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/raid1/www/Hosts/bankrupt/TCR_Public/061002.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, October 2, 2006, Vol. 10, No. 234 Headlines ADM TRONICS: June 30 Balance Sheet Upside-Down by $8.1 Million AFFILIATED COMPUTER: Seeks District Ct.'s "No Default" Declaration AIMS WORLDWIDE: June 30 Stockholders' Deficit Tops $1.3 Million AKSYS LTD: June 30 Stockholders' Deficit Tops $28.6 Million AMERICAN NATURAL: Net Loss Shrinks to $1MM in 2006 Second Quarter AMES DEPARTMENT: $150 Mil. Unsecured Note Gets Moody's LGD3 Rating APIDOS CDO: Moody's Rates $11 Million Class E Junior Notes at Ba2 ARMSTRONG WORLD: S&P Rates Proposed $1.1 Billion Facility at BB ASARCO LLC: Ct. Vacates Extension of Intercompany Claims Bar Date ASARCO LLC: Ct. Grants Partial Summary Judgment in Favor of ASARCO ASSURED PHARMACY: Reports $1.3MM Net Loss for Period Ended June 30 BAKER STREET: Moody's Rates $12 Million Class E Notes at Ba2 BARNHILL'S STEAK: Case Summary & 20 Largest Unsecured Creditors BEARINGPOINT INC: S&P Holds Corp. Credit & Debt Ratings on Watch BLACKROCK SENIOR: Moody's Rates $5.3MM Class E Sec. Notes at Ba2 BOMBARDIER INC: Inks $1.65 Bil. South Africa Rapid Rail Contract BOMBARDIER RECREATIONAL: Moody's Assigns LGD4 Rating to Term Loan BREK ENERGY: Posts $244,905 Net Loss in Quarter Ended June 30 BREK ENERGY: Agrees to Stock-for-Stock Merger with Gasco CALPINE CORP: New York Court Sets October 31 CGC Claims Bar Date CALPINE CORP: Submits Schedule of Purchases of $360MM Sr. Notes CAPELLA HEALTHCARE: Moody's Assigns Loss-Given-Default Ratings CAPITALSOURCE COMMERCIAL: Moody's Rates $56MM Class E Notes at Ba2 CERVANTES ORCHARDS: Files Second Amended Disclosure Statement CIFC FUNDING: Moody's Rates $23 Million Class B-2L Notes at Ba2 COMMODORE CDO: Moody's Rates $8.5 Mil. Class E Sec. Notes at Ba1 COMMUNITY HEALTH: Moody's Assigns Loss-Given-Default Ratings COMPLETE RETREATS: Wants Bermuda Cliffs' Chapter 11 Case Dismissed COMPLETE RETREATS: Taps O'Connor as Ordinary Course Professional CORNELL COS: Growth Cues Moody's to Lift Sr. Unsec. Rating to B2 D&E COMMUNICATIONS: Amends $234.6 Million Credit Facilities DANA CORP: Judge Lifland Approves Pact Extending Challenge Period DANA CORP: Selling Oklahoma Property for $2.6 Million to Caliber DATALOGIC INT'L: Rhode Island Ends DataLogic Consulting Contract DELPHI CORP: Court Defers CBA and GM Contract Hearings to Oct. 19 DELPHI CORP: 32 Parties Retain Pepper Hamilton as Legal Counsel DIAMOND LAKE: Moody's Rates $14.75 Mil. Class B-2L Notes at Ba3 DIRECTED ELECTRONICS: Moody's Assigns LGD3 Rating to Secured Loans DOLE FOOD: To Buy JP Fruit Distributors from Jamaica Producers DUANE STREET: Moody's Rates $11.75MM Class E Junior Notes at Ba2 EAST 44TH: Court Okays Use of NYCB's Cash Collateral Until Oct. 25 ECHOSTAR DBS: $500MM Notes Issue Cues Moody's to Affirm Ratings ECHOSTAR DBS: S&P Assigns BB- Rating to $500 Million Senior Notes EDISON INT'L: Improved Liquidity Prompts Fitch to Raise Ratings EGENE INC: Posts $275,212 Net Loss in Quarter Ended June 30 ELIZABETH ARDEN: Moody's Affirms $225 Mil. Sr. Sub. Rating at B1 E.SPIRE COMMUNICATIONS: Ch. 7 Trustee Taps Rawle as Co-Counsel FENDER MUSICAL: Moody's Assigns LGD5 Rating to Secured Second Lien FERRO CORP: S&P Holds Low-B Corp. Credit & Sr. Unsec. Debt Ratings FGX INTERNATIONAL: Moody's Assigns Loss-Given-Default Ratings FLORIDA PHONE: Case Summary & 20 Largest Unsecured Creditors FRONTLINE CAPITAL: Wants Until November 30 to File Chapter 11 Plan GATX FINANCIAL: Planned Asset Sale Cues Moody's to Review Ratings GE COMMERCIAL: Moody's Rates $14.4 Mil. Pref. Trust Certs. at Ba2 GLOBAL HOME: Panel Wants Basham Ringe as Special Mexican Counsel GMAC COMMERCIAL: Fitch Affirms Class M & N Certs.' Junk Ratings GRUPO TMM: Closes $200 Mil. Securitization Facility of 2007 Notes GRUPO TMM: Purchases New Anchor Handler Tug Supply Vessel GULFMARK OFFSHORE: S&P Downgrades Corporate Credit Rating to B+ HEMOSOL CORP: Sponsor Waives Condition Under Plan Sponsorship Deal HILLMAN COS: Moody's Puts LGD2 Rating on $275MM Sr. Sec. Loans HOST HOTELS: Fitch Rates Pref. Stock at B+ With Stable Outlook IMC INVESTMENT: Court Okays J. Eisch & Associates as Accountant INEX PHARMA: Shareholders Approve Spin Out of Tekmira Pharma INLAND EMPIRE: Case Summary & Four Largest Unsecured Creditors INTERACTIVE HEALTH: Moody's Assigns LGD4 Rating to $100M Sr. Notes INTERMEC INC: Fitch Affirms Double-B Ratings With Stable Outlook INTERSTATE BAKERIES: Can Enter Into Intercompany Tolling Pact INTERSTATE BAKERIES: Can Abandon Actions Filed Prior to Sept. 22 IPIX CORP: Ct. Okays Bidding Process & Set Oct. 23 as Bid Deadline ITC HOMES: Plan Confirmation Hearing Rescheduled to October 10 IVOICE INC: Posts $2.3 Mil. Net Loss in Quarter Ended June 30 JEANTEX GROUP: Second Quarter 2006 Net Loss Decreases to $45,676 KKR FINANCIAL: Moody's Rates $18 Mil. Class F Secured Notes at B3 KNOLL INC: Moody's Assigns LGD2 Ratings to $450 Mil. Senior Loans KUSHNER-LOCKE: Hires Hacker Douglas to Perform Library Valuation L-3 COMMUNICATIONS: Fitch Affirms Low-B Ratings With Neg. Outlook LAGUARDIA ASSOCIATES: Unit Wants CBRE to Market JFK Holiday Inn LAND VENTURES: Case Summary & Seven Largest Unsecured Creditors LATROBE CONSTRUCTION: Voluntary Chapter 11 Case Summary LGB INC: Disclosure Statement Hearing to Continue on October 23 LONGYEAR HOLDINGS: S&P Withdraws B+ Corporate Credit Rating MADISON PARK: Moody's Rates $22 Million Class D Notes at Ba2 MAGNOLIA ENERGY: Case Summary & 20 Largest Unsecured Creditors MAIN STREET: Case Summary & Two Largest Unsecured Creditors MARSH SUPERMARKETS: Acquisition Cues S&P to Withdraw Ratings MEDIACOM BROADBAND: S&P Puts B Rating on $200 Million Sr. Notes MEDICAL TECH: Case Summary & Six Largest Unsecured Creditors MEDMIRA INC: Completes Draw Down of Cornell Capital's Equity L/C MERIDIAN AUTOMOTIVE: Sells Grand Rapids Property for $675,000 MICHAEL STORES: Moody's Rates Proposed $3.1 Billion Loans at B2 MIRANT CORP: Board Authorizes $100 Mil. Share Repurchase Program MISSION ENERGY: Improved Liquidity Cues Fitch to Upgrade Ratings NAPIER ENVIRONMENTAL: Signs Distribution Agreement for Australia NATIONAL TERRAZZO: Case Summary & Nine Largest Unsecured Creditors NAVIGATOR CDO: Moody's Assigns Ba2 Rating to $12.5MM Sec. Notes NBOG BANCORPORATION: Posts $375,367 Net Loss in 2006 2nd Quarter NEW RIVER: Court Approves Berger Singerman as Bankruptcy Counsel NEW RIVER: U.S. Trustee Appoints Three-Member Creditors Committee NEW RIVER: Court Okays Bilzin Sumberg as Panel's Bankr. Counsel NORTH COVE: Moody's Assigns Ba1 Rating to $11 Mil. Class E Notes NORTHWEST AIRLINES: Judge Gropper Okays Claims Objection Protocol NORTHWOODS CAPITAL: Moody's Puts Ba2 Rating on $10M Class E Notes NRG ENERGY: Dist. Ct. Has Jurisdiction on CFTC Enforcement Action OCTAGON INVESTMENTS: Moody's Puts Ba2 Rating on $17.4M Sec. Notes OFSI FUND: Moody's Assigns Ba3 Rating to $25.5MM Class I Notes OXIS INT'L: Incurs $579,000 Net Loss in 2006 Second Quarter OXIS INT'L: Appoints Marvin Hausman President and CEO PCS EDVENTURES!.COM: Posts $674,046 Net Loss in 2006 2nd Quarter PHILLIPS-VAN HEUSEN: Discloses Investment Plans' Blackout Period PHOTOWORKS INC: Names Bruce Fischer as VP-Finance, Will Act as CFO POE FINANCIAL: Court Okays Holland & Knight as Bankruptcy Counsel POE FINANCIAL: Files Schedules of Assets and Liabilities PROFESSIONAL INVESTORS: Meeting of Creditors Continued to Oct. 11 PRICELINE.COM INC: S&P Assigns B Rating to $300 Mil. Senior Notes PROFESSIONAL INVESTORS: U.S. Trustee Unable to Form Panel Members Q COMM: Losses Continue in Quarter Ended June 30 QUEBECOR WORLD: S&P Downgrades Rating to B+ With Negative Watch REVLON CONSUMER: Debt Restructuring Cues Moody's to Lower Ratings ROWE COMPANIES: Taps Wiley Rein as Bankruptcy Counsel SAINT VINCENTS: Court Approves Wyckoff Management Agreements SASKATCHEWAN WHEAT: Proposes Solution to Pension Plan Deficit SHINNECOCK CLO: Moody's Puts Ba2 Rating on $7.5 Mil. Junior Notes SOLVIS GROUP: Late 2003 Results has Going Concern Qualification SPECIALTYCHEM PRODUCTS: Hires Fort Dearborn as Financial Advisor SPRINGDALE CDO: Moody's Puts Ba1 Rating on $10 Mil. Class E Notes STATSURE DIAGNOSTIC: June 30 Balance Sheet Upside-Down by $9.3MM TECHNICAL OLYMPIC: Fitch Puts Low-B Ratings on Negative Watch TENET HEALTHCARE: Announces Commitment for New Credit Facility TENET HEALTHCARE: Fitch Rates New $800 Million Facility at BB- TENET HEALTHCARE: Moody's Junks Ratings on Six Senior Notes TENET HEALTHCARE: S&P Lowers Sr. Unsecured Notes' Rating to CCC+ TIMKEN CO: Plans to Cut 700 Jobs due to Slumping Auto Industry TRANSALTA CORP: Moody's Affirms (P)Ba1 Pref. Stock Shelf Rating TRC HOLDINGS: Ct. OKs Asset Sale to Jackson Street & H/E Financial TYRINGHAM HOLDINGS: Files Schedules of Assets and Liabilities TYRINGHAM HOLDINGS: Panel Taps Marcus Santoro as Local Counsel UNITY WIRELESS: Incurs $1.1 Mil. Net Loss in 2006 Second Quarter UNIVISION COMMS: Moody's Cuts Senior Unsec. Notes' Rating to Ba3 URANERZ ENERGY: Stakes & Records 82 Additional Mining Claims UTILITY CRAFT: Panel Gets Okay to Hire Poyner & Spruill as Counsel UTILITY CRAFT: Final Cash Collateral Hearing Set for October 26 VERIFONE INC: S&P Rates Proposed $540 Million Facility at BB- VIRAGEN INC: Ernst & Young Raises Going Concern Doubt WADSWORTH CDO: Moody's Puts Ba1 Rating on $1.375 Mil. Sub. Notes WARNER CHILCOTT: S&P Raises Corporate Credit Rating to B+ from B WEEKS LANDING: Court Extends Plan-Filing Period to October 15 WEEKS LANDING: Court Sets September 30 as Claims Bar Date WEST CONTRA: Chapter 9 Case Summary & 20 Largest Unsec. Creditors WEST CORP: Moody's Assigns Caa1 Rating to $1.1 Bil. Senior Notes WEST CORP: S&P Rates Proposed $2.35 Billion Sr. Facilities at B+ WESTERN APARTMENT: La Jolla Wants Chapter 11 Case Dismissed WESTERN APARTMENT: Says No Cause Exists to Dismiss Chapter 11 Case WINN-DIXIE: Wants Court to Approve Deutsche Bank Stipulation WORLDCOM INC: McCormick, et al., to Appeal Court's La. Pact Order WORLDCOM INC: Court Okays Amended Pact Resolving Travelers' Claim WORLDCOM INC: Wants Summary Judgment on Campbell's Claim No. 38345 ZANETT INC: Posts $249,990 Net Loss in Quarter Ended June 30 * BOND PRICING: For the week of September 25 -- September 29, 2006 ********* ADM TRONICS: June 30 Balance Sheet Upside-Down by $8.1 Million -------------------------------------------------------------- ADM Tronics Unlimited Inc. incurred a $2.1 million net loss on $464,979 of net revenues for the three months ended June 30, 2006, compared with a $493,085 net loss on $321,010 of revenues in 2005. At June 30, 2006, the Company's balance sheet showed $2,924,612 in total assets and $11,081,449 in total liabilities, resulting in an $8,156,837 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $1.1 million in total current assets available to pay $1.8 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12a9 Going Concern Doubt As reported in the Troubled Company Reporter on July 21, 2006, Raich Ende Malter & Co. LLP expressed substantial doubt about ADM Tronics Unlimited, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended March 31, 2006 and 2005. The auditing firm pointed to the Company's recurring losses, accumulated deficit and stockholders' deficiency. About ADM Tronics Based in Northvale, New Jersey, ADM Tronics Unlimited Inc. -- http://www.admtronics.com/-- produces and markets chemical products for industrial users. The Group also manufactures, markets and leases medical equipment and medical devices. AFFILIATED COMPUTER: Seeks District Ct.'s "No Default" Declaration ------------------------------------------------------------------ Affiliated Computer Services, Inc., received a letter from persons claiming to hold certain of its senior notes advising the Company that it was purportedly in default of its covenants under an indenture dated June 6, 2005, between the Company and The Bank of New York Trust Company, N.A., as the Trustee. The letter alleged that the Company's failure to file its Form 10-K by Sept. 13, 2006, constitutes a default under the terms of the Indenture. The Company asserts that no default has occurred under the Indenture and has filed a lawsuit against the Trustee in the U.S. District Court, Northern District of Texas, Dallas Division, seeking a declaratory judgment affirming its position. Headquartered in Dallas, Texas, Affiliated Computer Services, Inc., (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to commercial and government clients. * * * Standard & Poor's Ratings Services lowered in June 2006 its corporate credit and senior secured ratings for Affiliated Computer Services Inc to 'BB' from 'BB+'. As reported in the Troubled Company Reporter on Aug. 15, 2006 Fitch Ratings assigned its 'BB' issuer default rating, 'BB' Senior secured revolving bank credit facility rating, 'BB' Senior secured term loan rating, and 'BB' Senior notes rating to Affiliated Computer Services, Inc. The rating outlook is negative. AIMS WORLDWIDE: June 30 Stockholders' Deficit Tops $1.3 Million --------------------------------------------------------------- AIMS Worldwide Inc.'s balance sheet at June 30, 2006, showed total assets of $2,877,456 and total liabilities of $4,241,492, resulting in a total stockholders' deficit of $1,364,036. The company's balance sheet at June 30, 2006, also disclosed negative working capital with $1,020,745 in total current assets and $4,025,492 in total current liabilities. For the three months ended June 30, 2006, the company incurred a $241,467 net loss on revenues of $507,860, compared to a $582,491 net loss on revenues of $248,781 for the same period in 2005. Full-text copies of the company's financial statements for the three months ended June 30, 2006, are available for free at: http://researcharchives.com/t/s?12a4 AIMS Worldwide, Inc. -- http://www.aimsworldwide.com/-- is a marketing communications consultancy firm providing organizations with its AIMSolutions branded focused marketing solutions. The Company says AIMS(TM) or Accurate Integrated Marketing Solutions increases the accuracy of the strategic direction of its client's marketing program, improves results and reduces the cost, by refocusing "mass marketing" to a more strategic "One-2-One(TM)" relationship with the ideal customer. AKSYS LTD: June 30 Stockholders' Deficit Tops $28.6 Million ----------------------------------------------------------- Aksys, Ltd., incurred an $11,065,800 net loss on $618,505 of net revenues for the three months ended June 30, 2006, compared to a $10,752,692 net loss on $485,178 of revenues for the same period in 2005. At June 30, 2006, the Company's balance sheet showed $14,076,286 in total assets and $42,773,043 in total liabilities, resulting in a $28,696,757 stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $8.7 million in total current assets available to pay $27.6 million in total current liabilities coming due within the next 12 months. At June 30, 2006, the Company's net operating losses available to offset future taxable income were approximately $181 million. The net operating loss carryforwards expire at various dates beginning in 2015. As a result of the annual limitation imposed on the use of any net operating loss carryforwards, a portion of these carryforwards may expire before ultimately becoming available to reduce federal income tax liabilities. Given the Company's historical losses and uncertainty with respect to its ability to generate taxable income, there is a full valuation allowance for its deferred tax assets at June 30, 2006. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12ad Aksys, Ltd. -- http://www.aksys.com/produces hemodialysis products, providing services for patients suffering from kidney failure. The Company's lead product, the PHD(R) System, is a currently available, advanced technology hemodialysis system designed to improve clinical outcomes of patients and reduce mortality, morbidity and the associated high cost of patient care. AMERICAN NATURAL: Net Loss Shrinks to $1MM in 2006 Second Quarter ----------------------------------------------------------------- For the three months ended June 30, 2006, American Natural Energy Corp.'s net loss decreases to $1,099,540 on $378,845 of net revenues from a $2,939,609 net loss on $704,650 of revenues in prior year. At June 30, 2006, the Company's balance sheet showed $8.2 million in total assets and $22.6 million in total liabilities, resulting in a $14.4 million stockholders' deficit. The Company's June 30 balance sheet also showed strained liquidity with $1 million in total current assets available to pay $21.3 million in total current liabilities coming due within the next 12 months. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12aa The Company disclosed that a decline in production from its drilling program has decreased revenues during the year ended Dec. 31, 2005, and the first six months of 2006. To date, The Company's production has not been sufficient to fund operations and drilling program. The Company has funded its capital expenditures and operating activities through a series of private and public debt and equity transactions and through an increase in vendor payables and note payables. At June 30, 2006, The Company did not have any available borrowing capacity. The Company discloses it has substantial need for funds to develop its oil and gas prospects and opportunities identified in the area of mutual interest the Company shares with ExxonMobil Corp. Any capital expenditures the Company currently intends to make will be funded from its available cash flows. To the extent additional funds are required to fully exploit and develop its unproved properties and the ExxonMobil Corp, the Company says it plans to raise additional capital through the private or public sale of equity securities, borrowings, or the sale of interests in its drilling activities or other alternative strategic transaction intended to maximize shareholder values. At June 30, 2006, the Company has no other commitments to expend additional funds for drilling activities for the rest of 2006. Going Concern Doubt As reported in the Troubled Company Reporter on May 22, 2006, PricewaterhouseCoopers LLP expressed substantial doubt about American Natural Energy Corporation's ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005, and Dec. 31, 2004. The auditing firm pointed to the Company's substantial losses, working capital deficit and accumulated deficit. About American Natural Headquartered in Tulsa, Oklahoma, American Natural Energy Corp. -- http://annrg.com/-- is engaged in the acquisition, development, exploitation and production of oil and natural gas. AMES DEPARTMENT: $150 Mil. Unsecured Note Gets Moody's LGD3 Rating ------------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its Caa1 Corporate Family Rating for Ames Department Stores, upgraded its Caa2 rating to Caa1 on the company's $150 million senior secured notes and affirmed its Caa3 rating on the Company's $150 million senior subordinated notes. Additionally, Moody's assigned an LGD3 rating to the $150 million senior unsecured notes, suggesting noteholders will experience a 49% loss in the event of a default and an LGD5 rating to the $150 million senior subordinated notes, suggesting noteholders will experience a 87% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Ames Department Stores filed for chapter 11 protection on Aug. 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No. 84; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) APIDOS CDO: Moody's Rates $11 Million Class E Junior Notes at Ba2 ----------------------------------------------------------------- Moody's reported that it has assigned ratings to six classes of notes issued by Apidos CDO IV These are Moody's Ratings: * Aaa to the $174,500,000 Class A-1 Senior Notes Due 2018; * Aaa the $87,500,000 Class A-2 Senior Delayed Draw Notes Due 2018; * Aa2 to the $20,000,000 Class B Senior Notes Due 2018; * A2 to the $16,000,000 Class C Deferrable Mezzanine Notes Due 2018; * Baa2 to the $14,000,000 Class D Deferrable Mezzanine Notes Due 2018; and * Ba2 to the $11,000,000 Class E Deferrable Junior Notes Due 2018. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio due to defaults, the transaction's legal structure and the characteristics of the underlying assets, consisting primarily of senior secured loans. The collateral manager is Apidos Collateral Management, LLC. ARMSTRONG WORLD: S&P Rates Proposed $1.1 Billion Facility at BB --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' bank loan rating to the proposed $1.1 billion senior secured bank facility of Armstrong World Industries Inc. (D/--/--), based on preliminary terms and conditions. At the same time, Standard & Poor's assigned a '2' recovery rating, indicating the likelihood of a substantial (80%-100%) recovery of principal in the event of a payment default. The bank facility is comprised of: * a $300 million five-year revolving credit facility; * a $300 million five-year delayed draw term loan A; and * a $500 million seven-year delayed-draw term loan B (collectively referred to as the senior credit facility). The bank loan ratings also assume that other conditions precedent to the bank facility becoming effective are satisfied; the ratings are subject to review once final documentation is received. "We expect to assign our 'BB' corporate credit rating to the building products company when Armstrong, the borrower, and its major U.S. subsidiaries, the guarantors, emerge from Chapter 11 bankruptcy protection, which we expect will occur on Oct. 2, 2006," said a Standard & Poor's credit analyst. "We expect the outlook to be stable." Armstrong and its major U.S. subsidiaries entered voluntary bankruptcy protection in December 2000 to resolve mounting asbestos-litigation costs and to resolve its asbestos claims. Proceeds from the senior credit facility will be used to fund the company's plan of reorganization, which includes contributions to a Section 524(g) asbestos personal injury trust. ASARCO LLC: Ct. Vacates Extension of Intercompany Claims Bar Date ----------------------------------------------------------------- The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi vacates the order approving the stipulation extending the Bar Date for ASARCO LLC's Subsidiary Debtors -- Encycle, Inc.; ASARCO Consulting, Inc.; Bridgeview Management Company, Inc.; Asarco Oil And Gas Company, Inc.; Government Gluch Mining Company Limited; ALC, Inc.; American Smelting and Refining Company; AR Mexican Explorations Inc.; AR Sacaton, LLC; Salero Ranch, Unit III; Community Association, Inc.; Covington Land Company; and Asarco Master, Inc. 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. 29; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). ASARCO LLC: Ct. Grants Partial Summary Judgment in Favor of ASARCO ------------------------------------------------------------------ The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi notes that TMD Acquisition Corporation and ASARCO LLC agreed that ASARCO's failure to establish the escrow account did not prevent closing, and therefore did not prevent termination under their Asset Purchase Agreement. Judge Schmidt finds that the pending motions for summary judgment do not deal with ASARCO's alternative theories. Thus, the Court holds that there are no genuine issues of material fact and that in the alternative, additional summary judgment motions with accompanying evidence must be filed. Accordingly, Judge Schmidt grants ASARCO's summary judgment in part as to TMD's cause of action based on breach of contract for failure to escrow the $250,000 deposit. The Court denies all other relief requested in the pending motions for summary judgment. As reported in the Troubled Company Reporter on Dec. 12, 2005, TMD entered into an Asset Purchase Agreement with ASARCO for the purchase of certain mining property in Tennessee on March 1, 2005. Pursuant to the APA, TMD paid a $250,000 deposit to ASARCO, which was required to be held by ASARCO in a segregated escrow pending closing. The $250,000 was part of the purchase price and was to be paid to ASARCO only in the event of closing. As reported in the Troubled Company Reporter on May 15, 2006, ASARCO admitted that it received $250,000, from TMD, but denied that the transfer was made consistent with the Asset Purchase Agreement. ASARCO related that it intended to apply the Transferred Funds towards the Purchase Price to be paid to it at the Closing Date, which was scheduled for Aug. 1, 2005. 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. 29; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). ASSURED PHARMACY: Reports $1.3MM Net Loss for Period Ended June 30 ----------------------------------------------------------------- Assured Pharmacy, Inc., incurred a $1,338,007 net loss for the three months ended June 30, 2006, compared with net income of $90,484 for the three months ended June 30, 2005. Net loss for the six months ended June 30, 2006, was $2,135,135, compared to a net loss of $1,013,413 for the six months ended June 30, 2005. The Company says the increase in net loss is primarily attributable to the gain on the forgiveness of debt reported during the three months ended June 30, 2005, in the amount of $1,011,522 and increased costs relating to expansion including payroll and marketing. Total revenue reported for the three months ended June 30, 2006, was $1,894,976, a 140% increase from $789,404 for the three months ended June 30, 2005. Total revenue reported for the six months ended June 30, 2006, was $3,410,620, a 137% increase from $1,437,806 for the six months ended June 30, 2005. The Company says revenue for the three and six months ended June 30, 2006, and 2005 was generated almost exclusively from the sale of prescription drugs. Management attributes the significant increase in revenue from the same reporting periods in the prior fiscal year to the Company's successful marketing efforts and an expansion of its business beyond the pain management sector to service customers that require prescriptions to treat cancer, psychiatric, and neurological conditions. At June 30, 2006, the Company's balance sheet showed $2,179,462 in total assets, $1,886,300 in total liabilities and minority interest of $470,925, resulting in a stockholders' deficit of $177,763. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12b1 Going Concern Doubt Squar, Milner, Reehl & Williamson, LLP, expressed substantial doubt about Assured Pharmacy's ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's negative cash flow from operations of approximately $2.7 million in 2005, an accumulated deficit of approximately $15.2 million at Dec. 31, 2005 and recurring losses from operations. About Assured Pharmacy Headquartered in Irvine, Calif., Assured Pharmacy, Inc., fka eRXSYS Inc. -- http://www.assuredpharmacy.com/-- is a specialty pharmacy chain focused exclusively on fulfilling prescriptions for patients with chronic pain and other long-term care conditions. Assured Pharmacy has agreements with major health plan administrators and prescription compounders licensed by the DEA to provide controlled substances in all 50 states. The company currently operates five retail locations on the west coast, with two in California (Santa Ana and Riverside), one in Oregon (Portland) and one in Washington (Kirkland/Seattle). BAKER STREET: Moody's Rates $12 Million Class E Notes at Ba2 ------------------------------------------------------------ Moody's Investors Service reported that it has assigned these ratings to notes issued by Baker Street CLO II Ltd.: * Aaa to $270,000,000 Class A-1 Floating Rate Notes Due October 2019; * Aaa to U.S. $30,000,000 Class A-2 Variable Funding Floating Rate Notes Due October 2019; * Aa2 to $20,100,000 Class B Floating Rate Notes Due October 2019; * A2 to $21,000,000 Class C Floating Rate Deferrable Notes Due October 2019; * Baa2 to $15,900,000 Class D Floating Rate Deferrable Notes Due October 2019 and * Ba2 to $12,000,000 Class E Floating Rate Deferrable Notes Due October 2019. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio due to defaults, the transaction's legal structure and the characteristics of the underlying assets, consisting primarily of senior secured loans. This transaction is managed by Baker Street Asset Management. BARNHILL'S STEAK: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Barnhill's Steak Company of Florida, Inc. aka Charles Barnhill's Buffet 5490 Mobile Highway Pensacola, FL 32526 Bankruptcy Case No.: 06-30573 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: September 12, 2006 Court: Northern District of Florida (Pensacola) Debtor's Counsel: J. Steven Ford Wilson, Esq. Wilson Harrell Farrington & Ford 307 South Palafox Street Pensacola, FL 32502 Tel: (850) 438-1111 Fax: (850) 432-8500 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Daffin Food Service $919,959 P.O. Box 779 Marianna, FL 32447 T & S of Pensacola, Inc. $608,035 9134 Daytona Drive Pensacola, FL 32526 Mobile Fixture $224,487 1155 Montlimar Mobile, AL 36609 Alabama Dept. of Revenue $106,304 Total Employee Leasing $98,000 Internal Revenue Service $95,000 Department of Treasury Bank of America Line of Credit $48,688 Florida Dept. of Revenue $45,632 Golden Corral $45,000 Gulf Coast Produce, Inc. $40,000 Patricia Barrington $32,019 Anthony R. Layne $27,000 Western Sizzlin $26,309 Adams Gulf Coast Produce, $25,000 Inc. R&R Electrical & Plumbing $21,000 Bank of America Credit Card $19,000 Purchases Alatax $15,016 Emerald Coast Produce $14,213 Mobile County $9,694 Coastal Mechanical, LLC $4,350 BEARINGPOINT INC: S&P Holds Corp. Credit & Debt Ratings on Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services' ratings on McLean, Virginia- based BearingPoint Inc., remained on CreditWatch with developing implications, where they were placed on March 18, 2005, reflecting concerns regarding continued financial reporting problems and a recently announced order entered by the New York State Supreme Court for New York County finding BearingPoint in default under the indenture governing the company's 2.75% Series B Convertible Subordinated Debentures because of a failure to file timely regulatory reports. "This court ruling also introduces the possibility that holders of BearingPoint's other indebtedness could pursue a similar notice of default or acceleration," said Standard & Poor's credit analyst Philip Schrank. Acceleration of the $200 million Series B debentures has not been sought by the trustee, nor ordered by the court and the company had almost $300 million in cash at Sept. 25, 2006. While indemnity agreements relating to surety bonds and certain other customer contracts could also be impacted, no other class of bond holder has yet filed a notice of default. Furthermore, senior debt holders can exercise blocking rights on payments, including acceleration, under certain terms of all series of BearingPoint's subordinated debentures. Although the company intends to appeal this ruling, and seek waivers from a majority of each series of debentures, barring either of these outcomes, BearingPoint would also face the possibility that its debt obligations would be classified as current, if it were to file its 10-k currently. Standard & Poor's will continue to monitor BearingPoint's progress toward completing its delayed filings and its discussions with representatives of the holders of all of its debentures and its banks. If progress is not made over the next few weeks in coming to agreements with all creditor groups regarding waivers and forbearance, the ratings will be lowered to the 'CCC' category. Conversely, the ratings could be reviewed for a possible upgrade following the resolution of all financial reporting issues and agreements with all the creditors. Ratings on CreditWatch: BearingPoint Inc.: * Corporate credit rating: B-/Watch Dev./-- * Senior secured: B-/Watch Dev. * Senior unsecured: B-/Watch Dev. * Subordinated debt: CCC+/Watch Dev. BLACKROCK SENIOR: Moody's Rates $5.3MM Class E Sec. Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service has assigned ratings to a new issuance of the notes and loans issued by BlackRock Senior Income Series III plc. Moody's assigned these ratings: * Aaa for up to $217,100,000 in loans incurred pursuant to the Credit Agreement; * Aa2 to $U.S.$8,600,000 Class B Second Senior Secured Notes due September 12, 2016; * A2 to $9,900,000 Class C Senior Subordinated Secured Notes due September 12, 2016; * Baa2 to $16,400,000 Class D Subordinated Secured Notes due September 12, 2016; and * Ba2 to $5,300,000 Class E Junior Subordinated Secured Notes due September 12, 2016. BlackRock Senior Income Series III plc is a managed market value collateralized debt obligation, backed by a pool of high yield securities, bank loans and special opportunity investments. The ratings on the notes and loans reflect the sufficiency of the market value of the underlying collateral, the transaction's legal structure and the expertise of the investment manager, BlackRock Financial Management, Inc. BOMBARDIER INC: Inks $1.65 Bil. South Africa Rapid Rail Contract ---------------------------------------------------------------- Bombardier, Inc., secured contracts worth approximately $1.65 billion for the construction and future maintenance of a rapid rail transit system in South Africa. The Company will supply 96 Electrostar vehicles and the electrical and mechanical systems for the project. As reported by Reuters, the Company's share of the $3.3 billion contract, part of a consortium to build the rapid rail transit system for the Gauteng provincial government in South Africa, included $950 million for the 54-month design-build portion of the project and $700 million for its share of a separate 15-year maintenance services contract. The project will provide rapid rail connection between Johannesburg, Tshwane and the Johannesburg International Airport. Headquartered in Valcourt, Quebec, Bombardier Inc. (TSX: BBD) -- http://www.bombardier.com/-- manufactures innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment. * * * As reported in the Troubled Company Reporter on May 25, 2006, Moody's Investors Service assigned a Ba2 rating to Bombardier Recreational Products' CDN$250 million senior secured revolver and a B1 rating to BRP's CDN$880 million senior secured term loan. At the same time, Moody's affirmed BRP's B1 corporate family rating and revised the ratings outlook to negative from stable. BOMBARDIER RECREATIONAL: Moody's Assigns LGD4 Rating to Term Loan ----------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B1 Corporate Family Rating for Bombardier Recreational Products Inc., confirmed its Ba2 rating on the Company's $250 million secured revolver and its B1 rating on the Company's $880 million secured term loan. Additionally, Moody's assigned an LGD2 rating to the $250 million secured revolver, suggesting noteholders will experience a 25% loss in the event of a default and an LGD4 rating to the $880 million secured term loan, suggesting noteholders will experience a 51% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Quebec, Canada, Bombardier Recreational Products Inc. -- http://www.brp.com/-- a privately-held company, is a world leader in the design, development, manufacturing, distribution and marketing of motorised recreational vehicles. The Company's portfolio of brands and products includes: Ski- Doo(R) and Lynx(TM) snowmobiles, Sea-Doo(R) watercraft and sport boats, Johnson(R) and Evinrude(R) outboard engines, direct injection technologies such as Evinrude E-TEC(R), Can-Am(TM) all- terrain vehicles, Rotax(R) engines and karts. BREK ENERGY: Posts $244,905 Net Loss in Quarter Ended June 30 ------------------------------------------------------------- Brek Energy Corporation incurred a $244,905 net loss on $119,317 of revenue for the three months ended June 30, 2006, compared with a $15,299 net loss on $141,743 of net revenue for the same period in 2005. For the six-month period ended June 30, 2006, the Company had a net loss of $369,303, which was an increase of $278,241 in net loss from a net loss of $91,062 for the six months ended June 30, 2005. The increase in net loss for the six months ended June 30, 2006, as compared to the six months ended June 30, 2005, was due primarily to an increase in the Company's operating expenses for SEC compliance costs. At June 30, 2006, the Company's balance sheet showed $6,543,851 in total assets, $1,386,459 in liabilities, stockholders' equity of $5,114,504 and minority interest of $42,888. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12ae Going Concern Doubt Mendoza Berger & Company, LLP, in Irvine, California, raised substantial doubt about Brek Energy Corporation's ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations. Headquartered in Reno, Nevada, Brek Energy Corporation -- http://www.brekenergy.com/-- is a natural gas and petroleum exploitation, development, and production company that acquires, operates and develops unconventional hydrocarbon prospects, primarily in the Rocky Mountain region. The Company drills in the Riverbend Project located in the Unita Basin of northeastern Utah, targeting the Wasatch, Mesaverde and Blackhawk formations. BREK ENERGY: Agrees to Stock-for-Stock Merger with Gasco -------------------------------------------------------- Brek Energy Corp. has agreed to merge with Gasco Energy, Inc., for an equity consideration of 11 million shares of Gasco's common stock valued at approximately $30 million based on the closing price of Gasco's common stock on Sept. 20, 2006. As a result of the merger, Gasco will acquire all of Brek's California, Utah and Wyoming assets. The directors of Brek and Gasco have approved the terms of the transaction, which is expected to close near the end of 2006. The completion of the acquisition is subject to the approval of Brek's stockholders and the completion of the distribution and disposition of certain subsidiaries of Brek to its stockholders and others, leaving only the California, Utah and Wyoming assets in Brek. Under the terms of the transaction, Brek will merge with and become a wholly owned subsidiary of Gasco. Brek's stockholders will receive a number of shares of Gasco's common stock equal to 11 million divided by the total number of shares of Brek's common stock outstanding, fully diluted, on the date of the merger. As part of the transaction, Brek's directors, who own a total of approximately 24% of Brek's outstanding common stock, have agreed to vote their shares in favor of the transaction; and Brek's president and CEO, who owns approximately 18% of Brek's outstanding common stock, has agreed to deposit 550,000 shares of Gasco's common stock acquired in the transaction in escrow to satisfy any claims resulting from breaches of Brek's representations and warranties. Commenting on the merger, Brek's CEO, Rick Jeffs, said, "The share exchange will give Brek's shareholders the liquidity that they have not had trading on the Pink Sheets. They will also benefit from Gasco's professional energy management team and the financial capacity that Gasco brings to this large and exciting energy play." Before the merger can close, Brek must distribute its interest in Vallenar Energy Corp., which owns oil and gas properties in Texas that are not core to Gasco's operating strategy, and dispose of its non-oil-and-gas subsidiaries. The distribution and dispositions of these interests are a condition to the completion of the merger and are subject to regulatory approvals. Headquartered in Reno, Nevada, Brek Energy Corporation -- http://www.brekenergy.com/-- is a natural gas and petroleum exploitation, development, and production company that acquires, operates and develops unconventional hydrocarbon prospects, primarily in the Rocky Mountain region. The Company drills in the Riverbend Project located in the Unita Basin of northeastern Utah, targeting the Wasatch, Mesaverde and Blackhawk formations. Going Concern Doubt Mendoza Berger & Company, LLP, in Irvine, California, raised substantial doubt about Brek Energy Corporation's ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses from operations. CALPINE CORP: New York Court Sets October 31 CGC Claims Bar Date ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York, set Oct. 31, 2006, as the deadline for all creditors owed money by Calpine Geysers Company L.P., a subsidiary of Calpine Corporation, on account of claims arising prior to May 2, 2006, to file their proofs of claim. Creditors must file written proofs of claim on or before the October 31 Claims Bar Date and those forms must delivered to: United State Bankruptcy Court Southern District of New York Calpine Corporation Claims Docketing Center Bowling Green Station P.O. Box 5040 New York, New York 10274-5040 or United States Bankruptcy Court Southern District of New York Calpine Corporation Claims Docketing Center, Room 534 New York, New York 10004-1408 Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. CALPINE CORP: Submits Schedule of Purchases of $360MM Sr. Notes --------------------------------------------------------------- Calpine Canada Energy Finance ULC (ULC 1) submitted a schedule of purchases relating to the acquisition and ownership by Calpine Canada Resources Company of $360 million principal amount of 8.5% Senior Notes due 2008 of ULC 1, which Senior Notes are guaranteed by Calpine Corporation. CCRC is an affiliate of ULC 1 and each of CCRC and ULC 1 is a debtor in proceedings commenced under the Companies' Creditors Arrangement Act (Canada) in December 2005. CCRC has commenced a process in those proceedings to market and sell the ULC 1 Senior Notes it owns, subject to Court approval. The documents are being made public in response to certain matters arising in that sale process, which is pending before the Alberta Court. ULC 1 is not a party to any of the documents. A Schedule of Purchases by Calpine Canada Resources Company of 8.50% Senior Notes Due 2008 Issued by Calpine Canada Energy Finance ULC is available for free at: http://ResearchArchives.com/t/s?12b7 About ULC 1 Calpine Canada Energy Finance ULC is an indirect wholly owned subsidiary of Calpine Corporation and was established as a special purpose finance subsidiary of Calpine Corporation whose primary business is to engage in financing activities to raise funds for the business operations of Calpine Corporation and its subsidiaries. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The Company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. CAPELLA HEALTHCARE: Moody's Assigns Loss-Given-Default Ratings -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its B3 Corporate Family Rating for Capella Healthcare, Inc. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Senior secured Revolving Credit Facility due 2011 B3 B2 LGD3 36% Senior secured First Lien Term Loan due 2012 B3 B2 LGD3 36% Senior Secured Second Lien Term Loan due 2013 Caa2 Caa2 LGD5 87% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Brentwood, Tennessee, Capella Healthcare, after the closing of the proposed transaction, will operate four acute care hospitals in three states. CAPITALSOURCE COMMERCIAL: Moody's Rates $56MM Class E Notes at Ba2 ------------------------------------------------------------------ Moody's reported that it has assigned ratings to notes issued by CapitalSource Commercial Loan Trust 2006-2. Moody's assigned these ratings: * Aaa to the $300,000,000 Class A-PT Floating Rate Asset Backed Notes Due 2022; * Aaa to the $550,000,000 Class A-1A Floating Rate Asset Backed Notes Due 2022; * Aaa to the $147,500,000 Class A-1B Floating Rate Asset Backed Notes Due 2022; * Aa2 to the $71,250,000 Class B Floating Rate Deferrable Asset Backed Notes Due 2022; * A2 to the $157,500,000 Class C Floating Rate Deferrable Asset Backed Notes Due 2022; * Baa3 to the $101,250,000 Class D Floating Rate Deferrable Asset Backed Notes Due 2022; and * Ba2 to the $56,250,000 Class E Floating Rate Deferrable Asset Backed Notes Due 2022. Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to the noteholders relative to the promise of receiving the present value of such payments. The ratings of the notes reflect the credit quality of the underlying assets, which consist primarily of loans made predominantly to middle market businesses, as well as the credit enhancement for the notes inherent in the capital structure and the transaction's legal structure. This cashflow CLO is managed by CapitalSource Finance LLC. CERVANTES ORCHARDS: Files Second Amended Disclosure Statement ------------------------------------------------------------- Cervantes Orchards and Vineyards LLC filed a Second Amended Disclosure Statement explaining its Plan of Reorganization with the Eastern District of Washington in Yakima. Treatment of Claims Holders of Allowed Class 1 Administrative Expenses Claims and Allowed Class 2 Priority Claims will be paid in full on the distribution date of the Plan. On the Distribution Date, holders of Allowed Class 3 Priority Tax Claims will receive $1,000 or the amount of the claim whichever is lesser. The balance of the allowed claim will be paid in 10 equal quarterly installments commencing on the Distribution Date or the Third Anniversary of the assessment of the tax, whichever is later. Class 4 Deere Credit, Inc., Claims will receive interest on the principal amount of its loans at the rate of CitiBank Prime rate plus 1% payable quarterly commencing on Dec. 31, 2006, together with minimum quarterly payments of $100,000 in reduction of principal. The principal and the accrued interest must be fully paid on Dec. 31, 2009. Class 5 U.S. Bank Trust NA Claims will receive interest on the principal amount of its loans at the rate of 8.11% per annum payable semi-annually commencing on Jan. 1, 2007, as part of payments in the amount of $87,434.90. All principal and accrued interest must be fully paid on July 1, 2014. Because the Debtor expects to obtain a recovery against Columbia Trust Bank in excess of the Bank's claim, Class 6 Columbia Trust Bank Claims will be treated in its full amount. Payments, however, will be paid to Columbia in an amount equal to 3% of the principal amount of the Bank's claims commencing three months after the effective date until the true amount of the claim, if any, is determined by final order. The Debtor may recover excess payments with interest. The holder of Class 7-1 Elbert B. Schinmann Claims will receive $19,373.83 annual payments. Interest will accrue on the principal of the claim from the Debtor's bankruptcy filing. The holder of Class 7-2 Douglas F. Bridgeman Claims will receive $25,463.05 annual payments until the claims are paid. Interest will accrue on the principal of the claim from the Debtor's bankruptcy filing. The holder of Class 7-3 Robert Lambrecht Claims will receive $22,720.05 annual payments until the claims are paid. Interest will accrue on the principal of the claim from the Debtor's bankruptcy filing. The holders of Class 7-4 American West Bank Claims will receive $11,804.16 semi-annual payments until the claims are paid. Interest will accrue on the principal of the claim from the Debtor's bankruptcy filing. The holders of Class 7-5 Ronald L. Curfman Claims will receive $12,025 annual payments until the claims are paid. Interest will accrue on the principal of the claim from the Debtor's bankruptcy filing. The holders of Class 7-6 Gary Simmons, Kay Moore, and Sherran Whatley Claims will receive $19,514.78 annual payments until the claims are paid. Interest will accrue on the principal of the claim from the Debtor's bankruptcy filing. The holders of Class 7-7 Everett L. Wiggins Claims will receive $7,600 annual payments until the claims are paid. Interest will accrue on the principal of the claim from the Debtor's bankruptcy filing. The Class 7-8 Donna Freeburn Claim will be paid in full on the Distribution Date. Holders of Class 8 Unsecured Claims will receive a cash payment equal to 20% of their allowed claims on the Distribution Date. The holders will also receive an 80% promissory note for the balance of their allowed claims. The note will bear a 6% interest per annum and payable on or before March 15, 2007. In the event all prior classes are fully paid under the Plan, Class 9 Related Entity Claims will receive any remaining funds available for distribution. Jose and Cynthia Cervantes hold the units of the Debtors. They are the holders of Class 10 Interest Claims. They will retain all units under the Plan. Full-text copies of the Debtor's Second Amended Disclosure Statement are available for a fee at: http://www.researcharchives.com/bin/download?id=060928221047 Headquartered in Sunnyside, Washington, Cervantes Orchards and Vineyards LLC filed for chapter 11 protection on Aug. 19, 2005 (Bankr. E.D. Wash. Case No. 05-06600). R. Bruce Johnston, Esq., at Law Offices of R. Bruce Johnston represents 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 listed estimated assets of $10 million to $50 million and estimated debts of $1 million to $10 million. CIFC FUNDING: Moody's Rates $23 Million Class B-2L Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service reported that it has assigned the following ratings to Notes issued by CIFC Funding 2006-I, Ltd: * Aaa to the $100,000,000 Class A-1LR Variable Funding Notes Due October 2020 and to the U.S.$293,000,000 Class A- 1L Floating Rate Notes Due October 2020, * Aa2 to the $26,500,000 Class A-2L Floating Rate Notes Due October 2020, * A2 to the $30,500,000 Class A-3L Floating Rate Notes Due October 2020, * Baa2 to the $20,000,000 Class B-1L Floating Rate Notes Due October 2020 and, * Ba2 to $23,000,000 Class B-2L Floating Rate Notes Due October 2020, collectively, the "Notes". Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio due to defaults, the transaction's legal structure and the characteristics of the underlying assets, consisting primarily of senior secured loans. Commercial Industrial Finance Corp. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. COMMODORE CDO: Moody's Rates $8.5 Mil. Class E Sec. Notes at Ba1 ---------------------------------------------------------------- Moody's Investors Service has assigned ratings to notes issued by Commodore CDO V, Ltd. These ratings were assigned: * Aaa to $75,000,000 Class A-1A First Priority Senior Secured Floating Rate Delayed Draw Notes Due 2047; * Aaa to $225,000,000 Class A-1B Second Priority Senior Secured Floating Rate Notes Due 2047; * Aaa to $50,000,000 Class A-2 Third Priority Senior Secured Floating Rate Notes Due 2047; * Aaa to $25,000,000 Class A-3 Fourth Priority Senior Secured Floating Rate Notes Due 2047; * Aa2 to $70,000,000 Class B Fifth Priority Senior Secured Floating Rate Notes Due 2047; * A2 to $13,250,000 Class C Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047; * Baa2 to $24,000,000 Class D Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047; * Ba1 to $8,500,000 Class E Eighth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047, and, * Aaa to $20,000,000 Class P Principal Protected Notes Due 2047. Moody's ratings of the Notes (other than the Class P Notes) vaddress the ultimate cash receipt of all required interest and principal payments as provided by the Notes' governing documents, and are based on the expected loss posed to holders relative to the promise of receiving the present value of such payments. Moody's rating of the Class P Notes addresses the ultimate receipt of the initial Class P Notes Rated Balance. Moody's rating of the Class P Notes does not address the receipt of any other distributions or payments thereon. Moody's ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of RMBS Securities, CMBS Securities, other Asset-Backed Securities and Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. This transaction is managed by Fischer Francis Trees & Watts, Inc. COMMUNITY HEALTH: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Hospital and Long-term Care sectors this week, the rating agency confirmed its Ba3 Corporate Family Rating for Community Health Systems, Inc., and its B2 rating on the company's $250 million issue of 6.5% senior subordinated notes due 2012. Moody's also assigned an LGD6 rating to those bonds, suggesting noteholders will experience a 92% loss in the event of a default. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on CHS/Community Health Systems, Inc.'s loans and bond debt obligations: Issuer: CHS/Community Health Systems, Inc. (subsidiary) Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $425 Million Senior Secured Revolving Credit Facility due 2009 Ba3 Ba3 LGD3 42% $1.2 Billion Senior Secured Term Loan due 2011 Ba3 Ba3 LGD3 42% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Community Health Systems, Inc., headquartered in Brentwood, Tennessee, is a non-urban provider of general hospital healthcare services in the U.S. COMPLETE RETREATS: Wants Bermuda Cliffs' Chapter 11 Case Dismissed ------------------------------------------------------------------ Complete Retreats LLC and its debtor-affiliates ask the Honorable Alan H.W. Shiff of the U.S. Bankruptcy Court for the District of Connecticut to dismiss the bankruptcy case of Bermuda Cliffs, LLC. Nicholas H. Mancuso, Esq., at Dechert LLP, in Hartford, Connecticut, relates that Bermuda Cliffs was formed pursuant to the Delaware Limited Liability Company Act and in contemplation of a business prospect in Bermuda, but that business never materialized. Mr. Mancuso notes that Bermuda Cliffs was never capitalized by any Tanner & Haley entity, no operating agreement was ever executed for it, and the Debtors never used Bermuda Cliffs for any purpose. Bermuda Cliffs' bankruptcy petition disclosed that it had no assets or operations. Mr. Mancuso informs the Court that Larry Langer, then a manager and officer of the Debtors, amended Bermuda Cliffs' certificate of formation to change its name to Arthrr, LLC, on Feb. 28, 2005. In addition, before the Debtors' bankruptcy filing, Mr. Langer executed an operating agreement pursuant to which he was the exclusive managing member. Mr. Mancuso says under the operating agreement, Mr. Langer capitalized the company with his own funds for the eventual purpose of conducting his own business in Arizona. Mr. Langer currently remains the sole member and manager of Arthrr. Mr. Langer has resigned from the Debtors effective as of Aug. 28, 2006. According to Mr. Mancuso, the Debtors have never been involved in any of Arthrr's operations and were unaware of the name change and subsequent capitalization and use of Arthrr by Mr. Langer before the Debtors' bankruptcy filing. On Sept. 8, 2006, Mr. Langer sent a letter to the Debtors confirming that: (i) no Tanner & Haley entity has ever had any member interest or other interest in Arthrr; (ii) Arthrr has never had any member interest or other interest in any Tanner & Haley entity; and (iii) no current or prior asset of Arthrr was transferred to Arthrr directly or indirectly from any Tanner & Haley entity. Moreover, Mr. Mancuso says, counsel for Arthrr has informed the Debtors that the filing of Bermuda Cliffs' bankruptcy petition has caused Arthrr to be in default under certain agreements, none of which the Debtors are a party to or are even aware of, and has otherwise significantly restricted its ability to conduct business. Thus, Mr. Mancuso asserts, Bermuda Cliffs' bankruptcy case should be dismissed because: (1) Arthrr has no connection with the Debtors. Arthrr does not contain any assets that are the property of the Debtors' estates, and it is not an affiliate of any of the Debtors; (2) Arthrr and the Debtors are not responsible for the obligations of each other; (3) The administration of Bermuda Cliffs' case would inevitably lead only to confusion and delay the course of the other Debtors' cases, especially if Arthrr's creditors assert that their claims cannot be treated alongside of those of the other Debtors. The Debtors reserve any and all claims that they may have against Mr. Langer, whether related to Arthrr, Bermuda Cliffs, or otherwise. Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor- affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPLETE RETREATS: Taps O'Connor as Ordinary Course Professional ---------------------------------------------------------------- Complete Retreats LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Connecticut for authority to employ O'Connor Davies Munns & Dobbins, LLP as an "ordinary course" professional pursuant to Sections 105, 327, 328, and 330 of the Bankruptcy Code. O'Connor Davies was the Debtors' prepetition accountant and tax advisor. The Debtors owe the firm approximately $93,550 for prepetition services rendered and expenses incurred. The Debtors inform the Court that O'Connor Davies possesses information and certain work papers necessary to complete their 2005 financial statements and to allow them to file their 2005 tax returns, and critical to the Debtors' efforts to fully investigate certain prepetition transactions. Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, relates that O'Connor Davies initially refused to turn over the Records and to provide postpetition services to the Debtors until its prepetition claims were paid. While the Debtors believe that they may be able to compel the firm to turn over the Records through litigation, that litigation would be costly and time-consuming, Mr. Daman says. Moreover, Mr. Daman continues, the Debtors believe that any firm they retain to replace O'Connor Davies would necessarily be at an informational disadvantage, especially without access to the Records, and that the costs of familiarizing a replacement firm with the Debtors' business and financial affairs would be substantial. The Debtors negotiated with O'Connor Davies to try to reach a consensual resolution and executed an engagement letter with O'Connor Davies, dated Sept. 8, 2006. Pursuant to the Engagement Letter, O'Connor Davies would turn over the Records at the Debtors' request and would provide postpetition accounting services and prepare federal and state tax returns on the Debtors' behalf. Accordingly, the Debtors ask the Court to approve the settlement agreement. The firm's hourly rates are: Designation Hourly Rates ----------- ------------ Partners $325 to $375 Senior Managers $300 to $325 Senior Staff $200 to $225 Junior Staff $125 to $150 If the Court approves the Debtors' request, the Debtors would pay O'Connor Davies $9,335, or 10% of its prepetition claim. In addition, in the event the Debtors' general unsecured creditors receive a distribution greater than 10% of their allowed unsecured claims under a plan of reorganization, the Debtors would pay the firm an additional amount so that its total percentage recovery on account of its unsecured claim is the same as that of other general unsecured creditors of the same class. Mr. Daman emphasizes that O'Connor Davies would not be entitled to any additional distributions on account of its prepetition claim. Finally, the Debtors have agreed to waive any preference claims against O'Connor Davies under Section 547 of the Bankruptcy Code. Mr. Daman reports that the Debtors paid the firm $58,550 within the 90 days prior to their bankruptcy filing. The Debtors believe that O'Connor Davies provided "new value" to them. Therefore, the Debtors assert that the firm would have a strong defense to any preference action brought against it. The Debtors propose to pay O'Connor Davies, without prior application to the Court, 100% of the fees and expenses incurred upon the submission to and approval by the Debtors of an appropriate invoice setting forth the nature of the services rendered and expenses actually incurred. The Debtors will file with the Court statements detailing the amounts of fees and expenses paid to the firm, and will serve those monthly statements on the United States Trustee and counsel to the Official Committee of Unsecured Creditors. If O'Connor Davies' fees and disbursements exceed $35,000, then payments to the firm would be subject to the prior Court approval. "This $35,000 threshold or any other threshold established for [O'Connor Davies] would be independent of the $110,000 aggregate threshold or any other threshold established by the Court for other 'ordinary course' professionals," Mr. Daman says. Although O'Connor Davies has an unsecured claim against the Debtors on account of prepetition services rendered to the Debtors in the ordinary course of their business, Mr. Daman relates, the Debtors do not believe that the firm represents or holds any interest adverse to the Debtors or to their estates with respect to the matters on which it is to be employed, and thus, it meets the special counsel retention requirement of Section 327(e) of the Bankruptcy Code. Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor- affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CORNELL COS: Growth Cues Moody's to Lift Sr. Unsec. Rating to B2 ---------------------------------------------------------------- Moody's Investors Service upgraded the senior unsecured rating of Cornell Companies, Inc., to B2 from B3. The outlook is stable. According to the ratings agency, the rating upgrade is a result of Cornell's growth, improvement in credit metrics and substantial removal of uncertainties surrounding recent litigation. According to Moody's, the firm has been able to participate in the healthy environment for private corrections as evidenced by projected revenue growth to $360 million in 2006 from $260 million in 2003. In addition, fixed charge coverage is 1.4X at 1H06 and improving, after falling to unsustainable levels in 2005. This progress is due in part to several of Cornell's initiatives, including the employment of a new chief executive officer, streamlining mid-level management and renewed focus on quality and efficiency. Moody's also believes liquidity is sound and remaining litigation is immaterial. Conversely, Cornell lags its larger peers in size and revenues. As well, the firm's juvenile platform will tend to exhibit more volatility and less predictability than adult corrections. Furthermore, leverage and secured debt levels remain high. Finally, Moody's notes that Cornell has retained an advisor to explore strategic alternatives. The stable outlook is based on Moody's expectation that Cornell will continue to improve fixed charge coverage and reduce leverage, while growing revenues and profitability. Moody's would consider a positive rating action should Cornell achieve fixed charge coverage in excess of 2X, annual revenues greater than $500 million and secured debt below 25% of gross assets. Conversely, sustained declines in coverage below 1.25X or revenues below $300 million, likely due to loss of contracts, would place negative pressure on the rating. This rating was raised one notch with a stable outlook: * Cornell Companies, Inc.: Senior unsecured to B2 from B3. In its last ratings action with respect to Cornell, Moody's assigned a senior unsecured rating of B3 in June 2004. Cornell Companies, Inc. [NYSE: CRN] is a leading private provider of corrections, treatment and educational services outsourced by federal, state and local governmental agencies. Cornell provides a diversified portfolio of services for adults and juveniles, including incarceration and detention, transition from incarceration, drug and alcohol treatment programs, behavioral rehabilitation and treatment, and grades 3-12 alternative education. The company has 79 facilities in 17 states, offering a total service capacity of 19,226. D&E COMMUNICATIONS: Amends $234.6 Million Credit Facilities ----------------------------------------------------------- D&E Communications, Inc., has completed an amendment to its senior secured credit facilities. The credit facilities, as amended, consist of a: * $25 million revolving line of credit, * Term Loan A in the amount of $36 million, * Term Loan B in the amount of $144.7 million, and * $28.9 million of term indebtedness. The effect of the amendment to the credit facilities was to allow D&E to lower the interest rates on its indebtedness, provide greater flexibility in its financial covenants, extend the amortization of principal, eliminate the $10 million permanent reduction on the revolving line of credit previously scheduled for Dec. 31, 2006 and eliminate the requirement to maintain interest rate protection with a weighted average life at least two years on 50% of total variable rate indebtedness. D&E also paid off the $7 million balance on the revolving line of credit by drawing $7 million from Term Loan A. The effect of the amendment on interest rates was to reduce the revolving line of credit and Term Loan A U.S. prime and LIBOR margins by 0.75%, the Term Loan B U.S. prime and LIBOR margins by 0.25% and the average interest rate on the term indebtedness by 0.35%. D&E anticipates that this reduction in the margins will result in an average annual cash savings of approximately $600,000. This savings assumes that the margin added to the U.S. prime and LIBOR rates in effect prior to the amendment would have been in effect throughout the term of the credit facilities using the amended loan amortization schedules. D&E incurred a one-time non-cash write-off of approximately $1,050,000 of unamortized debt issuance costs of the previous credit facility. D&E made cash payments of approximately $390,000 for costs related to the amendments to the credit facility of which approximately $340,000 was capitalized and approximately $50,000 was expensed in the third quarter of 2006. In connection with the amendment, interest rate swap agreements with a notional amount of $75 million were terminated. D&E received cash termination payments of approximately $1,100,000, which will be amortized as a reduction of interest expense over the remainder of the respective terms of the interest rate swap agreements. These agreements were due to mature between November 2008 and December 2009. Based in Lancaster County, Pennsylvania, D&E Communications Inc. (NASDAQ: DECC) -- http://www.decommunications.com/-- is an integrated communications provider offering high-speed data, Internet access, local and long distance telephone, voice and data networking, network management and security, and video services. * * * On Sept. 22, 2006, Moody's Investors Service assigned D&E Communications Inc. a Ba2 bank loan debt rating. DANA CORP: Judge Lifland Approves Pact Extending Challenge Period ----------------------------------------------------------------- Prior to their bankruptcy filing, Dana Corporation and its debtor- affiliates entered into a $400,000,000 Five Year Revolving Credit Facility among various lenders, with Citicorp USA, Inc., as the administrative agent for the lenders. The Debtors also entered into three corporate credit card arrangements with Citibank (South Dakota), N.A., and Citibank International plc. In May 2006, the U.S. Bankruptcy Court for the Southern District of New York authorized the Official Committee of Unsecured Creditors to conduct Rule 2004 examinations on the Prepetition Lenders and the Receivables Facility Agents. In a stipulation approved by the Honorable Burton R. Lifland, the Debtors, the Prepetition Agent, the Credit Card Issuers, the Creditors Committee and the Ad Hoc Noteholders' Committee agree that the Challenge Period solely for the Creditors Committee and the Ad Hoc Committee to contest the liens and claims under the Five Year Credit Facility and Corporate Credit Card Program is extended until the earlier of 100 days after: (a) any of the Debtors, the Creditors Committee, the Ad Hoc Committee, the Prepetition Agent or the Credit Card Issuers sends a notice to the other parties setting the last of the Challenge Period on the 100th day; and (b) the Debtors or any other party-in-interest first files a disclosure statement with the Court pursuant to Section 1125 of the Bankruptcy Code. The date of the Challenge Period Notice or the filing of the disclosure statement will be the Investigation Commencement Date. The Prepetition Agent, the Prepetition Lenders, the Credit Card Issuers and the Debtors may object to subpoenas served pursuant to Rule 2004 Orders on the 30th day after the Investigation Commencement Date. Oral examinations, as contemplated by the Subpoenas, will be conducted and concluded between the 51st day and the 95th day after the Investigation Commencement Date. Failure of the Prepetition Agent, the Prepetition Lenders, the Credit Card Issuers or the Debtors to comply with the discovery schedule will constitute cause for any further extension of the Challenge Period. If the Creditors Committee determines that its investigation with respect to the Five Year Credit Facility and the Credit Card Program cannot be completed absent resolution of a Subpoena Objection, then it will seek, not later than the 51st day after the Investigation Commencement Date, an expedited hearing to resolve that Subpoena Objection. If that Subpoena Objection is not resolved by the 70th day after the Investigation Commencement Date, then the Challenge Period may be further extended. 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. 22; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DANA CORP: Selling Oklahoma Property for $2.6 Million to Caliber ---------------------------------------------------------------- Pursuant to the U.S. Bankruptcy Court for the Southern District of New York's order approving procedures to sell or transfer certain de minimis assets, Dana Corporation and its debtor- affiliates ask the Court to approve the sale of a real property located at 14313 N. May Avenue, Suite 100, in Oklahoma City, Oklahoma, for $2,600,000 to Caliber Development Company, LLC. The Assets to be sold consist of: (a) approximately 7.26 acres of land at 14313 N. May Avenue, Suite 100, in Oklahoma City, Oklahoma, together with: * the Debtors' interests to all rights-of-way, open or proposed streets, alleys, easements, strips or gores of land adjacent to the Property; * buildings, improvements and structures located on the Property; and * fixtures that are located at and affixed to any of the Improvements as of the Closing Date; (b) all of the Debtors' right, title and interest in and to the tangible personal property that is located at and used in connection with any of the Property as of the Closing Date; and (c) to the extent transferable, all of the Debtors' right, title and interest in and to all tangible and intangible assets of any nature relating to the Property. The Debtors and Caliber Development agree that real estate and personal property taxes and assessments, utility bills and all amounts paid or payable by the Debtors under the Contracts will be allocated between them on a cash basis as of the Pro-ration Time. The parties also agree to share the costs and fees incurred in connection with the sale of the Assets. On or before the Closing, Caliber Development will deposit into an escrow account the Purchase Price, adjusted to account for Pro-ration and Closing Costs, together with all other costs and amounts it needs to pay at the Closing pursuant to the terms of the Asset Purchase Agreement. Corinne Ball, Esq., at Jones Day, in New York, discloses that two parties hold liens or have other interests in the Assets: 1. Citicorp North America, Inc., as Administrative Agent under the Senior Secured Superpriority DIP Credit Agreement, dated March 3, 2006; and 2. Citicorp USA, Inc., as Administrative Agent under the Security Agreement, dated November 18, 2005. According to Ms. Ball, each Lienholder has either consented to the Proposed Sale or the Lienholder's lien or interest can be extinguished, has been waived or is capable of monetary satisfaction. In connection with the Proposed Sale, the Debtors propose to pay a $67,600 broker commission to CB Richard Ellis Oklahoma who worked with Signature Associates to represent them on the sale. The Debtors will also pay $78,000 to Grubb Ellis Levy & Beffort, as is customary for real estate transactions in Oklahoma City. A full-text copy of the Caliber Asset Purchase Agreement is available for free at http://researcharchives.com/t/s?12ab 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. 22; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DATALOGIC INT'L: Rhode Island Ends DataLogic Consulting Contract ---------------------------------------------------------------- DataLogic International, Inc., and its wholly owned subsidiary, DataLogic Consulting, Inc., received notice from the State of Rhode Island that it was terminating the contractual arrangements under which DCI provides temporary employee services to agencies of the State. The Company disclosed that as a result of receiving the notice of termination, DCI has terminated the employment of approximately 360 employees who provided services under the Rhode Island Contract. The Rhode Island Contract represented approximately $11.5 million and $5.7 million of the Company's revenue for the year ended Dec. 31, 2005, and the six months ended June 30, 2006, respectively. The Rhode Island Contract represented a significant part of DCI's revenue but yielded a lower margin than other typical contracts of DCI. The working capital required to fulfill the contract was significant and as a result of the termination has reduced the working capital requirements of DCI. The Company also disclosed that on Sept. 20, 2006, the State of Rhode Island paid to the Company $801,382 and deposited an additional $323,248 in escrow in respect of amounts due for services provided under the Rhode Island Contract. Laurus Master Fund, Ltd., its secured creditor, agreed to release from the Company's accounts receivable "lockbox" account $478,764 of the funds received to permit the Company and its subsidiaries to meet payroll obligation to employees. The remaining funds received from the State of Rhode Island were applied as a pre-payment of the Company's secured term note held by Laurus, which as of Sept. 26, 2006, has approximately $1.4 million outstanding. Laurus has placed and is maintaining a hold on the Company's access to funds held in the "lockbox" account based on the default notice received by the Company from Laurus. Without access to funds in the "lockbox" account, the Company does not have sufficient funds to meet its payroll obligations to employees or otherwise support its operations. The Company further disclosed that, as of Sept. 26, 2006, substantially all of the employees of its communications business segment have resigned or been terminated. The business segment represented approximately $3.6 million and $2.8 million of the Company's revenue for the year ended Dec. 31, 2005 and the six months ended June 30, 2006, respectively. The Company is evaluating, with respect to the communications business segment, if it is required to write-off assets of the business due to material impairment. DataLogic International, Inc. -- http://www.dlgi.com/-- is a technology and professional services company providing a wide range of consulting services and communication solutions like GPS based mobile asset tracking, secured mobile communications and VoIP. The Company also provides Information Technology outsourcing and private label communication solutions. DataLogic's customers include U.S. and international governmental agencies as well as a variety of international commercial organizations. Going Concern Doubt As reported in the Troubled Company Reporter on May 17, 2006, Corbin & Company, LLP, in Irvine, California, raised substantial doubt about DataLogic's ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring losses and need to establish profitable operations. DELPHI CORP: Court Defers CBA and GM Contract Hearings to Oct. 19 ----------------------------------------------------------------- The U.S. Bankruptcy Court of the Southern District of New York has granted continued adjournments of hearings on Delphi Corporation's motions to reject collective bargaining agreements and modify retiree benefits under Sections 1113 and 1114 of the Bankruptcy Code and for authority to reject after notice certain commercial contracts with General Motors Corp. under Section 365 of the Bankruptcy Code. The 1113/1114 and Section 365 motion hearings were previously adjourned on Sept. 18, 2006. The Court has scheduled chambers conferences on Oct. 19, 2006 for status and scheduling purposes with the Company and the respondents to each motion. The action follows a chambers conference conducted by the Court on Sept. 28, 2006 and discussions between the Company and its major stakeholders including its statutory committees, labor unions and GM. The adjournments are intended to allow the parties to continue to focus on ongoing commercial and labor discussions. Based in Troy, Mich., Delphi Corp. -- 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 CORP: 32 Parties Retain Pepper Hamilton as Legal Counsel --------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, Pepper Hamilton LLP discloses that it has been retained to represent 31 corporate and individual creditors and one former officer in Delphi Corporation and its debtor-affiliates' Chapter 11 cases. In particular, Pepper Hamilton represents these entities: (a) Advanced Decorative Systems - Kamagraph Dennis Kayes, a partner with Pepper Hamilton's Detroit, Michigan office, has advised Kamagraph with respect to arranging postpetition payment terms with the Debtors. (b) Ametek, Inc., and its divisions and affiliates, Ametek Dixson, Rotron, Inc.; and Taylor Hobson Precision These entities have prepetition claims against the Debtors and this matter is being handled by J. Gregg Miller, a partner, and Anne Marie Aaronson, an associate, with Pepper Hamilton LLP's Philadelphia, Pennsylvania office. (c) Eftec Eftec is a defendant in a lawsuit filed in Oakland County (Michigan) Circuit Court by the Debtors that was recently settled. Eftec is a pre-existing client of Pepper Hamilton. This matter was handled by Abraham Singer, a partner with Pepper Hamilton's Detroit office. (d) ExxonMobil Corporation ExxonMobil has or may have claims against the Debtors for lubricants and specialty oils delivered to them. ExxonMobil is a pre-existing client of Pepper Hamilton. This matter is being handled by Bonnie MacDougal-Kistler, Of Counsel with Pepper Hamilton's Philadelphia office. (e) Paul Free, former Chief Administrative Officer and Controller of Delphi Corporation. Richard Rossman, Of Counsel with Pepper Hamilton's Detroit office, represents Mr. Free as part of an ongoing investigation by the Securities Exchange Commission into alleged accounting irregularities at Delphi Corporation. Mr. Free is also named as a co-defendant with Delphi Corp. in several securities and ERISA class action lawsuits filed against Delphi. (f) Henkel Corporation Henkel is a pre-existing client of Pepper Hamilton. Dennis Kayes, a partner with Pepper Hamilton's Detroit office, advised Henkel Corporation prepetition with respect to negotiating payment terms with the Debtors. Following the Petition Date, Dennis Kayes has been advising Henkel Corporation regarding a possible sale of its claim. (g) SKF USA Inc. SKF USA Inc. alleges that it held claims against the Debtors for $633,852 in ball bearings and seals delivered. This matter is being handled by Henry J. Jaffe, a partner with Pepper Hamilton's Wilmington office. (h) Teleflex Incorporated, et al. Teleflex has claims against the Debtors for goods delivered to them for not less than $1.2 million. This matter is being handled by Francis J. Lawall, a partner, and Bonnie MacDougal-Kistler, Of Counsel, with Pepper Hamilton's Philadelphia office. Pepper Hamilton also represents 24 creditors, which are employees of the Debtors, having general unsecured claims related to their employment status. Each matter is being handled by Dennis S. Kayes and Robert Hertzberg, partners with Pepper Hamilton's Detroit Office: 1. John P. Arle, vice president and treasurer; 2. James A. Bertrand, president, AHG; 3. Kevin M. Butler, vice president, human resources management; 4. Choon T. Chon, president, Asia Pacific operations; 5. Daniel B. Crishon, director of business processes; 6. Michael P. Gannon, human resources director; 7. Guy C. Hachey, president, Delphi Powertrain Systems and president of Delphi Europe, Middle East and Africa; 8. Karen L. Healy, vice president, corporate affairs, marketing, communications and facilities; 9. Ronald E. Jobe, chief financial officer, electronics & safety division; 10. David Knill, finance director; 11. Mark C. Lorenz, vice president, operations and logistics; 12. Rodney O'Neal, president and chief operating officer; 13. Francisco A. Ordonez, president, Delphi Product & Service Solutions; 14. Jeffrey J. Owens, president, Delphi Electronics & Safety; 15. Ronald Pirtle, vice president of Delphi and president of Delphi Thermal Systems; 16. Ronald M. Pogue, business line executive; 17. Robert J. Remenar, vice president of Delphi and president of Delphi Steering; 18. Timothy Richards, vice president, Delphi Electronics group; 19. Gary Siddall, assistant finance director, Delphi Packard; 20. James A. Spencer, president, Delphi Packard; 21. Dale R. Stelmach, director, customer satisfaction and program management; 22. Bette M. Walker, vice president and chief information officer; 23. Mark Weber, executive vice president; and 24. James P. Whitson, chief tax officer Pepper Hamilton further discloses that it does not own any claims against or interests in the Debtors. Pepper Hamilton assures the U.S. Bankruptcy Court for the Southern District of New York that current representations are completely separate and parties do not comprise a committee of any kind. The individual parties have agreed, however, to share some of the expenses associated with the firm's representation of them 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. 42; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DIAMOND LAKE: Moody's Rates $14.75 Mil. Class B-2L Notes at Ba3 --------------------------------------------------------------- Moody's Investors Service has assigned ratings to Notes issued by Diamond Lake CLO, Ltd.: * Aaa to the $5,250,000 Class X Notes Due December 2012, * to the $190,000,000 Class A-1L Floating Rate Notes Due December 2019, and to the up to U.S.$50,000,000 Class A-1LR Floating Rate Revolving Notes Due December 2019; * Aa2 to the $18,000,000 Class A-2L Floating Rate Notes Due December 2019; * A2 to the $16,000,000 Class A-3L Floating Rate Notes Due December 2019; Baa2 to the U.S.$14,000,000 Class B-1L Floating Rate Notes Due December 2019; and, * Ba3 to the $14,750,000 Class B-2L Floating Rate Notes Due December 2019. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio due to defaults, the transaction's legal structure and the characteristics of the underlying assets, consisting primarily of senior secured loans. Jefferies Capital Management Inc. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. DIRECTED ELECTRONICS: Moody's Assigns LGD3 Rating to Secured Loans ------------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B1 rating on Directed Electronics' $100 million senior secured revolver and its B1 rating on the Company's $307 million senior secured term loan. The Company also carries the rating agency's B2 PDR rating. Additionally, Moody's assigned an LGD3 rating to the $100 million senior secured revolver, suggesting noteholders will experience a 32% loss in the event of a default and an LGD3 rating to the $307 million senior secured term loan, suggesting noteholders will experience a 32% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Vista, California, Directed Electronics (Nasdaq: DEIX) -- http://www.directed.com/-- is a designer and marketer of consumer branded vehicle security and convenience systems and a supplier of home audio, mobile audio and video, and satellite radio products. Directed offers a broad range of products, including security, remote start, hybrid systems, GPS tracking and navigation, and accessories, which are sold under its Viper(R), Clifford(R), Python(R), and other brand names. In the home audio market, Directed designs and markets Definitive Technology(R) and a/d/s/(R) premium loudspeakers. Directed's mobile audio products include speakers, subwoofers, and amplifiers sold under its Orion(R), Precision Power(R), Directed Audio(R), a/d/s/(R), and Xtreme(R) brand names. Directed also markets a variety of mobile video systems under the Directed Video(R), Directed Mobile Media(R) and Automate(R) brand names. Directed also markets and sells certain SIRIUS-branded satellite radio products, with exclusive distribution rights for such products to Directed's existing U.S. retailer customer base. DOLE FOOD: To Buy JP Fruit Distributors from Jamaica Producers -------------------------------------------------------------- Dole Food Company, Inc., disclosed that pursuant to pre-existing agreements, it initiated a buy-sell process under which the Company either will buy the 65% of JP Fruit Distributors Ltd. it does not already own, or else will sell the 35% of JPFD that it does own. The owner of the 65% interest in JPFD, Jamaica Producers Group Ltd., is required either to accept the Company's offer to buy JPG's 65% interest or, alternatively, to accept the Company's offer to sell its 35% interest in JPFD. The Company expects the JPG Board to consider the offers today. The Company is considering expressions of interest by potential partners with respect to the ownership and operation of JPFD, if it ends up as the buyer. About JP Fruit Distributors JP Fruit Distributors Ltd. imports and sells fresh produce in the United Kingdom. Jamaica Producers Group Ltd. is the owner of the 65% interest in JPFD. About Dole Food Co. Based in Westlake Village, California, Dole Food Company, Inc., -- http://www.dole.com/-- is the world's largest producer and marketer of high-quality fresh fruit, fresh vegetables, and fresh- cut flowers based on revenues. Dole markets a growing line of packaged and frozen foods and is a produce industry leader in nutrition education and research. * * * As reported in the Troubled Company Reporter on Sept. 21, 2006, Standard & Poor's Ratings Services' ratings for Dole Food Co., Inc., remained on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Sept. 27, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors, and Agricultural Cooperative sectors, the rating agency confirmed its Ba3 Corporate Family Rating for Dole Food Company, Inc. DUANE STREET: Moody's Rates $11.75MM Class E Junior Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service reported that it has assigned these ratings to notes issued by Duane Street CLO II, Ltd.: * Aaa to $238,000,000 Class A-1 Senior Floating Rate Notes Due 2018; * Aaa to $75,000,000 Class A-2 Senior Revolving Floating Rate Notes Due 2018; * Aa2 to $25,500,000 Class B Senior Floating Rate Notes Due 2018; * A2 to $23,000,000 Class C Deferrable Mezzanine Floating Rate Notes Due 2018; * Baa2 to $18,500,000 Class D Deferrable Mezzanine Floating Rate Notes Due 2018; * Ba2 to $11,750,000 Class E Deferrable Junior Floating Rate Notes Due 2018 and * Aa2 to $5,000,000 Class Z Combination Notes Due 2018. Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents and are based on the expected losses posed to the noteholders relative to receiving the present value of such payments. The ratings of the notes reflect the credit quality of the underlying assets -- which consist primarily of senior secured loans -- as well as the credit enhancement for the notes inherent in the capital structure and the transactions's legal structure. This cash flow CLO transaction is managed by DiMaio Ahmad Capital LLC. EAST 44TH: Court Okays Use of NYCB's Cash Collateral Until Oct. 25 ------------------------------------------------------------------ The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York gave East 44th Realty, LLC, continued access to New York Community Bank's cash collateral until Oct. 25, 2006. As reported in the Troubled Company Reporter on Sept. 15, 2005, Judge Drain previously allowed the Debtor use of the cash collateral until Sept. 30, 2006. The Debtor's indebtedness to NYCB stems from Prepetition Agreements totaling $12,666,527.67 plus fees, costs, expenses and other accrued charges including $80,993.20 in fees and expenses of NYCB's counsel incurred as of Aug. 4, 2005. As reported in the Troubled Company Reporter on Sept. 13, 2005, valid and perfected first priority security interests and liens on substantially all of the Debtor's assets secure the debt. To provide the lender with adequate protection required under Section 363 of the U.S. Bankruptcy Code for any diminution in the value of its collateral, the Debtor will grant the Bank a replacement lien to the same extent, validity and priority as the prepetition lien. In addition, the Debtor will pay into escrow $12,500 for six months. The prepetition legal fees totaling $80,993.20 will be added to the principal amount of the prepetition debt. Gary M. Becker, Esq., at Kramer Levin Naftalis & Frankel LLP in Manhattan represents New York Community Bank. Judge Drain has set a hearing at 10:00 a.m., on Oct. 24, 2006, to consider the Debtor's use of cash collateral from and after Oct. 25, 2006. Headquartered in New York, East 44th Realty, LLC, is a tenant of a building located at 228-238 East 44th Street in Manhattan. The building is comprised of 164 residential units and three commercial spaces. The Debtor is the sub-lessor of the premises, collects rents from its subtenants and manages the premises. The Debtor is the tenant under a net-lease dated as of Dec. 9, 1960. The Debtor filed for chapter 11 protection on August 5, 2005 (Bankr. S.D.N.Y. Case No. 05-16167). Warren R. Graham, Esq., at Davidoff Malito & Hutcher LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $25,737,873 in assets and $13,128,560 in debts. ECHOSTAR DBS: $500MM Notes Issue Cues Moody's to Affirm Ratings --------------------------------------------------------------- Moody's Investors Service affirmed all ratings including the Ba3 corporate family and SGL-1 liquidity rating for EchoStar Communications Corporation and its subsidiary EchoStar DBS Corporation following the company's announcement of a proposed $500 million of EDBS notes. The $500 million in proceeds from the new fixed rate notes will be used to replace the same amount of the existing EDBS floating rate note. EchoStar's corporate family rating continues to reflect expectations of higher costs to grow and retain subscribers in an increasingly competitive operating environment as well as concerns regarding management's longer term operational and fiscal strategies. EchoStar's solid liquidity position (based predominantly on cash balances of approximately $2 billion), its substantial subscriber base of over 12 million, and modest positive free cash flow support the ratings. The outlook remains stable. These are the actions taken: Affirmed: * EchoStar Communications Corporation, Ba3 -- PDR: Ba2 -- SGL-1 -- Outlook Stable -- 5.75% sub conv due 2008, B2 --> B1, LGD6, 96% * EchoStar DBS Corporation -- 5.75% nts due 2008, Ba3 --> Ba3, LGD4, 58% -- 6.375% nts due 2011, Ba3 --> Ba3, LGD4, 58% -- 6 5/8% nts due Oct. 1 2014, Ba3 --> Ba3, LGD4, 58% -- 7.125% nts due 2016, Ba3 --> Ba3, LGD4, 58% Assigned * $500M of New Senior Notes due 2013 and 2016 -->Ba3, LGD4, 58% EchoStar Communications Corporation provides direct broadcast satellite pay television services to approximately 12 million subscribers. The company maintains its headquarters in Englewood, Colorado. ECHOSTAR DBS: S&P Assigns BB- Rating to $500 Million Senior Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB-' rating to Echostar DBS Corp.'s aggregate $500 million senior notes with maturities of 2013 and 2016. These are being issued under Rule 144A with registration rights. Proceeds will be used as the permanent financing of the redemption of the company's outstanding floating-rate senior notes due 2008. The corporate credit rating of Echostar DBS Corp. is 'BB-' and reflects that of its Denver-based parent EchoStar Communications Corp. (BB-/Stable/--), a satellite direct-to-home TV provider. The outlook is stable. "The ratings on EchoStar Communications reflect intense competition from cable TV system operators and its larger DTH rival, DIRECTV Group," said Standard & Poor's credit analyst said Catherine Cosentino. Some concern surrounds the company's longer-term competitive position from its inability to provide the high-speed data, voice, and advanced two-way video services available from cable companies, and likely to be offered by phone companies over the next few years. In addition, a degree of financial and strategic policy uncertainty weigh on the ratings. Tempering factors include good customer, revenue, and EBITDA growth, and solid liquidity from growing discretionary cash flow and a sizable cash balance. Ratings List: Echostar DBS Corp.: * $500 million senior notes due 2013 and 2016 rated BB- EDISON INT'L: Improved Liquidity Prompts Fitch to Raise Ratings --------------------------------------------------------------- Fitch Ratings upgraded Edison International's Issuer Default Rating to 'BBB-' from 'BB' and removed it from Rating Watch Positive, where it was placed March 10, 2006. The Rating Outlook is Stable. More than $11.9 billion of debt is affected by the rating action. Fitch also issued press releases detailing rating actions taken today on EIX subsidiaries Southern California Edison Co., Mission Energy Holding Co. and certain of its subsidiaries and Homer City Funding LLC. Fitch also upgraded and withdrew the IDR and senior unsecured ratings of Edison Funding, a subsidiary of Edison Capital to 'BBB-' from 'BB'. In April 2006, EC's wind investment portfolio was transferred to Edison Mission Energy (IDR rated 'BB-' with a Stable Rating Outlook by Fitch) and EIX plans no further investment in EC expecting its remaining investments to amortize over time. The ratings upgrade and Stable Rating Outlook reflect EIX's significantly improved liquidity position and credit metrics, driven primarily by the enhanced financial condition of SCE and EMG. EIX is wholly dependent on cash distributions from subsidiaries SCE and Edison Mission Group to meet its obligations. The higher ratings are supported by SCE's strong underlying credit metrics and operating fundamentals. For the 12-months ended June 30, 2006, the utility's funds from operations-to-interest expense and debt-to-FFO ratios were 7.1x and 2.4x, respectively, as adjusted by Fitch. The ratings also reflect more favorable wholesale power price trends and relatively low-cost generating capacity at EME's primarily coal-fired generating facilities, as well as lower financing costs and improved financial flexibility as a result of corporate restructuring activity. Nonetheless, MEHC's debt burden remains high with more than $6.7 billion of total debt outstanding, as adjusted by Fitch Ratings. For the 12-months ended June 30, 2006, EIX consolidated funds from operations-to-interest expense ratio was 3.7x and debt-to-FFO 4.0x, consistent with the higher rating category, as adjusted by Fitch Ratings. At the end of the second quarter-2006, EIX's parent-only liquidity position was strong with a $1 billion parent credit facility fully available and no short or long-term debt outstanding. On a consolidated basis, EIX and its subsidiaries have credit facilities totaling $3.7 billion, $1.86 billion of cash and cash equivalents and $518 million of short-term outstanding (excluding intercompany debt). Total consolidated EIX short- and long-term debt outstanding totaled $11.9 billion as adjusted by Fitch for off-balance sheet obligations and securitized debt. Approximately $5.4 billion or 45% of total consolidated EIX debt is composed of SCE obligations and the remainder unregulated operations. Primary concerns include unanticipated adverse changes to the currently balanced political/regulatory environment in California and a potential negative outcome in EIX's pending tax dispute regarding accounting for certain leveraged lease transactions at EC. Timing with regard to a resolution of this dispute remains uncertain. A prolonged episode of significantly lower U.S. wholesale power prices is also a concern that would likely result in renewed financial stress for MEHC and its subsidiaries and could result in future negative rating actions at EIX. EIX is a holding company that, through subsidiaries Southern California Edison (IDR rated 'A-') and Edison Mission Group, owns a major electric utility and is active in unregulated power generation markets in the U.S. EIX's core electric utility, SCE, accounted for 80% of EIX 2005 consolidated revenue and more than 90% of consolidated cash flow from operations as calculated by Fitch for the 12 months ended June 30, 2006, and is expected to remain the dominant contributor to consolidated EIX results for the foreseeable future. SCE, one of the largest electric utilities in the U.S., provides integrated electric utility service to approximately 4.7 million customers in parts of southern and central California. EMG is active in unregulated U.S. power markets through intermediate holding company subsidiaries MEHC and EME (IDR rated 'BB-' with a Stable Rating Outlook). MEHC owns all the shares of EME which, in turn, owns power facilities with generating capacity of more than 9,400 megawatts, primarily located in the U.S., through its various operating subsidiaries. While cross defaults exist between MEHC, EME and certain of its subsidiaries, there are no cross default provisions between MEHC and its ultimate parent, EIX or affiliate SCE. EGENE INC: Posts $275,212 Net Loss in Quarter Ended June 30 ----------------------------------------------------------- eGene, Inc., reported a $275,212 net loss for the quarter ended June 30, 2006, which was $48,064 higher compared to the previous year's quarterly loss of $227,148. Total sales increased for the three months ended June 30, 2006, as compared to the same period in 2005. The Company generated $356,600 of sales during the quarter ended June 30, 2006, compared to $216,706 of sales in the second quarter of 2005. According to the Company, the increase in quarterly sales reflect the successful sales ramp up in its distribution channels. The Company's balance sheet at June 30, 2006, showed $1,579,356 in total assets, $633,197 in total liabilities and $946,159 of stockholders' equity. Cash and cash equivalents were $198,424 on June 30, 2006, compared to $83,908 on June 30, 2005. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12b8 Going Concern Doubt Mantyla McReynolds LLC expressed substantial doubt about eGene, Inc.'s ability to continue as a going concern after auditing the Company's 2005 financial statements. The auditing firm pointed to the Company's accumulated losses and recurring negative cash flows from operations at Dec. 31, 2005. Based in Irvine, Calif., eGene, Inc. -- http://www.egeneinc.com/ -- focuses its core technologies of capillary electrophoresis, microfluidics, liquid handling and automation to develop and manufacture low-cost microfluidic, miniaturized digital analyzer systems, software and consumables for biological materials testing applications. These products detect, quantify, identify and characterize DNA and RNA at high rates of specificity and sensitivity while automating routine and non-routine laboratory and industrial procedures critical to product safety, development quality and productivity. ELIZABETH ARDEN: Moody's Affirms $225 Mil. Sr. Sub. Rating at B1 ---------------------------------------------------------------- Moody's lowered the speculative grade liquidity rating of Elizabeth Arden, Inc., to SGL-3 from SGL-2. Moody's also affirmed the RDEN's corporate family rating of Ba3 and its senior subordinated rating of B1. Ratings downgraded: * Specualtive Grade Liquidity Rating downgraded to SGL-3 from SGL-2. Ratings affirmed include the following: * Corporate family rating of Ba3; * $225 million senior subordinated rating of B1. The SGL-3 rating recognizes the company's increased utilization of the revolving credit facility to fund acquisitions and, more importantly, the increased reliance on the facility for strategic and financial initiatives other than normal seasonal working capital requirements. While Moody's expects a significant portion of the revolving indebtedness to be repaid following the upcoming peak holiday selling season, Moody's notes that over the next four quarters, expected cash flow from operations will not be sufficient to repay all of the revolving credit borrowings. In addition, Moody's is mindful that future acquisitions; ongoing share repurchases, inventory challenges in certain retail channels and product categories, as well as heightened brand support spending behind new product launches may result in lower levels of excess cash and/or higher levels of revolver borrowings over the next four quarters. Nonetheless, Moody's expects the company to appropriately manage its spending relative to its borrowing capacity, and notes RDEN's success in recent years in expanding its sales and brand portfolio while maintaining adequate annual profit and cash flow. The company's $300 million asset based revolving credit agreement contains only one, easily achievable financial covenant (1.10x fixed charge coverage covenant; applies only if average borrowing availability declines to less than $25 million - or $35 million from November 30 through May 30). While the $100 million increase in the committed amount to $300 million in August facilitated the recent acquisition of Sovereign, LLC, the balance of the facility still provides the appropriate size, flexibility and borrowing base advance rates to meet RDEN's upcoming highly seasonal working capital needs. This facility, however, will be reduced back to $250 million at 12/31/06. Although the company does have some unpledged trademark assets that could be monetized, alternative sources of liquidity should be considered modest given that their value could deteriorate substantially in a distress scenario. While a further lowering of the SGL rating is unlikely over the near-term, an upgrade is not probable until RDEN is able to generate positive free cash flow after share repurchases and acquisitions over four quarters while at the same time demonstrating a significant reduction or elimination of non- seasonal borrowings under its revolving credit facility. Elizabeth Arden, Inc., headquartered in Miami, Fla., currently has a corporate family rating of Ba3 with a stable outlook. E.SPIRE COMMUNICATIONS: Ch. 7 Trustee Taps Rawle as Co-Counsel -------------------------------------------------------------- Gary F. Seitz, Esq., the chapter 7 trustee appointed in e.Spire Communicaions, Inc. and its debtor-affiliates' bankruptcy cases, asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Rawle & Henderson LLP, as his co-counsel. Rawle & Henderson will: a) provide legal advice with respect to the Chapter 7 trustee's powers and duties under the Bankruptcy Code; b) assist in the investigation of the Debtors' acts, conduct, assets, liabilities, and financial condition, the operation of the Debtors' businesses, and any other matters relevant to the case or the orderly liquidation of the estates' assets; c) prepare, on behalf of the Chapter 7 Trustee, necessary applications, motions, complaints, answers, orders, agreements and other legal papers; d) review, analyze, and respond to all pleadings filed in these Chapter 7 cases and appear in court to present necessary motions, applications and pleadings and to otherwise protect the interests of the Chapter 7 Trustee and the Debtors' estates; and e) perform all other legal services for the Chapter 7 Trustee that may be necessary and proper in these proceedings. Rawle & Henderson's professionals bill at these rates: Designations Hourly Rate ------------ ----------- Partners $300-$400 Associates $150-$300 Paralegals $75-$150 Paralegal Assistants $75-$150 The Trustee assures the Court that the firm does not hold any interest adverse to the Debtors' estates. The firm can be reached at: Rawle & Henderson LLP 300 Delaware Avenue Suite 1015 Wilmington, Delaware 19801 Tel: (302) 654-0500 http://www.rawle.com/ Headquartered in Columbia, Maryland, e.Spire Communications was a facilities-based integrated communications provider, offering traditional local and long distance Internet access throughout the United States. The Company and its debtor-affiliates filed for chapter 11 protection on March 22, 2001 (Bankr. Del. Case No. 01-00974). Chad Joseph Toms, Esq., and Domenic E. Pacitti, Esq., at Saul Ewing LLP, and James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young & Jones, represented the Debtors in their chapter 11 proceedings. The Court converted the Debtors' chapter 11 cases to chapter 7 liquidation proceedings on May 6, 2006. Francis A. Monaco Jr., Esq., and Joseph J. Bodnar, Esq., at Monzack and Monaco, P.A., represented the Official Committee of Unsecured Creditors prior to the Debtors' cases being converted to chapter 7. When the Debtors filed for protection from their creditors, they listed $911.2 million in total assets and $1.4 billion in total debts. Gary F. Seitz, Esq., formerly the Court-appointed Chapter 11 Trustee, has also been appointed as the Chapter 7 Trustee in the Debtors' liquidation proceedings. Daniel K. Astin, Esq., and Anthony M. Saccullo, Esq., at The Bayard Firm; Erin Edwards, Esq., at Young Conaway Stargatt & Taylor LLP; and Deirdre M. Richards, Esq., at Obermayer Rebmann Maxwell & Hippel LLP, represent Mr. Seitz. FENDER MUSICAL: Moody's Assigns LGD5 Rating to Secured Second Lien ------------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B2 Corporate Family Rating for Fender Musical Instruments Corp., upgraded its B2 rating to B1, on the Company's $50 million 1st lien senior secured revolver; its B2 rating to B1 on the Company's $170 million secured term loan; and affirmed its Caa1 rating on the Company's $100 million secured 2nd lien. Additionally, Moody's assigned an LGD3 rating to the $50 million 1st lien secured revolver, suggesting noteholders will experience a 34% loss in the event of a default, an LGD3 rating to the $170 million senior secured term loan, suggesting noteholders will experience a 34% loss in the event of a default, and an LGD5 rating on the Company's $100 million secured 2nd lien, suggesting noteholders will experience an 84% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Fender Musical Instruments Corp. -- http://www.fender.com/-- is the world's foremost manufacturer of guitars, basses, amplifiers and related equipment. The FMIC family includes several other distinctive musical instrument brands: Charvel(R), Gretsch(R), Guild(R), Jackson(R), Olympia(R), Orpheum(R), SWR(R), Squier(R) and Tacoma(R). FMIC also manufactures a complete line of professional audio equipment under the Fender brand, including the Passport(R) portable sound system. Fender also offers a complete line of accessories, including strings, authorized replacement parts, cases, straps and clothing among others. FMIC's U.S. facilities are located in Arizona, California, Tennessee and Washington, with international facilities in England, France, Germany, Japan, Mexico, Spain and Sweden. FERRO CORP: S&P Holds Low-B Corp. Credit & Sr. Unsec. Debt Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services' 'B+' long-term corporate credit and 'B' senior unsecured debt ratings on Ferro Corp. remained on CreditWatch with negative implications, where they were placed Nov. 18, 2005. Standard & Poor's will resolve the CreditWatch after Ferro files its 2005 full year and 2006 quarterly financial statements, which are expected by Sept. 30th and Dec. 31st, respectively. The rating agency could lower the ratings if there are material negative surprises arising from disclosures in any of the financial statements or additional meaningful delays in the filings. "Still, in recent months the company has finalized a new credit facility and strengthened transparency with regard to current results," said Standard & Poor's credit analyst Wesley E. Chinn. "Moreover, the company plans to use proceeds from a pending sale of its specialty plastics business to reduce debt." The ratings on Ferro reflect: * its aggressive debt leverage; * cyclicality of its markets; * vulnerability to raw material costs; * lackluster operating margins and return on capital; and * delays in the filing of the 10-K and 10-Qs for 2005 and 10-Qs for 2006. These negatives are partially offset by: * satisfactory liquidity under a new credit facility; * improving earnings; and * a likely debt reduction from planned asset sales. The filing delays caused by the lengthy accounting investigation and restatement process, as well as still-limited transparency on business conditions and operating results, which have resulted from this review work, are a significant credit quality negative. Standard & Poor's expects that any deficiencies in the company's internal controls regarding financial reporting or other accounting areas are being addressed in a timely manner and will not hamper Ferro's ability to strengthen profitability and its financial condition. Price increases, initiatives to reduce overhead and procurement costs, improved conditions in the electronic materials market, and restructured polymer additives operations should contribute to a modest strengthening of operating margins and earnings in 2006 from weak levels. But the raw material and energy cost environment remains challenging. An earnings rebound would benefit the weak funds from operations to total debt ratio, taking into account capitalized operating leases, an accounts receivable securitization program, and meaningful unfunded pension and other postretirement obligations. That measure would also be bolstered by likely debt reduction using proceeds from the pending sale of the specialty plastics business, which generated revenues of $270 million in 2005. This divestiture, coupled with other asset sales, could eventually generate total net proceeds of roughly $200 million. FGX INTERNATIONAL: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the US Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B2 Corporate Family Rating for FGX International Limited. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $15 million First Lien Revolver B2 B1 LGD3 35% $150 million First Lien Term Loan B2 B1 LGD3 35% $50 million Second Lien Term Loan B3 Caa1 LGD5 84% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Smithfield, Rhode Island, FGX International Limited -- http://www.fgx.com/-- is a designer and marketer of non- prescription reading glasses, sunglasses and costume jewelry with a portfolio of brands including Foster Grant and Magnivision. FLORIDA PHONE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Florida Phone Service Inc. dba Global Telecom 7181 Southwest 117 Avenue Miami, FL 33183 Tel: (305) 274-9300 Bankruptcy Case No.: 06-14905 Type of Business: The Debtor sells telephone equipment and offers telephone services. Chapter 11 Petition Date: September 29, 2006 Court: Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Alan K. Marcus, Esq. Alan K. Marcus, P.A. 1320 South Dixie Highway, Suite 1045 Coral Gables, FL 33146 Tel: (305) 507-1203 Total Assets: $1,070,600 Total Debts: $818,171 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BellSouth Trade Debt $457,569 Telecommunications, Inc. 600 North 19th Street, 10th Floor Birmingham, AL 35203 Interiors of America Trade Debt $139,357 1499 West Palmetto Park Road Suite 410 Boca Raton, FL 33486 Mike's Grocery Store Trade Debt $24,818 33 Southwest 8 Street Homestead, FL 33030 Superway Discount Trade Debt $23,079 55 1/2 Southwest 7 Street Homestead, FL 33030 Ameri Wireless Corp. Trade Debt $22,854 14655 Southwest 56 Street Miami, FL 33175 AW Express Trade Debt $19,142 Florida Department of Revenue Taxes $18,344 U Wireless Corp. Trade Debt $18,156 Nationwide Cellular Trade Debt $17,216 USA Cingular Wireless Trade Debt $16,913 Y2K Wireless Trade Debt $16,623 Community Wireless Trade Debt $13,052 Internal Revenue Service Federal Taxes $8,191 Computer Shoppers Store Trade Debt $5,795 Bequick Softwre Trade Debt $5,146 Uva Restaurant Trade Debt $3,159 Lobsang Burgous Commissions $2,400 Globe Telecom Trade Debt $2,347 Pita Grill Trade Debt $1,899 Neil Mornick, CPA Accounting Services $1,200 FRONTLINE CAPITAL: Wants Until November 30 to File Chapter 11 Plan ------------------------------------------------------------------ FrontLine Capital Group asks the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan to extend the period within which it has the exclusive right to file a plan of reorganization until Nov. 30, 2006. The Debtor also wants to extend its exclusive right to solicit acceptances of that plan until Jan. 31, 2007. The Debtor has continued to negotiate, resolve, and deal with claim issues in its bankruptcy case. In June 2006, the Debtor filed an omnibus objection to claims seeking to (a) disallow and expunge, and (b) reclassify, reduce, and allow certain claims filed against its estate. The objection resulted in the disallowance, expungement, reclassification and reduction of approximately $500,000 of administrative and priority claims and in excess of $1,000,000 in unsecured non-priority claims. The Bankruptcy Court previously authorized the Debtor to engage Ernst & Young LLP to provide tax services to the Debtor concerning an analysis of the utilization of the Debtor's net operating losses. The scope of this engagement includes: (a) the determination of whether and when during the period of July 15, 1997, through Dec. 31, 2004, the Debtor had an ownership change as defined in Section 382(g) of the Internal Revenue Code; (b) assisting the Debtor in the determination of the quality of the net operating losses reported for regular federal and alternative minimum tax purposes; and (c) assisting the Debtor in analyzing the tax attribute reduction as a result of the bankruptcy. The Debtor has potential substantial net operating losses that would be critical to minimizing the potential tax implications its estate. As such, the results of the Section 382 Study will also bear significantly on any plan promulgated by Debtor. Judge Drain will convene a hearing at 10:00 a.m. on Oct. 17, 2006, to consider the Debtor's request. Objections to extension of its exclusive periods, if any, must be submitted by Oct. 13, 2006. Headquartered in New York City, FrontLine Capital Group, a holding company that manages its interests in a group of companies that provide a range of office related services, filed for chapter 11 protection on June 12, 2002 (Bankr. S.D.N.Y. Case No. 02-12909). Mickee M. Hennessy, Esq., at Westerman Ball Ederer & Miller, LLP, represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $264,374,000 in assets and $781,374,000 in debts. GATX FINANCIAL: Planned Asset Sale Cues Moody's to Review Ratings ----------------------------------------------------------------- Moody's Investors Service placed the ratings of GATX Financial Corp. (senior Baa3, short-term Prime-3) and affiliates on review for possible upgrade following the firm's announcement that it has agreed to sell a majority of its commercial aircraft leasing business to a consortium of investors, including Macquarie Bank and affiliated investment funds of Och Ziff Capital Management Group. Moody's said that it expects that its ratings review will likely result in up to a two-notch upgrade to GATX's long-term debt ratings and a one-notch uplift to its short-term rating should the transaction be completed under the terms disclosed. Moody's had changed the outlook on GATX's ratings to positive from stable in August 2005. GATX currently has well-established businesses in both railcar leasing and commercial aircraft leasing, but in Moody's opinion, commercial aircraft leasing contributes a disproportionate amount of risk to the firm's aggregate credit profile. Representing about 21% of GATX's total assets, GATX's aircraft leasing business has demonstrated significant earnings volatility and is vulnerable to airline industry cyclicality and event risks. While the sale of the aircraft leasing business would reduce GATX's earnings diversification, GATX's competitive positioning in railcar leasing is stronger than in its aircraft leasing business, and the profits generated by the rail business exhibit greater stability. With the disposition of aircraft leasing, Moody's expects GATX will focus its growth capital on its remaining higher-potential railcar leasing and smaller specialty finance businesses, with no ongoing involvement in aircraft leasing. During its review, Moody's will evaluate GATX's revised operating strategies, particularly in terms of its growth targets, asset and business mix, and the potential for its businesses to generate higher, more stable returns. Because activity levels in GATX's specialty finance segment have increased in recent quarters, Moody's will also seek to understand the risk and return characteristics of the marine and industrial equipment finance businesses GATX has indicated will be central to the strategy of this segment. Moody's will also consider the impact of GATX's financial strategies and policies on its post-sale credit profile. Though GATX management has taken steps to strengthen the capital base of the company in recent years, GATX's leverage remains high relative to peers, in Moody's view, limiting the firm's financial flexibility. Management's use of proceeds from the sale of the aircraft leasing business, including debt redemptions and shareholder distributions, will provide valuable context in understanding the firm's long-term financial policy. Moody's also noted that GATX's current funding strategies include a significant reliance on secured indebtedness, including sale- leaseback structures, leveraged leases and secured aircraft financing, which has been a source of potential downward rating pressure. A meaningful and permanent reduction in the proportion of secured financing in GATX's funding structure would provide relief from this issue. These ratings have been placed under review for possible upgrade: * GATX Financial Corp.: -- Senior Secured Baa2 -- Senior Unsecured Baa3 -- Subordinate shelf (P)Ba1 -- Short-term Prime-3 * GATX Corp.: -- Senior Unsecured (backed) Baa3 -- GATX Rail Corp.: -- Senior Secured (backed) Baa2 -- Senior Unsecured (backed) Baa3 * GATX Rail 2000-1 Pass Through Trust: -- Senior Secured Baa2 GATX Corporation, through its principal operating subsidiary GATX Financial Corporation, provides equipment leasing and associated services in its GATX Rail, GATX Air, and GATX Specialty Finance operating segments. At June 30, 2006, GATX Financial reported total assets of $6.1 billion. GE COMMERCIAL: Moody's Rates $14.4 Mil. Pref. Trust Certs. at Ba2 ----------------------------------------------------------------- Moody's reported that it has assigned ratings to six classes of notes issued by GE Commercial Loan Trust, Series 2006-3 These are Moody's Ratings: * Aaa to the $433,467,000 Class A-1 Floating Rate Secured Notes, Due 2015; * Aaa to the $352,822,000 Class A-2 Floating Rate Secured Notes, Due 2017; * Aa2 to the $36,826,000 Class B Floating Rate Secured Deferrable Interest Rate Notes, Due 2017; * A2 to the $64,695,000 Class C Floating Rate Secured Deferrable Interest Rate Notes, Due 2017; * Baa3 to the $44,789,000 Class D Floating Rate Secured Deferrable Interest Rate Notes, Due 2017; and * Ba2 to the $14,431,000 Preferred Trust Certificates. These are Moody's evaluation of the underlying collateral as of the Closing Date, the transaction's structure, the draft legal documentation, and the expertise of the manager, GE Capital Corporation, LLC. Moody's stated that the ratings of these notes address the ultimate cash receipt of all interest and principal payments required by the governing documents and are based on the expected losses posed to holders of notes relative to the promise of receiving the present value of such payments. This transaction, underwritten by Wachovia Securities, is a securitization of middle market and broadly syndicated loans. GLOBAL HOME: Panel Wants Basham Ringe as Special Mexican Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Global Home Products, LLC, and its debtor-affiliates' bankruptcy cases asks the Honorable Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware for permission to retain Basham, Ringe y Correa, S.C., as its special Mexican counsel, nunc pro tunc to Aug. 1, 2006. The Committee wants Basham Ringe to perform services relating to the examination of prepetition liens and security interests allegedly held by Wachovia Bank National Association and Madeleine LLC. Wachovia and Madeleine allegedly hold those liens in relation to the Debtors' foreign business entities and their non-debtor subsidiaries located in Mexico. Basham Ringe will: a. assist the Committee in investigating the extent, validity, priority, and perfection of alleged liens and security interest of Wachovia and Madeleine allegedly secured by the assets or equity of the Debtors and their non-debtor foreign subsidiaries located in Mexico; b. assist in the preparation of applications, motions, complaints, answers, orders, agreements, and other legal papers if necessary; and c. perform other related legal services as may be required and that are in the interest of the Committee and creditors represented by the Committee. Carlos Portilla discloses the Firm's hourly rates: Designation Hourly Rate ----------- ----------- Partners $310 - $350 Off Counsel $350 Associates $170 - $250 Legal Assistants $67 - $110 Mr. Portilla assures the Court that the Firm does not hold nor represent any interest adverse to the Debtors' estates. About Basham, Ringe y Correa, S.C. Basham, Ringe y Correa, S.C., is a Mexican law firm knowledgeable about Mexican laws relating to the granting and perfection of liens on assets located in Mexico. Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on April 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at Lowenstein Sandler, P.C., and David M. Fournier, Esq., at Pepper Hamilton LLP represent the Official Committee of Unsecured Creditors. Huron Consulting Group LLC gives financial advice to the Committee. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and estimated debts of more than $100 million. GMAC COMMERCIAL: Fitch Affirms Class M & N Certs.' Junk Ratings --------------------------------------------------------------- Fitch Ratings upgraded GMAC Commercial Mortgage Securities, Inc.'s mortgage pass-through certificates, series 2000-C2: -- $10.6 million class D to 'AAA' from 'AA+' -- $19.3 million class E to 'AA' from 'A' -- $9.7 million class F to 'A+' from 'BBB+' In addition, Fitch affirms these classes: -- $463.6 million class A-2 'AAA' -- Interest only classes X 'AAA' -- $31 million class B 'AAA' -- $28 million class C 'AAA' -- $4.8 million class M remains 'CC/DR3' -- $600,000 class N remains 'C/DR6' Class A-1 has been repaid in full. Fitch does not rate classes G, H, J, K, L, and O certificates. The rating upgrades reflect the increased credit enhancement levels due to scheduled amortization, the defeasance of an additional four loans (5.1%) since Fitch's last rating action, and a decrease in Fitch loss expectation. As of the August 2006 distribution date, the pool's aggregate certificate balance has been reduced 20.3% to $617 million from $773.7 million at issuance. There are 116 mortgage loans remaining in the transaction. Currently, one loan (1.2%) is in special servicing. This loan is secured by a 188,981-square foot retail property in Meriden, Connecticut. The loan was transferred to the special servicer in January 2003 when Ames, the property's anchor tenant, rejected its lease after filing for bankruptcy, significantly reducing occupancy to 47%. The special servicer and the borrower are currently in negotiations for a discounted payoff. Fitch expected losses upon liquidation will deplete Class N and impact Class M. GRUPO TMM: Closes $200 Mil. Securitization Facility of 2007 Notes ----------------------------------------------------------------- Grupo TMM, S.A., disclosed the closing of a $200 million securitization facility with Deutsche Bank AG, London. Under the terms of the Transaction, the company will make equal monthly payments of principal and interest of approximately $3.2 million from October 2006 to September 2010, a balloon payment of $40 million in October 2010 and equal monthly payments of principal and interest of approximately $4.2 million from October 2010 to the final maturity on Sept. 25, 2012. Using part of the proceeds from the Transaction, on Sept. 25, 2006, the company redeemed the total outstanding principal amount of $155,820,539 million and accrued interest of its Senior Secured Notes due 2007. The remainder of the net proceeds from the Transaction will be used in the implementation of the company's business plan including the purchase of vessels and other transportation assets. Deutsche Bank AG, London, acted as structuring agent of this facility, and provided the funding for the Transaction. The Bank of New York is the trustee for the certificates issued under this facility. Axis Capital Management acted as financial advisor to the Company. Javier Segovia, president of Grupo TMM, said, "We are pleased that the Company was successful in extending its debt maturity while at the same time adding financial flexibility to implement its business strategy going forward." Headquartered in Mexico City, Grupo TMM S.A. (NYSE: TMM)(MEX VALORIS: TMMA) -- http://www.grupotmm.com/-- is a Latin American multimodal transportation and logistics company. Through its branch offices and network of subsidiary companies, TMM provides a dynamic combination of ocean and land transportation services. * * * Standard & Poor's Ratings Services raised its corporate credit rating on Grupo TMM S.A. to 'B-' from 'CCC.' The rating was removed from Creditwatch, where it was placed on Dec. 15, 2004. S&P said the outlook is positive. GRUPO TMM: Purchases New Anchor Handler Tug Supply Vessel --------------------------------------------------------- Grupo TMM, S.A., has closed the purchase and taken delivery of a new anchor handler tug supply vessel. The AHTS is a newly built 150-ton bollard pull anchor handler. The purchase price of the vessel was $30.7 million, of which $25.4 million was financed. "During 2006, the company has significantly increased its owned offshore fleet, reducing the operating cost and at the same time building equity in these vessels," Javier Segovia, president of Grupo TMM, said. "The company's offshore fleet in now comprised of 24 vessels working to support the increasing demand of offshore exploration and production activities in the Gulf of Mexico under the umbrella of Mexico's Navigation Law." Headquartered in Mexico City, Grupo TMM S.A. (NYSE: TMM)(MEX VALORIS: TMMA) -- http://www.grupotmm.com/-- is a Latin American multimodal transportation and logistics company. Through its branch offices and network of subsidiary companies, TMM provides a dynamic combination of ocean and land transportation services. * * * Standard & Poor's Ratings Services raised its corporate credit rating on Grupo TMM S.A. to 'B-' from 'CCC'. The rating was removed from Creditwatch, where it was placed on Dec. 15, 2004. S&P said the outlook is positive. GULFMARK OFFSHORE: S&P Downgrades Corporate Credit Rating to B+ --------------------------------------------------------------- Standard & Poor's Ratings Services lowered the corporate credit rating on marine services company GulfMark Offshore Inc. to 'B+' from 'BB-'. At the same time, GulfMark's senior unsecured rating was lowered to 'B' from 'B+'. Finally, the outlook was revised to stable from negative. As of June 30, 2006, Houston, Texas-based GulfMark had about $241 million of debt. "The rating actions reflect lower-than-expected deleveraging during the past year, combined with expectations for limited debt repayment over the next 12 to 18 months, as GulfMark must fund elevated capital expense levels related to new vessel construction during 2007," said Standard & Poor's credit analyst Paul B. Harvey. "Despite the anticipated strong near-term market conditions, the debt funding needed for new vessel deliveries during 2007, a lack of contracts on the new vessels, as well as limited contracted cash flows beyond 2007, raise concerns that market conditions could sour at a time of elevated debt levels and contract renewals," he continued. The stable outlook reflects expectations for continued, solid near-term market conditions and modest debt repayment in advance of 2007 spending plans. If GulfMark continues to improve operating performance and exhibits a greater degree of financial discipline with regard to its newbuild programs, the ratings have the potential to improve over the medium term. However, if debt levels fail to improve over the medium term and aggressive growth is pursued to the detriment of financial strength, ratings could be lowered. HEMOSOL CORP: Sponsor Waives Condition Under Plan Sponsorship Deal ------------------------------------------------------------------ The Plan Sponsor of the Plan Sponsorship Agreement entered into between Hemosol Corp. and PricewaterhouseCoopers Inc., waived the condition contained in the agreement that required it to enter into satisfactory arrangements with ProMetic Bioscience Ltd. for the utilization of all ProMetic intellectual property, processes and know-how subject to the license agreement between ProMetic and Hemosol. The Plan Sponsor is the interim receiver of the assets, property and undertaking of Hemosol Corp. and its affiliate Hemosol LP. The agreement remains conditional upon a number of other conditions, including obtaining all approvals necessary to give effect to the transactions contemplated under the Plan Sponsorship Agreement. This also includes a plan of arrangement under the OBCA, which, if implemented, will result in a substantial dilution of the equity of Hemosol held by the shareholders existing at the time of implementation. About Hemosol Corp. Hemosol Corp. (NASDAQ: HMSLQ, TSX: HML) -- http://www.hemosol.com/ -- is an integrated biopharmaceutical developer and manufacturer of biologics, particularly blood-related protein based therapeutics. Information on Hemosol's restructuring is available at http://www.pwc.com/ca/eng/about/svcs/brs/hemosol.html Hemosol Corp and Hemosol LP filed a Notice of Intention to Make a Proposal Pursuant to section 50.4 (1) of the Bankruptcy and Insolvency Act on Nov. 24, 2005. The Company had defaulted in the payment of interest under its $20 million credit facility. Hemosol said that it would require additional capital to continue as a going concern and is in discussions with its secured creditors with respect to its current financial position. On Dec. 5, 2005, PricewaterhouseCoopers Inc. was appointed interim receiver of the Companies. HILLMAN COS: Moody's Puts LGD2 Rating on $275MM Sr. Sec. Loans -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency confirmed its B2 Corporate Family Rating for The Hillman Companies, Inc. The rating agency upgraded to Ba3 its B2 rating on the Company's $40 million senior secured revolver; and also to Ba3 its B2 rating on the Company's $235 million secured term loan. Additionally, Moody's assigned its LGD2 rating to the company's $40 million senior secured revolver and $235 million senior secured term loan, suggesting noteholders will experience a 23% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). The Hillman Companies, Inc., manufactures key making equipment and distributes key blank, fasteners, signage and other small hardware components. The Company sells and markets to hardware stores, home centers and mass merchants in the United States, Canada, Mexico and South America. HOST HOTELS: Fitch Rates Pref. Stock at B+ With Stable Outlook -------------------------------------------------------------- Fitch Ratings assigned an Issuer Default Rating of 'BB' to Host Hotels & Resorts, Inc. In addition, Fitch assigned a 'BB' rating to all series of unsecured debt issued by Host Marriott LP, a 'BB' rating to the company's unsecured credit facility, and a 'B+' rating to Host's preferred stock. The Rating Outlook is Stable. The ratings reflect Host's geographically diverse and high quality portfolio of hotel properties with the company's recent Starwood acquisition particularly enhancing these attributes. Host has shown the ability to maintain solid coverage and leverage metrics and has considerably improved operating performance in recent quarters as same-store REVPAR has experienced strong improvements. For the quarter ended June 30, 2006, HST had solid income metrics with a 3.3x EBITDA coverage of interest and a 2.4x fixed charge coverage ratio. HST also sustained manageable debt levels as debt to undepreciated book capital was 40.2% and debt plus preferred stock to undepreciated book capital was 40.9%. Similarly, as measured on a Debt to EBITDA basis, Host's leverage was 4.2x for the most recent quarter, which also compares favorably to its hotel company peers. In addition, HST has continued to employ a varied capital structure and has demonstrated its ability to repeatedly access the capital markets through unsecured note, preferred stock, and equity offerings as well as mortgage financings over the last several years. Moreover, the company exhibits further financial flexibility through its $575 million unsecured credit facility, which was fully available as of June 30, 2006, as well as by possessing substantial unencumbered assets, which was specifically improved with the recent Starwood transaction. The company has fairly solid geographic and property type (within different hotel categories and brands) asset diversification with 129 properties in 25 states. The ratings are balanced by HST's sensitivity to economic cycles with its performance being closely correlated to GDP growth. In addition, the transient nature of the lodging industry without the existence of long-term contracts presents more inherent risk than in other real estate segments; however, the company derives approximately 40% of its revenue from group business that appears to have consistent reliability, so this risk is mitigated to some degree. Fitch acknowledges the recent Starwood acquisition is a significant undertaking for the company, although it appears to have experienced a smooth transition and have contributed immediate positive operating results. While Host has shown recent adequate coverage and leverage metrics, these figures are significantly higher than what it had achieved in the 2002-2004 time period, thus demonstrating the potential volatility of coverage and leverage metrics in the hotel sector and prompting marginal concern about the sustainability of higher figures prospectively. Finally, as of Dec. 31, 2005, the company had sufficient unencumbered asset coverage of unsecured debt (estimated at 1.5x), based on the company's filings and the extent to which its line of credit was drawn. This figure appears to have improved appreciably to approximately 2.1x at the end of the second quarter with the acquisition of the predominantly unencumbered Starwood portfolio. Headquartered in Bethesda, Maryland, Host Hotels & Resorts, Inc. is an $11.6 billion (total assets as of June 30, 2006) owner of various segments and brands with the hotel property market. At the end of the second quarter 2006, the portfolio consisted of 129 properties containing approximately 67,000 rooms located in 25 states. IMC INVESTMENT: Court Okays J. Eisch & Associates as Accountant --------------------------------------------------------------- The Honorable Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas in Dallas authorized IMC Investment Properties, Inc., to employ J. Eisch & Associates, P.C., as its accountant. J. Eisch & Associates will: (a) prepare federal income tax returns on Form 1120S with supporting schedules for the years 2004 and 2005; (b) perform any bookkeeping necessary for preparation of the income tax returns; and, (c) provide consulting services with respect to accounting and tax matters. Jan Eisch, the president of J. Eisch & Associates, P.C., disclosed her firm's hourly rates: Professional Hourly Rate ------------ ----------- Jan Eisch $185 Ted Tomerlin $185 Clerical Assistant $35 Ms. Eisch assures the Court that her Firm does not hold nor represent any interest adverse to the Debtor in the matters upon which the Firm is to be engaged. Headquartered Dallas, Texas, IMC Investment Properties, Inc., filed for chapter 11 protection on July 3, 2006 (Bankr. N.D. Tex. Case No. 06-32754). Edwin Paul Keiffer, Esq., and Keith Miles Aurzada, Esq., at Hance Scarborough Wright Ginsberg and Brusilow, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. INEX PHARMA: Shareholders Approve Spin Out of Tekmira Pharma ------------------------------------------------------------ Shareholders of Inex Pharmaceuticals Corporation approved the Plan of Arrangement to spin-out all of the company's technology, products, cash and partnerships into a new company, Tekmira Pharmaceuticals Corporation. The shareholders voted 99.3% in favor of the spin-out. The shareholders also approved an amendment to the INEX stock option plan, which will be adopted as the Tekmira stock option plan on the completion of the spin-out. Timothy M. Ruane, President and Chief Executive Officer