet Upside-Down by $37.6 Million BURGER KING: Improving Performance Prompts S&P's Rating Upgrade CATHOLIC CHURCH: Spokane Prepared to Amend Plan If Mediation Fails CERADYNE INC: Receives $1.5 Million Transnuclear Initial Order COLLINS & AIKMAN: Customers Oppose Committee's Planned Inquiries COLLINS & AIKMAN: Selling De Minimis Assets to Various Parties CONSTAR INT'L: Moody's Lifts Rating on $175 Million Senior Note CRITTENDEN MEMORIAL: S&P Lowers Series 2000 Debt's Rating to B+ DANA CORP: Court Denies Sypris' Request to Compel Pact Decision DANA CORP: David Browning Wants Stay Lifted to Prosecute Action DANA CORP: U.S. Trustee Amends Non-Union Retiree Committee Members DAVIDSON DIVERSIFIED: Equity Deficit Widens to $8.4MM at June 30 DE LA ROSA: Case Summary & 20 Largest Unsecured Creditors DELPHI CORP: Pick Me, Equity Committee Tells Court DELPHI CORP: Court Records About 100 Claim Transfers in August DURA AUTOMOTIVE: Defers Dividend Payment on Preferred Securities EASTMAN KODAK: Signs Multi-Year Kiosk Contract with Wal-Mart EDDIE BAUER: To Open Stores in Georgia, Pennsylvania & California ELEC COMMUNICATIONS: Withdraws Offer to Buy Liberty Bell Telecom FALCON AIR: Ch. 11 Trustee Wants Until Dec. 6 to Decide on Leases FLEETWOOD ENT: Weak Demand Prompts Moody's to Downgrade Ratings GRACE ASSOCIATES: Case Summary & Largest Unsecured Creditor GRAY TELEVISION: High Leverage Prompts S&P's Negative Watch GREAT COMMISSION: Court OKs Timothy Dixon as Special Bond Counsel HAWS & TINGLE: Has Continued Cash Collateral Access Until Nov. 20 HAWS & TINGLE: Wants Veritas Advisory as Financial Consultant HAYES LEMMERZ: S&P Affirms B- Rating & Removes Negative Watch HECTOR DE LA ROSA: Voluntary Chapter 11 Case Summary INSIGHT COMMS: Plans to Refinance $2.575 Billion Midwest Debt INTERSTATE BAKERIES: Wants to Enter Into Intercompany Tolling Pact INTERSTATE BAKERIES: Wants Preference & Adversary Actions Pursued KMART CORP: Court Denies Request to Stay Discovery on Eagle Claims KMART CORP: Striking Penn. Workers Negotiate for Better Contract KRYSTAL POINT: Case Summary & 20 Largest Unsecured Creditors LIGAND PHARMA: Sells Avinza to King Pharma for $313 Mil. in Cash LIGAND PHARMA: Sells Oncology Product Line to Eisai for $205 Mil. LINENS 'N THINGS: Posts $39.1 Mil. Net Loss in Qtr. Ended July 1 LONGYEAR HOLDINGS: Purchase Plan Cues Moody's to Hold Ratings LUXELL TECH: Board Names Alec Couckuyt as Chief Executive Officer MARK IV: Slow Cash Flow Cues S&P to Lower Corp. Credit Rating to B MCMS INC: Claims Objection Deadline Stretched to February 14 MEDICAL ASSOCIATES: Case Summary & 19 Largest Unsecured Creditors MERIDIAN AUTOMOTIVE: IRS Opposes Third Amended Joint Plan MERIDIAN AUTOMOTIVE: Wants to Reject American Financial Lease MONONGAHELA POWER: Moody's Concludes Review and Upgrades Ratings MSO HOLDINGS: June 30 Balance Sheet Upside-Down by $10.9 Million NATIONAL CENTURY: CSFB Trust Sets Sept. 21 as Distribution Date NATIONAL CENTURY: Former VP Snoble Sentenced to 4-Yr. Imprisonment NEOPLAN USA: Wants Court to Set Oct. 23 General Claims Bar Date NORTH AMERICAN: Launches $60.4 Million Offering of 9% Senior Notes OPBIZ LLC: S&P Downgrades Ratings to CCC+ With Negative Watch PERFECTING NEW: Case Summary & 20 Largest Unsecured Creditors RENFRO CORP: Moody's Rates Proposed $145 Million Sr. Loan at B2 RENFRO CORP: S&P Rates Proposed $145 Million Senior Loan at B SAINT VINCENTS: Court Approves New York OAG Resolution Agreement SAINT VINCENTS: Inks Management Agreements with Wyckoff Heights SAINT VINCENTS: Court Approves Massey Knakal Sublease Pact SANTA FE: Court Gives Nod on Stevens & Lee as Bankruptcy Counsel SANTA FE: List of Eight Largest Unsecured Creditors SATELITES MEXICANOS: Files Amended Plan and Disclosure Statement SEDGWICK CMS: To Purchase All of Security Capital's Common Stock SEDGWICK CMS: S&P Assigns B+ Loan Rating to $510 Million Debts SERACARE LIFE: Board Appoints CEO Susan Vogt as Director SERACARE LIFE: Taps Prolman Group to Provide Financial Services SERACARE LIFE: Taps AccuVal Associates as Inventory Appraiser SHERIDAN HOLDINGS: Proposed Funding Cues Moody's to Lower Ratings SIERRA PACIFIC: Improved Performance Cues Moody's to Lift Rating SILICON GRAPHICS: Objects to LG Electronics' Claims SILICON GRAPHICS: Asks Court to Disallow Various Claims SIMMONS CO: Moody's Hold Ratings and Revises Outlook to Positive SOLUTIA INC: Equity Panel Wants Debtors' Intervention Role Limited SOLUTIA INC: Court Okays Payment of $5 Mil. Settlement Installment SPANISH BROADCASTING: Increasing Leverage Cues S&P's Neg. Watch STAR TELECOMMS: D&O Litigation Settled for $2 Million STATEWIDE REALTY: Voluntary Chapter 11 Case Summary STONEVILLE PROPERTIES: Case Summary & Two Largest Creditors STRATUS SERVICES: June 30 Stockholders' Deficit Narrows to $8 Mil. THOMAS EQUIPMENT: Unit Completes $15 Mil. Funding with Greystone TIME WARNER: Moody's Rates Proposed $700 Million Sr. Loan at Ba2 TRIPATH TECH: Agrees to Settle Litigation with Langley Partners TURNSTONE SYSTEMS: June 30 Net Liquidation Assets Increased $87K UNITED SUBCON: Moody's Junks Rating on $200 Million Term Loan USINTERNETWORKING INC: Joins Forces with AT&T in $300 Million Deal VERESTAR INC: Committee Wants Court Nod on Settlement Procedures VISTEON CORP: S&P Affirms B+ Rating and Removes Negative Watch VOLT INFORMATION: Earns $8.4 Million for the Quarter Ended July 30 WELD WHEEL: U.S. Trustee Names Seven-Member Creditors' Committee WELD WHEEL: Creditors' Committee Taps Spencer Fane as Counsel WINN-DIXIE: Judge Funk Approves Assumption of Seven Store Leases WINN-DIXIE: Sells Harahan Warehouse Facility to Ackel for $6.75MM WINN-DIXIE: Leesburg & Edgewood Bids Must be Received by Sept. 18 WORLDCOM INC: Court Dismisses Next Factors' Claims Against APCC WORLDCOM: Court Okays Revised Notice on Louisiana Settlement Pact WORLDCOM: La. Class Suit Counsel Can File Fee App. Until Sept. 28 XTREME COMPANIES: Equity Deficit at June 30 Widens to $9.7 Million ZOND-PANAERO: Reports $291,000 Net Income in 2006 Second Quarter * FTI Consulting to Acquire Financial Dynamics for $260 Million * PricewaterhouseCoopers Launches U.S. Restructuring Practice * Upcoming Meetings, Conferences and Seminars ********* ACCESS WORLDWIDE: June 30 Balance Sheet Upside-Down by $7.6 Mil. ---------------------------------------------------------------- At June 30, 2006, Access Worldwide Communications Inc.'s balance sheet showed total assets of $16,296,202 and total liabilities of $23,925,167 resulting to a total stockholders' deficit of $7,628,965. The Company's balance sheet at June 30, 2006 also showed strained liquidity with $11,261,270 in total current assets and $15,645,979 in total current liabilities. For the three months ended June 30, 2006, the Company incurred net loss of $1,673,013 from revenues of $9,755,920, compared to a $690,452 net loss from $9,535,225 in revenues in three months ended June 30, 2005. A full-text copy of the Company's financial report for the three months ended June 30, 2006 is available for free at: http://researcharchives.com/t/s?116d Headquartered in Arlington, Virginia, Access Worldwide Communications, Inc. (OTCBB: AWWC) -- http://www.accessww.com/-- provides sales, communication and medical education services. The Company has about 700 employees in offices throughout the United States and the Philippines. ACE CASH: Moody's Assigns Junk Rating on Senior Unsecured Notes --------------------------------------------------------------- Moody's Investors Service assigned these first-time ratings to ACE Cash Express, Inc.: a B3 Corporate Family Rating, a B3 senior secured rating to the company's secured Term Loan B, and a Caa1 senior unsecured rating to the company's senior unsecured notes. The assigned rating outlook is stable. These ratings were assigned to ACE: * Corporate Family Rating -- B3 * Senior Secured Rating -- B3 * Senior Unsecured Rating -- Caa1 * Outlook -- Stable On June 6, 2006, JLL Partners, a New York-based private equity firm, entered into a definitive agreement to acquire ACE for $479.7 million in a leveraged buyout. JLL will contribute 95.5% of the $179.7 million equity investment, while current ACE management will contribute the remaining 4.5%. The remaining $300 million will be funded by a $125 million secured Term Loan B and $175 million of senior unsecured notes, both of which Moody's is rating. In Moody's opinion, ACE's B3 CFR reflects its strong operating cash flow, an experienced management team, a strong competitive presence in the U.S. market, strong risk management and information systems infrastructure, and attractive industry growth fundamentals. The rating also reflects the firm's credit challenges, such as substantial leverage and the negative tangible net worth resulting from the significant goodwill and other intangibles following the leveraged buy-out. Debt to EBITDA will be approximately 6 times, which would be substantially higher than rated peers, while ACE's EBIT to interest expense at less than 2 times would be significantly weaker. EBITDA margin is also weaker than rated peers. However, the credit strengths cited above serve to offset these weaker financial measures. Therefore, ACE's CFR is at the same level as rated peer firms. Moody's also noted that the payday lending industry is exposed to potential adverse payday lending-related regulation, legislation and litigation and will remain so in the foreseeable future. Additionally, ACE, like other check cashing and payday lending institutions, deals with an inherently higher credit risk customer base. In Moody's view, asset coverage is not sufficient to support an upward ratings lift to the secured Term Loan B relative to Moody's assessment of the CFR of the company. The Caa1 senior unsecured rating takes into account its structurally subordinated status to the secured debt. Given the small proportion of tangible assets in the company's asset structure following the LBO, asset coverage for the secured debt in a distressed scenario is expected to be modest and virtually non-existent for the unsecured debt holder given their lower priority of claim. If ACE decreases its substantial leverage burden, and is expected to be sustained, this could result in upward rating pressure. Material weakening of free cash flow, increased leverage or material negative regulatory, legislative or litigation developments could result in downward rating pressure. ACE Cash Express, Inc. offers check cashing, payday lending, pre- paid debit card and bill payment services along with various other financial products. ADVOCACY & RESOURCES: Creditor Wants to Reclaim Unpaid Goods ------------------------------------------------------------ American Flange & Manufacturing Co., Inc., creditor and party-in- interest in Advocacy & Resources Corporation's chapter 11 case, asks the U.S. Bankruptcy Court for the Middle District of Tennessee for permission to reclaim the goods delivered to the Debtor or in the alternative, file for administrative expense priority claim amounting to $45,500. On June 15, 2006, American Flange delivered to the Debtor various goods in connection with the Debtor's business. The Debtor failed to pay the goods until it filed for bankruptcy. Subsequent to the Debtor's chapter 11 filing, on June 30, 2006, American Flange notified the Debtor that it intended to exercise its rights under Section 546 of the Bankruptcy Code and wanted to reclaim all goods delivered to the Debtor within the past 45 days. American Flange contends that the Debtor purchased the goods in the normal course of business while it was insolvent. American Flange tells the Court that it has satisfied all of the elements required under Section 546. American Flange made written demand for reclamation to the Debtor and their attorneys within 45 days after the Debtor received the goods or within 20 days after the commencement of the Debtor's case. American Flange claims that the Debtor was in possession of the goods at the time they received the notice of reclamation. In addition, American Flange asks the Court to direct the Debtor to abandon the questionable goods pursuant to Section 554(b) of the Bankruptcy Code. American Flange says that the cost of maintaining the property far exceeds the ability of the property to produce income, and the Debtor has no equity in the property, thus, the Debtor should abandon the property. Headquartered in Cookeville, Tennessee, Advocacy and Resources Corporation is a non-profit corporation that manufactures food products for feeding programs operated by the U.S. Government. Customers include the U.S. Department of Agriculture, the Department of Defense, and other private distribution firms. The Company filed for chapter 11 protection on June 20, 2006 (Bankr. M.D. Tenn. Case No. 06-03067). John Hayden Rowland, Esq., at Baker Donelson Bearman Caldwell and Berkowitz, P.C., represents the Debtor. When the Debtor filed for chapter 11 protection, it estimated assets and debts between $10 million and $50 million. AEROSYSTEMS INC: Strong Performance Cues Moody's to Lift Ratings ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of Spirit AeroSystems, Inc., Corporate Family and Senior Secured Credit Facilities to Ba3 from B1. The ratings outlook is stable. This concludes the review commenced on June 30, 2006. The ratings reflect revenue growth and strong financial performance that the company has reported in the first year of operating independence, relatively strong financial metrics despite substantial debt levels, and good revenue visibility owing to long term requirements contracts with the OEM's. The ratings upgrade was also influenced by expectations for near term debt reduction that would ensue through the use of funds from Spirit's planned Initial Public Offering of stock, announced in the company's S-1 filing dated August 30, 2006. However, the ratings continue to be negatively impacted by thin current free cash flow generation, Spirit's concentration of sales on essentially only two customers, Boeing and Airbus, as well as the company's relatively short operating history as a stand-alone company. The stable ratings outlook reflects Moody's expectations that revenue will continue to grow under stable margins, while free cash flows become substantially positive through fiscal year 2007 as development costs diminish and delivery rates pick up. As Spirit develops a longer track record as a stand-alone entity, demonstrating continued revenue growth and margin stability, ratings would be subject to upward revision if leverage were to fall below 2.5x and if free cash flow were to exceed 10% of debt for a sustained period, while cash flows generally stabilize as working capital and CAPEX requirements abate. Ratings or their outlook could be lowered if loss of contracts or unexpected deterioration in operating performance were to occur, or if Spirit were to increase debt levels materially for any reason, such that Debt were to exceed 4x or free cash flow were to remain negative for a prolonged period. Upgrades: Issuer: Spirit Aerosystems, Inc. * Corporate Family Rating, Upgraded to Ba3 from B1 * Senior Secured Bank Credit Facility, Upgraded to Ba3 from B1 Outlook Actions: Issuer: Spirit Aerosystems, Inc. * Outlook, Changed To Stable From Rating Under Review Spirit AeroSystems, Inc., headquartered in Wichita, Kansas, with facilities in Wichita, Tulsa and McAlester OK, and Prestwick, Scotland, is a designer and manufacturer of fuselages, struts, nacelles, thrust reversers and other complex components for Boeing and Airbus. AES CORP: Selling 33% Stake in Eletropaulo Metropolitana -------------------------------------------------------- AES Corp. plans to sell a 33% stake in its Brazilian unit -- Eletropaulo Metropolitana Electricidade de Sao Paulo SA -- to help reschedule a $1.2 billion debt owed to the state development bank, Bloomberg News reports. According to the same report, the stake in Eletropaulo is valued at BRL1.29 billion ($603 million) as of Sept. 1. AES Transgas Empreendimentos SA, a unit based in Sao Paulo, will sell 13.76 billion preferred B shares of Eletropaulo this month, through a public offering on domestic and international markets, Bloomberg says, citing a statement filed with Brazil's securities regulator. Brazil's state development bank, Banco Nacional de Desenvolvimento Econ"mico e Social, could have gotten hold of AES' Brazilian assets two years ago if the power company did not agree to a debt restructuring. "AES is trying to improve its cash position in Brazil," Januario Hosten Jr., an equity analyst at Leme Investimentos in Florianopolis, Brazil was quoted by Bloomberg as saying. "It also shows that the company is seeing better opportunities of gains in other types of investments than Eletropaulo." Meanwhile, Eletropaulo's shares are adversely affected by the proposed sale. "The sale is having a negative impact on the price of shares because it shows that Transgas doesn't expect Eletropaulo's shares to rise too much in the future," Leme Investimentos analyst told Bloomberg. After the sale, Transgas' shares will be up to 4.9% in Eletropaulo. Transgas plans to price the shares on Sept. 21, Bloomberg says. About Eletropaulo Eletropaulo distributes power in Brazil's industrial hub of Sao Paulo city and 23 surrounding towns. Power consumption in Sao Paulo state grew 3.8% in 2005 from 2004, according to data from Sao Paulo state government. About AES Corp. AES Corp. (NYSE:AES) -- http://www.aes.com/-- is a global power company. The Company operates in South America, Europe, Africa, Asia and the Caribbean countries. Generating 44,000 megawatts of electricity through 124 power facilities, the Company delivers electricity through 15 distribution companies. AES's Latin America business group is comprised of generation plants and electric utilities in Argentina, Brazil, Chile, Colombia, Dominican Republic, El Salvador, Panama and Venezuela. Fuels include biomass, diesel, coal, gas and hydro. The group also pursues business development activities in the region. AES has been in the region since May 1993, when it acquired the CTSN power plant in Argentina. * * * As reported in the Troubled Company Reporter on May 25, 2006, Fitch affirmed The AES Corp.'s Issuer Default Rating at 'B+'. Fitch also affirmed and withdrew the ratings for the company's junior convertible debt. Fitch said the Rating Outlook for all remaining instruments is Stable. As reported in the Troubled Company Reporter on March 31, 2006, Standard & Poor's Ratings Services raised its corporate credit rating on energy company The AES Corp. to 'BB-' from 'B+'. S&P said the outlook is stable. As reported in the Troubled Company Reporter on Jan. 11, 2006, Moody's affirmed the ratings of The AES Corp., including its Ba3 Corporate Family Rating and the B1 rating on its senior unsecured debt. Moody's said the rating outlook remains stable. AIRBASE SERVICES: Regent Aero Has Until Oct. 27 Decide on Leases ---------------------------------------------------------------- The Honorable D. Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas in Ft. Worth extended until Oct. 27, 2006, the time within which Regent Aerospace Corporation has to assume, assume and assign, or reject unexpired leases and executory contracts of Airbase Services, Inc. Regent Aerospace bought substantially all of the assets of Airbase Services on June 30, 2006. Regent Aerospace requested Dennis Faulker, the Chapter 11 Trustee of the Debtor, for the additional time to examine those leases and contracts. The Sale Order states that Regent Aerospace will have the right to designate any lease or contract to be assumed. From June 30, Regent Aerospace is responsible for postpetition performance until those leases and contracts are assumed, assumed and assigned, or rejected. The Chapter 11 Trustee supports the extension because he is not aware of any prejudice to the estate or to the creditors. Headquartered in Grand Prairie, Texas, Airbase Services, Inc. -- http://www.airbaseservices.com/-- maintained and repaired a wide range of cargo equipment and cabin interior designs for commercial airlines, and provided maintenance and management services for the airline industry. Due to bankruptcies filed by several of its airline customers, the Company filed for bankruptcy protection on May 1, 2006 (Bankr. N.D. Tex. Case. No. 06-41231). The Court approved the appointment of Dennis Faulkner as Chapter 11 Trustee in the Debtor's chapter 11 case on May 3, 2006. Mark J. Petrocchi, Esq., at Goodrich Postnikoff Albertson & Petrocchi, LLP, represents the Trustee. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. In its schedules of assets and liabilities, the Debtor listed $12,628,078 in total assets and $28,311,883 in total liabilities. ALLIED HOLDINGS: McConells Can Schedule Suit on Trial Calendar -------------------------------------------------------------- The Honorable C. Ray Mullins of the U.S. Bankruptcy Court for the Northern District of Georgia partially modifies the automatic stay to allow Frederick and Norma McConnell to take necessary actions solely to cause the case captioned McConnell, et al., v. Commercial Carriers, et al., to be placed on the trial calendar in the U.S. District Court for the Eastern District of Missouri. Judge Mullins rules that the Order is without prejudice to: * the McConnells' right to seek further relief from stay relating to the Federal Court Action; or * the Debtors' right to oppose any additional request for relief. The McConnells, Allied Holdings, Inc. and its debtor-affiliates are parties to a civil action currently pending in the City of St. Louis Circuit Court. Mr. McConnell asserts products liability claims and seeks recovery of damages for severe personal injuries. The Debtors assert that the McConnells have not established cause for relief and will not be unduly harmed by denial of the request. The Debtors further say that the estates will suffer substantial harm from the modification of the stay, including the significant time and expenses of litigating the claims. 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) AMERIVISION COMMS: Dataprose Production Contract Deemed Rejected ---------------------------------------------------------------- Amerivision Communications, Inc., doing business as Lifeline Communications, Inc., asked the U.S. Bankruptcy Court for the Western District of Oklahoma for an order enforcing the plan of reorganization confirmed in its chapter 11 case and deeming an executory contract with Dataprose, Inc., rejected. The Bankruptcy Court granted the Reorganized Debtor's request. Dataprose appealed to the United States Bankruptcy Appellate Panel of the Tenth Circuit, and, in a decision published at 2006 WL 2422662, the 10th Cir. BAP affirmed. Before the filing of Amerivision's Chapter 11 bankruptcy case on December 8, 2003 (Bankr. W.D. Okla. Case No. 03-23388), Amerivision and Dataprose were parties to an executory production contract -- one of over 350 similar executory contracts to which Amerivision was a party. Dataprose was served with notice of the filing of the Chapter 11 case. Amerivision listed Dataprose on its Schedule of Executory Contracts and Unexpired Leases. Schedule G was not served on parties in interest. William Winfield, Esq., at Nordman Cormany Hair & Compton LLP, Dataprose's counsel, entered an appearance in the Chapter 11 case on February 11, 2004. As the debtor in possession, Amerivision filed several Chapter 11 reorganization plans during the pendency of its case. Three creditors jointly filed a competing reorganization plan and amended plans. The bankruptcy court scheduled a simultaneous hearing on the competing Chapter 11 plans. Dataprose and Winfield were served with the Creditors' Second Amended Plan, Amerivision's Third Amended Chapter 11 Plan, a notice of the confirmation hearing, and a ballot. A single ballot was provided to the parties entitled to vote on the competing plans, including Dataprose, and Dataprose voted to accept Amerivision's proposed plan. The language of Amerivision's confirmed Chapter 11 plan, the 10th Cir. BAP says, combined with the notices served on Dataprose, provided adequate notice of the the debtor's intended rejection of the executory production contract. The plan put any party to an executory contract on notice that, absent specific assumption, the contract was rejected. The creditor had notice of the bankruptcy filing and was served with both competing plans, notice of the confirmation hearing, the ballot provided with the competing plans, and the deadline for filing rejection damages claims. Accordingly, the 10th Cir. BAP affirms the Bankruptcy Court's Enforcement Order. Keith Miles Aurzada, Esq., at Hance Scarborough Wright Ginsberg & Brusilow, LLP, in Dallas, Texas, represented Amerivision in this dispute. ARTIFICIAL LIFE: June 30 Balance Sheet Upside-Down by $4.2 Million ------------------------------------------------------------------ Artificial Life Inc. reported in its balance sheet as of June 30, 2006 total stockholders' deficit of $4,264,110 from total assets of $1,618,532 and total liabilities of $5,882,642. The Company also reported in its June 30, 2006 balance sheet $5,882,642 in total current liabilities and $1,518,687 in total current assets. For the three-month period ended June 30, 2006, the Company reported $705,203 of net income from revenues of $221,532, compared to a net loss of $328,915 from $81,579 in revenues in the three-month period ended June 30, 2005. A full-text copy of the Company's financial report for the three months ended June 30, 2006 is available for free at: http://researcharchives.com/t/s?116e Artificial Life Inc. -- http://www.artificial-life.com/-- is a public US corporation headquartered in Hong Kong. The Company provides mobile technology, content, games and applications. ASARCO LLC: Wants AMC's Objection to Escrow Pact Overruled ---------------------------------------------------------- ASARCO LLC asks the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to: (a) overrule Americas Mining Corporation's objection to its Lift Stay Motion; (b) grant its Lift Stay Motion; and (c) direct Americas Mining Corporation to file an adversary proceeding regarding the Refund. ASARCO LLC tells the Court that it has been working to collect an outstanding tax refund from the Internal Revenue Services for the last four years. If paid, the refund claims, estimated to be approximately $40,400,000, will be one of ASARCO's largest single cash assets. James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas, relates that the Department of Justice has been aware of the Refund since 2003, and has advised ASARCO that it will assert a set-off claim against the Refund for payment of environmental- related debts. ASARCO has not conceded the validity of the DOJ's claims, but has agreed to escrow the Refund with all the rights of both parties preserved. Mr. Prince asserts that under Treasury Regulation 301.7701- 2(c)(2)(iii), ASARCO LLC is entitled to a Refund because: (a) both the Refund and the tax audit with respect to the Refund relate solely to taxable years in which the taxpayer, ASARCO NJ, was not a disregard entity for tax purposes; and (b) ASARCO LLC succeeded to all of ASARCO NJ's assets and liabilities by virtue of the February 2005 merger of ASARCO NJ into ASARCO LLC. ASARCO LLC's post-merger status as a disregard entity, therefore, is irrelevant for purposes of determining its liability for taxes and entitlement to tax refunds relating to pre-merger tax periods, Mr. Prince argues. Mr. Prince emphasizes that AMC's reliance on the Internal Revenue Code is misplaced for these reasons: -- Entitlement to a tax refund is not a tax attribute subject to IRC provisions; and -- The net operating loss that generated the Refund in the present case no longer existed as an attribute as of the February 2005 merger because the loss had already been carried back and a claim for refund had been filled before the merger took place. The Limited Liability Agreement reiterating ASARCO LLC's status, as a disregard entity for tax purposes, is meaningless, Mr. Prince contends. Lift Stay Motion As reported in the Troubled Company Reporter on July 20, 2006, ASARCO LLC asked the Bankruptcy Court to lift the automatic stay, to the extent necessary, to permit ASARCO, the U.S. government and Wells Fargo Bank, National Association, as escrow agent to enter into the Stipulation and the Escrow Agreement and the deposit of the Tax Refund in the Escrow Account. A full-text copy of the Escrow Agreement is available for free at: http://ResearchArchives.com/t/s?de1 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: Creditors' Panel Wants Tax Sharing Pact Decided Later ----------------------------------------------------------------- ASARCO LLC and the Official Committee of Unsecured Creditors of ASARCO responded to Americas Mining Corporation's request to compel ASARCO and its debtor-affiliates to decide whether to assume or reject the Tax Sharing Agreement and the Tax Sharing Amendment. 1. Creditors' Committee The Official Committee of Unsecured Creditors argues that compelling ASARCO LLC to decide on the Tax Sharing Agreement between Americas Mining Corporation and Asarco Inc. is premature at this time. Derek J. Baker, Esq., at Reed Smith, LLP, in Pittsburgh, Pennsylvania, points out that AMC and Asarco Inc. seek to compel any decision from ASARCO at a point before any evaluation of its benefit has been determined. In addition, there is an ongoing investigation of causes of action against the counterparties of the Tax Sharing Agreement. Mr. Baker contends that AMC and Asarco Inc. have not showed sufficient cause that will justify altering the standard evaluation period provided to the Debtors. Rather, AMC and Asarco Inc. rely on perceived and potential claims, which could fall on them and impact their tax planning. The ability of AMC and Asarco Inc. to tax plan does not rise to the level of "cause" needed to alter the timeline for the estate to perform its full investigation and evaluation of the TSA and related issues, Mr. Baker argues. 2. ASARCO LLC The Lift Stay Motion to escrow the Refund and AMC's Motion to Compel Decision on the TSA are closely intertwined, James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas, points out. Although title to the Refund is disputed, if AMC is determined to be the owner of the Refund, it is required under the TSA to remit the Refund to ASARCO LLC without setoff, but net of professional fees. Thus, any decision on ownership of the Refund would invariably impact the potential value of the TSA to ASARCO's bankruptcy estate, Mr. Prince avers. Mr. Prince argues that if ASARCO immediately assumes the TSA, all its future obligations under the TSA will become administrative expenses. A premature decision on the TSA will adversely affect the parties-in-interest in ASARCO's Chapter 11 case. If ASARCO prematurely rejects the TSA and it is determined later that the TSA is the sole source of ASARCO's entitlement to the Refund, ASARCO would stand to lose more than $50,000,000, Mr. Prince says. On the other hand, AMC will suffer no harm by allowing ASARCO to make an informed decision on the TSA until the confirmation of a plan of reorganization, Mr. Prince states. Mr. Prince tells the Court that for the 2005 tax year, ASARCO and its subsidiaries will owe no regular income tax to AMC under the TSA. Although ASARCO has generated taxable income in 2006, it is expected that the net operating losses generated by ASARCO NJ would wholly set off the taxable income. Thus, AMC is not expected to pay any regular income tax on account of ASARCO's taxable income in 2005 and 2006. At most, AMC will have some alternative minimum tax liability on account of the operations of the entire AMC consolidated tax group, but neither ASARCO nor AMC knows what the actual payment may be, Mr. Prince says. Even if a tax liability accrues in 2006, AMC may qualify for a tax exemption that would allow it to base its estimated taxes on its previous year's tax liabilities, Mr. Prince says, and thus, may not need to pay estimated alternative minimum taxes in 2006. Moreover, ASARCO believes that AMC restructured ASARCO NJ as a limited liability company and caused it to enter into the TSA with the sole purpose of improving its tax position. ASARCO acknowledges that the TSA is an important contract to its estate. However, ASARCO does not have sufficient time to fully analyze the TSA's implications, Mr. Prince avers. ASARCO currently does not have its own internal tax staff to assist in evaluating the TSA and other tax issues. ASARCO asks the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to deny AMC's request. 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). ASSOCIATED MATERIALS: Earns $16.3 Mil. in Second Qtr. Ended July 1 ------------------------------------------------------------------ Associated Materials Incorporated reported its financial statements for the second quarter ended July 1, 2006. The Company reported net sales of $348.3 million for the quarter ended July 1, 2006, a 10.5% increase over net sales of $315.4 million for the same period in 2005. For the six months ended July 1, 2006, net sales were $607.6 million, or 13.8% higher than net sales of $533.9 million for the same period in 2005. Net income for the second quarter of 2006 was $16.3 million, compared with net income of $7.7 million for the same period in 2005. Net income was $16.4 million for the six months ended July 1, 2006, compared with net income of $400,000 for the same period in 2005. Net sales increased 10.5%, or $33.0 million, during the second quarter of 2006 compared to the same period in 2005 driven primarily by the realization of selling price increases due to an improved pricing environment, continued strong unit volume growth in the Company's vinyl window operations, as well as the benefit from the stronger Canadian dollar. Gross profit in the second quarter of 2006 was $87.2 million, or 25.0% of net sales, compared with gross profit of $72.2 million, or 22.9% of net sales, for the same period in 2005. The increase in gross profit as a percentage of net sales was primarily a result of the realization of price increases. Selling, general, and administrative expense increased to $52.5 million, or 15.1% of net sales, for the second quarter of 2006 versus $50.8 million, or 16.1% of net sales, for the same period in 2005. Selling, general and administrative expense includes $100,000 and $1 million, respectively, of amortization of prepaid management fees for the second quarters of 2006 and 2005. Excluding the amortization of prepaid management fees, selling, general and administrative expense for the second quarter of 2006 increased $2.5 million compared to the same period in 2005. The increase in selling, general and administrative expense was due primarily to increased expenses in the Company's supply center network, including increased payroll costs and building and truck lease expenses, and increases in EBITDA-based incentive compensation programs, partially offset by lower marketing expenses. Income from operations was $34.9 million for the second quarter of 2006 compared to $20.5 million for the same period in 2005. Net sales increased by 13.8%, or $73.7 million, for the six months ended July 1, 2006, compared with the same period in 2005 driven primarily by the realization of selling price increases due to an improved pricing environment during the first half of 2006, continued strong unit volume growth in the Company's vinyl window operations, as well as the benefit from the stronger Canadian dollar. Gross profit for the six months ended July 1, 2006, was $146.3 million, or 24.1% of net sales, compared with gross profit of $121.2 million, or 22.7% of net sales, for the same period in 2005. The increase in gross profit as a percentage of net sales was primarily a result of improved leverage of fixed costs due to higher net sales and the realization of price increases. Selling, general, and administrative expense increased to $103.5 million, or 17.0% of net sales, for the six months ended July 1, 2006, versus $101.6 million, or 19.0% of net sales, for the same period in 2005. Selling, general, and administrative expense for the six months ended July 1, 2006, includes $2.1 million of separation costs related to the resignation of the Company's former Chief Executive Officer and amortization of prepaid management fees of $300,000. Selling, general, and administrative expense for the same period in 2005 includes $2 million of amortization of prepaid management fees and non-cash stock compensation expense of $300,000. Excluding CEO separation costs, amortization of prepaid management fees and non-cash stock compensation expense, selling, general and administrative expense for the six months ended July 1, 2006, increased $1.8 million compared to the same period in 2005. The increase was primarily due to increased expenses in the Company's supply center network, expenses relating to new supply centers opened during the past 12 months, as well as increases in EBITDA-based incentive compensation programs, partially offset by lower marketing expenses. During the six months ended July 2, 2005, the Company incurred facility closure costs of approximately $3.4 million relating to the closing of its Freeport, Texas, manufacturing plant. Income from operations was $43 million for the six months ended July 1, 2006, compared with $16.2 million for the same period in 2005. At July 1, 2006, the consolidated balance sheet showed $898.215 million in total assets, $639.635 million in total liabilities, and $258.580 million in total stockholders' equity. Consolidated Financial Information The consolidated financial information for the quarters and six months ended July 1, 2006, and July 2, 2005, includes AMI and the Company's indirect parent company, AMH Holdings, Inc., which conducts all of its operating activities through AMI. Including AMH's interest expense, which primarily consists of the accretion on AMH's 11-1/4% senior discount notes, AMH's consolidated net income was $9.4 million and $2.7 million for the second quarters of 2006 and 2005, respectively. For the six months ended July 1, 2006, AMH's consolidated net income was $5.1 million compared to a consolidated net loss of $9.4 million for the same period in 2005. In connection with the December 2004 recapitalization transaction, AMH's parent AMH Holdings II, Inc., was formed, and AMH II subsequently issued $75 million of senior notes in December 2004. The AMH II senior notes, which had accreted to $79.2 million by July 1, 2006, are not guaranteed by either AMI or AMH. The senior notes accrue interest at 13-5/8%, of which 10% is paid currently in cash and 3-5/8% currently accrues to the value of the senior notes. As AMH II is a holding company with no operations, it must receive distributions, payments or loans from its subsidiaries to satisfy its obligations on its debt. Total AMH II long-term debt, including that of its consolidated subsidiaries, was $746.2 million as of July 1, 