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/raid1/www/Hosts/bankrupt/TCR_Public/061108.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, November 8, 2006, Vol. 10, No. 266 Headlines ACTIVECORE TECH: Converting $1.7 Million of Debt into Equity ALEC SOHMER: Case Summary & 16 Largest Unsecured Creditors AMBASSADORS OF CHIRST: Voluntary Chapter 11 Case Summary AMERISOURCEBERGEN CORP: Inks Pact Joining Kindred Pharmacy Units AMI SEMICONDUCTOR: Moody's Assigns Loss-Given-Default Ratings ASARCO LLC: Can Pay Ad Valorem Taxes Accdg. to Payment Procedures BEARINGPOINT INC: Obtains Waivers & Amends Credit Facility BENCHMARK ELECTRONICS: Signs Agreement to Acquire Pemstar BIG OAK: Case Summary & Two Largest Unsecured Creditors CAP CANA: Fitch Rates Senior Secured Notes at B CARAUSTAR INDUSTRIES: To Record $12.2 Mil. Asset Impairment Charge CB RICHARD: Launches 9-3/4% Senior Notes Solicitation Consent CHENIERE ENERGY: Sabine Pass to Sell $2 Bil. Senior Secured Notes CHIPPA INC: Voluntary Chapter 11 Case Summary CHIQUITA BRANDS: E.coli Concerns Cue S&P's 'B' Corp. Credit Rating CHIQUITA BRANDS: $96MM Loss Cues Moody's B3 Corp. Family Rating CHUKWUDI AMU: Case Summary & Largest Unsecured Creditor COLORADO INTERSTATE: Moody's Assigns Loss-Given-Default Rating COMMUNICATIONS CORP: U.S. Trustee Names 3-Member Creditors' Panel COMPLETE RETREATS: Creditors Panel Taps Fairfax Group as Advisor COMPLETE RETREATS: Fideicomiso Wants Stay Lifted to Take Property COMPLETE RETREATS: Says Co-Debtors are Current with 2 Client Pacts CONCENTRA OPERATING: To Sell Subsidiary to Innovation for $50MM CREDIT SUISSE: S&P Affirms Low-B Ratings of 6 Certificate Classes CRYSTAL US: Moody's Assigns Loss-Given-Default Rating DELPHI CORP: GM Chief Executive Reports Progress in Labor Talks DEUTSCHE ALT-A: Fitch Places Low-B Rating on Two Cert. Classes DORAL FINANCIAL: Names Marangal Domingo as Chief Fin'l Officer ENRON CORP: Wants $44 Million Settlement with Dynegy Approved ENRON CORP: Wants $25,081,204 Newpower Deal Approved ENTERGY NEW ORLEANS: Earns $7.4 Million in Third Quarter 2006 ENTERGY NEW ORLEANS: Panel Wants to Avoid Co. Affiliate Payments FERRELLGAS PARTNERS: Moody's Assigns Loss-Given-Default Rating FLYI INC: Has Until January 31 to File Notices of Removal FREE ENTERPRISE: Case Summary & 18 Largest Unsecured Creditors FREESCALE SEMICON: Buyout Plan Prompts S&P's Credit Rating Watch FREMONT HOME: Fitch Rates $23.9 Mil. Class M-10 Certs at BB+ GENERAL MOTORS: Paying Fourth Quarter Dividends on December 9 GENERAL MOTORS: Reduces Third Quarter Net Loss to $91 Million GENERAL MOTORS: Delphi Deal Coming Soon Says Rick Wagoner GENERAL MOTORS: Denies Plan to Give Avtovaz Joint Venture Stake GENERAL NUTRITION: Buyout Plan Cues S&P to Put Ratings on Watch GENTEK INC: To Shut Down New Jersey Plant in December 2006 GEORGIA GULF: Moody's Assigns Loss-Given-Default Rating GLOBAL HOME: Deadline for Filing Proofs of Claim Set to Nov. 15 GREENMAN TECH: Wins Deal to Cleanup Iowa Tire Disposal Sites HANOVER COMPRESSOR: Reports $12.2 Mil. Net Income in Third Quarter HC CARIBBEAN: Court Sets February 15 as Claims Filing Deadline HC CARIBBEAN: U.S. Trustee Sets November 17 Creditors Meeting HIDDEN CREEK: Case Summary & 4 Largest Unsecured Creditors HOOD NORWOOD: Voluntary Chapter 11 Case Summary HSI ASSET: Fitch Puts BB+ Rating to $10MM Privately Offered Class INDYMAC MBS: Fitch Rates $2 Million Class B-5 Certificates at B INTERSTATE BAKERIES: Wants Performance Bonus Payment Dates Altered INTERSTATE BAKERIES: Wants Central States Pension Fund Pact Okayed ISLE OF CAPRI: S&P Affirms 'BB-' Corporate Credit Rating JOE VALENCIK: Voluntary Chapter 11 Case Summary KARA HOMES: U.S. Trustee Wants Chapter 11 Trustee Appointed LANDMARK VIII: Moody's Rates $20MM Class E Secured Notes at Ba2 LOGAN'S ROADHOUSE: Inks $ 486MM Purchase Deal with LRI Holdings MANITOWOC COMPANY: Earns $50.4 Million in Quarter Ended Sept. 30 MARKWEST OPERATING: Moody's Assigns Loss-Given-Default Rating MAYCO PLASTICS: Court Okays AlixPartners LLC as Financial Advisor MESABA AVIATION: Court Strips Unions of Right to Stage Strikes MESABA AVIATION: Unions Opt To Conduct Discovery on CBA Rejection MGG MIDSTREAM: Moody's Assigns Loss-Given-Default Rating MORGAN STANLEY: S&P Affirms Rating on Class N Certificate at 'B-' MXENERGY HOLDINGS: Moody's Assigns Loss-Given-Default Rating NEW JERSEY: Weak Financial Results Cue S&P's Junked Bond Ratings N-45O FIRST: Fitch Lifts Rating on CDN$9.1MM Certs to B+ from B NISKA GAS (US): Moody's Assigns Loss-Given-Default Rating NORTHWEST AIRLINES: Court OKs Retrofitting 10 Boeing 757 Aircrafts NORTHWEST AIRLINES: Tennessee Gov. Supports Proposed China Route NORTHWEST AIRLINES: Wants Stay Enforced Against RI Commission NORTHWEST AIRLINES: Inks Contract Agreement with AMFA to End Row NUTRAQUEST INC: Court Approves Plan of Reorganization OMNITECH CONSULTANT: Files for Creditor Protection under BIA OMNOVA SOLUTIONS: Buyout Cues Moody's to Affirm B2 Corp. Rating OVERSEAS SHIPHOLDING: Earns $90.8 Million in 2006 Third Quarter PASCACK VALLEY: Bottom-Line Losses Cues Fitch to Cut Rating to B- PER-SE TECH: McKesson Buyout Cues S&P to Assign 'B+' Corp. Rating PIERRE FOODS: Zartic Deal Prompts S&P to Hold 'B+' Credit Rating PIERRE FOODS: Zartic Deal Cues Moody's to Affirm B1 Corp. Rating PINNACLE ENTERTAINMENT: Earns $22.4 Mil. in Third Quarter of 2006 PREDIWARE CORP: Hires Allen & Overy as Hong Kong Counsel PREMIER ENTERTAINMENT: Files Schedules of Assets and Liabilities PRIMARY ENERGY: Loan Redemption Cues S&P to Withdraw 'BB-' Rating PRUDENTIAL COMMERCIAL: S&P Affirms Class N Certs. Rating at 'B-' QWEST COMMS: Fitch Lifts Issuer Default Rating to BB from BBB- RENT-A-CENTER: Completes New $1.3 Billion Senior Loan Refinancing RENTAL SERVICE: Moody's Rates $1.13 Billion Senior Term Loan at B3 RENTAL SERVICE: S&P Rates Proposed $1.13 Billion Term Loan at 'B-' RESIDENTIAL ASSET: Fitch Upgrades 4, Affirms 10 RMBS Classes RESIDENTIAL ASSET: Fitch Ups 2 RMBS & Holds 9 RAMP Classes ROWE COMPANIES: Files Schedules of Assets and Liabilities ROWE COMPANIES: Gets Final Court Okay on Financing Deal with GECC ROWE COMPANIES: Taps Carl Marks as Crisis Management Advisor SALTON INC: Reduced Domestic Sales Cue Moody's to Junk Ratings SAMUEL BURROW: Case Summary & 10 Largest Unsecured Creditors SBA CMBS: Fitch Assigns Low-B Ratings to Four Certificate Classes SCOTT BERGER: Case Summary & 12 Largest Unsecured Creditors SCOTTISH RE: Alters CEO's Employment Pact, Employee Retention Plan SCOTTISH RE: Inks Amended Employment Pact with Paul Goldean SEA CONTAINERS: Reed Conner Ceases To Be A Major Shareholder SEA CONTAINERS: Wants To Give Up Railway Services In May 2007 SEITEL INC: ValueAct Deal Cues S&P to Put 'B' Rating on Watch SEMCO ENERGY: Moody's Assigns Loss-Given-Default Rating SHUMATE INDUST: Reports $500,000 Major Valve Purchase Order SPARTA SURGICAL: Case Summary & 22 Largest Unsecured Creditors STK INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors STONECREST MEDICAL: Voluntary Chapter 11 Case Summary STRUCTURED ASSET: Fitch Cuts Rating on Class B3 Certificates to BB STRUCTURED ASSET: Fitch Puts BB+ Rating on $4.5MM Class B1 Certs. TALECRIS BIOTHERAPEUTICS: S&P Assigns 'B+' Corp. Credit Rating TOWER RECORDS: Taps Keen Realty as Special Real Estate Consultant WCI STEEL: Earns $11.8 Million in Quarter Ended September 30 WESTPOINT STEVENS: Judge Defers Case Dismissal Hearing to Dec. 14 WESTPOINT STEVENS: Rockvale Asks to Compel $401,194 Admin. Payment WILLOWBEND NURSERY: Creditors' Panel Wants Goldman as Counsel XEROX CORPORATION: Moody's Eyes Upgrade on Ba1 Corporate Rating * Cooley Godward Partner R. Sussman Joins TMA's Board of Directors * Upcoming Meetings, Conferences and Seminars ********* ACTIVECORE TECH: Converting $1.7 Million of Debt into Equity ------------------------------------------------------------ ActiveCore Technologies Inc. filed an S8 that will convert $1.7 million of debt into equity and position the Company to execute an aggressive payment technology market entry strategy. "The significant restructuring required to convert ActiveCore into a pure play payment technology solution provider has resulted in a reduction of staff, facilities and existing revenue," Peter Hamilton, ActiveCore CEO, said. "These changes have resulted in the crystallization of direct labor, legal and consulting costs that must be dealt with now to position the Company for success in the payment technology market. Therefore, I felt that it was appropriate to inform shareholders that an S8 has been filed and that common shares have been issued to convert the costs associated with this restructuring into equity. This reduction of debt will also allow the use of funds from new sources to be used to support the growth of ActiveCore in the payment technology market." The Company has made a commitment to focus all of its resources and energy on becoming a successful payment technology solution provider. The Boards of both GSPS and ActiveCore have recently approved the planned acquisition of GSPS, the UK parent company of ePocket, and the Companies expect to sign a binding Purchase and Sale agreement by the end of October 2006. Completion of the GSPS acquisition will provide ActiveCore with a very exciting next-generation payment technology solution for the World Wide Web. GSPS has completed Version 1.1 of the ePocket product and is now ready to implement the technology. ActiveCore has supported GSPS in its marketing efforts and has consulting agreements in place with both North American and European parties to assist GSPS in finding a strategic partner that is willing to invest both time and money to implement the ePocket technology. With several initiatives underway, GSPS believes they will secure such a partner/customer in the very near future. Mr. Hamilton stated: "The significant debt reduction achieved as a result of the S8 removes a huge burden from the Company and will allow the new management team that will result from the merger with GSPS to focus its energy and spending on generating success in the payment technology market rather than cleaning up past debts." About ActiveCore Technologies Headquartered in Toronto, Ontario, ActiveCore Technologies, Inc. (OTCBB: ATVE) -- http://www.ActiveCore.com/-- operates as a payment technology solution provider. The Company's products encompass web portals, enterprise middleware, mobile data access, data management, and system migration applications. The Systems Integration & Modernization Division of ActiveCore operates under the trade names of CRATOS, MDI Solutions. The Corporate Disclosure and Messaging Division of ActiveCore operates under the trade names C Comm Network Corporation, DisclosurePlus, and ActiveCast. ActiveCore services clients in healthcare, financial services, government, and manufacturing worldwide. Going Concern Doubt As reported in the Troubled Company Reporter on April 25, 2006, Weinberg & Company, P.A., in Boca Raton, Florida, raised substantial doubt about ActiveCore Technologies' ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditors pointed to the Company's net loss, negative cash flow from operations, working capital deficiency, and accumulated deficit. ALEC SOHMER: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Alec G. Sohmer 23 Roxanne Road Pembroke, MA 02359 Bankruptcy Case No.: 06-14073 Chapter 11 Petition Date: November 26, 2006 Court: District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: Peter J. Haley, Esq. Gordon Haley LLP 101 Federal Street Boston, MA 02110 Tel: (617) 261-0100 Fax: (617) 261-0789 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ EMC Mortgage Corp. 10 Samoset Road $287,000 P.O. Box 141358 Mashpee, MA Irving, TX 75014 1 Diamond Street $250,900 Plymouth, MA 72 Purchase Street $200,000 Carver, MA Countrywide 23 Roxanne Road $700,000 P.O. Box 10229 Pembroke, MA Van Nuys, CA 91410 Countrywide Home Loan 420 High Street $342,000 4500 Park Granada Bridgewater, MA Calabasas, CA 91302 Aurora Loan Services 389 Centre Street $328,000 10350 Park Meadows Drive Hanover, MA Littleton, CO 80124 Citizens Bank $61,000 P.O. Box 9799 Providence, RI 02940 MBNA America $48,038 Greenberg Traurig, LLP $22,434 Yellow Book - NY $15,860 Perfection Fence $6,430 Banc of America Leasing $3,699 Citifinancial Retail Services $1,278 Bond Printing $329 American Express $324 Beth Austin Unknown Brad & Cynthia Lopes Unknown Deodata Sawyer Unknown AMBASSADORS OF CHIRST: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Ambassadors of Christ Christian Ministries fka Ambassadors of Christ Christian Center 4640 Sycamore School Road Fort Worth, TX 76133 Bankruptcy Case No.: 06-43858 Type of Business: The Debtor is a religious organization. See http://www.ambassadorsofchristministries.org/ Chapter 11 Petition Date: November 6, 2006 Court: Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Matthew G. Maben, Esq. Forshey & Prostok, L.L.P. 777 Main Street, Suite 1290 Fort Worth, TX 76102 Tel: (817) 877-8855 Fax: (817) 877-4151 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. AMERISOURCEBERGEN CORP: Inks Pact Joining Kindred Pharmacy Units ---------------------------------------------------------------- AmerisourceBergen Corporation and Kindred Healthcare Inc. have signed a definitive agreement to combine their respective institutional pharmacy businesses, PharMerica Long-Term Care and Kindred Pharmacy Services into a new, independent, publicly traded company. In August 2006, the transaction is intended to be tax-free to shareholders of both AmerisourceBergen and Kindred, and the transaction is expected to be completed in the first calendar quarter of 2007. The new company will be the second largest in the institutional pharmacy services market with revenues of approximately $1.9 billion and a customer base of approximately 330,000 licensed beds in 41 states. Preliminary synergy cost savings from the combination continue to be estimated at approximately $30 million. Paul J. Diaz, Kindred president and chief executive officer, said, "Completion of the definitive agreement is a major step in creating the new company and unlocking greater value for our shareholders. The new company will join two companies with shared values centered on customers, employees, and patients. "Upon completion of this transaction, Kindred's assets and resources will be concentrated on its hospital, nursing center and contract rehabilitation businesses. "Signing the definitive agreement is the critical milestone in building this new company and opening up opportunities for shareholders, associates and customers," AmerisourceBergen chief executive officer R. David Yost said. "We are taking the best of both organizations and building a strong national player in a growing market. With this transaction, AmerisourceBergen will be in a stronger position to focus on pharmaceutical distribution, specialty pharmaceutical distribution and related services, and other pharmaceutical supply channel services such as packaging." Summary of Proposed Transaction -- The combination is intended to be a tax-free transaction, which will result in AmerisourceBergen and Kindred shareholders each holding 50% of the shares of the new company. -- In connection with the transaction, PharMerica LTC and KPS will each make a one-time cash distribution, intended to be tax-free, of up to $150 million to their respective parent companies, subject to potential adjustments at the closing of the proposed transaction. -- PharMerica LTC and KPS will fund the distribution by borrowing up to $150 million each for a total of $300 million of new debt. The new company will assume this debt as part of the proposed merger. This new debt would be the only long-term debt the new company assumes from the parent companies, leaving it with significant financial flexibility. -- After the cash distribution, each of the institutional pharmacy businesses would be separately spun off to AmerisourceBergen and Kindred shareholders, to be followed immediately by a stock-for-stock merger which would result in AmerisourceBergen and Kindred shareholders each owning 50% of the new company. -- AmerisourceBergen currently provides pharmaceutical distribution to both KPS and PharMerica LTC and under the definitive agreement will continue to provide those services to the new company. Kindred will provide information systems support and some administrative support services to the new company for a period of time. -- The parties continue to conduct a national search for a chief executive officer and chief financial officer to lead the new public company, and are exploring the appropriate location for the new company's corporate headquarters. -- Deutsche Bank Securities is acting as financial adviser to AmerisourceBergen and Lehman Brothers is acting as Kindred's financial adviser. In order to be completed, the proposed transaction will require review of a registration statement for the new company by the Securities and Exchange Commission and a favorable determination by the Internal Revenue Service. The proposed transaction also is subject to the satisfaction of several closing conditions, including obtaining financing for the transactions and the new company. There can be no assurance that all conditions to completion of the transaction will be met. About Kindred Healthcare Louisville, Ky.-based Kindred Healthcare Inc. (NYSE: KND) -- http://www.kindredhealthcare.com/-- through its subsidiaries, operates long-term acute care hospitals, skilled nursing centers, institutional pharmacies, and a contract rehabilitation services business, Peoplefirst Rehabilitation Services, across the United States. Kindred provides services in over 500 locations in 39 states. The Company employs 56,000 people. About AmerisourceBergen Corp. Valley Forge, Pa.-based AmerisourceBergen Corp. (NYSE: ABC) -- http://www.amerisourcebergen.com/-- is a pharmaceutical services company in the United States and Canada. Servicing pharmaceutical manufacturers and healthcare providers in the pharmaceutical supply channel, the Company provides drug distribution and related services designed to reduce costs and improve patient outcomes. The Company employs more than 13,000 people and is ranked #27 on the Fortune 500 list. * * * As reported in the Troubled Company Reporter on Nov. 7, 2006, Moody's Investors Service confirmed AmerisourceBergen Corp.'s Ba1 Corporate Family Rating in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology. AMI SEMICONDUCTOR: Moody's Assigns Loss-Given-Default Ratings ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. technology semiconductor and distributor sector, the rating agency affirmed its Ba3 corporate family rating on AMI Semiconductor, Inc. Additionally, Moody's held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $90.0MM Sr Secured Revolver due 2010 Ba3 Ba3 LGD3 35% $320.0MM Sr Secured Term Loan due 2012 Ba3 Ba3 LGD3 35% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). AMI Semiconductor -- http://www.amis.com/-- designs and manufactures silicon solutions. AMI operates globally with headquarters in Pocatello, Idaho, European corporate offices in Oudenaarde, Belgium, and a network of sales and design centers located in the key markets of the North America, Europe and the Asia Pacific region. ASARCO LLC: Can Pay Ad Valorem Taxes Accdg. to Payment Procedures ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi authorized ASARCO LLC and its debtor-affiliates to pay their ad valorem taxes according to proposed payment procedures. As reported in the Troubled Company Reporter on Sept. 5, 2006, the Debtors estimated that they owe approximately $4,200,000 ad valorem taxes to 40 different taxing authorities, representing more than 700 distinct properties. The Debtors intended to pay the Ad Valoram Taxes to minimize the ongoing expense to their estates. By their nature, the Ad Valorem Taxes are secured by certain real property. In addition, the Ad Valorem Taxes are entitled to priority treatment under Section 507(a)(8)(B) of the Bankruptcy Code. As each day passes, the Ad Valorem Taxes increase due to postpetition interest. In light of the current copper market and the Debtors' current cash position, the Debtors believed that it is in their best interest to pay the Ad Valorem Taxes now and stop the accrual of postpetition interest. Furthermore, paying the Ad Valorem Taxes now will avoid improper claims for attorneys' fees. Payment of the Ad Valorem Taxes will also help local school districts and counties with their funding and budget requirements. The uniform procedures for settling tax claims: (a) If the applicable taxing authority will waive all attorneys' fees, penalties, and interest, the Debtors will pay the Ad Valorem Taxes without further notice. (b) If the applicable taxing authority will not waive all attorneys' fees, penalties, and interest, the Debtors will pay both the Ad Valorem Taxes and the accrued interest and attorneys' fees without further Court order, provided that the Debtors will notify: * counsel for the Official Committee of Unsecured Creditors of ASARCO LLC; * counsel for the Official Committee of Unsecured Creditors of the Asbestos Subsidiary Debtors; * counsel for Robert C. Pate, the future claimants representative; * counsel to The CIT Group/Business Credit, Inc.; and * the United States Trustee. (c) The Notice for the Proposed Tax Payment will: * identify the Taxes being paid; * identify the amount of interest, penalties, and attorneys' fees being paid; * note the significant terms of any settlement with the relevant taxing authority; and * note any evidence that the relevant taxing authority consents to waive any portion of owed interest or attorneys' fees. (d) If no written objections are filed with the Court by any of the Notice Parties, the Debtors will immediately consummate the payment without further Court order. (e) If a written objection filed with the Court by a Notice Party cannot be resolved, the relevant payment will only be made upon further Court order or resolution of the objection by the parties in question. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. (ASARCO Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). BEARINGPOINT INC: Obtains Waivers & Amends Credit Facility ---------------------------------------------------------- BearingPoint Inc. reached an agreement in principle with holders of a majority of each of the Company's 2.50% Series A Convertible Subordinated Debentures due 2024 (CUSIP No. 074002AA4) and 2.75% Series B Convertible Subordinated Debentures due 2024 (CUSIP No. 074002AB2). The agreement, among other things, contains waivers through Oct. 31, 2008, to the covenants relating to the Company's U.S. Securities and Exchange Commission reporting requirements and rescinds any acceleration related to the Company's failure to file such SEC reports. The proposed agreement with the holders of the Series A and Series B Debentures is also conditioned on the relevant holders of the Series B Debentures who had alleged that the Company is in default under the applicable indenture discontinuing their current lawsuit pending in New York State Supreme Court entitled The Bank of New York v. BearingPoint, Inc., Index No. 600169/06. Credit Facility Amendment The Company also amended its existing $150 million senior secured credit facility. The amendments to the credit facility include extensions of the filing deadlines for the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2005, to Nov. 30, 2006, and the Company's Quarterly Reports on Forms 10-Q for the first three quarters of 2005 to the earlier of two months after filing the 2005 Form 10-K and Jan. 31, 2007. The filing dates for the Company's 2006 Quarterly Reports on Form 10-Q have also been extended. "While we continue to disagree with the opinion of the New York State Court, we are pleased to have so quickly resolved the debenture issue in the best interest of all parties such that we may now move quickly on completing our 2005 Form 10-K filing," said Harry You, the Company's Chief Executive Officer. "We appreciate the continuing support of our shareholders, banks, surety providers, clients and employees in standing by us as we worked through this process. We have already turned our attention to completing our 2005 Form 10-K filing and hope to complete this by Thanksgiving to stay on course for holding our annual meeting of shareholders in early December." The revised terms of the consent solicitation for the Series A and Series B Debentures will be reflected in a supplement, which will be distributed to holders of the Series A Debentures and Series B Debentures shortly and which amend certain of the terms and conditions of the Consent Solicitation Statement dated Oct. 18, 2006. The terms, as modified, have been agreed to in principle by holders of a majority of each series of Debentures. Consent Solicitation Among other things, under the revised terms of the consent solicitation, in lieu of paying a consent fee: -- the interest rate payable on the Series A Debentures will be increased from the current 3.00% interest per annum to 3.10% per annum (inclusive of any liquidated damages relating to the failure to file a registration statement for the Series A Debentures that may be payable) until Dec. 23, 2011; and -- the interest rate payable on the Series B Debentures will be increased from the current 3.25% per annum to 4.10% per annum (inclusive of any liquidated damages relating to the failure to file a registration statement for the Series B Debentures that may be payable) until December 23, 2014. The increased interest rate will apply to all Series A Debentures and Series B Debentures outstanding. Additionally, the expiration date for the consent solicitation with respect to the Series A Debentures and Series B Debentures was extended until 5:00 p.m. New York City time on Nov. 6, 2006. BearingPoint reserves the right to further amend the consent solicitation for the Series A Debentures and Series B Debentures or further extend the expiration date at its sole discretion. On Nov. 2, 2006, the Company entered into a Supplemental Indenture with The Bank of New York, as trustee, which amends the indenture governing the Company's 5.00% Convertible Senior Subordinated Debentures due 2025 (CUSIP No. 074000AE0) in accordance with the Consent Solicitation Statement sent to the holders of the 5.00% Debentures. The Supplemental Indenture includes a waiver of the Company's SEC reporting requirements through Oct. 31, 2007, and provides for further extension through Oct. 31, 2008, upon payment of an addition fee of 0.25%. The Company paid to the holders of the 5.00% Debentures who provided their consents prior to the expiration of the consent solicitation the consent fee required under the Consent Solicitation Statement in an amount equal to 1.00% of the outstanding principal amount of the 5.00% Debentures. Citigroup Corporate and Investment Banking continues to serve as the solicitation agent for the consent solicitations. Questions regarding the consent solicitations may be directed to the Liability Management Group of Citigroup Corporate and Investment Banking at (800) 558-3745 (toll-free) or (212) 723-6106. The information agent for the consent solicitations is Global Bondholder Services Corporation. Requests for copies of the Consent Solicitation Statement and related documents may be directed to Global Bondholder Services Corporation at (866) 857- 2200 (toll- free) or (212) 430-3774. About BearingPoint Headquartered in McLean, Virginia, BearingPoint, Inc., -- http://www.BearingPoint.com/-- is an I/T systems integrator, consultancy, and managed services provider for commercial and governmental entities worldwide. * * * As reported in the Troubled Company Reporter on Oct. 10, 2006, Moody's Investors Service downgraded the ratings of BearingPoint, Inc., and has placed the company's ratings on review for further possible downgrade. Ratings downgraded and placed on review for further possible downgrade are: * Corporate Family Rating --downgraded to B2 from B1 * $250 million series A subordinated convertible bonds due 2024 --downgraded to B3 from B2 * $200 million series B subordinated convertible bonds due 2024 --downgraded to B3 from B2 As reported in the Troubled Company Reporter on Oct. 2, 2006 Standard & Poor's Ratings Services' ratings on BearingPoint Inc., remained on CreditWatch with developing implications, where they were placed on March 18, 2005. Ratings on CreditWatch are: * Corporate credit rating: B-/Watch Dev./-- * Senior secured: B-/Watch Dev. * Senior unsecured: B-/Watch Dev. * Subordinated debt: CCC+/Watch Dev. As reported in the Troubled Company Reporter on Sept. 29, 2006, BearingPoint, Inc., received an order entered by the New York State Supreme Court for New York County on Sept. 20, 2006, finding the Company in default under the indenture governing the its 2.75% Series B Convertible Subordinated Debentures due 2024. BENCHMARK ELECTRONICS: Signs Agreement to Acquire Pemstar --------------------------------------------------------- Benchmark Electronics, Inc., has signed a definitive merger agreement pursuant to which each outstanding share of Pemstar Inc. common stock will be converted into the right to receive 0.160 of a common share of Benchmark at transaction close. Based on Benchmark's closing price of $28.93 on Oct. 16, 2006, the transaction values Pemstar at approximately $300 million including the assumption of Pemstar net debt. The merger is expected to be a tax-free exchange of common shares. The merger agreement has been unanimously approved by the boards of directors of both Benchmark and Pemstar. The transaction, which is subject to the approval of Pemstar's shareholders, antitrust approvals and other closing conditions, is expected to close in the first calendar quarter of 2007, subject to the timing of completion of regulatory reviews. "The combination of the Benchmark/Pemstar organizations brings together two well respected teams with broad and complementary customer bases and serving diversified end markets. Pemstar's customer-focused culture and operating flexibility is highly compatible with that of Benchmark," said Cary Fu, Benchmark's chief executive officer. "This acquisition also supports Benchmark's strategy to continue to expand and deepen its suite of integrated services and solutions. Pemstar's strengths in design engineering and systems integration as well as its global footprint complement our existing growing business. I am confident that the combined organization will create additional value for our combined base of customers." "Benchmark's proven track record, strong balance sheet, and reputation as a global leader in electronics manufacturing services make the deal an attractive one for Pemstar's customers, shareholders and employees. This transaction will provide Pemstar customers with an enhanced portfolio of capabilities, expanded supply chain and operating leverage and the advantages of an increased global footprint," said Al Berning, Pemstar's chairman and chief executive officer. "Our customers will benefit greatly from Benchmark's capabilities in design engineering, complex manufacturing and test and repair, as well as expanded low-cost operations in Asia. There is a strong cultural fit between the two organizations, which will facilitate a smooth transition and ensure consistency of ongoing service delivery. The management team and I strongly support the transaction and the opportunity it provides." Pemstar provides a range of global engineering, product design, automation and test, manufacturing and fulfillment services to customers through facilities strategically located in North America, Asia and Europe. About Benchmark Benchmark Electronics, Inc. -- http://www.bench.com/-- manufactures electronics and provides its services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment, testing and instrumentation products, and telecommunication equipment. Benchmark's global operations include facilities in eight countries. Benchmark's Common Shares trade on the New York Stock Exchange under the symbol BHE. * * * As reported in the Troubled Company Reporter on Nov. 3, 2006, Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating on Angleton, Texas-based Benchmark Electronics Inc. on CreditWatch with positive implications after the company announced it will acquire Pemstar Inc. in a stock transaction valued at about $300 million. Moody's rates Benchmark's long-term corporate family rating at Ba3; Bank loan debt at Ba2; and equity linked at B2. The ratings were assigned on March 2003. BIG OAK: Case Summary & Two Largest Unsecured Creditors ------------------------------------------------------- Debtor: Big Oak Radiology Inc. aka Big Oak Imaging 2820 Townsgate Road, Suite 100A Westlake Village, CA 91361 Bankruptcy Case No.: 06-12049 Type of Business: The Debtor offers radiology and imaging services. Chapter 11 Petition Date: September 7, 2006 Court: Central District Of California (San Fernando Valley) Judge: Kathleen Thompson Debtor's Counsel: Kenneth B. Rodman, Esq. 223 East Thousand Oaks Boulevard, Suite 405 Thousand Oaks, CA 91360 Tel: (805) 371-0555 Total Assets: $665,830 Total Debts: $1,635,344 Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ WKV Imaging, LLC Trade Debt $1,445,344 2829 University Drive South Collateral: Fargo, ND 58103 $709,935 c/o Anderson & Bottrell Unsecured: State Bank Center, Suite 302 $735,409 3100 13th Avenue Southwest Fargo, ND 58106-0247 Regency Centers, L.P. Trade Debt $150,000 121 West Forsyth Street Suite 200 Jacksonville, FL 32202 CAP CANA: Fitch Rates Senior Secured Notes at B ----------------------------------------------- Fitch Ratings has assigned a 'B' rating to Cap Cana, S.A.'s senior secured notes. Cap Cana is domiciled in the Dominican Republic. Cap Cana's principal activity is the development, construction, operation and administration of a tourist and leisure resort community project of the same name. Cap Cana is a multi-use luxury resort located along five miles of coastline in the southeastern region of the country. The $250 million in proceeds from the offering will be used to complete the initial phase of construction as well as repay a significant amount of Cap Cana's existing debt. The notes will be secured by a first priority mortgage over unencumbered real estate property, as well as receivables related to the sale of property. The multi-use resort development consists of three main components: beach, golf, and marina. When fully developed, the project will be anchored by five championship golf courses (of which three are Jack Nicklaus signature courses), the largest inland marina in the Caribbean, several luxury hotels, more than 10,000 housing units, numerous sports facilities, along with high-end stores, restaurants, spas, and entertainment complexes. Cap Cana began development in 2002 and to date has invested approximately $220 million in infrastructure and other improvements, including 17 miles of paved roads, water reservoirs and treatment facilities, power generation capacity (five megawatts), a private beach club, the first Jack Nicklaus Signature Golf course, and substantial completion of the marina and numerous residential units therein. The first condos were delivered in October 2006. The structure backing this issuance adds significant investor protections in two forms: -- Cash flow controls that will reduce project execution risks. -- Bond proceeds sized to the remaining construction costs will be held in escrow and only released upon the achievement of construction milestones. A material security package backs the debt in the event of a corporate default. The collateral package will exist in two forms: -- First mortgage liens on land equal to a minimum of 200% of the outstanding debt (under certain limited circumstances, liens equal to a much greater amount are required); -- Receivables arising from the sale of developed properties will equal 125% of outstanding debt. Cap Cana's business model is to sell units prior to construction. Under the terms of this transaction, certain sales contracts will be pledged as collateral to back the notes. These receivables are subject to construction completion risks, but once completed, the receivables will act much like a mortgage. Prospective obligors are expected to be high net worth individuals. The major risks for Cap Cana are two-fold. First, sales of future units must be realized in order to collateralize the transaction and generate additional working capital for the project. Second, construction on individual units must be completed. Fitch believes these risks to be consistent with the expected rating. Independent engineer reports were used to facilitate modeling assumptions, which incorporated downside analysis regarding real estate valuations as well as construction costs. Fitch currently has a 'B' Long Term Issuer Default Rating (IDR) for the Dominican Republic with a Positive Outlook. CARAUSTAR INDUSTRIES: To Record $12.2 Mil. Asset Impairment Charge ------------------------------------------------------------------ Caraustar Industries Inc. will restate its second quarter financial statements to reflect an additional $12.2 million impairment of fixed assets related to its coated recycled paperboard operations which were classified as held for sale beginning Dec. 31, 2005. The company's management and the Audit Committee of its board of directors concluded that the three and six-month period operating results included in the company's June 30, 2006 quarterly report on Form 10-Q should be restated. The company disclosed that it has classified three coated recycled paperboard mills as held for sale beginning Dec. 31, 2005. It expected the three mills to be sold, by June 30, 2006, in two separate transactions, one transaction resulting in a loss and the other transaction expected to result in a gain that will offset the loss. The company continued to evaluate the impairment of the coated paperboard mills as a group since neither of the two transactions had been completed and some uncertainties existed. Subsequent to the issuance of the original June 30, 2006 10-Q filing, the company reevaluated the impairment calculation and determined that the three mills should have been evaluated as two separate disposal groups since the company expected the mills to be sold in two separate transactions. The revised impairment evaluation resulted in a pre-tax, noncash impairment charge of $12.2 million, which will be reflected in the results of discontinued operations during the three and six-month periods ended June 30, 2006. The company also disclosed that it believes that the expected gain on its remaining coated paperboard assets will offset the $12.2 million impairment charge. Based in Austell, Georgia, Caraustar Industries, Inc. -- http://www.caraustar.com/-- is an integrated manufacturer of converted recycled paperboard. Caraustar serves the four principal recycled boxboard product end- use markets: tubes, cores and composite cans; folding cartons; gypsum facing paper and miscellaneous other specialty paperboard products. * * * The Company's $200 million 7.375% Senior Notes due June 1, 2009 and $29 million 7.25% Senior Notes due May 1, 2010, carry Standard & Poor's B+ rating. The Company's $285 million 9.875% Senior Subordinated Notes due April 1, 2011, carry S&P's B- rating. Those ratings were assigned on May 9, 2006. CB RICHARD: Launches 9-3/4% Senior Notes Solicitation Consent ------------------------------------------------------------- CB Richard Ellis Services Inc., wholly owned subsidiary of CB Richard Ellis Group Inc., commenced a cash tender offer for any and all of its outstanding $130,000,000 aggregate principal amount 9-3/4% Senior Notes due 2010 on the terms and subject to the conditions set forth in its Offer to Purchase and Consent Solicitation Statement dated Nov. 3, 2006 and the related Consent and Letter of Transmittal. The Company is also soliciting consents to certain proposed amendments to the indenture governing the Notes to eliminate most of the restrictive covenants and certain events of default. The tender offer documents more fully set forth the terms of the tender offer and consent solicitation. The tender offer will expire at 5 p.m., New York City time, on December 4, 2006, unless extended or earlier terminated by the Company. The Company reserves the right to terminate, withdraw or amend the tender offer and consent solicitation at any time subject to applicable law. The Company expects to pay for any Notes purchased pursuant to the tender offer and consent solicitation in same-day funds on a date promptly following the expiration of the tender offer. The Company's obligation to accept for purchase, and to pay for, Notes validly tendered and not withdrawn pursuant to the tender offer and the consent solicitation is subject to the satisfaction or waiver of certain conditions, including the receipt of sufficient consents with respect to the proposed amendments to the indenture. The Company intends to finance the purchase of the Notes and related fees and expenses with cash on hand or funds drawn under its existing credit facility. The complete terms and conditions of the tender offer and the consent solicitation are set forth in the tender offer documents which are being sent to holders of Notes. Holders are urged to read the tender offer documents carefully. The Company has retained Credit Suisse to act as Dealer Manager in connection with the tender offer and consent solicitation. Questions about the tender offer and consent solicitation may be directed to Credit Suisse at 800-820-1653 or 212-538-0652. Copies of the tender offer documents and other related documents may be obtained from Georgeson Inc., the information agent for the tender offer and consent solicitation, at 866-244-9585 or 212-440-9800. The tender offer and consent solicitation is being made solely by means of the tender offer documents. Under no circumstances shall this press release constitute an offer to purchase or the solicitation of an offer to sell the Notes or any other securities of the Company or CB Richard Ellis Group, Inc. It also is not a solicitation of consents to the proposed amendments to the indenture. No recommendation is made as to whether holders of the Notes should tender their Notes or give their consent. 