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/raid1/www/Hosts/bankrupt/TCR_Public/061215.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, December 15, 2006, Vol. 10, No. 298 Headlines AIRADIGM CORP: Court Confirms Third Amended Reorganization Plan AIRTRAN HOLDINGS: Wants to Buy Midwest Air Group for $290 Million AIRTRAN HOLDINGS: Merger Plan Cues S&P to Hold Credit Rating at B AMERICAN CAMSHAFT: Case Summary & 59 Largest Unsecured Creditors AMERIGAS PARTNERS: Earns $91.1 Mil. in Fiscal Year Ended Sept. 30 ASARCO LLC: Wants Exclusive Filing Period Extended to May 11 ASARCO LLC: Wants Marten Law Group as Omaha Environmental Counsel BANC ONE: S&P Lifts Rating on Class H Certs. to BBB+ from BB+ BANC OF AMERICA: Moody's Holds Ba3 Rating on $7MM Class M Cert. BELDEN & BLAKE: Earns $34.1 Mil. in Third Quarter Ended Sept. 30 BFC AJAX: Moody's Rates $40-Million Class E Notes at Ba2 CALPINE CORP: Can File Reorganization Plan Until June 20, 2007 CAPITOL ARMORED: Case Summary & 18 Largest Unsecured Creditors CARPEDIEM-WEST: Case Summary & 11 Largest Unsecured Creditors CATHOLIC CHURCH: Portland to Suspend Appraisal Work CATHOLIC CHURCH: Court to Set Status Hearing on Voth's Claim Soon CENTRIX FINANCIAL: 2nd Hearing on Asset Sale Set for January 11 CITIZENS FINANCIAL: AM Best Affirms Financial Strength Ratings CONSORTIUM SERVICE: Sept. 30 Stockholders' Deficit Narrows to $6MM CONTINENTAL AIRLINES: Union Ready to Respond to Likely UAL Merger CREDIT SUISSE: S&P Holds Low-B Ratings on Classes J to O Certs. CRESCENT REAL: S&P Revises Outlook to Negative from Stable CYBER DEFENSE: Sept. 30 Balance Sheet Upside-Down by $14.1 Million CYOP SYSTEMS: Posts $1.1MM Net Loss in Quarter Ended Sept. 30 DAIMLERCHRYSLER: U.S. Unit Ceases Production on Various Plants DELPHI CORP: Ct. Indefinitely Adjourns Section 1113/1114 Hearing DELPHI CORP: Behind by $1,250,000,000 in Pension Payments DIAMOND ENTERTAINMENT: Sept. 30 Balance Sheet Upside-down by $1.8M DLJ COMMERCIAL: Fitch Junks Rating on $15.5MM Class B-8 Certs. DURA AUTOMOTIVE: Hires Glass & Associates as Financial Advisors DURA AUTOMOTIVE: Gets Court's Final Okay for Customer Programs ECOSPHERE TECH: Sept. 30 Balance Sheet Upside-Down by $8.9 Million ELCOM INT'L: Equity Deficit Narrows to $1.2 Mil. at Sept. 30 ENER1 INC: September 30 Balance Sheet Upside-Down by $47 Million ENTERGY NEW ORLEANS: Parent Plans Delisting from NYSE ARCA ENTERGY NEW: Inks Stipulation on Adequate Protection Payments ETHERIDGE CABINET: Case Summary & 20 Largest Unsecured Creditors FEDERAL-MOGUL: Court OKs Inter-company Equity Interest Transfers FIRST ACCEPTANCE: A.M. Best Affirms FSR Rating at B (Fair) FOAMEX INTERNATIONAL: Files Supplements to Second Amended Plan FORD MOTOR: Appoints Mark Fields to Lead Ford of the Americas FOSTER WHEELER: Improved Profile Prompts S&P's Positive Outlook GABRIEL TECHNOLOGIES: Williams & Webster Raise Going Concern Doubt GE CAPITAL: Fitch Holds Rating on $9.9-Mil. Class J Certs. at BB+ GENERAL AGENTS: A.M. Best Says Financial Strength is Fair GENERAL MOTORS: Expects $1 Million of Truck Sales in 2007 GENERAL MOTORS: S&P Holds Corporate Credit Rating at B GFA HOLDINGS: Boulder Buyout Proposal Cues Moody's Stable Outlook GRANITE BROADCASTING: Seeks Access to Lender's Cash Collateral GRANITE BROADCASTING: Wants Trumbull Group as Noticing Agent GREATWIDE LOGISTICS: Moody's Places B3 Corporate Family Rating GREENPARK GROUP: Unsec. Creditors to Get Full Payment Under Plan GREENPARK GROUP: Disclosure Statement Hearing Set for December 19 GS MORTGAGE: Moody's Holds Low-B Ratings on $23.4-Mil. of Debts HARBORVIEW NIM: DBRS Places Low-B Ratings on 2 Certificate Classes HARTVILEE GROUP: Incurs $5.7 Mil. Net Loss in 2006 Third Quarter HEWETT'S ISLAND: Fitch Confirms BB Rating on $3MM Class E Notes HM RIVERGROUP: S&P Assigns B- Corporate Credit Rating HORIZON LINES: Increases Revolving Credit Facility by $25 Million INTEGRATED HEALTHCARE: Sept. 30 Equity Deficit Rises to $32.5 Mil. INTEGRATED SECURITY: Sept. 30 Balance Sheet Upside-Down by $7.6MM JANESSA INC: Case Summary & 17 Largest Unsecured Creditors KARA HOMES AT ENCLAVE: Case Summary & 20 Largest Creditors KRISPY KREME: Delays Filing Report for Third Qtr. Ended Oct. 29 LEVEL 3: Unit Agrees to Sell $650 Million of 9.25% Senior Notes LEVEL 3: Fitch Rates Proposed $500MM Senior Notes Issue at B LEVEL 3: Unit Wants to Buy Back $500-Mil. of 10.75% Senior Notes LONG BEACH: Moody's Lowers Rating on Four Tranches MAKING OUR WAY: Case Summary & Nine Largest Unsecured Creditors MAVERICK COUNTY: Fitch Pares Rating on $13MM Debt to BB from BBB MERRILL LYNCH: Moody's Holds Low-B Ratings on $15MM of Debentures METALS USA: Moody's Junks Rating on Proposed $150-Mil. PIK Notes METALS USA: S&P Assigns CCC+ Rating to $150MM Senior Unsec. Notes MGM MIRAGE: Moody's Rates New $750-Million Senior Notes at Ba2 MGM MIRAGE: S&P Puts BB Rating on Proposed $750 Mil. Sr. Notes MRJ LLC: Case Summary & Six Largest Unsecured Creditors NAPIER ENVIRONMENTAL: Lenders Waive November Interest Payments NEWCOMM WIRELESS: Section 341(a) Meeting Slated for January 8 NOMURA ASSET: Collateral Losses Cue Fitch's Rating Downgrade OCCAM NETWORKS: Changes Financial Reporting End Dates ON THE BAY: Case Summary and Largest Unsecured Creditor PC HOTELS: Case Summary & 20 Largest Unsecured Creditors PEABODY ENERGY: Fitch Rates New $550-Mil. Junior Debt at BB- PERFORMANCE TRANSPORTATION: Files Schedule of Unexpired Leases PGMI INC: Reports $727,852 Net Loss in Quarter Ended Sept. 30 PLANET TECH: Posts $395,205 Net Loss in Quarter Ended Sept. 30 PRESIDENT CASINOS: Court Confirms Subsidiary's Reorganization Plan PRESTIGE FOODS: Voluntary Chapter 11 Case Summary Q-C CARRIAGE: Case Summary & 23 Largest Unsecured Creditors REFCO INC: Seven Claimants Want Temporary Allowance on Claims REFCO INC: Parties Ink Pact Resolving Alqahtani's Claim REMY INTERNATIONAL: Moody's Cuts Corporate Family Rating to Caa3 RISKMETRICS GROUP: S&P Junks Rating on Proposed $130-Mil. Loan RIVIERA HOLDINGS: S&P Holds B Rating with Developing Outlook SAINT VINCENTS: Bayonne Takes Over SV Staten Island SALOMON BROTHERS: Moody's Junks Rating on $15 Mil. of Certificates SASKATCHEWAN WHEAT: Shareholders Reelect 11 Directors to Board SCOTTS MIRACLE: S&P Places BB Rating on Negative CreditWatch SHERRITT INT'L: DBRS Holds Sr. Unsec. Debt Rating's at BB (high) SMART BALANCE: Moody's Assigns B3 Corporate Family Rating STONEBRIDGE HOMES: Involuntary Chapter 11 