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/raid1/www/Hosts/bankrupt/TCR_Public/061120.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, November 20, 2006, Vol. 10, No. 276 Headlines ACXIOM CORP: Earns $21.7 Million in Quarter Ended September 30 ALLIED HOLDINGS: Excl. Plan-Filing Period Stretched to January 17 ALLIED HOLDINGS: Court Approves Lot Sale to 1659579 Ontario APPTIS INC: Moody's Rates Proposed $180MM Credit Facility at B1 ARADIGM CORP: Earns $13.1 Million in Quarter Ended September 30 ASARCO LLC: Wants to Reject Tacoma Redevelopment Agreement ASARCO LLC: Wants to Purchase Equipment from EntreCap Financial ASARCO LLC: Wants to Expand SRK Consulting's Scope of Work AZUR HOLDINGS: Inks $50 Million Financing Deal with Nexxus One BANC OF AMERICA: Moody's Lifts Rating on $100-Mil. Certs to Ba1 BANKATLANTIC BANCORP: Earns $2.3 Million in 2006 Third Quarter BEAR STEARNS: Moody's Holds Low-B Rating on Six Cert. Classes BEAR STEARNS: Poor Performance Cues S&P's Negative Watch BLOUNT INC: Weak Market Prompts S&P's Negative Outlook BUILDING MATERIALS: ElkCorp Merger Cues S&P's Negative CreditWatch CATHOLIC CHURCH: Davenport Can Honor Employee Obligations CHARMING CASTLE: Bankruptcy Administrator Picks 3-Member Committee CHARMING CASTLE: Committee Taps Burr & Forman as Counsel CHERRYDALE FARMS: NatCity Assists in Asset Sale to Rosen Capital CLEAN HARBORS: Files Schedules of Assets and Liabilities CLEAN HARBORS: List of 20 Largest Unsecured Creditors COLLINS & AIKMAN: Wants Wachovia to Surrender Property COMMUNICATIONS CORP: Panel Hires Taylor Porter as Counsel COTT CORPORATION: Earns $6.6 Million in 2006 Third Quarter CROWN CASTLE: Unit Plans $1.55-Bil. Sr. Revenue Notes Offering CUMULUS MEDIA: Earns $1.3 Million in 2006 Third Quarter DANA CORP: Posts $356 Million Net Loss in Third Quarter of 2006 DAVITA INC: Moody's Holds Corporate Family Rating at B1 DEAN FOODS: Earns $70.8 Million in Quarter Ended September 30 DELL INC: Announcing Prelim Third Quarter Results by Month's End DELPHI CORP: Asks Court to Further Expand KPMG's Scope of Work DIRECTV GROUP: Earns $370.2 Million in 2006 Third Quarter DOBSON COMMUNICATIONS: Earns $28 Million in Third Quarter of 2006 DORAL FINANCIAL: Hires Bear Stearns and JPMorgan as Advisors DOV PHARMACEUTICAL: Sept. 30 Equity Deficit Widens to $50.9 Mil. DOV PHARMACEUTICAL: Offers to Repurchase all 2.5% Sub. Debentures DURA AUTOMOTIVE: Gets Interim Nod to Pay Foreign Vendor Claims EASY GARDENER: Court Confirms Amended Joint Plan of Liquidation ENRON CORP: Judge Lake Vacates Conviction Of Kenneth Lay ENRON CORP: Judge Werlein Sentences Two Former Officers to Prison ENRON CORP: Reaches $144,000,000 Settlement With Barclays PLC ENTERGY NEW: Says Amended Plan Resolves Panel and BNY's Concerns ENTERGY NEW ORLEANS: Court Approves Certain Transfers of Claims FALCON FRANCHISE: Moody's Junks $3.67 Million Class F Bonds FERRO CORP: Plans Closure of Niagara Falls Plant in 2007 FOREST CITY: Hallandale Beach Okays The Village Development GENERAL NUTRITION: Higher Debt Load Cues Moody's to Junk Ratings GLOBAL DOCUGRAPHIX: Trustee Schedules Creditors Meeting on Dec. 5 GLOBAL DOCUGRAPHICS: Trustee Wants Quilling Selander as Counsel GOODYEAR TIRE: Meets with Union to Discuss New Labor Deal GOODYEAR TIRE: Moody's Rates $1 Billion Unsec. Note Offer at B2 GREEKTOWN HOLDINGS: Construction Delays Cue S&P's CreditWatch HARBORVIEW NIM: DBRS Rates $15.7 Mil. Class N-4 Notes at B (high) HARBOURVIEW CLO: Moody's Rates $14MM Class D Floating Notes at Ba2 HAWAIIAN TELCOM: S&P Places B Corp. Credit Rating on CreditWatch HERTZ CORP: S&P Holds BB- Corp Credit Rating with Negative Outlook INCO LTD: Common Stock Ceases Trading on NYSE INDEPENDENCE I: Moody's Places Ba3 Rated $50-Mil. Notes on Watch INTERTAPE POLYMER: Amends Debt Facilities to Ease Covenants ISTANA HIGH: Moody's Rates $2.5MM Class E Priority Notes at Ba1 ISTAR FINANCIAL: Prices Public Offer of Common Shares ISTAR FINANCIAL: Earns $91.8 Million in Quarter Ended Sept. 30 JHT HOLDINGS: Moody's Assigns B1 Rating to 1st Lien Bank Debt KAISER ALUMINUM: Earns $14.3 Million in Quarter Ended September 30 KAISER ALUMINUM: Asks Court to Reduce Law Debenture Trust's Claims KINETEK INC: S&P Lifts Corporate Credit Rating to B from B- LB-UBS: S&P Places Preliminary Low-B Ratings on 6 Cert Classes LIMITED BRANDS: Inks Pact to Buy All Outstanding La Senza Shares M. FABRIKANT & SONS: Files Chapter 11 Petition in New York M. FABRIKANT & SONS: Case Summary & 45 Largest Unsecured Creditors MOHEGAN TRIBAL: S&P Cuts Issuer Credit Rating to BB- from BB MOSAIC COMPANY: Prices Units' Offer to Buy $1.5-Bil of Sr. Debts NEMI NORTHERN: Supreme Ct. Grants Stay of Proceedings Under CCAA NEOMEDIA TECH: Posts $30.9 Million Net Loss in 2006 Third Quarter NVF CO: Wants Exclusive Plan Filing Period Extended to January 10 NVF CO: Committee Wants Flaster/Greenberg as Conflicts Counsel ONEIDA LTD: Shareholders Elect Seven-Member Board of Directors OWENS CORNING: Court Approves Pinal County Settlement Pact OWENS CORNING: Wants to Enter Into Waiver Letter With JPMorgan PLAINS EXPLORATION: S&P Affirms BB Rating with Stable Outlook PLASTECH ENGINEERED: Moody's Rates $200MM Debt Facility at B1 QUAKER FABRIC: Posts $8.4 Million Net Loss in 2006 Third Quarter RADIOLOGIX INC: Primedex Deal Cues S&P's Ratings Withdrawal READER'S DIGEST: Moody's Expands Scope of Ratings Review READER'S DIGEST: Ripplewood Offer Cues S&P's Negative CreditWatch SAINT VINCENTS: Court OKs Caronia as Estimation Advisor SAN DIEGO CITY: Settles With SEC Regarding Municipal Bonds SCOTTISH RE: Moody's Hold Senior Unsecured Debt Rating at Ba3 SEA CONTAINERS: Wants to Employ Ordinary Course Professionals SEA CONTAINERS: Wants to Set Up Interim Compensation Procedures SKYEPHARMA PLC: Abbott Acquires Licensee Kos Pharmaceuticals SMART PRINTERS: Case Summary & 20 Largest Unsecured Creditors SOUNDVIEW HOME: DBRS Junks $4.2 Million Class M-15 Certificates STRUCTURED ASSET: DBRS Junks $5.5 Million Class B4 Certificates TEC FOODS: Bank of New York Balks at Second Amended Combined Plan TEC FOODS: Can Use Wells Fargo Cash Collateral Until December 31 TORONTO-DOMINION: S&P Reviews Ratings With Negative Implications UNITED CUTLERY: Committee Hires Woolf McClane as Local Counsel UNITED CUTLERY: Files Schedules of Assets and Liabilities UNIVERSITY HEIGHTS: Foundation Wants Bankruptcy Case Dismissed USA COMMERCIAL: Auctioning Assets on December 7 USG CORP: Prices $500 Million 6.30% Notes at 99.927% of Principal USXL FUNDING: S&P Places BB- Rating on $14-Mil Class B-1 Notes VALEANT PHARMA: S&P Cuts Corporate Credit Rating to B+ from BB- VICTORY MEMORIAL: Case Summary & 20 Largest Unsecured Creditors VISTEON CORP: Seeks Lenders' Approval for $100MM Additional Loan WALTON SCDO: S&P Places Ratings on Negative CreditWatch WORLDGATE COMMS: Posts $3.5 Mil. Net Loss in Third Quarter of 2006 * BOND PRICING: For the week of November 13 -- November 17, 2006 ********* ACXIOM CORP: Earns $21.7 Million in Quarter Ended September 30 -------------------------------------------------------------- Acxiom Corporation has filed its second quarter financial statements for the three months ended Sept. 30, 2006, with the Securities and Exchange Commission. For the three months ended Sept. 30, 2006, the Company reported $21.7 million of net income on $348.3 million of net revenues, compared to $7.1 million of net income on $330.5 million of net revenues from the same period in 2005. The Company's working capital at Sept. 30, 2006, totaled $63.9 million, compared to a working capital deficit of $41.1 million at March 31, 2006. Total current assets increased $91.1 million primarily due to invested cash resulting from the borrowings under the new credit agreement. New Credit Agreement Effective Sept. 15, 2006, the Company entered into an amended and restated credit agreement allowing: (1) term loans up to an aggregate principal amount of $600 million and (2) revolving credit facility borrowings consisting of revolving loans, letter of credit participations and swing- line loans to an aggregate amount of $200 million. On Sept. 15, 2006, the Company borrowed the entire amount of the term loan. The term loan is payable in quarterly principal installments of $1.5 million through September 2011, followed by quarterly principal installments of $150.0 million through June 2012, followed by a final installment of $120 million due Sept. 15, 2012. The term loan also allows prepayments before maturity. Revolving loan commitments and all borrowings of revolving loans mature on Sept. 15, 2011. The credit agreement is secured by the accounts receivable of Acxiom and its domestic subsidiaries, as well as by the outstanding stock of certain Acxiom subsidiaries. At Sept. 30, 2006 there were no revolving credit borrowings outstanding and the Company had $200 million available under the new credit agreement. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?1547 About Acxiom Based in Little Rock, Arkansas, Acxiom Corporation (Nasdaq: ACXM) -- http://www.acxiom.com/-- integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's solutions are Customer Data Integration technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom has locations throughout the United States, Europe, Australia and China. * * * As reported in the Troubled Company Reporter on Sept. 7, 2006, Standard & Poor's Ratings Services assigned its loan and recovery ratings to Little Rock, Arkansas-based Acxiom Corp.'s proposed $800 million secured first-lien financing. The first-lien facilities consist of a $200 million revolving credit facility and a $600 million term loan. They are rated 'BB' with a recovery rating of '2'. As reported in the Troubled Company Reporter on Aug. 25, 2006, Moody's Investors Service assigned a Ba2 rating to Acxiom Corporation's $800 million senior secured credit facilities, while affirming its corporate family rating of Ba2. The outlook is stable. ALLIED HOLDINGS: Excl. Plan-Filing Period Stretched to January 17 ----------------------------------------------------------------- The Honorable Coleman Ray Mullins of the U.S. Bankruptcy Court for the Northern District of Georgia extends Allied Holdings, Inc. and its debtor-affiliates exclusive period to: * file a plan of reorganization through and including Jan. 17, 2007; and * solicit acceptances of that plan through and including March 21, 2007. Following Judge Mullins' entry of a bridge order extending the Debtors' exclusive periods, The Yucaipa Funds LLC delivered to the Court a statement supporting the extension. The Official Committee of Unsecured Creditors, on the other hand, told the Court that it expects: (i) to promptly receive all information regarding a proposed plan of reorganization or other arrangement for the Debtors' businesses resulting from discussions between Allied Holdings, Inc., and Yucaipa or any other third party that may affect the interests of unsecured creditors; (ii) the Debtors to provide the Creditors' Committee with a realistic timeline setting forth, among other things, the anticipated effective date of that plan and all other plan benchmarks; and (iii) the Debtors to commit that they will not reach any agreement with any party concerning the plan or any other arrangement of the Debtors' business without consulting with, and obtaining the significant input of, the Creditors' Committee. The Creditors' Committee also demanded sufficient and timely progress toward the formulation of a plan to justify the increased administrative expenses necessitated by the further extension of the exclusive plan-filing period. Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/ or 215/945-7000) ALLIED HOLDINGS: Court Approves Lot Sale to 1659579 Ontario ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia has authorized Allied Holdings, Inc., and its debtor-affiliates to sell certain of its Canadian lots to 1659579 Ontario Ltd. As reported in the Troubled Company Reporter on Oct. 27, 2006, Allied Systems (Canada) Company, a subsidiary of Allied Holdings, Inc., owns 51.77 acres of real property located at 1790 Provincial Road, City of Windsor, in Ontario, Canada. Allied Systems has marketed the Lot for sale since 2001. In 2004, Allied Systems received expressions of market interest for 15.11 acres of the Lot. Allied Systems also obtained an independent appraisal of CDN$5,700,000, and a second appraisal of CDN$5,720,000 for the Lot. Cushman & Wakefield LePage, Inc., as real estate broker for Allied Systems, obtained a purchase offer from 1659579 Ontario Ltd. The Purchase Agreement offers Allied Systems a purchase price of CDN$2,250,000. Other salient terms of the Purchase Agreement include: * a deposit of CDN$100,000 tendered in two installments and applied towards the Purchase Price; * Ontario Ltd. will accept the Property on an entirely "as is, where is" basis; and * Cushman & Wakefield will receive a commission that is 5% of the Purchase Price. A full-text copy of the Purchase Agreement is available for free at http://researcharchives.com/t/s?13fe Headquartered in Decatur, Georgia, Allied Holdings, Inc. -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The Company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. (Allied Holdings Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/ or 215/945-7000) APPTIS INC: Moody's Rates Proposed $180MM Credit Facility at B1 --------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the proposed $180 million credit facility of Apptis, Inc. Despite a sizable amount of the net proceeds being used to return capital to its financial sponsor, New Mountain Capital, LLC, Moody's affirmed the B2 corporate family rating. Apptis is undertaking a recapitalization to repay outstandings of $77 million under its existing credit facility; to fully retire $50 million of the existing senior subordinated cash pay notes held by the Sponsor; to partially repay approximately $20.5 million of senior subordinated payment-in-kind notes and related accrued interest also held by the Sponsor; and to pay related fees and expenses. The transaction is being financed with proposed credit facilities that include a $30 million senior secured first lien revolver and a $150 million senior secured first lien term loan. Moody's took these actions: -- $30 million proposed senior secured first lien revolver maturing 2011, assigned B1, LGD3, 33% -- $150 million proposed senior secured first lien term loan B due 2012, assigned B1, LGD3, 33% -- Corporate Family Rating, affirmed B2 -- Probability of Default Rating, affirmed B2 -- Ratings for the prior $107 million credit facility, rated Ba2, are to be withdrawn upon conclusion of the proposed transaction. The ratings outlook is stable. The ratings are subject to the conclusion of the proposed transactions and Moody's review of final documentation. The affirmation of the B2 Corporate Family Rating continues to acknowledge Apptis' stable business as evidenced by strong win and retention rates on government contracts. This track record helps to allay some concern regarding the meaningful amount of contracts up for recompete within the next year. Other business concerns reflected in the B2 corporate family rating include a high concentration of revenue, Apptis' small revenue base -- notably when compared to its high debt burden, and the inherent exposure to delays or reduction in federal spending, which is prevalent in the government contract services business industry-wide. The sizable return of capital to the financial sponsor of approximately $70 million puts downward pressure on the ratings as pro forma adjusted leverage is expected to be approximately 5.7 times while year to date EBIT and EBITDA are below original expectations. The B1 rating on the senior secured credit facility reflects the facility's priority position in the capital structure and a Loss Given Default assessment of LGD3, 33%. The credit facility has a first priority perfected lien on all the capital stock and tangible and intangible assets of the borrower, Apptis, Inc., and its parent and subsidiaries. The rating on the credit facility benefits from the loss absorption provided by the $43 million PIK mezzanine notes at Apptis Holdings, Inc., the company's parent, which are expected to remain pro forma for the proposed transaction. The credit facility is guaranteed by the company's parent and all existing and future subsidiaries. The stable ratings outlook reflects Moody's expectation that Apptis will grow its services revenue, maintain positive free cash flow and use excess cash to reduce borrowings under its secured credit facility. In Moody's opinion, there is some room under pro forma credit statistics to absorb some negative variance without triggering a downgrade of the ratings. Sustained financial performance above current expectations resulting in adjusted debt to EBITDA at or below 4.5x, free cash flow to adjusted debt ranging between 7% and 10%, and evidence of maintaining adjusted EBIT to cash interest above 2x could result in a positive change in the outlook or ratings. The outlook or ratings could be lowered if Apptis loses a significant contract, otherwise experiences operational challenges, or pursues financial policies that result in adjusted debt to EBITDA rising above 6x and adjusted EBIT to cash interest falling below 1.5x. Apptis, headquartered in Chantilly, Virginia, provides information technology services and solutions primarily to federal government agencies. The company's core capabilities include software development and engineering, network infrastructure deployment and support services, and product fulfillment. Revenue for the twelve months ended June 2006 was approximately $303 million. ARADIGM CORP: Earns $13.1 Million in Quarter Ended September 30 --------------------------------------------------------------- Aradigm Corporation reported net income for the three months ended Sept. 30, 2006 of $13.1 million, compared with a net loss of $7.7 million for the same period in 2005. This gain was driven by the recognition of an $8 million gain on sale of royalty interest and a $12 million gain on sale of patents, both transactions with Novo Nordisk, a related party. The net loss for the nine months ended Sept. 30, 2006 was $7.6 million, compared with a net loss of $18.5 million for the same period in 2005. The company generated revenues for the three months ended Sept. 30, 2006 of $1.1 million compared to $700,000 for the same period in 2005. Revenues for the nine months ended Sept. 30, 2006 were $4 million compared with $9.6 million for the same period in 2005. Total operating expenses for the three months ended Sept. 30, 2006 were $8.4 million compared to $8.8 million for the same period in 2005. For the nine months ended Sept. 30, 2006 total operating expenses were $32.4 million compared with $29.1 million for the same period in 2005. As of Sept. 30, 2006, cash, cash equivalents and short-term investments totaled approximately $32.8 million. At Sept. 30, 2006, the Company's balance sheet showed a stockholders' equity of $1,100,000, compared to a deficit of $397,000 at March 31, 2006. NASDAQ Delisting Aradigm also disclosed that the NASDAQ Listing Qualifications Panel has determined to delist the securities of Aradigm from the Nasdaq Capital Market, effective Nov. 10, 2006. As reported in the Troubled Company Reporter on June 28, 2006, the Company received notice indicating that it had failed to comply with Marketplace Rule 4310(c)(2)(B) or Marketplace Rule 4310(c)(2)(B)(ii) of the Nasdaq Stock Market, requiring the company either maintain a minimum market value or shareholders' equity or meet certain net income levels. Upon then receiving a staff determination letter from the Nasdaq Stock Market Inc. stating that the Company's common stock is subject to delisting from the Nasdaq Capital Market for not meeting specific listing criteria, Aradigm requested and was granted a hearing before the Listing Qualifications Panel. On Aug. 22, 2006, the Panel granted the Company's request for continued listing, pending receipt of third quarter financials demonstrating continued compliance. On Oct. 24, 2006, the Company notified Nasdaq that the third quarter financials were not expected to demonstrate continued compliance, and requested a hearing to show its plan to regain and maintain compliance. About Aradigm Corp. Headquartered in Hayward, California, Aradigm Corporation (PINKSHEETS: ARDM) -- http://www.aradigm.com/-- combines its non- invasive delivery systems with novel formulations to create products that enable patients to comfortably self-administer biopharmaceuticals and small molecule drugs. The company's advanced AERx(R) pulmonary and Intraject(R) needle-free delivery technologies offer rapid delivery solutions for liquid drug formulations. Current development programs and priorities focus on the development of specific products, including partnered and self-initiated programs in the areas of respiratory conditions, neurological disorders, heart disorders, and smoking cessation. In addition, Aradigm and its partner, Novo Nordisk, are in Phase 3 clinical trials of the AERx Diabetes Management System for the treatment of Type 1 and Type 2 diabetes. ASARCO LLC: Wants to Reject Tacoma Redevelopment Agreement ---------------------------------------------------------- ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to reject an agreement among Metropolitan Park District of Tacoma; the city of Tacoma, Washington; the town of Ruston, Washington; and ASARCO. ASARCO LLC owns certain land in Washington on which it operated a copper smelter until 1985. Between 1987 and 1994, ASARCO conducted two phases of demolition activities, which razed most of the structures in the property and graded some portions, Tony M. Davis, Esq., at Baker Botts L.L.P., in Houston, Texas, relates. Certain property adjacent to the Washington Property is possessed and controlled by the Metropolitan Park District of Tacoma. Portions of the Washington and MPD Properties constitute the ASARCO Tacoma Superfund Site. A portion of the Superfund Site is located within the city of Tacoma, Washington's jurisdiction, and a portion is located within the town of Ruston, Washington's jurisdiction. In March 1995, the U.S. Environmental Protection Agency issued a Record of Decision, which described the remediation remedy for soil, slag and surface water at the Superfund Site and for on- site placement, without treatment, of hazardous soils, demolition debris and residential soils. For the implementation of EPA's Remediation Plan, ASARCO, Tacoma, Ruston, and MPD wished to redevelop portions of the Superfund Site for public and private use. In January 1997, the parties entered into a definitive agreement, which, among other things, provides for each party's obligations in the Site's redevelopment. Mr. Davis says some of the tasks have been completed. However, a number of significant obligations remain to be done, including: -- Tacoma and Ruston's consideration of the Remediation Plan, -- Remedial action and preparatory work, -- Vacation of the car tunnel and abandoned roadways, -- Work regarding the marina and its funding, -- Dirt and gravel mining on the MPD Property, and -- The creation of a public development authority and other related tasks. In January 2006, the Court approved the sale of the Washington Property to Point Ruston, LLC. All conditions precedent to the effectiveness of the Sale Order have been fulfilled, and the closing of the Property's sale occurred in October 2006. Pursuant to the sale, ASARCO's liabilities with respect to onsite remediation and, to a limited degree, the Property's offsite remediation have been transferred to Point Ruston. However, Point Ruston is not party to, or bound by, the Agreement. In effect, ASARCO could unlikely fulfill its obligations under the Agreement if ASARCO attempted to assume it, Mr. Davis contends. Even if ASARCO assumes the Agreement, Mr. Davis points out, the obligations would constitute a significant burden on the estate with no corresponding benefit. 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. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). ASARCO LLC: Wants to Purchase Equipment from EntreCap Financial --------------------------------------------------------------- ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to exercise a fixed option under the lease extension with EntreCap Financial Corporation for the purchase of certain Exchange Trucks. In December 1995, ASARCO LLC and EntreCap Financial Corporation, formerly known as Pitney Bowes Credit Corporation, entered into an equipment lease agreement. The Equipment Lease provided for the lease of five haul trucks and one electric shovel. In December 2003, EntreCap agreed to exchange two trucks under the Original Lease that were located at the Mission Mine for two similar trucks located at the Ray Mine. The parties also agreed that the lease term for the Exchange Trucks would be extended from Dec. 8, 2005, to Dec. 8, 2006. ASARCO assumed the Lease Agreement, including both the Original Lease and the Lease Extension, on Dec. 30, 2005. The Lease Extension includes a fixed purchase option that must be exercised by Dec. 8, 2006. James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas, contends that the Exchange Trucks, which are being utilized at the Ray mine, are indispensable to the successful operation of ASARCO's mine. In light of the low fixed price to purchase the Exchange Trucks in comparison with the fair market value for similar trucks, ASARCO has decided that it is in its best financial interest to purchase the Exchange Trucks now. To cure its defaults under the Lease, ASARCO will pay Entrecap: -- $25,445 as other fees due under the Lease, -- $59,665 as rent for last quarter, and -- $320,000 as purchase price for the two Exchange Trucks. 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. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). ASARCO LLC: Wants to Expand SRK Consulting's Scope of Work ---------------------------------------------------------- ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to expand the scope of SRK Consulting (U.S.) Inc.'s employment to include conducting a business plan for the company. In February 2006, the Court authorized ASARCO LLC to employ SRK Consulting (U.S.), Inc., to complete an audit of the company's operations. SRK has already reported the production findings and costs projections analysis to ASARCO's Board of Directors. The report addressed numerous issues and opportunities for mine optimization and improvement. James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas, tells the Court that ASARCO needs SRK Consulting to address the identified issues and opportunities, update the company's ore reserves, and produce a consolidated business plan in connection with all of the company's operations. Mr. Prince contends that due to its site-specific knowledge of the company's copper-producing operations and strategic location in Tucson, Arizona, SRK is well-suited to prepare a consolidated business plan on time and within budget. Mr. Prince informs the Court that SRK will accomplish those tasks under a two-phase project. In Phase I, SRK will: * establish a complete mineral resources database for each asset; * update mineral resource and ore reserve estimations at all operations using current costs and copper pricing information; * prepare a standard protocol and report for each mine site outlining the methods to be used to categorize and report resources and reserves; * conduct detailed actual-versus-modeled over a five-year period to validate the accuracy of the reserve models; * conduct confirmation drilling to facilitate long-range mine planning; * update existing geotechnical studies for pit slope stability and initiate geotechnical assessment, as it may be necessary at the various facilities; * produce a consolidated production schedule; * apply operating costs to business plans; and * review future capital requirements. In Phase II, SRK will further optimize the business plans based on a review of each operation individually as well as on a consolidated basis, to determine which options provide the best returns given identified operating constraints. The work will be completed over a nine-month period. Robert W. Klumpp, treasurer and principal of SRK, assures the Court that the firm does not have represent any interest adverse to ASARCO or its estate, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. ASARCO will pay SRK $45 to $260 per hour depending on the specific individual who performs the services. ASARCO will also reimburse SRK for its actual costs and expenses, plus a 5% mark- up. 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. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000). AZUR HOLDINGS: Inks $50 Million Financing Deal with Nexxus One -------------------------------------------------------------- Azur Holdings, Inc., has entered into a binding agreement with Nexxus One Capital Trust of Switzerland A.G. for up to $50 million of financing. Under an engagement agreement with Azur, Nexxus has committed up to $50 million of new financing for Azur Holdings Shell Landing Resort property or an amount equal to 80% of the newly appraised value. A new appraisal has been ordered and is expected in 4 to 6 weeks. Should the initial financing amount be less than $50,000,000, Azur Holdings can require Nexxus, for up to two years, to extend additional financing based upon updated appraisals. The financing will come in the form of a Senior Secured Redeemable Note purchased by a banking syndicate led by Nexxus One Capital. Funding will be used for the refinancing and restructuring of the debt and equity of Shell Landing Resort Development as well as development and working capital. Closing is scheduled to occur within 10 days of a new MAI appraisal of Shell Landing Development or no later than Dec. 29, 2006. About Azur Holdings Headquartered in Fort Lauderdale, Florida, Azur Holdings, Inc. (OTCBB: AZHI), (FRANKFURT: HCPB) -- http://www.azurholdings.com/ -- is a real estate development company, which develops and markets luxury residential and resort properties. The company also operates a real estate development company in Gautier, Mississippi. It owns the Shell Landing Golf Club in Gautier, and Azur Shell Landing Resort consisting of approximately 1,100 acres contiguous to the Shell Landing Golf Club. The company also has various real estate projects under development and consideration, which includes the development and acquisition of luxury hotels and resorts, domestically and internationally. In addition, Azur Holdings purchases land in strategic areas for future development or sale. The Company is a subsidiary of Azur International, Inc. At July 31, 2006, Azur Holdings' balance sheet showed a stockholders' deficit of $4,830,646, compared to a deficit of $1,800 at July 31, 2005. Going Concern Doubt As reported in the Troubled Company Reporter on Sept. 13, 2006, Baum & Company, P.A., in Coral Springs, Florida, expressed doubt about Azur Holdings, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended April 30, 2006. The auditing firm pointed to the Company's recurring losses since inception. The Company has accumulated losses of $2.7 million and a negative working capital position of $5.9 million. BANC OF AMERICA: Moody's Lifts Rating on $100-Mil. Certs to Ba1 --------------------------------------------------------------- Moody's Investors Service upgraded the ratings of nine classes and affirmed the ratings of five classes of Banc of America Large Loan, Inc., Commercial Mortgage Pass-Through Certificates, Series 2005-ESH: Class A-1, $749,050,000, Fixed, affirmed at Aaa Class A-2, $305,950,000, Fixed, affirmed at Aaa Class A-3, $475,000,000, Fixed, affirmed at Aaa Class X-1, Notional, affirmed at Aaa Class X-2, Notional, affirmed at Aaa Class B, $290,000,000,Fixed, upgraded to Aa2 from Aa3 Class C, $60,000,000, Fixed, upgraded to Aa3 from A1 Class D, $56,000,000, Fixed, upgraded to A1 from A2 Class E, $99,000,000, Fixed, upgraded to A2 form A3 Class F, $62,000,000, Fixed, upgraded to A3 from Baa1 Class G, $65,000,000, Fixed, upgraded to Baa1 from Baa2 Class H, $138,000,000,Fixed, upgraded to Baa2 from Baa3 Class J, $120,000,000,Fixed, upgraded to Baa3 from Ba1 Class K, $100,000,000,Fixed, upgraded to Ba1 from Ba2 The Certificates are supported by first priority mortgage loans having an aggregate principal balance of $2.52 billion. Collateral for the loans consists of 450 extended-stay hotel properties owned by affiliates of The Blackstone Group. The properties, which contain 50,790 rooms, are located in 41 states and are principally operated as Extended StayAmerica Deluxe, Extended StayAmerica and Homestead Studio Suites branded hotels. The top three state concentrations are California, Florida, and Texas. The Blackstone Group dominates the mid-price segment of the extended stay hotel market through its three principal brands as well as several lesser brands. Both RevPAR and the operating margin have improved for the collateral since securitization in October of 2005, although full- year 2005 performance was anticipated and considered in Moody's analysis. Moody's is upgrading Classes B, C, D, E, F, G, H, J and K due to performance improvements in calendar year 2006. RevPAR and net cash flow for calendar year 2005 as adjusted by Moody's were $37.00 and $310.5 million. For the eight-month period ending Aug. 2006, RevPAR increased by 6.9% over the comparable 2006 period while net cash flow increased by 8.4%. Moody's current net cash flow is $330.8 million. Moody's current loan to value ratio is 83.8%, compared to 89.4% at securitization. BANKATLANTIC BANCORP: Earns $2.3 Million in 2006 Third Quarter -------------------------------------------------------------- BankAtlantic Bancorp Inc. submitted its third quarter financial statements for the three months ended Sept. 30, 2006, to the Securities and Exchange Commission on Nov. 8, 2006. The Company earned $2.3 million on $98.9 million of net revenues for the quarter ended Sept. 30, 2006, compared to $16.2 million of net income earned on $92.9 million of net revenues for the same period in 2005. At Sept. 30, 2006, the Company's balance sheet showed total assets of $6.5 billion and total debts of $6 billion. The Company has established revolving credit facilities totaling $30 million with two independent financial institutions. The credit facilities contain customary financial covenants relating to regulatory capital, debt service coverage and the maintenance of certain loan loss reserves. Effective Sept. 30, 2006, the debt service coverage covenant was modified and the Company was in compliance with all covenants contained in the facilities. The Company had no outstanding borrowings under these credit facilities at Sept. 30, 2006. A full-text copy of the Company's quarterly report is available for free at http://researcharchives.com/t/s?1549 Headquartered in Fort Lauderdale, Florida, BankAtlantic Bancorp Inc. (NYSE: BBX) -- http://www.BankAtlanticBancorp.com-- is a diversified financial services holding company and the parent company of BankAtlantic and Ryan Beck & Co. Through these subsidiaries, BankAtlantic Bancorp provides a full line of products and services encompassing consumer and commercial banking, brokerage and investment banking. * * * As reported in the Troubled Company Reporter on Nov. 9, 2006, Fitch has affirmed BankAtlantic Bancorp Inc.'s Long-term Issuer Default Rating at BB+ and short-term issuer rating at B. BEAR STEARNS: Moody's Holds Low-B Rating on Six Cert. Classes ------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Bear Stearns Commercial Mortgage Securities Trust 2004-TOP 14, Commercial Mortgage Pass-Through Certificates, Series 2004-TOP14: Class A-1, $35,121,707, Fixed, affirmed at Aaa Class A-2, $152,000,000, Fixed, affirmed at Aaa Class A-3, $122,000,000 Fixed, affirmed at Aaa Class A-4, $442,061,000, Fixed, affirmed at Aaa Class X-1, Notional, affirmed at Aaa Class X-2, Notional, affirmed at Aaa Class B, $23,482,000,Fixed, affirmed at Aa2 Class C, $7,827,000, Fixed, affirmed at Aa3 Class D, $17,890,000,affirmed at A2 Class E, $8,945,000, Fixed, affirmed at A3 Class F, $10,064,000,Fixed, affirmed at Baa1 Class G, $5,591,000, Fixed, affirmed at Baa2 Class H, $7,827,000, Fixed, affirmed at Baa3 Class J, $4,472,000, Fixed, affirmed at Ba1 Class K, $4,473,000, Fixed, affirmed at Ba2 Class L, $2,236,000, Fixed, affirmed at Ba3 Class M, $2,236,000, Fixed, affirmed at B1 Class N, $2,237,000, Fixed, affirmed at B2 Class O, $8,945,781, Fixed, affirmed at B3 As of the Nov. 13, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 4.3% to $855.6 million from $894.5 million at securitization. The Certificates are collateralized by 108 mortgage loans ranging in size from less than 1.0% of the pool to 8.7% of the pool, with the top 10 loans representing 45.2% of the pool. The pool includes six shadow rated investment grade loans comprising 21.3% of the pool. Two loans, representing 6% of the pool balance, have defeased and are collateralized by U.S. Government securities. The pool has not sustained any losses to date and currently there are no loans in special servicing. Eight loans, representing 4% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2005 operating results for approximately 98.4% of the pool. Moody's loan to value ratio for the conduit component is 77.1%, compared to 80.8% at securitization. The largest shadow rated loan is the One & Three Christine Centre Loan, which is secured by two adjacent office buildings located in downtown Wilmington, Delaware. The two buildings total 633,000 square feet and are 100% occupied, the same as at securitization. The anchor tenant is Chase Card Services. Chase leases approximately 91% of the premises under a lease expiring in Dec. 2015. The sponsor is Macquarie Office Fund and Brandywine Realty. The loan is interest only for its entire term and matures in Jan. 2009. Moody's current shadow rating is Baa3, the same as at securitization. The second shadow rated loan is the Great Hall East Portfolio Loan, which is secured by seven retail properties located in Ohio, South Carolina, Massachusetts and Alabama. The portfolio totals 853,000 square feet and each property is leased to a single tenant under a long-term lease that extends beyond the loan maturity date. The tenants include Wal-Mart, Lowe's, Kroger and Sam's Club. The loan sponsor is Inland Retail Real Estate Trust, Inc. The loan is interest only for its entire term and matures in Oct. 2008. Moody's current shadow rating is A2, the same as at securitization. The remaining four shadow rated loans comprise 7.7% of the pool. The Greenville Place Apartment Loan, secured by a 519-unit apartment complex located in suburban Wilmington, Delaware, is shadow rated Baa2. The Hiram Pavilion Loan, secured by a 362,000 square foot power center located in suburban Atlanta, is shadow rated Baa1. The 12 E 22nd Street Loan, secured by an 89-unit multifamily property located in New York City, is shadow rated Aa2. The Lincoln Tower Cooperative Loan, secured by a residential cooperative building located in New York City, is shadow rated Aaa. The top three non-defeased conduit loans represent 16.6% of the outstanding pool balance: I The largest conduit loan is the U.S. Bank Tower Loan, which is secured by a 1.4 million square foot landmark Class A office building located in downtown Los Angeles, California. The loan represents a 25% pari passu interest in a first mortgage loan totaling $260 million. The building is 87% occupied, compared to 90.0% at securitization. The largest tenants are Latham & Watkins and Pacific Enterprises. The loan sponsor is Maguire Properties. The loan is interest only for the entire term and matures in July 2013. Moody's LTV is 74.7%, compared to 73.2% at securitization. II The second largest conduit loan is the 840 Memorial Drive Loan, which is secured by a 129,000 square foot biotech lab/office building located in Cambridge, Massachusetts. The largest tenant is UCB Research which occupies 40% of the premises under a lease expiring in June 2009. The property has been 89% leased since securitization. However, Moody's do expect near-term disruption in the property's performance because two tenants that lease approximately 44% of the premises have indicated their intent to vacate at the expiration of their leases in April and June of 2007. The Cambridge biotech market has declined since securitization, with market rents declining more than 30%. Moody's LTV is 97.6%, compared to 85.8% at securitization. III The third largest conduit loan is the San Antonio Office Portfolio Loan, which is secured by three office properties located in San Antonio, Texas. The portfolio is 95% occupied, compared to 82% at securitization. The loan is interest only for the entire term and matures in Jan. 2009. Moody's LTV is 78.5%, compared to 85.9% at securitization. The pool's collateral is a mix of retail, office and mixed use, multifamily, industrial and self storage and U.S. Government securities. The collateral properties are located in 37 states. The highest state concentrations are California, Delaware, Texas, Massachusetts and New Jersey. All of the loans are fixed rate. BEAR STEARNS: Poor Performance Cues S&P's Negative Watch -------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on classes M-9A and M-9B from Bear Stearns Asset Backed Securities I Trust's series 2004-BO1 on CreditWatch with negative implications. Concurrently, the ratings on five classes from Bear Stearns Asset Backed Securities Trust 2006-SD1 and 772 classes from various Bear Stearns Asset Backed Securities I Trust transactions are affirmed. The CreditWatch placements reflect the deteriorating performance of the collateral backing Bear Stearns Asset Backed Securities I Trust 2004-BO1. Realized losses have been outpacing the excess interest spread for the past six months. As of the September 2006 remittance period, overcollateralization for classes M-9A and M-9B had been reduced to 2.4% of the original pool balance, which is below its target of 2.9% of the original pool balance. Cumulative losses amounted to $34,294,675, or 2.55% of the original pool balance. Total delinquencies and severe delinquencies constitute 19.22% and 12.00% of the current pool balance, respectively. Standard & Poor's will continue to closely monitor the performance of these classes. If the delinquent loans cure to a point at which monthly excess interest begins to outpace monthly net losses, thereby allowing o/c to build and provide sufficient credit enhancement, the rating agency will affirm the ratings and remove them from CreditWatch negative. Conversely, if delinquencies cause substantial realized losses in the coming months and continue to erode credit enhancement, the rating agency will take further negative rating actions on these classes. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. Credit support for these are the rating actions: transactions is derived from subordination alone or from a combination of subordination, excess interest, and o/c. As of the Sept. remittance period, total delinquencies in the subprime collateral pool ranged from 5.32% to 22.81%, and severe delinquencies ranged from 0.09% to 15.84%. Total delinquencies in the prime Alt-A collateral pool ranged from 1.79%to 5.57%, and severe delinquencies ranged from 0% to 3.79%. The collateral primarily consists of 15- and 30-year, prime Alt-A or subprime, fixed- and/or adjustable-rate first- and second-lien mortgage loans secured by one- to four-family residential properties. Ratings Put On Creditwatch Negative Bear Stearns Asset Backed Securities I Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-BO1 M-9A A/Watch Neg A 2004-BOI M-9B A/Watch Neg A Ratings Affirmed Bear Stearns Asset Backed Securities I Trust Series Class Rating ------ ----- ------ 2004-BO1 I-A-1, I-A-2, I-A-3, II-A-1, II-A-2 AAA 2004-BO1 M-1, M-2, M-3 AAA 2004-BO1 M-4, M-5 AA+ 2004-BO1 M-6, M-7 AA 2004-BO1 M-8 AA- 2004-AC2 I-A-1, I-A-2, I-A-3, I-A-4, I-X AAA 2004-AC2 I-PO, II-A, II-X, II-PO AAA 2004-AC2 B-1 AA 2004-AC2 B-2 A 2004-AC2 B-3 BBB 2004-AC2 B-4 BB 2004-AC2 B-5 B 2004-AC3 A-1, A-2 AAA 2004-AC3 M-1 AA 2004-AC3 M-2 A 2004-AC3 M-3 A- 2004-AC3 B-1 BBB+ 2004-AC3 B-2 BBB 2004-AC4 A-1, A-2, A-3, A-4, A-5, A-6 AAA 2004-AC4 M-1 AA 2004-AC4 M-2 A 2004-AC4 B BBB 2004-AC5 A-1, A-2, A-3 AAA 2004-AC5 M-1 AA+ 2004-AC5 M-2 A+ 2004-AC5 M-3 A 2004-AC5 B-1 A- 2004-AC5 B-2 BBB+ 2004-AC5 B-3 BBB 2004-AC6 A-1, A-2, A-3 AAA 2004-AC6 M-1 AA 2004-AC6 M-2 AA- 2004-AC6 M-3, B-1 A 2004-AC6 B-2 A- 2004-AC6 B-3 BBB+ 2004-AC7 A-1, A-2, A-3 AAA 2004-AC7 M-1 AA 2004-AC7 M-2 A 2004-AC7 M-3 A- 2004-AC7 B-1 BBB+ 2004-AC7 B-2 BBB 2004-AC7 B-3 BBB- 2004-FR1 II-A, I-A-2 AAA 2004-FR1 M-1 AA+ 2004-FR1 M-2 AA 2004-FR1 M-3 A+ 2004-FR1 M-4, M-5 A 2004-FR1 M-6 A- 2004-FR1 M-7 BBB+ 2004-FR1 M-8A, M-8B BB+ 2004-FR2 II-A, I-A-2 AAA 2004-FR2 M-1 AA+ 2004-FR2 M-2 AA 2004-FR2 M-3 AA- 2004-FR2 M-4 A+ 2004-FR2 M-5 A 2004-FR2 M-6 BBB+ 2004-FR2 M-7 BBB 2004-FR2 M-8A, M-8B BB+ 2004-FR3 II-A, I-A-1, I-A-2 AAA 2004-FR3 M-1 AA+ 2004-FR3 M-2 AA 2004-FR3 M-3 AA- 2004-FR3 M-4 A+ 2004-FR3 M-5 A 2004-FR3 M-6 A- 2004-FR3 M-7 BBB 2004-HE4 A-3 AAA 2004-HE4 M-1 AA+ 2004-HE4 M-2 AA- 2004-HE4 M-3 A+ 2004-HE4 M-4 A 2004-HE4 M-5 A- 2004-HE4 M-6 BBB+ 2004-HE4 M-7 BBB- 2004-HE5 I-A-2, II-A, III-A AAA 2004-HE5 M-1 AA+ 2004-HE5 M-2 AA- 2004-HE5 M-3 A 2004-HE5 M-4 A- 2004-HE5 M-5 BBB+ 2004-HE5 M-6 BBB 2004-HE5 M-7 BBB- 2004-HE6 I-A-2, II-A, III-A AAA 2004-HE6 M-1 AA+ 2004-HE6 M-2 AA- 2004-HE6 M-3 A 2004-HE6 M-4 A- 2004-HE6 M-5 BBB+ 2004-HE6 M-6 BBB 2004-HE6 M-7A, M-7B BBB- 2004-HE7 I-A-2, I-A-3, II-A AAA 2004-HE7 M-1 AA+ 2004-HE7 M-2 AA- 2004-HE7 M-3 A+ 2004-HE7 M-4 A 2004-HE7 M-5 A- 2004-HE7 M-6 BBB+ 2004-HE7 M-7A, M-7B BBB- 2004-HE8 A AAA 2004-HE8 M-1 AA+ 2004-HE8 M-2 AA 2004-HE8 M-3 A+ 2004-HE8 M-4 A 2004-HE8 M-5 A- 2004-HE8 M-6 BBB+ 2004-HE8 M-7A, M-7B BBB- 2004-HE9 I-A-1, I-A-2, I-A-3, II-A, III-A-1 AAA 2004-HE9 III-A-2 AAA 2004-HE9 M-1 AA+ 2004-HE9 M-2 AA 2004-HE9 M-3 A+ 2004-HE9 M-4 A 2004-HE9 M-5 A- 2004-HE9 M-6 BBB+ 2004-HE9 M-7A, M-7B BBB- 2004-HE10 I-A-2, I-A-3, II-A-1, II-A-2 AAA 2004-HE10 M-1 AA 2004-HE10 M-2 A 2004-HE10 M-3 A- 2004-HE10 M-4 BBB+ 2004-HE10 M-5 BBB 2004-HE10 M-6 BBB- 2004-HE10 M-7 BB+ 2004-HE11 I-A-2, I-A-3, II-A-1, II-A-2 AAA 2004-HE11 M-1 AA 2004-HE11 M-2 A 2004-HE11 M-3 A- 2004-HE11 M-4 BBB+ 2004-HE11 M-5 BBB 2004-HE11 M-6 BBB- 2004-HE11 M-7 BB 2005-AC1 A AAA 2005-AC1 M-1 AA 2005-AC1 M-2 A 2005-AC1 M-3 A- 2005-AC1 B-1 BBB+ 2005-AC1 B-2 BBB 2005-AC1 B-3 BBB- 2005-AC2 I-A AAA 2005-AC2 I-M-1 AA 2005-AC2 I-M-2 A 2005-AC2 I-M-3 A- 2005-AC2 I-B-1 BBB+ 2005-AC2 I-B-2 BBB 2005-AC2 I-B-3 BBB- 2005-AC2 II-A-1, II-A-2 AAA 2005-AC2 II-M-1 AA 2005-AC2 II-M-2 A 2005-AC2 II-M-3 A- 2005-AC2 II-B-1 BBB+ 2005-AC2 II-B-2 BBB 2005-AC2 II-B-3 BBB- 2005-AC3 I-A-1, I-A-2 AAA 2005-AC3 I-M-1 AA+ 2005-AC3 I-M-2 AA 2005-AC3 I-M-3 AA- 2005-AC3 I-B-1 A 2005-AC3 I-B-2 A- 2005-AC3 I-B-3 BBB+ 2005-AC3 I-B-4 BBB- 2005-AC3 II-A-1, II-A-2, II-A-3, II-A-4 AAA 2005-AC3 II-X, II-PO AAA 2005-AC3 II-B-1 AA 2005-AC3 II-B-2 A 2005-AC3 II-B-3 BBB 2005-AC3 II-B-4 BB 2005-AC3 II-B-5 B 2005-AC4 A AAA 2005-AC4 M-1 AA+ 2005-AC4 M-2 A+ 2005-AC4 M-3 A 2005-AC4 B-1 A- 2005-AC4 B-2 BBB+ 2005-AC4 B-3 BBB 2005-AC4 B-4 BBB- 2005-AC5 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5 AAA 2005-AC5 I-M-1 AA 2005-AC5 I-M-2 A 2005-AC5 I-M-3 A- 2005-AC5 I-B-1 BBB+ 2005-AC5 I-B-2 BBB 2005-AC5 I-B-3 BBB- 2005-AC5 I-B-4 BB 2005-AC5 II-A-1, II-A-2, II-A-3 AAA 2005-AC5 II-A-4, II-X-1, II-X-2, II-PO AAA 2005-AC5 II-R-1, II-R-2, II-R-3 AAA 2005-AC5 II-X, II-PO AAA 2005-AC5 II-B-1 AA 2005-AC5 II-B-2 A 2005-AC5 II-B-3 BBB 2005-AC5 II-B-4 BB 2005-AC5 II-B-5 B 2005-AC6 I-A-1, I-A-2, I-A-3, I-A-4 AAA 2005-AC6 I-M-1 AA 2005-AC6 I-M-2 A 2005-AC6 I-M-3 A- 2005-AC6 I-B-1 BBB+ 2005-AC6 I-B-2 BBB 2005-AC6 I-B-3 BBB- 2005-AC6 I-B-4 BB 2005-AC6 II-1-A-1, II-1-A-2, II-2-A, II-1-X AAA 2005-AC6 II-1-A-3, II-1-PO AAA 2005-AC6 II-B-1 AA 2005-AC6 II-B-2 A 2005-AC6 II-B-3 BBB 2005-AC6 II-B-4 BB 2005-AC6 II-B-5 B 2005-AC7 A-1, A-2, A-3, A-4 AAA 2005-AC7 M-1 AA 2005-AC7 M-2 A 2005-AC7 M-3 A- 2005-AC7 B-1 BBB+ 2005-AC7 B-2 BBB 2005-AC7 B-3 BBB- 2005-AC7 B-4 BB 2005-AC8 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA 2005-AC8 X-1, A-8, A-9, A-10, R-1, R-2, R-3 AAA 2005-AC8 PO AAA 2005-AC8 B-1 AA 2005-AC8 B-2 A 2005-AC8 B-3 BBB 2005-AC8 B-4 BB 2005-AC8 B-5 B 2005-AC9 A-2, A-3, A-4, A-5 AAA 2005-AC9 M-1 AA 2005-AC9 M-2 A 2005-AC9 M-3 A- 2005-AC9 B-1 BBB+ 2005-AC9 B-2 BBB 2005-AC9 B-3 BBB- 2005-AC9 B-4 BB 2005-AQ2 A-1, A-2, A-3 AAA 2005-AQ2 M-1 AA+ 2005-AQ2 M-2 AA 2005-AQ2 M-3 AA- 2005-AQ2 M-4 A 2005-AQ2 M-5 A- 2005-AQ2 M-6 BBB+ 2005-AQ2 M-7 BBB 2005-AQ2 M-8 BBB- 2005-AQ2 M-9 BB+ 2005-AQ2 M-10 BB 2005-EC1 A-2, A-3 AAA 2005-EC1 M-1 AA+ 2005-EC1 M-2 AA 2005-EC1 M-3 AA- 2005-EC1 M-4 A 2005-EC1 M-5 A- 2005-EC1 M-6 BBB+ 2005-EC1 M-7 BBB 2005-EC1 M-8 BBB- 2005-FR1 I-A-1, I-A-2, I-A-3, II-A-1, II-A-2 AAA 2005-FR1 M-1 AA 2005-FR1 M-2 A 2005-FR1 M-3 A- 2005-FR1 M-4 BBB+ 2005-FR1 M-5 BBB 2005-FR1 M-6 BBB- 2005-FR1 M-7 BB+ 2005-FR1 M-8 BB 2005-HE1 I-A-2, I-A-3, II-A-1, II-A-2 AAA 2005-HE1 M-1 AA 2005-HE1 M-2 A 2005-HE1 M-3 A- 2005-HE1 M-4 BBB+ 2005-HE1 M-5 BBB 2005-HE1 M-6 BBB - 2005-HE1 M-7 BB 2005-HE2 I-A-2, I-A-3, II-A-1, II-A-2 AAA 2005-HE2 III-A-1, III-A-2 AAA 2005-HE2 M-1 AA 2005-HE2 M-2 A 2005-HE2 M-3 A- 2005-HE2 M-4 BBB+ 2005-HE2 M-5 BBB 2005-HE2 M-6 BBB - 2005-HE2 M-7 BB+ 2005-HE2 M-8 BB 2005-HE3 I-A-1, I-A-2, I-A-3, II-A-1, II-A-2 AAA 2005-HE3 III-A-1, III-A-2 AAA 2005-HE3 M-1 AA 2005-HE3 M-2 A 2005-HE3 M-3 A- 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2006-HE3 M-3 AA- 2006-HE3 M-4 A+ 2006-HE3 M-5 A 2006-HE3 M-6 A - 2006-HE3 M-7 BBB+ 2006-HE3 M-8 BBB 2006-HE3 M-9 BBB- 2006-HE3 M-10 BB+ 2006-HE4 I-A-1, I-A-2, I-A-3, II-A AAA 2006-HE4 M-1 AA+ 2006-HE4 M-2 AA 2006-HE4 M-3 AA- 2006-HE4 M-4 A+ 2006-HE4 M-5 A 2006-HE4 M-6 A - 2006-HE4 M-7 BBB+ 2006-HE4 M-8 BBB 2006-HE4 M-9 BBB- 2006-HE4 M-10 BB+ 2006-HE5 I-A-1, I-A-2, I-A-3, II-A AAA 2006-HE5 M-1 AA+ 2006-HE5 M-2 AA 2006-HE5 M-3 AA- 2006-HE5 M-4 A+ 2006-HE5 M-5 A 2006-HE5 M-6 A - 2006-HE5 M-7 BBB+ 2006-HE5 M-8 BBB 2006-HE5 M-9 BBB- 2006-HE5 M-10 BB+ 2006-HE5 M-11 BB 2006-HE6 I-A-1, I-A-2, I-A-3 AAA 2006-HE6 I-M-1 AA+ 2006-HE6 I-M-2 AA 2006-HE6 I-M-3 AA- 2006-HE6 I-M-4 A+ 2006-HE6 I-M-5 A 2006-HE6 I-M-6 A - 2006-HE6 I-M-7 BBB+ 2006-HE6 I-M-8 BBB 2006-HE6 I-M-9 BBB- 2006-HE6 I-M-10 BB+ 2006-HE6 I-M-11 BB 2006-HE6 II-A-1, II-A-2, II-A-3 AAA 2006-HE6 II-M-1 AA+ 2006-HE6 II-M-2 AA 2006-HE6 II-M-3 AA- 2006-HE6 II-M-4 A+ 2006-HE6 II-M-5 A 2006-HE6 II-M-6 A - 2006-HE6 II-M-7 BBB+ 2006-HE6 II-M-8 BBB 2006-HE6 II-M-9 BBB- 2006-HE6 II-M-10 BB+ 2006-HE6 II-M-11 BB 2006-HE7 II-1A-1, II-1A-2, II-1A-3, II-2A AAA 2006-HE7 II-M-1 AA+ 2006-HE7 II-M-2 AA 2006-HE7 II-M-3 AA- 2006-HE7 II-M-4 A+ 2006-HE7 II-M-5 A 2006-HE7 II-M-6 A - 2006-HE7 II-M-7 BBB+ 2006-HE7 II-M-8 BBB 2006-HE7 II-M-9 BBB- 2006-HE7 II-M-10 BB+ 2006-HE7 II-M-11 BB 2006-IM1 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA 2006-IM1 M-1 AA+ 2006-IM1 M-2 AA 2006-IM1 M-3 AA- 2006-IM1 M-4 A+ 2006-IM1 M-5 A 2006-IM1 M-6 A - 2006-IM1 M-7 BBB+ 2006-IM1 M-8 BBB 2006-IM1 M-9 BBB- 2006-PC1 A-1, A-2, A-3 AAA 2006-PC1 M-1 AA+ 2006-PC1 M-2, M-3 AA 2006-PC1 M-4 A+ 2006-PC1 M-5 A 2006-PC1 M-6 A - 2006-PC1 M-7, M-8 BBB+ 2006-PC1 M-9 BBB- Bear Stearns Asset Backed Securities Trust Series Class Rating ------ ----- ------ 2006-SD1 A AAA 2006-SD1 M-1 AA 2006-SD1 M-2 A 2006-SD1 M-3 BBB 2006-SD1 M-4 BBB- BLOUNT INC: Weak Market Prompts S&P's Negative Outlook ------------------------------------------------------ Standard & Poor's Rating Services revised its outlook on Portland, Oregon-based Blount Inc. to negative from stable. At the same time, Standard & Poor's affirmed its ratings on the company, including its 'BB-' corporate credit rating. The company had total balance sheet debt of over $377 million at Sept. 30, 2006. "The outlook revision reflects the downturn in Blount's operating results primarily due to weakness in the timber harvesting equipment end-market," said Standard & Poor's credit analyst Dan Picciotto. However, the company has pursued some cost-savings initiatives and has paid down debt somewhat offsetting the negative results. Still, a prolonged cyclical decline could negatively impact credit metrics. BUILDING MATERIALS: ElkCorp Merger Cues S&P's Negative CreditWatch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings, including its 'BB-' corporate credit rating, on roofing manufacturer Building Materials Corp. of America on CreditWatch with negative implications. The rating action followed the company's announcement of a proposed merger with unrated ElkCorp, which manufactures roofing and other building products, for a price of $35 per share, or about $700 million. "Although a combination with ElkCorp, which has annual revenue of about $900 million, could bolster BMCA's business profile, an aggressive financing structure could weaken BMCA's financial metrics," said Standard & Poor's credit analyst John Kennedy. At Sept. 30, 2006, BMCA had debt of $800 million and debt to last-12--month EBITDA of 3.7x. ElkCorp is currently engaged in a review of strategic alternatives and in evaluating a number of proposals. "We will monitor developments regarding the proposal and expect to resolve the CreditWatch after more details are disclosed about the certainty of execution, the transaction's financing structure, and the combined company's business profile," Mr. Kennedy said. The proposed transaction would be subject to some closing conditions, including approval from shareholders and certain regulators. CATHOLIC CHURCH: Davenport Can Honor Employee Obligations --------------------------------------------------------- The Catholic Diocese of Davenport obtained authority from the U.S. Bankruptcy Court for the Southern District of Iowa to pay prepetition employee wages and benefits, and continue to honor certain employee benefit obligations. As reported in the Troubled Company Reporter on Oct. 18, 2006, Richard A. Davidson, Esq., at Lane & Waterman LLP, in Davenport, Iowa, related that the Diocese has historically offered to its employees reasonable vacation and sick time leaves. The Diocese's employees are also provided with other employee benefits, which consist of health insurance, a 401(K) retirement plan, group disability insurance and group life insurance, and Federal Insurance Contributions Act and Medicare insurance. The Benefits Package is critical to the Diocese's ability to retain its current employees, Mr. Davidson explains. The inability to continue to honor the Benefits Package would likely result in massive turnover and low employee morale. The Benefits Package imposes minimal incremental costs relative to the expected impact," Mr. Davidson added. Mr. Davidson asserted that it is imperative for the Diocese that the checks be honored to preserve and maintain the services of its employees. The experience and knowledge of these employees is critical to the Diocese's ongoing operations and ministries. The Diocese's employees will suffer significant financial hardship if the Diocese fails to pay prepetition wages, he added. The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. In its Schedules of Assets and Liabilities filed with the Court, the Davenport Diocese reports $4,492,809 in assets and $1,650,439 in liabilities. (Catholic Church Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CHARMING CASTLE: Bankruptcy Administrator Picks 3-Member Committee ------------------------------------------------------------------ The U.S. Bankruptcy Administrator for the Northern District of Alabama appointed three creditors to serve on an Official Committee of Unsecured Creditors in Charming Castle LLC's chapter 11 case: 1. Patrick Industries, Inc. Attention: Ms. Nancy Janasiak 107 W. Franklin Street Elkhart, IN 46515 2. Door Components, LLC Attention: Mr. Allen Knight P.O. Box 336 Haleyville, AL 35565 3. Consolidated Forest Products, LLC Attention: Mr. O'Neal Miller 155 County Highway 62 Bear Creek, AL 35543 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Hackleburg, Alabama, Charming Castle LLC, dba Indies House -- http://www.indieshouse.net/-- manufactures mobile homes. The Company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. N.D. Ala. Case No. 06-71420). Robert L. Shields, III, Esq., at the Shields Law Firm represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of less than $50,000 but estimated debts between $10 million and $50 million. The Debtor's exclusive period to file a chapter 11 expires on Feb. 2, 2007. CHARMING CASTLE: Committee Taps Burr & Forman as Counsel -------------------------------------------------------- The Official Committee of Unsecured Creditors in Charming Castle LLC's chapter 11 case, asks the U.S. Bankruptcy Court for the Northern District of Alabama for permission to retain Burr & Forman LLP as its counsel, nunc pro tunc to Oct. 23, 2006. Burr & Forman will: a) assist the Committee in analyzing the reorganization or liquidation efforts of the Debtor; b) give legal advice with respect to its duties and powers in the Debtor's chapter 11 case; c) assist in its investigation of the acts, conduct, assets, liabilities and continuance of the business, and any other matter relevant to the case or to the formulation of a plan of reorganization or liquidation; d) participate in the formulation of the plan; e) assist in requesting the appointment of a trustee or examiner, if necessary; and f) perform other legal services as required in the interest of the creditors. The firm's professionals bill: Professional Position Hourly Rate ------------ -------- ----------- Robert B. Rubin, Esq. Partner $400 Derek F. Meek, Esq. Partner $285 Jennifer B. Kimble, Esq. Associate $190 Julie Crawford, Esq. Paralegal $150 To the best of the Committee's knowledge, Burr & Forman is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Hackleburg, Alabama, Charming Castle LLC, dba Indies House -- http://www.indieshouse.net/-- manufactures mobile homes. The Company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. N.D. Ala. Case No. 06-71420). Robert L. Shields, III, Esq., at the Shields Law Firm represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of less than $50,000 but estimated debts between $10 million and $50 million. The Debtor's exclusive period to file a chapter 11 expires on Feb. 2, 2007. CHERRYDALE FARMS: NatCity Assists in Asset Sale to Rosen Capital ---------------------------------------------------------------- Cherrydale Farms, Inc., aka R & R Operating Partnership, LP, has sold substantially all assets to Rosen Capital. Items sold included Cherrydale's brand of candies and chocolates, gift wrap, and licensed items under the Company's commercial division. The Special Situations Group of NatCity Investment Banking facilitated the sale of Cherrydale's commercial division to Rosen Capital, a New Jersey-based investment group. As a result of the sale, Cherrydale's shareholders were able to monetize investments in the company and also retain a minority equity stake in the business. National City also secured a $15 million senior credit facility, that closed concurrent with the sale, for the Company's fundraising division. Cherrydale was experiencing operating challenges in its commercial division related to the rapid growth of its businesses, much of which was driven by the expanding market for nutritional bars. The Company retained the Special Situations Group to advise on both sale alternatives as well as the placement of a senior debt facility for the fundraising business to meet its imminent seasonal working capital requirements. The Special Situations Group team was composed of Scott Victor, Robert Smith, Michael Goodman, Michael Gorman and Ryan Cole. Also advising on the deal were Mark G. Samson of Getzler Henrich as management and financial consultant; and Daniel J. Barrison, Esq., of Sherman Silverstein Kohl Rose & Podolsky. Based in Allentown, Pa., Cherrydale Farms, Inc., aka aka R & R Operating Partnership, LP, -- http://www.cherrydale.com/-- supplies product fundraising programs to schools and non-profit organizations. Cherrydale previously filed for Chapter 11 protection on March 15, 1999. CLEAN HARBORS: Files Schedules of Assets and Liabilities -------------------------------------------------------- Clean Harbors Plaquemine, LLC, delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the District of Massachusetts disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $186,859 B. Personal Property $2,530,690 C. Property Claimed as Exempt D. Creditors Holding $129,231,269 Secured Claims E. Creditors Holding Unsecured Priority Claims $1,580 F. Creditors Holding $272,520 Unsecured Nonpriority Claims ---------- ------------ Total $2,717,549 $129,505,369 Headquartered in Norwell, Massachusetts, Clean Harbors Plaquemine, LLC, operates a deep injection hazardous waste facility. The Company is a subsidiary of Clean Harbors, Inc. The Company filed for chapter 11 protection on Oct. 17, 2006 (Bankr. D. Mass. Case No. 06 13728). Whitton E. Norris, III, Esq., at David, Malm & D'Agostine, P.C., represents the Debtor. CLEAN HARBORS: List of 20 Largest Unsecured Creditors ----------------------------------------------------- Clean Harbors Plaquemine, LLC, released a list of its 20 Largest Unsecured Creditors with the U.S. Bankruptcy Court for the District of Massachusetts, disclosing: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Louisiana DEQ Permit Fee $234,943 P.O. Box 4311 Baton Rouge, LA 70821 Air Nu of Baton Rouge, LLC Trade $11,649 11340 Industriplex Boulevard Baton Rouge, LA 70809 Williams Scotsman Inc. Trade $7,848 P.O. Box 91975 Chicago, IL 60693 Schwing Mgmt., LLC Royalty $4,680 Subsurface Construction Corp. Trade $4,010 Williams Scotsman Inc. Trade $2,606 Lowes Trade $2,178 Pitney Bowes Credit Corp. KY Trade $1,069 Lubemaster Construction DIV Trade $949 Best Impressions Trade $453 SGS Petroleum Service Corp. Trade $450 Fisher Scientific Trade $352 Rental Service Corporation Trade $260 National Innovative Waste Trade $260 McJunkin Corporation Trade $221 Airgas Gulf States Trade $191 Bayou Oil Field Trade $180 Construction Co. Inc. White Castle Fertilizer Trade $179 Total Safety Trade $146 Bayou Road Lumber Trade $90 Hardware LLC Headquartered in Norwell, Massachusetts, Clean Harbors Plaquemine, LLC, operates a deep injection hazardous waste facility. The Company is a subsidiary of Clean Harbors, Inc. The Company filed for chapter 11 protection on Oct. 17, 2006 (Bankr. D. Mass. Case No. 06 13728). Whitton E. Norris, III, Esq., at David, Malm & D'Agostine, P.C., represents the Debtor. COLLINS & AIKMAN: Wants Wachovia to Surrender Property ------------------------------------------------------ Collins & Aikman Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Eastern District of Michigan to direct Wachovia Bank and Trust Company, N.A., to turnover property that is currently being held in trust by the Bank. In December 1986, the Debtors established a trust to pay supplemental retirement benefits to Donald F. McCullough, the former chief executive officer of Collins & Aikman Corp. Wachovia serves as Trustee of the C&A Rabbi Trust. Richard M. Cieri, Esq., at Kirkland & Ellis LLP, in New York, tells the Court that pursuant to a trust agreement, the Trust Assets are the Debtors' property and should be available for distribution to their creditors. Wachovia has informed the Debtors that it will transfer the Trust Assets to the Debtors pursuant only to a judgment by a "court of competent jurisdiction." Mr. Cieri also relates that Wachovia has breached the Trust Agreement by failing to discontinue payments to the beneficiary of the C&A Rabbi Trust after being informed of the Debtors' insolvency. Contrary to its obligations under the Trust Agreement, Wachovia did not independently determine whether the Debtors were in fact insolvent within 30 days of receiving notice of insolvency. Wachovia also did not discontinue the payment of benefits under the Trust. Instead, between June 2005 and October 2005, Wachovia continued to use or invade the Trust Assets to pay monthly benefits to Louise V. McCullough, the surviving spouse of Mr. McCullough and the sole remaining beneficiary of the Trust, aggregating $35,215. The Debtors also seek to recover the monetary damages that they have suffered as a result of Wachovia's breach of the Trust Agreement. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and $2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) COMMUNICATIONS CORP: Panel Hires Taylor Porter as Counsel --------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Louisiana in Shreveport allows the Official Committee of Unsecured Creditors appointed in Communications Corporation of America, White Knight Holdings, Inc. and their debtor-affiliates' bankruptcy cases to retain Taylor, Porter, Brooks & Phillips LLP as its counsel, nunc pro tunc to Sept. 27, 2006. Taylor Porter will: a) assist and advise the Committee in its consultations with the Debtors and other committees relative to the overall administration of the estates; b) represent the Committee at hearings before the Court and communicate with the Committee regarding the matters heard and issues raised, as well as decisions and considerations of the Court; c) assist and advise the Committee in its examination and analysis of the Debtors' conduct and financial affairs; d) review and analyze all applications, orders and operating reports, schedules and statements of affairs filed in the Debtors' case and advise the Committee on the necessity and propriety of these filings and their impact on the rights of creditors; e) assist the Committee in preparing appropriate legal pleadings and proposed orders required in support of positions taken by the Committee, prepare witnesses and review relevant documents; f) coordinate the receipt and disseminations of information prepared by and received from other professionals retained by the Debtors, as well as other information received from independent professionals engaged by the other committees; g) advise and assist the Committee in the negotiations with respect to any proposed plan or plans of reorganization; and h) assist the committee by providing other services as may be in the best interest of the parties represented by the Committee. The hourly rates for Taylor Porter's professionals are: Professional Designation Hourly Rate ------------ ----------- ----------- Brett P. Furr, Esq. Partner $300 Andree Matherne Cullens, Esq. Partner $250 Michael A. Crawford, Esq. Partner $250 Tom Easterly, Esq. Associate $185 Matthew L. Mullins, Esq. Associate $215 Paralegals $90 Taylor Porter assures the Court that it does not hold or represent any interest adverse to the Debtors' estates. Taylor Porter can be reached at: Taylor, Porter, Brooks & Phillips LLP 8th Floor - Chase Tower South 451 Florida Street Baton Rouge, LA 70801 P.O. Box 2471 Phone: 225-387-3221 Fax: 225-346-8049 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. COTT CORPORATION: Earns $6.6 Million in 2006 Third Quarter ---------------------------------------------------------- Cott Corporation reported a $6.6 million net income on $475.5 million of revenues for the third quarter ended Sept. 30, 2006, compared with a $1.8 million net loss on $469.9 million of revenues for the same period in 2005. Despite registering a lower gross profit of $62.0 million in the third quarter of 2006, compared to a gross profit of $65.4 million for the same period of 2005, the company managed to show a profit of $6.6 million largely due to lower recorded charges for unusual items of $9.3 million on a pre-tax basis in the current quarter compared with a charge for unusual items of $25.7 million on a pre-tax basis in the same quarter in 2005. This would account for the reported net income of $6.6 million in the third quarter of 2006 compared to the $1.8 million net loss for the same period in 2005. The $9.3 million of unusual items recorded in the third quarter of 2006 consists of $9.4 million of restructuring charges, partially offset by a $0.1 million gain related to a recovery from a note receivable. At Sept. 30, 2006, the company's consolidated balance sheet showed $1.2 billion in total assets, $653.5 million in total liabilities, $21.9 million in minority interest, and $513 million in stockholders' equity, The company also disclosed that to assure long-term success and profitability, it is focusing on reducing costs, becoming the best partner to their retailer customers, and building and sustaining a pipeline of innovation and new product development. The company also reported that it will cease production at their manufacturing plants in Elizabethtown, Kentucky and Wyomissing, Pennsylvania by Dec. 31, 2006; and will reallocate production volume to other manufacturing sites in North America. Full-text copies of the company's consolidated financial statements for the third quarter ended Sept. 30, 2006, are available for free at: http://researcharchives.com/t/s?1538 Headquartered in Toronto, Ontario, Canada, Cott Corporation (NYSE:COT; TSX:BCB) -- http://www.cott.com/-- is a non-alcoholic beverage company and a retailer brand beverage supplier. The Company commercializes its business in over 60 countries worldwide, with its principal markets being the United States, Canada, the United Kingdom and Mexico. Cott markets or supplies over 200 retailer and licensed brands, and Company-owned brands including Cott, Royal Crown, Vintage, Vess and So Clear. Its products include carbonated soft drinks, sparkling and flavoured mineral waters, energy drinks, juices, juice drinks and smoothies, ready-to-drink teas, and other non-carbonated beverages. * * * As reported in the Troubled Company Reporter on Sept. 26, 2006, Moody's Investors Service's affirmed its Ba3 Corporate Family Rating for Cott Corporation and its B1 Rating on Cott Beverages Inc.'s 8% Subordinate Notes Due 2011, in connection with Moody's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the U.S. beverage company sector. Moody's assigned an LGD5 rating to those bonds, suggesting noteholders will experience a 74% loss in the event of a default. CROWN CASTLE: Unit Plans $1.55-Bil. Sr. Revenue Notes Offering -------------------------------------------------------------- Crown Castle International Corp. has disclosed that certain of its indirect subsidiaries intend to offer, in a private transaction, up to $1.55 billion of Senior Secured Tower Revenue Notes, Series 2006-1, as additional debt securities under the existing Indenture dated as of June 1, 2005, pursuant to which the Senior Secured Tower Revenue Notes, Series 2005-1 were issued. The subsidiaries expected to issue the Offered Notes will be special purpose entities that hold substantially all of the U.S. towers of Crown Castle. Crown Castle expects that the majority of the Offered Notes will be rated investment grade. The servicing and repayment of the Offered Notes is expected to be made solely from the cash flow from the operation of the U.S. towers that are part of the transaction. The terms of the Offered Notes are expected to be substantially similar to the provisions applicable to the Initial Notes. Crown Castle expects to use the net proceeds received from this offering to: a) repay the outstanding term loan under the Crown Castle Operating Company credit facility; and b) pay the expected cash portion of the consideration of the planned acquisition of Global Signal Inc. or, in the event the acquisition of Global Signal Inc. is not consummated, for general corporate purposes. About Crown Castle Crown Castle International Corp. -- http://www.crowncastle.com/ -- engineers, deploys, owns and operates shared wireless infrastructure, including extensive networks of towers. Crown Castle offers wireless communications coverage to 68 of the top 100 United States markets and to substantially all of the Australian population. Crown Castle owns, operates and manages over 10,600 and over 1,300 wireless communication sites in the U.S. and Australia, respectively. * * * As reported in the Troubled Company Reporter on Oct. 17, 2006, Standard & Poor's Ratings Services placed the ratings of Houston, Texas-based wireless tower operator Crown Castle International Corp. and its related entities on CreditWatch with negative implications, including its 'BB' corporate credit rating and the 'BBB-' secured bank loan rating of intermediate holding company Crown Castle Operating Co. As reported in the Troubled Company Reporter on Oct. 10, 2006, Moody's Investors Service affirmed all ratings of Crown Castle Operating Company, including its B1 Corporate Family Rating, B1 Senior Secured Rating and SGL-2 Liquidity Rating. The ratings reflect a B1 probability of default and loss given default assessment of LGD3 (43%) on the senior secured facility. The outlook remains stable. CUMULUS MEDIA: Earns $1.3 Million in 2006 Third Quarter ------------------------------------------------------- Cumulus Media Inc. reported a $1.3 million net income on $82.9 million of revenues for the third quarter ended Sept. 30, 2006, compared with a $9.1 million net income on $85.3 million of revenues for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed $1.4 billion in total assets, $1 billion in total liabilities, and $381 million in total stockholders' equity. Net revenues decreased $1.3 million primarily because of the contribution of the company's Houston and Kansas City stations to its affiliate Cumulus Media Partners, LLC and the resulting loss of the revenue from those stations, offset by $1 million in management fees from Cumulus Media and organic growth over the company's existing platform. This revenue decrease and the increase in interest charges by $8.7 million, or 158.2%, to $14.2 million for the third quarter of 2006, compared to $5.5 million for same period in 2005, accounted for the decrease in net income to $1.3 million for the current quarter. The increase in interest expense was primarily due to higher interest rates on the portion of debt subject to variable rates and the increase in the average borrowing level. Full-text copies of the company's consolidated financial statements are available for free at: http://researcharchives.com/t/s?153b Headquartered in Atlanta, Georgia, Cumulus Media Inc. -- http://www.cumulus.com/-- is the second-largest radio company in the United States based on station count. Giving effect to the completion of all pending acquisitions and divestitures, Cumulus Media, directly and through its investment in Cumulus Media Partners, will own or operate 345 radio stations in 67 U.S. media markets. * * * As reported in the Troubled Company Reported on Sept. 28, 2006, Moody's Investors Service affirmed its Ba3 rating on Cumulus Media, Inc.'s secured revolver and secured term loans and assigned an LGD3 rating to these debts, in connection with Moody's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology for the US advertising and broadcasting sector. Cumulus Media also carries Moody's B1 PDR rating. DANA CORP: Posts $356 Million Net Loss in Third Quarter of 2006 --------------------------------------------------------------- Dana Corp. posted a $356 million net loss on $2 billion of net sales for the quarter ended Sept. 30, 2006, compared with a $1.3 billion net loss on $2.1 billion of net sales for the same period in 2005. At Sept. 30, 2006, the company's consolidated balance sheet showed $7.4 billion in total assets, $7.2 billion in total liabilities, $82 million in minority interest in consolidated subsidiaries, and $123 million in stockholders equity. The company's consolidated balance sheet at Sept. 30, 2006, also showed $3.7 billion in current assets and $2.3 billion in current liabilities. Net sales dropped $97 million in the current quarter compared to the same period in 2005 as a combined result of decreases in sales in the North America, Asia Pacific and the South America regions of $97 million, $62 million and $8 million, respectively, and the increase in Europe net sales of $57 million. Impairment charges of $165 million were also recorded in the third quarter of 2006 to reduce lease and other assets in Dana Credit Corp. to their fair value less cost to sell. A $46 million charge was also taken to write-off goodwill in company's Traction Products business after the company revised its earnings outlook on that business segment. In the third quarter in 2005 no impairment of goodwill or other assets were recorded. During the third quarter of 2005, the company also provided a valuation allowance of $907 million against its net U.S. deferred tax assets and provided additional allowances of $13 million against similar net deferred tax assets in the U.K. These provisions were the principal reason for tax expense of $921 million recognized during the third quarter of 2005. In the third quarter of 2006 the tax expense was $20 million. In the third quarter of 2006 the company also recorded losses of $84 million from the discontinued operations of its hard parts, fluid products and pump products businesses, as compared to losses of $306 million from discontinued operations of these same businesses in the third quarter of 2005. These businesses will be divested by the end of the first quarter of 2007. The combined effects of the 2006 third quarter decrease in net sales and the impairment charges for goodwill and other assets, were offset by the lower charges for tax expense and losses from discontinued operations, allowing the company to report a lower net loss of $356 million in the current quarter compared to a net loss of $1.3 billion in the same period in 2005. Company Plans Subject to the supervision of the U.S. Bankruptcy Court for the Southern District of New York, the company is proceeding with previously announced divestiture and restructuring plans, which include the sale of non-core businesses and the closure of certain facilities. As disclosed, the company is taking steps to reduce costs, increase efficiency and enhance productivity. The Debtors have until Jan. 3, 2007 to file a plan of reorganization, unless otherwise extended by the Court upon request of the Debtors. Dissolution of Spicer S.A. In July 2006, Dana and Desc Automotriz, S.A. de C.V. completed the dissolution of their Mexican joint venture, Spicer S.A. de C.V. The transaction included the sale by Dana of their 49% interest in Spicer S.A. to Desc and the purchase by Dana of the Spicer S.A. subsidiaries in Mexico that manufacture and assemble axles, driveshafts, gears, forgings and castings. Desc, in turn, acquired full ownership of the subsidiaries that hold the transmission and aftermarket gasket operations in which it previously held a 51% interest. DIP Facility The company has a $1.45 billion DIP Credit Agreement which was approved by the U.S. Bankruptcy Court for the Southern District of New York in March 2006. At Sept. 30, 2006 unused credit available amounted to $334 million. Full-text copies of the company's consolidated financial statements are available for free at: http://researcharchives.com/t/s?14ed About Dana Corporation Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. When the Debtors filed for protection from their creditors, they listed $7.9 billion in assets and $6.8 billion in liabilities as of Sept. 30, 2005. (Dana Corporation Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). DAVITA INC: Moody's Holds Corporate Family Rating at B1 ------------------------------------------------------- Moody's Investors Service changed DaVita, Inc.'s ratings outlook to positive from stable and affirmed DaVita's existing ratings. The positive outlook reflects DaVita's outpacing expectations, with respect to cash flow, EBITDA and debt reduction, after the acquisition of Gambro Healthcare, the US dialysis clinics of Sweden's Gambro AB. That transaction roughly doubled the revenue base and number of clinics of DaVita. Though Moody's believes that much of the risk associated with the integration of Gambro has passed, it may take DaVita several more years to fully integrate the two companies. While inefficiencies and incremental integration costs will likely exist, it is our view that they will be offset by the increased scale and purchasing power from the combined entity and other synergies. The outlook therefore reflects Moody's expectation of continued positive operating results, further improvement in metrics and additional debt reduction. Absent any deviation from these expectations, the ratings could be upgraded in the near term. The B1 Corporate Family Rating is supported by DaVita's large scale and competitive position as the second largest provider of dialysis services in the US. Moody's also believes that DaVita's revenue and cash flow will continue to grow at a steady pace driven by positive trends in demographics including the aging population, increasing incidences of end-stage renal disease caused by conditions such as diabetes, and annual increases to reimbursement rates. In addition, Moody's notes DaVita's steady cash flow is supported by the recurring nature of revenues, minimal exposure to bad debt and geographic diversification, which has been enhanced by the acquisition of the Gambro business. The rating continues to be constrained by the significant amount of leverage the company assumed in connection with the Gambro acquisition. This debt load limits the debt coverage metrics despite the strong, steady nature of the cash flows. Cash flow coverage metrics are expected to improve over the next 12-18 months as Moody's anticipates that the company will continue to prepay debt with internally generated cash flow. The rating is also constrained by the high concentration of revenues generated from the administration of Epogen, manufactured solely by Amgen, Inc. EPO, being one of the most costly pharmaceuticals to the US healthcare system, has been and will likely continue to be the subject of government scrutiny. In addition, there is the potential that new competitors to the market could change the dynamics of the kidney care pharmaceutical market. Further, the ratings capture the continued risk of ongoing investigations by US Attorney's Offices. The affirmation of the Speculative Grade Liquidity Rating of SGL-1 reflects our belief that the company will maintain excellent liquidity over the next four quarters. If DaVita continues to delever through the prepayment of debt or operating cash flow coverage of debt continues to improve Moody's could upgrade the ratings. A significant debt financed acquisition or establishment of significant shareholder initiatives could result in downward pressure on the ratings. These ratings are affirmed: -- Senior Secured Revolving Credit Facility due 2011, Ba2, LGD2, 29% -- Senior Secured Term Loan A, Ba2, LGD2, 29% -- Senior Secured Term Loan B, Ba2, LGD2, 29% -- Senior Unsecured notes due 2013, B2, LGD5, 73% -- Senior Subordinated notes due 2015, B3, LGD6, 90% -- Corporate Family Rating, B1 -- Probability of Default Rating, B1 -- Speculative Grade Liquidity Rating, SGL-1 The ratings outlook changed to positive from stable. DaVita, Inc., headquartered in El Segundo, California, is an independent provider of dialysis services in the U.S. for patients suffering from end-stage renal disease. As of Sept. 30, 2006, DaVita operated or provided administrative services to 1,269 outpatient dialysis centers located in 43 states serving approximately 101,000 patients. For the twelve months ended Sept. 30, 2006, DaVita recognized revenues of approximately $4.7 billion. DEAN FOODS: Earns $70.8 Million in Quarter Ended September 30 ------------------------------------------------------------- Dean Foods Company reported a $70.8 million consolidated net income on $2.5 billion of net sales for the quarter ended Sept. 30, 2006, compared with a $99.4 million consolidated net income on $2.6 billion of net sales for the same period in 2005. At Sept. 30, 2006, the company's consolidated balance sheet showed $6.8 billion in total assets, $4.8 billion in total liabilities, and $2 billion in total stockholders' equity. As disclosed by the company, net sales decreased primarily due to lower selling prices in the Dairy Group business segment resulting from the pass-through of lower class I raw skim milk and butterfat costs. This decrease was partly offset by fluid dairy volume growth in