/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/061102.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, November 2, 2006, Vol. 10, No. 261 Headlines ACE TRANSACTIONS: Fitch Lowers Rating on Class M-3 Issue to BB ADELPHIA COMMS: Court Denies Disclosure of MIA Non-Public Matters ALLIS-CHALMERS: Extends Notes Exchange Offer Expiration to Nov. 22 ARBY'S RESTAURANT: Moody's Affirms Ba3 Rating on $620MM Sr. Loan BANC OF AMERICA: Fitch Affirms 96 & Upgrades 15 RMBS Classes BARE ESCENTUALS: Moody's Affirms B2 Corporate Family Rating BEAR STEARNS: Better Credit Support Cues S&P to Hold 'BB' Ratings BEAR STEARNS: Fitch Assigns Low-B Ratings to Six Cert. Classes BEAR STEARNS: Fitch Rates $694MM ALT-A Trust Series 2006-7 Group 2 BLOCKBUSTER INC: Declares $18.75 Per Share Cash Dividend CABELA'S CREDIT: Moody's Rates $11.2 Million Class D Notes Ba2 CAFETERIA OF SOUTH BEACH: Case Summary & 17 Unsecured Creditors CAPITAL GROWTH: Posts $624,802 Net Loss in 2006 Second Quarter CB RICHARD: Inks Deal to Acquire Trammell Crow for $2.2 Billion CB RICHARD: Moody's Affirms Senior Bank Credit Facility at Ba1 CB RICHARD: Trammel Crow Deal Cues S&P to Put Ratings on Watch CENTURY REINSURANCE: Fitch Holds Rating at Junk with Neg. Outlook CENVEO INC: Withdraws Proposal to Acquire Banta Corp. CITIGROUP MORTGAGE: Fitch Rates $1MM Non-offered Class 1-B5 at B CMC HEARTLAND: Court Sets November 7 Hearing on Montana Deal COMPLETE RETREATS: Wants Plan Filing Period Extended to Feb. 18 COMPLETE RETREATS: Wants Lease Decision Period Moved to Feb. 18 COMPLETE RETREATS: Can Remove State Proceedings Until January 19 CONSOLIDATED ENERGY: Accepts Resignation of David Guthrie as CEO COREL CORP: Technical Sharing Cues Moody's to Hold B3 Corp. Rating CREDIT SUISSE: Fitch Assigns B Rating to $4.2 Mil of Certificates CWMBS INC: Fitch Puts Low-B Rating on Two Certificate Classes CYBER DEFENSE: Earns $977,238 in 2006 Second Quarter DORAL FINANCIAL: Fitch Cuts Issuer Default Rating to B+ from BB- EUGENE SCIENCE: Earns $1.4 Million in Second Quarter of 2006 FBO AIR: Posts $848,842 Net Loss in 2006 Second Quarter HARVEY ISOM: Case Summary & 11 Largest Unsecured Creditors HEADLINERS ENT: June 30 Balance Sheet Upside Down by $10.6 Million HEALTH SCIENCES: Posts $1.1 Mil. Net Loss in 2006 Second Quarter HEXION SPECIALTY: Eliminates Certain Defaults on Notes HIGHLINE PORTAFAB: Case Summary & 19 Largest Unsecured Creditors HOLLINGER INC: Gets Canadian Court Injunction Against David Radler IMPART MEDIA: Posts $3 Million Net Loss in Second Quarter of 2006 INFONXX INC: Recapitalization Cues Moody's to Place B2 Rating JOHN BALL: Case Summary & 10 Largest Unsecured Creditors KRISPY KREME: Grants 420,000 Common Shares to Executives LAKE AT LAS VEGAS: S&P Cuts Corp. Credit Ratings to CCC From B LEHMAN ABS: Fitch Affirms Ratings on 16 Lehman MH Securitizations LEVEL 3: Incurs $138 Million Net Loss in 2006 Third Quarter LEVEL 3: DBRS Upgrades Senior Unsecured Notes' Rating to B (low) LODGENET ENTERTAINMENT: Moody's Holds Corp. Family Rating at B1 M&K HOLDINGS: Case Summary & 12 Largest Unsecured Creditors MARK IV: Increased Debt Level Cues Moody's to Pare Ratings MORGAN STANLEY: Fitch Rates Six Certificate Classes at Low-Bs MORTGAGE ASSET: Class B-4 Certificates Get Fitch's BB- Rating MOSAIC COMPANY: Units Offer to Buy $1 Bil of Notes and Debentures MOSAIC COMPANY: Moody's Says Tender Offer Won't Change Ba3 Rating NCO GROUP: Special Shareholders' Meeting Set for November 9 NCO GROUP: Moody's Rates Proposed $200MM Sr. Notes at Caa1 NEW WORLD: N.Y. Bankruptcy Court Recognizes Bermuda Proceedings NORTHWESTERN CORP: McGreevey Settlement Hearing Slated for Nov. 9 OAKLAND/FALLS OFFICE: Case Summary & Four Largest Unsec. Creditors OPBIZ LLC: Credit Pact Amendment Cues S&P to Hold Junk Rating PACIFIC BAY: Moody's Eyes Upgrade of Ba3 Rated $17MM Pref. Shares PERFORMANCE TRANSPORTATION: Files Plan and Disclosure Statement PERFORMANCE TRANSPORTATION: Sets Voting & Solicitation Procedures PERFORMANCE TRANSPORTATION: Seeks Amendments to DIP Financing Pact PLEASANTVIEW SWIMMING: Case Summary & 20 Known Creditors PORTRAIT CORP: Court Sets November 28 as Proofs of Claim Bar Date RAM ENTERPRISES: Case Summary & 19 Largest Unsecured Creditors RENAISSANCE PARK: Case Summary & 20 Largest Unsecured Creditors SEMCO ENERGY: S&P Holds BB- Ratings with Positive Outlook SEQUIAM CORP: Posts $2,645,941 Net Loss in 2006 Second Quarter SHAW COMMS: Board Declares Dividend on Class A and Class B Shares SOPHIA MEIMAROGLOU: Case Summary & 13 Largest Unsecured Creditors STRUCTURED ADJUSTABLE: Fitch Rates $485.7MM Mortgage Certificates TIMBERSTAR TRUST: Moody's Rates $130MM Class F Certificates at Ba2 TIMBERSTAR TRUST: Fitch Rates $130 Mil Class F Certificates at BB TITANIUM METALS: Board Declares Dividend on 6.75% Preferred Stock TOOLS 4: Voluntary Chapter 11 Case Summary TRUSTREET PROPERTIES: Moody's Eyes Upgrade for B1 Rated Sr. Debt TRUSTREET PROPERTIES: S&P Puts Ratings on Positive CreditWatch VALASSIS COMM: Earns $6.6 Million in Quarter Ended September 30 VARIG S.A.: Hires Air Canada to Look for Equity Investors WACHOVIA BANK: Fitch Places Low-B Rating on Six Cert. Classes WARNER MUSIC: Good Performance Cues S&P to Lift Sr. Sec. Rating Z-1 CDO: Fitch Lowers Rating on $21 Million Notes to C from CC * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ACE TRANSACTIONS: Fitch Lowers Rating on Class M-3 Issue to BB -------------------------------------------------------------- Fitch has taken various rating actions on these classes of Ace Securities Corporation issues: Series 2002-HE3: -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+; -- Class M-2, rated 'A', placed on Rating Watch Negative; -- Class M-3 downgraded to 'BB' from 'BBB'. Series 2003-FM1 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+; -- Class M-5, rated 'BBB', placed on Rating Watch Negative; -- Class M-6, rated 'BBB-', placed on Rating Watch Negative. The underlying collateral for the mortgage transactions listed above consists of both fixed- and adjustable-rate mortgage loans secured by first and second liens on residential mortgages extended to subprime borrowers. The mortgage loans were acquired by various originators. The mortgage loans of series 2002-HE3 are serviced by Wells Fargo Bank, N.A. (rated 'RPS1' by Fitch) and Select Portfolio Servicing, Inc. (rated 'RPS2' by Fitch) and series 2003-FM1 are serviced by Litton Loan Servicing LP, a wholly owned subsidiary of Credit-Based Asset Servicing and Securitization LLC (C-BASS; rated 'RPS1' by Fitch). The affirmations reflect an adequate relationship between credit enhancement and expected loss and affect approximately $82.92 million in outstanding certificates. The negative actions on the classes M-2 and M-3 of series 2002-HE3 and classes M-4 and M-5 of series 2003-FM1 affect approximately $25.89 million in outstanding certificates. The class M-3 of series 2002-HE3 has been downgraded and class M-2 of series 2002-HE3 and classes M-4 and M-5 of series 2003-FM1 have been placed on Rating Watch Negative due to monthly losses exceeding the available excess spread in recent months, which has caused deterioration in the overcollateralization amounts. As of the October 2006 distribution, the OC for series 2002-HE3 has declined four months in a row and its OC amount of $2,700,627 is below the target amount of $3,487,960. The OC for series 2003-FM1 has declined three out of the last four months and its OC amount of $1,952,119 is below the target amount of $2,272,247. Both deals have stepped down and the OC targets for both transactions have reached their floors. The pools are seasoned 40 and 45 months and have pool factors (current principal balance as a percentage of original) of 9% (series 2003-FM1) and 11% for series 2003-FM1 and 2002-HE2, respectively. Fitch will closely monitor the relationship between excess spread and losses. If the losses exceed excess spread, the ratings will be reassessed. ADELPHIA COMMS: Court Denies Disclosure of MIA Non-Public Matters ----------------------------------------------------------------- The Honorable Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York denied the request of the Adelphia Communications Corporation Bondholder Group for the disclosure of non-public matters relating to the issues raised in the Motions in Aid of Confirmation. As previously reported, the ACC Bondholder Group asked the Court to revive the issues raised in the settlement negotiation process. The Court denies the ACC Bondholder Group's request, citing that it is premature. "A plan has been proposed that will settle the MIA issues, and make the MIA process unnecessary, relieving creditors of the extraordinary costs that continued litigation would entail, and relieving the Debtors and their continuing employees of the enormous strain the MIA process created. This is not the time to announce the MIA process's revival. If the Joint Plan is not confirmed, there will be time enough to revive the MIA process then," Judge Gerber says. Unsealing of Certain Evidence Judge Gerber, however, grants the ACC Bondholder Group's request to "declassify" evidence in the MIA process, and transcripts of the proceedings in the MIA process -- subject to the Debtors' rights to redact or withhold material that would otherwise be declassified, to excise material whose disclosure would be damaging to the interests of the estate. "Frankly, I have doubts as to whether review of the MIA evidence, or transcripts, would assist creditors in any significant way in evaluating the MIA dispute (which is extraordinarily complex), or in making predictions as to its outcome. But I'm willing to let creditors try, and (more realistically) to let plan supporters and opponents make arguments based on MIA evidence," Judge Gerber says. "I'll also declassify and unseal briefs and hearing or conference transcripts that were filed under seal in proceedings before me that related to the settlement process, except to the extent (which I believe is modest) that the submissions included commercially sensitive matter that is subject to protection by reason of my first ruling," Judge Gerber continues. Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 150; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ALLIS-CHALMERS: Extends Notes Exchange Offer Expiration to Nov. 22 ------------------------------------------------------------------ Allis-Chalmers Energy, Inc., has extended the expiration of the exchange offer relating to its 9% Senior Notes due 2014 until 5:00 p.m., New York City time, on Nov. 22, 2006. The extension is due to the pending dissemination of financial information relating to its completed acquisition of Petro- Rentals, Incorporated, and its pending acquisition of all the assets of Oil & Gas Rental Services, Inc. The exchange offer is being made by the Company's prospectus with respect to the exchange offer and the related letter of transmittal. Copies of the prospectus and letter of transmittal may be obtained from the exchange agent for the exchange offers at: By Registered or Certified Mail: Wells Fargo Bank, N.A. MAC N9303-121 P.O. Box 1517 Minneapolis, MN 55480-1517 Attn: Corporate Trust Operations By Regular Mail, Hand or Overnight Delivery: Wells Fargo Bank, N.A. Sixth and Marquette MAC N9303-121 Minneapolis, MN 55479 Attn: Corporate Trust Operations For Assistance (for eligible institutions): Tel.: (800) 344-5128 Fax: (612) 667-4927 Based in Houston, Texas, Allis-Chalmers Energy Inc. (AMEX: ALY) -- http://www.alchenergy.com/-- provides oilfield services and equipment to the oil and gas exploration and development companies primarily in Texas, Louisiana, New Mexico, Colorado, and Oklahoma; offshore in the United States Gulf of Mexico; and offshore and onshore in Mexico. The company offers directional drilling, compressed air drilling, casing and tubing, rental tools, and production services. * * * As reported in the Troubled Company Reporter on Sept. 27, 2006, Moody's Investors Service in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the oilfield service and refining and marketing sector, confirmed its B3 Corporate Family Rating for Allis- Chalmers Energy Inc. Moody's also affirmed its B3 rating on the company's 9% Senior Unsecured Guaranteed Global Notes Due 2014, and assigned the debentures an LGD4 rating suggesting a projected loss-given default of 54%. As reported in the Troubled Company Reporter on July 31, 2006, Standard & Poor's Ratings Services affirmed its 'B-' rating on Allis-Chalmers Energy Inc.'s proposed $80 million senior notes issuance due 2014. The rating service also affirmed its 'B-' corporate credit rating on the company. The outlook is stable. ARBY'S RESTAURANT: Moody's Affirms Ba3 Rating on $620MM Sr. Loan ---------------------------------------------------------------- Moody's Investors Service affirmed all ratings of Arby's Restaurant Group Inc. and changed the rating outlook to negative from stable. Ratings affirmed are: -- Corporate family rated B1 -- Probability of default rating of B2 -- $100 million guaranteed senior secured revolving credit facility, due July 25, 2011, rated Ba3 / 28% / LGD2 -- $620 million guaranteed senior secured term loan B due July 25, 2012, rated Ba3 / 28% / LGD2 Outlook changed to negative from stable The outlook reflects Arby's operating performance to date which has fallen short of Moody's previous expectations when the ratings were first assigned to Arby's on June 30, 2005. For twelve months ending June 30, 2006, leverage remained high at about 6x, coverage on an EBIT to gross interest basis was relatively weak at about 1.5x, while retained cash flow to debt was modest at about 6.9%. Moody's also views Arby's liquidity as weak based on our belief that there is only a modest cushion under its existing bank covenants, which could limit access to the facility or require modification to covenant levels. The ratings are supported by Arby's reasonable level of brand awareness in its core markets, meaningful scale with approximately 3,500 units, and relatively diversified day part breakdown between lunch and dinner. Arby's Restaurant Group, Inc., is headquartered in Atlanta, Georgia, and currently owns and operates approximately 1,043 and franchises 2,516 Arby's quick service restaurants, the majority of which are in the United States. BANC OF AMERICA: Fitch Affirms 96 & Upgrades 15 RMBS Classes ------------------------------------------------------------ Fitch has taken rating actions on these Banc of America mortgage pass-through certificates: Series 2001-4 Group 1: -- Class 1-B-1 affirmed at 'AAA'; -- Class 1-B-2 affirmed at 'AAA'; -- Class 1-B-3 affirmed at 'AAA'; -- Class 1-B-4 affirmed at 'AAA'; -- Class 1-B-5 affirmed at 'AA-'. Series 2001-4 Group 2: -- Class 2-B-1 affirmed at 'AAA'; -- Class 2-B-2 affirmed at 'AAA'; -- Class 2-B-3 affirmed at 'AAA'; -- Class 2-B-4 affirmed at 'AA+'; -- Class 2-B-5 affirmed at 'A'. Series 2002-J: -- Class A affirmed at 'AAA'. Series 2002-K: -- Class A affirmed at 'AAA'. Series 2002-L: -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA+'; -- Class B-3 affirmed at 'AA-'; -- Class B-4 affirmed at 'A'; -- Class B-5 affirmed at 'BBB'. Series 2003-1 Group 1: -- Class A affirmed at 'AAA'; -- Class 1-B-1 affirmed at 'AAA'; -- Class 1-B-2 affirmed at 'AA+'; -- Class 1-B-3 affirmed at 'AA'; -- Class 1-B-4 affirmed at 'A'; -- Class 1-B-5 affirmed at 'BB'. Series 2003-1 Group 2: -- Class A affirmed at 'AAA'. Series 2003-2 Group 1: -- Class A affirmed at 'AAA'. Series 2003-2 Group 2: -- Class A affirmed at 'AAA'. Series 2003-3 Group 1: -- Class A affirmed at 'AAA'. Series 2003-3 Group 2: -- Class A affirmed at 'AAA'; -- Class 2-B-1 affirmed at 'AAA'; -- Class 2-B-2 affirmed at 'AA'; -- Class 2-B-3 affirmed at 'A'; -- Class 2-B-4 affirmed at 'BBB'; -- Class 2-B-5 affirmed at 'BB'. Series 2003-4 Group 1: -- Class A affirmed at 'AAA'. Series 2003-4 Group 2: -- Class A affirmed at 'AAA'; -- Class 2-B-1 affirmed at 'AA+'; -- Class 2-B-2 affirmed at 'A+'; -- Class 2-B-3 affirmed at 'BBB+'; -- Class 2-B-4 affirmed at 'BB+'; -- Class 2-B-5 affirmed at 'B+'. Series 2003-6 Group 1: -- Class A affirmed at 'AAA'. Series 2003-6 Group 2: -- Class A affirmed at 'AAA'. Series 2003-7: -- Class A affirmed at 'AAA'. Series 2003-8 Group 1: -- Class A affirmed at 'AAA'; -- Class 1-B-1 upgraded to 'AA+' from 'AA'; -- Class 1-B-2 upgraded to 'A+' from 'A'; -- Class 1-B-3 upgraded to 'BBB+' from 'BBB'; -- Class 1-B-4 upgraded to 'BB+' from 'BB'; -- Class 1-B-5 upgraded to 'B+' from 'B'. Series 2003-8 Group 2: -- Class A affirmed at 'AAA'. Series 2003-8 Group 3: -- Class A affirmed at 'AAA'. Series 2003-9 Group 1: -- Class A affirmed at 'AAA'; -- Class 1-B-1 upgraded to 'AA+' from 'AA'; -- Class 1-B-2 upgraded to 'A+' from 'A'; -- Class 1-B-3 upgraded to 'BBB+' from 'BBB'; -- Class 1-B-4 upgraded to 'BB+' from 'BB'; -- Class 1-B-5 upgraded to 'B+' from 'B'. Series 2003-9 Group 3: -- Class A affirmed at 'AAA'; -- Class 3-B-1 affirmed at 'AA'; -- Class 3-B-2 affirmed at 'A'; -- Class 3-B-3 upgraded to 'BBB+' from 'BBB'; -- Class 3-B-4 upgraded to 'BB+' from 'BB'; -- Class 3-B-5 affirmed at 'B'. Series 2003-9 Groups 2&4: -- Class A affirmed at 'AAA'. Series 2003-A: -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA'; -- Class B-3 affirmed at 'A'; -- Class B-4 affirmed at 'BBB'; -- Class B-5 affirmed at 'BB'. Series 2003-F: -- Class A affirmed at 'AAA' -- Class B-1 affirmed at 'AA+' -- Class B-2 upgraded to 'AA-' from 'A+' -- Class B-3 affirmed at 'BBB+' -- Class B-4 affirmed at 'BB+' -- Class B-5 affirmed at 'B+' Series 2003-G: -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA+'; -- Class B-2 upgraded to 'AA-' from 'A+'; -- Class B-3 affirmed at 'BBB+'; -- Class B-4 affirmed at 'BB+'; -- Class B-5 upgraded to 'BB-' from 'B+'. Series 2003-H: -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA'; -- Class B-3 affirmed at 'A'; -- Class B-4 affirmed at 'BBB'; -- Class B-5 affirmed at 'BB'. Series 2003-I: -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2003-J: -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. Series 2003-K: -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA+'; -- Class B-4 affirmed at 'BB+'; -- Class B-5 affirmed at 'B+'. Series 2003-L: -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. The underlying collateral on the aforementioned transactions consists of 15-year and 30-year fixed-rate and adjustable-rate mortgages extended to prime borrowers. The transactions are primarily secured by first liens on one- to four-family residential properties. As of the October 2006 distribution date, the pool factors range from approximately 1% to 64%, and the transactions are seasoned in range of 34 months to 66 months. The master servicer for all transactions is Bank of America, N.A., which is currently rated 'RPS1' by Fitch. The affirmations reflect stable relationships of credit enhancement to future expected losses, and affect approximately $5.54 billion in outstanding certificates. The upgrades reflect an improvement in the relationship between CE and future expected losses, and affect approximately $31.22 million in outstanding certificates. BARE ESCENTUALS: Moody's Affirms B2 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service affirmed Bare Escentuals Beauty, Inc's corporate family rating of B2. The outlook has been revised to positive reflecting the rapid deleveraging of the company's balance sheet following its successful initial public offering. To reflect the significant changes in the company's capital structure, Moody's lowered the rating on Bare's first lien bank facilities to B2 from Ba2 reflecting the repayment of the second lien facilities and senior subordinated notes at the holding company, Bare Escentuals, Inc. The ratings on the second lien facilities have been withdrawn. These ratings were affirmed: -- Corporate family rating at B2; These ratings were downgraded: -- $25 million senior secured first-lien revolving credit facility due 2011, to B2 (LGD3, 33%) from Ba2 (LGD2, 22%); -- $343.7 million senior secured first-lien term loan facility due 2012, to B2 (LGD3, 33%) from Ba2 (LGD2, 22%); -- Probability of Default rating to B3 from B2. Outlook revised to positive from stable. Bare's corporate family rating and positive outlook reflect the company's strong operating momentum and leading mineral-based market position in the foundation category of the U.S. cosmetics industry. In addition, Bare's ratings reflect the company's growing brand identity, diversified retail distribution, along with its improving managerial and operational resources. Utilizing the 16 factors cited in Moody's Global Packaged Goods Industry rating methodology and Bare's pro-forma 2006 financial metrics, the company's corporate family rating would map to a Ba3, which is two levels above its current B2 corporate family rating. The methodology derived rating is lifted by the company's strong qualitative elements, which are more reflective of a Ba credit while profitability is more in line with investment grade companies. However, the current B2 corporate family rating reflects the company's small scale, limited product diversification and exposure to potential competitive activity by other industry players that have significantly more financial flexibility, greater bargaining power with customers, and considerably larger resources available to seek market share gains in the foundation category. In addition, the ratings are constrained by Bare's weak financial policy score, which is given particular weight in light of the history of debt-financed returns of capital to its shareholders. The company scores single-B for most of its proforma credit metrics, including a Caa score on Free Cash Flow to Debt. Moody's notes that Bare's proforma leverage has significantly improved following the initial public offering to approximately 3x (using Moody's standard analytical adjustments) and is more consistent with a Baa issuer. However, the risk of additional debt financed shareholder return initiatives remains moderate and will constrain the rating for the near-term. The establishment of a longer track record at current profitability levels, a more diversified mix of products, brands and distributional channels, and sustained de-leveraging over the long-term, with Free Cash Flow to Debt sustained above 8 percent (excluding the impact of dividend recapitalization transactions) and sustained Debt to EBITDA below 5 times, could result in a ratings upgrade. Conversely, negative rating actions could be possible through the realization of identified risks resulting in weakened profit levels. Debt to EBITDA sustained above 7 times or Free Cash Flow to Debt that remains in the low single digits or is negative, could result in a downgrade. Bare Escentuals Beauty, Inc. with headquarters in San Francisco, California, markets cosmetics and skin products, under the Bare Escentuals and MD Formulations brands. Last twelve months sales as of July 2, 2006 were $333 million. BEAR STEARNS: Better Credit Support Cues S&P to Hold 'BB' Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on nine classes of asset-backed certificates from five Bear Stearns Asset Backed Securities Trust transactions. Concurrently, ratings are affirmed on 273 classes from 37 series from the same issuer and on six classes from three Bear Stearns Asset Backed Securities Inc. transactions. The raised ratings reflect increases in the actual and projected credit support percentages for the respective classes, despite relatively high total delinquencies and cumulative realized losses. The higher credit support percentages resulted from the shifting interest structure of the transactions, which benefit from the relatively fast principal prepayments experienced by the collateral. As of the September 2006 remittance period, total delinquencies ranged from 2.8% to 16.74% (series 2002-AC1). Cumulative realized losses ranged from .08% to .49%. The affirmations reflect adequate actual and projected credit support percentages for the current ratings. As of the September 2006 remittance period, total delinquencies ranged from 1.65% to 31.31%. Cumulative realized losses ranged from .01% to 8.15% (series 2001-3). For most of these transactions, however, cumulative realized losses were well below 1.00%. In addition, most of the transactions are either at or approaching their respective overcollateralization targets, as each transaction is generating excess interest cash flow that is well above monthly net losses. Credit support is primarily provided by subordination alone or through a combination of subordination, o/c, and excess interest cash flow. The collateral primarily consists of 30-year prime, subprime, scratch-and-dent, or reperforming fixed- and/or adjustable-rate first- and second-lien mortgage loans secured by one- to four-family residential properties. Ratings Raised Bear Stearns Asset Backed Securities Trust Asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-AC1 B-3 AA+ AA 2003-AC4 M-1 AA+ AA 2003-AC4 M-2 AA- A 2003-AC5 M-1 AA+ AA 2003-AC5 M-2 A+ A 2003-SD2 B-1 AA+ AA 2003-SD2 B-2 A+ A 2004-AC1 M-1 AA+ AA 2004-AC1 M-2 A+ A Ratings Affirmed Bear Stearns Asset Backed Securities Inc. Asset-backed certificates Series Class Rating ------ ----- ------ 1998-1 M-1 AA 1998-1 M-2 A- 2000-1 AF AAA 2000-2 M-1 AAA 2000-2 M-2 A+ 2000-2 B BBB Bear Stearns Asset Backed Securities Trust Asset-backed certificates Series Class Rating ------ ----- ------ 2001-2 1-A2, 2-A AAA 2001-2 M-1 AA+ 2001-2 M-2 A 2001-2 B BBB 2001-3 A-1, A-2, A-3 AAA 2001-3 M-1 AA 2001-3 M-2 A 2001-3 B BBB 2002-1 1-A5, 2-A AAA 2002-1 M-1 AA 2002-1 M-2 A 2002-1 B BBB 2002-2 A-1, A-2 AAA 2002-2 M-1 AA+ 2002-2 M-2 AA- 2002-2 B BBB 2002-AC1 PO-1, PO-2, X-1, X-2, X-3, B-1, B-2 AAA 2003-1 A-1, A-2 AAA 2003-1 M-1 AA 2003-1 M-2 A 2003-1 B BBB 2003-2 A-1, A-2, A-3 AAA 2003-2 M-1 AA 2003-2 M-2 A 2003-2 B BBB 2003-3 A-1, A-2, A-IO AAA 2003-3 M-1 AA 2003-3 M-2 A 2003-3 B BBB 2003-ABF1 A AAA 2003-ABF1 M AA 2003-AC3 A-1 AAA 2003-AC3 M-1 AA 2003-AC3 M-2, M-3 A 2003-AC3 B-1 BBB 2003-AC4 A, A-IO AAA 2003-AC4 BB BBB 2003-AC5 A-1, A-2, A-3, A-4, A-5 AAA 2003-AC5 B BBB 2003-AC6 A-1, A-2, A-3, A-4, A-5 AAA 2003-AC6 M-1 AA 2003-AC6 M-2 A 2003-AC6 BB BBB 2003-AC7 A-1, A-2, A-3, A-4 AAA 2003-AC7 M-1 AA 2003-AC7 M-2 A 2003-AC7 B BBB 2003-HE1 I-A-2 AAA 2003-HE1 M-1 AA 2003-HE1 M-2 A 2003-HE1 M-3 A- 2003-HE1 M-4 BBB+ 2003-HE1 M-5 BBB 2003-HE1 M-6 BBB- 2003-SD1 A AAA 2003-SD1 M-1 AA 2003-SD1 M-2 A 2003-SD1 B BBB 2003-SD2 I-A, II-A, III-A AAA 2003-SD2 B-3 BBB 2003-SD2 B-4 BB 2003-SD2 B-5 B 2003-SD3 A AAA 2003-SD3 M-1 AA 2003-SD3 M-2 A 2003-SD3 B BBB 2004-1 A-1, A-2, A-IO AAA 2004-1 M-1 AA 2004-1 M-2 A 2004-1 M-3 BBB+ 2004-1 B-1, B-2 BBB- 2004-2 A-1, A-2, A-3, A-4, A-5, A-IO AAA 2004-2 M-1 AA+ 2004-2 M-2 A 2004-2 M-3 BBB 2004-2 B BBB- 2004-AC1 A-1, A-2, A-3 AAA 2004-AC1 B BBB 2004-HE1 I-A-2 AAA 2004-HE1 M-1 AA 2004-HE1 M-2 A 2004-HE1 M-3 A- 2004-HE1 M-4 BBB+ 2004-HE1 M-5 BBB 2004-HE1 M-6 BBB- 2004-HE2 I-A2, II-A AAA 2004-HE2 M-1 AA 2004-HE2 M-2 A 2004-HE2 M-3 A- 2004-HE2 M-4 BBB+ 2004-HE2 M-5 BBB 2004-HE2 M-6 BBB- 2004-HE3 I-A2, II-A AAA 2004-HE3 M-1 AA 2004-HE3 M-2 A 2004-HE3 M-3 A- 2004-HE3 M-4 BBB+ 2004-HE3 M-5 BBB 2004-HE3 M-6 BBB- 2004-HE3 M-7 BB 2004-SD1 A-1, A-2 AAA 2004-SD1 M-1 AA 2004-SD1 M-2 A 2004-SD1 M-3 BBB 2004-SD1 B BBB- 2004-SD2 I-A, II-A, III-A, IV-A AAA 2004-SD2 B-1 AA 2004-SD2 B-2 A 2004-SD2 B-3 BBB 2004-SD2 B-4 BB 2004-SD2 B-5 B 2004-SD3 A-1, A-2, A-3, A-4 AAA 2004-SD3 M-1 AA 2004-SD3 M-2 A 2004-SD3 M-3 BBB 2004-SD3 B BBB- 2004-SD4 A-1, A-2 AAA 2004-SD4 M-1 AA 2004-SD4 M-2 A 2004-SD4 B BBB 2005-1 A AAA 2005-1 M-1 AA 2005-1 M-2 A 2005-1 M-3 A- 2005-1 M-4 BBB+ 2005-1 M-5 BBB 2005-1 M-6 BBB- 2005-1 M-7 BB 2005-2 A-1, A-2, A-3 AAA 2005-2 M-1 AA 2005-2 M-2 A 2005-2 M-3 A- 2005-2 M-4 BBB+ 2005-2 M-5 BBB 2005-2 M-6 BBB- 2005-2 M-7 BB 2005-3 A-1, A-2, A-3 AAA 2005-3 M-1 AA 2005-3 M-2 A 2005-3 M-3 A- 2005-3 M-4 BBB+ 2005-3 M-5 BBB 2005-3 M-6 BBB- 2005-3 M-7 BB 2005-4 A-1 AAA 2005-4 M-1 AA 2005-4 M-2 A 2005-4 M-3 A- 2005-4 M-4 BBB+ 2005-4 M-5 BBB 2005-4 M-6 BBB- 2005-4 M-7 BB+ 2005-SD1 I-A-1, I-A-2, I-A-3, II-A AAA 2005-SD1 I-M-1, II-M-1 AA 2005-SD1 I-M-2, II-M-2 A 2005-SD1 I-M-3 A- 2005-SD1 I-M-4 BBB+ 2005-SD1 I-M-5, II-M-3 BBB 2005-SD1 I-M-6, II-B BBB- 2005-SD1 I-B BB 2005-SD2 I-A-1, I-A-2, I-A-3, II-A-1, II-A-2 AAA 2005-SD2 I-M-1, II-M-1 AA 2005-SD2 I-M-2, II-M-2 A 2005-SD2 I-M-3 A- 2005-SD2 I-M-4 