Case Summary STRATOS GLOBAL: Weak Results Cue S&P's Negative CreditWatch TIVO INC: Posts $11.1 Million Net Loss in 2006 Third Quarter TOTAL FITNESS: Case Summary & 187 Largest Unsecured Creditors TROUTMAN'S EMPORIUM: Creditors' Panel Wins Alamo Group Litigation TRUE TEMPER: Moody's Downgrades Corp. Family Rating to B3 from B2 UAL CORP: Union Ready to Respond to Possible Continental Merger UNITED COMPONENTS: S&P Cuts Corp. Credit Rating to B from B+ UNITED SOILS: Case Summary & 20 Largest Unsecured Creditors VENETO LLC: Court OKs Stephen Wade as Bankruptcy Counsel WEB-IDEALS LLC: Case Summary & 20 Largest Unsecured Creditors WERNER LADDER: Wants Loughlin Meghji to Serve as New CEO WERNER LADDER: Wants More Time to Remove Civil Actions WESTWAYS FUNDING: Fitch Rates $40-Million Income Notes at BB WINDSTREAM CORP: Fitch's Issuer Default Rating Remains at BB+ WINN-DIXIE: To Distribute Common Stock Under Plan on December 21 WILLOWBEND NURSERY: Trustee Taps Vincent Gaudio CPA as Accountant YUVAL RAN: Chapter 15 Petition Summary * Six Ulmer & Berne LLP Attorneys Named as 2007 Leading Lawyers * SEC to Propose Guidance for Sarbanes-Oxley 404 Implementation * BOOK REVIEW: Cardozo and Frontiers of Legal Thinking: With Selected Opinions ********* AIRADIGM CORP: Court Confirms Third Amended Reorganization Plan --------------------------------------------------------------- The Hon. Robert D. Martin of the U.S. Bankruptcy Court for the Western District of Wisconsin has confirmed Airadigm Communications, Inc.'s Third Amended Plan of Reorganization. Judge Martin determined that the Modified Plan satisfies the standards for confirmation under Section 1129(a) of the Bankruptcy Code. Plan Funding The Debtor says that the Plan will be funded through a loan made by the Telephone and Data Systems, Inc. or its designee. The loan will be added to the Allowed 3 Claims, which are secured with the same Liens as the claim. Treatment of Claims Under the Plan, Administrative Claims and Priority Claims will be paid in full. The Federal Communications Commission's Class 2 Secured Claims will be satisfied through: a) Delivery of Statement of Election The Debtor may deliver the Statement of Election to the FCC any time after the Confirmation Date, but must do so no later that the fifth Business Day after the later of (i) the date the Confirmation Order becomes a Final Order; (ii) the date the order or judgment in the FCC Adversary Proceeding determining the validity, priority and extent of the FCC's Liens on all the Licenses becomes a Final Order; (iii) the date the order or judgment determining the amount of all Class 2 Claims becomes a Final Order; and (iv) the date the Debtor obtains all necessary FCC approvals and any other regulatory approvals, on usual and customary terms and conditions, that may be required to effectuate the Plan and such approval and approvals become a Final Order or Final Orders; provided, however the Debtor will not elect to retain a Partial License unless the Debtor has obtained all necessary FCC approvals and any other regulatory approvals for the Partition or Disaggregation. b) Treatment Regarding Retained Licenses Holders of FCC Secured Claims, corresponding to each License the Debtor elects to retain, will be paid in full. c) Treatment Regarding Retained Partial Licenses The holder of the Secured Claim, corresponding to each Partial License the Debtor elects to retain from which the Partial License was partitioned or disaggregated, will receive, on the FCC Payment Date, as defined in the Plan, an amount in cash equal to the Retained Pro Rata Portion multiplied by the Secured Claim. d) Treatment Regarding Surrendered Licenses The holder of the Class 2 Claim secured by each License that the Debtor does not elect to retain will retain all of its rights and interests on the FCC Payment Date in full satisfaction of the claim. e) Treatment Regarding Surrendered Partial Licenses The Reorganized Debtor will surrender all of its rights and interests in each Partial License the Debtor does not elect to retain on the FCC Payment Date to the holder of the Class 2 Claim secured by the License from which the Partial License was Partitioned or Disaggregated. The Reorganized Debtor will receive a credit against that Claim in an amount equal to the Surrendered Pro Rata Portion of the claim. f) Treatment in Event of Section 1111(b) Election of the U.S. Bankruptcy Code (A creditor which is only partially secured to the extent of value of a collateral, may elect under Chapter 11 to have such claim treated as secured claim to the full extent that claim is allowed.) The holder of a Class 2 Claim corresponding to a License or Partial License that the Debtor elects to retain may make the election to treat the claim as a secured claim no later than the fifth Business Day following the date on which the Debtor delivers the Statement of Election. If the holder does not elect treatment under this Section, the Reorganized will satisfy the claim as summarized: (i) the holder's retention of its lien to the extent of the allowed amount of the Secured Claim until the claim is paid in full; (ii) holder's gain of securities and annuity contracts purchased by the Reorganized Debtor; (iii) When the holder of the Class 2 Claim has received the payment required from either the proceeds of securities or annuity contracts, the proceeds of a sale of the License, direct payment by the Debtor or any assignee, then the Claim is considered satisfied in full. Holders of Class 3 TDS Secured Claims will be paid in full. On the Payment Date, the Reorganized Debtor will pay Miscellaneous Claims at its election either: (i) payment in cash of the balance due and owing on each Allowed Claim plus any interest that may be due, or (ii) surrender the collateral securing the claim to the holder, in full and complete satisfaction of the claims. Holders of Unsecured Claims will receive shares of voting, common stock in the Reorganized Debtor on the later of (i) the FCC Payment Date and (ii) the date their claims are allowed. The Reorganized Debtor, in full satisfaction of the Unsecured Claims, will issue (i) one share of common stock for each $500,000 of each claim, and (ii) fractional shares for the balance of any claim that is not satisfied by the issuance of whole shares or for any claim that is allowed in an amount less than $500,000. Holders of Convenience Claims will also be paid in full. Holders of Equity Interests