the Dairy Group and higher selling prices and overall volume increases at White Wave Foods Company. Cost of sales as a percentage of net sales decreased to 72.4% in the third quarter of 2006 compared with 72.4% in the same period in 2005 primarily due to lower raw milk costs in the Dairy Group segment. Operating expenses increased approximately $12.2 million in the current quarter compared to the same period in 2005, primarily due to increase in distribution costs of $14.4 million resulting from higher fuel prices and increased volumes. Operating income during the current quarter was $168.7 million, an increase of $30.7 million from the third quarter of 2005 operating income of $138 million, primarily due to lower raw milk costs. Total other expense increased to $48 million in the current quarter compared to $37.7 million in the third quarter of 2005 because of increases in interest expense due to higher average debit balances and higher interest rates. Income from continuing operations increased to $120.8 million in the current quarter, compared to $100.3 million for the same period in 2005, as a result of the combined effects of the above. The decreased net income recorded for the third quarter of 2006 is due to the absence of a gain on sale of discontinued operations, net of tax, of $37.8 million recognized in the third quarter of 2005. This came about because of the spin-off of TreeHouse Foods, Inc. in June 27, 2005 and the completed sale of Marie's(R) dips and dressings and Dean's(R) dips businesses to Ventura Foods in August 2005. Full-text copies of the company's consolidated financial statements for the third quarter ended Sept. 30, 2006, are available for free at: http://researcharchives.com/t/s?154c Recent Developments On Sept. 14, 2006, the company completed the sale of its Iberian operations in Spain for approximately $96.3 million. An incremental loss on the sale of our operations in Spain of $2.4 million (net of tax) was recognized during the quarter ended Sept. 30, 2006. The company also disclosed that it agreed to sell its Portuguese operations for approximately $11.4 million. No other details were given. About Dean Foods Dean Foods Company is a food and beverage company in the U.S. Its Dairy Group division is the largest processor and distributor of milk and other dairy products in the country, with products sold under more than 50 familiar local and regional brands and a wide array of private labels. The Company's WhiteWave Foods subsidiary markets and sells a variety of dairy and dairy-related products, such as Silk soymilk, Horizon Organic milk and other dairy products and International Delight coffee creamers. WhiteWave Foods' Rachel's Organic brand is the largest organic milk brand and second largest organic yogurt brand in the United Kingdom. * * * As reported in the Troubled Company Reporter on Sept. 26, 2006, Moody's Investors Service affirmed its Ba1 Corporate Family Rating for Dean Foods Company and its subsidiary, Dean Holding Company, in connection with the implementation of the new Probability-of- Default and Loss-Given-Default rating methodology for the U.S. food and beverage company sector. Additionally, Moody's revised or held its probability-of-default ratings and assigned loss- given-default ratings on the Company's loans and bond debt obligations. Ratings revised include the Ba1 rating on the Company's $1.5B Gtd. Sr. Sec. Revolving Credit Facility due 2009, which was changed to Baa3. As reported in the Troubled Company Reporter on May 15, 2006, Standard & Poor's Ratings Services assigned its 'BB-' rating to Dean Foods Inc.'s proposed issue of $300 million 10-year notes. The notes are a drawdown from a Rule 415 shelf filing. As senior unsecured obligations, the rating is notched down twice from the 'BB+' corporate credit rating on the company because of the amount of secured debt outstanding. DELL INC: Announcing Prelim Third Quarter Results by Month's End ---------------------------------------------------------------- Dell Inc. intends to report its preliminary results for the fiscal third quarter by the end of this month. The move from the originally scheduled date of November 16 reflects the level of complexity the company is facing in the preparation of its preliminary results. The complexity arises out of the ongoing investigations by the Securities and Exchange Commission and the company's Audit Committee into certain accounting and financial reporting matters, and the fact the company has not filed its Form 10-Q for the second fiscal quarter. When the company does announce earnings it will be in the form of a press release only. In addition, the company said that future earnings announcements will be moved back by approximately one week versus Dell's prior schedule. The company also announced it has been informed that the SEC has entered a formal order of investigation. The delay in announcing earnings is not related to that development. Dell continues to cooperate with the SEC, and is committed to resolving all issues in connection with the investigation and regaining compliance with all SEC filing requirements as soon as possible. Headquartered in Round Rock, Texas, Dell Inc. (NASDAQ: DELL) -- http://www.dell.com/-- designs, develops, manufactures, markets, sells, and provides support for various computer systems and services to customers worldwide. DELPHI CORP: Asks Court to Further Expand KPMG's Scope of Work -------------------------------------------------------------- Delphi Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to further expand the scope of KPMG LLP's services. As the Debtors' tax advisor, KPMG will also: -- provide international tax package improvement project services to the Debtors; -- assist the Debtors in internal reporting initiatives; -- provide staff assistance in connection with a special investigation at the Debtors' HD Flint Facility; -- assist the Debtors in developing transfer prices on certain transactions between the Debtors' related party affiliates in the U.S. and Canada; and -- assist the Debtors with improving the financial close, consolidation and management reporting processes, including but not limited to finance restructuring, corporate accounting follow-up review, division reviews, corporate accounting re-visit and validation, report preparation and project stakeholders reviews, and deliverables. Delphi Corporation Vice President and Chief Restructuring Officer John D. Sheehan assures the Court that the proposed services of KPMG will not be unnecessarily duplicative of those provided by the Debtors' other professionals. KPMG has agreed to apply a voluntary 25% discount for its fees for international tax package improvement project services. Consequently, the Debtors will pay KPMG these hourly rates international tax improvement project services: Professional Hourly Rate ------------ ----------- Partner $470 Senior Manager 375 Manager 265 Senior Associate 210 Associate 170 KPMG has agreed to apply a voluntary 40% discount to its internal reporting fees. The Debtors will pay KPMG these hourly rates for internal fee reporting services: Professional Hourly Rate ------------ ----------- Partner $465 Director 450 Manager 432 Senior 315 Staff 231 KPMG has agreed to apply a voluntary 62.6% discount for its special investigation fees. The Debtors will pay KPMG's Senior Associates an hourly rate of $140. The Debtors will pay KPMG a Transfer Services Fee equal to the lesser of (i) the fees represented by the actual time incurred to complete the project at KPMG's standard hourly rates, or (ii) $45,000. KPMG has agreed to apply a voluntary 40% discount to its fees for financial close, consolidation and management reporting processes. The Debtors will pay KPMG these discounted hourly rates for consolidation and management report processing services: Professional Hourly Rate ------------ ----------- Partner $480 Director 465 Managing Director 465 Senior Manager 450 Manager 435 Senior Associate 300 Associate 195 The Debtors will reimburse KPMG for all incurred necessary expenses, including travel, lodging, meals, telephone, videoconferencing, word-processing, graphics, and administrative support. Mr. Sheehan informs the Court that without the Debtors' prior written approval, KPMG may subcontract with certain other KPMG Member Firms to provide services to the Debtors. KPMG will, however, remain fully and solely responsible for all of its liabilities and obligations to the Debtors. The expansion of KPMG's services is far more beneficial to and conservative of Debtors' estate resources than would be the case if each engagement between the Debtors and KPMG required a lengthy and expensive retention application, Mr. Sheehan asserts. Moreover, no bankruptcy policies will be offended by the proposed engagement because it does nothing to effect the administration of the Debtors' Chapter 11 cases, Mr. Sheehan adds. Troy, Mich.-based Delphi Corporation -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The Company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DIRECTV GROUP: Earns $370.2 Million in 2006 Third Quarter --------------------------------------------------------- The DIRECTV Group Inc. reported $370.2 million of net income on $3.7 billion of revenues for the third quarter ended Sept. 30, 2006, compared with $94.6 million of net income on $3.2 billion of revenues for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed $14.2 billion in total assets, $7.6 billion in total liabilities, $49.2 million in minority interests, and $7.9 billion in stockholders' equity. The company disclosed that the $433.6 million increase in total revenues was primarily due to the $354.7 million increase in revenues of the DIRECTV U.S. segment, which resulted mostly from higher average monthly revenue per subscriber and an increase in total subscribers, and an increase in revenues of $78.8 million at the DIRECTV Latin America segment mostly resulting from the added revenues from the acquisition of SkyBrazil in August 2006, and an increase in the total number of subscribers. New Set-top Receiver Leased Program On Mar. 1, 2006, DIRECTV U.S. introduced a new set-top receiver leased program. Set-top receivers leased to new and existing subscribers will now be capitalized and depreciated over their estimated useful lives. Prior to Mar. 1, 2006, most set-top receivers were immediately expensed upon activation as a subscriber acquisition or upgrade and retention cost. During the three months ended September 30, 2006, DIRECTV U.S. capitalized $203.5 million for set-top receivers leased to new subscribers and $121.1 million for set-top receivers leased to existing subscribers. Depreciation expense on these capitalized receivers was $44.5 million for the three months ended Sept. 30, 2006. Merger with Sky Brazil On Aug. 23, 2006, the company completed the merger of its Brazil business, Galaxy Brasil Ltda., with and into Sky Brazil, and completed the purchase of News Corporation's and Liberty's interests in Sky Brazil. As a result, the company now holds a 74% interest in the combined business. The purchase consideration for the transaction amounted to $670 million, represented by $396.4 million in cash paid, of which we paid $362 million to News Corporation and Liberty in 2004, the $63.6 million fair value of the reduction of our interest in Galaxy Brasil Ltda., resulting from the merger and the assumption of $210.0 million of Sky Brazil's debt. Patent Infringement Case Update Concerning the April 4, 2005 patent infringement action filed by Finisar Corp. against the company for infringing on its U.S. Patent, the jury determined that the company willfully infringed this patent and awarded approximately $78.9 million in damages. On July 7, 2006, the U.S. District Court for the Eastern District of Texas (Beaumontj) entered its final written judgment denying Finisar's request for injunction and instead granted the company a compulsory license. Under the license the company is obligated to pay Finisar $1.60 per new set-top box manufactured for use beginning June 17, 2006 and continuing until the patent expires in 2012. The Court also increased the damage award by $25 million and awarded pre-judgment interest of $13.4 million to Finisar. A notice of appeal to the Court of Appeals for the Federal Circuit was filed on Oct. 5, 2006. Management of the company, after discussions with their counsels, believes that they have a number of strong arguments available on appeal, and although the outcome is not assured, the company is confident that the judgment will ultimately be reversed, or remanded for a new trial wherein the company will prevail. The company therefore has not recorded any liability for this judgment nor record any expense for the compulsory license. * * * Headquartered in El Segundo, California, The DIRECTV Group, Inc. (NYSE: DTV) -- http://www.directv.com/-- provides direct broadcast satellite service to more than 15 million customers in the US and more than 1.5 million customers through its DIRECTV Latin America segment. * * * The DIRECTV Group Inc.'s long-term local and foreign issuer credits carry Standard & Poor's BB ratings. The ratings were placed on Aug. 9, 2004 with a stable outlook. DOBSON COMMUNICATIONS: Earns $28 Million in Third Quarter of 2006 ----------------------------------------------------------------- Dobson Communications Corp. reported a $28 million consolidated net income on $336.4 million of revenues for the third quarter of 2006, compared with a $63.4 million consolidated net loss on $315.8 million of revenues for the same period in 2005. At Sept. 30, 2006, the company's balance sheet showed $3.4 billion in total assets, $3.1 billion in total liabilities, $135.7 million in Series F Convertible Preferred Stock, and $193 million in total stockholders' equity. Accumulated deficit at Sept. 30, 2006, stood at $1.2 billion. The company's operating revenue consists of service, roaming, and equipment and other revenue. For the three months ended Sept. 30, 2006, the company's service revenue increased due to an increase in average monthly service revenue per subscriber and additional Eligible Telecommunications Carrier revenue from qualifying high cost areas. For the three months ended Sept. 30, 2006, the company's roaming revenue increased as a result of the 26.4% increase in roaming minutes, which in turn was due to the expanded coverage areas and increased usage, offset in part by a 14.1% decline in roaming revenue per minute-of-use due to lower contractual rates. For the 3 months ended Sept. 30, 2006, the company's equipment revenue increased due to the result of an increase in post-paid and pre-paid gross subscriber additions and an increase in the sales mix of higher priced, higher quality handsets. Other revenue increased for the three months ended Sept. 30, 2006, due to the result of an increase of approximately $0.3 million related to residual payments under various agreements between the company and the former AT&T Wireless, offset by a decrease in rental revenue due to tower sale and leaseback transactions during 2005. In the third quarter of 2005, the company recorded a loss on redemption and repurchases of mandatory redeemable preferred stock of $66.4 million, and paid dividends on mandatory redeemable preferred stock of $5.5 million. The company did not report any such loss and did not pay dividends on preferred stock in the current quarter. This would account for the $28 million consolidated net income earned in the third quarter of 2006, as against a $63.4 million consolidated net loss for the same period in the prior year. Full-text copies of the company's consolidated financial statements are available for free at: http://researcharchives.com/t/s?154f Recent Acquisitions On Aug. 2, 2006, the company, through its 100% owed subsidiary, Dobson Cellular Systems, Inc. completed the purchase of the wireless assets of New Horizons Telecom, Inc. and Kodiak Association, Inc. and the wireless assets of Sitnasuak Native Corp. and SNC Telecommunications, Inc. for a total purchase price of $2.1 million. On October 5, 2006, the Company, through its wholly owned subsidiary, American Cellular Corp., acquired Highland Cellular LLC, which provides wireless service to West Virginia 7 RSA, and four adjacent counties in West Virginia 6 RSA and Virginia 2 RSA. In addition, Highland Cellular owns Personal Communication Services, wireless spectrum in Virginia and West Virginia. The currently served markets and additional spectrum are primarily south of markets that the Company owns and operates in western Maryland, southern Ohio, southern Pennsylvania and West Virginia. Upon completion of the merger, Highland Cellular became a wholly owned subsidiary of American Cellular Corp. The total purchase price for Highland Cellular was approximately $95 million. About Dobson Dobson Communications (Nasdaq: DCEL) -- http://www.bobson.net/-- provides wireless phone services to rural and suburban markets in the United States. Headquartered in Oklahoma City, the Company owns wireless operations in 16 states. The company has two wholly owned subsidiaries, Dobson Cellular Systems, Inc. and American Cellular Corp. * * * As reported in the Troubled Company Reporter on July 25, 2006, Standard & Poor's Ratings Services revised its outlook for Dobson Communications Corp. and its wholly owned operating subsidiary, American Cellular Corp. to developing from negative and affirmed the 'B-' corporate credit rating for both entities. DORAL FINANCIAL: Hires Bear Stearns and JPMorgan as Advisors ------------------------------------------------------------ Doral Financial Corporation has selected Bear Stearns and JPMorgan to assist the Company and its Board of Directors in evaluating alternatives for refinancing Doral's $625 million floating rate senior notes that mature in July 2007 and restructuring its balance sheet to reduce interest rate risk exposure and improve its future earnings profile. "I am confident that these highly experienced firms will be able to assist us in the development of the right solutions and the right way to implement the strategies developed, in a manner that serves the long-term interests of Doral and its stakeholders," said Glen Wakeman, Chief Executive Officer. 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. DOV PHARMACEUTICAL: Sept. 30 Equity Deficit Widens to $50.9 Mil. ---------------------------------------------------------------- DOV Pharmaceutical Inc. filed its financial statements for the third quarter ending Sept. 30, 2006, with the Securities and Exchange Commission on Nov. 9, 2006. At Sept. 30, 2006, the Company's balance sheet showed $54.528 million in total assets and $105.504 million in total liabilities, resulting in a $50.975 million stockholders' deficit. The Company had a $19.301 million deficit at Dec. 31, 2005. The Company's September 30 balance sheet also showed strained liquidity with $48.794 million in total current assets available to pay $86.580 million in total current liabilities. Third Quarter 2006 Performance For the third quarter of 2006, the Company reported a net loss attributable to common stockholders of $17.5 million as compared with $15.7 million for the comparable period in 2005. For the nine months ended Sept. 30, 2006, the Company reported a net loss attributable to common stockholders of $58.4 million compared with $36.0 million for the comparable period in 2005. At Sept. 30, 2006, cash and cash equivalents and marketable securities totaled $47.3 million as compared with $97.6 million at Dec. 31, 2005. Revenue for the third quarter of 2006 was $1.1 million compared with $1.4 million for the comparable period last year. Revenue for the nine months ended Sept. 30, 2006, was $3.7 million compared with $7.3 million for the comparable period in 2005. Revenue for the three and nine months ended Sept. 30, 2006, consisted of $1.1 million and $3.7 million, respectively, of amortization of the $35.0 million fee the Company received on the signing of the license, research and development agreement for its collaboration with Merck over the estimated research and development period, compared with $1.4 million and $5.3 million, respectively, in the comparable period in 2005. In the nine months ended Sept. 30, 2005, the Company also realized a $2.0 million milestone payment under DOV's partnership agreement with Neurocrine Biosciences Inc. upon the acceptance of the New Drug Application by the U.S. Food and Drug Administration for indiplon tablets for the treatment of insomnia. The increase in payroll and payroll-related expenses is primarily the result of an increase in non-cash stock compensation of $801,000 related to the adoption of SFAS 123(R) offset by an overall decrease in headcount. Interest expense for the three and nine months ended Sept. 30, 2006, includes non-cash amortization of $2.1 million of deferred issuance costs on the Company's convertible subordinated debt as well as contractual interest expense of 2.5% on the outstanding balance. Debt conversion and other expense for the three and nine months ended Sept. 30, 2006, includes a $5.6 million non-cash charge related to the additional shares issued to induce the exchange of an aggregate of $10 million in original principal amount of the Company's outstanding convertible debentures for 3,445,000 shares of its common stock. NASDAQ Delisting DOV shares were no longer listed for trading on a national securities exchange as of Oct. 27, 2006. The delisting of the Company's common stock represents a "fundamental change" under the indenture governing its 2.50% Convertible Subordinated Debentures due 2025. As a result, DOV is obligated to offer to repurchase the debentures. The Company offered to repurchase the debentures on Nov. 9, 2006. There are currently $70 million in aggregate principal amount of debentures outstanding. Holders of the debentures will have the option, but not the obligation, to require the Company to repurchase their debentures at 100% of the principal amount of the debentures, plus any accrued and unpaid interest. The Company has retained Houlihan Lokey Howard & Zukin Capital, Inc. to serve as its financial advisor to assist with its evaluation of strategic alternatives and restructuring efforts with respect to the debentures. New Strategic Direction DOV announced in October 2006 a new strategic direction in which the Company will focus its internal efforts on its Phase I and II clinical and pre-clinical research programs for the development and discovery of drugs to treat neuropsychiatric disorders, advance the Company's later-stage drug development programs through external partnerships and collaborations, and optimize the Company's financial position. As a result of this new strategic direction, DOV announced that it would further reduce its in-house late stage clinical development expenditures such as those associated with bicifadine, its novel analgesic in Phase III for pain. Currently, DOV has drug development programs that are at the pre- clinical, Phase I and Phase II clinical stages. These include DOV 21,947 (entering Phase II for depression), DOV 102,677 (Phase I for alcohol abuse) and an active preclinical discovery program in reuptake inhibitors and GABA modulators. The Company also has retained an investment-banking firm, HSBC Securities (USA) Inc., to identify and evaluate its strategic options. Full-text copies of the Company's third quarter financials are available for free at http://ResearchArchives.com/t/s?154d Going Concern Doubt & Bankruptcy Warning Management raised substantial doubt about the Company's ability to continue as a going concern. If the Company is unable to raise sufficient funds to repurchase the requisite amount of debentures or restructure its obligations under its 2.50% Convertible Subordinated Debentures due 2025, it may be forced to seek protection under the United States bankruptcy laws. About DOV Pharmaceutical Somerset, New Jersey-based DOV Pharmaceutical Inc. (PS: DOVP.PK) -- http://www.dovpharm.com/-- is a biopharmaceutical company focused on the discovery, acquisition, and development of novel drug candidates for central nervous system disorders. The Company's product candidates address some of the largest pharmaceutical markets in the world including depression, pain and insomnia. DOV PHARMACEUTICAL: Offers to Repurchase all 2.5% Sub. Debentures ----------------------------------------------------------------- DOV Pharmaceutical Inc. is offering to repurchase all of its 2.50% Convertible Subordinated Debentures due Jan. 15, 2025, as required by the Indenture dated Dec. 22, 2004, by and between DOV and Wells Fargo Bank, National Association, as Trustee. DOV said it is obligated to provide this notice as a result of the delisting of its common stock from The NASDAQ Global Market on Oct. 27, 2006. The delisting of DOV's common stock from The NASDAQ Global Market constituted a "fundamental change" under the Indenture governing the Debentures. As a result, DOV is obligated under the Indenture to make an offer to repurchase to all holders of its Debentures. There are currently $70 million in aggregate principal amount of Debentures outstanding. Holders of the Debentures have the right, beginning as of Nov. 10, 2006, to surrender their Debentures for cash as contemplated by the Indenture. The option will expire at 5:00 p.m. New York City time on Jan. 2, 2007. Each holder of Debentures has the right to require DOV to repurchase on Jan. 2, 2007, all or any part of a holder's Debentures at a price equal to $1,012.50 per $1,000 of principal amount at maturity, which amount includes interest accrued but not yet paid, calculated in accordance with the Indenture. If all outstanding Debentures are surrendered for repurchase, the aggregate cash purchase price will be approximately $70.9 million. At Sept. 30, 2006, DOV has approximately $47.3 million in cash, cash equivalents and marketable securities that are not subject to restrictions on use, accounts payable and accrued expenses of approximately $12.1 million and $70 million in aggregate principal amount of the Debentures. DOV cannot predict the number of holders of Debentures that will exercise their Option. DOV does not presently have the capital necessary to repurchase all or a significant portion of the Debentures if holders of all or a significant portion of the Debentures exercise their Option. If DOV fails to pay for all Debentures tendered to it for repurchase, an event of default will occur under the Indenture. DOV currently has no commitments or arrangements for any financing. It, however, continues to explore a variety of initiatives to address its current capital structure issues and improve its liquidity position. The Company has retained Houlihan Lokey Howard & Zukin Capital Inc. to serve as its financial advisor to assist with its evaluation of strategic alternatives and restructuring efforts with respect to the Debentures. In order to surrender Debentures for repurchase, a holder of Debentures must deliver a repurchase notice to Wells Fargo, as Trustee under the Indenture and paying agent for the repurchase of the Debentures, before the expiration of the Option. Holders of Debentures complying with the transmittal procedures of The Depository Trust Company need not submit a physical repurchase notice to Wells Fargo. Holders may withdraw any Debentures previously surrendered for repurchase at any time before the expiration of the Option. The Debentures are convertible (at any time prior to the close of business on the business day immediately preceding the date of the Debentures' stated maturity) into 43.9560 shares of DOV's common stock, par value $0.0001 per share, per $1,000 principal amount at maturity of Debentures, subject to adjustment under certain circumstances. Debentures as to which a repurchase notice has been given may be converted into shares of DOV's common stock at any time before the close of business on Jan. 2, 2007, only if the applicable repurchase notice has been withdrawn in accordance with the terms of the indenture. In the event DOV is unable to repurchase all Debentures tendered to it in response to the Option, such failure to repurchase will constitute an event of default under the Indenture governing the Debentures and all Debentures will remain outstanding. About DOV Pharmaceutical Somerset, New Jersey-based DOV Pharmaceutical Inc. (PS: DOVP.PK) -- http://www.dovpharm.com/-- is a biopharmaceutical company focused on the discovery, acquisition, and development of novel drug candidates for central nervous system disorders. The Company's product candidates address some of the largest pharmaceutical markets in the world including depression, pain and insomnia. Bankruptcy Warning Management raised substantial doubt about the Company's ability to continue as a going concern. If the Company is unable to raise sufficient funds to repurchase the requisite amount of debentures or restructure its obligations under its 2.50% Convertible Subordinated Debentures due 2025, it may be forced to seek protection under the United States bankruptcy laws. At Sept. 30, 2006, the Company's balance sheet showed $54.528 million in total assets and $105.504 million in total liabilities, resulting in a $50.975 million stockholders' deficit. The Company had a $19.301 million deficit at Dec. 31, 2005. The Company's September 30 balance sheet also showed strained liquidity with $48.794 million in total current assets available to pay $86.580 million in total current liabilities. DURA AUTOMOTIVE: Gets Interim Nod to Pay Foreign Vendor Claims -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted, on an interim basis, DURA Automotive Systems, Inc.'s request to pay claims, prior to the filing for chapter 11 protection, owing to vendors, service providers, regulatory agencies, and governments located in foreign jurisdictions, including claims for payment for direct and indirect materials and services provided to the Debtors, as well as import or tax obligations. The Debtors estimate they owe approximately $3,400,000 to Foreign Vendors as of the Petition Date. Of that amount, the Foreign Claims of the foreign joint venture aggregate approximately $100,000. The Debtors also request that they be authorized to permit all checks issued by them to the Foreign Vendors, prior to the filing for chapter 11 protection, to clear the Debtors' bank accounts. The Debtors further request that the banks honor, unless otherwise directed, any and all checks drawn by the Debtors prior to the Petition Date to pay any of the obligations, prior to the filing for chapter 11 protection, owing to the Foreign Entities that have not cleared the banking system prior to the Petition Date and any and all checks drawn by the Debtors after the Petition Date to pay any claims, prior to the filing for chapter 11 protection, of the Foreign Vendors. Keith R. Marchiando, chief financial officer and vice president, emphasizes the satisfaction of the Foreign Claims will not be deemed to be an assumption or adoption of any agreements that relate to those operations. Mr. Marchiando tells the Court that the Debtors are making every effort to avoid interruptions in the supply chain and the adverse effects that even a temporary break in the supply chain could have on their businesses. Many of the Foreign Vendors supply goods or services to the Debtors that are crucial to the Debtors' ongoing U.S. and Canadian operations. Moreover, Mr. Marchiando says, some of these Foreign Vendors supply goods or services to the Debtors that cannot be obtained from other sources in sufficient quantity or quality or without significant delays. The Debtors regularly transact business with Foreign Vendors of this type in Brazil, China, Czech Republic, France, Germany, India, Japan, Korea, Mexico, Romania, Slovakia, Spain, the United Kingdom, and elsewhere in Europe and Asia. "[I]f these goods are not obtained from Foreign Vendors without interruption, the Debtors likely would not be able to fulfill their obligations to their customers." Mr. Marchiando notes Foreign Vendors might be confused or have guarded reactions to the U.S. bankruptcy process. "[T]here is a significant risk that the nonpayment of even a single invoice could cause a foreign vendor to stop shipping goods to the Debtors on a timely basis and completely sever its business relationship with the Debtors. But even short of that, nonpayment of prepetition claims may cause Foreign Vendors to utilize extreme caution and adopt a wait-and-see attitude in approaching the unfamiliar territory of Chapter 11, resulting in costly delays in the shipment of additional goods. The Debtors can ill afford delays of this nature." "If the Foreign Claims are not paid, the Foreign Vendors may take precipitous action against the Debtors based upon an erroneous belief that they are not subject to the jurisdiction of the Court and, thus, not subject to the automatic stay provisions of Section 362(a) of the Bankruptcy Code," Mr. Marchiando notes. The Debtors have a number of non-debtor affiliates located in more than 15 foreign countries, and thus, the Foreign Vendors may also take action against those non-debtor affiliates, or against any property owned by the Debtors themselves located in foreign territory. If Foreign Vendors fail to ship goods or refuse to do business with the Debtors because of a failure to pay the Foreign Claims, or if foreign governmental entities seize goods from sole-source suppliers because of a failure to pay the Foreign Claims, the Debtors' manufacturing facilities utilizing those parts would likely be forced to shut down less than 24 hours after the missed shipment, Mr. Marchiando says. Shortly after a shutdown of one of the Debtors' facilities, the Debtors' OEM Customers would likely be forced to halt production of their products on one or more of their assembly lines. Shutting down one assembly line could cause an affected OEM Customer to assert damages against the Debtors exceeding $10,000,000 per day. Thus, the Debtors to continue the payment of Foreign Claims on the agreement of the individual foreign vendor to continue supplying goods and services to the Debtors on terms that are consistent with the historical trade terms between the parties. The Debtors propose that the Customary Trade Terms apply for the remaining term of the Foreign Vendor's agreement with the Debtors, as long as the Debtors agree to pay for those goods in accordance with those terms. The Debtors reserve the right to negotiate trade terms with any vendor, as a condition to payment of any Foreign Claim, that vary from the Customary Trade Terms to the extent the Debtors determine that those terms are necessary to procure essential goods or services or are otherwise in their best interests. If a Foreign Vendor accepts a payment on account of an obligation of the Debtors, prior to the filing for chapter 11 protection and thereafter, fails to provide the Debtors with the requisite Customary Trade Terms, then: (a) any Foreign Payment received by the Foreign Vendor will be deemed an unauthorized postpetition transfer under Section 549 of the Bankruptcy Code that the Debtors may either: (i) recover from the Foreign Vendor in cash or goods, or (ii) at the Debtors' option, apply against any outstanding administrative claim held by that Foreign Vendor; and (b) upon recovery of any Foreign Payment, the corresponding prepetition claim of the Foreign Vendor will be reinstated in the amount recovered by the Debtors, less the Debtors' reasonable costs to recover those amounts. The Debtors also seek authorization, but not direction, to obtain written verification before issuing payment to a Foreign Vendor that that Foreign Vendor will continue to provide goods and services to the Debtors on Customary Trade Terms for the remaining term of the Foreign Vendor's agreement with the Debtors; provided, however, that the absence of such written verification will not limit their rights. Finally, to facilitate the payment of Foreign Vendors and, thus, the avoidance of foreign actions against the Debtors and their assets, the Debtors request that the banks be authorized and required to (a) honor any checks drawn against their accounts, but not cleared prior to the Petition Date, and (b) complete an fund transfer requests made but not completed prior to the Petition Date. In addition, the Debtors seek the Court's permission to issue postpetition checks and to make postpetition fund transfer requests to replace any prepetition checks and transfers, prior to the filing for chapter 11 protection, to Foreign Creditors that may be dishonored by the banks. The Court will convene a hearing on November 20, 2006, at 1:00 p.m. Eastern Time to consider final approval. Rochester Hills, Mich.-based DURA Automotive Systems, Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EASY GARDENER: Court Confirms Amended Joint Plan of Liquidation --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware has confirmed the amended disclosure statement explaining Easy Gardener Products Ltd. and its debtor-affiliates' amended joint plan of liquidation. The Court determined that the Plan satisfies the 16 standards for confirmation under Section 1129(a) of the Bankruptcy Code. Overview of the Plan The Debtors' Plan, as published in the Troubled Company Reporter on Sept. 27, 2006, is premised upon a limited substantive consolidation of the Debtors' estates solely for purposes of actions associated with the confirmation and consummation of the Plan. Under the Plan, the Debtors will be deemed substantively consolidated for distribution purposes as of the Confirmation Date, and all Intercompany Claims will be eliminated. The Plan does not contemplate the merger or dissolution of any of the Debtors or the transfer or commingling of assets of the Debtors, except to accomplish the distributions to creditors contemplated under the Plan. Treatment of Claims All Allowed Administrative Claims will be paid in full on the later of the effective date, the date the claim becomes an allowed administrative claim, or as soon as practical. All Allowed Priority Tax Claims will be paid in full on the effective date, except those claims that have been paid before the effective date. All Class 1 Allowed Other Priority Claims will be paid in full on the later of the effective date, the date the claim becomes an allowed other priority claim, or as soon as practical. All Class 2 Allowed Lenders' Claims will be paid from the proceeds of the asset sale, under the conditions stated in the Sale Order and the Final DIP Financing Order. Class 3 Allowed Other Secured Claims are impaired. Except if a creditor agrees to a different treatment, each holder of an Allowed Other Secured Claim will receive the collateral securing the claim, as is, where is. All costs associated with obtaining the collateral will be borne by the creditors. Any portion not satisfied by the return of the collateral will be treated as a general unsecured claim. Holders of Class 4 Allowed General Unsecured Claims will receive a pro rata share of 90% of the Net Available Funds within 30 days after the effective date. The remaining 10% will be retained by the Debtors until the Final Distribution. The Debtors expect general unsecured creditors to receive 20% to 25% of their claims. Class 5 Equity Interests will not receive anything under the Plan. A full-text, redlined, copy of the Debtors' First Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=060926213653 About Easy Gardener Products Headquartered in Waco, Texas, Easy Gardener Products, Ltd. -- http://www.easygardener.com/-- manufactured and sold a broad range of consumer lawn and garden products, including weed preventative landscape fabrics, fertilizer spikes, decorative landscape edging, shade cloth and root feeders, which are sold under various recognized brand names including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and Ross. The Company and four of its affiliates filed for bankruptcy on April 19, 2006 (Bankr. D. Del. Case Nos. 06-10393 to 06-10397). James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G.M. Selzer, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP and John F. Higgins, Esq., James Matthew Vaughn, Esq., and Joshua W. Wolfshohl, Esq., at Porter & Hedges LLP, represented the Debtors. Adam Dunayer, Brett Lowrey, Michael Boone, and Ben Williams at Houlihan Lokey Howard & Zukin gave financial advice to the Debtors. Joel A. Waite, Esq., and M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor LLP represented the Official Committee of Unsecured Creditors. Samuel Star at FTI Consulting Inc. provided financial advice to the Committee. When the Debtors filed for bankruptcy, they reported assets amounting to $103,454,000 and debts totaling $107,516,000. ENRON CORP: Judge Lake Vacates Conviction Of Kenneth Lay -------------------------------------------------------- As widely reported, the Honorable Sim Lake of the U.S. District Court for the Southern District of Texas vacated the conviction of former Enron Corp. CEO and founder Kenneth Lay, ruling that Mr. Lay's death before he could file an appeal practically voided his conviction. Judge Lake ruled that under existing federal laws that were used as precedent ruling by the Fifth Judicial District, a defendant's conviction could be dismissed if the defendant dies before he or she could appeal the conviction. On May 25, 2006, the jury found Mr. Lay and his co-accused, former Enron CEO Jeffrey Skilling guilty of conspiracy and securities and wire fraud in the Enron fraud case. Mr. Lay died of a heart attack on July 5, 2006, while vacationing in Aspen, Colorado. Appeals Court Upholds Ruling The 5th U.S. Circuit Court of Appeals affirmed the ruling of Judge Lake who vacated the conviction of former Enron Corp. CEO and founder Kenneth Lay. Judge Lake had ruled that Mr. Lay's death before he could file an appeal practically voided his conviction. Former Enron shareholder Russell Butler filed the appeal, seeking an order of restitution based on Mr. Lay's conviction under the Crime Victims' Rights Act of 2004, The Associated Press reported. The three-judge panel in the Appellate Court, however, denied the appeal, citing that, "Unless the law of this circuit ... is changed retroactively by Congress, by the Supreme Court or by this court revisiting our precedent ... we and the courts of this circuit are bound to apply and enforce the doctrine of abatement." 