BBB+ 2005-SD2 I-M-5, II-M-3 BBB 2005-SD2 I-M-6, II-B BBB- 2005-SD2 I-B BB 2005-SD3 I-A, II-A-1, II-A-1 AAA 2005-SD3 I-M-1, II-M-1 AA 2005-SD3 I-M-2, II-M-2 A 2005-SD3 I-M-3 A- 2005-SD3 I-M-4 BBB+ 2005-SD3 I-M-5, II-M-3 BBB 2005-SD3 I-M-6, II-M-4 BBB- 2005-SD3 II-B BB 2005-SD4 I-A-1, I-A-2, I-X, I-PO, II-A-1, II-A-2 AAA 2005-SD4 I-B1, II-M-1 AA 2005-SD4 I-B-2, II-M-2 A 2005-SD4 I-B-3, II-M-3 BBB 2005-SD4 II-M-4 BBB- 2006-1 A AAA 2006-1 M-1 AA 2006-1 M-2 AA- 2006-1 M-3 A 2006-1 M-4 A- 2006-1 M-5 BBB+ 2006-1 M-6 BBB 2006-1 M-7 BBB- BEAR STEARNS: Fitch Assigns Low-B Ratings to Six Cert. Classes -------------------------------------------------------------- Bear Stearns Commercial Mortgage Securities Trust 2006-TOP24, commercial mortgage pass-through certificates are rated by Fitch: -- $59,200,000 class A-1 'AAA'; -- $173,230,000 Class A-2 'AAA'; -- $91,660,000 class A-3 'AAA' -- $81,000,000 class A-AB 'AAA' -- $715,258,000 class A-4 'AAA' -- $153,472,000 class A-M 'AAA' -- $101,676,000 class A-J 'AAA' -- $1,534,723,954 Class X-1 'AAA' (notional amount and interest only); -- $1,502,572,000 class X-2 'AAA' (notional amount and interest only); -- $28,776,000 class B 'AA'; -- $13,429,000 class C 'AA-'; -- $21,102,000 class D 'A'; -- $13,429,000 class E 'A-'; -- $13,429,000 class F 'BBB+'; -- $19,184,000 class G 'BBB'; -- $9,592,000 class H 'BBB-'; -- $3,837,000 class J 'BB+'; -- $3,837,000 class K 'BB'; -- $5,755,000 class L 'BB-'; -- $5,755,000 class M 'B+'; -- $1,918,000 class N 'B'; -- $1,919,000 class O 'B-'. The $17,265,954 class P is not rated by Fitch. Classes A-1, A-2, A-3, A-AB, A-4, A-M, and A-J are offered publicly, while classes X, B, C, D, E, F, G, H, J, K, L, M, N, and O are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 153 fixed-rate loans having an aggregate principal balance of approximately $1,534,723,955, as of the cutoff date. BEAR STEARNS: Fitch Rates $694MM ALT-A Trust Series 2006-7 Group 2 ------------------------------------------------------------------ Fitch rates Bear Stearns ALT-A Trust, Mortgage Pass-Through Certificates, series 2006-7/Group II: -- $643,760,000 classes I-AE-1 through I-AE-5, II-1A-1, II- 1A-2, II-1X-1, II-2A-1A, II-2A-1B, II-2A-2, II-3A-1, II- 3A-2, and II-2X-1 through II-2X-5, and II-3X-1 'AAA' ('senior certificates'); -- $27,069,000 classes II-B-1 and II-BX-1 'AA'; -- $7,635,000 class II-B-2 'A'; -- $5,899,000 class II-B-3 'BBB'; -- $3,818,000 class II-B-4 (privately offered) 'BB'; -- $3,123,000 class II-B-5 (privately offered) 'B'. The 'AAA' ratings on the group II senior certificates reflects the 7.25% subordination provided by the 3.90% class II-B-1, the 1.10% class II-B-2, the 0.85% class II-B-3, the 0.55% II-B-4, the 0.45% class II-B-5, and 0.40% unrated class II-B-6. Fitch believes the amount of credit enhancement available will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral, the integrity of the legal and financial structures and the master servicing capabilities of Wells Fargo Bank, N.A.; rated 'RMS1' by Fitch Ratings). The mortgage loans have an aggregate principal balance of approximately $694,082,539 as of the cut-off date (October 1, 2006), an average balance of $406,134, a weighted average remaining term to maturity of 359 months, a weighted average original loan-to-value ratio of 76.84% and a weighted average coupon of 6.94%. Rate/term and cash-out refinances account for 10.6% and 27.5% of the loans, respectively. The weighted average FICO credit score of the loans is 715. Owner occupied properties and second homes account for 80.15% and 10.9% of the loans, respectively. The states that represent the largest geographic concentration are California (34%), Florida (19%) and Georgia (12%). All other states represent less than 5% of the aggregate loan pool. None of the mortgage loans is a 'high cost' loan as defined under any local, state or federal laws. BLOCKBUSTER INC: Declares $18.75 Per Share Cash Dividend -------------------------------------------------------- Blockbuster Inc.'s board of directors has declared a quarterly cash dividend of $18.75 per share on its shares of 7-1/2% Series A Cumulative Convertible Perpetual Preferred Stock, in accordance with the terms of the Series A Preferred Stock. The dividend will be payable on Nov. 15, 2006, to the holders of record of the Series A Preferred Stock at the close of business on Nov. 1, 2006. About Blockbuster Blockbuster Inc. -- http://www.blockbuster.com/-- provides in-home movie and game entertainment, with more than 9,000 stores throughout the Americas, Europe, Asia and Australia.. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Moody's Investors Service affirmed its B3 Corporate Family Rating for Blockbuster Inc. in connection with its implementation of the new Probability-of-Default and Loss-Given-Default rating methodology for the US and Canadian Retail sector. Standard & Poor's Ratings Services lowered, in November 2005, its corporate credit and bank loan ratings on Blockbuster Inc. to 'B-' from 'B' and the subordinated note rating to 'CCC' from 'CCC+'. S&P said the outlook is negative. Fitch downgraded, in August 2005, Blockbuster Inc.'s Issuer default rating to 'CCC' from 'B+'; Senior secured credit facility to 'CCC' from 'B+' with an 'R4' recovery rating; and Senior subordinated notes to 'CC' from 'B-' with an 'R6' recovery rating. CABELA'S CREDIT: Moody's Rates $11.2 Million Class D Notes Ba2 -------------------------------------------------------------- Moody's Investors Service assigned provisional ratings of Aaa, Aaa, A2, Baa2 and Ba2 to Series 2006-III Class A-1, Class A-2, Class B, Class C and Class D notes respectively issued out of Cabela's Credit Card Master Note Trust. These are the rating actions: * Issuer: Cabela's Credit Card Master Note Trust -- $250,000,000 Class A-1 Fixed Rate Asset-Backed Notes, Series 2006-III, rated (P)Aaa -- $182,500,000 Class A-2 Floating Rate Asset-Backed Notes, Series 2006-III, rated (P)Aaa -- $35,000,000 Class B Floating Rate Asset-Backed Notes, Series 2006-III, rated (P)A2 -- $21,250,000 Class C Floating Rate Asset-Backed Notes, Series 2006-III, rated (P)Baa2 -- $11,250,000 Class D Floating Rate Asset-Backed Notes, Series 2006-III, rated (P)Ba2 Structure Y. Angela Ge, an associate analyst in Moody's Structured Finance Group, said "this is the second series issued from the Note Trust that does not benefit from a monocline bond insurance policy." Instead, the notes and related ratings are based on the quality of the underlying pool of credit card receivables and the transaction's structural protections, including subordination, early amortization trigger events, and credit enhancement levels that reflect the potential risks associated with the floating rate payment obligations of the trust. Collateral The collateral of the Note Trust consists of the Series 2004-1 certificate issued out of Cabela's Master Credit Card Trust, which represents an undivided interest in the assets of the Master Trust. The underlying assets mainly consist of prime receivables arising in selected VISA revolving credit card accounts that meet certain eligibility criteria. Compared to the industry averages, the Trust receivables have very low charge-off rate and high payment rate. Origination and servicing Cabela's Incorporated originates and services its $1.4 billion credit card program through a wholly-owned, unrated subsidiary, World's Foremost Bank. WFB is a limited purpose credit card bank located in Lincoln, Nebraska. Cabela's is an unrated, public retail company located in Lincoln, Nebraska. Cabela's was established in 1961 and is currently the leading outdoor mail order business in the U.S. The company mails more than 120 million catalogs annually to customers in all 50 states and 120 countries. As of the closing date, Cabela's also operates thirteen retail stores. CAFETERIA OF SOUTH BEACH: Case Summary & 17 Unsecured Creditors --------------------------------------------------------------- Debtor: Cafeteria of South Beach, Ltd., LLLP 546 Lincoln Road Miami Beach, FL 33139 Bankruptcy Case No.: 06-15608 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: November 1, 2006 Court: Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Mark D. Cohen, Esq. Mark D. Cohen, P.A. 4000 Hollywood Boulevard #435 South Hollywood, FL 33021 Tel: (954) 962-1166 Financial Condition as of October 30, 2006: Total Assets: $3,000,000 Total Debts: $6,000,000 Debtor's 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ The Denison Corp. $1,285,000 c/o Michael Schiffrin, Esq. 9130 South Dadeland Boulevard #1109 Miami, FL 33156 Holland & Knight LLP $113,847 c/o James D. Wing, Esq. 701 Brickell Avenue, Suite 3000 Miami, FL 33131 Cananwill Inc. $51,000 1234 Market Street, Suite 340 Philadelphia, PA 19107 Miami-Dade County Tax Collector $36,000 First Commercial Insurance Co. $35,000 City of Miami Beach $28,000 Luis Produce $27,000 Joel Popkin & Co. $25,000 U.S. Foods $20,000 Netkin Foods Inc. $14,072 Northstar Seafood $10,000 Teco Peoples Gas $10,000 La Provence Bread Co. $7,600 Cusano's Bakery $7,500 Country Milk $7,500 Robert Grossman $6,579 Cintas $5,500 CAPITAL GROWTH: Posts $624,802 Net Loss in 2006 Second Quarter -------------------------------------------------------------- Capital Growth Systems Inc. posted a $627,350 net loss on $3,653,565 of revenues for the second quarter ended June 30, 2006, compared with a $624,802 net loss on $3,478,100 of revenues for the same period in 2005. At June 30, 2006, the company's balance sheet showed $10,854,813 in total assets, $10,241,025 in total liabilities and $613,788 in stockholders' equity. Accumulated deficit at June 30, 2006, worsened to $12,397,285 from the accumulated deficit of $10,984,315 at the end of 2005. As of June 30, 2006, the company's balance sheet also showed strained liquidity with $3,398,032 in total current assets available to pay $9,527,506 in total current liabilities. Full-text copies of the company's second quarter financials are available for free at http://researcharchives.com/t/s?143b Going Concern Doubt Plante & Moran, PLLC, expressed substantial doubt about Capital Growth Systems, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's recurring losses, negative cash flows from operations, and its net working capital deficiency. About Capital Growth Systems Capital Growth Systems, Inc., generates revenue from selling and installing hardware, licensing its software and the provision of services, through its wholly owned subsidiaries, Nexvu Technologies LLC and Frontrunner Network Systems Corp. Nexvu Technologies LLC develops and sells application performance management software to large and mid-sized companies for use in connection with their computer network systems and applications. Frontrunner Network Systems Corp. is a single-source provider of business communications equipment and multimedia integration services for data, voice, video and advanced applications. CB RICHARD: Inks Deal to Acquire Trammell Crow for $2.2 Billion --------------------------------------------------------------- CB Richard Ellis Group Inc. has entered into a definitive agreement to acquire Trammell Crow Company for $49.51 per share of common stock in cash. The acquisition will expand CB Richard Ellis' global leadership and strengthen its ability to provide integrated account management and outsourcing solutions. The transaction is valued at approximately $2.2 billion, including the assumption of Trammell Crow Company's corporate debt as well as transaction and integration costs. It is expected to close either in late 2006 or early 2007, subject to approval by Trammell Crow Company's shareholders and federal regulatory agencies as well as other customary conditions. Upon completion of the transaction, the Company will have combined pro-forma 2006 revenues of approximately $4.4 billion and 21,000 employees. It would be the first commercial real estate services company to qualify for the FORTUNE 500 list of the largest U.S. corporations. The combination of the two companies is expected to generate meaningful net expense synergy savings. "Our strategic objective has long been to create the market- leading commercial real estate services firm delivering comprehensive solutions to our clients. Well targeted acquisitions have played a pivotal role in our strategy," CB Richard Ellis' president and chief executive officer Brett White said. "With the acquisition of Insignia in 2003, we achieved preeminence in our transaction business. Now the acquisition of Trammell Crow Company creates the best-in-class corporate outsourcing and institutional property management business, and further augments our transaction business. "Trammell Crow Company is one of the premier service companies in our industry, with a rich history, dedicated employees and strong management, a stellar client base and core competencies that are highly complementary to our own." Trammell Crow Company provides integrated outsourcing solutions for a stable of prestigious corporate clients, and the combined company will provide services to more than 85% of the Fortune 100. As a result of the transaction, CB Richard Ellis' contractual revenues associated with outsourcing activities are anticipated to increase from approximately 8% to 18% of total revenues, based on 2006 expected results. Upon completion of the transaction, Trammell Crow Company's Development and Investment business will be run as a wholly owned but independently operated subsidiary. It will retain the highly valued Trammell Crow Company brand name. Robert E. Sulentic, chairman and chief executive officer of Trammell Crow Company, will join CB Richard Ellis as Group President with responsibility for the Development and Investment business as well as the Company's EMEA and Asia-Pacific operations. Cal Frese, CB Richard Ellis' president, Americas Region, said: "We are excited about having the Trammell Crow Company team join with ours and its service offerings becoming a valuable part of our platform. "Importantly, both companies have very similar and proud heritages that are embedded in their corporate cultures, and which highly value integrity, work ethic and customer service excellence. "We've had terrific success with integrating large service companies in the past, based on the idea of adopting the best people, processes and ideas of both companies, and we believe this integration will also succeed because of the similar cultures and business fit." The Company plans to issue $2.2 billion of term loans to finance the transaction, and will also amend or refinance its existing $600 million revolving credit facility. In addition, the Company plans to sell Trammell Crow Company's approximately 20% ownership interest in Savills, plc, a real estate services provider in the United Kingdom. The Company's initial view, to be refined at a later date, is that on a pro-forma basis, assuming the transaction had been completed on Jan. 1, 2006, and after giving effect to the first-year expected net expense synergy savings and excluding one-time transaction and integration costs, the transaction would generate incremental percentage earnings accretion per share in the low teens. Los Angeles, Calif.-based CB Richard Ellis Group, Inc. (NYSE: CBG) -- http://www.cbre.com/-- a FORTUNE 1000 company, is a commercial real estate services firm. With approximately 14,500 employees, the Company serves real estate owners, investors, and occupiers through more than 200 offices worldwide (excluding affiliate and partner offices). CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; investment management; appraisal and valuation; research and consulting. CB RICHARD: Moody's Affirms Senior Bank Credit Facility at Ba1 -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of CB Richard Ellis Services, Inc., with a stable outlook following the announcement that CBRE will acquire Trammell Crow Company in a transaction valued at $2.2 billion. This transaction will solidify CB Richard Ellis' leadership position as a commercial real estate services provider in the U.S. market, and materially shift its services platform to less volatile business lines. CBRE's property and facilities management business currently contributes 8% of total revenue, and should shift to 18% after closing. Tempering these positive attributes is the fully-leveraged nature of this transaction. CB Richard Ellis plans to fund the Trammell Crow acquisition with $2.2 billion of term loan debt, which will increase initial net debt to EBITDA to between 2.5x and 3x. The stable rating outlook reflects Moody's expectation that CBRE will paydown acquisition debt with operating cash flow over the next few years without incurring additional debt, while successfully integrating Trammell Crow and sustaining its EBITDA margins in the high-teens. Ratings improvement is dependent upon CBRE's ability to further develop its worldwide franchise with at least equal shares of revenue from the Americas, EMEA, and Asia-Pacific, while growing and stabilizing its EBITDA margins to at least 18%. Alternatively, ratings could be upgraded should at least 40% of its recurring operating cash flow be contributed by its less volatile business lines, including investment, property and facilities management. Sustained deterioration in operating performance resulting in a drop in margins below 12%, or a change to a permanent leverage capital strategy, would likely result in a downgrade. These ratings were affirmed: * CB Richard Ellis Services, Inc. -- senior secured bank credit facility at Ba1; senior unsecured debt at Ba1. In April 2006, Moody's raised the senior debt ratings of CB Richard Ellis Services, Inc. to Ba1, from Ba3. Trammell Crow Company is a diversified commercial real estate services company providing brokerage, project management, building management, and development and investment services to both investors in and users of commercial real estate. Headquartered in Los Angeles, California, CB Richard Ellis Services, Inc., provides commercial real estate services. Services it provides include property sales/leasing brokerage, property management, corporate services and facilities management, capital markets advice and execution, appraisal/valuation services, research and consulting. CB Richard Ellis has approximately 14,500 employees and over 200 offices across more than 50 countries. CB RICHARD: Trammel Crow Deal Cues S&P to Put Ratings on Watch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on CB Richard Ellis Services Inc., including its 'BB+' long-term counter party credit rating, on CreditWatch with negative implications. "We took this rating action in response to the company's announced acquisition of Trammel Crow Co.," explained Standard & Poor's credit analyst Robert B. Hoban Jr. "Although we believe that Trammel is a good strategic fit for CB Richard Ellis, the financing of the acquisition with debt will greatly increase debt leverage and reduce interest coverage." In addition, the transaction will result in substantial negative tangible equity, which becomes an issue given management's plans to continue Trammel's direct real estate investment operations. We will be meeting with the company to fully assess the acquisition and determine the final ratings outcome. If we determine that the amount of credit and market risk being taken on is significant, the ratings could be lowered. The ratings on CB Richard Ellis reflect the company's results being dependent on cyclical commercial real estate sales and leasing transaction volume, moderate interest coverage, and high debt leverage. Although management had been aggressively paying down debt and recovering from negative tangible equity from past acquisitions, this acquisition will reverse the trend. Pro forma end-of-year total recourse debt is a very high 2x capital, and negative tangible equity slides to negative $2.3 billion. These pro forma figures assume that CB Richard Ellis will successfully tender one existing debt issue and that the company is able to sell a Trammel minority interest. CB Richard Ellis is the operating subsidiary of CB Richard Ellis Group Inc., a publicly traded company. The company is based in Los Angeles, California, and engaged in commercial real estate sales and services industry, with trailing-12-month revenue through the third quarter of about $2.9 billion. CENTURY REINSURANCE: Fitch Holds Rating at Junk with Neg. Outlook ----------------------------------------------------------------- Fitch Ratings affirmed the 'A+' insurer financial strength ratings of INA Holdings, with a Stable Outlook. At the same time, Fitch affirmed the 'B-' IFS rating of Century Indemnity Co. with a Negative Outlook, and the 'CCC+' rating of Century Reinsurance Co. with a Negative Outlook. Century Indemnity and Century Reinsurance are insurance company subsidiaries of Brandywine Holdings. Brandywine Holdings is an intermediate holding company that is ultimately owned by ACE Limited. Brandywine Holdings and INA Holdings, another intermediate holding company, together comprise the domestic operations of INA Financial, their parent, and represent the domestic property/casualty insurance operation that ACE purchased from CIGNA Corporation in 1999. INA Holdings owns the 15 insurance companies that represent the group's active insurance operations. Brandywine Holdings owns the two domestic insurance companies which are inactive, runoff operations now largely consisting of asbestos and environmental claims. The two groups were separated in a 1996 restructuring; however, the groups remain linked through an aggregate excess of loss agreement. The excess of loss agreement originally provided Century Indemnity, the lead inactive company, with up to $800 million of support for either net worth maintenance or liquidity needs. The active-company affirmations recognize strong underwriting results over the past several years. The active companies reported underwriting gains in both 2004 and 2005, a period when many companies reported losses due to back-to-back intense hurricane seasons. The rating action also reflects the significant increase in surplus that resulted from a combination of net earnings and capital contributions. As the result of this increase in surplus, the active companies' operating leverage and risk-adjusted capital ratios have improved substantially. The ratings also consider that the active companies still remain obligated to provide up to approximately $100 million that is left on the support agreement with the inactive companies. The inactive companies' ratings benefit from having a dedicated staff focused exclusively on runoff activities and from not being exposed to ongoing operational risks such as property catastrophes. However, the inactive companies are now very thinly capitalized, have consumed approximately $700 million of the original $800 million available to them under the support agreement, and are exposed to asbestos and environmental claims which are long-tailed and notoriously difficult to quantify. Fitch affirms these individual ratings with a Stable Outlook: ACE American Insurance Co. ACE American Lloyds Insurance Co. ACE Fire Underwriters Ins. Co. ACE Indemnity Insurance Co. ACE Insurance Co. of Illinois ACE Insurance Co. of Ohio ACE Insurance Co. of the Midwest ACE Property and Casualty Insurance Co. Atlantic Employers Insurance Co. Bankers Standard Fire & Marine Co. Bankers Standard Insurance Co. Illinois Union Insurance Co. Indemnity Insurance Co. of North America Insurance Co. of North America Pacific Employers Insurance Co. -- Insurer Financial Strength Ratings (IFS) at 'A+'. Fitch affirms these individual ratings with a Negative Outlook: Century Indemnity Co. -- IFS at 'B-'. Century Reinsurance Co. -- IFS at 'CCC+'. The ACE Group of Companies is one of the world's largest providers of property and casualty insurance and reinsurance. Headquartered in Bermuda, ACE provides a diversified range of products and services to clients in nearly 50 countries around the world. CENVEO INC: Withdraws Proposal to Acquire Banta Corp. ----------------------------------------------------- Cenveo, Inc.'s chairman and chief executive officer, Robert G. Burton, Sr., sent a letter to Stephanie A. Streeter, Banta Corporation's chairman, president and chief executive officer, saying that the Company is withdrawing all its proposals to acquire Banta Corp. Mr. Burton said, in his letter to Banta Corp., that the reason for the witdrawal of the Company's proposal was Banta Corp.'s refusal to enter into a discussion or respond to the submitted proposal. The Company had previously made an unsolicited offer to acquire Banta Corp. at $50 per share. Headquartered in Menasha, Wisconsin, Banta Corp. -- http://www.banta.com/-- engages in printing and supply-chain management services. The company focuses on five printing services markets: books, special- interest magazines, catalogs, direct marketing and literature management. Its global supply- chain management business provides outsourcing capabilities to companies. Services range from materials sourcing, product configuration and customized kitting, to order fulfillment and distribution. The company has operations in Ireland, Hungary, The Netherlands, Scotland, Singapore and China. * * * As reported in the Troubled Company Reporter on Aug. 11, 2006 Standard & Poor's Ratings Services placed its ratings on Englewood, Colorado-based commercial printer Cenveo Inc. on CreditWatch with negative implications, including its 'B+' corporate credit rating. CITIGROUP MORTGAGE: Fitch Rates $1MM Non-offered Class 1-B5 at B ---------------------------------------------------------------- Citigroup Mortgage Loan Trust Inc.'s mortgage pass-through certificates, series 2006-AR7, are rated by Fitch Ratings: Group I: -- $427.5 million classes 1-A1, 1-A2A, 1-A2B, 1-2IO, 1-A3A, 1-A3B, 1-3IO, 1-A4A, 1-A4B, 1-4IO and 1-R senior notes 'AAA'; -- $8.9 million class 1-B1 'AA'; -- $2.9 million class 1-B2 'A'; -- $2.2 million class 1-B3 'BBB'; -- $1.3 million non-offered class 1-B4 'BB'; -- $1.1 million non-offered class 1-B5 'B'. Group II : -- $471.5 million classes 2-A1A, 2-A1B, 2-1IO, 2-A2A, 2-A2B, 2-2IO, 2-A3A, 2-A3B, 2-3IO, 2-A4A, 2-A4B, 2-4IO and 2-R senior notes 'AAA'; -- $11 million class 2-B1 'AA'; -- $6 million class 2-B2 'A'; -- $3.8 million class 2-B3 'BBB'; -- $4.5 million non-offered class 2-B4 'BB'; -- $2.3 million non-offered class 2-B5 'B'. Fitch does not rate the $1.1 million non-offered class 1-B6 nor the $2 million non-offered class 2-B6 certificates. The 'AAA' ratings on the Group I senior notes reflect the 3.95% subordination provided by the 2% class 1-B1, 0.65% class 1-B2, 0.50% class 1-B3, 0.30% non-offered class 1-B4, 0.25% non-offered class 1-B5 and 0.25% non-offered class 1-B6 (not rated by Fitch). The 'AAA' ratings on the Group II senior notes reflect the 5.90% subordination provided by the 2.20% class 2-B1, 1.20% class 2-B2, 0.75% class 2-B3, 0.90% non-offered class 2-B4, 0.45% non-offered class 2-B5, 0.40% non-offered class 2-B6 (not rated by Fitch). Fitch believes the amount of credit enhancement available will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral, the integrity of the legal and financial structures, primary servicing capabilities of Countrywide Home Loans Servicing LP (rated 'RPS1' by Fitch); Fifth Third Bank; HomeBanc Mortgage Corporation; CitiMortgage, Inc. (rated 'RPS1'); Wells Fargo Bank, N.A. ('RPS1') and the master servicing capabilities of CitiMortgage, Inc.('RMS1'). The transaction is secured by two groups of mortgage loans, which consist of approximately 2,151 conventional, one- to four-family, adjustable-rate mortgage loans secured by first liens on residential real properties. The mortgage loans have and aggregate principal balance of approximately $946,083,757 as of the cut-off date (Oct. 1, 2006). The two groups of mortgage loans are not cross-collateralized. The Group I mortgage loans have a final aggregate principal balance of approximately $445,041,336 as of Oct. 1, 2006, an average balance of $616,401, a weighted average remaining term to maturity of 355 months, a weighted average original loan-to-value ratio of 71.87% and a weighted average coupon of 6.298%. The weighted average FICO credit score of the loans is 742. Owner occupied properties and second homes comprise 87.68% and 11.63% of the loans, respectively. The states that represent the largest geographic concentration are California (41.41%), Florida (13.55%), Michigan (5.25%) and Ohio (5.07%). All other states represent less than 5% of the outstanding balance of the pool. The Group II mortgage loans have a final aggregate principal balance of approximately $501,042,421 as of Oct. 1, 2006, an average balance of $350,625, a WAM of 357 months, a weighted average OLTV of 77.47% and a WAC of 6.836%. The weighted average FICO credit score of the loans is 728. Owner occupied properties and second homes comprise 81.83% and 9.65% of the loans, respectively. The states that represent the largest geographic concentration are Florida (26.27%), California (24.10%) and Georgia (13.45%). All other states represent less than 5% of the outstanding balance of the pool. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. U.S. Bank National Association will serve as trustee. CMC HEARTLAND: Court Sets November 7 Hearing on Montana Deal ------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, will convene a hearing at 10:00 a.m. on Nov. 7, 2006, to consider CMC Heartland Partners and its debtor- affiliates' compromise with Montana Department of Environmental Quality, Trinity Railcar Repair Inc., and Trinity Industries Inc. The hearing will be held in Courtroom 744, the U.S. Courthouse, No. 219 South Dearborn Street, in Chicago, Illinois. The compromise pertains to the Debtors' pending litigation in the District Court for the 16th Judicial District of Montana regarding the Debtors' activities in Miles City, Montana and some claims asserted by DEQ and Trinity against the Debtors' bankruptcy estates. The Proposed Compromise generally contemplates that: a) the Debtors will make a payment in the aggregate amount of $2.5 million to the Montana Court, DEQ, and TRRI; b) TRRI will receive an allowed, general unsecured claim against the Debtors' bankruptcy estates in the amount of $5 million capped at a distribution of $800,000; and c) TRRI will hold a claim of $250,000 against the bankruptcy estate of CMC Heartland Partners entitled to administrative expense priority under Sec. 503(b)(1) of the Bankruptcy Code. CMC Heartland Partners and its debtor-affiliates filed for chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, under case number 06- 04759. The Honorable Eugene R. Wedoff presides the case. COMPLETE RETREATS: Wants Plan Filing Period Extended to Feb. 18 --------------------------------------------------------------- Complete Retreats LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Connecticut to extend their exclusive periods to: (a) file a plan of reorganization through and including Feb. 18, 2007; and (b) solicit and obtain acceptances of that plan through and including Apr. 19, 2007. Since their bankruptcy filing, the Debtors have made significant progress toward stabilizing their business operations, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, relates. The Debtors have made substantial progress in their financing, sale and assumption efforts, as well as on potential investor front. Among other things, the Debtors have: -- been successful in obtaining a replacement DIP financing facility and have recently sought the Court's approval for it; -- been investigating and pursuing litigation, with the hope of increasing the ultimate recovery for creditors in these cases. To that end, the Debtors, along with the Official Committee of Unsecured Creditors, have filed numerous motions for examinations pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure and have commenced one, and plan to initiate more, adversary proceedings; -- commenced a sale process with respect to certain properties that they do not consider to be core to their future operations; and -- rejected numerous unexpired leases and executory contracts. The Debtors continue to evaluate their portfolio of properties to determine which properties they would like to retain and which they would like to sell, Mr. Daman adds. The Debtors also continue to review their remaining leases and contracts to determine which they would like to assume and which they would like to reject. Section 1121(b) of the Bankruptcy Code provides that only the debtor may file a plan of reorganization during the initial 120 days after the Petition Date. Section 1121(c)(3) provides that if a plan is filed, then the debtor has the exclusive right to solicit acceptances for 180 days after the Petition Date. Section 1121(d) provides that a court may extend the Debtors' exclusive opportunity to file a plan and to solicit acceptances "for cause," after notice and hearing. Until the various analyses and the sales and negotiation processes are completed over the next two to four months, the Debtors will not be in a position to file a meaningful plan of reorganization, much less a consensual one, Mr. Daman contends. Mr. Daman asserts that the extension of the Exclusive Periods will not harm the Debtors' creditors or other parties-in- interest. Rather, the extension would permit the Debtors' reorganization process to move forward in an orderly and expeditious fashion. On the contrary, termination of the Exclusive Periods at this time would defeat the purpose of Bankruptcy Code and the possibility of the Debtors' conducting productive meetings with investors and formulating a consensual plan of reorganization. Mr. Daman assures the Court that the Debtors have been paying their postpetition debts as they become due. The Debtors' existing DIP financing agreement has allowed them to pay postpetition creditors, lessors, and vendors in the ordinary course of business. Moreover, the Debtors have obtain postpetition financing from Ableco Finance, LLC, that would ensure more than adequate liquidity for the duration of their reorganization. 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. 12; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPLETE RETREATS: Wants Lease Decision Period Moved to Feb. 18 --------------------------------------------------------------- Complete Retreats LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Connecticut to extend the time within which they must assume or reject their unexpired non- residential real property leases, through and including Feb. 18, 2007. In the ordinary course of their businesses, the Debtors are parties to several unexpired non-residential real property leases. The Debtors have yet to determine whether it is in the best interests of their estates and their creditors to assume or to reject the Leases, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, informs the Court. The Debtors are still in the process of analyzing the necessity of the Leases in connection with their development of a long-term business plan and anticipate assuming or rejecting the Leases in the near future. Subject to certain exceptions, Section 365(d)(4) of the Bankruptcy Code provides that "[a]n unexpired lease of nonresidential real property under which the debtor is a lessee shall be deemed rejected . . . if the [debtor-in-possession] does not assume or reject the unexpired lease by the earlier of (i) the date that is 120 days after the order for relief; or (ii) the date of the entry of an order confirming a plan." Under Section 365(d)(4)(B)(i), the Court can extend by 90 days the time within which the Debtors must assume or reject the Leases on the motion of a debtor-in-possession for cause. Mr. Daman asserts that the Debtors' request is warranted. As an initial matter, the Leases may be necessary to the Debtors' ongoing operations and thus are vital Debtors' assets, Mr. Daman points out. In addition, the Debtors' cases are large and complex. The Debtors have been required to expend a tremendous amount of time and effort stabilizing their business and addressing various operational concerns at the initial stages and, as a result, have not yet completed a review of the Leases. An extension of the Lease Decision Period is unlikely to result in any prejudice to the relevant lessor, Mr. Daman contends. The Debtors, to the extent they have not already done so, plan on satisfying their postpetition obligations under the Leases. Furthermore, the Debtors have obtained, subject to definitive documentation and court approval, replacement postpetition financing in these cases, which will provide them sufficient liquidity to continue to make payments in accordance with the terms of the Leases and to continue in the reorganization efforts, Mr. Daman adds. Absent the extension, the Leases would be automatically and prematurely rejected on or about November 20, 2006, pursuant to the operation of the Bankruptcy Code. If the 120-day period is not extended, the Debtors would be obligated either to expend significant time and resources at this early stage of the proceedings in to determine whether it makes long-term business sense to assume the Leases and the associated burdens or to automatically reject the Leases and lose potentially valuable assets of their estates, Mr. Daman emphasizes. 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. 12; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPLETE RETREATS: Can Remove State Proceedings Until January 19 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Connecticut gave Complete Retreats LLC and its debtor-affiliates until Jan. 19, 2007, to remove state proceedings, without prejudice to their right to seek further extensions of the removal period. As reported in the Troubled Company Reporter on Oct. 11, 2006, as of their bankruptcy filing, the Debtors were involved in approximately 21 state proceedings pending in courts throughout the country. Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, told the Court that due to the complexity and rapidity of their Chapter 11 cases, the Debtors have not completed a thorough review of the Proceedings to determine whether any individual actions should be removed under Bankruptcy Rule 9027(a). According to Mr. Daman, the Debtors have focused primarily on: (1) stabilizing their business; (2) responding to a multitude of creditor inquiries; (3) addressing a variety of creditor concerns; and (4) working towards negotiating a potential consensual plan of reorganization. The extension will afford the Debtors sufficient opportunity to assess whether the actions can and should be removed, thereby protecting the Debtors' right to adjudicate lawsuits pursuant to Section 1452, Mr. Daman asserted. The Debtors' adversaries will not be prejudiced by the extension, as they may not prosecute the actions absent relief from the automatic stay, Mr. Daman explained. Furthermore, the extension will not prejudice any party to a proceeding that the Debtors seek to remove from pursuing a remand pursuant to Section 1452(b). 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. 12; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CONSOLIDATED ENERGY: Accepts Resignation of David Guthrie as CEO ---------------------------------------------------------------- The Board of Directors of Consolidated Energy, Inc., accepted the resignation of David Guthrie as president, chief executive officer and director pursuant to the terms of his resignation letter dated October 25, 2006. The Company disclosed that Mr. Guthrie is resigning to pursue other opportunities. In accordance with the Board's approval, he will continue to receive his salary in the normal course of business through Nov. 15, 2006, and the Company shall also transfer ownership to Mr. Guthrie of an automobile previously purchased by the Company for his use while he was employed. The Company has not appointed any replacement for Mr. Guthrie, and all existing officers shall continue to be employed in their current positions. Consolidated Energy, Inc. (OTCBB: CEIW) mines coal in Eastern Kentucky. The Company conducts business through its wholly owned coal-mining subsidiary, Eastern Consolidated Energy, Inc. The Company is also engage in gas and oil exploration and development, and develops related clean energy technologies that are environment friendly. Going Concern Doubt As reported in the Troubled Company Reporter on May 25, 2006, Killman, Murrell & Company, P.C., Houston, Texas, raised substantial doubt about Consolidated Energy, Inc.'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 recurring losses from operations and limited capital resources. COREL CORP: Technical Sharing Cues Moody's to Hold B3 Corp. Rating ------------------------------------------------------------------ Moody's Investors Service affirmed the B3 corporate family rating and B3 senior secured bank loan ratings of Corel Corporation after reviewing Corel's pending $195 million acquisition of InterVideo, Inc. The acquisition will be financed with cash on hand and the proceeds from a proposed offering of up to $100 million senior secured term loan, which is rated B3 as well. The change in outlook to positive reflects Moody's view that a successful integration of InterVideo coupled with continued growth in revenue and profits could position Corel for an increased rating. While Moody's remains concerned about Corel's reliance on technical information sharing from its two primary competitors, Microsoft Corporation and Adobe Systems, Moody's views the addition of InterVideo with its successful line of video editing, burning and playback software as a positive diversification to Corel's existing portfolio of software products, a diversification which could ultimately lead to a higher rating. The benefits of this product diversification as well as the access to InterVideo's large customer base and number of OEM partnerships are somewhat tempered by the integration risks associated with acquiring a company of InterVideo's size which at $109 million in revenue for fiscal year 2005 is comparable to Corel's $164 million in revenue for fiscal year 2005. Moody's notes however, Corel's recent successful acquisition and integration of two smaller software companies, Jasc Software, Inc. and WinZip, as indicative of their capabilities. The ratings are also tempered by InterVideo's recent loss of Hewlett Packard's consumer computer business as a major customer for their WinDVD product line. While the acquisition will increase Corel's leverage marginally above 3x (prior to any synergies for the combined companies), Moody's views this leverage as manageable and is offset by the increase in diversification from InterVideo's portfolio of consumer and pro-summer software titles. Additionally, Moody's expects that Corel will continue to make debt financed acquisitions but does not expect leverage levels to exceed 3x for long periods of time, although there will continue to be meaningful amounts of debt. Corel Corporation is a global packaged software company. It provides products in the areas of office productivity, graphics, and digital imaging software. The company is headquartered in Ottawa, Canada. CREDIT SUISSE: Fitch Assigns B Rating to $4.2 Mil of Certificates ----------------------------------------------------------------- Credit Suisse Mortgage Securities Corp. mortgage pass-through certificates, series 2006-9, is rated by Fitch Ratings: -- $830.72 million classes 1-A-1, 2-A-1, 3-A-1, 4-A-1 through 4-A-15, 5-A-1, 6-A-1 through 6-A-15, 7-A-1, 7-A-2, A-X, D- X, DP, AR, and AR-L(senior certificates) 'AAA'; -- $11.35 million class C-B-1 'AA'; -- $3.70 million class C-B-2 'A'; -- $6.409 million classes C-B-3 and D-B-3 'BBB'; -- $1.182 million class D-B-4 'BBB-'; -- $4.979 million classes C-B-4 and D-B-5 'BB'; -- $4.239 million classes C-B-5 and D-B-6 'B'. The 'AAA' rating on the senior certificates for groups 1 through 4, and the AR, D-X, DP, and AR-L certificates reflect the 8.75% subordination provided by the 3.85% class D-B-1, 1.60% class D-B- 2, 1.00% class D-B-3, 0.30% class D-B-4, 0.70% class D-B-5, 0.70% class D-B-6, and the 0.60% class D-B-7 (not rated by Fitch). The 'AAA' rating on the senior certificates for groups 5 through 7 reflect the 4.55% subordination provided by the 2.30% class C-B-1, 0.75% class C-B-2, 0.50% class C-B-3, 0.45% class C-B-4, 0.30% class C-B-5, and the 0.25% class C-B-6 (not rated by Fitch). Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the master servicing capabilities of Wells Fargo Bank, N.A. (Master Servicer), which is rated 'RMS1' by Fitch. The trust will contain fixed-rate mortgage loans secured by first liens on one- to four-family residential properties with an approximate aggregate principal balance of $874,852,151. The mortgage loans in Pool 1, which collateralize Groups 1-4, AR, AR-L, D-X, DP, and the D-B certificates, consist of 681 fixed-rate mortgage loans with an aggregate principal balance of $394,219,004.71 as of the cut-off date (Oct. 1, 2006). The mortgage pool has a weighted average loan-to-value ratio of 83.745% with a weighted average mortgage rate of 6.089%. Cash-out refinance loans account for 29.81% and second homes 8.87%. The average loan balance is $578,882.53 and the loans are located in Puerto Rico. The mortgage loans in Pool 2, which collateralize Groups 5-7, A-X, and the C-B certificates, consist of 833 fixed-rate mortgage loans with an aggregate principal balance of $493,455,649.81 as of the cut-off date (Oct. 1, 2006). The mortgage pool has a weighted average LTV of 71.24% with a weighted average mortgage rate of 6.774%. Cash-out refinance loans account for 31.43% and second homes 6.32%. The average loan balance is $592,383.73 and the loans are primarily concentrated in California (44.90%), New York (8.61%) and New Jersey (5.52%). U.S. Bank National Association will serve as trustee. Credit Suisse First Boston Mortgage Securities Corp., a special purpose corporation, deposited the loans in the trust that issued the certificates. For federal income tax purposes, an election will be made to treat the trust as multiple real estate mortgage investment conduits. CWMBS INC: Fitch Puts Low-B Rating on Two Certificate Classes ------------------------------------------------------------- Fitch rates CWMBS, Inc.'s Mortgage Pass-Through Certificates, CHL Mortgage Pass-Through Trust 2006-17: -- $501,447,893 million classes A-1 through A-11, X, PO, and A-R certificates (senior certificates) 'AAA'; -- $12,243,000 class M 'AA'; -- $3,126,000 class B-1 'A'; -- $1,563,000 class B-2 'BBB'; -- $1,042,000 class B-3 'BB'; -- $781,000 class B-4 'B'; The 'AAA' rating on the senior certificates reflects the 3.75% subordination provided by the 2.35% Class M, the 0.60% Class B-1, the 0.30% Class B-2, the 0.20% privately offered Class B-3, the 0.15% privately offered Class B-4 and the 0.15% privately offered Class B-5 (not rated by Fitch). Classes M, B-1, B-2, B-3, and B-4 are rated 'AA', 'AA', 'A', 'BBB', 'BB', and 'B' based on their respective subordination only. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults. In addition, the rating also reflects the quality of the underlying mortgage collateral, strength of the legal and financial structures and the master servicing capabilities of Countrywide Home Loans Servicing LP (Countrywide Servicing), rated RMS2+ by Fitch, a direct wholly owned subsidiary of Countrywide Home Loans, Inc. The mortgage pool consists primarily of 30-year conventional, fully amortizing mortgage loans totaling $520,984,825 as of the cut-off date, October 1, 2006, secured by first liens on one-to four- family residential properties. The mortgage pool, as of the cut-off date, demonstrates an approximate weighted-average OLTV of 72.71%. The weighted average FICO credit score is approximately 748. Cash-out refinance loans represent 23.87% of the mortgage pool and second homes 6.80%. The average loan balance is $626,937. The three states that represent the largest portion of mortgage loans are California (40.78%), Virginia (6.54%), and New Jersey (5.04%). All other states represent less than 5% of the pool as of the cut-off date. CWMBS purchased the mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. The Bank of New York will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CYBER DEFENSE: Earns $977,238 in 2006 Second Quarter ---------------------------------------------------- Cyber Defense Systems Inc. earned $977,238 of net income on revenues of $136,223 for the quarter ended June 30, 2006, compared with a $9,076,537 net loss on $65,765 of revenues for the same period in 2005. At June 30, 2006, the company's balance sheet showed $15,648,095 in total assets and $16,832,897 in total liabilities, resulting in a $1,184,802 stockholders' deficit. The net income earned as well as increases in addition paid-in capital during the second quarter helped to bring down the company's stockholder's deficit to $1.18 million at June 30, 2006. The company also recognized a derivative valuation gain for the three months ended June 30, 2005 in the amount of $4,485,171. At June 30, 2006, the company's balance sheet also showed strained liquidity with $667,453 in total current assets available to pay $15,561,582 in total current liabilities. Full-text copies of the company's second quarter financials are available for free at http://researcharchives.com/t/s?143e Going Concern Doubt As reported in the Troubled Company Reporter on May 24, 2006, Hansen, Barnett & Maxwell, in Salt Lake City, Utah, expressed substantial doubt about Cyber Defense Systems, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's working capital deficits and losses from operations. About Cyber Defense Based in St. Petersburg, Florida, Cyber Defense Systems, Inc. -- http://www.cyberdefensesystems.com/-- offers security solutions for the military, government, and the private sector. Cyber Defense manufactures new generation airships for surveillance and communication. DORAL FINANCIAL: Fitch Cuts Issuer Default Rating to B+ from BB- ---------------------------------------------------------------- Fitch Ratings has downgraded Doral Financial Corporation's Long- Term Issuer Default rating to 'B+' from 'BB-'. The ratings remain on Rating Watch Negative. The rating action is driven by a combination of near-term and long-term challenges. The primary short-term challenges are refinancing $625 million of unsecured debt coming due July 20, 2007, low capital levels but still 'Well Capitalized' by regulatory standards, and high percentage of hybrid equity as part of total equity. Long-term concerns consist of regulatory restrictions on Doral Bank, level of capitalization, poor operational performance in 2006, potential financial impact from lawsuits, and the change of business model from a mortgage company to a full service bank. The resolution of the Rating Watch Negative will mostly be driven by the successful completion of the refinancing. In addition, Fitch will look for the removal of the cease and desist order on Doral Bank, demonstration of management's ability to improve capitalization levels, and demonstrated ongoing steady state level of profit generation under the new business model. With the restatement and delayed filings behind DRL, the biggest challenge over the near-term is the refinancing of $625 million of unsecured debt coming due in July 2007. Fitch has lowered the senior debt rating below the IDR in recognition of the challenge facing DRL in refinancing the near-term maturity and the amount of liquid assets at the holding company level. DRL's recent operating performance, regulatory constraints, current debt ratings and evolving business model could limit the appetite of investors for DRL exposure. Based on current financials and available unencumbered assets, DRL could monetize certain assets, and/or seek an equity infusion to payoff/refinance the debt maturity in July 2007. Following the restatement and unwinding of mortgage sales, DRL's capital levels are at the low end of the peer group, particularly at the consolidated level. Somewhat offsetting the low capital levels, is the reduction/elimination of the riskier assets on DRL's books, including residual interests and mortgage servicing rights. Also, DRL's capital structure has a large percentage of hybrid equity versus peers. Hybrid equity made up 59% of total equity at June 30, 2006. Further impacting equity over the past year has been other comprehensive income. For the quarter ending June 30, 2006, DRL had another comprehensive loss of approximately $64.1 million related principally to the adverse impact of the increase in interest rates on the value of the Company's portfolio of securities. As of June 30, 2006, accumulated other comprehensive loss reached $250.6 million. Fitch expects the capital levels to remain at low levels over the near-term as profitability will be pressured and internal capital formation will be low. Fitch would view positively the issuance of common equity to improve capitalization and would view any additional hybrid equity as debt due to the current hybrid equity levels. Resolution of the Negative Watch will partially be driven by demonstrated improvement in capitalization levels. DRL is in the process of implementing a new business strategy of profitable growth versus market share growth. The Company is reducing originations by focusing on higher quality originations and attempting to cross-sell current and future customers more bank products. With the amount of competition in the Puerto Rico market, Doral's new strategy will be difficult to implement. DRL has made several management changes since the announcement of the restatements. The management changes are viewed positively by Fitch as they bring much needed direction and expertise in certain areas to DRL. However, demonstrated success in resolving current issues facing DRL and successful implementation of a new business model will be challenging. Although the new management team brings in the needed expertise in accounting, risk management, Puerto Rico market, and mortgages, only time will tell whether their new business strategy will be successful. Doral Bank continues to operate profitably, asset quality metrics remain reasonable, and capital ratios are higher than the parent. This drives the rating distinction between the bank and the parent. However, tightening margins have decreased earnings. Furthermore, softness in the local economy and uncertainty surrounding any implications from problems at the parent, drive the rating downgrade and Negative Watch. DRL's operating performance for the first half of 2006 continues to be poor as the Company reported a net loss for the quarter ended June 30, 2006 of $50.9 million, compared to a loss of $22.8 million for the comparable 2005 period. DRL's operating performance for the second quarter of 2006 was impacted by lower net interest income as a result of a decrease in net interest margin together with a decrease in assets, a $17.5 million charge against earnings related to a market valuation adjustment to the Company's loans held for sale portfolio, and a $8.2 million net charge against earnings related to the restructuring of certain previous transfers of residential and commercial mortgage loans to local financial institutions. The market value adjustment to loans reflects the impact of rising interest rates on the Company's mortgage loans held for sale portfolio, as well as market terms for secondary sales in the United States market. The decrease in net interest income resulted from a decrease in net interest margin from 1.70% in the second quarter of 2005 to 1.47% for the second quarter of 2006. With competition for deposits in Puerto Rico continuing to be intense, margin relief over the near term is not likely. Fitch expects profitability metric's to be relatively low and volatile as the company implements its new business strategy and net interest margins remain pressured. Regulatory issues and constraints have been and will continue to be burdensome to DRL's operations. Although DRL is implementing many new policies to remediate identified weak internal controls, Fitch expects the regulatory constraints to remain till regulators annual review. The resolution of lawsuits against DRL is not expected to be resolved over the near-term. However, a settlement could further weaken DRL's financial condition and capital levels. These ratings have been downgraded by Fitch: Doral Financial Corporation -- Long-term IDR to 'B+' from 'BB-'; -- Senior debt to 'B' from 'BB-'; -- Preferred Stock to 'CCC+' from 'B'; -- Individual to 'D/E' from 'D'. Doral Bank -- Long-term IDR to 'BB-' from 'BB'; -- L-T Deposit Obligations to 