of INEX, said the shareholder vote is a strong endorsement of the spin-out of Tekmira to build on INEX's past accomplishments. "Tekmira will take advantage of the recent successes at INEX including the signing of two significant partnerships and the development of a promising oligonucleotide drug candidate." Closing of the transaction is now subject to certain regulatory and court approvals, including transferring an ongoing legal dispute between INEX and Protiva Biotherapeutics, Inc. from INEX to Tekmira. The dispute with Protiva relates to rights of certain drug delivery technology for the delivery of small interfering RNA (siRNA), a new class of oligonucleotide drugs. As part of contractual agreements that created Protiva in 2001, INEX retained all rights to the delivery of oligonucleotides, including siRNA. The spin-out of Tekmira is dependent on approvals by the court to transfer the litigation from INEX to Tekmira. INEX believes these court hearings will take place before the end of October. The completion of the spin-out of Tekmira will allow INEX, having no pharmaceutical assets, to complete a financing with an investor group led by Sheldon Reid, a co-founder of Energy Capitol Resources Ltd. The Investor Group will invest up to $5.6 million in INEX by way of convertible debentures. Upon conversion of the debenture following the completion of the reorganization, the Investor Group will hold 100% of non-voting shares in INEX and 80% of the total number of shares outstanding. As a result, current INEX common shareholders will own 20% of the equity of INEX and 100% of the Tekmira shares. The Investor Group plans to raise additional capital and acquire a new business for INEX. The money received by INEX as part of the corporate reorganization will be paid to the previous holders of INEX's convertible debt as per the note purchase and settlement agreement announced June 20, 2006. Ruane added, "We are confident that we will be successful in having the ongoing legal dispute with Protiva transferred from INEX to Tekmira and we aim to close the transaction as soon as possible following the court decisions." About INEX Pharma Based in Vancouver, Canada, Inex Pharmaceuticals Corporation (NASDAQ: HNAB) (TSX: IEX) -- http://www.inexpharma.com/-- is a biopharmaceutical company developing and commercializing proprietary drugs and drug delivery systems to improve the treatment of cancer. * * * At June 30, 2006, the Company's balance sheet showed a stockholders' deficit of CDN$3,878,468, compared with a deficit of CDN$21,478,441 at Dec. 31, 2005. INLAND EMPIRE: Case Summary & Four Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Inland Empire Developments Inc 600 Ferrari Lane West Covina, CA 91791 Bankruptcy Case No.: 06-14394 Type of Business: Virginia-Coast Hwy Development, which also owns the same property as the Debtor, filed for chapter 11 protection on Oct. 28, 2005 (Bankr. C.D. Calif. Case No. 05-50024). Chapter 11 Petition Date: September 12, 2006 Court: Central District Of California (Los Angeles) Judge: Ernest M. Robles Debtor's Counsel: Robert P. Goe, Esq. Goe & Forsythe LLP 660 Newport Center Drive, Suite 320 Newport Beach, CA 92660 Tel: (949) 467-3780 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Orange County Tax Collector Third Party Debt $3,045 Treasurer-Tax Collector 12 Civic Center Plaza Santa Ana, CA 92701 O.C. Treasurer/Tax Collector Third Party Debt $1,061 12 Civic Center Plaza Room G58 P.O. Box 1980 Santa Ana, CA 92702 O.C. Treasurer/Tax Collector Third Party Debt $366 12 Civic Center Plaza Room G58 P.O. Box 1980 Santa Ana, CA 92702 O.C. Treasurer/Tax Collector Third Party Debt $37 12 Civic Center Plaza Room G58 P.O. Box 1980 Santa Ana, CA 92702 INTERACTIVE HEALTH: Moody's Assigns LGD4 Rating to $100M Sr. Notes ------------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. rental company sector, the rating agency confirmed its Caa1 Corporate Family Rating for Interactive Health and downgraded its Caa1 rating on the company's $100 million senior discount notes to Caa2. Additionally, Moody's assigned an LGD4 rating to those bonds, suggesting noteholders will experience a 63% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Interactive Health -- http://www.interhealth.com/-- is the U.S. market leader of upscale robotic massage products. The Company delivers high-quality robotic massage products, zero gravity chairs and other massage products. Interactive Health(R) sells products to various specialty retailers as well as fine furniture stores across the country, in addition to international retailers and distributors in more than 28 countries worldwide. Interactive Health owns an exclusive multi-patent robotic massage system called Human Touch Technology and sells various products under 2 brands: Human Touch and iJoy(TM). INTERMEC INC: Fitch Affirms Double-B Ratings With Stable Outlook ---------------------------------------------------------------- Fitch affirmed Intermec, Inc.'s ratings: -- Issuer Default Rating 'BB-' -- Secured bank facility 'BB+' -- Senior unsecured debt 'BB-' The Rating Outlook is Stable. The ratings reflect Intermec's: -- strong credit protection measures driven by limited outstanding debt and solid operating performance; -- potential for earnings growth and margin expansion arising from the monetization of its radio frequency identification patent portfolio through its Rapid Start License Program, despite slower-than-anticipated industry rollouts to date of RFID products based on Gen 2 standards; and -- broad product and patent portfolios, which Fitch believes should enable Intermec to capitalize on the solid market growth for Automated Information and Data Collection products and services, especially RFID. Fitch's rating concerns consist of: -- strong competition from traditional bar code companies and new entrants, which include larger, better capitalized companies intent on capitalizing on the expected strong growth of the AIDC market; -- the extent to which the transition to RFID could potentially cannibalize Intermec's existing bar code business; -- risks of rapid technological change in the AIDC industry as RFID standards evolve or alternate technologies emerge, both of which are mitigated by Intermec's significant product and patent portfolios, supply chain expertise cultivated through years of bar code technology deployments and ability to leverage existing customer relationships. As a result of solid operating performance and minor debt reduction in the past year, leverage (total debt/operating EBITDA), excluding volatile intellectual property settlements, declined to 1.4x for the latest 12 months ended July 2, 2006 from 1.8x in the corresponding year-ago period. Interest coverage (operating EBITDA/gross interest expense), excluding IP settlements, improved to 8x in the LTM period from 4.1x in the corresponding year-ago period. Fitch expects a slight improvement in these metrics near-term due to continued operating profit growth rather than debt reduction since Fitch believes Intermec is unlikely to call its last remaining debt issue prior to maturity on March 15, 2008. Intermec's liquidity at July 2, 2006, consisted of approximately $323 million of cash and cash equivalents and a $50 million asset- based revolving credit facility that expires September 2007. As of July 2, 2006, no borrowings were outstanding under the facility, but Intermec had borrowing capacity of only $18.2 million due to outstanding letters of credit. In addition, Fitch estimates Intermec generated free cash flow of approximately $45 million for the LTM ended July 2, 2006, excluding non-recurring cash flow attributable to discontinued operations, IP settlements and RSLP origination fees, compared with nearly $28 million in 2005. Lastly, Intermec has $8.2 million of assets, primarily excess real estate, available for sale. Fitch believes Intermec has more than sufficient liquidity and financial flexibility to meet operational requirements and satisfy its remaining $100 million debt maturity in March 2008. As of July 2, 2006, total debt was $100 million, down slightly from $108.5 million as of July 3, 2005. Intermec redeemed an $8.5 million industrial revenue bond upon maturity in July 2005, reducing total debt to $100 million. Intermec's sole remaining outstanding debt issue, consisting of $100 million of 7% senior unsecured notes, matures on March 15, 2008. INTERSTATE BAKERIES: Can Enter Into Intercompany Tolling Pact ------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri authorized Interstate Bakeries Corporation and its debtor- affiliates 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. As reported in the Troubled Company Reporter on Sept. 13, 2006, the Debtors have undertaken an analysis of certain potential actions involving third parties, in anticipation the Sept. 22, 2006, deadline for them to pursue certain actions pursuant to Sections 108 and 546 of the Bankruptcy Code. The Debtors, however, 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, told 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 said. Mr. Hoffman stated 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. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Can Abandon Actions Filed Prior to Sept. 22 ---------------------------------------------------------------- The Honorable Jerry W. Venters of the U.S. Bankruptcy Court for the Western District of Missouri authorizes Interstate Bakeries Corporation and its debtor-affiliates to abandon: -- all Potential Actions not covered by a Tolling Agreement entered, or an Adversary Action filed, before September 22, 2006; and -- any particular Potential Actions if no written objections are filed. For procedural purposes only, the Court authorizes the Debtors to file a single Complaint. Judge Venters extends the deadline for the Debtors to commence service of process on all defendants identified in all complaints they may file until the earlier of: -- December 31, 2007; or -- 90 days after the effective date of any confirmed plan of reorganization. If the Debtors commence a complaint against the Prepetition Lenders or JPMorgan Chase Bank, as administrative agent and collateral agent for the Prepetition Lenders, the Service Deadline will be the earliest of: -- December 31, 2007; -- 90 days after the Effective Date; or -- 30 days after the Debtors' receipt of a written demand from the Prepetition Agent after Jan. 31, 2007. Three Defendants American Sugar Refining, Inc., Okeelanta Corporation and Golden Flake Snack Foods, Inc., asked the Court to deny the Debtors' request. The Debtors previously asserted that the three Entities have received preferential transfers: Defendant Transfer --------- ---------- American Sugar Refining, Inc. $4,548,062 Okeelanta Corporation 588,825 Golden Flake Snack Foods, Inc. 225,063 The Potential Defendants complained that filing one complaint against 377 potential preference defendants violates Rule 7020 of the Federal Rules of Bankruptcy Procedure. On behalf of the Potential Defendants, Jerald S. Enslein, Esq., at Gallas & Schultz, in Kansas City, Missouri, asserted that the transactions complained of by the Debtors are discrete to each potential defendant against whom relief is sought. There is no commonality between the transactions other than that they are all allegedly preferential transfers. Contrary to the Debtors' assertions, Bankruptcy Rule 7004 does not provide a basis for extending the time to commence service of process, Mr. Enslein contended. A court may extend the deadline for service but the purpose of that extension is to allow time to cure a failure in service, not to extend time before service is even attempted, Mr. Enslein explained. The Debtors have had a full opportunity to investigate the merits of potential preference recovery actions during the pendency of their cases, Ms. Enslein noted. The Potential Defendants believe that there are no special circumstances in the Debtors' Chapter 11 cases that warrant the relief the Debtors requested, even if that relief were permissible under the Bankruptcy Code. If the Debtors needed additional time to investigate potential claims under Section 547, the proper procedure is for them to seek the consent of a potential defendant to an extension of the statute of limitations pursuant to a tolling agreement, Mr. Enslein averred. The Potential Defendants also complained that the Debtors did not provide any standard for determining how they will abandon actions, and any remedy for creditors who may object to the abandonment of preference actions. Subsequently, the Potential Defendants withdraw their responses to the Debtors' request, without prejudice. 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. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) IPIX CORP: Ct. Okays Bidding Process & Set Oct. 23 as Bid Deadline ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Virginia, Alexandria Division approved the Bidding Procedures and the bid deadline date of Oct 23, at 4:00 p.m., for receipt of sealed-bid submissions in the liquidation of IPIX Corporation. Additionally, the Court entered an Order that the Debtor may resume limited operations and reactivate its website for its customers, according to Donald F. King, an attorney with Odin Feldman and Pittleman, PC, in Fairfax, Va., and the court- appointed trustee. The Debtor filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code on July 31 and ceased all operations until the new bankruptcy court ruling came down, allowing it to generate revenue again from sources including ipixstore.com. Certain former employees have been temporarily rehired by the Trustee to assist with the efforts. Another development in the liquidation of the Debtor is the uncovering of additional assets since the initial bankruptcy filing, according to Stephen Karbelk, sales agent for the trustee and the auction process. Based in Fairfax, Va., Mr. Karbelk is the Regional President for Tranzon Fox, an affiliate of the national auction organization, Tranzon, LLC. Mr. Karbelk said, "Assets really span the spectrum, from the simple to the complex, which really widens the base of potential bidders. Interested parties may submit bids for individual patents or trademarks, including the IPIX brand, or pursue a much higher investment level and pursue entire business units, such as the Digital Still Photography business, or the entire company." "There are approximately 38 U.S. patents owned by IPIX in addition to other patents registered with the European Union and other nations. IPIX's core technology, as well as seven different trademarks and the IPIX name and logo, are all available for purchase." The asset list includes the Debtor's assets such as the 360 Degrees Digital Immersive Video business line, including the CommandView(TM) product line; the Still Photography business line, including the Host@IPIX self-service management for immersive image distribution; and the Gigapixel Camera patents, an experimental high-resolution camera developed through a federal government research project. Additional patents that were not part of IPIX's core business, including the Omniview Motionless Camera Endoscopy System, as well as a host of others. Bidders are required to sign the Confidentiality Agreement prior to receiving the detailed Asset Information Package CD's, which will include copies of file wraps from the patent and trade offices of U.S. as well as foreign governments, plus other due diligence documentation. In total, there are over 17,000 pages of information in the Asset Information Package. Mr. King believes the final sales tally will exceed the Debtor's $5 million secured lien and expects to identify the highest bidders within a week of the Oct. 23 deadline date, completing the sales and transferring the assets by the end of November of beginning of December. All sales are subject to U.S. Bankruptcy Court's approval. Interested bidders may contact Stephen Karbelk or Meg Vavrick at Tranzon Fox at 703-539-8622 (office). For a complete listing of the available assets, the Bidding Procedures and a Confidentiality Agreement, log on to http://www.tranzon.com/ About Tranzon Fox Tranzon Fox is a full-service real estate auction company and a member company of Tranzon, L.L.C., which is based in Richmond, Va. Founded in 2001, Tranzon L.L.C. has 14 independently owned and operated member auction companies that collectively have more than 20 offices coast-to-coast. The professionals working at Tranzon member companies specialize in providing real estate, business asset and liquidation auction and accelerated marketing services to corporations, financial institutions, trustees, individuals and estates throughout the U.S. About IPIX Corp. Headquartered in Reston, Virginia, IPIX Corporation (NASDAQ:IPIX) -- http://www.ipix.com/-- is a premium provider of immersive imaging products for government and commercial applications. The company combines experience, patented technology and strategic partnerships to deliver visual intelligence solutions worldwide. The company's immersive, 360-degree imaging technology has been used to create high-resolution digital still photography and video products for surveillance, visual documentation and forensic analysis. The Company filed a voluntary petition for relief under Chapter 7 of the U.S. Bankruptcy Code on July 31, 2006, in the U.S. Bankruptcy Court for the Eastern District of Virginia, Alexandria Division (Case No. 06-10856). As a result of the filing, IPIX terminated all business activities after concluding it didn't have sufficient funding to remain solvent and was unsuccessful in securing the additional funding crucial for continued operation. ITC HOMES: Plan Confirmation Hearing Rescheduled to October 10 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona reset to 2:00 p.m., on Oct. 10, 2006, the hearing to consider confirmation of ITC Homes Inc.'s Amended Chapter 11 Plan of Reorganization. The hearing will be held at Courtroom 446, No. 38 South Scott Avenue in Tucson, Arizona. As reported in the Troubled Company Reporter on Sept. 20, 2006, the Court had initially scheduled the hearing on Sept. 26, 2006, 10:00 a.m. Overview of the Plan Under the Amended Plan, the Debtor proposes that holders of Class 3 Claims will retain their liens and security interests and will be paid in accordance with the terms and conditions in the loan documents evidencing the Class 3 creditors' claims. To the extent an allowed secured claim is a claim for real property taxes, the claim will be paid, together with interest, at the statutory rate, as and when the lot to which the lien attached is sold to a third party buyer. Class 4 general unsecured claims are entitled to deferred pro rata payments, together with interest from and after the effective date of the Plan, at the rate of 5% per annum, over a period not to exceed six months. The secured claims of First National Bank of Arizona -- the Debtor's only primary secured lender -- will be in paid in full and in cash, in accordance with the loan and security documents evidencing the Bank's claims as modified pursuant to the Cash Collateral Stipulation, and except that: (i) for so long as the Debtor will not be in default under the Cash Collateral Stipulation, as modified by the Plan, FNBA will not be entitled to receive or retain any claim for accrued interest in excess of the non-default rate stated in the FNBA loan and security documents; and (ii) notwithstanding anything contained in the Cash Collateral Stipulation to the contrary, and provided the Debtor will not be in default, the date on which the claims will be paid in full will be a date that is not more than 18 months following the effective date of the Plan. M&S Unlimited LLC's general unsecured insider claim will be paid without interest only after claims in classes 1, 2, 4 and 5 have been paid in full, while M&S and its owners Moshe and Susie Gedalia's contingent and unliquidated insider claims under an FNBA loan guarantee will not receive anything under the Plan. Existing shareholders of the Debtor will not receive any distribution on account of their interests unless and until all sums due all claims in other classes are paid in full pursuant to the Plan. The Debtor explains that because the Plan provides for a 100% repayment, and because there is no need for infusion of additional capital in order to implement it, no new capital is necessary or required to be contributed by the exiting interest holder under the Plan for the equity holders to retain their interest in the Debtor under the Plan. Vail, Arizona-based ITC Homes, Inc. -- http://www.itchomesinc.net/ -- develops residential real estates. The Company filed for chapter 11 protection on Jan. 26, 2006 (Bankr. D. Ariz. Case No. 06-00053). Scott D. Gibson, Esq., at Gibson, Nakamura & Decker, PLLC, represents the Debtor. 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 of $10 million to $50 million. IVOICE INC: Posts $2.3 Mil. Net Loss in Quarter Ended June 30 ------------------------------------------------------------- iVoice Inc. incurred a $2,351,159 net loss for the three months ended June 30, 2006, as compared to the $341,893 net loss for the three months ended June 30, 2005. Total sales for the three months ended June 30, 2006, and 2005 were $50,924 and $8,749, respectively. The sales in 2006 represent initial product sales of the Company's Acid-All product that was introduced in March and is being promoted by its subsidiary, Thomas Pharmaceuticals. Upon creation of the three wholly owned subsidiaries, iVoice Technology, Inc., Deep Field Technologies, Inc. and SpeechSwitch, Inc. in 2004, the Company allocated all the sales and expenses of the business to these three subsidiaries. With the Spin-off of these subsidiaries on Aug. 4, 2005, the Company reclassified the accounts of the subsidiaries on the financial statements to reflect the reclassification of these operations to below the line as discontinued operations. In addition, the Company acquired Thomas Pharmaceuticals, which is a start-up company with limited operations, in January 2006. For these reasons, the Company said the results of operations had minimal activity in 2005 which makes the comparison to 2006 not meaningful. At June 30, 2006, the Company's balance sheet showed $12,712,029 in total assets, $9,632,545 in total liabilities and $3,079,484 in total stockholders' equity. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12b5 Going Concern Doubt Bagell, Josephs, Levine & Company, LLC, in Gibbsboro, New Jersey, raised substantial doubt about iVoice Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's substantial accumulated deficits. iVoice, Inc. (OTCB: IVOC) -- http://www.ivoice.com/-- designs, manufactures, and markets innovative speech-enabled applications and computer telephony communications systems. JEANTEX GROUP: Second Quarter 2006 Net Loss Decreases to $45,676 ---------------------------------------------------------------- Jeantex Group, Inc., fka Lexor Holdings Inc.'s net loss for the three months ended June 30, 2006, decreased to $45,676 from a $1,501,519 net loss for the three months ended June 30, 2005. Sales for the current quarter rose to $589,661 from $0 sales for the same period last year. The company's balance sheet at June 30, 2006, showed strained liquidity with $709,305 in total current assets and $1,102,086 in total current liabilities. As of June 30, 2006, the company had total assets of $6,832,714, total liabilities of $1,102,086, and total stockholders' equity of $5,730,628. Full-text copies of the company's financial statements for the three months ended June 30, 2006, are available for free at: http://researcharchives.com/t/s?12a3 Based in Huntington Beach, California, Jeantex Group, Inc. -- http://www.jeantexgroup.com/-- designs, develops, manufactures, and markets consumer products for the apparel markets worldwide. The Company is a majority owner of Yves Castaldi Corp., which designs high end apparel under the 'Just Yves,' "I Generation,' and 'Instinct Yves' brands and also manufactures and markets new lines of jeans, T- Shirts, and accessories under the "Bone People" trademark. The Company has design and manufacturing facilities in Los Angeles. KKR FINANCIAL: Moody's Rates $18 Mil. Class F Secured Notes at B3 ----------------------------------------------------------------- Moody's Investors Service has assigned KKR Financial CLO 2006-1, Ltd. ratings of: * Aaa to the $334,000,000 Class A-1 Senior Secured Floating Rate Notes Due 2018, * Aaa to the $207,000,000 Class A-2a Senior Secured Floating Rate Notes Due 2018, * Aa1 to the $69,000,000 Class A-2b Senior Secured Floating Rate Notes Due 2018, * Aa2 to the $43,000,000 Class B Senior Secured Floating Rate Notes Due 2018, * A2 to the $87,000,000 Class C Deferrable Mezzanine Secured Floating Rate Notes Due 2018, * Baa3 to the $67,000,000 Class D Deferrable Mezzanine Secured Floating Rate Notes Due 2018, * Ba3 to the $48,000,000 Class E Deferrable Mezzanine Secured Floating Rate Notes Due 2018, and, * B3 to the $18,000,000 Class F Deferrable Mezzanine Secured Floating Rate Notes Due 2018. The Issuer has also issued the $48,000,000 Class G Deferrable Junior Secured Floating Rate Notes Due 2018, the $48,000,000 Class H Deferrable Junior Secured Floating Rate Notes Due 2018, and the $48,000,000 Subordinated Notes Due 2018, none of which Moody's has publicly rated. According to Moody's, each note's rating reflects the ultimate return to an investor of principal and interest, as provided by such note's governing documents, and is based primarily on the expected loss posed to investors relative to the promise of receiving the present value of such payments. Moody's also analyzed the risk of diminishment of cash flows from the underlying collateral portfolio -- which consists primarily of speculative-grade senior secured loans - due to defaults, the characteristics of these assets, and the safety of the transaction's structure. This cash flow CLO is managed by KKR Financial Advisors II, LLC. KNOLL INC: Moody's Assigns LGD2 Ratings to $450 Mil. Senior Loans ----------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the for the U.S. Consumer Products, Beverage, Toy, Natural Product Processors, Packaged Food Processors and Agricultural Cooperative sectors, the rating agency assigned its B1 Corporate Family Rating for Knoll Inc., and upgraded its Ba3 rating on the company's $200 million senior secured revolver and $250 million senior secured term loan to Ba2. Additionally, Moody's assigned an LGD2 rating to both loans, suggesting noteholders will experience a 27% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in East Greenville, Pennsylvania, Knoll Inc., (NYSE:KNL) designs and manufactures branded office furniture products and textiles, serves clients worldwide. It distributes its products through a network of more than 300 dealerships and 100 showrooms and regional offices. The Company operates four manufacturing sites in North America: East Greenville, Pennsylvania; Grand Rapids and Muskegon, Michigan; and Toronto, Ontario. In addition, it has plants in Foligno and Graffignana, Italy. KUSHNER-LOCKE: Hires Hacker Douglas to Perform Library Valuation ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California gave The Kushner-Locke Company and eight of its debtor-affiliates permission to employ Hacker Douglas & Co. LLP. The firm will perform valuation of the Debtors' film and library for use in connection with the confirmation of the Debtors' chapter 11 plan. The firm asserts that it will not be responsible for: i) appearances before the Bankruptcy Court and the U.S. Trustee; ii) litigation in Bankruptcy Court with respect to matters that are primarily disputes involving issues of bankruptcy law; and iii) the provision of legal advice with the bankruptcy field. The firm further tells the Court that it will not devote its time to form professional opinions. Wendy W. Mills, CPA, a member of the firm, will bill $275 per hour for this engagement. James R. Perry will also be rendering additional services at $350 per hour. Ms. Mills discloses that the cost of the valuation will not exceed $15,000. Ms. Mills assures the Court that the 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 Court. Ms. Mills can be reached at: Wendy W. Mills, CPA Hacker, Douglas & Company LLP 1900 Avenue of the Stars, Suite 1850 Los Angeles, CA 90067 Tel: (310) 553-6588 Fax: (310) 553-7430 http://www.filmaudit.com Headquartered in Los Angeles, California, The Kushner-Locke Company is a low-budget movie production studio. The Company, along with its debtor-affiliates filed for chapter 11 protection on Nov. 21, 2001 (Bankr. C.D. Calif. Case No. 01-44828). Charles D. Axelrod, Esq., at Stutman, Treister & Glatt, P.C., and Mara Morner-Ritt, Esq., in Santa Monica, Calif., represent the Debtors in their restructuring efforts. L-3 COMMUNICATIONS: Fitch Affirms Low-B Ratings With Neg. Outlook ----------------------------------------------------------------- Fitch affirmed the ratings of L-3 Communications Holdings, Inc. and its wholly-owned subsidiary, L-3 Communications Corporation: L-3 Communications Holdings, Inc.: -- Issuer Default Rating 'BB+' -- Contingent convertible notes 'BB' L-3 Communications Corporation: -- Issuer Default Rating 'BB+' -- Senior unsecured debt 'BBB-' -- Senior subordinated debt 'BB' The Rating Outlook is Negative. Approximately $4.7 billion of debt is affected by the ratings. The ratings reflect: * continued high levels of defense spending; * strong free cash flow (cash from operations less capital expenditures less dividends); * strong organic growth; * an ability to increase operating income at acquired companies; and * expected growth in homeland security spending. The ratings also consider LLL's diversification within the defense and homeland security arenas, and the alignment between LLL's products and services and expected Department's of Defense and Homeland Security needs. Concerns focus on: * the potential for additional debt-funded acquisitions; * potential changes in the DoD budget going forward; and * outstanding legal issues. An additional concern is management succession as a result of the passing of founding Chairman and CEO Frank Lanza in June, but LLL continues to be supported by a deep management team and Fitch does not expect the company's strategy to change significantly when a new CEO is named. Fitch's Negative Outlook reflects LLL's low credit metrics for the rating category combined with the potential for metrics to remain low given LLL's acquisition strategy, which Fitch expects will not be supported by equity issuance in the near-term. Also supporting the Negative Outlook is a potential $126 million litigation payment next year and LLL's willingness to continue making large percentage increases in dividends -- 50% increase this year, but only an approximately $30 million increase to about $92 million in dividends projected for 2006. The ratings and the Outlook do, however, incorporate small-to- medium sized acquisitions and moderate dividend increases through 2007 without the issuance of equity High levels of U.S. defense spending continue to support LLL's ratings. The final fiscal 2007 DoD budget is expected to be largely in line with the president's request given only minor changes approved by the House and the Senate. The legislation is currently in conference so changes are still possible. The president's request of a 6.9% increase in modernization (procurement plus research, development, test and evaluation, which is the most important part of the budget for defense contractors, exceeded Fitch's expectations. Fitch continues to have concerns regarding future budgetary constraints and/or shifts within the defense budget. Large platforms are obvious targets for stretching production and/or reducing quantities ordered. As LLL is not a prime contractor for large platforms, its exposure is less than that of the large primes. In addition, LLL components are often used on both existing platforms and replacement platforms, so LLL normally realizes upgrade work on existing platforms when replacement platforms are delayed or cancelled. Fitch also believes that LLL's growing portfolio of services is in line with the DoD's outsourcing goals and its products are also in line with DoD objectives, as validated by management's expected organic growth at the high end of the 8-10% range in 2006 after achieving 11.6% in 2005. LLL's diverse contract portfolio, with approximately 1,500 contracts exceeding one million dollars in value and none greater than 4.5% of revenues, minimizes the impact of losing any given contract. The loss of revenues that could result from an end to the conflicts in Iraq and Afghanistan is also a concern, but the impact would not be immediate as Fitch expects that resetting equipment to combat status could take up to four years. This lag should allow LLL to adjust to changes in resultant funding. Fitch also believes that some of the funding for these conflicts may be shifted to DHS, where LLL is well-positioned. LLL has made approximately $1 billion in acquisitions since the TTN acquisition, when Fitch initially revised the Rating Outlook to Negative. This level of acquisition spending is more than Fitch had anticipated at the time of the outlook revision, but free cash flow, even with the approximately $30 million increase in dividends, has also exceeded Fitch's expectations. As such, LLL issued only a minimal amount of debt to fund the acquisitions. There have not been any sizable acquisitions announced since Mr. Lanza's passing, but during its second quarter earnings call in July management indicated that it was looking at two potential transactions in the $500-800 million range as well as smaller ones. Should either of these large transactions occur, Fitch will review the ratings at that time. LLL faces several outstanding legal issues which by themselves are not likely to trigger a ratings action, but could be a factor if further debt financed acquisitions exceed Fitch's expectations. In May, OSI Systems, Inc. was awarded $126 million for litigation with LLL regarding a contract to sell assets to OSI. LLL has filed a motion seeking summary judgment in its favor and barring that will appeal the verdict. Should LLL be unsuccessful, it does not expect to pay the judgment before 2007. OSI is also seeking pre-judgment interest and the transfer of certain businesses to OSI. The former TTN is under investigation by the General Services Administration and the Department of Justice regarding billing rates and information technology services, respectively. Another LLL subsidiary remains under criminal investigation by the Army related to manufacturing deficiencies of a component supplied by a vendor and the subsidiary's actions when it became aware of the potential problem. LLL is cooperating fully with these investigations and Fitch does not expect the outcomes to have a material impact on the firm. Another subsidiary is in litigation regarding the conversion of 747 aircraft to freighter configuration. Kalitta Air is claiming $235 million in damages. LLL believes that it not only has meritorious defenses but that Kalitta has recovered sufficient compensation from other parties. LLL's insurance carrier has accepted defense in the matter, but has reserved the right to dispute its obligations in the event of an adverse result. In the second quarter, LLL took a $39 million charge as the result of a voluntary review of its historical stock-based compensation award practices and related accounting treatment from the completion of LLL's IPO in May 1998 to July 2003. Fitch does not consider the situation to be material to LLL's ratings at this time, nor does Fitch believe that the situation indicates problems with overall corporate governance. As of June 30, 2006, LLL had a liquidity position of approximately $1 billion, consisting of $184 million of cash and $845 million in revolving credit facilities, net of $68 million in drawings and $87 million utilized for letters of credit. With no long term debt maturities before 2010, LLL's capital structure provides the company with significant financial flexibility. LLL's credit metrics remain weakened by the TTN acquisition. However, despite the $1 billion in subsequent acquisitions, LLL has only modestly increased debt, utilizing free cash flow and cash on hand to fund the bulk of the acquisitions. As such, Fitch believes that pro forma leverage and interest coverage ratios have improved slightly over the last twelve months (pro forma EBITDA is not available). L-3 Communications Corporation leverage ratio (including LLL's contingent convertible notes, which it guarantees pari passu with its own senior subordinated debt) as defined by Debt to EBITDA and adjusted debt to EBITDAR, was 3.5x and 3.8x, respectively, for the twelve months ending Jun 30, 2006, declining from 4.0x and 4.4x, respectively, for full year 2005 and declining from 4.4x and 4.8x, respectively, for the twelve months ending Sept. 30, 2005 (which was the first quarter end that included TTN and its associated debt). Interest coverage (also including debt at LLL), as defined by EBITDA/interest was 5.0x for the twelve months ending June 30, 2006, declining from 5.6x in full year 2005, and 6.0x for the twelve months ending Sept. 30, 2005. LAGUARDIA ASSOCIATES: Unit Wants CBRE to Market JFK Holiday Inn --------------------------------------------------------------- Field Hotel Associates, L.P, a debtor-affiliate of LaGuardia Associates, L.P., asks the Honorable Stephen Raslavich of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania in Philadelphia for authority to expand the employment of CB Richard Ellis to become its real estate broker. FHA wants CBRE to market and sell the JFK Holiday Inn. The Court authorized FHA and LaGuardia on May 23, 2006, to employ CBRE to act as an expert witness in the Debtors' cases. FHA will pay CBRE a 1.25% commission based on the sales price in exchange for CBRE's real estate broker services, except in the event of a sale to SunTrust, as indenture trustee, any Brickman party; Martin Field; Harry Gross or his affiliates; Intercontinental Hotels, the Holiday Inn franchisor; or any agency of the City of New York. In addition, FHA will pay CBRE for costs incurred to market the hotel. CBRE's marketing costs will not be credited against its commissions. Ronald D. Danko, Jr., a senior vice president at CBRE, assures the Court that his firm does not have any interest adverse to the Debtors' estate. Headquartered in King of Prussia, Pennsylvania, LaGuardia Associates, L.P., owns and operates the 358-room Crowne Plaza Hotel located at 104-04 Ditmars Boulevard in East Elmhurst, New York. The Company and its debtor-affiliate filed for chapter 11 protection on October 29, 2004 (Bankr. E.D. Pa. Case No. 04-34514). Martin J. Weis, Esq., at Dilworth Paxon LLP represent the Debtors in their restructuring. Ashely M. Chan, Esq., and Myron Alvin Bloom, Esq., at Hangley Aronchick Segal & Pudlin represent the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it estimated assets and liabilities of $10 to $50 million. LAND VENTURES: Case Summary & Seven Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Land Ventures, Inc. P.O. Box 715 Edinboro, PA 16412 Bankruptcy Case No.: 06-11234 Type of Business: The Debtor filed for chapter 11 protection on January 19, 2001 (Bankr. W.D. Pa. Case No. 01- 10106). Chapter 11 Petition Date: September 29, 2006 Court: Western District of Pennsylvania (Erie) Debtor's Counsel: Gary V. Skiba, Esq. Yochim, Skiba, Moore & Nash 345 West 6th Street Erie, PA 16507 Tel: (814) 454-6345 Fax: (814) 456-6603 Estimated Assets: Unknown Estimated Debts: $1 Million to $10 Million Debtor's Seven Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dianne M. DeCarlo $73,300 106 Terrace Drive Edinboro, PA 16412 Ritchie T. Marsh, Esq. $40,000 300 State Street, Suite 300 Erie, PA 16507 Bette Lou Christensen $30,000 102 Terrace Drive Edinboro, PA 16412 Bill Danylko & Son Excavating, Inc. $16,100 10330 Osborne Road McKean, PA 16426 Mr. and Mrs. Albert R. Porto $12,500 519 Leah Court Gibsonia, PA 15044-4917 David J. Laird, Eng. $6,325 Root, Spitznas & Smiley, Inc. $1,375 LATROBE CONSTRUCTION: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Latrobe Construction Company P.O. Box 150 Latrobe, PA 15650 Bankruptcy Case No.: 06-24337 Chapter 11 Petition Date: September 5, 2006 Court: Western District of Pennsylvania (Pittsburgh) Judge: M. Bruce McCullough Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. LGB INC: Disclosure Statement Hearing to Continue on October 23 --------------------------------------------------------------- The U.S. Bankruptcy Court of the Eastern District of California will convene at 11 a.m. on Oct. 23, 2006, in the U.S. Federal Courthouse, 501 I Street, 7th Floor in Sacramento, California, to consider the adequacy of the 11 Disclosure Statement explaining LGB, Inc.'s Chapter 11 Plan of Reorganization. As reported in the Troubled Company Reporter on Sept. 14, 2006, LGB delivered a disclosure statement explaining its Chapter 11 Plan of Reorganization on Aug. 25, 2006. Treatment of Claims Under the Debtor's Plan, All Administrative Priority Claims will be paid in full. Holders of Allowed Priority Tax Claims, totaling $12,128, will be paid in full by deferred cash payments within five years of its bankruptcy filing date. From and after the effective date, those claims will bear interest at the Federal Funds Target Rate by the Federal Reserve Bank of New York. The balance owed on said claims will be paid in sixteen equal quarterly installments of principal and interest, with the first payment being due on the 15th day of the first full calendar quarter following the effective date. Debtor may, at its sole discretion, pre-pay these tax claims. Class 1 Allowed Claims are comprised of Allowed Claims arising out of one or more joint ventures with the Debtor, which claims are being litigated in the State Court Action. To the extent there are one or more joint ventures by and between the Debtor and the Class 1 Creditors, and such joint ventures constitute an "executory contract," such executory contracts will be assumed under the Plan. The Class 1 Claims, which existed against the Debtor or any interest of the Debtor in real or personal property, will remain unaltered as a result of the confirmation of the Plan. Class 2 Allowed Unsecured Claims will be paid in full plus interest. Claims under Class 2 will be paid pro-rata from the first available net income upon: resolution of the State Court Action, sale or transfer of any interest in the Kalihi Properties, or a combination of both. Holders of interests in the Debtor will get nothing under the plan. A full-text copy of the Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060913214559 Headquartered in Grass Valley, California, LGB, Inc., filed for chapter 11 protection on Apr. 27, 2006 (Bankr. E.D. Calif. Case No. 06-21340). George C. Hollister, Esq., at Hollister Law Corp., represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and estimated debts between $100,000 and $500,000. LONGYEAR HOLDINGS: S&P Withdraws B+ Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B+' corporate credit and senior secured ratings on Longyear Holdings Inc. at the company's request. MADISON PARK: Moody's Rates $22 Million Class D Notes at Ba2 ------------------------------------------------------------ Moody's Investors Service has assigned ratings to notes issued by Madison Park Funding III, Ltd. These are the ratings assigned: * Aaa to $245,000,000 Class A-1 Floating Rate Notes Due 2020; * Aaa to $221,500,000 Class A-2a Floating Rate Notes Due 2020; * Aa1 to $25,000,000 Class A-2b Floating Rate Notes Due 2020; * Aa2 to $34,000,000 Class A-3 Floating Rate Notes Due 2020; * A2 to $40,000,000 Class B Deferrable Floating Rate Notes Due 2020; * Baa2 to $24,500,000 Class C Deferrable Floating Rate Notes Due 2020; * Ba2 to $22,000,000 Class D Deferrable Floating Rate Notes Due 2020; and * Baa3 to the Class Q Combination Notes. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to the Noteholders relative to receiving the present value of such payments. The ratings of the Notes reflect the credit quality of the underlying assets--which consist primarily of senior secured loans-- as well as the credit enhancement for the Notes inherent in the capital structure and the transaction's legal structure. The rating of the Class Q Combination Notes addresses the ultimate return of the Rated Principal Amount and Rated Interest Amount. This cash flow CLO is managed by Credit Suisse Alternative Capital. MAGNOLIA ENERGY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Magnolia Energy L.P. aka Intergen-Forney Power Compnay L.P. 325 Highway 4 West Ashland, MI 38603 Bankruptcy Case No.: 06-11069 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Magnolia Generating Partners I LLC 06-11070 Magnolia Generating Partners II LLC 06-11071 Magnolia Generating Partners III LLC 06-11072 Chapter 11 Petition Date: September 29, 2006 Court: District of Delaware Debtor's Counsel: Mark D. Collins, Esq. Richards Layton & Finger One Rodney Square P.O. Box 551 Wilmington, DE 19899 Tel: (302) 651-7531 Fax: (302) 651-7701 Estimated Assets: More than $100 Million Estimated Debts: More than $100 Million Debtors' Consolidated List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ GE International Inc. Services $1,607,965 4200 Wildwood Pkwy. 4-11A-09 Atlanta, GA 30339 Farese, John Booth Services $50,000 P.O. Box 98 Ashland, MS 38603 Eagle Energy Partners I, LP Services $15,000 7904 N. Sam Houston Pkwy. Houston, TX 77064 GE Contractual Services Services $13,288 P.O. Box 643449 Pittsburgh, PA 15264 CCI International Ltd. (USA) Supplier $12,496 P.O. Box 2544 Los Angeles, CA 90084 Sportsman's Landscaping and Services $8,719 Lawn Care 4264 Laws Hill Rd. Waterford, MS 38685 Beta International, Inc. Supplier/Services $5,143 P.O. Box 201421 Houston, TX 77216 Centro, Inc. Supplier $4,495 P.O. Box 1000; Dept. # 532 Memphis, TX 38148 Nexair LLC Supplier/Services $4,331 P.O. Box 125 Memphis, TN 38101 Remote Control, Inc. Services $4,013 Dept. CH 17343 Palatine, IL 60055 Alstom Power, Inc. Services $3,757 P.O. Box 70586 Chicago, IL 60673 Applied Connectors & Supplier/Services $1,621 Controls, Inc. P.O. Box 751697 Memphis, TN 38175 E. Roberts Alley & Assoc., Services $1,500 Inc. 300 10th Avenue South Nashville, TN 37203 Bell South Services $1,457 P.O. Box 105262 Atlanta, GA 30348 Nesco Electrical Supplier $1,402 Distributors P.O. Box 1484 Tupelo, MS 38802 Premier Chemical & Services Supplier $1,395 4664 Jamestown, Suite 405 Baton Rouge, LA 70808 Steam & Process Repairs Services $1,348 2403 South Philippe Avenue Gonzales, LA 70737 AmeriPride Linen & Apparel Services $1,312 Services 805 N. Hook Street Tuscumbia, AL 35674 AT&T Services $1,233 P.O. Box 277019 Atlanta, GA 30384 MSC Industrial Supply Services $1,225 Company Inc. Dept. CH 0075 Palatine, IL 60055 MAIN STREET: Case Summary & Two Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Main Street USA, Inc. 4555 Irlo Bronson Highway Kissimmee, FL 34647 Tel: (407) 396-9024 Bankruptcy Case No.: 06-02582 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- PYC Development One, LLC 06-02583 PYC Development IV, LLC 06-02584 Chapter 11 Petition Date: September 29, 2006 Court: Middle District of Florida (Orlando) Judge: Arthur B. Briskman Debtor's Counsel: R. Scott Shuker, Esq. Gronek & Latham LLP P.O. Box 3353 Orlando, FL 32802 Tel: (407) 481-5800 Fax: (407) 481-5801 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million A. Main Street USA, Inc.'s Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ ASM Development Services Trade Debt $87,700 1030 North Orlando Avenue Suite B Winter Park, FL 32789 B. PYC Development One, LLC's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Casa Nobble, Inc. $48,452 12236 McKinnon Road Windermere, FL 34786 C. PYC Development IV, LLC does not have any creditors who are not insiders. MARSH SUPERMARKETS: Acquisition Cues S&P to Withdraw Ratings ------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'B-' corporate credit and all other ratings on Indianapolis, Indiana-based Marsh Supermarkets Inc. Ratings had been on CreditWatch with developing implications since Nov. 29, 2005. This action follows the announcement that MSH Supermarkets Inc., an affiliate of Sun Capital Partners, had completed the acquisition of Marsh Supermarkets for about $325 million. MEDIACOM BROADBAND: S&P Puts B Rating on $200 Million Sr. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B' rating to $200 million 8.5% senior notes due 2015 to be issued by Mediacom Broadband LLC (BB-/Negative/--) and Mediacom Broadband Corp. The issuers are subsidiaries of Middletown, New York-based cable television operator Mediacom Communications Corp. (Mediacom; BB- /Negative/B-1). Issue proceeds will be used to refinance a portion of a subsidiary credit facility. The notes are rated two notches below the corporate credit ratings to reflect the significant amount of priority obligations, largely represented by the secured bank debt. The notes will be issued under Rule 144A with registration rights and under an indenture executed on Aug. 30, 2005. The new issue is an add-on to, and pari passu with the $200 million notes earlier sold under that indenture. "Ratings on Mediacom reflect mature revenue growth prospects for video services, competitive pressure from satellite TV providers, the less lucrative characteristics of small-market cable operations, competition from telephone companies for high-speed data services, and high leverage," said Standard & Poor's credit analyst Richard Siderman. Tempering factors include: * Mediacom's position as the still-dominant provider of pay TV services in its small and midsize markets; * solid revenue and cash flow growth from high-speed data customer additions; * growth potential from cable telephony; * limited exposure to telephone company on-network video in the near term because of low housing densities; and * solid liquidity from substantial bank borrowing availability. Ratings List: Mediacom Broadband LLC: Mediacom Broadband Corp.: * $200 million 8.5% senior notes due 2015 rated 'B' MEDICAL TECH: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Medical Technologies, LLC dba Med-Tech of Duncan 919 West Willow Avenue Duncan, OK 73533 Bankruptcy Case No.: 06-12333 Type of Business: The Debtor sells medical supplies. Chapter 11 Petition Date: September 14, 2006 Court: Western District of Oklahoma (Oklahoma City) Judge: Richard L. Bohanon Debtor's Counsel: James H. Bellingham, Esq. Bellingham, Collins & Loyd, P.C. 2050 Oklahoma Tower 210 Park Avenue Oklahoma City, OK 73102 Tel: (405) 235-9371 Fax: (405) 232-1003 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Invacare Credit Corporation Loan $398,828 P.O. BOX 4028 Elyria, OH 44036 Invacare Corporation Loan $162,276 P.O. BOX 4028 Elyria, OH 44036 VGM Financial Services Loan $86,844 1111 West San Marnan Drive Waterloo, IA 50701 Internal Revenue Service 940 & 941 Taxes $35,694 2202 Southwest "A" Avenue Suite B Lawton, OK 73501 Invacare Supply Group Inc Open Account $24,878 P.O. BOX 4028 Elyria, OH 44036 Rossabbott Laboratories Inc Vehicles $13,935 75 Remittance Drive Suite 1310 Chicago, IL 60675-1310 MEDMIRA INC: Completes Draw Down of Cornell Capital's Equity L/C ---------------------------------------------------------------- MedMira Inc. has completed the draw down against its equity line of credit with Cornell Capital Partners, LP, which was announced on Sept. 5, 2006. Under the terms negotiated in the equity line, Cornell has purchased 80,506 common shares from MedMira at an average price of $0.3478 which is 96.5% of the daily volume weighted average price over a 10 day pricing period, beginning on Sept. 6, 2006, and ending on Sept. 19, 2006, for net proceeds of $28,000. The shares issued are not subject to any hold period by the TSX Venture Exchange or other regulatory bodies. First Purchasers of MedMira common shares issued in relation to this draw down notice have certain statutory rights of rescission or damages for a period of 40 days from the settlement date. The terms of the equity line financing, and the rights of First Purchasers are described in more detail in a prospectus dated November 21, 2005 which is available on the Company's web site at http://www.medmira.com/and on SEDAR at http://www.sedar.com/ About MedMira Inc. MedMira Inc. (TSX Venture: MIR, NASDAQ:MMIRF) -- http://www.medmira.com/-- manufactures and markets in vitro flow- through rapid diagnostic tests. MedMira delivers rapid diagnostic solutions to healthcare communities around the globe. Its corporate offices and manufacturing facilities are located in Halifax, Nova Scotia, Canada with a representative office in Guilin, China. * * * At April 30, 2006, MedMira's balance sheet showed a CDN$6,133,000 stockholders' deficit, compared with a CDN$9,805,000 deficit at July 31, 2005. MERIDIAN AUTOMOTIVE: Sells Grand Rapids Property for $675,000 ------------------------------------------------------------- At Meridian Automotive Systems, Inc., and its debtor-affiliates' behest, the Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorizes the sale of real property at 5312 and 5214-5292 Kraft Avenue SE, in Grand Rapids, Michigan, to Theo Mol for $675,000 cash, free and clear of all liens, claims, interests or encumbrances. Any Liens on the Property will transfer and attach to the Net Proceeds of the Sale with the same validity and priority as the Liens had with respect of the Property before to the Sale. The Property consists of 27 acres of vacant land zoned for industrial use and is subject to a prior recorded mortgage by State Street Bank and Trust. The Debtors have never used the Property. The Debtors listed the Property for sale with NAI West Michigan four years ago. In April 2006, the Debtors received a written offer of $750,000 for the Property from Third Coast Development Partners, LLC, but the offer never resulted in a sale. In August 2006, the Debtors received and accepted Mr. Mol's $675,000 offer. Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington, Delaware, tells the Court that the Debtors have not received any other offer or inquiry with respect to the Property. In addition, there have been no objections to the Proposed Sale. 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. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). MICHAEL STORES: Moody's Rates Proposed $3.1 Billion Loans at B2 --------------------------------------------------------------- Moody's Investors Service rated Michael's Stores, Inc.'s: -- proposed $2.4 billion secured term loan of, at B2'; -- proposed $700 million senior note issue at B2; -- proposed $700 million senior subordinated note issue at Caa1; and -- corporate family rating at B2. Moody's applied the Probability of Default and Loss Given Default Rating Methodology to all of the company's long-term ratings. The ratings for the three debts reflect both the overall company probability of default, to which Moody's assigned a PDR of B2, and a loss given default of LGD 3 for the secured term loan, LGD 4 for the senior notes, and LGD 6 for the subordinated notes. Moody's did not rate the proposed $1.0 billion secured revolving credit facility. Proceeds from the new debt, together with incremental equity investment from the new owners Blackstone and Bain, will be used to finance the leveraged buyout of the company for total consideration of about $6.0 billion. The rating outlook is stable. These are the ratings assigned: * Corporate family rating at B2; * Probability-of-default rating at B2; * $2.4 billion senior secured term loan at B2 (LGD 3, 49% LGD rate); * $700 million senior notes at B2 (LGD 4, 57% LGD rate); * $700 million senior subordinated notes at Caa1 (LGD 6, 93% LGD rate); * Speculative Grade Liquidity Ratings of SGL-3. The corporate family rating assignment of B2 reflects the balance of certain qualitative rating drivers that have low investment grade characteristics with important quantitative and qualitative attributes that are solidly non-investment grade. In particular, driving down the rating with Caa attributes are the weak post- transaction credit metrics reflecting high leverage, low fixed charge coverage, and minimal free cash flow. Also constraining the rating with a B characteristic is the company's aggressive financial policy in which forward financial flexibility is being severely diminished for the benefit of pre- transaction shareholders. Partially offsetting these risks are the history of low cyclicality and seasonality for Michael's stores compared to many other specialty retailers, the geographic diversity across the U.S. and Canada, and the strong market position relative to other traditional and non-traditional craft retailers. The Speculative Grade Liquidity Rating of SGL-3 (adequate liquidity) recognizes that cash flows for capital investment are likely to be sizable in comparison with operating cash flow, and that the revolving credit facility will be meaningfully utilized at least for the next four quarters. The stable outlook anticipates that the company will steadily grow revenue and cash flow. The outlook also considers Moody's expectation that the company's policy with respect to uses of discretionary cash flow will be measured, resulting in balance sheet improvement. In addition, Moody's also expects that the company will maintain solid liquidity through moderation of planned growth capital investment if operating results fall below plan. Ratings could eventually move upward if the company continues the historical pattern of consistent sales growth at new and existing stores; if the company achieves a material part of anticipated post-merger operating synergies; and if financial flexibility sustainably strengthens such that EBIT coverage of interest expense approaches 1.5 times, leverage falls toward 6 times, and Free Cash to Debt approaches 5% on a sustainable basis. A permanent decline in revolving credit facility availability, inability to improve comparable store sales and operating margins, or an aggressive financial policy action could cause the ratings to be lowered. Specifically, ratings would to be lowered if operating performance falters such that debt to EBITDA is permanently above 8 times, EBIT to interest expense remains near or below 1 time, or free cash flow to debt continues to be negative. Moody's has applied its new Probability-of-Default and Loss-Given- Default rating methodology to Michael's. Moody's current long- term credit ratings are opinions about expected credit loss which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology disaggregates these two key assessments in long-term ratings. The LGD rating methodology also enhances the consistency in Moody's notching practices across industries and improves the transparency and accuracy of our ratings as our research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% - 9%) to LGD6 (loss anticipated to be 90% - 100%). Michael's Stores, Inc, with headquarters in Irving, Texas, operates the largest chain of craft superstores in North America with 1085 stores located in the U.S. and Canada. Revenue for the twelve months ending July 29, 2006, was $3.7 billion. MIRANT CORP: Board Authorizes $100 Mil. Share Repurchase Program ---------------------------------------------------------------- The Board of Directors of Mirant Corporation has authorized a $100 million share repurchase program. The company intends, from time to time until Sept. 30, 2007, as business conditions warrant, to purchase common stock on the open market or in negotiated transactions. Aug. 21, 2006, marked the expiration of the company's recent "Dutch auction" self tender offer, in which the company repurchased 43,000,000 shares of common stock for an aggregate of approximately $1.23 billion. As of Sept. 8, 2006, Mirant had approximately 257 million shares of common stock (basic) outstanding and approximately $1 billion in cash and short-term investments. Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. * * * Moody's Investors Service downgraded in July 2006 the ratings of Mirant Corporation and its subsidiaries Mirant North America, LLC and Mirant Americas Generation, LLC. The Ba2 rating for Mirant Mid-Atlantic, LLC's secured pass through trust certificates was affirmed. The rating outlook is stable for Mirant, MNA, MAG, and MIRMA. Moody's downgraded Mirant Americas Generation, LLC's Senior Unsecured Regular Bond/Debenture, to B3 from B2. Moody's also downgraded Mirant Corporation's Corporate Family Rating, to B2 from B1, and Speculative Grade Liquidity Rating, to SGL-2 from SGL-1. Mirant North America, LLC's Senior Secured Bank Credit Facility, was also downgraded to B1 from Ba3 and its Senior Unsecured Regular Bond/Debenture, to B2 from B1. Fitch Ratings placed in July 2006 the ratings of Mirant Corp., including the Issuer Default Rating of 'B+', and its subsidiaries on Rating Watch Negative following its announced plans to buy back stock and sell its Philippine and Caribbean assets. Ratings affected are Mirant Corp.'s 'B+' Issuer Default Rating and Mirant Mid-Atlantic LLC's 'B+' Issuer Default Rating and the Pass- through certificates' 'BB+/Recovery Rating RR1'. Fitch also placed Mirant North America, Inc.'s Issuer Default Rating of 'B+', Senior secured bank debt's 'BB/RR1' rating, Senior secured term loan's 'BB/RR1' rating, and Senior unsecured notes' 'BB-/RR1' rating on Rating Watch Negative. Mirant Americas Generation, LLC's Issuer Default Rating of 'B+' and Senior unsecured notes' 'B/RR5' rating was included as well. Standard & Poor's Ratings Services also placed the 'B+' corporate credit ratings on Mirant Corp. and its subsidiaries, Mirant North American LLC, Mirant Americas Generating LLC, and Mirant Mid- Atlantic LLC, on CreditWatch with negative implications. MISSION ENERGY: Improved Liquidity Cues Fitch to Upgrade Ratings ---------------------------------------------------------------- Fitch upgraded and removed from Rating Watch Positive the following ratings for Mission Energy Holding Company and Edison Mission Energy: MEHC: -- Issuer Default Rating to 'BB-' from 'B' EME: -- Issuer Default Rating to 'BB-' from 'B' Midwest Generation, LLC: -- Issuer Default Rating to 'BB' from 'B' Fitch originally placed MEHC from Rating Watch Positive on March 10, 2006. The Rating Outlook is Stable. Approximately $6.7 billion of debt is affected by the rating action. As a consequence of the upgrade of MEHC and its subsidiaries' IDRs to the 'BB' category from 'B', Fitch will no longer publish recovery ratings for MEHC, EME and MWG. Fitch notes that recovery analysis is implicitly reflected in the issuer's individual obligation ratings. Fitch also issued press releases detailing rating actions taken today, Sept. 27, 2006, at MEHC's ultimate parent, Edison International, affiliate Southern California Edison Company and subsidiary Homer City Funding. The IDR upgrades reflect the beneficial effect of lower financing costs and improved liquidity and financial flexibility as a result of MEHC's corporate restructuring and strong cash flow from MEHC's low cost coal-fired generation fleet. Management, under the restructuring, used proceeds from the sale of EME's international assets in the fourth quarter of 2004 and available cash to repay maturing Edison Mission Midwest Holding debt and bridge loan to EME's international asset sale, terminate the Collins leasehold and facilitate a significant capital injection to MWG. EME recently refinanced $1 billion of notes at favorable terms, extending maturities from 2008 ($400 million) and 2011 ($600 million) to 2013 ($500 million) and 2016 ($500 million), respectively. Fitch expects that MEHC will utilize a portion of the $1.6 billion of cash and cash equivalents and short-term investments on its consolidated balance sheet as of June 30, 2006 to redeem its $800 million 13.5% notes due November 2008. Additional liquidity is provided by a $500 million secured credit facility at EME, which was upsized from $98 million. MEHC subsidiary MWG also has a $500 million working capital facility in place to provide liquidity to support collateral needs associated with power sales. Nonetheless, MEHC's debt burden remains high and its coverage ratios and debt measures weak. The increased MEHC, EME and MWG ratings also reflect more favorable post-2004 wholesale power price trends from an investor point-of-view and relatively low-cost, coal-fired generating capacity at MEHC and its indirect operating subsidiaries Midwest Generation LLC and HC. The ratings assume power prices will remain in the mid-$40 per megawatt level or higher on an annual basis in the near-to- intermediate term, on average. While lower sustained near-to- intermediate term power prices cannot be ruled out, Fitch believes that recent, higher power prices and resulting improvement to MEHC cash flows are more likely to persist allowing further debt reduction and improving credit metrics over time. The primary concern for MEHC and its subsidiaries is a sharp and sustained decline in natural gas and wholesale energy prices, which would likely end the companies' financial recovery and lead to future downgrades. In addition to ongoing exposure to commodity price volatility, prospective federal and/or state environmental standards could result in significantly higher capital and operating costs, bringing incremental pressure to bear on MEHC and its subsidiaries' cash flows and creditworthiness. MEHC participated in the recently completed reverse auction conducted in Illinois for default power supply. While MEHC has been named among the successful bidders in the auction, details regarding the auction to supply power for 17-, 29- and 41-month periods have not been released as of this writing. Fitch notes that the Illinois reverse auction resulted in power prices in excess of $60 per megawatt hour. Positively, MEHC recently announced that it entered into a 500 megawatt, three-year bilateral contract to supply on-peak power that requires no collateral posting. As of June 26, 2006, MEHC subsidiaries MWG and HC have hedged approximately 62% and 56% of total expected generation for the remainder of 2006 and calendar year-2007, respectively. The average hedged price for MWG was $48 per megawatt hour for MWG for both the remainder of 2006 and full-year 2007 and $54 per megawatt hour for HC for the remainder of 2006 and $64 for calendar year 2007. After the Illinois auction, the hedge ratio and average price is likely to be higher for MWG. In addition, more than 95% of MWG and HC's coal requirements have been hedged through the end of 2007. MEHC is a wholly-owned intermediate holding company subsidiary of Edison International. Formed in July 2001, MEHC's sole asset is EME common stock. EME, through its operating subsidiaries, leases, owns, develops, acquires, operates and sells the output of independent power facilities located primarily in the U.S. EME's also owns a 144 megawatt (80%) interest in a natural gas- fired plant in Doga, Turkey. Including certain wind projects currently under construction, EME owns or is developing more than 9,400 megawatts of generating capacity in total. Of that amount 9,295 mWs are currently in commercial operation, of which 7,497 mWs (81%) is coal-fired generation located in Illinois and Pennsylvania. MWG and HC are indirect operating subsidiaries of EME that own and control through leaseholds 5,613 and 1,884 mWs of coal-fired generation, respectively. Fitch upgraded and removed these ratings from Rating Watch Positive: MEHC: -- Issuer Default Rating to 'BB-' from 'B' -- Senior secured notes to 'BB-' from 'B-' EME: -- Issuer Default Rating to 'BB-' from 'B' -- Senior unsecured notes to 'BB-' from 'B' MWG: -- Issuer Default Rating to BB from B -- First priority term loan to 'BBB-' from 'BB' -- Second priority secured notes to 'BB+' from 'B+' The Outlook is Stable for all ratings. NAPIER ENVIRONMENTAL: Signs Distribution Agreement for Australia ---------------------------------------------------------------- Napier Environmental Technologies Inc. has signed a multi-year Distribution Agreement with Striptech Pty Ltd. in Australia. Striptech will be supplying the entire country from their headquarters in Queensland and their current 50 distribution points. Striptech is an Australian company established to promote environmentally friendly surface treatment and protection products. They will promote Napier's full range of products through a network of established distribution outlets to heavy industrial, architectural, marine, and aeronautical contractors, governmental and institutional agencies, hardware retailers, paint retailers and janitorial product wholesalers. This is the first Distribution Agreement that has been signed with the focus of expanding the existing business into counter seasonal markets to enable Striptech to fully utilize its personnel and facilities. About Napier Environmental Headquartered in Delta, British Columbia, Napier Environmental Technologies, Inc. (TSX:NIR) -- http://wwwbiowash.com/-- is a Canadian company primarily engaged in the development, manufacture and distribution of a wide range of products utilizing environmentally advanced technology. The product lines include coating removal and wood restoration products for both the industrial/commercial market and the consumer/retail market. Napier is currently operating under the protection of the Canadian Bankruptcy and Insolvency Act. NATIONAL TERRAZZO: Case Summary & Nine Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: National Terrazzo, Inc. 1475 Busch Parkway Buffalo Grove, IL 60089 Bankruptcy Case No.: 06-11292 Chapter 11 Petition Date: September 11, 2006 Court: Northern District of Illinois (Chicago) Debtor's Counsel: Joel A. Schechter, Esq. Law Offices of Joel Schechter 53 West Jackson Boulevard, Suite 1025 Chicago, IL 60604 Tel: (312) 332-0267 Fax: (312) 939-4714 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million Debtor's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Union National Bank $3,349,321 101 East Chicago Street Elgin, IL 60120 Internal Revenue Service Taxes owed $1,500,000 P.O. Box 145566 Cincinnati, OH 45214 Commerce & Industry Insurance $287,823 c/o Lerner & Weiss 1600 Ventura Boulevard Suite 1111 Encino, CA 914362730 Illinois Department of Taxes due and owing $159,000 Employment Security Northern Region 260 East Indian Trail Road Aurora, IL 60505 CGA Investment $63,000 Van Vlissingen & Co. One Overlook Point Lincolnshire, IL 60069 Companion Property & Casualty $52,798 P.O. Box 6000 Columbia, SC 29260 Michael Whelan $33,000 970 Lee Street, #202 Des Plaines, IL 60016 Michael Singer, PC $28,603 300 Dundee Road, Suite 315 Northbrook, IL 60062 Illinois Dept. of Revenue Taxes owed $15,000 Field Compliance District 02 9571 West Harrison Avenue Des Plaines, IL 60016 NAVIGATOR CDO: Moody's Assigns Ba2 Rating to $12.5MM Sec. Notes --------------------------------------------------------------- Moody's reported that it has assigned ratings to seven classes of notes issued by Navigator CDO 2006, Ltd. Moody' Ratings: * Aaa to the U.S. $40,000,000 Class A Floating Rate Senior Secured Revolving Notes Due 2020; * Aaa to the U.S. $265,000,000 Class A Floating Rate Senior Secured Term Notes Due 2020; * A2 to the U.S. $26,000,000 Class B-1 Floating Rate Secured Deferrable Term Notes Due 2020; * A2 to the U.S. $7,000,000 Class B-2 Fixed Rate Secured Deferrable Term Notes Due 2020; * Baa2 to the U.S. $15,500,000 Class C Floating Rate Secured Deferrable Term Notes Due 2020; * Ba2 to the U.S. $12,500,000 Class D Floating Rate Secured Deferrable Term Notes Due 2020; and * A3 to the U.S. $ 10,000,000 Class 1 Combination Notes Due 2020. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to the Noteholders relative to receiving the present value of such payments. The ratings of the Notes reflect the credit quality of the underlying assets as well as the credit enhancement for the Notes inherent in the capital structure and the transaction's legal framework. This cash-flow CLO, whose assets consist primarily of senior secured loans, is managed by GE Asset Management. NBOG BANCORPORATION: Posts $375,367 Net Loss in 2006 2nd Quarter ---------------------------------------------------------------- NBOG Bancorporation, Inc., incurred a $375,367 net loss for the for the three months ended June 30, 2006, up $86,821 or 30% from the $288,546 net loss incurred during the second quarter of 2005. A net loss of $557,176 was incurred for the first half of 2006 as compared with a net loss of $658,443 for the same period in 2005 resulting in an improvement of $101,267 or 15%. Net interest income declined to $338,620 or 21% for the quarter ended June 30, 2006, compared with $430,056 for the quarter ended June 30, 2005, and declined to $667,729 or 27% for the first six months of 2006 compared to the $916,911 that was earned for the first six months of 2005. This decrease was due to a lower volume of loan demand during the last twelve months. In addition, this decrease is part of an ongoing effort by management to seek and reduce classified and criticized loans by payoff or by their exit from the Bank. This decrease was also due to interest foregone on classified loans being placed in a non-earning status. Total non-interest income for the quarter ended June 30, 2006 was $19,669, compared with $19,519 for the quarter ended June 30, 2005, and was $48,932 for the six months ended June 30, 2005, compared with $37,379 for the six months ended June 30, 2005, an increase of $11,553 or 31%. Non-interest income includes service charges on deposit accounts, customer service fees, and mortgage origination fee income. The increase in non-interest income for the first half of 2006 compared with the first half 2005 was mostly due to higher fees assessed for mortgage origination, NSF charges and check cashing services. NBOG's balance sheet at June 30, 2006, showed $37,143,028 in total assets, $34,179,027 in total liabilities and $2,964,001 of stockholders' equity. Total assets decreased $738,270 or 2% from Dec. 31, 2005, to June 30, 2006. One of the major sources of reduction was in net loans, which decreased by $564,584 or 2% over the last six months of 2006. The other major source of reduction was the $785,599 or 9% decrease in investment securities available-for-sale since Dec. 31, 2005. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12ba CFO Resigns On Sept. 21, 2006, Bryan Hendrix informed the Board of NBOG that he intends to resign as Chief Financial Officer and cease employment with NBOG upon the earlier to occur of March 31, 2007 or the completion of the merger with El Banco Financial Corporation. As a result, NBOG will allow Mr. Hendrix's existing employment agreement to expire in accordance with its terms on Oct. 21, 2006. Starting Nov. 1, 2006, Mr. Hendrix will continue part-time employment with NBOG, and will continue as principal executive and financial officer of NBOG pending the completion of the merger with El Banco Financial Corporation, until the Board of Directors hires and appoints new officers. Going Concern Doubt McNair, McLemore, Middlebrooks & Co., LLP, expressed substantial doubt about NBOG Bancorporation's ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditing firm pointed to the Company's failure to comply with the terms of a formal agreement with its primary regulator. In August 2004, as a result of a regulatory examination conducted in April of that year, the Bank entered into a formal agreement with its primary regulator with regard to, among other things, achievement of agreed-upon capital levels, obtaining a permanent President and Senior Lender, obtaining current and satisfactory credit information on all loans over $25,000, and eliminating the basis of criticism of assets criticized. By not meeting these requirements, in addition to losses incurred during the six months ended June 30, 2006 and in prior periods, the bank could be exposed to possible further regulatory actions. About NBOG NBOG Bancorporation, Inc., a bank holding company, owns 100% of the outstanding common stock of The National Bank of Gainesville, which operates in the Gainesville, Georgia, area. NEW RIVER: Court Approves Berger Singerman as Bankruptcy Counsel ---------------------------------------------------------------- The Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida in Fort Lauderdale authorized New River Dry Dock, Inc., to employ James H. Fierberg, Esq., and Berger Singerman, P.A., as its bankruptcy counsel, nunc pro tunc to July 18, 2006. Berger Singerman will: a. give advice to the Debtor with respect to its powers and duties as debtor-in-possession and the continued management of its business; b. advise the Debtor with respect to its responsibilities to comply with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the Court; c. prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the Debtor's case; d. determine the interests of the Debtor in all matters pending before the Bankruptcy Court; and e. represent the Debtor in negotiations with its creditors in the preparation of a plan. Mr. Fierberg, a shareholder at Berger Singerman, P.A., disclosed that the Firm received a $50,000 prepetition retainer from the Debtors. As of the bankruptcy filing, the retainer has a $44,105 balance and will be held in a trust account for the services to be provided by the Firm. Designation Hourly Rate ----------- ----------- Shareholders $410 Attorneys $220 - $450 Associate Attorneys $220 - $325 Legal Assistants & Paralegals $65 - $145 Mr. Fierberg assures the Court that he and the Firm do not have any interest adverse to the Debtor and are disinterested as required by Section 327(a) of the Bankruptcy Code. New River Dry Dock, Inc., filed for chapter 11 protection on July 18, 2006 (Bankr. S.D. Fla. Case No. 06-13274). James H. Fierberg, Esq., at Berger Singerman, P.A., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and its debts between $1 million to $10 million. NEW RIVER: U.S. Trustee Appoints Three-Member Creditors Committee ----------------------------------------------------------------- Felicia S. Turner, the U.S. Trustee for Region 21, appointed three creditors to serve on an Official Committee of Unsecured Creditors in New River Dry Dock, Inc.,'s chapter 11 case: a. Leigh R. Miller Corporate Representative Marina Mile Shipyard, Inc. 5255 North Federal Highway, Third Floor Boca Raton, FL 33487 Tel: (954) 356-9900 Fax: (954) 356-9324 b. Scott Bieber 140 Montrose Avenue South Orange, NJ 07079 Tel: (973) 327-4569 Fax: (973) 327-4569 c. Jeffrey V. Gordon 111 Nathaniel Court Mooresville, NC 28117 Tel: (704) 658-0245 Fax: (704) 658-0247 The Committee selected Bilzin Sumberg Baena Price & Axelrod LLP as its bankruptcy counsel. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. New River Dry Dock, Inc., filed for chapter 11 protection on July 18, 2006 (Bankr. S.D. Fla. Case No. 06-13274). James H. Fierberg, Esq., at Berger Singerman, P.A., represents the Debtor in its restructuring efforts. Mindy A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and its debts between $1 million to $10 million. NEW RIVER: Court Okays Bilzin Sumberg as Panel's Bankr. Counsel --------------------------------------------------------------- The Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida in Fort Lauderdale authorized the Official Committee of Unsecured Creditors appointed in New River Dry Dock, Inc.'s bankruptcy case to retain Bilzin Sumberg Baena Price & Axelrod LLP as its bankruptcy counsel, nunc pro tunc to Aug. 15, 2006. Bilzin Sumberg will: a. provide the Committee with legal advice with respect to its rights, duties, and powers in the Debtor's case; b. assist the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's business, the desirability of the continuance of such business, and any other matter relevant to the case or to the formation of a plan; c. prepare pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; d. participate in the formulation of plan of reorganization and advise the Committee regarding it; e. assist the Committee in considering and requesting the appointment of a trustee or examiner, should that action becomes necessary; f. consult with the Debtor and its counsel and the U.S. Trustee concerning the administration of the Debtor's estate; g. represent the Committee in hearings and other judicial proceedings; and h. perform other legal services as may be required and as deemed to be in the best interest of the Committee in accordance with its powers and duties accorded under the Bankruptcy Code. Papers filed with the Court do not disclose how much the firm will be paid. Mindy A. Mora, Esq., a partner at Bilzin Sumberg Baena Price & Axelrod LLP, assured the Court that the Firm does not hold nor represent any interest adverse to the Committee and is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Mora can be contacted at: Mindy A. Mora, Esq. Bilzin Sumberg Baena Price & Axelrod LLP 2500 Wachovia Financial Center 200 South Biscayne Boulevard Miami, FL 33131 New River Dry Dock, Inc., filed for chapter 11 protection on July 18, 2006 (Bankr. S.D. Fla. Case No. 06-13274). James H. Fierberg, Esq., at Berger Singerman, P.A., represents the Debtor in its restructuring efforts. Mindy A. Mora, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and its debts between $1 million to $10 million. NORTH COVE: Moody's Assigns Ba1 Rating to $11 Mil. Class E Notes ---------------------------------------------------------------- Moody's Investors Service reported that it has assigned these ratings to the notes issued by North Cove CDO III, Ltd.: * Aaa to the $132,000,000 Class A First Priority Senior Secured Floating Rate Notes due March, 2045 * Aa3 to the $74,000,000 Class B Second Priority Senior Secured Floating Rate Notes due March, 2045 * A3 to the $44,000,000 Class C Third Priority Senior Secured Floating Rate Notes due March, 2045 * Baa2 to the $27,000,000 Class D Fourth Priority Senior Secured Floating Rate Notes due March, 2045 * Ba1 to the $11,000,000 Class E Fifth Priority Secured Floating Rate Notes due March, 2045 In addition, Moody's also assigned a rating of Aaa to the Unfunded supersenior tranche. The Moody's ratings of the Notes and the Unfunded supersenior tranche address the ultimate cash receipt of all interest and principal payments required by the transaction's governing documents and are based on the expected loss posed to the holders relative to the promise of their receiving the present value of such payments. The ratings are also based upon the transaction's legal structure and the characteristics of the reference pool, which primarily consists of synthetic exposures to residential motgage-backed securities and commercial mortgage-backed securities. NORTHWEST AIRLINES: Judge Gropper Okays Claims Objection Protocol ----------------------------------------------------------------- The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York grants the Northwest Airlines, Inc., and its debtor-affiliates' request to establish procedures for omnibus objections to proofs of claim and compromising disputed proofs of claims filed their Chapter 11 cases. The Debtors modified the Claims Objection Procedures and the Settlement Procedures to address various parties-in-interests' concerns. The Debtors removed the provision in the proposed claims objection notice requiring claimants to appear at the hearing on the objection. A full-text copy of the Claims Objection Procedures is available free of charge at http://ResearchArchives.com/t/s?124f The Court overrules all unresolved objections except for General Foods Credit Corporation's objection. Judge Gropper rules that the approved Settlement Procedures do not apply to General Foods' claims. As reported in the Troubled Company Reporter on Sept. 1, 2006, the Debtors asked Court to establish procedures for filing omnibus objections to proofs of claim filed in their Chapter 11 cases. The Debtors related that through the Objection Procedures, the they sought to establish a uniform process for the resolution claim objections that will minimize the administrative burdens on the estates and the Court while protecting the due process rights of all parties-in-interest. As reported in the Troubled Company Reporter on Sept. 19, 2006, various parties-in-interest, including airport authorities and aircraft creditors, delivered to the Court their objections to the Debtors' proposed procedures for filing omnibus objections to proofs of claim and settling disputed claims: (a) City of Billings, Montana, owner and operator of Billings Logan International Airport; (b) Sacramento County, a political subdivision of the State of California, and owner and operator of an airport system at Sacramento International Airport; (c) the City and County of San Francisco, owner and operator of an airport system at San Francisco International Airport; (d) Memphis-Shelby County Airport Authority; (e) a consortium of airports, namely, Metropolitan Washington Airports Authority, Lehigh Valley-Northampton Airport Authority, City of Phoenix, Clark County (Las Vegas) Nevada, City of Baton Rouge, Burlington Airport Commission, John Wayne Airport, Tucson Airport Authority, Austin-Bergstrom International Airport, Sarasota-Manatee Airport Authority, Albany International Airport, Metropolitan Airport Authority of Rock Island County, IL, Capital Region Airport Authority (Lansing, MI), Norfolk Airport Authority, Columbus Regional Airport Authority, Port of Portland, Lee County Airport Authority and Kent County Department of Aeronautics (Grand Rapids, MI); (f) General Foods Credit Corporation; (g) the NWA Aircraft Finance Group, a group of parties-in- interest, each a party to one or more financial or leasing transactions with the Debtors pursuant to certain operative agreements, which transactions are secured by a lien or other interest in, or leases of certain aircraft; and (h) certain aircraft creditors, namely, MBIA Insurance Company, Bank of America, Transamerica Aviation LLC and TA Air VII, Goldman Sachs Credit Partners, Credit Industriel et Commercial, DVB Bank AG, Halifax Bank plc, The Governor and Company of the Bank of Scotland, Bayerische Landesbank, HSH Nordbank AG, Lloyds Bank PLC, Sumitomo Bank, Strategic Value Partners, Wayzata, Bear Stearns Investment Products, Inc., GMAC Commercial Credit, LLC, Merrill Lynch and Q Aviation. Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NORTHWOODS CAPITAL: Moody's Puts Ba2 Rating on $10M Class E Notes ----------------------------------------------------------------- Moody's Investors Service had assigned ratings to nine classes of notes issued by Northwoods Capital VII, Limited, a CLO transaction managed by Angelo, Gordon & Co. L.P. These ratings were assigned: * Aaa to the $137,500,000 Class A-1 Floating Rate Notes due 2021; * Aaa to the $75,000,000 Class A-2 Floating Rate Delayed Drawdown Notes due 2021; * Aaa to the $100,000,000 Class A-3 Floating Rate Notes due 2021; * Aaa to the $25,000,000 Class A-4 Floating Rate Notes due 2021; * Aa2 to the $30,000,000 Class B Floating Rate Notes due 2021; * A2 to the $37,500,000 Class C Deferrable Floating Rate Notes due 2021; * Baa2 to the $32,500,000 Class D Deferrable Floating Rate Notes due 2021; and * Ba2 to the $10,000,000 Class E Deferrable Floating Rate Notes due 2021. The Moody's Ratings of these notes address the ultimate cash receipt of all required interest and principal payments required by the governing documents and are based on the expected losses posed to holders of notes relative to the promise of receiving the present value of such payments. Moody's also assigned ratings of: * Baa2 to the $7,000,000 Composite Obligations due 2021. The Moody's Rating on the Composite Obligations only address the ultimate receipt of payments equal to the Rated Amount and does not address any additional promises in respect of any other cash flows that may now or hereafter be made to such holders. NRG ENERGY: Dist. Ct. Has Jurisdiction on CFTC Enforcement Action ----------------------------------------------------------------- The United States Court of Appeals for the Eight Circuit reversed and remanded the decision of the U.S. District Court for the District of Minnesota granting the request of NRG Energy, Inc., to dismiss an enforcement action filed by the Commodity Futures Trading Commission. The Eighth Circuit says the District Court erred in its conclusion that it didn't have subject matter jurisdiction to consider the CFTC's complaint. The CFTC brought an action against NRG on July 1, 2004, in the District Court to enjoin the energy company from reporting inaccurate market information in violation of the Commodity Exchange Act. The Commission alleges that from its headquarters in Minneapolis, NRG employees intentionally reported false information regarding natural gas prices and transactions. The Commission further alleges that the reporting of false information to the industry newsletter, "Platts' Gas Daily," influenced the daily index published by Platts and affected the price of natural gas sold and traded in interstate commerce. NRG moved to dismiss the action for lack of jurisdiction. NRG contends that the district court lacks jurisdiction to hear this case because the exclusive jurisdiction provisions in its confirmed chapter 11 plan and the confirmation order entered by the U.S. Bankruptcy Court for the Southern District of New York apply to all matters arising out of, or related to, its chapter 11 cases and the NRG Plan. NRG claimed further that the bankruptcy court has exclusive jurisdiction over the matter because the facts underlying the Commission's complaint are the same facts on which its proof of claim was based. The District Court bought the Reorganized Debtor's argument and dismissed the CFTC's enforcement action. The Commission appealed, arguing that the district court erred because the bankruptcy court's orders do not apply to the enforcement action. In the alternative, the CFTC posited, the bankruptcy court lacked the authority to deprive a district court of jurisdiction to hear an enforcement action arising under the Act. In a decision published at 2006 WL 2192651, the Eighth Circuit ruled that the enforcement action brought by the Commission was not a claim and was not discharged by the confirmation order in NRG's chapter 11 case. The three-judge panel (Murphy, Gibson and Benton, JJ.) explains that the nonconstitutional jurisdiction of all federal courts, including bankruptcy courts, is fixed by Congress. Congress has provided that if the Commission determines that any entity or other person has violated a provision of the Act, it may bring an action in the proper district court of the United States. Jurisdiction over bankruptcy proceedings is governed by Title 28 of the U.S. Code, which provides that district courts have original and exclusive jurisdiction of all chapter 11 cases under Title 11 and original but not exclusive jurisdiction of all civil proceedings arising under the title. Martin B. White, Esq., in Washington, D.C., represented the Commodity Futures Trading Commission in this dispute. Charles B. Rogers, Esq., at Briggs and Morgan, P.A., in Minneapolis, Minnesota, represented NRG Energy. Headquartered in Princeton, New Jersey, NRG Energy, Inc. (NYSE: NRG) -- http://www.nrgenergy.com/-- presently owns and operates a diverse portfolio of power-generating facilities, primarily in Texas and the Northeast, South Central and Western regions of the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities. NRG also has ownership interests in generating facilities in Australia and Germany. * * * As reported in the Troubled Company Reporter on Aug. 4, 2006, Fitch Ratings has upgraded the rating of NRG Energy's senior notes to 'B+' from 'B'. Fitch also affirmed these ratings with a Stable Outlook: Senior secured term loan B at 'BB'/'RR1'; Senior secured revolving credit facility at 'BB'/'RR1'; Convertible preferred stock at 'CCC+'/'RR6'; and Issuer default rating at 'B'. OCTAGON INVESTMENTS: Moody's Puts Ba2 Rating on $17.4M Sec. Notes ----------------------------------------------------------------- Moody's Investors Service has assigned ratings to notes issued by Octagon Investment Partners X, Ltd. These ratings were assigned: * Aaa to $281,250,000 Class A-1 Senior Secured Floating Rate Notes Due 2020; * Aaa to $22,500,000 and ?17,662,297 Class A-1R Redenominatable Senior Secured Floating Rate notes Due 2020; * Aa2 to $38,250,000 Class B Senior Secured Floating Rate Notes Due 2020; * A2 to $24,750,000 Class C Secured Deferrable Floating Rate Notes Due 2020; * Baa2 to $19,125,000 Class D Secured Deferrable Floating Rate Notes Due 2020; * Ba2 to $17,450,000 Class E Secured Deferrable Floating Rate Notes Due 2020; * Baa3 to $2,000,000 Class F Combination Notes Due 2020 and, * Baa1 to $5,000,000 Class G Combination Notes Due 2020. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio due to defaults, the transaction's legal structure and the characteristics of the underlying assets, consisting primarily of senior secured loans. This transaction is managed by Octagon Credit Investors, LLC. OFSI FUND: Moody's Assigns Ba3 Rating to $25.5MM Class I Notes -------------------------------------------------------------- Moody's Investors Service has assigned ratings to nine classes of notes issued by OFSI Fund III, Ltd. Moody's Ratings: * Aaa to the $200,000,000 Class A-1 First Priority Senior Notes Due 2019; * Aaa to the $140,625,000 Class A-2 First Priority Delayed Draw Senior Notes Due 2019; * Aa2 to the $39,500,000 Class B Second Priority Senior Notes Due 2019; * A2 to the $36,500,000 Class C Third Priority Subordinated Deferrable Notes Due 2019; * Baa2 to the $28,750,000 Class D Fourth Priority Subordinated Deferrable Notes Due 2019; * Ba2 to the $11,500,000 Class E-1 Fifth Priority Subordinated Deferrable Notes Due 2019; * Ba2 to the $9,125,000 Class E-2 Fifth Priority Subordinated Deferrable Notes Due 2019; * Ba3 to the $25,500,000 Class I Combination Notes Due 2019; and * A2 to the $16,670,000 Class III Combination Notes Due 2019. The ratings reflect Moody's evaluation of the underlying collateral as of the Closing Date, the transaction's structure, the draft legal documentation, and the expertise of the manager, Orchard First Source Asset Management, LLC. Moody's stated that the ratings of these notes address the ultimate cash receipt of all interest and principal payments required by the governing documents and are based on the expected losses posed to holders of notes relative to the promise of receiving the present value of such payments. This transaction, underwritten by Merrill Lynch, is a securitization of middle market and broadly syndicated loans. OXIS INT'L: Incurs $579,000 Net Loss in 2006 Second Quarter ----------------------------------------------------------- OXIS International, Inc., reported a $579,000 net loss for the three months ended June 30, 2006, compared with a $300,000 loss for the same period in 2005. For the three months ended June 30, 2006, the Company reported product revenues of $1,356,000, in contrast to product revenues of $555,000 in the prior year. The increase in product revenues was primarily attributable to the consolidation of $1,014,000 of revenues from the Company's recently acquired subsidiary BioCheck, Inc., that was partially offset by a $213,000 decrease in sales from the OXIS parent company. The Company expects third quarter 2006 product revenues to increase modestly from the second quarter as it introduces new products. At June 30, 2006, the Company's balance sheet showed $7,581,000 in total assets, $4,983,000 in total liabilities, shareholders' equity of $1,908,000 and minority interest of $690,000. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12af Going Concern Doubt Williams & Webster, PS, expressed substantial doubt about OXIS International, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's significant and ongoing operating losses. About OXIS and BioCheck OXIS International, Inc. (OTCBB: OXIS.OB) (Nouveau March,: OXIS) (FWB: OXI) -- http://www.oxis.com/-- develops technologies and products to research, diagnose, treat and prevent diseases of oxidative stress associated with damage from free radical and reactive oxygen species. OXIS has acquired a 51% interest in and has the option to purchase the remaining 49% of BioCheck. BioCheck, Inc. -- http://www.biocheckinc.com/-- provides enzyme immunoassay research services and products including immunoassay kits for cardiac and tumor markers, infectious diseases, thyroid function, steroids, and fertility hormones. The company operates a 15,000 square-foot, U.S. Food and Drug Administration certified cGMP, and ISO device-manufacturing facility in Foster City, California. OXIS purchased BioCheck for $6 million in cash on Sept. 19, 2005. OXIS INT'L: Appoints Marvin Hausman President and CEO ----------------------------------------------------- OXIS International, Inc., disclosed that Steve T. Guillen's employment as the president and chief executive officer of OXIS was terminated on Sept. 15, 2006. Mr. Guillen will continue to serve on the company's Board of Directors. The Board of Directors of OXIS has appointed Dr. Marvin S. Hausman to succeed Mr. Guillen. Dr. Hausman will maintain his current position as Chairman of the Board. John Repine M.D., OXIS Board member and CEO of Webb-Waring Institute, Denver, Colorado, a leading antioxidant research center, stated "Because of his extensive experience, creative insights and numerous contacts in medical diagnostics and therapeutics, Dr. Hausman brings a visionary leadership to OXIS. He has the comprehensive scientific, marketing and business skills needed to integrate and energetically advance OXIS's diagnostic and therapeutic portfolios." Dr. Hausman is a highly respected physician-scientist and graduate of New York University School of Medicine. He is a Board Certified Urological Surgeon who trained at the UCLA School of Medicine and was a practicing physician for more than 25 years. Dr. Hausman has gained over 30 years of experience in the research and development of pharmaceutical therapeutic and diagnostic products. He has assisted in the successful research, development and launch of marketed pharmaceutical products for many companies, including Bristol Myers International, Mead Johnson Pharmaceutical Company, Baxter-Travenol and E. R. Squibb. In addition he co- founded Medco Research, Inc, a NYSE biopharmaceutical company acquired by King Pharmaceuticals as well as Axonyx, Inc, a NASDAQ listed company specializing in the development of central nervous system drugs, who on June 8th, 2006 announced a merger with Torrey Pines Therapeutics Inc. Dr. Hausman is a Principal of Northwest Medical Research, Inc., a company dedicated to the discovery of drugs, neutraceuticals and diagnostic agents that have applications in promoting the well- being of humans and animals. Northwest Medical Research is currently involved in an international collaboration on the development of a rapid sensitive diagnostic assay to track Avian Influenza infections as well as the development of bioactive anti- inflammatory products from exotic mushrooms. About OXIS and BioCheck OXIS International, Inc. (OTCBB: OXIS.OB) (Nouveau March,: OXIS) (FWB: OXI) -- http://www.oxis.com/-- develops technologies and products to research, diagnose, treat and prevent diseases of oxidative stress associated with damage from free radical and reactive oxygen species. OXIS has acquired a 51% interest in and has the option to purchase the remaining 49% of BioCheck. BioCheck, Inc. -- http://www.biocheckinc.com/-- provides enzyme immunoassay research services and products including immunoassay kits for cardiac and tumor markers, infectious diseases, thyroid function, steroids, and fertility hormones. The company operates a 15,000 square-foot, U.S. Food and Drug Administration certified cGMP, and ISO device-manufacturing facility in Foster City, California. OXIS purchased BioCheck for $6 million in cash on Sept. 19, 2005. Going Concern Doubt Williams & Webster, PS, expressed substantial doubt about OXIS International, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's significant and ongoing operating losses. PCS EDVENTURES!.COM: Posts $674,046 Net Loss in 2006 2nd Quarter ---------------------------------------------------------------- PCS Edventures!.com, Inc., reported a $674,046 net loss for the quarter ended June 30, 2006. This net loss is an increased loss of $817,764 or approximately 569% from the net income for the quarter ended June 30, 2005, of $143,718. Revenues for the three-month period ended June 30, 2006, decreased to $560,669 or by $374,303, as compared to $934,972 for the three- month period ended June 30, 2005. This decrease is due to the unusually large sales during the June 30, 2005, quarter to Edison Schools that were not replicated in this quarter. This amount was partially offset by increased license renewals and new customer sales. At June 30, 2006, the Company's balance sheet showed $1,322,254 in total assets, $1,316,091 in total Liabilities and total stockholders' equity of 6,163. As of the quarter ended June 30, 2006, the Company had $154,938 in Cash, with total current assets of $681,252 and total current liabilities of $1,316,091. The Company had an accumulated deficit of $26,541,118 at June 30. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12b9 Going Concern Doubt As reported in the Troubled Company Reporter on July 7, 2006, HJ & Associates, LLC, expressed substantial doubt about PCS Edventures!.com, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended March 31, 2006 and 2005. The auditing firm pointed to the Company's recurring losses from operations and working capital deficit. About PCS Edventures!.com PCS Edventures!.com, Inc. -- http://www.edventures.com/-- is the recognized leader in design, development and delivery of hands-on, project based learning labs to the K-14 market worldwide. It has sold and installed more than 2,750 hands-on, Engineering, Robotics & Science labs at public and private schools, pre-schools, Boys & Girls Clubs, YMCAs, and other after-school programs in all 50 states in the U.S., as well as sites in 15 countries internationally. The Labs are supported by Edventures! OnLine, which is an Internet-based and accessed program available in multiple languages, through its curriculum, communication, assessment capabilities, and online community features. PHILLIPS-VAN HEUSEN: Discloses Investment Plans' Blackout Period ---------------------------------------------------------------- Phillips-Van Heusen Corporation notified its employees that, as a result of a change in the recordkeeper for the Company's Associates Investment Plans, there will be a blackout period that will begin on Oct. 31, 2006, at 4:00 p.m. Eastern Time and is expected to end on Nov. 5, 2006. The Company disclosed that during the Blackout Period, participants in the Plan will be temporarily unable to access their individual accounts under the Plan, including being able to direct or diversify their investment of existing account balances or future contributions made to their individual accounts, changing their contribution rate, obtaining a loan under the Plan, or obtaining a withdrawal or other distribution from the Plan. As a result of the Blackout Period, on Sept. 26, 2006, the Company sent a notice to its directors and executive officers informing them that during the Blackout Period the directors and executive officers will be prohibited from, directly or indirectly, purchasing, selling, or otherwise acquiring or transferring any equity or derivative security of the Company acquired in connection with their services as a director or employment as an executive officer. Participants in the Plan, stockholders of the Company or other interested persons may obtain, without charge, information regarding the Blackout Period, including the actual ending date of the Blackout Period, by contacting Mary Kazan, Human Resources- Employee Benefits, Phillips-Van Heusen Corporation, 1001 Frontier Road, Bridgewater, New Jersey 08807, at telephone number (908) 685-0050, during the Blackout Period and for a period of two years after the ending of the Blackout Period. Phillips-Van Heusen Corporation -- http://www.pvh.com/-- owns and markets the Calvin Klein brand worldwide. It is a shirt company that markets a variety of goods under its own brands: Van Heusen, Calvin Klein, IZOD, Arrow, Bass and G.H. Bass & Co., Geoffrey Beene, Kenneth Cole New York, Reaction Kenneth Cole, BCBG Max Azria, BCBG Attitude, Sean John, MICHAEL by Michael Kors, Chaps and Donald J. Trump Signature. * * * Phillips-Van Heusen's 7-3/4% Debentures due 2023 carry Moody's Investors Service's Ba3 rating and Standard and Poor's BB+ rating. PHOTOWORKS INC: Names Bruce Fischer as VP-Finance, Will Act as CFO ------------------------------------------------------------------ The Board of Directors of PhotoWorks, Inc., appoints Bruce Fischer as its Vice President-Finance, and he will act as chief financial officer. Mr. Fischer had previously been controller of the Company. In connection with his promotion, Mr. Fischer's base salary was increased to $120,000 and he will participate in the Company's Performance Incentive Plan to a maximum of 30% of his base salary. Headquartered in Seattle, Washington, PhotoWorks(R), Inc., (OTCBB:FOTO) -- http://www.photoworks.com/-- is an Internet based digital photo-publishing company. The company's web based services allow PC and Mac users to create hard bound photo books, customized greeting cards, calendars, prints and other photography sourced products straight from their computers. Formerly known as Seattle Film Works, PhotoWorks has a 30-year national heritage of helping photographers share and preserve their memories with innovative and inspiring products and services. Going Concern Doubt Williams & Webster, PS, expressed substantial doubt about the Company's ability to continue as a going concern after it audited the financial statements for the year ending Sept. 30, 2005. The auditing firm pointed to the Company's net losses and cash flow shortages. POE FINANCIAL: Court Okays Holland & Knight as Bankruptcy Counsel ----------------------------------------------------------------- The Honorable Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida in Tampa authorized Poe Financial Group, Inc., and it debtor-affiliates to employ Holland & Knight, LLP, as their bankruptcy attorneys, nunc pro tunc to Aug. 18, 2006. As reported in the Troubled Company Reporter on Sept 15, 2006, Holland & Knight will: a) advise the Debtors with respect to its powers and duties as debtors-in-possession in the continued management and operation of their business and properties; b) attend meetings and negotiate with representative of creditors and other parties in interest; c) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of any action commenced against the Debtors, negotiations concerning all litigation in which the Debtors are involved, and objections to claims filed against Debtors' estates; d) prepare the Debtors all motions, applications, answers, orders, reports, and papers necessary to the administration of the estates; e) negotiate and prepare on the Debtors' behalf any other plan or plans of reorganization, disclosure statements, and all related agreements and documents, and take any necessary action on behalf of the Debtors to obtain confirmation of such plans; f) represent the Debtors in connection with obtaining post- petition loans; g) advise the Debtors in connection with any potential sale of assets, restructuring or recapitalization; h) appear before the court, any appellate courts, and the U.S. Trustee and protect the interests of the Debtors' estates before such Courts and the U.S. Trustee; i) consult with the Debtors regarding tax matters; j) represent the Debtors with respect to general corporate and transactional matters; and k) perform all other necessary legal services and provide all other necessary legal services to the Debtors in connection with these chapter 11 cases. Rod Anderson, Esq., a partner at Holland & Knight, disclosed the current hourly rates of the firm's professionals: Professionals Designation Hourly Rate ------------- ----------- ----------- Leonard Gilbert, Esq. Partner $475 Rod Anderson, Esq. Partner $375 Noel Boeke, Esq. Partner $275 Michael Sjuggerud, Esq. Associate $225 Mary Bailey Paralegal $155 The Firm has received a $100,000 retainer from the Debtor. Mr. Anderson assured the Court that the firm does not hold any interest adverse to the Debtors, its estates, and creditors. Headquartered in Tampa, Florida, Poe Financial Group, Inc. -- http://www.poefinancialgroup.com/-- specializes in insuring coastal properties assumed from Florida's high-risk insurance pool. The Debtor and three of its affiliates file for chapter 11 protection on Aug. 18, 2006 (Bankr. M.D. Fa. Case No. 06-04288 Noel R. Boeke, Esq., Leonard Gilbert, Esq., and Rod Anderson, Esq., at Holland & Knight, LLP, represent the Debtors. When the Debtor filed for protection from its creditors, it estimated assets and debts of more than $50 million. POE FINANCIAL: Files Schedules of Assets and Liabilities -------------------------------------------------------- Poe Financial Group, Inc., delivered its schedules of assets and liabilities to the U.S. Bankruptcy Court for the Middle District of Florida in Tampa, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $1,818 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims 0 F. Creditors Holding Unsecured Non-priority Claims $14,033,843 ------ ----------- Total $1,818 $14,066,908 The Company owns 100% of seven subsidiaries and their value cannot be determined at present. Headquartered in Tampa, Florida, Poe Financial Group, Inc. -- http://www.poefinancialgroup.com/-- specializes in insuring coastal properties assumed from Florida's high-risk insurance pool. The Debtor and three of its affiliates file for chapter 11 protection on Aug. 18, 2006 (Bankr. M.D. Fa. Case No. 06-04288 Noel R. Boeke, Esq., Leonard Gilbert, Esq., and Rod Anderson, Esq., at Holland & Knight, LLP, represent the Debtors. When the Debtor filed for protection from its creditors, it estimated assets and debts of more than $50 million. PROFESSIONAL INVESTORS: Meeting of Creditors Continued to Oct. 11 ----------------------------------------------------------------- William T. Neary, the U.S. Trustee for Region 6 will continue the meeting of Professional Investors Insurance Group, Inc.'s creditors at 2:00 p.m., on Oct. 11, 2006, at Room 976, U.S. Trustee's Office at 1100 Commerce Street in Dallas, Texas. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Plano, Texas, Professional Investors Insurance Group, Inc., filed for chapter 11 protection on Aug. 9, 2006 (Bankr. N.D. Tex. Case No. 06-33278). John P. Lewis, Jr., Esq., represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $1 million and $10 million. PRICELINE.COM INC: S&P Assigns B Rating to $300 Mil. Senior Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating to online travel agency Priceline.com Inc.'s $150 million convertible senior notes due 2011 and $150 million convertible senior notes due 2013. At the same time, the rating agency affirmed the corporate credit rating on the company at 'B'. Proceeds from the offering will be used to fund the buyback of about $130 million in Priceline.com common stock and the repurchase of a portion of the company's outstanding convertible senior notes due 2010 and 2025. Priceline.com has not disclosed how much of the outstanding convertible senior notes that it plans to repurchase. The outlook is stable. Pro forma for the debt offering, total debt outstanding was $523 million as of June 30, 2006. Norwalk, Connecticut-based Priceline.com is a provider of bid- based and retail travel services in airline tickets, hotel rooms, rental cars, vacation packages, cruises, and travel insurance. "The ratings reflect the company's significant supplier concentration in airlines and hotels, low profit margins, acquisition-driven growth strategy, and likely decrease in global distribution systems incentive fees received," said Standard & Poor's credit analyst Andy Liu. These factors are only partially offset by: * the company's leading position in the consumer bid-based travel business; * good cash balances, which provide some cushion; and * growing retail operations, especially in Europe. PROFESSIONAL INVESTORS: U.S. Trustee Unable to Form Panel Members ----------------------------------------------------------------- William T. Neary, the U.S. Trustee for Region 6 informs the U.S. Bankruptcy Court for the Northern District of Texas that there was a lack of interest and an insufficient number of creditors willing to serve on an Official Committee of Unsecured Creditors in the chapter 11 case of Professional Investors Insurance Group, Inc. Accordingly, the U.S. Trustee is unable to appoint a committee under Section 1102(a) of the Bankruptcy Code at this time. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the chapter 11 cases to a liquidation proceeding. Headquartered in Plano, Texas, Professional Investors Insurance Group, Inc., filed for chapter 11 protection on Aug. 9, 2006 (Bankr. N.D. Tex. Case No. 06-33278). John P. Lewis, Jr., Esq., represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. When the Debtor filed for protection from its creditors, it estimated assets between $10 million and $50 million and debts between $1 million and $10 million. Q COMM: Losses Continue in Quarter Ended June 30 ------------------------------------------------ Q Comm International, Inc., reported a $1,398,399 net loss for the quarter ended June 30, 2006, compared with a $3,296,998 net loss for the same period in the prior year. The Company's sales and revenues decreased by approximately $695,000 for the three months ended June 30, 2006, relative to the comparable period in 2005 primarily due to reduced sales of prepaid wireless products. The Company generated $12,628,171 of sales for the quarter ended June 30, 2006, compared with sales of $13,322,692 for the period ended June 30, 2005. The Company's balance sheet at June 30, 2006, showed $5,698,779 in total assets, $1,763,586 in total liabilities and stockholders' equity of $3,935,193. As of June 30, 2006, the Company had working capital of approximately $3,130,746 million. As of June 30, 2006, the Company's balance of cash and cash equivalents was $1,629,999 and the balance of restricted cash was $326,912. Restricted cash is maintained to support letters of credit covering capital lease arrangements and to secure a bank account that is used for processing automated clearinghouse transactions. In order to secure the bank account, the Company must maintain a balance of 2% of the previous month's total transactions that have been processed through the account. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12b4 Going Concern Doubt Hansen, Barnett & Maxwell, Salt Lake City, Utah, expressed substantial doubt about Q Comm International's ability to continue as a going concern after it audited the Company's financial statements for the fiscal years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the recurring losses from operations and accumulated deficit. About Q Comm Q Comm International, Inc. -- http://www.qcomm.com/-- is a prepaid transaction processor that electronically distributes prepaid products from service providers to the point of sale. Q Comm offers proprietary prepaid transaction processing platforms, support of various point-of-sale terminals, product management, merchandising, customer support and engineering. QUEBECOR WORLD: S&P Downgrades Rating to B+ With Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on commercial printer Quebecor World Inc., including its long-term corporate credit rating to 'B+' from 'BB-', and placed the ratings on CreditWatch with negative implications. "The downgrade and CreditWatch placement reflect concerns that earnings and credit measures at Quebecor World may weaken further in the medium term due to a challenging pricing environment, operating losses in the company's European division, inefficiencies related to the installation of new printing presses, and intense competition," said Standard & Poor's credit analyst Lori Harris. "Furthermore, the company is expected to be a borrower in the near term, increasing debt levels to fund negative discretionary cash flow at a time when the cushion in credit facility covenants has narrowed," Ms. Harris added. In addition, unfavorable shifts in product mix and higher energy costs are adding to the company's challenges and are expected to result in margins well below historical levels. Free cash flow will continue to be negatively affected by the significant reduction in earnings and increased investments being made in the company's manufacturing platform. The ratings on Quebecor World reflect: * the company's highly leveraged financial profile; * its weakness in revenues, earnings, and free cash flow despite restructuring efforts; * challenges within the European operations; and * difficult industry conditions. * Quebecor World remains the world's second-largest printer, supported by its product and global diversity. To resolve its CreditWatch listing, Standard & Poor's will meet with management and review Quebecor World's overall financial policies, as well as its operating and financial strategies. REVLON CONSUMER: Debt Restructuring Cues Moody's to Lower Ratings ----------------------------------------------------------------- Moody's Investors Service reported that it lowered Revlon Consumer Products Corporation's long-term ratings, including the corporate family rating to Caa1 from B3. Moody's affirmed the company's speculative grade liquidity rating of SGL-4. These rating actions reflect the higher risk of future debt restructurings that may be unfavorable to current bondholders, as well as the significant liquidity and financial challenges that Revlon faces in the next 6-12 months. The outlook remains negative. These ratings were affected by this action: * Corporate family rating, downgraded to Caa1 from B3; * Probability of default rating, downgraded to Caa1 from B3; * $160 million senior secured asset based revolving credit facility due 2009, downgraded to B1 from Ba3 (LGD 2, 11%); * $800 million senior secured term loan facility due 2010, downgraded to B3 from B2 (LGD 3, 35%); * $387 million 9.5% senior notes due 2011, downgraded to Caa2 from Caa1 (LGD 4, 61%); * $217 million 8.625% senior subordinated notes due 2008, downgraded to Caa3 from Caa2 (LGD 6, 93%); * Speculative grade liquidity rating, affirmed at SGL-4 Outlook is negative. The company's Caa1 corporate family rating and negative outlook reflect the materially negative free cash flow, high leverage and weak liquidity profile of Revlon. In order to comply with the 2004 Credit Agreement requirement that the 8 5/8% senior subordinated notes be reduced to not more than $25 million in aggregate principal amount by October 2007, Revlon needs to refinance these notes in the near term. While the company has a number of refinancing options, the risk of a refinancing that is unfavorable to current bondholders has increased given Revlon's weaker than expected operating performance due to its unsuccessful launch of Vital Radiance and the costs involved in exiting this brand. Revlon's long term ratings also reflect Moody's expectation that the company will be able to maintain its current liquidity through a possible amendment to its bank credit agreement, as well as by raising $75 million in equity by early 2007 (this issuance is backstopped by MacAndrews & Forbes). While Moody's views the increased equity offering commitment as an important mitigant to risks associated with the high leverage levels, Revlon's sources of available liquidity are dependent upon the successful completion of a number of critical financings, the assurance of which is not necessarily guaranteed. Additionally, once the equity offering has occurred, the $87 million committed line from MacAndrews & Forbes goes away and Revlon will face tighter liquidity given likely drawings on its revolver. Moody's notes that Revlon's persistently negative cash flow generation -- EBITDA to interest coverage ratios of approximately .9x and high leverage levels of approximately 11x for the LTM period ending June 2006 (including Moody's standard adjustments for operating leases and under-funded pension plans) -- significantly constrain the rating. More importantly, the company's leveraged profile remains a rating concern as it participates in an industry segment that requires material upfront brand support, fixture, and product development expenditures with uncertain consumer receptivity. Further negative rating actions could be possible if Revlon is not able to restore momentum in its core Revlon brands or if its liquidity deteriorates significantly from current levels. To stabilize the rating outlook, the company needs to improve its liquidity profile, including a successful refinancing of its senior subordinated notes in a manner that is at least neutral to current bondholders. Revlon's speculative grade liquidity rating of SGL-4 reflects credit metrics, including cash flow from operations that continue to deteriorate and are not likely to improve materially over the near-term. In addition, Moody's notes that the company has sought three amendments from its bank group for covenant violations during 2006 and remains at risk of further breaches should financial goals not be achieved. Finally, Moody's remains concerned regarding the elimination of the MacAndrews & Forbes line of credit following the successful completion of the pending equity offering. Revlon, headquartered in New York, is a worldwide cosmetics, skin care, fragrance, and personal care products company. The company is a wholly-owned subsidiary of Revlon, Inc., which in turn is majority-owned by MacAndrews and Forbes, which is wholly-owned by Ronald O. Perelman. Revlon's net sales for the twelve-month period ended June 2006 were approximately $1.4 billion. ROWE COMPANIES: Taps Wiley Rein as Bankruptcy Counsel ----------------------------------------------------- The Rowe Companies and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Virginia for authority to employ Wiley Rein & Feilding LLP, as their bankruptcy counsel. Wiley Rein will: a. advise the Debtors with respect to their rights, powers and duties as Debtors and debtors-in-possession in the continuing management and operation of their respective businesses and properties under chapter 11 of the Bankruptcy Code; b. advise and consult on the conduct of the cases, including all of the legal and administrative requirements of operating in chapter 11; c. attend meetings and negotiate with representatives of creditors, equity security holders, employees, and other parties-in-interest in the Debtors' chapter 11 cases; d. advise the Debtors in connection with any contemplated sales of assets or business combinations, including the negotiation of asset, stock purchase, merger or joint venture agreements, formulating and implementing bidding procedures, evaluating competing offers, drafting appropriate corporate documents with respect to the proposed sales, and counseling the Debtors in connection with the closing of such sales; e. advise the Debtors in connection with postpetition financing and cash collateral agreements and negotiate and draft documents relating thereto, provide advice and counsel with respect to prepetition financing arrangements, and provide advice to the Debtors in connection with the emergence financing and capital structure, and negotiate and draft documents relating thereto; f. advise the Debtors on matters relating to the evaluation of the assumption, rejection, assignment, restructuring or recharacterization of unexpired leases and executory contracts; g. provide advice to the Debtors with respect to legal issues arising in or relating to the Debtors' ordinary course of business including attendance at senior management meetings, meetings with the Debtors' financial and turnaround advisors and meetings of the board of directors, and advice on employee, workers' compensation, employee benefits, executive compensation, tax, banking, insurance, corporate, business operation, contract, joint venture and real property issues, press or public affairs, and regulatory and other matters; h. take necessary action to protect and preserve the Debtors' estates, including the prosecution of actions and proceedings on their behalf, the defense of any actions and proceedings commenced against those estates, negotiations concerning all litigation in which the Debtors may be involved and assist the Debtors in reviewing, estimating, objecting to and resolving claims asserted against the Debtors' estates; i. prepare on behalf of the Debtors motions, applications, answers, orders, reports, schedules and other documents necessary or appropriate to the administration of the estates; j. advise the Debtors concerning, and prepare responses to applications, motions, other pleadings, notices, and other papers filed by other parties in the Debtors' chapter 11 cases; k. advise the Debtors regarding and negotiate and prepare on the Debtors' behalf plan or plans of reorganization, plan or plans of liquidation, disclosure statements and all related agreements or documents and take any necessary action on behalf of the Debtors to obtain confirmation of the plan or plans; l. attend meetings with third parties and participate in negotiations with respect to the above matters; m. appear before the Court, other courts, and the U.S. Trustee, and protect the interests of the Debtors' estates before such courts and the U.S. Trustee; n. meet and coordinate with other counsel and other professionals retained on behalf of the Debtors and approved by the Bankruptcy Court; o. perform al other necessary legal services and provide all other necessary legal advice to the Debtors in connection with their chapter 11 cases; and p. handle other matter as requested by the Debtors from time to time. H. Jason Gold, Esq., a partner at Wiley Rein, tells the Court that the firm currently holds a $224,607 retainer. Mr. Gold discloses that the firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- H. Jason Gold, Esq. Partner $560 Valerie P. Morrison, Esq. Partner $500 Alexander M. Laughlin, Esq. Partner $475 Todd Bromberg, Esq. Partner $405 Robert J. Butler, Esq. Partner $390 Dylan G. Trache, Esq. Associate $360 Kalina B. Miller, Esq. Associate $300 Rebecca L. Saitta, Esq. Associate $300 Maria L. Mullarkey, Esq. Associate $225 Robert W. Ours Paraprofessional $160 patricia A. McCarthy Paraprofessional $115 Justin D. LEighty Paraprofessional $100 Mr. Gold assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Gold can be reached at: H. Jason Gold, Esq. Wiley Rein & Feilding LLP 7925 Jones Branch Drive, Suite 6200 McLean, VA 22102 Tel: (703) 905-2800 Fax: (703) 905-2820 http://www.wrf.com/ About The Rowe Companies Headquartered in McLean, Virginia, The Rowe Companies -- http://www.therowecompanies.com/-- manufactures upholstered retail home and office furniture, interior decorations, tableware, lighting fixtures, and other interior design accessories. The Company owns 100% of stock of manufacturing and retail subsidiaries, Rowe Furniture -- http://www.rowefurniture.com/-- and Storehouse, Inc. -- http://www.storehousefurniture.com/ The Company and its two of its debtor-affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142 to 06-11144). When the Debtors filed for protection from their creditors, The Rowe Companies listed total assets of $130,779,655 and total debts of $93,262,974; Rowe Furniture estimated assets between $50 million and $100 million and debts between $10 million and $50 million; and Storehouse, Inc. estimated assets and debts between $10 million and $50 million. SAINT VINCENTS: Court Approves Wyckoff Management Agreements ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has approved two management agreements between Saint Vincent Catholic Medical Centers and Wyckoff Heights Medical Center. The agreement covers 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. The Debtors told the Court that the Management Agreements will reduce the operating losses generated by the Queens Hospitals prior to the closing of the sale to Caritas, 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. 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. 35 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SASKATCHEWAN WHEAT: Proposes Solution to Pension Plan Deficit ------------------------------------------------------------- Saskatchewan Wheat Pool Inc. tabled a proposed permanent solution to the Grain Services Union to address the Saskatchewan Wheat Pool/Grain Services Union Pension Plan deficit. The Pool submitted an offer to the Union that would see active employees cease participation in the Defined Benefit Plan and start participation in a Retirement Savings Plan with the current Plan being wound up. The company would fund 50% of the solvency deficit in the current Plan up to a maximum of $20 million. In return, the Union would need to agree that responsibility for the remaining deficit would rest with Plan members and not the Pool. This proposal would be subject to ratification by the Union, approval by the Pool's Board of Directors and approval by appropriate regulatory authorities. "What we have on the table is of great significance, given the fact that neither the collective agreement with the GSU, the Pension Plan text, nor the spirit or intent of the original agreement requires the Pool to pay solvency deficits," said Mayo Schmidt, President and CEO of the Pool. Based on a Dec. 31, 2005, actuarial report, the Plan had a $7.9 million going concern surplus and a solvency deficit of $38.8 million. The Plan is jointly sponsored between the Company and the Union, and the contribution rate that the Company makes is negotiated with the Union. "Through two-years of negotiations with the Union, the Pool has worked hard to find a solution for our employees and pensioners that is fair and reasonable. As a co-sponsor of the Plan, we are certainly willing to do our part, and we believe this offer achieves these goals," said Mr. Schmidt, adding that he's hopeful the GSU will take the proposal to its membership for a vote. "A resolution to this matter is of paramount importance to all of the Pool's stakeholders, but particularly for our active employees who continue to see their future benefits erode. We look forward to coming to an agreement with Union officials as quickly as possible so that we can resolve this issue and restore confidence and certainty for those affected by this difficult situation," Mr. Schmidt said. The SWP/GSU Plan, representing approximately 600 active employees and 1400 former employees, is one of five pension plans at the Pool. Based in Regina, Saskatchewan Wheat Pool Inc. (TSX:SWP) -- http://www.swp.com/-- is a publicly traded agribusiness. Anchored by a prairie-wide grain handling and agri-products marketing network, the Pool channels Prairie production to end-use markets in North America and around the world. These operations are complemented by value-added businesses and strategic alliances, which allow the Pool to leverage its pivotal position between Prairie farmers and destination customers. * * * Dominion Bond Rating Service placed Saskatchewan Wheat Pool Inc.'s ratings, "Under Review with Positive Implications" including Senior Secured Debt -- Under Review, Positive B (high); Senior Subordinated Notes -- Under Review, Positive B; and Senior Unsecured Notes -- Under Review, Positive B. SHINNECOCK CLO: Moody's Puts Ba2 Rating on $7.5 Mil. Junior Notes ----------------------------------------------------------------- Moody's Investors Service reported that it has assigned ratings to notes issued by Shinnecock CLO 2006-1, Ltd. These ratings were assigned: * Aaa to $198,000,000 Class A-1 Senior Floating Rate Notes Due 2018; * Aa1 to $22,000,000 Class A-2 Senior Floating Rate Notes Due 2018; * Aa2 to $24,000,000 Class B Senior Floating Rate Notes Due 2018; * A2 to $14,000,000 Class C Deferrable Mezzanine Floating Rate Notes Due 2018; * Baa2 to $12,000,000 Class D Deferrable Mezzanine Floating Rate Notes Due 2018 and * Ba2 to $7,500,000 Class E Deferrable Junior Floating Rate Notes Due 2018. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio due to defaults, the transaction's legal structure and the characteristics of the underlying assets, consisting primarily of senior secured loans. This cash-flow CLO is managed by Clinton Group, Inc. SOLVIS GROUP: Late 2003 Results has Going Concern Qualification --------------------------------------------------------------- The Solvis Group, Inc., a subsidiary of Dalrada Financial Corporation, has filed a 10-KSB Annual Report for its 2003 fiscal year ended Sept. 30, 2003. Solvis, formerly Quik Pix, Inc., has been working with its independent accountants to achieve current reporting status in order for the Company to be re-listed on the NASD Over-the-Counter Bulletin Board. The Company reported its financial results for its 2002 fiscal year in August. The 2003 10-KSB report does not include any revenues from its staffing and staff leasing businesses, which currently represent the core of The Solvis Group business. Rather, the report covers activities associated with the imaging business represented by the Company when it was operated principally as QPI. The Company reported total revenues of $854,000, compared to $434,000 in fiscal 2002. Solvis reported a net loss of $144,000 for its 2003 fiscal year compared with a net loss of $689,000 for fiscal 2002. Solvis is currently working on its filings for fiscal 2004 and 2005, which will reflect results of its core staffing and staff leasing business activities. "We continue to pursue current filer status and have committed to an accelerated program to become current by the end of 2006," said Brian Bonar, CEO. A full-text copy of the Company's 2003 annual report is available for free at http://researcharchives.com/t/s?12be Going Concern Doubt Weinberg & Company, PA, expressed substantial doubt about The Solvis Group, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended Sept. 30, 2003. The auditing firm pointed to the Company's working capital deficit of $2,348,462 and stockholders' deficit of $2,447,609 as of Sept. 30, 2003, and net loss of $144,257 for the year ended September 30, 2003 About The Solvis Group The Solvis Group -- http://www.thesolvisgroup.com/-- a subsidiary of Dalrada Financial Corporation, includes a number of operating units, including Solvis Medical Staffing (formerly MandM Nursing), Solvis Home Health Care, CallCenterHR, and MedicalHR. The Company provides a variety of staffing services to businesses, including comprehensive human resource administration, payroll services, workers compensation and risk management insurance, and employee benefits such as health insurance, supplemental insurance, HAS plans, 125 cafeteria plans, and 401(k) plans. The Company also includes an imaging products and services unit, Imaging Tech, Inc., which provides a variety of innovative products and services associated with graphics, photography, and color management. Its technologies include ColorBlind(R) software and PhotoMotion Images. SPECIALTYCHEM PRODUCTS: Hires Fort Dearborn as Financial Advisor ---------------------------------------------------------------- SpecialtyChem Products Corp. obtained permission from the U.S Bankruptcy Court for the District Court of Wisconsin to employ Fort Dearborn Partners, Inc., as its financial advisor and turnaround consultant, nunc pro tunc to June 12, 2006. Fort Dearborn will: a) assist in the preparation of and timely filing of all reports, schedules and financial statements required by the bankruptcy code during the pendency of the case. b) assist in the preparation, monitoring and analysis of the Debtor's budgets and financial forecasts. c) assist in negotiations over the terms of a plan with an Official Committee of Unsecured Creditors which may be created. d) assist the Debtor's management in negotiations with vendors to obtain trade credit or other agreements. e) assist the Debtor's management in preparing materials describing the Debtor's business and prospects, and managing a sale process in the event such a course of action is adopted. f) provide testimony to the Court as required in support of Debtor's motions as they may be filed, including those related to the above described matters. g) assist the Debtor's management in negotiation with its current lender or other lenders regarding debtor- in-possession financing. The Debtor told the Court that the hourly rates of the Firm's professionals range from $200 to $450 per hour. The Debtor said it has paid the Firm a $50,000 retainer. The Firm estimated that its total fees for this engagement is between $150,000 to $300,000. To the best of the Debtor's knowledge, the Firm does not hold any interest adverse to the Debtor, its estate or creditors. Headquartered in Marinette, Wisconsin, SpecialtyChem Products, Corp., manufactures various organic chemicals for paper products, electronics, agricultural products and other materials. The company filed for chapter 11 protection on June 12, 2006 (Bankr. E.D. Wis. Case No. 06-23131). Christopher J. Stroebel, Esq., Timothy F. Nixon and Marie L. Nienhuis, Esq., at Godfrey & Kahn, S.C., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and debts of 10 million to $50 million. SPRINGDALE CDO: Moody's Puts Ba1 Rating on $10 Mil. Class E Notes ----------------------------------------------------------------- Moody's Investors Service reported that it has assigned ratings to notes issued by Springdale CDO 2006-1 Ltd. These ratings were assigned: * Aaa to $80,000,000 Class A-2 Senior Secured Floating Rate Notes Due March 2051; * Aa2 to $60,000,000 Class B Senior Secured Floating Rate Notes Due March 2051; * A2 to $26,300,000 Class C Secured Floating Rate Deferrable Interest Notes Due March 2051; * Baa2 to $25,000,000 Class D Secured Floating Rate Deferrable Interest Notes Due March 2051; * Ba1 to $10,000,000 Class E Secured Floating Rate Deferrable Interest Notes Due March 2051 and Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to the Noteholders relative to receiving the present value of such payments. The ratings of the Notes reflect the credit quality of the underlying assets--which consist primarily of RMBS, CMBS, and CDO securities -- as well as the credit enhancement for the Notes inherent in the capital structure and the transaction's legal structure. This synthetic ABS CDO is managed by Princeton Advisory Group. STATSURE DIAGNOSTIC: June 30 Balance Sheet Upside-Down by $9.3MM ---------------------------------------------------------------- StatSure Diagnostic Systems, Inc., has filed its third quarter financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission. The Company reported a $7,025,272 net loss on $231,007 of net revenues for the three months ended June 30, 2006, compared to a $1,536,456 net loss on $176,534 of revenues in prior year. At June 30, 2006, the Company's balance sheet showed $2.3 million in total assets and $11.6 million in total liabilities, resulting in a $9.3 million stockholders' deficit. A full-text copy of the Company's Quarterly Report is available for free at http://researcharchives.com/t/s?12ac Inverness Definitive Agreement On July 31, 2006, subsequent to the balance sheet date, the Company signed a term sheet with Inverness Medical Innovations, Inc. (AMEX:IMA) to develop and market the Company's consumer diagnostic products for HIV. The parties have contracted to enter into a definitive agreement to cooperate in the Company's completion of the clinical studies of its rapid test HIV products, with Inverness Medical Innovations being appointed the Company's exclusive, worldwide licensee in the rapid testing product consumer markets, and appointed a non-exclusive licensee to market the Company's HIV barrel product to professional markets. Going Concern Doubt Lazar Levine & Felix LLP expressed substantial doubt about Statsure Diagnostic Systems, Inc.'s ability to continue as a going concern after it audited the Company's financial statements for the years ended Dec. 31, 2005, and Dec. 31, 2004. The auditing firm pointed to the Company's recurring losses from operations, has negative working capital and has a net capital deficiency. About StatSure Diagnostic Based in Framingham, Massachusetts, StatSure Diagnostic Systems, Inc. -- http://www.statsurediagnostics.com/-- engages in the development, manufacture, and marketing of oral fluid collection devices for the drugs of abuse market and rapid immunoassays for use in the detection of infectious diseases. TECHNICAL OLYMPIC: Fitch Puts Low-B Ratings on Negative Watch ------------------------------------------------------------- Fitch Ratings placed Technical Olympic USA, Inc.'s ratings on Ratings Watch Negative. The Rating Outlook was previously Positive. Fitch currently rates TOA as: -- Issuer Default Rating 'B+' -- Senior unsecured debt and revolving credit facility 'BB-/RR3' -- Senior subordinated debt 'B-/RR6' The rating action stems from the severe slowdown in Technical Olympic's major markets and financial difficulties being experienced by the company's Transeastern joint venture. Technical Olympic recently announced that the joint venture is exploring options to provide sufficient liquidity, including requesting waivers from its lenders regarding potential defaults and permitting future advances under the revolving credit facility, and restructuring land bank obligations. Currently, Technical Olympic and its JV partner do not intend to contribute capital under the existing capital structure. The debt of the joint venture is non-recourse to Technical Olympic. However, this JV is significant to Technical Olympic and the company is unlikely to fully distance itself from it. The Rating Watch will in part be resolved by the ability of the Transeastern joint venture to execute a successful refinancing and/or restructuring without further meaningful support from Technical Olympic. In this currently challenging environment, management of the balance sheet and cash flow generation will also be taken into account as to the Watch status. There is a potential for an asset impairment charge relating to Technical Olympic's investment in the Transeastern JV (including loans receivable), which totals about $130 million to $140 million. Additionally, the agreement that governs the operations of the Transeastern JV requires the joint venture to make preferred payments to Technical Olympic's joint venture partner. Technical Olympic is required under the joint venture agreement to advance funds (in the form of member loans) to the joint venture in the event that the joint venture is prohibited by its bank agreement to make these payments. Based on Technical Olympic's joint venture partner's current equity investment, the quarterly preferred payment is $3.8 million. Over the past year, Technical Olympic has advanced about $11.3 million to the Transeastern JV to allow for these preferred payments to Technical Olympic's joint venture partner. Fitch anticipates that Technical Olympic will take a more cautious stance on land purchases during the balance of the year (and in 2007) and that inventories, which have been growing into mid-2006, will decline by fiscal year-end 2006. Fitch anticipates that liquidity will improve, as cash flow comparisons in the second half of 2006 should be much stronger than in the first half of the year. Fitch will also continue to closely monitor the trends of the broad housing market in its assessment of the appropriate credit ratings for all homebuilders. The current ratings for Technical Olympic USA are based on the company's: * broad customer base; * conservative land and inventory management practices; * strong management team; and * acquisition expertise. Technical Olympic USA is a subsidiary of Technical Olympic SA, a publicly traded Greek corporation. Technical Olympic SA owns approximately 67% of the voting power of Technical Olympic USA's common stock. Technical Olympic's EBITDA margins were roughly 9% early in the decade, but advanced to 9.7% in 2003, 11.7% for the 12 months ending Dec. 31, 2004, 16.9% in 2005, and 19.0% for the latest 12 months from June 30, 2006. EBITDA coverage ratios declined from 7.8x in 2001 to 4.7x in 2002 and 2.9x in 2003, but then rose to 3.7x in 2004, 5.1x in 2005, and 5.4x for the LTM from June 30, 2006. The FFO interest coverage ratio was 3.1x in 2001, slipped to 2.6x in 2002 and 1.5x in 2003, and then improved to 3.0x in 2004, was steady at 2.9x in 2005, and further improved to 3.6x for the LTM from June 30, 2006. Technical Olympic's debt to EBITDA was 1.8x in 2001 and increased to 3.2x in 2002, then remained essentially stable for the next two years (3.1x in 2003 and 3.3x in 2004) before decreasing to 2.1x in 2005 and 2.2x for the LTM from June 30, 2006. Debt to capitalization was 49.1% as of June 30, 2006, which compares to a ratio of 47.4% at the conclusion of 2005 (and 55.0% at the end of 2004). Inventory turnover has steadily decreased from 1.6x in 2002 to 1.1x in 2005. The company's EBITDA and EBIT to interest ratios continue to be lower than its peers. The debt/EBITDA and other leverage ratios are somewhat higher than those of the other larger public homebuilders that Fitch follows, while Technical Olympic's inventory turnover ratio is similar to the majority of the builders that Fitch rates. Although the company has certainly benefited from the generally strong housing market of recent years, a degree of profit enhancement is also attributed to purchasing design and engineering, access to capital, and other scale economies that have been captured by the large national and regional public homebuilders in relation to non-public builders. These economies, the company's presale operating strategy and a return on equity and assets orientation provide the framework to soften the margin impact of declining market conditions in comparison to previous cycles. Risk factors include the inherent (although somewhat tempered) cyclicality of the homebuilding industry. The ratings also manifest the company's concentration in Florida, historic aggressive growth strategy, below peer credit metrics, and Technical Olympic's size. Technical Olympic typically options or purchases land only after necessary entitlements have been obtained so that development or construction may begin as market conditions dictate. The company extensively uses lot options. At present approximately 52% of its lots are controlled through options and 24% through joint ventures -- among the higher percentages of the public builders that Fitch tracks. Technical Olympic has a small number of specific performance options. A modest amount of its owned or optioned land is unentitled. The company currently has refundable and nonrefundable deposits aggregating $215.3 million and had issued letters of credit of approximately $247.3 million associated with its option contracts. A portion of this represents the capital at risk should Technical Olympic not go forward with the exercise of its options. The company typically controls a five-to-seven-year homesite supply, based on forward delivery projections. It typically owns one-to- two years supply of lots. The balance is options or in joint ventures. It targets communities for completion in a two-to-three- year time frame. The four acquisitions in late 2002 and early 2003 and the acquisition of Gilligan Homes in September 2004 enabled the company to build its position, broadening product and customer bases in some existing markets, and enabled the company to enter new markets. The acquisitions were typically funded by cash on the balance sheet and debt. Typically, there were earn-outs which reduced risk and served to retain key management. In August 2005, the company, through a joint venture, completed the acquisition of homebuilding assets and operations of Transeastern Properties, Inc., the 37th largest homebuilder in the U.S. in 2004. Now that Technical Olympic has the geographic diversity and has built up its skilled personnel and systems infrastructure, Fitch expects the company will concentrate on expanding volume within these existing markets in the intermediate term. The company has an $800 million revolving line of credit maturing in March 2010. A s of June 30, 2006, Technical Olympic had no borrowings under the revolving credit facility and had issued letters of credit totaling $281 million. The company has about $420 million of borrowing base availability as of June 30, 2006. Technical Olympic's stock has a small float and there has not been share repurchase in the past. The company pays a small dividend. Debtholders are protected by financial covenants, including: * adjusted consolidated tangible net worth; * maximum indebtedness to adjusted consolidated tangible net worth ratio; * minimum interest coverage ratio; * unsold land to adjusted consolidated tangible net worth; and * unsold units to units closed. TENET HEALTHCARE: Announces Commitment for New Credit Facility -------------------------------------------------------------- Tenet Healthcare Corporation disclosed that it has accepted a commitment from a group of banks led by Citigroup and Bank of America for a five-year, $800-million senior secured revolving credit facility. The facility will be secured by patient accounts receivable at Tenet's acute care and specialty hospitals. The company said it expects the new credit facility together with its existing unrestricted cash on hand to provide it with adequate liquidity to meet all its anticipated future operating needs. An additional $200 million also would be available under the new credit facility, depending on the amount of eligible receivables outstanding, the company said. In December 2004, Tenet terminated its previous, unused $800 million revolving credit agreement, and replaced it with a letter of credit facility, because the company had substantial liquidity on its balance sheet and no immediate need for borrowings against the credit agreement. Since then, the company has pledged $262.5 million in restricted cash to support its letters of credit. Those existing letters of credit will be rolled into the new credit facility, thus removing the restrictions on the cash and making it available for all corporate purposes. "This new commitment would give us sufficient credit to meet our future needs with a minimum number of restrictions," said Trevor Fetter, Tenet's president and chief executive officer. "Establishing a new credit facility is an important step in the long-term repositioning of our capital structure. This new, receivables-backed credit line should also give Tenet reasonable annual facility costs and less restrictive operating covenants. It would also free up $262.5 million of cash used to support previous letters of credit, thus improving our liquidity even further." The new facility is expected to include standard terms and conditions for a secured, asset-backed credit facility. The credit facility interest rate is subject to finalization with the lead banks and other lenders in the syndicate. Final terms and closing of the new credit facility are subject to customary covenants and documentation requirements. The company expects to complete and finalize the new credit facility by late October. About Tenet Tenet Healthcare Corporation -- http://www.tenethealth.com/-- through its subsidiaries, owns and operates acute care hospitals and related health care services. Tenet's hospitals aim to provide the best possible care to every patient who comes through their doors, with a clear focus on quality and service. TENET HEALTHCARE: Fitch Rates New $800 Million Facility at BB- -------------------------------------------------------------- Fitch Ratings affirmed Tenet Healthcare Corp.'s 'B-' Issuer Default Rating and 'B-/RR4' senior unsecured debt rating, in light of the announcement of a new credit facility. Simultaneously, Fitch initiated a 'BB-/RR1' rating for Tenet's new secured $800 million revolving credit facility. The Rating Outlook remains Negative. Tenet's ratings are: -- Secured bank facility 'BB-/RR1' -- Issuer Default Rating 'B-' -- Senior unsecured debt 'B-/'RR4' The five-year $800 million credit facility is fully secured by accounts receivables, and can be expanded by another $200 million given available receivables. The facility also includes a maximum of $300 million in letters of credit. The previous $250 million LOC facility will be terminated and the $263 million of restricted cash used to backstop the facility becomes unrestricted. Fitch anticipates that Tenet will not significantly access the facility in the intermediate term. The credit agreement enhances liquidity as free cash flow generation in 2006 has been negatively affected by cash flows devoted to legal settlements. Fitch believes that the company will have negative free cash flow of $1.0 billion in 2006, which includes the increase in capital spending to $800 million and litigation payments of approximately $640 million. Strengthening of free cash flow will need to be derived from operational improvement given a larger capital commitment in the intermediate term. Tenet's unrestricted cash balance totaled $568 million at the end of the second quarter of 2006. The company has stated that it expects to have $1 billion of available cash at the end of 2006, which includes $263 million of unrestricted cash that will become available with the closure of the credit agreement. Tenet does not have a significant long-term debt maturity until 2011. Industry factors continue to weigh on Tenet's credit profile. The Negative Outlook reflects the challenge of reversing an operational downturn in an environment plagued by soft volumes and volatile bad debt exposure. However, the company has been able to sustain a positive pricing trend for four consecutive quarters starting with the third quarter of 2005, demonstrating productive negotiations with managed care payors. TENET HEALTHCARE: Moody's Junks Ratings on Six Senior Notes ----------------------------------------------------------- Moody's Investors Service affirmed the B3 Corporate Family Rating of Tenet Healthcare Corporation following the announcement that the company accepted a commitment for an $800 million secured credit facility. Moody's also assigned a Ba3 rating to the credit facility and downgraded the ratings on the company's existing unsecured notes to Caa1 from B3, reflecting the subordination of the unsecured debt to amounts available under the new revolver. Additionally, Moody's changed the ratings outlook to stable from negative reflecting the elimination of uncertainty around the timing and amount of settlement amounts and the effect those payments would have on the company's liquidity. Separately, Moody's upgraded Tenet's speculative grade liquidity rating to SGL-2 from SGL-4. The strengthening of the company's liquidity position comes from the addition of external liquidity sources through its new $800 million secured revolving credit facility and increased confidence regarding the amount of cash needed for settlement payments in the forecast period. The stable ratings outlook reflects the expectation that the company will maintain metrics consistent with the single B rating category over the rating horizon. Moody's also expects slight improvement in pricing and margin performance as the company completes its planned divestitures and continues to implement its turnaround plan. The elimination of uncertainty around the company's liquidity position also adds to the stable ratings outlook. The affirmation of the ratings reflects Moody's belief that the combination of qualitative issues and Tenet's operating metrics will still be representative of a B3 rating in accordance with the Global For-profit Hospital Rating Methodology. Specifically, the expectation of weak cash flow coverage of debt metrics, including negative free cash flow, significant financial leverage and weak interest coverage continue to constrain the rating. Additionally, Moody's expects continued pressure on Tenet's margin as the company's turnaround plan is still in its early stages of implementation. Supporting the ratings is Tenet's diversified portfolio of assets, significant scale and improved liquidity. These are the rating actions: * Ratings Affirmed: -- Corporate Family Rating, B3 * Ratings Assigned: -- $800 million senior secured revolving credit facility due 2011, Ba3, LGD1, 2% * Ratings Downgraded: -- 6 1/2% senior notes 2012, to Caa1, LGD4, 62% from B3, LGD5, 73% -- 6 3/8% senior notes due 2011, to Caa1, LGD4, 62% from B3, LGD5, 73% -- 6 7/8% senior notes due 2031, to Caa1, LGD4, 62% from B3, LGD5, 73% -- 7 3/8% senior notes due 2013, to Caa1, LGD4, 62% from B3, LGD5, 73% -- 9 1/4% senior notes due 2015, to Caa1, LGD4, 62% from B3, LGD5, 73% -- 9 7/8% senior notes due 2014, to Caa1, LGD4, 62% from B3, LGD5, 73% -- PDR to B3 from B2 * Ratings Upgraded: -- Speculative Grade Liquidity Rating, to SGL-2 from SGL-4 Outlook: To Stable from Negative Tenet Healthcare Corporation, headquartered in Dallas, Texas operates 57 hospitals (excluding facilities held for sale). The company recognized approximately $9.3 billion in net revenue for the twelve months ended June 30, 2006. TENET HEALTHCARE: S&P Lowers Sr. Unsecured Notes' Rating to CCC+ ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Dallas, Texas-based hospital operator Tenet Healthcare Corp. to stable from negative. The 'B' corporate credit rating on the company was affirmed. Tenet had about $4.8 billion of debt outstanding as of June 30, 2006. "The outlook revision reflects Tenet's recently improved financial results and better prospects that its financial profile will likely be maintained at a level consistent with the current rating," said Standard & Poor's credit analyst David Peknay. "Contributing factors include much better managed care pricing patterns, better expense management, an asset divestiture plan, and the elimination of key litigation risk." At the same time, Standard & Poor's lowered its rating on Tenet's senior unsecured notes to 'CCC+' from 'B'. The rating on the unsecured notes is now two notches below the 'B' corporate credit rating on the company. This reflects the structural subordination of the unsecured notes to the large amount of priority debt ahead of it, including capitalized operating leases, certain balance sheet liabilities, and the announced pending secured financing. The low-speculative-grade ratings on Tenet reflect the company's weak operating performance, cash flow, and financial profile over the past several years. These factors override the still reasonably large size and scale of the company's hospital facility base, which is much smaller than it was several years ago due to significant downsizing efforts. Tenet's operations have been improving, but continue to struggle with subpar margins from continuing operations of only about 9.5%. Key factors helping operations include better pricing from private insurance companies, good cost control, and targeted asset sales. However, patient volume trends (highlighted by the declining number of managed care patients), high bad debt expenses, and litigation expenses represent some of the more important factors driving still-weak results. The company also continues to face numerous challenges, such as potentially adverse reimbursement changes, local market competition, and labor cost increases that may limit its ability to substantially improve its currently weak financial profile for several years. Recent performance, coupled with our expectations for the remainder of 2006, translates to lease-adjusted debt to EBITDA of about 6.5x. TIMKEN CO: Plans to Cut 700 Jobs due to Slumping Auto Industry -------------------------------------------------------------- The Timken Company is taking additional actions to improve the performance of its business in the face of worsening conditions in the North American automotive industry. Declines in North American automotive production are expected to negatively impact the company's overall third-quarter and full-year 2006 results, which continue to benefit from the strength of global industrial markets. Timken is revising its earnings estimate for the third quarter, excluding special items, to an estimated $0.50 to $0.55 per share. For the year, the company now anticipates estimated earnings per share of $2.60 to $2.75, excluding special items. The company had previously provided estimated earnings of $0.70 to $0.75 per share for the third quarter and $3.00 to $3.15 per share for the full year, excluding special items. Earnings per share, excluding special items, in 2005 were $0.58 in the third quarter and $2.53 for the full year. "The widening decline in North American auto industry production has had a significant impact on our performance," said James W. Griffith, Timken's president and chief executive officer. "This structural auto industry shift reinforces our resolve to diversify our corporate portfolio and customer mix. In addition to our previously announced restructuring, we are taking new steps to offset the impact of the further decline in sales, including a workforce reduction of approximately 700 positions, or about 5% of our Automotive Group employment. Moreover, we continue to advance our strategy to expand in global industrial markets, which is contributing to the strong overall performance of the company in 2006." About The Timken Company Headquartered in Canton, Ohio, The Timken Company (NYSE: TKR) -- http://www.timken.com/-- is a manufacturer of highly engineered bearings and alloy steels. It also provides related components and services such as bearing refurbishment for the aerospace, medical, industrial and railroad industries. The Company has operations in 27 countries and employs 27,000 employees. * * * The Company's 7.16% Medium-Term Notes, Series A due 2027 carry Moody's Investors Service's Ba1 rating. TRANSALTA CORP: Moody's Affirms (P)Ba1 Pref. Stock Shelf Rating --------------------------------------------------------------- Moody's Investors Service has revised TransAlta Corporation's rating outlook to stable from negative and affirmed TransAlta's Baa2 senior unsecured rating and its (P)Ba1 first preferred share shelf rating. The stabilization of TransAlta's rating outlook reflects the steady improvement in the company's financial condition in the last few years. The stable outlook reflects Moody's expectation that TransAlta will continue to manage its generation portfolio such that it exceeds management's 75% minimum contracting target at all times and that TransAlta's trading and marketing activities will continue to constitute a small proportion of TransAlta's overall activities and that trading and marketing exposures will remain relatively short-dated. The stable outlook also reflects the expectation that for the foreseeable future, TransAlta's growth will be modest and conservatively financed. TransAlta's ratings are underpinned by the high degree of contractedness of its portfolio of merchant generating assets, as well as by its strengthened balance sheet and cash flow metrics. TransAlta's ratings are also supported by the approximately 40% of its generating capacity which operates under Alberta Power Purchase Agreements which are effectively back-stopped by Alberta's Balancing Pool, an independent body with the ability fund its operations by levying charges on Alberta's electricity consumers. Finally, TransAlta's ratings are supported by the geographic and fuel-type diversity of its portfolio of its generating assets. Moody's believes that TransAlta's ratings could be upgraded if the company were able to demonstrate sustainable improvement in FFO/Debt above 25% and FFO Interest Coverage in excess of 5x. Conversely, Moody's believes that any one or more of the following factors would result in downward pressure on TransAlta's ratings * any failure to maintain contractedness in excess of management's minimum 75% target; * any material reduction in the weighted average credit rating of TransAlta's power purchasers; * a significant expansion of proprietary trading activities; or, * any reduction in FFO/Debt below 20% and/or FFO Interest Coverage below 4x for an extended period. TransAlta Corporation is a merchant generation and wholesale energy marketing company headquartered in Calgary, Alberta. TRC HOLDINGS: Ct. OKs Asset Sale to Jackson Street & H/E Financial ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Wisconsin authorized TRC Holdings, Inc. and its debtor-affiliates to sell, free and clear of all liens, claims and encumbrances, any and all assets to Jackson Street Funding LLC and H/E Financial LLC. The Court also approved the Asset Purchase Agreement between the Debtors and the buyers. An order was entered establishing the bid procedures to be utilized for the sale of the assets and establishing a hearing date on the sale of the Debtors' assets for Aug. 24, 2006. On Aug. 24, 2006, the Court denied approval of the requested sale and on Sept. 1, 2006, the Court extended the Bid Procedures Order, allowing the Debtors through Sept. 15, 2006 to sell their assets. On Sept. 6, 2006, the Court authorized the Debtors to employ Lawrence Clancy to act as sale supervisor to oversee the Debtors' renewed efforts to market the assets. The Court was informed of the efforts of the Debtors and the Sale Supervisor since the prior hearing. The Court concludes that there has been compliance with the Bid Procedures Order entered July 28, 2004, as extended to Sept. 1, 2006, with modifications thereto made the Sale Supervisor being hereby approved. The Court also finds and determines that the notice of sale to potential purchasers was reasonable and all notices required by the Bankruptcy Code were proper and appropriate. A full-text copy of the Asset Purchase Agreement is available for free at http://ResearchArchives.com/t/s?12b2 TRC Holdings, Inc., is a staffing agency that provides skilled and semi-skilled temporary staff to small and mid-market employees primarily in the areas of industrial, administrative, technical, construction, light industrial and health care. The Debtor currently employs approximately 930 temporary and 50 full-time workers. The Debtor filed for chapter 11 protection on April 18, 2006 (Bankr. E.D. Wis. Case No. 06-21855). Daryl L. Diesing, Esq., Patrick B. Howell, Esq., and Daniel J. McGarry, Esq., at Whyte Hirschboeck Dudek S.C. represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Debtor filed for protection from its creditors, it estimated assets between $1 million to $10 million and debts between $10 million to $50 million. TYRINGHAM HOLDINGS: Files Schedules of Assets and Liabilities ------------------------------------------------------------- Tyringham Holdings, Inc., delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Eastern District of Virginia, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $26,603,834 C. Property Claimed as Exempt D. Creditors Holding $19,956,567 Secured Claims E. Creditors Holding $324,500 Unsecured Priority Claims F. Creditors Holding $4,766,450 Unsecured Nonpriority Claims ----------- ----------- Total $26,603,834 $25,047,517 Headquartered in Richmond, Virginia, Tyringham Holdings, Inc., sells premium brand name jewelry to a broad base of middle and upper income customers. The Company filed for chapter 11 protection on Sept. 6, 2006 (Bankr. E.D. Va. Case No. 06-32385). Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran, PLC, represent the Debtor. Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. At Aug. 30, 2006, the Debtor disclosed that it had $25 million in total assets and $23.7 million in total debts. TYRINGHAM HOLDINGS: Panel Taps Marcus Santoro as Local Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors in Tyringham Holdings, Inc.'s chapter 11 case asks the U.S. Bankruptcy Court for the Eastern District of Virginia for permission to retain Marcus, Santoro & Kozak, P.C. as its local counsel Marcus Santoro will: a. advise the Committee with respect to its powers and duties under Section 1103 of the Bankruptcy Code; b. take all necessary action to preserve, protect and maximize the value of the Debtor's estate for the benefit of the Debtor's unsecured creditors, including but not limited to, investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's businesses and the desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a plan; c. prepare on behalf of the Committee motions, applications, answers, orders, reports and papers that may be necessary to the Committees interests in the Debtor's chapter 11 case; d. participate in the formulation of a plan as may be in the bests interests of the Committee and the unsecured creditors of the Debtor's estate; e. represent the Committee's interests with respect to the Debtor's efforts to obtain postpetition secured financing; f. advise the Committee in connection with any potential sale of assets; g. appear before the Court, any appellate courts, and the U.S. Trustee and protect the interests of the Committee and the value of the Debtor's estate before such courts and the U.S. Trustee; and h. perform all other services as may be required and in the interests of the creditors. Karen M. Crowley, Esq., a member at Marcus Santoro, tells the Court that attorneys at the firm bill between $150 and $310 per hour while paralegals bill between $75 and $90 per hour. Ms. Crowley assures the Court that her firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Crowley can be reached at: Karen M. Crowley, Esq. Marcus, Santoro & Kozak, P.C. 1435 Crossways Boulevard, Suite 300 Chesapeake, Virginia 23320-2896 Tel: (757) 222-2224 Fax: (757) 333-3390 http://www.mskpc.com/ Headquartered in Richmond, Virginia, Tyringham Holdings, Inc., sells premium brand name jewelry to a broad base of middle and upper income customers. The Company filed for chapter 11 protection on Sept. 6, 2006 (Bankr. E.D. Va. Case No. 06-32385). Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran, PLC, represent the Debtor. Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. At August 30, 2006, the Debtor disclosed that it had $25.0 million in total assets and $23.7 million in total debts. UNITY WIRELESS: Incurs $1.1 Mil. Net Loss in 2006 Second Quarter ---------------------------------------------------------------- Unity Wireless Corporation posted a $1,167,404 net loss for the second quarter ended June 30, 2006, a decrease of $198,000, or 14.50%, from a loss of $1,365,404 in the second quarter of 2005. This decrease was primarily the result of the general improvement in the operation and the decrease in accretion of interest. Net sales in the second quarter of 2006 were $1,998,397, an increase of 16.40% or $281,509, from $1,716,888 in the second quarter of 2005. This increase was primarily due to the result of the realization of projects in the Company's customer base and a general improvement in the telecommunication industry. Cost of goods sold during the second quarter of 2006 was $1,597,679 resulting in a gross margin of $400,718 or 20.05% of net sales, compared to $1,224,026 in the second quarter of 2005 resulting in a gross margin of $492,862, or 28.70% of net sales. This decrease in gross margin percentage is primarily the result of the high portion of sales related to China in which the margins were lower due to the competition pressures. At June 30, 2006, the Company's balance sheet showed $10,122,122 in total assets and $12,492,288 in total liabilities, resulting in a $2,370,166 stockholders' deficit. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12b0 Going Concern Doubt KPMG LLP expressed substantial doubt about Unity Wireless' ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's recurring losses from operations About Unity Wireless Based in Bellingham, Washington, Unity Wireless Corporation (OTCBB: UTYW) -- http://www.unitywireless.com/-- is a developer of wireless subsystems and coverage-enhancement solutions for wireless communications networks. UNIVISION COMMS: Moody's Cuts Senior Unsec. Notes' Rating to Ba3 ---------------------------------------------------------------- Moody's Investors Service downgraded Univision Communications Inc.'s senior unsecured notes to Ba3 from Baa3 and assigned the company a B1 Corporate Family Rating and B1 Probability of Default Rating. The ratings are on review for possible downgrade. Downgrades: * Issuer: Univision Communications Inc * Senior Unsecured Regular Bond/Debenture, Downgraded to Ba3 from Baa3 * Senior Unsecured Shelf, Downgraded to (P)B3 from (P)Baa3 * Subordinated Shelf, Downgraded to (P)B3 from (P)Ba1 * Junior Subordinated Shelf, Downgraded to (P)B3 from (P)Ba1 * Preferred Stock Shelf, Downgraded to (P)B3 from (P)Ba2 Assignments: * Issuer: Univision Communications Inc * Corporate Family Rating, Assigned B1 * Probability of Default Rating, Assigned B1 The rating downgrade reflects the significant increase in Univision's leverage that will occur as a result of the proposed $13.7 billion acquisition of the company by a group of private equity investors pursuant to the June 26, 2006 merger agreement. Moody's is taking the rating action at this time because Univision's announcement that shareholders approved the buyout removes a material contingency and Moody's now believes that the acquisition is highly likely to close. Moody's believes the B1 CFR is the highest achievable for the post-acquisition company assuming -- that Televisa and Venevision retain a 25% ownership interest (approximately $1.3 billion of equity), and, -- there is a plan to significantly reduce debt over the very near term. Moody's believes the B1 CFR is the upper limit for Univision at these metric levels despite the company's strong market position in Spanish-language media, good operating margins and growth prospects. Moody's has not discussed post-acquisition strategies with the proposed new owners, and there remains significant uncertainty over the ultimate asset makeup and capital structure of the company. The ratings remain on review for downgrade due to the potential that Televisa and Venevision will ultimately decide not to retain an ownership position and pending more clarity on anticipated asset sales that may be used to delever the company. Moody's will evaluate in the review the new controlling equity holders' plans for the company upon completion of the acquisition including the potential monetization of selected business lines or television station assets while maintaining the television networks, cost reductions, revenue enhancements, or other cash saving strategies that could partially mitigate the debt burden as well as any modifications to Spanish-language licensing arrangements should Televisa and Venevision retain an ownership position. Ratings on the existing senior unsecured notes were lowered to Ba3 from Baa3. The notes do not have change of control put rights but Moody's expects the notes will obtain a security interest in the post-acquisition company due to the existence of a negative pledge in the indentures. The Ba3 note rating reflects this collateral assumption and is based on application of Moody's loss-given default notching methodology to the capital structure presented in the company's Aug. 17, 2006, proxy statement. Additional rating adjustments to the existing notes could occur if the CFR is lowered or the capital mix differs from that outlined in the proxy statement. Moody's confirmed the existing Baa3 rating on the 2.875% notes due October 15, 2006 as the notes will mature prior to completion of the proposed acquisition of Univision, which the company indicated is expected in the spring of 2007. Moody's does not rate Univision's existing $1 billion revolver. Univision Communications Inc. is the largest Spanish-language media company in the United States. The company is headquartered in Los Angeles with television network operations in Miami and television and radio stations and sales offices in major cities throughout the United States. URANERZ ENERGY: Stakes & Records 82 Additional Mining Claims ------------------------------------------------------------ Uranerz Energy Corporation staked and recorded an additional 54 federal lode mining claims at the Nichols Ranch property and an additional 28 claims have been staked and recorded at the Hank property. This recent claim staking activity is based on the results of the exploration drilling program conducted during the past two months. Permitting activities continue on both Hank and Nichols projects. The vegetation and wildlife surveys have been completed and the data is being incorporated into the mine permit application as appendices as required by the Wyoming Department of Environmental Quality. Soil surveys are currently ongoing. During the drilling program hydrogeologic test wells were installed for upcoming pumping tests and core samples of the deposit were taken for the radiation environmental data requirements. The mine plan chapter of the application is scheduled for management review and incorporation into the application during the first half of October. At this time, the submittal of the application covering both projects is still on schedule for mid 2007. Currently, the company has uranium properties in Saskatchewan, Mongolia and Wyoming. The Canadian and Mongolian uranium properties are in the exploration stage and Uranerz has joint ventured these projects to other companies as a means of reducing its exploration risk. These projects are operated and funded by their joint venture partners. The company's Powder River Basin Wyoming uranium properties are advanced, and the company has initiated environmental licensing and mine planning for the development of two of these projects. About Uranerz Energy Based in Vancouver, British Columbia, Uranerz Energy Corporation (AMEX:URZ)(FWB:U9E)-- http://www.uranerz.com/-- is engaged in the acquisition, exploration and development of properties in the uranium sector. The company's goal is to become a primary producer of uranium which will be utilized as fuel in the western world's nuclear electrical generating facilities. Uranerz Energy is the only pure uranium company listed on the American Stock Exchange. The company is composed of an experienced team of mining personnel, many of whom are former officers, senior management and employees of the original Uranerz Exploration and Mining Limited and related companies. The Uranerz Group was acquired in 1998 by Cameco, the world's largest primary uranium producer. Going Concern Doubt Manning Elliott LLP, in Vancouver, Canada, raised substantial doubt about Uranerz Energy's ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's significant operating losses and need to generate any revenue since inception. The company has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate future. The continuation of the company is dependent upon its ability to obtain necessary equity financing to continue operations, and additional financial support from its shareholders. UTILITY CRAFT: Panel Gets Okay to Hire Poyner & Spruill as Counsel ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of North Carolina allowed the Official Committee of Unsecured Creditors appointed in Utility Craft, Inc.'s chapter 11 case to retain Poyner & Spruill, LLP, as its bankruptcy counsel. As reported in the Troubled Company Reporter on Aug. 8, 2006, Poyner & Spruill will: a. provide legal advice with respect to the Committee's powers and duties and keep the Committee and the other unsecured creditors in the case informed of developments; b. assist the Committee in evaluating the legal basis for, and effect of, the various pleadings that will be filed by the Debtor and other parties-in-interest in the Debtor's chapter 11 case; c. investigate the acts, conduct, assets, liabilities, and financial condition of the Debtor; d. assist the Committee in evaluating the monthly reports and evaluating and negotiating the Debtor's or any other party's plan of liquidation and any associated disclosure statement; e. consult with the Debtor and its professionals concerning administration of the case; f. commence and prosecute any and all necessary and appropriate actions or proceedings on behalf of the Committee in the Debtor's bankruptcy proceedings; g. appear in Court to protect the interest of the Committee; h. perform all other legal services for the Committee which may be necessary and proper in the Debtor's bankruptcy proceedings; and i. monitor the liquidation sale of the Debtor's assets. The Debtor told the Court that the firm's professionals bill: Attorney Hourly Rate -------- ----------- Judy D. Thompson, Esq. $310 Diane P. Furr, Esq. $300 Anna S. Gorman, Esq. $275 Deborah M. Tyson, Esq. $190 Paralegal --------- Susan Black $100 Ms. Thompson assured the Court that her firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in High Point, North Carolina, Utility Craft, Inc., dba Wood Armfield Furniture, specializes in manufacturing high quality furniture and accessories. The Company filed for chapter 11 protection on July 20, 2006 (Bankr. M.D. N.C. Case No. 06- 10816). 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. UTILITY CRAFT: Final Cash Collateral Hearing Set for October 26 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of North Carolina will convene a hearing at 9:30 a.m., on Oct. 26, 2006, for the final consideration of Utility Craft, Inc., dba Wood Armfield Furniture's request to use cash collateral securing repayment of the its indebtedness to High Point Bank and Trust Co. The Court also authorized the Debtor to satisfy the HPB existing obligations. As of Aug. 31, 2006, the Debtor owed $1,839,369.52, with interest continuing to accrue at $410.16 per diem, to High Point under the first HPB Loan and the second HPB Loan, excluding the attorney's fees to which the Bank may be entitled. To provide the lender with adequate protection required under 11 U.S.C. Sec. 363 for any diminution in the value of its collateral, High Point's liens and security interests will be perfected. The Debtor's access to HPB's cash collateral will allow it to continually maintain, preserve and protect its assets. A copy of the Cash Collateral Budget is available for free at http://researcharchives.com/t/s?12b3 Sale Order On Aug. 7, 2006, the Court temporarily granted the Debtor's Sale Promotion agreement with H.P.G. Enterprises, Inc., selling its inventory assets. High Point's liens were transferred to the guaranteed amount to be paid by the Debtor. In addition, its existing obligations will constitute a valid fully secured claim on substantially all of the Debtor's inventory assets. Upon the sale of all or substantially all of the HBP Collateral, the Debtor will pay over the proceeds as may be necessary to satisfy the outstanding principal, interest and other charges owed to High Point. Headquartered in High Point, North Carolina, Utility Craft, Inc., dba Wood Armfield Furniture, specializes in manufacturing high quality furniture and accessories. The Company filed for chapter 11 protection on July 20, 2006 (Bankr. M.D. N.C. Case No. 06- 10816). 