will receive nothing under the Plan. A full-text copy of the Third Amended Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=061205053442 About Airadigm Headquartered in Little Chute, Wisconsin, Airadigm Communications, Inc. -- http://www.eisnteinpcs.com/-- provides local wireless phone services through its Einstein PCS wireless networking technology. The company filed for chapter 11 protection on July 28, 1999 (Bankr. W.D. Wis. Case No. 99-33500). The Court confirmed its plan of reorganization in 2000. The company filed a new chapter 11 petition on May 8, 2006 (Bankr. W.D. Wis. Case No. 06-10930). Kathryn A. Pamenter, Esq., and Ronald Barliant, Esq., at Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd., represent the Debtor in its new bankruptcy proceedings. No Official Committee of Unsecured Creditors has been appointed in the Debtor's new bankruptcy case. In its second bankruptcy filing, the Debtor estimated assets between $10 million to $50 million and debts of more than $100 million. AIRTRAN HOLDINGS: Wants to Buy Midwest Air Group for $290 Million ----------------------------------------------------------------- AirTran Holdings, Inc., the parent of AirTran Airways, has made a proposal to acquire all of the outstanding common stock of Midwest Air Group, Inc. for $11.25 per Midwest share in cash and AirTran stock or a total equity value of approximately $290 million. The offer represents a 37% premium to the thirty-day average closing price and an 89% premium to the six months average closing price for Midwest's common stock, prior to Oct. 20, 2006, the date the offer was made. The proposed merger was initially outlined in a letter from Joe Leonard, Chairman and Chief Executive Officer of AirTran Holdings, to the Midwest Board of Directors on Oct. 20, 2006. After a series of communications between the principals and the companies' respective advisors, on Dec. 7, 2006, Mr. Leonard was informed that the Midwest board had declined AirTran's merger offer, determined not to consider AirTran's proposal further and intended to remain independent. On Dec. 13, 2006, Mr. Leonard sent a letter to the Midwest board advising them that AirTran would continue to pursue a merger with Midwest because it believes the proposed combination offers substantial and compelling benefits to the constituents of both Midwest Airlines and AirTran Airways. The combination of AirTran Airways and Midwest Airlines would create a truly national low cost airline with pro forma revenue of approximately $3 billion in 2007. AirTran believes that both companies would benefit from this merger by building greater scale, efficiencies and growth opportunities to better succeed in the face of an increasingly competitive airline environment. Because the network routes of the two carriers are complementary with limited overlap, the combined company would have a national footprint and result in an airline with approximately 1,036 daily departures with 173 unique markets between 74 cities across the United States. The combination of the companies creates a strong growth platform and allows the addition of new cities -- more than 30 new non-stop routes and well over 150 additional departures over the next several years. AirTran Airways expects that the merger will generate more than $60 million in estimated annual synergies, including $40+ million in network synergies and $20+ million in cost synergies. The Company expects the transaction would be accretive to earnings by the end of the first full year following the close of the transaction and significantly accretive thereafter. Mr. Leonard stated, "As the airline industry becomes more competitive and consolidations are more commonplace, a combination of our two companies ensures the best opportunity for serving our respective constituencies. With our similar cultures, compatible low-cost business models, complementary networks, and fleet commonality, Midwest Airlines and AirTran Airways are as close to a perfect fit as anyone can imagine." "By joining together, we can deepen our presence in our hubs, expedite the expansion of our network, and strengthen our long- term growth and profitability potential. This will enhance our ability to provide value to travelers, protect the long-term security of our employees and generate significant economic benefits to Milwaukee, Atlanta and all the communities we serve." "Finally, but certainly not less important, we have the utmost respect for Midwest, its talented employees and the strong loyalty they have built among travelers and the communities they serve. We, at AirTran Airways, have a similar affinity with our constituents, and, in that spirit, we believe that once combined, we can maintain and foster the values and culture that have driven the success of both our airlines. We have full confidence that our commonality will enable us to successfully integrate our two airlines to form a stronger, truly national low-cost airline that will offer Midwest's constituencies growth opportunities that far exceed what could be achieved independently," Mr. Leonard concluded. The AirTran Holdings' proposal is conditioned upon customary due diligence, which the company believe can be completed in a timely manner, as well as regulatory and shareholder approval. AirTran believes the transaction can be completed by the end of the first quarter 2007. Morgan Stanley and Credit Suisse are serving as financial advisors to AirTran Holdings and Smith, Gambrell & Russell, LLP, are serving as legal advisors. Innisfree M&A Incorporated is serving as information agent. About Midwest Air Midwest Air Group (AMEX: MEH), the parent company of Midwest Airlines, features nonstop jet service to major destinations throughout the United States. Midwest Connect offers connections to Midwest Airlines flights, as well as point-to-point service between select markets on regional jet and turboprop aircraft. About AirTran AirTran Airways, Inc. (NYSE: AAI) -- http://www.airtran.com/-- operates over 600 daily flights to 50 destinations. The airline's hub is at Hartsfield-Jackson Atlanta International Airport, where it is the second largest carrier. AirTran Airways recently added the fuel-efficient Boeing 737-700 aircraft to create America's youngest all-Boeing fleet. The airline is also the first carrier to install XM Satellite Radio on a commercial aircraft and the only airline with Business Class and XM Satellite Radio on every flight. * * * As