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. * * * On Nov. 2, 2006, Moody's Investors Service affirmed the ratings of CB Richard Ellis Services Inc.'s senior secured bank credit facility at Ba1; senior unsecured debt at Ba1, with a stable outlook following the announcement that CBRE will acquire Trammell Crow Company in a transaction valued at $2.2 billion. In April 2006, Moody's raised the senior debt ratings of CB Richard Ellis Services, Inc. to Ba1, from Ba3. CHENIERE ENERGY: Sabine Pass to Sell $2 Bil. Senior Secured Notes ----------------------------------------------------------------- Sabine Pass LNG, L.P., a wholly owned subsidiary of Cheniere Energy, Inc., entered into a purchase agreement with Credit Suisse Securities (USA) LLC, as representative of several initial purchasers, to sell to the Initial Purchasers $550,000,000 aggregate principal amount of its 7.25% Senior Secured Notes due 2013 and $1,482,000,000 aggregate principal amount of its 7.50% Senior Secured Notes due 2016. A full text-copy of the Purchase Agreement by and among Sabine Pass LNG, L.P. and Credit Suisse Securities (USA) LLC may be viewed at no charge at http://ResearchArchives.com/t/s?149c About Sabine Pass LNG Sabine Pass LNG L.P. is a liquefied natural gas receiving terminal under construction in western Cameron Parish, Louisiana and is a wholly owned subsidiary of Cheniere Energy, Inc. About Cheniere Energy Based in Houston, Texas, Cheniere Energy Inc. (AMEX:LNG) explores and produces oil. It also develops a liquefied natural gas receiving-terminal business. It operates a seismic database covering about 7,000 sq. mi. It also has a 9% interest in exploration and production affiliate Gryphon Exploration, which explores areas targeted by a seismic data licensed from Fairfield Industries. With proved reserves of 3,021 barrels of oil and 919.1 million cu. ft. of natural gas, it operates along the coast of Louisiana, both onshore and in the shallow waters along the Gulf of Mexico. In 2005, it acquired BPU LNG. * * * Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Cheniere Energy Inc. and affirmed its 'BB' rating on the $600 million term B bank loan at Cheniere LNG Holdings LLC, an indirectly owned, 100% subsidiary of Cheniere Energy. The outlook is stable. CHIPPA INC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Chippa, Inc. dba Maha Cleaners 18550 Kieth Harrow Boulevard Houston, TX 77084 Bankruptcy Case No.: 06-35997 Type of Business: The Debtors offers dry-cleaning and laundry services. Chapter 11 Petition Date: November 4, 2006 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtor's Counsel: Imdad A. Seehar 10301 Northwest Freeway, Suite 311 Houston, TX 77092 Tel: (713) 680-9530 Fax: (713) 680-9532 Total Assets: $414,335 Total Debts: $1,010,507 The Debtor did not file a list of its 20 largest unsecured creditors. CHIQUITA BRANDS: E.coli Concerns Cue S&P's 'B' Corp. Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered ratings on Cincinnati, Ohio-based Chiquita Brands International Inc., including its corporate credit rating, from 'B+' to 'B'. The ratings remain on CreditWatch with negative implications where they were placed on Sept. 26, 2006, after the company's announcement that third-quarter operating performance was expected to be significantly affected by continued weak banana prices in European and trading markets, excess fruit supply, and lower sales/higher costs in its Fresh Express business because of recent industry health concerns related to E.-coli-tainted spinach. Total debt outstanding at the company was about $990 million as of Sept. 30, 2006. "The downgrade follows Chiquita's recent third-quarter earnings release and reflects continued weak operating performance and significantly higher than expected leverage," said Standard & Poor's credit analyst Alison Sullivan. For the twelve months ended Sept. 30, 2006, adjusted EBITDA declined by 45% as compared to the prior-year period. This included over a 75% decline in adjusted EBITDA for the third quarter alone: -- Third-quarter operating performance was weaker than expected because of intense pricing pressure in Europe; and, -- unusually hot weather in northern Europe, which reduced consumer demand for bananas, depressed prices, and contributed to substantial price weakness in trading markets, where Chiquita incurred substantial losses on the sale of temporary excess supply from Latin America. Additionally, Fresh Express experienced lower sales and higher costs related to fresh spinach health concerns in the U.S. beginning in mid-September, although there have been no confirmed cases of consumer illness linked by the FDA to Fresh Express products. Chiquita is also faced with ongoing challenging conditions in Europe after the tariff change effective Jan. 2006, that has increased competition, leading to lower pricing, and higher net tariff costs. As a result, credit measures have weakened further. Lease adjusted total debt to EBITDA increased to about 6.5x for the 12 months ended Sept. 30, 2006 from about 4x at Dec. 31, 2006, and we believe leverage could increase further over the near term, given challenging operating conditions. In addition, the company is seeking an amendment of its credit facility to preclude any violation of its covenants that otherwise would occur upon the expiration of the existing waiver and to provide additional flexibility in future periods. If Chiquita receives an amendment to its credit facility and operating performance does not deteriorate significantly in the interim, Standard & Poor's will affirm the 'B' corporate credit rating, remove all ratings from credit watch and assign a negative outlook. CHIQUITA BRANDS: $96MM Loss Cues Moody's B3 Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service downgraded the ratings for Chiquita Brands L.L.C. -- senior secured to B1 from Ba3, as well as for its parent Chiquita Brands International, Inc. -- corporate family rating to B3 from B2. The outlook on all ratings is stable. The rating action follows the company's announcement that it had incurred a $96 million net loss for its 2006 third quarter. This weaker-than-expected operating performance results from a number of factors including continuing weak pricing in core European markets, losses in key secondary European banana trading markets, unexpected lower demand for bananas in some European markets and the resulting need to liquidate at a very low prices excess fruit, as well as a $43 million non-cash impairment charge to write-off goodwill related to an underperforming European subsidiary. Operations are also continuing to suffer from the impact of recent e. coli discoveries in US fresh spinach products, which during September and October had resulted in an FDA advisory and industry-wide withdrawals of fresh spinach product by most processors, and lower consumption of some salad products. Continuing high fuel and other industry costs, as well as unusually high costs to source fruit during shortages in late 2005/early 2006, have also pressured earnings and cash flow. Given the company's weak operating performance, it is unlikely that it will be able to meet the target credit metrics Moody's had set out in order for it to maintain its prior rating. The stable rating outlook reflects Moody's expectation that Chiquita's operating performance will continue to be pressured by fierce competition and margin pressure in its key European banana markets as the industry adapts to the new banana marketing regulations which took effect in January 2006. It is Moody's view that Chiquita's ratings reflect the continuing uncertainty surrounding how the company's operations will ultimately be impacted by this new regulatory environment, and the volatility in earnings and cash flow that is likely to exist throughout the transition period. Existing ratings also assume that Chiquita is successful in negotiating an amendment to its bank credit facilities in a manner which provides ample financial flexibility to the company. Chiquita's existing ratings reflect a company with a good qualitative profile, but with credit metrics which have been weakening due to a combination of leveraged acquisitions and weaker than expected operating performance, resulting in an overall B3 rating. The key rating factors currently influencing Chiquita's ratings and stable outlook are: -- The company is one of the largest global producers and marketers of fresh fruit and vegetables, with good geographic and product market diversity. -- Its franchise strength and growth potential are considered moderate, with good market share and volume growth in some segments, partially offset by the low margin commodity nature of much of its business which, at times, can lead to earnings and cash flow volatility. -- Liquidity under stress has been weak over the past year, as evidenced by the need to seek financial covenant relief. -- Overall credit metrics had been relatively strong for its rating category, but have been weakening due to a combination of higher debt from leveraged acquisitions and weak operating performance. Chiquita's ratings could be further downgraded if its earnings and cash flow remain weak - conceivably due to the impact of the new EU banana regulations being more negative than anticipated, the company's inability to successfully pass along higher energy costs, or its liquidity becomes constrained as it seeks further amendments to financial covenants from its lenders. Specifically, Chiquita's ratings could be downgraded if three-year average Debt/EBITDA (incorporating Moody's standard analytic adjustments) rose above 6x times and was likely to rise above 8x on a lagging 12-month basis in a downturn, and/or three year average EBIT/Interest fell below 1x and were likely to fall below 0.7x on a lagging 12-month basis in a downturn. Given the recent downgrade, a rating upgrade in the near term is unlikely. Over the intermediate term, however, upward rating pressure would start to build if the company successfully adapts to the new EU banana import regulations, its operating performance improves, and it successfully negotiates amendments to its bank facilities which provide it with ample financial flexibility. A ratings upgrade would also require Chiquita to be able to sustain three-year average Debt/EBITDA below 5.5x and lagging 12-month Debt/EBITDA below 7x in a downturn, and to maintain three-year average EBIT/Interest above 1.5x, with lagging 12-month EBIT/Interest above 1x in a downturn. Ratings downgraded with a stable outlook: * Chiquita Brands LLC (operating subsidiary) -- $200 million senior secured revolving credit to B1,LGD2, 26% from Ba3 LGD2, 26% -- $24.5 million senior secured term loan B to B1 LGD2, 26% from Ba3 LGD2, 26% -- $372.2 million senior secured term loan C to B1 LGD2, 26% from Ba3 LGD2, 26% * Chiquita Brands International, Inc. -- $250 million 7.50% senior unsecured notes due 2014 to Caa2, LGD 5, 89% from Caa1, LGD 5, 89% -- $225 million 8.875% senior unsecured notes due 2015 to Caa2, LGD5, 89% from LGD 5, 89% -- Corporate family rating at B3 -- Probability of default rating at B3 With 2005 sales of $3.9 billion, Cincinnati-based Chiquita is one of the global producers and marketers of fresh fruit and vegetables. CHUKWUDI AMU: Case Summary & Largest Unsecured Creditor ------------------------------------------------------- Debtor: Chukwudi Bato Amu 135 Riley Ridge Road Atlanta, GA 30327 Bankruptcy Case No.: 06-74141 Chapter 11 Petition Date: November 6, 2006 Court: Northern District of Georgia (Atlanta) Judge: Paul W. Bonapfel Debtor's Counsel: Diana McDonald, Esq. Suite C - George Towne Creek 2800 Peachtree Industrial Boulevard Duluth, GA 30097 Tel: (678) 542-2255 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ MBNA America $44,649 P.O. Box 15288 Wilmington, DE 19886-5288 COLORADO INTERSTATE: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the broad energy midstream sector, encompassing companies that engage in the extraction, treating, transmission, distribution, and logistics for crude oil, natural gas, and other hydrocarbon products, the rating agency affirmed its Ba1 corporate family rating on Colorado Interstate Gas Company. Additionally, Moody's revised its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Debs, 10.0% and 6.85% due 2037 Ba2 Ba1 LGD3 35% Sr. Notes 5.95% and 6.80% due 2015 Ba2 Ba1 LGD3 35% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Colorado Interstate Gas -- http://www.cigco.com/-- is a major transporter of natural gas in the Rocky Mountain region. The Colorado Interstate Gas system is connected to nearly every major supply basin in the Rocky Mountains as well as production areas in the Texas Panhandle, western Oklahoma, western Kansas, and Wyoming. COMMUNICATIONS CORP: U.S. Trustee Names 3-Member Creditors' Panel ----------------------------------------------------------------- R. Michael Bolen, the United States Trustee for Region 5, appointed three creditors serve on an Official Committee of Unsecured Creditors in Communications Corporation of America and its debtor-affiliates' chapter 11 cases: 1. Katz Communications, Inc. Attn: Robert "Bob" Damon Senior Vice President Chief Financial Officer 125 West 55 St. New York, NY 10019 Phone: 212-424-6881 Fax: 212-424-6591 2. Clark L. White 106 Jonah Circle Lafayette, LA 70508 Phone: 337-984-8959 337-278-3003 Fax: 337-984-8959 3. Regent Broadcasting Attn: Mike Grimsley General Manager/Regional Vice President 1749 Bertrand Drive Lafayette, LA 70506 Phone :(337) 233-6000 Fax: (337) 234-7360 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Lafayette, Louisiana, Communications Corporation of America, is a media and broadcasting company. Along with media company White Knight Holdings, Inc., it owns and operates around 23 TV stations in Indiana, Texas and Louisiana. Communications Corporation and 10 of its affiliates filed for bankruptcy protection on June 7, 2006 (Bankr. W.D. La. Case Nos. 06-50410 through 06-50421). Douglas S. Draper, Esq., William H. Patrick III, Esq., and Tristan Manthey, Esq., at Heller, Draper, Hayden, Patrick & Horn, LLC, represents Communications Corporation and its debtor-affiliates. When Communications Corporation and its debtor-affiliates filed for protection from their creditors, they estimated assets and debts of more than $100 million. COMPLETE RETREATS: Creditors Panel Taps Fairfax Group as Advisor ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Complete Retreats LLC and its debtor-affiliates' bankruptcy cases ask the U.S. Bankruptcy Court for the District of Connecticut for authority to retain The Fairfax Group, as its forensic advisor, nunc pro tunc to Sept. 11, 2006. Committee Chair Joel S. Lawson III relates that the Committee formed a subcommittee of its members to interview and evaluate candidates qualified to perform the type of forensic accounting and investigatory due diligence services required in the Debtors' cases. After soliciting qualification materials from, and rigorously interviewing various candidates, the subcommittee recommended the retention of Fairfax as the Committee's forensic advisor. Mr. Lawson notes that Fairfax employs and has working professional relationships with some of the world's leading experts in compliance, investigations and security. Fairfax's past engagements have included rendering service in the areas of corporate internal investigations; due diligence; asset tracing and anti-money laundering; electronic evidence-gathering and preservation; witness identification and interview; documentary evidence gathering and research of corporate and individual histories. Fairfax will, among others, perform forensic accounting and investigatory due diligence concerning the Debtors; the Debtors' businesses and operations; and any individuals or entities with whom the Debtors, their officers, directors, shareholders, agents and employees, have done business or may decide to do business. Fairfax will also analyze all relevant information from the time of the Debtors' formation through and including the present. The Committee reserves its rights to augment or authenticate the work of XRoads Solutions Group, or any other professionals conducting forensic analysis, where it deems that the additional work is necessary to maximize the recovery of unsecured creditors. The Debtors will pay Fairfax for its services according to its customary hourly rates. The hourly rates charged by Fairfax professionals differ based on, among other things, the individual professional's experience. The customary rates for Fairfax personnel in year 2006 range from $275 to $400 per hour. Fairfax will provide a phased budget, which will contain explicit fee limitations for each phase of its investigation. The Debtors will reimburse Fairfax's out-of-pocket expenses reasonably incurred in connection with services it renders to the Committee. Michael J. Hershman, president of the Fairfax Group, assures the Court that the firm has no connection with the Debtors, their creditors, the U.S. Trustee or any other party in interest in the Chapter 11 cases. Mr. Hershman asserts that Fairfax is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Debtors' estates with respect to the matters for which it is to be retained. About Complete Retreats 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. 13; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPLETE RETREATS: Fideicomiso Wants Stay Lifted to Take Property ----------------------------------------------------------------- On October 21, 2005, Fideicomiso F/197, Fideicomiso F/198, Fideicomiso F/199 and Preferred Retreats LLC, entered into a management and operating agreement, pursuant to which the Debtor was granted occupancy of three houses located on a waterfront property in Cabo San Lucas, Mexico. According to Douglas S. Skalka, Esq., at Neubert, Pepe & Monteith, P.C., in New Haven, Connecticut, the Debtor defaulted on the Agreement prior to the Debtors' bankruptcy filing. The Debtor also became delinquent in the discharge of its obligations to the Lessors. Through a July 7, 2006 Delinquency Notice, the Lessors notified the Debtor that it had 20 days to pay the delinquent sum or the delinquency would become a non-curable Event of Default under the Agreement. The Debtor did not cure the default, Mr. Skalka says. Thus, the default and delinquency became non-curable immediately after Sept. 21, 2006. Mr. Skalka asserts that the Debtor owes the Lessors $626,056 prepetition and $251,907 postpetition, plus damages for breach of the Agreement. Disregarding the delinquency interest, the Debtor owes the Lessors $136,979 prepetition and $67,783 postpetition, plus damages for breach of the Agreement. Accordingly, the Lessors ask the U.S. Bankruptcy Court for the District of Connecticut to: (a) lift the automatic stay to permit them to take all necessary steps to terminate the Agreement; (b) deem the Agreement rejected; and (c) direct the Debtor to surrender the Property to them by Nov. 21, 2006. In the alternative, the Lessors ask the Court to require the Debtor, no later than Nov. 20, 2006, to assume or reject the Agreement and cure all defaults as a condition of assumption Mr. Skalka argues that the automatic stay should be lifted for these reasons: (1) The Agreement has been terminated through the Debtor's default and delinquency, the Delinquency Notice, and the expiration of the time to cure the default and delinquency; (2) The interests of the Lessors in the Property are not adequately protected; (3) The Property has its greatest utility and its greatest value from the period covering late December through the middle of April; and (4) The Debtor does not have equity in the Property and the property is not necessary to the Debtor's effective reorganization. About Complete Retreats 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. 13; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMPLETE RETREATS: Says Co-Debtors are Current with 2 Client Pacts ------------------------------------------------------------------ Complete Retreats LLC and its debtor-affiliates believe that Preferred Retreats LLC and Preferred Retreats Design Group, L.L.C., are current on their obligations under their client service agreements with Administaff Companies II, L.P. The Debtors are currently negotiating with Administaff regarding the relief requested in the Administaff Motion. Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, relates that the Debtors are willing to prepare a motion either to assume or to reject the Service Agreements within "a reasonable time", presumably around mid January 2007. The Debtors aver that this amount of time is reasonable, especially in light of the fact that they are current on their obligations under the Service Agreements. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the District of Connecticut to allow them to file a motion to assume, assume and assign or reject the Service Agreements no later than Jan. 16, 2007. As reported in the Troubled Company Reporter on Sept. 22, 2006, Administaff Companies asked the Court to compel the Debtors to assume or reject two client service agreements the Debtors entered into with Administaff. Administaff serves as a full-service human resources department for small and medium-sized businesses throughout the United States. Administaff delivers personnel management services by entering into a co-employment relationship with a client company and its existing employees. Before the Debtors' bankruptcy filing, Administaff entered into two client service agreements with Debtors Preferred Retreats Design Group, LLC, and Preferred Retreats, LLC. The Client Service Agreements were effective as of Jan. 24, 2004, and Dec. 27, 2003. The terms of the Agreements are continuous until either Administaff or the Debtors terminate them in accordance with their terms. Pursuant to the Agreements, Administaff: -- acts as co-employer of the Debtors' employees; -- pays the salaries and wages of the Debtors' employees; and -- provides other personnel management services to the Debtors. If the Debtors decided to assume the Service Agreements, Administaff asks the Court to require the Debtors to provide adequate assurance of future performance by prepaying all salaries, wages, and charges in advance of the first pay day of each payroll period. In Administaff's behalf, Daniel E. Bruso, Esq., at Cantor Colburn LLP, in Bloomfield, Connecticut, explained that Administaff pays the salaries and wages of the Debtors' employees in arrears on a bi-weekly basis. All payroll checks are drawn on Administaff's account and Administaff collects its fee to cover wages and other costs for each pay period by drafting on the Debtors' account when the payroll is run. As a result, Administaff incurs financial obligations of approximately $480,000 per pay period before it is paid by the Debtors. Mr. Bruso asserted that Administaff continues to incur liability to the Debtors' employees but have no adequate assurance that the Debtors will continue to pay their obligations to Administaff. Motion Filing Violates Court Procedures The Clerk of the Bankruptcy Court noted that Administaff's Motion was not submitted through the Court's Electronic Filing System and thus, was filed in violation of the Court's Administrative Procedures. The Clerk asserted that the Motion should be stricken from the Court record. About Complete Retreats 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. 13; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CONCENTRA OPERATING: To Sell Subsidiary to Innovation for $50MM --------------------------------------------------------------- Concentra Operating Corporation signed an agreement to sell its First Notice Systems, Inc. subsidiary to The Innovation Group plc, for $50 million cash consideration to the Company. "The acquisition of First Notice gives The Innovation Group critical mass in the U.S. and is complementary to our recently announced acquisition of SurePlan" Hassan Sadiq, The Innovation Group's CEO, said. This strategic U.S. presence, underpinned by a strong global performance, leaves the enlarged group well placed for future growth." The Innovation Group specializes in providing outsourcing services and software solutions to insurers and other risk carriers through its international network of offices over the breadth of the administrative processes of insurers and risk carriers, including back office functions such as policy and claims management and sales. The Innovation Group has offices in the United Kingdom, Continental Europe, South Africa, Japan, Australia and North America. The Innovation Group's U.S. operations are based principally in Connecticut, and global operations for the Group are headquartered in the United Kingdom near London. "We believe our customers will benefit from the pairing of First Notice and The Innovation Group" Commenting on the announcement, Daniel Thomas, Concentra's President and CEO, said. We consider The Innovation Group to be a strategic partner in delivering cost- effective solutions to our clients in common." Concentra and The Innovation Group expect to complete the sale of First Notice later this year, subject to the approval of Concentra's senior lenders, the approval of The Innovation Group's shareholders, the arrangement of necessary financing by The Innovation Group, and other customary conditions. Pursuant to the requirements of its Senior Credit Agreement, Concentra currently anticipates that it will apply approximately $25 million to $30 million of the net after-tax cash proceeds it receives from the sale toward the prepayment of a portion of its senior term indebtedness. First Notice was acquired by Concentra in 1997 and has operated since that time as a standalone unit within the Company's Network Services business segment. Concentra Operating Corporation, a wholly owned subsidiary of Concentra Inc., is dedicated to improving the quality of life by making healthcare accessible and affordable. Serving the occupational, auto and group healthcare markets, Concentra provides employers, insurers and payors with a series of integrated services that include employment-related injury and occupational healthcare, in-network and out-of-network medical claims review and repricing, access to preferred provider organizations, first notice of loss services, case management and other cost containment services. Concentra provides its services to approximately 136,000 employer locations and 3,700 insurance companies, group health plans, third-party administrators and other healthcare payors. The Company has 300 health centers located in 40 states. It also operates the Beech Street and FOCUS networks. These provider networks include 544,000 providers, 52,000 ancillary providers and 4,400 acute-care hospitals nationwide. * * * Concentra Operating Corporation's 9.5% Senior Subordinated Notes due 2010 carry Moody's Investor Services' B3 rating and Standard and Poor's Ratings Services' B- rating. Moody's and S&P assigned those ratings on October 10, 2003. CREDIT SUISSE: S&P Affirms Low-B Ratings of 6 Certificate Classes ----------------------------------------------------------------- Standard & Poor's Ratings Services raised ratings on eight classes of commercial mortgage pass-through certificates from Credit Suisse First Boston Mortgage Securities Corp.'s series 2003-C4. Concurrently, ratings are affirmed on the remaining 13 classes from the same series. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The upgrades of several senior certificates reflect the defeasance of $203.0 million (16%) in collateral since issuance. The raised rating on the raked certificate, class MM, reflects the improved performance of the Mayfair Mall and Office Complex. The MM certificate's cash flow is derived from the junior participation interest that is secured by the property. As of the Oct. 17, 2006, remittance report, the collateral pool consisted of 170 loans with an aggregate trust balance of $1.281 billion, compared with 171 loans totaling $1.339 billion at issuance. The master servicer, KeyCorp Real Estate Capital Markets Inc., reported primarily full-year 2005 financial information for 100% of the pool. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.80x, up from 1.71x at issuance. The current DSC figure excludes the loans for the defeased collateral. All of the loans in the pool are current. To date, the trust has experienced one loss totaling $1.2 million. The top 10 loans secured by real estate have an aggregate outstanding balance of $335.2 million (32%) and a weighted average DSC of 2.28x, compared with 2.04x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans. All of the properties were characterized as "good." Credit characteristics for three of the loans in the pool remain consistent with those of investment-grade obligations. These are the details of the loans: -- The largest exposure in the pool, the Circle Centre Mall loan, has a trust balance of $75.8 million (6%). The loan is secured by the leasehold interest in a 790,505-sq.-ft. regional mall in Indianapolis, Ind. For the six months ended June 30, 2006, the DSC was 2.1x. Standard & Poor's adjusted NCF is similar to its level at issuance. -- The fourth-largest exposure in the pool, the 540 Madison Avenue loan, has a trust balance of $45 million (4%) and is secured by a fee interest in a 280,666-sq.-ft. office property in Manhattan. Occupancy was 99% as of July 2006. Standard & Poor's adjusted NCF is similar to its level at issuance. -- The fifth-largest exposure in the pool, the Mayfair Mall and Office Complex loan, is encumbered by a $184 million class A-1 note and a $2.3 million class A-2 note. The A-1 note is divided into three pari passu pieces, of which $44.3 million serves as the trust collateral. The A-2 note provides 100% of the cash flows to the class MM raked certificate. The loan is secured by 858,165 sq. ft. of the 1,068,879-sq.-ft. Mayfair Mall and four office properties totaling 419,318 sq. ft., all in the Milwaukee suburb of Wauwatosa, Wisconsin. The sponsor of the loan and manager of the property is General Growth Properties Inc. (BBB-/Negative/--). Standard & Poor's adjusted NCF is 12% above its level at issuance. KeyBank reported a watchlist of 27 loans ($140.8 million, 11%). The Red Lions Hotel portfolio, the 10th-largest exposure, has an outstanding balance of $21.5 million (2%) and is secured by a portfolio of five lodging properties in Washington, Idaho, and California with a total of 788 units. Two of the cross- collateralized and cross-defaulted loans appear on the watchlist because the collateral properties reported a year-end 2005 DSC below 1x. The five properties reported a weighted average year- end 2005 DSC of 1.62x. Standard & Poor's stressed the loans on the watchlist and other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised (Pooled Certificates) Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2003-C4 Rating Class To From Credit enhancement (%) B AAA AA 14.81 C AAA AA- 13.50 D AA A 10.89 E AA- A- 9.58 F A BBB+ 7.88 G BBB+ BBB 6.71 H BBB BBB- 5.40 Ratings Raised (Raked Certificate) Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2003-C4 Rating Class To From Credit enhancement (%) MM AA BBB N/A Ratings Affirmed Credit Suisse First Boston Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2003-C4 Class Rating Credit enhancement (%) A-1 AAA 17.69 A-2 AAA 17.69 A-3 AAA 17.69 A-4 AAA 17.69 A-1A AAA 17.69 J BB+ 4.22 K BB 3.57 L BB- 3.05 M B+ 2.26 N B 1.87 O B- 1.74 A-X AAA N/A A-SP AAA N/A N/A-Not applicable. CRYSTAL US: Moody's Assigns Loss-Given-Default Rating ----------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sectors, the rating agency confirmed its B1 Corporate Family Rating for Crystal US Holdings 3 LLC. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Issuer: Crystal US Holdings 3 LLC Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $321.6 Million 10.5% Senior Discount Notes due 2014 Caa2 B3 LGD6 95% $77 Million 10% Senior Discount Notes due 2014 Caa2 B3 LGD6 95% Issuer: BCP Crystal US Holdings Corp. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- EUR187 Million (US$228 Million) Credit-Linked Letter of Credit Facility B1 Ba3 LGD3 40% EUR313 Million (US$380 Million) Guaranteed Senior Secured Revolving Credit Facility due 4/2009 B1 Ba3 LGD3 40% US$220 Million Guaranteed Senior Secured Revolving Credit Facility due 4/2009 B1 Ba3 LGD3 40% EUR270 Million (US$327 Million) Guaranteed Senior Secured Term Loan Facility due 4/2011 B1 Ba3 LGD3 40% $935 Million Guaranteed Senior Secured Term Loan Facility due 4/2011 B1 Ba3 LGD3 40% $426 Million Guaranteed Senior Secured Term Loan Facility due 4/2011 B1 Ba3 LGD3 40% $800 Million 9.625% Guaranteed Senior Sub. Global Notes due 6/2014 B3 B3 LGD5 88% EUR130 Million (US$165 Million) 10.375% Guaranteed Senior Sub. Global Notes due 6/2014 B3 B3 LGD5 88% Issuer: CNA Holdings, Inc. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $13.765 Million 7.125% MTN due 3/2009 B2 B3 LGD5 80% Various Pollution Control & Industrial Revenue Bonds due at Various Dates Through 2030 B2 B3 LGD5 80% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). BCP Crystal US Holdings Corporation acquired the assets and liabilities of BCP Caylux Holdings Luxembourg S.C.A., who is the majority owner of Celanese AG. BCP Crystal US Holdings Corporation is a subsidiary of Crystal US Holdings 3 LLC. Crystal US Holdings 3 LLC is a subsidiary of Celanese Corporation. Celanese Corporation, headquartered in Dallas, Texas, produces acetyls, emulsions (including vinyl acetate monomer), acetate tow and engineered thermoplastics. CNA Holdings Inc. is the holding company that contains Celanese's North American operating companies. DELPHI CORP: GM Chief Executive Reports Progress in Labor Talks --------------------------------------------------------------- General Motors Corp. anticipates forging a deal with Delphi Corp. over contributions to the bankrupt auto parts maker's labor costs "reasonably soon," The Wall Street Journal reports. GM's Chief Executive, Rick Wagoner, told The Journal's Gordon Fairclough that "a huge amount of progress has been made" towards a compromise with Delphi. GM had recently updated estimates related to benefit guarantees as a result of progress in ongoing discussions with Delphi and its unions. In its report for the quarter-period ended Sept. 30, 2006, GM disclosed that its has narrowed the range of estimated potential exposure related to Delphi's bankruptcy at between $6 and $7.5 billion pre-tax, as compared to a previously disclosed range of $5.5 to $12 billion. Reflecting these updated estimates, GM also increased the reserve for its contingent liability for Delphi by $500 million in the third quarter, bringing the total charges taken to date to $6 billion pre-tax. In addition to these charges, the final agreement with Delphi may result in GM agreeing to reimburse Delphi for certain labor expenses to be incurred upon and after Delphi 's emergence from bankruptcy. The initial payment in 2007 is not expected to exceed approximately $400 million pre-tax, and the ongoing expenses would be of limited duration and estimated to average less than $100 million pre-tax annually. About General Motors General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. About Delphi Troy, MI-based Delphi Corporation -- http://www.delphi.com/-- supplies vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. DEUTSCHE ALT-A: Fitch Places Low-B Rating on Two Cert. Classes -------------------------------------------------------------- Fitch rates Deutsche Alt-A Securities Inc.'s mortgage pass-through certificates, series 2006-AR5 group II: -- $116.9 million classes II-1A, II-2A, II-3A, II-X1, II-X2, II-PO, II-AR (senior certificates) 'AAA'; -- $2.9 million class II-M 'AA'; -- $0.7 million class II-B-1 'A'; -- $0.6 million class II-B-2 'BBB'; -- $0.4 million privately offered class II-B-3 'BB'; -- $0.3 million privately offered class II-B-4 'B'. The 'AAA' rating on the senior certificates reflects the 4.25% subordination provided by the 1.85% class II-M, the 1.25% class II-B-1, the 0.75% class II-B-2, the 0.45% non-offered class II-B- 3, and the 0.20% non-offered class II-B-4. 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. The ratings also reflect the quality of the mortgage collateral, the capabilities of Wells Fargo Bank, National Association, as Master Servicer (rated 'RMS1' by Fitch), and Fitch's confidence in the integrity of the legal and financial structure of the transaction. The group II mortgage loans in aggregate contain fully amortizing adjustable rate mortgage loans, with an aggregate principal balance of $122,048,362, and an average principal balance of $171,176. The weighted average original loan-to-value ratio is 67.02%, with a weighted average FICO of 707. The states with the largest concentration of mortgage loans are California (22.01%), Florida (13.69%) and New York (9.59%). All other states represent less than 9% of the aggregate pool balance as of the cut-off date. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. Deutsche Alt-A Securities, Inc., a Delaware corporation will assign all its interest in the mortgage loans to the trustee for the benefit of certificate holders. For federal income tax purposes, an election will be made to treat the trust as multiple real estate mortgage investment conduits. HSBC Bank USA, National Association will act as trustee. DORAL FINANCIAL: Names Marangal Domingo as Chief Fin'l Officer -------------------------------------------------------------- Doral Financial Corporation disclosed that Marangal Domingo has been named chief financial officer of the Company, replacing Lidio Soriano who resigned. Mr. Domingo also will continue as the company's treasurer and chief investment officer, positions which he assumed upon joining Doral. "I am satisfied that these management appointments will help Doral manage its financial position," Glen Wakeman, chief executive officer, stated, "address its balance sheet priorities, including the refinancing of Doral's $625 million of debt due July 2007, and continue moving Doral forward with its SEC regulatory filings." In addition, Doral Financial Corporation announced that Cesar Ortiz, who has served as Doral's Director of Internal Audit, has been named the Corporation's comptroller and chief accounting officer. In light of this appointment, the Company is undertaking a search for a new Director of Internal Audit. Arturo Tous, who previously served as the chief accounting officer, will remain with the Company as a senior vice president reporting to the CFO. Doral Financial Corp. -- http://www.doralfinancial.com/-- a financial holding company, is a residential mortgage lender in Puerto Rico, and the parent company of Doral Bank, a Puerto Rico based commercial bank, Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm, Doral Insurance Agency, Inc. and Doral Bank FSB, a federal savings bank based in New York City. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, Standard & Poor's Ratings Services removed from CreditWatch and affirmed its ratings on Doral Financial Corp., including its 'B+' counterparty rating. The ratings were placed on CreditWatch with negative implications on April 19, 2005. The outlook is negative ENRON CORP: Wants $44 Million Settlement with Dynegy Approved ------------------------------------------------------------- Enron Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to approve a Settlement Agreement with Dynegy Inc. and its affiliates concerning the Guarantee Litigation and the Dynegy Adversary Proceeding. Effective Nov. 8, 2001, Enron Corp., Enron North America Corp. fka Enron Capital and Trade Resources Corp., EnronOnline, LLC, and their non-debtor affiliates Enron Canada Corp., Enron Capital and Trade Resources, Ltd., entered into a Master Netting Security and Setoff Agreement with: -- Dynegy Inc., -- Dynegy Marketing and Trade, -- Dynegy Power Marketing, Inc., -- Dynegy Broadband Marketing and Trade, -- Dynegy Canada, Inc., -- Dynegydirect Inc., -- Dynegy Global Liquids, Inc., -- Dynegy Liquids Marketing and Trade, -- and Dynegy UK Limited. Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the MNA purported to create cross-product and cross- affiliate netting and set-off rights as to the underlying obligations among all the Dynegy Parties and Enron Parties under their respective trading agreements, or Underlying Master Agreements. The MNA also seeks to aggregate claims and debts among the Enron Parties and the Dynegy Parties, which means the claims and debts would be reduced to a singular amount due from the Dynegy Parties to the Enron Parties or vice versa. Additionally, Enron provided the Dynegy Parties with the Enron Group Guarantee Agreement, which guaranteed all of the Enron Parties' obligations under the MNA. On Nov. 29, 2001, ECTRL went into administration proceedings in the United Kingdom. Certain of the Dynegy Parties filed claims with ECTRL's administrators, Steven Pearson and Anthony Lomas, partners of PriceWaterhouseCoopers LLP, in the ECTRL Administration for amounts due under the underlying contracts between certain of the Dynegy Parties and ECTRL, and the joint and several liability provisions of the MNA. On Oct. 15, 2002, the Dynegy Parties filed Claim Nos. 13397, 13398, 13399, 13400, 13401, 13402 and 13403 against the Enron Debtors, with each claim amounting to $93,558,630. The Dynegy Parties argued that the Claims are due under the Enron Guarantee. Before filing their Claims, the Dynegy Parties filed a request for relief from the automatic stay to enforce the MNA and commence arbitration against the Enron Debtors. On Oct. 18, 2002, the Dynegy Parties filed Arbitration Proceeding No. 50T 198 00542 02, with the American Arbitration Association in Houston, Texas, against ECTRL, EOL, ECC, and ECTRC. The Enron Parties objected to the Dynegy Parties' stay relief motion and moved to enjoin the Arbitration Proceeding. The Court subsequently granted the Enron Parties' request. Concurrent with the filing of their stay relief objection, the Enron Debtors filed Adversary Proceeding No. 02-3468 against the Dynegy Parties. The Enron Debtors sought declaratory relief that the MNA was avoidable and without legal effect and seeking payment of $229,936,102, plus interest and attorneys' fees to the Enron Parties for amounts due under the Underlying Master Agreements. On March 4, 2003, the Dynegy Adversary Proceeding and all other trading cases were referred to mediation under a Court-ordered mediation process before the Honorable Allan L. Gropper of the Southern District of New York Bankruptcy Court as the court- appointed mediator. The parties participated in five mediation sessions, and the last mediation session occurred on October 26, 2005. On Dec. 1, 2003, the Enron Debtors also filed Adversary Proceeding No. 03-93576 against DMT and DCI, to avoid, as a fraudulent transfer, a credit support guarantee issued in connection with certain of the parties' contracts. The parties eventually agreed that the Guaranty Litigation would ultimately be consolidated in the Dynegy Adversary Proceeding. On April 26, 2006, Judge Gropper advised the Court that mediation between the parties was no longer suitable and suggested that the mediation be withdrawn. At a June 8, 2006 status conference, the Court ordered the Dynegy Adversary Proceeding withdrawn from mediation. On June 15, 2006, the Dynegy Parties filed an answer, affirmative defenses and counterclaim seeking to enforce the MNA and the arbitration clause under the MNA. According to Ms. Gray, as a result of the Dynegy Adversary Proceeding and other orders entered by Judge Gonzalez, the Enron Debtors hold reserves related to $1,144,320,954 of disputed claims for the benefit of the Dynegy Parties in the Disputed Claims Reserve. After negotiations, the parties reached a settlement agreement. The terms of the settlement are: (1) they will release each other from all claims, obligations, demands, actions, causes of action, and liabilities arising from any event, transaction, matter and circumstance related to the Guarantee Litigation and the Dynegy Adversary Proceeding; (2) the Dynegy Parties will make a $44,000,000 settlement payment to the Enron Parties; (3) the Dynegy Claims will be deemed irrevocably withdrawn, with prejudice, and to the extent applicable, expunged; and (4) After actual receipt of the settlement payment, the Enron Parties will enter into stipulations with the Dynegy Parties, dismissing with prejudice the Dynegy Adversary Proceeding, the Guarantee Litigation, and all claims and counterclaims related to the Adversary Proceeding and the Guarantee Litigation. About Enron Corp. Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP represent the Debtor. Jeffrey K. Milton, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 181; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENRON CORP: Wants $25,081,204 Newpower Deal Approved ---------------------------------------------------- Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, Enron Corp. and its debtor-affiliates ask the Honorable Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York to approve their settlement agreement with Mr. Dorsey and the NewPower Entities. Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York, related that on March 14, 2001, Enron Corp., Enron North America Corp., Enron Energy Services, Inc., Enron Power Marketing, Inc., Enron Energy Services, LLC, entered into a Master Cross-Product Netting, Setoff and Security Agreement with The New Power Company, NewPower Holdings, Inc., and TNPC Holdings, Inc., concerning a series of commodity purchase and swap transaction. The Master Agreement was amended on Oct. 18, 2001, pursuant to which the Enron Debtors held $70,000,000 in collateral posted by the NewPower Entities and the Debtors obtained secured claims against the NewPower Entities for $28,000,000. Enron and its non-debtor affiliates Cortez Energy Services, LLC, McGarret I, LLC, McGarret II, LLC, McGarret III, LLC, and EES Warrant Trust presently own 31,666,800 shares of NewPower Holdings common stock and 24,117,800 warrants for the purchase of NewPower Holdings common stock. The 31,666,800 shares and 24,117,800 warrants collectively represent the Enron Parties' 44% equity interests in NewPower. After the Petition Date, the Enron Debtors and the NewPower Entities entered into a settlement agreement to resolve the disputes arising under the Master Agreement and the Second Agreement. Under the first settlement, the NewPower Entities allowed the Enron Debtors to foreclose the $70,000,000 Pledged Collateral and NewPower delivered to the Debtors a $28,000,000 secured note with respect to the payment of the Enron Secured Claims. On June 11, 2000, the NewPower Entities sought Chapter 11 protection in the U.S. Bankruptcy Court for the Northern District of Georgia. The Enron Debtors filed timely proofs of claim in the NewPower Chapter 11 cases. The Enron Debtors assert secured claims of more than $28,000,000 for outstanding principal and interest due on the Secured Note pursuant to the first NewPower settlement. On Nov. 5, 2002, the NewPower Entities paid $28,485,958 to the Enron Debtors pursuant to the NewPower Bankruptcy Court's cash collateral order. On Jan. 15, 2003, the NewPower Entities, the Enron Debtors and the NewPower Unsecured Creditors Committee entered into a second settlement agreement to resolve the Committee's objection to the Debtors' claim for attorneys' fees and costs. Under the settlement, the NewPower Entities paid $137,000 in attorneys' fees and costs to the Debtors. On Jan. 17, 2003, the NewPower Bankruptcy Court approved the appointment of Rufus T. Dorsey, IV, as the examiner for the NewPower Entities. After confirming NewPower Entities' 2nd Amended Plan of Reorganization, the NewPower Bankruptcy Court authorized NewPower to make interim distributions to certain holders of equity interests and the NewPower Entities were directed to establish an interest-bearing account reserve for the Enron Parties. NewPower deposited $30,806,204 in the Enron Reserve. On Sept. 24, 2004, Mr. Dorsey filed Adversary Proceeding No. 04-04303 in the Enron Bankruptcy Court, seeking to recover the New Power Entities' $28,000,000 payment on the Secured Note, recharacterize the indebtedness evidenced by the Secured Note as equity in NewPower Holdings, and to equitable subordinate all of the equity interests in NewPower Holdings held or asserted by the Enron Parties. On March 29, 2005, Mr. Dorsey filed an objection in the NewPower Bankruptcy Court, seeking to disallow the Enron Parties' equity interests. In response to the objection, the Enron Debtors filed a motion in the Enron Bankruptcy Court, seeking to enforce the automatic stay and Enron Plan injunction, and impose sanctions on Mr. Dorsey and his counsel for their knowing violation of the stay in the Enron Chapter 11 cases. The Enron and NewPower Bankruptcy Courts subsequently referred the Enron Debtors and Mr. Dorsey to mediation and both courts stayed further pursuit of the Adversary Proceeding, Mr. Dorsey's Objection, and the Sanctions Motion pending the completion of the mediation. Based on the monthly operating report submitted by NewPower Entities on June 30, 2006, the Enron Reserve held $31,169,375 for the benefit of the Enron Parties, while the interest-bearing money market account maintained by the NewPower Entities held $16,277,572. To resolve their dispute, the parties entered into a settlement agreement. The terms of the settlement are: (1) the Enron Claims and the Enron Equity Interest will be allowed in the NewPower Chapter 11 cases, provided, however, that the Enron Parties will waive their rights to receive, collectively, the first $5,725,000 of the Enron Reserve; (2) the NewPower Entities will transfer to the Enron Parties the Enron Reserve reflected in the NewPower June MOR, plus any interest accrued on the balance after June 30, 2006, minus $5,725,000; (3) The NewPower Entities will make the subsequent shareholder distributions to the Enron Parties on or before December 14, 2006, and certain Enron shares held by the non-Debtor Enron affiliates will be cancelled and they will have no more ownership interest in the NewPower Entities; and (4) they will mutually release each other from all claims related to the Adversary Proceeding, the Objection and the Sanctions Motion. About Enron Corp. Headquartered in Houston, Texas, Enron Corporation filed for chapter 11 protection on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. Albert Togut, Esq., at Togut Segal & Segal LLP and Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP represent the Debtor. Jeffrey K. Milton, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 181; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW ORLEANS: Earns $7.4 Million in Third Quarter 2006 ------------------------------------------------------------- Entergy Corporation has released its financial results for the quarter ended Sept. 30, 2006. Entergy and its subsidiaries, including Entergy New Orleans, Inc., recorded as-reported earnings of $285,900,000 for the third quarter of 2006, compared to earnings of $285,800,000 in the third quarter of 2005. ENOI earned $7,430,000 for the third quarter. According to Entergy's press release, ENOI's third quarter 2006 results reflect the ongoing effects of the hurricane as well as certain actions taken by the Debtor specific to its continuing effort to stabilize its financial condition. Entergy said that ENOI's results for the current period include significantly lower revenues from customers due to extended outages and customer losses partially set off by lower operation and maintenance expense due to the continued focus on storm restoration rather than routine operating activities, and ongoing cost reduction initiatives. Current results, according to Entergy, also reflect lower interest expense due to a reduction in interest accrued on first mortgage bonds. Interest had not been accrued for a year as a result of an agreement among bondholders and ENOI in its Chapter 11 case. ENOI resumed accruing interest late in third quarter 2006. A full text copy of Entergy's press release on its third quarter 2006 results is available for free at: http://researcharchives.com/t/s?149f Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW ORLEANS: Panel Wants to Avoid Co. Affiliate Payments ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Entergy New Orleans Inc. and its debtor-affiliates' chapter 11 cases asks the U.S. Bankruptcy Court for the Eastern District of Louisiana to affirm its standing to pursue, on behalf of Entergy New Orleans, Inc., an avoidance action under Section 549 of the Bankruptcy Code in connection with the postpetition payments made by ENOI to its affiliates on account of ENOI's alleged prepetition obligations. On September 29, 2005, October 24, 2005 and November 16, 2005, ENOI paid an aggregate of $12,934,642 to the Affiliates in satisfaction of its alleged prepetition obligations under certain power purchase agreements: Affiliate Amount --------- ------ Entergy Power, Inc. $1,091,471 Entergy Gulf States, Inc. 5,021,988 Entergy Arkansas, Inc. 6,821,182 In a December 6, 2005 motion seeking retroactive approval of the Affiliate Payments, ENOI asserted that the PPAs constituted "forward contracts" and that the Affiliates were "forward contract merchants" under Section 556 of the Bankruptcy Code and further, that the Court's approval of the Affiliate Payments was warranted under a so-called "doctrine of necessity." The Creditors Committee opposed the Original Motion and argued that the funds constituted unlawful postpetition payments of prepetition obligations of the Debtor that must be returned to the estate. The Committee also opposed an amended motion by ENOI seeking to assume the PPAs and for retroactive approval of the Affiliate Payments. The Committee argued, among others, that the assumption of the PPAs was premature, as it could not be determined whether the PPAs will be useful or desired under a plan of reorganization that will ultimately be confirmed by the Court. The Debtor has withdrawn the Amended Motion. In addition, the Creditors Committee has recently learned that, on October 24, 2005, the Debtor had paid to $6,174,217 to its affiliate, System Energy Resources, under their Unit Power Sales Agreement for their Grand Gulf Power Contract. ENOI's president, chief executive officer and chairman of the board, Dan Packer was deposed on September 27, 2006 and testified that none of the Affiliate Payments were authorized by ENOI, Philip K. Jones, Esq., at Liskow & Lewis, APLC, at New Orleans, Louisiana, relates. The Creditors Committee believes that it is entitled to pursue, on behalf of ENOI, an avoidance action against the Affiliates. The Committee reiterates that the Affiliate Payments constitute unlawful postpetition payments of prepetition obligations of ENOI that must be returned to the estate. Under Rule 6001 of the Federal Rules of Bankruptcy Procedure, the burden of proof as to the validity of any postpetition transfer is on the entity asserting that the transfer is valid. ENOI has already admitted that it made the Affiliate Payments without Court authorization, Mr. Jones notes. The Creditors Committee acknowledges that the authority to collect the assets of the estate and to bring avoidance actions attendant thereto are ordinarily reserved to the trustee or debtor-in- possession. However, when the debtor-in-possession unjustifiably refuses a demand to purse an action, its creditor or the creditors committee may seek leave of the bankruptcy court to prosecute the action on behalf of the debtor-in-possession, if they can establish a colorable claim, Mr. Jones notes, citing, among others, Louisiana World Exposition v. Federal Insurance Company, 858 F.2d 233, 247-48 (5th Cir. 1988). Despite the Committee's demands, ENOI has refused to return to the estate the Affiliate Payments or the interest charges incurred by ENOI in favor of Entergy Corp. to finance the Payments, Mr. Jones points out. "Because the Debtor has had to borrow funds to make these funds to make the Payments, the Debtor has incurred between $900,000 to $41,000,000 in interest costs under the DIP financing facility with Entergy Corp." Headquartered in Baton Rouge, Louisiana, Entergy New Orleans Inc. -- http://www.entergy-neworleans.com/-- is a wholly owned subsidiary of Entergy Corporation. Entergy New Orleans provides electric and natural gas service to approximately 190,000 electric and 147,000 gas customers within the city of New Orleans. Entergy New Orleans is the smallest of Entergy Corporation's five utility companies and represents about 7% of the consolidated revenues and 3% of its consolidated earnings in 2004. Neither Entergy Corporation nor any of Entergy's other utility and non-utility subsidiaries were included in Entergy New Orleans' bankruptcy filing. Entergy New Orleans filed for chapter 11 protection on Sept. 23, 2005 (Bankr. E.D. La. Case No. 05-17697). Elizabeth J. Futrell, Esq., and R. Partick Vance, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., represent the Debtor in its restructuring efforts. Carey L. Menasco, Esq., Philip Kirkpatrick Jones, Jr., Esq., and Joseph P. Hebert, Esq., at Liskow & Lewis, APLC, represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $703,197,000 and total debts of $610,421,000. (Entergy New Orleans Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FERRELLGAS PARTNERS: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the broad energy midstream sector, encompassing companies that engage in the extraction, treating, transmission, distribution, and logistics for crude oil, natural gas, and other hydrocarbon products, the rating agency affirmed its Ba3 corporate family rating on Ferrellgas Partners L.P. Additionally, Moody's held its B2 probability-of-default rating on the Company's 8.75% Sr. Unsec. Notes due 2012 and assigned an LGD6 rating to these notes, suggesting holders will experience a 91% loss in the event of a default. Moody's also held its Ba3 probability-of-default rating on Ferrellgas, LP's 6.75% Sr. Unsec. Global Notes due 2014 and assigned and LGD3 rating, suggesting noteholders will experience a 44% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Overland Park, Kansas, Ferrellgas Partners, LP -- http://www.ferrellgas.com/-- through its operating partnership, Ferrellgas, LP, is a propane marketer in the United States. Ferrellgas serves more than 1 million customers in all 50 states, the District of Columbia, Puerto Rico, and Canada, and has annual sales volumes approaching 1 billion retail gallons. Ferrellgas employees indirectly own more than 20 million common units of the partnership through an employee stock ownership plan. FLYI INC: Has Until January 31 to File Notices of Removal --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended FLYi Inc. and its debtor-affiliates' deadline to file notices of removal with respect to pending prepetition civil actions through and including Jan. 31, 2007. As reported in the Troubled Company Reporter on Oct. 11, 2006, the extension will afford the Debtors additional time to determine whether or not to remove any pending civil action and will ensure that the Debtors do not forfeit their rights under Section 1452 of the Judiciary and Judicial Procedure Code, M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, contended. Headquartered in Dulles, Virginia, FLYi, Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. Brett H. Miller, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. (FLYi Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FREE ENTERPRISE: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Free Enterprise of Atlanta, Inc. dba George's Motor Coach 550 Discovery Place Mableton, GA 30126-4666 Bankruptcy Case No.: 06-74289 Type of Business: The Debtor offers transportation services for tourists and sightseeing groups. See http://www.georgesmotorcoach.com/ Chapter 11 Petition Date: November 6, 2006 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: G. Frank Nason, IV, Esq. Lamberth, Cifelli, Stokes & Stout, P.A. Suite 550 3343 Peachtree Road, Northeast Atlanta, GA 30326 Tel: (404) 262-7373 Fax: (404) 262-9911 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ MCII Financial Service Vehicles - Buses $2,205,025 9787 Clifford Drive Secured: Dallas, TX 75220 $1,020,000 T&W Funding Co. VII, LLC $931,000 c/o Brian M. Born 950 Pacific Avenue, Suite 1050 Tacoma, WA 98402 Textron Financial Corp. $827,180 c/o Jay Pontrelli 3350 Riverwood Parkway Southeast, Suite 1700 Atlanta, GA 30339-3345 CitiCapital Vehicle $225,000 American Equipment Leasing Secured: P.O. Box 7247-7878 $80,000 Philadelphia, PA 19170-7878 U.S. Bancorp Liens subject to $220,871 c/o Thomas Sterns Kenney Ebank, Flag Bank, 3675 Crestwood Parkway SBA and IRS Suite 500 Duluth, GA 30096 Burkett Oil Company $16,000 MCI Fleet Support $6,800 All Points Capital Corp. Vehicle $24,456 Secured: $20,000 Harmon Brothers $3,300 Atlanta Commercial Tire $2,700 Timothy Camp Court Litigation $2,354 Nextel Communications $1,300 Georgia Power Company $900 Quick Fleet Tire Sales $800 AT&T $300 Cobb County Water System $250 NAPA $200 Staples $150 FREESCALE SEMICON: Buyout Plan Prompts S&P's Credit Rating Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services kept ratings, including the 'BB+' corporate credit rating, on Austin, Texas-based Freescale Semiconductor Inc. on CreditWatch with negative implications, where they were placed on Sept. 11, 2006, after the company's announcement that it was considering a business transaction, later confirmed as a leveraged buyout. "We have determined the rating actions that will be taken upon the completion of the financing that will facilitate the acquisition of Freescale by the consortium, expected to be in the near term," said Standard & Poor's credit analyst Bruce Hyman. The anticipated rating actions reflect the pending LBO, which will materially increase debt leverage while substantially reducing liquidity and free cash flows. The corporate credit rating will be lowered to 'BB-' with a negative outlook, and a 'BB' rating will be assigned to the company's senior secured bank loan package with a '1' recovery rating. Freescale's $4.25 billion senior secured bank facility will consist of a $3.5 billion senior secured term loan and a $750 million revolving credit agreement. The term loan and credit facility will be rated 'BB', one notch higher than the corporate credit rating, with a recovery rating of '1', indicating an expectation of full recovery of principal in the event of a payment default. The senior fixed-rate, senior toggle, senior unsecured floating rate, and senior subordinated notes will all be rated 'B'; the 'BB+' rating on the existing senior unsecured notes will be withdrawn. The anticipated post-LBO ratings on Freescale reflect the company's near-investment grade business profile, enabling a leverage profile that is high for the rating level. The business profile reflects the company's strong position in its industry and improving cost structure, offset by substantial customer concentration in a cyclical, capital-intensive marketplace. Debt leverage will be high, about 5.6x trailing four quarters' adjusted EBITDA, treating pensions, postretirement benefits and capitalized operating leases as debt, with an adequate initial cash balance around $600 million. The planned ratings anticipate that free cash flows should enable the company to deleverage moderately over the intermediate term. FREMONT HOME: Fitch Rates $23.9 Mil. Class M-10 Certs at BB+ ------------------------------------------------------------ Fremont Home Loan Trust's mortgage-backed certificates, series 2006-D, are rated by Fitch Ratings: Group 1: -- $1.229 billion classes 1A1, 2A1, 2A2, 2A3 and 2A4 'AAA'; -- $74.13 million class M-1 'AA+'; -- $71.74 million class M-2 'AA'; -- $26.31 million class M-3 'AA-'; -- $30.29 million class M-4 'A+'; -- $27.1 million class M-5 'A'; -- $19.13 million class M-6 'A-'; -- $17.54 million class M-7 'BBB+'; -- $14.35 million class M-8 'BBB'; -- $19.13 million class M-9 'BBB-'; -- $23.91 million class M-10 'BB+'. The mortgage loans consist of fixed- and adjustable-rate subprime mortgage loans secured by first or second lien mortgages or deeds of trust on residential properties. The 'AAA' rating on the senior certificates reflects the 22.90% credit enhancement provided by the 4.65% class M-1, 4.50% class M- 2, 1.65% class M-3, 1.90% class M-4, 1.70% class M-5, 1.20% class M-6, 1.10% class M-7, 0.90% class M-8, 1.20% class M-9, 1.50% class M-10, as well as 2.60% target overcollateralization. The ratings also reflect the quality of the mortgage collateral, strength of the legal and financial structures, and Fremont Investment and Loan's servicing capabilities as servicer. As of the cut-off date, the mortgage loans in have an aggregate balance of $1,594,233,538. The weighted average mortgage rate is approximately 8.46% and the weighted average remaining term to maturity (WAM) is 358 months. The average cut-off date principal balance of the mortgage loans is $205,728. The weighted average original loan-to-value ratio is 81.5%. The properties are primarily located in California (26.02%), Florida (10.60%), New York (9.98%), Maryland (8.13%), and Illinois (8.10%). Located in Brea, California, Fremont is a state-chartered industrial bank. Fremont conducts business in 45 states and its primary source of origination is through licensed mortgage brokers. Fremont Investment and Loan currently operates five wholesale residential real estate loan production offices. GENERAL MOTORS: Paying Fourth Quarter Dividends on December 9 ------------------------------------------------------------- General Motors Corp. declared a fourth-quarter dividend of $0.25 per share on GM common stock. The dividend is payable Dec. 9, 2006, to holders of record as of Nov. 17, 2006. The dividend is unchanged from the previous quarter. About General Motors General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. would remain on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new $4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GENERAL MOTORS: Reduces Third Quarter Net Loss to $91 Million ------------------------------------------------------------- General Motors Corporation's consolidated net loss for the third quarter of 2006 has been reduced by $24 million to a net loss of $91 million. General Motors Corporation previously announced preliminary consolidated net loss for the third quarter of 2006 as $115 million. The reduction in net loss is attributable to additional loan sales that had not been previously reported by GM's unit, General Motors Acceptance Corporation LLC. GMAC has also revised its loss to $325 million, from the $349 million it reported earlier, the Associated Press reports. A full-text copy of GM's revised quarterly report, filed with the Securities and Exchange Commission on Nov. 7, 2006, is available for free at http://researcharchives.com/t/s?14a0 About General Motors General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. would remain on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new $4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GENERAL MOTORS: Delphi Deal Coming Soon Says Rick Wagoner --------------------------------------------------------- General Motors Corp. anticipates forging a deal with Delphi Corp. over contributions to the bankrupt auto parts maker's labor costs "reasonably soon," The Wall Street Journal reports. GM's Chief Executive, Rick Wagoner, told The Journal's Gordon Fairclough that "a huge amount of progress has been made" towards a compromise with Delphi. GM had recently updated estimates related to benefit guarantees as a result of progress in ongoing discussions with Delphi and its unions. In its report for the quarter-period ended Sept. 30, 2006, GM disclosed that its has narrowed the range of estimated potential exposure related to Delphi's bankruptcy at between $6 and $7.5 billion pre-tax, as compared to a previously disclosed range of $5.5 to $12 billion. Reflecting these updated estimates, GM also increased the reserve for its contingent liability for Delphi by $500 million in the third quarter, bringing the total charges taken to date to $6 billion pre-tax. In addition to these charges, the final agreement with Delphi may result in GM agreeing to reimburse Delphi for certain labor expenses to be incurred upon and after Delphi 's emergence from bankruptcy. The initial payment in 2007 is not expected to exceed approximately $400 million pre-tax, and the ongoing expenses would be of limited duration and estimated to average less than $100 million pre-tax annually. About Delphi Troy, MI-based Delphi Corporation -- http://www.delphi.com/-- supplies vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. About General Motors General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. would remain on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new $4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GENERAL MOTORS: Denies Plan to Give Avtovaz Joint Venture Stake --------------------------------------------------------------- General Motors Corp. is not selling its 50% stake in General Motors-Avtovaz joint venture to Avtovaz OAO, RIA Novosti cites GM Russian Director Warren Brown. Mr. Brown stressed that the two companies have positive relations, thus no reason for change. General Motors, Avtovaz and the European Bank for Reconstruction and Development inked a deal to form the $338-million joint venture, which opened in September 2002. About Avtovaz Headquartered in Toliatti, Russia, Avtovaz OAO -- http://www.lada-auto.ru/-- manufactures passenger cars under brand names LADA, VAZ and NIVA. Through its subsidiaries and associates, the Company manufactures automobile components, distributes automobiles and spare parts and operates automobile service centers. About General Motors General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- the world's largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM employs about 317,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. * * * As reported in the Troubled Company Reporter on Oct. 11, 2006, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. would remain on CreditWatch with negative implications, where they were placed March 29, 2006. As reported in the Troubled Company Reporter on July 27, 2006, Dominion Bond Rating Service downgraded the long-term debt ratings of General Motors Corporation and General Motors of Canada Limited to B. The commercial paper ratings of both companies are also downgraded to R-3 (low) from R-3. As reported in the Troubled Company Reporter on June 22, 2006, Fitch assigned a rating of 'BB' and a Recovery Rating of 'RR1' to General Motor's new $4.48 billion senior secured bank facility. The 'RR1' is based on the collateral package and other protections that are expected to provide full recovery in the event of a bankruptcy filing. As reported in the Troubled Company Reporter on June 21, 2006, Moody's Investors Service assigned a B2 rating to the secured tranches of the amended and extended secured credit facility of up to $4.5 billion being proposed by General Motors Corporation, affirmed the company's B3 corporate family and SGL-3 speculative grade liquidity ratings, and lowered its senior unsecured rating to Caa1 from B3. The rating outlook is negative. GENERAL NUTRITION: Buyout Plan Cues S&P to Put Ratings on Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed ratings on General Nutrition Centers Inc., including the 'B' corporate credit rating, on CreditWatch with developing implications. "The placement follows news that GNC is evaluating alternatives that include a possible sale of the company or an IPO," said Standard & Poor's credit analyst Jackie Oberoi. The sale of the company, which could be financed with a substantial amount of additional debt, may lead to lowered ratings. Conversely, the company has an S-1 filing outstanding with the SEC by parent company GNC Corp. for an IPO of up to $400 million of its common stock. Should proceeds be used to reduce debt levels, ratings could be raised. Standard & Poor's also assigned its 'CCC+' rating on Pittsburgh, Pa.-based GNC Parent Corporation's $325 million payment-in-kind notes, due 2011. The rating was placed on CreditWatch Developing. Given the expected use of proceeds from the PIK notes, the existing ratings on GNC's senior unsecured notes and bank facility may be raised. Proceeds from the notes, along with of cash on hand, will be used to redeem the company's preferred stock, repay a portion of its bank debt, and pay a dividend to common equity. The rating reflects a resulting capital structure that is highly leveraged, with total lease-adjusted debt of about $1.2 billion and expected debt to EBITDA of about 6.3x. GNC's operating performance has improved in the current year to date due to solid comparable-store sales growth and better margins. Management attributes the turnaround largely to a new national pricing model and new marketing efforts. U.S.-based company-owned stores experienced 12.6% comparable-store growth for the nine months ended Sept. 30, 2006; U.S. franchised stores posted 6.6% growth. GENTEK INC: To Shut Down New Jersey Plant in December 2006 ---------------------------------------------------------- GenTek Inc. will be closing its Newark, N.J. sulfuric acid production plant at the end of this year. The production and shipment of other products, aluminum sulfate and ferric sulfate, currently being sold from the Newark, N.J. location will continue without any interruptions. GenTek's decision was driven by the fact that the Newark Sulfur operation, already cash flow negative, was facing increasingly adverse market conditions and required infrastructure investments, which would have lead to material cash losses in this business. It is anticipated that shipment of product will cease during December of 2006 and all closure activities are expected to be completed by the end of April of 2007. The Company is currently negotiating with a third party on the potential sale of the site. The restructuring charges as a result of this closure include termination costs of approximately $1 million and other closure costs totaling approximately $1 million, substantially all of which are expected to be paid in 2007. GenTek Inc. -- http://www.gentek-global.com/-- provides specialty inorganic chemical products and services for treating water and wastewater, petroleum refining, and the manufacture of personal- care products, valve-train systems and components for automotive engines and wire harnesses for large home appliance and automotive suppliers. GenTek operates over 60 manufacturing facilities and technical centers and has approximately 6,900 employees * * * In February 2005, Moody's Investors Service placed a B2 rating on GenTek's $60 million senior secured revolving credit facility, due 2010, $235 million senior secured term loan B, due 2011. GEORGIA GULF: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. Chemicals and Allied Products sectors, the rating agency confirmed its Ba3 Corporate Family Rating for Georgia Gulf Corporation. Additionally, Moody's held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- $375 Million Guaranteed Senior Secured Revolving Credit Facility due 9/2011 Ba2 Ba2 LGD3 33% $800 Million Guaranteed Senior Secured Term Loan due 9/2013 Ba2 Ba2 LGD3 33% $500 Million Guaranteed Senior Unsec. Notes due 9/2014 B1 B1 LGD4 67% $100 Million 7.125% Guaranteed Global Unsecured Notes due 12/2013 B1 B1 LGD4 67% $250 Million Guaranteed Senior Sub. Notes due 9/2016 B2 B2 LGD6 93% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Based in Atlanta, Georgia Gulf Corp. -- http://www.ggc.com/-- manufactures and markets two integrated product lines, chlorovinyls and aromatics. The company generated revenues of $2.3 billion for the year ended Dec. 31, 2005. GLOBAL HOME: Deadline for Filing Proofs of Claim Set to Nov. 15 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware entered an order in Global Home Products LLC and its debtor-affiliates' chapter 11 cases setting Nov. 15, 2006, 4:00 p.m. E.S.T., as: (a) the last day for filing all proofs of claim against the Debtors arising prior to April 10, 2006; (b) the last day for all governmental units, as defined in Section 101(27) of the Bankruptcy Code, to assert claims arising before April 10, 2006; and (c) the last day for all parties asserting administrative expenses against the Debtors' estates arising under Section 503(b)(9) of the Bankruptcy Code, to file a request for payment of these administrative expense with the Claims Agent, Bankruptcy Services, LLC. Proofs of claims must be received on or before the Bar Dates by: Global Home Products Claims Processing c/o Bankruptcy Services, LLC FDR Station, P.O. Box 5269 New York, NY 10150-5269 These claims are not required to be filed on or before the Claims Bar Date, the Governmental Unit Bar Date, and the Administrative Bar Date: -- claims already duly filed in the Debtors' chapter 11 cases with the Claims Agent, or the Clerk of Court; -- claims listed in the Debtors' schedules of assets and liabilities, or as listed in any supplements or amendments in the schedules; and -- claims arising on or after the Petition Date, except as provided pursuant to 503(b)(9) Administrative Bar Date Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on April 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at Lowenstein Sandler, P.C., and David M. Fournier, Esq., at Pepper Hamilton LLP represent the Official Committee of Unsecured Creditors. Huron Consulting Group LLC gives financial advice to the Committee. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and estimated debts of more than $100 million. GREENMAN TECH: Wins Deal to Cleanup Iowa Tire Disposal Sites ------------------------------------------------------------ The Iowa Department of Natural Resources has awarded GreenMan Technologies Inc.'s Iowa subsidiary the contract to cleanup scrap tires located at various sites throughout Iowa during the next five months. "We are very pleased the Iowa Department of Natural Resources has chosen us to complete this cleanup project" Mark Maust, GreenMan of Iowa's president said. "We anticipate commencing the project during November on a limited basis with a majority of the work to be completed during the December through March 2007 timeframe" Mr. Maust added. "This coincides with our seasonally slower time of the year. We estimate this cleanup project will generate approximately $400,000 of new accretive revenue and will be recycled into alternative fuel and other value-added material for Iowa industries." Based in Lynnfield, Massachusetts, GreenMan Technologies, Inc. (OTCBB: GMTI), markets scrap granular tires in the United States. The company's products are used as a tire-derived fuel used by pulp and paper producers. * * * At June 30, 2006, the Company's balance sheet showed $10.6 million in total assets and $22.3 million in total liabilities, resulting in an $11.6 million stockholders' deficit. The Company's equity deficit stood at $8.6 million as of Dec. 31, 2005. HANOVER COMPRESSOR: Reports $12.2 Mil. Net Income in Third Quarter ------------------------------------------------------------------ Hanover Compressor Company delivered its third quarter financial statements for the three months ended Sept. 30, 2006, to the Securities and Exchange Commission on Nov. 1, 2006. The Company earned $12.2 million of net income on $423.7 million of net revenues for the quarter ended Sept. 30, 2006, compared to a $14.9 million net loss on $369.8 million of net revenues for the same period in 2005. At Sept. 30, 2006, the Company's accumulated deficit lowered to $129.6 million from $186 million of deficit as of Sept. 30, 2005. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?1484 Hanover Compressor Company -- http://www.hanover-co.com/-- is a global market leader in full service natural gas compression and a leading provider of service, fabrication and equipment for oil and natural gas production, processing and transportation applications. Hanover sells and rents this equipment and provides complete operation and maintenance services, including run-time guarantees for both customer-owned equipment and its fleet of rental equipment. * * * As reported in the Troubled Company Reporter on Sept. 29, 2006, Moody's Investors Service, in connection with the implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the North American Forest Products sector, confirmed its B1 Corporate Family Rating for Hanover Compressor Company. Four layers of bond debt issued by Hanover Compressor and maturing between 2008 and 2014 carry low-B ratings from Moody's Investors Service and Standard & Poor's Rating Services. HC CARIBBEAN: Court Sets February 15 as Claims Filing Deadline -------------------------------------------------------------- The U.S. Bankruptcy Court District of Puerto Rico has set these deadlines for persons owed money by HC Carribean Chemicals Inc. to file proofs of claim against the Debtor: a) Feb. 15, 2007 -- for all creditors except governmental units; and b) April 18, 20007 -- for governmental units. Proofs of claim must be received by the bankruptcy clerk's office on the bar dates at this address: Celestino Matta-Mendez Clerk of the Bankruptcy Court District of Puerto Rico Room 109 U.S. Post Office and Courthouse Building 300 Recinto Sur Street San Juan, PR 00901 Headquartered in Ponce, Puerto Rico, HC Caribbean Chemicals Inc. sells chemical, industrial, and janitorial cleaning products. The company is the exclusive distributor for Zep Products in Puerto Rico. HC Caribbean filed a chapter 11 petition on October 16, 2006 (U.S. Bankr. P.R. Case No. 06-03960). Nydia Gonzalez Ortiz, Esq. at Santiago & Gonzalez represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it disclosed more than $100 million in assets and more than $100 million in debts. HC CARIBBEAN: U.S. Trustee Sets November 17 Creditors Meeting ------------------------------------------------------------- The United States Trustee for Region 21 will convene a meeting of HC Carribean Chemicals Inc.'s creditors on Nov. 17, 2006, 1:30 p.m., at the first floor of Ochoa Building, 500 Tanca Street, San Juan, Puerto Rico. This is the first meeting of creditors required under Section 341(a) of the U.S. Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Ponce, Puerto Rico, HC Caribbean Chemicals Inc. sells chemical, industrial, and janitorial cleaning products. The company is the exclusive distributor for Zep Products in Puerto Rico. HC Caribbean filed a chapter 11 petition on October 16, 2006 (U.S. Bankr. P.R. Case No. 06-03960). Nydia Gonzalez Ortiz, Esq. at Santiago & Gonzalez represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it disclosed more than $100 million in assets and more than $100 million in debts. HIDDEN CREEK: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Hidden Creek, Ltd. 17300 North Dallas Parkway, Suite 2040 Dallas, TX 75248 Bankruptcy Case No.: 06-34842 Chapter 11 Petition Date: November 6, 2006 Court: Northern District of Texas (Dallas) Debtor's Counsel: Gregory Todd Meyer, Esq. 1316 Village Creek Drive, Suite 500 Plano, TX 75093 Tel: (972) 484-6544 Fax: (972) 484-6522 Total Assets: $3,735,000 Total Debts: $1,602,836 Debtor's 4 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Penney Bates Note $50,000 P.O. Box 794032 Dallas, TX 75379 Shelcan, LLC Engineering $28,500 940 N. MacArthur Blvd. Services Suite 124-618 Irving, TX 75063 Butler Burgher, Inc. Engineering $2,500 8750 N. Central Expy. Services 15th Floor Dallas, TX 75206 Wisdom Engineering, Inc. Engineering $650 2616 Stonewall St. Services Greenville, TX 75807 HOOD NORWOOD: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Hood Norwood Properties, LP 1501 North Norwood Drive, Suite 152 Hurst, TX 76054 Tel: (817) 285-6108 Bankruptcy Case No.: 06-43915 Chapter 11 Petition Date: November 6, 2006 Court: Northern District of Texas (Ft. Worth) Debtor's Counsel: F. Bady Sassin, Esq. Buchholz Sassin, P.L.L.C. 4131 N. Central Expressway, Suite 800 Dallas, TX 75204 Tel: (214) 754-5500 Fax: (214) 754-9100 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. HSI ASSET: Fitch Puts BB+ Rating to $10MM Privately Offered Class ----------------------------------------------------------------- Fitch rates HSI Asset Securitization Corporation Trust 2006-HE1, which closed Nov. 3 2006: -- $1,052 million classes I-A, II-A-1 through II-A-5 (senior certificates) 'AAA', -- $42.0 million class M-1, 'AA+'; -- $36.9 million class M-2, 'AA+'; -- $ 22.9 million class M-3 'AA'; -- $ 20.4 million class M-4 'AA-'; -- $19.7 million class M-5 'A+'; -- $ 17.8 million class M-6 'A'; -- $ 17.2 million class M-7 'BBB+'; -- $ 9.5 million class M-8 'BBB'; -- $ 8.3 million class M-9 'BBB-'; -- $ 10.2 million privately offered class M-10 'BB+'. The 'AAA' rating on the senior certificates reflects the 17.35% total credit enhancement provided by 3.30% class M-1, the 2.90% class M-2, the 1.80% class M-3, the 1.60% class M-4, the 1.55% class M-5, the 1.40 % class M-6, the 1.35% class M-7, the 0.75% class M-8, the 0.65% class M-9, the 0.80% privately offered class M-10 and the 1.25% initial and target over-collateralization (OC). All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the quality of the loans, the integrity of the transaction's legal structure as well as the capabilities of Wells Fargo Bank, N.A and Countrywide Home Loan Services LP as servicer and Wells Fargo Bank, N.A. as Master servicer. Deutsche Bank National Trust Company is the trustee. As of the statistical cut-off date, the collateral pool consists of 6,551 fixed and adjustable rate loans and totals $1,361,755,543. Approximately 25.05% of the mortgage loans are fixed-rate, 74.95% are adjustable-rate and 16.88% are interest- only rate mortgage loans. Approximately 4.88% of the mortgage loans are secured by a second lien. The weighted average original loan-to-value ratio is 79.81%. The average outstanding principal balance is approximately $207,870, the weighted average coupon is 8.122% and the weighted average remaining term to maturity is 358 months. The weighted average credit score is 633. The loans are geographically concentrated in California (33.89%), Florida (11.41%) and New York (6.91%). For federal income tax purposes, multiple real estate mortgage investment conduit elections will be made with respect to the trust estate. INDYMAC MBS: Fitch Rates $2 Million Class B-5 Certificates at B --------------------------------------------------------------- Fitch rates IndyMac MBS, Inc., Residential Asset Securitization Trust (RAST) 2006-A14CB, residential mortgage pass-through certificates: -- $339.4 million classes 1-A-1, 1-A-2, 1-A-3, 1-A-4, 2-A-1, 2-A-2, 2-A-3, 2-A-4, 2-A-5, 2-A-6, 2-A-7, PO, A-X, and A-R 'AAA' (senior certificates); -- $12.3 million class B-1 'AA'; -- $4.8 million B-2 'A'; -- $3.8 million B-3 'BBB'; -- $2.4 million B-4 'BB'; -- $2 million B-5 'B'. The 'AAA' rating on the senior certificates reflects the 7.35% subordination provided by the 3.35% B-1, 1.30% class B-2, 1.05% class B-3, 0.65% non-offered class B-4, 0.55% non-offered class B- 5, and 0.45% non-offered and non-rated class B-6. 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 reflect the quality of the mortgage collateral, the strength of the legal and financial structures, and the capabilities of IndyMac Bank, FSB (IndyMac) as a servicer (rated 'RPS2+' by Fitch). The mortgage pool consists of 1,645 recently originated, conventional, fixed-rate, fully amortizing, first lien, one- to four-family residential mortgage loans with original terms to stated maturity of 20-30 years. As of the cut-off date (Oct. 1, 2006), the pool had an aggregate principal balance of approximately $366,327,577.35. The average loan balance is $222,692, and the weighted average original loan-to-value ratio for the mortgage loans in the pool is approximately 73.32%. The weighted average FICO credit score for the pool is approximately 699. Cash-out and rate/term refinance loans represent 40.50% and 11.50% of the pool, respectively. Second and investor-occupied homes account for 2.91% and 14.30% of the pool, respectively. The states that represent the largest geographic concentration are California (27.53%), Florida (12.87%), and New York (12.63%). None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. The loans were originated or purchased by IndyMac Bank, F.S.B., which were subsequently sold to IndyMac MBS, Inc. IndyMac MBS, Inc. deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. For federal income tax purposes, elections will be made to treat the trust as separate multiple real estate mortgage investment conduits. Deutsche Bank National Trust Company will act as trustee. INTERSTATE BAKERIES: Wants Performance Bonus Payment Dates Altered ------------------------------------------------------------------ Interstate Bakeries Corporation and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Western District of Missouri to modify their Key Employee Retention Plan to accelerate payment of the remaining 50% of the 2005 Restructuring Performance Bonuses with half of the amount payable on Dec. 15, 2006, and the other half on April 30, 2007. The Debtors' Key Employee Retention Plan provides for restructuring performance bonuses in lieu of the Debtors' 2005 annual incentive bonus plan. The Restructuring Performance Bonuses were based on the Debtors achieving a target EBITDAR of $50,000,000 for fiscal year 2005. The first 50% of a Restructuring Performance Bonus is payable on the date that was the earlier of (i) the date on which the Debtors' fiscal 2005 financial statements are complete, or (ii) Aug. 15, 2005. The remaining 50% of a Restructuring Performance Bonus is payable on the date that is the later of (i) 30 days after the Effective Date, or (ii) the Statements Completion Date. As of Oct. 19, 2006, the Debtors have paid approximately $3,000,000 in Restructuring Performance Bonuses, J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Ill., tells the Court. The KERP further provides that: (i) no Restructuring Performance Bonuses would be payable if the Actual EBITDAR is less than 80% of the target EBITDAR; and (ii) the aggregate amount of the Restructuring Performance Bonuses was capped at approximately $6,200,000, payable only if the actual EBITDAR was 125% of the target EBITDAR. In fiscal year 2005, the Debtors actually achieved 125% of the target EBITDAR, Mr. Ivester notes. Recently, however, the Debtors have experienced significant key employee departures, disappointing sales results and lower than expected EBITDA performance, Mr. Ivester informs the Court. Moreover, the Debtors did not anticipate that the payment of the remaining portion of the Restructuring Performance Bonus would be delayed. The Debtors believe that accelerating payments of the Restructuring Performance Bonuses will be able to motivate their key employees and provide a much-needed boost to employee morale. The Debtors also believe that creating more immediacy and certainty of payment for a portion of remaining KERP benefits will enable them to maximize their ability to retain employees in the near term until they have finalized their exit from bankruptcy. In addition, Mr. Ivester contends that making the payments is important because the eligible recipients of the Performance Bonuses are employees who have generally not received merit pay increases for at least two years despite the fact that the Debtors' base salaries are below market in many regions of the country. During that period, the employees have absorbed additional costs of their health and welfare benefits through increases to premiums and co-pay provisions. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Wants Central States Pension Fund Pact Okayed ------------------------------------------------------------------ Interstate Bakeries Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Western District of Missouri to approve their Settlement Agreement with Central States Southeast and Southwest Areas Pension Fund. The Debtors contribute to the Central States Southeast and Southwest Areas Pension Fund on behalf of approximately 3,400 employees. The Central States Pension Fund, however, is underfunded, J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, tells the Court. Due to the underfunding, the Central States Pension Fund asked the Internal Revenue Services for an extension of the period allowed for amortizing their underfunded liabilities, Mr. Ivester relates. Without an extension, employers-participants in the Central States Pension Fund faced the prospect of paying excise taxes of up to 100% of the funding shortfall as well as paying their pro-rata share of the funding deficiency. The IRS approved the Pension Fund's request. Moreover, the IRS required the Pension Fund to maintain its existing ratio of assets to liabilities through 2011 and to show moderate improvement in the funding ratio from year to year in later years. To satisfy that requirement, the Pension Fund took several actions including establishing an annual pension contribution rate increase of 7% for collective bargaining agreements set to expire between Nov. 9, 2005, and Dec. 31, 2006. Mr. Ivester relates that most, if not all, of the CBAs in which the Debtors agreed to contribute to the Pension Fund have been renegotiated between November 2005 and December 2006. Because of the substantial costs and the Debtors' need to control their costs to emerge from Chapter 11, the International Brotherhood of Teamsters and the Debtors approached the Pension Fund to seek a waiver of the Required Contribution Increase. The Pension Fund asserted that to obtain any waiver of the Required Contribution Increase, the Debtors would need to simultaneously resolve various claims filed against the Debtors by the Pension Fund and the Central States Southeast and Southwest Areas Health and Welfare Fund. Central States Claims Central States has asserted eight categories of claims: 1. 2004 Partial Withdrawal Liability for $11,893,789. Due to a cessation of contributions with respect to the Spencer, Iowa, thrift store; Traverse City, Michigan, routes; Des Moines, Iowa, thrift store; and Fond Du Lac, Wisconsin, route; the Pension Fund alleges that a partial withdrawal from the benefit plan occurred. 2. 2001 Partial Withdrawal Liability for $2,957,826. The Pension Fund asserts that all Detroit office employees covered by a CBA with Local Union No. 51 of the Teamsters ceased participation in the Pension Fund in September 2001 when the work performed by those employees was transferred to another office that did not participate in Central States Pension Fund. 3. Profit Center Restructurings Since their bankruptcy filing, the Debtors have been closing certain bakeries, depots and thrift stores and consolidating delivery routes at their 10 geographically defined profit centers. Although no claims have yet been made, it is possible that the Pension Fund will allege that a partial withdrawal from the Pension Fund has occurred or may occur in the future as a result of the PC Restructurings. 4. Various Routine Audit Claims for $900,000, regarding the results of routine audits at the Debtors' facilities in Columbus Akron, St. Louis, and Knoxville. 5. London, Ky., Claim for $109,732, arising from a retro bill due as a result of the Debtors allegedly paying the incorrect contribution rate for a specified period of time at the London, Ky., location. 6. Brown's or Defiance Partial Withdrawal Claim for $216,953, plus attorneys' fees and expenses. The Pension Fund asserts that there was a partial withdrawal because at the time of the Debtors' purchase of Brown's, the Debtors did not provide a bond under ERISA's sales of assets provision. 7. Local 215 Retro Invoice, arising from a retro bill due as a result of the Debtors allegedly paying the incorrect contribution rate for a specified period of time at Local 215. 8. Contingent Complete Withdrawal Liability Claim for $247,004,537, alleging a 2004 complete withdrawal from the Pension Fund. The Debtors dispute the validity of the Central States Claims. The partial withdrawals did not occur because the Debtors continued to have an obligation to continue to the Pension Fund and the Debtors did not transfer the relevant work, Mr. Ivester asserts. The Debtors remitted the correct amount of contributions and no complete withdrawal has occurred, Mr. Ivester adds. The Settlement Agreement After engaging in extensive negotiations, the Debtors and Central States entered into a settlement agreement, which provides that: (a) The Required Contribution Increase will not be applicable to the Debtors with respect to the first three years of all five-year Teamster CBAs negotiated in 2006 as long as each Teamster CBA requires them to pay the Central States Pension Fund at least 24 monthly payments of the Required Contribution Increases by no later than Dec. 31, 2011. (b) Upon completion of the Rate Increase Waiver Period, the contribution rate to be paid during the succeeding 12-month period covered by each affected CBA will be increased by 7%, and will again be increased a year after the completion of the Rate Increase Waiver Period by 7% over the prior year's contribution rate. (c) Upon the expiration of each Teamster CBA, if the Pension Fund seeks contribution rate increases from the Debtors greater than the rates applicable to comparable employer participants, the Debtors will not allege that the circumstances constitute a violation of the Employee Retirement Income Security Act of 1974. The Pension Fund agrees that if it seeks an increase, it will neither request nor receive a contribution rate increase in excess of the Benefit received by the Debtors as a result of not having paid the Required Contribution Increase. (d) The "Most Favored Nations Obligation" provides that the Debtors will increase their contributions to the Pension Fund under certain circumstances and subject to certain limitations in the event they agree to increase pension contributions to other non-Central States covered employees in an amount more than the rate agreed to with Central States. (e) The Debtors will not pay Central States with respect to the Most Favored Nations Obligation more than what the Debtors would have paid Central States if they have simply paid the Required Contribution Increase. (f) The Debtors will pay Central States $1,056,582 in full satisfaction of the Central States Claims. (g) The parties will release each other and other related parties from the Central States Claims; provided, however, that Central States will not release the Debtors from any future withdrawals, which may occur with respect to the restructuring of profit centers, or any other claims other than the Central States Claims. (h) The parties agree that no complete withdrawal has yet occurred, and the Debtors' plan of reorganization will specify that the Complete Withdrawal Claim is not impaired. If the Debtors' case is converted, the Pension Fund will have an allowed claim for a complete withdrawal to be calculated in accordance with ERISA. (i) The Settlement does not change the priority status of any claim or impairs any arguments of either party. A full-text copy of the Central States Settlement Agreement is available for free at http://ResearchArchives.com/t/s?148f "The savings of more than $1,300,000 in the first year alone, [pursuant to the Settlement], more than justify the proposed resolution of the Central States Claims, and the savings over the five-year terms of the long-term extensions of approximately $17,900,000 clearly far outweigh any benefits to be obtained by disputing the claims," Mr. Ivester asserts. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ISLE OF CAPRI: S&P Affirms 'BB-' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services affirmed ratings on Isle of Capri Casinos Inc., including its 'BB-' corporate credit rating. At the same time, Standard & Poor's removed the ratings from CreditWatch where they were placed on Oct. 4, 2006, with negative implications. The outlook is stable. The affirmation was after the rating agency's review of the company's growth plans after pressure by certain shareholders for management to pursue equity alternatives to support the company's future growth. Standard & Poor's made an assessment that these pressures will not result in a meaningful financial policy shift. "It is our expectation that existing planned debt-funded capital spending projects during the next two years will result in weaker debt leverage. However, upon completion of spending plans, we expect Isle's credit measures to improve and be maintained at levels consistent with current ratings," said Standard & Poor's credit analyst Peggy Hwan Hebard. While rating upside potential is limited in the intermediate term, if operating performance during the next two years is lower than expected causing leverage to peak higher than originally anticipated, downside pressure on ratings is possible. JOE VALENCIK: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Joe Valencik, Inc. 15546 Seedling Drive Houston, TX 77032 Bankruptcy Case No.: 06-36174 Type of Business: The Debtor is a traffic lane painting contractor and manufactures signs & advertising displays. Chapter 11 Petition Date: November 6, 2006 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtor's Counsel: Richard L. Fuqua, II, Esq. Fuqua & Keim 2777 Allen Parkway, Suite 480 Houston, TX 77019 Tel: (713) 960-0277 Fax: (713) 960-1064 Total Assets: $2,957,100 Total Debts: $3,258,711 The Debtor did not file a list of its 20 largest unsecured creditors. KARA HOMES: U.S. Trustee Wants Chapter 11 Trustee Appointed ----------------------------------------------------------- U.S. Trustee Kelly Beaudin Stapleton for Region 3 asks the U.S. Bankruptcy Court for the District of New Jersey to appoint a chapter 11 Trustee in Kara Homes Inc.'s cases to take control of the Company's operations from its founder and president Zuhdi Karagjozi, the Associated Press reports. Ms. Stapleton said in court papers that the lenders wouldn't advance any more funds to the Debtors as long as Mr. Karagjozi is in charge. According to the report, the Company owed about $230 million in guaranteed construction debt to 14 lenders. Kara disclosed it has contracts, worth $215 million, to build about 300 homes. However, the Company's bankruptcy has left hundreds of homeowners uncertain about the status of their homes and their deposits, which in some cases total more than $100,000. Kara can only obtain funds to complete the homes if an appointed trustee will take charge of the Company, Ms. Stapleton added. The Court will convene a hearing on Nov. 13, 2006, to consider the request. Headquartered in East Brunswick, New Jersey, Kara Homes, Inc., aka Kara Homes Development LLC, builds single-family homes, condominiums, town homes, and active-adult communities. The Company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. D. N.J. Case No. 06-19626). David L. Bruck, Esq., at Greenbaum, Rowe, Smith, et al., represents the Debtor. When the Debtor filed for protection from its creditors, it listed total assets of $350,179,841 and total debts of $296,840,591. On Oct. 9, 2006, nine affiliates filed separate chapter 11 petitions in the same Bankruptcy Court. On Oct. 10, 2006, 12 more affiliates filed chapter 11 petitions. Kara Homes' exclusive period to file a chapter 11 plan expires on Feb. 2, 2007. LANDMARK VIII: Moody's Rates $20MM Class E Secured Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service reported it assigned these ratings to notes issued by Landmark VIII CLO Ltd.: -- Aaa to $317,875,000 Million Class A-1 Senior Secured Floating Rate Notes Due 2020; -- Aa1 to $35,500,000 Million Class A-2 Senior Secured Floating Rate Notes Due 2020; -- Aa2 to $36,000,000 Million Class B Senior Secured Floating Rate Notes Due 2020; -- A2 to $34,000,000 Million Class C Secured Deferrable Floating Rate Notes Due 2020; -- Baa2 to $26,000,000 Million Class D Secured Deferrable Floating Rate Notes Due 2020 and -- Ba2 to $20,000,000 Million Class E Secured Deferrable Floating Rate Notes Due 2020. $8,000,000 Million in Composite Obligations Due 2020 were also issued and were rated Baa3. Each note's rating reflects the ultimate return to an investor of principal and interest, as provided by such note's governing documents, and is based primarily on the expected loss posed to investors relative to the promise of receiving the present value of such payments. Moody's rating assigned to the Composite Obligations only addresses the ultimate return of the Rated Balance and the Composite Obligation Stated Rate. Moody's also analyzed the risk of diminishment of cashflows from the underlying collateral portfolio -- which consists primarily of speculative-grade senior secured loans - due to defaults, the characteristics of these assets, and the safety of the transaction's structure. This cash-flow CLO is managed by Aladdin Capital Management LLC. LOGAN'S ROADHOUSE: Inks $ 486MM Purchase Deal with LRI Holdings --------------------------------------------------------------- CBRL Group, Inc. has executed a definitive agreement to sell its subsidiary, Logan's Roadhouse, Inc., to LRI Holdings, Inc., an affiliate of Bruckmann, Rosser, Sherrill & Co., Inc., and an affiliate of Canyon Capital Advisors LLC, and its associated private equity and debt investment firm, Los Angeles-based Black Canyon Capital LLC. Logan's currently operates 143 and franchises 25 restaurants in 20 states. Total consideration in the transaction is $486 million, subject to customary post-closing adjustments, if any, for working capital, indebtedness and capital expenditures. This amount includes the anticipated proceeds from a real estate sale- leaseback transaction to be undertaken by Logan's and closed simultaneously with the sale of Logan's to LRI. CBRL, BRS, Canyon and Black Canyon expect the transaction to close on or before November 30, 2006. CBRL has not yet made final determination of the use of proceeds but presently expects net proceeds after related taxes, fees and expenses to be used for share repurchases, debt reduction, and other general corporate purposes. Wachovia Securities acted as advisor to CBRL in the transactions. Headquartered in Lebanon, Tennessee, CBRL Group, Inc. presently operates 548 Cracker Barrel Old Country Store restaurants and gift shops located in 41 states and 143 company-operated and 25 franchised Logan's Roadhouse restaurants in 20 states. * * * As reported in the Troubled Company Reporter on Nov. 3, 2006, Moody's Investors Service assigned a first-time B2 corporate family rating to Logan's Roadhouse, Inc. along with Ba3 ratings for its proposed senior secured credit facilities. MANITOWOC COMPANY: Earns $50.4 Million in Quarter Ended Sept. 30 ---------------------------------------------------------------- The Manitowoc Company Inc. delivered its third quarter financial statements for the three months ended Sept. 30, 2006, to the Securities and Exchange Commission. For the third quarter ended Sept. 30, 2006, the Company earned $50.4 million of net income on $779 million of net revenues compared to $17.1 million of net income on $564.9 million of net revenues for the same period in 2005. At Sept. 30, 2006, the Company's outstanding debt consists of $67.6 million of borrowings under its revolving credit facility, 150 million of 7-1/8% senior notes due 2013, $113.8 million of 10-1/2% senior subordinated notes due 2012 and outstanding amounts under foreign overdraft facilities and capital leases. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?1487 Headquartered in Maniwotoc, Wisconsin, The Manitowoc Company, Inc. (NYSE: MTW) -- http://www.manitowoc.com/-- provides lifting equipment for the global construction industry, including lattice- boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. As a leading manufacturer of ice-cube machines, ice/beverage dispensers, and commercial refrigeration equipment, the company offers the broadest line of cold-focused equipment in the foodservice industry. In addition, the company is a leading provider of shipbuilding, ship repair, and conversion services for government, military, and commercial customers throughout the maritime industry. * * * Manitowoc's Senior Unsecured Notes and Senior Subordinated Notes carry Moody's Investors Service's B1 and B2 rating with a positive outlook. MARKWEST OPERATING: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the broad energy midstream sector, encompassing companies that engage in the extraction, treating, transmission, distribution, and logistics for crude oil, natural gas, and other hydrocarbon products, the rating agency revised its probability- of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations issued by MarkWest Operating Company LLC. Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Sec. Revolving Credit Facility due 2010 Ba3 Ba1 LGD 2 15% Sr. Sec. Term Loan due 2010 Ba3 Ba1 LGD 2 15% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). MAYCO PLASTICS: Court Okays AlixPartners LLC as Financial Advisor ----------------------------------------------------------------- The Honorable Phillip J. Shefferly of the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit authorized Mayco Plastics Inc. and Stonebridge Industries Inc. to employ AlixPartners LLC as their financial advisor, nunc pro tunc to Sept. 12, 2006. AlixPartners will: a. prepare and analyze the Debtors' current and projected liquidity position; b. prepare and analyze the Debtors' current results and financial projections; and c. analyze sale or wind down process and related progress. Anthony C. Flanagan, a managing director at AlixPartners LLC, disclosed that the Firm received a $50,000 prepetition retainer, which had a balance of $3,706. Mr. Flanagan will bill $450 per hour, and Steve Olmstead, also a managing director, will bill $450 per hour. The Firm's professionals bill: Designation Hourly Rate ----------- ----------- Managing Directors $450 Directors $380 Vice Presidents $330 Associates $260 Mr. Flanagan assured the Court that AlixPartners LLC holds no interest adverse to the Debtors and is disinterested pursuant to Section 101(14) of the Bankruptcy Code. Headquartered in Sterling Heights, Michigan Mayco Plastics Inc. -- http://www.mayco-mi.com/-- is an automotive supplier of injection molded plastics. Stonebridge Industries Inc., the majority shareholder and parent of Mayco Plastics, is an investment firm that acquires companies and helps them grow their business in order to increase shareholder value. Mayco and Stonebridge filed for chapter 11 protection on Sept. 12, 2006 (Bankr. E.D. Mich. Case Nos. 06-52727 & 06-52743). Stephen M. Gross, Esq., and Jeffrey S. Grasl, Esq., at McDonald Hopkins Co. LPA represent the Debtors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. MESABA AVIATION: Court Strips Unions of Right to Stage Strikes -------------------------------------------------------------- In a 40-page memorandum decision, the Honorable Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota issued a preliminary injunction in favor of Mesaba Aviation Inc. Specifically, Judge Kishel enjoined, pending entry of a final judgment in the adversary proceeding: * the Air Line Pilots Association, International, * the Association of Flight Attendants-CWA, AFL-CIO, and * the Aircraft Mechanics Fraternal Association, from calling, permitting, engaging in, instigating, encouraging, participating in, authorizing, or approving self-help of any kind, including but not limited to any strike, work stoppage, action that AFA names "Create Havoc Around Our System" or "CHAOS," sick-out, slow-down, or other concerted refusal to perform normal employment duties. According to Judge Kishel, the injunction will not apply to Greg Wertz, a former Mesaba employee, and Duane E. Woerth, upon the end of his term as ALPA President. Pursuant to Rule 7065 of the Federal Rules of Bankruptcy Procedure, Mesaba need not file a bond as a condition for the effectiveness of the preliminary injunction, Judge Kishel ruled. Judge Kishel also ruled that the U.S. National Mediation Board may intervene in the Debtor's dispute with the Association of Flight Attendants-CWA, AFL-CIO. NMB's expertise in mediation ensures that bargaining disputes rarely escalate into disruptions of passenger service and the transportation of commerce. The RLA, he continues, provides for the "prompt and orderly settlement" of labor-management disputes in the railroad industry and protects commerce and commercial carriers from the disruptions that those disputes may cause. Court's Argument The Court noted the main dispute as: "Does the Norris-LaGuardia Act, 29 U.S.C. [Section] 101 et seq., deprive this Court of jurisdiction to enjoin the Unions from striking; or, is this one of those uncommon cases where equitable relief will lie in a federal court, notwithstanding the NLGA's generalized proscription, to restrain a union from avoiding 'status quo' responsibilities under the Railway Labor Act?" More narrowly, Judge Kishel says, the latter question is whether the Unions will have a right under the RLA to exercise self-help, i.e., to strike, if the Debtor exercises its court-granted authority to reject their collective bargaining agreements, and then imposes terms of employment on the Unions' members that are less favorable than those fixed by the pre-petition agreements. The Court relied on the decision of the United States District Court for the Southern District of New York, In re Northwest Airlines Corp., _____ B.R. _____, 2006 WL 2642194 (S.D.N.Y. 2006), on appeal from the decision of the United States Bankruptcy Court for that district, In re Northwest Airlines Corp., 346 B.R. 333 (Bankr. S.D.N.Y. 2006). Judge Kishel notes the outcome on appeal in Northwest Airlines was in favor of the debtor-employer; the union in question -- the AFA -- was enjoined by the District Court from initiating its CHAOS procedure or otherwise exercising self-help in consequence of Northwest's rejection and imposition. According to Judge Kishel, the Unions are not entitled to strike because: (1) When the Debtor entered Chapter 11, Mesaba and AMFA clearly were still in active mediation through the offices of the NMB pursuant to Sections 5 and 6 of the RLA. AMFA has a continuing statutory duty under the RLA to participate in the NMB's process until a consensual resolution of AMFA's differences with the Debtor is reached or until the mediation process ends. (2) The Debtor and the AFA are also still very much engaged in the process of Sections 5 and 6 of the RLA. The NMB has not released the parties. As a result, the AFA has no more right to exercise self-help in the event of the Debtor's rejection and imposition than AMFA does. (3) The Debtor and ALPA are not currently engaged in a dispute resolution process under the RLA. However, upon post-rejection imposition by the Debtor, the duration clause under the 2004 ALPA collective bargaining agreement will be supplanted by that under the Debtor's terms, as authorized by the Court. The new duration clause would immediately open up ALPA's right to commence a dispute resolution process under Section 6 and 5, if it takes exception to the terms of imposition once they are effective. Thus, ALPA will have both the duty to make "every reasonable effort to make and maintain agreements" and an outlet to resolve its disputes with the Debtor over any aspect of the post-imposition terms of employment. Thus, ALPA will have no present right to strike under the RLA at or after rejection-and- imposition. "As evidenced by the failure to come to consensual agreements to date, the Unions still do not attach any legitimacy to the Debtor's picture of its -- and very much their -- situation. In the last instance, however, the Bankruptcy Court, as an adjudicative body for dispute resolution, must find facts on the evidence that the parties have given to the court, apply the law, and parse out the portions accordingly," Judge Kishel explains. Without predilection, and only after a very difficult and searching evaluation of what is "right," what is "legal," and how they have to intersect, the Court says it has performed its function in a dispute that has been maddeningly intractable to date. "The parties may do with the results what they may. This is an injunction issued by a federal court, enforceable as appropriate. There is still hope for this company, but turning that to reality is once again up to the Debtor and the Unions alike," Judge Kishel points out. A full-text copy of Judge Kishel's Memorandum Decision is available for free at: http://researcharchives.com/t/s?1482 The Unions had objected and asked Judge Kishel to deny, among others, the Debtor's request for a preliminary injunction against a strike following its rejection of the Unions' collective bargaining agreements. ALPA representative, James Jorissen, Esq., at Leonard, O'Brien, Spencer, Gale & Sayre, Ltd., in Minneapolis, Minnesota, said that an injunction would require the pilots, flight attendants and mechanics to: (i) work for years under terms proposed by the Debtor and approved by the Court but never agreed to by the employees; and (ii) work under a legal regime completely alien to American labor law, law, in which pay, benefits and other critical conditions of employment are set by decree. Mr. Jorissen argued that allowing the Debtor to impose on the workers terms different from those promised in their CBAs, while depriving the Unions the right to exercise self-help in response, would be to ignore any notion of a level playing field or of reciprocity. Rather than reducing the risk of strife, it would increase it, by yoking the Unions with terms they did not agree to but cannot avoid. Mr. Jorissen explained that reciprocal pressure creates incentives for bargaining, and that without the threat of union self-help, the employer has the power to impose its will and has little incentive to reach a deal. Furthermore, Mr. Jorissen pointed out that the Debtor seeks an injunction by relying almost exclusively on the decision and reasoning of Judge Marrero of the U.S District Court for the Southern District of New York in Northwest Airlines Corp.'s bankruptcy case. Mr. Jorissen contended that Judge Kishel should not reach the same conclusion as in Northwest's case since Judge Marrero's reasoning is profoundly flawed. Among other things, Mr. Jorissen asserted that the case before Judge Marrero, like the Debtor's case, concerned rejection of a CBA under Chapter 11 of the Bankruptcy Code -- a process entirely different from the Railway Labor Act "major" dispute procedures -- and one which is governed by Section 1113 of the Bankruptcy Code. Even if the Bankruptcy Court chooses not to reject Judge Marrero's decision in Northwest as erroneous, the Unions believed that Judge Kishel should nonetheless deny the injunction sought because: (1) In Northwest's case, the parties were involved in Section 6 of the RLA negotiations, and Judge Marrero hinged his decision on that fact. By contrast (a) the Debtor and ALPA are not in Section 6 negotiations, as ALPA's CBA does not become amendable until 2009, and (b) Section 6 negotiations between the Debtor and AFA have terminated by virtue of the Debtor's inaction for more than ten days in March 2006; (2) The Debtor is guilty of bad faith conduct, which deprives it of the equitable remedy of an injunction; and (3) The injunction sought by the Debtor is overbroad and would infringe on the employees' right to free speech and to quit. About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 27 and 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MESABA AVIATION: Unions Opt To Conduct Discovery on CBA Rejection ----------------------------------------------------------------- The Air Line Pilots Association, the Aircraft Mechanics Fraternal Association, and the Association of Flight Attendants-CWA, AFL- CIO ask the U.S. Bankruptcy Court for the District of Minnesota to re-open the record to permit them to conduct discovery on, and offer evidence related to, any and all elements relevant to the Section 1113 proceedings. The Unions assert that reopening the record to Mesaba Aviation, Inc.'s advantage would be inappropriate, as it would not accurately reflect the reality of the current situation and could not satisfy the dictates of the U.S. District Court for the District of Minnesota. The Unions argue that the Debtor has presented very limited evidence on the two issues remanded by the U.S. District Court for the District of Minnesota, and has made "new proposals" that are remarkably and substantially different from the proposals it had relied on in its previous efforts to reject its labor contracts. The Unions submit that they cannot meaningfully evaluate or respond to the Debtor's most recent proposals due to: (a) the lack of complete and reliable information from the Debtor regarding the new terms; (b) the inconsistencies in the Debtor's position; and (c) the Debtor's refusal to negotiate in good faith. Debtor May Walk Away from CBAs The Court finds that the Debtor has bargained in good faith on snap-backs, or automatic restorations of cuts in the future, The Associated Press reports. The Court also rejected a union argument that MAIR Holdings, Inc., would get an economic windfall through bankruptcy. Accordingly, the Honorable Gregory F. Kishel authorized the Debtor to: (i) reject its current CBAs with the Unions, effective as of Oct. 18, 2006, at 12:01 a.m., and (ii) impose modified terms of employment as to the members of each union, in accordance with the last proposals made. The terms of imposition will be subject to the amendment of the Debtor's proposals, and to the proviso read onto the record at the close of the hearing on Oct. 11, 2006, that would allow any party to initiate dispute resolution procedures under applicable statute, including Section 6 of the Railway Labor Act, by filing the appropriate notice at any time. "No portion of the rulings on the present matter shall affect any rights of ALPA, AFA, and AMFA to the allowance of a claim in this case consequent to the Debtor's rejection of their collective bargaining agreements, or the legal attributes of that claim," Judge Kishel clarifies. Prior to the ruling, Judge Kishel -- at the Debtor's behest -- reopened the record and received evidence and argument on the two issues on remand. The Unions' request to reopen record was denied. Judge Kishel directed the Debtor to timely respond to the Unions' Discovery Requests with respect to seven specified topics, including: -- the impact the inclusion of snap-backs in the union contracts would have on the Debtor's ability to reorganize; -- communications between the Debtor and Northwest Airlines, Inc.; -- the amended Section 1113 proposals sent by the Debtor to its labor unions on Sept. 21, 2006; and -- the basis for the Debtor's contention that it is entitled to impose new terms and conditions of employment on its union employees for a five and one-half or six year duration. Judge Kishel found the subject matter of the Unions' remaining Discovery Requests not relevant to the two narrow issues on remand. The Unions' Discovery Requests with respect to the communications between the Debtor and MAIR, regarding the treatment of MAIR's claim in the Debtor's Chapter 11 case, and any claims analysis performed by or on behalf of the Debtor, were deemed withdrawn. Judge Kishel also denied MAIR's request to quash a subpoena, to the extent of the subject matter to which the Debtor agreed to provide its own discovery responses to the Unions. The Court directed MAIR to timely respond to the Unions' discovery as to that subject matter, in accordance with its commitments. As to the remaining subject matter identified in the Unions' subpoena and as contemplated for their deposition of MAIR's designated witness, the Court held that the subpoena is quashed and MAIR's witness had no obligation to respond at deposition. * * * Judge Kishel had extended the effective date of the authorization to the Debtor to reject its current collective bargaining agreements with the Unions, and to impose modified terms of employment, to 12:01 a.m. on Oct. 26, 2006. Judge Kishel amended his Section 1113 ruling on the basis of the record made during a hearing on the Debtor's request for a preliminary injunction in Mesaba Aviation, Inc. v. Aircraft Mechanics Fraternal Association, et al, ADV 06-3428, and pursuant to his directive recited on the record at the end of that hearing. About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation, Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines. The Company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05-39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. (Mesaba Bankruptcy News, Issue No. 27 and 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) MGG MIDSTREAM: Moody's Assigns Loss-Given-Default Rating -------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the broad energy midstream sector, encompassing companies that engage in the extraction, treating, transmission, distribution, and logistics for crude oil, natural gas, and other hydrocarbon products, the rating agency affirmed its Ba1 corporate family rating on MGG Midstream Holdings, LP. In addition, the rating agency revised its Ba3 rating on the Company's Sr. Sec. Term Loan due 2010 to Ba3 and attached an LGD6 rating to these debts, suggesting holders will experience a 93% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). MGG Midstream Holdings LP indirectly owns 64.9 percent of the general partner of Magellan Midstream Partners LP, a transporter and distributor of petroleum products. MORGAN STANLEY: S&P Affirms Rating on Class N Certificate at 'B-' ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three classes of commercial mortgage pass-through certificates from Morgan Stanley Capital I Trust 2003-IQ6. Concurrently, ratings are affirmed on the remaining 17 classes from the same transaction. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the Oct. 16, 2006, remittance report, the collateral pool consisted of 175 loans with an aggregate trust balance of $959.3 million, compared with the same number of loans totaling $997.7 million at issuance. The master servicer, Wells Fargo Commercial Mortgage Servicing, reported primarily full-year 2005 financial information for 98% of the pool. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 1.99x, down from 2.64x at issuance. All of the loans in the pool are current. To date, the trust has not experienced any losses. The top 10 loans have an aggregate outstanding balance of $421.5 million (44%) and a weighted average DSC of 1.83x, up from 1.75x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans, and all of the properties were characterized as "good." Credit characteristics for five of the loans in the pool remain consistent with those of investment-grade obligations. These are the details of these loans: -- The largest exposure in the pool, the Mall at Tuttle Crossing loan, has a trust balance of $120 million. The loan is secured by 380,953 sq. ft. of a 1.1 million- sq.-ft. regional mall in Dublin, Ohio. For the six months ended June 30, 2006, the DSC was 2.12x. Standard & Poor's adjusted NCF is similar to its level at issuance. The Mills Corp., a Virginia-based REIT, is the manager of the property and is the sponsor for the loan. Mills has disclosed that it is being investigated by the SEC and plans to restate its earnings. In addition, Mills is considering various financial options, including a sale of the company. Standard & Poor's will continue to monitor the situation and evaluate the financial and operational effects, if any, on the performance of the trust collateral. -- The sixth-largest exposure in the pool, the Westshore Plaza loan, has a whole-loan balance of $95.5 million and a trust balance of $32.5 million. The loan is secured by 356,024 sq. ft. of a 1.06 million-sq.-ft. regional mall in Tampa, Florida. The property reported a year-end 2005 DSC of 2.27x. The sponsor of the loan and manager of the property is Glimcher Realty Trust. Standard & Poor's adjusted NCF is up 6% from its level at issuance. -- The seventh-largest exposure in the pool, the 3 Times Square loan, is encumbered by a $154.5 million class A-1 note and a $94.2 million class B note. The A note is divided into three pari passu pieces, $31.7 million of which serves as the trust collateral. The loan is secured by a leasehold interest in a 883,405-sq.-ft. office property in Manhattan. The property serves as the U.S. headquarters for Reuters Group PLC (A-/Stable/A-2). Reuters' lease extends until November 2021. Occupancy was 99% as of June 30, 2006. -- The ninth-largest exposure in the pool, the 250 West 19th Street loan, has trust balance of $20.2 million (2%). The loan is secured by a fee interest in a 200-unit multifamily property in Manhattan. Occupancy was 100% as of March 17, 2006. Standard & Poor's adjusted NCF is similar to its level at issuance. -- The 11th-largest exposure in the pool, the Country Club loan, has a trust balance of $19.5 million. The loan is secured by a 392,139-sq.-ft. regional mall in Cumberland, Maryland. The property reported a year-end 2005 DSC of 2.07x. Standard & Poor's adjusted NCF is similar to its level at issuance. Wells Fargo reported a watchlist of 20 loans. The Charleston Tower Office Building is the largest loan on the watchlist with an outstanding balance of $12.5 million and is secured by an 88,300- sq.-ft. office property in Las Vegas, Nevada. This loan is on the watchlist because the collateral property reported a year-end 2005 DSC that was below 1.1x and because the largest tenant's lease expires this month. Standard & Poor's stressed the loans on the watchlist and other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised Morgan Stanley Capital I Trust 2003-IQ6 Commercial Mortgage Pass-Through Certificates Series 2003-IQ6 Rating Class To From Credit enhancement (%) ----- -- ---- ---------------------- B AA+ AA 10.27 C A+ A 7.15 D A A- 5.98 Ratings Affirmed Morgan Stanley Capital I Trust 2003-IQ6 Commercial Mortgage Pass-Through Certificates Series 2003-IQ6 Class Rating Credit enhancement (%) ----- ------ ---------------------- A-1 AAA 13.00 A-2 AAA 13.00 A-3 AAA 13.00 A-4 AAA 13.00 A-1A AAA 13.00 E BBB+ 5.20 F BBB 4.03 G BBB- 3.25 H BB+ 2.60 J BB 2.08 K BB- 1.82 L B+ 1.56 M B 1.30 N B- 1.04 X-1 AAA N/A X-2 AAA N/A X-Y AAA N/A N/A-Not applicable. MXENERGY HOLDINGS: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------------ In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the broad energy midstream sector, encompassing companies that engage in the extraction, treating, transmission, distribution, and logistics for crude oil, natural gas, and other hydrocarbon products, the rating agency affirmed its B3 corporate family rating on MxEnergy Holdings Inc. In addition, the rating agency affirmed its Caa1 rating on the Company's Sr. Unsecured Floating Rate Global Notes due 2011 and attached an LGD5 rating to these notes, suggesting noteholders will experience a 77% loss in the event of a default. Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). MxEnergy Holdings Inc. -- http://www.mxholdings.com/-- is a retail natural gas supplier serving more than 500,000 customers in 30 utility territories in the United States and Canada. Founded in 1999 to provide natural gas and electricity to consumers in deregulated energy markets, Mxenergy helps residential customers and business owners control their energy bills by providing both fixed and variable rate plans. NEW JERSEY: Weak Financial Results Cue S&P's Junked Bond Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on New Jersey Health Care Facilities Finance Authority's series 2003 and 1998 bonds, issued for Pascack Valley Hospital, to 'CCC' from 'B+', reflecting a precipitous deterioration in financial results and liquidity in the year-to-date period after years of weak performance. The outlook is developing, reflecting Pascack's recent negotiations to merge with Hackensack University Medical Center, the largest health care provider in the state. "We believe the acquisition could provide significant upside potential to bondholders, as Hackensack could potentially assume Pascack's debt," said Standard & Poor's credit analyst Anita Varghese. "However, if the negotiations fail to be successful, Pascack's financial viability as a stand-alone hospital is a serious concern in light of year-to-date results and would leave the hospital vulnerable to a payment default." Pascack recorded a $13.7 million operating loss, or negative 15.6% margin, in the unaudited eight-month period ended August 2006. As a result, unrestricted cash reserves plummeted to a thin $5.5 million, or 14 days' cash on hand. Pascack Valley Hospital is located in Westwood, N.J., an affluent suburb of Bergen County. The 291-bed hospital is the smallest of five acute care providers in a highly competitive county. Hackensack University Medical Center is a 871-bed teaching and research hospital affiliated with The University of Medicine and Dentistry of New Jersey-New Jersey Medical School. The rating downgrade affects approximately $80 million in rated debt. N-45O FIRST: Fitch Lifts Rating on CDN$9.1MM Certs to B+ from B --------------------------------------------------------------- Fitch upgrades N-45o First CMBS Issuer Corporation Series 2003-1, commercial mortgage-backed bonds: -- C$16.8 million class C to 'AAA' from 'A+'; -- C$19.6 million class D to 'A' from 'BBB+'; -- C$14 million class E to 'BBB-' from 'BB'; -- C$9.1 million class F to 'B+' from 'B'. These classes are affirmed: -- C$110.3 million class A-1 at 'AAA'; -- C$278.6 million class A-2 at 'AAA'; -- Interest only class IO at 'AAA'; -- C$8.4 million class B at 'AAA'. Fitch does not rate the $13.3 million class G certificates. The upgrades are the result of increased credit enhancement due to loan payoffs and amortization, as well as the continued strong performance of the pool. As of the October 2006 distribution date, the pool has paid down 16%, to $470 million from $559.7 million at issuance. The properties are located in Canada, with concentrations in Quebec (58.9%) and Ontario (35.8%) and consist mostly of office (56.2%) and retail (25.1%) properties. To date, there have been no losses and no delinquent or specially serviced loans. Using the most recent financial information provided by the servicer, the Fitch stressed weighted average debt service coverage ratio for the remaining 58 loans was 1.80 times (x) compared to 1.69x at issuance for the same loans. NISKA GAS (US): Moody's Assigns Loss-Given-Default Rating --------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the broad energy midstream sector, encompassing companies that engage in the extraction, treating, transmission, distribution, and logistics for crude oil, natural gas, and other hydrocarbon products, the rating agency held its probability-of- default ratings and assigned loss-given-default ratings on these loans and bond debt obligations issued by Niska Gas Storage US, LLC: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- Sr. Sec. Term Loan due 2013 Ba3 Ba3 LGD4 50% Sr. Sec. Revolving Credit Facility due 2011 Ba3 Ba3 LGD4 50% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Niska Gas Storage's -- http://www.niskags.com/-- natural gas storage business is located in key North American natural gas producing and consuming regions and is connected to multiple gas transmission pipelines. Niska and its subsidiaries own and operate approximately 140 billion cubic feet (Bcf) of working gas capacity at three facilities: Suffield - 85 Bcf in Alberta; Countess - 40 Bcf in Alberta; and Salt Plains - 15 Bcf in Oklahoma. The Suffield and Countess gas storage facilities conduct business under the name AECO Hub. NORTHWEST AIRLINES: Court OKs Retrofitting 10 Boeing 757 Aircrafts ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York gave Northwest Airlines Corp. and its debtor-affiliates permission to retrofit 10 aircrafts they have selected. The Debtors have identified a number of Transatlantic routes that they may profitably serve with 10 Boeing 757-200 aircrafts. However, the available 757-200s in the Debtors' fleet must be retrofitted to serve the overseas routes in order to meet regulatory, operational, and other requirements, Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, related. The cost to perform the upgrades is nearly $6,000,000 per Aircraft, Mr. Ellenberg said. The 757-200 aircraft identified by the Debtors to be the best candidates for the retrofit are: (a) aircraft bearing Tail Nos. N544US, N545US, N546US, N547US, N548US, and N549US, which they acquired pursuant to the Court-approved restructuring of the 2000-1 EETC transaction; and (b) aircraft bearing Tail Nos. N535US, N536US, N537US, N538US, which they currently lease under the 1996-1 EETC transaction, for which a Court-approved restructuring term sheet provides for entry into new leases at reduced rates. Boeing, or its subsidiary, will provide certification for certain upgrades, and the Debtors are in the process of selecting vendors for other major components, Mr. Ellenberg informed the Court. None of the vendors will be insiders or affiliates of the Debtors. Mr. Ellenberg said the Debtors have extensively analyzed the economics of operating the selected routes and investing in the retrofit of the Aircraft, and have determined that the proposal is anticipated to generate significant returns for the estates. The Debtors said the economics are favorable even if the leased Aircraft are returned with the upgrades at the end of the lease term. The upgrades will increase the value of the Aircraft and may be performed in compliance with the leases. If other 757-200 aircraft in the Debtors' fleet become available and may be retrofitted more advantageously, the Debtors may retrofit the aircraft in place of some of the Aircraft listed, Mr. Ellenberg said. Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NORTHWEST AIRLINES: Tennessee Gov. Supports Proposed China Route ---------------------------------------------------------------- Northwest Airlines Corp. said that the governor of Tennessee has added his support in the China route case before the U.S. Department of Transportation. The airline is seeking government approval to provide daily, nonstop service between its WorldGateway at Detroit hub and Shanghai, China. "We would like to thank Governor Bredesen of Tennessee for his support of Northwest's application for additional passenger service frequencies between the United States and China," said Andrea Fischer Newman, NWA's senior vice president of government affairs. Governor Phil Bredesen's letter stated the Detroit to Shanghai service would provide convenient connecting service to China from four major cities in Tennessee, and will help stimulate trade and travel between China and the Mid-south region. Northwest operates a total of 20 roundtrip flights daily between four Tennessee airports in Memphis, Nashville, Knoxville, and Bristol/Johnson City/Kingsport, and the airline's WorldGateway at Detroit international hub. Governor Bredesen joins the governors of Michigan and Minnesota, along with the bipartisan coalition of 17 legislators in the U.S. Senate and U.S. House of Representatives, in supporting Northwest's application. Northwest proposes to start nonstop Detroit to Shanghai service on or about March 25, 2007, using its Boeing 747-400 aircraft with 65 seats in World Business Class and 338 seats in coach class. According to Northwest's Web site, more than 168,000 individuals signed letters and petitions supporting its proposal. Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NORTHWEST AIRLINES: Wants Stay Enforced Against RI Commission ------------------------------------------------------------- Northwest Airlines Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to enforce the automatic stay against the Rhode Island Commission for Human Rights, and Patricia A. Wilson. According to Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, the Commission and Ms. Wilson violated the automatic stay extant in the Debtors' Chapter 11 cases by proceeding with an action on Ms. Wilson's behalf to recover monetary damages for alleged disability discrimination in connection with Ms. Wilson's 2003 termination from Northwest Airlines. Ms. Wilson filed a complaint in December 2003. In March 2004, Northwest filed with the Commission a request to dismiss the Rhode Island Action on grounds that the Commission lacked subject matter jurisdiction to decide the matter because it is preempted by the Railway Labor Act, or alternatively, for dismissal on the merits, Mr. Ellenberg relates. The Commission issued a complaint against the Debtors in December 2005. In June 2006, the Commission issued a decision denying Northwest's request to dismiss the Rhode Island Action. The Commission has scheduled a hearing on the merits of Ms. Wilson's claim to be held in Rhode Island on May 8, 2007. Though the Debtors have attempted on numerous occasions to advise them that the Debtors are entitled to the protections of the automatic stay, Mr. Ellenberg says, Ms. Wilson and the Commission have asserted that the automatic stay does not apply to them. Mr. Ellenberg asserts that contrary to the Commission's position, the Rhode Island Action does not fit within the narrow police power exception to the automatic stay set forth in Section 363(d)(4) of the Bankruptcy Code. In applying the limited exception to permit a government unit to exercise its police power outside of the Bankruptcy Court, courts examine whether the action primarily advances the government's pecuniary interest and whether the action has an overriding public purpose, Mr. Ellenberg notes. Mr. Ellenberg points out that Section 362 of the Bankruptcy Code prohibits the commencement or continuation of judicial proceedings that could have been commenced prepetition. He also notes that employee discrimination complaints similar to the Rhode Island Action have been stayed in the Debtors' Chapter 11 cases. Because its primary purpose is apparently to recover money damages for alleged prepetition conduct by the Debtors, and because the complaint seeks to adjudicate private rights, the Rhode Island Action is in violation of the automatic stay and is therefore void and without effect, Mr. Ellenberg contends. RI Commission Objects The Rhode Island Commission for Human Rights contends that Section 362(b)(4) of the Bankruptcy Code provides an exception to the automatic stay under which it is proceeding. Francis A. Gaschen, Esq., in Providence, Rhode Island, asserts that the automatic stay does not apply to exercises of the Commission's police powers. The Commission states that if the Court finds that the automatic stay did encompass the exercise of its police powers, the stay should be lifted to allow it to conclude its investigation. According to Mr. Gaschen, the primary purpose of the Commission's investigation into the allegations of the charge is not to recover money damages for complainant Patricia A. Wilson, but to determine if there is probable cause to believe the allegations of the charge of discrimination. If no probable cause is found, the matter will be dismissed in its entirety, Mr. Gaschen points out. He also assures the Court that allowing the Commission to proceed would not interfere with the Debtors' bankruptcy proceeding. The Commission maintains that judicial economy would be best served by lifting the stay, and that it is ready to continue its investigation and only waits for the submission of a few documents requested from the Debtors' corporate counsel. Once those documents are received, Mr. Gaschen says, scant time is required for the investigator to conclude her work and for a determination to issue. "No harm would be created to the Debtor should the investigation be allowed to continue. Clearly, there could be harm to the public should the charge not be investigated," Mr. Gaschen concludes. Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. (Northwest Airlines Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) NORTHWEST AIRLINES: Inks Contract Agreement with AMFA to End Row ---------------------------------------------------------------- Northwest Airlines Corp. reached a ratified contract agreement with the Aircraft Mechanics Fraternal Association to end the labor dispute involving the airline's technicians. The agreement was approved by 72% of AMFA members who voted. "We are pleased to have reached a contract agreement with AMFA technicians," said Mike Becker, senior vice president of human resources and labor relations. The agreement maintains the necessary $203 million in annual labor costs savings from AMFA-represented employees as part of the airline's overall labor cost savings requirement. In addition to AMFA technicians, Northwest has reached agreements on permanent wage and benefit reduction agreements with the Air Line Pilots Association, the International Association of Machinists and Aerospace Workers, Aircraft Technical Support Association, the Transport Workers Union of America, and the Northwest Airlines Meteorologists Association. Two rounds of salaried and management employee pay and benefit cuts have also been instituted and the needed flight attendant labor cost savings have been implemented, which allowed Northwest to meet its goal of achieving $1.4 billion in annual labor savings. Mr. Becker continued, "We remain in active contract discussions with our flight attendants, represented by the Association of Flight Attendants. We are hopeful of reaching a consensual agreement with the AFA in the near future." According to Bloomberg News, Northwest issued a statement that 75 pilot positions must be filled before the end of the year and 150 more in 2007. The Northwest chapter of the Air Line Pilots Association disclosed that all 700 pilots will get a chance to return by the end of 2007 since some of them have rejected Northwest's offer so far. Since beginning its restructuring process in September 2005, Northwest has been making steady progress on its plan to realize $2.5 billion in annual business improvements in order to return the company to profitability on a sustained basis. The restructuring plan is focused on three goals: * resizing and optimization of the airline's fleet to better serve Northwest's markets; * realizing competitive labor and non-labor costs; and * restructuring and recapitalization of the airline's balance sheet. Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. NUTRAQUEST INC: Court Approves Plan of Reorganization ----------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey approved Nutraquest, Inc.'s Plan of Reorganization to emerge from bankruptcy, three years after it filed for protection from lawsuits related to its ephedra-based products, the Star-Ledger reports. Greg Saitz, Star-Ledger staff writer, says the Plan class for owner Robert Chiney, Jr., and others to pay as much as $55 million to settle legal actions, although the actual amount paid is expected to be less. Injured consumers or their families will receive $34.4 million, with the Debtor contributing no more than $4.35 million and Mr. Chiney and related companies chipping in $11.1 million. Reports show that while the Court approved the Debtor's Plan, it won't become effective until a settlement between the Debtor and the Federal Trade Commission staff is confirmed by the agency's commissioners. Overview of the Plan Under the Plan, Administrative Expense Claims and Priority Tax Claims will be paid in full. Holders of General Unsecured Claims will receive their pro rata share of the $50,000 fund. Pursuant to the Ephedra PI Settlement Agreement, holders of Ephedra Personal Injury Claims will be paid in full through: * payment of 90% of their claims in cash on the Effective Date, and * the balance, consisting of a portion of Phoenix Laboratories, Inc.'s share of the funding obligation, to be paid over an 18-month period pursuant to a secured, interest-bearing Note. On the Effective Date, the Park Class Claim and all Individual Park Class Member Claims will be automatically, and without further act or deed, transferred to, vested in and assumed by the Park Claims Resolution Facility, and the Park Settlement Administrator shall have the sole authority to determine the Allowed Amounts of the Claims. Distributions to the Park Class Representative and the holders of the Individual Park Class Member Claims are limited to amounts allowed and paid from the Park Claims Resolution Facility. On the Effective Date, all Individual Markowitz Class Member Claims based upon retail purchase of Xenadrine(R) RFA-1 will be automatically, and without further act or deed, transferred to, vested in and assumed by the Markowitz Xenadrine(R) RFA-1 Claims Resolution Facility, and the Markowitz Settlement Administrator shall have the sole authority to determine the Allowed Amounts of such Claims. All Individual Markowitz Class Member Claims based upon retail purchase of Xenadrine(R) EFX will also be automatically, and without further act or deed, transferred to, vested in and assumed by the EFX Consumer Redress Fund. The Federal Trade Commission, or its designee, shall have the sole authority to determine the Allowed Amounts of the Claims. Mr. Chinery will retain his interests. Headquartered in Manasquan, New Jersey, Nutraquest, Inc., is the marketer of the ephedra-based weight loss supplement, Xenadrine RFA-1. The Company filed for chapter 11 protection on October 16, 2003 (Bankr. N.J. Case No. 03-44147). Andrea Dobin, Esq., and Simon Kimmelman, Esq., at Sterns & Weinroth, P.C. represent the Debtor in its restructuring efforts. Natalie D. Ramsey, Esq., at Montgomery, McCracken, Walker & Rhoads LLP represents the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of $50 million to $100 million. OMNITECH CONSULTANT: Files for Creditor Protection under BIA ------------------------------------------------------------ Omnitech Consultant Group Inc. and its subsidiary Groupe Isac Inc. filed a notice of intention to make a proposal to creditors in accordance with the provisions of the Bankruptcy and Insolvency Act. Although it was not initially planned for Isac to file such a notice, it became difficult for the company to carry on its normal business activities after Omnitech, its parent company, filed a notice of intention because of pressure from some of its suppliers. The Corporation is confident that such a proposition will facilitate its reorganization and return to a long-term viable financial situation while continuing normal business operation. The firm PricewaterhouseCoopers inc. has been retained as trustee. In addition to its legal responsibilities, the firm will assist Omnitech's management team in the development of a proposition to its creditors that will be subject to vote at a meeting, which will be held at a date yet to be determined. The schedule of this process will essentially be dictated by the Corporation's progress in refinancing and negotiating with its financial partners. In the meantime, Omnitech and Isac will benefit from a complete stay with regards to debt payments and to any creditor proceeding. The Corporation will then be able to dedicate its resources towards operational growth, refinancing and the development of a plan to satisfy its creditors while preserving shareholders equity. In order to be accepted the proposition will have to obtain the approval of at least 66% of the total value of the Corporation debt and 50% plus one of the number of creditors allowed to vote at the creditors assembly. "[The Company's] highly leveraged balance sheet is a drain on its profitability and compromises its future development," declared Philippe Collard, Chairman and Chief Executive Officer of Omnitech. "By going ahead with this proposition to creditors, the Corporation will continue its reorganization process in order to pursue its operations in a profitable manner. "Following our initial evaluation, it did not seem necessary to include Isac in GCO's proposition proceedings. However, circumstances have evolved in such a way that it became more prudent to ensure that Isac benefits from the same protection granted by the Act than the other subsidiaries." About Omnitech Consultant Group Inc. Based in Qubec City, Quebec, Omnitech Consultant Group Inc. (TSX VENTURE: GCO) offers solutions as a one-stop-shop in engineering, information technology and systems maintenance. GCO integrates new technologies or optimizes existing systems by applying cutting-edge expertise currently used in the best practices. OMNOVA SOLUTIONS: Buyout Cues Moody's to Affirm B2 Corp. Rating --------------------------------------------------------------- Moody's Investors Service affirmed Omnova Solutions Inc.'s corporate family rating at B2 and moved the company's rating outlook to positive. This rating is after the recent sale of the firm's building products business. Current ratings: * Omnova Solutions Inc. -- Corporate family rating at B2 -- $165mm 11.25% Sr. Sec. Notes due 2010 at B3, LGD4, 64% The change to a positive outlook reflects Moody's expectation that the firm will continue to improve its credit metrics, achieve top line growth and benefit from moderating prices for its key raw materials and improving EBITDA margins. With the divestiture of its buildings products business, the firm will be able to concentrate on growth opportunities for its remaining two businesses, which enjoy strong market positions in their niche markets. Omnova sold the building products business for a cash value of approximately $40 million and has targeted the proceeds for reduction of outstanding debt under the firm's revolving credit facility and the outstanding notes due 2010, once the issue becomes callable in May 2007, and to fund growth in the remaining businesses. The business sold represented 14% of 2005 sales, but only 3% of 2005 operating profit. The outlook and ratings reflect the firm's debt reduction over the past three years, the better financial profile of the remaining businesses and improvement in credit metrics in 2005 and 2006. Prior to the assets sale, Omnova had been successful in reducing long-term debt by approximately $27 million over the past three years. After repayment of revolving credit facility borrowings with the building products divestiture proceeds, Omnova should have improved liquidity with no outstanding borrowings under the facility other than letters of credit. In the past year, Omnova has improved its operating margin through reductions in SG&A expenses that have helped offset the negative impact of increased manufacturing costs. Despite improvement in Omnova's credit metrics, it still has suffered some deterioration in gross margins and is impacted by volatile raw material costs and is subject to cyclical markets. Omnova's ratings would likely be moved up if industry conditions were supportive of an upgrade and Omnova was able to sustain recent margins, reduced debt, made progress in managing working capital, and generated free cash flow greater than $20 million per year. Omnova manufactures decorative and functional surfaces, emulsion polymers and specialty chemicals. The company operates in two business segments, Decorative Products, which makes commercial wallcoverings, coated fabrics and decorative laminates, and Performance Chemicals, which offerings include binders, coatings and adhesives for the paper and carpet industries. Headquartered in Fairlawn, Ohio, OMNOVA was formed when it was spun-off from GenCorp in 1999. Revenues, excluding the divested building products business, were $698 million for the LTM ended August 31, 2006. OVERSEAS SHIPHOLDING: Earns $90.8 Million in 2006 Third Quarter --------------------------------------------------------------- Overseas Shipholding Group Inc. reported operating income of $94 million from consolidated revenue of $265 million for the quarter ended Sept. 30, 2006. For the three months ended Sept. 30, 2005, the Company reported operating income of $84 million, from consolidated revenue of $203 million. For the quarter ended Sept. 30, 2006, Time Charter Equivalent revenues increased by 31% to $254.8 million from $194.8 million in the third quarter of 2005. The Company disclosed that the TCE revenue performance was the result of strong rates across its VLCC, Aframax, Panamax and Handysize Product Carrier fleets. EBITDA for the third quarter was $135.6 million compared with $135.4 million in the third quarter of 2005. Net income for the quarter ended Sept. 30, 2006 was $90.8 million, compared with $72.1 million, for the third quarter of 2005. The current quarter benefited from gains on vessel sales and sale of securities of $15.8 million, compared with $22.4 million, in the same period a year ago. In addition, the current quarter reflects the impact of a $27 million increase in the reserve related to the U.S. Department of Justice investigation. For the first nine months ended Sept. 30, 2006, the Company reported a 9% increase in TCE revenues to $751.2 million from $690.5 million in the comparable period of 2005. EBITDA for the first nine months of 2006 decreased to $424.8 million from $535.1 million in the first nine months of 2005 and including the increase in the reserve. Net income for the nine month period ended Sept. 30, 2006 was $279.4 million, compared with $351.1 million in the comparable 2005 period. The first nine months of 2006 benefited from gains on vessel sales and sale of securities of $21.1 million, compared with $60.7 million in the comparable period of 2005. Operating income was $297 million from consolidated revenue of $787 million for the nine months ended Sept. 30, 2006, versus operating income of $389 million from consolidated revenue of $716 million for the comparable period in 2005. Morten Arntzen, president and chief executive officer, stated, "Third quarter TCE revenues were largely the result of a strong spot rate environment in both the crude and product transportation sectors and additions to our product carrier fleet. The increase in operating income before gains and special charges reflects the benefits from OSG's diverse fleet and chartering strategy." Mr. Arntzen continued, "Our objective to achieve a market leadership position in the U.S. Flag sector will be realized upon the completion of the Maritrans acquisition. This is another example of our ongoing efforts to transform OSG, which began nearly three years ago. Our shareholders will continue to benefit from OSG's leadership position, fleet diversification and spot/time-charter mix that will ensure competitive returns not only in a strong rate environment but throughout all market cycles." TCE revenues in the third quarter of 2006 for the International Crude Tanker segment were $175.9 million, an increase of 42% quarter-over-quarter, which were partially offset by a decrease in revenue days for VLCCs as a result of increased drydocking and repair days and the sale of three older Aframax tankers. TCE revenues for the International Product Carriers segment increased 25% to $55 million from $44.2 million in the prior year. Its U.S. segment TCE revenues decreased 7% quarter-over-quarter to $19 million from $20.4 million in the same period a year ago. Income from vessel operations was $88.9 million in the third quarter of 2006, compared with $82.9 million in the same period a year earlier. For the quarter ended Sept. 30, 2006, total ship operating expenses increased $56.6 million to $176.9 million from $120.3 million in the corresponding quarter in 2005, of which $27 million relates to the reserve taken for the U.S. Department of Justice investigation. Financial Profile At Sept. 30, 2006, the Company's shareholders' equity increased by $242.1 million to $2.1 billion and liquidity, including undrawn bank facilities, increased to more than $2.27 billion. Total long-term debt as of Sept. 30, 2006 was $799.4 million compared with $965.7 million at Dec. 31, 2005. Liquidity adjusted debt to capital was 9.7% as of Sept. 30, 2006, an improvement from 24.5% as of Dec. 31, 2005. The Company further disclosed that, in 2004 and the first quarter of 2005, it made provisions totaling $10 million for anticipated fines and contributions to environmental protection programs associated with a possible settlement of the U.S. Department of Justice investigation. In the third quarter of 2006, the Company, based on discussions with the U.S. Department of Justice that resumed in August 2006, made an additional $27 million provision. Overseas Shipholding Group Inc. (NYSE:OSG) -- http://www.osg.com/ -- is a publicly traded tanker company, with a combined owned, operated and newbuild fleet of 118 vessels aggregating 12.9 million dwt and 865,000 cbm. The Company has offices in Athens, London, Manila, Montreal, Newcastle, New York City and Singapore. * * * As reported in the Troubled Company Reporter on Aug. 9, 2006, Moody's Investors Service affirmed the debt ratings of Overseas Shipholding Group, Inc.'s Senior Unsecured at Ba1. The outlook has been changed to stable from negative. PASCACK VALLEY: Bottom-Line Losses Cues Fitch to Cut Rating to B- ----------------------------------------------------------------- Fitch Ratings has downgraded to 'B-' from 'BB' these two New Jersey Health Care Facilities Financing Authority (Pascack Valley Hospital Association Issue) revenue bond series: -- $49.4 million series 2003; -- $32.5 million series 1998. The downgrade to 'B-' is due to Pascack Valley Hospital's (Pascack) large recent operating and bottom-line losses, which may result in a covenant violation relating to debt service coverage in 2006, leading to a weakened financial profile. Pascack's liquidity position has eroded significantly due to ongoing operating losses. Through nine months of fiscal 2006, maximum annual debt service coverage by earnings before interest, taxes, depreciation and amortization is negative 1.1 times (x), operating margin is negative 15.4%, excess margin is negative 14.7%, EBITDA margin is negative 5.7%, and days cash on hand is 12.1 days. Management indicates that year-to-date performance in 2006 has been largely impacted by a confluence of one-time events relating to salaries, professional fees, purchased services (nursing agency), and interest expense. Despite Pascack's weak financial profile, it has not missed any debt service payments to-date. Pascack maintains a fully funded debt service reserve fund in the amount of approximately $8 million. Pascack's bonds are secured with a revenue pledge and a mortgage. The bonds have been placed on Rating Watch Evolving, which indicates Pascack's rating could be raised, lowered, or maintained. The key rationale for the Rating Watch Evolving is the potentially significant impact of a proposed acquisition of Pascack by Hackensack University Medical Center (Hackensack; rated 'A-' by Fitch), for which due diligence is now underway and is scheduled to be complete by mid-January 2007 per an executed memorandum of understanding dated as of Oct. 27. Pascack and Hackensack have not provided details about the treatment of Pascack's existing debt, if an acquisition is consummated. Fitch will review Pascack's rating upon the establishment of a formal acquisition plan or if negotiations between Pascack and Hackensack discontinue. Located in Westwood, NJ, approximately ten miles from Hackensack, Pascack is a 291-licensed bed general acute-care facility. In 2005, total operating revenues for Pascack were $134 million. Pascack covenants to disclose audited annual and unaudited quarterly financial information and utilization statistics to the Nationally Recognized Municipal Securities Information Repositories, which Fitch views positively. Furthermore, Pascack has to-date provided thorough and timely disclosure, including quarterly disclosure of income statements, balance sheets, statements of cash flows and utilization statistics to bondholders through the NRMSIRs. Pascack has no interest rate swaps outstanding. PER-SE TECH: McKesson Buyout Cues S&P to Assign 'B+' Corp. Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B+' corporate credit rating, on Alpharetta, Ga.--based Per-Se Technologies Inc. on CreditWatch with positive implications. "The rating actions follow the announcement that Per-Se Technologies has reached a definitive agreement to be acquired by major competitor McKesson Corp. (BBB/Positive/A-2)," said Standard & Poor's credit analyst Stephanie Crane. McKesson plans to pay $28 per share for the outstanding shares, a 14.5% premium over its stock price. Including the assumption of Per-Se Technology debt outstanding, which was about $510 million as of September 2006, the acquisition amounts to about $1.8 billion. The acquisition is expected to close in the first quarter of 2007, subject to customary conditions, including regulatory review. ValueAct Capital, a holder of about 15.5% of Per-Se Technology's voting common stock, has executed a voting agreement to vote their shares in favor of the transaction. Per-Se Technologies' provides revenue management and bill processing services and software to about 100,000 physicians in small practices, 17,000 hospital affiliated physicians, 3000 hospitals, and 50,000, retail pharmacies. By merging with Per-Se Technologies, McKesson will expand its scale of operations, and will provide its client base with more enhanced services and products and generate further growth opportunities. As of Sept. 30, 2006, Per-Se Technologies reported revenue of $148.9 million, and adjusted EBITDA of $36 million. Standard & Poor's will monitor the progress of the acquisition of Per-Se Technologies by McKesson Corp. The rating agency will raise our ratings on Per-Se's outstanding debt to 'BBB' upon completion of the transaction. PIERRE FOODS: Zartic Deal Prompts S&P to Hold 'B+' Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' bank loan rating, the same as the corporate credit rating, and '2' recovery rating, to processed food manufacturer and marketer Pierre Foods Inc.'s $100 million add-on to its senior secured term loan, indicating expectation for substantial recovery of principal in the event of a payment default. The $100 million will increase the size of the company's outstanding aggregate $131 million term loan B. At the same time, Standard & Poor's affirmed the existing ratings on Pierre Foods, including the 'B+' corporate credit rating. The rating outlook is negative. The rating actions was after the company's disclosure that it has entered into an agreement to acquire substantially all of the assets of Zartic Inc., a manufacturer and marketer of packaged beef, poultry, pork, and veal products, and its affiliated distribution company, Zar Tan Inc., for an aggregate preliminary purchase price of $94 million plus the assumption of certain liabilities, subject to certain post-closing adjustments. The add-on term loan will be used to finance the proposed transaction. Pro forma for the transaction, we expect the company to have about $369.7 million in total debt outstanding, excluding operating- lease obligations. "The ratings reflect Pierre Foods' modest scale of operations, highly competitive operating environment, and leveraged capital structure," said Standard & Poor's credit analyst Mark Salierno. "These factors are partially mitigated by the company's leading position in the niche markets for formed, precooked and ready-to- eat meat products and by the company's ability to manage raw- material costs through market-related pricing contracts." PIERRE FOODS: Zartic Deal Cues Moody's to Affirm B1 Corp. Rating ---------------------------------------------------------------- Moody's Investors Service affirmed the B1 corporate family rating of Pierre Foods, Inc. and concurrently placed all instrument ratings on review for possible downgrade. The actions were triggered by Pierre's announcement that it has agreed to acquire substantially all of the assets of Zartic, Inc. and its affiliated distribution company, Zar Tran, Inc. for $94 million plus the assumption of certain liabilities, subject to post-closing adjustments. The transaction is expected to be financed with a proposed add-on to Pierre's existing term loan B. The review of Pierre's debt instruments stems from the all-debt financing in the transaction. Upon funding of the proposed add-on term loan, the ratings on the revolver and upsized term loan would likely fall one notch. Pierre's SGL-2 speculative grade liquidity rating was also affirmed, reflecting Moody's expectation for good liquidity over the next twelve months. Despite the expected increase in leverage to over 5x with the debt-financed acquisition of Zartic, Moody's affirmed Pierre's B1 corporate family rating. The affirmation reflects: (a) the potential benefits of the Zartic transaction, which includes diversification of Pierre's product offering, strengthening its presence within existing end markets, particularly in the military channel, and increasing its production capacity and capabilities; and, (b) Moody's expectation that the company will continue to generate good free cash flow and quickly reduce acquisition debt and leverage. Pierre's BI corporate family rating is supported by: (a) the company's strong historical growth that maps to "A," led by new product introductions, increasing customer penetration and an ongoing trend in away-from-home meal consumption; (b) diversity across channels and by customer, despite some degree of concentration with CKE Restaurants, operator of Hardee's and Carl Junior's restaurants; and, (c) the company's demonstrated ability to repay debt, having repaid $43 million of debt since June 2004. Constraining the ratings are: (a) Pierre's continued weak debt protection measures, many of which map to a "B" rating or below; (b) Moody's expectation that Pierre's credit metrics will moderately weaken over the near-term as a result of the additional acquisition debt; and (c) Pierre's small scale and geographic diversification, both mapping to "B" on the Methodology grid. These ratings were affirmed: -- B1 corporate family rating -- B1 probability-of-default rating -- SGL-2 Speculative Grade Liquidity Rating These ratings were placed on review for possible downgrade: -- Ba2, LGD 2, 28% on the $40 million senior secured revolving credit facility maturing 2009, -- Ba2, LGD 2, 28% on the $131 million senior secured term loan facility maturing 2010, -- B3, LGD-5, 82% on the $125 senior subordinated notes maturing 2012 Pierre, a manufacturer and marketer of differentiated processed food solutions, focusing on formed, pre-cooked protein products and hand-held convenience sandwiches, had revenues of $429 million in the LTM period ending September 2, 2006. The Company's headquarters are in Cincinnati, Ohio. PINNACLE ENTERTAINMENT: Earns $22.4 Mil. in Third Quarter of 2006 ----------------------------------------------------------------- Pinnacle Entertainment Inc. reported strong financial results for the third quarter and nine months ended Sept. 30, 2006. Revenues for the third quarter of 2006 were $236.7 million, an increase of 35.7% from $174.4 million in last year's quarter. Adjusted EBITDA rose 160% to $54 million in the current period from $20.8 million. Adjusted EBITDA margin was approximately 22.8%. The quarterly results include solid business levels at L'Auberge du Lac, continued strong performance at Boomtown New Orleans and continued margin improvement at Boomtown Bossier City. The 2006 results were strong, but the year-over-year comparisons are augmented by the effects of Hurricanes Katrina and Rita in 2005 and start-up costs associated with L'Auberge du Lac's May 2005 opening. On a GAAP basis, the Company reported net income of $22.4 million versus the prior-year net income of $5 million. GAAP net income in the 2006 quarter benefited from asset sale gains included in discontinued operations, while GAAP net income in the prior year quarter was boosted by a $14.9 million income tax benefit. "We are pleased with our Company's performance in the third quarter," Pinnacle's chairman and chief executive officer Daniel R. Lee said. "L'Auberge's adjusted EBITDA was $19.8 million, bringing us to $55 million for the nine-month period. Belterra achieved record adjusted EBITDA and Boomtown New Orleans continues to do well, as the New Orleans area continues to be rebuilt. "We look forward to the additional benefit that the hotel expansion projects at these three properties will provide when they open in late 2007 and early 2008. "We also continue to lay the framework for Pinnacle's extended growth," Mr. Lee continued. "Construction continues apace on both our projects in St. Louis. "Local approval for our Sugarcane Bay project in Lake Charles, Louisiana, is on the November 7 ballot. We recently submitted plans to the Louisiana Gaming Control Board for a new casino in Baton Rouge. "We have also passed the 'overbid period' in our agreement to purchase The Sands/Traymore site in Atlantic City. In sum, our development pipeline positions us well for at least the next five years." Nine-Month Results Revenues for the nine months ended Sept. 30, 2006, increased 58.5% to $699.7 million from $441.4 million for the 2005 period, reflecting the May 2005 opening of L'Auberge du Lac and the adverse effect to 2005 results from the hurricanes. Adjusted EBITDA rose 135% to $168 million from $71.6 million in the prior- year nine-month period. On a GAAP basis, net income for the first nine months of 2006 was $81.9 million, compared with a net loss of $1.4 million for the nine months ended Sept. 30, 2005. The recent nine-month period's GAAP net income includes merger termination proceeds from the Company's proposed agreement to purchase Aztar Corporation and asset sale gains, while the net loss in the 2005 nine-month period was narrowed by a sizable income tax benefit recorded in the third quarter. Recent Developments -- In September 2006, Pinnacle signed an agreement to purchase the entities that own The Sands Hotel and Casino and Traymore sites in Atlantic City, New Jersey, from entities affiliated with financier Carl Icahn for approximately $250 million, plus an additional $20 million for certain tax-related benefits and additional real estate. Together, the land being acquired comprises approximately 18 contiguous acres at the heart of Atlantic City, with extensive frontage along The Boardwalk, Pacific Avenue, and Brighton Park. Pinnacle plans to design and build an entirely new casino hotel on the site, which is intended to be among the largest and most spectacular resorts in the region. Design and construction of such casino resort is expected to require four to five years. The agreement included a time period, which expired on October 18, wherein the seller of The Sands could terminate the agreement in connection with higher offers. -- In September 2006, Pinnacle broke ground on its $45 million hotel tower expansion at L'Auberge du Lac in Lake Charles, Louisiana. The new tower will feature expanded retail space, a VIP lobby and lounge, and an additional 250 rooms or suites, bringing the total number of guestrooms at the property to approximately 1,000. It is expected to be complete by the end of 2007. -- In October 2006, Pinnacle reached a settlement agreement with President Casinos, Inc. and related parties to complete the purchase by Pinnacle of the bankrupt President Casino in St. Louis. If approved by the bankruptcy court and the Missouri Gaming Commission, Pinnacle will pay $31.5 million to the bankruptcy estate and receive a distribution of approximately $52 million in respect of the approximately $62 million of allowed claims that Pinnacle acquired in a tender offer process in August and September. Pinnacle may receive up to another $5 million in payments at a later date and has agreed to waive $5 million in claims. On that basis, and before any later recoveries, Pinnacle effectively will have paid approximately $41.5 million for the President Casino in St. Louis and certain related assets. -- At Pinnacle's construction site in downtown St. Louis, concrete forms are being installed for the sixth level. The project is scheduled to open in the second half of 2007, subject to licensing by the Missouri Gaming Commission, and will include a casino with approximately 2,000 slot machines and 40 table games, a spa, several restaurants, and 12,000 square feet of meeting and convention space. -- At River City, Pinnacle's $375 million casino project in south St. Louis County, site clearing and demolition are complete. Environmental remediation is underway and is expected to be substantially complete by the end of the year. Foundation work is expected to begin in December. The project is scheduled to open in the second half of 2008, subject to licensing by the Missouri Gaming Commission, and will include a casino with approximately 3,000 slot machines and 60 table games, a 100-room hotel, full-service spa, restaurants, a boutique bowling alley, a multiplex movie theatre, an indoor ice rink, a public park with athletic fields and a hatch-shell music and entertainment venue. Artists' renderings of the Company's St. Louis projects and pictures of the work in progress are accessible via the Company's corporate Web site at http://www.pnkinc.com/ -- The Company anticipates completing its acquisition of the Harrah's Lake Charles gaming assets and related licenses in mid-November. Completion of the transaction received Louisiana regulatory approval in August. A local-option referendum is scheduled to be held on November 7 which would permit construction of a new $350 million casino hotel, Sugarcane Bay, adjacent to the Company's L'Auberge du Lac facility rather than reopening the Harrah's facility. The Company intends to acquire the Harrah's assets irrespective of the outcome of the local referendum. -- The Company also recently purchased approximately 54 acres of land in Baton Rouge, Louisiana, and informed the Louisiana Gaming Control Board of its intent to construct a casino on the site, subject to a local-option referendum and Louisiana regulatory approval. -- The Company is scheduled to present its Philadelphia project plans to the Pennsylvania Gaming Control Board in November. Pinnacle is one of five companies vying for two licenses expected to be issued in Philadelphia. Artists' renderings and an overview of the proposal, which would initially include a 3,000-slot casino, a multiplex movie theater, and multiple dining and entertainment options, are accessible at http://www.pnkinphilly.com/ -- In October 2006, Pinnacle executed an amendment to its credit facility. The amendment becomes effective upon completion of the Sands transaction and receipt of final regulatory approvals. Among other things, the amendment improves overall financing flexibility, particularly in relation to Pinnacle's agreement to acquire the entities that own The Sands and Traymore sites in Atlantic City. The Company also anticipates increasing the credit facility by $250 million to $1 billion concurrently with the closing of the Sands transaction. Other Items Biloxi Insurance Matters On April 11, the Company filed a $346.5 million insurance claim for its losses associated with Hurricane Katrina at Casino Magic Biloxi. To date, Pinnacle has received a total of $100 million in advances towards resolution of its insurance claim, including $15 million received and recorded in October. In August 2006, Pinnacle filed suit against three of its excess insurance carriers. The suit relates to the loss incurred by Pinnacle as a result of Hurricane Katrina at its Casino Magic property in Biloxi, Mississippi. Collectively, the three insurers provide $300 million of coverage, in excess of $100 million of coverage provided to Pinnacle by other insurers. In total, Pinnacle's policies applicable to the Hurricane Katrina loss provide an aggregate of up to $400 million of coverage for loss caused by a Weather Catastrophe Occurrence and up to $100 million of inclusive coverage for loss caused by a Flood Occurrence. The three insurers are Allianz Global Risks US Insurance Company, Arch Specialty Insurance Company and RSUI Indemnity Company. The suit alleges, among other things, that those insurers have improperly asserted that Pinnacle's losses were due to a Flood Occurrence as opposed to a Weather Catastrophe Occurrence; that, after the close of the proposed sale of certain Casino Magic Biloxi assets to Harrah's Entertainment, Inc., Pinnacle is not covered for any continued business interruption loss; and that Pinnacle is not entitled to designate its St. Louis County project as a replacement for Casino Magic Biloxi under the policies. The Company strongly disagrees with those assertions and intends to pursue its insurance claim vigorously. Nevertheless, the Company anticipates that full resolution of its insurance claim and related litigation will be protracted. New Orleans Insurance Matters In the 2006-second quarter, the Company filed insurance claims of approximately $11 million for its business interruption and property losses associated with Hurricane Katrina at Boomtown New Orleans. A deductible of approximately $5 million would likely apply against this claim amount. Corporate Expenses Excluding the corporate portion of the non-cash stock-based compensation charge of $1 million, corporate costs for the third quarter of 2006 were $7.3 million. For the prior-year period, corporate costs were $5.8 million. The Company expects to continue to hire additional corporate staff in support of its expanding operations. Pre-opening and Development Costs During the quarter, the Company incurred pre-opening and development costs of $7 million, including $2.7 million related to the St. Louis projects, $2.1 million for the Sands acquisition and $1.2 million related to the Sugarcane Bay project. The 2005 quarter included $2.3 million of those costs, primarily related to the St. Louis projects. Tax Matters In the 2005 third quarter, the Company reversed a valuation allowance of $9.8 million related to the utilization of net operating loss carry-forwards for Indiana state income tax purposes. A benefit is reflected in the income tax provision for the 2005 third quarter, and had no cash impact on the Company's results or financial condition. Discontinued Operations The Company completed the sale of its leasehold interest and related receivables in the Hollywood Park Casino card club in July for net cash proceeds of approximately $24.2 million plus the cancellation of Pinnacle's lease obligation. The sale of the Hollywood Park Casino assets resulted in a pre-tax book gain of approximately $16.5 million, which is reflected in discontinued operations in the 2006 third quarter. Also included in discontinued operations are the results of Casino Magic Biloxi, as the Company has agreed to sell the Casino Magic Biloxi site. Liquidity The Company had approximately $308 million in cash, cash equivalents and restricted cash at Sept. 30, 2006. Approximately $220 million of this balance will be used to complete the purchase of The Sands/Traymore site, in addition to the $50 million already in escrow. Of the Company's $750 million bank credit facility, approximately $484 million remained unutilized as of Sept. 30, 2006. This amount does not include the $250 million increase in the Company's credit facility, which is expected to become effective upon closing of The Sands/Traymore site purchase. Community Contribution Pinnacle pays significant taxes in the communities in which it operates. During the first nine months of 2006, Pinnacle paid or accrued $168.6 million in gaming taxes, $12.1 million in payroll taxes, $10.1 million in property taxes, and $3.8 million in sales taxes. Setting aside income taxes, Pinnacle paid or accrued $194.6 million for taxes to state and local authorities in the first nine months of 2006. About Pinnacle Entertainment Headquartered in Las Vegas, Nevada, Pinnacle Entertainment, Inc., (NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates casinos in Nevada, Louisiana, Indiana and Argentina, owns a hotel in Missouri, receives lease income from two card club casinos in the Los Angeles metropolitan area, has been licensed to operate a small casino in the Bahamas, and owns a casino site and has significant insurance claims related to a hurricane-damaged casino previously operated in Biloxi, Mississippi. Pinnacle opened a major casino resort in Lake Charles, Louisiana in May 2005 and a new replacement casino in Neuquen, Argentina in July 2005. * * * As reported in the Troubled Company Reporter on Oct. 4, 2006, Moody's Investors Service's confirmed Pinnacle Entertainment, Inc.'s B2 Corporate Family Rating. At the same time, Standard & Poor's Ratings Services affirmed its 'BB-' rating and '1' recovery rating following Pinnacle Entertainment Inc.'s $250 million senior secured bank facility add-on. PREDIWARE CORP: Hires Allen & Overy as Hong Kong Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California gave Prediwave Corporation authority to employ Allen & Overy, as its Hong Kong Litigation Counsel. Allen & Overy is expected to represent the Debtor in the Hong Kong proceedings, effective Aug. 17, 2006. The Hong Kong proceedings relate to the Debtor's bulk purchase of memory modules in the years 2000 and 2001. Allen & Overy will also instruct Mr. Chua Guan-Hock S.C., the Debtor's senior counsel, in connection with the Hong Kong proceedings. The Debtor has agreed that 30% of the firm's compensation be billed to the Debtor and 70% be billed to the other defendants, with 1/9 of that 70% portion billed to each of the other defendants. Angus Ross, Esq., firm's partner, assured the Court that his firm does not hold any interest adverse to the Debtors, its estate or creditors. Mr. Ross can be reached at: Allen & Overy LLP 1221 Avenue of the Americas New York, NY 10020 United States of America Tel: (212) 610-6300 Fax: (212) 610-6399 http://www.allenovery.com/ Headquartered in Fremont, Calif., PrediWave Corporation -- http://www.prediwave.com/-- provides cable and satellite operators with end-to-end digital broadcast platforms, and offers products like Video On Demand, Digital Video Recording, interactive video shopping, and subscription services. The Debtor filed for chapter 11 protection on April 14, 2006 (Bankr. N.D. California Case No. 06-40547). Robert A. Klyman, Esq., at Latham & Watkins, LLP, and Jonathan S. Shenson, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP represent the Debtor in its restructuring efforts. John D. Fiero, Esq., at Pachulski, Stang, Ziehl, Young and Jones represents the Official Committee Of Unsecured Creditors. The Debtor's Schedules of Assets and Liabilities showed $145,282,246 in total assets and $773,033,371 in total liabilities. PREMIER ENTERTAINMENT: Files Schedules of Assets and Liabilities ---------------------------------------------------------------- Premier Entertainment Biloxi LLC dba Hard Rock Hotel & Casino Biloxi and its debtor-affiliates filed with the U.S. Bankruptcy Court for the Southern District of Mississippi their schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A - Real Property $87,646,759 B - Personal Property 165,215,455 C - Property Claimed as Exempt D - Creditors Holding Secured Claims $193,467,866 E - Creditors Holding Unsecured Priority Claims 5,258 F - Creditors Holding Unsecured Nonpriority Claims 36,669,241 ------------ ------------ Total $252,862,214 $230,142,366 Based in Biloxi, Mississippi, Premier Entertainment Biloxi LLC dba Hard Rock Hotel & Casino Biloxi -- http://www.hardrockbiloxi.com/ -- owns and operates hotels. The Company filed for chapter 11 protection on Sept. 19, 2006 (Bankr. S.D. Ms. Case No. 06-50975). No Official Committee of Unsecured Creditors has been appointed in the Debtor's bankruptcy proceedings. When the Debtor filed for protection from its creditors, it estimated assets $252,862,215 and debts of $226,069,921. PRIMARY ENERGY: Loan Redemption Cues S&P to Withdraw 'BB-' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB-' rating on Primary Energy Finance LLC. "The rating action follow Primary Energy's redemption of its $150 million senior secured term loan," said Standard & Poor's credit analyst Daniel Welt. The redemption was done in connection with EPCOR Power L.P.'s acquisition of Primary Energy Ventures LLC, the parent of Primary Energy Holdings, which is the 100% owner of Primary Energy Finance LLC. PRUDENTIAL COMMERCIAL: S&P Affirms Class N Certs. Rating at 'B-' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on six classes of commercial mortgage pass-through certificates from Prudential Commercial Mortgage Trust 2003-PWR1. Concurrently, the ratings on the remaining 10 classes are affirmed. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The upgrades of several senior certificates reflect the defeasance of $98 million of the collateral since issuance. As of the remittance report dated Oct. 11, 2006, the trust collateral consisted of 99 mortgage loans with an outstanding principal balance of $908.9 million, compared with 100 loans with a $960.0 million balance at issuance. The master servicers, Wells Fargo Bank N.A. and Prudential Asset Resources Inc., reported primarily year-end 2005 financial information for 98% of the pool. Based on this information and excluding the defeased loans, Standard & Poor's calculated a weighted average debt service coverage of 1.65x, compared with 1.64x at issuance. Although all of the loans in the pool are current, one loan is with the special servicer, ArCap Servicing Inc. To date, the trust has not experienced any losses. The top 10 exposures have an aggregate outstanding balance of $344.9 million (38%) and a weighted average DSC of 1.77x, up slightly from 1.73x at issuance. Despite an overall increase in the DSC for the top 10, two of the loans experienced declines in DSC, one of which is on the master servicers' watchlist and is discussed below. Although the ninth-largest loan, 10th and Broadway, is not on the watchlist, performance of the collateral property has declined since issuance. The borrower for the 169,540-sq.-ft. office building in Oakland, Calif., reported a DSC of 1.14x as of Sept. 30, 2006, compared with 1.4x at issuance. The low DSC is attributable to flat effective gross income and increased operating expenses. Standard & Poor's reviewed the master servicers' property inspection reports for the top 10 exposures, and all of the properties were reported to be in "good" or "excellent" condition. Two of the top 10 exposures exhibited credit characteristics consistent with investment-grade obligations at issuance, and each has maintained its respective credit characteristics. The first is the largest loan in the pool, 1290 Avenue of the Americas. It consists of two notes split into six pieces: a $385 million A note that is participated into five pari passu pieces, of which $80 million serves as trust collateral; and a B note that has a $55 million balance held outside of the trust. The trust's portion of the A notes represents 9% of the aggregate outstanding pool balance. Standard & Poor's underwritten net cash flows decreased 6% since issuance due to higher operating expenses and capital reserves offset by higher income. The second exposure, Inland Portfolio 2, is a group of six cross- collateralized and cross-defaulted loans secured by six anchored retail properties in various locations totaling 566,950 sq. ft. Standard & Poor's underwritten cash flows were relatively flat from issuance. The master servicers reported 16 loans totaling $110.4 million on the watchlist. The sixth-largest loan, Renaissance Pere Marquette Hotel, is secured by a 280-room full-service hotel in New Orleans, La. The loan is on the watchlist due to a low DSC and damage incurred from Hurricane Katrina. The repairs to the lobby, dining area, and bar are ongoing and scheduled to be completed by August 2007. DSC was 0.25x as of June 30, 2006, down from 0.35x at Dec. 31, 2005, and 1.14x at issuance. Occupancy was 65% as of June 30, 2006. The remaining loans on the watchlist have low occupancies, low DSCs, or major tenant lease terminations. The sole specially serviced loan, Riverbank Mall LLC, is secured by a 9,780-sq.-ft. retail strip shopping center in Newark, N.J. The $1.7 million loan was transferred to the special servicer in Nov. 2005 due to the borrower's failure to make its debt service payments. However, as of October 2006, the borrower is current on its payments. The property reported 100% occupancy as of June 30, 2006, and a DSC of 0.98x as of year-end 2005. The loan is being monitored for return to the master servicers subject to the borrower making the next two payments on time. Standard & Poor's stressed various assets in the mortgage pool as a part of its analysis, including those with the special servicer, on the watchlist, or otherwise considered credit impaired. The resultant credit enhancement levels adequately support the raised and affirmed ratings. Ratings Raised Prudential Commercial Mortgage Trust 2003-PWR1 Series 2003-Pwr1 Commercial Mortgage Pass-Through Certificates Rating Class To From Credit enhancement (%) ----- -- ---- ---------------------- B AA+ AA 15.45 C AA A 11.49 D A+ A- 9.90 E A- BBB+ 8.85 F BBB+ BBB 7.66 G BBB BBB- 6.34 Ratings Affirmed Prudential Commercial Mortgage Trust 2003-PWR1 Series 2003-Pwr1 Commercial Mortgage Pass-Through Certificates Class Rating Credit enhancement (%) ----- ------ ---------------------- A-1 AAA 19.01 A-2 AAA 19.01 H BB+ 4.49 J BB 3.70 K BB- 3.17 L B+ 2.38 M B 1.98 N B- 1.58 X-1 AAA N/A X-2 AAA N/A N/A-Not applicable. QWEST COMMS: Fitch Lifts Issuer Default Rating to BB from BBB- -------------------------------------------------------------- Fitch Ratings has upgraded the Issuer Default Rating of Qwest Communications International, Inc., and its wholly owned subsidiaries Qwest Corporation, Qwest Services Corporation, Qwest Capital Funding, and Qwest Communications Corporation to 'BB' from 'B+'. In addition, Fitch has also upgraded the specific issue ratings assigned to the debt issued by Qwest and its subsidiaries, including upgrading the rating assigned to the senior unsecured debt issued by Qwest Corporation to 'BBB-' from 'BB+'. The Rating Outlook is Stable for Qwest and its subsidiaries. Approximately $14.9 billion of debt as of the end of the 3Q'06 is affected by Fitch's actions. Fitch's rating action recognizes the continuing strengthening of the company's credit profile stemming from operating margin improvement derived from ongoing cost reductions and productivity enhancements, rationalization of the company's network and less profitable products, the emergence and growth potential of IP based data products as well as the improvement to Qwest's balance sheet. Overall the ratings assigned to Qwest and its subsidiaries incorporate the scope, scale and relatively stable cash flow generated by QC's local exchange business, the reduced cash requirements of Qwest's out of region businesses, and Fitch's expectation of continued credit metric improvement and generation of material free cash flow. Fitch's ratings also reflect the competitive pressure from ongoing product and technology substitution. Fitch anticipates that the operating environment within consumer markets will become more competitive as voice over IP telephony service becomes broadly available through cable multiple system operators. Fitch points out however that in several markets Qwest has competed for telephony subscribers with cable companies that offer legacy circuit switch telephone service for some time. The effects of competition manifest themselves through access line losses. Overall the pace of access line erosion has accelerated during 2006 with access line losses for the third quarter-2006 (3Q'06) of 6%. Fitch expects that during 2007 and 2008 competition from cable telephone providers will further accelerate access line losses. Qwest's strategy to mitigate the competitive pressures within consumer markets centers on strengthening its product bundle. From Fitch's perspective, the strategy is gaining traction. Penetration of bundled products increased to 56% as of the end of the 3Q'06 reflecting an increase from 50% from the year earlier period. Qwest's Mass Market customer connections, a measurement of mass market access lines, high speed internet subscribers, video subscribers through the company's alliance with DIRECTV and wireless subscribers, increased 2.8% on a year over year basis during the 3Q'06. The bundled service strategy positions the company to offset the revenue lost by access line erosion. As of the end of the third quarter, Qwest was able to expand its consumer ARPU to $50.07 reflecting a 7.3% year over year growth rate and grow Mass Market revenues 3.5% on a year over year basis while Mass Market access lines declined by 5.4%. Qwest's ability to grow its revenue base will, in Fitch's opinion, be predicated on the company's ability to drive further bundled service penetration, grow the ARPU of growth products and continue to migrate its enterprise customer base to more advanced data services. Fitch expects that over the current ratings horizon Qwest's service bundling strategy will offset much of the revenue loss associated with access line losses. Since the end of 2002, Qwest has reduced outstanding debt by nearly $8 billion and improved leverage from 5.4 times (x) to 3.4x as of the LTM period ended Sept. 30, 2006. The improvement was largely attributable to a significant turn around in Qwest's ability to generate free cash flow and management's use of free cash flow generation to reduce debt. Fitch believes that Qwest's credit profile will continue to improve during the ratings horizon with leverage declining modestly to under 3.3x by year-end 2007 and approaching 3.1x by YE 2008. In Fitch's opinion, Qwest's liquidity position is strong and is supported by existing cash and short term investments totaling approximately $1.2 billion, the $850 million senior secured revolver as well as Fitch's expectation that the company will continue to generate stable levels of free cash flow. Scheduled maturities of debt during 2007 and 2008 total approximately $1 billion, which Fitch expects that Qwest will retire with cash. Qwest expects to generate free cash flow ranging between $1.35 and $1.5 billion during 2006 and Fitch expects the company to generate free cash flow of approximately $1.6 billion during 2007 and 2008. From Fitch's perspective free cash flow growth will be limited to Qwest's ability to drive further margin improvements as the prospects of revenue growth is muted by competitive pressures. The ongoing Department of Justice investigation and pending shareholder lawsuits pose a potentially significant contingent liability to Qwest's liquidity profile. However given the level of near term expected free cash flow generation, Fitch believes that the company has adequate financial flexibility to address potential judgments and settlements. Qwest has announced a $2 billion stock repurchase program that will be executed over the next two years. From Fitch's perspective, the share repurchase program will not have a material negative impact the company's financial flexibility. Importantly, Fitch expects that the company will fund the program with a combination of existing cash and expected free cash flow generation. Fitch estimates that the stock repurchase program represents approximately 49% of Qwest's existing cash and expected free cash flow generation over the next two years. Given the free cash flow expectations of Qwest, Fitch anticipates that the pressure to increase the level of shareholder friendly actions will be an over hang on Qwest's credit profile over the ratings horizon. However, the amount of stock repurchases and other shareholder friendly actions is limited by restricted payment covenants contained in Qwest's debt indentures and credit facility. The credit facility limits restricted payments to net income (as of Jan. 1, 2006) plus $1.7 billion. Based on this restriction, Fitch estimates that Qwest's restricted payment basket is approximately $2.1 billion. The restricted payment covenants included in the Qwest notes are less restrictive and Fitch estimates that the restricted payment basket under the Qwest indentures is approximately $6 billion. The Stable Rating Outlook reflects Fitch's expectation for continued stabilization of the company's revenue base driven by further strengthening of Qwest's service bundling strategy and investment in growth products such as high speed internet and advanced data products. The stable revenue base coupled with anticipated improvement in operating margins should in Fitch's opinion yield relatively stable generation of free cash flow and continue improvement of the company's key credit protection measures. Fitch has upgraded these ratings of Qwest and its subsidiaries: Qwest Communications International, Inc. -- Issuer Default Rating (IDR) to 'BB' from 'B+'; -- Senior secured credit facility to 'BBB-' from 'BB+'; -- Senior unsecured notes (guaranteed by QSC) to 'BB+' from 'BB'; -- Senior unsecured notes to 'BB' from 'B+' Qwest Corporation -- Issuer Default Rating (IDR) to 'BB' from 'B+'; -- Senior term loan to 'BBB-' from 'BB+'; -- Senior unsecured notes to 'BBB-' from 'BB+'. Qwest Services Corporation -- Issuer Default Rating (IDR) to 'BB' from 'B+'; -- Senior subordinated to 'BB+' from 'BB'. Qwest Capital Funding -- Issuer Default Rating (IDR) to 'BB' from 'B+'; -- Senior unsecured notes to 'BB' from 'B+'. Qwest Communications Corporation -- Issuer Default Rating (IDR) to 'BB' from 'B+'; -- Senior unsecured notes to 'BB' from 'B+'. RENT-A-CENTER: Completes New $1.3 Billion Senior Loan Refinancing ----------------------------------------------------------------- Rent-A-Center Inc. disclosed the completion of the documentation of its previously reported senior secured debt refinancing. The new $1,322.5 million senior credit facilities consist of $922.5 million in term loans and a $400 million revolving credit facility. The Company intends to utilize the proceeds of the new senior credit facilities to repay its existing senior debt, currently $365.2 million outstanding, finance the proposed acquisition of Rent-Way, Inc., and for general corporate purposes. The funding of the new senior credit facilities is contingent upon the closing of the pending acquisition of Rent-Way, Inc. and customary closing conditions for financings of this nature. The Company anticipates closing the refinancing substantially contemporaneously with the closing of the acquisition of Rent-Way, Inc. In connection with the closing of the refinancing, the Company will record a charge in the fourth quarter of approximately $2.7 million relating to capitalized costs incurred in connection with the Company's existing senior credit facility. Based in Plano, Texas, Rent-A-Center, Inc. (Nasdaq:RCII) -- http://www.rentacenter.com/-- operates the largest chain of consumer rent-to-own stores in the U.S. with 2,751 company operated stores located in the U.S., Canada, and Puerto Rico. The company also franchises 297 rent-to-own stores that operate under the "ColorTyme" and "Rent-A-Center" banners. * * * Standard & Poor's Ratings Services lowered on Oct. 10, 2006, its corporate credit rating on Plano, Texas-based Rent-A-Center Inc. to 'BB' from 'BB+'. S&P said the outlook is negative. At the same time, Standard & Poor's assigned its 'BB' bank loan rating to Rent-A-Center Inc.'s proposed US$1.325 billion credit facility. The rating agency also assigned a recovery rating of '2' to the facility, indicating the expectation for substantial (80%-100%) recovery of principal in the event of a payment default. The proposed loan comprises: -- a $400 million revolving credit facility due in 2011, -- a $200 million term loan A due in 2011, and -- a $725 million term loan B due in 2012. "The downgrade is due to an increase in debt leverage and a decline in cash flow protection, as the acquisition of Rent-Way Inc. will be funded with $600 million of incremental debt," said Standard & Poor's credit analyst Gerald Hirschberg. RENTAL SERVICE: Moody's Rates $1.13 Billion Senior Term Loan at B3 ------------------------------------------------------------------ Moody's Investors Service assigned: -- a Ba2 first time rating to Rental Service Corp.'s $1.7 billion first lien senior secured credit facility ($1.3 billion revolving credit facility and $400 million term loan); -- a B3 to the company's $1.13 billion second lien senior secured term loan; -- a Caa1 rating to the company's $620 million senior unsecured notes; and, -- a B2 corporate family rating. The ratings for the three facilities reflect both the overall probability of default of the company, to which Moody's assigns a PDR of B2, and a loss given default of LGD 2 for the first lien secured facility, LGD 4 for the second lien facility, and a LGD 6 for the unsecured notes. Moody's also assigned a SGL-2 Speculative Grade Liquidity Rating to RSC. The rating outlook is stable. The purpose of the credit facilities is to fund the acquisition of RSC by Ripplewood Holdings L.L.C. and Oak Hill Capital Management LLC, for an