2006. About Investcorp Investcorp -- http://www.investcorp.com/-- is a global asset management firm specializing in alternative investments with offices in New York, London and Bahrain. The firm has four products: private equity, hedge funds, real estate investment and venture capital. It was established in 1982 and currently manages total investments in alternative assets of around $10 billion. About Harvest Partners Harvest Partners -- at http://www.harvpart.com/-- is a private equity investment firm. Founded in 1981, Harvest Partners has approximately $1 billion of invested capital under management. About Associated Materials Headquartered in Akron, Ohio, Associated Materials Incorporated -- http://www.associatedmaterials.com/-- manufactures exterior residential building products, which are distributed through company-owned distribution centers and independent distributors across North America. AMI produces a broad range of vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and accessories, as well as vinyl fencing, decking and railing. AMI is a privately held, wholly owned subsidiary of Associated Materials Holdings Inc., a wholly owned subsidiary of AMH, a wholly owned subsidiary of AMH II, which is controlled by affiliates of Harvest Partners, Inc., and Investcorp S.A. * * * Moody's downgraded the ratings of Associated Materials Inc. and its holding company AMH Holdings, Inc. AMH Holdings' corporate family rating and ratings on the AMI's senior secured credit facilities were downgraded to B3 from B2, effective Jan. 19, 2006. Moody's said the ratings outlook is stable. AZUR HOLDINGS: Baum & Co. Expresses Going Concern Doubt ------------------------------------------------------- Baum & Company, P.A., in Coral Springs, Florida, expressed doubt about Azur Holdings, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended April 30, 2006. The auditing firm pointed to the Company's recurring losses since inception. The Company has accumulated losses of $2.7 million and a negative working capital position of $5.9 million. For the fiscal year ended April 30, 2006, the Company incurred a $2.2 million net loss on $717,713 of net revenues compared to a $8,672 net loss on zero revenue in 2005. At April 30, 2006, the Company's balance sheet showed $37,641,442 in total assets and $40,630,282 in total liabilities, resulting in a $2,988,840 stockholders' deficit. The Company's April 30 balance sheet also showed strained liquidity with $910,322 in total current assets available to pay $6.8 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Annual Report is available for free at http://researcharchives.com/t/s?1165 Headquartered in Fort Lauderdale, Florida, Azur Holdings, Inc. -- http://www.azurholdings.com/-- is a real estate development company, which develops and markets luxury residential and resort properties. The company also operates a real estate development company in Gautier, Mississippi. It owns the Shell Landing Golf Club in Gautier, and Azur Shell Landing Resort consisting of approximately 1,100 acres contiguous to the Shell Landing Golf Club. The company also has various real estate projects under development and consideration, which includes the development and acquisition of luxury hotels and resorts, domestically and internationally. In addition, Azur Holdings purchases land in strategic areas for future development or sale. The Company is a subsidiary of Azur International, Inc. BGF INDUSTRIES: June 30 Balance Sheet Upside-Down by $37.6 Million ------------------------------------------------------------------ BGF Industries Inc. reported in its balance sheet at June 30, 2006 total assets of $84,594,000 and total liabilities of $122,208,000 resulting to total stockholder's deficit of $37,614,000. For the three months ended June 30, 2006, the Company's net income increased $508,000, to $1,456,000 from $948,000 in the three months ended June 30, 2005, while the Company's net sales for the three months ended June 30, 2006 increased $4,595,000, to $46,323,000 from net sales of $41,728,000 in the same period last year. A full-text copy of the Company's financial report for the three months ended June 30, 2006 is available for free at: http://researcharchives.com/t/s?116f Headquartered in Greensboro, North Carolina, BGF Industries, Inc. -- http://www.bgf.com/-- manufactures woven and non-woven glass fiber fabrics in North America. The Company also produces other high performance fabrics. BURGER KING: Improving Performance Prompts S&P's Rating Upgrade --------------------------------------------------------------- Standard & Poor's Ratings Services raised the corporate credit and senior secured debt ratings on Miami-based quick-service operator Burger King Corp. to 'BB-' from 'B+'. Concurrently, the recovery rating on the company's secured credit facility was raised to '2' from '3' due to the repayment of $400 million of debt. The '2' recovery rating indicates the expectation for substantial (80%-100%) recovery of principal in the event of a payment default. All ratings are removed from CreditWatch, where they were placed on Feb. 1, 2006, with positive implications. The outlook is stable. "The upgrade reflects Burger King's improving operating performance and reduced leverage," said Standard & Poor's credit analyst Diane Shand. A healthier franchise system, the streamlining of general and administrative operations, and better products and advertising have enabled Burger King to generate positive operating trends over the past three years. The company has also decreased leverage significantly -- to 4.8x in fiscal 2006 from 7.5x in fiscal 2005 -- as a result of utilizing $350 million of its proceeds from its initial public offering to reduce debt and improve profitability. Ratings on Burger King reflect the company's: * vulnerable business profile; * participation in the competitive quick service sector of the restaurant industry; * leveraged capital structure; and * aggressive financial policy. These risks are partially mitigated by the company's good market position and improving operating performance. Burger King's operating performance has shown improvement since the company was purchased by a consortium of investors in 2002. The company has strengthened its management team, developed new products, and addressed financial and relationship issues in the franchise system. This has resulted in positive same-store sales for the past 10 quarters and the operating margin expanding to 24% in fiscal 2006, from 19.2% in fiscal 2005. Standard & Poor's believes that the company has the opportunity to further improve operating performance over the next few years through menu changes, further strengthening store execution and advertising, and expanding store hours. But progress could be slow and uneven because Burger King is up against formidable competitors such as McDonald's Corp. (A/Stable/A-1), Wendy's International Inc. (BB+/Negative/B-1), and Yum! Brands Inc. (BBB/Stable/--) Burger King is the third-largest quick-service restaurant operator in the world in terms of sales and units, with 1,204 company-owned restaurants and 9,889 franchised restaurants worldwide. CATHOLIC CHURCH: Spokane Prepared to Amend Plan If Mediation Fails ------------------------------------------------------------------ Shaun M. Cross, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, in Spokane, Washington, tells the U.S. Bankruptcy Court for the Eastern District of Washington that if the mediation talks will not be successful, the Diocese of Spokane: * will amend its First Amended Plan of Reorganization and Disclosure Statement dated December 30, 2005; * expects that the Plan filed by the Tort Claimants Committee and the Future Claims Representative will also be revised; and * expects that the Tort Litigants Committee will file a competing plan. To simplify the scheduling of matters related to potentially competing plans, the Diocese proposes that all plans and disclosure statements be filed on October 16, 2006. The Diocese suggests that a scheduling conference will be held on October 23, 2006, or as soon thereafter as possible, to set a schedule for all matters related to the competing plans. The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CERADYNE INC: Receives $1.5 Million Transnuclear Initial Order -------------------------------------------------------------- Ceradyne, Inc., received its initial order for boron carbide/aluminum metal matrix composite components from Transnuclear, for more than $1.5 million. The MMC components are for dry storage of spent nuclear fuel and are scheduled for delivery by the end of second-quarter 2007. The Company's new subsidiary, Ceradyne Canada, in Chicoutimi, Quebec, will manufacture the components from MMC ingots, which will be produced by Alcan Inc. utilizing its patented MMC casting process. The components will be integrated into Transnuclear's NUHOMS(R) Systems, which are used by U.S. nuclear-powered utilities. Michael Kraft, vice president of sales, marketing and business development, commented: "We are very pleased with this first order, as it confirms the viability of our business strategy with Alcan to not only supply Boral(R) and boron carbide/aluminum MMCs, but also control all the production steps in the value stream, from the boron carbide powder to final delivery of these critical components. This vertically integrated capability makes Ceradyne unique and provides superior value to end-customers in the nuclear waste containment market. "Utilizing this capability, and in partnership with Transnuclear, we engineered an MMC that meets the rigorous specifications of their system," Mr. Kraft continued. "We believe in building long- term relationships with our customers and view this as an excellent start in building a major presence in this market. Furthermore, our earlier announcements about entering the MMC market with advanced materials, technical support, and manufacturing capabilities in partnership with Alcan have been well-received by the utilities, spent-fuel storage original equipment manufacturers, and fabricators. We look forward to expanding our line of MMCs and Boral(R) for neutron absorption in both wet and dry storage applications." About Transnuclear Transnuclear is a wholly owned U.S. division of Areva Group, a French-based energy company offering technological solutions worldwide for nuclear power generation and electricity transmission and distribution. About Ceradyne Inc. Based in Costa Mesa, California, Ceradyne, Inc. (Nasdaq: CRDN) -- http://www.ceradyne.com/-- develops, manufactures and markets advanced technical ceramic products and components for defense, industrial, automotive/dieseland consumer applications. * * * As reported in the Troubled Company Reporter on July 24, 2006, Ceradyne's $50 million revolving credit facility due 2009 carries Standard & Poor's BB- rating. The Company's credit rating is also rated BB- by Standard & Poor's. COLLINS & AIKMAN: Customers Oppose Committee's Planned Inquiries ---------------------------------------------------------------- The request of the Official Committee of Unsecured Creditors of Collins & Aikman Corporation and its debtor-affiliates to conduct examinations and obtain documents from the Debtors' three largest customers, Ford Motor Corporation, General Motors Corporation, and DaimlerChrysler Corporation, drew fire from both the Debtors and the affected customers. As reported in the Troubled Company Reporter on Aug. 18, 2006, the committee wished to obtain additional evidence relating to potential causes of action that may be asserted against these principal customers under applicable fraudulent transfer and antitrust laws. Objections (1) Debtors The Committee seeks overly broad discovery with respect to tenuous causes of action for which it lacks standing at a particularly sensitive juncture in the Debtors' Chapter 11 cases, Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, argues. As previously reported, the Committee wants to conduct an examination under Rule 2004 of the Federal Rules of Bankruptcy Procedure against DaimlerChrysler Corporation, General Motors Corporation, and Ford Motor Company to investigate alleged fraudulent actions. Mr. Schrock points out that the Committee's requested discovery is duplicative of an investigation currently being conducted by the Debtors. The Debtors believe that through the Request, the Committee has turned to an ill-timed effort to gain negotiation leverage with respect to the Debtors' plan of reorganization. Mr. Schrock argues that these tactics directed at DaimlerChrysler, GM, and Ford are not only outside the permissible scope of Rule 2004 but also place at risk the success of the Debtors' ongoing negotiations with their major customers regarding the global resolutions necessary for the Debtors to emerge from bankruptcy. Mr. Schrock relates that, as reflected in the recently filed Disclosure Statement and the Plan of Reorganization, the value of the Debtors' enterprise appears to be substantially below the debt owed to its lenders. The Debtors continue to be engaged in productive discussions with the Customers regarding the award of future new business, the resolution of outstanding commercial issues, and the reconciliation of prepetition claims, Mr. Schrock says. The Debtors ask the U.S. Bankruptcy Court for the Eastern District of Michigan to view the Committee's request in its true light -- a harassment tactic being used in an effort to gain leverage in negotiations with respect to the Plan. (2) GM E. Todd Sable, Esq., at Honigman Miller Schwartz and Cohn LLP, in Detroit, Michigan, tells Judge Rhodes that the Committee has sought expansive discovery to investigate claims that can be described, at best, as specious. According to Mr. Sable, the Committee's fraudulent transfer theory can be summarized as: if a debtor loses money on a contract with a third party that the debtor entered into at a time when it was insolvent, then, by definition, a debtor is entitled to collect the amount of the losses under such contract. Fundamentally, this theory ignores the risks inherent in contracting in a free market, which include fluctuating raw material costs, rising labor costs and a myriad of other factors that impact upon a contract's ultimate profitability, Mr. Sable points out. Mr. Sable relates that the Debtors are investigating the facts underlying the Committee's allegations and analyzing the attenuated legal theory introduced by the Committee in support of those claims. The Court should not take the extraordinary step of divesting the Debtors of the right to pursue, settle or abandon those claims, Mr. Sable says. (3) Ford The Committee, by its own admission, seeks permission to go on a "fishing expedition" into the confidential business records of Ford, DaimlerChrysler and GM to investigate alleged fraudulent transfers. Stephen S. LaPlante, Esq., at Miller, Canfield, Paddock and Stone, PLC, in Detroit, Michigan, points out that while the Request was filed a few weeks before the Plan, it is apparent that the Committee was well aware of the terms and conditions of the Plan and the treatment provided for its constituencies. Mr. LaPlante explains that the Plan offers little, if anything, for unsecured creditors and asserts that unsecured creditors are out of the money. The filing of the Request at the same as the Debtors' determination of the treatment for unsecured creditors and the commencement of the Plan confirmation process is not mere coincidence, Mr. LaPlante notes. Mr. LaPlante argues that the Request lacks any discernible legal basis or legitimate purpose. Its apparent purpose is to unduly pressure Ford, GM and DaimlerChrysler in an effort to extract an enhanced payment under the Plan. Ford denies that it engaged in any collusive conduct with DaimlerChrysler, GM or any other competitor. Mr. LaPlante assure the Court that information and decisions about the pricing of component parts purchased from suppliers like the Debtors are confidential and proprietary to Ford. (4) DaimlerChrysler James A. Plemmons, Esq., at Dickinson Wright PLLC, in Detroit, Michigan, asserts that overall, the Committee's claims are prima facie insufficient to state a claim and the timing of the Committee's Request speaks volumes as to its true motivations. The discussions taking place now between the Customers and Debtors may well determine whether the Debtors are able to emerge from bankruptcy, Mr. Plemmons points out. As the Debtors' financial condition has continued to deteriorate, the Committee certainly recognizes that its members will likely not realize any substantial value on their claims against the Debtors, Mr. Plemmons said. "[T]he Committee is desperately resorting to the possible 'in terrorem' affect this sort of broad discovery might have and how it would negatively affect the Customers in their discussions with the Debtors," notes Mr. Plemmons. DaimlerChrysler asks the Court to not condone these tactics. 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: Selling De Minimis Assets to Various Parties -------------------------------------------------------------- Collins & Aikman Corporation and its debtor-affiliates notify the U.S. Bankruptcy Court for the Eastern District of Michigan that they plan to sell certain assets to these parties: Purchaser Asset Price --------- ----- ----- Fisher Textile Inc. 15 Box Frames $1,875 Petit Textile Machinery 24 Van de Wiele 1,200,000 Jacquard Looms Gordon Brothers 17 Package Dye Machines 100,000 1 Chemical Dispensing System 1 Lab Packaging Machine with Winder 2 200HP Air Compressors 2 50HP Air Compressors 1 150HP Air Compressor 1 Beaker Dye Machine 1 Texcon Stock Solution and Dispenser 2 Package Dye Sample Machines 5 Lab Packaging Machines 5 Sample Dye Machines 3 Spindle Winders 3 Space Dye Machines 1 Spectrophoto Colorite System 1 RPR Doubler Spindle Virginia Carolina 6 office partitions 150,000 Realty & Auction Co. JP Composite Materials 20 box frames 2,500 Morning Glory Church 55 folding chairs 550 of God and Christ Republic Textile 62 Trico Knit Machines 2,850,000 Equipment Company 54 Mayer DNB Knit Machines 6 Direct Warpers Beams 3 Slitter lines and spare parts for knit machines Smith Glass, Inc. 3 HP Air Compressor 200 Marc J. Carmel, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, relates that each de minimis asset is being sold "as- is" and "where-is" with no representations and warranties by the Debtors. The Purchasers will incur substantially all costs associated with dismantling and moving the assets, Mr. Carmel says. Furthermore, the Debtors notify the Court and parties-in-interest that they will abandon assets found at these locations: Location Assets -------- ------ 2110 Charles Redfern Drive 1 Pitney Bowes Check Singer Athens, Tennessee 1 Line Printer 2782 East U.S. 52 Measurex modem & monitor Morristown, Indiana EF-11 Elec Poly Strapping Unit Servolap Control Box - DP021 Coater 2 Latex Pump Vacuum that collects dust 2 DeskJet Printers 1 HP LaserJet Printer 4 Production PC Computers 1 ScanJet 4C CLR Scanner Kodak 210 Digital Camera 300 Shelhouse Drive 1 Militoya Optical Comparator Rantoul, Illinois 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) CONSTAR INT'L: Moody's Lifts Rating on $175 Million Senior Note --------------------------------------------------------------- Moody's Investors Service changed the outlook for the ratings of Constar International Inc. to stable from negative and concurrently affirmed its B3 Corporate Family Rating and B3 rating for the $220 million floating rate first mortgage note. Moody's also upgraded the $175 million 11% senior subordinated note rating to Caa2 from Caa3. The change of the ratings outlook to stable from negative acknowledges Constar's improved consolidated performance due to strong product mix performance and working capital improvements as average receivables days outstanding and average inventory days have been reduced. While acknowledging the likely continuation of some variances in monthly volume and profitability on the conventional business, the stable outlook recognizes the company's strong U.S. performance in aggregate, disappointing but stable European performance, an improved raw material market, Constar's established customer base and sizable contracted revenue. Constar's ability to negotiate its contract with Pepsi, which accounts for over 33% of it business and expires Dec. 31, 2007, or to replace that business should negotiations fail, is integral to the company's outlook and ratings. The stable ratings outlook is prospective for the company meeting revised expectations and sustaining the recent enhancements in its consolidated credit profile, including improved gross profit margins, successful cost reduction initiatives and the expectation of positive cash flow from operations. However, the company remains constrained by substantial financial leverage, negative to low free cash flow and minimal interest coverage. Constar's B3 CFR reflects the company's weak, albeit improving credit statistics as evidenced by the expectation of positive free cash flow throughout the intermediate term and some reduction of its currently high financial leverage. Although improving, continued margin pressure given the substantial portion of commoditized products in its revenue mix, price discounting, price pressure as a result of customer consolidation, and high raw material and energy costs, are also reflected in the ratings. Moody's took these actions: * Affirmed the existing B3 rating for the $220 million floating rate first mortgage note, due 2012 * Upgraded the rating to Caa2 from Caa3 for the $175 million senior subordinated notes, due 2012 * Affirmed the B3 Corporate Family Rating The ratings outlook changed to stable from negative. Headquartered in Philadelphia, Pennsylvania, Constar had consolidated revenues of approximately $978 million for the twelve months ended June 30, 2006. CRITTENDEN MEMORIAL: S&P Lowers Series 2000 Debt's Rating to B+ --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Crittenden County, Arkansas' series 2000 debt, issued for Crittenden Memorial Hospital, to 'B+' from 'BB-'. The downgrade reflects income levels for fiscal 2006 through July 31, 2006 (unaudited), that are behind budget and the prior fiscal year's levels. The outlook is stable. "Despite Crittenden's improvement to its operating and excess incomes in fiscal 2005, we believe that Crittenden remains in a precarious business position given its very constrained liquidity, aging physical plant, competitive market, and weaker year-to-date 2006 financials," said Standard & Poor's credit analyst Kevin Holloran. "Significant improvements to liquidity levels, coupled with a longer track record of positive operating results, will be needed to secure a higher rating in the future." The 'B+' rating reflects Crittenden's: * highly constrained cash position, with just 12 days' cash on hand; * high average age of plant, at more than 16 years; and * improvement in operating and excess income for 2005. The weaker financial results through July 31, 2006, are attributable to a one-time accounting change. The average age of plant is partly exacerbated by minimal capital expenditures over the past two years. Additional rating factors include: * the historically limited population growth and potential for out-migration to the nearby Memphis, Tennessee market; * the inherent risks in operating a small hospital; and * a change in the CEO position about eight months ago that has produced favorable physician recruitment results, improved patient volumes, and record cash collections over the past several months. The lowered rating affects $7.825 million in rated debt. DANA CORP: Court Denies Sypris' Request to Compel Pact Decision --------------------------------------------------------------- The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York denied Sypris Technologies Inc.'s request to compel Dana Corporation and its debtor- affiliates to assume or reject, on or before Oct. 3, 2006: (a) an Asset Purchase Agreement relating to the Debtors' plant in Marion, Ohio, and an interrelated supply agreement; and (b) Asset Purchase Agreements relating to the Debtors' Morganton, Toluca and Glasgow & Humboldt Plants, and interrelated supply agreements. Judge Lifland found that the issues arising from either an assumption or rejection of the Supply Contracts, including Sypris' alleged ability to enjoin the Debtors from purchasing requirements from other entities, are not before the Court. Those issues will be ripe for determination when the decision to assume or reject is made, the Court noted. The Court held that it would be inappropriate to compel the Debtors to make the decision regarding the Sypris Supply Contracts -- in particular, prematurely -- because: 1. the Debtors cases are large and complex, and they purchase goods and services from approximately 5,000 suppliers; 2. Sypris has granted no concessions for the benefit of the Debtors, for their Contracts to be assumed or rejected. Sypris instead obtained substantial payment of prepetition obligations as well as beneficial modification of credit terms; and 3. the Debtors cannot know the precise nature and extent of the contract obligations Sypris is seeking until the issues in the Arbitration are resolved. Sypris has not met the burden of establishing that the Debtors should be compelled to determine whether the Supply Contracts should be assumed or rejected on an expedited basis, the Court said. "In a self-serving manner, Sypris cavalierly ventures into the land of waiver and estoppel," Judge Lifland opined. "The moving papers, while seeking the specific remedy of 'assumption or rejection' relief, inconsistently seek to preserve a right at another time to argue against the Debtors' assumption or rejection rights. The choice having been made and issue joined, Sypris cannot come back later and argue that the Supply Contracts are not executory contracts incapable of rejection, but are financial accommodations instead," the Court added. In its request, published in the Troubled Company Reporter on Aug. 28, 2006, Sypris told the Court that pursuant to the Agreements, Sypris has raised and committed more than $100,000,000 in capital over the last five years primarily to: * acquire assets under the Agreements, * modernize and repair the Plants and businesses, * substantially increase productive capacity, and * re-engineer the Plants into an integrated system. An integral part of the Agreements was granting Sypris the exclusive right to supply 100% of Dana's North America requirements for more than 1,000 component part designs through 2014, Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, in New York, explained. Without the exclusive right to supply, Sypris would not have purchased the Debtors' non-competitive assets, Ms. Klestadt said. The exclusive long-term right was the cornerstone of the Debtors' and Sypris' relationship. According to Ms. Klestadt, the Agreements are by far the most significant transactions in Sypris' 22-year history and have transformed the company into one of the largest Tier 2 component suppliers to the North American heavy truck market. Dana represents more than $200,000,000 of Sypris' annual revenues. Sypris is Dana's largest component supplier and Dana is Sypris' largest customer, Ms. Klestadt avered. As of Aug. 15, 2006, the Debtors have not yet decided whether to assume or reject the Agreements with Sypris. Ms. Klestadt asserted that Sypris' request is warranted for these reasons: (a) The sheer size of Sypris' productive capacity is important to the ongoing operation of the Debtors' estate. Sypris cannot continue to attract and retain the capital resources or the key employees it needs while its core business remains under a cloud of uncertainty. In turn, the Debtors' ability to satisfy its OEM customers would be harmed. (b) The ongoing expenditures and costs that Sypris incurs to perform under the Agreements, including capital expenditures and the long-term union contracts, are quite significant; (c) The Debtors have limited options as to the Agreements; and (d) The Debtors continue to breach of the Agreements. Dana repudiate any further responsibility to conduct remediation activities in the Marion Plant when the Agreements require the Debtors to indemnify Sypris for ongoing environmental issues. The transfer of certain lines of business to Sypris has still not taken place. The decision to assume or reject the Agreements will require very little analysis, and thus can be made easily by October 3, 2006, Ms. Klestadt states. Rejection of the Agreements will not benefit the Debtors' estate, Ms. Klestadt added. Ms. Klestadt noted that if rejected, the Agreements will allow Sypris to enjoin the Debtors from purchasing any of their requirements for certain commodities other than from Sypris through 2014. Thus, the customary benefits of rejecting a supply contract are unavailable. Moreover, rejection of the Agreements would effectively require the Debtors to exit from the markets served by their commercial vehicle services division, among others, for lack of essential components, Ms. Klestadt said. "In essence, the only assessment required is whether the Debtors desire to stay in the heavy truck business," Ms. Klestadt maintained. Indeed, the Debtors can only reject the Agreements if it intends to stop using all of the Parts purchased from Sypris under the Agreements. About Dana Corporation Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. 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). DANA CORP: David Browning Wants Stay Lifted to Prosecute Action --------------------------------------------------------------- In January 2006, David Browning commenced a personal injury tort action against DTF Trucking, Inc., and Jeffrey B. Perry in the United States District Court for the Western District of Kentucky. DTF Trucking is a debtor-affiliate of Dana Corporation. Mr. Browning alleges that he suffered personal injuries stemming from an automobile accident in which Jeffrey Perry, as an agent and driver of DTF's truck, negligently struck him. The litigation was stayed pursuant to DFT's bankruptcy filing. Mr. Browning intends to prosecute the Kentucky Action to pursue his claims against DFT but only to the extent of any of DFT's available insurance proceeds. Accordingly, Mr. Browning asks the U.S. Bankruptcy Court for the Southern District of New York to lift the automatic stay in the Debtors' Chapter 11 cases to allow him to prosecute the Kentucky Action. About Dana Corporation Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. 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). DANA CORP: U.S. Trustee Amends Non-Union Retiree Committee Members ------------------------------------------------------------------ Diana G. Adams, acting United States Trustee for Region 2, appointed John A. Damusis to serve in the Official Committee of Non-Union Retirees in Dana Corporation and its debtor-affiliates' Chapter 11 cases. Claudia J. Holstein is no longer a member of the Non-Union Retirees Committee. The Non-Union Retirees Committee is now composed of: 1. Robert Fitzmorris 1176 Harbor Town Way Venice, Florida 34292 Tel. No.: (941) 493-2178 2. Michael R. Carrigan 926 Emerald Bay Drive Destin, Florida 32541 Tel. No.: (850) 269-2003 3. John A. Damusis 519 Connecticut Avenue Naperville, Illinois 60565 Tel. No.: (630) 416-9742 4. Edward Balcar 1827 Glen Ellyn Drive Toledo, Ohio 43614 Tel No.: (419) 382-7634 5. Donna R. Doyle 282 South Hampton Drive Bristol, Tennessee 37620 Tel. No.: (432) 764-4010 6. Melvin H. Rothlisberger 5236 Spring Creek Lane Sylvania, Ohio 43560 Tel. No.: (419) 824-2456 7. Edward Cole 1711 Woodland Lake Pass Fort Wayne, Indiana 46825 Tel. No.: (260) 489-2279 About Dana Corporation Toledo, OH-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. 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. 21; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DAVIDSON DIVERSIFIED: Equity Deficit Widens to $8.4MM at June 30 ---------------------------------------------------------------- Davidson Diversified Real Estate III, L.P., filed its second quarter financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission on Aug. 14, 2006. The Company incurred a $313,000 net loss on $1,066,000 of net revenues for the three months ended June 30, 2006, compared to a $751,000 net loss on $940,000 of net revenues in 2005. At June 30, 2006, the Company's balance sheet showed $12,754,000 in total assets and $21,224,000 in total liabilities, resulting in an $8,470,000 stockholders' deficit. The Company's total stockholders' deficit at March 31, 2006, stood at $8,157,000. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?1164 Going Concern Doubt Ernst & Young LLP expressed substantial doubt about Davidson Diversified's ability to continue as a going concern after auditing the Company's financial statement for the year ended Dec. 31, 2005. The auditing firm pointed to the Company's recurring operating losses and an accumulated deficit. About Davidson Diversified Based in Greenville, South Carolina, Davidson Diversified Real Estate III, L.P., is a Delaware limited partnership organized in July 1985. The Company's primary business is to operate and hold for investment existing income-producing residential real estate properties. The Company receives income from its property and is responsible for operating expenses, capital improvements and debt service payments under mortgage obligations secured by the property. The general partners of the Company are Davidson Diversified Properties, Inc., the managing general partner, Freeman Equities, Ltd., the associate general partner, and David W. Talley and James T. Gunn, the individual general partners. DE LA ROSA: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: De La Rosa Pharmacy, Inc. 1500 East 6th Street Weslaco, Texas 78596 Bankruptcy Case No.: 06-70398 Type of Business: The Debtor is a licensed pharmacy. Chapter 11 Petition Date: September 7, 2006 Court: Southern District of Texas (McAllen) Judge: Richard S. Schmidt Debtor's Counsel: John Kurt Stephen, Esq. Cardena, Whitis, & Stephen, L.L.P. 100 South Bicentennial Boulevard McAllen, Texas 78501-7050 Tel: (956) 631-3381 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Davis & Davis, PC $50,205 PO Box 1588 Austin, TX 78767 Dyer & Associates $50,123 3700 North Tenth Street, Suite 105 McAllen, TX 78501 Top RX $30,615 P.O. Box 341127 Bartlett, TN 38184-1127 Gemco Medical $20,376 McKesson $20,169 Ridge Sharyland Med Ptnrs I $16,656 c/o Inter National Bank Gulf South Medical Supply $12,434 Anda, Inc. $12,159 Value In Pharmaceuticals $10,687 Donna Plaza LLC $10,000 Blue Cross & Blue Shield of Texas $9,293 Direct Capital Corporation $8,863 Asereth Medical Services, Inc. $8,723 Baxter Healthcare Corp. $8,579 ParMed Pharmaceuticals $8,319 AICCO, Inc. $7,288 MBNA America $6,387 Ross Products $5,897 Invacare Corporation $5,763 G.F.A.S. Acct. Intermed Gas Prod. Corp. $5,661 DELPHI CORP: Pick Me, Equity Committee Tells Court -------------------------------------------------- The Official Committee of Equity Security Holders appointed in Delphi Corporation and its debtor-affiliates' bankruptcy case asks the U.S. Bankruptcy Court for the Southern District of New York to deny the request of the Official Committee of Unsecured Creditors to prosecute, on behalf of the Debtors' estates, the Claims and Defenses raised in a complaint against General Motors Corporation. The Creditors' Committee had asserted that the Claims and Defenses may support the recapture of billions of dollars in payments and avoidance of obligations that the Debtors were forced to undertake for GM's benefit. The Claims and Defenses may also reduce or eliminate the Defendants' claims against the Debtors. According to the Committee, successful prosecution of the Claims and Defenses will increase dramatically the payout to unsecured creditors. Douglas L. Dethy, chairman of the Equity Committee says the Debtors' claims, causes of action and defenses relating to General Motors Corporation are of paramount interest and concern to the Equity Committee. Like the Official Committee of Unsecured Creditors, the Equity Committee believes that GM improperly used the spin-off of the Debtors to substantially improve its own balance sheet and financial performance. Since the Spin-Off, GM has dominated and controlled the Debtors and caused them to incur substantial undue and unfair burdens for GM's sole and exclusive benefit at the expense of the Debtors and their shareholders, Mr. Dethy asserts. The Equity Committee agrees with the conclusions of the Creditors Committee that GM's conduct gives rise to significant affirmative claims and causes of action against GM, and significant defenses and objections to any claims GM may assert against the Debtors. According to Mr. Dethy, this wrongful conduct gives rise to numerous and substantial affirmative claims against GM worth about $26 billion, based on the Equity committee's preliminary analysis. However, the Equity Committee believes that giving the Creditors Committee control to pursue the claims, causes of action and defenses will not maximize the value of the Debtors' estates for the benefit of all constituencies. The Creditors Committee lacks the incentive or obligation to realize the full value of the claims, causes of action and defenses. Mr. Dethy explains that successful prosecution of the claims and defenses against GM would result in the increase of the Debtors' estates by billions of dollars. Because any value in the Debtors' estates that exceeds the amounts necessary to pay creditors in full belongs to holders of the Debtors' equity, recoveries from the claims, causes of action and defenses belong to Delphi shareholders. Control of the claims, causes of action and defenses must lie with those who owe equity holders fiduciary duties. Mr. Dethy points out that the Debtors, their officers, directors and various professionals owe fiduciary duties directly to equity holders, and have a clear and definitive burden, duty and obligation to achieve the maximum recovery possible on the claims for the benefit of the Debtors' estates and all stakeholders. In the alternative, if the Court determines that the Debtors should no longer control and have the authority to prosecute the GM Claims and Defenses, the Equity Committee seek the authority to file, serve and prosecute on behalf of the Debtors' estates the claims, causes of action and defenses against GM and certain former officers of the Debtors, and any other actions. The Equity Committee recognizes and applauds the Creditors Committee's substantial efforts to investigate, analyze and pursue certain of the claims, causes of action and defenses against GM. However, despite its efforts, the Creditors Committee does not have the responsibility and accountability to all stakeholders to realize maximum value for the claims, causes of action and defenses. Rather, the Creditors Committee has duties only to unsecured creditors, and its obligation to maximize the value of the claims, causes of action and defenses ends when unsecured creditors are paid in full. The Creditors Committee is not an advocate for the Debtors' estates as a whole or for stakeholders other than those represented by it, and its only concern and function are to obtain a recovery that would pay its constituency the full amount it is owed on their claims, Mr. Dethy adds. The Creditors Committee cannot be expected to zealously pursue any settlement in an amount greater than the value of unsecured claims. In fact, it would be obligated to agree to any arrangement that pays creditors in full regardless of the value that is truly due and owing the Debtors' estates. The recovery on the claims, causes of action and defenses will be artificially capped at the amount necessary to make the creditors whole. 