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. VERIFONE INC: S&P Rates Proposed $540 Million Facility at BB- ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on San Jose, California-based VeriFone, Inc., and assigned its 'BB-' debt rating, with a recovery rating of '3', to the proposed $540 million first-lien bank facility. The bank facility consists of a $40 million revolving credit facility and a $500 million term loan. Proceeds from the facility, along with approximately $475 million of cash and equity, will be used to fund the acquisition of Lipman Electronic Engineering Ltd. The outlook is negative. "The ratings on VeriFone reflect the company's increased debt leverage, acquisitive growth strategy, and relatively short financial history as an independent entity," said Standard & Poor's credit analyst Martha Toll-Reed. These factors are partially offset by VeriFone's leading position in the niche market for electronic payment solutions, a diversified customer base and, pro forma for the proposed acquisition, expanded market and product base. VeriFone designs, markets and services system solutions that enable secure electronic payments. Organic revenue growth has accelerated over the past two years, benefiting from management's focus on increasing penetration of electronic payments in international markets, replacement of existing solutions to accommodate newer payment applications, and an overall market shift from paper-based transactions to electronic transactions at the point of sale. The company reported revenues of $148 million in the quarter ended July 31, 2006, up 17% over the prior year period. EBITDA margins have benefited from increased operating leverage and are currently in the low-20% range. However, the Lipman acquisition will be VeriFone's largest to date, and could pose integration and operational challenges. VIRAGEN INC: Ernst & Young Raises Going Concern Doubt ----------------------------------------------------- Ernst & Young LLP, in Fort Lauderdale, Fla., raised substantial doubt about Viragen, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended June 30, 2006, and 2005. The auditing firm pointed to the Company's recurring operating losses, accumulated and stockholders' deficiencies, and dependence on its ability to raise adequate capital to fund necessary product commercialization and development activities. For the year ended June 30, 2006, the Company reported a $19,496,484 net loss attributable to common stockholders on $391,213 of product sales, compared with a $26,209,856 net loss on $278,784 of product sales for the same period in 2005. At June 30, 2006, the Company's balance sheet showed $13,973,966 in total assets and $15,587,613 in total liabilities, resulting in a $1,613,647 stockholders' deficit. AMEX Delisting Notice The Company received deficiency letters from the American Stock Exchange, or AMEX, advising that it did not meet AMEX's continued listing standards. Specifically, the Company has not met AMEX's combined minimum stockholders' equity and net losses requirements since June 30, 2005. The Company submitted a plan to AMEX to regain compliance with its continued listing standards, which was accepted by AMEX. AMEX has granted the Company a conditional extension of time until March 20, 2007, to regain compliance with its continued listing standards. The Company is subject to periodic review by AMEX during the extension period. If the Company fails to make progress consistent with the plan or to regain compliance with the continued listing standards by the end of the extension period, the Company's shares of common stock will be delisted from AMEX. Recent Developments The Company have experienced significant losses and a negative cash flow from operating activities since inception. In July 2006, it filed a registration statement to register 67 million units (not including 10.05 million units to cover underwriters' over-allotment option if exercised). The Company believes that the net proceeds from its proposed secondary offering, if completed as currently contemplated and the Company raises the level of proceeds anticipated, will be sufficient to fund its operations through its fiscal year ending June 30, 2007. In the event that its proposed secondary offering is not completed as contemplated or the Company raises fewer net proceeds than anticipated, and if it is unable to obtain additional financing or generate licensing and sales revenue sufficient to sustain its operations, as needed, it could be forced to significantly curtail or suspend its operations, including laying-off employees, recording asset impairment write-downs, and other measures. Additional capital may not be available to it when needed, or on terms that are acceptable to it, or at all. The Company is contractually not permitted to incur additional indebtedness except in limited circumstances, and its ability to raise additional funds through the issuance of additional debt will be limited absent a waiver from debt holders. There can be no assurance that debt holders will provide waivers, if required. In August 2006, the Company's majority-owned subsidiary, Viragen International, Inc., completed a private placement of 3,154 shares of Viragen International Series D 24% cumulative preferred stock. Viragen International received net proceeds of approximately $284,000 in connection with this transaction. In July 2006, Viragen International completed a private placement of 18,000 units with each unit consisting of one share of Viragen International Series C 24% cumulative preferred stock and 200 shares of Viragen International common stock. Accordingly, 18,000 shares of its Series C cumulative preferred stock and 3,600,000 shares of its common stock were issued. Viragen International received net proceeds of approximately $1.6 million in connection with this transaction. A full-text copy of the Company's annual report is available for free at http://ResearchArchives.com/t/s?12c6 About Viragen, Inc. Viragen, Inc., is a bio-pharmaceutical company engaged in the research, development, manufacture and commercialization of products for the treatment of cancers and viral diseases. The Company operates from three locations: Plantation, Florida, which contains the Company's administrative offices and support; Viragen (Scotland) Ltd., located outside Edinburgh, Scotland, which conducts the Company's research and development activities; and ViraNative, located in Umea, Sweden, which houses the Company's human alpha interferon manufacturing facilities. As of June 30, 2006, the Company owned approximately 81.2% of Viragen International, Inc. Subsequent to June 30, 2006, its ownership interest of Viragen International was reduced to approximately 77.0%. Viragen International owns 100% of ViraNative AB, its Swedish subsidiary, and 100% of Viragen (Scotland) Ltd., its Scottish research center. WADSWORTH CDO: Moody's Puts Ba1 Rating on $1.375 Mil. Sub. Notes ---------------------------------------------------------------- Moody's Investors Service has assigned these ratings to notes issued by Wadsworth CDO, Ltd., a structured finance collateral debt obligation: * Aaa to the $800,000,000 Class A-1A Senior Secured Floating Rate Notes due 2046 * Aaa to the $256,000,000 Class A-1B Senior Secured Floating Rate Notes due 2046 * Aaa to the $72,500,000 Class A-2 Senior Secured Floating Rate Notes due 2046 * Aa2 to the $38,000,000 Class B Senior Secured Floating Rate Notes due 2046 * A2 to the $15,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2046 * Baa2 to the $8,250,000 Class D Secured Deferrable Floating Rate Notes due 2046 * Ba1 to the $1,375,000 Class S-1A Subordinated Notes due 2046 Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. Moody's Investors Service also assigned a rating of Aaa to the $5,000,000 Class P Notes due 2046. Moody's rating of the Class P Notes addresses the return of the Class P Investor Balance and is solely based upon Moody's rating of the Treasury Strip, CUSIP No. 9128331CD1. Moody's rating of the Class P Notes may vary with any change to Moody's rating of the Treasury Strip. Hartford Investment Management Company will be the collateral manager of the transaction. WARNER CHILCOTT: S&P Raises Corporate Credit Rating to B+ from B ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Warner Chilcott Corp. The corporate credit rating was raised to 'B+' from 'B'. At the same time, the ratings were removed from CreditWatch, where they were placed with positive implications on June 13, 2006, following the company's announcement that it was planning an IPO, with the bulk of proceeds to be used for debt reduction. The rating outlook is stable. "The ratings upgrade reflect the completion of the IPO, in which the specialty pharmaceutical company raised more than $1 billion and plans to use the majority of the proceeds to reduce debt by $633 million," said Standard & Poor's credit analyst Arthur Wong. Nevertheless, the company will remain highly leveraged, with debt to EBITDA at roughly 4.5x, and Standard & Poor's believes that the company will remain financially aggressive. These risk factors are partially offset by the company's diverse product portfolio and solid positions in the women's health and dermatology categories. Rockaway, New Jersey-based Warner has built -- largely through Acquisitions -- solid franchises in both the women's health and dermatology markets, and the company's portfolio is relatively diversified. Women's health, consisting of oral contraceptives and hormone replacement therapy, accounts for more than 50% of Warner's annual sales. The company's Ovcon, Estrostep, and Loestrin 24 brands compete in the branded oral contraceptives market. Warner recently cancelled an agreement with generic drug maker Barr Pharmaceuticals, which would have allowed Barr to sell a generic version of Ovcon 35. The drug generated $95 million in high-margin sales for Warner for the 12 months ended July 31, 2006. Warner hopes to largely offset lost sales with a new chewable version of Ovcon 35, as well as continued sales of the original product. The company also recently launched Loestrin 24, low estrogen oral contraceptive that produces a shorter, lighter menstrual flow. Warner's EBITDA operating margin is high, at more than 50%, and many of the company's products boast gross margins of more than 90%. Still, since its buyout in early 2005, the company has been highly leveraged. Annualized debt to EBITDA, pro forma for the IPO-related reduction of debt and the Dovonex acquisition, will be greater than 4.5x, and funds from operations to total debt will be roughly 11%. WEEKS LANDING: Court Extends Plan-Filing Period to October 15 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida in Fort Meyers extended: a) until Oct. 15, 2006, Weeks Landing, LLC, and its debtor- affiliates' exclusive period to file a Chapter 11 Plan of Reorganization; and b) until Dec. 15, 2006, their exclusive period to solicit acceptances of their Plan. As reported in the Troubled Company Reporter on Aug. 23, 2006, Jordi Guso, Esq., at Berger Singerman, PA, told the Court that the proposed exclusivity extensions will allow RCMP Enterprises, LLC, to complete its due diligence. RCMP agreed to fund the Debtors' plan of reorganization pursuant to a court-approved Term Sheet. Under the term sheet, RCMP anticipated completing its due diligence by July 24, 2006. However, RCMP failed to complete its due diligence by the July deadline and asked the Debtor for and an extension of the due diligence through Sept. 24, 2006. The Debtors have consented to the extension. Headquartered in Bonita Springs, Florida, Weeks Landing, LLC, owns the Weeks Fish Camp. The Debtor and three of its affiliates filed for chapter 11 protection on Apr. 14, 2006 (Bankr. M.D. Fla. Case No. 06-01721). Jordi Guso, Esq., at Berger Singerman, P.A., represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. WEEKS LANDING: Court Sets September 30 as Claims Bar Date --------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida in Fort Myers set Sept. 30, 2006, as the Bar Date for filing Proofs of Claim or Proofs of Interest against Weeks Landing, LLC, and its debtor-affiliates. As reported in the Troubled Company Reporter on Aug. 31, 2006, the Debtors said the September 30 Bar Date will allow them to ascertain the number and amount of claims in various classes and finalize the terms of a Plan of Reorganization and Disclosure Statement. Jordi Guso, Esq., at Berger Singerman, told the Court that in order to develop a comprehensive, viable Plan, the Debtors will require complete and accurate information regarding the nature, amount, and status of all claims that will be asserted in their Chapter 11 cases. The September 30 Bar Date also applies to the claims of any Governmental Unit. Headquartered in Bonita Springs, Florida, Weeks Landing, LLC, owns the Weeks Fish Camp. The Debtor and three of its affiliates filed for chapter 11 protection on Apr. 14, 2006 (Bankr. M.D. Fla. Case No. 06-01721). Jordi Guso, Esq., at Berger Singerman, P.A., represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. WEST CONTRA: Chapter 9 Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: West Contra Costa Healthcare District dba Doctors Medical Center San Pablo/Pinole 2000 Vale Road San Pablo, CA 94806 Tel: (510) 243-9591 Bankruptcy Case No.: 06-41774 Type of Business: The Debtor is engaged in the health care business. Chapter 9 Petition Date: October 1, 2006 Court: Northern District of California (Oakland) Debtor's Counsel: M. Elaine Hammond, Esq. Friedman, Dumas and Springwater LLP 150 Spear Street, Suite 1600 San Francisco, CA 94105 Tel: (415) 834-3800 Fax: (415) 834-1044 Estimated Assets: $50 Million to $100 Million Estimated Debts: $50 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Medtronic, Inc. Trade Debt $958,791 P.O. Box 848086 Dallas, TX 75284-8086 Tenet Health System Trade Debt $904,890 Scott Ramsey 13737 Noel Road, Suite 100 Dallas, TX 75240 World Health Trade Debt $295,409 P.O. Box 404118 Atlanta, GA 30384-4118 Owens & Minor Inc. Trade Debt $269,329 P.O. Box 841420 Dallas, TX 758410-1420 Total Renal Care Inc. Trade Debt $244,800 Renal Treatment Center P.O. Box 403008 Atlanta, GA 30384-3008 Healthcare Financial Solutions Trade Debt $181,017 Key Government Finance, Inc. Trade Debt $153,327 Boston Scientific Trade Debt $148,543 Inpatient Consultants of CA, Inc. Trade Debt $141,001 Spheris Corporation Trade Debt $134,057 Agostini & Associates Trade Debt $125,983 CMRE Financial Services, Inc. Trade Debt $120,903 McKesson Drug Co. Trade Debt $118,051 Healthcare Recoveries Trade Debt $102,630 Integrated Incare Medical Group Trade Debt $77,227 McKesson Info Solutions Trade Debt $76,702 Dell Marketing, LP Trade Debt $75,876 Angelica Textile Services Trade Debt $73,530 Beta Healthcare Group Trade Debt $70,809 Impac Medical Systems, Inc. Trade Debt $70,199 WEST CORP: Moody's Assigns Caa1 Rating to $1.1 Bil. Senior Notes ---------------------------------------------------------------- Moody's Investors Service assigned to West Corporation: -- a Ba3 first time rating $2.35 billion senior secured credit facility ($2.1 billion term loan and $250 million revolver), -- Caa1 ratings to both the company's $650 million of senior unsecured notes and $450 million of senior subordinated notes, and a -- a B2 corporate family rating. The ratings for these debt instruments reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B2, and a loss given default of LGD 3 for the secured credit facility, LGD 5 to the senior unsecured notes and LGD 6 to the subordinated notes. The rating outlook is stable. On May 31, 2006, West entered into a definitive agreement to recapitalize by merger of Omaha Acquisition Corp., a newly-formed Delaware corporation whose current owners are private equity funds sponsored by Thomas H. Lee Partners, L.P. and Quadrangle Group LLC, with and into West. The transaction values West at approximately $4.1 billion, including debt as of the date of the definitive agreement. The transaction is expected to close in the fourth quarter of 2006 and is subject to customary closing conditions including the approval of West's stockholders. Upon closing of this transaction, West's stock will no longer be publicly traded. The transaction is expected to be funded with the $2.1 billion term loan, $650 million of senior unsecured notes, $450 million of senior subordinated notes, $720 million of cash equity contributed by the sponsors and $285 million of rollover equity. The ratings reflect substantial leverage and minimal free cash flow from operations pro forma for the recapitalization, declining pricing trends in the conferencing and communications segments, and technology risks. The ratings are supported by a large revenue base, solid operating margins, a track record of improving financial performance and long-term relationships with a blue chip client base. The Ba3 rating of the senior secured credit facility reflects an LGD 3 loss given default assessment as this facility is secured by a pledge of substantially all of company's domestic assets (excluding the assets of special purpose receivable financing subsidiaries) and there is a significant amount of junior debt (32% of debt capitalization assuming 75% of the committed revolver is drawn). The Caa1 rating of the senior unsecured notes reflects an LGD 5 loss given default assessment given that it is effectively subordinated to the secured credit facility. The Caa1 rating of the senior subordinated notes, although rated at the same level as the senior unsecured notes, reflects an LGD 6 loss given default assessment given that it is contractually subordinated to the secured credit facility and the senior unsecured notes. The SGL-2 rating reflects a good liquidity position pro forma for the recapitalization transaction. Ratings/assessments assigned: * Corporate family rating at B2; * Probability-of-default rating at B2; * $2.1 billion senior secured 7-year term loan at Ba3 (LGD 3, 32%) * $250 million senior secured 6-year revolver at Ba3 (LGD 3, 32%) * $650 million senior unsecured notes at Caa1 (LGD 5, 81%) * $450 million senior subordinated notes at Caa1 (LGD 6, 93%) * Speculative grade liquidity rating at SGL-2 The stable outlook anticipates moderate revenue and EBIT growth over the next 12-18 months. Cash flow from operations is expected to be used to fund capital expenditures of about $100 million per year, niche acquisitions, which complement existing business segments and required term loan amortization. The ratings could be upgraded if financial performance improves such that EBIT coverage of interest and free cash flow to total debt can be sustained at over 1.7 times and 7%, respectively. The ratings could be pressured if pricing trends worsen or new competitors or technologies emerge resulting in declining revenues and operating margins. A significant debt financed acquisition that weakens credit metrics could also pressure the rating. If these conditions result in EBIT coverage of interest and free cash flow to debt that are expected to sustained at under 1 time and 0%, respectively, a downgrade is likely. Based in Omaha, Nebraska, West is a leading provider of business process outsourcing services. The company reported revenues of $1.7 billion for the 12-month period ending June 30, 2006. West operates through 3 business segments: communication services (55% of revenues), conferencing services (32% of revenues) and receivable management (13% of revenues). WEST CORP: S&P Rates Proposed $2.35 Billion Sr. Facilities at B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating and stable outlook to business process outsourcer West Corp. At the same time, Standard & Poor's assigned a bank loan rating of 'B+' and recovery rating of '2' to West's proposed $2.35 billion senior secured credit facilities, indicating an expectation of substantial (80%-100%) recovery of principal in the event of a payment default. The credit facilities consist of a $250 million revolving credit facility due 2012 and a $2.1 billion term loan due 2013. The rating agency also assigned a 'B-' rating to the company's proposed $650 million senior notes due 2014 and a 'B-' rating to its proposed $450 million senior subordinated notes due 2016. Proceeds from the transaction will be used to finance the acquisition of West by Thomas H. Lee Partners L.P. and Quadrangle Group LLC. Pro forma for the transaction, total debt outstanding was about $3.2 billion as of June 30, 2006. "The ratings reflect West's high leverage following the buyout, its acquisition-centric growth strategy, and the fragmented and competitive communication services outsourcing market," said Standard & Poor's credit analyst Andy Liu. "These factors are only partially offset by the company's good operating history and profit margins." Omaha, Nebraska-based West is a business process outsourcer with operations in the U.S., the U.K., and many other countries. The company's services include agent-based and automated call center services, conferencing services, and accounts receivable management. WESTERN APARTMENT: La Jolla Wants Chapter 11 Case Dismissed ----------------------------------------------------------- La Jolla Loans, Inc., asks the U.S. Bankruptcy Court for the District of Hawaii to dismiss Western Apartment Supply & Maintenance Company's chapter 11 case. La Jolla is the Debtor's first mortgagee and secured creditor. La Jolla contends that cause to dismiss the case exists citing: 1. lack of good faith with respect to the Debtor's current chapter 11 case; 2. substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation; 3. failure to comply with the law prohibiting the payment of the prepetition unsecured debt in the absence of a plan or other authorization; 4. failure to comply with the requirements of Section 327 and 330 of the Bankruptcy Code prior to the retention and payment of accounting professional; and 5. failure to file proper schedules, failure to timely satisfy the filing or reporting requirements with respect to monthly operating reports, and repeated material inaccuracies in those reports. Based in San Diego, California, Western Apartment Supply & Maintenance owns a 73-room hotel in Maui, Hawaii known as the Best Western Maui Oceanfront Inn. The Company filed for chapter 11 protection on Jan. 12, 2004 (Bankr. D. Hawaii Case NO. 04-00072). That case was dismissed on May 16, 2006. The Debtor filed its second chapter 11 petition on Apr. 18, 2006 (Bankr. S.D. Calif. Case No. 06-00821). Gustavo E. Bravo, Esq., and John L. Smaha, Esq., at Smaha and Daley, represent the Debtor. When the Debtor filed for chapter 22, it listed total assets of $18,045,054 and total debts of $18,131,069. On June 30, 2006, at the request La Jolla Loans Inc., a secured creditor, the U.S. Bankruptcy Court for the Southern District of California transferred the Debtor's case to the U.S. Bankruptcy Court for the District of Hawaii on July 1, 2006 (Bankr. D. Hawaii Case No. 06-00459). No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. WESTERN APARTMENT: Says No Cause Exists to Dismiss Chapter 11 Case ------------------------------------------------------------------ Western Apartment Supply & Maintenance Company tells the U.S. Bankruptcy Court for the District of Hawaii that it objects to La Jolla Loans, Inc.'s motion to dismiss its chapter 11 case. La Jolla is the Debtor's secured creditor. The Debtor reminds the Court that in its request, La Jolla identifies three "causes" for the dismissal: 1. the Debtor has taken too long to sell its property or confirm a plan of reorganization; 2. the Debtor has no reasonable prospect of rehabilitation; and 3. according to La Jolla, the Debtor has deliberately ignored the rules and requirements of bankruptcy. The Debtor discloses that with respect to the first two arguments, these "issues" would not be issues at all but for La Jolla's interference and various objections in its bankruptcy proceeding. The Debtor contends that La Jolla has failed to show that there has been any delay on the part of the Debtor in selling or refinancing or that there is no reasonable prospect for rehabilitation. With regards to the third alleged "cause," the Debtor argues that any mistakes made have been cured or will be cured within a short period of time. The Debtor assures the Court that its chapter 11 case was not filed in bad faith and there is no continuing or substantial diminution of the estate. The Debtor relates that though it failed to provide accurate Monthly Operating Reports, it has shown that there was a reasonable justification for the miscalculations provided in those Reports and has taken all available steps to cure those inaccuracies. The Debtor says that if its case is dismissed, La Jolla will complete its foreclosure and it will not have a chance to pursue its adversary claim against La Jolla in Court. The Debtor concludes that it only wants justice to be served and this is possible by establishing the true amount owed to La Jolla and allow the Debtor to pay off this truly owed debt. Based in San Diego, California, Western Apartment Supply & Maintenance owns a 73-room hotel in Maui, Hawaii known as the Best Western Maui Oceanfront Inn. The Company filed for chapter 11 protection on Jan. 12, 2004 (Bankr. D. Hawaii Case NO. 04-00072). That case was dismissed on May 16, 2006. The Debtor filed its second chapter 11 petition on Apr. 18, 2006 (Bankr. S.D. Calif. Case No. 06-00821). Gustavo E. Bravo, Esq., and John L. Smaha, Esq., at Smaha and Daley, represent the Debtor. When the Debtor filed for chapter 22, it listed total assets of $18,045,054 and total debts of $18,131,069. On June 30, 2006, at the request La Jolla Loans Inc., a secured creditor, the U.S. Bankruptcy Court for the Southern District of California transferred the Debtor's case to the U.S. Bankruptcy Court for the District of Hawaii on July 1, 2006 (Bankr. D. Hawaii Case No. 06-00459). No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. WINN-DIXIE: Wants Court to Approve Deutsche Bank Stipulation ------------------------------------------------------------ Pursuant to Rules 2002 and 9019 of the Federal Rules of Bankruptcy Procedure, Winn-Dixie Stores, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the Middle District of Florida to approve their stipulation with Deutsche Bank Trust Company Americas. Deutsche Bank, formerly known as Bankers Trust Company, acts as Pass-Through Trustee under an amended and restated Pass-Through Trust Agreement (Winn-Dixie Pass-Through Certificates, Series 1999-1) dated Feb. 1, 2001, and as an Indenture Trustee under 15 indentures. In the transaction contemplated by the Pass-Through Trust Agreement, certain of the Debtors sponsored the issuance of over $402,000,000 in securities denominated of which approximately $245,200,000 remains outstanding as of Sept. 19, 2006. The securities represent undivided interests in a pool of notes issued pursuant to the Indentures that are secured by: -- mortgages on 15 properties each owned by a special purpose entity and leased under separate leases to the Debtors under a guaranty agreement; -- assignments of the 15 Leases; and -- a Residual Value Surety Bond issued by Centre Reinsurance (U.S.) Limited to assure the residual value of the leased premises at the end of the Lease terms. After the Petition Date, Deutsche Bank timely filed 14 proofs of claim relating to the properties leased to the Debtors: Claim No. Facility Location --------- ----------------- 8869 Miami Florida Dairy 8870 Orlando Florida Distribution Center 8871 Sarasota Florida Distribution Center 8872 Jacksonville Florida Corporate Headquarters 8873 Miami Florida Distribution Center 8874 Bartow Florida Egg Plant 8875 Fitzgerald Georgia (Deep South/Chek Beverage) 8876 Hammond Louisiana Distribution Center 8877 Atlanta Georgia Distribution Center 8878 Montgomery Alabama Perishables Distribution Center 8879 Montgomery Alabama Pizza Plant 8880 Greenville South Carolina Distribution Center 8882 Clayton North Carolina Distribution Center 8883 Charlotte North Carolina Distribution Center Deutsche Bank also filed Claim No. 8868 asserting guarantee claims in connection with the properties. On Dec. 20, 2005, Deutsche Bank filed Claim Nos. 12795, 12796, 12797, and 12798 to amend Claim Nos. 8877, 8879, 8880, 8881, and 8883. The Court, however, sustained the Debtors' 11th Omnibus Claims Objection, disallowing the Amended Claims, among others. Following discussions between the parties, Deutsche Bank advised the Debtors that the Claims that related to the Leases that were rejected by the Debtors -- Claim Nos. 8868, 8871, 8874, 8877, 8879, 8880, 8882, and 8883 -- totaled approximately $52,200,000. In addition, Deutsche Bank filed Claim No. 8881 for claims associated with a dairy in Highpoint, North Carolina. On Jane 30, 2006, the Debtors filed their 2nd Omnibus Motion to Assume Non-Residential Property Leases, seeking to assume several of the Leases. Deutsche Bank objected to the Assumption Motion, arguing, among other things, that the proposed cure amounts should be increased to reflect additional items. To resolve their dispute with respect to the allowance and treatment of Deutsche Bank's Claims, the parties agree that: (1) Claim 8871 will be allowed as a Class 13-Landlord Claim for $51,500,000. This is intended as a global settlement of several claims; (2) Claim Nos. 8868, 8870 to 8880, 8882, and 8883 will be disallowed and expunged with prejudice; (3) Deutsche Bank will withdraw its objection to the Assumption Motion; (4) the Highpoint Claim will not be affected by the stipulation; (5) Deutsche Bank will be precluded from asserting any administrative claims with respect to the leases that are subject of the stipulation; (6) Deutsche Bank waives and releases all claims it may have against the Debtors or any of them through September 19, 2006, provided that the stipulation will not limit the fees and expenses that it is entitled to recover pursuant to Section 12.3 of the Debtors' proposed Joint Plan of Reorganization; and (7) if the Plan is not confirmed, the claims disallowed by the agreement will be deemed reinstated. 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. 54; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WORLDCOM INC: McCormick, et al., to Appeal Court's La. Pact Order ----------------------------------------------------------------- About 20 individuals notify the U.S. Bankruptcy Court for the District of New York that they will file an appeal to the U.S. District Court for the Southern District of New York of the Honorable Arthur Gonzalez's order certifying a Settlement Class and approving the Louisiana Right of Way Settlement: * Randolph McCormick, * Allen Bellow, * Calvin Delafossie, * Carla Karam, * Charles Stuart Burk, * Dennis P. Gobert, * Elberta Fruge, * Francis Duplachan, Jr., * Jenora Negata, * Joseph Tanny Devillier, * Kenneth and Elise Miller, * Kenneth Jones, * Lloyd Manuel, * Lloyd P. Leonards, Sr., * Moise Fruge, * Nicki Gaspar, * Robert Glen Fruge, * Ronald Hilts, Sr., * Steve D. Ortego, * Wilson Papillion, and * Yvonne M. Hyatt. As reported in the Troubled Company Reporter on Sept. 13, 2006, the Court approved 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. The Court also 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. 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. WorldCom, Inc., a Clinton, Miss.-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. 125; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WORLDCOM INC: Court Okays Amended Pact Resolving Travelers' Claim ----------------------------------------------------------------- Pursuant to a stipulation approved by the U.S. Bankruptcy Court for the District of New York on Jan. 24, 2005, Travelers Casualty and Surety Company of America was granted an Allowed WorldCom General Unsecured Claim for $1,758,741. The January 2005 Order provides, among other things, that in the event Travelers Casualty incurs liquidated clams after Jan. 24, 2005, it is authorized to file amendments to the Proofs of Claim or additional proofs of claim reflecting the liquidated amounts it incurred and will be entitled to payment as soon as practicable under the Debtors' confirmed Plan of Reorganization. Travelers Casualty has incurred additional liquidated claims totaling $890,269 after January 2005 through July 10, 2006 Accordingly, in addition to the Allowed Claim, the Debtors and Travelers Casualty stipulate that Travelers Casualty is granted an Allowed WorldCom Unsecured Claim equal to $890,269. The Supplemental Claim will be paid out as soon as practicable. The Court approves the parties' Amended Stipulation. WorldCom, Inc., a Clinton, Miss.-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. 125; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WORLDCOM INC: Wants Summary Judgment on Campbell's Claim No. 38345 ------------------------------------------------------------------ WorldCom Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of New York to enter summary judgment against Gary Campbell and expunge his personal injury claim. Shane C. Mecham, Esq., at Stinson Morrison Hecker LLP, in Kansas City, Missouri, relates that Mr. Campbell filed Claim No. 38345 in June 2004, seeking $30,000 for "personal injury/wrongful death." Mr. Campbell filed a personal injury lawsuit in December 2003 against the Debtors in the Marion County Superior Court, in Indiana, asserting personal injury. The Debtors' confirmed Plan of Reorganization provides that "no distributions shall be made on account of any Personal Injury Claim until such Claim is liquidated and becomes an Allowed Claim," Mr. Mecham notes. The only way that a Personal Injury Claim can become an Allowed Claim is for the Claim to be determined by an administrative or judicial tribunal of appropriate jurisdiction. The administrative or judicial tribunal of appropriate jurisdiction for Mr. Campbell's Claim is the Marion Superior Court because that is where he filed the state court action on which his claim is based, Mr. Mecham elaborates. However, the Marion Court has dismissed Mr. Campbell's lawsuit. Accordingly, as a matter of law, Mr. Campbell's Claim has been determined by an administrative or judicial tribunal of appropriate jurisdiction, and that determination precludes it from becoming an allowed claim, Mr. Mecham emphasizes. Moreover, the period to file an appeal of the Marion Court decision has lapsed, Mr. Mecham adds. WorldCom, Inc., a Clinton, Miss.-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. 125; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ZANETT INC: Posts $249,990 Net Loss in Quarter Ended June 30 ------------------------------------------------------------ Zanett, Inc., reported a $249,990 net loss for the three months ended June 30, 2006, versus a net loss of $881,527 recorded for the second quarter of 2005. The Company's operating segments generated revenues of $11,397,221 for the quarter ended June 30, 2006, as compared to $8,932,114 for the same quarter ended June 30, 2005, up 28% from last year. At June 30, 2006, the Company's balance sheet showed $29,617,642 in total assets, $22,453,122 in total liabilities and stockholders' equity of $7,164,520. The Company had cash and cash equivalents of $322,931 at June 30, representing a 60% decrease of $224,482 from the Dec. 31, 2005 year-end balance of $588,259. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?12bb Executive Changes During the first six months of fiscal 2006, the Company made significant changes to its senior management. Effective Feb. 10, 2006, Claudio M. Guazzoni, formerly the President of Zanett, was elected Chairman of the Board and appointed Chief Executive Officer of the company, replacing David M. McCarthy. Also effective Feb. 10, 2006, Jack M. Rapport, formerly the Chief Financial Officer, was appointed President and Kenneth DeRobertis was appointed Chief Financial Officer. In addition, Pierre- Georges Roy resigned from his position as Zanett's Chief Legal Officer effective June 30, 2006, and resigned from the company effective June 30, 2006. Mr. DeRobertis resigned from the company, effective upon the close of business on June 30, 2006. In July 2006, Dennis Harkins was appointed Chief Financial Officer. Revenue Guidance Zanett expects its third quarter of 2006 services revenue, including reimbursed expenses, to be in the range of $10.4 million to $10.6 million. The guidance range would represent services growth of 2.5% to 4.4% year-over-year and, together with results from the first and second quarters, would be tracking a revenue amount of $42 million to $44 million for all of 2006, a growth of 20.4% to 26.1% from revenues in the prior year. Mr. Guazzoni stated, "The fundamentals underlying Zanett's operations have never been better. Zanett is continuing to show new signs of strength. For example, our newly implemented methodology for collecting Receivables has improved operations to the point that we are currently using only $3.5 million of our $5 million Line of Credit." "We have 4 banks bidding for our business. Zanett has never been stronger, both financially and operationally." Going Concern Doubt Deloitte & Touche LLP expressed substantial doubt Zanett's ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended Dec. 31, 2005. The auditing firm pointed to the Company's recurring losses from operations and working capital deficiency. About Zanett Inc. Headquartered in New York, Zanett Inc. -- http://www.zanett.com/ -- is an information technology company that provides customized, mission-critical IT solutions to Fortune 500 corporations, mid- market companies, and classified government agencies involved in Homeland Defense and Homeland Security. The Company operates in two segments: Commercial Solutions and Government Solutions. * BOND PRICING: For the week of September 25 -- September 29, 2006 ------------------------------------------------------------------ Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 01/15/04 1 ABC Rail Product 10.500% 12/31/04 1 Adelphia Comm. 3.250% 05/01/21 0 Adelphia Comm. 6.000% 02/15/06 0 Adelphia Comm. 7.500% 01/15/04 62 Adelphia Comm. 7.750% 01/15/09 62 Adelphia Comm. 7.875% 05/01/09 60 Adelphia Comm. 8.125% 07/15/03 60 Adelphia Comm. 8.375% 02/01/08 61 Adelphia Comm. 9.250% 10/01/02 61 Adelphia Comm. 9.375% 11/15/09 65 Adelphia Comm. 9.500% 02/15/04 59 Adelphia Comm. 9.875% 03/01/05 61 Adelphia Comm. 9.875% 03/01/07 61 Adelphia Comm. 10.250% 11/01/06 60 Adelphia Comm. 10.250% 06/15/11 65 Adelphia Comm. 10.500% 07/15/04 62 Adelphia Comm. 10.875% 10/01/10 62 Allegiance Tel. 11.750% 02/15/08 45 Allegiance Tel. 12.875% 05/15/08 48 Amer & Forgn Pwr 5.000% 03/01/30 66 Amer Color Graph 10.000% 06/15/10 68 Ames Dept. Stores 10.000% 04/15/06 0 Antigenics 5.250% 02/01/25 64 Anvil Knitwear 10.875% 03/15/07 69 Armstrong World 6.350% 08/15/03 64 Armstrong World 6.500% 08/15/05 64 Armstrong World 7.450% 05/15/29 64 Armstrong World 9.000% 06/15/04 66 Atlantic Mutual 8.150% 02/15/28 61 ATA Holdings 13.000% 02/01/09 4 Autocam Corp. 10.875% 06/15/14 62 Avado Brands Inc 11.750% 06/15/09 1 Bank New England 8.750% 04/01/99 5 Bank New England 9.500% 02/15/96 13 BBN Corp 6.000% 04/01/12 0 Burlington North 3.200% 01/01/45 58 Calpine Corp 4.750% 11/15/23 48 Calpine Corp 6.000% 09/30/14 39 Calpine Corp 7.625% 04/15/06 73 Calpine Corp 7.750% 04/15/09 75 Calpine Corp 7.750% 06/01/15 37 Calpine Corp 7.875% 04/01/08 73 Calpine Corp 8.500% 02/15/11 50 Calpine Corp 8.625% 08/15/10 50 Calpine Corp 8.750% 07/15/07 74 Calpine Corp 10.500% 05/15/06 73 Charter Comm Hld 10.000% 05/15/11 75 Cell Therapeutic 5.750% 06/15/08 70 Chic East Ill RR 5.000% 01/01/54 56 CIH 9.920% 04/01/14 68 CIH 10.000% 05/15/14 68 CIH 11.125% 01/15/14 70 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 3 Columbia/HCA 7.050% 12/01/27 73 Columbia/HCA 7.500% 11/15/95 72 Comcast Corp 2.000% 10/15/29 40 Comprehens Care 7.500% 04/15/10 65 Cray Research 6.125% 02/01/11 5 Dal-Dflt09/05 9.000% 05/15/16 30 Dana Corp 5.850% 01/15/15 66 Dana Corp 7.000% 03/15/28 69 Dana Corp 7.000% 03/15/28 67 Dana Corp 7.000% 03/01/29 67 Dana Corp 9.000% 08/15/11 67 Delco Remy Intl 9.375% 04/15/12 46 Delco Remy Intl 11.000% 05/01/09 51 Delphi Trust II 6.197% 11/15/33 57 Delta Air Lines 2.875% 02/18/24 28 Rotech HealthCare 9.500% 04/01/12 68 Delta Air Lines 7.700% 12/15/05 27 Delta Air Lines 7.900% 12/15/09 29 Delta Air Lines 8.000% 06/03/23 29 Delta Air Lines 8.300% 12/15/29 29 Delta Air Lines 8.540% 01/02/07 73 Delta Air Lines 9.250% 03/15/22 28 Delta Air Lines 9.750% 05/15/21 27 Delta Air Lines 10.000% 06/01/08 56 Delta Air Lines 10.000% 08/15/08 28 Delta Air Lines 10.000% 06/05/13 74 Delta Air Lines 10.060% 01/02/16 73 Delta Air Lines 10.080% 06/16/07 65 Delta Air Lines 10.125% 05/15/10 28 Delta Air Lines 10.375% 02/01/11 28 Delta Air Lines 10.375% 12/15/22 29 Deutsche Bank NY 8.500% 11/15/16 71 Dov Pharmaceutic 2.500% 01/15/25 57 Dura Operating 8.625% 04/15/12 44 Dura Operating 9.000% 05/01/09 5 DVI Inc 9.875% 02/01/04 8 Empire Gas Corp 9.000% 12/31/07 1 Duty Free Int'l 7.000% 01/15/04 0 Dyersburg Corp 9.750% 09/01/07 0 Eagle-Picher Inc 9.750% 09/01/13 74 Encysive Pharmac 2.500% 03/15/12 73 Epix Medical Inc. 3.000% 06/15/24 70 Exodus Comm Inc 10.750% 12/12/09 0 Exodus Comm Inc 11.625% 07/15/10 0 Fedders North AM 9.875% 03/01/14 65 Federal-Mogul Co. 7.375% 01/15/06 56 Federal-Mogul Co. 7.500% 01/15/09 56 Federal-Mogul Co. 8.160% 03/06/03 50 Federal-Mogul Co. 8.330% 11/15/01 58 Federal-Mogul Co. 8.370% 11/15/01 53 Federal-Mogul Co. 8.800% 04/15/07 59 Finova Group 7.500% 11/15/09 29 Ford Motor Co 6.500% 05/01/18 75 Ford Motor Co 6.625% 02/15/28 75 Ford Motor Co 7.125% 11/15/25 74 Ford Motor Co 7.400% 11/01/46 73 Ford Motor Co 7.700% 05/15/97 72 Ford Motor Co 7.750% 06/15/43 74 Golden Books Pub 10.750% 12/31/04 0 GB Property Fndg 11.000% 09/29/05 51 Graftech Intl 1.625% 01/15/24 73 Graftech Intl 1.625% 01/15/24 75 GST Network Fndg 10.500% 05/01/08 0 Gulf Mobile Ohio 5.000% 12/01/56 75 Cooper Standard 8.375% 12/15/14 74 Gulf States Stl 13.500% 04/15/03 0 HNG Internorth 9.625% 03/15/06 36 Home Prod Intl 9.625% 05/15/08 60 JTS Corp 5.250% 04/29/02 0 Inland Fiber 9.625% 11/15/07 66 Insight Health 9.875% 11/01/11 34 Iridium LLC/CAP 10.875% 07/15/05 25 Iridium LLC/CAP 11.250% 07/15/05 28 Iridium LLC/CAP 13.000% 07/15/05 27 Iridium LLC/CAP 14.000% 07/15/05 28 Isolagen Inc. 3.500% 11/01/24 73 K&F Industries 9.625% 12/15/10 70 Kaiser Aluminum 9.875% 02/15/02 33 Kaiser Aluminum 12.750% 02/01/03 13 Kellstrom Inds 5.500% 06/15/03 0 Kmart Corp 8.540% 01/02/15 28 Kmart Corp 8.990% 07/05/10 4 Kmart Corp 9.350% 01/02/20 10 Kmart Funding 8.800% 07/01/10 30 Liberty Media 3.750% 02/15/30 63 Liberty Media 4.000% 11/15/29 67 Lifecare Holding 9.250% 08/15/13 71 Macsaver Financl 7.400% 02/15/02 4 Macsaver Financl 7.600% 08/01/07 3 Macsaver Financl 7.875% 08/01/03 0 Merisant Co 9.500% 07/15/13 65 Movie Gallery 11.000% 05/01/12 65 MSX Int'l Inc. 11.375% 01/15/08 70 Muzak LLC 9.875% 03/15/09 61 New Orl Grt N RR 5.000% 07/01/32 69 Pac-West-Tender 13.500% 02/01/09 71 Northern Pacific RY 3.000% 01/01/47 57 Northern Pacific RY 3.000% 01/01/47 57 Northwest Airlines 6.625% 05/15/23 53 Northwest Airlines 7.248% 01/02/12 20 Northwest Airlines 7.625% 11/15/23 53 Northwest Airlines 7.875% 03/15/08 53 Northwest Airlines 8.700% 03/15/07 54 Northwest Airlines 8.875% 06/01/06 53 Northwest Airlines 9.152% 04/01/10 7 Northwest Airlines 9.179% 04/01/10 23 Northwest Airlines 9.875% 03/15/07 53 Northwest Airlines 10.000% 02/01/09 53 NTK Holdings Inc 10.750% 03/01/14 69 Oakwood Homes 7.875% 03/01/04 9 Oakwood Homes 8.125% 03/01/09 9 Oscient Pharm 3.500% 04/15/11 67 Outboard Marine 9.125% 04/15/17 0 Outboard Marine 10.750% 06/01/08 4 Overstock.com 3.750% 12/01/11 74 Owens Corning 7.000% 03/15/09 47 Owens Corning 7.500% 05/01/05 51 Owens Corning 7.500% 08/01/18 49 Owens Corning 7.700% 05/01/08 51 Owens-Corning Fiber 8.875% 06/01/02 48 PCA LLC/PCA Fin 11.875% 08/01/09 25 Pegasus Satellite 9.625% 10/15/49 11 Pegasus Satellite 9.750% 12/01/06 11 Phar-mor Inc 11.720% 09/11/02 0 Piedmont Aviat 10.250% 01/15/49 1 Pixelworks Inc 1.750% 05/15/24 71 Plainwell Inc 11.000% 03/01/08 2 Pliant Corp 13.000% 07/15/10 40 Primus Telecom 3.750% 09/15/10 48 Primus Telecom 8.000% 01/15/14 63 PSINET Inc 10.500% 12/01/06 0 PSINET Inc 11.000% 08/01/09 0 Nutritional Src 10.125% 08/01/09 66 Radnor Holdings 11.000% 03/15/10 10 Railworks Corp 11.500% 04/15/09 1 Read-Rite Corp. 6.500% 09/01/04 11 Rite Aid Corp 6.875% 12/15/28 73 RJ Tower Corp. 12.000% 06/01/13 21 Salton Inc 12.250% 04/15/08 73 Solectron Corp 0.500% 02/15/34 73 Diva Systems 12.625% 03/01/08 1 Toys R Us 7.375% 10/15/18 72 Tribune Co 2.000% 05/15/29 66 Triton Pcs Inc. 8.750% 11/15/11 74 Triton Pcs Inc. 9.375% 02/01/11 73 Tropical Sportsw 11.000% 06/15/08 7 United Air Lines 7.270% 01/30/13 56 United Air Lines 7.870% 01/30/19 54 United Air Lines 8.700% 10/07/08 39 United Air Lines 9.020% 04/19/12 56 United Air Lines 9.350% 04/07/16 30 United Air Lines 9.560% 10/19/18 61 United Air Lines 10.020% 03/22/14 45 United Air Lines 10.110% 02/19/49 44 US Air Inc. 10.700% 01/01/49 22 US Air Inc. 10.700% 01/15/49 23 US Air Inc. 10.750% 01/01/49 0 US Air Inc. 10.750% 01/15/49 24 USAutos Trust 5.100% 03/03/11 75 Venture Holdings 9.500% 07/01/05 1 Venture Holdings 11.000% 06/01/07 0 Vesta Insurance Group 8.750% 07/15/25 9 Werner Holdings 10.000% 11/15/07 10 Westpoint Steven 7.875% 06/15/05 0 Westpoint Steven 7.875% 06/15/08 0 Winn-Dixie Store 8.875% 04/01/08 66 Xerox Corp. 0.570% 04/21/18 34 Ziff Davis Media 12.000% 07/15/10 40 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. 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