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, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 181 and 182; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENRON CORP: Judge Werlein Sentences Two Former Officers to Prison ----------------------------------------------------------------- The Honorable Ewing Werlein of the U.S. District Court for the Southern District of Texas, Houston Division, imposed prison sentences on former Enron Corp. executives Michael Kopper and Mark Koenig for their part in the criminal activities at Enron that led to its financial collapse and bankruptcy filing in 2001. Judge Werlein sentenced Mr. Kopper to three years and one month in prison and Mr. Koenig to 18 months in prison. Judge Werlein also ordered Messrs. Kopper and Koenig to pay $50,000 in fines. Mr. Kopper was managing director of Enron's Global Equity Markets Group, while Mr. Koenig was executive vice-president and director of Investor Relations at Enron. Judge Werlein's light sentence on the two defendants was in consideration for their cooperation with the U.S. government's criminal investigation in the collapse of Enron. In August 2002, Mr. Kopper pleaded guilty to conspiracy and money laundering in exchange for agreeing to accept a maximum 15-year prison sentence for his criminal acts. Mr. Kopper also agreed to forfeit about $12,000,000 of his earnings from Enron. Mr. Koenig pleaded guilty in August 2004 to securities fraud in connection with his employment at Enron. As part of his plea agreement with the U.S. government, he agreed to a statutory maximum sentence of 10 years in prison and pay disgorgement and a civil penalty totaling $1,493,572 through forfeiture and imposition of a fine. 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, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. ENRON CORP: Reaches $144,000,000 Settlement With Barclays PLC ------------------------------------------------------------- Enron Corp. and its debtor-affiliates recently reached an agreement with Barclays PLC to settle Barclays' portion in the MegaClaim Litigation. According to the terms of the agreement, Barclays will pay the Debtors $144,000,000 in cash and the Debtors, in turn, will allow Barclays claims filed in the bankruptcy case totaling $310,000,000. Barclays did not admit to any wrongdoing or liability in the settlement. John J. Ray III, Enron's Board Chairman, said, "The Barclays agreement is the ninth settlement reached with the financial institutions. Today's announcement reflects our determination to resolve the litigation and continue to deliver value to creditors as quickly as possible, and reflects the lesser role played by Barclays relative to others involved in the litigation." The settlement remains subject to the execution of definitive agreements and the approval of the United States Bankruptcy Court for the Southern District of New York. Financial institutions yet to settle with the Debtors include Citigroup Inc. and Deutsche Bank AG. According to Reuters, Barclays said that its 2006 earnings would not be impacted by the $144,000,000 because an adequate provision had already been made for the likely cost in prior periods. The Debtors are represented in this matter by Susman Godfrey LLP, Togut, Segal & Segal, and Venable LLP. Barclays PLC is a global financial services provider engaged in retail and commercial banking, credit cards, investment banking, wealth management and investment management services. 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, Brian S. Rosen, Esq., Martin Soslan, Esq., Melanie Gray, Esq., Michael P. Kessler, Esq., Sylvia Ann Mayer, Esq., at Weil, Gotshal & Manges LLP, Frederick W.H. Carter, Esq., Michael Schatzow, Esq., Robert L. Wilkins, Esq., at Venable, Baetjer and Howard, LLP, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft, LLP represent the Debtor. Jeffrey K. Milton, Esq., Luc A. Despins, Esq., Matthew Scott Barr, Esq., and Paul D. Malek, Esq., at Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. (Enron Bankruptcy News, Issue No. 182; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW: Says Amended Plan Resolves Panel and BNY's Concerns ---------------------------------------------------------------- Tara G. Richard, Esq., at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P., in New Orleans, Louisiana, notes that ENOI has filed a First Amended Chapter 11 Plan of Reorganization and an accompanying First Amended Disclosure Statement on Nov. 14, 2006, to address the objections of FGIC and BNY. According to Ms. Richard, ENOI has eliminated most of the conditions to the Effective Date and added an outside Effective Date of June 30, 2007. Among other things, ENOI has removed the provisions of the City Council's issuance of resolutions regarding the 2006 Gas FRP Application, the 2006 Electric FRP Application, the Storm Cost Recovery Riders, and the Storm Reserve Rider; and ENOI's assurances of receiving the $250,000,000 Katrina Insurance Proceeds and the $200,000,000 Community Development Block Grant Funds. FGIC wants to propose a plan because it is no longer satisfied with the First Mortgage Bonds it originally insured, Ms. Richard asserts. In addition, Ms. Richard argues that, terminating ENOI's Exclusivity Period to allow FGIC to file a competing plan of reorganization will only create confusion among the parties-in- interest, the CDBG releasing process, and ENOI's regulators. Ms. Richard adds that a competing plan process will add to the expense, delay and confusion of ENOI's bankruptcy proceeding because the competing plan process is complicated. Adding to the delay and confusion is that the Court would first have to determine whether both plans would be circulated together with a shared disclosure statement or if each will go out separately, and if so, whether they will go out at different times. Additionally, a completing plan will also strain ENOI's management resources to work on a disclosure statement for another plan, time which could be more profitably spent preparing for emergence from Chapter 11 under the full recovery plan proposed ENOI, Ms. Richard says. She adds, it is also possible that the competing plan process will delay the Dec. 7, 2006 Disclosure Statement Hearing past the point at which confirmation of ENOI's Plan could have otherwise occurred. Furthermore, according to Ms. Richard, two competing plans will make the confirmation process more complex because each proponent will oppose confirmation of each other's plan, objections to both plans will be lodged, briefed and must be decided, and the Court must additionally determine which of the two plans to confirm, which will all contribute to the delay and confusion in the confirmation process. Prior to the Debtor's Amended Plan filing, FGIC asserts that its request to terminate ENOI's Exclusive Periods should be approved because ENOI's Plan: (1) inappropriately categorizes the holders of Bonds as unimpaired while unilaterally overriding the Court- approved December 7, 2005 settlement; (2) raises serious concerns about ENOI's future liquidity; and (3) substantially delays the Plan's Effective Date unnecessarily. Rudy J. Cerone, Esq., at McGlinchey Stafford, PLLC, in New Orleans, Louisiana, notes that because the Plan fails to provide sufficient liquidity for ENOI to sustain its future operations, ENOI's creditors, including the Bondholders and the holders of Litigation Claims, will be harmed if ENOI is permitted to proceed with its efforts to confirm its Plan on an exclusive basis. Mr. Cerone explains that under the Plan, ENOI cannot satisfy Section 1129(a)(11) because it will not retain sufficient liquidity to satisfy its future capital requirements. ENOI also fails to satisfy Section 1123(a)(3), which requires a Plan to "specify the treatment of any class of claims or interests that is impaired under the plan." Mr. Cerone asserts that if the Court grants FGIC's request, its alternative plan will correct the deficiencies in ENOI's current Plan, and facilitate a fair and efficient outcome of ENOI's Chapter 11 case that would be beneficial to creditors and other parties-in-interest. Parties Support Termination (1) Ad Hoc Bondholder Committee An ad hoc committee of holders of the first priority mortgage bonds issued by Entergy New Orleans, Inc., supports the Financial Guaranty Insurance Company's request for: (i) the termination of the exclusive periods within which ENOI may file, and solicit acceptances of, a plan of reorganization, and (ii) authority to file a plan of reorganization. According to David S. Rosner, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, the Bondholder Committee was organized when it learned of the terms of ENOI's Chapter 11 Plan of Reorganization dated October 23, 2006, which attempts "to reinstate" the Bonds' below market interest rates while, through the guise of "unimpairment," strips collateral and illegally shifts over $12,500,000 from the Bondholders to ENOI's controlling parent, Entergy Corporation. ENOI's Plan discriminates against the Bonds and is neither fair nor equitable because it strips from Bondholders their legal entitlement to full interest payment and collateral protection, Mr. Rosner asserts. The Bondholder Committee believes that ENOI's Plan is neither confirmable nor susceptible to nonconsensual confirmation, and if pursued in exclusivity, will lead to unnecessary and wasteful litigation. Specifically, the Bondholders Committee asserts that ENOI's Plan: (1) decidedly "impairs" the Bond claims and it does not cure all defaults under the Bond Indenture; (2) does not provide the Bonds with the collateral protection that the Indenture provides, nor does it pay to the Bondholders the interest due; and (3) does not compensate the Bondholders for damages caused by Bondholders' reasonable reliance on the Indenture. The Bondholder Committee expects that FGIC will lead to a confirmable plan through further negotiation or through proposal of an alternative plan that, unlike ENOI's Plan, will satisfy the requirements of Section 1129 of the Bankruptcy Code. The Bondholder Committee has started to work with FGIC and expects that it will quickly and consensually be able to complete with FGIC the terms of a confirmable plan. It has not yet read FGIC's plan and cannot say whether it agrees with each of its terms. "However, to be clear, the Bondholder Committee is not planning to file its own plan; but rather, is planning to work with FGIC to promote a fair and fully consensual plan among the Debtor's creditors." Mr. Rosner says. (2) BNY The Bank of New York, as Successor Trustee, supports FGIC's request on grounds that some of the conditions for the Effective Date of the Plan may never occur. The conditions include: -- the City of New Orleans' issuance of resolutions regarding the 2006 Gas FRP Application, the 2006 Electric FRP Application, the Storm Cost Recovery Riders, and the Storm Reserve Rider, -- ENOI's assurance that it will receive $250,000,000 in Katrina Insurance Proceeds and the $200,000,000 of CDBG Funds in cash, and -- ENOI will obtain a final order from the U.S. Federal Energy Regulatory Commission authorizing ENOI's issuance of short-term debt securities under credit arrangements, the Entergy System Money Pool, and unilateral arrangements with Entergy Corp. Douglas S. Draper, Esq., Heller, Draper, Hayden, Patrick & Horn, L.L.C., in New Orleans, Louisiana, says that creditors and parties-in-interest should not be placed in the untenable position of litigating over the confirmation of a plan that may never become effective if even one of the many conditions provided by ENOI does not occur. Mr. Draper asserts that the Plan also violates the terms of the Dec. 7, 2005 settlement agreement, which provides, among other things, that BNY will be granted a lien on all of ENOI's assets securing the DIP Lien, which include all pre and postpetition property of ENOI, whether existing on or acquired after the Petition Date, in addition to the Bond Collateral. Mr. Draper notes that the Plan attempts to drastically limit the collateral that secures BNY Bond Claims, a violation of the December 7, 2005 settlement. (3) Creditors Committee The Official Committee of Unsecured Creditors says that ENOI's Plan is unacceptable and unconfirmable as a matter of law. The Creditors Committee notes that the Plan fails to pay unsecured claims postpetition interest while preserving the equity for Entergy Corp., which means any statement that the Plan will "fully compensate the creditors", is a misrepresentation by ENOI. Philip K. Jones, Esq., at Liskow & Lewis, APLC, at New Orleans, Louisiana, explains that without payment of postpetition interest, the unsecured creditors are impaired under Section 1124 of the Bankruptcy Code, a treatment that the Creditors Committee opposes. He notes that a solvent debtor like ENOI cannot satisfy the "fair and equitable" test of Section 1129(b)(2) unless it pays postpetition interest, nor can it satisfy the absolute priority rule of Section 1129(a)(7)(A)(ii). Mr. Jones also argues that the Effective Date under the Plan is ephemeral at best because it is subject to conditions that may never occur, will occur in 2008 and 2009, or are solely at the discretion of Entergy Corp. or ENOI, which is completely controlled by Entergy. The Creditors Committee also disputes ENOI's arguments that a competing plan will cause confusion, delay or difficulty in the plan confirmation process. Mr. Jones asserts that the ability of FGIC or any other party to propose an alternative plan will not adversely affect ENOI but could assure that a confirmable plan is presented and considered by the Court as soon as possible. Apache Corporation supports the Committee's position on the Termination Motion. 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. 27; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW ORLEANS: Court Approves Certain Transfers of Claims --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Louisiana approves the transfers of the claims of Chain Electric Company, Killen Contractors, Inc., NRG Power Marketing, Inc., Osmose Utilities Services, Inc., and Don Bohn Ford Inc. As reported in the Troubled Company Reporter on Nov. 10, 2006, the Bankruptcy Clerk of the Court recorded 14 claim transfers in Entergy New Orleans Inc. and its debtor-affiliates' chapter 11 cases, as of Nov. 2, 2006: Creditor Transferee Claim Amount -------- ---------- ------------ Formed Plastics Trade-Debt.Net Inc. $212 Inc. Roussel Welding & Trade-Debt.Net Inc. Metal Works Inc. 185 Magnus Entergy Deutsche Bank 2,226,291 Marketing, Ltd. Securities, Inc. CNP Houston Electric Entergy Services, Inc. 184,653 LLC, a/k/a/ CenterPoint Energy Capital Electric ESI Builders, Inc. 95,331 Coral Power, L.L.C. Cottonwood Energy 787,827 Company LP Professional Shorthand ESI Reporters not disclosed Chain Electric ESI Company 41,652 Killen Contractors, Inc. ESI 15,230 Inc. Alliance Reporting, Inc. ESI not disclosed D.M.T., Inc. ESI not disclosed NRG Power Hain Capital 3,679,190 Marketing, Inc. Holdings, LLC Osmose Utilities Hain Capital 117,327 Services, Inc. Holdings Don Bohn Ford Inc. Trade-Debt.Net Inc. 3,277 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. 27; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FALCON FRANCHISE: Moody's Junks $3.67 Million Class F Bonds ----------------------------------------------------------- Moody's Investors Service confirmed two classes and downgraded six classes of Falcon Franchise Loan Trust Certificates, Series 2000- 1. This transaction is backed by loans to franchise automobile dealerships. These are the rating actions: * Issuer: Falcon Franchise Loan LLC, Franchise Loan Trust Certificates, Series 2000-1 -- $25,048,807 Million 7.382% Class A-1 Certificates, confirmed Aaa; -- $40,398,000 Million 7.743% Class A-2 Certificates, downgraded to Aa1 from Aaa; -- $6,437,000 Million 7.913% Class B Certificates, downgraded to A1 from Aa2; -- $4,292,000 Million 8.157% Class C Certificates, downgraded to A3 from A1; -- $3,985,000 Million 8.938% Class D Certificates, downgraded to Ba1 from Baa2; -- $4,905,000 Million 6.500% Class E Certificates, downgraded to B1 from Ba2; -- $3,679,000 Million 6.500% Class F Bonds, downgraded to Caa1 from B2; -- Class IO Certificates, confirmed Aaa. This deal is backed by 24 loans to franchise automobile dealerships, several of which have been experiencing problems. Two obligors had recent disruptions in floorplan financing, and foreclosure proceedings are in process in relation to a third loan. Falcon Financial II, LLC expects near-term sales with strong recoveries of principal and interest on two of these loans, and less certain recoveries and longer time to resolution on the third. Several other dealerships have seen some deterioration in performance during 2006. The downgrade actions reflect the impact of these developments and updated expectations on pool credit. Falcon Financial Investment Trust, the parent of the issuer, was a specialty finance company that lent to franchised vehicle dealerships. Falcon Financial II, LLC, the primary and special servicer for the Trust holding the certificates under review, is now owned by AutoStar Realty Operating Partnership, LP. Neither Falcon Financial II, LLC nor AutoStar Realty Operating Partnership, LP is rated by Moody's. FERRO CORP: Plans Closure of Niagara Falls Plant in 2007 -------------------------------------------------------- Ferro Corporation plans to close its Niagara Falls, New York, facility by the end of 2007. Approximately 150 employees are located at the facility, which supplies a range of dielectric and industrial ceramic products for the electronic materials and other marketplaces. The activities currently performed at Niagara Falls will be gradually transferred to other Ferro facilities. "The Niagara Falls facility has been impacted by changes in its markets," said Barry Russell, Vice President of Ferro Electronic Material Systems. "Demand for the types of products produced at the Niagara Falls facility has diminished greatly over the last several years. The remaining volume of business is insufficient to support the current manufacturing capacity and this is not expected to change in the future. "Ferro regrets the impact that this difficult, but necessary, business decision will have on our employees. However, the proposed closure will allow us to remain competitive and at the same time retain the flexibility needed to support future business growth." Ferro also maintains a production facility in Penn Yan, New York. That site employs about 207 and also produces materials for the electronic materials market. Ferro anticipates that the transfer of a portion of the work currently being done in Niagara Falls will add approximately 25 jobs at the Penn Yan facility, while other work transfer is expected to add about 16 jobs at Ferro's site in Uden, The Netherlands. New CFO Sallie B. Bailey will join Ferro Corp on Jan. 2, 2007, as Vice President and Chief Financial Officer. Ms. Bailey will replace Thomas M. Gannon. Ms. Bailey currently serves as Senior Vice President-Finance and Controller with The Timken Company. She will report to James F. Kirsch, President and Chief Executive Officer at Ferro. About Ferro Corp Headquartered in Cleveland, Ohio, Ferro Corporation -- http://www.ferro.com/-- supplies technology-based performance materials for manufacturers. Ferro materials enhance the performance of products in a variety of end markets, including electronics, telecommunications, pharmaceuticals, building and renovation, appliances, automotive, household furnishings, and industrial products. The Company has approximately 6,800 employees globally. * * * Standard & Poor's Ratings Services' 'B+' long-term corporate credit and 'B' senior unsecured debt ratings on Ferro Corp. remains on CreditWatch with negative implications, where they were placed Nov. 18, 2005. FOREST CITY: Hallandale Beach Okays The Village Development ----------------------------------------------------------- Magna Entertainment Corp. and Forest City Enterprises, Inc. received final approval from the city of Hallandale Beach, Florida for the development of The Village at Gulfstream Park, paving the way for a planned Spring 2007 groundbreaking for Phase 1 of the 60-acre, master-planned lifestyle destination. The Village at Gulfstream Park, to be built around MEC's thoroughbred racetrack, will offer fashion and home accessory shops, destination retailers, signature restaurants, outdoor cafes, unique entertainment options and a residential live/work environment. The first phase will include 375,000 square feet of lifestyle retail, featuring 70 upscale shops and specialty stores and 70,000 square feet of office space, which is expected to be up and running in Fall 2008. The Village, to be built over 15 years, calls for 1,500 condos, 750,000 square feet of retail space, 140,000 square feet of office space, a 500-room hotel and a 2,500-seat cinema. The project will involve the construction of 225 affordable/workforce-housing units both on the site itself and in neighborhoods within the city. It is expected to generate more than $22 million in taxes and create more than 2,800 permanent jobs. "With the successful approval of the entitlements we look forward to the many benefits of the combination of Gulfstream's extraordinary location and entertainment experience with the capabilities of Forest City, one of the pre-eminent development companies in the United States, which puts us in a position to create a compelling retail-entertainment destination for virtually every type of consumer," Frank Stronach, Chairman of MEC, said. "Forest City is extremely pleased to have received final project approval for the project. Given the unique integration with MEC's premier thoroughbred horse racing facility, The Village will be one of the highest profile, most exciting and vibrant developments of its kind in the country," commented Brian Ratner, president of East Coast Development, Forest City. "Our vice president of retail leasing is in Europe right now talking with potential tenants to bring unique retailers to this location." About The Village The Village at Gulfstream Park is located in the heart of the Miami, Dade, Broward, and West Palm Beach area. The City of Hallandale Beach, is situated along US1 South Florida and near I-95, the major north/south interstate along the Eastern United States. About Magna Entertainment Magna Entertainment Corp. (NASDAQ: MECA; TSX: MEC.A) -- http://www.magnaentertainment.com/-- North America's number one owner and operator of horse racetracks, based on revenues, acquires, develops, and operates horse racetracks and related casino and pari-mutuel wagering operations, including off-track betting facilities. Additionally, MEC owns and operates XpressBet(R), a national Internet and telephone account wagering system, and Horse Racing TV(TM), a 24-hour horse racing television network. About Forest City Enterprises Headquartered in Cleveland, Ohio, Forest City Enterprises, Inc. is a $5.9 billion NYSE-listed real estate company. The Company is principally engaged in the ownership, development, acquisition and management of commercial and residential real estate throughout the United States. The Company's portfolio includes interests in retail centers, apartment communities, office buildings and hotels in 20 states and the District of Columbia. * * * As reported on the Troubled Company Reporter on Oct. 6, 2006, Standard & Poor's Ratings Services affirmed its 'BB+' rating on Forest City Enterprises Inc. The rating affirmation affects roughly $550 million in rated senior notes. The outlook remained stable. GENERAL NUTRITION: Higher Debt Load Cues Moody's to Junk Ratings ---------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of GNC Parent Corporation to B3 and the $425 million holding company note issue to Caa2. GNC Parent Corp. ultimately owns General Nutrition Centers, Inc. Proceeds from the new debt principally will be used to retire its PIK preferred stock for $149 million and to pay a $287 million dividend. Relative to the prior capital structure that was rated on Nov. 8, the holding company note issue was upsized to $425 million from $325 million and the dividend was also increased. The downgrade of the corporate family rating was prompted by Moody's opinion that the incremental debt will cause financial flexibility to materially weaken. In addition to issuance of these holding company notes, the company also reported that it is exploring strategic alternatives such as a sale of the company or an initial public offering. These ratings are lowered: -- Corporate family rating to B3 from B2; -- Probability of Default Rating to B3 from B2; -- Senior secured bank loan to Ba3, LGD1, 4% from Ba2; -- $150 million of 8.625% senior notes (2011) to B1, LGD2, 25%, from Ba3; -- $425 million notes issued by GNC Parent Corp. to Caa2, LGD5, 84% from Caa1. Affirmed: -- $215 million of 8.5% senior subordinated notes (2010) at B3, LGD4, 56%. Moody's downgraded and reassigned the ratings from General Nutrition Centers, Inc. to GNC Parent Corporation in order to regularize Moody's ratings. GNC's corporate family rating of B3 balances the company's aggressive financial policy, weak credit metrics, and revenue vulnerability to new product introductions against certain qualitative aspects that have low investment grade or high non- investment characteristics. Weighing down the overall rating with B characteristics are the company's shareholder enhancement policy and credit metrics that have remained weak since the November 2003 leveraged buyout. The ongoing challenges in matching changes in consumer preferences for VMS products also constrain the ratings. The company's geographic diversification and the relative lack of cash flow seasonality have solidly investment grade scores, while the company's scale and widespread consumer recognition of the GNC name in the intensely competitive segment of vitamin, mineral, and nutritional supplement retailing have Ba scores. The stable rating outlook recognizes that the recent negative trends in sales and operating profit have turned positive, and that most proforma credit metrics are appropriate for a B rated credit. Moody's expects that, while future free cash flow will be small relative to total debt, a large portion of future discretionary cash flow will be applied to balance sheet improvement. A permanent decline in cash balances or revolving credit facility availability that would result if free cash flow fell below break- even, a return to declining store-level operating performance, or another sizable shareholder enhancement activity would cause the ratings to be lowered. Given the sizable contribution to operating profit from franchise royalties, difficulties or closure of many franchisees also would negatively impact the ratings. Specifically, debt to EBITDA close to 7 times, EBIT to interest expense below 1 time, or negative free cash flow to debt would cause ratings to be lowered. In the near term, a rating upgrade is unlikely. Ratings could eventually move upward if the company establishes a long-term track record of sales stability and improved margins, the system expands both from new store development and existing store performance, and if financial flexibility were to sustainably strengthen such that EBIT coverage of interest expense approaches 1.5x, leverage falls toward 5.5x, and Free Cash to Debt consistently exceeds 3%. General Nutrition Centers, Inc., with headquarters in Pittsburgh, Pennsylvania, retails and manufactures vitamins, minerals, and nutritional supplements domestically and internationally through about 5850 company operated and franchised stores. Revenue for the twelve months ending Sept. 2006 approached $1.5 billion. GLOBAL DOCUGRAPHIX: Trustee Schedules Creditors Meeting on Dec. 5 ----------------------------------------------------------------- The U.S. Trustee for Region 6 will convene a meeting of Global DocuGraphix Inc. and its debtor-affilate Global DocuGraphix USA Inc.'s creditors on Dec. 5, 2006, 3:10 p.m. at the Office of the U.S. Trustee, Room 524, 1100 Commerce Street, in Dallas, Texas. This is first meeting of creditors after the cases have been converted to a chapter 7 liquidation proceeding. Headquartered in Plano, Texas, Global DocuGraphix, Inc. -- http://www.gdxinc.com/-- is a commercial printing company offering products and solutions for printing, advertising, marketing, office, and document management. The Company and its subsidiary, Global DocuGraphix USA, Inc., filed for chapter 11 protection on July 18, 2006 (Bankr. N.D. Tex. Case No. 06-32889) Holland N. O'Neil, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne and Sewell LLP represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they reported assets and debts totaling between $10 million and $50 million. The Debtors' chapter 11 bankruptcy cases has been converted to a chapter 7 liquidation proceeding on Nov. 8, 2006. GLOBAL DOCUGRAPHICS: Trustee Wants Quilling Selander as Counsel --------------------------------------------------------------- John H. Litzler, chapter 7 trustee of Global DocuGraphix, Inc. and its debtor-affiliate Global DocuGraphix USA Inc., asks the U.S. Bankruptcy Court for the Northern District of Texas to employ Quilling, Selander, Cummiskey & Lownds, P.C. as his counsel. Quilling Selander will: a. assist the Trustee in evaluating and pursuing avoidable transfers, if any; b. assist the Trustee in determining the extent of property of the bankruptcy estates; c. give the Trustee legal advice with respect to his powers and duties as Trustee; d. take such action as is necessary to preserve, protect and collect property of the bankruptcy estates; e. prepare on behalf of the Trustee all necessary applications, answers, orders, objections, reports and other legal documents; and f. perform any and all other legal services for the Trustee which may be necessary herein. Hudson M. Jobe, Esq., an associate at Quilling Selander, discloses that the hourly rates charged by the law firm's bankruptcy group range from $175 to $250 for associates and $300 to $350 for partners. Mr. Jobe assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent any interest adverse to the Debtors' estates. Contact Quilling, Selander, Cummiskey & Lownds, P.C. 2001 Bryan Tower, Suite 1800 Dallas, Texas 75201 Telephone (214) 871-2100 Fax (214) 871-2111 Headquartered in Plano, Texas, Global DocuGraphix, Inc. -- http://www.gdxinc.com/-- is a commercial printing company offering products and solutions for printing, advertising, marketing, office, and document management. The Company and its subsidiary, Global DocuGraphix USA, Inc., filed for chapter 11 protection on July 18, 2006 (Bankr. N.D. Tex. Case No. 06-32889) Holland N. O'Neil, Esq., and Richard McCoy Roberson, Esq., at Gardere, Wynne and Sewell LLP represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they reported assets and debts totaling between $10 million and $50 million. The Debtors' chapter 11 bankruptcy cases has been converted to a chapter 7 liquidation proceeding on Nov. 8, 2006. GOODYEAR TIRE: Meets with Union to Discuss New Labor Deal --------------------------------------------------------- The Goodyear Tire & Rubber Company disclosed Friday that bargaining teams from the company and the United Steelworkers met last week in Cincinnati. Goodyear presented copies of its latest proposals to the Union's full bargaining committee. Goodyear reviewed its proposals in detail and responded to questions from the Union's bargaining team. The Union made no new proposals. The company said it is clear from the discussions that the two primary issues continue to be retiree health care and the announced closure of the Tyler, Texas plant. Dates for further meetings with the union have not been established. Goodyear's latest proposal can be viewed at: http://researcharchives.com/t/s?155c The United Steelworkers struck Goodyear on Oct. 5 after refusing to further extend a three-year master contract with the company. About Goodyear Tire Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. It has marketing operations in almost every country around the world. Goodyear employs more than 80,000 people worldwide. * * * As reported in the Troubled Company Reporter on Oct. 23, 2006, Fitch Ratings placed The Goodyear Tire & Rubber Company on Rating Watch Negative. Goodyear's current debt and recovery ratings are -- Issuer Default Rating (IDR) 'B'; $1.5 billion first lien credit facility 'BB/RR1'; $1.2 billion second lien term loan 'BB/RR1'; $300 million third lien term loan 'B/RR4'; $650 million third lien senior secured notes 'B/RR4'; Senior Unsecured Debt 'CCC+/RR6'. As reported in the Troubled Company Reporter on Oct. 19, 2006, Standard & Poor's Ratings Services placed its 'B+' corporate credit rating on Goodyear Tire & Rubber Co. on CreditWatch with negative implications because of the potential for business disruptions and earnings pressures that could result from the ongoing labor dispute at some of its North American operations. Goodyear has total debt of about $7 billion. GOODYEAR TIRE: Moody's Rates $1 Billion Unsec. Note Offer at B2 --------------------------------------------------------------- Moody's Investors Service assigned a B2, LGD4, 63% rating to Goodyear Tire & Rubber Company's new $1 billion offering of unsecured notes. At the same time, the rating agency affirmed Goodyear's Corporate Family Rating of B1 and negative outlook and revised its Speculative Grade Liquidity rating to SGL-2. All other long-term ratings are unchanged. The new unsecured notes will consist of a $0.5 billion floating rate issue with a three year maturity, and a $0.5 billion fixed rate issue with a five year maturity. Both issues will benefit from upstreamed guarantees from Goodyear's material North American subsidiaries. Goodyear will use $515 million of the proceeds to repay maturing obligations in December ($215 million) and March 2007 ($300 million) with the balance retained for general corporate purposes. The new financing will strengthen Goodyear's liquidity profile as it works to resolve the strike affecting its U.S. production capacity. Goodyear's Corporate Family rating of B1 recognizes strong scores for several factors in Moody's Automotive Supplier Methodology. These factors include: (a) the company's substantial scale; (b) global brands, leading market share; (c) diversified geographic markets; and, (d) improved debt maturity and liquidity profiles. Scores for those qualitative attributes would normally track to a higher Corporate Family rating. However, the B1 rating considers Goodyear's relatively weak quantitative scores including leverage, which has stepped-up further from recent borrowings, low EBIT returns and weak FCF/debt ratios. Contributions to pension plans will remain substantial for another year before declining in 2008. Scores from those quantitative factors counter qualitative strengths. The company faces challenges in restoring its balance sheet, resolving its U.S. organized labor contract and contending with various contingent liabilities. Nonetheless, debt levels have likely peaked and leverage measurements could quickly retreat should a satisfactory accord be reached with its North American union with incremental debt retired in short order. The negative outlook anticipates that the strike will be settled within several months, but recognizes stepped-up leverage from recent financing, and weak demand in North American replacement tire markets. Several pro forma metrics already suggest lower rating categories. However, leverage measurements could decline if the strike was resolved quickly, recent incremental debt was unwound, and lower underfunded pension liabilities anticipated at year end were recognized. In addition, the company is positioned with strong liquidity and faces minimal debt maturities until 2009. On balance, Moody's believes the risks are weighted to the downside by these short term issues until the company's North American cost structure is resolved. Developments on these concerns could either evolve rapidly or emerge over several months depending upon the outcome of its labor negotiations. Ongoing challenges also include maintaining and bolstering profitability in the face of elevated and volatile raw material prices, generating adequate cash flow from its operations, and strengthening its capital structure. Recent replacement tire demand has been less than robust which could intensify competition and pricing. Growth in replacement tire demand should also resume over the intermediate period. Ratings assigned: * Goodyear Tire & Rubber Company -- $500 million senior unsecured guaranteed notes due 2009, B2 LGD-4, 63% -- $500 million senior unsecured guaranteed notes due 2011, B2 LGD-4, 63% Ratings affirmed: * Goodyear Tire & Rubber Company -- Corporate Family Rating, B1 -- Outlook, Negative -- Probability of Default, B1 -- first lien credit facility, Ba1, LGD 2, 10% -- second lien term loan, Ba3, LGD 3, 35% -- third lien secured term loan, B2, LGD 4, 63% -- 11% senior secured notes, B2, LGD 4, 63% -- floating rate senior secured notes, B2, LGD 4, 63% -- 9% senior notes, B2, LGD 4, 63% -- 6 5/8% senior notes, B3, LGD 6, 94% -- 8 1/2% senior notes, B3, LGD 6, 94% -- 6 3/8% senior notes, B3, LGD 6, 94% -- 7 6/7% senior notes, B3, LGD 6, 94% -- 7% senior notes, B3, LGD 6, 94% -- senior unsecured convertible notes, B3, LGD 6, 94% * Goodyear Dunlop Tyres Europe -- Euro revolving credit facilities, Ba1, LGD 2, 10% -- Euro secured term loan, Ba1, LGD 2, 10% Ratings changed: Speculative Grade Liquidity rating to SGL-2 from SGL-3 The last rating action was on Oct. 16 at which time the outlook was changed to negative and the liquidity rating was lowered to SGL-3. The B2, LGD4, 63% rating assigned to the new notes recognizes their junior position relative to the company's first, second and third lien credit facilities as well as the benefits of upstreamed guarantees from material North American subsidiaries, an enhancement that is not in place on certain other unsecured notes. The SGL-2 liquidity rating, representing good liquidity over the next 12 months, emphasizes substantial balance sheet cash sourced through the recent revolving credit borrowings and note issuance. However, external liquidity is very limited as the company's domestic revolving credit is nearly fully utilized. The company should have adequate room under its financial covenants, but the cushion could diminish should North American results be adversely affected by the strike. While substantial assets have been pledged, the company does have flexibility on the use of proceeds from prospective asset sales. Goodyear Tire & Rubber Company, based in Akron, Ohio, is one of the world's largest tire companies with more than 100 facilities in 29 countries around the world. Products include tires, engineered rubber products, and chemicals. Revenues in 2005 were approximately $20 billion. GREEKTOWN HOLDINGS: Construction Delays Cue S&P's CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including its 'B' corporate credit rating, on Greektown Holdings LLC on CreditWatch with negative implications following the report of construction delays related to the company's permanent casino expansion. The delays will likely affect the timing of cash flows, which potentially could result in a breach of covenants related to Greektown's bank facility, possibly impacting its liquidity position. Moreover, the delays are likely to result in a covenant violation relative to the company's agreement with the Michigan Gaming Control Board, which in turn could force a sale of the casino. Greektown has requested that the MGCB provide a 12-month extension for it to achieve established revenue goals. In resolving the CreditWatch listing, the rating agency will discuss with the company potential remedies for these issues, and assess potential additional support from Greektown's owner, the Sault Ste. Marie Tribe of Chippewa Indians. HARBORVIEW NIM: DBRS Rates $15.7 Mil. Class N-4 Notes at B (high) ----------------------------------------------------------------- Dominion Bond Rating Service assigned the following ratings to the NIM Notes, Series 2006-9 issued by HarborView NIM CI-4 Corp.: * $62.6 million Class N-1 rated at A * $31.9 million Class N-2 rated at BBB * $11.9 million Class N-3 rated at BB * $15.7 million Class N-4 rated at B (high) The NIM Notes are backed by a 100% interest in Class C and Class P certificates issued by HarborView Mortgage Loan Trust 2006-9. The underlying Class C certificates will be entitled to receive the excess cash flows; the Class P certificates will be entitled to receive the prepayment charges, if any, generated by the mortgage loans each month after payment of all the required distributions. Payments on the NIM Notes will be made on the 19th of each month, commencing in November 2006. From 91% of available funds, the distribution of interest and principal will be made sequentially to noteholders of Classes N-1 through N-4 until the principal balance of each such class has been paid to zero, then any remaining amounts may be paid to the holders of the Class A preference shares, which are not rated by DBRS. From 9% of available funds, any remaining amounts may be paid to the Class S preference shares. All the mortgage loans in the Underlying Trust were originated or acquired by Countrywide Home Loans, Inc. The loans are first-lien option adjustable-rate mortgages, indexed to the 12-month treasury average with a negative amortization feature. HARBOURVIEW CLO: Moody's Rates $14MM Class D Floating Notes at Ba2 ------------------------------------------------------------------ Moody's Investors Service reported that it assigned ratings to notes issued by HarbourView CLO 2006-1: -- Aaa to $337,000,000 Million Class A-1 Floating Rate Notes Due 2019; -- Aa2 to $23,000,000 Million Class A-2 Floating Rate Notes Due 2019; -- A2 to $25,000,000 Million Class B Deferrable Floating Rate Notes Due 2019; -- Baa2 to $16,000,000 Million Class C Floating Rate Notes Due 2019; -- Ba2 to $14,000,000 Million Class D Floating Rate Notes Due 2019; and, -- A2 to the Class J Blended Securities. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to the Noteholders relative to receiving the present value of such payments. The ratings of the Notes reflect the credit quality of the underlying assets--which consist primarily of senior secured loans-- as well as the credit enhancement for the Notes inherent in the capital structure and the transaction's legal structure. The rating assigned to the Blended Securities addresses solely the ultimate return of the Class J Blended Securities Rated Balance. HAWAIIAN TELCOM: S&P Places B Corp. Credit Rating on CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Hawaiian Telcom Communications Inc., including its 'B' corporate credit rating, on CreditWatch with negative implications. This is after the release of Hawaiian Telcom's 10-Q statement in which the company indicated that delays and limited system functionality related to the development of its stand-alone back- office infrastructure are likely to continue over the next few quarters. "The CreditWatch action reflects our heightened concerns regarding continued delays in the development of Hawaiian Telcom's back- office systems," said Standard & Poor's credit analyst Susan Madison. Since April 2006 when the company terminated its transition services agreement with Verizon Communications Inc., the lack of full back-office system functionality has resulted in significant issues regarding customer care, order management, billing, and financial reporting. This situation is further exacerbated by the intensifying competitive environment for telecommunication services in Hawaii after the deployment of cable telephony by Oceanic Time Warner Cable in mid-2005. Year to date, incremental costs due to the systems-related delay in transition from Verizon and the need to augment limited system functionality totaled $34 million. Additionally, the company now believes that deficiencies in financial controls related to the implementation of the new systems have resulted in a material weakness in internal controls, which could lead to misstatements of financial statements. Standard & Poor's review will focus on Hawaiian Telcom's ability to implement a back-office infrastructure that is sufficiently robust to support the level of customer care and product deployment needed to compete in a highly competitive market, the remediation of financial reporting controls to ensure accurate and timely financial statement filings, and the company's ability to recover some of the incremental costs associated with system delays. Given the rating agency's level of concern regarding Hawaiian Telcom's ability to implement the necessary back-office infrastructure in a timely manner, any potential lowering of the corporate credit rating may not be limited to one notch. Hawaiian Telcom is an independent local exchange provider of integrated communication services throughout the State of Hawaii. At Sept. 30, 2006, the company had approximately 615,000 switched access lines and about $1.4 billion in debt outstanding. HERTZ CORP: S&P Holds BB- Corp Credit Rating with Negative Outlook ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Hertz Corp., including the 'BB-' corporate credit rating, and removed them from CreditWatch, where they were placed with negative implications June 26, 2006. The outlook is negative. "The rating affirmation is based on the successful completion yesterday of a $1.3 billion IPO by Hertz Global Holdings Inc., Hertz Corp.'s parent, of which $1 billion proceeds will be used to repay a $1 billion loan that financed a $1 billion dividend to Hertz's owners in June 2006," said Standard & Poor's credit analyst Betsy Snyder. "However, the negative outlook reflects the company's more aggressive financial policy, with all of the proceeds from the IPO paid to the company's owners in the form of a dividend, rather than retaining some proceeds at Hertz." The ratings on Park, Ridge, New Jersey-based Hertz reflect a weakened financial profile following its $14 billion leveraged acquisition in December 2005, its owners' very aggressive financial policy, and the price-competitive nature of on-airport car rentals and equipment rentals. Ratings also incorporate the company's position as the largest global car rental company and the strong cash flow its businesses generate. Hertz was acquired from Ford Motor Co. by Clayton, Dubilier & Rice Inc., The Carlyle Group, and Merrill Lynch Global Private Equity, who combined now own a 72% stake after the $1.3 billion IPO. The acquisition, which added over $2 billion of debt to Hertz's balance sheet, has resulted in an increase in its borrowing costs, and credit ratios have weakened from their previous relatively healthy levels. Hertz's financial policy has become significantly more aggressive since its acquisition. Its owners completed a $1 billion debt-financed dividend just six months after acquiring the company and proceeds of the IPO, after $1 billion is used to repay debt incurred for the dividend, will be paid to the owners as a dividend. In addition, around two-thirds of the company's tangible assets are now secured, versus around 10% prior to its acquisition. Hertz, the largest global car rental company, participates primarily in the on-airport segment of the car rental industry. This segment, which generates approximately 56% of Hertz's consolidated revenues, is heavily reliant on airline traffic. Demand tends to be cyclical, and can also be affected by global events such as wars, terrorism, and disease outbreaks. Hertz's financial policy has become considerably more aggressive. Its owners have taken $1.3 billion of dividends from the company in less than a year, partially funded through debt that was subsequently repaid with proceeds from an IPO. Additional significant dividends would result in a downgrade. If the company were to delever without further significant dividends, the outlook could be revised to stable. INCO LTD: Common Stock Ceases Trading on NYSE --------------------------------------------- Nov. 16, 2006 was the final day for trading of Inco Limited's common shares on the New York Stock Exchange. The Inco common shares will continue to trade on the Toronto Stock Exchange, in both Canadian dollars and U.S. dollars, until Jan. 3, 2007, the date on which Inco has scheduled a special meeting of its shareholders to consider an amalgamation transaction which would enable Companhia Vale do Rio Doce to acquire all of the Inco common shares that it does not already own. CVRD acquired approximately 86.57% of the issued and outstanding common shares of Inco pursuant to its recently completed take-over bid. Inco's Board of Directors and management are working with CVRD to ensure a smooth integration of the two companies, with a view to creating a new global leader in the metals and mining industry. About Inco Ltd. Headquartered in Sudbury, Ontario, Inco Limited (TSX, NYSE:N) -- http://www.inco.com/-- produces nickel, which is used primarily for manufacturing stainless steel and batteries. Inco also mines and processes copper, gold, cobalt, and platinum group metals. It makes nickel battery materials and nickel foams, flakes, and powders for use in catalysts, electronics, and paints. Sulphuric acid and liquid sulphur dioxide are produced as byproducts. The company's primary mining and processing operations are in Canada, Indonesia, and the U.K. * * * Inco Limited's 3-1/2% Subordinated Convertible Debentures due 2052 carry Moody's Investors Service's Ba1 rating. INDEPENDENCE I: Moody's Places Ba3 Rated $50-Mil. Notes on Watch ---------------------------------------------------------------- Moody's Investors Service reported it has placed the ratings on the following notes issued in 2000 by Independence I CDO, Ltd., an investment grade collateralized debt obligation issuer, on watch for possible downgrade: * The $223,500,000 Million Class A First Priority Senior Secured Floating Rate Notes due 2030 -- Prior Rating: Aa2 -- Current Rating: Aa2, on watch for possible downgrade * The $50,000,000 Million Class B Second Priority Senior Secured Floating Rate Notes due 2035 -- Prior Rating: Ba3 -- Current Rating: Ba3, on watch for possible downgrade The rating action reflects the overall deterioration in the credit quality of the transaction's underlying collateral portfolio. As reported in the Sept. 2006 trustee report, the weighted average rating factor of the portfolio was 1677, significantly higher than the transaction's trigger level of 450. Similarly, the weighted average spread of the portfolio stood at 1.62%, below the trigger level of 1.8%. The overcollateralization tests for the Class A notes and the Class B notes was reported to be 93.14%, significantly lower than the trigger level of 105.75%. INTERTAPE POLYMER: Amends Debt Facilities to Ease Covenants ------------------------------------------------------------ Intertape Polymer Group Inc. executed definitive documentation to amend its credit facilities, in a manner, which will accommodate the recent changes in its business results and provide it with the flexibility needed to manage its business. The amendments to the credit facilities permit the add back of certain one-time charges in connection with the Company's continuing cost cutting efforts, accommodate its impairment charge and relax the interest coverage covenant, leverage ratio covenant and fixed charges covenant. The Company's credit facilities as amended will permit IPG to exclude from the calculation of its consolidated earnings before income taxes, depreciation and amortization up to $4.35 million in restructuring charges related to severance and retail restructuring costs, goodwill impairment charges of up to $120 million and costs associated with the amendment of the credit facilities, all of which are expected to be taken in the fiscal quarters ending Dec. 31, 2006 or March 31, 2007. "IPG appreciates the support of its Lenders in approving these amendments," H. Dale McSween, Interim Chief Executive Officer stated. "The Company continues to implement its restructuring plan and the amendments are an important step in that process." About Intertape Polymer Based in Montreal, Quebec and Sarasota/Bradenton, Florida, Intertape Polymer Group Inc. (TSX: ITP)(NYSE: ITP) -- http://www.intertapepolymer.com/-- develops and manufactures specialized polyolefin plastic and paper based packaging products and complementary packaging systems for industrial and retail use. The Company employs approximately 2450 employees with operations in 18 locations, including 13 manufacturing facilities in North America and one in Europe. * * * As reported in the Troubled Company Reporter on Oct. 6, 2006, Standard & Poor's Ratings Services placed its ratings, including its 'B+' corporate credit rating, on Intertape Polymer Group Inc. on CreditWatch with negative implications. The CreditWatch placement follows the company's announcement that its Board of Directors will initiate a process to explore various strategic and financial alternatives. The nature of options being explored and the timeline of the exercise have not been announced, but the culmination of such an exercise could result in a change of ownership. ISTANA HIGH: Moody's Rates $2.5MM Class E Priority Notes at Ba1 --------------------------------------------------------------- Moody's Investors Service reported it assigned these ratings to notes issued by Istana High Grade ABS CDO I, Ltd., a collateral debt obligation issuance: -- Aaa to the $600,000,000 Million Class A-1 First Priority Delayed Draw Floating Rate Notes Due 2048 -- Aaa to the $250,000,000 Million Class A-2 Second Priority Floating Rate Notes Due 2048 -- Aaa to the $50,000,000 Million Class A-3 Third Priority Floating Rate Notes Due 2048 -- Aaa to the $50,000,000 Million Class A-4 Fourth Priority Floating Rate Notes Due 2048 -- Aa2 to the $21,500,000 Million Class B Fifth Priority Floating Rate Notes Due 2048 -- A2 to the U.S.$13,000,000 Class C Sixth Priority Deferrable Floating Rate Notes Due 2048 -- Baa2 to the $7,500,000 Class D Seventh Priority Deferrable Floating Rate Notes Due 2048 -- Ba1 to the $2,550,000 Million Class E Eighth Priority Deferrable Floating Rate Notes Due 2048 Moody's ratings of the notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. Moody's has also assigned a rating of Aaa to the $250,000 Combination Securities due March 5, 2048. The rating of the Combination Securities addresses the ultimate return of principal at maturity. ST Asset Management will be the collateral manager of the transaction. ISTAR FINANCIAL: Prices Public Offer of Common Shares ----------------------------------------------------- iStar Financial Inc. priced the public offering of 11,000,000 shares of its common stock at $44.50 per share. All of the shares were offered by the Company. The resulting gross proceeds from the offering will be approximately $489.5 million. The net proceeds to the Company after deducting underwriting discounts and commissions and offering expenses payable by the Company will be approximately $471.1 million. The Company has granted the underwriters a 30-day option to purchase up to an additional 1,650,000 shares of common stock to cover over-allotments. The Company intends to use the net proceeds from the offering for the repayment of debt. Bear Stearns, Citigroup Corporate and Investment Banking and Lehman Brothers served as joint book-running managers for the offering. iStar Financial (NYSE: SFI) -- http://www.istarfinancial.com/-- is a publicly traded finance company focused on the commercial real estate industry. The Company provides custom- tailored financing to high-end private and corporate owners of real estate nationwide, including senior and junior mortgage debt, senior and mezzanine corporate capital, and corporate net lease financing. The Company, which is taxed as a real estate investment trust, seeks to deliver a strong dividend and superior risk-adjusted returns on equity to shareholders by providing the highest quality financing solutions to its customers. * * * iStar Financial Inc.'s preferred stock carry Moody's Investors Service's Ba1 rating with a stable outlook. Fitch Ratings also raised the Company's preferred stock rating to 'BB+' from 'BB' in January 2006. Fitch said the Rating Outlook is Stable. ISTAR FINANCIAL: Earns $91.8 Million in Quarter Ended Sept. 30 -------------------------------------------------------------- iStar Financial Inc., reported net income allocable to common shareholders for the third quarter ended Sept. 30, 2006, of $91.8 million, compared to $46.8 million for the third quarter 2005. Adjusted earnings allocable to common shareholders for the third quarter 2006 were $103.1 million on a diluted basis, compared to $112.2 million for the third quarter 2005. Adjusted earnings represents net income computed in accordance with GAAP, adjusted for preferred dividends, depreciation, depletion, amortization and gain (loss) from discontinued operations. Net investment income for the quarter was $115.7 million, compared to $46.7 million for the third quarter of 2005. The year-over- year increase in net investment income was primarily due to growth of the Company's loan portfolio, as well as $44.3 million of expenses associated with the prepayment of the Company's STARs asset-backed notes in the third quarter of 2005. Net investment income represents interest income, operating lease income and equity in earnings from joint ventures, less interest expense, operating costs for corporate tenant lease assets and loss on early extinguishment of debt. The Company reported that during the third quarter, it closed a record 37 new financing commitments, for a total of $1.95 billion, up 138% year-over- year. Of that amount, $1.41 billion was funded during the third quarter. In addition, the Company funded $154.2 million under pre-existing commitments and received $621.9 million in principal repayments. Additionally, the company completed the sale of a non-core, back-office technology facility for $32.5 million net of costs, resulting in a net book gain of approximately $17.3 million. Cumulative repeat customer business totaled $11.1 billion at September 30, 2006. For the quarter ended September 30, 2006, the Company generated return on average common book equity of 20.7%. The Company's debt to book equity plus accumulated depreciation/depletion and loan loss reserves, all as determined in accordance with GAAP, was 2.6x at quarter end. The Company's net finance margin, calculated as the rate of return on assets less the cost of debt, was 3.35% for the quarter. Capital Markets Summary During the third quarter, the Company issued $700 million of fixed rate 5.95% senior unsecured notes due 2013 and $500 million of floating rate senior unsecured notes due 2009. The floating rate notes bear interest at a rate per annum equal to 3-month LIBOR plus 0.34%. In addition, the Company recently completed an exchange offer and consent solicitation for the exchange of the Company's outstanding 8.75% Notes due 2008 for its newly issued 5.95% Senior Notes due 2013. As of Sept. 30, 2006, the Company had $696.4 million outstanding under $2.7 billion in credit facilities. Consistent with its match funding policy under which a one percentage point change in interest rates cannot impact adjusted earnings by more than 2.5%, as of Sept. 30, 2006, a 100-basis- point increase in rates would have increased the Company's adjusted earnings by 0.75%. Earnings Guidance For fiscal year 2006, the Company is increasing earnings guidance, and now expects to report diluted adjusted earnings per share of $3.50 - $3.60, and diluted GAAP earnings per share of $2.70 - $2.80, based on expected net asset growth of approximately $2 billion. For fiscal year 2007, the Company expects diluted adjusted earnings per share of $3.80 - $4.00 and diluted earnings per share of $2.70 - $2.90, based on expected net asset growth of approximately $3.0 billion. The Company continues to expect to fund its net asset growth with a combination of unsecured debt and equity. Risk Management At Sept. 30, 2006, first mortgages, participations in first mortgages, senior loans and corporate tenant lease investments collectively comprised 83.8% of the Company's asset base versus 88.2% in the prior quarter. The Company's loan portfolio consisted of 59.6% floating rate and 40.4% fixed rate loans, with a weighted average maturity of 4.3 years. The weighted average first and last dollar loan-to-value ratio for all structured finance assets was 15.6% and 64.7%, respectively. At quarter end, the Company's corporate tenant lease assets were 94.5% leased with a weighted average remaining lease term of 10.8 years. At Sept. 30, 2006, the weighted average risk ratings of the Company's structured finance and corporate tenant lease assets were 2.75 and 2.39, respectively. During the quarter, the Company wrote-off $5.5 million of the book value of a $5.7 million mezzanine loan on a class A office building in the mid-west. The write-off was primarily due to a projected decrease in property cash flow resulting from an unexpected lease termination at the property. The write-off was applied to the Company's loan loss reserves and had no impact to third quarter 2006 earnings. At Sept. 30, 2006, the Company's non-performing loan assets represented 0.18% of total assets. NPLs represent loans on non- accrual status. At September 30, 2006, the Company had two loans on non-accrual status. In addition, one asset was removed and two assets were added to the watch list this quarter, with watch list assets representing 1.09% of total assets at September 30, 2006. The Company is currently comfortable that it has adequate collateral to support the book value for each of the watch list assets. About iStar iStar Financial (NYSE: SFI) -- http://www.istarfinancial.com/-- is a publicly traded finance company focused on the commercial real estate industry. The Company provides custom- tailored financing to high-end private and corporate owners of real estate nationwide, including senior and junior mortgage debt, senior and mezzanine corporate capital, and corporate net lease financing. The Company, which is taxed as a real estate investment trust, seeks to deliver a strong dividend and superior risk-adjusted returns on equity to shareholders by providing the highest quality financing solutions to its customers. * * * iStar Financial Inc.'s preferred stock carry Moody's Investors Service's Ba1 rating with a stable outlook. Fitch Ratings also raised the Company's preferred stock rating to 'BB+' from 'BB' in January 2006. Fitch said the Rating Outlook is Stable. JHT HOLDINGS: Moody's Assigns B1 Rating to 1st Lien Bank Debt ------------------------------------------------------------- Moody's Investors Service assigned a B1 first time rating to JHT Holdings, Inc.'s first lien bank credit facilities and a B2 Corporate Family Rating. Moody's assigned a B3 Probability of Default Rating and a Loss Given Default of LGD2, 28% to the Bank Credit Facilities. The rating outlook is stable. The B2 Corporate Family rating emphasizes attributes typical of the B rating category: (a) a modest scale of operation; (b) volatile revenues and cash flows because of the high exposure to heavy and medium duty truck production; and, (c) significant financial leverage with few tangible assets. Until recently, JHT posted a relatively low EBITDA margin, considering the strong operating conditions at present. Those factors are partially offset by JHT's business model which has meaningful barriers to entry as well as the company's important role handling deliveries for substantially all of the nation's production of Class 8 tractors from OEMs to more than 10,000 dealers and other destinations throughout North America. The particularly strong market position is characteristic of higher rating categories, especially when combined with an efficient operating structure, and term business awards with long standing customers which provide for certain cost recoveries. The company's "asset light" model serves to minimize capital expenditure requirements, which, when combined with the extent of its variable costs, should produce free cash flow generation despite anticipation of an extensive decline in North American Class 8 vehicle production beginning next year. The stable outlook is supported by this expectation of free cash flow, the company's leading market shares and the term nature of its business awards. The Bank Credit Facilities, consisting of a $110 million six year term loan and a $20 million five year revolving credit facility, refinance debt arranged in June 2006 when a consortium of private equity investors acquired control of JHT. At closing, the bank obligations will represent some 98% of JHT's external balance sheet debt. As a consequence, Moody's has set the family recovery rating deployed in its LGD Methodology at 65%. The B1 rating of the first lien bank debt reflects an LGD2, 28% LGD assessment. Extensive balance sheet intangibles were created from values attributable to JHT's acquisition price. Hard asset coverage provided to the first lien holders is weak, leaving lender recovery in downside scenarios dependent upon enterprise valuations. The 65% recovery rate with only a modicum of non-debt liabilities beneath the secured obligations produce a one notch uplift from the B2 corporate family rating with the first lien facilities rated at B1. As Moody's ratings represent expected loss, a function of probability of default and loss given default, a PDR of B3 has been assigned, one notch below the Corporate Family rating. JHT Holdings, Inc., based in Kenosha, Wisconsin, is a service provider to North American manufacturers of commercial vehicles. The company is expected to generate 2006 revenues of roughly $500 million and has approximately 3,000 employees. KAISER ALUMINUM: Earns $14.3 Million in Quarter Ended September 30 ------------------------------------------------------------------ In its financial report on Form 10-Q submitted to the U.S. Securities and Exchange Commission, Kaiser Aluminum Corporation reported net income of $14,300,000 for the three months ended Sept. 30, 2006, compared to net income of $16,600,000 for the same period in 2005. The company additionally reported a $3,100,000,000 non-cash gain associated with the implementation of its plan of reorganization and fresh-start accounting. Kaiser reported operating income of $21,700,000 for the third quarter 2006, which compares to $19,700,000 for the prior year quarter. Operating income for the nine months of 2006 totaled $74,100,000 compared to $45,500,000 in the same period of 2005. Net sales for the third quarter of 2006 increased by 22% to $331,400,000, compared to $271,600,000 for the third quarter of 2005. Net sales for the first nine months of 2006 increased by 25% to $1,000,000,000 compared to $815,900,000 for the same period the previous year. Both periods reflected increased shipments and significantly higher metal prices. "The company continues to deliver strong results leveraging the broad-based demand for our fabricated products, especially for aerospace and high strength applications," said Jack A. Hockema, chairman, president, and chief executive officer of Kaiser Aluminum. Fabricated Products Division Operating income in the fabricated products division totaled $29,000,000 for the third quarter of 2006 compared with $26,000,000 for the same period in 2005. The third quarter results improved 13% from what was a very strong quarter in 2005. Slightly higher shipments and continuing stronger conversion prices contributed about $5,000,000 to the improvement. In addition, operating income improved around $2,000,000 in the current period due to lower depreciation as the company implemented fresh start accounting. This was offset somewhat by higher than normal major maintenance spending and other costs. "Our third quarter 2006 operating income compares favorably to the same quarter in 2005 which is especially impressive given that last year's results were driven by a dramatic increase in plate sales," added Mr. Hockema. "Heat treat plate demand remains at unprecedented levels and we expect this trend to continue." For the first nine months of 2006, operating income in the fabricated products division totaled $90,000,000 compared with $66,000,000 for the same period in 2005. The significant improvement in operating results for the nine-month period reflects higher shipments, stronger conversion prices and favorable scrap raw material costs offset by unfavorable energy and non-run-rate costs. Primary Products Division Operating income in the primary products segment, which includes the non-core Anglesey operations, totaled $3,000,000 for the third quarter, around $2,000,000 below the third quarter 2005. Operating income in the primary products segment totaled $15,000,000 for the first nine months of 2006, an approximate $2,000,000 increase over the same period in 2005. Favorable impacts from rising ingot prices were largely offset by firm price commitments to the fabricated products business in both periods. Additionally, the 2006 periods reflected adverse impacts in both power and alumina costs. The results also included the following non-run-rate items: -- Mark-to-market gains on hedging-related derivative transactions for the third quarter of $1,000,000 compared with a loss of $1,000,000 for the 2005 period; and -- Mark-to-market gains on hedging-related derivative transactions for the first nine months of $8,000,000 compared with a loss of $5,000,000 for the 2005 period. Trentwood Facility The company previously announced a further expansion at its Trentwood facility, increasing plate capacity and capabilities. The first phase of this project is now operating at full production. The second phase is expected to be fully operational by mid 2007, and the entire project by early 2008. "The Trentwood expansion enjoys broad and strong customer support, and we are pleased to have added several new multi-year supply contracts," added Mr. Hockema. "The additional capacity created by this expansion will increase our ability to serve our customers." Post-Bankruptcy Upon emergence from its Chapter 11 proceedings on July 6, 2006, the company adopted fresh-start accounting as required by American Institute of Certified Professional Accountants Statement of Position 90-7, and a significant amount of liabilities subject to compromise were relieved. As more fully discussed in the company's Form 10-Q, these changes make the historic financial statements for the periods prior to emergence difficult to compare to the financial statements presented on or after emergence. A full-text copy of Kaiser's Third Quarter 2006 Report is available for free at http://researcharchives.com/t/s?153a Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006, and the company emerged from Chapter 11. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 107; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 609/392-0900) KAISER ALUMINUM: Asks Court to Reduce Law Debenture Trust's Claims ------------------------------------------------------------------ Reorganized Kaiser Aluminum Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to reduce the Law Debenture Claim to $427,200,000. In December 2002, State Street Bank and Trust Company, a predecessor indenture trustee for Kaiser Aluminum & Chemical Corporation's 12-3/4% Senior Subordinated Notes due 2003, filed eight proofs of claim against KACC and certain of its affiliates. The claims asserted general unsecured status, each in the aggregate amount of $427,213,838. Pursuant to their reorganization plan, the aggregate allowed amount of all claims against the Reorganized Debtors in respect of the Senior Subordinated Notes and the Senior Subordinated Note Indenture was set at $427,200,000. Under the Court order confirming the Plan, each of the non- Canadian Reorganized Debtors was substantively consolidated. Thus, one claim of State Street was deemed to be a surviving claim and was allowed for $427,200,000. In February 2006, Law Debenture Trust Company of New York, the current indenture trustee for the Senior Subordinated Notes, filed Claim No. 16607 against KACC asserting a general unsecured claim for $432,390,511 in respect of the Senior Subordinated Notes and the Senior Subordinated Note Indenture. On the face of Claim No. 16607, Law Debenture indicated that it was amending the State Street Claim. Except for the inclusion of $5,176,674 in postpetition fees and expenses incurred by State Street's agent U.S. Bank N.A. and Law Debenture, Claim No. 16607 is entirely duplicative of the State Street Claim, Kimberly D. Newmarch, Esq., at Richards, Layton & Finger in Wilmington, Delaware, tells the Court. Ms. Newmarch notes that a provision in the Reorganized Debtors' Plan specifically limited the aggregate allowed amount of all claims in respect of the Senior Subordinated Notes and the Senior Subordinated Note Indenture. Ms. Newmarch also points out that the portion of the Law Debenture Claim in respect of postpetition fees and expenses is not allowable because general unsecured creditors cannot recover postpetition fees and costs. Headquartered in Foothill Ranch, California, Kaiser Aluminum Corporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high- strength, general engineering, automotive, and custom industrial applications. The Company filed for chapter 11 protection on Feb. 12, 2002 (Bankr. Del. Case No. 02-10429), and has sold off a number of its commodity businesses during course of its cases. Corinne Ball, Esq., at Jones Day, represents the Debtors in their restructuring efforts. Lazard Freres & Co. serves as the Debtors' financial advisor. Lisa G. Beckerman, Esq., H. Rey Stroube, III, Esq., and Henry J. Kaim, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, and William P. Bowden, Esq., at Ashby & Geddes represent the Debtors' Official Committee of Unsecured Creditors. The Debtors' Chapter 11 Plan became effective on July 6, 2006. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. (Kaiser Bankruptcy News, Issue No. 107; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 609/392-0900) KINETEK INC: S&P Lifts Corporate Credit Rating to B from B- ----------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Kinetek Inc. to 'B' from 'B-', and removed it from CreditWatch with developing implications, where it was placed Sept. 13, 2006. The outlook is stable. As the same time, Standard & Poor's affirmed its 'B' bank loan rating and recovery rating of '2' on Kinetek's $270 million first- lien credit facilities, and its 'CCC+' bank loan rating and a recovery rating of '5' on the company's $95 million second-lien credit facilities. The company's $270 million senior notes due Nov. 15, 2006, were repaid at maturity, and the rating on these notes has been withdrawn. "The upgrade reflects the completion of the acquisition of Kinetek by The Resolute Fund LP, and the company's improved liquidity position," said Standard & Poor's credit analyst Gregoire Buet. LB-UBS: S&P Places Preliminary Low-B Ratings on 6 Cert Classes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to LB-UBS Commercial Mortgage Trust 2006-C7's $3.04 billion commercial mortgage pass-through certificates series 2006-C7. The preliminary ratings are based on information as of Nov. 16, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying mortgage loans, and the geographic and property type diversity of the loans. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.4x, a beginning LTV of 96.8%, and an ending LTV of 92.2%. Preliminary Ratings Assigned LB-UBS Commercial Mortgage Trust 2006-C7 Class Rating Preliminary Recommended amount credit support (%) ----- ------ ----------- -------------- A-1 AAA $40,000,000 30.000 A-2 AAA $624,000,000 30.000 A-AB AAA $54,000,000 30.000 A-3 AAA $960,735,000 30.000 A-1A AAA $452,301,000 30.000 A-M AAA $304,433,000 20.000 A-J AAA $296,823,000 10.250 B AA+ $22,833,000 9.500 C AA $30,443,000 8.500 D AA- $30,444,000 7.500 E A+ $26,638,000 6.625 F A $26,638,000 5.750 X-CP* AAA $2,876,716,000 N/A X-CL* AAA $3,044,337,469 N/A G A- $26,638,000 4.875 H BBB+ $30,443,000 3.875 J BBB $26,638,000 3.000 K BBB- $26,638,000 2.125 L BB+ $7,611,000 1.875 M BB $3,805,000 1.750 N BB- $11,416,000 1.375 P B+ $3,806,000 1.250 Q B $3,805,000 1.125 S B- $3,806,000 1.000 T NR $30,443,469 N/A *Interest-only class with a notional amount. N/A--Not applicable. NR--Not rated. LIMITED BRANDS: Inks Pact to Buy All Outstanding La Senza Shares ---------------------------------------------------------------- Limited Brands, Inc., and La Senza Corporation have executed a definitive support agreement, under which the Company agreed to purchase all outstanding shares of La Senza. The Company, through an indirect wholly-owned subsidiary, has agreed to make an offer to acquire all of the issued and outstanding subordinate voting shares of La Senza, including subordinate voting shares issued upon conversion of the outstanding multiple voting shares and issued upon the exercise of outstanding options, at a price of CDN$48.25 per share. Irv Teitelbaum, Stephen Gross and Laurence Lewin, and their beneficial interests, together with all of the other holders of multiple voting shares, have entered into a hard lock-up agreement that expires on June 30, 2007, which provides that they will deposit all of their subordinate voting shares, including those issued upon conversion of all of the multiple voting shares held by them, to the offer. The shares subject to the lock-up agreement total 7,120,535 shares, which represent 48% of the fully diluted shares post conversion. The offer will be subject to a number of conditions, including that the number of validly deposited subordinate voting shares under the offer constitute at least 66-2/3% of the issued and outstanding subordinate voting shares on a fully diluted basis. The minimum condition cannot be waived. If the number of shares offered meet the minimum tender condition, the Company, agreed to pursue lawful means of acquiring the remaining shares, including through a subsequent acquisition transaction. The proposed transaction is expected to close mid-January 2007. The Company disclosed that the definitive support agreement with La Senza, among other things, provides that La Senza will support the tender offer and for a non-solicitation covenant on the part of La Senza. The agreement also allows La Senza to declare and pay its regular quarterly dividend. The Company also disclosed that the Board of Directors of La Senza has determined unanimously that the Offer is fair to all holders of subordinate voting shares and has resolved unanimously to recommend that all holders of subordinate voting shares, other than the locked-up shareholders, accept the Offer. The proposed transaction has an equity value of approximately CDN$710 million or $628 million. The offer price represents a premium of 47.8% based on the C$32.65 closing price for La Senza shares on the Toronto Stock Exchange on Nov. 14, 2006. The Company further disclosed that Irv Teitelbaum, chairman and chief executive officer, Stephen Gross, vice chairman, and Laurence Lewin, president and chief operating officer, will remain in their respective positions and La Senza will remain headquartered in Montreal. The proposed transaction is equivalent to an enterprise value of $568 million after taking into account the cash, securities and debt on La Senza's balance sheet as of July 29, 2006. Banc of America Securities and Financo, Inc. served as financial advisors and Davis Polk & Wardwell and Osler, Hoskin & Harcourt, LLP as legal advisors for Limited Brands. Davies Ward Phillips & Vineberg LLP served as legal advisors to La Senza and Stikeman Elliott LLP was legal advisor to the locked up shareholders. Scotia Capital Inc. provided a fairness opinion with respect to the transaction to the Board of Directors of La Senza. About La Senza Corp. La Senza Corporation (TSX: LSZ) -- http://www.lasenza.com-- owns and operates 318 La Senza Lingerie, La Senza Express, La Senza Spirit and La Senza Girl stores throughout Canada. In addition a further 327 La Senza and La Senza Girl stores are operated in 34 other countries in the world through corporate licensing and co- operation agreements. About Limited Brands , Headquartered in Columbus, Ohio, Limited Brands, Inc., (NYSE: LTD) -- http://www.cleveland-cliffs.com-- operates about 3,534 specialty stores under the Victoria's Secret, Bath & Body Works, Express, Limited Stores, White Barn Candle Co. and Henri Bendel names, and sells products online. Revenues for the twelve months ended in July 29, 2006 exceeded $9.9 billion. La Senza owns and operates 318 stores in Canada, and licensees operate a further 327 stores in 34 other countries. * * * As reported in the Troubled Company Reporter on Nov. 17, 2006 Moody's Investors Service affirmed the ratings of Limited Brands, Inc. The Company's senior unsecured debt was affirmed at Baa2; Senior unsecured shelf at (P)Baa2; Subordinated shelf at (P)Baa3; Preferred shelf at (P)Ba1 and Commercial paper at Prime-2. The rating outlook remains negative. M. FABRIKANT & SONS: Files Chapter 11 Petition in New York ---------------------------------------------------------- M. Fabrikant & Sons, Inc., together with its domestic subsidiary, Fabrikant-Leer International, Ltd., filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. The Company's foreign and domestic affiliates were not included in the Chapter 11 filing. The Company is expected to continue to operate its business during the pendency of this Chapter 11 case as a debtor in possession under the Bankruptcy Code. The Company expects a smooth transition into Chapter 11, with all of its facilities expected to remain open on normal schedules. Fabrikant has negotiated financing arrangements with its senior secured lenders that remain subject to court approval. Using the Chapter 11 process, Fabrikant plans to continue to pay employee wages and benefits and to honor the customer fulfillment obligations and programs for which the Company has become so well known, and to make uninterrupted payments to suppliers for goods and services. In addition, the Company continues to actively pursue a full range of strategic alternatives, including the sale or refinancing of the firm. Fabrikant believes that its Chapter 11 proceedings currently provide the best opportunity to maximize the value of its assets and its business for all stakeholders. Headquartered in New York City, M. Fabrikant & Sons, Inc. -- http://www.fabrikant.com/-- sells & distributes diamonds and jewelries. Established in 1895, the Company is one of the oldest diamond and jewelry wholesaler in the world. M. FABRIKANT & SONS: Case Summary & 45 Largest Unsecured Creditors ------------------------------------------------------------------ Lead Debtor: M. Fabrikant & Sons, Inc. One Rockefeller Plaza New York, NY 10020 Bankruptcy Case No.: 06-12737 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Fabrikant-Leer International, Ltd. 06-12739 Type of Business: The Debtors sell diamonds and jewelry. See http://www.fabrikant.com/ Chapter 11 Petition Date: November 17, 2006 Court: Southern District of New York (Manhattan) Debtors' Counsel: Mitchel H. Perkiel, Esq. Troutman Sanders LLP 405 Lexington Avenue New York, NY 10174 Tel: (212) 704-6016 Fax: (212) 704-6288 Estimated Assets: More than $100 Million Estimated Debts: More than $100 Million A. M. Fabrikant & Sons, Inc.'s 25 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ ABN AMRO Bank N.V. Bank Debt $13,854,000 Pelikannstraat Street 70-76 2018 Antwerpen, Belgium Antwerpse Diamanbank NV Bank Debt $8,804,000 Pelikannstraat 54 B-2018 Antwerpen 1 Union Bank of Israel Bank Debt $7,870,000 Diamond Exchange Branch 3 Jabotinski Street P.O. Box 3006 Ramat Gan 52310 Israel H. Dipak & Co. Trade Debt $5,671,876 D-10, Road No-21, MIDC Andheri (E) Mumbai, 400 063 India Blue Star Trade Debt $5,554,113 312A Prasad Chambers, Opera House Mumbai, 400 004 India Hong Kong & Shanghai Bank Debt $4,509,000 Banking Corporation Limited HSBS Main Building 1 Queen Road Central Hong Kong Israel Discount Bank Bank Debt $3,396,000 Diamond Exchange Branch 3 Jabotinski Street Ramat Gan 52310 Israel K. Girdharlal International Trade Debt $2,288,357 Pvt Ltd 1003 Panchratna, Opera House Mumbai, 400 004 India K P Sanghvi & Sons Trade Debt $1,807,075 1301 Prasad Chambers Opera House Mumbai 400 004 India Bhavani Gems Trade Debt $1,479,016 101 Prasad Chambers M.P. Marg, Opera House, Bombay, 400 004 India Disons Gems, Inc. Trade Debt $1,341,372 22 West 48th Street Suite #300 New York, NY 10036 Chaim Ausch Diamonds Trade Debt $1,165,743 18 East 48th Street 4th Floor New York, NY 10017 Laxmi Diamond Trade Debt $1,052,886 416 Prasad Chamber, Opera House Mumbai, 400 004 India K.G.K. Enterprises Trade Debt $499,173 647 - A Panchratna Opera House Mumbai, 400 004 India M. Suresh & Co. Pvt. Ltd. Trade Debt $470,593 419 Parekh Market, Opera House Mumbai, 400 004 India Kiran Exports Trade Debt $439,266 109 Prasad Chambers Opera House Mumbai, 400 004 India Dhanraj Dhadda Exports Trade Debt $400,147 1208 Panchratna Opera house Mumbai, 400 004 India Shree Ramkrishna Export Trade Debt $392,461 214 Prasad Chambers Opera House Mumbai, 400 004 India Bluerays, Inc. Trade Debt $377,325 22 West 48th Street Suite #1006 New York, NY 10036 Impex Diamonds Trade Debt $317,658 302 Dharam Place 100/103 Hughes Road Mumbai, 400 007 India Asian Star Company Ltd. Trade Debt $308,295 114 Mittal Court-C Nariman Point Mumbai, 400 021 India Schain Leifer Guralnick Trade Debt $281,031 10 East 40th Street Suite 2710 New York, NY 10016-0348 Enlink Inc. Trade Debt $250,078 10 Parsonage Road Suite 312 Edison, NJ 08837 Diashine Exports Trade Debt $232,639 2504 Panchratna Opera house Mumbai, 400 004 India EMA Trade Debt $203,476 Molla Fenari MH. Vezirhan CD. #42/47 Cerberlitas 34120 Istanbul, Turkey B. Fabrikant-Leer International, Ltd.