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. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Court Records About 100 Claim Transfers in August -------------------------------------------------------------- The Clerk of the U.S. Bankruptcy Court for the Southern District of New York recorded about a hundred claims against Delphi Corporation and its debtor-affiliates changing hands in August 2006. Argo Partners, ASM Capital, Contrarian Funds LLC, Longacre Master Fund, Ltd., among others, again bought claims during the month. Argo Partners bought eight claims in August from these parties: Transferor Claim Amount ---------- ------------ QNX Software Systems Ltd. $74,548 ICR Inc. 97,621 Crowley Tool Co. 13,625 Dane Systems Inc. 30,454 Abba Rubber International Inc. 10,530 Fulton Industries Inc. 49,489 Environ International Corp. 89,446 Electric Service Co. Inc. 35,863 Argo has offices at 12 West 37th Street, 9th Floor, in New York, with contact number (212) 643-5443. Meanwhile, ASM Capital bought at least 20 claims in August, including: Transferor Claim Amount ---------- ------------ VPI Acquisition Corp. $285,141 C-Plastics Corp. 56,261 Tobar Inc. 177,460 Contact ASM through Adam S. Moskowitz at telephone number (516) 224-6040. ASM is based in Woodbury, New York. During the month, Bank of America NA transferred a $2,974,015 claim to Contrarian Funds LLC. Other claims purchased by Contrarian are from these parties: Transferor Claim Amount ---------- ------------ Howard & Howard Attorneys PC $233,285 Howard & Howard Attorneys PC 1,347 Austin Tube Products Inc. 137,996 Premier Products Inc. 145,309 Premier Products Inc. 147,402 Intel Corp. 10,692 Intel Americas Inc. 83,274 Contrarian has offices at 411 West Putnam Avenue, S-225 in Greenwich, Connecticut. Contact person for Contrarian is Alpa Jimenez. Special Situations Investing Group Inc. bought some of the largest claims during the month from Merrill Lynch Credit Products LLC: Transferor Claim Amount ---------- ------------ Merrill Lynch Credit Products LLC $9,157,458 Merrill Lynch Credit Products LLC 123,917 Merrill Lynch Credit Products LLC 223,391 STMicroelectronics Inc. also transferred its $1,454,529 claim to Special Situations Investing. Special Situations' contact information: c/o Goldman, Sachs & Co. 85 Broad Street - 27th Floor New York, NY 10004 Attn: Al Dombrowski Phone: (212) 902-4103 Furthermore, Longacre Master Fund, Ltd., bought these claims in August: Transferor Claim Amount ---------- ------------ United Plastics Group, Inc. $358,909 United Plastics Group De Mexico 136,483 Special Situations Investing Group 454,529 Batesville Tool & Die Inc. 620,519 Batesville Tool & Die Inc. 620,519 Noma Company 491,625 Longacre has offices at 810 Seventh Avenue, in New York. Contact person listed for Longacre is Vladimir Jelisavcic. Goldman Sachs Credit Partners LP also made claim purchases during the month. In particular, Goldman Sachs bought five claims: Transferor Claim Amount ---------- ------------ M&Q Plastic Products $653,829 M&Q Plastic Products 653,829 Asys Automation LLC 182,213 Ekra America Inc. 238,567 VDO Automotive SAS 1,545,794 Goldman Sachs' offices are at the 42nd Floor of One New York Plaza in New York. Moreover, Motorola Inc. transferred three $8,358,154 claims and two $19,360 claims to Temic Automotive of North America Inc. in August. Temic Automotive may be reached through Robert J. Patton at 21440 West Lake Cook Road, in Deer Park, Illinois. During the month, TI Group Automotive Systems LLC transferred a $1,777,501 claim to APS Clearing Inc., which subsequently transferred the claim to JPMorgan Chase Bank NA. JPMorgan's contact information: JPMorgan Chase Bank, NA Attn: Neelima Veluvolu 270 Park Ave, 17th Floor New York, NY 10017 Other investors that acquired claims during the period are Midtown Claims LLC, Liquidity Solutions, Amroc Investments, Hain Capital Holdings, Debt Acquisition, Fair Harbor Capital, and Redrock Capital Partners. 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. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DURA AUTOMOTIVE: Defers Dividend Payment on Preferred Securities ---------------------------------------------------------------- Dura Automotive Systems, Inc., has elected to defer the dividend payment on the 7-1/2% Convertible Trust Preferred Securities issued by the Dura Automotive Capital Trust that would have otherwise been paid on Sept. 30. The 7-1/2% Convertible Trust Preferred Securities are traded on the Nasdaq Global Market under the symbol "DRRAP". The terms of the Dura Automotive Capital Trust and the underlying 7-1/2% Convertible Subordinated Debentures due 2028 issued by the Company to the Capital Trust permit the deferral of dividends and the underlying interest payments on the Debentures for up to 20 consecutive quarters. This is the first such deferral and any decision on any future deferrals will be reviewed on a quarterly basis. The deferral of the dividend is consistent with the Company's ongoing evaluation of its capital structure. Headquartered in Rochester Hills, Michigan, DURA Automotive Systems, Inc. -- http://www.duraauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive and recreation & specialty vehicle industries. DURA, which operates in 63 locations, sells its products to every major North American, Asian and European automotive original equipment manufacturer and many leading Tier 1 automotive suppliers. It currently operates in 63 locations including joint venture companies and customer service centers in 14 countries. * * * As reported in the Troubled Company Reporter on Aug. 1, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on Dura Automotive Systems Inc. to 'CCC' from 'B-'. The rating outlook is negative. EASTMAN KODAK: Signs Multi-Year Kiosk Contract with Wal-Mart ------------------------------------------------------------ Eastman Kodak Company has signed a new multi-year contract with Wal-Mart for digital photo kiosk equipment and consumables. The deal will add 2,000 Kodak Picture Kiosks to 1,000 Wal-Mart stores across the U.S. Financial terms of the agreement were not disclosed. "This is proof that Kodak's digital innovation and understanding of the consumer is a distinct competitive advantage," said Nicki Zongrone, Kodak's Worldwide Kiosk General Manager and Vice President, Consumer Digital Imaging Group. "Wal-Mart recognized the benefit of Kodak's modular, upgradeable and flexible kiosk platform to help their business grow and provide consumers with an easy way to get high quality digital prints in as little as four seconds." Kodak's new G4 Picture Kiosk platform represents an entirely new category of high performing photo kiosks, with significant improvements in speed, performance, reliability and styling. The G4 Picture Kiosk supports all popular digital media formats, digital scanning, and wireless printing via BLUETOOTH and infrared technologies. Kodak has more than 80,000 units installed at retail locations across the globe, which provide self-service lab quality prints in seconds to millions of consumers. About Eastman Kodak Headquartered in Rochester, New York, Eastman Kodak Company -- http://www.kodak.com/-- is a worldwide vendor of imaging products and services. The company is committed to a digitally oriented growth strategy focused on four businesses: Digital & Film Imaging Systems - providing consumers, professionals, and cinematographers with digital and traditional products and services; Health -- supplying the medical and dental professions with traditional and digital imaging and information systems, IT solutions, and services; Graphic Communications - providing customers with a range of solutions for prepress, traditional and digital printing, document scanning, and multi-vendor IT services; and Display & Components - supplying original equipment manufacturers with imaging sensors as well as intellectual property and materials for the organic light- emitting diode and LCD display industries. * * * As reported in the Troubled Company Reporter on Aug. 11, 2006, Moody's Investors Service placed Eastman Kodak Company on review for possible downgrade. Ratings under review include the Company's B1 Corporate Family Rating; B2 Senior Unsecured Rating; and Ba3 rating on the Senior Secured Credit Facilities. Moody's review continues to focus on the company's potential sale of the Kodak Health Group as well as the fundamental operating performance of the company. As reported in the Troubled Company Reporter on Aug. 7, 2006, Standard & Poor's Ratings Services placed its ratings on Eastman Kodak Co. (B+/Watch Neg/--) on CreditWatch with negative implications. The Rochester, New York-based imaging company had $3.5 billion in debt as of June 30, 2006. EDDIE BAUER: To Open Stores in Georgia, Pennsylvania & California ----------------------------------------------------------------- Eddie Bauer Holdings, Inc., plans to open a new store at Avenue at West Cobb in Marietta, Georgia and at Shoppes at Susquehanna Marketplace in Harrisburg, Pennsylvania, on Sept. 22, 2006, and at the Westfield San Francisco Centre in San Francisco, California in conjunction with the mall grand opening on Sept. 28, 2006. Lisa Erickson, Eddie Bauer spokesperson, disclosed that the Company is thrilled to be opening at the three locations, which are surrounded by natural beauty that residents can embrace the modern outdoor lifestyle. Eddie Bauer is looking forward to providing active customers with apparel and accessories that offer the perfect mix of function and style. The locations will open featuring the company's Fall 2006 Collection, including new denim and pants fits for men and women. As part of the Grand Opening Celebration, customers will receive exclusive new store offers including our "Free Day Out" promotion. The new Avenue at West Cobb Eddie Bauer will join our existing locations at Avenue at East Cobb, Town Center, Mall of Georgia, Peachtree Mall and Macon Mall in the greater Atlanta area. The new Westfield San Francisco Centre Eddie Bauer will join our existing Stonestown store in the San Francisco area. Headquartered in Redmond, Washington, Eddie Bauer Holdings, Inc. -- http://www.eddiebauer.com/-- is a specialty retailer that sells casual sportswear and accessories for the "modern outdoor lifestyle." Established in 1920 in Seattle, Eddie Bauer believes the Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style, and customer service. Eddie Bauer products are available at approximately 375 stores throughout the United States and Canada, through catalog sales and online at http://www.eddiebaueroutlet.com/ The Company also participates in joint venture partnerships in Japan and Germany and has licensing agreements across a variety of product categories. Eddie Bauer employs approximately 10,000 part-time and full-time associates in the United States and Canada. * * * As reported in the Troubled Company Reporter on March 29, 2006, Standard & Poor's Ratings Services lowered its corporate credit rating on specialty apparel retailer Eddie Bauer Holdings Inc. and the bank loan rating on Eddie Bauer Inc. to 'B' from 'B+'. S&P says the outlook is negative. ELEC COMMUNICATIONS: Withdraws Offer to Buy Liberty Bell Telecom ---------------------------------------------------------------- eLEC Communications Corp., withdrew its offer to buy all outstanding membership interests of Liberty Bell Telecom LLC. The Company previously signed a letter of intent to acquire Liberty, a privately-held telecommunications company. The Company disclosed that in contemplation of the acquisition, it raised acquisition financing in the amount of $1.05 million from Laurus Master Fund, Ltd., which are currently being held in a restricted cash account pending the closing of the proposed Liberty acquisition or another acquisition approved by Laurus. The Company intends to seek the approval of Laurus for the release of the funds for the acquisition of another entity or the release of all or a portion of such funds for working capital purposes. The Company further disclosed that if it is unable to obtain the consent, the funds will be returned to Laurus to reduce the Company's outstanding indebtedness. eLEC Communications Corp. (OTCBB:ELEC) -- http://www.elec.net/-- is a Competitive Local Exchange Carrier that offers local and long distance calling plans to small business and residential customers. The Company sells under the names of New Rochelle Telephone and eLEC Communications, and the Company delivers telephone services. Going Concern Doubt As reported in the Troubled Company Reporter on March 7, 2006, Nussbaum Yates & Wolpow, PC, expressed substantial doubt about eLEC's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Nov. 30, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations. FALCON AIR: Ch. 11 Trustee Wants Until Dec. 6 to Decide on Leases ----------------------------------------------------------------- Kenneth A. Welt, the Chapter 11 Trustee appointed in Falcon Air Express, Inc.'s chapter 11 case, asks the U.S. Bankruptcy Court for the Southern District of Florida to extend until Dec. 6, 2006, the period within which he can assume, assume and assign or reject unexpired nonresidential real property leases. Mr. Welt informs the Court that on June 29, 1999, the Debtor and 9500 Building, Ltd., entered into a lease for certain real property located at 9500 Northwest 41st Street in Miami, Florida. The original lease term expired July 31, 2004. According to Mr. Welt, the lease was extended through May 31, 2006, and the Debtor has remained in possession of the premises since that period, as a month-to-month tenant at will, on an agreed basis with the landlord pursuant to the terms of the lease and the parties' Court-approved stipulation entered July 7, 2006. Mr. Welt and the Debtor intend to relocate to another building located at 9000 Northwest 15th Street in Miami, Florida, pursuant to a commercial property lease entered between the Debtor and Lakes Edge Commercial Properties, LLC, on or about March 14, 2005. The new lease had a five-year term. Mr. Welt considers the Debtors' interests in the leases and rights as valuable property leases. In addition, the new lease has a valuable purchase option that is attractive to prospective buyers of the Debtor's business. The extension, Mr. Welt says, will allow him to decide on leases in connection with a Section 363 sale or Chapter 11 Plan, and to avoid substantial administrative expenses to the estate by preventing assumption of the new lease prior to sale of the business or Plan confirmation. Headquartered in Miami, Florida, Falcon Air Express, Inc. -- http://www.falconairexpress.net/-- is a small and low-cost airline company that provides charter service and renders foreign and U.S. carriers sub-services on schedules routes. The Debtor and its affiliate, MAJEL Aircraft Leasing Corp., filed for chapter 11 protection on May 10, 2006 (Bankr. S.D. Fla. Case Nos. 06-11877 & 06-11878). Brian G. Rich, Esq., at Berger Singerman, P.A., represents the Debtors in their restructuring efforts. Peter D. Russin, Esq., and Michael S. Budwick, Esq., at Meland Russin & Budwick, P.A., represent the Official Committee of Unsecured Creditors. On June 26, 2006, Kenneth A. Welt was appointed as the Debtor's Chapter 11 Trustee. Ariel Rodriguez, Esq., and Frank P. Terzo, Esq., at Katz Barron Squitero Faust represents the Chapter 11 Trustee. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. FLEETWOOD ENT: Weak Demand Prompts Moody's to Downgrade Ratings --------------------------------------------------------------- Moody's Investors Service lowered the Corporate Family Rating of Fleetwood Enterprises, Inc. to B3 from B2, and affirmed the Caa3 rating of the company's $160 million trust preferred securities due 2028. The outlook is negative. The downgrade reflects Moody's expectation that demand in Fleetwood's recreational vehicle and manufactured housing markets will remain weak through 2006, and that the resulting credit metrics will weaken from the levels achieved during FYE April 2006. Fleetwood's RV business will continue to be pressured by high fuel prices, while the manufactured housing operations will be burdened by the lack of sufficient funding sources for retail customers, more stringent credit standards when retail funding is available, and competition from the stock of repossessed units. Demand in both sectors is expected to be further weakened by high interest rates. The negative outlook recognizes the risk that Fleetwood's credit metrics and liquidity could continue to erode during the coming 6 to 9 months and that the company's liquidity profile could erode unless operating conditions improve. During FYE April, 2006 Fleetwood's operating and financial performance benefited from the sale of emergency living units in the aftermath of hurricane Katrina, the successful issuance of $66 million in common equity, and the sale of the retail and financial services operations for $145 million. As a result, credit metrics improved from April 2005 to April 2006, with interest coverage strengthening to 1.2x from negative 1.9x; debt dropping to 39.9% from 47.9%, and free cash flow improving to negative $9 million from negative $130 million. In addition, Fleetwood's available liquidity approximated a comfortable $155 million. During the first quarter ended July 2006, the market pressures confronting the RV and manufactured housing operations began to severely erode Fleetwood's operating performance compared with the similar period of 2005. Operating income fell to negative $8.2 million from negative $0.9 million, interest coverage dropped below 1x, and free cash flow eroded to negative $54.9 million from positive $17.1 million. The company also repurchased $31 million of its 6% trust preferred securities. As a result of this transaction, and the erosion in operating performance, Fleetwood's available liquidity declined to approximately $62 million. Fleetwood's operating performance and cash will remain depressed through the quarter ending January 2007 due to weak market fundamentals and the normal winter slowdown. Performance could begin to rebound during the spring selling season, particularly if there is healthy market acceptance of new travel trailer products being introduced by the company. Sustaining adequate liquidity during the coming two quarters will be critical. Should the erosion in Fleetwood's operating performance result in a material reduction in the company's $62 million available liquidity position, the ratings could be vulnerable to downgrade. The affirmation of the Caa3 preferred stock rating reflects benefits accruing from the company's $60 million issuance of common equity which increased the amount of capital junior to the preferred, and which enabled the company to come current on its previously deferred preferred dividend payment. Fleetwood Enterprises, Inc., headquartered in Riverside, California, is a leading producer of recreational vehicles and manufactured homes. GRACE ASSOCIATES: Case Summary & Largest Unsecured Creditor ----------------------------------------------------------- Debtor: Grace Associates Inc. 151-21 Sixth Road Whitestone, NY 11357 Bankruptcy Case No.: 06-43325 Chapter 11 Petition Date: September 12, 2006 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Matthew G. Roseman, Esq. Cullen and Dykman Bleakley Platt LLP 100 Quentin Roosevelt Blvd. Garden City, NY 11530 Tel: (516) 296-9106 Total Assets: $2,285,218 Total Debts: $14,129,387 Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Grace Industries Inc. $129,388 151-21 Sixth Road Whitestone, NY 11357 GRAY TELEVISION: High Leverage Prompts S&P's Negative Watch ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Gray Television Inc., including the 'B+' corporate credit rating, on CreditWatch with negative implications. The company had total debt, including preferred stock, of approximately $858 million outstanding as of June 30, 2006. "The CreditWatch placement recognizes that Gray's leverage is meaningfully higher than our target leverage for the company at the 'B+' rating level," said Standard & Poor's credit analyst Heather M. Goodchild. The leverage deterioration resulted from debt-financed acquisitions and the absence of expected improvements in EBITDA as a result of acquisitions in the first half of the year, and from below-average same-station revenue growth in the first half of 2006. In resolving the CreditWatch listing, Standard & Poor's will consider the overall operating outlook, including performance of the newly acquired stations. The rating agency will also assess any actions the company could take to restore its leverage to less than 6x and to maintain it at those levels in non-election years. Based on Standard & Poor's current view of the company's business and financial profile, it could lower the rating one notch, to 'B'. GREAT COMMISSION: Court OKs Timothy Dixon as Special Bond Counsel ----------------------------------------------------------------- The Honorable Mary D. France of the U.S. Bankruptcy Court for the Middle District of Pennsylvania in Harrisburg authorized The Great Commission Care Communities, Inc., dba The Woods at Cedar Run to employ the Law Office of Timothy E. Dixon as its special bond counsel. The Firm will give professional services on matters involving restructuring of the Debtor's bonds. Timothy E. Dixon, Esq., discloses that attorneys of the Firm will bill $275 per hour. Mr. Dixon assures the Court that the Firm does not represent any interest adverse to the Debtor. The Firm can be contacted at: Law Office of Timothy E. Dixon 201 North Charles Street, Suite 2206 Baltimore, MD Headquartered in Camp Hill, Pennsylvania, The Great Commission Care Communities, Inc., dba The Woods at Cedar Run -- http://www.woodsatcedarrun.com/-- is a non-profit retirement community providing independent housing and assisted living services. The company filed for chapter 11 protection on May 10, 2006 (Bankr. M.D. Penn. Case No. 06-00914). Robert E. Chernicoff, Esq., at Cunningham and Chernicoff, P.C., represents the Debtor. David W. Carickhoff, Esq., at Blank Rome LLP represents the Official Committee of Unsecured Creditors. Howard S. Cohen, CPA, at Parente Randolph, LLC, gives financial advice to the Committee. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million and $50 million. HAWS & TINGLE: Has Continued Cash Collateral Access Until Nov. 20 ----------------------------------------------------------------- The Hon. Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas in Dallas authorized Haws & Tingle, Ltd. to continue to use cash collateral securing repayment of its debts to Zurich American Insurance Company. The Debtor can access Zurich's cash collateral through Nov. 20, 2006. The Cash collateral use is restricted by the terms of a court-approved budget. A copy of the budget is available for free at http://ResearchArchives.com/t/s?116a The cash collateral consists of income, receivables, and proceeds received from or on account of the Debtor's prepetition or postpetition business operations. Zurich had issued one or more payment and performance bonds to secure the Debtor's performance with respect to certain projects. The Debtor says that Zurich is its only purported secured lender. As reported in the Troubled Company Reporter on Oct. 11, 2005, Zurich has filed over $2 million in claims against the Debtor. Since Zurich filed a Form UCC-1 with the Secretary of State on July 26, 2005 -- 90 days before the Debtor's chapter 11 filing -- to perfect its security interest, the Debtor says the purported lien is subject to avoidance as a preference. Mark E. Andrews, Esq., at Neligan Tarpley Andrews & Foley LLP, told the Bankruptcy Court that Zurich is already adequately protected since it is fully collateralized and the value of its security interest will not decrease over time. Headquartered in Fort Worth, Texas, Haws & Tingle, Ltd., is a building contractor. The Debtor filed for chapter 11 protection on October 6, 2005 (Bankr. N.D. Tex. Case No. 05-82478). Mark Edward Andrews, Esq., and Omar J. Alaniz, Esq., at Neligan Tarpley Andrews & Foley LLP represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. HAWS & TINGLE: Wants Veritas Advisory as Financial Consultant ------------------------------------------------------------- Haws & Tingle, Ltd., asks authority from the U.S. Bankruptcy Court for the Northern District of Texas to employ Veritas Advisory Group, Inc., as its financial consultant. Veritas will provide services to assist the Debtor with the litigation involving the Estate and Hensel Phelps. Bradford L. Bright, member at Veritas Advisory discloses that the firm's professionals bill: Professional Hourly Rate ------------ ----------- Vice President $250 - $300 Principal $195 - $215 Manager $160 - $180 Senior Consultant $140 - $155 Associate Consultant $125 - $135 The Debtor discloses that Veritas is a creditor in its chapter 11 case but believes however that this status will not affect any judgment because the amounts due Veritas represent less than 2% of all unsecured claims and that Veritas has no interests which are adverse to those of the Debtor's estate other than the Veritas' prepetition claim. Mr. Bright assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtor's estates. About Haws & Tingle Headquartered in Fort Worth, Texas, Haws & Tingle, Ltd., is a building contractor. The Debtor filed for chapter 11 protection on October 6, 2005 (Bankr. N.D. Tex. Case No. 05-82478). Mark Edward Andrews, Esq., and Omar J. Alaniz, Esq., at Neligan Tarpley Andrews & Foley LLP represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. HAYES LEMMERZ: S&P Affirms B- Rating & Removes Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Hayes Lemmerz International Inc. and removed the rating from CreditWatch with negative implications, where it was placed Aug. 21, 2006. The outlook is negative. The Northland, Michigan-based wheel manufacturer has total adjusted debt of about $780 million plus underfunded employee benefit obligations of approximately $390 million. The rating affirmation follows a review of the impact of Ford Motor Co.'s recently announced plans to sharply reduce vehicle production in the fourth quarter of 2006. "We have concluded that the negative impact on Hayes' earnings and cash flow will be partially offset by gradually improving performance in the company's international operations," said Standard & Poor's credit analyst Gregg Lemos Stein. This should enable Hayes to maintain credit measures consistent with its already low speculative-grade rating. While Hayes generates about 20% of its total sales from Ford, about half of that comes from outside North America, where Ford's production cuts are focused. Hayes' sales from General Motors Corp. and the Chrysler unit of DaimlerChrysler AG are also well diversified between North America and Europe. Hayes' guidance for the full year ending Jan. 31, 2007, remains unchanged because of the automakers' production cuts, with the company expecting $2.2 billion to $2.3 billion of sales and a slight improvement on last year's $176 million of EBITDA. Hayes' business risk profile remains weak. The company's financial results have suffered in recent years because of the difficult industry conditions facing automotive suppliers, including: * high raw-material costs, * customer market-share shifts, * product-mix changes, and * pricing pressure. While Hayes has a leadership position in wheel manufacturing, the business is highly fragmented and intensely competitive. In response to these challenges, Hayes has announced various restructuring and austerity measures, including: * the closing of a U.S. aluminum wheel plant; * the consolidation of several business units; and * the reduction of certain employees' compensation. The various cost-cutting actions are expected to save the company $35 million annually, partially offsetting the impact of soft industry volumes, pricing pressures, and adverse product mix. HECTOR DE LA ROSA: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Hector & Terri De La Rosa dba De La Rosa Pharmacy of Mercedes 1210 Hacienda del Sol Weslaco, Texas 78596 Bankruptcy Case No.: 06-10586 Chapter 11 Petition Date: September 8, 2006 Court: Southern District of Texas (Brownsville) Judge: Richard S. Schmidt Debtors' Counsel: Eduardo V. Rodriguez, Esq. 1265 North Expressway 83 Brownsville, Texas 78521 Tel: (956) 547-9638 Fax: (956) 547-9630 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million The Debtors did not file a list of their 20 Largest Unsecured Creditors. INSIGHT COMMS: Plans to Refinance $2.575 Billion Midwest Debt ------------------------------------------------------------- Insight Communications disclosed plans to refinance certain indebtedness of Insight Midwest. The refinancing contemplates increased term and revolving credit facilities aggregating $2.575 billion and using proceeds to redeem all of Insight Midwest's 10-1/2% Senior Notes due November 1, 2010, and a portion of its 9-3/4% Senior Notes due October 1, 2009. Closing of the contemplated credit facilities is expected to occur in early October. Insight has engaged Bank of America Securities LLC and J.P. Morgan Securities Inc. to arrange and syndicate the refinancing. Insight Communications (NASDAQ: ICCI) is the 9th largest cable operator in the United States, serving approximately 1.3 million customers in the four contiguous states of Illinois, Indiana, Ohio, and Kentucky. Insight specializes in offering bundled, state-of-the-art services in mid-sized communities, delivering analog and digital video, high-speed Internet, and voice telephony in selected markets to its customers. * * * Insight carries Fitch Ratings' B+ Issuer Default Rating. Fitch also rates the Company's senior unsecured notes at 'CCC+'. Approximately $2.8 billion of debt is affected by Fitch's ratings. INTERSTATE BAKERIES: Wants to Enter Into Intercompany Tolling Pact ------------------------------------------------------------------ Interstate Bakeries Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Western District of Missouri to enter into a Tolling Agreement to allow them to preserve any Intercompany Claim that might be subject to any statute of limitations or similar rule of law or equity. The Debtors have undertaken an analysis of certain potential actions involving third parties, in anticipation the September 22, 2006, deadline for them to pursue certain actions pursuant to Sections 108 and 546 of the Bankruptcy Code. However, the Debtors have not undertaken any material effort to investigate potential claims against each other, except to the extent the claims are disclosed on their books and records or on their Schedules of Assets and Liabilities, Paul M. Hoffman, Esq., at Stinson Morrison Hecker, LLP, in Kansas City, Missouri, tells the Court. The Debtors have not yet filed a plan of reorganization. Whether or not the Debtors or any other party will actually prosecute all of the Intercompany Claims pursuant to a confirmed plan of reorganization is not known, Mr. Hoffman says. Mr. Hoffman states that each Debtor is willing to enter into tolling agreements to avoid the cost and inconvenience associated with the possible commencement of litigation arising from the Potential Claims. The salient terms of the Tolling Agreement are: (a) The running of any statute of limitations or any rule of law with respect to any Potential Claims will be tolled during the period from the date the Tolling Agreement is approved until 90 days after the effective date of any confirmed plan of reorganization; (b) The Tolling Agreement will not be construed as the date on which the Statute of Limitations for any Potential Claim begins or ends, or as an admission as to the date on which the Statute of Limitations for any Potential Claim begins or ends. It will not be taken as an admission by the parties as to the applicability of any Statute of Limitations as to any Potential Claim; (c) The Agreement will not be treated as reviving any Statute of Limitations that has expired before September 20, 2006; and (d) By entering into the Agreement, each Debtor does not admit that any valid claim exist or that any other Debtor has standing to assert those claims. Each of the Debtors reserves all rights, arguments and defenses to any Potential Claim. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014 on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Wants Preference & Adversary Actions Pursued ----------------------------------------------------------------- Interstate Bakeries Corporation and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Western District of Missouri to pursue certain preference and other adversary actions. The Debtors also ask the Court to approve uniform procedures for the pursuit of the Potential Actions. Pursuant to Sections 108 and 546 of the Bankruptcy Code, the deadline for the Debtors to pursue certain actions will expire on Sept. 22, 2006. In anticipation of the deadline to commence avoidance actions, the Debtors have undertaken analysis of certain potential actions, including: -- potential actions under Sections 544, 555, 547, 548 and 554 of the Bankruptcy Code; and -- potential actions that may be subject to Section 108, including state law fraudulent conveyance actions and derivative claims. As a result of the diligence, the Debtors have identified a number of potential claims that can be asserted against a number of potential parties. The Debtors have shared the results of the diligence with the Official Committee of Unsecured Creditors, the Official Committee of Equity Security Holders, and JPMorgan Chase Bank, N.A., subject to confidentiality agreements. The Debtors propose to: (a) enter into tolling agreements with certain parties; (b) file adversary actions against certain other parties; and (c) abandon claims against all other parties that may be subject to the Avoidance Action Deadline. The Debtors intend to abandon all Potential Actions against any party not covered by a Tolling Agreement entered, or an adversary proceeding filed, before Sept. 22, 2006. The Debtors seek to abandon particular Potential Actions, including those covered by a Tolling Agreement entered, or an Adversary Proceeding filed, before Sept. 22, 2006, if no written objection is received. As to Potential Preference Actions, the Debtors seek to file a single Complaint, instead of filing separate adversary proceedings against each defendant. Paul M. Hoffman, Esq., at Stinson Morrison Hecker, LLP, in Kansas City, Missouri, relates that the Debtors have reviewed a list of all parties that received potential Preferences, and have identified a number of reasons for not pursuing preference actions against certain parties, including: -- providing important unsecured postpetition credit to the Debtors, or -- being a sole source provider, or providing certain material and unique benefits, to the Debtors that would be difficult to replace. A list of the Potential Preference Parties is available for free at http://ResearchArchives.com/t/s?1161 The Debtors reserve the right to waive or abandon any potential Preference claims against one or more of the parties, or enter into tolling agreements, before or after filing of the Complaint. The Debtors also intend to defer the commencement of the 120-day period to obtain service of process under Rule 7004 of the Federal Rules of Bankruptcy Procedure on the Proposed Actions until up to 90 days after the effective date of any confirmed plan. Mr. Hoffman argues that establishing the procedures to pursue Potential Actions will allow the Debtors to preserve their ability to pursue certain actions that might otherwise expire on Sept. 22, 2006, and simultaneously allow them to continue working on and negotiating a potential plan of reorganization that may or may not include prosecution of some or all of the Proposed Actions. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014 on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) KMART CORP: Court Denies Request to Stay Discovery on Eagle Claims ------------------------------------------------------------------ For reasons stated in open court, the Honorable Susan Pierson Sonderby of the U.S. Bankruptcy Court for the Northern District of Illinois denied without prejudice Kmart Corporation's request to stay discovery relating to Eagle Janitorial Services Inc.'s invoices and claims against the Debtor's stores in California. The Troubled Company Reporter on Aug. 24, 2006 relates that Kmart sought summary judgment from the Court to disallow: (i) Eagle Janitorial's claim for services performed in California; and (ii) any claim for interest, other charges, or not otherwise supported with documentation. On July 29, 2002, Eagle Janitorial filed Claim No. 36815 asserting $329,452 for janitorial services provided to Kmart stores located in four states. The Claim is based on 201 invoices, of which 193 are for services provided to Kmart stores in California. The invoices show charges totaling $214,075, which is $115,377 less than the face amount of Claim No. 36815. Of the Total Invoice Amount, $201,860 is for services rendered to Kmart stores in California. Kmart objected to Eagle's claim asserting that the claim lacked sufficient documentation based on Kmart's books and records. In response, Eagle contended that its entire claim is valid based on California's limitation of action statutes and applicable California case law, which provide that Eagle's entire Claim is subject to a four-year statute of limitation that begins to run on the last date of service or payment by Kmart of the account. Eagle also contended that it was unable to state what Kmart's records might show because Kmart has refused to respond to Eagle's discovery requests and that the non-existence of documents in Kmart's books and records is far from conclusive that Kmart is not liable for Eagle's Claim. About Kmart Corp. Headquartered in Troy, Michigan, Kmart Corporation nka KMART Holding Corporation -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000) KMART CORP: Striking Penn. Workers Negotiate for Better Contract ---------------------------------------------------------------- On Aug. 30, 2006, about 400 members of the United Auto Workers Union Local 8275 in Kmart Corp.'s distribution center in Falls, Pennsylvania, went on strike after their three-year contract with Kmart expired, Winslow Mason, Jr., of Bucks County Courier Times reports. The paper says formal negotiation, which began on September 4, 2006, is ongoing between Kmart's officials and union representatives. UAW Spokeswoman Patty Hentz told the paper that the workers rejected a contract that would have required them to pay the full cost of their health insurance. Among other things, the striking Kmart workers demand: * a cost-of-living wage increase; * a freeze that would prevent Kmart from changing health benefits coverage during the length of the contract; and * Kmart to do away with a quota system that requires workers to load or unload a set amount of packages per day or risk losing their jobs. The union wants all workers to qualify for the same top pay scale, Mr. Mason reports. About Kmart Corp. Headquartered in Troy, Michigan, Kmart Corporation nka KMART Holding Corporation -- http://www.bluelight.com/-- operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. (Kmart Bankruptcy News, Issue No. 116; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945- 7000) KRYSTAL POINT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Krystal Point Ventures, LLC dba KPV Environmental 2824 North Power Road #113-278 Mesa, Arizona 85215 Bankruptcy Case No.: 06-02805 Type of Business: The Debtor owns and operates two divisions: Real Estate and Environmental Waste Management. See http://www.krystalpointventures.com/ Chapter 11 Petition Date: September 5, 2006 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Allan D. Newdelman, Esq. Allan D. Newdelman, PC 80 East Columbus Avenue Phoenix, Arizona 85012 Tel: (602) 264-4550 Fax: (602) 277-0144 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bennett Family Trust Loan $433,400 218 B. Street Vallejo, CA 94590 Mavicar Environmental Consultants $152,470 2800 Mountain Road Harrisburg, PA Hammons Family Trust Loan $83,086 2929 North Power Road #107 Mesa, AZ 85215 Peri Brown Trust Loan $79,234 Classic Conveyor Services $30,032 Pensco Trust CO FPO Loan $30,000 Pensco Trust CO FBO Loan $25,000 S. Degory, Esq. Legal Fees $20,000 Tauro Brothers Trucking Services $14,574 Klett Rooney, Esq. Legal Fees $13,014 Anderson Electric Services $12,338 Cambria Tractor Claimed Balance $11,552 lease judgment Van Nor & Assoc Legal Fees $9,400 CWM Testing Services $5,375 Maudie Trucking Services $5,253 Armstrong Security Services $4,746 Mcguire Woods Legal Fees $4,538 Erie Insurance Bond/Premium Payment $4,446 CNH CAPITAL Claimed Lease $3,798 payment Hillcrest Group Services $3,546 LIGAND PHARMA: Sells Avinza to King Pharma for $313 Mil. in Cash ---------------------------------------------------------------- Ligand Pharmaceuticals Incorporated has signed a definitive asset purchase agreement to transfer the assets associated with AVINZA to King Pharmaceuticals, Inc. The purchase price is a combination of aggregate up-front cash consideration of $313 million, plus a tiered royalty agreement, which survives until the patent expiration in Nov. 2017. Under the terms of the asset purchase agreement King will make a $265 million payment to the Company to acquire all rights to AVINZA in the United States, its territories and Canada. In addition, King will assume a product-related liability owed to Organon totaling $48 million and all other existing product royalty obligations. In addition to existing royalty obligations, King will pay the Company a 15% royalty during the first 20 months after the closing date. Subsequent royalty payments will be based upon calendar year net sales. The Company also disclosed that it has entered into a separate contract sales agreement, under which King has been granted the right to and will promote AVINZA during a transition period until closing of the asset purchase agreement. The Company further disclosed that the asset purchase and contract sales agreements have been approved by the board of directors of each company and is subject to approval by its stockholders, at a special meeting anticipated to be before the year-end. The transaction is also subject to Hart-Scott-Rodino clearance. Under the terms of the agreement, King has agreed to minimum monthly product details through 2009 and has agreed to hire the Company's specialty pain sales representatives. In conjunction with the Company's specialty sales force, King will support AVINZA with both its Primary Care and Neuroscience Specialty sales representatives. The Company will pay King a customary fee for each product detail and certain marketing and promotional expenses as agreed between the parties. Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) -- http://www.ligand.com/-- discovers, develops and markets new drugs that address critical unmet medical needs of patients in the areas of cancer, pain, skin diseases, men's and women's hormone- related diseases, osteoporosis, metabolic disorders, and cardiovascular and inflammatory diseases. Ligand's proprietary drug discovery and development programs are based on gene transcription technology, primarily related to intracellular receptors. * * * As reported in the Troubled Company Reporter on Aug. 16, 2006 Ligand Pharmaceuticals Incorporated's balance sheet at June 30, 2006 showed total assets of $285.9 million and total liabilities of $524.4 million resulting in a stockholders' deficit of $238.5 million. This compares to a stockholders' deficit of $110.4 million at Dec. 31, 2005. LIGAND PHARMA: Sells Oncology Product Line to Eisai for $205 Mil. ----------------------------------------------------------------- Ligand Pharmaceuticals Incorporated has signed a definitive agreement to sell its oncology product line and the associated assets to Eisai Co., Ltd., Tokyo, and Eisai Inc., New Jersey. The sale includes the Company's four marketed oncology drugs: ONTAK, Targretin capsules, Targretin gel and Panretin gel. The Company disclosed that the asset purchase agreement and related contracts have been approved by relevant executive committee and/or boards of directors of the companies, but is, however, subject to Hart-Scott-Rodino clearance, and is expected to close soon afterwards. Under the terms of the asset purchase agreement, the Company will receive cash of $205 million and Eisai will assume all future royalty payment obligations for the products. Eisai will receive from the Company all rights to the products worldwide including the related intellectual property and licenses, transfer of product inventory, and the assignment of certain agreements, principally patent licenses and supply and distribution agreements. Henry F. Blissenbach, chairman and interim chief executive officer, stated, "We have now sold our two commercial operations for aggregate cash consideration of $518 million, and have also retained a significant royalty participation in AVINZA - which we believe will provide extraordinary value to the Company as a result of the excellent sales capabilities of King Pharmaceuticals. The shareholder value maximization process will remain ongoing as we continue to identify sources of value for Ligand's shareholders. With the sale of our commercial operations, Ligand will become a dynamic and highly-specialized R&D and royalty company. On the royalty front, we are excited about the future income streams from AVINZA (through Nov. 2017) and are also optimistic about potential milestones and royalties from GSK's Promacta, Wyeth's Bazedoxifene, and Ligand's several other clinical-stage partnered products. By the end of 2006, Ligand expects to have new corporate leadership, to have restructured and narrowly focused its research and development endeavors in order to focus on our most promising compounds (two of which we expect will be going into clinical trials before year end), and to minimize its expense structure with a goal to be both earnings and cash-flow positive." Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) -- http://www.ligand.com/-- discovers, develops and markets new drugs that address critical unmet medical needs of patients in the areas of cancer, pain, skin diseases, men's and women's hormone- related diseases, osteoporosis, metabolic disorders, and cardiovascular and inflammatory diseases. Ligand's proprietary drug discovery and development programs are based on gene transcription technology, primarily related to intracellular receptors. * * * As reported in the Troubled Company Reporter on Aug. 16, 2006 Ligand Pharmaceuticals Incorporated's balance sheet at June 30, 2006 showed total assets of $285.9 million and total liabilities of $524.4 million resulting in a stockholders' deficit of $238.5 million. This compares to a stockholders' deficit of $110.4 million at Dec. 31, 2005. LINENS 'N THINGS: Posts $39.1 Mil. Net Loss in Qtr. Ended July 1 ---------------------------------------------------------------- Linens Holding Co. filed its financial results for the second quarter ended July 1, 2006, with the Securities and Exchange Commission. The Company reported total net sales of $611.6 million for the quarter, a 6.7% increase over the same quarter in 2005. This increase in net sales resulted from the opening of new store locations and a slight increase of 0.2% in comparable net sales for the quarter. For the quarter, the Company generated a loss before interest, income taxes, depreciation and amortization of $10.2 million compared to positive EBITDA of $13.7 million in the second quarter of 2005. The decrease in EBITDA was due primarily to markdowns taken to clear nonproductive and aged inventory and the effects of purchase accounting on occupancy costs. Adjusted EBITDA for the second quarter of 2006, which excludes the impact of transaction expenses from the February 2006 acquisition of Linens 'n Things, Inc., rent-related adjustments, one-time inventory reserves and other non-recurring or non-cash expenses, was negative $14.6 million compared with positive Adjusted EBITDA of $16.6 million in the second quarter of 2005. The Company generated a net loss for the second quarter of 2006 of $39.1 million compared with a net loss of $5.9 million in the second quarter of 2005. "During this past quarter we began to actively reposition our business. Merchandising initiatives, such as 'Best Bets' and intensification of our top stores began to build momentum. We also used this time frame to clear nonproductive merchandise, which while resulting in increased markdowns, did create open to buy dollars and helped to improve store operations," Robert DiNicola, chairman and chief executive officer, said. "Long term we expect to recapture market share with improving assortments, better execution at the store level and more impactful marketing," Mr. DiNicola added. For the second quarter, the Company used cash in operating activities of $19.4 million, ending the quarter with a short-term borrowing position net of cash balances of $141.6 million and excess availability under its revolving credit facility of $280.3 million. Net sales for the 26-week period ended July 1, 2006, increased 5.3% to $1.204 billion, as compared with net sales of $1.144 billion for the same period last year. Comparable net sales for the twenty-six week period ended July 1, 2006, decreased 1.8%. Net loss for the 26-week period ended July 1, 2006, was approximately $104.6 million as compared with a net loss of $10 million for the same period last year. During the second quarter of 2006, the Company opened six stores as compared with opening 17 stores during the second quarter of 2005. Store square footage increased approximately 6.5% to 18.5 million at July 1, 2006, compared with 17.3 million at July 2, 2005. At July 1, 2006, the Company had $652.0 million of total long-term debt outstanding. For the second quarter of 2006, the Company had capital expenditures of $16.7 million. At July 1, 2006, the Company's balance sheet showed $2.049 billion in total assets, $1.454 billion in total liabilities, and $595 million in total shareholders' equity. Full-text copies of the second quarter financials are available for free at http://ResearchArchives.com/t/s?1168 Linens 'n Things -- http://www.lnt.com/-- is a national, large format retailer of home textiles, housewares and home accessories. As of July 1, 2006, Linens 'n Things operated 555 stores in 47 states and six provinces across the United States and Canada. * * * Fitch initiated rating coverage of Linens 'n Things, Inc., in February 2006. Fitch assigned issuer default rating at 'B-'; asset-based revolver at 'BB-/RR1'; and senior secured notes 'B-/RR4'. Fitch said the rating outlook is negative. Standard & Poor's Ratings Services assigned its single 'B' corporate credit rating to specialty home furnishings retailer Linens 'n Things Inc. At the same time, Standard & Poor's assigned its single 'B' secured debt rating and a recovery rating of '2' to the $650 million senior secured floating-rate notes due 2014 to be co-issued by Linens and Linens 'n Things Center Inc. Moody's Investors Service assigned first time ratings to Linens 'N Things, Inc., February 2006. Moody's assigned corporate family rating at B3; $650 Million of senior secured guaranteed notes due 2014 at B3; and speculative grade liquidity rating at SGL-3. Moody's said the outlook is stable. LONGYEAR HOLDINGS: Purchase Plan Cues Moody's to Hold Ratings ------------------------------------------------------------- Moody's Investors Service affirmed existing ratings but changed its rating outlook for Longyear Holdings, Inc. to negative from stable following the announcement last week that a consortium led by Macquarie Bank plans to acquire a 51% stake in Longyear. Current owners Advent International, Bain Capital, and management collectively will retain a 49% ownership interest. In connection with this expected change in ownership, new financing in the amount of $1,395 million will be arranged. The new financing, plus $213 million in new equity, will be used to retire existing debt of about $575 million, acquire capital stock from existing shareholders, fund the pending acquisition of DrillCorp Limited, and pay related fees and expenses. Moody's believes that all of Longyear's existing debt will be retired and that the current ratings will be withdrawn at the conclusion of the proposed transaction. Therefore, the negative rating outlook applies to Longyear's B2 corporate family rating and reflects the heightened risks associated with the proposed transaction given a twofold increase in debt. Moody's affirmed these ratings: * B2 corporate family rating, * B2 for the senior secured first lien revolving credit facility and term loan, and * Caa1 for the $75 million senior secured second lien term loan. Longyear Holdings, Inc. is a global supplier of services and a manufacturer of equipment and products to the natural resource, environmental, water, energy, and construction industries. In 2005, it had sales of just over $1 billion. LUXELL TECH: Board Names Alec Couckuyt as Chief Executive Officer ----------------------------------------------------------------- The Board of Directors of Luxell Technologies Inc. appointed Alec G. Couckuyt, as Chief Executive Officer, effective Sept. 11, 2006. The appointment of Mr. Couckuyt concludes the 4th of 5 stages that the Board of Directors reported in November 2005 consistent with the ongoing restructuring of Luxell. "Our appointment of Mr. Couckuyt concludes a 3 month extensive search for a new CEO, and meets the objectives of the search committee and the Board. Our three core requirements were prior experience with restructuring companies, a proven leader with turnaround expertise, and someone who is willing to back-up their perspective on the future of Luxell with a significant investment," John MacDonald, Interim CEO and Chairman of the Board states. "Alec meets and exceeds these core requirements and the Board is confident and expectant that Alec can lead the next phase of Luxell to realizing on the profit potential of all the investment made by shareholders." Prior to joining Luxell, Mr. Couckuyt owned and operated a private consulting company, AGC Consulting, which assisted Senior Executives in maximizing their company's business potential. His most recent assignment, which is currently winding down, was with EDS of Plano, Texas. Prior to forming AGC Consulting, Mr. Couckuyt held senior executive positions with Symcor Inc., a financial outsourcing services firm as Senior Vice President of Operations; with Transcontinental Inc., which specializes in printing products for the North American Direct Marketing industry, as Vice-President of Direct Marketing; and with AGFA- Gevaert, a German-Belgian multi-national with businesses in Graphic Arts, Medical Diagnostics and Photo Imaging products, as Vice-President of Graphic Arts Systems, with both local and international postings. Mr. Couckuyt said that he was "excited to take this position with Luxell at this point in the company's life. There is excellent core expertise and we must focus on taking advantage of this expertise in moving the bottom line to a profit position. I believe there are real opportunities for Luxell in the marketplace and we must be very specific in how we target and deliver on those opportunities." Mr. MacDonald, who has followed the successful career of Mr. Couckuyt for several years, remarked, "Alec has a proven record of leading change and making money for shareholders, and our Board is confident he has the ability to do that here at Luxell. We're very optimistic about the operating and marketing strategies he has discussed with us and greatly value the importance he places on partnership relationships with everyone from employees, to customers and suppliers." About Luxell Luxell Technologies Inc. (TSX: LUX) -- http://www.luxell.com/ http://www.aktelux.com/and http://www.luxellresearch.com/-- designs, manufactures and licenses flat panel display technologies and solutions for defence and avionics industries through its operating divisions Aktelux and Luxell Research. * * * As reported in the Troubled Company Reporter on Aug. 30, 2006, Mr. MacDonald stated, "...the Company's Board of Directors has determined the best option to realize a possible future for the Company, its shareholders, employees, suppliers and customers, is to file a proposal to creditors under the Bankruptcy and Insolvency Act, which will take a minimum of 45 days to complete and provide the Company with a complete stay on any creditor proceedings." In order to continue operations, the Company sought new financing for $1 million of Debtor-in-Possession Financing to provide the Company with working capital as well as to fund C.O.D. payments to suppliers. This additional term debt is intended to provide holders of promissory notes with assurance that if the assets of the Company were sold they would not be prejudiced for having accepted the proposal. The Company is also examining the structuring of a further $5 million convertible debenture and what the terms and conditions of such additional financing would entail. MARK IV: Slow Cash Flow Cues S&P to Lower Corp. Credit Rating to B ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Amherst, New York-based Mark IV Industries to 'B' from 'B+' and removed the rating from CreditWatch with negative implications, where it was placed Aug. 21, 2006. "The downgrade reflects the company's sluggish free cash flow generation, caused by competitive pressures in the automotive industry, which has impeded its ability to pay down debt," said Standard & Poor's credit analyst Gregg Lemos Stein. The outlook is stable. Mark IV, a maker of automotive, industrial and electronic toll collection equipment, has total debt of about $1.1 billion and underfunded postretirement benefit liabilities of about $235 million. Intense competition and pricing pressures in the automotive industry have led to lower margins in many of Mark IV's segments. These pressures may grow in the near term as several automakers have sharply cut their North American production plans for the fourth quarter of 2006, including a 21% decline by Ford Motor Co. and a 13% reduction by General Motors Corp. Ford and GM's North American operations together account for just 11% of revenues for Mark IV, which benefits from fair customer diversity. Still, any decline in sales to Ford and GM comes at an inopportune time for Mark IV, which faces a total of $51 million of mandatory pension plan contributions by the end of the current fiscal year ending February 2007. In the electronic toll equipment segment, which accounts for 22% of Mark IV's EBITDA, results have been soft recently because of postponed shipments to government agencies. Although Mark IV expects to record these sales, the timing may be pushed back several quarters, further stretching Mark IV's financial profile. In the heavy-duty truck segment, which provides 12% percent of Mark IV's EBITDA, sales have been strong this year, but an industry-wide downturn is expected in 2007 because of new EPA emissions standards. These business challenges notwithstanding, Mark IV's moderate capital requirements and improved operational efficiencies should enable the company to continue generate solid low- to mid-teens percentage EBITDA margins over the economic cycle. MCMS INC: Claims Objection Deadline Stretched to February 14 ------------------------------------------------------------ The Honorable Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware extended until Feb. 14, 2007, the time within which Francis A. Monaco, Jr., the Chapter 11 Liquidating Trustee of MCMS, Inc., can object to claims. The Liquidating Trustee requires additional time to complete his review of those claims and all other proofs of claim filed in the Debtors' cases to make sure they have been properly scheduled. The Liquidating Trustee is in the process of resolving the remaining preference actions filed in the Debtors' cases. To the extent settlements are reached and the parties agree to waive their claims, additional objection will need to be filed in order to formally expunge the disputed claims. The extension will give the Liquidating Trustee sufficient time to make informed decisions concerning the resolution of claims and to communicate with the claimants. Following the sale of its business and associated trade names and trademarks, MCMS, Inc., changed its name to Custom Manufacturing Services, Inc. Debtor MCMS Customer Services, Inc., has also changed its name to CMS Customer Services, Inc. The Debtors filed for chapter 11 protection on September 18, 2001 (Bankr. D. Del. Case No. 01-10477) and converted these cases under Chapter 7 Liquidation of the Bankruptcy Code on May 13, 2002. Eric D. Schwartz, Esq., and Donna L. Harris, Esq., at Morris, Nichols, Arsht & Tunnell represent the Debtors as they wind-up their assets. Francis A. Monaco, Jr., at Monzack & Monaco, P.A., and Charles L. Glerum, Esq., at Choate, Hall & Stewart served the Committee's counsel. When the company filed for protection from its creditors, it listed $173,406,000 in total assets and $343,511,000 in total debt. The Debtors' First Amended Consolidated Liquidating Plan of Reorganization was confirmed on Dec. 3, 2003, an became effective on Jan. 13, 2004. Francis A. Monaco, Jr., was appointed as the Chapter 11 Liquidating Trustee of the Debtors. Kevin J. Mangan, Esq., represents the Liquidating Trustee. MEDICAL ASSOCIATES: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Medical Associates of Pinellas, L.L.C. 1064 Keene Road Dunedin, Florida 34698 Bankruptcy Case No.: 06-04800 Type of Business: The Debtor offers medical services. Chapter 11 Petition Date: September 8, 2006 Court: Middle District of Florida (Tampa) Debtor's Counsel: David S Jennis, Esq. Jennis Bowen & Brundage, P.L. 400 North Ashley Drive, Suite 2540 Tampa, Florida 33602 Tel: (813) 229-1700 Fax: (813) 229-1707 Total Assets: $1,459,362 Total Debts: $474,246 Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gary Greenspan, M.D. Former partner $51,829 601 Main Street Claim related to Dunedin, FL 34698 capital account Leonard Dunn, M.D. Former partner $49,467 601 Main Street Claim related to Dunedin, FL 34698 capital account Robert Stein, M.D. Former partner $47,728 1840 Mease Drive, Suite 400 Claim related to Safety Harbor, FL 34695 capital account Leslie Goodman, M.D. Former partner $40,535 1840 Mease Drive, Suite 400 Claim related to Safety Harbor, FL 34695 capital account Olympia Development Group Rent on Office $21,760 Beckman Coulter, Inc. Lease on BCI $21,260 Synchron LX 20 Chemistry System BD Fairways, Ltd. Office Lease $13,127 Elais Kolettis, D.O. Former partner $12,577 Claim related to capital account Vincent Dilella, D.O. Former partner $11,718 Claim related to capital account Bobby Haley, D.O. Former partner $11,030 Claim related to capital account Cardinal Health Supplies $9,869 Biomerieux, Inc. Supplies $9,296 Lewis Birch & Ricardo, LLC Accounting services $8,960 Stevens & Stevens, Inc. Storage $8,497 Pinellas County Tax Coll. Personal Property $8,095 Taxes due for 2006 Sanford Plevin, M.D. Former partner $7,797 Claim related to capital account Charles Nutinsky, D.O. Former partner $7,579 Claim related to capital account Larry Feinman, D.O. Former partner $6,762 Claim related to capital account Sunset Medical Clinic, Ltd. Rent on Office $6,279 MERIDIAN AUTOMOTIVE: IRS Opposes Third Amended Joint Plan --------------------------------------------------------- The Internal Revenue Service asks the U.S. Bankruptcy Court for the District of Delaware to deny Meridian Automotive Systems, Inc., and its debtor-affiliates' Third Amended Joint Plan of Reorganization. The IRS complains that the Debtors' Third Plan provides for an unreasonably short administrative bar date of 30 days after the Effective Date of the Plan. To the extent that the Debtors seek a prompt determination of their tax liability, they should abide by Section 505(b) of the Bankruptcy Code for a determination of their administrative tax claims, Ellenn. W. Sights, Esq., in Wilmington, Delaware, asserts. The IRS opposes the Third Amended Plan to the extent that: a. it fails to preserve IRS' set-off and recoupment rights; and b. its discharge and release provisions exceed the scope of Section 1141(d) of the Bankruptcy Code. Ms. Slights argues that discharge should apply to debts incurred prior to the Confirmation Date rather than the Effective Date. The IRS objects to the release from liability of non-Debtor third parties and maintains that it will not grant the releases described in the Plan. The IRS has filed two unsecured claims against the Debtors. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/ or 215/945-7000). MERIDIAN AUTOMOTIVE: Wants to Reject American Financial Lease ------------------------------------------------------------- Meridian Automotive Systems, Inc., and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to reject their executory equipment lease with American Financial Leasing, Inc., effective as of Sept. 7, 2006. The Debtors have discontinued operations at their Canton, Ohio facility where the equipment subject to the Lease is utilized, Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, informs the Court. As a result, the Lease provides the Debtors and their estates with little or no benefit based on: -- the Debtors' need for the Equipment; -- the cost to fulfill the Debtors' obligations under the Lease; and -- costs to transport and store the Equipment. The Lease's rejection will avoid additional administrative expenses to the Debtors' estates, Mr. Fredericks asserts. Moreover, the Lease holds no material economic value to the Debtors' estates and is not essential to the conduct of the bankruptcy cases. Headquartered in Dearborn, Mich., Meridian Automotive Systems, Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. (Meridian Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/ or 215/945-7000). MONONGAHELA POWER: Moody's Concludes Review and Upgrades Ratings ---------------------------------------------------------------- Moody's Investors Service upgraded Monongahela Power Company's long-term ratings by one notch, including the upgrade of its senior unsecured debt to Baa3 from Ba1. This concludes the review for possible upgrade that was initiated on August 9, 2006. The rating outlook is stable. The upgrade recognizes substantial improvements in MP's financial position, and favorable regulatory signals with regard to its large environmental capital spending program. MP's stand-alone financial ratios are consistent with a Baa rating, with funds from operations covering interest about four times and FFO to debt approaching 20%. MP's ratings also consider the financial and operational interrelationship of the Allegheny Energy, Inc. family of companies. Allegheny effectively manages all of its regulated operating subsidiaries as a single system, including MP, and the utility subsidiaries share their resources through a regulated money pool borrowing arrangement. The West Virginia Public Service Commission recently approved a securitization to recover expected costs for construction of flue gas desulfurization equipment to reduce sulfur dioxide emissions at the company's Ft. Martin coal-fired power plant. Last week, the company announced that the estimated costs are now about $160 million to $200 million higher than previously expected. The upgrade incorporates the belief that the project would be unlikely to proceed without reasonable expectations for relatively timely recovery of these environmental expenditures. The West Virginia PSC approved full recovery through a securitization covering the previously estimated expenditure of $338 million. The outlook is stable, reflecting the expected low volatility of the company's underlying utility operations and the expectation that MP's improved financial profile will be maintained over the next several years, and that there will be reasonably supportive regulatory action to address recovery of increased costs and outlays for environmental spending. Monongahela Power, a subsidiary of Allegheny Energy, Inc., is an integrated utility serving approximately 374,000 electric customers in West Virginia. MSO HOLDINGS: June 30 Balance Sheet Upside-Down by $10.9 Million ---------------------------------------------------------------- MSO Holdings, Inc., filed its second quarter financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission on Aug. 14, 2006. The Company incurred a $467,399 net loss on $997,872 of net revenues for the three months ended June 30, 2006, compared to a $1,702,541 net loss on $1,995,255 of net revenues in 2005. At June 30, 2006, the Company's balance sheet showed $1,079,554 in total assets and $11,979,555 in total liabilities, resulting in a $10,900,001 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $747,139 in total current assets available to pay $1,672,865 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?1162 Going Concern Doubt As reported in the Troubled Company Reporter on June 28, 2006, BDO Seidman, LLP, expressed substantial doubt about MSO Holdings' ability to continue as a going concern after auditing the Company's financial statements for the years ended December 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses and negative cash flows from operations. About MSO Holdings MSO Holdings, Inc. -- http://www.WeightLossSurgery.com/-- is an Obesity Disease Management company with corporate, union, health insurance plan and hospital clients. MSO has a sophisticated non- interventional weight-loss program with individualized behavioral coaching by experienced psychotherapist coaches. Also, MSO surgery functions are conducted through its six CORI (Centers for Obesity Related Illnesses) Centers in New York City, Brooklyn, Queens, Long Island, Detroit and the Chicago area. MSO contracts with acute care hospitals to establish Bariatric Surgery Centers of Excellence under the brand name CORI, while contracting with corporations, unions and health insurance plans for Obesity Disease Management for employees, members and the general public. MSO has been awarded the Joint Commission on Accreditation of Healthcare Organizations Disease-Specific Care Certification for Bariatric Surgery. NATIONAL CENTURY: CSFB Trust Sets Sept. 21 as Distribution Date --------------------------------------------------------------- Avidity Partners, LLC, as trustee of the CSFB Claims Trust, notifies beneficiaries that it will make a distribution calculated pursuant to the provisions of the Trust Agreement. Avidity has set: * September 8, 2006, as the record date; and * September 21, 2006, as the distribution date. Inquiries concerning the distribution must be directed to: Jill DePietto, U.S. Bank, c/o ASG, 8475 Western Way, Suite 100 Jacksonville FL 32256 Phone: (904) 807-3057 Fax: (904)807-3030 Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust, is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represents the Debtors. (National Century Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/ or 215/945-7000) NATIONAL CENTURY: Former VP Snoble Sentenced to 4-Yr. Imprisonment ------------------------------------------------------------------ John Allen Snoble, age 64, of Upper Arlington was sentenced in the United States District Court to four years imprisonment for his role in a conspiracy to launder the proceeds of securities fraud while he held management positions with National Century Financial Enterprises, Inc. Snoble was also sentenced to make restitution to victims of his crime. Judge Graham indicated that he would set a separate hearing to determine the amount and recipients of restitution. Earlier proceedings have determined the total loss to be as much as $2.9 billion between 1994 and 2002. Gregory G. Lockhart, United States Attorney for the Southern District of Ohio; Timothy P. Murphy, Special Agent in Charge, Federal Bureau of Investigation, Cincinnati Field Division; Cromwell A. Handy, Special Agent in Charge, Internal Revenue Service Criminal Investigation; Gerald O'Farrell, Assistant Inspector in Charge, U.S. Postal Inspection Service; and Merri Jo Gillette, Regional Director, Midwest Regional Office, Securities and Exchange Commission, announced the sentence handed down by Senior United States District Judge James L. Graham. "Judge Graham's sentence should serve as a message of deterrence to others in positions of responsibility that such crimes will result in lengthy terms of imprisonment," Lockhart said. Snoble pled guilty in November 2004 to one count of conspiracy to launder money. Snoble held two management positions with NCFE, beginning as Chief Financial Officer in 1993 and becoming Vice President/Controller in 1999. Snoble and others conspired to defraud investors in health care receivable securitization notes issued by NCFE subsidiaries known as NPF VI and NPF XII. Snoble and others are alleged to have regularly moved hundreds of millions of dollars between and among bank accounts to hide the company's shortages. As part of his plea agreement, Snoble agreed to assist the government in the investigation and prosecution of others. In May 2006, a federal grand jury returned a 60-count indictment charging seven former executives with conspiracy, securities fraud, wire fraud, mail fraud, and money laundering. Their trial is set to begin in September 2007. Snoble is the third NCFE management figure to plead guilty in the case. Sherry L. Gibson, NCFE's former Executive Vice President for Compliance, pled guilty to conspiracy to commit securities fraud in August 2003. She was sentenced to 48 months imprisonment in June 2004 and ordered to liquidate all her assets for restitution. Brian J. Stucke, age 33, of London, Ohio, was Director of Compliance for NCFE. Stucke pled guilty in December 2003 to conspiracy to commit securities fraud and is awaiting sentence. The Dublin, Ohio-based Company bought medical accounts receivable from health care providers around the country. NCFE financed the purchases by selling securities in the form of notes to large institutional investors outside Ohio. According to documents provided to potential investors, NCFE was to use the money it collected from the accounts receivable to repay investors. In its promotional materials, NCFE billed itself as the "nation's leading supplier of working capital to the medical industry." Lockhart commended the agents and analysts of the FBI, IRS, SEC, and Postal Inspectors who continue to analyze and investigate the information contained in thousands of boxes of documents and computer files seized by the FBI with the assistance of the Dublin Police Department and the Franklin County Sheriff's Office from NCFE's Dublin offices in November 2002. Lockhart also commended the efforts of Assistant U.S. Attorney Dale E. Williams, Jr., U.S. Department of Justice Trial Attorney Mark Yost, and other attorneys in the U.S. Department of Justice Criminal Division who are working on the investigation and related prosecutions. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust, is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represents the Debtors. (National Century Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/ or 215/945-7000) NEOPLAN USA: Wants Court to Set Oct. 23 General Claims Bar Date --------------------------------------------------------------- Neoplan USA Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to set Oct. 23, 2006, as the deadline for all creditors owed money by the Debtors on the account of claims arising prior to Aug. 17, 2006. The Debtors further ask the Court to set Feb. 13, 2007, as the deadline for all governmental units owed money by the Debtors to on the account of claims arising prior to the petition date. The Debtors say that establishing bar dates will advance the goal of determining the appropriate treatment of various creditor constituencies on the extent of the claims asserted against them. Further, the Debtors intend to sell their remaining assets pursuant to a liquidating plan, which was filed on Aug. 24, 2006. Copies of written proofs of claim must be sent or hand delivered before 4 p.m. (EST) on Oct. 23, 2006 for general claims and before 4 p.m. (EST) on Feb. 13, 2007 for government units claims to: Delaware Claims Agency, LLC 230 North Market Street, 2nd Floor P.O. Box 515 Wilmington, DE 19801 Headquartered in Denver, Colorado, Neoplan USA manufactures standard floor buses, low floor buses, and articulated buses. Neoplan USA licenses its designs from the German corporation, Neoplan. Neoplan USA is entirely separate from Neoplan in Germany. The Company, its parent, IAP Acquisition Corporation, and two affiliates, filed for chapter 11 protection on Aug. 17, 2006 (Bankr. D. Del. Lead Case No. 06-10872). Tobey M. Daluz, Esq., at Ballard Spahr Andrews & Ingersoll LLP, represents the Debtors. The Official Committee of Unsecured Creditors is represented by David B Stratton, at Pepper Hamilton LLP. When Neoplan USA filed for protection from its creditors, it listed $13,696,911 in total assets and $59,009,471 in total debts. NORTH AMERICAN: Launches $60.4 Million Offering of 9% Senior Notes ------------------------------------------------------------------ North American Energy Partners Inc. commenced a cash tender offer to purchase any and all of its $60,481,000 aggregate principal amount outstanding of 9% Senior Secured Notes due 2010 (CUSIP No. 656844 AE 7). In connection with the tender offer, the Company is soliciting consents to, among other things, eliminate substantially all of the restrictive covenants and certain events of default contained in the indenture governing the notes. The tender offer and the consent solicitation are being made upon the terms and subject to the conditions set forth in the offer to purchase and consent solicitation statement and the related letter of transmittal, each dated Sept. 8, 2006. The tender offer is scheduled to expire at 5:00 p.m., New York City time, on Oct. 6, 2006, unless extended. The total consideration for each $1,000 aggregate principal amount of notes validly tendered and accepted for payment and for the related consents, will be the sum of (x) 35% of the equity claw-back price ($1,090 per $1,000 principal amount of notes validly tendered) and (y) 65% of the fixed spread price. However, if the fixed spread price is less than the amount calculated above, the total consideration for each $1,000 aggregate principal amount of notes will be the fixed spread price. The fixed spread price is equal to the present value on the date of payment for the notes of all future cash flows on the notes minus accrued and unpaid interest to but not including, the payment date of June 1, 2008, the first date on which the notes are redeemable, based on the yield on the 4% U.S. Treasury Note due May 31, 2008, plus 50 basis points. The total consideration for notes tendered, and for the related consents, if such notes are tendered on or prior to the consent date of 5:00 p.m., New York City time, on Sept. 21, 2006, unless such date is extended, and such notes are accepted for payment by the Company, includes a consent payment of $30 per $1,000 aggregate principal amount of notes. Holders, who tender notes after the consent date, will not receive the consent payment. Holders, who tender notes that are accepted for payment and purchased by the Company, also will be paid accrued and unpaid interest up to but not including, the applicable payment date. Tendered notes may not be withdrawn and consents may not be revoked after the consent date. The dealer manager and solicitation agent will determine the actual pricing, based on the foregoing, on Sept. 22, 2006, although this price determination date may be extended by the Company. The Company will publicly announce the pricing information by issuing a news release prior to 9:00 a.m., New York City time, on the day following the price determination date. The Company expects to pay for any Notes purchased, pursuant to the tender offer and consent solicitation, on a date promptly following the expiration of the tender offer. The Company may accept and pay for any Notes at any time after the consent date, in its sole discretion. Holders may not tender notes without delivering consents and may not deliver consents without tendering notes. The obligation of the Company to accept for payment and purchase the notes in the tender offer and pay for the related consents, is conditioned on, among other things, the Company's proposed amalgamation with its parent corporations and the subsequent initial public offering of common shares of the amalgamated company and the receipt of consents to the proposed amendments from the holders of at least a majority of the aggregate principal amount of outstanding notes, each as described in more detail in the offer to purchase and consent solicitation statement. The Company has retained Credit Suisse Securities (USA) LLC to serve as the dealer manager and solicitation agent for the tender offer and the consent solicitation. Questions regarding the tender offer and the consent solicitation may be directed to: Credit Suisse Securities (USA) LLC Telephone (212) 538-0652 (collect) Toll Free (800) 820-1853 Requests for documents in connection with the tender offer and the consent solicitation may be directed to the information agent for the tender offer and the consent solicitation: D. F. King & Co., Inc. Telephone (800) 431-9633 About North American Energy Headquartered in Edmonton, Alberta, North American Energy Partners Inc. -- http://www.naepi.ca/-- provides mining and site preparation, piling and pipeline installation services in western Canada. The Company specializes in providing services for the Canadian oil sands. * * * As reported in the Troubled Company Reporter on July 31, 2006, Standard & Poor's Ratings Services placed its 'B-' long-term corporate credit, its 'B' senior secured debt, and its 'CCC' senior unsecured debt ratings on North American Energy Partners Inc. on CreditWatch with positive implications. OPBIZ LLC: S&P Downgrades Ratings to CCC+ With Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Las Vegas-based casino owner OpBiz LLC to 'CCC+' from 'B-'. In addition, the ratings remained on CreditWatch with negative implications where they were placed on Aug. 18, 2006. The downgrade reflects Standard & Poor's concerns about the company's near-term liquidity position given: -- The company's failure to satisfy its minimum construction- spending requirement, which was $72 million at Aug. 31, 2006, by $35.6 million, as outlined in its existing bank facility and the lack of resolution to this covenant breach to date; -- The continued weaker-than-expected operating performance at the property, which has resulted in the violation of minimum EBITDA covenant contained in the company's bank facility (while the company's owners have committed to injecting $5 million to cure this non-compliance, this remedy is not permitted in future periods if a subsequent violation occurs); -- The higher renovation project budget, $165 million, which will require additional funding, either through incremental financing and/or the owners; and -- The delayed construction timetable, with full completion now scheduled for the second quarter of 2007 (despite the interior work still scheduled to be completed by the end of 2006. As a result of the violation of the minimum construction spending requirement covenant, the company may be required to make a mandatory prepayment of amounts outstanding under the bank facility for a renovation-spending shortfall. The viability of the renovation project is in question. Standard & Poor's review of OpBiz's rating will concentrate on lender negotiations and their impact on the company's near-term liquidity position. Prospects for a further downgrade are not necessarily limited to one notch. PERFECTING NEW: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Perfecting New Life Full Gospel Baptist Church 1224 Franklin Street North Little Rock, Arkansas 72114 Bankruptcy Case No.: 06-13930 Type of Business: The Debtor operates a church. Chapter 11 Petition Date: September 7, 2006 Court: Eastern District of Arkansas (Little Rock) Judge: Richard D. Taylor Debtor's Counsel: Frederick S. Wetzel, Esq. Wetzel Law Firm 200 North State Street, Suite 200 Little Rock, Arkansas 72201 Tel: (501) 663-0535 Total Assets: $1,278,650 Total Debts: $845,322 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ GMAC 2005 Cadillac $56,330 P.O. Box 3100 Escalade (39,458 Midland, TX 79702 miles) Value of security: $39,750 Pulaski Bank 2005 Chevy Van-15 $23,172 5800 "R" Street (24,236 miles) Little Rock, AR 72207 Value of security: $18,000 Visa Business $9,253 P.O. Box 7500 Little Rock, AR 72217 AWI International $7,781 Associated Plumbers $5,879 North Little Rock Electric $5,317 Arlington Resort & Spa $4,376 Dryades Savings Bank $3,500 Great Central $2,927 LaHarpe's Office Furniture $2,836 KARK $2,500 Airmasters $2,042 Modern Image Systems $1,679 Glenn Daniels Transmission $1,200 Williams AC Hearing $1,188 GMAC Payment Processing $1,085 ADT Security Services $1,059 Visual Engineering $950 Kone, Inc. $905 Brinks Home Security $888 RENFRO CORP: Moody's Rates Proposed $145 Million Sr. Loan at B2 --------------------------------------------------------------- Moody's Investors Service assigned first time ratings of B2 to Renfro Corporation's corporate family and to its proposed $145 million senior secured term loan facility. The rating for the proposed term loan reflects the overall probability of default of the company, to which Moody's assigns a PDR of B3, and a loss given default assessment of LGD3. The ratings assigned are subject to there being no material changes in the terms and conditions of the transaction as advised to Moody's. These ratings were assigned: * Corporate family rating at B2 * $145 million senior secured term loan facility at B2 * Probability of Default Rating at B3 Moody's B2 rating reflects Renfro's moderate scale in the apparel industry, its sole focus on the sock sector, and the commoditized nature of the segment. Ratings are also constrained by limited brand diversification, with the licensed Fruit of the Loom brand accounting for the majority of sales, and high client concentration, with the top three customers accounting for a substantial majority of sales. The rating reflects financial leverage that is within the rating category and also takes into account the company's leading market share and low cost manufacturing platform. The rating outlook is stable as Moody's expectations are for relatively steady operating margins and slowly improving financial metrics given the moderate level of free cash flow which is appropriate for the rating category. The rating and outlook also incorporate flexibility for the company to utilize a $35 million "accordion" feature of its term loan to pursue potential bolt-on acquisitions which are expected to have limited impact to credit metrics. In view of the company's scale and limited diversification, there is limited upward rating pressure at this time. Ratings could be lowered if the pace of acquisition activity exceeds Moody's expectations, if integration issues arise in any acquisitions, or the category experiences increased price competition resulting in reduced operating margins. The B2 rating of the term loan B facility reflects an LGD3 loss given default assessment as this facility is secured by a first lien on substantially all assets of the company, other than accounts receivable and inventory, over which the term loan B will have a second lien, junior to the $60 million secured revolving credit facility. Due to the priority position of the secured revolving credit facility over the most liquid assets, the LGD assessment reflects expectation of a less than full recovery in a possible distressed scenario. Activation of the $35 million "accordion" feature of the term loan is not expected to have material effect on the ratings or LGD assessment. Based in Mount Airy, North Carolina and founded in 1921, Renfro Corporation is the largest US-headquartered manufacturer and distributor of socks with estimated revenue of approximately $300 million. The company primarily manufactures products under licenses including "Fruit of the Loom". RENFRO CORP: S&P Rates Proposed $145 Million Senior Loan at B ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Mount Airy, North Carolina-based sock manufacturer Renfro Corporation. The rating outlook is stable. At the same time, Standard & Poor's assigned its loan and recovery ratings to Renfro's proposed $145 million senior secured term loan B ($110 million funded at close). The loan was rated 'B' (at the same level as the corporate credit rating on the company) with a recovery rating of '4', indicating the expectation for marginal (25%-50%) recovery of principal in the event of a payment default. The ratings are based on preliminary offering statements and are subject to review upon final documentation. Proceeds from the proposed bank loan, along with some borrowings from a proposed $60 million asset-based revolving credit facility (unrated), will be used by financial sponsor Kelso & Company to finance the acquisition of Renfro. Standard & Poor's estimates that Renfro will have about $130 million in total debt outstanding upon the closing of the transaction. The company has up to $35 million available to draw from the term loan over the next 18 months for corporate purposes. "The rating on Renfro reflects the company's participation in the highly competitive apparel manufacturing industry, its narrow product portfolio, customer concentration, and highly leveraged financial profile," said Standard & Poor's credit analyst Susan Ding. "These factors are somewhat mitigated by the well-known Fruit of the Loom brand." Although Renfro does not own the Fruit of the Loom brand, it does have a long-term license to sell Fruit of the Loom socks until 2026. Standard & Poor's assigns a high degree of business risk to the apparel manufacturing industry because of intense competitions, low barriers to entry, and the commodity-like nature of certain apparel items, such as socks. Renfro is a designer, manufacturer, and marketer of men's, women's and children's socks, selling primarily to mass merchandisers. Its major well-known licensed brand name is Fruit of the Loom, which comprises a significant portion of revenues. Seventy-five percent of Renfro's sales are in the sport sock category. The sock manufacturing segment is somewhat fragmented with other major brands that include Hanes and Gold Toe. SAINT VINCENTS: Court Approves New York OAG Resolution Agreement ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates' Resolution Agreement with the Office of the Attorney General of the State of New York. As reported in the Troubled Company Reporter on Aug. 25, 2006, the OAG had received complaints concerning the provision of language interpretation and translation services at St. Vincent's Hospital, Staten Island. Subsequently, the OAG began an investigation into SVHSI's policies, procedures, and practices regarding language assistance services. To avoid the expense and inconvenience of further investigation or litigation, and while denying any wrongdoing or liability in the matter, Saint Vincent Catholic Medical Centers, doing business as SVHSI, entered into a resolution agreement with the OAG. The Resolution Agreement revises SVHSI's policies in a number of ways, specifically, in the areas of: * Assessment of Interpreters and Language Banks; * Providing and Securing Language Assistance Services; * Monitoring; * Training; and * Appointment of a Language Assistance Coordinator. Among other things, the Resolution Agreement provides that: (a) SVHSI will establish a written Language Bank identifying Hospital Employees who may interpret or translate Medical Information to LEP Patients -- patients whose primary language is not English and who cannot speak, read, write or understand English at a level sufficient to permit the patient to interact effectively with health care providers. (b) SVHSI will ensure that each shift includes a sufficient number of Qualified Interpreters. (c) SVHSI will continue to maintain a contract with a company qualified to provide telephonic interpretation services. (d) Hospital Employees will seek to provide face-to-face interpretation services where possible. (e) SVHSI will collect and report data over three Reporting Periods. (f) SVHSI will prepare Language Assistance Monitoring Reports. (g) The Language Assistance Monitoring Reports will be used to address service deficiencies and to help prepare a separate report summarizing internal needs and plans for future changes. Both the Language Assistance Monitoring Report and the Internal Needs Assessment Report will be provided to the OAG. (h) SVHSI will take additional steps to measure the adequacy of its language assistance services, including: (1) patient satisfaction surveys; (2) provider satisfaction surveys; (3) spot checks of various departments to determine the extent to which Hospital Employees are complying with language assistance policies and procedures; and (4) telephone tests to assess the adequacy of staff responses to telephone inquiries from LEP persons. (i) SVHSI will develop a concise summary of procedures to follow when employees come into contact with LEP Patients, which will be subject to the approval of the OAG. Once approved, the LEP Policy Summary will be distributed to all employees who come into contact with patients, and will be posted in specific locations. (j) SVHSI will appoint a specific individual or individuals responsible for implementing language assistance services and for ensuring compliance with the Agreement. A full-text copy of the Resolution Agreement is available for free at http://ResearchArchives.com/t/s?1066 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. 34 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAINT VINCENTS: Inks Management Agreements with Wyckoff Heights --------------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve two management agreements, by and between Saint Vincent Catholic Medical Centers and Wyckoff Heights Medical Center, for certain management services to be provided by Wyckoff at Mary Immaculate Hospital, Queens, and St. John's Queens Hospital. Wyckoff is an affiliate of Caritas Health Care Planning, Inc., which has agreed to purchase the Debtors' Queens Hospitals pursuant to an asset purchase agreement dated May 9, 2006, Andrew M. Troop, Esq., at Weil, Gotshal & Manges LLP, in New York, explains. Although the Court has approved the Purchase Agreement, the closing of the transaction still requires receipt of numerous regulatory approvals, Mr. Troop relates. The delayed closing of the sale caused by the regulatory approval process will force the Debtors and their estates to continue to fund the significant operating losses generated by the Queens Hospitals for several additional months. Mr. Troop informs the Court that the Management Agreements will reduce the operating losses generated by the Queens Hospitals prior to the Closing Date, and will help assure that Mary Immaculate and St. John's are transferred to Caritas on the Closing Date with the least amount of disruption to the patients and employees of the hospitals. The two Management Agreements, which contain identical terms, provide a framework under which Wyckoff will assume responsibility for the daily management of the Queens Hospitals prior to the Closing Date, under the oversight and control of SVCMC. Each Management Agreement provides that: (1) Wyckoff: * will be responsible for the overall management and administration of the hospital; * will not, without SVCMC's prior approval, have management authority (i) with respect to the disposition of any asset involved in the operation of the hospital unless that asset will be transferred to Caritas on the Closing Date pursuant to the Purchase Agreement, or (ii) except as incidental to the daily management of the hospital, any operations of SVCMC relating to the hospital if after the Closing Date Caritas will not be responsible for the operations; * will comply with the policies of SVCMC requiring the approval of officers or directors for certain kinds of contracts, commitments, actions and decisions; * is authorized to delegate any of its duties to one or more third parties with applicable expertise; and * will appoint a chief administrative officer for the hospital, who will report directly to SVCMC's chief executive officer. (2) SVCMC will retain the ultimate authority and responsibility for its policies, management, and overall operations to the extent required by applicable law and accreditation standards of the Joint Commission on Accreditation of Healthcare Organizations. (3) The Board of Trustees of SVCMC will retain responsibility for: (a) the appointment and discharge of the hospital's senior executives; (b) control over the books and records of the hospital; (c) the disposition of assets used in the operation of the hospital and the incurring of liabilities in connection with the operation of the hospital that are not normally associated with the day-to-day operations in the ordinary course of business; (d) the adoption of all policies affecting the delivery of health care services; and (e) compliance of the hospital with all pertinent provisions of federal, state, and local statutes, rules and regulations. (4) SVCMC will retain authority with respect to any action regarding the operation of the hospital that is outside the ordinary course of business. (5) SVCMC will: -- pay to Wyckoff a monthly fee of $20,000; -- reimburse Wyckoff for its reasonable out-of-pocket expenses incurred in connection with the Management Agreement; -- reimburse Wyckoff for the costs of subcontractors and professionals it used in performing its duties under the Management Agreement, provided the costs have been approved in writing by SVCMC; and -- be responsible for all expenses related to the operation of the hospital. The Management Agreement will take effect within five business days after the later of the date on which the Management Agreement is approved by (i) the Court and (ii) the Commissioner, and will continue until the earliest to occur of: (a) the Closing Date; (b) the first anniversary of the effective date; (c) denial of Caritas' certificate of need and establishment applications for approval of Caritas' purchase of the Queens Hospitals and the exhaustion of any appeal of the denial; and (d) termination of the Management Agreement with respect to the other Queens Hospital. The Management Agreement may be terminated, among others, without cause by either party upon 90 days' written notice to the other party, or by the breach of a material obligation by either party that is not cured within 30 days' written notice. SVCMC will indemnify Wyckoff to the same extent as the most favorable indemnification SVCMC extends to its officers or directors. Under no circumstance will Wyckoff or any of its personnel be liable for any indirect or consequential damages. Wyckoff and SVCMC also agree to standard restrictions regarding disclosure of confidential information. Additionally, the Management Agreement does not require the referral, admission, or any other arrangement for the provision of any item or service offered to patients at the other party's facilities. A full-text copy of the Management Agreement for Mary Immaculate is available for free at http://ResearchArchives.com/t/s?1173 A full-text copy of the Management Agreement for St. John's is available for free at http://ResearchArchives.com/t/s?1174 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. 34 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAINT VINCENTS: Court Approves Massey Knakal Sublease Pact ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved a sublease agreement between Saint Vincents Catholic Medical Centers of New York and its debtor-affiliates and Massey Knakal Realty for nonresidential real property located at 447 86th Street, 2nd Floor in Brooklyn, New York. As reported in the Troubled Company Reporter on Aug. 28, 2006, the Debtors are selling a portion of the premises at which St. Mary's Hospital in Brooklyn had been located that includes Shevlin Hall, the current location of the administrative office of SVCMC's home health care agency. In light of the asset disposition, the Debtors must relocate various continuing services that will continue to operate after the sale closes, including the Home Care Office. After arm's-length negotiations, the Debtors reached an agreement in principle for the Sublease with Massey Knakal, as the Sub- Landlord, and HSBC Bank USA, the over-landlord for the Premises, pursuant to which: * the Debtors will sublease approximately 4,000 square feet of office space for a 17-month term with a three-month early termination clause and an option to renew for an additional five-year period; * rent will be $97,900 per year or about $8,150 per month plus utilities and real estate taxes; and * no security deposit is required for the first 17-month term of the Sublease. 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. 34 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SANTA FE: Court Gives Nod on Stevens & Lee as Bankruptcy Counsel ---------------------------------------------------------------- Santa Fe Mineral, Inc., and its sole shareholder and debtor- affiliate, 15375 Memorial Corporation, obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Stevens & Lee, P.C., as their bankruptcy counsel. Stevens & Lee is expected to: (a) advise management concerning their fiduciary obligations to the estate, the creditors and the Court; (b) assist regarding the administration of the Debtors' chapter 11 cases, including prosecutions of motions and adversary proceedings, defense of actions commenced against the Debtor, commencement and prosecution of objections to claims, representation in the claims reconciliation process and counseling regarding the preparation of schedules, statements and operating reports; (c) assist in the formulation, negotiation and confirmation of a chapter 11 plan or reorganization and related disclosure statement; and (d) render other legal services as may be requested by management and required in furtherance of the Debtors' chapter 11 cases. John D. Demmy, Esq., a shareholder at Stevens & Lee, tells the Court that attorneys at the firm bill between $280 to $365 per hour while paralegals bill between $140 to $190 per hour. Mr. Demmy assures the Court that his firm does not hold or represent any interest adverse to the Debtors or their estates. Mr. Demmy can be reached at: John D. Demmy, Esq. Stevens & Lee, P.C. 1105 North Market Street, 7th Floor Wilmington, Delaware 19801 Tel: (302) 654-5180 Fax: (302) 654-5181 http://www.stevenslee.com/ About Santa Fe Minerals Headquartered in Houston, Texas, 15375 Memorial Corporation is the sole shareholder of Santa Fe Mineral, Inc. Santa Fe Minerals is a Wyoming based corporation dissolved in 2000. Under Wyoming law, creditors of a dissolved corporation can recover their debts from the dissolved corporation's shareholders, up to the value of the assets that each shareholder received at the dissolution. 15375 Memorial and Santa Fe Minerals filed for chapter 11 protection on Aug. 16, 2006 (Bankr. D. Del. Case No. 06-10859 & 06-10860). When the Debtors filed for protection from their creditors, they estimated their assets between $100,000 to $500,000 and liabilities of more than $100 million. SANTA FE: List of Eight Largest Unsecured Creditors --------------------------------------------------- Santa Fe Mineral, Inc., and its sole shareholder, 15375 Memorial Corporation, released a list of their eight Largest Unsecured Creditors with the U.S. Bankruptcy Court for the District of Delaware, disclosing: Entity Claim Amount ------ ------------ William Tebow $300,000,000 Donald T. Carmouche, Esq. Talbot, Carmouche & Marcello 214 West Cornerview P.O. Box 759 Gonzales, LA 70707-0759 Jerold E. Knoll, Esq. The Knoll Law Firm, LLC 233 South Main Street P.O. Box 426 Marksville, LA 71351-0425 Nancy Mikelli Carruth $300,000,000 Donald T. Carmouche, Esq. Talbot, Carmouche & Marcello 214 West Cornerview P.O. Box 759 Gonzales, LA 70707-0759 Jerold E. Knoll, Esq. The Knoll Law Firm, LLC 233 South Main Street P.O. Box 426 Marksville, LA 71351-0425 Donna Tebow $300,000,000 Donald T. Carmouche, Esq. Talbot, Carmouche & Marcello 214 West Cornerview P.O. Box 759 Gonzales, LA 70707-0759 Jerold E. Knoll, Esq. The Knoll Law Firm, LLC 233 South Main Street P.O. Box 426 Marksville, LA 71351-0425 Jackie Eugene Ellison $10,000,000 aka Gene Ellison Richard M. Healy, Esq. 720 Northeast 63rd Oklahoma City, OK 73105 Jackie Eugene Ellison, Trustee $10,000,000 Richard M. Healy, Esq. 720 Northeast 63rd Oklahoma City, OK 73105 Marcia Ellison $10,000,000 Richard M. Healy, Esq. 720 Northeast 63rd Oklahoma City, OK 73105 Reginald Harris Unknown Gregory Stamos, Esq. Rose Klein Marias, LLP 401 East Ocean Boulevard, Suite 300 Long Beach, CA 90601 Wyomania Harris Unknown Gregory Stamos, Esq. Rose Klein Marias, LLP 401 East Ocean Boulevard, Suite 300 Long Beach, CA 90601 The Debtors further disclose that the persons listed are plaintiffs in lawsuits that have asserted claims against Santa Fe Minerals. The Debtors relate that other defendants in those lawsuits may assert claims against the Debtors but have not yet done so, as such, have not been included in the list. The Debtors tell the Court that if a demand has not been made, formally or informally, the amount of the claim was labeled as "unknown." Environmental Lawsuit As reported in the Troubled Company Reporter on Aug. 21, 2006, Santa Fe Minerals was placed in bankruptcy by its parent, GlobalSantaFe Corp., in an attempt to hold off a $300 million environmental lawsuit. The three Louisiana landowners who filed the suit are alleging that around 95 wells drilled by Santa Fe and another defendant damaged their property. About Santa Fe Minerals Headquartered in Houston, Texas, 15375 Memorial Corporation is the sole shareholder of Santa Fe Mineral, Inc. Santa Fe Minerals is a Wyoming based corporation dissolved in 2000. Under Wyoming law, creditors of a dissolved corporation can recover their debts from the dissolved corporation's shareholders, up to the value of the assets that each shareholder received at the dissolution. 15375 Memorial and Santa Fe Minerals filed for chapter 11 protection on Aug. 16, 2006 (Bankr. D. Del. Case No. 06-10859 & 06-10860). When the Debtors filed for protection from their creditors, they estimated their assets between $100,000 to $500,000 and liabilities of more than $100 million. SATELITES MEXICANOS: Files Amended Plan and Disclosure Statement ---------------------------------------------------------------- Satelites Mexicanos, S.A. de C.V., delivered its First Amended Plan of Reorganization and accompanying Disclosure Statement to the U.S. Bankruptcy Court for the Southern District of New York on Sept. 8, 2006. Creation of Equity Trust Prior to the Effective Date, the Debtor will form an Equity Trust, instead of special purpose entities, to settle the Debtor's obligations under the Amended Plan. On the Effective Date, New Common Stock representing 90% of the equity voting rights and 96% of the equity financial rights in the Reorganized Debtor will be held by an Equity Trust Trustee for the benefit of the holders of Allowed Existing Bond Claims, Allowed Existing Preferred Stock Interests, and Allowed Existing Common Stock Interests, other than the Mexican Government. The Equity Trust Trustee will deposit global trust certificates representing beneficial ownership of New Common Stock corresponding to 43% of the voting rights and 78% of the financial rights in the Reorganized Debtor with the Depository Trust Company, Euroclear Bank S.A./N.V., or Clearstream Banking societe anonyme. Interests in the Global Trust Certificate will be received by the holders of Existing Bond Claims on a pro rata basis in exchange for a portion of the Existing Bond Claims. Recovery for Servicios & Mexican Government Servicios Corporativos Satelitales, S.A. de C.V., will receive beneficial interests in the Equity Trust corresponding to New Series A Common Stock representing 45% of the equity voting rights and 16% of the equity financial rights in the Reorganized Debtor, on a fully diluted basis. The Mexican Government will receive New Series A Common Stock and New Series N Common Stock representing 10% of the equity voting rights and 4% of the equity financial rights in the Reorganized Debtor subject to the same terms and conditions as the New Common Stock held by the Equity Trust Trustee, on a fully diluted basis. Servicios is restructuring its debt obligations. The Debtor relates that the Mexican Government, as creditor of Servicios, will ultimately receive the economic benefits of the beneficial interests in the Debtor distributed to Servicios under the Plan in full satisfaction of Servicios' obligation to the Mexican Government arising from a promissory note referred to as the Menoscabo. As previously reported, Servicios owed the Mexican Government approximately $125.1 million plus interest in connection with Servicios' purchase of a stake in the Debtor. Servicios holds 70.71% equity stake and 100% voting interest in the Debtor as of the date of filing for chapter 11 protection. The Mexican Government holds 23.57% equity stake and limited voting rights for extraordinary matters. Recovery of Claims in Classes 2 & 6 For purposes of voting to accept or reject the Amended Plan, the Class 2 Senior Secured Note Claims are allowed for $203,388,000, in the aggregate. For purposes of distribution, the Class 2 Senior Secured Note Claims are allowed for $203,388,000 plus unpaid accrued interest through the Effective Date, with interest calculated so that, assuming an Effective Date of Sept. 30, 2006, the Allowed amount will be $234,400,000. With respect to Classes 6A and 6B Existing Preferred Stock Interests, the Plan provides that: (i) Principia S.A. de C.V., will receive beneficial interests in the Equity Trust corresponding to New Series B Common Stock and New Series N Common Stock, which will represent 0.67% of the total equity financial rights and 0.67% of the total equity voting rights of the Reorganized Debtor on a fully diluted basis; and (ii) Loral Skynet Corporation and Loral SatMex, Ltd., will receive beneficial interests in the Equity Trust corresponding to New Series B Common Stock and New Series N Common Stock, which will represent 1.33% of the total equity financial rights and 1.33% of the total equity voting rights of the Reorganized Debtor on a fully diluted basis. Issuance of Secured Notes On the Plan Effective Date, the Reorganized Debtor will issue $203,388,000 in First Priority Senior Secured Notes. The First Priority Notes will mature five years after the Effective Date and incur interest at one-month or three-month LIBOR plus 875 basis points per annum (LIBOR+8.75%), payable in arrears in Cash on the last day of the applicable one-month or three-month period. The Reorganized Debtor will issue $140,000,000 in Second Priority Senior Secured Notes, which will mature seven years after the Effective Date. The Second Priority Notes will incur interest payable quarterly in arrears at 10.125% per annum. Interest will be payable in Cash, provided that until the earlier of (a) the fifth anniversary of the Effective Date, and (b) the date the First Priority Notes are paid in full, the interest will be payable in kind. Satmex to Pay Other Parties' Legal Fees The Amended Plan provides that the Debtor will be entitled to and will pay the reasonable fees and expenses of professionals retained by: * the Ad Hoc Senior Secured Noteholders' Committee; * the Ad Hoc Existing Bondholders' Committee; * Thomas Heather, the conciliador in the Concurso Proceeding in Mexico; * Loral; and * Servicios. Appointment of Common Representative Pursuant to the Amended Plan, a common representative will be irrevocably appointed under Mexican law to act for the benefit of the holders of the Second Priority Notes solely for the purposes of: (i) voting in favor of or accepting a plan of reorganization in any future concurso mercantil proceeding; (ii) exercising all veto rights in connection with the approval of a concurso plan in Mexico, but only in the event that the plan is accepted by holders of a majority of the aggregate outstanding principal amount of the Second Priority Notes; and (iii) releasing certain liens. Other Disclosures The Debtor disclosed that it has recently been granted an extension of the Orbital Concessions to Oct. 22, 2037, without the payment of any additional consideration to the Mexican Government. As previously reported, the Mexican Government has granted the Debtor three Orbital Concessions that allow it to operate satellites in Mexico's orbital slots. The Orbital Concessions may be further extended subject to certain conditions. The Debtor also reported that the order approving its convenio concursal terminated the Concurso proceeding in Mexico, and became final, binding and non-appealable on Aug. 1, 2006. In addition, the Bankruptcy Court closed the Debtor's Section 304 Proceeding on Aug. 11, 2006. The Bankruptcy Court also authorized the Debtor to assume its settlement agreements with certain Loral entities. Plan Has Support of Major Constituents The Debtor relates that its Chapter 11 Plan has the support of: -- Servicios, Loral and Principia; -- the beneficial holders of more than 67% of the 10-1/8% Unsecured Senior Notes due Nov. 1, 2004; and -- the beneficial holders of more than 67% of the Senior Secured Floating Rate Notes due June 30, 2004. A blacklined copy of the Debtor's First Amended Plan is available at no charge at http://ResearchArchives.com/t/s?1178 A blacklined copy of the Debtor's First Amended Disclosure Statement is available at no charge at: http://ResearchArchives.com/t/s?1179 About Satelites Mexicanos Satelites Mexicanos, S.A. de C.V., provides fixed satellite services in Mexico. Satmex provides transponder capacity via its satellites to customers for distribution of network and cable television programming, direct-to-home television service, on-site transmission of live news reports, sporting events and other video feeds. Satmex also provides satellite transmission capacity to telecommunications service providers for public telephone networks in Mexico and elsewhere and to corporate customers for their private business networks with data, voice and video applications. Satmex also provides the government of the United Mexican States with approximately 7% of its satellite capacity for national security and public purposes without charge, under the terms of the Orbital Concessions. The Debtor filed for chapter 11 petition on August 11, 2006 (Bankr. S.D.N.Y. Case No. 06-11868). Luc A. Despins, Esq., at Milbank, Tweed Hadley & McCloy LLP represents the Debtor in the U.S. Bankruptcy proceedings. Attorneys from Galicia y Robles, S.C., and Quijano Cortina Lopez y de la Torre give legal advice in the Debtor's Mexican Bankrutpcy proceedings. UBS Securities LLC and Valor Consultores, S.A. de C.V., give financial advice to the Debtor. Steven Scheinman, Esq., Michael S. Stamer, Esq., and Shuba Satyaprasad, Esq., at Akin Gump Strauss Hauer & Feld LLP give legal advice to the Ad Hoc Existing Bondholders' Committee. Dennis Jenkins, Esq., and George W. Shuster, Jr., Esq., at Wilmer Cutler Pickering Hale and Dorr LLP give legal advice to Ad Hoc Senior Secured Noteholders' Committee. As of July 24, 2006, the Debtor has $905,953,928 in total assets and $743,473,721 in total liabilities. On May 25, 2005, certain holders of Satmex's Existing Bonds and Senior Secured Notes filed an involuntary chapter 11 petition against the Company (Bankr. S.D.N.Y. Case No. 05-13862). On June 29, 2005, Satmex filed a voluntary petition for a Mexican