reported in the Troubled Company Reporter on Nov. 23, 2006, Moody's Investors Service confirmed its B3 Corporate Family Rating for AirTran Holdings Inc. and its Caa1 rating on the company's 7.0% Guaranteed Convertible Notes Due July 1, 2023, in connection with 's implementation of its Probability-of-Default and Loss- Given-Default rating methodology for the Transportation sector. Moody's also assigned an LGD6 rating to those loans, suggesting noteholders will experience a 91% loss in the event of a default. AIRTRAN HOLDINGS: Merger Plan Cues S&P to Hold Credit Rating at B ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on AirTran Holdings Inc. and its primary operating subsidiary, AirTran Airways Inc., including the 'B-' corporate credit rating on AirTran Holdings. The ratings affirmation comes after the report that AirTran has proposed a merger with unrated Midwest Air Group Inc. for approximately $290 million. The merger would combine the complementary route networks of both airlines; AirTran's major operating hub is Atlanta, and Midwest's is Milwaukee. "If the merger is completed as currently proposed, AirTran's lease-adjusted debt would increase by approximately 25%, primarily through the addition of Midwest's substantial operating lease commitments," said Standard & Poor's credit analyst Betsy Snyder. "However, with expected combined annual operating synergies of at least $60 million, the effect on AirTran's credit ratios is not expected to be material." The merger is subject to approval by Midwest's Board and its shareholders. If proposed terms of the merger were to be revised, Standard & Poor's could revise the outlook to negative from stable. The ratings on Orlando, Florida-based AirTran Holdings Inc. and its primary operating subsidiary, AirTran Airways Inc., reflect a modest competitive position within the U.S. airline industry and a highly leveraged financial profile. Ratings also incorporate low operating costs and fairly good liquidity for its size. AirTran operates a fleet of 127 aircraft to 52 destinations, primarily out of its main hub at Atlanta. However, the company is significantly smaller than the seven largest U.S. airlines, with substantial competition on most of its major routes. The company operates primarily on the East Coast against Delta Air Lines Inc., the leading airline at Atlanta, and low-cost airlines Southwest Airlines Co., JetBlue Airways Corp., and US Airways Group Inc. While AirTran has been reducing its reliance on Atlanta, it still has a much smaller presence there than Delta. A successful AirTran-Midwest merger would result in a complementary route network, with minimum overlap, and reduce AirTran's reliance on Atlanta. AirTran has a highly leveraged financial profile due to substantial operating leases used to fund most of its aircraft, and only modest profitability since 2004. Its EBITDA interest coverage has averaged in the low-1x area, funds from operations to debt in the mid-single-digit percent range, and debt to capital in the mid-to-high-80% area since 2004. Midwest also has a significant operating lease burden, with most of its aircraft leased as well. However, the combined entity should benefit from annual operating synergies of at least $60 million and be earnings accretive by the end of the first year after the merger. As a result, AirTran's financial profile is not expected to weaken materially if the merger, as proposed, is completed. AMERICAN CAMSHAFT: Case Summary & 59 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: American Camshaft Specialties, Inc. 1000 Town Center, Suite 1050 Southfield, MI 48075 Bankruptcy Case No.: 06-58298 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Assembled Camshaft, Inc. 06-58300 ACS Orland, Inc. 06-58301 ACS Grand Haven, Inc. 06-58302 Chapter 11 Petition Date: December 9, 2006 Court: Eastern District of Michigan (Detroit) Judge: Phillip J. Shefferly Debtors' Counsel: Christopher A. Grosman, Esq. Robert A. Weisberg, Esq. Carson Fischer, P.L.C. 4111 Andover West, Second Floor Bloomfield Hills, MI 48302-1924 Tel: (248) 644-4840 Estimated Assets Estimated Debts ---------------- --------------- American Camshaft Less than $50,000 $10 Million to Specialties, Inc. $50 Million Assembled Camshaft, Inc. $10 Million to $10 Million to $50 Million $50 Million ACS Orland, Inc. Less than $50,000 $10 Million to $50 Million ACS Grand Haven, Inc. $10 Million to $10 Million to $50 Million $50 Million A. American Camshaft Specialties, Inc's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Federal Mogul Corporation $750,000 2655 Northwest Highway Southfield, Michigan 48034 Miller Johnson Snell & Cummisky $13,376 P.O. Box 306 Grand rapids, MI 49501 Service Express $5,912 4845 Corporate Exchange Grand Rapids, MI 49512 Plante & Moran, PLLC $5,650 Not So Basic Training & Consulting $5,010 George Fergision $2,500 ADP, Inc. $2,134 Consultation Plus, LLC $2,120 The Hartford $1,904 CDW $1,870 Environmental Resource Mgt. $1,569 Global Crossing $1,223 Research in Motion Corp. $927 Cingular Wireless $816 Sterling Commerce $609 Oakstone Wellness $575 Employers Association of West Michigan $477 AT&T $440 Vision Service Plan $413 B. Assembled Camshaft, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Nippon Piston Ring Co., Ltd. $486,177 No. 12-10-5-Chome Honmachi-Higashi Yono-City Saitama Japan Ametek $278,816 Specialty Metal Products Div. Route 419 Box 427 Eighty Four, PA 15330 Grand Haven Charter Twp. $211,001 13300 - 168th Avenue Grand Haven, MI 49417 BMC Bill-Mac Corporation $87,190 Mac Steel $79,340 Consumers Power Co. $55,279 Accu Serve Corporation $41,853 C.B. Dekorne, Inc. $30,182 Gosiger Michigan $28,376 Graphite Machining $22,779 Creston Industrial $21,369 Assured Tool & Gauge, Inc. $19,450 Liquid Industrial Waste $15,299 Donald Engineering $14,312 Cinetic Landis Grinding Corp. $13,500 K&G Tool Company $10,891 RCM Technology $10,451 Great Lakes Industrial $9,857 Metallurgical High Vac $8,667 Reliant Professional Cleaning Contractors Inc. $8,612 C. ACS Grand Haven, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Cummins Inc. $3,035,000 Box 3005 Columbus, Indiana 47202 Mac Steel $1,647,714 Division of Quanex Corp. One Jackson Square, Suite 500 Jackson, MI 49201 Mahle Metal Leve S.A. $790,488 Rod. SP 340, KM 176,5 Mogi Guacu - SP Brasil 13486-901 Creston Industrial $322,496 1150 Front Street Northwest Grand Rapids, MI 49417 Grand Haven Charter Township $240,738 