'BB' from 'BB+'. In addition, Fitch rates: Doral Financial Corporation -- Short-term IDR 'B'; -- Support '5'. Doral Bank -- Short-term IDR 'B'; -- Individual 'C/D'; -- S-T Deposit Obligations 'B'; -- Support '5'. EUGENE SCIENCE: Earns $1.4 Million in Second Quarter of 2006 ------------------------------------------------------------ Eugene Science Inc. has filed its second quarter financial statements for the three months ended June 30, 2006, with the Securities and Exchange Commission. Eugene Science reported a $1,440,112 net income on $220,397 of revenues for the second quarter ended June 30, 2006, compared with a $960,992 net loss on $100,082 of revenues for the same period in 2005. The net income was mainly due to the recognition of a gain on sale of assets in the second quarter in the amount $5,490,547. At June 30, 2006, the company's balance sheet showed $6,098,465 in total assets and $16,190,785 in total liabilities, resulting in a $10,092,320 stockholders' deficit. The company's balance sheet at June 30, 2006, also showed strained liquidity with $2,625,718 in total current assets available to pay $15,526,969 in total current liabilities. Full-text copies of the company's second quarter financials are available for free at http://researcharchives.com/t/s?1439 Going Concern Doubt As reported in Troubled Company Reporter on May 18, 2006, SF Partnership, LLP, Chartered Accountants, in Toronto, Canada, raised substantial doubt about Eugene Science, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring losses, negative working capital, and operation in a country whose economy is currently unstable -- South Korea. About Eugene Science Based in Kyonggi Do, South Korea, Eugene Science, Inc. is a global biotechnology company that develops, manufactures and markets nutraceuticals, or functional foods that offer health-promoting advantages beyond that of nutrition. Plant sterols are the company's primary products, which include CZTM Series of food additives and CholZeroTM branded beverages and capsules. In June 2005, the company received regulatory approval for certain health claims associated with the company's products from government agencies in the Republic of Korea. FBO AIR: Posts $848,842 Net Loss in 2006 Second Quarter ------------------------------------------------------- FBO Air Inc. reported a $848,842 net loss on $8,968,720 of revenues for the quarter ended June 30, 2006, compared with a $605,594 net loss on $2,158,867 of revenues for the same period in 2005. At June 30, 2006, the company's balance sheet showed $11,669,053 in total assets, $9,442,656 in total liabilities and $870,368 in stockholders' equity. The company's balance sheet at June 30, 2006, also showed strained liquidity with $5,250,906 in total current assets available to pay $8,274,154 in total current liabilities. Full-text copies of the company's second quarter financials are available for free at http://researcharchives.com/t/s?1446 Going Concern Doubt As reported in the Troubled Company Reporter on May 22, 2006, Marcum & Kliegman LLP in New York raised substantial doubt about FBO Air, 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 significant operating losses since inception. About FBO Air FBO Air Inc. is an aviation services company with operations in the aircraft charter management and fixed base operations segments of the general aviation industry. The company has two segments -- FirstFlight segment, which provides on-call passenger and cargo air transportation, and Tech Aviation, which provides services like fueling, hangaring, maintenance and repair to private/general aviation aircraft operators. HARVEY ISOM: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Harvey Richard Isom dba Far West Plumbing 9350 Spencer Court Lakeside, CA 92040 Bankruptcy Case No.: 06-03362 Chapter 11 Petition Date: November 1, 2006 Court: Southern District of California (San Diego) Debtor's Counsel: Thomas B. Gorrill, Esq. Law Offices of Thomas B. Gorrill 401 West A Street, Suite 1770 San Diego, CA 92101 Tel: (619) 237-8889 Total Assets: $2,381,918 Total Debts: $1,961,916 Debtor's 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ George Ballard Company $58,639 4075 Nelson Avenue, Suite 6 Concord, CA 94520 AIG $53,308 22427 Network Place Chicago, IL 60673-1224 Hub International $24,849 1331 Morena Boulevard, Suite 300 San Diego, CA 92110 Wamu/Prvdn $7,408 AICCO, Inc. $6,859 Imperial A I Credit Co, Inc. $6,859 HSBC NV $4,244 Windham Professionals $2,390 Chase $1,416 Cap 1 Bank $1,266 Citi $773 HEADLINERS ENT: June 30 Balance Sheet Upside Down by $10.6 Million ------------------------------------------------------------------ Headliners Entertainment Group Inc. has filed its second quarter financial statements for the quarter ended June 30, 2006, with the Securities and Exchange Commission. Headliners Entertainment reported a $588,105 net loss on $2,490,449 of revenues for the second quarter ended June 30, 2006, compared with a $929,971 net loss on $2,342,125 of revenues for the same period in 2005. The company's balance sheet at June 30, 2006, showed $4,380,720 in total assets and $14,982,466 in total liabilities, resulting in a $10,601,746 stockholders' deficit. Additionally, the company's accumulated deficit stood at $69,791,039 as of June 30, 2006. At June 30, 2006, the company's balance sheet also showed strained liquidity with $394,649 in total current assets available to pay $4,718,045 in total current liabilities. Full-text copies of the company's second quarter financials are available for free at http://researcharchives.com/t/s?143a Going Concern Doubt Bagell, Josephs, Levine & Company, L.L.C., in Gibbsboro, New Jersey, raised substantial doubt about Headliners Entertainment Group, 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 sustained operating losses and capital deficits. About Headliners Entertainment Based in Montclair, New Jersey, Headliners Entertainment Group, Inc., -- http://www.rascalscomedyclub.com/-- through its subsidiaries, engages in the operation of comedy clubs primarily in New Jersey. It operates embedded, hotel-based, and licensed comedy clubs. HEALTH SCIENCES: Posts $1.1 Mil. Net Loss in 2006 Second Quarter ---------------------------------------------------------------- Health Sciences Group Inc. reported a $1,167,951 net loss on $7,608 of sales for the second quarter ended June 30, 2006, compared with $527,204 of net income earned on zero sales for the same period in 2005. At June 30, 2006, the company's balance sheet showed $3,787,776 in total assets and $8,274,726 in total liabilities, resulting in a $4,486,950 stockholders' deficit. The company's balance sheet at June 30, 2006, also showed strained liquidity with $93,891 in total current assets available to pay $4,979,831 in total current liabilities. Full-text copies of the company's second quarter financials are available for free at http://researcharchives.com/t/s?1444 Going Concern Doubt As reported in the Troubled Company Reporter on May 24, 2006, Stonefield Josephson, Inc., in Santa Monica, California, raised substantial doubt about Health Sciences Group, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring operating losses, accumulated deficit and working capital deficit at Dec. 31, 2005. About Health Sciences Headquartered in Los Angeles, California, Health Sciences Group, Inc. -- http://www.healthsciencesgroup.com./ -- is an integrated provider of innovative products, proprietary technologies used in nutritional supplements, and functional foods and beverages. The company's active subsidiaries include BioSelect Innovations, which develops proprietary technologies, and Swiss Research, Inc., which markets and sells branded products addressing major wellness categories. HEXION SPECIALTY: Eliminates Certain Defaults on Notes ------------------------------------------------------ Hexion Specialty Chemicals Inc.'s wholly owned finance subsidiaries, Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC, entered into a third supplemental indenture to the Indenture dated as of Aug. 12, 2004 and a supplemental indenture to the Indenture dated as of May 20, 2005. The third supplemental indenture dated as of Oct. 26, 2006 to the Indenture dated as of Aug. 12, 2004, by and among Hexion U.S. Finance Corp., Hexion Nova Scotia Finance, ULC, each of the guarantors party thereto, and Wilmington Trust Company, as Trustee, pursuant to which the Second-Priority Senior Secured Floating Rate Notes due 2010 and the 9% Second-Priority Senior Secured Notes due 2014 were issued. The supplemental indenture dated as of Oct. 26, 2006 to the Indenture dated as of May 20, 2005, by and among Hexion U.S. Finance Corp., Hexion Nova Scotia Finance, ULC, each of the guarantors party thereto, and Wilmington Trust Company, as Trustee, pursuant to which the Second-Priority Senior Secured Floating Rate Notes due 2010 were issued. The 2004 Notes Supplemental Indenture and 2005 Notes Supplemental Indenture were entered into in connection with the Company's tender offers and consent solicitations with respect to the 2004 Floating Rate Notes, the 9% Notes and the 2005 Floating Rate Notes, which were commenced Oct. 12, 2006. The Supplemental Indentures amend the terms governing the Notes to, among other things, eliminate most of the restrictive covenants and certain events of default, and delete all references to collateral in the 2004 Notes Indenture and the 2005 Notes Indenture. Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://hexionchem.com/-- makes thermosetting resins (or thermosets). Thermosets add a desired quality (heat resistance, gloss, adhesion) to a number of different paints and adhesives. Hexion also makes formaldehyde and other forest product resins, epoxy resins, and raw materials for coatings and inks. The Company has 86 manufacturing and distribution facilities in 18 countries. * * * As reported in the Troubled Company Reporter on Oct. 23, 2006 Standard & Poor's Ratings Services lowered its corporate credit rating on Hexion Specialty Chemicals Inc. to 'B' from 'B+'. The outlook is stable. S&P also lowered the rating on the existing $225 million first-lien senior secured revolving credit facility to 'B' from 'B+'. As reported in the Troubled Company Reporter on Oct. 19, 2006 Moody's Investors Service assigned B3 ratings to the new guaranteed senior secured second lien notes due 2014 of Hexion Specialty Chemicals Inc. HIGHLINE PORTAFAB: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Highline Portafab Inc. 20105 Broadway Avenue SE Snohomish, WA 98296 Bankruptcy Case No.: 06-13849 Type of Business: The Debtor designs and manufactures high quality excavator attachments for. The Debtor's products include thumbs, buckets, guarding packages, excavator rakes, bucket rakes and dozer rakes. The Debtor also has a full service manufacturing and repair facility. See http://www.hpf.com/ Chapter 11 Petition Date: October 31, 2006 Court: Western District of Washington (Seattle) Judge: Thomas T. Glover Debtor's Counsel: James L. Day, Esq. Bush Strout & Kornfeld 601 Union Street, Suite 5500 Seattle, WA 98101-2373 Tel: (206) 292-2110 Fax: (206) 292-2104 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service $1,177,134 915 2nd Avenue #1600 M/S 244 Seattle, WA 98174-1081 Department of Revenue $159,005 P.O. Box 34051 Seattle, WA 98124-1051 Wendell & Tina Malberg $115,000 9603 196th Street SE Snohomish, WA 98296 Snohomish County Treasurer $36,220 Department of Labor & Industries $26,683 Employment Security Department $14,507 General Equipment Co. $5,814 Pacific Fluid Systems $4,945 Fittings, Inc. $4,161 Team Tube LLC $2,085 Easthill Hydraulic $1,975 Forrest Tech. Coatings $1,958 Chinook Lumber Inc. $1,724 Northwest Cascade Inc. $1,694 Mosbrucker Excavating Inc. $1,293 Industrial Supply $1,230 Northwest Steel & Pipe Inc. $877 Heavy Equipment Parts $867 Verizon Northwest $525 HOLLINGER INC: Gets Canadian Court Injunction Against David Radler ------------------------------------------------------------------ Hollinger Inc. disclosed that on Oct. 25, 2006, the British Columbia Supreme Court granted a Mareva Injunction Order against David Radler and F.D. Radler Ltd. The Company previously filed an action against Mr. Radler and F.D. Radler Ltd., among a number of other parties, for breach of fiduciary duty, oppressive conduct, and a variety of causes of action. The Company says that the Mareva Injunction Order, applicable worldwide, prevents Mr. Radler and F.D. Radler Ltd. from disposing of, mortgaging or transferring their assets, and freezes their bank accounts while the claim filed by the Company is pending before the courts. Hollinger Inc.'s (TSX: HLG.C)(TSX: HLG.PR.B) -- http://www.hollingerinc.com/-- principal asset is its approximately 70.1% voting and 19.7% equity interest in Sun-Times Media Group Inc. (formerly Hollinger International Inc.), a newspaper publisher with assets which include the Chicago Sun- Times and a large number of community newspapers in the Chicago area. Hollinger also owns a portfolio of commercial real estate in Canada. Litigation Risks Hollinger Inc. faces various court cases and investigations: (1) a consolidated class action complaint filed in Chicago, Illinois; (2) a class action lawsuit that was filed in the Saskatchewan Court of Queen's Bench on September 7, 2004; (3) a $425,000,000 fraud and damage suit filed in the State of Illinois by International; (4) a lawsuit seeking enforcement of a November 15, 2003, restructuring proposal to uphold a Shareholders' Rights Plan, a declaration that corporate by-laws were invalid and to prevent the closing of a certain transaction; (5) a lawsuit filed by International seeking injunctive relief for the return of documents of which it claims ownership; (6) a $5,000,000 damage action commenced by a lessor of an aircraft lease, in which Hollinger was the guarantor; (7) an action commenced by the United States Securities and Exchange Commission on November 15, 2004, seeking injunctive, monetary and other equitable relief; and (8) investigation by the enforcement division of the OSC. IMPART MEDIA: Posts $3 Million Net Loss in Second Quarter of 2006 ----------------------------------------------------------------- Impart Media Group, Inc. reported a $3,065,045 net loss on $1,426,337 of revenues for the second quarter ended June 30, 2006, compared to $26,792 of net income on $1,016,966 of revenues for the same period in 2005. At June 30, 2006, the company's balance sheet showed $16,902,427 in total assets, $9,419,919 in total liabilities, and $7,482,508 in stockholders' equity. Despite losses in the previous two quarters, the company's stockholders' equity as of June 30, 2006, improved mainly because of increases in additional paid-in capital in the previous two quarters. Additionally, the company's accumulated deficit deteriorated to $10,086,732 at June 30, 2006. The company's balance sheet as of June 30, 2006, also showed strained liquidity with $7,096,163 in total current assets available to pay $9,327,591 in total current liabilities. Full-text copies of the company's second quarter financials are available for free at http://researcharchives.com/t/s?1438 Going Concern Doubt As reported in the Troubled Company Reporter on May 17, 2006, Peterson Sullivan PLLC in Seattle, Washington, raised substantial doubt about Impart Media Group, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's recurring losses from operations and substantial accumulated deficit. About Impart Media Based in Seattle, Wash., Impart Media Group, Inc., -- http://www.Impartmedia.com/-- sells dynamic digital media solutions consisting of monitors, media servers, and associated technological hardware and software. The company provides design, integration, fabrication, assembly, quality assurance, creative production, and installation services throughout the United States. As a result of the company's acquisition of E&M Advertising, Inc. and its affiliates in Feb. 2006, the company now provides advertising capability to digital elements and other media services. INFONXX INC: Recapitalization Cues Moody's to Place B2 Rating ------------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating to InfoNXX, Inc. InfoNXX is undertaking a recapitalization to repay existing debt of $215.1 million, pay a dividend to shareholders of $300 million, and pay fees and expenses. The transaction is being financed with proposed credit facilities that include a $200 million senior secured first lien revolver, a $275 million senior secured first lien term loan, and a $125 million senior secured second lien term loan. Moody's assigned these first-time ratings to the proposed capital structure: -- $200 million senior secured first lien revolver maturing Dec. 2010, B1 (LGD3, 35%) -- $275 million senior secured first lien term loan B due 2012, B1 (LGD3, 35%) -- $125 million senior secured second lien term loan due 2013, Caa1 (LGD5, 85%) -- Corporate family rating, B2 -- Probability of default rating, B2 The ratings outlook is stable. The ratings reflect significant leverage subsequent to the proposed recapitalization. Pro forma for the recapitalization and after application of Moody's standard adjustments, total debt to adjusted EBITDA at Sept. 30, 2006 was approximately 4.8 times, adjusted free cash flow to debt was about 7%, and adjusted EBIT coverage of interest expense was about 1.7x. EBITDA has been adjusted to reflect the expected pro forma effects of the company's recent France and Italy launches, two acquisitions, and the addition of a large customer account in the U.S. The key factors limiting InfoNXX's credit ratings are the significant amount of adjustments made to pro forma EBITDA and the company's lack of a track record operating at its current size and leverage. Moody's views InfoNXX's business profile as entailing certain risks. Rapid growth in the past two years, including two acquisitions in 2006, raises uncertainty and integration risk. Other risks include significant customer concentration in the U.S., technology risk regarding potential automated directory assistance, the possibility of wireless customers bringing their directory assistance services in-house, and competitive pricing practices in Europe. Strengths in InfoNXX's business profile include: -- its substantial market share and brand recognition in the U.K., France, and Ireland; -- long-term relationships and contracts with its largest corporate customers; and, -- moderately high switching costs. The B1 rating on the senior secured first lien credit facility reflects the facility's priority position in the capital structure and a Loss Given Default assessment of LGD3. Domestic borrowings under the first lien credit facility benefit from a first priority perfected lien on all tangible and intangible assets of the domestic borrower, InfoNXX, Inc., and the capital stock of its subsidiaries. Foreign borrowings under the first lien credit facility benefit from a first priority perfected lien on all tangible and intangible assets of the foreign borrowers, Carbone S.A.R.L., The Number UK Limited, and InfoNXX Lux. The rating on the first lien facility benefits from the loss absorption provided by the second lien term loan. Domestic borrowings are guaranteed by each existing and future domestic subsidiary of the domestic borrower, and foreign borrowings are guaranteed by the domestic borrower, the domestic guarantors, certain foreign subsidiaries, and each existing and future foreign subsidiary of the domestic borrower. A debt allocation mechanism exists under which lenders of the first lien facilities would share losses in the event of a default. The security and guarantees are subject to customary exceptions and limitations. The Caa1 and LGD5 ratings assigned to the $125 million senior secured second lien term loan reflect its subordination to the sizable amount of first lien debt. The second lien has the same borrowers and guarantees as the first lien facility, has a second priority claim on the same collateral, and also contains a loss- sharing mechanism. The stable ratings outlook reflects Moody's expectation that InfoNXX will successfully integrate its recent acquisitions and maintain solid EBITDA, free cash flow and operating margins. The outlook or ratings could be lowered if InfoNXX loses a significant customer, experiences integration inefficiencies, or encounters other operational difficulties that result in a sustained shortfall in EBITDA below current expectations causing adjusted debt to EBITDA to rise above 5.8x and adjusted EBIT to interest expense to fall below 1.5 times. A track record of sustained operating performance that results in adjusted debt to EBITDA of less than 4.6x and EBIT interest coverage above 1.9x would likely result in a positive change in the outlook or ratings. InfoNXX, Inc. is a non-carrier provider of directory assistance services in the U.S. and Europe. In the U.S., which comprised approximately one-third of third quarter 2006 revenue, wireless carriers outsource directory assistance calls to InfoNXX under long-term customer agreements. In Europe, the directory assistance market is deregulated and InfoNXX markets its brand and telephone numbers directly to the end user. Revenue for the twelve months ended September 30, 2006 was approximately $429 million. JOHN BALL: Case Summary & 10 Largest Unsecured Creditors -------------------------------------------------------- Debtor: John Patrick Ball aka John P. Ball 2 Waterfront Place Apartment 1401 Morgantown, WV 26501 Bankruptcy Case No.: 06-01002 Chapter 11 Petition Date: October 31, 2006 Court: Northern District of West Virginia (Clarksburg) Debtor's Counsel: Martin P. Sheehan, Esq. Sheehan & Nugent, PLLC 41 15th Street Wheeling, WV 26003 Tel: (304) 232-1064 Fax: (304) 232-1066 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Decedent's Estate of Order of Supreme $837,362 Gladys G. Davis Court of West c/o Ward D Stone, Jr. Virginia on 990 Elmer Prince Drive 6/15/06 Morgantown, WV 26505 (executor fee) (annuity) $493,093 Decedent's Estate of Order of Supreme $785,996 Vivian D. Michael Court of West c/o Ward D. Stone, Jr. Virginia on 990 Elmer Prince Drive 6/15/06 Morgantown, WV 26505 (executor fee) (vehicle) $20,000 Decedent's Estate of Order of Supreme $318,934 Earle D.Elmore Court of West c/. Ward D. Stone, Jr. Virginia 6/15/06 as 990 Elmer Prince Drive amended by ODC Morgantown, WV 26505 hearing on 9/8/06 (Trustee fee) (executor fee) $60,000 Steptoe and Johnson Legal Fees and $50,415 P.O. Box 1702 Expenses Clarksburg, WV 26302-1732 Office of Disciplinary Counsel Order of ODC as a $9,567 2008 Kanawha Boulevard East result of hearing Charleston, WV 25311 on 9/8/06 Collier City Florida Real Real Estate Tax $8,684 Estate Tax Monogalia County Real Estate Tax Real Estate Tax $2,419 Internal Revenue Service Federal Income Tax Unknown Mass Mutual Insurance Unknown c/o Jerry L. Jones, CLU, ChFC Policy No. 1425 Earl Core Road 005674509 Morgantown, WV 26505 West Virginia State Income Tax Unknown State Tax Department KRISPY KREME: Grants 420,000 Common Shares to Executives -------------------------------------------------------- The Compensation Committee of the Board of Directors of Krispy Kreme Doughnuts Inc. approved grants of stock options for an aggregate of 900,000 shares of the Company's common stock, including grants to its executive officers. The Company disclosed that the grants included: Executive Officer No. of Shares ---------------- ------------- Jeffrey L. Jervik 150,000 Executive Vice President - Operations Douglas R. Muir 120,000 Chief Accounting Officer Michael C. Phalen 150,000 Chief Financial Officer The Company also disclosed that the date of grant will be the second trading day following the filing of its Annual Report on Form 10-K for the fiscal year ended Jan. 29, 2006. The grants will be made under the Company's 2000 Stock Incentive Plan and a Nonqualified Stock Option Agreement. The exercise price of the options will be the closing price of the Company's common stock on the New York Stock Exchange on the date of the grant. Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme (NYSE: KKD) -- http://www.krispykreme.com/-- is a branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. There are currently approximately 320 Krispy Kreme stores and 80 satellites operating systemwide in 43 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United Kingdom. Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC is a majority-owned subsidiary and franchisee partner of Krispy Kreme Doughnuts, Inc., in the Philadelphia region. Freedom Rings operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268). M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated $10 million to $50 million in assets and debts. Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). The bankruptcy filing will facilitate the sale of 12 Krispy Kreme stores, as well as the franchise development rights for Colorado, Minnesota and Wisconsin, for approximately $10 million to Westward Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho, Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP represents Glazed in its restructuring efforts. When Glazed filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. KremeKo, Inc., Krispy Kreme's Canadian franchisee, is currently restructuring under the Companies' Creditors Arrangement Act. Pursuant to the Court's Initial Order, Ernst & Young Inc. was appointed as Monitor in KremeKo's CCAA proceedings. The Monitor is attempting to sell the KremeKo business. LAKE AT LAS VEGAS: S&P Cuts Corp. Credit Ratings to CCC From B -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit ratings on Lake at Las Vegas Joint Venture and LLV-1 LLC to 'CCC' from 'B' and revised the outlook to negative. Additionally, the rating on the bank loan is lowered to 'CCC+' from 'B+' and the recovery rating is affirmed at '1', indicating a reasonable expectation for full recovery of principal in the event of default. These actions affect first-lien term loan debt totaling $502 million. "The downgrade was prompted by a sharp reduction in cash flow as a consequence of stagnant demand for land parcels within the highly amenitized Lake Las Vegas master-planned community," said Standard & Poor's credit analyst James Fielding. "Cash balances are low, and the borrowers are not currently in compliance with the interest coverage covenant governing the senior first-lien credit facility." Mr. Fielding added that while longer-term demographic trends are very favorable for the Las Vegas area housing markets, the duration of the current correction is uncertain, suggesting the possibility that the borrowers may not have the capacity to meet their financial commitments in the near term. The outlook will remain negative until the bank loan agreement is successfully amended and sufficient equity is contributed. If these transactions fail to occur in a timely manner, a default is likely. Alternatively, we would revise our outlook back to stable and possibly raise our ratings if the borrowers' liquidity improves and sales return to a more normalized pace. LEHMAN ABS: Fitch Affirms Ratings on 16 Lehman MH Securitizations ----------------------------------------------------------------- Fitch affirms these Lehman ABS Corp. manufactured housing-backed certificates: Series 1998-1 Group I -- Class I-A-1 at 'A-'; -- Class I-IO at 'AAA'. Series 1998-1 Group II -- Class II-A-1 at 'CC/DR2'; -- Class II-A-2 at 'CC/DR3'; -- Class II-IO at 'CC/DR3'. Series 2001-B -- Classes A-1 through A-6 at 'A+'; -- Class A-7 at 'AAA'; -- Class A-IO-C at 'AAA'; -- Class M-1 at 'BBB-'; -- Class M-2 at 'CC/DR3'; -- Class B-1 at 'C/DR4'. The affirmations affect approximately $820 million of the outstanding certificates. Series 1998-1 Group I is collateralized by 10 senior tranche classes from 9 Green Tree manufactured housing transactions. Series 1998-1 Group II is collateralized by 5 mezzanine tranche classes from 5 Green Tree manufactured housing transactions. Due to the lack of additional credit enhancement, the credit risk of both groups of series 1998-1 is directly tied to the credit risk of the underlying Green Tree classes. The credit risk on the underlying classes has remained stable over the last six months and, as a result, all underlying classes were affirmed in October 2006. The affirmation of all classes in series 1998-1 reflects the affirmation of all underlying classes. Series 2001-B is collateralized by fixed-rate manufactured housing contracts that were originated by The CIT Group. The affirmation of A-7 is the result of a certificate guaranty policy issued by Ambac Assurance Corp., which maintains an insurer financial strength rating of 'AAA' with Fitch. The affirmation of all other classes in the transaction reflects a stable relationship between credit enhancement and expected loss. This transaction is seasoned 59 months and has a pool factor of 50%. Fitch's Distressed Recovery ratings, introduced in April 2006 across all sectors of structured finance, are designed to estimate recoveries on a forward-looking basis while taking into account the time value of money. LEVEL 3: Incurs $138 Million Net Loss in 2006 Third Quarter ----------------------------------------------------------- Level 3 Communications Inc. reported consolidated revenue of $875 million for the third quarter 2006, compared to consolidated revenue of $835 million for the second quarter 2006. As the company completed the sale of its subsidiary, Software Spectrum, Inc., in the third quarter of 2006, the results of operations of Software Spectrum are reflected as discontinued operations for all periods provided in this release and are not consolidated with the results of operations of Level 3's communications and other businesses. The net loss for the third quarter 2006 was $138 million compared to a net loss of $201 million for the previous quarter. Included in the net loss for the third quarter is a gain of $33 million associated with the sale of Software Spectrum. Included in the net loss for the second quarter 2006 was a loss of $55 million attributable to the amendment and restatement of the Level 3 Financing Inc.'s $730 million credit agreement. "Excluding the benefit of acquisitions during the third quarter, we had an approximately 6% growth in core communications services revenue," said James Q. Crowe, CEO of Level 3. "This positive outcome is the result of particularly strong contributions from transport and infrastructure and voice services, the ongoing stabilization in the pricing environment; and the positive impact of industry consolidation. The trend in organic growth bodes well for future performance, and the communications business saw positive contributions from the WilTel integration and other, more recent acquisitions." Consolidated Adjusted OIBDA defined as Adjusted Operating Income Before Depreciation and Amortization was $176 million in the third quarter 2006, compared to third quarter 2006 projections of $170 million to $190 million and $170 million for the second quarter 2006. "Our favorable performance in core services revenue was offset by declines in SBC Contract Services revenues and higher operating expenses, which were primarily due to the acceleration of certain integration related expenses and increased costs attributable to the acquired companies," said Sunit S. Patel, CFO of Level 3. Revenue Communications revenue for the third quarter 2006 was $858 million, versus $819 million for the previous quarter. The company recognized less than $1 million in termination revenue during the third quarter 2006 and $3 million in termination revenue during the second quarter 2006, primarily related to the SBC Contract Services. Core Communications Services revenue, which includes transport and infrastructure, wholesale IP and Data, Voice and Vyvx, increased quarter over quarter by 29% due to a 6% organic growth in core communications services, primarily from transport and infrastructure and voice services, the benefit of a full quarter's revenue from ICG Communications, as well as revenue for part of the quarter from the acquisitions of TelCove and Looking Glass Networks. Other Communications Services revenue declined 11% to $107 million during the quarter, as a result of expected declines in managed modem and managed services. SBC Contract Services SBC Contract Services declined by 26% from the previous quarter. As previously disclosed, SBC has announced its intention to migrate the services provided under the agreement to its own network facilities in accordance with terms previously negotiated by WilTel. Under the terms of this agreement, SBC agreed to pay WilTel a minimum amount of gross margin regardless of the actual revenue generated under the contract. Accordingly, while the company expects future SBC Contract Services quarterly revenue will be difficult to predict and the rate of decline to vary from quarter to quarter, the gross margin contribution over time is fixed. The communications deferred revenue balance was $896 million at the end of the third quarter 2006, compared to $912 million at the end of the second quarter. The decline in communications deferred revenue quarter over quarter is a result of the amortization of previously recognized deferred revenue balances and a $20 million decrease associated with an integration related change in the billing cycle for certain legacy WilTel customers, partially offset by cash receipts associated with wavelength and dark fiber sales. Excluding the effect of the change in the billing cycle, the communications deferred revenue balance would have increased from the second quarter by $4 million. Cost of Revenue Communications cost of revenue for the third quarter 2006 was $368 million, versus $385 million in the previous quarter. Cost of revenue decreased during the quarter primarily due to the benefit of synergies from the WilTel integration and lower expenses associated with SBC Contract Services revenue partially offset by increases from a full quarter of costs associated with ICG Communications, and a partial quarter of costs associated with TelCove and Looking Glass. Communications gross margin was 57% for the third quarter, versus 53% for the second quarter. The increase in communications gross margin is primarily attributable to the higher margin revenue from TelCove, Looking Glass and ICG Communications; organic growth in our core communications services; a reduction in lower margin services associated with SBC Contract Services revenue; and integration benefits from the WilTel acquisition. "We are pleased with the improvement in our gross margin," said Mr. Crowe. "Given positive market conditions and the benefits of integration activity and acquisitions, we expect improvements in gross margin to continue in the fourth quarter." Selling, General and Administrative Expenses Communications SG&A expenses were $333 million for the third quarter 2006, versus $281 million for the previous quarter. The third and second quarter 2006 Communications SG&A expenses include $18 million and $20 million, respectively, of non-cash compensation expense. SG&A increased in the third quarter primarily due to costs associated with TelCove and Looking Glass, and a full quarter of costs from ICG Communications. "Our integration expenses increased in the quarter as we started integrating various operating and business support systems and processes," said Mr. Patel. "For the balance of the year, we are accelerating some of the metro integration efforts that were previously planned for 2007." Adjusted OIBDA for the communications business increased to $174 million for the third quarter 2006, compared to $170 million for the previous quarter. Communications Adjusted OIBDA margin was 20% for the third quarter 2006, versus 21% in the previous quarter. Communications Adjusted OIBDA in the third quarter includes $1 million in cash restructuring charges associated with reductions in workforce resulting from the integration of acquired businesses and excludes a $1 million non-cash asset impairment charge, and $18 million of non-cash compensation expense. Second quarter 2006 Communications Adjusted OIBDA includes $3 million in cash restructuring charges associated with reductions in workforce resulting from the integration of acquired businesses and excludes a $4 million non-cash asset impairment charge, and $20 million of non-cash compensation expense. Other Businesses The company's other businesses consist primarily of coal mining operations. Revenue from other businesses was $17 million in the third quarter, compared to $16 million in the second quarter of 2006. Consolidated Adjusted OIBDA from Other Businesses in the third quarter was $2 million and Other Businesses did not contribute to Consolidated Adjusted OIBDA in the second quarter 2006. During the third quarter 2006, Unlevered Cash Flow was positive $121 million, versus positive $93 million for the previous quarter. Consolidated Free Cash Flow for the third quarter was negative $64 million, versus negative $13 million for the previous quarter. As of Sept. 30, 2006, the company had cash and marketable securities of approximately $1.2 billion. "The combination of the company's acquisitions, financing activities during the year and continued organic core communications growth has strengthened our financial condition," said Mr. Patel. Corporate Transactions On Oct. 17, 2006, Level 3 announced that it had signed a definitive agreement to acquire Broadwing Corporation. Under the terms of the agreement, Level 3 will pay $8.18 of cash plus 1.3411 shares of Level 3 common stock for each share of Broadwing common stock outstanding at closing. In total, Level 3 expects to pay approximately $744 million of cash and issue approximately 122 million shares of common stock. During the third quarter, Level 3 closed the acquisitions of Telcove and Looking Glass. Also during the third quarter, Level 3 completed the sale of Software Spectrum to Insight Enterprises Inc. for total proceeds of $353 million in cash, consisting of $287 million in purchase price and approximately $66 million in a working capital adjustment. The cash received at closing remains subject to certain post-closing adjustments. Organizational Update The Wholesale Markets Group services the communications needs of the largest global service providers, including carriers, cable companies, wireless companies, and voice service providers. These customers typically integrate Level 3 services into their own products and services to offer to their end user customers. The Content Markets Group focuses on serving media and content companies with large and growing bandwidth needs. Customers in this market include video distribution companies, providers of gaming, mega-portals, software service providers, social networking providers, as well as more traditional media distribution companies such as broadcasters, television networks and sports leagues. The Business Markets Group targets enterprise customers and regional carriers who value a local, professional sales force. Specific customer markets include small, medium, and large businesses, local and regional carriers, state and local government entities, and higher education institutions. The European Markets Group serves the largest European consumers of bandwidth, including the largest European and international carriers, large system integrators, voice service providers, cable operators, Internet service providers, content providers, and government and education sectors. "The alignment around customer markets we believe will continue to drive rapid growth while enabling the company to better focus on the needs of our customers, and deliver the high quality services they expect from Level 3," said Kevin O'Hara, president and COO of Level 3. "Each group is supported by the dedicated sales, marketing, product management, customer facing operations, and necessary support resources required to execute and grow revenues in these key segments." Integration Update We have completed the majority of the physical integration of WilTel's network, and we are seeing the benefit of the network and operating expense savings we expected from this acquisition in our results this quarter," said Mr. O'Hara. "Our primary focus going forward will be to continue the integration efforts of our metro acquisitions and begin the integration work on Broadwing subject to the requirements and restrictions of applicable law. "The integrations of the metro acquisitions are underway, and we are beginning to see the benefits of our increased local footprints across the communications business. We are on track to complete the majority of the integration of these companies by the end of 2007." Capital Markets Activity During the third quarter, the company redeemed all of its outstanding 9 1/8% Senior Notes due 2008 and 10 1/2% Senior Discount Notes due 2008. Aggregate principal, call premium and accrued interest totaled $470 million. As a result, long-term debt due in 2008 was reduced by approximately $460 million. 2006 Business Outlook "The continued strength in our core communications business and our strengthening gross margin are indicators of strong momentum," said Mr. Crowe. "We are confident in our ability to continue to deliver industry leading growth in our core communications revenues." "We are increasing the midpoint for our 2006 core communications services and total communications revenue as a result of stronger than anticipated organic growth," said Mr. Patel. "Excluding benefits from the pending acquisition of Broadwing, we reiterate our expectation that Consolidated Adjusted OIBDA in 2007 will be $830 million to $890 million." "We are pleased with the continued demand we are seeing from our customers, we believe our performance this quarter continues to demonstrate that our business and industry dynamics are strong," said Mr. Crowe. "We believe we are well positioned for the future. In addition, we believe our pending acquisition of Broadwing creates significant value for our stockholders and expands our opportunities for growth." Headquartered in Bloomfield, Colorado, Level 3 Communications, Inc. (Nasdaq: LVLT) -- http://www.Level3.com/-- an international communications company, provides Internet connectivity for millions of broadband subscribers. The company provides a comprehensive suite of services over its broadband fiber optic network including Internet Protocol services, broadband transport and infrastructure services, colocation services, voice services and voice over IP services. * * * As reported in the Troubled Company Reporter on Oct. 30, 2006, Fitch assigns a rating of 'B/RR1' to Level 3 Financing, Inc.'s issuance of $600 million of 9.25% senior notes due 2014. In addition, Fitch affirms the 'CCC' Issuer Default Rating and each issue rating for Level 3 Communications, Inc. and Level 3 Financing, Inc. The Rating Outlook is Positive. LEVEL 3: DBRS Upgrades Senior Unsecured Notes' Rating to B (low) ---------------------------------------------------------------- Dominion Bond Rating Service upgraded the ratings of Level 3 Communications Inc.'s Senior Unsecured Notes to B (low) from CCC and Subordinated Notes to CC from C and Level 3 Financing Inc.'s Senior Secured Credit Facility to B from B (low) and Senior Unsecured Notes to B(low) from CCCwith all trends now Stable. This concludes the Under Review with Positive Implications that Level 3's ratings were placed under on October 17, 2006. The upgrade is a result of the near-finished integration of WilTel Communications, LLC that has demonstrated meaningful cash flow improvement along with the improved outlook of Level 3 achieving a free cash flow positive business model in 2008. Despite the recent operational improvements, DBRS notes that Level 3 has not increased its 2007 EBITDA guidance, which is expected to be in a forecasted range between $830 million and $890 million including restructuring costs. Notwithstanding, DBRS believes that Level 3 will be able to substantially increase its EBITDA in 2008 as a result of integrating its acquisitions and capitalizing on network and operating integration efforts, which mainly involves moving more Broadwing Corporation traffic onto Level 3's higher-margin network. DBRS reiterates that its major concern at this time is the considerable integration risk at Level 3, given that it has recently closed the larger acquisitions of Telcove, Inc., Looking Glass Networks, Inc., along with the expected acquisition of Broadwing. Therefore, Level 3 will face substantial integration challenges in 2007. In addition, DBRS acknowledges that Level 3's debt levels still remain somewhat high at $6.6 billion as of September 30, 2006, and continue to restrict its ratings despite the expected improvements in cash flow from acquisitions. However, Level 3 has $1.2 billion in cash, which is sufficient to cover the cash component of the Broadwing purchase price and DBRS's expectation of free cash flow deficits over the next 12 months that includes integration costs ranging between $100 million and $120 million. Finally, DBRS notes that Level 3 has little debt maturing between now and 2008 as a result of the Company's recent debt refinancing efforts. In addition, Level 3 Financing Inc. has just announced a further $600 million debt issuance to help fund the cash portion of any past or pending acquisitions. Therefore, near-term liquidity is not a concern. Positive rating action would likely occur if Level 3 achieves further improvement in credit metrics with EBITDA-to-interest coverage approaching two times, with cash flow-to-gross debt moving towards 0.1x. In addition, this could be augmented by Level 3 negotiating to convert $1.3 billion of convertible debt that is currently above its strike price into equity in advance of the current conversion schedule of late 2008/early 2009 that would help offset the recent increases in debt to help fund acquisitions. LODGENET ENTERTAINMENT: Moody's Holds Corp. Family Rating at B1 --------------------------------------------------------------- Moody's revised LodgeNet's outlook to positive from stable, as Moody's expects that LodgeNet will continue to have good operating performance and use its growing free cash flow to repay debt, leading leverage to potentially decline to the mid-to-high 2x debt-to-EBITDA level in 2007. Moody's affirmed the corporate family and all other ratings. LodgeNet's B1 corporate family rating continues to reflect significant exposure to the lodging industry's inherent cyclicality, seasonality and volatility, as well as the company's dependence on the quality of Hollywood product, significant need for capital investment, and thin interest coverage after capital expenditures. The rating is supported by LodgeNet's large installed room base (over one million rooms served) and the consequent advantages of scale, growing free cash flow, and diversification (albeit modest) from the new revenues streams, such as from services to healthcare facilities and travel centers. This is the list of Moody's action: * Affirmed: -- Corporate Family Rating B1 -- Probability of Default Rating B1 -- Senior Secured Revolver Ba1, LGD2, 16% -- Senior Secured Term Loan Ba1, LGD2, 16% -- 9.5% Senior Sub Notes, B2, LGD5, 72% The outlook is positive. LodgeNet Entertainment Corporation provides cable, video-on-demand and video game entertainment services to the lodging industry. The company's annual revenues are approximately $290 million. LodgeNet maintains its headquarters in Sioux Falls, South Dakota. M&K HOLDINGS: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: M&K Holdings, LLC 7500 College, Suite 1200 Overland Park, KS 66210 Bankruptcy Case No.: 06-42971 Type of Business: The Debtor provides municipal engineering and industrial/commercial land development. See http://www.morrow-associates.com/ Chapter 11 Petition Date: October 31, 2006 Court: Western District of Missouri (Kansas City) Judge: Arthur B. Federman Debtor's Counsel: Nancy S. Jochens, Esq. Blackwell Sanders Peper Martin LLP 4801 Main Street, Suite 1000 Kansas City, MO 64112 Tel: (816) 983-8000 Fax: (816) 983-8080 Total Assets: $7,175,000 Total Debts: $5,553,609 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Redford Construction $509,100 P.O. Box 1065 Raymore, MO 64083 Lisa M. Garney $50,053 1420 West 50th Terrace Kansas City, MO 64112 Jerry D. Morrow Personal Loan $48,731 7500 College, Suite 1200 Overland Park, KS 66210 Shafer, Kline & Warren Inc. $48,445 11100 West 91st Street Overland Park, KS 66214 Mark One $43,150 Fields & Brown $41,082 Douglas R. Kean Personal Loan $31,415 Ralph C. Johnson & Co., P.C. $27,028 King Hershey PC $13,210 Gun-Ko Traffic Control Inc. $12,000 Jim Kidwell Construction Co. Unknown Tax Increment Financing Unknown Comm. of KCMO MARK IV: Increased Debt Level Cues Moody's to Pare Ratings ---------------------------------------------------------- Moody's Investors Service lowered the ratings of Mark IV Industries, Inc. -- Corporate Family, to B2 from B1; -- guaranteed second lien senior secured term loan at Dayco Products LLC, to B3 from B2. At the same time, Moody's affirmed the ratings of the guaranteed senior secured credit facility at Ba3 and maintained the negative rating outlook. The ratings reflect worsening credit protection measures resulting from declining margins in several of the company's businesses as well as increased debt levels. Performance in its electronic toll collections business has been weaker than expected because of delayed shipments to government agencies, although the company expects to make up the shortfall in the second half of fiscal year 2007. Its automotive OEM segment has suffered from lower production volumes, pricing concessions and rising raw material costs. For the last 12 months ended Aug. 31, 2006, Debt/EBITDA (using Moody's standard adjustments) rose to 6.2x, EBIT/cash interest was approximately 1.3x. Free cash flow was approximately negative $50 million, driven by lower profitability and higher working capital usage. Moody's noted in its prior rating action that the company's credit metrics were already weak for it ratings. The company's progress to date makes the achievement of solid B1 credit metrics highly unlikely in the near term. The negative outlook continues to reflect Moody's belief that challenging conditions in the North American automotive industry, including lowered production levels and continued pricing pressures, will persist in the near term. Mark IV derives approximately 25% of its revenues from North American automotive OEMs. Additionally, the heavy duty truck segment, one of Mark IV's higher margin businesses, is expected to face an industry-wide downturn in 2007 as new emission standards take effect. Moody's is also concerned that negotiations on the part of government toll road agencies will likely result in reduced transponder toll tag pricing, as this business matures. These factors, combined with the company's remaining required pension contribution of $42 million in fiscal year 2007, may result in increasing leverage during FY 2007. Liquidity as of Aug. 31, 2006, was comprised of $85.7 million of cash on hand and approximately $62 million of availability under its revolving credit facility. These ratings were lowered: * Mark IV Industries, Inc. -- Corporate Family Rating, to B2 from B1 -- Probability of Default Rating, to B2 from B1 -- $150 million senior secured second lien term loan due 2011, to B3 (LGD5, 71%) from B2 (LGD5, 71%) These ratings were affirmed: * Dayco Products, LLC -- Ba3 (LGD3, 31%) rating for the guaranteed senior secured credit facilities consisting of: -- $150 million US/European revolving credit facility due 2010 (up to $50 million-equivalent to be available in Euros) -- $747 million 7-year US term loan B due 2011 * Dayco Europe SrL -- $100 million ($91 million remaining balance)-equivalent Euro denominated European term loan A due 2010 The last rating action was on Sept. 22, 2006, when Mark IV's issue ratings were raised with the LGD Methodology implementation. Future events that have the potential to drive Mark IV's ratings lower include: -- evidence that the company is unable to maintain the technological leadership necessary to hold its leading market positions in its higher margin product lines; -- declines in production volumes of the company's North American and European OEM customers; -- annual price concessions to OEM customers that are not substantially offset by cost-cutting efforts or by sufficiently profitable new business awards; -- material increases in raw materials prices that cannot be passed on to customers; or, -- deteriorating liquidity. Consideration for a lower rating could arise if any combination of these factors results in leverage approaching 7x or reduces EBIT/cash interest coverage to 1x or lower. Future events that have the potential to drive Mark IV's outlook or ratings higher include: -- growth in the company's higher margin products and continued improvement of the company's operations; -- the generation of material new business awards with sufficient margins to offset negotiated price concessions; -- meaningful debt reduction from operating cash flows or an incremental equity contribution or IPO. Consideration for a higher outlook or rating could arise if any combination of these factors were to increase EBIT/Interest coverage to over 1.9x or reduce leverage to 4x. Mark IV is a diversified manufacturer of engineered systems and components utilizing radio frequency identification, information display system, small diesel engines, mechanical power transmission, air admission, fuel and fluid handling and other technologies that serve industrial, transportation and automotive markets. Mark IV manages and reports its operations into two categories Industrial/Distribution and Automotive OEM. Annual revenues approximate $1.8 billion. MORGAN STANLEY: Fitch Rates Six Certificate Classes at Low-Bs ------------------------------------------------------------- Fitch affirms Morgan Stanley Capital I Trust's commercial mortgage pass-through certificates, series 2005-HQ5: -- $104.9 million class A-1 at 'AAA'; -- $160.9 million class A-2 at 'AAA'; -- $159.4 million class A-3 at 'AAA'; -- $66.4 million class A-AB at 'AAA'; -- $711.3 million class A-4 at 'AAA'; -- $112.4 million class A-J at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $30.5 million class B at 'AA'; -- $19 million class C at 'AA-'; -- $15.2 million class D at 'A+'; -- $17.1 million class E at 'A'; -- $15.2 million class F at 'A-'; -- $15.2 million class G at 'BBB+'; -- $13.3 million class H at 'BBB'; -- $21 million class J at 'BBB-'; -- $5.7 million class K at 'BB+'; -- $5.7 million class L at 'BB'; -- $5.7 million class M at 'BB-'; -- $3.8 million class N at 'B+'; -- $1.9 million class O at 'B'; -- $3.8 million class P at 'B-'. Fitch does not rate the $19 million class Q certificates. The rating affirmations reflect the stable pool performance and minimal paydown since issuance. As of the October 2006 distribution date, the pool has paid down 1.1% to $1.51 billion from $1.52 billion at issuance. Fitch reviewed the credit assessments of the following loans: Wells REF Portfolio (9.6%), Houston Center (7.9%), 75 Broad Street (7.2%), 111 Eighth Avenue (4.9%), and Towne East Square Mall (4.5%). Based on their performance since issuance, all five loans maintain investment grade credit assessments. The largest credit assessed loan, the Wells REF Portfolio, is secured by nine office properties located in six different states, containing a total of 2.9 million square feet. The whole loan consists of a $125 million Group 1 Note in the MSCI 2004-HQ4 trust, an $80 million Group 2 Note in MSCI 2005-TOP17, and a $145 million Group 3 Note, which is included in this trust. As of year-end 2005, all of the properties remained 100% leased and performance has been stable since issuance. As of YE 2005, net cash flow for two of the top ten loans, 1401 H Street (7.6%) and 111 Eighth Avenue (4.9%), has declined considerably since issuance. NCF for the 1401 H Street loan declined by 33% since issuance due to large tenant improvement expenditures in 2005. The servicer-reported YE 2005 DSCR (based on NCF) was 0.94 times (x) compared to 1.40x at issuance. Occupancy has declined to 90% as of May 2006 versus 95.9% at issuance. In addition, despite the NCF decline for 111 Eighth Avenue, the property is now 100% occupied and the decline in NCF was attributable to tenant improvement and leasing commissions in connection with new leases. MORTGAGE ASSET: Class B-4 Certificates Get Fitch's BB- Rating ------------------------------------------------------------- Fitch Ratings has affirmed these Mortgage Asset Securitization