reorganization, known as a Concurso Mercantil, which was assigned to the Second Federal District Court for Civil Matters for the Federal District in Mexico City. On August 4, 2005, Satmex filed a petition, pursuant to Section 304 of the Bankruptcy Code to commence a case ancillary to the Concurso Proceeding and a motion for injunctive relief seeking, among other things, to enjoin actions against Satmex or its assets (Bankr. S.D.N.Y. Case No. 05-16103). (Satmex Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEDGWICK CMS: To Purchase All of Security Capital's Common Stock ---------------------------------------------------------------- Sedgwick CMS Holdings, Inc. will acquire all of the outstanding shares of Security Capital Common Stock and Class A Common Stock. More than 95% of the Company's outstanding shares were voted in favor of the adoption of the merger agreement. Commenting on the approval of the merger by Security Capital's stockholders, Brian D. Fitzgerald, Chairman, President and CEO of the Company, stated: "The merger represents the culmination of our previously announced formal sale process of the Company. The Company's Board of Directors believes that the formal sale process has resulted in the Company's stockholders receiving the highest price reasonably obtainable for their shares." Upon the completion of the merger, Security Capital stockholders will be entitled to receive $16.46 in cash per share of Security Capital Common Stock and Class A Common Stock. The merger is expected to close shortly. As soon as reasonably practicable after the merger closes, a paying agent designated by Sedgwick CMS will mail a form of letter of transmittal and instructions to all of Security Capital's stockholders of record. The form of letter of transmittal and instructions will tell such stockholders how to surrender their stock certificates in exchange for the $16.46 per share consideration, without interest. About Segwick CMS Sedgwick CMS Holdings, Inc. is the holding company for Sedgwick Claims Management Services, Inc. Sedgwick is headquartered in Memphis, Tennessee, and is a market leader in insurance claims management services. For 2005, the company reported total revenue of $398 million. SEDGWICK CMS: S&P Assigns B+ Loan Rating to $510 Million Debts -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' senior secured bank loan rating to Sedgwick CMS Holdings Inc.'s (Sedgwick; B+/Positive/--) $450 million term loan B due 2013 and a $60 million revolving credit facility due 2012. "The ratings reflect the company's relatively low interest coverage and above-average leverage. These metrics contribute to Sedgwick's weak financial flexibility," noted Standard & Poor's credit analyst James Brender. Offsetting the company's weaknesses is the: * good competitive position as the leading domestic third-party administrator of self-insured claims management systems; * very stable operating performance; and * extremely strong customer retention. "The positive outlook reflects Sedgwick's improving competitive position, good operating performance, and stable cash flows," Mr. Brender added. Standard & Poor's expects Sedgwick will solidify its position as the market leader within its sector. Management will accomplish this by cross selling to existing customers, attracting new customers and acquiring companies that will either broaden Sedgwick's product line or increase its market share. Sedgwick will also establish new sources of revenue from business process outsourcing and international expansion. Customer retention should not decrease to less than 96%. Operating performance will continue to feature both high single-digit top- line growth (after adjusting for acquisitions completed in 2006) and low to mid double-digit EBITDA margin. The only significant dark cloud is the possibility of off-shoring. Standard & Poor's would consider raising Sedgwick's bank loan ratings one notch to 'BB-' if the firm executes its business plan including the integration of two recently acquired entities. Alternatively, Standard & Poor's might revise the outlook back to stable if operating performance suffers from the acquisition, though this seems unlikely. SERACARE LIFE: Board Appoints CEO Susan Vogt as Director -------------------------------------------------------- The Board of Directors of SeraCare Life Sciences, Inc., appointed Susan Vogt, president and chief executive officer, to fill a vacancy on the Board. The Company disclosed that it did not enter into a further employment agreement with Ms. Vogt aside from the agreement dated July 14, 2006. Ms. Vogt was not named to any committee of the Board. The employment agreement provides for an initial three-year term expiring on Aug. 25, 2009. The term will be automatically extended for an additional one-year period on the expiry date and each subsequent anniversary of the expiry date. The employment agreement also provides for, among other things, an annual base salary of $350,000 and an annual incentive bonus opportunity based on the achievement of certain performance objectives to be established by the Board of Directors or the Compensation Committee. Pursuant to the Employment Agreement, Ms. Vogt's target incentive bonus amount will be not less than 75% of her base salary. The Company will also reimburse Ms. Vogt up to $175,000 for costs and expenses associated with relocating to the area in which the Company's principal offices are located. In addition the Company also granted Ms. Vogt a nonqualified stock option to purchase 450,000 shares of the Company's common stock. The option vests in annual installments over a three-year period following the date of grant, has a term of 10 years, and has an exercise price of $6 per share. Based in Oceanside, California, SeraCare Life Sciences, Inc., -- http://www.seracare.com/-- develops and manufactures biological based materials and services for diagnostic tests, commercial bioproduction of therapeutic drugs, and medical research. The Company filed for chapter 11 protection on March 22, 2006 (Bankr. S.D. Calif. Case No. 06-00510). The Official Committee of Unsecured Creditors selected Henry C. Kevane, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, as its counsel. When the Debtor filed for protection from its creditors, it listed $119.2 million in assets and $33.5 million in debts. SERACARE LIFE: Taps Prolman Group to Provide Financial Services --------------------------------------------------------------- SeraCare Life Sciences, Inc., asks the U.S. Bankruptcy Court for the Southern District of California to employ Prolman Group, Inc., dba Prolman Associates to provide financial services for a specific purpose. The Debtor tells the Court that it lacks the internal resources necessary to compile and analyze financial information required to support its efforts to secure new financing needed to exit bankruptcy. The Debtor wants Prolman Group's services to prepare a financing package that contains an overview of the Debtor's business and assets, including accounts receivable, inventory and equipment that may be used to collateralize a loan, which package may be presented to potential lenders for the purposes of soliciting financing proposals. The firm's professionals bill: Professional Hourly Rate ------------ ----------- David A. Prolman $350 Bette Hiramatsu $295 Mr. Prolman, President of Prolman Group, discloses that the firm has agreed to cap its fees at $94,000, plus out-of-pocket expenses. Mr. Prolman assures the Court that the firm does not hold any interest materially adverse to the Debtor or its estate. Based in Oceanside, California, SeraCare Life Sciences, Inc. -- http://www.seracare.com/-- develops and manufactures biological based materials and services for diagnostic tests, commercial bioproduction of therapeutic drugs, and medical research. The Company filed for chapter 11 protection on March 22, 2006 (Bankr. S.D. Calif. Case No. 06-00510). Garrick A. Hollander, Esq., Paul J. Couchot, Esq., and Peter W. Lianides, Esq., represent the Debtor. The Official Committee of Unsecured Creditors selected Henry C. Kevane, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, as its counsel. When the Debtor filed for protection from its creditors, it listed $119.2 million in assets and $33.5 million in debts. SERACARE LIFE: Taps AccuVal Associates as Inventory Appraiser ------------------------------------------------------------- SeraCare Life Sciences, Inc., asks the U.S. Bankruptcy Court for the Southern District of California to employ AccuVal Associates, Inc., as its inventory appraiser. The Debtor wants AccuVal Associates to advise and assist the Debtor in the allocation of the acquisition purchase price paid for the assets of Celliance Milford, for financial reporting purposes. Richard E. Schmitt, President and CEO of AccuVal Associates, discloses that the firm has agreed to perform services for a $20,000 flat fee plus out-of-pocket expenses that will not exceed to $4,500. Mr. Schmitt assures the Court that AccuVal Associates is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Oceanside, California, SeraCare Life Sciences, Inc. -- http://www.seracare.com/-- develops and manufactures biological based materials and services for diagnostic tests, commercial bioproduction of therapeutic drugs, and medical research. The Company filed for chapter 11 protection on March 22, 2006 (Bankr. S.D. Calif. Case No. 06-00510). Garrick A. Hollander, Esq., Paul J. Couchot, Esq., and Peter W. Lianides, Esq., represent the Debtor. The Official Committee of Unsecured Creditors selected Henry C. Kevane, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, as its counsel. When the Debtor filed for protection from its creditors, it listed $119.2 million in assets and $33.5 million in debts. SHERIDAN HOLDINGS: Proposed Funding Cues Moody's to Lower Ratings ----------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of Sheridan Holdings, Inc. and Sheridan Healthcare, Inc., as co- borrowers to B2 from B1 following the announcement of a proposed refinancing. Moody's also assigned a B2 rating to the company's proposed first lien credit facilities, consisting of a $50 million revolver, a $273 million term loan and a Caa1 rating to a proposed $135 million second lien term loan. The proceeds of the proposed facilities are expected to be used to refinance existing debt, fund two acquisitions and pay a $146 million dividend to shareholders. The outlook for the ratings is stable. The lowering of the Corporate Family Rating reflects Moody's belief that pro forma for the acquisitions and increased debt load, the company will have financial metrics that are more appropriate for the B2 rating category. Additionally, the B2 Corporate Family Rating reflects the conversion to debt of a significant amount of equity resulting from the payment of a debt financed dividend. Moody's estimates consolidated pro forma adjusted debt to adjusted EBITDA for the twelve months ended June 30, 2006 would have been approximately 6.9 times. Pro forma cash flow coverage of debt also decreased to a level appropriate for the B2 rating category as a result of the increased debt load. Moody's estimates that pro forma adjusted operating and free cash flow coverage of adjusted debt would have been approximately 5% and 4%, respectively, excluding the dividend to shareholders, for the twelve months ended June 30, 2006. The company's relative size and revenue concentration also continue to constrain the ratings. Pro forma for the two planned acquisitions, the company would have recognized revenue of approximately $436 million for the twelve months ended June 30, 2006. Also considered in the ratings is Sheridan's ability to maintain margins and cash flow in the face of rising labor cost trends, risks associated with the ability of the company to continue to recruit new physicians in light of the decreasing supply of new anesthesiologists and continued exposure to medical malpractice claims and changes in physician reimbursement. The ratings also incorporate Sheridan's leading position as a provider of anesthesia and neonatology staffing services and the leverage that position provides in negotiating reimbursement with managed care payors. The company has experienced steady growth through the addition of new contracts, expansion of services, and acquisitions, which has mitigated some risks associated with the concentration of revenue. Moody's also notes that the company has a history of steady debt repayment over time and expects the company will use available free cash flow to decrease financial leverage. Additionally, margins remain healthy even though they are expected to continue to be under pressure from an increase in the number of lower margin contracts based on hospital subsidies. The stable ratings outlook reflects the expectation of favorable operating performance of the company following the two planned acquisitions. Downgrades: Issuer: Sheridan Holdings, Inc. * Corporate Family Rating, Downgraded to B2 from B1 Assignments: Issuer: Sheridan Healthcare, Inc. * Senior Secured Bank Credit Facility, Assigned B2 * Senior Secured Bank Credit Facility, Assigned Caa1 Withdrawals: Issuer: Sheridan Healthcare, Inc. * Senior Secured Bank Credit Facility, Withdrawn, previously rated B1 Issuer: Sheridan Holdings, Inc. * Senior Secured Bank Credit Facility, Withdrawn, previously rated B1 Headquartered in Sunrise, Florida, Sheridan Healthcare is a leading provider of physician services to hospitals and ambulatory surgical facilities that desire to outsource the physician staffing for the anesthesia, neonatology and emergency departments. Sheridan also provides a full compliment of professional and administrative support services including physician billing. SIERRA PACIFIC: Improved Performance Cues Moody's to Lift Rating ---------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating of Sierra Pacific Resources to Ba2 from Ba3. All of the other ratings of SRP's B1 senior unsecured and its utility subsidiaries, which include Nevada Power Company's Ba1 senior secured and Sierra Pacific Power Company's Ba1 senior secured are unchanged. The rating outlook continues to be stable for SRP and its subsidiaries. The rating action reflects the improved financial performance of SRP and expectations for relatively supportive rate treatment by the Public Utility Commission of Nevada for deferred energy costs and recent investments in utility infrastructure, including significant additions to owned generation capacity. The company issued approximately $280 million of common equity in August to support this capital spending. The upgrade of the CFR also reflects the rising proportion of total debt that is represented by secured debt at the subsidiary operating company level. The company has reduced its funded debt and lowered its interest expense by refinancing. In addition, the Nevada Supreme Court recently provided a favorable ruling in an appeal of the PUCN's decision from NPC's 2001 deferred energy rate case. The outcome of the Supreme Court's ruling remands the case back to the PUCN to determine the appropriate rate schedule for recovery of $180 million of purchased fuel and power costs previously disallowed. As a result, NPC intends to reverse charges previously taken to account for the disallowance. SRP is considering the sale of its 50% investment in Tuscarora Gas Transmission Company, which, if successful, would provide additional funds to support future utility capital expenditures. SRP's financial performance has improved over the past three years. However, over the next few years, rising capital expenditures and regulatory lag are expected to constrain the company's financial profile. NPC and SPPC will need to fund sizable capital spending for additions to generating and transmission capacity to meet continued strong growth in electricity demand in Nevada. Sierra Pacific Resources is a holding company whose principal subsidiaries, Nevada Power Company and Sierra Pacific Power Company, are electric and electric and gas utilities, respectively. Sierra Pacific Resources also holds relatively modest non-utility investments through other subsidiaries. Sierra Pacific Resources' headquarters are in Las Vegas, Nevada. SILICON GRAPHICS: Objects to LG Electronics' Claims --------------------------------------------------- In August 2006, LG Electronics, Inc., filed Claim No. 623 against Silicon Graphics, Inc., for unsubstantiated and unliquidated damages, for not less than $75,000,000. LGE also filed Claim Nos. 619, 620, 621, 622, 624, 625, 626, 627, 628, 629, 630, 631 and 632 against each of the other Debtors. Each proof of claim asserts an unsubstantiated, unsecured, non- priority, contingent, and unliquidated claim relating to the Debtors' alleged infringement of patents owned by LGE. Adam P. Strochak, Esq., at Weil, Gotshal & Manges LLP, in New York, argues that LGE's claims must be disallowed in their entirety because: -- LGE has failed to demonstrate even a cursory understanding of the Debtors' products and has made no effort to clarify or particularize its allegations; -- the Patents and each related claim is invalid as they fail to comply with the provisions of the patent laws, including Sections 102, 103, and 112 of Title 35 of the United States Code, which statutes govern the conditions for Patentability; -- the Claims are barred under the doctrines of prosecution history estoppel, laches, and equitable estoppel; -- LGE is estopped from claiming that the Patents cover or include any product or service that the Debtors manufacture, sell, or provide; and -- the Claims have been exhausted, and LGE has granted to the Debtors an implied license to practice the invention. Mr. Strochak further notes that 12 of the 14 Debtors in the Chapter 11 cases cannot, under U.S. patent law, be liable for infringement of the Patents, because they: (a) are inactive corporations or holding companies; (b) do not make, use, offer to sell, sell, or import into the United States any "patented invention;" and (c) are not party to or liable in connection with Silicon's contracts with customers and vendors. Mr. Strochak notes that only SGI and Silicon Graphics Federal, Inc., either make, use, offer to sell, or sell SGI's products in the U.S. and, thus, are the only entities that could bear any liability in connection with the products and services. Hence, the Debtors also ask the U.S. Bankruptcy Court for the Southern District of New York to immediately expunge the LGE Claims asserted against the Non-Operational Debtors. The Debtors reserve their rights to assert additional defenses, if necessary or appropriate, at a later date. 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. The Debtors' exclusive plan-filing period will expire on Dec. 29, 2006, and its exclusive solicitation period will expire on Feb. 28, 2007. (Silicon Graphics Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SILICON GRAPHICS: Asks Court to Disallow Various Claims ------------------------------------------------------- Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that as of Aug. 25, 2006, 700 proofs of claim were filed against Silicon Graphics, Inc., and its debtor-affiliates' estate. The Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to disallow 124 claims in their entirety, specifically: * 28 duplicative claims filed against the same Debtor for the same dollar amount and in respect of the same obligation. The Duplicate Claims include: Claimant Claim No. Claim Amount -------- --------- ------------ EBM-PAPST, Inc. 226 $694,820 Electronic Data Systems 534 941,732 Gyrogroup 286 727,418 LC Capital Master Fund, Ltd. 453 32,805,526 McLaughlin, Kevin 362 136,523 PICTET & CIE 297 107,380 Pinnacle Data Systems, Inc. 597 624,169 Sales Analytics, Inc. 450 163,000 * nine claims that are no longer valid claims as the holder of each claim has filed a subsequent proof of claim which was intended to amend and supersede the previously filed claim. The Amended and Superseded Claims are: Claimant Claim No. Claim Amount -------- --------- ------------ Accurate Components Sales 389 $117,328 Commonwealth of Massachusetts 39 4,000 EMC2-Corporation 376 1,120,927 IDC Research, Inc. 2 157,167 Itanium Solutions Alliance 32 121,560 MSA Systems, Inc. 28 159,201 Spherion Corp. 68 92,328 SPL Integrated Solutions 49 740,690 University of Wisconsin 73 121,000 * 19 claims for which none of the Debtors have any record of liability, which includes: Claimant Claim No. Claim Amount -------- --------- ------------ BT Americas 92 $482,399 Computer Sciences Corp. 438 178,973 LC Capital Master Fund 461 32,805,526 Levitt, Martin 677 200,001,869 Oracle USA, Inc. 383 302,087 Royal Indemnity Company 96 169,997 Stratfor 417 100,000 * 44 claims that Silicon Graphics, Inc., may be liable for, but none of the other Debtor entities against which the claims were filed have any liability. The Debtors want the Court to expunge and disallow the 44 claims as against each Debtor entity other than Silicon Graphics, Inc. The claims include: Claimant Claim No. Claim Amount -------- --------- ------------ Bank of America Leasing 587 $1,884,809 Celestica Corporation 640 1,364,033 Fleet Business Credot, LLC 591 4,661,487 J.P. Morgan Chase Bank, N.A. 539 57,713,001 QLOGIC Corporation 482 293,635 * 24 claims that do not represent valid claims against the Debtors. The Equity-Based Claims include: Claimant Claim No. Claim Amount -------- --------- ------------ HSBC Private Bank (Suisse) 604 $10,220 Mallon, Margaret 666 24,000 PICTET & CIE 298 43,200 Schwind, Alan 424 19,098 Taylor, Mark 110 17,689 In addition, the Debtors ask the Court to reduce two claims asserting amounts in excess of the actual amounts due and owing. The Reduced Claims are: Original Reduced Claimant Claim No. Amount Amount -------- --------- -------- -------- Extron Electronics 141 $6,803 $563 Transitive Corporation and 205 967,799 797,772 Transitive Corporation, Ltd. In the event that any of the claims objected to are not disallowed or reduced on the grounds asserted, the Debtors reserve the right to object to any claim on any other basis. 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. The Debtors' exclusive plan-filing period will expire on Dec. 29, 2006, and its exclusive solicitation period will expire on Feb. 28, 2007. (Silicon Graphics Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SIMMONS CO: Moody's Hold Ratings and Revises Outlook to Positive ---------------------------------------------------------------- Moody's Investors Service affirmed Simmons' ratings and revised the ratings outlook to positive from stable based on the company's recent and expected continued improved operating performance and improved financial flexibility. Moody's also assigned a B2 rating to the company's new senior secured credit facility. These ratings were affirmed by this action: * Corporate family rating, at B2; * $165 million secured discount notes due 2014 at Caa2; * $200 million senior subordinated notes due 2014 of Caa1. These ratings were assigned by this action: * $75 million senior secured term loan B due 2011 of B2; * $492 million senior term loan D due 2011 of B2. These ratings were withdrawn by this action: * $75 million senior secured term loan B due 2011 of B2; * $405 million senior term loan B due 2011 of B2; * $140 million senior unsecured floating rate loan due 2012 of B3 The change in ratings outlook to positive reflects Moody's belief that the company is in a better position to weather the current uncertainty in consumer spending because of its improved free cash flow and operating margins following its recent operational improvements in streamlining its manufacturing facilities and its marketing and distribution functions; the operational improvements are also a result of the company's enhanced remerchandising efforts to align its products at key retail price points. The positive outlook also reflects Moody's expectation that the industry's strong growth dynamics will materially continue over the next 12 to 18 months, despite the uncertainty in consumer spending, and that Simmons will generate sufficient cash flow to allow for continued to de-leveraging based on its strong operating and competitive position. Moody's expects management to sustain its strategic direction, which is centered on premium pricing, new products and distribution channels, cost and asset efficiency measures, and debt reduction. The ratings affirmation also reflects Simmons's history of product innovation and strong market share offset by relatively high, yet moderating leverage. Headquartered in Atlanta, Georgia, Simmons Company is one of the largest manufacturers of premium mattresses, foundations and related accessories. The company has the second largest market share, behind Sealy, in the U.S. mattress industry.Net sales for the LTM ended June 2006 approximated $900 million. SOLUTIA INC: Equity Panel Wants Debtors' Intervention Role Limited ------------------------------------------------------------------ While the Official Committee of Equity Security Holders appointed in the bankruptcy cases of Solutia Inc. and its debtor-affiliates recognizes that the Debtors may have a right to intervene in the Adversary Proceeding, the Committee asks the U.S. Bankruptcy Court for the Southern District of New York to limit the Debtors' role just as it did when the Ad Hoc Solutia Trade Claims Committee, the Ad Hoc Committee of Solutia Noteholders and the Official Committee of Unsecured Creditors of Solutia were permitted to intervene in the Adversary Proceeding. The Debtors have been involved in the adversary proceeding commenced by the Equity Committee against Pharmacia Corporation and Monsanto Company from its inception and have been served with all of the pleadings and present at all of the hearings, Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP, in New York, notes. The Debtors' intervention should not be a mechanism for circumventing the Court's other determinations and allow the Debtors to usurp the Equity Committee's authority and ability to prosecute or settle the causes of action in its Complaint, Ms. Dine asserts. Moreover, Ms. Dine contends, the Debtors' intervention should not become a vehicle that permits them to reargue issues such as standing, as the issues have previously been decided by the Court, nor should they offer the Debtors the opportunity to control the timing of the litigation. The Equity Committee wants to ensure that the Debtors will only be allowed to attend depositions and Court proceedings on the condition that they be granted a restricted right to question witnesses on the issues presented in the Complaint. Additionally, due to the short time remaining before trial begins in the Adversary Proceeding and the advanced state of discovery, the Equity Committee asks the Court not to permit the Debtors to serve their own discovery requests or notice their own depositions. Like the other parties who have intervened, the Debtors should be treated a general parties by the Court and should not be permitted to act in any way that would delay the progress of the Adversary Proceeding, Ms. Dine says. While the Equity Committee has determined not to formally object to the Debtors' Intervention Motion, the Committee continues to be concerned about the role the Debtors will play in the Adversary Proceeding. Thus, the Equity Committee reserves all its rights with respect to filing an objection. Equity Committee Identifies Rebuttal Experts The Equity Committee informs the Court that it has designated two rebuttal expert witnesses in the Adversary Proceeding: (1) Dr. Patrick C. Lucia will rebut the Defendants' expert, Dr. Robert H. Harris, concerning environmental remediation cost issues; and (2) Walter P. Schuetze will rebut the Defendants' expert, Dr. William W. Holder, concerning Federal Accounting Standards Board Statement No. 5 disclosure issues. Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SOLUTIA INC: Court Okays Payment of $5 Mil. Settlement Installment ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorizes Solutia Inc. and its debtor-affiliates to pay the third installment of $5 million under the Side Agreement and the Litigation Settlement Agreements among the Debtors, Monsanto Company, and Pharmacia Corporation. Solutia sought the Court's authority to pay the third settlement installment because: -- it will help preserve its ability to argue that Monsanto's release of the Anniston Indemnity Claim, a claim for $550,000,000, under the Side Agreement remains in effect; -- it is contemplated by the Debtors' business plan; -- it is permitted by the Debtors' postpetition financing agreement; and -- it is consistent with the First and Second Installment Payment Orders. According to Solutia, one could interpret the Side Agreement as an executory contract that it could assume or reject during the Chapter 11 cases. But this interpretation may be subject to dispute and would require an analysis of whether assumption of the Side Agreement is warranted. Even if the agreement were deemed to be subject to rejection, Solutia notes that a rejection could trigger damage claims far exceeding the cost of the proposed payment. Thus, Solutia has decided not to bring these issues before the Court at this time. As previously reported, Solutia entered into the Global Settlement Agreements with Monsanto and Pharmacia to resolve certain lawsuits pending against them. The Litigation Settlement Agreements require an aggregate of $5,000,000 to be paid annually from Aug. 26, 2004, to Aug. 26, 2013. Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SPANISH BROADCASTING: Increasing Leverage Cues S&P's Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B' corporate credit rating, on Spanish Broadcasting System Inc. on CreditWatch with negative implications. The Miami, Florida-based radio broadcaster had approximately $337 million in debt at June 30, 2006. "The CreditWatch listing reflects our concern over the company's increasing leverage and limited discretionary cash flow," said Standard & Poor's credit analyst Heather M. Goodchild. In resolving the CreditWatch listing, Standard & Poor's will assess the company's intermediate-term business strategies and the appropriateness of its debt reduction plan. Standard & Poor's believes the rating downside is limited to one notch. STAR TELECOMMS: D&O Litigation Settled for $2 Million ----------------------------------------------------- The Continuing Creditors' Committee of the Star Creditors' Liquidating Trust has settled its lawsuit against Star Telecommunications, Inc.'s former directors and officers. Subject to Bankruptcy Court approval of the compromise and settlement, the Committee has agreed to dismiss its lawsuit and exchange mutual releases in consideration of a $2 million cash payment to the Trust by former Chairman and CEO Brett S. Messing. Gordon Hutchings, Jr., the Trust's liquidating trustee advised the Bankruptcy Court in June that parties to the lawsuit (Dist. Del. Civil Action No. 03-278-KAJ), had reached an agreement in principle, subject to documentation, settling the D&O Action. The terms of the settlement weren't disclosed at that time. The Committee charged the former directors and officers with breach of their fiduciary duties of loyalty, good faith, and care, and that the acts or omissions constituted gross negligence, mismanagement, and corporate waste. The Committee further alleged that payments made by Star Telecommunications to Mr. Messing constituted unjust enrichment. Mr. Messing denied all of the Committee's allegations and asserted affirmative defenses in an Answer filed on Feb. 14, 2005. To date, the Liquidating Trustee, pursuant to the terms of the Chapter 11 Plan confirmed in the Debtors' cases, has made two distributions to creditors and has resolved all other actions to recover additional assets. Headquartered in Santa Barbara, California, Star Telecommunications, Inc., was a leading provider of global telecommunications services to consumers, long distance carriers, multinational corporations and Internet service. The Company and its debtor-affiliates filed for chapter 11 protection on March 13, 2001 (Bankr. D. Del. Case No. 01-00830). Daniel A. Lowenthal, III, Esq., at Thelen Reid & Priest LLP represented the Debtors and represents the Continuing Creditors' Committee. When the Debtors filed for chapter 11 protection, they listed total assets of $630,065,000 and total debts of $284,634,000. The Court confirmed the Debtors and Unsecured Creditors Committee's chapter 11 Plan on July 31, 2002, and the Plan took effect on Aug. 13, 2002. Gordon Hutchins, Jr. is the Liquidating Trustee for the confirmed Plan. Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C. represents the Liquidating Trustee. STATEWIDE REALTY: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Statewide Realty, LLC Post Office Box 1506 McComb, Mississippi 39649 Bankruptcy Case No.: 06-01861 Chapter 11 Petition Date: September 8, 2006 Court: Southern District of Mississippi (Jackson) Debtor's Counsel: Craig M. Geno, Esq. Harris Jernigan & Geno, PLLC 587 Highland Colony Parkway P.O. Box 3380 Ridgeland, Mississippi 39157 Tel: (601) 427-0048 Fax: (601) 427-0050 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. STONEVILLE PROPERTIES: Case Summary & Two Largest Creditors ----------------------------------------------------------- Debtor: Stoneville Properties, LLC 343 Maplewood Drive Eden, North Carolina 27288 Bankruptcy Case No.: 06-11025 Chapter 11 Petition Date: September 5, 2006 Court: Middle District of North Carolina (Greensboro) Judge: William L. Stocks Debtor's Counsel: Gene B. Tarr, Esq. Blanco Tackabery Combs & Matamoros, P.A. Suite 500 110 South Stratford Road P.O. Drawer 25008 Winston-Salem, North Carolina 27114-5008 Tel: (336) 761-1250 Total Assets: $1,600,152 Total Debts: $881,952 Debtor's 2 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mary S. Barrow Loan to LLC $20,000 343 Maplewood Drive Eden, NC 27288 Ken Frazier Commissions $20,000 Mossdale Drive Stoneville, NC 27048 STRATUS SERVICES: June 30 Stockholders' Deficit Narrows to $8 Mil. ------------------------------------------------------------------ Stratus Services Group Inc. filed its financial statements for the second quarter ended June 30, 2006, with the Securities and Exchange Commission. At June 30, 2006, the Company's balance sheet showed $2,547,610 in total assets and $10,632,766 in total liabilities, resulting in an $8,085,156 stockholders' equity. At Sept. 30, 2005, the Company had a $9,875,971 deficit. Revenues increased 8.6% to $1,282,074 for the three months ended June 30, 2006, from $1,180,222 for the three months ended June 30, 2005. This increase was primarily a result of an increase in billable hours. The Company reported net income of $8,987 on $1,282,074 of revenues for the second quarter of 2006 compared with net income of $2,080,797 on $1,180,222 of revenues for the same period in 2005. Gross profit increased 9.1% to $371,498 for the three months ended June 30, 2006 from $340,665 for the three months ended June 30, 2005, primarily as a result of increased revenues. Gross profit as a percentage of revenues increased slightly to 29.0% for the three months ended June 30, 2006 from 28.9% for the three months ended June 30, 2005. Liquidity At June 30, 2006, the Company had limited liquid resources. Current liabilities were $9,642,322 and current assets were $2,375,351. The difference of $7,266,971 is a working capital deficit, which is primarily the result of losses incurred during the last four years. These factors, among others, indicate that the Company may be unable to continue as a going concern. Management recognizes that the Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to allow it to satisfy its obligations on a timely basis, to fund the operation and capital needs, and to obtain additional financing. Full-text copies of the Company's second quarter financials are available for free at http://ResearchArchives.com/t/s?1170 Going Concern Doubt E. Randall Gruber, CPA, PC, expressed substantial doubt about Stratus Services' ability to continue as a going concern after it audited the Company's financial statements for the year ended Sept. 30, 2005. The auditing firm pointed to the Company's recurring losses from operations and working capital deficit. About Stratus Services Group Headquartered in Manalapan, New Jersey, Stratus Services Group Inc. (OTCBB: SSVG.OB) -- http://www.stratusservices.com/-- provided a wide range of staffing and productivity consulting services nationally through a network of offices located throughout the United States until December 2005. The Company plan on expanding its information technology staffing solutions businessthrough its 50% owned consolidated joint venture, Stratus Technology Services, LLC. THOMAS EQUIPMENT: Unit Completes $15 Mil. Funding with Greystone ---------------------------------------------------------------- Pneutech Inc., a wholly owned subsidiary of Thomas Equipment Inc., has successfully refinanced its existing credit facility with a larger $15 million credit facility provided by Greystone Business Credit II, LLC. "We are pleased to work with JP and his team at Thomas," said Drew Neidorf, President of Greystone Business Credit II, LLC. On September 6, 2006, Pneutech Inc., and its wholly-owned subsidiaries Rousseau Controls Inc. and Hydramen Fluid Power Limited, initiated a court-supervised restructuring to facilitate a refinancing of its credit facilities with the Royal Bank of Canada. Pneutech obtained an order under the Canadian Companies' Creditors Arrangement Act in a hearing before the Quebec Superior Court of Justice, which maintains jurisdiction over Pneutech. "We are excited by our partnership with Pneutech and feel confident we can support its financing needs as it executes on its opportunities," stated Joel Flig, Executive Vice President of Greystone Business Credit II, LLC. Pursuant to the Order, Pneutech received authorization to enter into a debtor in possession financing arrangement with Greystone to immediately replace Royal Bank of Canada as Pneutech's principal lender. "We are extremely disappointed with the Royal Bank of Canada and are currently assessing all legal claims related to their conduct from the original expiration of the credit facility through the date of refinancing with Greystone on September 8th, 2006," stated David Marks, Chairman of Thomas Equipment, Inc. "We were delighted to close this financing with Greystone so we can rapidly proceed through our corporate restructuring." The new credit facilities provide Pneutech with increased financing to fund ongoing operations while Pneutech implements its restructuring and will continue after Pneutech emerges from these proceedings. The credit facility with Greystone includes a revolving line of credit in the maximum amount of $15,000,000, which also includes term loans of up to $1,158,000. The loans bear interest at a rate of 3%, plus the prime interest rate. The facility will expire in 3 