Nucor $212,810 Consumers Energy $138,281 Federal-Mogul Camshaft Ltd. $129,616 Manpower $121,823 Kennametal, Inc. $84,155 Super Steel Treating $79,997 Motion Industries $65,691 Alro Steel Corp. $51,241 Gosiger, Inc. $50,660 C.B. Dekorne, Inc. $47,753 K&G Tool Company $47,742 Saint Gobrain Abrasives $44,278 Asahi Diamond America, Inc. $36,954 Norchuk Supply Co. $35,397 Action Industrial Supply $33,405 AMERIGAS PARTNERS: Earns $91.1 Mil. in Fiscal Year Ended Sept. 30 ----------------------------------------------------------------- AmeriGas Partners L.P. reported that its net income increased by $30.3 million to $91.1 million for the fiscal year ended Sept. 30, 2006, from $60.8 million for the prior fiscal year, which principally reflects the increase in EBITDA and the $5.8 million decrease in interest expense related to debt refinancings and reduced use of its revolving credit facility. Revenues for the 2006 fiscal year totaled $2.1 billion, versus $1.9 billion for the fiscal 2005. Propane revenues increase to $1.9 billion for the current fiscal year from $1.8 billion in the 2005 fiscal year. Retail propane revenues increased $136.8 million due to higher average selling prices and Wholesale propane revenues decreased $2.8 million due to lower sales volumes. In Fiscal 2006, average retail propane product cost per retail gallon sold was approximately 18% higher than in Fiscal 2005 resulting in higher year-over-year prices. The average wholesale cost per gallon of propane during Fiscal 2006 at Mont Belvieu, one of the major supply points in the United States, was approximately 21% greater than the average cost per gallon during Fiscal 2005. EBITDA during fiscal 2006 increased $22 million to $237.9 million from $215.9 million in fiscal 2005 as a result of the increase in total margin and a $16.5 million decrease in the loss on the early extinguishments of debt from $33.6 million in fiscal 2005 to $17.1 million in fiscal 2006. The $17.1 million loss on the early extinguishments of debt that was incurred during fiscal 2006 was associated with the refinancings of AmeriGas OLP's Series A and Series C First Mortgage Notes totaling $228.8 million, $59.6 million of the Partnership's $60 million 10% Senior Notes, and a $35 million term loan with $350 million of 7.125% Senior Notes due 2016. Operating income increased $6.8 million to $184 million for the 2006 fiscal quarter from $177.2 million in fiscal 2005, reflecting the increase in total margin and the $1.2 million decrease in depreciation and amortization expense. Senior Notes Refinancing In January 2006, the partnership refinanced Series A and Series C First Mortgage Notes totaling $228.8 million, $59.5 million of the Partnership's $60 million 10% Senior Notes and a $35 million term loan with $350 million of its 7.125% Senior Notes due 2016. the partnership recognized a loss of $17 million associated with the refinancings which is reflected in "Loss on extinguishments of debt" in the 2006 Consolidated Statements of Operations. The company's balance sheet at Sept. 30, 2006, showed total assets of $1.6 billion, current liabilities of $1.4 billion and total partners' capital of $200 million. Current assets were $368.2 million and current liabilities were $380.1 million. A full text-copy of the partnership's fiscal annual report may be viewed at no charge at http://ResearchArchives.com/t/s?16f4 AmeriGas Partners L.P. (NYSE:APU) -- http://www.amerigas.com/-- is a retail propane marketer, serving nearly 1.3 million customers from over 650 locations in 46 states. UGI Corporation (NYSE:UGI) through its subsidiaries owns 44% of the Partnership and individual unitholders own the remaining 56%. * * * As reported in the Troubled Company Reporter on Oct. 18, 2006, Moody's Investors Service affirmed AmeriGas Partners L.P.'s Ba3 corporate family rating in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given- Default rating methodology. ASARCO LLC: Wants Exclusive Filing Period Extended to May 11 ------------------------------------------------------------ ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to further extend their exclusive period to file a plan of reorganization until May 11, 2007, and their exclusive period to solicit acceptances of that plan until July 11, 2007. James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas, says the Debtors have made significant progress in their restructuring efforts since the Petition Date; however, there still remains much to be done. The Debtors' management is currently focused on securing a new labor contract in the next several weeks as the labor contracts of the employees who went on strike in 2005 will expire at the end of 2006. In addition, the Debtors are expending much of their time resolving, negotiating and undergoing discovery processes in connection with: (a) derivative asbestos-related claims against their Asbestos Subsidiary Debtors; (b) environmental liabilities; (c) disputes on the Mission Mine leases and their related reclamation claims; (d) complex water rights issues related to the Debtors' operations at Hayden Smelter and Ray Mine; (e) billions of dollars of alleged claims filed as a result of the August 1, 2006 Bar Date; and (f) several adversary proceedings dealing with disputes regarding the improvident sale of corporate assets before the Petition Date, including the dispute with Mineral Park, Inc., and the dispute regarding the Debtors' purchase of the remaining stocks of the Copper Basin Railway. A trial date for the estimation of the Debtors' derivative asbestos claims is set for Sept. 4, 2007, Mr. Prince notes. A moratorium on negotiations regarding the Debtors' environmental liabilities will expire in February 2007 and an estimation trial will probably be in the summer of 2007. Mr. Prince argues that an extension of the Debtors' exclusive periods will provide them additional time to quantify, either by estimation or negotiation, contingent claims and move forward with presenting a confirmable plan of reorganization for the benefit of all creditors and stakeholders. During the extension period, Mr. Prince says the Debtors will continue their efforts to resolve various cases and controversies with their various creditor constituencies, and to work with all deliberate speed in resolving issues necessary to formulate a confirmable plan in an orderly manner, which will, in the Debtors' opinion, be of substantial benefit to the estate and their creditors. 