Transactions, Inc. - MASTR Alternative Loan Trust mortgage pass- through certificates: Series 2003-9 -- Class A at 'AAA'. -- Class B-1 at 'AA-'; -- Class B-2 at 'A-'; -- Class B-3 at 'BBB' -- Class B-4 at 'BB-'. The affirmations, affecting approximately $271 million of the outstanding certificates, reflect a stable relationship between credit enhancement and expected loss. All of the affirmed classes have experienced a 50% growth in credit enhancement. In addition, the transaction has suffered only $27,281 of cumulative loss (0.01% of the original collateral balance) to date. The collateral for the above transaction consists of conventional, fully amortizing, 10-year to 30-year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties. The loans were acquired by UBS from various originators and are master serviced by Wells Fargo Bank Minnesota, N.A., which is rated 'RMS1' by Fitch. As of the October 2006 distribution date, the pool factor (i.e. current mortgage loans outstanding as a percentage of the initial pool) is 58% and the transaction is seasoned 34 months. MOSAIC COMPANY: Units Offer to Buy $1 Bil of Notes and Debentures ----------------------------------------------------------------- The Mosaic Company reported the commencement of tender offers by its subsidiary Mosaic Global Holdings Inc. to purchase for cash any and all of its 6.875% Debentures due 2007, 10.875% Senior Notes due 2008, 11.250% Senior Notes due 2011, and 10.875% Senior Notes due 2013. Mosaic also disclosed the commencement of a tender offer by its subsidiary Phosphate Acquisition Partners L.P. to purchase for cash any and all of its 7% Senior Notes due 2008. Concurrently, solicitations of consents will be made for the purpose of removing substantially all of the restrictive covenants from the indentures pursuant to which the Senior Notes and Debentures were issued. It is anticipated that the tender offers and consent solicitations will be financed from the proceeds of a combination of new loans under The Mosaic Company's amended and restated credit facilities and the proceeds from offerings of new senior notes. As part of these financing transactions, The Mosaic Company will refinance outstanding borrowings under its existing term loan B facility. The "Total Consideration" for each $1,000 principal amount of the Mosaic Global Holdings 2011 Notes validly tendered prior to Nov. 14, 2006 is $1,058.75. The "Total Consideration" for each $1,000 principal amount of the Mosaic Global Holdings 2007 Debentures, 2008 Notes and 2013 Notes and the Phosphate Acquisition Partners 7% Senior Notes validly tendered prior to the Consent Date is based on the assumption that the Mosaic Global Holdings 2013 Notes will be redeemed in full at the redemption price applicable on the first date on which such Notes may be redeemed by Mosaic Global Holdings (the "Earliest Redemption Date"), and, for the Mosaic Global Holdings 2007 Debentures and the 2008 Notes (which are not redeemable) and the Phosphate Acquisition Partners 7% Senior Notes (which are not redeemable), such Notes will be repaid in full at par on the maturity date of such Notes (the "Maturity Dates" and, together with the Earliest Redemption Date, the "Reference Dates"), and is equal to: (i) the present value (determined in accordance with standard market practice) on November 30, 2006 (the "Payment Date", assuming the Tender Offers are not extended) of the price (the "Earliest Redemption Price" or the "Maturity Price," as applicable) set out below and all future interest payments payable up to the applicable Reference Date, determined on the basis of a yield (the "Tender Offer Yield") to the applicable Reference Date equal to the sum of (x) the yield on the applicable benchmark U.S. Treasury Note set out below (the "Reference Security"), as calculated by the Dealer Manager and Solicitation Agent in accordance with standard market practice, based on the bid-side price for such Reference Security as of 2:00 p.m., New York City time, on the tenth business day immediately preceding the Expiration Date (the "Price Determination Date"), or any other recognized quotation source selected by the Dealer Manager and Solicitation Agent in its sole discretion if the Bloomberg Government Pricing Monitor is not available or manifestly erroneous, plus (y) the applicable Fixed Spread (such price being rounded to the nearest cent per $1,000 principal amount of Notes), minus (ii) accrued and unpaid interest to, but not including, the Payment Date. For each series of securities the "Tender Offer Consideration" is equal to the Total Consideration for such series minus the consent payment of $30 for each $1,000 principal amount of the Mosaic Global Holdings 6.875% Debentures due 2007, 10.875% Senior Notes due 2008, and 10.875% Senior Notes due 2013 and the Phosphate Acquisition Partners L.P. 7% Senior Notes due 2008 and $2.50 for each $1,000 principal amount of the Mosaic Global Holdings 11.250% Senior Notes due 2011. Holders validly tendering after the Consent Date but at or prior to the Expiration Date will be eligible to receive only the Tender Offer Consideration, which will be payable to such Holders on the Payment Date. The offers will expire at midnight, New York City time, on November 29, 2006, unless extended by Mosaic Global Holdings or Phosphate Acquisition Partners, as applicable, in its sole discretion. Senior Notes and Debentures accepted for payment are expected to be paid for on November 30, 2006, assuming the Expiration Date is not extended. The consummation of the tender offers is subject to several conditions, including the receipt of net proceeds from financings sufficient to pay for Senior Notes and Debentures accepted in the tender offers. Senior Notes and Debentures tendered prior to the Consent Date may be withdrawn prior to the Consent Date. Thereafter, tenders of Senior Notes and Debentures may not be validly withdrawn unless Mosaic Global Holdings or Phosphate Acquisition Partners, as applicable, reduces the amount of the Tender Offer Consideration, the Consent Payment or the principal amount of Senior Notes or Debentures subject to the Offers or is otherwise required by law to permit withdrawal. The offers are made upon the terms and subject to the conditions set forth in the Offers to Purchase and Consent Solicitation Statements dated October 31, 2006 that are being distributed to registered holders of the debt securities. Copies of the Offers to Purchase and Consent Solicitation Statements can be obtained from: MacKenzie Partners, Inc. Information Agent/Depositary Attention: Jeanne Carr Simon Coope Phone: (800) 322-2885, Questions concerning the terms of the offers may be directed to: J.P. Morgan Securities Inc. Dealer Manager and Solicitation Agent Attention: Laura Yachimski Phone: (212) 270-3994 (call collect) Questions concerning procedures regarding the offers may be directed to MacKenzie Partners, Inc. Additional Information concerning the Senior Notes and Debentures and the Total Consideration being offered can be viewed at: http://researcharchives.com/t/s?1451 About The Mosaic Company The Mosaic Company -- http://www.mosaicco.com/-- produces and markets concentrated phosphate and potash crop nutrients. For the global agriculture industry, Mosaic is a single source of phosphates, potash, nitrogen fertilizers and feed ingredients. MOSAIC COMPANY: Moody's Says Tender Offer Won't Change Ba3 Rating ----------------------------------------------------------------- Moody's comments that the Mosaic Company's announcement that it has commenced tender offers to purchase a material portion of the senior notes issued by its subsidiaries is not expected to result in a change in Mosaic's Ba3 corporate family rating. It is anticipated that the tender offers and consent solicitations will be financed from the proceeds of a combination of new loans under The Mosaic Company's amended and restated credit facilities and the proceeds from offerings of new senior notes. As part of these financing transactions, The Mosaic Company is expected to refinance outstanding borrowings under its existing term loan B facility. The proposed refinancing is viewed as a credit positive given a lowered interest burden and the extension of debt maturities. However, in the event that the combined refinancing includes a substantial increase in the amount of secured debt relative to Mosaic's current mix of secured and unsecured debt the current ratings and LGD assessments of Mosaics secured debt and other debt instruments may be negatively impacted by as much as a notch. Moody's will monitor the proposed refinancing effort and rate the new securities as appropriate. NCO GROUP: Special Shareholders' Meeting Set for November 9 ----------------------------------------------------------- NCO Group, Inc., has established a record date and special meeting date for its shareholders to consider and vote on a proposal to adopt the previously announced merger agreement providing for the acquisition of NCO by an entity controlled by One Equity Partners and its affiliates with participation by Michael J. Barrist, Chairman, President and Chief Executive Officer of NCO and certain other members of executive management who will be given an opportunity to participate. NCO shareholders of record at the close of business on Friday, Oct. 13, 2006, will be entitled to notice of the special meeting and to vote on the proposal. The special meeting will be held on Nov. 9, 2006 at 10:00 a.m., local time, at Philadelphia Marriott West, 111 Crawford Avenue in West Conshohocken, Pennsylvania. NCO Group, Inc. -- http://www.ncogroup.com/news/-- provides business process outsourcing services including accounts receivable management, customer relationship management and other services. NCO provides services through 90 offices in the United States, Canada, the United Kingdom, Australia, India, the Philippines, the Caribbean and Panama. NCO GROUP: Moody's Rates Proposed $200MM Sr. Notes at Caa1 ---------------------------------------------------------- Moody's Investors Service assigned a B3 rating to NCO Group, Inc.'s proposed $165 million senior unsecured notes and a Caa1 rating to its proposed $200 million of senior subordinated notes, which are intended to replace a proposed $365 million senior subordinated notes offering that was cancelled. Concurrently, Moody's withdrew the Caa1 rating assigned to the discussed $365 million of senior subordinated notes. Pro-forma for the aforementioned capital mix changes, Moody's affirmed the B2 corporate family rating and the Ba3 rating on the $565 million senior secured credit facility. The rating outlook is stable. On July 21, 2006, NCO entered into a definitive agreement to be acquired by an entity controlled by One Equity Partners, with participation by certain members of senior management. The transaction is expected to close in the fourth quarter of 2006 and is subject to customary closing conditions including the approval of NCO's shareholders. Upon closing of this transaction, NCO's stock will no longer be publicly traded. The transaction is expected to be funded with a $465 million term loan, $200 million of senior subordinated notes, $165 million of senior unsecured floating rate notes, $365 million of cash equity contributed by OEP and $23 million of rollover equity. The ratings benefit from solid pro forma credit metrics for the rating category, high levels of EBIT, leading market positions in receivables management and portfolio management business lines and a good track record of profitability and cash flow generation. The ratings are constrained by the potential for profitability erosion due to increasing competition in portfolio management business, sensitivity of receivable collection trends to a weakening economy and moderate revenue concentration. The Ba3 rating on the senior secured credit facility reflects an LGD 2 loss given default assessment as this facility is secured by a pledge of the assets of the guarantor subsidiaries which comprise about 60% of consolidated EBITDA for the June 30, 2006 LTM period and 65% of the stock of foreign subsidiaries. The LGD 2 assessment benefits from a significant amount of junior debt in the capital structure. The B3 rating on the senior unsecured notes reflects an LGD 4 loss given default assessment given that it is effectively subordinated to the secured credit facility but benefits from $200 million of junior ranking subordinated notes. The Caa1 rating on the senior subordinated notes reflects an LGD 6 loss given default assessment given that it is effectively 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. Moody's took these rating actions: -- Assigned $165 million senior unsecured floating rate notes at B3 (LGD 4, 63%) -- Assigned $200 million senior subordinated notes at Caa1 (LGD 6, 90%) -- Withdrew $365 million senior subordinated notes, rated Caa1 (LGD 5, 82%) -- Affirmed $465 million 7 year senior secured term loan at Ba3 (to LGD 2, 29% from LGD 2, 26%) -- Affirmed $100 million 5 year senior secured revolver at Ba3 (to LGD 2, 29% from LGD 2, 26%) -- Affirmed corporate family rating at B2 -- Affirmed probability-of-default rating at B2 -- Affirmed 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 $30-$40 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 1.7x and 7%, respectively. Given the company's solid position in the rating category, a moderate increase in pricing trends in the portfolio management segment or decline in accounts receivable collection rates will be unlikely to pressure the ratings. However, a sharp downturn in the business which results in EBIT coverage of interest and free cash flow to debt that are expected to sustained at under 1 time and 0%, respectively, could lead to a downgrade. A significant debt financed acquisition that substantially weakens credit metrics and liquidity could also pressure the rating. Based in Horsham, Pennsylvania, NCO is a global provider of business process outsourcing services, primarily focused on accounts receivable management and customer relationship management. The company also purchases and manages past due consumer accounts receivable (PM or portfolio management business) from consumer creditors such as banks, finance companies, retail merchants, utilities, healthcare companies, and other consumer- oriented companies. The company reported revenues of about $1.1 billion for the twelve month period ending June 30, 2006. NEW WORLD: N.Y. Bankruptcy Court Recognizes Bermuda Proceedings --------------------------------------------------------------- The Honorable Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York has granted recognition to the winding up proceeding of New World Network International Ltd. pending before the Supreme Court of Bermuda. The winding up proceeding is pursuant to the Companies Act 1981 of Bermuda. The order of Judge Gropper grants: (1) recognition of the foreign proceeding as a foreign main procee1ding, as defined in Section 1502(4) of the U.S. Bankruptcy Code; and (2) the relief requested by Mark W.R. Smith of Deloitte & Touche Bermuda, as provisional liquidator and the foreign representative , including injunctive relief enjoining and restraining all persons and entities from taking certain actions that are inconsistent with, or to the detriment of the foreign proceeding. As reported in the Troubled Company Reporter on Feb. 23, 2006, Mark W.R. Smith, the duly appointed provisional liquidator for New World Network International, Ltd., asked the U.S. Bankruptcy Court to recognize New World's pending case before the Bermuda Supreme Court as a foreign main proceeding. Headquartered in Hamilton, Bermuda, New World Network International, Ltd., is a holding company for the New World Group of companies, an independent, privately held telecommunications group. Through a number of its direct and indirect subsidiaries, the New World Group owned and operated an optical fiber submarine cable system called the Americas Region Cable Ring System or ARCOS, as well as some other assets. ARCOS is an 8,600km high capacity undersea digital broadband fiber optic network that connects the United States with Puerto Rico and other countries in Central America, South America and the Caribbean. New World filed a chapter 15 petition on Jan. 26, 2006 (Bankr. S.D.N.Y. Case No.: 06-10157). Mark W.R. Smith serves as the Foreign Debtor's provisional liquidator. Ingrid Bagby, Esq., at Cadwalader, Wickersham & Taft LLP, represents the Mr. Smith in the United States. Robin J. Mayor, Esq., at Conyers, Dill & Pearman is Mr. Smith's Counsel in Bermuda. NORTHWESTERN CORP: McGreevey Settlement Hearing Slated for Nov. 9 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a final hearing at 10:00 a.m., on Nov. 9, 2006, to consider Northwestern Corp.'s settlement agreement with its wholly owned subsidiary, Clark Fork and Blackfoot LLC, resolving claims filed and asserted by the McGreevey claimants through a class action against Northwestern. The McGreevey Class Claimants are those holders of common stock in the former Montana Power Company, from the period of Dec. 17, 1999, to and through Feb. 15, 2002. The Settlement Agreement, which was preliminary approved by the Court on Sept. 18, 2006, states that Northwestern will transfer and assign without recourse to the McGreevey Class Claimants Northwestern's respective rights, title and interests in certain insurance policies, claims to the extent they exist against the issuing insurance companies, and any claims Northwestern -- to the extent Northwestern is deemed to be a successor to Montana Power -- have against certain entities and individuals. Copies of the documents can be obtained by: a) sending a written request and self-addressed stamped envelope to: Kurtzman Carson Consultants LLC Attn: Angela Lo Suite 1 12910 Culver Boulevard Los Angeles, CA 90066 b) calling call 1-866-381-9100 for electronic copies. Final objections to the motion and the preliminary order must be submitted at 4:00 p.m. today, Nov. 2, 2006, to: The United States Bankruptcy Court District of Delaware 3rd Floor 824 Market Street Wilmington, DE 19801 Copies of the objections must be served on or before the Objection Deadline to these counsels: a) Reorganized Debtor Dennis A. Meloro, Esq. Greenberg Traurig LLP The Brandywine Building Suite 1540 1000 West St. Wilmington, DE 19810 b) McGreevey Class Claimants Jesse H. Austin III, Esq. Paul, Hastings, Janofsky & Walker LLP Suite 2400 600 Peachtree St., NE Atlanta, GA 30308 Allan M. McGarvey, Esq. McGarvey, Heberling, Sullivan & McGarvey P.C. 745 South Main Kalispell, MT 59901 Headquartered in Sioux Falls, South Dakota, Northwestern Corp. provides electricity and natural gas in the Upper Midwest and Northwest. The company and its debtor-affiliates filed for chapter 11 protection on Sept. 14, 2003 (U.S. Bankr. Del. Case No. 03-12872). The Court confirmed the Debtors' Reorganization Plan on Oct. 8, 2004, which took effect in November 2004. OAKLAND/FALLS OFFICE: Case Summary & Four Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Oakland/Falls Office Village, LLC 2840 Plaza Place, Suite 104 Raleigh, NC 27612 Bankruptcy Case No.: 06-01753 Chapter 11 Petition Date: October 31, 2006 Court: Eastern District of North Carolina (Raleigh) Judge: A. Thomas Small Debtor's Counsel: Trawick H. Stubbs, Jr., Esq. Stubbs & Perdue, P.A. P.O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 Total Assets: $1,430,503 Total Debts: $1,894,008 Debtor's Four Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Wake County Revenue Department $12,357 Attn: Manager or Agent P.O. Box 96084 Charlotte, NC 28296 Triad Design Group $6,500 Attn: Manager or Agent 4807-C Koger Boulevard Greensboro, NC 27407 NC Secretary of State $200 Attn: Corporations Divison P.O. Box 29622 Raleigh, NC 27626 Fred E. Raber Unknown 7505 Matherly Drive Wake Forest, NC 27587 OPBIZ LLC: Credit Pact Amendment Cues S&P to Hold Junk Rating ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'CCC+' corporate credit and senior secured debt ratings on OpBiz LLC. At the same time, the ratings were removed from CreditWatch with negative implications where they were placed on Aug. 18, 2006. The outlook is negative. Total consolidated debt outstanding at June 30, 2006, was about $615 million. The affirmation and CreditWatch removal reflect OpBiz's recent amendment to its senior secured credit facility, under which lenders waived existing technical defaults relating to the reporting deliveries and the company's failure to spend and pay $72 million on renovation capital expenditures by Aug. 31, 2006. Still, S&P says: -- the company's operating performance continues to be much weaker than expected; -- the cost of the renovation is significantly higher, at $165 million; and, -- the delayed construction timetable further restricts near- term liquidity. PACIFIC BAY: Moody's Eyes Upgrade of Ba3 Rated $17MM Pref. Shares ----------------------------------------------------------------- Moody's Investors Service placed on watch for possible upgrade the ratings on the notes issued in 2003 by Pacific Bay CDO, Ltd. a structured finance collateralized debt obligation issuer: * The $36,000,000 Million Class B Third Priority Senior Secured Floating Rate Notes Due 2038 -- Prior Rating: Aa2 -- Current Rating: Aa2, on watch for possible upgrade * The $17,000,000 Million Class C Mezzanine Secured Floating Rate Notes Due 2038 -- Prior Rating: Baa2 -- Current Rating: Baa2, on watch for possible upgrade * 17,000 Preference Shares ($17,000,000 Million Aggregate Liquidation Preference) -- Prior Rating: Ba3 -- Current Rating: Ba3, on watch for possible upgrade The rating actions reflect the improvement in the credit quality of the transaction's underlying collateral portfolio, consisting primarily of structured finance securities as well as the ongoing delevering of the transaction, according to Moody's. PERFORMANCE TRANSPORTATION: Files Plan and Disclosure Statement -------------------------------------------------------------- Performance Logistics Group, Inc., and its 13 debtor-affiliates delivered their Joint Plan of Reorganization and accompanying Disclosure Statement to the U.S. Bankruptcy Court for the Western District of New York on Oct. 27, 2006. Yucaipa American Alliance Fund I, LP, and Yucaipa American Alliance (Parallel) Fund I, LP, holders of majority of the Debtors' prepetition second lien secured debt, are co-proponents of the Joint Plan. The Plan contemplates the Debtors' emergence from bankruptcy on Dec. 31, 2006. The Debtors will continue to exist after the effective date as a significantly de-leveraged company. The Debtors expect their emergence capital structure to consist of: * approximately $86,000,000 of term debt; * a $63,000,000 off balance sheet letter of credit facility; and * a $15,000,000 revolving line of credit. All property of the Estates will vest in the Reorganized Debtors, free and clear of all Claims, Liens, charges, other encumbrances and Interests. Reorganized PLG will become the ultimate corporate parent of the other Reorganized Debtors. In conjunction with formulating the Plan, the Debtors directed FTI Consulting, Inc., their financial advisors, to determine the post- confirmation going concern value for the Reorganized Debtors. Based on information available to, and analyses undertaken by, FTI as of October 5, 2006, FTI estimates the Reorganized Debtors' Enterprise Value to be between approximately $100,000,000 to $115,000,000, with a midpoint of $107,500,000. The Debtors note that the Plan and the Disclosure Statement reflect their extensive negotiations with Yucaipa and the Second Lien Lenders. Plan Implementation The Plan provides for: (i) the payoff in Cash of Claims based on or arising out of Performance Transportation Services, Inc.'s First Lien Senior Secured Credit Agreement dated as of January 31, 2005, with Credit Suisse, as agent, and a syndicate of lenders; (ii) the conversion into new common stock of Claims based on or arising out of PTS' Second Lien Senior Secured Credit Agreement dated as of January 31, 2005, with Credit Suisse, as collateral agent, and a consortium of lenders; (iii) the reinstatement or return of collateral to the holders of Other Secured Claims; (iv) the cancellation of old equity interests; (v) the assumption of certain contracts; and (vi) the Reorganized Debtors' entry into an exit financing facility. All Cash necessary for the Reorganized Debtors to make payments pursuant to the Plan will be obtained from funds received from the Exit Financing, the Reorganized Debtors' Cash balances, the operations of the Reorganized Debtors, or post-Effective Date borrowings, as applicable. Classification & Treatment of Claims The Plan does not provide for substantive consolidation of the Debtors' estates. Under the Plan, claims against and interests in each Debtor is grouped into seven classes: Class Description Status Voting Rights ----- ----------- ------ ------------- N/A Administrative Unimpaired Not entitled to vote Expense (Deemed to accept) Claims * Professional Fees * Ordinary Course Liabilities * Postpetition Tax Claims * Yucaipa Substantial Contribution Claim N/A Priority Tax Unimpaired Not entitled to vote Claims (Deemed to accept) N/A DIP Facility & Unimpaired Not entitled to vote Junior DIP (Deemed to accept) Facility Claims 1 First Lien Unimpaired Not entitled to vote Claims (Deemed to accept) 2 Second Lien Impaired Entitled to vote Claims 3 Other Secured Some claims Unimpaired holders et Claims are Unimpaired will not be entitled seq. while others to vote; (Deemed to are Impaired accept) Impaired (A list of all holders will be Class 3 Claims entitled to vote will be filed prior to the Disclosure Statement Hearing) 4 Priority Claims Unimpaired Not entitled to vote (Deemed to accept) 5 General Impaired Entitled to vote Unsecured Claims 6 Subordinated Impaired Not entitled to vote Unsecured Claims (Deemed to reject) 7 Old Common Stock Impaired Not entitled to vote (Deemed to reject) Under the Plan, Administrative Expense Claims, Priority Tax Claims, DIP Facility Claims, Junior DIP Facility Claims (at the option of Yucaipa), First Lien Claims, certain Other Secured Claims and Priority Claims will be paid in full in Cash. The other Claims will be treated under the Plan in this manner: -- Priority Tax Claims, if allowed, will be paid in full in cash or paid in full in cash over time in equal cash installment payments on a semi-annual basis with 4% interest per annum during a period not to exceed five years after the Petition Date; -- Second Lien Claims, if allowed, will receive a Pro Rata Share of the New PLG Common Stock. Yucaipa also retains the option to convert the Junior DIP Facility into New PLG Common Stock; -- Other Secured Claims, if allowed, that the Debtors and Yucaipa determine, in their discretion, not to (a) pay in full in cash or (b) reinstate the Claim, will receive any one or a combination of any of: (i) Cash in an amount equal to the Allowed Class 3 Claim; (ii) deferred Cash payments totaling at least the Allowed amount of the Allowed Class 3 Claim, of a value, as of the Effective Date, of at least the value of the holder's interest in the Debtors' property securing the Allowed Class 3 Claim; (iii) the Debtors' property securing the holder's Allowed Class 3 Claim; (iv) payments or Liens amounting to the indubitable equivalent of the value of the holder's interest in the Debtors' property securing the Allowed Class 3 Claim; (v) reinstatement of the Class 3 Claim; or (vi) other treatment as the Debtor and the holder will have agreed upon in writing; -- General Unsecured Claims, if allowed, will receive on a Pro Rata basis, 50% of all net proceeds arising from claims and causes of action under Sections 502(d), 544, 545, 548, 549 and 550 of the Bankruptcy Code, or any other avoidance actions. If a specific Debtor does not recover any avoidance action proceeds, Class 5 claimants against that particular Debtor will not receive any cash or property on account of their Claims; and -- Subordinated General Unsecured Claims and Old Common Stock will receive nothing, and the Old Common Stock will be cancelled. As of October 16, 2006, BMC Group, Inc., the Debtors' claims agent, had received approximately 2,000 Claims: Total No. of Claim Claims Filed Total Amount ----- ------------ ------------ Secured Claims 58 $122,773,119 (including