aggregate purchase price of $3.4 billion. The acquisition is also funded with $250 million of equity from each of the Sponsors and rollover equity of $85 million from Atlas Copco AB, the existing RSC owner. Moody's said that RSC's B2 Corporate Family Rating reflects its leading competitive position in the North American equipment rental industry. The company is benefiting from the strong non- residential construction market, which is the key to its financial performance over the near to medium term. The strength of non- residential construction activities has led to higher demand for rental equipment and rising rental rates. However, the increased level of debt resulting from the leveraged buyout will stress the company's financial metrics. Key credit metrics will likely erode in the following manner on a pro forma basis for 2006: -- EBIT/Interest expense to 1.7x from 2.3x; -- EBITDA/Interest expense to 2.9x from 3.9x; and, -- Debt/EBITDA to 4.30x from 3.6x. These credit metrics position RSC as one of the more leveraged companies amongst its industry peers. While meeting the debt service requirements of its leveraged capital structure, RSC must also contend with the ongoing cyclicality of the non-residential construction sector, and the need to ultimately fund renewal of its rental fleet. The stable outlook reflects Moody's belief that RSC's debt protection measures should improve over the intermediate term and better position the company within the B2 rating. RSC should be able to weather future cyclical downturns due to its improved internal efficiencies, its well established North American branch network, and a commitment to maintain ample liquidity. The Ba2 rating of the $1.7 billion first lien senior secured credit facility reflects an LGD 2, 21% loss given default assessment as this facility is secured by a first lien pledge on substantially all of the company's domestic assets and benefits from a significant amount of junior debt behind these facilities in priority. The B3 rating of the $1.13 billion of the second lien senior secured term loan reflects an LGD 4, 67% loss given default assessment as this facility is secured by a second lien pledge on substantially all of the company's domestic assets and benefits from a sizeable amount of junior debt behind this facility in priority. The Caa1 rating of the $620 billion of the senior unsecured notes reflects an LGD 6, 91% loss given default assessment as this facility is unsecured and the most junior debt within the capital structure. The SGL-2 Speculative Grade Liquidity Rating reflects Moody's belief that the company will maintain a good liquidity profile over the next 12-month period. The SGL rating anticipates that approximately $400 million in availability at closing under the company's proposed first lien senior secured credit facility and free cash flow should be sufficient to fund the company's capital spending and operational needs over the next 12 months. These are the rating actions: -- Corporate family rating B2; -- Probability-of-default rating B2; -- $1.3 billion senior secured revolving credit facility due late 2011 at Ba2, LGD 2, 21%; -- $400 million senior secured term loan due late 2012 at Ba2, LGD 2, 21%; -- $1.13 billion senior secured term loan due late 2013 at B3, LGD 4, 67%; -- $620 million senior unsecured notes at Caa1, LGD 6, 91%; Speculative Grade Liquidity at SGL-2. RSC, headquartered in Scottsdale, Arizona, is an equipment rental company operating in North America and operates more than 450 locations throughout the United States and Canada. RENTAL SERVICE: S&P Rates Proposed $1.13 Billion Term Loan at 'B-' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to equipment rental company Rental Service Corp. At the same time, Standard & Poor's assigned its bank loan and recovery ratings to the company's proposed $1.7 billion first-lien asset-based lending facility. It is rated 'BB-' with a recovery rating '1' indicating high expectation of full recovery of principal in the event of a default. Additionally, the rating agency assigned its 'B-' rating to RSC's proposed $1.13 billion senior secured second-lien term loan and a recovery rating of '5' indicating negligible recovery of principal in the event of a default after repayment of the entire first-lien facility. Standard & Poor's also assigned their 'B-' rating to RSC's proposed $620 million senior unsecured notes due in 2014. The outlook is stable. The proceeds from these financings will be used to purchase RSC in a leveraged recapitalization transaction from Atlas Copco AB for about $3.4 billion. Atlas Copco will retain a minority interest in RSC, and two financial sponsors-- Ripplewood Holdings L.L.C. and Oak Hill Capital Partners LLC--each of which will hold about 43% of the company. The transaction is expected to close at the end of November 2006. "The ratings on RSC reflect its highly leveraged financial profile which more than offsets its position as the second largest provider of equipment rentals," said Standard & Poor's credit analyst John R. Sico. RESIDENTIAL ASSET: Fitch Upgrades 4, Affirms 10 RMBS Classes ------------------------------------------------------------ Fitch Ratings has taken rating actions on these Residential Asset Mortgage Products, Inc. home equity mortgage asset-backed pass- through certificates, series 2001-RM2 issue: Group I -- Class A-I affirmed at 'AAA'; -- Class AP-I affirmed at 'AAA'; -- Class AV-I affirmed at 'AAA'; -- Class M-I-1 affirmed at 'AAA'; -- Class M-I-2 affirmed at 'AA-'; -- Class M-I-3 affirmed at 'BBB'; -- Class B-I-1 affirmed at 'B'; -- Class B-I-2 remains at 'CC/DR5'. Group II -- Class A-II affirmed at 'AAA'; -- Class M-II-1 affirmed at 'AAA'; -- Class M-II-2 upgraded to 'AA+' from 'AA'; -- Class M-II-3 upgraded to 'A+' from 'A'; -- Class B-II-1 upgraded to 'BBB-' from 'BB'; -- Class B-II-2 upgraded to 'BB-' from 'B'. The upgrades reflect an improvement in the relationship between credit enhancement and expected future losses and affect approximately $2 million in outstanding certificates, as of the Oct. 25, 2006 distribution date. The affirmations of the other classes reflect a satisfactory relationship between CE and expected future losses and affect approximately $26 million in outstanding certificates. The mortgage pool consists of fixed- and adjustable-rate loans extended to subprime borrowers secured by first liens on one- to four-family residential properties. The master servicer for these loans is Residential Funding Company, LLC (rated 'RMS1', Rating Watch Evolving by Fitch). The pool factors (current principal balance as a percentage of original balance) for group 1 and 2 are 11.45% and 22.50%, respectively. The four upgraded classes benefit from credit enhancement approximately three to four times the original levels. RESIDENTIAL ASSET: Fitch Ups 2 RMBS & Holds 9 RAMP Classes ---------------------------------------------------------- Fitch has taken rating actions on the following Residential Asset Mortgage Products, Inc. mortgage pass-through certificates: RAMP Series 2002-SL1 Group 1: -- Classes A-I-3, A-I-IO affirmed at 'AAA'. RAMP Series 2002-SL1 Group 2: -- Classes A-II-1 to A-II-4 affirmed at 'AAA'. -- Class M-II-1 upgraded to 'AA+' from 'AA'. -- Class M-II-2 upgraded to 'A+' from 'A'. -- Class M-II-3 affirmed at 'BBB'. -- Class B-II-1 affirmed at 'BB'. -- Class B-II-2 affirmed at 'B'. The upgrades reflect an improved relationship between credit enhancement and expected future loses and affect approximately $1 million in outstanding certificates, as of the Oct. 25, 2006 distribution date. The affirmations reflect a satisfactory relationship between CE and future loss expectations and affect approximately $29 million in outstanding certificates. The collateral in the 2002-SL1 series consists of seasoned fixed rate and adjustable rate mortgage loans secured by first liens on one- to four- family residential properties. Residential Funding Company, LLC (rated RMS1, rating watch evolving, by Fitch) is the master servicer for these loans. As of the October 25, 2006 distribution date, the pool factors (current principal balance as a percentage of original balance) for group 1 & group 2 are 7.42% and 26.63%, respectively. The upgraded classes benefit from credit enhancement (in the form of subordination) over three times the original levels. ROWE COMPANIES: Files Schedules of Assets and Liabilities --------------------------------------------------------- The Rowe Companies and its debtor-affiliates filed with the U.S. Bankruptcy Court for the Eastern District of Virginia its schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A - Real Property $0 B - Personal Property 42,939,781 C - Property Claimed as Exempt 0 D - Creditors Holding Secured Claims $34,583,513 E - Creditors Holding Unsecured Priority Claims 144,617 F - Creditors Holding Unsecured Nonpriority Claims 220,076 ----------- ------------ Total $42,939,781 $34,948,206 About The Rowe Companies Headquartered in McLean, Virginia, The Rowe Companies -- http://www.therowecompanies.com/ -- manufactures upholstered retail home and office furniture, interior decorations, tableware, lighting fixtures, and other interior design accessories. The Company owns 100% of stock of manufacturing and retail subsidiaries, Rowe Furniture -- http://www.rowefurniture.com/ -- and Storehouse, Inc. -- http://www.storehousefurniture.com/ The Company and its two of its debtor-affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142 to 06-11144). Dylan G. Trache, Esq., H. Jason Gold, Esq., and Valerie P. Morrison, Esq., at Wiley Rein & Fielding LLP, represent the Debtors. When the Debtors filed for protection from their creditors, The Rowe Companies listed total assets of $130,779,655 and total debts of $93,262,974; Rowe Furniture estimated assets between $50 million and $100 million and debts between $10 million and $50 million; and Storehouse, Inc. estimated assets and debts between $10 million and $50 million. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 16, 2006. ROWE COMPANIES: Gets Final Court Okay on Financing Deal with GECC ----------------------------------------------------------------- The United States Bankruptcy Court for the Eastern District of Virginia gave The Rowe Companies and its debtor-affiliates authority, on a final basis, to obtain debtor-in-possession financing from General Electric Capital Corporation. The Court authorized the Debtors to request extensions of credit up to an aggregate outstanding principal amount of $50,000,000 at any one time outstanding, including: a) a sub-limit for letters of credit having a maximum drawing amount of not more than $5,000,000; and b) to the extent any prepetition obligations remain outstanding after entry of the final order, an amount sufficient to indefeasibly pay in full the outstanding prepetition obligations under the prepetition credit documents. As adequate protection, the Debtors granted GECC superpriority administrative expense claims, which will be subject only to the carve-out amount. The carve-out amount is intended for payment of allowed administrative expenses pursuant to Section 1930(a)(6) of the Judiciary Code and allowed fees and expenses incurred by the Debtors and statutory committees pursuant to Section 327 and 1103 of the Bankruptcy Code. A full-text copy of the Court's final order on the DIP financing is available for free at http://researcharchives.com/t/s?1486 About The Rowe Companies Headquartered in McLean, Virginia, The Rowe Companies -- http://www.therowecompanies.com/ -- manufactures upholstered retail home and office furniture, interior decorations, tableware, lighting fixtures, and other interior design accessories. The Company owns 100% of stock of manufacturing and retail subsidiaries, Rowe Furniture -- http://www.rowefurniture.com/ -- and Storehouse, Inc. -- http://www.storehousefurniture.com/ The Company and its two of its debtor-affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142 to 06-11144). Dylan G. Trache, Esq., H. Jason Gold, Esq., and Valerie P. Morrison, Esq., at Wiley Rein & Fielding LLP, represent the Debtors. When the Debtors filed for protection from their creditors, The Rowe Companies listed total assets of $130,779,655 and total debts of $93,262,974; Rowe Furniture estimated assets between $50 million and $100 million and debts between $10 million and $50 million; and Storehouse, Inc. estimated assets and debts between $10 million and $50 million. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 16, 2006. ROWE COMPANIES: Taps Carl Marks as Crisis Management Advisor ------------------------------------------------------------ The Rowe Companies and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the Eastern District of Virginia to employ Carl Marks Advisory Group LLC as their crisis management advisors and consultants, nunc pro tunc to Sept. 18, 2006. Carl Marks will: a) analyze financial issues including cash flow information, various operational restructuring proposals, manufacturing rationalization, and financial analysis; b) make recommendations on improvements to quality, including simplification of product lines; increasing production and manufacturing efficiency; cutting costs, including employee headcount; improvement of software systems; and improvement of financial controls and cash flow. Compensation Terms Carl Marks proposed to charge the Debtors a flat monthly fee for its services pursuant to the terms of an amended consulting agreement previously entered into by the parties. Specifically, the Consulting Agreement provides, among others, that Marc Pfefferle, a member and principal of the firm, will bill $500 per hour for this engagement. If other personnel are required, they will be billed at their regular hourly rates. The firm will also seek reimbursement of actual and necessary out-of-pocket expenses. Carl Marks has received from the Debtors a $1,548,588 prepetition payment and a $100,000 retainer. In addition, Carl Marks recently received from the Debtors: 1) $70,000, paid on Sept. 7, 2006, for services rendered in the month of September; and 2) $19,439, paid on Sept. 14, 2006, for reimbursement of costs prior to the Debtors' bankruptcy filing. Mr. Pfefferle assures the Court that his firm does not hold any interest adverse to the Debtors and is disinterested pursuant to Sec. 101(14) of the Bankruptcy Code. About the Rowe Companies Headquartered in McLean, Virginia, The Rowe Companies -- http://www.therowecompanies.com/-- manufactures upholstered retail home and office furniture, interior decorations, tableware, lighting fixtures, and other interior design accessories. The company owns 100% of stock of manufacturing and retail subsidiaries, Rowe Furniture -- http://www.rowefurniture.com/ -- and Storehouse, Inc. -- http://www.storehousefurniture.com/ The company and its two of its debtor-affiliates filed for chapter 11 protection on Sept. 18, 2006 (Bank. E.D. Va. Case Nos. 06-11142 to 06-11144). Dylan G. Trache, Esq., H. Jason Gold, Esq., and Valerie P. Morrison, Esq., at Wiley Rein & Fielding LLP, represent the Debtors. When the Debtors filed for protection from their creditors, The Rowe Companies listed total assets of $130,779,655 and total debts of $93,262,974; Rowe Furniture estimated assets between $50 million and $100 million and debts between $10 million and $50 million; and Storehouse, Inc. estimated assets and debts between $10 million and $50 million. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 16, 2006. SALTON INC: Reduced Domestic Sales Cue Moody's to Junk Ratings -------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of Salton Inc. to Caa2 from Caa1 and the subordinated debt rating to Ca from Caa3. The subordinated debt ratings reflect both the overall probability of default of the company under Moody's LGD framework using a fundamental approach, to which Moody's assigns a PDR of Caa2, and a loss-given-default of LGD 5, 88% for the subordinated debt. The rating outlook remains negative. The rating downgrade reflects Salton's continued operational challenges including reduced domestic sales, pricing pressure, increasing global raw material costs, inventory shortages and a weak foreign retail market. Despite recent improvements in the company's cost structure, improvements in sales of the George Foreman line and new product introductions the company incurred a negative reported EBIT in its most recent fiscal year. The rating downgrade reflects uncertainties around liquidity, as the company's senior credit facilities have been amended and compliance with minimum fixed charge coverage and minimum EBITDA will be required after March 2007. Salton also faces significant debt maturities over the next 18 to 24 months which Moody's does not expect will be capable of being met from operating cash flow. Moody's used a fundamental valuation approach, based on assumed recoveries of stated asset values, to estimate loss-given-default rather than a mean family-level LGD estimate. Based on this approach, the company's recovery estimate is 55% from 50%. The higher recovery estimate resulted in the probability of default rating remaining the same as the corporate family rating. The rating outlook remains negative, given uncertainties over operating performance and liquidity in the next year. The negative outlook also reflects the announcement on October 23, 2006 that Salton would explore strategic alternatives to enhance stockholder value, which could include a sale or merger of the company, which could have a negative impact on the subordinated debt holders. If a transaction is disclosed, Moody's would review its terms to determine the impact on Salton's ratings and outlook at that time. These ratings were lowered: -- Corporate Family Rating to Caa2 from Caa1 -- Subordinated debt rating to Ca, LGD 5, 88% from Caa3, LGD 6, 91% -- Probability of default rating to Caa2 from Caa1 Headquartered in Lake Forest, Illinois, Salton, Inc. designs, markets and distributes small appliances and home decor and personal care products. Sales for the fiscal year ended July 1, 2006 were approximately $636 million. SAMUEL BURROW: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Samuel Burrow, Jr. 11600 West Winchester Lane Ellicott City, MD 21042 Bankruptcy Case No.: 06-17002 Chapter 11 Petition Date: October 6, 2006 Court: District of Maryland (Baltimore) Judge: Nancy V. Alquist Debtor's Counsel: Adam M. Freiman, Esq. Sirody, Freiman & Feldman, P.C. 1777 Reisterstown Road, Suite 360 East Baltimore, MD 21208 Tel: (410) 415-0445 Fax: (410) 415-0744 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 ------ --------------- ------------ Martin Sheet Metal Services $15,616 4000 Gill Avenue Hampstead, MD BGE Services $11,652 P.O. Box 1475 Baltimore, MD 21203 Able Electric Services $10,000 7522 Connelly Drive, Suite B Hanover, MD 21076 DeVeer Insulation Services $7,155 7501 Resource Court Curtis Bay, MD 21226 Adam M. Freiman, P.A. Legal Fees - Balance $2,500 1777 Reisterstown Road Suite 360 Pikesville, MD 21208 Blue Dot Services $2,500 Household Bank MasterCard Credit $1,525 Nuvell Credit Corp. 2000 Chevy Venture $6,988 Secured: $6,200 TC Excalibur Co., LLC Miscellaneous $700 Home Depot Credit $682 SBA CMBS: Fitch Assigns Low-B Ratings to Four Certificate Classes ----------------------------------------------------------------- SBA CMBS Trust, series 2006-1, commercial mortgage pass-through certificates are rated by Fitch Ratings: -- $439,420,000 class 2006-1A 'AAA'; -- $106,680,000 class 2006-1B 'AA'; -- $106,680,000 class 2006-1C 'A'; -- $106,680,000 class 2006-1D 'BBB'; -- $36,540,000 class 2006-1E 'BBB-'; -- $81,000,000 class 2006-1F 'BB+'; -- $121,000,000 class 2006-1G 'BB'; -- $81,000,000 class 2006-1H 'BB-'; -- $71,000,000 class 2006-1J 'B+'. Fitch, after giving effect to the offered notes, affirms these ratings to the $405,000,000 SBA CMBS Trust, series 2005-1 collateralized fixed-rate notes: -- $238,580,000 class 2005-1A 'AAA'; -- $48,320,000 class 2005-1B 'AA'; -- $48,320,000 class 2005-1C 'A'; -- $48,320,000 class 2005-1D 'BBB'; -- $21,460,000 class 2005-1E 'BBB-'. SBA CMBS Trust, series 2006-1 represents an additional issuance pursuant to the SBA CMBS Trust, series 2005-1 closed on Nov. 18, 2005, which holds a mortgage loan secured by 1,714 wireless communication sites. The current issuance reflects the contribution of an additional 3,261 sites and increased cash flow from the initial sites; 16 tower sites included in the initial issuance will be removed due to negative cash flow. The initial and current issuance of certificates are secured by the same pool of collateral and are pari passu among like rated classes. All classes 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 4,975 wireless communication sites securing one fixed rate loan having an aggregate principal balance of approximately $1,555,000,000, as of the cutoff date. SCOTT BERGER: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Scott Aaron Berger 28 South Garfield Street Denver, CO 80209 Bankruptcy Case No.: 06-18120 Chapter 11 Petition Date: September 11, 2006 Court: District of Colorado (Denver) Judge: Howard R. Tallman Debtor's Counsel: Stephen C. Nicholls, Esq. Nicholls Nicholls Biles & Bower, LLC 1725 Gaylord Street, Suite 100 Denver, CO 80206 Tel: (303) 329-9700 Fax: (303) 329-6950 Total Assets: $1,457,486 Total Debts: $1,658,192 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ EMC Mortgage Corp. 28 South $287,405 P.O. Box 141358 Garfield Street Secured: Irving, TX 75014-1358 Denver, CO 80209 $1,060,000 Senior Lien: $287,405 MNBA America Credit Card $88,084 P.O. Box 15102 Purchases Wilmington, DE 19886-5102 Vectra Bank Colorado Vehicles $43,302 717 - 17th Street, Suite 300 Secured: Denver, CO 80202 $18,000 Wells Fargo Business Direct Business Line $29,072 P.O. Box 54349 of Credit Los Angeles, CA 90054-0349 Business Credit $6,921 Card Purchases Citi Cards Credit Card $13,306 P.O. Box 6414 Purchases The Lakes, NV 88901-6414 Chase Credit Card $12,960 Purchases Wells Fargo Card Services Credit Card $11,794 Purchases Beneficial Finance Line of Credit $7,077 American Express - Texas Business Credit $7,027 Card Purchases American Express - Florida Business Credit $3,181 Card Purchases Wells Fargo Financial Personal Loan $1,120 American Family Insurance Prime Comm. $413 Trade Debt SCOTTISH RE: Alters CEO's Employment Pact, Employee Retention Plan ------------------------------------------------------------------ In a filing with the U.S. Securities and Exchange Commission, Scottish Re Group Ltd. disclosed the approval of an amended employment agreement, dated July 1, 2002, between Paul Goldean and the company. Pursuant to the amendment, Mr. Goldean will serve as President and Chief Executive Officer of Scottish RE, nunc pro tunc to Oct. 26, 2006, with an annual base salary of $550,000. Also, the company's board of directors approved a Senior Executive Success Plan. The Plan's purpose is to retain essential personnel through the transition period relating to the possible sale of Scottish RE. Participation in the Plan is limited to these executives, each of whom will receive the guaranteed payout if the transaction is completed: Executive Guaranteed Payout --------- ----------------- Paul Goldean $300,000 Dean Miller $200,000 Cliff Wagner $200,000 David Howell $200,000 Jeff Delle Fave $100,000 In addition to the guaranteed payouts, each of the executives will receive additional payments to the extent that the sales price of the company in the transaction exceeds certain thresholds established by the Board. If any of the executives leave Scottish RE prior to the completion of the transaction, that executive will forfeit his right to any payments under the Plan. The executives will be entitled to payments under the Plan 90 days after the completion of the transaction unless that executive is terminated by the company for cause or due to resignation without good reason, in which case the payment will be forfeited. Payments under the Plan will be includable in calculations related to Section 280G of the United States Internal Revenue Code of 1986, as amended. Scottish Re Group Limited -- http://www.scottishre.com/-- is a global life reinsurance specialist. Scottish Re has operating companies in Bermuda, Charlotte, North Carolina, Dublin, Ireland, Grand Cayman, and Windsor, England. At March 31, 2006, the reinsurer's balance sheet showed $12.2 billion assets and $10.8 billion in liabilities * * * On Aug. 21, 2006, Standard & Poor's Ratings Services lowered its counterparty credit rating on Scottish Re Group Ltd. to 'B+' from 'BB+'. Moody's Investor Service downgraded Scottish Re's senior unsecured debt rating to Ba3 from Ba2 due to liquidity issues. A.M. Best Co. has downgraded on Aug. 22, 2006, the financial strength rating to B+ from B++ and the issuer credit ratings to "bbb-" from "bbb+" of the primary operating insurance subsidiaries of Scottish Re Group Limited (Scottish Re) (Cayman Islands). A.M. Best has also downgraded the ICR of Scottish Re to "bb-" from "bb+". AM Best put all ratings under review with negative implications. SCOTTISH RE: Inks Amended Employment Pact with Paul Goldean ----------------------------------------------------------- In a filing with the U.S. Securities and Exchange Commission, Scottish Re Group Ltd. disclosed the approval of an amended employment agreement, dated July 1, 2002, between Paul Goldean and the company. Pursuant to the amendment, Mr. Goldean will serve as President and Chief Executive Officer of Scottish RE, nunc pro tunc to Oct. 26, 2006, with an annual base salary of $550,000. Also, the company's board of directors approved a Senior Executive Success Plan. The Plan's purpose is to retain essential personnel through the transition period relating to the possible sale Scottish RE. Participation in the Plan is limited to these executives, each of whom will receive the guaranteed payout listed below if the transaction is completed: Executive Guaranteed Payout --------- ----------------- Paul Goldean $300,000 Dean Miller $200,000 Cliff Wagner $200,000 David Howell $200,000 Jeff Delle Fave $100,000 In addition to the guaranteed payouts, each of the executives will receive additional payments to the extent that the sales price of the company in the transaction exceeds certain thresholds established by the Board. If any of the executives leave Scottish RE prior to the completion of the transaction, that executive will forfeit his right to any payments under the Plan. The executives will be entitled to payments under the Plan 90 days after the completion of the transaction unless that executive is terminated by the company for cause or due to resignation without good reason, in which case the payment will be forfeited. Payments under the Plan will be includable in calculations related to Section 280G of the United States Internal Revenue Code of 1986, as amended. About Scottish Re Scottish Re Group Limited -- http://www.scottishre.com/-- is a global life reinsurance specialist. Scottish Re has operating companies in Bermuda, Charlotte, North Carolina, Dublin, Ireland, Grand Cayman, and Windsor, England. At March 31, 2006, the reinsurer's balance sheet showed $12.2 billion assets and $10.8 billion in liabilities. On July 31, 2006, Fitch Ratings cut Scottish Re's issuer default rating to BBB from A-, and lowered its insurer financial strength rating one notch to A-. Fitch rates the reinsurer's hybrid and preferred securities at BB+. SEA CONTAINERS: Reed Conner Ceases To Be A Major Shareholder ------------------------------------------------------------ In a regulatory filing with the Securities and Exchange Commission, Reed Conner & Birdwell, LLC, discloses that it has ceased to be the beneficial owner of more than 5% of the Common Stock of Sea Containers, Ltd. As of October 20, 2006, the investment adviser beneficially owned 1,100 shares of the Company's common stock. A month earlier, as of September 11, 2006, Reed Conner beneficially owned 2,818,510 shares, representing a 10.84% equity stake in Sea Containers. Donn B. Conner is the firm's president and chief executive officer while Jeffrey Bronchick is the chief investment officer. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEA CONTAINERS: Wants To Give Up Railway Services In May 2007 ------------------------------------------------------------- Sea Containers, Ltd., will walk away from its wholly owned non- debtor subsidiary, Great North Eastern Railway Ltd., in May 2007, if it will not obtain more favorable franchise terms, The Sunday Times reports. GNER operates high-speed passenger trains between London and Scotland along the East Coast main line of Britain under a franchise agreement with the British Government since April 1996. Robert D. MacKenzie, president and chief executive officer of Sea Containers, told The Sunday Times although GNER is profitable, it cannot "cope with the GBP1.3 billion premium that it had to pay to the Treasury under the franchise agreement." What's more, GNER's performance bond nearly doubles on May 1 from GBP15.3 million to GBP28.7 million, Dominic O'Connell of The Sunday Times writes. According to Mr. O'Connell, Britain's Department for Transport has rejected suggestions it will renegotiate the franchise. GNER currently operates a fleet of 41 train sets totaling 463 cars and locomotives covering approximately 920 route miles and 52 stations, and in 2005 achieved 16,700,000 passenger journeys. As previously reported, Sea Containers, Ltd., and its subsidiaries, Sea Containers Services, Ltd., and Sea Containers Caribbean, Inc., filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. On October 16, 2006, the Company initiated a complementary proceeding in Bermuda to facilitate the Chapter 11 Filing. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEITEL INC: ValueAct Deal Cues S&P to Put 'B' Rating on Watch ------------------------------------------------------------- Standard & Poor's Ratings Services reported that that the 'B' corporate credit rating on seismic data provider Seitel Inc. remains on CreditWatch with developing implications, where it was placed on Aug. 29, 2006, following the announcement that the company has signed a definitive merger agreement with ValueAct Capital and its affiliates. The transaction is valued at about $780 million, including the assumption or repayment of about $189 million of debt and the anticipated payment of about $50 million associated with the early retirement of the company's senior notes. The CreditWatch developing listing reflects the likelihood that ratings could be affirmed, raised, or lowered in the near term. As of Sept. 30, 2006, Houston, Texas-based Seitel had $189 million in total adjusted debt. Standard & Poor's notes that the transaction will be subject to approval by the majority of non-ValueAct shareholders, voting in the special meeting, over the intermediate term. ValueAct currently owns beneficially about 39% of Seitel's outstanding common stock on a fully diluted basis. "If the ValueAct acquisition is successfully executed as outlined, Seitel's existing bonds (11.75% senior notes) would likely be retired, and we would consequently remove ratings from that specific debt issue," said Standard & Poor's credit analyst Jeffrey B. Morrison. "Nevertheless, we will need to gain further clarity around the potential strategic and capital structure implications of the ValueAct transaction, before resolving the CreditWatch listing as it relates to Seitel's corporate credit rating and ratings for any potential new debt instruments," he continued. SEMCO ENERGY: Moody's Assigns Loss-Given-Default Rating ------------------------------------------------------- In connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the broad energy midstream sector, encompassing companies that engage in the extraction, treating, transmission, distribution, and logistics for crude oil, natural gas, and other hydrocarbon products, the rating agency affirmed its Ba2 corporate family rating on SEMCO Energy, Inc. Additionally, Moody's held its probability-of-default ratings and assigned loss-given-default ratings on these loans and bond debt obligations: Projected Old POD New POD LGD Loss-Given Debt Issue Rating Rating Rating Default ---------- ------- ------- ------ ---------- 6.4% Sr. Unsec. Medium Term Notes due 2008 Ba2 Ba2 LGD3 37% 7.03% Sr. Unsec. Medium Term Notes due 2013 Ba2 Ba2 LGD3 37% 8% Sr. Unsec. Notes due 2016 Ba2 Ba2 LGD3 37% 6.49% Sr. Unsec. Notes due 2009 Ba2 Ba2 LGD3 37% 7.75% Sr. Unsec. Global Notes due 2013 Ba2 Ba2 LGD3 37% 7.125% Sr. Unsec. Global Notes due 2008 Ba2 Ba2 LGD3 37% Moody's explains that current long-term credit ratings are opinions about expected credit loss, which incorporate both the likelihood of default and the expected loss in the event of default. The LGD rating methodology will disaggregate these two key assessments in long-term ratings. The LGD rating methodology will also enhance the consistency in Moody's notching practices across industries and will improve the transparency and accuracy of Moody's ratings as Moody's research has shown that credit losses on bank loans have tended to be lower than those for similarly rated bonds. Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha- numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations. Loss-given-default assessments are assigned to individual rated debt issues -- loans, bonds, and preferred stock. Moody's opinion of expected loss are expressed as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0% to 9%) to LGD6 (loss anticipated to be 90% to 100%). Headquartered in Port Huron, Michigan, SEMCO Energy Inc. -- http://www.semcoenergy.com/-- together with its subsidiaries, operates as a regulated public utility company. The company operates in one segment, Gas Distribution. The Gas Distribution segment purchases, transports, distributes, and sells natural gas to residential, commercial, and industrial customers in Michigan and Alaska. SHUMATE INDUST: Reports $500,000 Major Valve Purchase Order ----------------------------------------------------------- Shumate Industries Inc. reported the receipt of a significant purchase order for its surface-level Hemiwedge valve targeting mid-stream and energy flow control applications. "This order from a valve distributor in North America, validates the demand for our products during the launch and market acceptance of the Hemiwedge(R) valve" Shumate Industries' Chairman and CEO, Larry Shumate, commented. Receiving this significant purchase order, and indications from other future customers, further evidences the interest levels we have seen while marketing to valve sales representative companies, valve distributors and our target end customers. "In our view, the economic savings derived from reduced supply disruption and in-line maintenance, utilizing our proprietary Hemiwedge(R) Cartridge feature, has been well received by our target customers within flow control applications such as terminal and gathering stations. The initial sales launch of the Hemiwedge(R) valve is the result of tremendous hard work and dedication by our entire team, for which our firm is grateful to its employees." This purchase order totals over $500,000 which includes the purchase of two inch through six inch size ANSI class Hemiwedge valves, and Shumate anticipates deliveries throughout the next ninety days. After more than a year of preparation, engineering and design, testing, and global supply chain build up, the launch of Hemiwedge surface-level valve this quarter continues to be a major focus of the Company. "In addition to the launch of our surface level Hemiwedge valve, we anticipate other revenue producing agreements to follow as our business development and marketing efforts gain momentum created by Hemiwedge(R)'s market exposure," Matthew Flemming, Shumate Industries' CFO, stated. "We anticipate additional revenues from licensing Hemiwedge(R) technology for use in sub sea high pressure applications and additional milestone payments from the progress of the development of the Hemiwedge(R)'s down hole isolation valve." Headquartered in Conroe, Texas, Shumate Industries Inc. (OTCBB:SHMT) -- http://www.shumateinc.com/-- formerly known as Excalibur Industries, serves the energy field services market through its Shumate Machine Works operating subsidiary. With its roots going back more than 25 years, Shumate is a contract machining and manufacturing company utilizing state-of-the-art 3-D modeling software, computer numeric controlled machinery and manufacturing expertise to perform close tolerance and precision machining for energy field service applications. At June 30, 2006, the company's balance sheet showed $ 3,666,316 in total stockholders' equity deficit compared to a $ 6,277,008 deficit at Dec. 31, 2005. SPARTA SURGICAL: Case Summary & 22 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Sparta Surgical Corp. 5445 DTC Parkway, Suite 520 Greenwood Village, CO 80111 Bankruptcy Case No.: 06-18117 Type of Business: The Debtor manufactures and markets specialty surgical instruments, critical care disposables, and related medical equipment. Chapter 11 Petition Date: November 6, 2006 Court: District of Colorado (Denver) Judge: A. Bruce Campbell Debtor's Counsel: Lee M. Kutner, Esq. Kutner Miller, P.C. 303 East 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 Fax: (303) 832-1510 Debtor's financial condition as of August 31, 2006: Total Assets: $0 Total Debts: $1,064,527 Debtor's 22 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ LKDTBJP Living Trust $276,160 12 Champagne Circle Rancho Mirage, CA 92270 Pepe & Hazzard, LLP Trade Debt $98,359 c/o John Kostenbanck Goodwin Square Hartford, CT 06103 Internal Revenue Service $85,580 U.S. Treasury P.O. Box 1210 Charlotte, NC 28201 Healthcare Holdings, Inc. $51,500 8150 North Central Expressway Dallas, TX 75206 Peabody & Arnold, LLP Trade Debt $35,446 c/o John Kestrubanc 50 Rowes Wharf Boston, MA 02110 Thomas F. Reiner $25,000 Wellbong/Michelson Trade Debt $20,700 Angell & Deering Trade Debt $19,650 Gary Agron Loan $16,786 Schmetter, Aptaker Trade Debt $10,843 American Stock TRF Trade Debt $10,591 Fox Rothschild Trade Debt $7,595 State of California $6,452 Gadsby Hannah, LP Trade Debt $6,052 Kendall Healthcare Co. Trade Debt $4,208 Business Wire Trade Debt $3,585 Mitchell Financial Printing Trade Debt $3,500 Ethox, Inc. Trade Debt $3,276 NASDAQ, Inc. Trade Debt $3,230 Platzer, Swergold, Karlin Trade Debt $3,014 PR Newswire Trade Debt $2,735 Allen J. Korn Trade Debt $2,470 STK INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: STK International Inc. 311 East Artesia Boulevard Compton, CA 90220 Bankruptcy Case No.: 06-15729 Type of Business: The Debtor imports and sells various foreign merchandise at low, discounted prices. See http://www.stkintl.com/ The Debtor filed for chapter 11 protection on May 20, 2003 (Bankr. C.D. Calif. Case No. 03- 23651). Chapter 11 Petition Date: November 6, 2006 Court: Central District Of California (Los Angeles) Judge: Thomas B. Donovan Debtor's Counsel: Vicki L. Schennum, Esq. 2677 North Main Street, Suite 320 Santa Ana, CA 92805 Tel: (714) 542-1411 Fax: (714) 558-7435 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Jiansu Guao Tai Purchase-China $348,377 9th Floor, Guotai Building Renmin Road, Zhangiagang Jiangsu 215600 China Ningbo Home-Dollar Imp. & Exp. Purchase-China $163,578 69 Guang Yuang Road Jiangbei District Ningbo 315033 China AMB Property LP Rent $121,932 P.O. Box 301112 Los Angeles, CA 90030 Transportation Solutions, Inc. Freight $113,868 285 Country Club Drive Stockbridge, GA 30281 Ningbo Stepower Houseware Co. Purchase-China $107,930 No. 14a1, Donghai Shuguang Building No. 455 East Zhongshan Road Ningbo, China Roadrunner Dawes Freight $66,706 Ree-Cee Trading Co. Ltd. Purchase-China $37,913 Chinatop Enterprises Co., Ltd. Purchase-China $36,859 CSI Express Line Inc. Duty/Dock Fees $36,280 CIT Capital (Bankers Direct) Office Exp. $34,189 Chinapack Ningbo Imp./Exp. Co. Purchase-China $30,622 Yangjiang Yuzbong Daily Art. Purchase-China $29,218 USF Reddaway Freight $27,611 Hangzhou Tianyuan Arts & Craft Purchase-China $26,491 Anhui New Dragon I/E Corp. Purchase-China $24,370 Hainan Econ Company Purchase-China $24,323 Consumer Product Safety Litigation Penalty $22,733 Jiangsu Guo Tai International Purchase-China $18,994 Stickerking/Tatooking, Inc. Purchase-Local $18,448 Ningbo Wins Handicraft Co. Ltd. Purchase-China $17,812 STONECREST MEDICAL: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Stonecrest Medical Promenade, LLC 8225 Mall Parkway Lithonia, GA 30038 Bankruptcy Case No.: 06-74435 Chapter 11 Petition Date: November 7, 2006 Court: Northern District of Georgia (Atlanta) Judge: C. Ray Mullins Debtor's Counsel: Dorna Jenkins Taylor, Esq. Taylor & Tew P.C. Suite 500 1401 Peachtree Street Atlanta, GA 30309 Tel: (404) 870-3560 Fax: (404) 745-0136 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 largest unsecured creditors. STRUCTURED ASSET: Fitch Cuts Rating on Class B3 Certificates to BB ------------------------------------------------------------------ Fitch Ratings has taken rating actions on these Structured Asset Securities Corp. Amortizing Residential Collateral Trust residential mortgage-backed certificates: Series 2002-BC7 -- Class A1 affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 downgraded to 'BBB+' from 'A-'; -- Class B1 downgraded to 'BB+' from 'BBB+'; -- Class B2 downgraded to 'BB' from 'BBB'; -- Class B3 downgraded to 'BB' from 'BBB-'. Series 2002-BC10 -- Class M2 rated 'A' is placed on Rating Watch Negative; -- Class M3 rated 'BBB+' is placed on Rating Watch Negative. The affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $56.5 million of outstanding certificates. CE is in the form of subordination, overcollateralization and excess spread. The negative rating actions, affecting approximately $5.4 million of outstanding certificates, reflect deterioration in the relationship between CE and expected losses due to higher-than- expected delinquencies and losses as well as OC below its target amount. Approximately 44% of the pool for series 2002-BC7 is more than 60 days delinquent (including loans in Bankruptcy, Foreclosure and Real Estate Owned). The OC amount is currently $500,470 below its target amount of $3,310,137. In four of the past six months, the excess spread has not been sufficient to cover the monthly losses incurred. Cumulative losses as a percent of the original collateral balance are 2.1%. Approximately 34% of the pool for series 2002-BC10 is more than 60 days delinquent (including loans in Bankruptcy, Foreclosure and Real Estate Owned). The OC amount is currently $475,171 below its target amount of $3,209,598. In four of the past six months, the excess spread has not been sufficient to cover the monthly losses incurred. Cumulative losses as a percent of the original collateral balance are 1.3%. The transactions are seasoned 49 (series 2002-BC7) and 46 (series 2002-BC10) months and the pool factor (current mortgage loan principal outstanding as a percentage of the initial pool) for both series is 8%. The mortgage pools consists of fixed and adjustable rate, fully amortizing and balloon, first and second lien conventional residential mortgage loans having an original term of no more than 30 years. The mortgage loans were originated or acquired by various originators or their correspondents in accordance with such originator's respective underwriting standards and guidelines and are master serviced by Aurora Loan Services, Inc., which is rated 'RMS1-' by Fitch. STRUCTURED ASSET: Fitch Puts BB+ Rating on $4.5MM Class B1 Certs. ----------------------------------------------------------------- Structured Asset Securities Corporation mortgage pass-through certificates, series 2006-GEL4, is rated by Fitch Ratings: -- $247,956,000 classes A1, A2, and A3 'AAA'; -- $29,437,000 classes M1 and M2 'AA+'; -- $5,823,000 class M3 'AA'; -- $5,823,000 class M4 'AA-'; -- $5,176,000 class M5 'A+'; -- $5,176,000 class M6 'A'; -- $3,882,000 class M7 'A-'; -- $5,985,000 class M8 'BBB'; and -- $4,529,000 class B1 'BB+'. The 'AAA' rating on the class A certificates reflects the 24.35% credit enhancement provided by the 7.00% class M1, the 2.10% class M2, the 1.80% class M3, the 1.80% class M4, the 1.60% class M5, the 1.60% class M6, the 1.20% class M7, the 1.85% class M8, the 1.40% class B1, and the 1.40% class B2 (not rated by Fitch), along with overcollateralization. The initial OC amount is 1.60% growing to a target OC of 2.60%. In addition, the ratings on the certificates reflect the quality of the underlying collateral, and Fitch's level of confidence in the integrity of the legal and financial structure of the transaction. The mortgage pool consists of fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties, with an aggregate principal balance of $323,491,285. As of the cut-off date, Oct. 1, 2006, the mortgage loans had a weighted average loan-to-value ratio of 82.14%, weighted average coupon of 7.599%, weighted average remaining term to maturity of 340 months and an average principal balance of $178,823. Single-family properties account for approximately 75.03% of the mortgage pool, condos 11.85%, and two- to four- family properties 6.33%. The three largest state concentrations are California (17.48%), Florida (12.21%), and Texas (5.09%). None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. Structured Asset Securities Corporation deposited the loans into the trust, which issued the certificates, representing beneficial ownership in the trust. For federal income tax purposes, the Trust will consist of multiple real estate mortgage investment conduits. U.S. Bank National Association will act as trustee. Aurora Loan Services LLC, rated 'RMS1-' will act as master servicer for this transaction. TALECRIS BIOTHERAPEUTICS: S&P Assigns 'B+' Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Talecris Biotherapeutics Inc. The rating outlook is stable. At the same time, Standard & Poor's assigned its loan and recovery ratings to Talecris' $1.2 billion senior secured term loan due 2013. The loan was rated 'BB-' with a recovery rating of '1', indicating a high expectation for full recovery of principal in the event of a payment default. The company's $250 million asset based lending facility due 2011 is unrated. The corporate credit rating on Talecris is based on the company's solid position in the blood plasma-derived biopharmaceutical industry, highlighted by its two best-selling products, as well as the industry's healthy growth prospects and relatively high barriers of entry. These factors are offset by the company's short operating track record as an independent entity, high debt leverage, and heavy capital investments expected over the intermediate term. Talecris is a biopharmaceutical company that develops, manufactures, and markets plasma-derived and recombinant protein therapeutics. TOWER RECORDS: Taps Keen Realty as Special Real Estate Consultant ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in MTS Inc. dba Tower Records and its debtor-affiliates' chapter 11 cases asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Keen Realty LLC, as their special real estate consultant. Keen Realty specifically will provide analysis and valuation of the Debtors' 89 real property leases. Additionally, Keen Realty will: a) provide the committee, by mail, with a desktop spreadsheet report analyzing and evaluating the value or liability associated with the Debtors leases, including a summary of the basis for value and liability set forth in the report and certain owned properties if designated in writing by the committee; and b) present the report to the committee outlining its estimate as to the value or liability of each of the evaluation properties and of the portfolio as a whole by Oct. 3, 2006, 12:00 noon (PST). Keen's valuation shall be based upon analysis of the market, review of the lease documents and upon its exercise of its professional judgment. It is not anticipated that Keen will inspect any of the locations. The Debtors will pay Keen Realty $20,000 for this engagement. Matthew Bordwin, principal and executive vice president, assures the Court that his firm does not hold any interest adverse to the Debtors, its estate or creditors. Mr. Bordwin can be reached at: Matthew Bordwin Keen Realty LLC 60 Cutter Mill Road, Suite 214 Great Neck, NY 11021 Phone: 516-482-2700 Fax: 516-482-5764 http://www.keenconsultants.com/ Headquartered in West Sacramento, California, MTS, Inc., dba Tower Records -- http://www.towerrecords.com/-- is a retailer of music in the U.S., with nearly 100 company-owned music, book, and video stores. The Company and its affiliates previously filed for chapter 11 protection on Feb. 9, 2004 (Bankr. D. Del. Lead Case No. 04-10394). The Court confirmed the Debtors' plan on March 15, 2004. The Company and seven of its affiliates filed their second voluntary chapter 11 petition on Aug. 20, 2006 (Bankr. D. Del. Case Nos. 06-10886 through 06-10893). Richards, Layton & Finger, P.A. and O'Melveny & Myers LLP represent the Debtors. The Official Committee of Unsecured Creditors is represented by McGuirewoods LLP and Cozen O'Connor. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Dec. 18, 2006. WCI STEEL: Earns $11.8 Million in Quarter Ended September 30 ------------------------------------------------------------ WCI Steel Inc. reported net income of $11.8 million for the quarter ending Sept. 30, 2006. EBITDA was $85 per ton, significantly exceeding the company's prior guidance. On May 1, Reorganized WCI Steel purchased all the assets of the former WCI Steel Inc. as part of its plan of reorganization. Revenues for the quarter totaled $237.2 million, 39% higher than in the same period last year for Old WCI. For the quarter, the company reported: * Shipments of 321,000 tons, * Revenues from product sales of $232.2 million, or $723 per ton, * EBITDA of $27.3 million, or $85 per ton, * Operating income of $22.6 million, or $70 per ton, and * Net income of $11.8 million prior to the accrued PIK preferred dividend, or $37 per ton. Patrick G. Tatom, president and chief executive officer, said the quarterly results demonstrated that WCI Steel has successfully reorganized and is well positioned as a strong custom flat-rolled producer. "We are very pleased with our performance to date and appreciate the contributions of our employees and the support of our customers," Mr. Tatom said. "Our shipments for the quarter were in line with the prior guidance; however, our EBITDA of $85 per ton substantially exceeded the prior forecasted range of $50 to $60 per ton." Mr. Tatom added, "The quarter benefited by good demand in our key markets, a higher-value mix, generally robust prices and solid operations. Our results also reflected the benefits of operational efficiency and cost reduction made possible by the new work systems under our new collective bargaining agreement." Cynthia B. Bezik, chief financial officer, noted, "Our liquidity remains strong. At the end of September, we had $5.8 million of cash on hand and $19.8 million borrowed under the $150 million revolving credit facility. Our borrowings under the revolving credit facility increased by only $4.3 million since June 30, reflecting the seasonal build-up of raw materials. "We anticipate that our borrowing under the credit facility will increase to about $45 million at year-end, primarily due to our planned capital spending program and the continuation of normal seasonal build-up of iron ore pellets for the winter." Capital Expenditures As previously announced, WCI Steel is investing $66 million in two major capital projects, a walking beam slab reheat furnace at the hot strip mill, which will be operational early in 2008, and a baghouse system to meet new federal air quality standards to be operational in April 2007. During the quarter, WCI Steel spent $7.8 million in capital, primarily related to these two projects. In November 27, WCI Steel will decommission one of the three pusher-style furnaces in the hot strip mill to allow construction to commence on the new walking beam furnace early in 2007. Capital spending in the final quarter of the year is currently forecasted at about $15 million. Outlook "Distributor inventory positions that reached 3.8 months-on-hand in September, high import levels in recent months and downward adjustments to automotive build schedules will impact our markets throughout the fourth quarter," Mr. Tatom said. As a result, WCI Steel currently plans to ship approximately 260,000 tons in the final quarter of 2006, a decrease of 50,000 tons, or about 16%, compared with earlier expectations. Calendar year 2006 shipments are anticipated to total 1,269,000 tons. By comparison, Old WCI shipped 1,194,000 tons in calendar year 2005 and 1,108,000 tons in calendar year 2004. Mr. Tatom noted that WCI Steel has undertaken a variety of actions in response to a slowing market, including: * accelerating planned maintenance programs and emphasizing ongoing training efforts related to the new work systems, * cutting front-end production to match the order book, * considering potential outages in finishing operations in November and December, and * reducing overtime within the operations and implementing additional spending controls. As a result of lower shipments, reduced pricing, and additional planned maintenance, it is currently expected that EBITDA per ton shipped for the fourth quarter will be between $40 and $50 per ton. WCI's preliminary estimate of its steel shipments for 2007 remains at 1,250,000 tons, slightly less than the projected 2006 calendar year level due to production outages related to the capital program. Once the walking beam furnace is operational in 2008, shipments are expected to approach 1.4 million tons. "With a solid financial position, a focus on niche markets and improved efficiencies from our new work systems, WCI Steel is well-positioned to grow and build shareholder value," Tatom said. Background Information On May 1, WCI Steel issued $100 million senior secured notes, received $50 million in cash for the issuance of 5 million preferred shares, and was obligated to issue 4 million shares of common stock to the creditors of Old WCI as bankruptcy claims are resolved. As of September 30, WCI Steel had distributed 3.8 million shares of common stock and expects to distribute the remainder by the first quarter of 2007. The 5 million shares of preferred stock have a 10% "payment-in- kind" dividend, payable semi-annually on November 1 and May 1. The Nov. 1, 2006, PIK dividend is payable to shareholders of record as of Sept. 15, 2006. The preferred stock converts into common stock at a 1.2 ratio no later than May 1, 2008. Assuming conversion of the 5 million shares of preferred stock as of Sept. 30, 2006, and the 4 million shares of common stock, WCI Steel has approximately 10.3 million common shares outstanding on a fully diluted basis. Under the Indenture for the $100 million of senior secured notes, WCI Steel plans to exchange the notes with new notes with similar terms that will be registered with the Securities and Exchange Commission in the second quarter of 2007 and, at that time, the company expects to begin to file periodic financial reports with the SEC. About WCI Steel Warren, Ohio-based WCI Steel Inc. (OTC: WCIS.PK) -- http://www.wcisteel.com/-- is an integrated steel maker producing 185 grades of flat-rolled custom and commodity steel products. Its products include high carbon, alloy, ultra high strength, and heavy-gauge galvanized steel. Major customers are steel converters, processors, service centers, construction product companies, and to a lesser extent, automobile manufacturers. WCI Steel filed for chapter 11 protection on Sept. 16, 2003 (Bankr. N.D. Ohio Case No. 03-44662) and emerged from chapter 11 in May 2006, under a plan proposed by 17 Noteholders led by Harbinger Capital Partners Master Fund I, Ltd., that gave the Noteholders $100,000,000 in new 8% Secured Notes and more than 98% in equity of the reorganized steel company. * * * WCI Steel Inc. carries Moody's Investors Service's C Senior Unsecured Debt Rating. WESTPOINT STEVENS: Judge Defers Case Dismissal Hearing to Dec. 14 ----------------------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York further adjourns the hearing on WestPoint Stevens, Inc., and its debtor-affiliates' request to dismiss their Chapter 11 cases to Dec. 14, 2006, at 10:00 a.m., Eastern Time. The Court previously rescheduled the hearing for Oct. 26, 2006. As reported in the Troubled Company Reporter on Aug. 16, 2005, the Debtors informed the Court that they have no ongoing business operations and are administratively insolvent, thus, confirmation of a chapter 11 plan is impossible in accordance with the Bankruptcy Code. The Debtors believed that a chapter 7 conversion is not advisable because it will increase administrative cost to the estate and require the appointment of a chapter 7 trustee. Headquartered in West Point, Georgia, WestPoint Stevens, Inc. -- http://www.westpointstevens.com/-- is the #1 US maker of bed linens and bath towels and also makes comforters, blankets, pillows, table covers, and window trimmings. It makes the Martex, Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux brands, as well as the Martha Stewart bed and bath lines; other licensed brands include Ralph Lauren, Disney, and Joe Boxer. Department stores, mass retailers, and bed and bath stores are its main customers. (Federated, J.C. Penney, Kmart, Sears, and Target account for more than half of sales.) It also has nearly 60 outlet stores. Chairman and CEO Holcombe Green controls 8% of WestPoint Stevens. The Company filed for chapter 11 protection on June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. (WestPoint Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WESTPOINT STEVENS: Rockvale Asks to Compel $401,194 Admin. Payment ------------------------------------------------------------------ Rockvale Outlet Center, LP, asks the U.S. Bankruptcy Court for the Southern District of New York to direct Westpoint Stevens Inc. and its debtor-affiliates to pay it $401,194 as administrative expenses plus reasonable attorney's fees in relation to the Rockvale Lease in Pennsylvania. WestPoint Stevens Stores, Inc., as successor-in-interest to WestPoint Pepperell Stores, Inc., operated an outlet store as tenant under a lease dated Aug. 27, 1993, with Rockvale Outlet Center, LP, as landlord. The leased space is located at 35 S. Willowdale Drive, Lancaster, Pennsylvania. Before the Lease expired in October 2004, the Debtors: * sought and obtained Court approval to assume the Rockvale Lease; and * renewed the Lease for an additional three years, from Nov. 1, 2004, through Oct. 31, 2007, with a $95,000 yearly minimum base rent, payable in monthly installments. On July 8, 2005, the Court approved the sale of substantially all of the Debtors' assets to an indirect subsidiary of American Real Estate Partners, L.P., and the Debtors announced that they would wind down their bankruptcy estates. Constantine D. Pourakis, Esq., at Stevens & Lee, P.C. in New York, relates that, as part of the sale, the Debtors agreed to assume and assign certain leases to the purchaser. However, Rockvale's Lease was not included in the list filed in Court. Therefore, Mr. Pourakis asserts, the Rockvale Lease remained property of the Debtors. In August 2005, WestPoint ceased operations at the Rockvale Premises and stopped paying rent, Mr. Pourakis tells the Court. Mr. Pourakis contends WestPoint breached the terms of the assumed Lease by vacating the Premises and stopping rent payments. Therefore, Rockvale is entitled to payment as an administrative expense priority pursuant to Section 503(b)(1) of the Bankruptcy Code. Beal Bank Objects Beal Bank, S.S.B., a successor first lien agent and collateral trustee, does not object to the allowance of Rockvale's claim for the amount due under the Lease, but to the immediate payment of the Claim due to the limited amount of assets available to pay the expenses. All of the assets of the estate are encumbered by a lien in favor of the First Lien Lenders, followed by a lien in favor of the Second Lien Lenders, Gregory G. Hesse, Esq., at Jenkens & Gilchrist, in Dallas, Texas, explains. Hence, Rockvale's administrative expense claim is behind and subordinate to the payment of the First Lien Agent's fees and expenses. Beal Bank, therefore, asks the Court to delay any payment of Rockvale's Claim until the payment of all of the First Lien Agent's fees and expenses. Headquartered in West Point, Georgia, WestPoint Stevens, Inc. -- http://www.westpointstevens.com/-- is the #1 US maker of bed linens and bath towels and also makes comforters, blankets, pillows, table covers, and window trimmings. It makes the Martex, Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux brands, as well as the Martha Stewart bed and bath lines; other licensed brands include Ralph Lauren, Disney, and Joe Boxer. Department stores, mass retailers, and bed and bath stores are its main customers. (Federated, J.C. Penney, Kmart, Sears, and Target account for more than half of sales.) It also has nearly 60 outlet stores. Chairman and CEO Holcombe Green controls 8% of WestPoint Stevens. The Company filed for chapter 11 protection on June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. (WestPoint Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WILLOWBEND NURSERY: Creditors' Panel Wants Goldman as Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Willowbend Nursery, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Ohio for permission to retain Goldman & Rosen, Ltd., as its counsel. The Committee wants Goldman & Rosen to provide legal services at the regular hourly rates applicable when these services are rendered. The current hourly rates charged by Goldman & Rosen's professionals are: Professional Hourly Rate ------------ ----------- Marc P. Gertz, Partner $250 Michael A. Steel, Partner $210 James R. Russell, Associate $150 Peter G. Tsarnas, Associate $150 Paralegal $60 Goldman & Rosen has received a $7,500 retainer for their services prior to being fully engaged. Members of the Committee paid for the retainer. The Committee assures the Court that Goldman & Rosen is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Perry, Ohio, Willowbend Nursery, Inc. -- http://www.willowbendnursery.com/-- owns and operates a nursery and grow quality bareroot plants & shrubs. The Company and its affiliates filed for chapter 11 protection on Sept. 20, 2006 (Bankr. N.D. Ohio Case No. 06-14353). When the Debtors filed for protection from their creditors, they listed estimated assets between $1 million and $10 million and estimated debts between $10 million and $50 million. Andrew W. Suhar, Esq., was named as Chapter 11 Trustee for the Debtors' estates pursuant to a request filed by Fifth Third Bank, the Debtors' senior secured creditor. XEROX CORPORATION: Moody's Eyes Upgrade on Ba1 Corporate Rating --------------------------------------------------------------- Moody's Investors Service placed the ratings of Xerox Corporation and supported subsidiaries under review for possible upgrade. Overall, Moody's believes that the combination of consistent business execution, secured debt reduction, and positive operating trends warrant the consideration of a rating upgrade. Ratings under review for possible upgrade include: * Xerox Corporation -- Corporate Family Rating at Ba1 -- Senior unsecured at Ba1, LGD3, 48% -- Senior unsecured shelf registration at Ba1, LGD3, 48% -- Subordinated at Ba2, LGD6, 94% -- Subordinated shelf registration at Ba2, LGD6, 94% -- Preferred shelf registration at Ba2, LGD6, 97% * Xerox Credit Corporation: -- Senior unsecured at Ba1 (support agreement from Xerox Corporation), LGD3, 48% The rating review will focus on the prospects for (a) continued steady business execution, that includes equipment installation growth that provides the basis for ongoing post sale revenue streams; (b) overall modest revenue growth; (c) consistent operating profitability in the 8-9% range; (d) ongoing annual cash flow from operations in the $1 to $1.5 billion range; (e) continued reduction of secured debt, which reduction we expect should approximate $1 billion annually; and, (f) the maintenance of solid liquidity and continued discipline with respect to share repurchase activity which should funded with free cash flow generation. Since Moody's changed the ratings outlook to positive in Sept. 2005, Xerox has continued to demonstrate good installation growth throughout its product offering and, with a good product lineup. At the same time, overall product mix has shifted slightly downward, which has contributed to slight pressure on gross margins, although they remain over 40%. Consistent and well managed operating expenses have contributed to operating margins remaining in the 8% to 9% range. Importantly, the company has continued to consistently reduce the level of secured debt in its capital structure. Since June 2005, secured debt has been nearly cut in half to $2.3 billion and we expect that this trend should continue. Liquidity remains solid, with cash balances of $1.6 billion at Sept. 2006 plus access to a $1.25 billion unsecured revolving credit facility, for which covenant room is expected to remain ample. Xerox Corporation, headquartered in Stamford, Connecticut, develops, manufactures and markets document processing systems and related supplies and provides consulting and outsourcing document management services. * Cooley Godward Partner R. Sussman Joins TMA's Board of Directors ------------------------------------------------------------------ Ronald R. Sussman, a partner in Cooley Godward Kronish's industry- leading Bankruptcy & Restructuring Practice, has been named to two leadership positions within important associations in the bankruptcy sector. Mr. Sussman was re-elected to the Board of Directors at the Turnaround Management Association's recent annual meeting in Orlando, Florida. He will serve a two-year term, after having recently completed a first three-year term. Mr. Sussman was also recently elected Secretary/Treasurer of the Association of Certified Turnaround Professionals. He is also a member of the Board of Directors of ACTP. With international headquarters in Chicago, Illinois, the Turnaround Management Association -- http://www.turnaround.org/-- is the only international non-profit association dedicated to corporate renewal and turnaround management. TMA has 7,100 members in 38 regional chapters who comprise a professional community of turnaround practitioners, attorneys, accountants, investors, lenders, venture capitalists, appraisers, liquidators, executive recruiters and consultants. The Association of Certified Turnaround Professionals (ACTP) is the sole international organization dedicated to developing, monitoring and maintaining a program of certification for professionals engaged in the turnaround, crisis management, restructuring and renewal of troubled businesses, organizations and associations. Cooley Godward Kronish's Bankruptcy & Restructuring Practice represents secured lenders, official and unofficial creditors' committees, equity committees, employee and retiree committees, tort committees, investors in distressed situations, debtors, companies and governmental entities in the negotiation of complex reorganizations. The group has handled major cases, including litigations in the Enron, Montgomery Ward, Federated Department Stores, Pacific Gas and Electric Company and USG Corporation Chapter 11 cases. About Cooley Godward Kronish LLP Cooley Godward Kronish's -- http://www.cooley.com/-- 550 attorneys have an entrepreneurial spirit and deep, substantive experience and are committed to solving clients' most challenging legal matters. From small companies with big ideas to international enterprises with diverse legal needs, Cooley Godward Kronish has the breadth of legal resources to enable companies of all sizes to seize opportunities in today's global marketplace. The firm represents clients across a broad array of dynamic industry sectors, including technology, life sciences, financial services, retail and energy. The firm has full-service offices in major commercial, government and technology centers: Palo Alto, California; New York City; San Diego, California; San Francisco, California; Reston, Virginia; Broomfield, Colorado and Washington, DC. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- November 9, 2006 TURNAROUND MANAGEMENT ASSOCIATION Real Estate Update CityPlace Conference Center, Dallas, TX Contact: http://www.turnaround.org/ November 9, 2006 TURNAROUND MANAGEMENT ASSOCIATION Webinar "Second Lien Financing or Investing: Are There Opportunities for You?" TMA HQ, Chicago, IL Contact: http://www.turnaround.org/ November 10, 2006 CEB Creditors' Remedies & Debtors' Rights San Francisco, CA Contact: http://www.ceb.com/ November 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Program St. Louis, Missouri Contact: 815-469-2935 or http://www.turnaround.org/ November 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Program - Cost Containment Strategies St. Louis, MO Contact: http://www.turnaround.org/ November 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Holiday Cocktail Reception Honoring the Bankruptcy Benches of the Southern & Eastern Districts of New York and New Jersey Association of the Bar of the City of New York New York, NY Contact: http://www.turnaround.org/ November 14, 2006 TURNAROUND MANAGEMENT ASSOCIATION Sure-Fire Strategies for Destroying Value: An Expose of Common Errors, Oversights, and Missed Opportunties in Turnaround Management, Workouts, and Restructurings Marriott Downtown, Los Angeles, CA Contact: http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint Reception with NYIC/NYTMA TBA, New York Contact: 908-575-7333 or http://www.turnaround.org/ November 15, 2006 LI TMA Formal Event TMA Australia National Conference Long Island, New York Contact: http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Citrus Club, Orlando, Florida Contact: 561-882-1331 or http://www.turnaround.org/ November 15, 2006 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Arena Panel Discussion with Some of the Leading Investors Red Barn Restaurant, Westport, CT Contact: http://www.turnaround.org/ November 15-16, 2006 EUROMONEY INSTITUTIONAL INVESTOR Asia Capital Markets Forum Island Shangri-La, Hong Kong Contact: http://www.euromoneyplc.com/ November 16, 2006 BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA New Legal Strategies for Retaining Executives at Troubled Companies Contact: 240-629-3300; http://www.beardaudioconferences.com/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Bankruptcy Judges Panel Duquesne Club, Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner Program TBA, Seattle, Washington Contact: 503-223-6222 or http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Dinner Program TBA, Seattle, WA Contact: 403-294-4954 or http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Life in the Bankruptcy Court with BAPCPA, A View from The Bench Oxford Hotel, Denver, CO Contact: http://www.turnaround.org/ November 16, 2006 TURNAROUND MANAGEMENT ASSOCIATION Turnaround & Transaction of the Year Award Presentations Solera, Minneapolis, MN Contact: http://www.turnaround.org/ November 16-17, 2006 STRATEGIC RESEARCH INSTITUTE 8th Annual West Distressed Debt Investing Forum Venetian Resort Hotel Casino, Las Vegas, NV Contact: http://www.srinstitute.com November 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION Breakfast with Harry Nolan, Author of Airline without a Pilot - Lessons in Leadership Westin Buckhead, Atlanta, GA Contact: http://www.turnaround.org/ November 17, 2006 TURNAROUND MANAGEMENT ASSOCIATION The Brave New World of Selling Distressed Companies Mid-Day Club, Chicago, IL Contact: http://www.turnaround.org/ November 22, 2006 TURNAROUND MANAGEMENT ASSOCIATION "Inherent Jurisdiction of the Courts" Dinner Event - Special Presentation by Madam Justice Juliana Topolniski Union Bank Inn, Edmonton, AB Contact: http://www.turnaround.org/ November 23, 2006 TURNAROUND MANAGEMENT ASSOCIATION Martini Party Vancouver, British Columbia Contact: 403-294-4954 or http://www.turnaround.org/ November 23-24, 2006 EUROMONEY CONFERENCES 5th Annual China Conference China World Hotel Beijing, China Contact: http://www.euromoneyconferences.com/ November 27-28, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Thirteenth Annual Conference on Distressed Investing Maximizing Profits in the Distressed Debt Market The Essex House Hotel - New York Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, FL Contact: 561-882-1331 or http://www.turnaround.org/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Joint TMA Florida/ACG Tampa Bay Luncheon Buying and Selling a Troubled Company Centre Club, Tampa, FL Contact: http://www.turnaround.org/ November 28, 2006 TURNAROUND MANAGEMENT ASSOCIATION Some Do's and Don'ts in Investing in Turnarounds University Club, Milwaukee, WI Contact: http;//www.turnaround.org/ November 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Special Program TBA, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ November 29, 2006 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Industry Trends Jasna Polana, Princeton, NJ Contact: http://www.turnaround.org/ November 30, 2006 EUROMONEY CONFERENCES Euromoney/DIFC Annual Conference Managing superabundant liquidity Madinat Jumeirah, Dubai Contact: http://www.euromoneyconferences.com/ November 30, 2006 TURNAROUND MANAGEMENT ASSOCIATION Restructuring Around Intellectual Property - Preserving Value When Trouble Lurks Carnelian Room, San Francisco, CA Contact: http://www.turnaround.org/ November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ December 1, 2006 CEB Creditors' Remedies & Debtors' Rights Garden Grove, CA Contact: http://www.ceb.com/ December 4-5, 2006 PRACTISING LAW INSTITUTE Mortgage Servicing & Default Management Washington, DC Contact: http://www.pli.edu/ December 5, 2006 EUROMONEY CONFERENCES CFO Forum Hyatt Regency, Hangzhou, China Contact: http://www.euromoneyconferences.com/ December 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION Intellectual Property - Are You Overlooking Significant Value? 5th Avenue Suites, Portland, OR Contact: http://www.turnaround.org/ December 6, 2006 TURNAROUND MANAGEMENT ASSOCIATION Holiday Dinner Portland, Oregon Contact: 503-223-6222 or http://www.turnaround.org/ December 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast The Newark Club, Newark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ December 7, 2006 TURNAROUND MANAGEMENT ASSOCIATION Cash Management After The Storm: Near-Term Planning for Long-Term Business Success Sheraton, Metairie, LA Contact: http://www.turnaround.org/ December 8, 2006 CEB Creditors' Remedies & Debtors' Rights Los Angeles / Century City, CA Contact: http://www.ceb.com/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Holiday Party TBA, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ December 13, 2006 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function GE Commercial Finance, Sydney, Australia Contact: 0438 653 179 or http://www.turnaround.org/ December 20, 2006 TURNAROUND MANAGEMENT ASSOCIATION Holiday Extravaganza - TMA, AVF & CFA Georgia Aquarium, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ January 11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Lender's Panel University Club, Jacksonville, FL Contact: http://www.turnaround.org/ January 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Annual Lender's Panel Breakfast Westin Buckhead, Atlanta, GA Contact: http://www.turnaround.org/ January 17, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ January 17-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference Wynn, Las Vegas, NV Contact: http://www.turnaround.org/ February 8-11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Certified Turnaround Professional (CTP) Training NY/NJ Contact: http://www.turnaround.org/ February 22, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA PowerPlay - Atlanta Thrashers Philips Arena, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ January 25-27, 2007 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Hyatt Regency, Denver, CO Contact: 1-703-739-0800; http://www.abiworld.org/ February 8-9, 2007 EUROMONEY Leveraged Finance Asia JW Marriott Hong Kong Contact: http://www.euromoneyplc.com/ February 21-22, 2007 EUROMONEY Euromoney Pakistan Conference Perceptions & Realities Marriott Hotel, Islamabad, Pakistan Contact: http://www.euromoneyplc.com/ February 22, 2007 EUROMONEY 2nd Annual Euromoney Japan Forex Forum Mandarin Oriental, Tokyo, Japan Contact: http://www.euromoneyplc.com/ February 25-26, 2007 NORTON INSTITUTES Norton Bankruptcy Litigation Institute Marriott Park City, UT Contact: http://www2.nortoninstitutes.org/ February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800; http://www.abiworld.org/ March 1, 2007 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - West Regency Beverly Wilshire, Los Angeles, CA Contact: http://www.abiworld.org/ March 2, 2007 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Bankruptcy Battleground West Regency Beverly Wilshire, Los Angeles, CA Contact: http://www.abiworld.org/ March 15, 2007 TURNAROUND MANAGEMENT ASSOCIATION Martini Madness Cocktail Reception with Geraldine Ferraro Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ March 15-18, 2007 NATIONAL ASSOCIATION OF BANKRUTPCY TRUSTEES NABT Spring Seminar Ritz-Carlton Buckhead, Atlanta, GA Contact: http://www.NABT.com/ March 21, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ March 21-22, 2007 EUROMONEY 2nd Annual Vietnam Investment Forum Melia, Hanoi, Vietnam Contact: http://www.euromoneyplc.com/ March 21-22, 2007 EUROMONEY Euromoney Indian Financial Market Congress Grand Hyatt, Mumbai, India Contact: http://www.euromoneyplc.com/ March 27, 2007 TURNAROUND MANAGEMENT ASSOCIATION "The Six Keys of Sustained Profitable Growth" Rodney Page, Senior Partner of Blue Springs Partners Citrus Club, Orlando, FL Contact: http://www.turnaround.org/ March 27-31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spring Conference Four Seasons Las Colinas, Dallas, Texas Contact: http://www.turnaround.org/ March 29-31, 2007 ALI-ABA Chapter 11 Business Reorganizations Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ April 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL Contact: 561-882-1331 or http://www.turnaround.org/ April 12, 2007 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - East JW Marriott, Washington, DC Contact: http://www.abiworld.org/ April 20, 2007 TURNAROUND MANAGEMENT ASSOCIATION Breakfast meeting with Chapter President, Bruce Sim Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ April 24, 2007 TURNAROUND MANAGEMENT ASSOCIATION "Why Prospects Become Clients" Mark Fitzgerald, President of Sales Training Institute Inc Centre Club, Tampa, FL Contact: http://www.turnaround.org/ April 26-28, 2007 ALI-ABA Fundamentals of Bankruptcy Law Philadelphia, PA Contact: http://www.ali-aba.org April 29 - May 1, 2007 INTERNATIONAL BAR ASSOCIATION International Insolvency Conference Zurich, Switzerland Contact: http://www.ibanet.org/ May 14, 2007 TURNAROUND MANAGEMENT ASSOCIATION Annual TMA Atlanta Golf Outing White Columns, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ May 4, 2007 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - NYC Alexander Hamilton US Custom House, SDNY New York, NY Contact: http://www.abiworld.org/ May 7, 2007 AMERICAN BANKRUPTCY INSTITUTE 9th Annual New York City Bankruptcy Conference Millennium Broadway Hotel & Conference Center New York, NY Contact: http://www.abiworld.org/ May 16, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ June 28 - July 1, 2007 NORTON INSTITUTES Norton Bankruptcy Litigation Institute Jackson Lake Lodge, Jackson Hole, WY Contact: http://www2.nortoninstitutes.org/ July 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL Contact: 561-882-1331 or www.turnaround.org July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, RI Contact: 1-703-739-0800; http://www.abiworld.org/ July 18, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ July 25-28, 2007 AMERICAN BANKRUPTCY INSTITUTE 12th Annual Southeast Bankruptcy Workshop The Sanctuary, Kiawah Island, SC Contact: http://www.abiworld.org/ August 9-11, 2007 AMERICAN BANKRUPTCY INSTITUTE 3rd Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, MD Contact: http://www.abiworld.org/ September 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Southwest Bankruptcy Conference Four Seasons Las Vegas, NV Contact: http://www.abiworld.org/ September 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/ October 11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL Contact: 561-882-1331 or http://www.turnaround.org/ October 16-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ December 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ January 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ April 3-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 26th Annual Spring Meeting The Renaissance, Washington, DC Contact: http://www.abiworld.org/ June 4-7, 2008 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 24th Annual Bankruptcy & Restructuring Conference JW Marriott Spa and Resort, Las Vegas, NV Contact: http://www.airacira.org/ June 12-14, 2008 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, MI Contact: http://www.abiworld.org/ August 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, FL Contact: http://www.abiworld.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ December 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, AZ Contact: http://www.abiworld.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergers - the New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Emerging Role of Corporate Compliance Panels Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Deepening Insolvency - Widening Controversy: Current Risks, Latest Decisions Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Distressed Market Opportunities Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Reverse Mergers-the New IPO? Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Contact: http://www.beardaudioconferences.com 240-629-3300 The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Robert Max Victor M. Quiblat II, Shimero R. Jainga, Joel Anthony G. Lopez, 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 ***