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. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000) ASARCO LLC: Wants Marten Law Group as Omaha Environmental Counsel ----------------------------------------------------------------- ASARCO LLC seeks authority from the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi to employ Marten Law Group, PLLC, as special counsel in connection with the company's environmental claims litigation, including but not limited to the Omaha Lead Site in Omaha, Nebraska. As special counsel, Marten Law Group will render all services necessary for the litigation of ASARCO's environmental liabilities. ASARCO will pay Marten Law Group in its hourly rates: Professional Hourly Rates ------------ ------------ Larson, Linda, Esq. $450 Marten, Bradley, Esq. 450 Jones, Steven, Esq. 355 Martin, Connie Sue, Esq. 315 Yowell, Margaret, Esq. 305 Kray, Jeffrey, Esq. 315 Lufkin, Michael, Esq. 295 Ferrell, Jessica, Esq. 225 Till, Dustin, Esq. 225 Fandino, Laura, Esq. 225 Pollock, Eve 155 Chow, Rosanne 115 Linda R. Larson, Esq., at Marten Law Group, PLLC, assures the Court that her firm does not represent any interest adverse to ASARCO and its estate. Ms. Larson adds that Marten Law Group is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000) BANC ONE: S&P Lifts Rating on Class H Certs. to BBB+ from BB+ ------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on two classes of Banc One/FCCC Commercial Mortgage Loan Trust's commercial mortgage pass-through certificates from series 2000-C1. Concurrently, ratings were affirmed on three other classes from the same transaction. Under various stress scenarios, the rating actions reflect: -- The stable performance of the pool; -- A large increase in credit support since origination; -- A successful payoff history of the loan pool with only minor losses to date; and, -- A low delinquency rate. The strengths are offset by: -- A lack of performance data for most of the pool; -- Significant geographic concentrations; and, -- Near-term refinancing risk. As of the Nov. 20, 2006 remittance report, the collateral pool consisted of 119 loans with an aggregate principal balance of $61.5 million, down from 1,099 loans totaling $857.1 million at issuance, representing a 93% paydown. Predecessors of Bank One N.A. originated most of the loans, with the earliest origination at issuance dating back to 1978. At the time of issuance, the loans had a weighted average seasoning of 42.5 months. Currently, remaining loans have an average balance of $516,000, which minimizes the impact of a loss on the pool from any one particular loan. Because of the age and size of most of the loans, much of the traditional securitization and reporting information, such as debt service coverage, is not required and is unavailable. The master servicer, Midland Loan Services L.P., provided recent year-end net cash flow and debt service coverage figures for 41% of the pool. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.64x. The top 10 loan exposures have an aggregate outstanding balance of $24.6 million. The weighted average DSC for the top 10 exposures is 1.64x, excluding the seventh- and eighth-largest exposures, which are with the special servicer. Standard & Poor's reviewed property inspections provided by Midland for all of the assets underlying the top 10 exposures and 26 were characterized as "good", and six properties were characterized as "fair." The lack of reporting information is mitigated by several factors. First, the mortgages in the pool are well seasoned, as evidenced by the age of the pool and the origination dates of the loans. Nine-hundred-and-eighty mortgage loans have paid off to date, and the pool has only experienced five losses totaling $686,909, which suggests that the loans were underwritten conservatively. The fact that 84% of the remaining mortgages are full recourse loans and 14% are fully amortizing loans also supports the upgrades. Finally, there are no delinquent loans in the pool. Five loans are with LNR Partners Inc., the special servicer. One of the loans is in special servicing because of a maturity default, and the borrower is currently seeking to refinance. Three loans are current but remain with the special servicer because of reasons including second liens, maturity defaults on second mortgages, and back payments on tax advances. The special servicer is pursuing foreclosure on the remaining loan, which has an exposure of $1.7 million. The collateral property for this loan will be marketed for sale after foreclosure. Midland reported 14 loans on its watchlist. The loans are on the watchlist due to vacancy, low DSC, pending maturity, or delinquency. The trust collateral is located in six states, with Illinois, Indiana, and Ohio accounting for more than 98% of the pool balance. The collateral in Illinois is all located within the Chicago metropolitan statistical area. The geographic concentration of the loans has been factored into our analysis. Standard & Poor's stressed various loans with credit issues as part of its pool analysis. The resultant credit enhancement levels support the revised raised ratings. Ratings Raised Banc One/FCCC Commercial Mortgage Loan Trust Commercial Mortgage Pass-Thru Certificates Series 2000-C1 Rating ------ Class To From Credit enhancement ----- -- ----- ------------------ G AA+ A 47.67% H BBB+ BB+ 23.28% Ratings Affirmed Banc One/FCCC Commercial Mortgage Loan Trust Commercial Mortgage Pass-Thru Certificates Series 2000-C1 Class Rating Credit enhancement ----- ------ ------------------ E AAA 99.94% F AAA 86.00% X AAA N/A N/A-Not applicable. BANC OF AMERICA: Moody's Holds Ba3 Rating on $7MM Class M Cert. --------------------------------------------------------------- Moody's Investors Service upgraded the ratings of six classes and affirmed the ratings of nine classes of Banc of America Commercial Mortgage Inc., Commercial Mortgage Pass-Through Certificates, Series 2001-PB1 as: -- Class A-2, $550,817,460, Fixed, affirmed at Aaa; -- Class A-2F, $36,679,640, Fixed, affirmed at Aaa; -- Class XC, Notional, affirmed at Aaa; -- Class XP, Notional, affirmed at Aaa; -- Class B, $37,531,329, Fixed, affirmed at Aaa; -- Class C, $9,382,832, Fixed, upgraded to Aaa from Aa1; -- Class D, $11,728,540, Fixed, upgraded to Aaa from Aa2; -- Class E, $18,765,664, Fixed, upgraded to Aa2 from A2; -- Class F, $11,728,540, Fixed, upgraded to Aa3 from A3; -- Class