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Vaishali Diamond Corp. Trade Debt $2,043,674 579 Fifth Avenue Suite 1475 New York, NY 10017 Providence Chain Co. Trade Debt $362,617 225 Carolina Avenue Providence, RI 02905-4538 Gramercy Jewelry Mfg. Corp. Trade Debt $214,755 115 West 30th Street 10th Floor new York, NY 10001 National Stampcast, Inc. Trade Debt $208,424 15 West 37th Street New York, NY 10018 Findings, Incorporated Trade Debt $200,700 P.O. Box 847440 Boston, MA 02284-7440 M&Z Creations, Ltd. Trade Debt $155,895 dba Ordan Corp. Suite 201 New York, NY 10036 JAH Advisors Inc. Services $109,600 1350 South Grandstaff Auburn, IN 46706 International Gemmological Trade Debt $85,957 Institute 589 Fifth Avenue 4th Floor New York, NY 10017 J.S.A. Jewelry, Inc. Trade Debt $81,510 10 West 47th Street, #1307 New York, NY 10036 C.D. Jewels Trade Debt $80,450 576 Fifth Avenue Suite 200-B New York, NY 10036 Leo Wolleman, Inc. Trade Debt $75,180 45 West 45th Street 10th Floor New York, NY 10036 Manufacturing USA Ent., Inc. Trade Debt $73,778 632 Irving Avenue Glendale, CA 91201 BK Jewelry Contractors, Inc. Trade Debt $63,411 64 West 48th Street Suite #600 New York, NY 10036 Companion Trading Co., Inc. Trade Debt $60,313 P.O. Box 580002 Flushing, NY 11358 R.S. Importing Ltd. Trade Debt $59,804 2 West 46th Street Suite 407 New York, NY 10036 Keystone Findings, Inc. Trade Debt $46,561 600 Emlen Way Telford, PA 18969 Fremada Gold Inc. '04 Trade Debt $40,505 2 West 45th Street Suite 1605 New York, NY 10036 Limited Parcel Service Services $35,255 P.O. Box 7247-0244 Philadelphia, PA 19170-0001 Pacific Northern, Inc. Trade Debt $30,707 3116 Belmeade Drive Carrollton, TX 75006 Real Gems, Inc. Trade Debt $29,245 18 East 48th Street Room 801 New York, NY 10017 MOHEGAN TRIBAL: S&P Cuts Issuer Credit Rating to BB- from BB ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on casino owner and operator Mohegan Tribal Gaming Authority, including its issuer credit rating to 'BB-' from 'BB'. Concurrently, the rating agency assigned a 'BB-' rating to the proposed $1 billion senior secured credit facility due five years from closing. Net proceeds from the proposed bank facility are expected to be used to refinance existing debt and to fund capital spending plans, which will include the build-out of its Pocono Downs facility in Pennsylvania and to fund a sizeable expansion at Mohegan Sun casino. The outlook is stable. As of June 30, 2006, total debt outstanding was about $1.3 billion, including roughly $115 million of priority debt at the Tribal level. Results for MTGA's fiscal year ended Sept. 30, 2006, period have not yet been released. The downgrade was after the Tribe's report that it plans to embark on a $740 million Phase III expansion at Mohegan Sun, which will include a 1,000-room hotel tower, additional gaming space, about 7,000 additional parking spaces, and various entertainment, restaurant, and retail amenities. "We believe the additional hotel rooms and expanded amenities will be important drivers of demand for the property in the coming years. Still, leverage, as measured by total debt to EBITDA, was already expected to weaken over the next couple of years as the Tribe invests in its permanent facility at Pocono Downs," said Standard & Poor's credit analyst Peggy Hwan Hebard. While peak leverage will be weak for the new ratings, the rating agency would expect this measure to improve starting in 2010. MOSAIC COMPANY: Prices Units' Offer to Buy $1.5-Bil of Sr. Debts ---------------------------------------------------------------- The Mosaic Company has priced the previously announced tender offers and consent solicitations by its subsidiary Mosaic Global Holdings Inc. to purchase for cash any and all of its 6.875% Debentures due 2007, 10.875% Senior Notes due 2008, 11.250% Senior Notes due 2011, and 10.875% Senior Notes due 2013 and by its subsidiary Phosphate Acquisition Partners L.P. to purchase for cash any and all of its 7% Senior Notes due 2008. The terms of the tender offers and consent solicitations for the debt securities are detailed in Mosaic Global Holdings Inc.'s and Phosphate Acquisition Partners L.P.'s respective Offer to Purchase and Consent Solicitation Statements, each dated Oct. 31, 2006. The total consideration for each $1,000 principal amount of the 2011 Notes validly tendered and not withdrawn at or prior to 5:00 p.m. New York time on Nov. 14, 2006 is $1,058.75, which includes a consent payment of $2.50. The total consideration for each of the remaining senior notes and debentures validly tendered and not withdrawn at or prior to the Consent Date was determined as of 2:00 p.m., New York City time, on Nov. 14, 2006, using the yield on the applicable U.S. Treasury Security, as calculated by the Dealer Manager and Solicitation Agent in accordance with standard market practice, based on the bid-side price for such applicable U.S. Treasury Note. The total consideration for each $1,000 principal amount of the 2007 Debentures validly tendered prior to the Consent Date was determined using the yield on the 3-7/8% U.S. Treasury Security due July 31, 2007 at the Time of Pricing plus a fixed spread of 50 basis points. The yield on the 3-7/8% U.S. Treasury Security at the Time of Pricing was 5.047%. Accordingly, the total consideration, excluding accrued and unpaid interest, for each $1,000 principal amount of 2007 Debentures validly tendered and not withdrawn at or prior to the Consent Date is $1,007.93, which includes a consent payment of $30.00. The tender offer consideration, excluding accrued and unpaid interest, for each $1,000 principal amount of 2007 Debentures validly tendered after the Consent Date but at or before the "Expiration Date" is $977.93, which equals the total consideration less the consent payment. The total consideration for each $1,000 principal amount of the MGH 2008 Notes validly tendered prior to the Consent Date was determined using the yield on the 4-7/8% U.S. Treasury Security due May 31, 2008 at the Time of Pricing plus a fixed spread of 50 basis points. The yield on the 4-7/8% U.S. Treasury Security at the Time of Pricing was 4.810%. Accordingly, the total consideration, excluding accrued and unpaid interest, for each $1,000 principal amount of MGH 2008 Notes validly tendered and not withdrawn at or prior to the Consent Date is $1,079.23, which includes a consent payment of $30.00. The tender offer consideration, excluding accrued and unpaid interest, for each $1,000 principal amount of MGH 2008 Notes validly tendered after the Consent Date but at or before the Expiration Date is $1,049.23, which equals the total consideration less the consent payment. The total consideration for each $1,000 principal amount of the 2013 Notes validly tendered prior to the Consent Date was determined using the yield on the 3-1/4% U.S. Treasury Security due August 15, 2008 at the Time of Pricing plus a fixed spread of 50 basis points. The yield on the 3-1/4% U.S. Treasury Security at the Time of Pricing was 4.753%. Accordingly, the total consideration, excluding accrued and unpaid interest, for each $1,000 principal amount of 2013 Notes validly tendered and not withdrawn at or prior to the Consent Date is $1,138.33, which includes a consent payment of $30.00. The tender offer consideration, excluding accrued and unpaid interest, for each $1,000 principal amount of 2013 Notes validly tendered after the Consent Date but at or before the Expiration Date is $1,108.33, which equals the total consideration less the consent payment. The total consideration for each $1,000 principal amount of the PAP 2008 Notes validly tendered prior to the Consent Date was determined using the yield on the 3% U.S. Treasury Security due February 15, 2008 at the Time of Pricing plus a fixed spread of 30 basis points. The yield on the 3% U.S. Treasury Security at the Time of Pricing was 4.900%. Accordingly, the total consideration, excluding accrued and unpaid interest, for each $1,000 principal amount of the PAP 2008 Notes validly tendered and not withdrawn at or prior to the Consent Date is $1,020.66, which includes a consent payment of $30.00. The tender offer consideration, excluding accrued and unpaid interest, for each $1,000 principal amount of the PAP 2008 Notes validly tendered after the Consent Date but at or before the Expiration Date is $990.66, which equals the total consideration less the consent payment. The offers will expire at midnight, New York City time, on November 29, 2006, unless extended by Mosaic Global Holdings or Phosphate Acquisition Partners, as applicable, in its sole discretion. The consummation of the tender offers is subject to several conditions, including the receipt of net proceeds from financings sufficient to pay for Senior Notes and Debentures accepted in the tender offers. Senior Notes and Debentures tendered prior to the Consent Date may not be withdrawn after the Consent Date unless Mosaic Global Holdings or Phosphate Acquisition Partners, as applicable, reduces the amount of the tender offer consideration, the consent payment or the principal amount of Senior Notes or Debentures subject to the offers or is otherwise required by law to permit withdrawal. The offers are made upon the terms and subject to the conditions set forth in the Offers to Purchase and Consent Solicitation Statements dated October 31, 2006 that have been distributed to registered holders of the debt securities. Copies of the Offer to Purchase and Consent Solicitation Statements can be obtained from: MacKenzie Partners, Inc. Attention: Jeanne Carr or Simon Coope Phone: (800) 322-2885 None of The Mosaic Company, Mosaic Global Holdings Inc., Phosphate Acquisition Partners L.P., J.P. Morgan Securities Inc., as the Dealer Manager and Solicitation Agent, or the Information Agent/Depositary makes any recommendation as to whether or not holders should sell their Senior Notes or Debentures pursuant to the offers, and no one has been authorized by any of them to make such a recommendation. Holders must make their own decision as to whether to sell Senior Notes and Debentures, and if so, the principal amount of Senior Notes and Debentures to sell. Questions concerning the terms of the offers may be directed to: J.P. Morgan Securities Inc. Dealer Manager and Solicitation Agent Attention: Laura Yachimski Phone: (212) 270-3994 (call collect) Questions concerning procedures regarding the offers may be directed to MacKenzie Partners. About The Mosaic Company The Mosaic Company -- http://www.mosaicco.com/-- produces and markets concentrated phosphate and potash crop nutrients. For the global agriculture industry, Mosaic is a single source of phosphates, potash, nitrogen fertilizers and feed ingredients * * * As reported in the Troubled Company Reporter on Nov. 14, 2006, Standard & Poor's Ratings Services revised its outlook on The Mosaic Co. to negative from stable. Standard & Poor's affirmed its 'BB' long-term and 'B-1' short-term corporate credit ratings on the company. As reported in the Troubled Company Reporter on Nov. 9, 2006, Fitch assigned a 'BB' rating to The Mosaic Company's proposed senior unsecured notes due 2014 and 2016 and a 'BB+' rating to the company's proposed senior secured term loans. The ratings affected approximately $950 million of new senior notes and $1.05 billion of new term loans. As reported in the Troubled Company Reporter on Nov 9, 2006, Moody's Investors Service assigned Ba1 ratings to The Mosaic Company's proposed new $1.05 billion guaranteed senior secured credit facilities. Moody's also assigned B1 ratings to $900 million of proposed senior unsecured debt. Mosaic's Ba3 corporate family rating was affirmed but the ratings of the existing revolver and the term loan A were downgraded to Ba1 from Baa3 and those of the existing senior unsecured debt lowered to B1 from Ba3 in accordance with the LGD methodology. The ratings outlook is stable. NEMI NORTHERN: Supreme Ct. Grants Stay of Proceedings Under CCAA ---------------------------------------------------------------- NEMI Northern Energy & Mining Inc. has been granted an order, on Nov. 16, 2006, by the British Columbia Supreme Court extending the stay of proceedings under the Companies' Creditors Arrangement Act until Dec. 28, 2006, and establishing the procedure whereby NEMI will complete its restructuring under the CCAA and the transfer of assets to a partnership to be formed by NEMI, Anglo Coal Canada Inc. and Hillsborough Resources Limited. NEMI Interest Transfer Agreement NEMI signed an agreement with Anglo, HLB and Western Canadian Coal Corp. pursuant to which WCC consents to the transfer of NEMI's interest in the Belcourt Saxon Limited Partnership to the partnership to be formed by NEMI, Anglo and HLB. The Agreement also sets the platform for advancing the Belcourt Saxon work program and funding on a going-forward basis, once NEMI's interest has been transferred to the Partnership. In addition, the Agreement provides a mechanism to resolve the issue of whether a break fee is payable by NEMI in connection with the termination of the merger transaction between NEMI and WCC. WCC has advised NEMI that it will not be proceeding with the merger transaction and NEMI takes the position that no break fee is payable. Under the Agreement, NEMI and WCC have agreed that this issue will be resolved by an independent expert to be appointed by NEMI and WCC within 10 days of the closing of the transfer of NEMI's assets to the Partnership. The determination of the independent expert is due within 30 days of the independent expert's appointment. Based in Vancouver, British Columbia, NEMI Northern Energy & Mining Inc. (TSX:NNE.a) -- http://www.nemi-energy.com/-- is a coal company focused on the exploration, development, and mining of its Northeast BC metallurgical coal properties. NEOMEDIA TECH: Posts $30.9 Million Net Loss in 2006 Third Quarter ----------------------------------------------------------------- NeoMedia Technologies Inc. filed its financial statements for the third quarter ended Sept. 30, 2006, with the Securities and Exchange Commission on Nov. 9, 2006. In 2006, NeoMedia implemented an aggressive growth strategy aimed at penetrating the rapidly evolving mobile marketing industry, through the acquisition of Mobot Inc., Gavitec AG, 12Snap AG, and Sponge Ltd. Results of Operations Net Sales Total net sales from continuing operations for the three months ended Sept. 30, 2006, were $6,249,000, which represented a $6,056,000, or 3,138%, increase from $193,000 for the three months ended Sept. 30, 2005. This increase resulted from (i) $6,067,000 net sales from subsidiaries Mobot Inc., Sponge Ltd., Gavitec AG, 12Snap AG, and BSD Software Inc., all of which were acquired during the first quarter of 2006, offset by a (ii) decrease of $7,000 in net sales from the Company's underlying business represented by qode(R) and NeoMedia's legacy software products. Cost of Sales Cost of technology services, products, and licenses fees were $4,112,000 for the three months ended Sept. 30, 2006, compared with $116,000 for the three months ended Sept. 30, 2006, an increase of $3,996,000, or 3,445%. This increase resulted from (i) $3,523,000 product and service related cost of sales from subsidiaries Mobot, Sponge, Gavitec, 12Snap and BSD, all of which were acquired during the first quarter of 2006, (ii) amortization of $519,000 of intangible assets relating to the acquisitions of Mobot, Sponge, Gavitec, 12Snap and BSD, offset by (iii) a decrease of $46,000 in cost of sales from the Company's underlying business represented by qode(R) and NeoMedia's legacy software products. Write-off of Deferred Equity Financing Costs During the three months ended Sept. 30, 2006, NeoMedia incurred a charge of $13,256,000 to write off deferred equity financing costs related to the 2005 SEDA. No comparable charges were taken during the three months ended Sept. 30, 2005. Net loss The net loss for the three months ended Sept. 30, 2006, was $30,909,000, which represented a $28,959,000, or 1,485% increase from a $1,950,000 loss for the three months ended Sept. 30, 2005. This increased net loss resulted from: (a) $9,271,000 expense from the change in fair value from revaluation of warrants and embedded conversion features associated with the preferred stock and convertible debenture financing, (b) $13,256,000 charge to write off deferred equity financing costs associated with the 2005 SEDA, (c) $2,390,000 increase to stock based compensation expense as a result of the adoption of SFAS 123(R) on Jan. 1, 2006, (d) $1,105,000 loss from subsidiaries Mobot, Sponge, Gavitec, 12Snap and BSD, all of which were acquired during the first quarter of 2006, (e) $653,000 bad debt reserve for the Micro Paint customer in China, and (f) $2,284,000 increased loss from the Company's underlying business represented by qode(R), NeoMedia's legacy software products, and corporate administration. Balance Sheet At Sept. 30, 2006, the Company's balance sheet showed $87.822 million in total assets, $44.037 million in total liabilities, $2.931 million in preferred stock, and $40.854 million in total shareholders' equity. The Company had $4.227 million in shareholders' equity at Dec. 31, 2005. The Company's September 30 balance sheet showed strained liquidity with $13.742 million in total assets available to pay $43.964 million in total current liabilities. Standby Equity Distribution Agreements with Cornell NeoMedia and Cornell entered into a $20 million Standby Equity Distribution Agreement on Oct. 27, 2003. The agreement provided for a maximum draw of $280,000 per week, not to exceed $840,000 in any 30-day period, and Cornell was obligated to purchase up to $20 million of the Company's common stock over a two-year period. The SEDA became effective during January 2004, and expired after a two-year term in January 2006. During the nine months ended Sept. 30, 2006, and 2005, NeoMedia sold 751,880 and 19,337,119 shares of its common stock to Cornell pursuant to the 2003 SEDA. NeoMedia and Cornell entered on March 30, 2005, into a Standby Equity Distribution Agreement known as the 2005 SEDA under which Cornell agreed to purchase up to $100 million of NeoMedia common stock over a two-year period, with the timing and amount of the purchase at NeoMedia's discretion. The maximum amount of each purchase would be $2,000,000 with a minimum of five business days between advances. The shares would be valued at 98% of the lowest closing bid price during the five- day period following the delivery of a notice of purchase by NeoMedia, and NeoMedia would pay 5% of the gross proceeds of each purchase to Cornell. Based on NeoMedia's current market capitalization and other outstanding securities, NeoMedia does not believe that the 2005 SEDA is currently a viable source of financing. As a commitment fee for Cornell to enter into the 2005 SEDA, NeoMedia issued 50 million warrants to Cornell with an exercise price of $0.20 per share for a term of three years, and also paid a cash commitment fee of $1 million. During the nine months ended Sept. 30, 2006, Cornell exercised 40 million of the warrants, generating cash proceeds of $8 million to NeoMedia. During August 2006, in connection with the Convertible Debenture, NeoMedia repriced the remaining 2 million warrants to an exercise price of $0.10 per share. NeoMedia also issued 4 million warrants with an exercise price of $0.227 to a consultant as a fee in connection with the 2005 SEDA, which have not been exercised. NeoMedia recorded the $13,256,000 fair value of the warrants to "Deferred equity financing costs" at inception. This amount was written off during the three months ended Sept. 30, 2006, because the Company believes that it can no longer consider the SEDA a viable financing source due to the requirements of the preferred stock financing and the debenture financing. Sale of Micro Paint Business Unit NeoMedia signed on Aug. 30, 2006, a non-binding letter of intent to sell its Micro Paint Repair business unit to Jose Sada, a technology partner of NeoMedia Micro Paint Repair, backed by Global Emerging Markets Group of New York City. The letter of intent calls for consummation of the transaction on or before Nov. 24, 2006. As a result of the pending sale, the operations of the NeoMedia Micro Paint Repair business unit have been classified as discontinued operations on the accompanying consolidated statements of operations for the three and nine months ended Sept. 30, 2006, and 2005, and the assets and liabilities of the business unit have been classified as assets held for sale and liabilities held for sale on the accompanying consolidated balance sheets as of Sept. 30, 2006, and Dec. 31, 2005. Loss from these discontinued operations was $1,620,000 and $381,000 for the three months ended Sept. 30, 2006, and 2005, respectively, and $2,826,000 and $1,307,000 for the nine months ended Sept. 30, 2006, and 2005, respectively. The carrying value of assets held for sale was $3,451,000 and $4,058,000 as of Sept. 30, 2006, and Dec. 31, 2005, respectively. The carrying value of liabilities held for sale was $750,000 and $669,000 as of Sept. 30, 2006, and Dec. 31, 2005, respectively. There have been no adjustments to the carrying value subsequent to Sept. 30, 2006, and before this filing. NeoMedia will not recognize depreciation and amortization on the assets held for sale subsequent to Sept. 30, 2006, through the date of sale. Depreciation and amortization on assets held for sale would be approximately $77,000 per quarter. Termination of Hip Cricket Acquisition NeoMedia terminated on Aug. 24, 2006, a non-binding letter of intent to acquire Hip Cricket, due to an inability of the parties to come to terms on a definitive purchase price. Previously, NeoMedia and Hip Cricket signed on Feb. 16, 2006, the letter of intent, under which NeoMedia intended to acquire all of the outstanding shares of Hip Cricket in exchange for $500,000 cash and $4,000,000 of NeoMedia common stock, subject to due diligence and signing of a mutually agreeable definitive purchase agreement by both parties. In addition to signing the letter of intent, NeoMedia loaned Hip Cricket the principal amount of $500,000 in the form of (a) a promissory note, dated Feb. 16, 2006, in the amount of $250,000 and (b) a promissory note, dated March 20, 2006, in the amount of $250,000. The notes accrue interest at a rate of 8% per annum. The notes were to be applied toward the cash portion of the purchase price upon signing of a definitive purchase agreement for the acquisition of all of the outstanding shares of Hip Cricket by NeoMedia, as contemplated in the letter of intent. Due to the termination of the letter of intent, and pursuant to the terms of the notes, the face amount of the notes, plus any and all accrued interest, will become payable and due on Nov. 22, 2006. In the event the Notes are not repaid by Nov. 22, 2006, the notes will convert into shares of Hip Cricket common stock using a valuation of $4.5 million for Hip Cricket. Full-text copies of the Company's third quarter financials are available for free at http://ResearchArchives.com/t/s?1542 Going Concern Doubt Stonefield Josephson Inc. expressed substantial doubt about NeoMedia Technologies' ability to continue as a going concern after auditing the Company's financial statements for the fiscal year ended Dec. 31, 2005. The auditing firm pointed to the Company's operating losses, negative cash flows from operations, and working capital deficit. About NeoMedia Technologies Headquartered in Fort Myers, Florida, NeoMedia Technologies, Inc. (OTC BB: NEOM) -- http://www.neom.com/-- is a global company offering leading edge, technologically advanced products and solutions for companies and consumers, built upon its solid family of patented products and processes, and management experience and expertise. Its NeoMedia Mobile group of companies offers end-to- end mobile enterprise and mobile marketing solutions, through its flagship qode(R) direct-to-mobile-web technology and ground- breaking products and services from 4 (shortly to be 5) of the USA's and Europe's leading mobile marketing providers. NVF CO: Wants Exclusive Plan Filing Period Extended to January 10 ----------------------------------------------------------------- NVF Co. and its debtor-affiliate, Parsons Paper Company Inc., ask the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive periods to: -- file a chapter 11 plan of reorganization, through and including Jan. 10, 2007; and -- solicit acceptances of that plan, through and including Mar. 12, 2007. This is the Debtors' fifth request to extend the Exclusive Periods. The Debtors seek the extension to avoid premature formulation of a chapter 11 plan of reorganization or liquidation and ensure that the formulated plan takes into account the best interests of the Debtors, their creditors and estates. Based in Yorklyn, Delaware, NVF Company -- http://www.nvf.com/-- manufactures thermoset composites (glass, Kevlar), vulcanized fiber, custom containers, circuitry materials, custom fabrication, and welding products. The Company along with its wholly owned subsidiary, Parsons Paper Company Inc., filed for chapter 11 protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and 05-11728). Jason M. Madron, Esq., at Richards, Layton & Finger, P.A. and Rebecca L. Booth, Esq., at Morgan Lewis & Bockius, represent the Debtors in their restructuring efforts. Elizabeth A. Wilburn, Esq., and Jason W. Staib, Esq., at Blank Rome LLP represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million to $50 million and estimated debts of more than $100 million. NVF CO: Committee Wants Flaster/Greenberg as Conflicts Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors of NVF Company and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Flaster/Greenberg P.C., as its special conflicts counsel. Flaster/Greenberg will: a) give the Committee legal advice with respect to the contested matter; b) prepare necessary applications, answers, orders, reports and other legal papers; c) pursue any claims or matters as the Committee shall desire; and d) provide any and all other legal services for the Committee which may be necessary or desirable in connection with this case. William J. Burnett, Esq., a firm's shareholder, will bill $325 per hour for this engagement. Also rendering her services, Maris J. Finnegan, Esq., will bill $195 per hour. The firm's other professionals and their hourly rates are: Designation Hourly Rate ----------- ----------- Shareholder $255-$420 Associates $165-$265 Paralegals $105-$170 Mr. Burnett assures the Court that his firm does not hold any interest adverse to the Debtors' estate and creditors. Mr. Burnett can be reached: William J. Burnett, Esq. 913 Market Street, Suite 1001 Wilmington, Delaware 19801 Tel: (302) 351-1910 Fax: (302) 351-1919 www.flastergreenberg.com/ Based in Yorklyn, Delaware, NVF Company -- http://www.nvf.com/-- manufactures thermoset composites (glass, Kevlar), vulcanized fiber, custom containers, circuitry materials, custom fabrication, and welding products. The Company along with its wholly owned subsidiary, Parsons Paper Company, Inc., filed for chapter 11 protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and 05-11728). Rebecca L. Booth, Esq., at Richards, Layton & Finger, P.A., represents the Debtors in their restructuring efforts. Elizabeth A. Wilburn, Esq., and Jason W. Staib, Esq., at Blank Rome LLP represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million to $50 million and estimated debts of more than $100 million. ONEIDA LTD: Shareholders Elect Seven-Member Board of Directors -------------------------------------------------------------- Oneida Ltd. announced the election of a new seven-member Board of Directors that became effective on Nov. 1, 2006. Over the past two years, the Company's previous Board presided over a comprehensive operational restructuring and refinancing which included a successful pre-negotiated Chapter 11 proceeding, positioning Oneida for a new era of financial flexibility and growth. Under the new Board's stewardship, Oneida will focus on building its iconic brands globally and implementing innovative long-term growth strategies. "We are very excited about our future and believe this new Board brings world-class credentials from both the Retail and Foodservice industries," Oneida Ltd. president James E. Joseph said. "This Board was carefully chosen for their keen perspective on today's consumer and for their commitment to helping Oneida execute our global expansion plans." Newly elected board member Andrew Herenstein, a Managing Principal of Quadrangle Group LLC and a Managing Member of Quadrangle Debt Recovery Advisors LLC, which in the aggregate are Oneida's largest shareholders, said Oneida has emerged from its recent restructuring positioned for growth: "We join Oneida's Board of Directors at a pivotal time in the Company's history. Our goal is to build on the strengths of Oneida's 126-year-old brand and heritage." The Oneida Board of Directors consists of: -- Diane Price Baker, former executive vice president and chief financial officer of Atari Inc., a major video game manufacturer. Previously, she was chief financial officer at The New York Times Company from 1995 to 1998 and chief financial officer at R.H. Macy & Co. from 1990 to 1995 following a career in corporate restructuring and investment banking at Salomon Brothers Inc. -- Andrew Herenstein, who joined Quadrangle Group LLC in 2002 and is a managing principal and co-portfolio manager. Previously, he was a director of Lazard Freres & Co. LLC and served as co-portfolio manager of the Lazard Debt Recovery Funds. During his career he also held positions at The Delaware Bay Co. Inc.; Brean, Murray, Foster Securities; and Bear, Stearns & Co. -- Norman S. Matthews, a former president of Federated Department Stores, one of the nation's premier retailers with more than 850 department stores under the names of Macy's and Bloomingdale's. In addition to his senior management roles at Federated Department Stores from 1978 to 1988, Mr. Matthews also served as senior vice president and general merchandise manager at E.J. Korvette and senior vice president of marketing and corporate development at Broyhill Furniture Industries. -- Edward W. Rabin, who retired as president of Hyatt Hotels Corporation in January 2006 following a distinguished 37-year career in general management and operations at the hotel chain, ultimately overseeing 130 hotels and resorts in the U.S., Canada and the Caribbean. He is currently a trustee of the American Hotel Foundation and SMG Corporation, the world's largest owner and operator of stadiums, arenas, and conventions centers and a joint venture between Hyatt and Aramark Corporation. -- Hugh R. Rovit, a member of Oneida Ltd.'s Board of Directors since October 2004. Mr. Rovit is presently chief executive officer of Sure-Fit Inc. and was recently a principal of turnaround management firm Masson & Company from 2001 through 2005. Previously, Mr. Rovit held the positions of chief financial officer of Best Manufacturing Inc., a manufacturer and distributor of institutional service apparel and textiles, from 1998 through 2001 and chief financial officer of Royce Hosiery Mills Inc., a manufacturer and distributor of men's and women's hosiery, from 1991 through 1998. -- Thomas J. Russo, a Partner in RAVE, a privately held LLC specializing in quality assurance and customer satisfaction for the hospitality, restaurant and retail industries. His career also encompasses more than 30 years of senior management positions in foodservice, lodging and consumer goods at such well-known companies as Howard Johnson's, Ponderosa, Hanson Industries Housewares Group, and Miami Subs, among others. -- Eric S. Salus, a past president of Macy's and Macy's Home Store from 1997 to 2005 and 2004 to 2005, respectively. Previously, he held the positions of president of Bon Macy's from 2003 to 2004; executive vice president of Home Store and Cosmetics at Macy's from 1997 to 2003; executive vice president and merchandising and marketing officer of Dick's Sporting Goods; and senior positions at Foley's Houston, May D&F and The Hecht Co., all divisions of May Department Stores. Headquartered in Oneida, New York, Oneida Ltd. (OTC: ONEI) -- http://www.oneida.com/-- manufactures stainless steel and silverplated flatware for both the Consumer and Foodservice industries, and supplies dinnerware to the foodservice industry. Oneida also supplies a variety of crystal, glassware and metal serveware for the tabletop industries. The Company has operations in the United States, Canada, Mexico, the United Kingdom, and Australia. The Company and its eight affiliates filed for Chapter 11 protection on March 19, 2006 (Bankr. S.D. N.Y. Case No. 06-10489). On May 12, 2006, Judge Gropper approved the Debtors' disclosure statement. Their pre-negotiated plan of reorganization was confirmed on Aug. 31, 2006. The Company emerged from Chapter 11 on Sept. 15, 2006, as a privately held company. * * * At July 29, 2006, the Company's balance sheet showed $296.5 million in total assets and $355 million in total debts resulting in a $58.5 million stockholders' deficit. OWENS CORNING: Court Approves Pinal County Settlement Pact ---------------------------------------------------------- The U.S. Bankruptcy for the District of Delaware has approved the claims settlement between Owens Corning and its debtor-affiliates and Pinal County of Arizona. As reported in the Troubled Company Reporter on Oct. 16, 2006, the Debtors and Pinal County had a dispute concerning secured real and personal property tax liability for the 2000 and 2004 tax years. Following arm's-length negotiations, the Debtors and Pinal County agreed that: (a) Claim No. 12328 will be treated as an allowed Owens Corning Other Secured Tax Claim under Class A2-A of the Plan for $82,134, including interest, if the Claim is paid: * by Sept. 30, 2006, for $156,339; * by Oct. 31, 2006, for 157,491; * by Nov. 30, 2006, for 158,643; or * after Nov. 30, 2006, with additional interest at an applicable statutory rate. (b) The Settlement resolves all outstanding prepetition personal and real property claims among the Debtors and Pinal County. (c) All other taxes, interest, charges and penalties related to the Claim are disallowed. (d) The Debtors will pay the Claim as provided in the Plan. About Owens Corning Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 143; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) OWENS CORNING: Wants to Enter Into Waiver Letter With JPMorgan -------------------------------------------------------------- Enron Corp. and its debtor-affiliates ask permission from the Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to enter into a Waiver Letter agreement with J.P. Morgan Securities, Inc., and to pay the $15,000,000 Waiver Fee immediately. Equity Commitment Agreement Occurrence of the effective date of the Debtors' Sixth Amended Plan of Reorganization is premised, among others, by the consummation of transactions contemplated in the Debtors' equity commitment agreement with J.P. Morgan Securities, Inc. The Equity Commitment Agreement contemplates a $2,187,000,000 rights offering, whereby certain holders of eligible Owens Corning bond and other unsecured claims would be offered the opportunity to subscribe for up to their pro rata share of 72,900,000 shares of Reorganized Owens Corning common stock at $30 per share. JPMorgan will purchase the unsold shares. The Rights Offering has since been fully consummated, and about 2,900,000 shares of Reorganized Owens Corning stock were purchased. The Equity Commitment Agreement requires as a condition precedent to JPMorgan's funding obligation that the order confirming the Sixth Amended Plan will have become final. JPMorgan may terminate the Agreement on or after Oct. 31, 2006, unless the Debtors, among other things, pay a $30,000,000 extension fee to extend the commitment until December 15. Confirmation Conditions Doubted On Oct. 6, 2006, Joel Ackerman sought reconsideration of the conclusions of law confirming the Plan. Both the Bankruptcy Court and the U.S. District Court for the District of Delaware rejected the Ackerman Motion. "Mr. Ackerman's filing has placed a potential cloud on whether the Confirmation Order may become a Final Order, and therefore whether the Finality Conditions may be satisfied, by Oct. 31, 2006," Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington, Delaware, tells Judge Fitzgerald. Despite the dismissal of the Ackerman Motion, an argument can be made that as a result of the filing of that motion, the Confirmation Order may not become final by Oct. 31, 2006, for purposes of the Plan and certain provisions of the Equity Commitment Agreement, Mr. Pernick explains. To avoid any potential termination of the Equity Commitment Agreement, the Debtors would potentially have little choice but to pay JPMorgan the extension fee, Mr. Pernick adds. Mr. Pernick relates that the Debtors and the other Plan Proponents intend to close the Equity Commitment Agreement and pursue the effective date of the Plan by Oct. 31, 2006, so the Debtors will be able to make on that date or as soon thereafter as practicable, all payments or other distributions contemplated in the Plan. The Debtors, after consulting their co-Proponents and other key constituents, entered into a waiver letter with JPMorgan, pursuant to which the Investor will waive the funding requirement that the Confirmation Order become final. In exchange, the Debtors will pay JPMorgan $15,000,000. The Waiver Fee will be considered a partial prepayment of, and credited in full against the payment of, the Extension Fee in the event the Debtors seek an extension of the commitment, Mr. Pernick says. Mr. Pernick notes that if the Debtors emerge from bankruptcy on October 31, their estates will save a substantial sum by avoiding the need to pay the entire extension fee. The Debtors will also cut off the accrual of significant postpetition interest owed to various creditors under the Plan, including more than $700,000 paid per day to holders of Bank Debt, and other costs of administration. Mr. Pernick adds that the Waiver Letter has the support of various other key constituents, including the Asbestos Claimants Committee, the Future Claims Representative, and the Ad Hoc Bondholders' Committee. Mr. Pernick clarifies that payment of the Waiver Fee will have no material adverse effect on any of the classes of claims and interests. About Owens Corning Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. Headquartered in Toledo, Ohio, the Company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 143; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLAINS EXPLORATION: S&P Affirms BB Rating with Stable Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' rating on independent exploration and production company Plains Exploration & Production Company and removed the ratings from CreditWatch with negative implications, where they had been placed on April 25, 2006, following PXP's announcement that it would be acquiring Stone Energy and incurring additional costs to restructure legacy hedge positions. The outlook is stable. "The rating action reflects our expectations that despite PXP's strategic repositioning efforts in 2006--including the failed acquisition of Stone Energy Corp. (B+/Watch Neg/--), a second bout of hedge restructuring payments ($605 million), and recent asset sales--the company's business risk profile continues to remain consistent with our expectations for the 'BB' ratings level," said Standard & Poor's credit analyst Jeffrey B. Morrison. "In addition, we note that significant debt reduction, an improved hedge profile, and the durable cash flow characteristics of the company's long-lived California asset base lend support to PXP's current financial risk profile," said Mr. Morrison. The ratings on PXP reflect participation in a volatile and cyclical industry, a historically acquisitive growth strategy, and recent strategic repositioning initiatives that have included sizable cash outlays for hedge restructurings, asset sales, and two deepwater