years, subject to earlier termination under certain circumstances. As additional consideration for the facility, Thomas Equipment, Inc. will issue a warrant to Greystone to purchase 1,000,000 shares of common stock at a price of $0.5 per share. About Thomas Equipment Headquartered in Milwaukee, Wisconsin, Thomas Equipment, Inc. -- http://www.thomas-equipment.com/-- is a technologically advanced global manufacturer of a full line of skid steer and mini skid steer loaders as well as attachments, mobile screening plants and six models of mini excavators. The Company distributes its products through a worldwide network of distributors and wholesalers. In addition, the Company's wholly owned subsidiaries manufacture specialty industrial and construction products, a complete line of potato harvesting and handling equipment, fluid power components, pneumatic and hydraulic systems, spiral wound metal gaskets, and packing material. At March 31, 2006, Thomas Equipment Inc.'s balance sheet showed a stockholders' deficit of $31,289,000, compared to a $67,129,000 deficit at June 30, 2005. TIME WARNER: Moody's Rates Proposed $700 Million Sr. Loan at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the proposed $100 million senior secured first lien revolving credit facility and to the $600 million senior secured first lien term loan at Time Warner Telecom Holdings, Inc., a wholly owned subsidiary of Time Warner Telecom Inc. The proposed term loan will fund the cash portion of TWT's acquisition of Xspedius Communications, and will refinance $440 million of existing debt. The ratings for the facilities reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B2, and a loss given default assessment of LGD 2. Moody's also assigned LGD 4 to the 9.25% senior notes at TWTH and LGD 5 to the convertible notes at TWT. Moody's affirmed the B2 corporate family rating and upgraded the company's liquidity rating to SGL-1 from SGL-2. Moody's took these rating actions: At Time Warner Telecom, Inc.: * Speculative grade liquidity rating -- Upgraded to SGL-1 from SGL-2 * Corporate family rating -- Affirmed B2 * Probability of Default Rating -- Assigned B2 * Convertible senior notes due 2026 -- Affirmed Caa1 and Assigned LGD 5 -- 89% At Time Warner Telecom Holdings Inc.: * Sr. Secured Revolver due 2011 -- Assigned Ba2 and LGD 2 -- 20% * Sr. Secured Term Loan B due 2013 -- Assigned Ba2 and LGD 2 -- 20% * r. Secured Revolver due 2009 -- Affirmed B1 to be withdrawn * Sr. Secured Term Loan B due 2010 -- Affirmed B1 to be withdrawn * Second Priority Senior Secured Floating Rate Notes due 2011 -- Affirmed B2 to be withdrawn Senior Notes due 2014 -- Affirmed B3 and Assigned LGD 4 -- 64% The rating outlook remains stable. Pro-forma the financing, the company's leverage at year-end 2006 is expected to modestly increase to 4.9x from about 4.5x at June 30, 2006. Operationally, the addition of Xspedius' fiber assets will provide a growth platform for TWT to serve an additional 31 markets and to expand its facilities in 13 existing markets. The rating is tempered by the complexity of integrating Xspedius, the planned integration costs, including higher capital expenditures related to Xspedius. As a result, sustained free cash flow generation is not expected before 2007. The stable rating outlook considers the company's growth plans and the reasonable likelihood of achieving merger synergies. The Ba2 rating of the first lien senior secured credit facilities reflects an LGD 2 loss given default assessment as this facility is secured by a pledge of all of the company's assets, while the 9.25% senior notes at TWTH and the convertible debentures at TWT provide junior debt cushion of over 51% of total obligations. As a result, the 9.25% senior notes are B3, with an LGD4 loss given default assessment, and the convertible debentures are Caa1, with an LGD5. Time Warner Telecom Inc., headquartered in Littleton, Colorado, provides data, dedicated Internet access, and local and long distance voice services to business customers in 44 metropolitan markets in the United States. TRIPATH TECH: Agrees to Settle Litigation with Langley Partners --------------------------------------------------------------- Tripath Technology Inc. entered into a Stipulation and Agreement of Settlement to settle the litigation entitled Langley Partners, L.P. against Tripathi Technology, Inc., Adya Tripath and David Eichler, pending against the Company and certain of its current and former officers and directors. The Stipulation and Agreement became final and binding upon the parties only after the U.S. District Court for the Northern District of California entered an order approving it. The Court entered the order on September 8, 2006. "This settlement puts the Langley Partners litigation behind Tripath," said Dr. Adya Tripathi, Tripath's President & CEO and Chairman of the Board. Under the terms of the Stipulation and Agreement, Langley Partners L.P. is providing a general release to the Company, Dr. Adya Tripathi and David Eichler for any and all claims that have been or could have been made by Langley Partners against the Company, Dr. Adya Tripathi and David Eichler, in return for which, the Company is agreeing (i) to pay to Langley $40,000 and (ii) to issue and deliver to Langley the amount of Company common stock that corresponds to three hundred fifty-seven thousand seven hundred and fifty dollars based on the closing bid price of Company common stock on the first trading day immediately prior to the date the Company transfers such stock in accordance with the Court's order, provided that in no event will the Company issue or deliver to Langley more than 9.99% of the amount of the Company's common stock that is outstanding at the time the stock to Langley is issued and delivered. About Tripath Headquartered in San Jose, California, Tripath Technology Inc. -- http://www.tripath.com/-- is a fabless semiconductor company which provides power amplification to the Flat Panel Television, Home Theater, Automotive Audio and Consumer and PC Convergence markets. Tripath owns the patented technology called Digital Power Processing. Tripath markets audio amplifiers with DPP(R) under the brand name Class-T(R). Tripath's current customers include Alcatel, Alpine, Hitachi, JVC, Samsung, Sanyo, Sharp, Sony and Toshiba. Going Concern Doubt As reported in the Troubled Company Reporter on Dec. 15, 2005, Stonefield Josephson, Inc., expressed substantial doubt about Tripath Technology Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the year ended Sept. 30, 2005 and 2004. The auditing firm pointed to the Company's recurring operating losses and accumulated deficit. TURNSTONE SYSTEMS: June 30 Net Liquidation Assets Increased $87K ---------------------------------------------------------------- At June 30, 2006, Turnstone Systems Inc. reported $1,071,000 of net assets in liquidation, an increase of $87,000, from the $984,000 net assets in liquidation in the same period last year. The $1,071,000 net assets in liquidation as of June 30, 2006 consists of $1,132,000 in cash and cash equivalents, partially offset by $61,000 of estimated costs to be incurred during liquidation. During the six months ended June 30, 2006, the Company's net assets in liquidation increased $33,000 due to $51,000 received from bankruptcy proceedings of two former customers, partially offset by an increase of $18,000 in estimated costs to be incurred during liquidation. The Company expects to use its capital resources to execute its complete plan of liquidation and dissolution, settle existing claims, including existing litigation and other current liabilities and accrued expenses, and to make liquidating distributions to stockholders. Eric S. Yeaman, the Company's chief executive officer and chief financial officer, said in an Aug. 14, 2006 regulatory filing with the Securities and Exchange Commission, that the Company's capital resources available for liquidating distributions to stockholders may vary if the Company incurs greater than estimated operating expenses associated with executing the plan of complete liquidation and dissolution, actual settlement costs for existing claims vary from estimates, or if there are existing, but unknown claims made against the Company in the future. The Company's cash and cash equivalents at June 30, 2006 were held primarily in money market funds. The Company expects to continue to hold its cash and cash equivalents primarily in money market funds while it executes the plan of dissolution. A full-text copy of the Company's financial report for the three months and six months ended June 30, 2006 is available for free at: http://researcharchives.com/t/s?1167 Liquidation & Dissolution On Aug. 6, 2003, the Company's Board of Directors approved, subject to the approval by stockholders, a plan to liquidate and dissolve the Company. The Plan was approved by a majority of the Company's stockholders on Nov. 11, 2003. The key features of the Plan are: (1) file a Certificate of Dissolution with the Secretary of State of the State of Delaware; (2) cease conducting normal business operations, except as may be required to wind up the Company's business affairs; (3) attempt to convert all of the Company's remaining assets into cash or cash equivalents in an orderly fashion; (4) pay or attempt to adequately provide for the payment of all of the Company's known obligations and liabilities; and (5) distribute pro rata in one or more liquidating distributions all of the Company's remaining assets to its stockholders as of the applicable record date. Headquartered in Livermore, California, Turnstone Systems Inc. formerly developed and marketed products for the local exchange carriers in deploying and maintaining copper local loop services. The Company commenced the commercial sale of its products in the first quarter of 1999. UNITED SUBCON: Moody's Junks Rating on $200 Million Term Loan ------------------------------------------------------------- Moody's Investors Service rated United Subcontractor's new credit facility B2 and affirmed the company's Corporate Family Rating at B2. Moody's also rated the company's second lien term loan Caa1 in conjunction with a $125 million dividend recapitalization. The B2 Corporate Family rating affirmation and stable outlook balance the expectation that the company's financial metrics are expected to deteriorate given the $125 million dividend distribution and the weakened outlook for new homebuilding construction against the cushion in the current rating given the many financial metrics that are strong for the B2 rating category. The rating also benefits from the company's variable cost structure as this suggests that the company should be able to cut costs as business slows. These ratings were assigned: * $300 million first lien term loan B, due 2013, rated B2; * $35 million revolving credit facility, due 2011, rated B2; * $15 million synthetic LC facility, due 2013, rated B2; * $200 million second lien term loan, due 2014, rated Caa1. These ratings were affirmed: * Corporate Family Rating, rated B2. This ratings were withdrawn: * $295 million first lien term loan, due 2012, rated B2, * $40 million revolving credit facility, due 2011, rated B2, * $65 million second lien term loan, due 2013, rated Caa1. The ratings and outlook may deteriorate if free cash flow to debt were to decline below 2% and if leverage were to increase above 5.5x for an extended period. Upward rating pressure could arise if the company's free cash flow to debt improves to over 10% and if total debt to EBITDA falls below 3.5x on a sustainable basis. United Subcontractors, Inc., is headquartered in Minneapolis, Minnesota. Revenues for 2005 were $483 million. USINTERNETWORKING INC: Joins Forces with AT&T in $300 Million Deal ------------------------------------------------------------------ AT&T Inc.' subsidiary, AT&T Corp., has agreed to acquire privately held USinternetworking, Inc., for approximately $300 million in cash and assumed debt. The transaction, which is expected to close in the fourth quarter, is designed to enhance AT&T's enterprise service offerings. It strategically aligns USi's software and eBusiness management services and consulting expertise with AT&T's existing portfolio of enterprise hosting and managed services. Following the acquisition, USi will operate as a wholly owned subsidiary and business unit within AT&T's existing enterprise services organization, which is led by Group President Forrest Miller. AT&T expects to retain USi's team and its domestic and international operations. "The addition of USi's technology and expertise in applications management to AT&T's global reach, networking expertise and extensive hosting capabilities will broaden the range of solutions for our customers," said Mr. Miller. "Our enhanced capabilities will enable businesses around the globe to more efficiently and effectively manage their core operations, enhance their productivity and derive further business value from their relationship with AT&T," Mr. Miller said. "The USi team is excited to be joining forces with AT&T," said Andrew A. Stern, USi's chairman and chief executive officer. "Over the past eight years, USi has developed an unmatched ability to deliver enterprise-scale applications as fully integrated, on- demand services. Combining our capabilities with AT&T's global footprint creates an unparalleled opportunity for growth and the basis for continued market leadership for years to come." Mr. Stern will join AT&T as CEO of USi upon the closing of the transaction. About AT&T AT&T -- http://www.att.com/-- provides an array of hosted managed services capabilities that support the IT operations of customers ranging from small and medium businesses up to the largest global corporations. AT&T Inc. holds a 60 percent ownership interest in Cingular Wireless, which is the No. 1 U.S. wireless services provider with 57.3 million wireless customers. About USi Headquartered in Annapolis, Maryland, USinternetworking, Inc., -- http://www.usi.com/-- is an independent Application Service Provider specializing in managed enterprise solutions and on demand services for Fortune 1000 companies. USi delivers application outsourcing, remote management, professional services, ISV enablement, and eBusiness development and hosting to more than 150 world-class organizations in over 30 countries. The Company and its affiliates filed for chapter 11 protection on Jan. 7, 2002 (Bankr. D. Md. Lead Case No. 02-50215). Paul M. Nussbaum, Esq., at Whiteford, Taylor & Preston, represents the Debtors. Lindsee P. Granfield, Esq., at Cleary, Gottlieb, Steen & Hamilton, represented the creditors' committee. The Court confirmed the Company's Chapter 11 Reorganization Plan on May 7, 2002. VERESTAR INC: Committee Wants Court Nod on Settlement Procedures ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Verestar Inc. and its debtor-affiliates' Chapter 11 cases asks the Honorable Allan L. Groper of the U.S. Bankruptcy Court for the Southern District of New York for authority to compromise, settle and release any avoidance actions the Committee deems appropriate for settlement in accordance with the Committee's proposed procedures. The Committee tells the Court that approval of the Proposed Procedures will facilitate the Committee's ability to resolve the Avoidance Actions in a manner that minimizes costs to the Estates while maximizing recoveries to the creditors. Settlement Procedures The Committee is evaluating the Avoidance Actions and distinguishing those actions that should proceed to trial from those actions that may be settled on terms favorable to the Estates. Any Avoidance Action deemed appropriate for settlement will be placed into one of three classes based on the Committee's determination of the amount of the defendant's liability in light of the defenses demonstrated by the defendant. The proposed settlement will then be effectuated in accordance with these procedures: a) Class 1 Settlement -- liability of $100,000 and less The Committee may fully and finally settle, without further Notice or Court order, any Avoidance Action in which the Defendant has demonstrated to the sole satisfaction of the Committee that the defendant's liability is $100,000 or less. b) Class 2 Settlement -- liability greater than $100,000, but less than $300,000 The Committee may settle any Avoidance Action in which the defendant has demonstrated to the sole satisfaction of the Committee that the defendant's liability is greater than $100,000, but less than $300,000 in accordance with the procedures in subsection (b). The Committee will provide five business days' written notice to counsel for the Debtors and to the Office of the United States Trustee of each proposed Class 2 Settlement. Any objection to a proposed Class 2 Settlement will be in writing, describe in detail the basis for the objection and served upon the Class 2 Notice Parties. The claims subject to any Class 2 Settlement will become fully and finally settled, without further notice or Court order, if no objection by the Class 2 Notice Parties is received by the Committee within the Class 2 Notice Period. In the event the objection is received by the Committee during the Class 2 Notice Period, the proposed Class 2 Settlement will not become effective until: (i) the objecting Class 2 Notice Party consents in writing to the proposed Class 2 Settlement; or (ii) the Court enters an Order approving the Class 2 Settlement. c) Class 3 Settlement -- liability of $300,000 and greater The Committee may settle any Avoidance Action in which the Committee believes that the defendant's liability is $300,000 or greater only by filing a motion with the Court under Bankruptcy Rule 9019(a) in accordance with the procedures in subsection (c). The Committee will provide 15 calendar days' written notice of the Class 3 Settlement Motion to the: (i) Class 2 Notice Parties; (ii) defendant; and (iii) parties requesting special notice pursuant to Bankruptcy Rule 2002. The Court may enter an Order approving the Class 3 Settlement Motion, without conducting a hearing, if no objection by the Class 3 Notice Parties is received by the Committee within the Class 3 Notice Period. Any objection to a proposed Class 3 Settlement Motion will be in writing, describe in detail the basis for the objection, and will be filed and served in accordance with the Bankruptcy Rules and the Local Bankruptcy Rules. If a written objection by any of the Class 3 Notice Parties to the Class 3 Settlement Motion is timely filed and served, a hearing on the Class 3 Settlement Motion will be scheduled and notice of the hearing will be provided to the Class 3 Notice Parties, including the objecting party. The Committee submits that the Settlement Procedures should be approved because: (a) the plain language of, and the policies underlying, the Bankruptcy Code and the Bankruptcy Rules permit the Procedures; (b) the Committee has a duty to (and will) ensure that each settlement is fair, equitable and in the best interest of the unsecured creditors as a class; and (c) implementation of the Settlement Procedures will generate the greatest recovery from the Avoidance Actions for the lowest cost. Headquartered in Fairfax, Virginia, Verestar, Inc. -- http://www.verestar.com/-- was a provider of satellite and terrestrial-based network communication services prior to the sale of substantially all of its assets. Verestar is a wholly owned subsidiary of American Tower Corporation, a non-debtor. The Company and two of its affiliates filed for chapter 11 protection on December 22, 2003 (Bankr. S.D.N.Y. Case No. 03-18077). Matthew Allen Feldman, Esq., at Willkie Farr & Gallagher LLP represents the Debtors. When the Company filed for protection from its creditors, it listed $114 million in assets and more than $635 million in debts. David S. Rosner, Esq., Cindy C. Kelly, Esq., Michael J. Bowe, Esq., Brian Condon, Esq., and Erin Zavalkoff, Esq., at Kasowitz, Benson, Torres & Friedman LLP, represent the Official Committee of Unsecured Creditors. Barry N. Seidel, Esq., and Scott E. Eckas, Esq., at King & Spalding LLP, represent American Tower Corporation and the Individual Defendants. Barry H. Berke, Esq., and Stephen M. Sinaiko, Esq., at Kramer, Levin, Naftalis & Frankel, LLP, represent the Bear Stearns Defendants. VISTEON CORP: S&P Affirms B+ Rating and Removes Negative Watch -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Van Buren Township, Michigan-based Visteon Corp., and removed the rating from CreditWatch with negative implications where it was placed on Aug. 21, 2006. Visteon, a global manufacturer of automotive components, has total debt of about $2.3 billion. The rating outlook is negative. The affirmation follows Standard & Poor's review of the impact of Ford Motor Co.'s planned third and fourth quarter vehicle production cuts on Visteon's credit profile. Ford is Visteon's largest customer, accounting for 48% of sales. Sales to Ford in North America, where the production cuts are concentrated, account for 24% of Visteon's sales. Ford's vehicle production will be down 15% in the second half of the year, with light trucks making up the bulk of the reduction, down 278,000 units, or 25%. Standard & Poor's expects the production cuts to cause Visteon's results to fall short of its most recent guidance, which calls for EBIT before restructuring of $170 million - $200 million and free cash flow of $50 million. "However, the shortfall is expected to be less than $50 million, and Visteon should have the wherewithal to absorb the earnings and cash flow hit without significantly impairing its ability to meet its debt service obligations," said Standard & Poor's credit analyst Martin King. Two credit facilities recently put in place in the U.S. and Europe, along with strong cash balances, give the company substantial liquidity to deal with near-term challenges in the auto industry. Longer term, Visteon's continued progress under a comprehensive restructuring program, and the gradual improvement in customer diversity, should allow the company to raise earnings and cash flow during the next few years despite the difficulties facing Ford. Recent press reports indicate that Visteon is engaged in discussions surrounding the potential sale of the company. At this time, the ratings do not incorporate any assumptions about the likelihood or timing of a potential transaction. VOLT INFORMATION: Earns $8.4 Million for the Quarter Ended July 30 ------------------------------------------------------------------ Volt Information Sciences, Inc., filed with the Securities and Exchange Commission, its financial report for the three and nine months ended July 30, 2006 on Sept. 8, 2006. In the first nine months of fiscal 2006, consolidated net sales increased by $140.8 million, or 9%, to $1.7 billion, from the comparable period in fiscal 2005. Net income for the first nine months of fiscal 2006 was $17.1 million compared to net income of $8.7 million in the comparable 2005 period. In the third quarter of fiscal 2006, consolidated net sales increased by $41.4 million, or 8%, to $584.9 million, from the comparable period in fiscal 2005. Net income for the third quarter of fiscal 2006 was $8.4 million compared to $5 million in the third quarter of 2005. Cash and cash equivalents, decreased by $16.7 million to $45.3 million in the nine months ended July 30, 2006. Operating activities provided $79.2 million of cash in the first nine months of fiscal 2006. In the comparable fiscal 2005 period, operating activities provided $36.7 million in cash. Under the Company's accounts receivable securitization program, at July 30, 2006, Three Rivers Funding Corporation had purchased from Volt Funding a participation interest of $110 million out of a pool of approximately $270.8 million of receivables. At July 30, 2006, the Company had total outstanding foreign currency bank borrowings of $10.4 million, $6.4 million of which were under its credit agreement. The bank borrowings provide a hedge against devaluation in foreign currency denominated assets. Stock Repurchase The Company disclosed that on Sept. 6, 2006, its Board of Directors had authorized the repurchase of up to 1.5 million shares of the Company's common stock from time to time in open market or private transactions, in order to fund awards under the "Volt Information Sciences, Inc. 2006 Incentive Stock Plan". A full text-copy of the Company's financial report for the three and nine months ended July 30, 2006 may be viewed at no charge at http://ResearchArchives.com/t/s?1166 Volt Information Sciences, Inc. -- http://www.volt.com/-- provides national Staffing Services and Telecommunications and Information Solutions to Fortune 100 customers. Operating through a network of over 300 Volt Services Group branch offices, the Staffing Services segment fulfills IT and other technical, commercial and industrial placement requirements of its customers, on both a temporary and permanent basis. The Telecommunications and Information Solutions businesses, which include the Telecommunications Services, Computer Systems and Telephone Directory segments, provide complete telephone directory production and directory publishing; a full spectrum of telecommunications construction, installation and engineering services; and advanced information and operator services systems for telephone companies. * * * As reported in the Troubled Company Reporter on July 4, 2006 Fitch Ratings upgraded Volt Information Sciences' Issuer Default Rating to 'BB' from 'BB-', and has affirmed its senior secured rating at 'BBB-'. The Rating Outlook is Stable. WELD WHEEL: U.S. Trustee Names Seven-Member Creditors' Committee ---------------------------------------------------------------- Nancy J. Gargula, the U.S. Trustee for Region 13, appointed seven creditors to serve on an Official Committee of Unsecured Creditors in Weld Wheel Industries, Inc., and its debtor-affiliates' chapter 11 cases: 1. Ormet Primary Aluminum Corporation Attn: John Teitz P. O. Box 176 State Route 7 Hannibal, OH 43931-0176 Tel: (740) 820-1800 Fax: (740) 820-1810 2. Invader Specialties, Inc. Attn: Jeffrey J. Carey 212 NE Tudor Road Lee's Summit, MO 64086 Tel: (816) 246-9445 Fax: (816) 525-1555 3. AFX Group, Inc. Attn: William J. Madden 7451 Warner Avenue, E-108 Huntington Beach, CA 92647 Tel: (714) 323-6255 Fax: (714) 903-7608 4. International Paper Attn: Traci E. Cochran 4049 Willow Lake Boulevard Memphis, TN 38118 Tel: (901) 419-1270 Fax: (901) 419-1235 5. UPS Attn: Kelli Bohuslav-Kail Steve Sass 55 Glenlake Parkway Atlanta GA 30328 Tel: (410) 773-4033 Fax: (410)773-4057 6. Jackson Lea Attn: Beth Klimezak PO Box 699 Conover, NC 28613 Tel: (828) 466-7312 Fax: (828) 464-7094 7. Carroll's Inc., dba Carroll Tire Company Attn: Sarah Adair 4770 Hickory Hill Road Memphis TN 38141 Tel: (901) 541-3621 Fax: (901) 541-3758 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's 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 Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. 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. When the Debtor sought protection from its creditors, it estimated its assets and debts at $10 to $50 million. WELD WHEEL: Creditors' Committee Taps Spencer Fane as Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Weld Wheel Industries, Inc., and its debtor-affiliates' bankruptcy case asks the U.S. Bankruptcy Court for the Western District of Missouri, Western Division, for permission to retain Spencer Fane Britt & Browne LLP as its counsel. The Committee selected Spencer Fane based on the firm's extensive experience in Chapter 11 proceedings, and in corporate, litigation, securities, tax, real estate and solvency matters. Spencer Fane will: a. advise the Committee with respect to its rights, duties and powers as an official unsecured creditors' committee; b. advise the Committee with respect to terms, conditions and documentation of financing agreements, cash collateral orders and related transactions; c. advise the Committee in connection with any potential sale of assets or businesses; d. investigate the nature and validity of liens asserted against Debtors' assets and to advise the Committee concerning the enforceability of these liens; e. investigate and advise the Committee with respect to the taking of actions necessary to collect and, in accordance with applicable law, recover property for the benefit of the estates; f. prepare and submit on behalf of the Committee, among other things, applications, motions, pleadings, orders, notices, schedules and other legal papers to be prepared and submitted in the Debtors' case, and review financial and other reports; g. advise the Committee concerning and to prepare responses to applications, motions, pleadings, notices and other documents; h. counsel the Committee in connection with the formulation, negotiation and promulgation of a plan or plans of reorganization and related documents; i. appear on behalf of the Committee at all hearings scheduled before the Court; j. review pending litigation and evaluating and advising the Committee concerning appropriate actions to be taken under the circumstances; and k. represent the Committee, and perform all other legal services for the Committee that may be necessary, in connection with this case. The current hourly billing rates for Spencer Fane's professionals are: Designation Hourly Rate ----------- ----------- Partners $260 - $410 Associates $195 - $250 Paralegals $110 - $140 Lisa A. Epps, Esq., at Spencer Fane, assures the Court that her firm does not hold any interest adverse to the Debtors' estates and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. When the Debtor sought protection from its creditors, it estimated its assets and debts at $10 to $50 million. WINN-DIXIE: Judge Funk Approves Assumption of Seven Store Leases ---------------------------------------------------------------- Judge Funk of the U.S. Bankruptcy Court for the District of Florida overrules the objections of five landlords and authorizes Winn-Dixie Stores, Inc., and its debtor-affiliates to assume the leases of Store Nos. 84, 599, 736, 1852, 2213, 2230, and 2333, effective as of the effective date of their Joint Plan of Reorganization. The Landlords are E&A Acquisitions Two LLP, E&A Investments LP, E&A Southeast LP, E&A Financing II LP, and GLA LLC. Judge Funk clarifies that if the Plan will not become effective, the Landlords may retain any cure amounts paid by the Debtors before the Effective Date, and the Store Leases will be deemed rejected. In addition, Judge Funk approves the assumption of the lease of Store No. 6 and directs the Debtors to pay the landlord, Skinners of Point Meadows, Inc., any undisputed cure amounts due on the Effective Date. If the Debtors and Skinner are unable to resolve Skinner's cure objection consensually, the Debtors will set the cure objection for hearing before the Court. 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: Sells Harahan Warehouse Facility to Ackel for $6.75MM ----------------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates solicited offers for the warehouse facility located in Jefferson Parish, Louisiana -- Harahan Warehouse Facility. However, no competing bid for the Facility was received. Accordingly, the U.S. Bankruptcy Court for the Middle District of Florida authorizes the Debtors to sell the Harahan Facility to Ackel Real Estate, LLC, and John Georges. As reported in the Troubled Company Reporter on Aug. 15, 2006, before the bankruptcy filing, the Debtors used the Harahan Warehouse Facility to supply stores located in Louisiana. Since the bankruptcy filing, the Debtors have consolidated their warehouse operations for this area into their Hammond, Louisiana Facility and no longer need the Harahan Warehouse Facility. Since filing for bankruptcy, the Debtors have marketed the Harahan Warehouse Facility extensively through DJM Asset Management, Inc. DJM sent over 2,500 sale notices for the Harahan Warehouse Facility to potential purchasers. Through DJM's efforts, the Debtors have received four offers, including the offer by Ackel for $6,750,000. According to the Debtors, Ackel's offer is the highest or otherwise best offer for the Harahan Warehouse Facility. On Aug. 3, 2006, WD Logistics and Ackel entered into a Facility Agreement, which provides, among other things, that: -- Ackel has deposited $2,000,000 in escrow; -- The assets will be transferred free and clear of any liens, claims, interests and encumbrances other than the Permitted Encumbrances; -- The initial minimum overbid that may be accepted by the Debtors at any auction must have a value of at least $6,952,500; and -- WD Logistics has agreed to pay Ackel a termination fee of $50,000 for Ackel's expenses in the event Ackel is not the successful bidder at the Auction for the Assets. 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: Leesburg & Edgewood Bids Must be Received by Sept. 18 ----------------------------------------------------------------- Winn-Dixie Stores, Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Middle District of Florida to sell: (1) the Leesburg Outparcel to the State of Florida Department of Transportation; and (2) the Edgewood Outparcel to AJDC LLC, or to a party submitting a higher or better offer. D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, relates that the Debtors own: (a) a one-half fee simple interest in a tract of land located in Leesburg, Florida; and (b) a tract of land facing Edgewood Avenue in Jacksonville, Florida. The Debtors have no plans to develop the Outparcels, Mr. Baker says. The Debtors have marketed the Leesburg and Edgewood Outparcels extensively through DJM Asset Management, Inc. The Debtors received two offers for the Leesburg Outparcel, and three for the Edgewood Outparcel. After reviewing the offers, the Debtors have determined that the bids of the Florida Transportation Dept. and AJDC are currently the highest and best offers for the Outparcels, Mr. Baker says. Leesburg Outparcel Purchase Agreement On Aug. 18, 2006, the Florida Transportation Dept. entered into a real estate purchase agreement with the Debtors and Huber Investments, which holds the remaining 50% interest in the Leesburg Outparcel. Material terms of the Leesburg Outparcel Purchase Agreement include: (i) The net aggregate purchase price for the entire fee simple interest in the Leesburg Outparcel is $354,500, of which $177,250 will go to the Debtors; (ii) The Debtors are responsible for payment of the commission due to their brokers; and (iii) The Leesburg Outparcel and related assets are to be transferred free and clear of any liens, claims, interests and encumbrances other than the permitted encumbrances. Edgewood Outparcel Purchase Agreement The Debtors and AJDC entered into a real estate purchase agreement on March 16, 2006, and have amended the agreement seven times since then. Material terms of the Edgewood Outparcel Purchase Agreement include: * The net aggregate purchase price for the Edgewood Outparcel is $480,000. AJDC has deposited $35,000 with escrow agent Smith, Gambrell & Russell LLP; * The Debtors have agreed to pay a $20,000 termination fee if AJDC is not the successful bidder at the auction for the Edgewood Outparcel; * The Debtors are responsible for payment of a brokerage commission of 3% of the Purchase Price due to AJDC's broker if the transaction is consummated; and * The Edgewood Outparcel are to be transferred free and clear of liens, claims, interests and encumbrances other than the permitted encumbrances. Notwithstanding that the Edgewood Outparcel has been sufficiently marketed, the Debtors are soliciting higher and better bids for the property. Interested bidders are directed to submit their offers for the Edgewood Outparcel and related assets by Sept. 18, 2006, to James Avallone at DJM, 445 Broadhollow Road, Suite 417, Melville, New York 11747. All bids must comply with the Court-approved bidding procedures. If the Debtors receive a higher or better offer, they will conduct an auction at the offices of Smith Hulsey & Busey in Jacksonville, Florida, on Sept. 20, 2006. In an effort to close the two transactions as promptly as possible, the Debtors further ask the Court to waive the 10-day stay period. Deadline for filing objections to the two transactions is on Sept. 14, 2006. 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. 52; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WORLDCOM INC: Court Dismisses Next Factors' Claims Against APCC --------------------------------------------------------------- At APCC Services Inc.'s behest, the U.S. Bankruptcy Court for the District of New York dismissed, with prejudice, any and all claims or requests asserted by Next Factors Inc. against APCC. To recall, WorldCom Inc. and its debtor-affiliates filed their First Omnibus Motion for Deemed Schedule Amendments in October 2004. In response to the Omnibus Motion, Next Factors asked the Court to grant it relief against APCCS based on its purchase of certain claims of payphone service providers for whom APCCS filed proofs of claim in the Debtors' bankruptcy cases. Subsequently, APCCS opposed, and asked the Court to deny, Next Factors' response. APCCS asserted that: -- Next Factors is not entitled to the relief it sought under the facts presented and under applicable law; and -- the outcome of any dispute between the parties could not have any effect on the administration of the Debtors' estates, and is therefore not within the Court's "related to" jurisdiction. The Court then directed the parties to meet and confer with respect to scheduling and procedural matters, including a time frame for conducting and completing discovery and briefing. On APCCS' behalf, Jeffrey Rhodes, Esq., at Dickstein, Shapiro, Morin & Oshinsky, LLP, in Washington, D.C., contacted Next Factors' then-counsel of record, David Stich, Esq., at Solomon Pearl Blum Heymann & Stich, L.L.P., to discuss a possible framework for resolving the dispute. However, Mr. Stitch disclosed that preliminary discussions could not move forward because he was unable to communicate with Next Factors on the matter. Mr. Stitch informed the Court that if he remained unable to communicate with Next Factors, he would withdraw as its counsel. Mr. Stich and Solomon Pearl eventually withdrew as Next Factors' counsel, citing substantially disagreements over legal strategies to employed in prosecuting claims against APCCS. The Court granted the Withdrawal Motion and set the matter for trial. Judge Gonzalez also ordered Next Factors to hire another counsel and to give notice to the Court by Aug. 10, 2006. Mr. Rhodes pointed out that Next Factors failed to comply with the Court's Order. Next Factors did not file any notice of appearance by counsel in the proceedings. "Thus, Next Factors failed to prosecute any of its claims and did comply with the orders and directives of the Court," Mr. Rhodes argued. "The Court has given Next Factors a more than fair opportunity to be heard on its claims against APCCS in this case, but [it] has, without excuse, failed and refused to avail itself of such opportunity." Moreover, Next Factors is not represented by an attorney in the Debtors' cases, Mr. Rhodes added. Under these circumstances, no sanction other than dismissal of Next Factors' claims is appropriate, Mr. Rhodes said. About WorldCom WorldCom, Inc., a Clinton, MS-based global communications company, filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, WorldCom listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and on Apr. 20, 2004, the Company formally emerged from U.S. Chapter 11 protection as MCI, Inc. On Jan. 6, 2006, MCI merged with Verizon Communications, Inc. MCI is now known as Verizon Business, a unit of Verizon Communications. (WorldCom Bankruptcy News, Issue No. 124; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WORLDCOM: Court Okays Revised Notice on Louisiana Settlement Pact ----------------------------------------------------------------- The Honorable Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York approved the revised individual notices mailed to more than 7,000 class members regarding settlement of a Louisiana right of way class action suit filed by land owners against WorldCom Inc. and its debtor-affiliates. The Court noted that the Reorganized Debtors and Claimants XCL, Ltd., LM Holding Assoc. LP, David Odom, Katherine McClellan Sibille, the Sibille Co., Inc., Sylvia Weil Marcuse, H.M. Kimball Jr. and Elizabeth Kimball Lewis have made non-material revisions to the Notice so as to tailor it specifically to parishes in Orleans, Jefferson, St. Tammany and Calcasieu. Accordingly, Judge Gonzalez authorized the Parties to distribute the Revised Notice to settlement class members owning property located in the Hurricane-Affected Parishes. The Settlement Class Members will have 90 days from the mailing of the Revised Notice to seek exclusion from or to object to the Settlement. The Court also certified the Settlement Class for settlement purposes and approved pursuant to Rule 23 and Rule 7023 of Federal Rule of Civil Procedure and Federal Rules of Bankruptcy Procedure. Any objections to the Settlement Motion to the extent not resolved are overruled. Louisiana Suit Settlement On Oct. 5, 1994, William Kimball, H.M. Kimball, Jr., and Elizabeth Kimball Lewis, together with XCL, Ltd., Katherine McClelland Sibille, The Sibille Co., Inc., Lutcher Moore Land & Royalty Company, L.M. Holding Associates, LP, Colonial Sugars, Inc., and David Odom filed two separate class action petitions against the Debtors in the 18th Judicial District Court, West Baton Rouge Parish, Louisiana, which were consolidated for pre- trial management, administration and discovery on July 3, 1996. In their class action petitions, the Louisiana Plaintiffs alleged improper location of Sprint Communications' and the predecessors of MCI WorldCom Network Services Inc.'s telecommunications facilities on their lands. On Nov. 18, 2000, the Parties to the Louisiana Suits reached an agreement in principle for the settlement of the claims, which settlement was approved by the Louisiana State Court in September 2001. On May 29, 2002, the Louisiana Court approved the form of notice and the procedure of distribution of the Notice of the Class Action Settlement Agreement. The Notice was distributed to over 8,000 landowners. As of the Debtors' bankruptcy filing, the Louisiana Suits were stayed as to MWNS. However, it went forward with respect to Sprint. The Louisiana Court granted final approval to Sprint's Settlement Agreement on Dec. 5, 2002. The Louisiana First Circuit Court of Appeals subsequently issued a decision, reversing the approval on the ground that the class members were not given adequate notice about MWNS's bankruptcy filing, which could have an effect on how the settlement was implemented with respect to the remaining parties. After the Debtors' bankruptcy filing, numerous Louisiana landowners filed timely proofs of claims asserting right-of-way claims or claims based on the Settlement Agreement. To resolve the proofs of claim and the underlying right-of-way causes of action, the Claimants and MWNS agreed to go forward with the Settlement Agreement with respect to MWNS as a prepetition contract. On May 18, 2005, William Kimball, H.M. Kimball, Jr., Elizabeth Kimball Lewis and the Debtors executed a Settlement Implementation Agreement. The Kimballs then asked the Court to, among others: (a) certify a settlement class of Louisiana landowners with potential claims based on the presence of the Debtors' fiber optic cables in the rights of way on or adjoining the landowners' property; and (b) designate representatives of the settlement class. Judge Gonzalez preliminarily certified the Settlement Class for settlement purposes pursuant to Civil Rule 23 and Rule 7023 of the Federal Rules of Civil Procedure. The Court also appointed William Kimball, H.M. Kimball Jr., and Elizabeth Kimball Lewis as representatives of the Settlement Class. About WorldCom WorldCom, Inc., a Clinton, MS-based global communications company, filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, WorldCom listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and on Apr. 20, 2004, the Company formally emerged from U.S. Chapter 11 protection as MCI, Inc. On Jan. 6, 2006, MCI merged with Verizon Communications, Inc. MCI is now known as Verizon Business, a unit of Verizon Communications. (WorldCom Bankruptcy News, Issue No. 124; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WORLDCOM: La. Class Suit Counsel Can File Fee App. Until Sept. 28 ----------------------------------------------------------------- The Honorable Arthur Gonzalez of the U.S. Bankruptcy Court for the District of New York gave the counsel for the Louisiana right of way claimants until Sept. 28, 2006 to file their applications for interim attorneys' fees. The Louisiana Claimants are landowners holding potential claims based on the presence of WorldCom Inc. and its debtor-affiliates' fiber optic cables in the rights of way on or adjoining the Claimants' property. The Louisiana Claimants are represented by: a) Victor L. Marcello, Esq., Donald T. Carmouche, Esq., and John H. Carmouche, Esq., at Talbot, Carmouche & Marcello; b) Michael R. Mangham, Esq., and Donald J. Ethridge, Esq., at Mangham & Associates LLC; c) Willaim E. Steffes, Esq., at Steffes, Vingiello, & McKenzie, LLC; d) Patrick W. Pendley, Esq., at Patrick W. Pendley, APLC; and e) Allen J. Myles, Esq., at Myles & Myles. The Interim Fee Application Order relates to the Court's approval of the revised individual notices mailed to more than 7,000 class members regarding settlement of a class action suit, which the Louisiana Claimants filed against the Debtors. Louisiana Suit Settlement On Oct. 5, 1994, William Kimball, H.M. Kimball, Jr., and Elizabeth Kimball Lewis, together with XCL, Ltd., Katherine McClelland Sibille, The Sibille Co., Inc., Lutcher Moore Land & Royalty Company, L.M. Holding Associates, LP, Colonial Sugars, Inc., and David Odom filed two separate class action petitions against the Debtors in the 18th Judicial District Court, West Baton Rouge Parish, Louisiana, which were consolidated for pre- trial management, administration and discovery on July 3, 1996. In their class action petitions, the Louisiana Plaintiffs alleged improper location of Sprint Communications' and the predecessors of MCI WorldCom Network Services Inc.'s telecommunications facilities on their lands. On Nov. 18, 2000, the Parties to the Louisiana Suits reached an agreement in principle for the settlement of the claims, which settlement was approved by the Louisiana State Court in September 2001. On May 29, 2002, the Louisiana Court approved the form of notice and the procedure of distribution of the Notice of the Class Action Settlement Agreement. The Notice was distributed to over 8,000 landowners. As of the Debtors' bankruptcy filing, the Louisiana Suits were stayed as to MWNS. However, it went forward with respect to Sprint. The Louisiana Court granted final approval to Sprint's Settlement Agreement on Dec. 5, 2002. The Louisiana First Circuit Court of Appeals subsequently issued a decision, reversing the approval on the ground that the class members were not given adequate notice about MWNS's bankruptcy filing, which could have an effect on how the settlement was implemented with respect to the remaining parties. After the Debtors' bankruptcy filing, numerous Louisiana landowners filed timely proofs of claims asserting right-of-way claims or claims based on the Settlement Agreement. To resolve the proofs of claim and the underlying right-of-way causes of action, the Claimants and MWNS agreed to go forward with the Settlement Agreement with respect to MWNS as a prepetition contract. On May 18, 2005, William Kimball, H.M. Kimball, Jr., Elizabeth Kimball Lewis and the Debtors executed a Settlement Implementation Agreement. The Kimballs then asked the Court to, among others: (a) certify a settlement class of Louisiana landowners with potential claims based on the presence of the Debtors' fiber optic cables in the rights of way on or adjoining the landowners' property; and (b) designate representatives of the settlement class. Judge Gonzalez preliminarily certified the Settlement Class for settlement purposes pursuant to Civil Rule 23 and Rule 7023 of the Federal Rules of Civil Procedure. The Court also appointed William Kimball, H.M. Kimball Jr., and Elizabeth Kimball Lewis as representatives of the Settlement Class. About WorldCom WorldCom, Inc., a Clinton, MS-based global communications company, filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, WorldCom listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on Oct. 31, 2003, and on Apr. 20, 2004, the Company formally emerged from U.S. Chapter 11 protection as MCI, Inc. On Jan. 6, 2006, MCI merged with Verizon Communications, Inc. MCI is now known as Verizon Business, a unit of Verizon Communications. (WorldCom Bankruptcy News, Issue No. 124; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) XTREME COMPANIES: Equity Deficit at June 30 Widens to $9.7 Million ------------------------------------------------------------------ Xtreme Companies, Inc., filed its financial report for the three and six months ended June 30, 2006, with the Securities and Exchange Commission. For the three and six months ended June 30, 2006, the Company generated net revenues of negative $792,895 and negative $34,305, respectively, as compared to net revenues of $552,300 and $620,300 for the three and six months ended June 30, 2005. The major change in the Company's business that impacted revenues for the three and six months ended June 30, 2006 was the termination of its distribution agreement with Wayton Marine International and the return of product to the Company in the three months ended June 30, 2006, resulting in negative sales for the year. The Company had a net loss of $3.6 million and $5.1 million for the three and six months ended June 30, 2006, respectively, as compared to the respective net losses of $459,468 and $1.5 million for the three and six months ended June 30, 2005. The Company's balance sheet at June 30, 2006 showed total assets of $5 million and total liabilities of $14.7 million resulting in a total shareholders' deficit of $9.7 million. The Company's total shareholders' deficit at Dec. 31, 2005 stood at $1.7 million. Cash and cash equivalents were $49,390 as of June 30, 2006 as compared to $331,386 as of Dec. 31, 2005. The Company, as of June 30, 2006, had debts of $14.7 million including convertible debentures and promissory notes, which total $8.7 million. The convertible debentures will fall due in 2009, 2010 and 2011. A full text-copy of Xtreme Companies' financial report for the three and six months ended June 30, 2006 may be viewed at no charge at http://ResearchArchives.com/t/s?116b Headquartered in Washington, Missouri, Xtreme Companies, Inc., (OTC Bulletin Board: XTME) -- http://www.xtremecos.com/-- manufactures and markets mission-specific Fire-Rescue and Patrol boats used in emergency, surveillance and defense deployments. The boats have been marketed and sold directly to fire and police departments, the U.S. Military and coastal port authorities throughout the United States. ZOND-PANAERO: Reports $291,000 Net Income in 2006 Second Quarter ---------------------------------------------------------------- Zond-PanAero Windsystem Partners I filed its second quarter financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission on Aug. 14, 2006. The Company earned $291,000 on $1.2 million of net revenues for the three months ended June 30, 2006, compared to $1.4 million of net income on $2.1 million of net revenues in 2005. As of June 30, 2006, the Company had no current or planned commitments for capital expenditures. Sale of Assets On July 25, 2006, the Company sold substantially all of its assets to Western Wind Energy Corp pursuant to the Agreement and Plan of Merger dated as of July 3, 2006, as amended. On that date, the Company, PAMC Management Corporation, PanAero California Ltd., a California limited partnership, Alta Mesa Energy, LLC, Mesa Wind Developers, Enron Wind Systems, LLC, Zond-PanAero Windsystem Partners II, a California limited partnership, and Western Wind, entered into the Omnibus Termination Agreement. In accordance with the Termination Agreement, effective as July 25, 2006, the parties terminated several agreements related to the assets sold to Western Wind including the Wind Park Easement Agreement and the Reservation of Rights Agreement. The parties to the terminated agreements released each other from all claims and liabilities thereunder. The Company did not incur any early termination penalties in connection with the termination of the foregoing agreements. Pursuant to the terms of the Merger Agreement, at the closing, the Company received $873,913 for the sale of its assets. Operation and Maintenance Services The Company and EWS entered into a Seventh Amendment to Windsystem Management Agreement dated as of Aug. 11, 2006, which extended the termination date of the Management Agreement from May 31, 2006 to Sept. 30, 2006. GE Settlement Pursuant to a Settlement Agreement and Release executed on July 3, 2006, and effective as of May 1, 2006, among other things, EWS settled claims by GE for amounts owed for operation and maintenance services rendered relating to the Windsystem. Pursuant to the Settlement Agreement, EWS paid to GE the sum of $147,000 related to operation and maintenance services provided by GE relating to the Windsystem. As of June 30, 2006, the Company had a recorded liability to EWS in the amount of $186,000 related to this obligation. The settlement payment was made by EWS to GE in July 2006. At that time, the Company recognized a $39,000 reduction in its recorded liabilities and operation and maintenance expenses. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?1160 Going Concern Doubt Hein & Associates LLP expressed substantial doubt about Zond- PanAero Windsystem Partners I's ability to continue as a going concern after it audited the Company's financial statements for the fiscal year ended Dec. 30, 2005. The auditor pointed to the Company's insufficient cash flows from operations to make payments of interest in arrears on outstanding debt and certain agreements relating to the Company's ability to generate electricity expire in 2006. About Zond-PanAero Zond-PanAero Windsystem Partners I, a California Limited Partnership, was formed on June 29, 1984, to purchase, own and operate a system of 300 Vestas Energy A/S Model V15 wind turbine electric generators. The electricity generated by the Turbines is sold by the Company to its sole customer, Southern California Edison Company. * FTI Consulting to Acquire Financial Dynamics for $260 Million --------------------------------------------------------------- FTI Consulting, Inc. entered into an agreement to acquire privately held Financial Dynamics International (Holdings) Limited for approximately $260 million. "Our acquisition of FD is a unique opportunity to execute, in a single transaction, many of the strategic objectives for our international expansion and one that should enable us to achieve our 2009 Plan a year earlier than expected," Jack Dunn, FTI's president and chief executive officer, commented. "First, FD has senior level, deeply ingrained, trusted advisor relationships with businesses and governments in important financial centers throughout the world. These relationships will allow us to expand and grow our "gold standard" practices into new markets under the auspices and through the contacts of FD, a widely recognized and trusted brand. Second, FD brings global market leadership to FTI and our clients in a new practice area -- strategic business and financial communications -- one of the most critical areas facing corporate boards and executives given the vital and increasing importance of reputational risk. These strategic communications services represent immediate opportunity and value to our clients in the U.S. Finally, the core values of the great professionals at FD are the same as our own: dedication to clients, highest standards of integrity and a commitment to bring the very best in intellectual capital to bear on the financial, regulatory and reputational issues that affect the futures of our clients. Teams of professionals from both companies are already at work on the integration and client service opportunities that will allow us to hit the ground running." "FTI is a company we have greatly admired for some time and we believe this partnership is a perfect commercial, cultural and strategic fit for FD," Charles Watson, CEO of FD, added. "We live and operate in complementary markets and practices where we enjoy numerous relationships and interests in common. The potential for collaboration is compelling. Joining forces with a recognized leader in the consulting world that, like FD, focuses on critical issues that confront clients, also marks a landmark for the communications industry -- creating the optimal environment in which FD will continue to thrive and grow for the benefit of all our staff and, most importantly, our clients. We are genuinely excited about our future together." FD's business is structured around four principal practice areas: * Financial Communications: FD provides counsel on matters that affect the valuation of companies' securities in the public markets, such as M&A transactions, capital market activities including IPOs, regulatory and corporate governance issues and financial markets intelligence; * Brand Communications: FD counsels clients on all issues pertaining to protecting and enhancing the reputation of their products and services; * Public Affairs and Crisis & Issues Management: FD advises on issues affecting corporate and organizational reputation, relations with governments at the national and local level, public policy and all aspects of crisis communications; * Business Consulting: FD's business consulting practice is at the intersection of all three communications practices. It uses extensive diagnostic research tools to assess brand, reputation and valuation issues and develops strategies to address and resolve the issues coming from the research. Purchase Price The purchase price for the acquisition is $260 million, consisting of $215 million in cash, $20 million in notes and deferred purchase obligations and $25 million of restricted FTI stock. To finance the acquisition of FD, FTI intends to offer $215 million of senior unsecured notes. Deutsche Bank Securities, Inc., which acted as financial advisor to FTI, is committed to provide the financing to fund the acquisition. It is anticipated that the acquisition will close in the first week of October and be accretive to FTI's 2007 earnings per diluted share. FD is currently owned by Advent International, a global private equity firm, and FD management. Advent has elected to receive cash for all of its holdings. Management shareholders are expected to elect the alternate offer comprised of cash, the FTI restricted stock and the opportunity to participate in future contingent consideration of up to $80 million based on exceeding certain financial objectives over the next five years, which would further align the interests of FD professionals and FTI and its shareholders. Robert W. Baird & Co. acted as exclusive financial advisor to FD. FTI intends to operate FD as a separate business segment run by the existing management team, including FD's London based Group CEO Charles Watson and U.S. CEO Declan Kelly. Margin Improvement Steps In light of the acquisition and in keeping with the Company's previously announced commitment to address underperforming operations, FTI has taken action to restructure its U.K. operations and consolidate certain non-core practices in the U.S. The Company expects to record a one-time charge related to this of approximately $20 million ($0.28 per diluted share after tax), in the third quarter, primarily reflecting severance costs. Excluding the one-time charge, the Company is maintaining its earnings guidance for 2006 and continues to expect earnings per diluted share to be in a range of $1.26 to $1.35, which includes the impact of the FD acquisition and expensing stock options. About FD FD is a strategic business and financial communications consultancy, providing a comprehensive range of solutions for the communications requirements of the corporate boardroom. The Company advises over 750 clients with a staff of over 450 people. It has offices in London, New York, Washington, San Francisco, Frankfurt, Paris, Dublin, Boston, Bahrain, Chicago, Hong Kong, Moscow, Dubai, Manchester, Johannesburg and Cape Town. About FTI Consulting FTI Consulting Inc. (NYSE:FCN) provides problem-solving consulting and technology services to major corporations, financial institutions and law firms when confronting critical issues that shape their future and the future of their clients, such as financial and operational improvement, major litigation, complex investigations, mergers and acquisitions and regulatory issues. FTI has 25 offices in major U.S. cities, and offices in Europe, Asia and Australia. FTI's total workforce of more than 1,400 employees includes numerous PhDs, MBAs, CPAs, CIRAs and CFEs, who are committed to delivering the highest level of service to clients. * PricewaterhouseCoopers Launches U.S. Restructuring Practice ------------------------------------------------------------- PricewaterhouseCoopers LLP disclosed Tuesday the formal launch of PricewaterhouseCoopers Corporate Advisory & Restructuring LLC, a new business providing integrated financial, transactional and operational services to underperforming and distressed companies. PricewaterhouseCoopers LLP also disclosed that senior restructuring advisor Tom Sperry has joined PwC CAR's leadership team as U.S. Market Leader. Peter Spratt will serve as president of PwC CAR and head of PwC's global restructuring practice. PwC CAR's formation marks the natural extension of PricewaterhouseCoopers' related service offerings and market leading global restructuring capabilities into the U.S. market. These services encompass value-enhancing solutions for companies at various stages of financial pressure. With its ability to leverage the global network of PricewaterhouseCoopers and its extensive range of services and industry-specific capabilities, PwC CAR addresses the increasing demand for a suite of financial, transactional and operational services that clients need to implement the types of changes that lead to a sustained recovery. "PwC CAR will bring fresh thinking and a renewed approach to the corporate turnaround market for the benefit not only of companies in difficulty, but also for the restructuring business itself," said Mr. Spratt. Commenting on the addition of Mr. Sperry, Mr. Spratt said "Tom brings a wealth of practical experience and creativity to the corporate restructuring market in the U.S. that will enhance PwC CAR's broad capabilities in solving problems of companies facing operational issues and financial difficulties." "I am thrilled at the opportunity to work with top professionals in PwC CAR to help lead and grow our U.S. practice," said Mr. Sperry. "I am excited about the capabilities PwC CAR has to preserve and create value for our clients by drawing on our already deep restructuring expertise as well as the full range of services that only a major global organization can provide." A former managing director at UBS Warburg, where he founded and headed its Restructuring Group, Mr. Sperry most recently started and ran a restructuring advisory practice for middle market mergers and acquisitions firm Goldsmith Agio Helms. Mr. Sperry has an extensive background in helping underperforming and insolvent multinational and middle market companies to restructure billions of dollars in liabilities in the U.S. and various countries around the world. Mr. Sperry has worked as an advisor and investment banker for both public and private companies in many of the largest out-of-court and Chapter 11 cases. These include acting as financial advisor to multinational Ferruzzi/Montedison Group of Italy on a multi- tiered $12 billion debt restructuring; advising Integrated Health Services on its $3.4 billion Chapter 11 debt restructuring and break-up; and representing the creditors of Confederation Life of Canada in the largest ever North American insurance company failure. PwC CAR provides integrated financial, transactional and operational services to underperforming and distressed companies. Drawing upon the global network of PricewaterhouseCoopers member firms, PwC CAR provides a wide array of services designed to help troubled companies emerge healthier and drive a sustained recovery. The PwC CAR team includes experienced advisors drawn from its restructuring and corporate finance practices throughout the global network of PricewaterhouseCoopers. PwC CAR consolidates the position of PricewaterhouseCoopers as the dominant global restructuring practice with approximately 2,000 dedicated professionals from member firms located in over 60 countries. In combination with the industry resources of PwC, the PwC CAR team possesses restructuring experience across numerous industries and senior members of the U.S.-based PwC CAR team have played significant roles in many high profile domestic and cross-border restructurings. Examples include America West Airlines, Beaulieu of America, P.A. Bergner/Carson Pirie Scott, ConFederation Life Insurance, Drax Power, El Paso Electric, Ferruzzi/Montedison Group, Globopar, Global Telesystems, Huffy Corp., Integrated Health Services, Iridium Satellite, Marconi, Sylvania, Tower Automotive, TrizecHahn Corporation, and Von Roll Corporation. PricewaterhouseCoopers -- http://www.pwc.com/-- provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries work collaboratively across our network using Connected Thinking to develop fresh perspectives and practical advice. PricewaterhouseCoopers Corporate Advisory & Restructuring LLC is owned by PricewaterhouseCoopers LLP, a member firm of the PricewaterhouseCoopers network and is a member of the NASD and SIPC. PwC CAR is not engaged in the practice of public accountancy. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- September 13-15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Texas Regional Conference Hyatt Regency Resort & Spa Lost Pines, TX Contact: 870-760-7116 or http://www.turnaround.org/ September 14, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS Advanced Restructuring and Plan of Reorganization Park Central, New York, NY Contact: http://www.airacira.org/ September 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Kick-Off Reception Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ September 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION BOK Review - Management Gardner Carton & Douglas, Chicago, IL Contact: 815-469-2935 or http://www.turnaround.org/ September 17-24, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES Optional Alaska Cruise Seattle, Washington Contact: 800-929-3598 or http://www.nabt.com/ September 19-20, 2006 STRATEGIC RESEARCH INSTITUTE 2nd Annual Euro Distressed Debt Summit Le Meridien Parkhotel, Frankfurt, Germany Contact: http://www.srinstitute.com/ September 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Bankers Club, Miami, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 21, 2006 TURNAROUND MANAGEMENT ASSOCIATION Young Professionals Group - "Conversations in Networking" Dave & Buster's, Philadelphia, PA Contact: 215-657-5551 or http://www.turnaround.org/ September 21, 2006 TURNAROUND MANAGEMENT ASSOCIATION Restructuring Workshop With US Bankruptcy Judges Hale, Nelms and Lynn Belo Mansion - The Pavilion, Dallas, TX Contact: http://www.turnaround.org/ September 24, 2006 TURNAROUND MANAGEMENT ASSOCIATION Restructuring the Troubled High Tech Company Arizona Contact: http://www.turnaround.org/ September 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION 10th Annual Turnaround Tee-off Golf Tournament & Fundraiser Green Valley Country Club, Lafayette Hill, PA Contact: 215-657-5551 or http://www.turnaround.org/ September 25, 2006 TURNAROUND MANAGEMENT ASSOCIATION Carolinas Membership Luncheon featuring a presentation by James Porter of Mesirow Financial City Club, Charlotte, NC Contact: 704-319-2288 or http://www.turnaround.org/ September 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ September 27, 2006 BEARD AUDIO CONFERENCES Year One of BAPCPA: Lessons Learned and Outlook A Look at the Business Provisions One Year Later Contact: 240-629-3300 Or http://www.beardaudioconferences.com/ September 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint Education Program with NYIC Joint Reception CFA/RMA/IWIRC Woodbridge Hilton, Iselin, NJ Contact: http://www.turnaround.org/ September 26-27, 2006 EUROMONEY Asia Pacific High Yield Debt Summit JW Marriott Hotel, Hong Kong Contact: http://www.euromoneyplc.com/ September 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION 7th Annual Cross Border Business Restructuring and Turnaround Conference Banff, Alberta Contact: http://www.turnaround.org/ September 27, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS New York Luncheon - Pension Panel Program Harmonie Club, New York, NY Contact: 541-58-1665 or http://www.airacira.org/ October 3, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Organization of Women Networking Event/ Fundraiser TBD, Philadelphia, PA Contact: 215-657-5551 or http://www.turnaround.org/ October 3, 2006 TURNAROUND MANAGEMENT ASSOCIATION 3rd Annual Golf Outing Fox Chapel Golf Club, Pittsburgh, PA Contact: 412-644-8794 or http://www.turnaround.org/ October 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION Commercial Lenders Breakfast Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 6, 2006 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy 2006: Views from the Bench Georgetown University Law Center, Washington, DC Contact: 1-703-739-0800; http;//www.abiworld.org/ October 10, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Center Club, Baltimore, Maryland Contact: 703-912-3309 or http://www.turnaround.org/ October 11, 2006 TURNAROUND MANAGEMENT ASSOCIATION Professional Development Meeting Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION UTS Fundamentals of Turnaround Management Melbourne, Australia Contact: 0438 653 179 or http://www.turnaround.org/ October 11-14, 2006 TURNAROUND MANAGEMENT ASSOCIATION 2006 Annual Conference Milleridge Cottage, Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/ October 12, 2006 TURNAROUND MANAGEMENT ASSOCIATION UTS Fundamentals of Turnaround Management Mecure Hotel - Haymarket, Sydney, Australia Contact: http://www.turnaround.org/ October 16, 2006 AMERICAN BANKRUPTCY INSTITUTE A Year After BAPCPA Georgetown University Law Center, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ October 18-19, 2006 EUROMONEY 2nd Annual Latin America Syndicated Loans Conference JW Marriott Hotel, Miami, FL Contact: http://www.euromoneyplc.com/ October 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION Updates on the New Bankruptcy Law Kansas City, Missouri Contact: http://www.turnaround.org/ October 19, 2006 TURNAROUND MANAGEMENT ASSOCIATION Billards Networking Night - Young Professionals TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Hedge Funds - Expanded Financing Opportunities in Business Turnarounds Arizona Contact: http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #3 TBA, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ October 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series #3 TBA, Calgary, Alberta Contact: 403-294-4954 or http://www.turnaround.org/ October 27, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast with Coach Dan Reeves Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ October 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION BK/TMA Golf Tournament Orange Tree Golf Resort, AZ Contact: 623-581-3597 or http://www.turnaround.org/ October 30-31, 2006 Distressed Debt Summit: Preparing for the Next Default Cycle Financial Research Associates LLC Helmsley Hotel, New York, NY Contact: http://www.frallc.com/ October 31, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ October 31 - November 1, 2006 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC Annual Conference San Francisco, California Contact: http://www.iwirc.com/ November 1, 2006 TURNAROUND MANAGEMENT ASSOCIATION Halloween Isn't Over! - Ghosts of turnarounds past who remind you about what you should have done differently Portland, Oregon Contact: http://www.turnaround.org/ November 1-4, 2006 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges San Francisco, California Contact: http://www.ncbj.org/ November 2, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA UK Annual Conference Millennium Gloucester Hotel, London, UK Contact: http://www.turnaround.org/ November 2-3, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Third Annual Conference on Physician Agreements & Ventures Successful Strategies for Medical Transactions and Investments The Millennium Knickerbocker Hotel - Chicago Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ November 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Marriott, Bridgewater, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 7-8, 2006 EUROMONEY 5th Annual Distressed Debt Investment Symposium Hyatt Regency, London, UK Contact: http://www.euromoneyplc.com/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Tyson's Corner, Vienna, Virginia Contact: 703-912-3309 or http://www.turnaround.org/ November 8, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Australia National Conference Sydney, Australia Contact: http://www.turnaround.org/ November 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Program St. Louis, Missouri Contact: 815-469-2935 or http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint Reception with NYIC/NYTMA TBA, New York Contact: 908-575-7333 or http://www.turnaround.org/ November 15, 2006 LI TMA Formal Event TMA Australia National Conference Long Island, New York Contact: http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Bankruptcy Judges Panel Duquesne Club, Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner Program TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ November 16-17, 2006 STRATEGIC RESEARCH INSTITUTE 8th Annual West Distressed Debt Investing Forum Venetian Resort Hotel Casino, Las Vegas, NV Contact: http://www.srinstitute.com November 23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Martini Party Vancouver, British Columbia Contact: 403-294-4954 or http://www.turnaround.org/ November 27-28, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Thirteenth Annual Conference on Distressed Investing Maximizing Profits in the Distressed Debt Market The Essex House Hotel - New York Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, FL Contact: 561-882-1331 or http://www.turnaround.org/ November 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Special Program TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Industry Trends Jasna Polana, Princeton, NJ Contact: http://www.turnaround.org/ November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ December 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION Holiday Dinner Portland, Oregon Contact: 503-223-6222 or http://www.turnaround.org/ December 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast The Newark Club, Newark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Holiday Party TBA, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function GE Commercial Finance, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ December 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION Holiday Extravaganza - TMA, AVF & CFA Georgia Aquarium, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ January 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Annual Lender's Panel Breakfast Westin Buckhead, Atlanta, GA Contact: http://www.turnaround.org/ February 8-11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Certified Turnaround Professional (CTP) Training NY/NJ Contact: http://www.turnaround.org/ February 22, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA PowerPlay - Atlanta Thrashers Philips Arena, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ February 25-26, 2007 NORTON INSTITUTES Norton Bankruptcy Litigation Institute Marriott Park City, UT Contact: http://www2.nortoninstitutes.org/ February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800; http://www.abiworld.org/ March 15, 2007 TURNAROUND MANAGEMENT ASSOCIATION Martini Madness Cocktail Reception with Geraldine Ferraro Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ March 15-18, 2007 NATIONAL ASSOCIATION OF BANKRUTPCY TRUSTEES NABT Spring Seminar Ritz-Carlton Buckhead, Atlanta, GA Contact: http://www.NABT.com/ March 27-31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spring Conference Four Seasons Las Colinas, Dallas, Texas Contact: http://www.turnaround.org/ March 29-31, 2007 ALI-ABA Chapter 11 Business Reorganizations Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ April 20, 2007 TURNAROUND MANAGEMENT ASSOCIATION Breakfast meeting with Chapter President, Bruce Sim Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ June 28 - July 1, 2007 NORTON INSTITUTES Norton Bankruptcy Litigation Institute Jackson Lake Lodge, Jackson Hole, WY Contact: http://www2.nortoninstitutes.org/ July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, RI Contact: 1-703-739-0800; http://www.abiworld.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/ October 16-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergers - the New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Emerging Role of Corporate Compliance Panels Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II, Shimero R. Jainga, Joel Anthony G. Lopez, 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 ***