G, $14,074,248, Fixed, upgraded to A2 from Baa1; -- Class H, $14,074,248, Fixed, upgraded to Baa1 from Baa2; -- Class J, $11,728,541, Fixed, affirmed at Baa3; -- Class K, $18,765,664, Fixed, affirmed at Ba1; -- Class L, $14,074,248, Fixed, affirmed at Ba2; and, -- Class M, $7,037,124, Fixed, affirmed at Ba3. As of the Nov. 13, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 16.1% to $787.5 million from $938.3 million at securitization. The Certificates are collateralized by 116 mortgage loans ranging in size from less than 1.0% to 8.3% of the pool, with the top 10 loans representing 42.3% of the pool. Ten loans, representing 20.1% of the pool balance, have defeased and are collateralized by U.S. Government securities. The defeased loans include the pool's largest two loans: -- Outrigger Reef Hotel at $71.8 million, 8.3%; and, -- Market Square at $49.8 million, 5.3%. Four loans have been liquidated from the pool, resulting in an aggregate realized loss of approximately $6.4 million. Currently there are no loans in special servicing. Twenty two loans, representing 21.4% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2005 operating results for approximately 96.6% of the pool. Moody's loan to value ratio is 87.7%, compared to 88.2% at securitization. Although the overall pool performance has been stable since securitization, LTV dispersion has increased. Based on Moody's analysis, 16.9% of the pool has a LTV greater than 100%, compared to 5.0% at securitization. Moody's is upgrading Classes C, D, E, F, G and H due to increased subordination levels, defeasance and stable overall pool performance. Classes B, C and D were upgraded on Aug. 2, 2006 and Classes C and D were placed on review for further possible upgrade based on a Q tool based portfolio review. The top three non-defeased loans represent 10.3% of the outstanding pool balance. The largest loan is the Milwaukee Center Office Tower Loan at $31.3 million, 4% which is secured by a 374,000 square foot office building located in downtown Milwaukee, Wisconsin. The property was 75% occupied as of June 2006, compared to 98% at securitization. The decline in occupancy is largely due to several large lease expirations that occurred in 2003 and 2004. The loan is on the master servicer's watchlist due to debt service coverage less than 1x. The Milwaukee CBD office market has experienced an increase in its overall vacancy rate as well as a decline in average rental rates since securitization. The building's average per square foot rental rate is $14.00, compared to $22.00 at securitization. Moody's LTV is in excess of 100.0%, compared to 82.1% at securitization. The second largest loan is the Pacific Professional Building Loan at $28.1 million, 3.6% which is secured by a 111,000 square foot medical office building located in San Francisco, California. The building is 100% occupied, the same as at securitization. Property performance has improved since securitization due to increased rental revenue and stable expenses. Moody's LTV is 77.7%, compared to 86.0% at securitization. The third largest loan is the Nokia Office Building Loan at $21.5 million, 2.7% which is secured by a 135,000 square foot office/R&D facility located in San Diego, California. The building is a build-to-suit for Nokia Mobile Phones, Inc., which occupies 100% of the building under a lease that expires in August 2010. The lease, which is guaranteed by parent company Nokia Corporation, contains three 5-year renewal options. The loan matures in June 2011 and amortizes on a 25-year schedule. Moody's LTV is 79.6%, compared to 86.5% at securitization. The pool's collateral is a mix of multifamily, office, U.S. Government securities, retail, industrial and self storage, lodging and land. The collateral properties are located in 32 states. The highest state concentrations are California, Texas, Ohio, Nevada and Washington. All of the loans are fixed rate. BELDEN & BLAKE: Earns $34.1 Mil. in Third Quarter Ended Sept. 30 ---------------------------------------------------------------- Belden & Blake Corporation reported a net income of $34.1 million for the third quarter ended Sept. 30, 2006, compared with a net loss of $4.9 million in the comparable quarter in 2005. The net loss in 2005 included a derivative fair value loss of $12.9 million related to changes in the fair value of the derivative instruments, comprised of natural gas swaps, crude oil swaps, and interest rate swaps. The company had a derivative fair value gain of $50.2 million in the third quarter of 2006. Revenues for the quarter ended Sept. 30, 2006, totaled $34.2 million, versus total revenues of $39.6 million for the same quarter in 2005. Operating revenues decreased from $39.5 million in the third quarter of 2005 to $34.1 million in the third quarter of 2006, due to lower oil and gas sales revenues of $4.9 million and lower gas gathering and marketing revenues of $570,000. The company's balance sheet at Sept. 30, 2006, showed total assets of $782.3 million, total liabilities of $642.4 million and total shareholders' equity of $139.9 million. Total shareholders' equity at Dec. 31, 2005, stood at $89.3 million. Working capital increased $24.3 million, from a deficit of $39 million at Dec. 31, 2005, to a deficit of $14.7 million at Sept. 30, 2006, primarily due to a decrease in the current liability related to the fair value of derivatives of $36.4 million and a decrease in accounts payable and accrued expenses of $11.3 million. A full text-copy of the company's quarterly report on Form 10-Q may be viewed at no charge at http://ResearchArchives.com/t/s?16e2 Belden & Blake Corporation -- http://www.beldenblake.com/-- develops, produces, operates and acquires oil and natural gas properties in the Appalachian and Michigan Basins (a region which includes Ohio, Pennsylvania, New York and Michigan). The company is a subsidiary of Capital C, an affiliate of EnerVest Management Partners, Ltd. * * * As reported in the Troubled Company Reporter on Sept. 25, 2006, Moody's Investors Service confirmed Belden & Blake Corp.'s Caa1 corporate family rating and Caa1 rating on the company's 8.75% Senior Secured Guaranteed Global Notes due 2012 in connection with the rating agency's implementation of its new Probability-of- Default and Loss-Given-Default rating methodology. BFC AJAX: Moody's Rates $40-Million Class E Notes at Ba2 -------------------------------------------------------- Moody's Investors Service assigned these ratings to notes issued by BFC Ajax CDO Ltd., a collateral debt obligation issuance: -- Aaa to $275,000,000 Class A Senior Floating Rate Notes Due 2046; -- Aa3 to $15,000,000 Class B Floating Rate Notes Due 2046; -- A1 to U.S.