Gulf of Mexico discoveries and one prospect to Statoil ASA, and a more ambitious near-term exploration program in the U.S. Gulf of Mexico. Concerns are nearly offset by a long-lived and predictable reserve base in California, significant debt reduction in recent periods, an improved hedge position, and an experienced management team. The stable outlook reflects our expectation that an improved financial risk profile and ample liquidity will yield PXP additional flexibility with which to fund growth initiatives and additional rewards to its shareholders. While significant financial profile improvement has been achieved in the near term, positive rating actions will likely be limited until PXP can successfully improve its business risk profile. In addition, while current ratings incorporate room for additional leverage, ratings could potentially be threatened if acquisitions or additional shareholder initiatives are undertaken in a substantially more aggressive manner. PLASTECH ENGINEERED: Moody's Rates $200MM Debt Facility at B1 ------------------------------------------------------------- Moody's Investors Service assigned ratings to Plastech Engineered Products, Inc.'s new senior secured credit facilities: -- asset based revolving credit facility, B1; -- first lien term loan B2; and, -- second lien term loan Caa2. Moody's also confirmed Plastech's Corporate Family and Probability of Default Ratings at B3. The combined senior secured credit facilities will be used to refinance Plastech's existing first-lien and second-lien senior secured credit facilities. The outlook is changed to stable. These rating actions conclude the review for possible downgrade that was initiated on Aug. 24, 2006 as a result of the company requiring a suspension agreement with regard to its fixed charge covenant test under the previous first lien credit facilities. The confirmation of the B3 Corporate Family rating and the change of the outlook to stable reflect the incremental liquidity afforded under the new asset based revolving credit, and the reduced debt amortization requirements afforded by the proposed term loans to support a more stable liquidity profile. Despite these constructive developments, Plastech continues to face formidable operating and financial challenges that support the B3 rating. These include continuing weak credit metrics resulting from North American Big-3 production declines, further price concessions to OEMs, and the risk of higher raw material costs. Plastech continues to be heavily concentrated with the Big 3 domestic OEMs which are approximately 63% of direct revenues and is therefore vulnerable to lowered production volumes and market shares losses. In addition, the company maintains a significant concentration of its major platforms in the light truck/SUV segment which are vulnerable to energy price's effect on demand. The company could mitigate the adverse impact of these challenges by achieving progress in its ongoing efforts to: capture new business contracts with domestic and transplant OEMs, improve the efficiencies in its operations, and expand its long-term business relationship with JCI. These initiatives could allow the company's credit metrics to be maintained at the current rating level over the near-term. These ratings were assigned: -- the $200 million asset based revolving credit facility, due 2011 at B1, LGD2, 26% -- the $250 million first lien term loan, due 2012 at B2, LGD3, 42% -- the $150 million second lien term loan, due 2013 at B2, LGD3, 42% These ratings were confirmed: -- Corporate Family Rating, at B3 -- Probability of Default Rating, at B3 These ratings will be withdrawn upon their refinancing: -- B2, LGD3, 40% ratings of the $465 million of guaranteed senior secured first-lien credit facilities consisting of: (a) $100 million revolving credit facility due March 2009; (b) $75 million term loan A facility due March 2009; (c) $290 million term loan B facility due March 2010; -- Caa2, LGD5, 82% rating of the $50 million guaranteed senior secured second-lien term loan facility due March 2011 Plastech's last rating action was on Sept. 22, 2006 when the issue ratings were raised under the LGD Methodology. For the twelve month period ending Sept. 30, 2006, Debt/EBITDA was 4.2x, and EBIT/Interest was 1.5x. Free cash flow was positive at approximately $5 million. Free cash flow was significantly lower than fiscal 2005 due to lower sales levels and a shift away from favorable payment terms at a certain customer. At Nov. 8th, 2006 the company had approximately $30 million of availability under its revolving credit line. Pro forma for the proposed refinancing, Debt/EBITDA is expected to be approximately 4.4x. Pro forma availability under the new asset based revolving credit is expected to be approximately $75 million. Factors that could result in pressure on the rating include: (a) liquidity is not being adequately maintained; (b) anticipated new business contracts not materializing in sufficient amounts to offset customer pricedowns; (c) reports that the company is expecting to complete acquisitions; and, (d) continued increases in raw materials prices which are not passed on to customers. Pressures that could result in downward outlook or rating migration would arise if any combination of these factors were to result in leverage of over 6x and/or result in EBIT/Interest coverage approaching 1x. Factors that could contribute to an improved rating outlook and eventual rating upgrades include: (a) further diversification of Plastech's revenue base which results in stabilized or improved operating margins; (b) stabilized commodity prices; a positive operating impact from negotiations with JCI on the fulfillment purchase requirements; and, (c) additional new business awards with solid margins sufficient to offset OEM pricedowns. Consideration for an improved rating outlook or upward rating migration would arise if any combination of these factors were to reduce leverage consistently under 4x or increase EBIT/interest coverage consistently above 2x Plastech Engineered Products , headquartered in Dearborn, Michigan, is a designer and manufacturer of primarily plastic automotive components and systems for OEM and Tier I customers. These components and systems incorporate injection-molded plastic parts, blow-molded plastic parts, and a small percentage of stamped metal components. They are used for interior, exterior and under-the-hood applications. Annual revenues approximate $1 billion. QUAKER FABRIC: Posts $8.4 Million Net Loss in 2006 Third Quarter ---------------------------------------------------------------- Quaker Fabric Corp. filed its financial statements for the third quarter ended Sept. 30, 2006, with the Securities and Exchange Commission on Nov. 9, 2006. For the three months ended Sept. 30, 2006, the Company reported an $8.438 million net loss compared with $7.155 million net loss in the comparable quarter of 2005. Net Sales Net sales for the third quarter of 2006 decreased $16.146 million, or 34.8%, to $30.311 million from $46.457 million in the third quarter of 2005. Net fabric sales within the United States decreased 31.6%, to $24.5 million in the third quarter of 2006 from $35.8 million in the third quarter of 2005, as a result of continued competition from leather, microdenier faux suede, and other furniture coverings being imported into the U.S. in roll and "kit" form, primarily from low labor cost countries in Asia. Net foreign sales of fabric decreased 15.6%, to $5.3 million in the third quarter of 2006 from $6.3 million in the third quarter of 2005. This decrease in foreign sales was due primarily to lower sales in Canada. Canadian furniture manufacturers sell furniture into both the United States and Canadian markets where strong competition from imported faux suede fabrics and leather continued during the third quarter of 2006 and contributed to a more difficult competitive environment. Sales to the Middle East were also down due to unrest in the area. Net yarn sales decreased to $500,000 in the third quarter of 2006 from $4.4 million in the third quarter of 2005, with the decrease in the third quarter of 2006 principally due to lower craft yarn sales to a single customer. Sales to this customer accounted for 0.0% of third quarter 2006 and 70.2% of third quarter 2005 yarn sales. The gross volume of fabric sold decreased 32.8%, to 4.7 million yards in the third quarter of 2006 from 7.1 million yards in the third quarter of 2005. The weighted average gross sales price per yard increased 4.8%, to $6.33 in the third quarter of 2006 from $6.04 in the third quarter of 2005, as a result of product mix changes. The Company sold 17.4% fewer yards of middle to better-end fabrics and 56.5% fewer yards of promotional-end fabrics in the third quarter of 2006 than in the third quarter of 2005. The average gross sales price per yard of middle to better-end fabrics decreased by 1.8%, to $7.16 in the third quarter of 2006 from $7.29 in the third quarter of 2005. The average gross sales price per yard of promotional-end fabrics decreased by 4.9%, to $3.92 in the third quarter of 2006 from $4.12 in the third quarter of 2005. Gross Margin The gross margin percentage for the third quarter of 2006 decreased to 6.6%, from 13.1% for the third quarter of 2005. Sales declined by approximately 35% and fixed costs decreased by 16% resulting in higher fixed costs per unit and a decline of 520 basis points. Higher variable manufacturing costs contributed approximately 40 basis points to the margin decline and higher return and allowance charges contributed 90 basis points. Balance Sheet At Sept. 30, 2006, the Company's balance sheet showed $171.011 million in total assets, $54.344 million in total liabilities, and $116.667 million in total stockholders' equity. Full-text copies of the Company's third quarter financials are available for free at http://ResearchArchives.com/t/s?154b Going Concern Doubt As reported in the Troubled Company Reporter on April 12, 2006, auditors at PricewaterhouseCoopers LLP in Seattle, Washington, raised substantial doubt about Quaker Fabric Corporation's ability to continue as a going concern after auditing the company's Dec. 31, 2005 and Jan. 1, 2005 consolidated financial statements and its internal control over financial reporting as of Dec. 31, 2005. PwC pointed to the Company's recurring losses from operations, certain debt covenant defaults, and operating performance decline. About Quaker Fabric Based in Fall River, Massachusetts, Quaker Fabric Corporation (NASDAQ: QFAB) -- http://www.quakerfabric.com/-- manufactures woven upholstery fabrics for furniture markets in the United States and abroad, and produces Jacquard upholstery fabric. RADIOLOGIX INC: Primedex Deal Cues S&P's Ratings Withdrawal ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B-' rating on Radiologix Inc. after the completion of its acquisition by Primedex Health Systems Inc. The 'CCC+' rating on Radiologix's senior unsecured debt was also withdrawn, as this debt will be refinanced by the acquirer. Ratings List: * Radiologix Inc. -- Corporate Credit Rating, from NR to 'B-'/Negative -- Senior Unsecured, from NR to CCC+ READER'S DIGEST: Moody's Expands Scope of Ratings Review -------------------------------------------------------- Moody's Investors Service is expanding the scope of its review for downgrade of The Reader's Digest Association, Inc.'s after the company's report that Ripplewood Holdings LLC will take the company private for approximately $2.4 billion. Moody's originally placed Reader's Digest's Ba1 Corporate Family Rating and Ba2 senior unsecured note rating on review for downgrade on Sept. 6, 2006. Ratings Remaining On Review for Possible Downgrade: * Issuer: Reader's Digest Association, Inc. -- Corporate Family Rating, currently Ba1 -- Probability of Default Rating, currently Ba1 -- Senior Unsecured Regular Bond/Debenture, currently Ba2, LGD5, 82% Moody's will evaluate Ripplewood's proposed financing structure including the amount of any equity contribution, strategies to grow revenues and enhance operating margins, and plans for asset sales, but believe the cash purchase price will likely result in a significant increase in leverage and a multi-notch downgrade of the CFR. Reader's Digest's existing $300 million notes indenture has a change of control provision that allows bondholders to put the notes back to the company at 101% of par. Moody's expects the notes and the existing $500 million credit agreement will be retired if the acquisition closes at which point the rating on the notes would be withdrawn. As part of the review, Moody's will continue to evaluate the company's plans to stabilize and reverse the significant operating performance decline in the consumer business segments, and improve working capital management in support of new product introductions and the international expansion strategy. Moody's believes negative pressure remains on the rating if a leveraged acquisition of the company does not close. The Reader's Digest Association, Inc, headquartered in Pleasantville, New York, is a global publisher and direct marketer of products including magazines, books, recorded music collections and home videos. Products include Readers Digest magazine, which is published in 50 editions and 21 languages. Annual revenues approximate $2.4 billion. READER'S DIGEST: Ripplewood Offer Cues S&P's Negative CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services reported that the 'BB' ratings on Reader's Digest Association Inc. remain on CreditWatch with negative implications, where they were placed on Aug. 15, 2006. The company entered into a definitive agreement to be acquired by an investor group led by Ripplewood Holdings LLC for $2.4 billion, including the assumption of debt. "The transaction is expected to significantly increase debt leverage, which is likely to result in a ratings downgrade," said Standard & Poor's credit analyst Hal F. Diamond. Pleasantville, New York-based Reader's Digest is a leading direct marketer of books. Total debt outstanding at Sept. 30, 2006, was $776 million. SAINT VINCENTS: Court OKs Caronia as Estimation Advisor ------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York, its debtor- affiliates, the Official Committee of Tort Claimants, and the Official Committee of Unsecured Creditors agree that in order to negotiate a consensual plan of reorganization and to determine that Plan's feasibility, it is necessary to estimate medical malpractice claims filed prior to the Oct. 31, 2006, bar date. In a protocol approved by the U.S. Bankruptcy Court for the Southern District of New York, the parties agreed to retain Caronia Corporation to assist in the Medical Malpractice Estimation and the protection of discovery material, including medical records, requests for admissions, and other transactions produced in connection with the Estimation. A full-text copy of the Protocol and Protective Order is available for free at http://researcharchives.com/t/s?155a Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 37 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAN DIEGO CITY: Settles With SEC Regarding Municipal Bonds ---------------------------------------------------------- The City of San Diego, Calif. -- http://www.sandiego.gov/-- settled with the Securities and Exchange Commission regarding the fraud charges in connection with the offer and sale of over $260 million in municipal bonds in 2002 and 2003. The SEC instituted cease-and-desist proceedings against the City. The City settled the case without admitting or denying the Commission's findings. At the time of the municipal bonds' offerings, City officials knew that the City faced severe difficulty funding its future pension and health care obligations unless: -- new revenues were obtained, -- pension and health care benefits were reduced, or -- City services were cut. The City's looming financial crisis resulted from: -- the City's intentional under-funding of its pension plan since fiscal year 1997; -- the City's granting of additional retroactive pension benefits since fiscal year 1980; -- the City's use of the pension fund's assets to pay for the additional pension and retiree health care benefits since fiscal year 1980; and -- the pension plan's less than anticipated earnings on its investments in fiscal years 2001 through 2003. Despite the magnitude of the problems the City faced in funding its future pension and retiree health care obligations, the City conducted five separate municipal bond offerings, raising more than $260 million, without disclosing these problems to the investing public. In each of these offerings, the City prepared disclosure documents that are used with municipal securities offerings -- preliminary and official statements -- and made presentations to rating agencies. In addition, in 2003 it prepared and filed information pursuant to continuing disclosure agreements under Exchange Act Rule 15c2-12 with respect to $2.29 billion in outstanding City bonds and notes. Although the City provided some disclosure about its pension and retiree health care obligations, it did not reveal the gravity of the City's financial problems: -- The City's unfunded liability to its pension plan was expected to dramatically increase, growing from $284 million at the beginning of fiscal year 2002 and $720 million at the beginning of fiscal year 2003 to an estimated $2 billion at the beginning of fiscal year 2009; -- The City's total under-funding of the pension plan was also expected to increase dramatically, growing tenfold from $39.2 million in fiscal year 2002 to an estimated $320 million to $446 million in fiscal year 2009; -- The City's projected annual pension contribution would continue to grow, from $51 million in 2002 to $248 million in 2009; and -- The estimated present value of the City's liability for retiree health benefits was $1.1 billion. The City's enormous pension and retiree health liabilities and failure to disclose those liabilities placed the City in serious financial straits. When the City eventually disclosed its pension and retiree health care issues in fiscal year 2004, the credit rating agencies lowered the City's credit rating. The City also has not obtained audited financial statements for fiscal years 2003, 2004, and 2005. Consequently, the City violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5, which prohibit the making of any untrue statement of material fact or omitting to state a material fact in the offer or sale of securities. The City's Remedial Efforts Since 2005, the City has implemented several remedial measures with a view to detect and prevent securities violations. Specifically, the City has terminated certain officials in the City Manager's and Auditor and Comptroller's offices or has allowed them to resign. The City has filled these positions with qualified employees. The City has hired a full time municipal securities attorney who is responsible for coordinating the City's public disclosure and who has conducted continuing education for the City's deputy attorneys on the City's disclosure requirements. The Mayor resigned and has been replaced by a former City police chief. In January 2006, pursuant to a public referendum, the City changed from a strong city manager form of government to a strong mayor form of government. The City has hired new outside professionals including new auditors for its fiscal year audits. The City also hired individuals not affiliated with the City to act as its Audit Committee and charged the Committee with investigating the City's prior disclosure deficiencies and making recommendations to prevent future disclosure failures. The City has also hired new disclosure counsel for all of its future offerings, who will have better and more continuous knowledge on the City's financial affairs. This disclosure counsel has conducted seminars for City employees on their responsibilities under the federal securities laws. The City has also enacted ordinances designed to change the City's disclosure environment. First, the City created a Disclosure Practices Working Group comprised of senior City officials from across city government. The Working Group is charged with reviewing the form and content of all the City's documents and materials prepared, issued, or distributed in connection with the City's disclosure obligations relating to securities issued by the City or its related entities; and conducting a full review of the City's disclosure practices and to recommend future controls and procedures. Second, the Mayor and City Attorney must now personally certify to the City Council the accuracy of the City's official statements. Third, the City Auditor must annually evaluate the City's internal financial controls and report the results to the City Council. A full-text copy of the SEC order is available for free at http://ResearchArchives.com/t/s?153c A full-text copy of Mayor Jerry Sanders's comments on the City's settlement with the SEC is available for free at http://ResearchArchives.com/t/s?153d SCOTTISH RE: Moody's Hold Senior Unsecured Debt Rating at Ba3 ------------------------------------------------------------- Moody's Investors Service commented that after the recent earnings release issued by Scottish Re Group Limited, Moody's continues to review the company's ratings with direction uncertain. The Ba3 senior unsecured debt is affirmed. The rating agency added that it anticipates that it will take rating action on Scottish Re over the very near term, likely by mid next week, by which time it expects to have more information on the key driver of the outcome of the review process, which is the probability that Scottish Re will secure an equity infusion or sign a definitive agreement related to the sale of the company. According to the rating agency, the direction of the review indicates the possibility that Scottish Re's ratings could be downgraded, upgraded or confirmed depending on future developments at Scottish Re. The direction of the ratings review impacts the company's debt ratings and the Baa3 insurance financial strength ratings of the company's core insurance subsidiaries, Scottish Annuity & Life Insurance Company Ltd. and Scottish Re, Inc. If an equity investment in or sale of the company were completed, the ultimate ratings of the company would depend upon the structure of the deal, including an analysis of implicit and explicit support provided. Moody's added that a limited equity investment in Scottish Re would have less upward ratings pressure than an outright purchase of the company, with ongoing explicit or implicit support. "While the sales process has taken longer than anticipated, we expect there to be more definitive information -- either positive or negative -- on the likely outcome of that process by next week, at which point we would intend to address the status of our rating review," said Scott Robinson, Vice President & Senior Credit Officer at Moody's. "Given the extremely tight liquidity situation at the company, positive momentum in the sales process is necessary for a favorable resolution of the rating review. Any further delay in the process would likely result in further ratings downgrades," Robinson added. The rating agency highlighted the risk that certain items may need to be resolved prior to a sale. Moody's also noted that a potential investor could help expedite the resolution of these items. For example, if necessary, an investor could help Scottish Re eliminate its credit facility by helping to secure alternate letters of credit. Eliminating the credit facility is important since the agreement limits the movement of funds from SALIC to the ultimate holding company. Convertible note holders have the right to put $115 million of notes to Scottish Re at par on Dec. 6th, and as a consequence, the company needs to move funds to the holding company prior to that time to cover the potential call on liquidity. Notwithstanding the issues with the credit facility, Moody's emphasized that the sales process is the key rating issue as it is likely that in conjunction with any significant investment in Scottish Re, an investor would provide some form of short-term collateral and/or liquidity support to the company. "Failure to raise outside capital would have an immediate and adverse impact on the ratings of Scottish Re. While Scottish could potentially eliminate the bank facility on its own, we believe that the company would be significantly challenged in a runoff scenario," Robinson added. On Sept. 5, 2006, Moody's changed the direction of the review on the ratings of Scottish Re and the Baa3 IFS ratings of SALIC and Scottish Re, Inc. to direction uncertain from review for possible downgrade. Scottish Re Group Limited is a Cayman Islands company with principal executive offices located in Bermuda; it also has significant operations in Charlotte NC, Denver CO and Windsor England. On Sept. 30, 2006, Scottish Re reported assets of $13.8 billion and shareholders' equity of $1.3 billion. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to repay punctually senior policyholder claims and obligations. SEA CONTAINERS: Wants to Employ Ordinary Course Professionals ------------------------------------------------------------- Sea Containers, Ltd. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to continue to utilize the services of ordinary course professionals postpetition without the necessity of filing formal applications for the employment and compensation of each OCP pursuant to Sections 327, 328, 329, 330, and 331 of the Bankruptcy Code. The Debtors regularly utilize the services of various attorneys, accountants, financial advisors, and other professionals in the ordinary course of their business operations. The OCPs provide services to the Debtors in a variety of discrete matters unrelated to the Debtors' Chapter 11 cases, including, but not limited to, general litigation, employment and labor law, intellectual property law, general corporate and securities law, accounting, auditing, financial advisory, and tax matters. Other OCPs have been, or may be, utilized by the Debtors from time to time. A list of the Debtors' OCPs is available for free at: http://researcharchives.com/t/s?146b Due to the number and geographic diversity of the OCPs that they utilized, the Debtors note that it would be costly and administratively burdensome to both the Debtors and the Court to ask each OCP to apply separately for approval of its employment and compensation. The Debtors want to employ the OCPs on terms substantially similar to those in effect before the Petition Date, but subject to certain terms and conditions. The Debtors represent that: (a) they wish to employ the OCPs as necessary for the day-to- day operations of the Debtors' businesses; (b) the fees and expenses incurred by the OCPs will be kept to a minimum; and (c) the OCPs will not perform substantial services relating to bankruptcy matters without Court permission. The Debtors propose to implement uniform procedures for the retention and compensation of OCPs: (1) After an OCP submits an affidavit and a monthly invoice, the OCP will be allowed to offset the invoiced amount against any unapplied prepetition retainer, and if there are unsatisfied postpetition fees and expenses related to that invoice, the Debtors will be allowed to pay 100% of the postpetition fees and expenses incurred; provided that the fees do not exceed: * GBP40,000 per month on average over the previous rolling three-month period to the extent that the OCP has historically been paid in pounds sterling, or * $40,000 per month on average over the previous rolling three-month period to the extent that the OCP has historically been paid in U.S. dollars. (2) If the fees incurred and invoiced exceed the monthly cap, the OCP must seek Court approval of the fees; provided that the OCP will be entitled to a net interim offset and payment of up to $40,000 or GBP40,000. (3) Each OCP will file with the Court and serve on the Office of the United States Trustee, counsel to the Debtors, and counsel to the Official Committee, an Affidavit within 30 days of commencing postpetition services to the Debtors. The OCP Affidavit will include information like services to be rendered, the hourly rates to be charged by the OCP, and a disclosure of its disinterestedness. (4) The Notice Parties have 10 days to object to the OCP Affidavit. Objections not resolved will be brought before the Court. (5) Beginning with the fiscal quarter ending December 31, 2006, within 15 days following the end of each fiscal quarter in which the Debtors' Chapter 11 cases are pending, the Debtors will file with the Court and serve on the Notice Parties a statement containing: -- the name of the OCP, -- the total amounts paid during the previous quarter, and -- a general description of the services rendered. (6) The Debtors reserve the right to supplement the OCP List. The Debtors note that while some of the OCPs may wish to continue to represent them on an ongoing basis, others may be unwilling to do so if they are forced to apply for payment of fees and expenses through the formal application process. If the knowledge and expertise of any OCP with respect to the particular areas and matters for which it was responsible before the Petition Date are lost, the Debtors say they will undoubtedly incur additional and unnecessary expenses as other professionals without that background and expertise will have to be retained to assist the Debtors with their business operations. The Debtors believe the OCP Procedures will allow them to avoid any disruption in the professional services required in the day- to-day operation of their businesses. As the OCPs will provide professional services in connection with the Debtors' ongoing business operations, the Debtors do not believe the OCPs are "professionals," as that term is used in Section 327 of the Bankruptcy Code, whose retention must be approved by the Court. Nevertheless, the Debtors seek the Court's approval to avoid any subsequent controversy regarding their employment and compensation of the OCPs during the pendency of their Chapter 11 cases. 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. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Wants to Set Up Interim Compensation Procedures --------------------------------------------------------------- Sea Containers, Ltd. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to establish uniform procedures for: (i) the allowance of interim compensation and reimbursement of expenses of professionals retained by court order; and (ii) the reimbursement of expenses incurred by the members of the Official Committee of Unsecured Creditors. The Debtors have filed or intend to file applications to employ: (a) Sidley Austin LLP as general reorganization and bankruptcy counsel, (b) Young Conaway Stargatt & Taylor, LLP, as Delaware counsel, (c) PricewaterhouseCoopers LLP as financial advisor, (d) Kirkland & Ellis LLP as special conflicts litigation counsel, (e) Carter Ledyard & Milburn LLP as special counsel for U.S. corporate matters, and (f) Richards Butler LLP as special counsel for foreign legal matters. The Debtors expect to hire other estate professionals in their Chapter 11 cases. The Creditors' Committee will likely seek to retain its own professionals as well. The Debtors want to streamline the professional compensation process and enable the Court and all parties-in-interest to more effectively monitor the fees incurred by the Professionals. The procedures will also reduce the financial burdens imposed on the Professionals while awaiting final approval of their fees and expenses. Specifically, the Debtors propose that: (1) No earlier than the 25th day of each month following the month for which compensation is sought, each Professional seeking interim allowance of its fees and expenses may file an application and serve a copy of that application to: (a) the Office of the United States Trustee for the District of Delaware J. Caleb Boggs Federal Building, Rome 2207 844 N. King Street Wilmington, DE 19801 Attn: David Buchbinder, Esq. (b) the Debtors Sea Containers, Ltd. c/o Sea Containers Services Ltd. 20 Upper Ground London SE1 9PF, United Kingdom Attn: Edwin S. Hetherington, Esq. (c) counsel to the Debtors Sidley Austin LLP One South Dearborn Chicago, IL 60603 Attn: Larry J. Nyhan, Esq., and Brian J. Lohan, Esq. -- and -- Young Conaway Stargatt & Taylor, LLP The Brandywine Building 1000 West Street Wilmington, DE 19801 Attn: Robert S. Brady, Esq. (d) counsel to the official committee (2) Each Notice Party will have 20 days to object to a Monthly Fee Application. If there are no objections, the Debtors will be allowed to pay 80% of the Professional's fees and 100% of the expenses requested. If objections are filed, the Debtors will be allowed to pay 80% of the undisputed fees and 100% of the undisputed expenses. The first Monthly Fee Application will cover the period from the Petition Date through and including October 31, 2006. (3) The parties are encouraged to resolve timely objections filed. If unsuccessful, the parties may seek a Court ruling on the Objection. The Professionals may seek payment of the difference, if any, between the Maximum Interim Payment and the Actual Interim Payment made, or forego payment of the Incremental Amount until the next quarter fee application request hearing or final fee application hearing, at which time the Court will consider and rule on the Objection, if requested by the parties. (4) Beginning with the approximate three-month period from the Petition Date and ending on December 31, 2006, and at the end of each three-month period thereafter, each Professional must file with the Court and serve on the Notice Parties a notice requesting interim Court approval and allowance of compensation for services rendered and reimbursement of expenses sought in the Monthly Fee Applications filed during that period. Each Quarterly Fee Application Request will be filed and served by no later than 45 days after the end of the applicable Interim Fee Period. The first Interim Fee Application Deadline will be February 14, 2007. (5) The Debtors will ask the Court to schedule a hearing on Quarterly Fee Application Requests at least once every six months or at other intervals as the Court deems appropriate. (6) The pendency of an Objection will not disqualify a Professional from future payment. (7) All fees and expenses paid to Professionals in accordance with the Compensation Procedures are subject to disgorgement until final allowance by the Court. The Debtors further ask the Court to allow each Committee Member to submit statements of expenses and supporting vouchers to counsel to the applicable Committee, who will collect and submit those requests for reimbursement in accordance with the Compensation Procedures as if that Committee Member were a Professional. 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. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SKYEPHARMA PLC: Abbott Acquires Licensee Kos Pharmaceuticals ------------------------------------------------------------ SkyePharma PLC's exclusive licensee to jointly develop Flutiform(TM), Kos Pharmaceuticals, Inc., was acquired by Abbott. Flutiform(TM) is the Company's novel combination product for asthma and chronic obstructive pulmonary disease. The Company also disclosed that Abbott in their statement said, "Flutiform(TM), in-licensed from SkyePharma, is currently in late- stage development for adult and adolescent asthma and will provide an expanded presence for Abbott in the $10 billion asthma market, in addition to Kos' currently marketed asthma product." Frank Condella, chief executive officer, said, "We are encouraged by Abbott's statement regarding Flutiform(TM). This transaction is a positive development for our lead product. Abbott brings additional size and marketing strength in the primary care area which complements the specific expertise Kos has in inhalation therapies." Following discussions with the FDA on the Phase II trial results, the Company further disclosed that the Phase III trial of Flutiform(TM) started on schedule in February 2006 and it believes that Flutiform(TM) should reach the U.S. market in 2009. Headquartered in London, SkyePharma PLC (Nasdaq: SKYE; LSE: SKP) -- http://www.skyepharma.com/-- develops pharmaceutical products benefiting from world-leading drug delivery technologies that provide easier-to-use and more effective drug formulations. There are now twelve approved products incorporating SkyePharma's technologies in the areas of oral, injectable, inhaled and topical delivery, supported by advanced solubilisation capabilities. Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 1, 2006, PricewaterhouseCoopers LLP in London raised substantial doubt about Skyepharma PLC's ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the uncertainty as to when Skyepharma's certain strategic initiatives may be concluded and their effect on the company's working capital requirements. SMART PRINTERS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Smart Printers, LP dba Westbridge Printing, Victory Press, Sandford Press and Premier Graphics 3100 Premier Drive Suite 232 Irving, TX 75063 Bankruptcy Case No.: 06-44084 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Westbridge Printing Services 06-42723 Type of Business: Smart Printers, LP, is a full service printing company. Chapter 11 Petition Date: Nov. 16, 2006 Court: U.S. Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Russell F. Nelms Debtor's Counsel: Edwin Paul Keiffer Hance, Scarborough, Wright et. al. 1401 Elm St., Suite 4750 Dallas, TX 75202 Tel: (214) 651-6517 Fax: (214) 744-2615 Total Assets: $1,000,001 to $10 Million Total Debts: $500,001 to $1 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Blumberg & Bagley, LP Trade Debt/Legal Fees $52,285 1119 W. Randoll Mills Rd., #101 Arlington, TX 76012 Craig Martin Commissions $2,000 3809 Seminole Circle Carrollton, TX 75007 Doug Vrazo Commissions $2,000 3908 Wedgway Dr. Fort Worth, TX 76133 Bill Miller Commissions $2,000 3509 Wayland Drive Fort Worth, TX 76133-3130 Dennis Heath Commissions $2,000 1209 Medford Rd. Bedford, TX 76021 John Wiggins Commissions $2,000 5528 Crosscreek Ln #2144 Fort Worth, TX 76109 United Graphics Trade Debt, Disputed and Unknown 1130 Avenue H East Subject to Setoff Arlington, TX 76011 United Graphics Property Lease, Disputed Unknown 1130 Avenue H East and Subject to Setoff Arlington, TX 76011 SOUNDVIEW HOME: DBRS Junks $4.2 Million Class M-15 Certificates --------------------------------------------------------------- Dominion Bond Rating Service downgraded Classes M-14 & M-15 of Soundview Home Loan Trust 2005-B Asset-Backed Certificates, Series 2005-B: * $9,972,000 Asset-Backed Certificates, Series 2005-B, Class M-14 to B (low) from BB (low) * $4,202,103 Asset-Backed Certificates, Series 2005-B, Class M-15 to C from B (high) The mortgage loans consist of 100% of fixed-rate second lien mortgage loans, which are subordinate to senior lien mortgage loans on the respective properties. The mortgage loans were primarily originated or acquired by Long Beach Mortgage Company, Countrywide Home Loans, Inc, and New Century Mortgage Corporation. The deal is 12 months seasoned with a remaining pool factor of 54.5% as of the October 2006 distribution. STRUCTURED ASSET: DBRS Junks $5.5 Million Class B4 Certificates --------------------------------------------------------------- Dominion Bond Rating Service downgraded Classes B3 & B4 of Structured Asset Securities Corporation 2005-S5 Mortgage Pass-Through Certificates, Series 2005-S5: * $12,085,000 Mortgage Pass-Through Certificates, Series 2005-S5, Class B3 to B (low) from BB * $ 5,522,315 Mortgage Pass-Through Certificates, Series 2005-S5, Class B4 to C from BB (low) The mortgage loans consist of 100% of fixed-rate second lien mortgage loans, which are subordinate to senior lien mortgage loans on the respective properties. The mortgage loans were primarily originated or acquired by Aurora Loan Services LLC, Option One Mortgage Corporation, Fremont Investment & Loan and First NLC Financial Services, Inc. The deal is 13 months seasoned with a remaining pool factor of 62.8% as of the October 2006 distribution. TEC FOODS: Bank of New York Balks at Second Amended Combined Plan ----------------------------------------------------------------- The Bank of New York, as servicing agent for Wells Fargo Bank N.A. and as indenture trustee, objects to the treatment of Wells Fargo's all-assets first priority secured claim in TEC Foods Inc.'s second amended combined plan of reorganization and disclosure statement. BONY argues that the Debtor's Amended Combined Plan is not confirmable because it allows for payment of creditors junior in priority to Wells Fargo before Wells Fargo is paid in full. Additionally, BONY argues that the Debtor's Amended Combined Plan does not provide for adequate means of implementation as required by Section 1123(a)(5) of the Bankruptcy Code because it does not adequately explain the sale-leaseback transactions that it states will aid in the funding of the Plan. BONY notes that Wells Fargo has a security interest in the collateral that will be used in the sale-leaseback transactions and the Plan does not provide, among other things, for replacement liens or payment of the full amount of Wells Fargo's Secured Claim in exchange for sale of Wells Fargo's collateral. BONY further argues that the Debtor's Amended Combined Plan improperly includes in the release that the "Debtor, its officers, directors, shareholders [and] its affiliates" are released from "(i) any actions taken or not taken during the course of the Bankruptcy Case; (ii) the Plan; (iii) the authorization for or the formulation, negotiation, confirmation, or consummation of the Plan; (iv) distributions, payments or transfers made under the Plan; or (v) acts performed pursuant to the Plan." Wells Fargo Claim Resolution BONY and the Debtor have negotiated a resolution for the treatment of Wells Fargo's claim, a full-text copy of which is available for free at http://researcharchives.com/t/s?1541 In the event the Debtor amends the Plan to include the Negotiated Language, and the Debtor does not otherwise include additional language in the Plan that would in any way change or render invalid the Negotiated Language, BONY says it would withdraw its objection to the Plan as amended. BONY also submits that when the Debtor includes the Negotiated Language in the Plan and BONY withdraws its Plan Objection, these actions constitute cause under Rule 3018(a) of the Federal Rules of Bankruptcy Procedure so that BONY's vote to reject the Plan would be changed to a vote to accept the Plan without further action by BONY or the Debtor. Moreover, if the Negotiated Language is not for any reason included into an amended plan, BONY reserves its rights to amend or supplement its Objection and to file additional objections to the Plan or a subsequently amended plan. Treatment of Wells Fargo's Claims Under the Second Amended Combined Plan The Debtor's Second Amended Combined Plan provides that the $5,092,784 secured claim of Wells Fargo will be paid in full pursuant to the existing contractual and secured note terms through fiscal year 2007. Through sale-leaseback transactions for seven of the Debtor's stores, the Debtor will pay Wells Fargo $3,749,299 in fiscal year 2007. The balance owed to Wells Fargo after the payment will be approximately $745,075. The secured note obligation will be re-amortized over 13 years from the effective date of the Plan at 10.09% and paid in cash. Specifically, the Plan proposes to pay Wells Fargo $8,592 per month. The note obligations owed by the Debtor to Wells Fargo will continue to be secured by liens in all of the Debtor's assets. The Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit has given preliminary approval on the Debtor's Amended Combined Plan reflecting resolution of outstanding allowed claims. The Debtor's original combined reorganization plan and disclosure statement, as published in the Troubled Company Reporter on Oct. 9, 2006, was denied Court-approval because of some terms requiring the Debtor's correction or clarification. The Court noted, among others, that the Plan must: 1. state what the projected monthly payments will be to claims under Classes 1, 2, and 5 over the life of the Plan; and 2. describe any potential claims, including Chapter 5 causes of action, and their estimated value, and include those in the litigation analysis. Gina M. Capua, Esq., and Sheryl L. Toby, Esq., at Dykema Gossett PLLC represent the Bank of New York in this case. About TEC Foods Headquartered in Pontiac, Michigan, TEC Foods, Inc., is a Taco Bell franchisee. The company filed for chapter 11 protection on Nov. 3, 2005 (Bankr. E.D. Mich. Case No. 05-89154). Paula A. Hall, Esq., at Butzel Long, P.C., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for protection form its creditors, it estimated assets and debts between $10 million and $50 million. TEC FOODS: Can Use Wells Fargo Cash Collateral Until December 31 ---------------------------------------------------------------- TEC Foods Inc. obtained authority from the Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit to use cash collateral securing repayment of its obligations to Wells Fargo Bank NA until Dec. 31, 2006. The Debtor's last cash collateral access expired on Oct. 31, 2006. The Debtors will use the fund according to a budget, which is available for free at http://researcharchives.com/t/s?1548 Wells Fargo, as indenture trustee, holds secured claims totaling $5,092,784. Under the Debtor's second amended combined plan of reorganization and disclosure statement, which was preliminarily approved by the Court in October 2006, provides that Wells Fargo's claim will be paid in full pursuant to the existing contractual and secured note terms through fiscal year 2007. Through sale-leaseback transactions for seven of the Debtor's stores, the Debtor will pay Wells Fargo $3,749,299 in fiscal year 2007. The balance owed to Wells Fargo after the payment will be approximately $745,075. The secured note obligation will be re-amortized over 13 years from the effective date of the Plan at 10.09% and paid in cash. Specifically, the Plan proposes to pay Wells Fargo $8,592 per month. The note obligations owed by the Debtor to Wells Fargo will continue to be secured by liens in all of the Debtor's assets. Headquartered in Pontiac, Michigan, TEC Foods, Inc., is a Taco Bell franchisee. The company filed for chapter 11 protection on Nov. 3, 2005 (Bankr. E.D. Mich. Case No. 05-89154). Paula A. Hall, Esq., at Butzel Long, P.C., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for protection form its creditors, it estimated assets and debts between $10 million and $50 million. TORONTO-DOMINION: S&P Reviews Ratings With Negative Implications ---------------------------------------------------------------- Standard & Poor's Ratings Services placed The Toronto-Dominion Bank's CDN$63,866,000 portfolio credit linked notes' rating on CreditWatch with negative implications. Standard & Poor's also placed 25 other U.S. synthetic CDO tranche ratings on CreditWatch with negative implications. Concurrently, one tranche rating is placed on CreditWatch with positive implications. The CreditWatch negative placements reflect negative rating migration in the transactions' respective portfolios and synthetic rated overcollateralization ratios that fell below 100% during the month-end run. The rating placed on CreditWatch positive had an SROC ratio that was above 100% at a higher rating level during the month-end run. Ratings List: Aphex Capital MOTIVE Series 2004-C Rating ------ Class To From ----- -- ---- A AA/Watch Neg AA Arlo III Ltd. Series 2005 (Green Park) Rating ------ Class To From ----- -- ---- Notes AA/Watch Neg AA Barton Springs CDO SPC Series 2005-2 SEG Rating ------ Class To From ----- -- ---- B-1 A+/Watch Neg A+ B-2 A+/Watch Neg A+ Blue Point CDO SPC Series 2005-1 Rating ------ Class To From ----- -- ---- A-1 AA+/Watch Neg AA+ A-2 AA+/Watch Neg AA+ Blue Point CDO SPC Series 2005-2 Rating ------ Class To From ----- -- ---- A AA+/Watch Neg AA+ Credit Linked Notes Ltd. 2005-1 Rating ------ Class To From ----- -- ---- Notes AA-/Watch Neg AA- Jefferson Valley CDO SPC Series 2006-1 Rating ------ Class To From ----- -- ---- A AA-/Watch Neg AA- B-1 A-/Watch Neg A- B-2 A-/Watch Neg A- Morgan Stanley ACES SPC Series 2005-15 Rating ------ Class To From ----- -- ---- III A A/Watch Neg A III B A/Watch Neg A Morgan Stanley ACES SPC Series 2005-16 Rating ------ Class To From ----- -- ---- Ser2005-16 A-/Watch Neg A- Morgan Stanley ACES SPC Series 2006-3 Rating ------ Class To From ----- -- ---- IA AA/Watch Neg AA IB AA/Watch Neg AA IC AA/Watch Neg AA Morgan Stanley ACES SPC Series 2006-5 Rating ------ Class To From ----- -- ---- IA AAA/Watch Neg AAA Morgan Stanley ACES SPC Series 2006-7 Rating ------ Class To From ----- -- ---- IIA A-/Watch Neg A- Morgan Stanley ACES SPC Series 2006-9 Rating ------ Class To From ----- -- ---- II A/Watch Neg A Morgan Stanley ACES SPC Series 2006-12 Rating ------ Class To From ----- -- ---- I A+/Watch Neg A+ Morgan Stanley Managed ACES SPC Series 2006-4 Rating ------ Class To From ----- -- ---- II AA/Watch Pos AA Portfolio Credit Default Swap (Ref. No. IRP5783424) Rating ------ Class To From ----- -- ---- Cr Link BBB-/Watch Neg BBB- Prelude Europe CDO Ltd. Series 2006-2 Rating ------ Class To From ----- -- ---- Notes AA/Watch Neg AA Series 2006-1 Segregated Portfolio of Greystone Rating ------ Class To From ----- -- ---- B A/Watch Neg A C BBB/Watch Neg BBB STEERS Credit Linked Trust Minoa Tranche Series 2006-1 Rating ------ Class To From ----- -- ---- Trust Cert A+/Watch Neg A+ STEERS Randolph Gate CDO Trust Series 2006-1 Rating ------ Class To From ----- -- ---- Trust unit AA/Watch Neg AA Toronto-Dominion Bank (The) CDN$63,866,000 portfolio credit linked notes Rating ------ Class To From ----- -- ---- Prt Cr Lnk BB+/Watch Neg BB+ Toronto-Dominion Bank (The) CDN$263,860,000 Portfolio Credit Linked Notes Rating ------ Class To From ----- -- ---- PtflCdtLk BBB/Watch Neg BBB Tribune Ltd. Series 26 Rating ------ Class To From ----- -- ----- Aspen-B2 A-/Watch Neg A- Walton SCDO 2003-1 Rating ------ Class To From ----- -- ---- A-2L AA/Watch Neg AA A-2F AA/Watch Neg AA B-1F BB+/Watch Neg BB+ UNITED CUTLERY: Committee Hires Woolf McClane as Local Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Tennessee allowed the Official Committee of Unsecured Creditors in United Cutlery Corp. and its debtor-affiliates' chapter 11 cases, to retain Gregory C. Logue, Esq., and the firm Woolf, McClane, Bright, Allen & Carpenter, PLLC, as its local counsel. Woolf McClane will assist John Weider, Esq., and Ingrid Palermo, Esq., at Harter Secrest & Emery, LLP, the Committee's lead counsel. Mr. Logue will charge $225 per hour for his services. Mr. Logue discloses other professionals at Woolf McClane bill: Designation Hourly Rate ----------- ----------- Associates $160 Paralegals $80 Mr. Logue assures the Court that the firm does not hold nor represent any interest adverse to the Debtors or their estates within the meaning in Section 101(14) of the Bankruptcy Code. Headquartered in Sevierville, Tennessee, United Cutlery Corp. -- http://www.unitedcutlery.com/-- manufactures hunting, camping, fishing, military, utility, collectible, and fantasy knives. The Debtors also market fantasy-based swords, weapons and armor under license from movie studios. The Company and two of its affiliates filed for chapter 11 protection on Oct. 2, 2006 (Bankr. E.D. Tenn. Case No. 06-50884). Maurice K. Guinn, Esq., at Gentry, Tipton & McLemore P.C., represents the Debtors. John Weider, Esq., and Ingrid Palermo, Esq., at Harter Secrest & Emery, LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $10 million and $50 million. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 30, 2007. UNITED CUTLERY: Files Schedules of Assets and Liabilities --------------------------------------------------------- United Cutlery Corp. and its debtor-affiliates delivered its Schedules of Assets and Liabilities to the U.S. Bankruptcy Court for the Eastern District of Tennessee disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $150,000 B. Personal Property $9,814,288 C. Property Claimed as Exempt D. Creditors Holding $17,950,969 Secured Claims E. Creditors Holding $108,159 Unsecured Priority Claims F. Creditors Holding $8,302,802 Unsecured Nonpriority Claims ----------- ----------- Total $9,964,288 $26,361,930 Headquartered in Sevierville, Tennessee, United Cutlery Corp. -- http://www.unitedcutlery.com/-- manufactures hunting, camping, fishing, military, utility, collectible, and fantasy knives. The Debtors also market fantasy-based swords, weapons and armor under license from movie studios. The Company and two of its affiliates filed for chapter 11 protection on Oct. 2, 2006 (Bankr. E.D. Tenn. Case No. 06-50884). Maurice K. Guinn, Esq., at Gentry, Tipton & McLemore P.C., represents the Debtors. John Weider, Esq., and Ingrid Palermo, Esq., at Harter Secrest & Emery, LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $10 million and $50 million. The Debtors' exclusive period to file a chapter 11 plan expires on Jan. 30, 2007. UNIVERSITY HEIGHTS: Foundation Wants Bankruptcy Case Dismissed -------------------------------------------------------------- The Marty and Dorothy Silverman Foundation, the largest creditor in University Heights Association, Inc.'s Chapter 11 case, asks the U.S. Bankruptcy Court for the Northern District of New York, to dismiss the Debtor's bankruptcy case, or in the alternative, appoint a chapter 11 Trustee. As reported in the Troubled Company Reporter on March 24, 2006, the Foundation and the Debtor are parties in a litigation titled "Marty and Dorothy Silverman Foundation v. University Heights Association, Inc.," (Case No. 05-603478) in the New York State Supreme Court, New York County. The Foundation says this is the Debtor's second bad faith filing in eight months. The Debtor filed its first chapter 11 petition on Feb. 13, 2006, in an attempt to prevent entry of a judgment against it in an action filed by the Foundation in New York County Supreme Court. The Court dismissed the case on April 14, 2006. On July 7, 2006, the Supreme Court rejected the Debtor's arguments that loans made by the Foundations were "gifts" and ruled that UHA must pay the Foundation $24,862,568.75. On Oct. 11, 2006, the parties submitted an agreed proposed judgment against the Debtor effectuating the New York Order. The very next day, before a judgment had been entered, the Debtor filed a chapter 22 petition. The case is a classic two-party dispute where the bankruptcy statute is being misused to frustrate the creditor's efforts to collect on a debt, the Foundation asserts. No Business to Reorganize The Foundation also contends that the Debtor is a single asset entity that does not operate a business in any traditional sense. The Foundation says that the Debtor is a non-profit corporation whose business consists of owning a piece of real estate in Albany, New York, much of which in turn has been leased by UHA to insider institutions at below market terms. The Foundation claims that these leases generate no free cash flow since the lease revenues are paid in their entirety to the trustee for certain bonds that were issued to construct and renovate buildings for two of the insider institutions -- the Albany Law School and Albany Pharmacy College. The Foundation says the Debtor is, in essence, a conduit or shell through which the insider institutions, whose representatives make up its board, lease property to themselves. The Court will convene a hearing at 10:30 a.m., on Dec. 6, 2006, to consider the Foundation's request. Headquartered in Albany, New York, University Heights Association Inc. -- http://www.universityheights.org/-- is composed of four educational institutions that aim to enhance the economic vitality and quality of life of its immediate community. The company filed for chapter 11 protection on Feb 13, 2006 (Bankr. N.D.N.Y. Case No. 06-10226). Judge Littlefield dismissed the Debtor's chapter 11 case due to bad faith filing. On Oct. 12, 2006, the Debtor filed a chapter 22 petition. Francis J. Smith, Esq., at McNamee, Lochner, Titus & Williams, PC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets and liabilities between $10 million and $50 million. USA COMMERCIAL: Auctioning Assets on December 7 ----------------------------------------------- The Hon. Linda B. Riegle of the U.S. Bankruptcy Court for the District of Nevada has approved the bid procedures governing the sale of substantially all the assets of Debtor USA Capital First Trust Deed Fund, LLC, and certain assets of Debtor USA Commercial Mortgage Company. Pursuant to the bid procedures, an auction for the assets will be held before Judge Riegle at 9:30 a.m., on Dec. 7, 2006, at the U.S Bankruptcy Court in Nevada, Foley Federal Building, 300 Las Vegas Boulevard South, Courtroom 1 in Las Vegas, Nevada. Assets to be sold include the FTD Fund's ownership interest as a direct lender in 47 specifically identified loans, for a proposed purchase price of $46.5 million and USACM's servicing rights in 80 specifically identified loans, including rights to collect servicing fees and other fees for a proposed purchase price of one-half of the first $1 million in servicing fees to be collected by the Purchaser, as well as certain upside sharing and other considerations. The Debtors, in consultation with the Official Committees appointed in their bankruptcy cases, will select the potential bidders who will participate at the auction. Parties interested in submitting an offer must submit their preliminary qualifications by mail, hand-delivery or facsimile, to: Counsel for the Debtors: Ray Quinney & Nebeker PC Attn: Annette W. Jarvis, Esq. 36 S. State Street, Ste. 1400 P.O. Box 45385 Salt Lake City, UT 84145-0385 Fax: (801) 532-7543 Counsel for the Official Committee of Equity Holders of USA Capital First Trust Deed Fund, LLC: Stutman, Treister & Glatt, P.C. Attn: Frank A. Merola, Esq. 1901 Avenue of the Stars, 12th Floor Los Angeles, CA 90067 Fax: (310) 228-5788 Counsel for the Official Committee of Holders of Executory Contract Rights through USA Commercial Mortgage Company: Gordon & Silver, Ltd. Attn: Gregory E. Garman, Esq. 3960 Howard Hughes Pkwy., 9th Floor Las Vegas, NV 89109 Fax: (702) 796-5555 Counsel for the Official Committee of Equity Holders of USA Capital Diversified Trust Deed Fund, LLC: Orrick, Herrington & Sutcliffe LLP Attn: Marc A. Levinson, Esq. 400 Capitol Mall, Suite 3000 Sacramento, CA 95814-4497 Fax: (916) 329-4900 Counsel for the Official Committee of Unsecured Creditors of USA Commercial Mortgage Company: Lewis and Roca LLP Attn: Rob Charles, Esq. 3993 Howard Hughes Pkwy., Suite 600 Las Vegas, NV 89109 Fax: (702) 949-8398 Only those parties selected by the Debtors will be asked to submit a "Qualified Bid" by no later than 4:00 p.m. Pacific Time, on Nov. 30, 2006. Qualified bidders are required to make a good faith cash or cash equivalent deposit of at least $2,325,000. SPCP Group LLC has submitted a $46.5 million stalking-horse bid for the assets. In the event that SPCP is not selected as the successful bidder at the auction, the Court allows the Debtors to pay SPCP a break-up fee equal to $1.5 million. The Debtors also agree to reimburse SPCP up to $500,000 for expenses incurred related to the purchase. A copy of the bid procedures for the sale of the Debtors' assets is available for a fee at: http://www.researcharchives.com/bin/download?id=061119214829 About USA Commercial Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba USA Capital -- http://www.usacapitalcorp.com/-- provides more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide. The Company and its debtor-affiliates filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev. Case Nos. 06-10725 to 06-10729). Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, and Annette W. Jarvis, Esq., at Ray Quinney & Nebeker, P.C., represent the Debtors in their restructuring efforts. Thomas J. Allison, a senior managing director at Mesirow Financial Interim Management LLC, has been employed as Chief Restructuring Officer for the Debtors. Susan M. Freeman, Esq., and Rob Charles, Esq., at Lewis and Roca LLP represent the Official Committee of Unsecured Creditors of USA Commercial Mortgage Company. Edward M. Burr at Sierra Consulting Group, LLC, gives financial advice to the Creditors Committee of USA Mortgage. Marc A. Levinson, Esq., and Jeffery D. Hermann, Esq., at Orrick, Herrington & Sutcliffe LLP, and Bob L. Olson, Esq., and Anne M. Loraditch, Esq., at Beckley Singleton, Chartered, represent the Official Committee of Equity Security Holders of USA Capital Diversified Trust Deed Fund, LLC. FTI Consulting, Inc., gives financial advice to the Equity Committee of USA Diversified. Candace C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon, Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola, Esq., and Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC, represent the Official Committee of Equity Security Holders of USA Capital First Trust Deed Fund, LLC. Matthew A. Kvarda, at Alvarez & Marsal, LLC, gives financial advise to the Equity Committee of USA First. When the Debtors filed for protection from their creditors, they estimated assets of more than $100 million and debts between $10 million and $50 million. USG CORP: Prices $500 Million 6.30% Notes at 99.927% of Principal ----------------------------------------------------------------- USG Corporation announced the pricing of a private offering of $500 million aggregate principal amount of its 6.30% Senior Notes due Nov. 15, 2016. The notes will be the unsecured obligations of USG and will be sold to investors at a price of 99.927% of the principal amount, plus any accrued interest from Nov. 17, 2006. The offering of the notes was expected to close on or about Nov. 17, 2006. The Company intends to use the net proceeds of the private offering for any or a combination of the following: to pay a portion of its $3.05 billion contingent payment note that was issued to the Section 524(g) asbestos trust created under its plan of reorganization, to replace a portion of the commitments or repay a portion of amounts outstanding under the term loan facility under its credit agreement entered into in August 2006, for working capital purposes and/or for general corporate purposes. The Company disclosed that the notes will be offered and sold only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933. Headquartered in Chicago, Illinois, USG Corporation -- http://www.usg.com/-- through its subsidiaries, is a leading manufacturer and distributor of building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The Company filed for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). David G. Heiman, Esq., Gus Kallergis, Esq., Brad B. Erens, Esq., Michelle M. Harner, Esq., Mark A. Cody, Esq., and Daniel B. Prieto, Esq., at Jones Day represent the Debtors in their restructuring efforts. Lewis Kruger, Esq., Kenneth Pasquale, Esq., and Denise Wildes, Esq., represent the Official Committee of Unsecured Creditors. Elihu Inselbuch, Esq., and peter Van N. Lockwood, Esq., at Caplin & Drysdale, Chartered, represent the Official Committee of Asbestos Personal Injury Claimants. Martin J. Bienenstock, Esq., Judy G. Z. Liu, Esq., Ralph I. Miller, Esq., and David A. Hickerson, Esq., at Weil Gotshal & Manges LLP represent the Statutory Committee of Equity Security Holders. Dean M. Trafelet is the Future Claimants Representative. Michael J. Crames, Esq., and Andrew A. Kress, Esq., at Kaye Scholer, LLP, represent the Future Claimants Representative. Scott Baena, Esq., and Jay Sakalo, Esq., at Bilzen Sumberg Baena Price & Axelrod LLP, represent the Asbestos Property Damage Claimants Committee. When the Debtors filed for protection from their creditors, they listed $3,252,000,000 in assets and $2,739,000,000 in debts. The Debtors emerged from bankruptcy protection on June 20, 2006. * * * As reported in the Troubled Company Reporter on Nov. 15, 2006 Standard & Poor's Ratings Services assigned its 'BB+' debt rating to the proposed $500 million senior unsecured notes of USG Corp., due 2016. The rating outlook is stable. USXL FUNDING: S&P Places BB- Rating on $14-Mil Class B-1 Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to USXL Funding II LLC's $325 million equipment contract- backed notes series 2006-1. The preliminary ratings are based on information as of Nov. 16, 2006. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The class A notes benefit from a financial guarantee provided by Financial Guaranty Insurance Co.; -- The credit enhancement provides multiple coverage of the company portfolio's historical base-case losses; -- A 1% nonamortizing liquidity reserve; -- The transaction's cash flow structure, which was subjected to various stresses requested by Standard & Poor's; -- A sound legal structure; and -- The designated back-up and successor servicer, and a transition reserve account created to mitigate any potential risk associated with a transfer of servicing. Preliminary Ratings Assigned USXL Funding II LLC Class Rating Amount ----- ------ ------ A-1 AAA $311,000,000 B-1 BB- 14,000,000 VALEANT PHARMA: S&P Cuts Corporate Credit Rating to B+ from BB- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Costa Mesa, Califorinia-based Valeant Pharmaceuticals International. The corporate credit rating was lowered to 'B+' from 'BB-'. The ratings remain on CreditWatch with negative implications, where they were placed Oct. 24, 2006 to reflect the ongoing uncertainty regarding the company's inability to file its Form 10- Q for the third quarter and the consequences if the company is not able to resolve the situation in 60 days. "The ratings downgrade reflects our concern regarding specialty pharmaceutical company Valeant's continued struggles to generate earnings and cash flow growth," explained Standard & Poor's credit analyst Arthur Wong. Sales growth of the company's core product portfolio has been tepid. Valeant is highly reliant on product acquisitions for growth. Compelling product acquisition opportunities, however, are few, and those that do exist are expensive for the company. Valeant also faces increasing R&D funding needs and, with the major setback in the development of its lead product prospect, no new product launches are expected soon from the company's internal pipeline. The third-quarter 10-Q filing delay was attributed to Valeant's need to restate its financials, possibly as far back as 1997, due to errors in accounting for stock option grants. This failure to file on time constitutes a default of reporting requirements under the company's convertible and high-yield note agreements, which, if not cured within 60 days, could result in an acceleration of the amounts outstanding under those notes. Standard & Poor's will monitor the cost and ability of Valeant to cope with this situation before resolving the CreditWatch listing. VICTORY MEMORIAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Victory Memorial Hospital 699 92nd Avenue Brooklyn, NY 11228 Bankruptcy Case No.: 06-44387 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Victory Memorial Ambulance Services, Inc. 06-44388 Victory Memorial Pharmacy, Inc. 06-44389 Type of Business: Victory Memorial Hospital is a not-for profit, full service acute care voluntary hospital with approximately 241 beds and a skilled nursing unit with 150 beds. Victory Hospital provides a full range of medical services with a focus on community care and a program of community outreach to the Brooklyn community. Victory Ambulance is a for-profit subsidiary of Victory Hospital and provides Victory Hospital with ambulance services. Victory Pharmacy is a for-profit subsidiary of Victory Hospital without any employees or assets. Chapter 11 Petition Date: Nov. 15, 2006 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtor's Counsel: Timothy W. Walsh and Jeremy R. Johnson DLA Piper US LLP 1251 Avenue of the Americas New York, NY 10020 Tel: (212) 335-4500 Fax: (212) 335-4501 Total Assets: $1 Million to $100 Million Total Debts: $1 Million to $100 Million The Debtors did not file a schedule of their 20 largest creditors. VISTEON CORP: Seeks Lenders' Approval for $100MM Additional Loan ---------------------------------------------------------------- Visteon Corporation is seeking lender approval for an additional $100 million to $200 million in secured term loans under its existing $800 million seven-year secured term loan that expires in June 2013. The Company says the action will further enhance its liquidity as it executes its three-year plan, and allows the company to take advantage of strong financial market conditions. Under provisions of the seven-year secured term loan, Visteon can increase the term loan by as much as $100 million and to raise an amount greater than $100 million, it will require lenders approval under the term loan and the $350 million U.S. asset-based revolving credit facility. "Given the current strength of market conditions, we believe it is a prudent time to further enhance the liquidity of Visteon as we implement our three-year plan," James F. Palmer, executive vice president and chief financial officer, said. J.P. Morgan Securities Inc. and Citigroup Global Markets, Inc. will act as lead arrangers for the transaction; JPMorgan Chase Bank, N.A. is the administrative agent. The Company expects to complete the transaction in 2006, which is subject to final documentation and other conditions. Headquartered in Van Buren Township, Michigan, Visteon Corporation (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. With corporate offices in the Michigan (U.S.); Shanghai, China; and Kerpen, Germany; the company has more than 170 facilities in 24 countries and employs approximately 50,000 people. At Sept. 30, 2006 the Company's balance sheet showed total assets of $6.721 billion and total liabilities of $6.823 billionresulting in a total shareholders' deficit of $102 miilion. Total shareholders' deficit at Dec. 31, 2005 stood at $48 million. * * * Standard & Poor's Ratings Services has lowered its long-term corporate credit rating on Visteon Corp. to 'B' from 'B+' and its short-term rating to 'B-3' from 'B-2'. These actions stem from the company's weaker-than-expected earnings and cash flow generation, caused by vehicle production cuts, inefficiencies at several plant locations, sharply lower aftermarket product sales, continued pressure from high raw material costs, and several unusual items that will impact 2006 results. WALTON SCDO: S&P Places Ratings on Negative CreditWatch ------------------------------------------------------- Standard & Poor's Ratings Services placed Walton SCDO's 2003-1 Classs B-1F debt rating on CreditWatch with negative implications. Standard & Poor's Ratings Services also placed 26 U.S. synthetic CDO tranche ratings on CreditWatch with negative implications. Concurrently, one tranche rating is placed on CreditWatch with positive implications. The CreditWatch negative placements reflect negative rating migration in the transactions' respective portfolios and synthetic rated overcollateralization ratios that fell below 100% during the month-end run. The rating placed on CreditWatch positive had an SROC ratio that was above 100% at a higher rating level during the month-end run. Ratings List: Aphex Capital MOTIVE Series 2004-C Rating ------ Class To From ----- -- ---- A AA/Watch Neg AA Arlo III Ltd. Series 2005 (Green Park) Rating ------ Class To From ----- -- ---- Notes AA/Watch Neg AA Barton Springs CDO SPC Series 2005-2 SEG Rating ------ Class To From ----- -- ---- B-1 A+/Watch Neg A+ B-2 A+/Watch Neg A+ Blue Point CDO SPC Series 2005-1 Rating ------ Class To From ----- -- ---- A-1 AA+/Watch Neg AA+ A-2 AA+/Watch Neg AA+ Blue Point CDO SPC Series 2005-2 Rating ------ Class To From ----- -- ---- A AA+/Watch Neg AA+ Credit Linked Notes Ltd. 2005-1 Rating ------ Class To From ----- -- ---- Notes AA-/Watch Neg AA- Jefferson Valley CDO SPC Series 2006-1 Rating ------ Class To From ----- -- ---- A AA-/Watch Neg AA- B-1 A-/Watch Neg A- B-2 A-/Watch Neg A- Morgan Stanley ACES SPC Series 2005-15 Rating ------ Class To From ----- -- ---- III A A/Watch Neg A III B A/Watch Neg A Morgan Stanley ACES SPC Series 2005-16 Rating ------ Class To From ----- -- ---- Ser2005-16 A-/Watch Neg A- Morgan Stanley ACES SPC Series 2006-3 Rating ------ Class To From ----- -- ---- IA AA/Watch Neg AA IB AA/Watch Neg AA IC AA/Watch Neg AA Morgan Stanley ACES SPC Series 2006-5 Rating ------ Class To From ----- -- ---- IA AAA/Watch Neg AAA Morgan Stanley ACES SPC Series 2006-7 Rating ------ Class To From ----- -- ---- IIA A-/Watch Neg A- Morgan Stanley ACES SPC Series 2006-9 Rating ------ Class To From ----- -- ---- II A/Watch Neg A Morgan Stanley ACES SPC Series 2006-12 Rating ------ Class To From ----- -- ---- I A+/Watch Neg A+ Morgan Stanley Managed ACES SPC Series 2006-4 Rating ------ Class To From ----- -- ---- II AA/Watch Pos AA Portfolio Credit Default Swap (Ref. No. IRP5783424) Rating ------ Class To From ----- -- ---- Cr Link BBB-/Watch Neg BBB- Prelude Europe CDO Ltd. Series 2006-2 Rating ------ Class To From ----- -- ---- Notes AA/Watch Neg AA Series 2006-1 Segregated Portfolio of Greystone Rating ------ Class To From ----- -- ---- B A/Watch Neg A C BBB/Watch Neg BBB STEERS Credit Linked Trust Minoa Tranche Series 2006-1 Rating ------ Class To From ----- -- ---- Trust Cert A+/Watch Neg A+ STEERS Randolph Gate CDO Trust Series 2006-1 Rating ------ Class To From ----- -- ---- Trust unit AA/Watch Neg AA Toronto-Dominion Bank (The) CDN$63,866,000 portfolio credit linked notes Rating ------ Class To From ----- -- ---- Prt Cr Lnk BB+/Watch Neg BB+ Toronto-Dominion Bank (The) CDN$263,860,000 Portfolio Credit Linked Notes Rating ------ Class To From ----- -- ---- PtflCdtLk BBB/Watch Neg BBB Tribune Ltd. Series 26 Rating ------ Class To From ----- -- ----- Aspen-B2 A-/Watch Neg A- Walton SCDO 2003-1 Rating ------ Class To From ----- -- ---- A-2L AA/Watch Neg AA A-2F AA/Watch Neg AA B-1F BB+/Watch Neg BB+ WORLDGATE COMMS: Posts $3.5 Mil. Net Loss in Third Quarter of 2006 ------------------------------------------------------------------ WorldGate Communications Inc. filed its financial statements for the third quarter ended Sept. 30, 2006, with the Securities and Exchange Commission on Nov. 9, 2006. For the three months ended Sept. 30, 2006, the Company reported a $3.591 million net loss, compared with a $2.647 million net loss in the comparable period in 2005. Revenues for the three and nine months ended Sept. 30, 2006, were $962,000 and $1.658 million, respectively, primarily reflecting the initial product revenues from the Company's direct distribution of the Ojo product subsequent to the termination of its exclusive distribution agreement with its former distributor on Feb. 17, 2006. These revenues represent deliveries of videophones and related service fees. Revenues during the three and nine months ended Sept. 30, 2005, were $2.290 million and $3.866 million, respectively, and reflect product inventory build up by the Company's former distributor. The reduction in revenue during 2006 with respect to comparable periods in 2005, primarily reflects the delay in the Company's sales activities as a result of transitioning the reseller network of our former distributor and adding incremental direct distribution. During the quarters ended June 30, 2006, and Sept. 30, 2006, the Company shipped several thousand units to customers with a right of return should the units not be sold through to their customer. Revenue for these units were deferred as of Sept. 30, 2006, in accordance with FAS 48 "Revenue Recognition when a Right of Return Exists." The Company, however, do expect to begin recording these shipments as revenue as and when these units are sold by its customers. The cost of revenues, consisting of product and delivery costs relating to the initial deliveries of videophones, was $894,000 and $2.076 million, respectively, for the three and nine months ended Sept. 30, 2006. Costs of revenues during the three and nine months ended Sept. 30, 2005, were $2.450 million and $3.840 million, respectively. In addition, reduced inventory valuation, freight charges, product rework expenses, reserves for warranty and other costs related to the product further increased the cost of revenues by $184,000 and $235,000, respectively, for the three and nine months ended Sept. 30, 2006. Balance Sheet At Sept. 30, 2006, the Company's balance sheet showed $12.976 million in total assets, $8.838 million in total liabilities, $130,000 in redeemable preferred stock, and $4.008 million in total stockholders' equity. Going Concern Doubt As reported in the Troubled Company Reporter on May 16, 2006, Marcum & Kliegman LLP expressed substantial doubt about WorldGate Communications, Inc.'s ability to continue as a going concern. The accounting firm pointed to the Company's recurring losses from operations and accumulated deficit of $229 million after auditing its financial statements for the year ended Dec. 31, 2005. About WorldGate Communications Trevose, Pa.-based WorldGate Communications Inc. (NASDAQ: WGAT) -- http://www.wgate.com/-- designs, manufactures, and distributes personal video phones. WorldGate's products is marketed to consumers through cable, DSL, VoIP and satellite service providers as well as through retail stores worldwide under the Ojo brand name. * BOND PRICING: For the week of November 13 -- November 17, 2006 ---------------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 12/31/04 0 Adelphia Comm. 6.000% 02/15/06 1 Adelphia Comm. 3.250% 05/01/21 0 Allegiance Tel. 11.750% 02/15/08 41 Allegiance Tel. 12.875% 05/15/08 41 Amer & Forgn Pwr 5.000% 03/01/30 64 Amer Color Graph 10.000% 06/15/10 69 Antigenics 5.250% 02/01/25 66 Anvil Knitwear 10.875% 03/15/07 69 Archibald Candy 10.000% 11/01/07 0 ATA Holdings 13.000% 02/01/09 4 Atlantic Coast 6.000% 02/15/34 13 Autocam Corp. 10.875% 06/15/14 51 Bank New England 9.500% 02/15/96 13 Bank New England 8.750% 04/01/99 6 BBN Corp 6.000% 04/01/12 0 Budget Group Inc 9.125% 04/01/06 0 Burlington North 3.200% 01/01/45 58 Calpine Corp 10.500% 05/15/06 75 Calpine Corp 8.750% 07/15/07 74 Calpine Corp 7.875% 04/01/08 74 Calpine Corp 7.750% 04/15/09 73 Calpine Corp 8.625% 08/15/10 52 Calpine Corp 8.500% 02/15/11 52 Calpine Corp 6.000% 09/30/14 42 Calpine Corp 7.750% 06/01/15 35 Calpine Corp 4.750% 11/15/23 51 Cell Therapeutic 5.750% 06/15/08 70 Central Tractor 10.625% 04/01/07 0 Chic East Ill RR 5.000% 01/01/54 57 Clark Material 10.750% 11/15/06 0 Collins & Aikman 10.750% 12/31/11 4 Comcast Corp 2.000% 10/15/29 41 Cooper Standard 8.375% 12/15/14 74 Dal-Dflt09/05 9.000% 05/15/16 35 Dana Corp 9.000% 08/15/11 74 Dana Corp 5.850% 01/15/15 72 Dana Corp 7.000% 03/15/28 69 Dana Corp 7.000% 03/01/29 69 Delco Remy Intl 11.000% 05/01/09 50 Delco Remy Intl 9.375% 04/15/12 41 Delta Air Lines 7.700% 12/15/05 36 Delta Air Lines 9.250% 12/27/07 29 Delta Air Lines 10.000% 08/15/08 39 Delta Air Lines 7.900% 12/15/09 38 Delta Air Lines 10.125% 05/15/10 36 Delta Air Lines 10.375% 02/01/11 34 Delta Air Lines 9.750% 05/15/21 35 Delta Air Lines 9.250% 03/15/22 35 Delta Air Lines 10.375% 12/15/22 37 Delta Air Lines 8.000% 06/03/23 37 Delta Air Lines 2.875% 02/18/24 36 Delta Air Lines 8.300% 12/15/29 39 Delta Air Lines 10.000% 06/01/11 70 Delta Air Lines 10.060% 01/02/16 73 Delta Mills Inc 9.625% 09/01/07 23 Deutsche Bank NY 8.500% 11/15/16 71 Diamond Triumph 9.250% 04/01/08 71 Diva Systems 12.625% 03/01/08 1 Dov Pharmaceutic 2.500% 01/15/25 50 Drum Financial 12.875% 09/15/99 0 Dura Operating 9.000% 05/01/09 6 Dura Operating 8.625% 04/15/12 27 Duty Free Int'l 7.000% 01/15/04 0 DVI Inc 9.875% 02/01/04 8 E.Spire Comm Inc 13.750% 07/15/07 0 E.Spire Comm Inc 10.625% 07/01/08 0 Eagle Family Food 8.750% 01/15/08 74 Empire Gas Corp 9.000% 12/31/07 1 Epix Medical Inc 3.000% 06/15/24 71 Exodus Comm Inc 10.750% 12/15/09 0 Exodus Comm Inc 11.625% 07/15/10 0 Fedders North AM 9.875% 03/01/14 70 Federal-Mogul Co. 8.330% 11/15/01 63 Federal-Mogul Co. 8.370% 11/15/01 61 Federal-Mogul Co. 8.370% 11/15/01 63 Federal-Mogul Co. 8.160% 03/06/03 65 Federal-Mogul Co. 8.250% 03/03/05 65 Federal-Mogul Co. 7.375% 01/15/06 68 Federal-Mogul Co. 8.800% 04/15/07 68 Federal-Mogul Co. 7.500% 01/15/09 68 Finova Group 7.500% 11/15/09 30 Ford Motor Co 7.125% 11/15/25 74 Ford Motor Co 6.625% 02/15/28 73 Ford Motor Co 7.750% 06/15/43 75 Ford Motor Co 7.400% 11/01/46 73 Ford Motor Co 7.700% 05/15/97 74 GB Property Fndg 11.000% 09/29/05 57 Golden Books Pub 10.750% 12/31/04 0 GST Network Fndg 10.500% 05/01/08 0 Gulf Mobile Ohio 5.000% 12/01/56 75 HNG Internorth 9.625% 03/15/06 38 Home Prod Intl 9.625% 05/15/08 71 Imperial Credit 9.875% 01/15/07 0 Inland Fiber 9.625% 11/15/07 64 Insight Health 9.875% 11/01/11 25 Iridium LLC/CAP 10.875% 07/15/05 24 Iridium LLC/CAP 11.250% 07/15/05 25 Iridium LLC/CAP 13.000% 07/15/05 26 Iridium LLC/CAP 14.000% 07/15/05 25 Isolagen Inc. 3.500% 11/01/24 75 IT Group Inc 11.250% 04/01/09 0 JTS Corp 5.250% 04/29/02 0 Kaiser Aluminum 9.875% 02/15/02 30 Kaiser Aluminum 12.750% 02/01/03 7 Kellstrom Inds 5.750% 10/15/02 0 Kellstrom Inds 5.500% 06/15/03 0 Tom's Foods Inc 10.500% 11/01/04 9 Kmart Corp 9.350% 01/02/20 10 Kmart Funding 9.440% 07/01/18 23 Liberty Media 4.000% 11/15/29 67 Liberty Media 3.750% 02/15/30 62 Lifecare Holding 9.250% 08/15/13 59 Macsaver Financl 7.400% 02/15/02 5 Macsaver Financl 7.875% 08/01/03 5 Macsaver Financl 7.600% 08/01/07 5 Merisant Co 9.500% 07/15/13 63 MHS Holdings Co 16.875% 09/22/04 0 Movie Gallery 11.000% 05/01/12 66 MSX Int'l Inc. 11.375% 01/15/08 73 Muzak LLC 9.875% 03/15/09 62 New Orl Grt N RR 5.000% 07/01/32 70 Northern Pacific RY 3.000% 01/01/47 57 Northern Pacific RY 3.000% 01/01/47 57 Northwest Airlines 9.179% 04/01/10 27 Northwest Airlines 6.625% 05/15/23 63 Northwest Airlines 7.625% 11/15/23 63 Northwest Airlines 8.875% 06/01/06 63 Northwest Airlines 8.700% 03/15/07 65 Northwest Airlines 9.875% 03/15/07 66 Northwest Airlines 7.875% 03/15/08 63 Northwest Airlines 10.000% 02/01/09 64 Northwest Airlines 9.152% 04/01/10 7 NTK Holdings Inc 10.750% 03/01/14 70 Nutritional Src 10.125% 08/01/09 66 Oakwood Homes 7.875% 03/01/04 9 Oakwood Homes 8.125% 03/01/09 9 Oscient Pharm 3.500% 04/15/11 70 OSU-DFLT10/05 13.375% 10/15/09 0 Outboard Marine 7.000% 07/01/02 0 Outboard Marine 9.125% 04/15/17 0 Overstock.com 3.750% 12/01/11 70 Pac-West-Tender 13.500% 02/01/09 64 PCA LLC/PCA Fin 11.875% 08/01/09 19 Pegasus Satellite 9.750% 12/01/06 11 Pegasus Satellite 13.500% 03/01/07 0 Pegasus Satellite 12.375% 08/01/08 11 Pegasus Satellite 9.625% 10/15/49 13 Phar-mor Inc 11.720% 09/11/02 2 Piedmont Aviat 10.250% 01/15/49 3 Pixelworks Inc 1.750% 05/15/24 69 Plainwell Inc 11.000% 03/01/08 2 Pliant Corp 13.000% 07/15/10 53 Polaroid Corp 7.250% 01/15/07 0 Polaroid Corp 11.500% 02/15/06 0 Primus Telecom 12.750% 10/15/09 73 Primus Telecom 3.750% 09/15/10 39 Primus Telecom 8.000% 01/15/14 58 PSINET Inc 11.000% 08/01/09 0 Radnor Holdings 11.000% 03/15/10 12 Railworks Corp 11.500% 04/15/09 1 Read-Rite Corp. 6.500% 09/01/04 8 RJ Tower Corp. 12.000% 06/01/13 15 Scotia Pac Co 7.110% 01/20/14 75 Spinnaker Inds 10.750% 10/15/06 0 Tribune Co 2.000% 05/15/29 67 Trism Inc 12.000% 02/15/05 0 United Air Lines 8.700% 10/07/08 39 United Air Lines 9.210% 01/21/17 7 United Air Lines 9.200% 03/22/08 49 United Air Lines 9.300% 03/22/08 49 United Air Lines 9.350% 04/07/16 33 United Air Lines 10.020% 03/22/14 52 United Air Lines 10.110% 01/05/06 3 United Air Lines 10.110% 02/19/49 48 United Air Lines 10.850% 02/19/15 48 United Homes Inc 11.000% 03/15/05 0 US Air Inc. 10.800% 01/01/49 10 US Air Inc. 10.750% 01/15/49 0 Venture Holdings 11.000% 06/01/07 0 Venture Holdings 12.000% 06/01/09 0 Vesta Insurance Group 8.750% 07/15/25 9 Werner Holdings 10.000% 11/15/07 8 Wheeling-Pitt St 6.000% 08/01/10 70 Winstar Comm Inc 12.500% 04/15/08 0 Winstar Comm Inc 12.750% 04/15/10 0 World Access Inc 13.250% 01/15/08 5 Xerox Corp 0.570% 04/21/18 43 Ziff Davis Media 12.000% 07/15/10 42 ********* 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 ***