First and Second Lien Claims) Priority Claims 158 $84,227,575 General Unsecured 1,909 $2,458,300,762 Claims The First Lien Claims total $78,300,000 -- plus an additional $43,058,271 of outstanding letter of credit -- plus interest, fees, costs and reasonable out-of-pocket expenses. The Second Lien Claims total $35,000,000 plus interest, fees, costs and reasonable out-of-pocket expenses. The Debtors believe that many of the filed proofs of claim are invalid, untimely, duplicative or overstated. The Debtors are in the process of objecting to the Claims. Post-Effective Date Management The current members of the management of each of the Debtors may continue to serve through the first meeting of the Initial Board of the Reorganized Debtor after the Effective Date. Yucaipa currently expects that the Debtors' senior management will continue to serve in their positions. On the Effective Date, the Debtors' senior executives will include: (a) Jeffrey Cornish, chief executive officer; (b) Jack Stalker, chief financial officer; (c) John Richter, chief operating officer; (d) Ron O'Reilly, vice president Logistics & Analysis; (e) Shirley Sanislow, vice president Safety & Human Resources; (f) Brian Hick, vice president Quality Assurances; and (g) Tom Ryan, vice president Industrial Relations. Incentive Plans Under the Plan, the Reorganized Debtors' board of directors is permitted to adopt new compensation and bonus plans for senior management after the Effective Date. The Debtors also contemplate securing tail coverage under their directors' and officers' insurance policy for the current officers and directors in an amount to be determined, subject to Yucaipa's reasonable consent. The tail coverage provisions remain subject to further discussions among the Plan Proponents. In addition, the Debtors have developed an EBITDAR Realization Bonus -- a pool of money generated for the benefit of eligible management personnel of the Debtors -- in recognition of the importance of the services provided by the Debtors' senior management, vice presidents, directors and terminal managers. The size of the Realization Bonus pool will depend on the Debtors' ability to surpass their 2006 earnings before interest, taxes, depreciation, amortization and restructuring costs target. The terms of the Realization Bonus are currently being finalized and will be filed as a Plan supplement prior to the hearing to confirm the Plan. Yucaipa's $1,000,000 Contribution Claim Pursuant to the Plan, Yucaipa will be allowed a claim for substantial contribution under Section 503(b) of the Bankruptcy Code for its fees and expenses incurred in connection with the successful reorganization of the Debtors. The Claim will not exceed $1,000,000 and will be payable on the Effective Date. The Debtors note Yucaipa enhanced recoveries to creditors by: * negotiating and drafting the terms of the Plan; * providing a $7,000,000 Junior DIP Financing facility; * carving out of its recovery as a holder of Second Lien Claims the incentive payments to members of the Debtors' senior management; * playing an instrumental role in ensuring full payment recoveries to holders of First Lien Claims and the holders of claims under the DIP Facility; and * playing a key role in obtaining Exit Financing. Plan Is Feasible As a condition to plan confirmation, the Bankruptcy Code requires, among other things, the Bankruptcy Court to find that confirmation is not likely to be followed by either a liquidation or the need to further reorganize the debtor. Management analyzed the Reorganized Debtors' ability to meet their obligations under the Plan to maintain sufficient liquidity and capital resources to conduct their businesses. With FTI's assistance, management developed a set of financial projections to establish Plan feasibility. The Projections indicate that the Reorganized Debtors should have sufficient cash flow to pay and service their debt obligations, and to fund their operations. The Debtors will present their Projections at the Confirmation Hearing. Reorganization Beats Liquidation Before the Plan may be confirmed, the Bankruptcy Court must find that the Plan provides, with respect to each Class, that each Holder of a Claim or Interest in the Class either (a) has accepted the Plan, or (b) will receive or retain under the Plan property of a value, as of the Effective Date, that is not less than the amount that the Holder would receive or retain if Debtors liquidated under Chapter 7 of the Bankruptcy Code. This is often called the "Best Interests of Creditors" test. The Debtors believe that their Plan provides for a larger distribution to holders of Allowed Claims than would otherwise result from a Chapter 7 liquidation. The Plan also provides for a greater distribution to all holders of Claims junior to the First Lien holders than would otherwise be available if the Bankruptcy Code's "absolute priority" rule were strictly enforced. The Debtors' liquidation analysis indicates that in a hypothetical Chapter 7 liquidation, the Debtors will have $54,793,909 in proceeds available for distribution: Estimated Book Value Estimated Liquidation Liquidation of Assets at 08/30/06 Recovery Value --------------------- ----------- --------- ----------- Cash & cash equivalents $11,902,000 100.0% $11,902,000 Restricted cash 3,499,000 0.0% - Accounts receivable 18,691,000 79.5% 14,859,345 Inventory 2,718,000 0.0% - Prepaid & Other Current Assets 5,804,000 0.0% - Fixed Assets - Excluding Land 48,863,000 60.7% 29,677,218 Land 2,990,000 52.3% 1,565,000 Other Assets 640,000 0.0% - ----------- GROSS LIQUIDATION VALUE $58,003,563 ESTIMATED LIQUIDATING EXPENSES Chapter 7 Trustee Fees $1,383,047 Collection, selling & broker costs 1,826,607 ----------- Total $3,209,654 ----------- TOTAL PROCEEDS AVAILABLE FOR DISTRIBUTION $54,793,909 =========== Based on the Debtors' Liquidation Analysis, only holders of DIP Credit Facility Claims and Claims under the DIP Carve-Out will receive distribution in a Chapter 7 liquidation. No proceeds will be available for First Lien Secured Claims, Second Lien Secured Claims, Administrative Claims, and General Unsecured Claims. The DIP Credit Facility Claims are estimated to be approximately $60,500,000 at August 30, 2006. The Claims consist of $32,260,000 in term loan obligations and $28,240,000 of letter of credit facilities, which are off balance sheet obligations. Holders of the DIP Credit Facility Claims will recover 87.7%. Claims under the DIP Carve-Out are estimated to total $1,750,000. Holders will recover 100% of their Claims. A full-text copy of the Debtors' Chapter 11 Plan is available at no charge at http://ResearchArchives.com/t/s?144c A full-text copy of the Debtors' Disclosure Statement is available at no charge at http://ResearchArchives.com/t/s?144d A full-text copy of the Debtors' liquidation analysis is available at no charge at http://researcharchives.com/t/s?144e Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PERFORMANCE TRANSPORTATION: Sets Voting & Solicitation Procedures ----------------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates ask the U.S. Bankruptcy Court for the Western District of New York to approve a set of uniform noticing, balloting, voting, and tabulation procedures to be used in connection with soliciting votes accepting or rejecting their Chapter 11 Plan of Reorganization. A hearing to consider the adequacy of the Debtors' Disclosure Statement has been scheduled for Nov. 21, 2006. Objections, if any, to the Disclosure Statement are due Nov. 16, 2006. The Debtors also ask Judge Michael J. Kaplan to: -- establish the date the Disclosure Statement is approved as the record date for determining the holders of stocks, bonds, debentures, notes and other securities entitled to receive ballots and materials necessary for voting on the Plan; -- set a deadline for creditors entitled to vote to submit their ballots; -- convene a hearing to consider confirmation of the Plan on or before December 22, 2006; and -- set a date for parties-in-interest to file and serve Plan confirmation objections. The Debtors will direct BMC Group, Inc., their voting agent, to distribute solicitation packages immediately after the Disclosure Statement is approved. The Debtors also seek the Court's permission to send customized ballots for Classes 2, 3 and 5, the classes entitled to vote on the Plan. The customized ballots are based substantially on Official Form No. 14, but have been modified to address particular needs of the Debtors' cases. For votes to be counted, all ballots must be properly executed, completed and delivered by the Voting Deadline. Any ballot that is properly executed by a claimholder but (i) does not clearly indicate an acceptance or rejection of the Plan or (ii) indicates both an acceptance and a rejection of the Plan, will not be counted. Each claimholder may cast only one ballot for each claim held. By signing and returning a ballot, each holder of a claim in Classes 2, 3 (certain claims) or 5 will certify to the Court and the Debtors that no other ballots with respect to the claim have been cast or, if any other ballots have been cast with respect to the class of claims, the earlier ballots are superseded and revoked. The Debtors may extend the Voting Deadline, without further Court order, to a date that is no later than two days before the Confirmation Hearing, if necessary. The Debtors propose two alternative Solicitation Packages: 1) They will distribute to voting creditors (a) a copy of the Plan, Disclosure Statement, and Disclosure Statement Order; (b) a Confirmation Hearing Notice, which will contain, among other things, the Plan Objection Deadline, the Voting Deadline, and Confirmation Hearing Date; (c) ballots, the applicable voting instructions, and a return envelope; and (d) a letter from the Debtors, customized for each voting class, urging creditors to vote on the Plan; or 2) They will transmit to voting creditors (a) the Confirmation Hearing Notice; (b) ballots, the applicable voting instructions, and a return envelope; (c) a letter from the Debtors, customized for each voting class, urging creditors to vote on the Plan; and (d) a notice of voting status, which will contain a brief summary of the Plan and will direct creditors how to obtain copies of the Plan and Disclosure Statement. The Debtors prefer the second option. The Debtors explain that the potential recovery to holders of Allowed General Unsecured Claims could be de minimis and exclusively derived from 50% of the net proceeds of certain avoidance actions. It is possible, they note, that the cost of transmitting the Solicitation Package could approach or even outweigh the size of the General Unsecured Claim Distribution. The second Solicitation Package will curb distribution expenses. The Debtors also note that the alternative Solicitation procedure has been followed in In re Aloha Airgroup, Inc., Case No. 04- 03063 (RJF) (Bankr. D. Haw. September 27, 2005), and In re THCR/LP Corporation, Case No. 04-46898 (JHW) (Bankr. D.N.J. February 15, 2005). The Debtors will publish the Confirmation Hearing Notice in the Detroit News & Free Press, Automotive News, and Transport Topics to provide notification to those persons who may not receive notice by mail. Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PERFORMANCE TRANSPORTATION: Seeks Amendments to DIP Financing Pact ------------------------------------------------------------------ Performance Transportation Services, Inc., and its debtor- affiliates seek permission from the U.S. Bankruptcy Court for the Western District of New York to enter into a third amendment to their DIP credit agreement with Credit Suisse, Cayman Islands Branch, as agent for the lenders, and each of the individual lenders. Garry M. Graber, Esq., at Hodgson Russ LLP in Buffalo, New York, asserts that the Debtors must maintain appropriate insurance coverage to be able to continue with their businesses. Through the Debtors' $7,000,000 loan with Yucaipa American Alliance Fund I, LP, and Yucaipa American Alliance (Parallel) Fund I, LP, their insurance coverage with National Union has been extended until April 1, 2007. He adds that the Debtors believe that the National Union provides beneficial and cost-effective services to their estates, and thus, the coverage must be renewed after April 2007. Mr. Graber notes that without the insurance, the Debtors will be unable to operate their vehicle-hauling business, which will significantly impair their estates. The Debtors seek to amend the DIP Credit Agreement to obtain an increase in the maximum credit allowance for the insurance. The salient terms of the Third Amendment are: (a) the Revolving Credit Commitments are increased to $25,262,328; (b) the Revolving Letter of Credit Sublimit is increased in two increments to provide additional availability for letters of credit under the Revolving Credit Facility in an amount not to exceed $8,700,000 in the aggregate; (c) the Lenders consent to the incurrence of $7,000,000 of Junior DIP financing; (d) certain covenants and default provisions are added to the Facility as set forth in the Third Amendment; and (e) the Debtors will request the issuance of letters of credit for their own account up to the amount of the Revolving L/C Sublimit. Mr. Graber says that the terms in the Third Amendment are reasonable and the result of good faith negotiations with DIP Lenders. He adds that the amendment is the product of sound business judgment and is for the best interests of the Debtors' estates. Pursuant to Sections 105, 363 and 364 of the Bankruptcy Code, the Debtors also seek the Court's authority to pay an undisclosed amount as work fee for Credit Suisse. The fee amount, Mr. Graber explains, is not been disclosed due to the confidentiality of that information in the context of the DIP Lenders' business. The Lenders, however, will provide that information to the Court, counsel to the Official Committee of Unsecured Creditors, counsel to Yucaipa, and the U.S. Trustee upon request. A full-text copy of Amendment No. 3 to the Debtors' DIP Credit Agreement with Credit Suisse is available at no charge at: http://researcharchives.com/t/s?144f Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLEASANTVIEW SWIMMING: Case Summary & 20 Known Creditors -------------------------------------------------------- Debtor: The Pleasantview Swimming Pool Association, Inc. 3801 Wexford Drive Kensington, MD 20895-1606 Bankruptcy Case No.: 06-16871 Chapter 11 Petition Date: October 31, 2006 Court: District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: Brett Weiss, Esq. Brett Weiss P.C. 18200 Littlebrooke Drive Olney, MD 20832 Tel: (301) 924-4400 Fax: (301) 570-3025 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million Debtor's 20 Known Creditors: Entity Claim Amount ------ ------------ Allied Waste Service Unknown 8145 Reichs Ford Road Frederick, MD 21704-6647 Allison Baskin Unknown 4101 Saul Road Kensington, MD 20895-3726 Barbetta J. Jones & Ann Baskin Unknown T/A SOP Joint Venture 12710 Littleton Street Silver Spring, MD 20906-4256 Capital One Unknown Attn: Bankruptcy/Legal Department P.O. Box 85167 Richmond, VA 23285-5167 Chase Visa Unknown P.O. Box 15008 Wilmington, DE 19850-5008 Chesapeake Pool Unknown 601 N Hammonds Ferry Road, Suite B Linthicum Heights, MD 21090-1321 Christine Wood Unknown 4209 Saul Road Kensington, MD 20895-3728 Community Pool Service, Inc. Unknown c/o Craig L. Sarner, Esquire 1250 Eye Street NW Washington, DC 20005-3922 Ellen Baskin Unknown 4101 Saul Road Kensington, MD 20895-3726 Erin Harper Unknown 4302 Elizabeth Street Rockville, MD 20853-3363 Henry Amaya Unknown 1601 Cedar View Court Silver Spring, MD 20910-1560 Henry C. Clarke, Jr., PA Unknown 6 Montgomery Village Avenue, Suite 640 Gaithersburg, MD 20879-3516 Marco Cajas Unknown 2008 Lansdowne Way Silver Spring, MD 20910-1335 Montgomery County, Maryland Unknown Division of Revenue 51 Monroe Street, 4th Floor Rockville, MD 20850-2421 PEPCO Unknown P.O. Box 2812 Washington, DC 20067-2812 Phillip Jones Unknown 2905 Newton Street Silver Spring, MD 20902-1233 Shulman, Rogers, Gandal, Pordy & Ecker Unknown 11921 Rockville Pike, Suite 300 Rockville, MD 20852-2737 Steven Bueker Unknown 7 Larkmeade Court Potomac, MD 20854-2779 Wolfe & Reichelt Insurance Agency Unknown 4040 Blackburn Lane Burtonsville, MD 20866-6136 WSSC Unknown 14501 Sweitzer Lane Laurel, MD 20707-5902 PORTRAIT CORP: Court Sets November 28 as Proofs of Claim Bar Date ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York set 5:00 p.m., eastern time, on Nov. 28, 2006, as the last day for persons owed money by Portrait Corp. of America Inc. and its debtor-affiliates to file their proofs of claim against the Debtors. The Bar Date applies to claims that arose on or prior to Aug. 31, 2006. The Proofs Of Claim must be received on or before the Bar Date by: a) if by mail: The U.S. Bankruptcy Court Southern District of New York Attn: Portrait Corp. of America Claims Processing Bowling Green Station P.O. Box 5074 New York, NY 10274-5074 b) if by messenger or overnight courier: Office of the Clerk The U.S. Bankruptcy Court Southern District of New York Re: Portrait Corp. of America Claims Processing One Bowling Green, New York, NY 10274 About Portrait Corporation Portrait Corporation of America, Inc. -- http://pcaintl.com/-- provides professional portrait photography products and services in North America. The Company operates portrait studios within Wal-Mart stores and Supercenters in the United States, Canada, Mexico, Germany and the United Kingdom. The Company also operates a modular traveling business providing portrait photography services in additional retail locations and to church congregations and other institutions. Portrait Corporation and its debtor-affiliates filed for Chapter 11 protection on Aug. 31, 2006 (Bankr S.D. N.Y. Case No. 06-22541). John H. Bae, Esq., at Cadwalader Wickersham & Taft LLP, represents the Debtors in their restructuring efforts. Berenson & Company LLC serves as the Debtors' Financial Advisor and Investment Banker. At June 30, 2006, the Debtor had total assets of $153,205,000 and liabilities of $372,124,000. RAM ENTERPRISES: Case Summary & 19 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: RAM Enterprises Inc. aka Laucio, Inc. 2908 North 14th Street Ponca City, OK 74601 Bankruptcy Case No.: 06-12925 Chapter 11 Petition Date: November 1, 2006 Court: Western District of Oklahoma (Oklahoma City) Judge: T.M. Weaver Debtor's Counsel: Steven W. Bugg, Esq. McAfee & Taft 10th Floor Two Leadership Square 211 North Robinson Oklahoma City, OK 73102 Tel: (405) 235-9621 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Pioneer Bank and Trust $906,021 P.O. Box 111 Ponca City, OK 74602 Burger King Corporation $78,000 5505 Blue Lagoon Drive Miami, FL 33126 MBM Customized Foodservice $12,591 P.O. Box 841170 Dallas, TX 75284 Ponca City Utility Authority Utility Bills $3,745 Sullivan & Associates Inc. $2,939 Savage O'Donnell McNulty $2,450 Flowers Baking Co. of Denton $1,581 Prince Castle Inc. $1,233 Oklahoma Natural Gas Company Utility Bills $900 First Insurance Funding Umbrella Policy $780 Frontline Systems $571 Textron Financial $518 CM Financial $243 Southwestern Bell Utility Bills $140 Daneey Publishing Company $125 Curtis Restaurant Supply Co. $125 NuCO2 $100 Quality Water $90 Liftpak LC $78 RENAISSANCE PARK: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Renaissance Park Hotel, LLC c/o Cleveland White Realtors 187 North Church Street, Suite 201 Spartanburg, SC 29306 Bankruptcy Case No.: 06-04893 Type of Business: The Debtor operates a Marriott Hotel. Chapter 11 Petition Date: October 31, 2006 Court: District of South Carolina (Spartanburg) Judge: John E. Waites Debtor's Counsel: G. William McCarthy, Jr., Esq. Nancy E. Johnson, Esq. Robinson, Barton, McCarthy & Calloway 1715 Pickens Street P.O. Box 12287 Columbia, SC 29211-2287 Tel: (803) 256-6400 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Marriott International Inc. $4,000,000 c/o Global Asset Management Marriott Drive Department 51.911.95 Washington, DC 20058 Ken Anthony $250,000 P.O. Box 3565 Spartanburg, SC 29304 Video Systems $208,903 5100 Old Pineville Road Charlotte, NC 28217 Getz $189,954 1000 West Morehead Street, Suite M100 Charlotte, NC 28208 Greg Shurburtt $164,605 P.O. Box 5121 Spartanburg, SC 29304 Gramling $110,880 14960 Asheville Highway Gramling, SC 29348 Stravolo and Company $55,500 220 Westgate Mall Drive, Suite 5 A Spartanburg, SC 29301 Brian Czechowski $50,000 301 Matchlock Commons Spartanburg, SC 29302 Self and Associates $42,500 1155 Woodburn Road Spartanburg, SC 29302 Intertech Security $38,556 519 East Main Street Carnegie, PA 15106 Nexsen Pruet Adams Kleemeier LLC $23,162 P.O. Box 2426 Columbia, SC 29202 CGLS $20,672 6520 Powers Ferry Road, Suite 150 Atlanta, GA 30339 On Command $19,617 4610 South Ulster Street, 6th Floor Denver, CO 80237 Sinclair and Associates $14,750 P.O. Box 1344 Duncan, SC 29334 Hearth and Patio $13,995 4332 Monroe Road Charlotte, NC 28205 Living Works Studio $13,333 24 North Lexington Avenue Asheville, NC 28801 Byington Landscape Architects $10,000 188 Dug Hill Trail Tryon, NC 28782 Event Rentals $7,374 225 West Main Street Spartanburg, SC 29306 Prestige Marble $6,000 P.O. Box 3727 Greenville, SC 29608 Impact Enterprises $3,828 11 Horse Hill Lane Warwick, NY 10990 SEMCO ENERGY: S&P Holds BB- Ratings with Positive Outlook --------------------------------------------------------- Standard & Poor's Ratings Services affirmed the 'BB-' ratings on gas distribution company Semco Energy Inc. and revised the outlook on the company to positive from stable. The positive outlook reflects the potential for a higher rating based on SEMCO's ability to reduce debt and increase free cash flow, continue to work successfully with its bank group and regulators, and continue to focus on core regulated operations. "The ratings on SEMCO reflect its highly leveraged financial risk profile, offset somewhat by its strong business risk profile," said Standard &Poor's credit analyst Ralph A. DeCesare. An upgrade depends on success in improving rate designs, further decreases in debt leverage, and the ability to maintain unencumbered access to sufficient liquidity. Conversely, adverse regulatory reviews, erosion of the company's liquidity, or failure to maintain compliance with its bank line covenants would likely trigger an outlook revision to stable. SEQUIAM CORP: Posts $2,645,941 Net Loss in 2006 Second Quarter -------------------------------------------------------------- Sequiam Corp. reported a $2,645,941 net loss on $120,966 of revenues for the second quarter ended June 30, 2006, compared with a $1,471,020 net loss on $69,522 of revenues for the same period in 2005. The increase in net loss for the second quarter was due to a $434,174 increase in selling, general, and administrative expenses, the $200,000 loss on settlement of lawsuit recognized in 2006, and a $639,315 increase in interest expense. At June 30, 2006, the company's balance sheet showed $4,335,107 in total assets and $7,204,472 in total liabilities, resulting in a $2,869,365 stockholders' deficit. The company's balance sheet at June 30, 2006, also showed strained liquidity with $2,081,920 in total current assets available to pay $5,702,028 in total current liabilities. Full-text copies of the company's financial statements for the second quarter ended June 30, 2006 are available for free at http://researcharchives.com/t/s?1442 Going Concern Doubt Tedder, James, Worden & Associates, P.A., expressed substantial doubt about Sequiam Corp.'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 recurring losses from operations, its working capital deficit and its shareholders' deficiency. About Sequiam Headquartered in Orlando, Florida, Sequiam Corporation, through its wholly owned subsidiaries, primarily develops, markets, and supports a portfolio of biometric fingerprint unlocking devices that enable users to gain access using their personal identity. The company also develops, markets and supports Internet and print enterprise-wide software products that enable users to acquire, manage, personalize, and present information. In addition, the company provides application service provider hosting of internet- enabled solutions, internet service provider services including internet access and hosting, consulting, application integration, custom web development and software development services. SHAW COMMS: Board Declares Dividend on Class A and Class B Shares ----------------------------------------------------------------- Shaw Communications Inc.'s Board of Directors has increased the equivalent annual dividend rate on its Class A Participating Shares and Class B Non-Voting Participating Shares by $0.40 per share. The equivalent annual dividend rate will be $0.995 per Class A Participating Share and $1 per Class B Non-Voting Participating Share, payable in monthly installments commencing Dec. 29, 2006. Based upon the increase in the dividend rates, the Company's board of directors declared monthly dividends of $0.0829166667 per Class A Participating Share and $0.0833333333 per Class B Non-Voting Participating Share, payable on Dec. 29, 2006, Jan. 31, 2007 and Feb. 28, 2007 to all holders of record at the close of business of Dec. 15, 2006, Jan. 15, 2007 and Feb. 15, 2007, respectively. Shaw Communications Inc. (TSX: SJR.B) (NYSE: SJR) -- http://www.shaw.ca/-- is a diversified Canadian communications company whose core business is providing broadband cable television, Internet, Digital Phone, telecommunications services (through Big Pipe Inc.) and satellite direct-to-home services (through Star Choice Communications Inc.) to approximately 3 million customers. Shaw is a member of the S&P/TSX 60 index. * * * Moody's Investors Service rates Shaw Communications Inc.'s CDN$300 million senior unsecured debenture at Ba2. The outlook is stable. The CDN$300 million senior unsecured notes due 2016 also carry Standard & Poor's Ratings Services BB+ rating. S&P has also affirmed the Company's 'BB+' long-term corporate credit rating. The outlook is stable. SOPHIA MEIMAROGLOU: Case Summary & 13 Largest Unsecured Creditors ----------------------------------------------------------------- Lead Debtor: Sophia Meimaroglou 1454 West Fargo Chicago, IL 60625 Bankruptcy Case No.: 06-14092 Chapter 11 Petition Date: October 31, 2006 Court: Northern District of Illinois Judge: A. Benjamin Goldgar Debtor's Counsel: Philip A. Igoe Phillip A Igoe Law Offices 221 North LaSalle Street Chicago, IL 60601 Tel: (312) 372-4298 Fax: (312) 372-5147 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtors' 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Broadway Bank Unsecured Claims $3,000,000 900 West Van Buren St. Chicago, IL 60607 RA Shavitz Unsecured Claims $100,000 Thaddeus S. Gauza 388 Bellaire Des Plaines, IL 60016 Peoples Engy Unsecured Claims $5,656 130 E. Randolph Chicago, IL 60601 Peoples Engy Unsecured Claims $3,354 130 E. Randolph Chicago, IL 60601 Abt Tv/gemb Unsecured Claims $1,628 PO Box 981439 El Paso, TX 79998 Peoples Engy Unsecured Claims $135 130 E. Randolph Chicago, IL 60601 Chase Unsecured Claims $10 800 Brooksedge Westerville, OH 43081 Amex Unsecured Claims $0 PO Box 297871 Fort Lauderdal, FL 33329 Bk of Amer Unsecured Claim $0 PO Box 1598 Norfolk, VA 23501 Broadway BK Unsecured Claims $0 5960 Broadway Chicago, IL 60660 Citi Unsecured Claims $0 PO Box 6241 Sioux Falls, SD 57117 Fleet Cc Unsecured Claims $0 300 Wakefield Dr. Newark, DE 19702 HSBC Nv Unsecured Claims $0 PO Box 19360 Portland, OR 97280 STRUCTURED ADJUSTABLE: Fitch Rates $485.7MM Mortgage Certificates ----------------------------------------------------------------- Fitch rates Structured Adjustable Rate Mortgage Loan Trust's $487.2 million mortgage pass-through certificates, series 2006-10, which closed today, Oct. 31, 2006: -- $463 million classes 1-A1, 1-A2, 1-AX, 2-A1, 2-A2, 3-A1 through 3-A4, 3-AF, 3-AF1, 3-AX and R 'AAA'; -- $10.8 million classes B1-I and B1-II, 'AA'; -- $4.5 million classes B2-I and B2-II 'A'; -- $3.4 million classes B3-I and B3-II, 'BBB'; -- $2.2 million classes B4-I and B4-II 'BB'; -- $1.8 million classes B5-I and B5-II 'B'. The Group 1 'AAA' rating on the senior certificates reflects the 4.75% total credit enhancement provided by the 2.20% class B1-I, the 0.85% class B2-I, the 0.65% class B3-I, the 0.40% class B4- Iand the 0.35% class B5-I, as well as the non-rated 0.30% class B6-I. The Group 2 'AAA' rating on the senior certificates reflects the 5.25% total CE provided by the 2.25% class B1-II, the 1.00% class B2-II, the 0.75% class B3-II, the 0.50% class B4-II, and the 0.40% class B5-II, as well as the non-rated 0.35% class B6-II. Fitch believes that the amount of CE will be sufficient to cover credit losses, including limited bankruptcy, fraud and special hazard losses. In addition, the ratings reflect the quality of the mortgage collateral, the strength of the legal and financial structures, and the master servicing capabilities of Aurora Loan Services, Inc. (rated 'RMS1-' by Fitch) and the primary servicing capabilities of Countrywide Home Loan Servicing LP, Aurora Loan Services LLC and PHH Mortgage Corporation. Group 1 consists of 460 adjustable-rate, conventional, first lien residential mortgage loans, substantially all of which have original terms to stated maturity of 30 years. As of the cut-off date (Oct. 1, 2006), the mortgages have an aggregate principal balance of approximately $268,986,472. The Group 1 mortgage pool has a weighted average original loan-to-value ratio of 74.95%, a weighted average coupon of 6.533%, and a weighted average remaining term of 359. Group 2 consists of 357 adjustable-rate, conventional, first lien residential mortgage loans, substantially all of which have original terms to stated maturity of 30 years. As of the cut-off date (Oct. 1, 2006), the mortgages have an aggregate principal balance of approximately $218,266,923. The Group 2 mortgage pool has a weighted average original loan-to-value ratio of 71.84%, a weighted average coupon of 6.798%, and a weighted average remaining term of 359. The mortgage loans were originated by various originators or acquired by various originators or their correspondents in accordance with such originator's respective underwriting standards and guidelines. The largest percentages of originations (as a percentage of the cut-off date balance) are Countrywide Home Loans Servicing LP (76.96%) and Lehman Brothers Bank, FSB (22.14%). SASCO, a special purpose corporation, deposited the loans in the trust, which issued the certificates. For federal income tax purposes, an election will be made to treat the trust fund as multiple real estate mortgage investment conduits. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. TIMBERSTAR TRUST: Moody's Rates $130MM Class F Certificates at Ba2 ------------------------------------------------------------------ Moody's Investors Service assigned ratings to certificates issued by TimberStar Trust I, a securitization sponsored by TimberStar Operating Partnership, L.P., a subsidiary of iStar Financial Inc. Securitization proceeds, along with an equity contribution, were used to acquire approximately 900,000 acres of timberlands located in Texas, Louisiana, and Arkansas from International Paper Company. Cash flow to certificate holders will be generated from the harvest and sale of timber from these timberlands. The rating actions are: * Issuer: TimberStar Trust I * Commercial Mortgage Pass-Through Certificates, Series 2006-1 -- $400,000,000 Class A Certificates, rated Aaa -- $80,000,000 Class B Certificates, rated Aa2 -- $80,000,000 Class C Certificates, rated A2 -- $80,000,000 Class D Certificates, rated Baa2 -- $30,000,000 Class E Certificates, rated Baa3 -- $130,000,000 Class F Certificates, rated Ba2 The ratings are based on: (1) advance rates for the various classes of certificates. -- Class A certificates have an initial balance of $400 million, which is 36% of the appraised value of the timberlands; -- Class B certificates have a loan-to-value ratio of 43%; -- Class C at 51%; -- Class D at 58%; -- Class E at 61%; and, -- Class F at 72%. (2) The quality of the timber portfolio, which consists of a high percentage of southern pine. The topography allows for year round harvesting and substantially all of the timberlands are located within trucking distance of 80 sawtimber, pulp and other mills operated by IP and other forest products companies; (3) the quality of the manager, TimberStar Southwest Manager LLC, who will hire most of the IP employees currently engaged in managing the day-to-day activities of the timberlands; (4) supply agreements with IP, which provide a steady source of revenue for the borrowers; and, (5) a liquidity facility equal to six months of interest payments on the certificates. No principal payments are scheduled to be paid on the certificates for 10 years after closing. The certificates are scheduled to be refinanced in October 2016, and, if investors are not paid in full on that date, all cash flow from the timberlands will be used to pay down the certificates sequentially, starting with the Class A certificates. iStar Financial is a commercial real estate finance and corporate tenant lease property company organized as a REIT. iStar provides structured custom tailored financing to high-end private and corporate owners of real estate. International Paper Company, headquartered in Memphis, Tennessee, is a global forest products, paper, and packaging company. The notes were sold in privately negotiated transactions without registration under the Securities Act of 1933. The issuance has been designed to permit resale under Rule 144A. TIMBERSTAR TRUST: Fitch Rates $130 Mil Class F Certificates at BB ----------------------------------------------------------------- TimberStar Trust I, series 2006-1, commercial mortgage pass- through certificates, which closed Oct. 30, 2006, are rated by Fitch Ratings: -- $400,000,000 class A 'AAA'; -- $80,000,000 class B 'AA'; -- $80,000,000 class C 'A'; -- $80,000,000 class D 'BBB'; -- $30,000,000 class E 'BBB-'; -- $130,000,000 class F 'BB'. All classes are privately placed pursuant to Rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, the asset of which is a fixed- rate mortgage loan having an aggregate principal balance of approximately $800,000,000, as of the cutoff date. TITANIUM METALS: Board Declares Dividend on 6.75% Preferred Stock ----------------------------------------------------------------- Titanium Metals Corporation's board of directors has declared a quarterly dividend of $0.84375 per share on its 6-3/4% Series A Preferred Stock, payable on Dec. 15, 2006, to stockholders of record as of the close of business on Dec. 1, 2006. Headquartered in Denver, Colorado, Titanium Metals Corporation (NYSE: TIE) -- http://www.timet.com/-- is a worldwide producer of titanium metal products. * * * Moody's Investors Services placed a Caa1 issuer rating and B3 LT Corp Family Rating on Titanium Metals. TOOLS 4: Voluntary Chapter 11 Case Summary ------------------------------------------ Lead Debtor: Tools 4 Hire dba Tools 4 Hire Inc. 2 H Street Boston, MA 02127-1426 Bankruptcy Case No.: 06-14004 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Fuel 4 Sale, Inc. 06-14005 Shawmut Crane & Rigging, Inc. 06-14006 Type of Business: The Debtor. Chapter 11 Petition Date: November 1, 2006 Court: District of Massachusetts (Boston) Debtors' Counsel: Charles R. Bennett, Jr., Esq. Hanify & King, P.C. One Beacon Street Boston, MA 02108 Tel: (617) 423-0400 Fax: (617) 556-8985 Estimated Assets Estimated Debts ---------------- --------------- Tools 4 Hire $1 Million to $1 Million to $100 Million $100 Million Fuel 4 Sale, Inc. $10,000 to $10,000 to $100,000 $100,000 Shawmut Crane & $100,000 to $100,000 to Rigging, Inc. $1 Million $1 Million The Debtors did not file a list of their 20 largest unsecured creditors. TRUSTREET PROPERTIES: Moody's Eyes Upgrade for B1 Rated Sr. Debt ---------------------------------------------------------------- Moody's Investors Service placed the ratings of Trustreet Properties, Inc. under review for upgrade. This rating action follows the announcement of Trustreet's plans to be acquired by GE Capital Solutions, Franchise Finance, a unit of GE Commercial Finance. During its review, Moody's will focus on the REIT's prospective capital structure, and GE Capital's plans for Trustreet's rated securities. Should a unit of GE provide an explicit guarantee or other form of substantial support, Trustreet's securities would be upgraded, perhaps by several notches, the degree of upgrade being a function of the character of the support. These ratings were placed under review for upgrade: * Trustreet Properties, Inc. -- Ba3 guaranteed senior unsecured debt; -- B1 senior unsecured debt; and, -- B3 Series A cumulative preferred stock. In the most recent action with respect to Trustreet, Moody's lowered the REIT's preferred rating to B3 in March 2005. Trustreet Properties, Inc. is headquartered in Orlando, Florida, USA, and is a leading provider of triple-net lease financing to operators of national and regional restaurant chains, and is the largest publicly traded self-advised restaurant REIT in the USA. The REIT's core net-lease portfolio has more than 2,000 properties including full service, family and quick service restaurants diversified among more than 175 concepts and operated by more than 500 tenants in 49 states. GE Capital Solutions, Franchise Finance is a leading lender for the franchise finance market via direct sales and portfolio acquisition in the USA. With more than $11 billion in served assets, GE Capital Solutions Franchise Finance serves more than 6,000 customers and more than 20,000 property locations, primarily in the restaurant, hospitality, branded beverage, storage and automotive industries. TRUSTREET PROPERTIES: S&P Puts Ratings on Positive CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Trustreet Properties Inc. on CreditWatch with positive implications. The rating actions affect $300 million of senior notes, a $450 million secured credit facility, and $375.95 million of preferred stock. The CreditWatch placements follow the recent announcement that Trustreet has agreed to be acquired by GE Capital Solutions Franchise Finance, a unit of GE Commercial Finance. GECS has agreed to pay $17.05 in cash per outstanding share of Trustreet's common stock, a 36% premium over the Oct. 27, 2006 closing price. The total consideration for the transaction is approximately $3 billion, which includes the assumption and refinancing of roughly $1.5 billion of outstanding debt and $377 million of preferred stock. GECS intends to liquidate the surviving corporation into a subsidiary of GECS. In connection with the merger and liquidation, GECS will redeem the outstanding preferred stock for $25 per share in cash, plus any accrued but unpaid dividends. The secured credit facility is likely to be repaid and retired. While General Electric, GE Commercial Finance's parent, is rated 'AAA', its many separate and independent business units generally have lower ratings. There is uncertainty surrounding the ultimate treatment of the rated Trustreet bonds-whether they will be refinanced or remain outstanding. S&P will likely raise the corporate credit rating on Trustreet, but the ultimate level hinges on whether or not a guarantee or other form of formal support will ultimately be provided. S&P will monitor the progress of the merger transaction, including the status of the rated bonds. Orlando, Fla.-based Trustreet is the largest public REIT owner and investor in triple-net-lease restaurant properties in the U.S. The company's portfolio includes more than 2,000 properties, including full-service, family, and quick-service restaurants. GECS is a leading lender for the franchise market via direct sales and portfolio acquisition in the U.S. and Canada. With more than $11 billion in served assets, GECS serves more than 6,000 customers and more than 20,000 property locations, primarily in the restaurant, hospitality, branded beverage, storage, and automotive industries. The transaction, which is expected to close in the first quarter of 2007, is subject to approval by Trustreet's shareholders and other customary closing conditions. Ratings Placed On Creditwatch Positive Trustreet Properties Inc. Rating To From -- ---- Corporate credit BB/Watch Pos/-- BB/Stable/ Secured bank debt BB/Watch Pos (Recovery rtg: 1) BB Senior notes B+/Watch Pos/-- B+ Preferred stock B/Watch Pos B VALASSIS COMM: Earns $6.6 Million in Quarter Ended September 30 --------------------------------------------------------------- Valassis Communications Inc. disclosed its financial results for the third quarter ended Sept. 30, 2006. The company reported quarterly revenues of $248.9 million, down 6.5% from the third quarter of 2005. Third-quarter net earnings were $6.6 million. Earnings prior to $10.1 million (net of tax) in charges related to the proposed acquisition of ADVO and the subsequent lawsuit to rescind the agreement and $2.3 million of non-recurring charges taken in the third quarter were $19.0 million. "While we have made important progress in some areas of our business, year-to-date, our 2006 performance has fallen short of expectations," said Alan F. Schultz, Valassis Chairman, President and CEO. "Clearly, the free- standing insert industry continues to be very price competitive, and in fact, the revenue and profit decline in this segment of our business in Q3 is entirely attributable to pricing. This competitive pricing environment will also negatively impact 2007 FSI revenue and profitability. "Accordingly, we have refocused our efforts on our Strategic Growth Initiative, which has been geared toward attaining sustainable growth and the enhancement of shareholder value. We are confident in and committed to this plan for growth, which addresses four key strategies designed to: grow and diversify our revenue base; restore and enhance profit margins across all business units; leverage data, technology and analytics to enhance our competitive advantage; and enrich and evolve our strong traditions and culture," Mr. Schultz added. SG&A expense for the third quarter of 2006 includes $6.4 million in costs related to the close-down of both the French agency business and the eSettlement business unit of NCH and expenses related to the proposed ADVO acquisition and subsequent efforts to rescind the merger agreement. Without these charges, SG&A expense was down 3.9% to $32.2 million compared to the third quarter of 2005 due to reductions in headcount and incentive compensation expenses, partially offset by the inclusion of $1.4 million in stock option expense in accordance with FAS123R. The Company had Cash and auction-rate securities of $167.5 million at the end of the quarter. The company's debt position, net of cash and auction-rate securities, was $92.4 million at quarter-end. On Oct. 2, 2006, Valassis paid a cash settlement in the amount of $11.3 million in connection with the termination of a $400 million interest-rate swap contract. In addition, the Company did not exercise its $400 million interest-rate swaption contract which expired Sept. 28, 2006, for which it paid a premium of approximately $1.0 million. Both of these contracts were entered into as a bridge hedge for a portion of the acquisition financing related to the proposed ADVO transaction pursuant to a merger agreement, which Valassis is now seeking to rescind. These charges have been included in interest expense during the quarter ended Sept. 30, 2006. In addition, on Sept. 28, 2006, the company replaced its bridge hedge by entering into a new $400 million swaption contract. The premium paid for the new swaption was approximately $2.1 million, representing the maximum cost to be recognized as interest expense as the swaption is marked to market over the reporting period through Feb. 28, 2007. Capital expenditures through the first nine months of 2006 were $8.4 million in comparison to $22.0 million for the first nine months of 2005. The company expects capital expenditures to be substantially less than the $20 million level originally forecasted for 2006. Business Segment Discussion -- Market Delivered Free-standing Insert: Co-op FSI revenues for the third quarter were $105.9 million, down 7.1% from the third quarter of 2005. This decrease was due to a reduction in FSI pricing compared to the third quarter of 2005. As expected, Valassis' FSI market share during the third quarter of 2006 was up modestly versus the first half of 2006. Management noted that FSI cost of goods sold was down by approximately 3% for the quarter on a cost per thousand basis due to reductions in media insertion rates and the cost of paper. -- Market Delivered Run of Press: ROP revenues, generated from the brokering of advertising space on behalf of newspapers, were down 17.4% in the third quarter to $24.6 million due to a change in mix to more fee-based business versus margin- based business. While ROP revenues were down, the company earned $4.4 million in profit for ROP for the quarter, an increase of 104.4% over the third quarter of 2005. -- Neighborhood Targeted Products: Neighborhood Targeted product revenues decreased 10.0% for the quarter to $79.0 million. This segment continued to be impacted by a pullback in spending due to industry consolidations in the telecommunications and appliance manufacturing industries, and the reduction in spending of a specialty retail customer. As expected, the company had a strong quarter in the sampling business. -- Household Targeted Products: Household Targeted product revenues were flat for the third quarter at $12.6 million, as a result of securing new business to offset the loss of revenue associated with the discontinuance of PreVision's agency business. The Household Targeted product segment continued to be profitable. -- International & Services: International & Services revenues are comprised of NCH Marketing Services, Valassis Canada and Promotion Watch. International & Services reported revenues of $26.8 million for the third quarter, up 22.4%, driven by increased revenue from the French media business and Valassis Canada. During the quarter, the company recognized a $1.7 million non-recurring charge, net of tax, related to the close-down of the French agency business as it continues to transition to a media-based business model. The company also closed down the eSettlement unit of NCH with an associated $600,000 non-recurring charge, net of tax. Outlook "Regarding our current 2006 EPS guidance range of $1.60 to $1.80 per share, we still have some selling time left in the year and some hard work to do to get to the low end of this range, excluding transaction costs and other, one-time charges," said Mr. Schultz. "Additionally, several factors, including the pending outcome of the ADVO litigation and continuing negotiations of the remaining FSI business to be contracted for 2007, suggest that now is not the best time to provide 2007 EPS guidance. At the same time, we believe existing contracts and those currently in negotiation are expected to lead to a pricing decline next year, similar to the one experienced in 2006, which is approximately 10 percent," Mr. Schultz concluded. About Valassis Headquartered in Livonia, Michigan, Valassis Communications Inc. (NYSE: VCI) -- http://www.valassis.com/-- provides marketing services to consumer-packaged goods manufacturers, retailers, technology companies and other customers with operations in the United States, Europe, Mexico and Canada. Valassis' products and services portfolio includes: newspaper-delivered promotions and advertisements such as inserts, sampling, polybags and on-page advertisements; direct-to-door advertising and sampling; direct mail; Internet-delivered marketing; loyalty marketing software; coupon and promotion clearing; and promotion planning and analytic services. Valassis has been listed as one of FORTUNE magazine's "Best Companies to Work For" for nine consecutive years. Valassis subsidiaries include Valassis Canada, Promotion Watch, Valassis Relationship Marketing Systems, LLC and NCH Marketing Services, Inc. * * * Moody's Investors Service downgraded Valassis Communications, Inc.'s senior unsecured note ratings to Ba1 from Baa3. Moody's also assigned a Ba1 Corporate Family Rating, Ba1 Probability of Default Rating, and LGD4 loss given default assessments to Valassis' debt securities. VARIG S.A.: Hires Air Canada to Look for Equity Investors --------------------------------------------------------- VARIG, S.A., hired ACE Aviation Holdings Inc.'s airline unit, Air Canada, to help complete the sale of equity interests in the Brazilian carrier and raise capital needed to revive the Company, Bloomberg News reports citing the Agencia Estado news agency. Bloomberg relates that Agencia Estado, citing Marco Antonio Audi, chairman of VarigLog, said the delay in obtaining approval for operating licenses from Brazil's civil aviation agency is making it harder for VARIG to attract partners. Volo do Brasil acquired the operating arm of VARIG at an auction in July 2006. Volo pledged to invest more than $500,000,000 to pay VARIG's debt and keep the airline flying. ACE Aviation was previously reported to be eyeing a 10% equity interest in VARIG. Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in-possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In this capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. (VARIG Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WACHOVIA BANK: Fitch Places Low-B Rating on Six Cert. Classes ------------------------------------------------------------- Fitch rates Wachovia Bank Commercial Mortgage Trust, Series 2006- C28 commercial mortgage pass-through certificates: -- $38,798,000 class A-1 'AAA'; -- $418,676,000 class A-2 'AAA'; -- $168,389,000 class A-PB 'AAA'; -- $215,000,000 class A-3 'AAA'; -- $802,246,000 class A-4 'AAA'; -- $623,528,000 class A-1A 'AAA'; -- $250,000,000 class A-4FL 'AAA'; -- $3,595,196,700 class IO 'AAA'; -- $359,520,000 class A-M 'AAA'; -- $278,628,000 class A-J 'AAA'; -- $22,470,000 class B 'AA+'; -- $58,422,000 class C 'AA'; -- $31,458,000 class D 'AA-'; -- $49,433,000 class E 'A'; -- $40,446,000 class F 'A-'; -- $40,446,000 class G 'BBB+'; -- $40,446,000 class H 'BBB'; -- $44,940,000 class J 'BBB-'; -- $17,976,000 class K 'BB+'; -- $8,988,000 class L 'BB'; -- $13,482,000 class M 'BB-'; -- $4,494,000 class N 'B+'; -- $8,988,000 class O 'B'; -- $8,988,000 class P 'B-'; -- $49,434,700 class Q 'NR'; -- $8,000,000 class FS 'NR'. Classes A-1, A-2, A-PB, A-3, A-4, A-1A, IO, A-M, A-J, B, C, D, and E are offered publicly, while classes A-4FL, F, G, H, J, K, L, M, N, O, P, Q, and FS are privately placed pursuant to rule 144A of the Securities Act of 1933. With the exception of the FS certificates, which represent an interest in a subordinate note secured by the Four Seasons Resort and Club - Dallas, Texas. The certificates represent beneficial ownership interest in the trust, primary assets of which are 207 fixed rate loans having an aggregate principal balance of approximately $3,595,196,701, as of the cutoff date. WARNER MUSIC: Good Performance Cues S&P to Lift Sr. Sec. Rating --------------------------------------------------------------- Standard & Poor's Ratings Services raised its long-term corporate credit and senior secured ratings on Warner Music Group Corp. to 'BB-' from 'B+'. At the same time, Standard & Poor's raised its senior subordinated debt rating on WMG to 'B' from 'B-', two notches below the 'BB-' corporate credit rating. The outlook is stable. The U.S.-based music recording and publishing company had approximately $2.25 billion of debt outstanding as of June 30, 2006. "The upgrade reflects WMG's continuously improved credit metrics since its LBO and stronger operational performance because of past restructuring initiatives," Standard & Poor's credit analyst Michael Altberg said. These improvements have occurred despite industry challenges including sales declines in CDs and other physical recordings, ongoing piracy, and the risks associated with increasing migration to a digital downloading business model. Standard & Poor's expects that WMG is more likely to use its good discretionary cash flow to return cash to shareholders or to reinvest in the business than to reduce debt. However, this rating action assumes that the company will not complete significant debt-financed transactions in the near-to-intermediate term. Z-1 CDO: Fitch Lowers Rating on $21 Million Notes to C from CC -------------------------------------------------------------- Fitch downgrades one and affirms one class of notes issued by Z-1 CDO 1996 Ltd. These rating actions are the result of Fitch's review process and are effective immediately: -- $117,726,648 class A-2 notes affirmed at 'AAA'; -- $21,000,000 class B notes downgraded to 'C/DR5' from 'CC/DR5'. Z-1 CDO is a collateralized debt obligation, comprised primarily of high yield bonds, that closed Oct. 31, 1996 and is managed by Patriarch Partners, LLC. Patriarch was named replacement manager in May 2003 after the transaction entered an event of default due to insufficient overcollateralization ratios. Included in this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward. The transaction is severely undercollateralized, with a class A-2 OC ratio of 54.8% as of the Oct. 2, 2006 trustee report. Fitch projects that the class A-2 notes will not receive full principal payments from the underlying assets; however, these notes are insured by MBIA Insurance Corp., rated 'AAA' by Fitch for insurer financial strength. The rating of the class A-2 notes is directly related to MBIA's rating. The class B notes would receive payments on their principal only after the class A-2 notes are paid in full. Fitch's projections indicate that these notes will not receive any principal payments. Fitch therefore lowers the long-term credit rating on these notes to 'C' to reflect the inadequacy of future principal receipts. The class B notes are still receiving current interest and are expected to receive full interest until maturity, as the transaction is using principal proceeds to make up for any interest shortfalls. The distressed recovery rating of 'DR5' remains in place for these notes. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re Davis Rogers Davis Bankr. C.D. Calif. Case No. 06-13122 Chapter 11 Petition filed October 25, 2006 See http://bankrupt.com/misc/cacb06-13122.pdf In re Family Living, Inc. Bankr. D. Kans. Case No. 06-41078 Chapter 11 Petition filed October 25, 2006 See http://bankrupt.com/misc/ksb06-41078.pdf In re Jose O. Gonzalez Bankr. S.D. Tex. Case No. 06-70489 Chapter 11 Petition filed October 25, 2006 See http://bankrupt.com/misc/txsb06-70489.pdf In re Optimum Healthcare Associates, LLC Bankr. N.D. Ga. Case No. 06-73410 Chapter 11 Petition filed October 25, 2006 See http://bankrupt.com/misc/alnb06-73410.pdf In re Sabela's Catering, Inc. Bankr. W.D. Pa. Case No. 06-11361 Chapter 11 Petition filed October 25, 2006 See http://bankrupt.com/misc/pawb06-11361.pdf In re The Financial Warehouse, Inc. Bankr. E.D. Mich. Case No. 06-55506 Chapter 11 Petition filed October 25, 2006 See http://bankrupt.com/misc/mieb06-55506.pdf In re Garton, Inc. Bankr. N.D. Ala. Case No. 06-82249 Chapter 11 Petition filed October 26, 2006 See http://bankrupt.com/misc/alnb06-82249.pdf In re Prime Nite Life, Inc. Bankr. M.D. Fla. Case No. 06-05922 Chapter 11 Petition filed October 26, 2006 See http://bankrupt.com/misc/flmb06-05922.pdf In re Budge It Movers, LLC Bankr. W.D. Tenn. Case No. 06-12775 Chapter 11 Petition filed October 27, 2006 See http://bankrupt.com/misc/tnwb06-12775.pdf In re SNAVS Corp. Bankr. D. Colo. Case No. 06-17795 Chapter 11 Petition filed October 27, 2006 See http://bankrupt.com/misc/cob06-17795.pdf In re Timothy Keith Beaver Bankr. W.D. N.C. Case No. 06-31796 Chapter 11 Petition filed October 27, 2006 See http://bankrupt.com/misc/ncwb06-31796.pdf In re Eichenbau Construction and Property Development, LLC Bankr. W.D. Mo. Case No. 06-42931 Chapter 11 Petition filed October 29, 2006 See http://bankrupt.com/misc/mowb06-42931.pdf In re Restaurant Company of Pennsylvania, Inc. Bankr. W.D. Pa. Case No. 06-11390 Chapter 11 Petition filed October 30, 2006 See http://bankrupt.com/misc/pawb06-11390.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II, Shimero R. Jainga, Joel Anthony G. Lopez, Melvin C. Tabao, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Ronald C. Sy, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin, and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***