$10,000,000 Class X Deferrable Floating Rate Notes Due 2046; -- A2 to $20,000,000 Class C Deferrable Floating Rate Notes Due 2046; -- Baa2 to $40,000,000 Class D Deferrable Floating Rate Notes Due 2046; and, -- Ba2 to $40,000,000 Class E Deferrable Floating Rate Notes Due 2046. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. Financial Guaranty Insurance Company will act as a Credit Enhancer for the Class A Notes. The rating of Aaa assigned to the Class A reflects the credit enhancement provided by FGIC. Braddock Financial Corporation will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. CALPINE CORP: Can File Reorganization Plan Until June 20, 2007 -------------------------------------------------------------- The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York further extended Calpine Corp. and its debtor-affiliates' period to propose a reorganization plan through and including June 20, 2007, and the period to solicit acceptances of that plan through and including Aug. 20, 2007. Creditors Committee Responds The Official Committee of Unsecured Creditors acknowledged that, since the bankruptcy filing, the Debtors have made significant progress in their reorganization efforts and that, while both parties have not always agreed with respect to certain matters, they have worked constructively to resolve their differences without the need for Court intervention. The Committee acknowledged that while the Debtors have generally been cooperative and transparent, there have been situations where the Committee has been frustrated with its inability to obtain timely certain information and data required for it to acquit its fiduciary duty to the Debtors' unsecured creditors. The Committee had been persistent in advising the Debtors of its need to obtain all diligence materials deemed necessary including, without limitation, all of the fundamental assumptions and supporting data for the business plan, on a timely basis. Without the Committee's timely receipt of those materials, it would be unable to evaluate the forthcoming business plan effectively. To resolve the Committee's concerns regarding information sharing in connection with the business plan process, the Debtors have committed to meet regularly with the Committee's professionals to: -- discuss key topics related to the business plan, -- provide certain requested diligence before rolling out the business plan, and -- provide certain requested diligence and an appropriate timeline for delivery of the remaining diligence at the time the business plan is presented and more follow-up data, as needed. Based on those assurances, the Committee has had no objection to the requested extension of the Exclusive Periods. The Committee was hopeful that the time afforded by the extension of the Exclusive Periods would provide the Debtors and their primary stakeholders with the opportunity to build consensus around an appropriate business plan that would provide the framework for a consensual plan of reorganization. About Calpine Corp. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. (Calpine Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CAPITOL ARMORED: Case Summary & 18 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Capitol Armored Services, Inc. 2910 Bloomingdale Road Kingsport, TN 37662 Bankruptcy Case No.: 06-51178 Type of Business: The Debtor offers security guard and patrol services. Chapter 11 Petition Date: December 12, 2006 Court: Eastern District of Tennessee (Greeneville) Judge: Marcia Phillips Parsons Debtor's Counsel: Fred M. Leonard, Esq. 27 Sixth Street Bristol, TN 37620 Tel: (423) 968-3151 Total Assets: $475,208 Total Debts: $1,203,495 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ GE Capital Security Agreement $38,272 P.O. Box 740434 Value of Security: Atlanta, GA 30374 $75,000 First Community Bank Value of Security: $28,084 of East Tennessee $110,000 809 West Main Street Rogersville, TN 37857 GE Capital Value of Security: $24,147 P.O. Box 740434 $60,000 Atlanta, GA 30374 GE Capital Value of Security: $18,830 $75,000 BT Leasing Value of Security: $18,133 $75,000 American Express $15,000 Bobby Campbell $13,000 First Community Bank of $10,250 East TN Bank of Tennessee $10,000 Fuel Man $7,118 Bays Mart #5 $4,215 The Barger Group $4,000 Nextel $3,480 Exxon Mobile $2,200 Szabo Associates Inc. $1,500 Roberts Tire $1,417 Kingsport Times News $1,400 Bruce Shine $1,000 CARPEDIEM-WEST: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Carpediem-West, LLC 336 West Main Street P.O. Box 778 Yanceyville, NC 27379 Bankruptcy Case No.: 06-11522 Chapter 11 Petition Date: December 6, 2006 Court: Middle District of North Carolina (Greensboro) Judge: Thomas W. Waldrep Jr. Debtor's Counsel: Dirk W. Siegmund, Esq. Ivey, McClellan, Gatton & Talcott, L.L.P. 121-B South Elm Street P.O. Box 3324 Greensboro, NC 27402-3324 Tel: (336) 274-4658 Fax: (336) 274-4540 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Faigen M. Blackwell $1,151,000 2234 Lakeview Terrace Burlington, NC 27215 Wiley J. Pope $84,947 c/o Ibrahim Oudeh 403 West Broad Street Dunn, NC 28334 Wray Crawford $11,000 P.O. Box 466 Elkin, NC 28621 Swann's Machine & Supply $770 Town of Yanceyville $627 Marlin Leasing Corp. $291 CAN $137 Directv $96 BTI $90 Dodson Pest Control $75 Pitney Bowes $26 CATHOLIC CHURCH: Portland to Suspend Appraisal Work --------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon grants the Archdiocese of Portland in Oregon's request to suspend further work on real estate appraisals pending another hearing on the matter. These real estate appraisers include: -- Powell Valuation, Inc., -- Duncan & Brown, Inc., and -- Skelte & Associates, Inc. Judge Elizabeth L. Perris permits the Appraisers to seek an increase on their fees if the suspension of the appraisal work will cause the cost to complete the appraisals to increase. As reported in the Troubled Company Reporter on Nov. 16, 2006, Thomas W. Stilley, Esq., at Sussman Shank LLP, in Portland, Oregon, explains that the parties in the Archdiocese's Chapter 11 case are currently engaged in a global mediation with two mediators: (1) Honorable Michael R. Hogan of the U.S. District Court for the District of Oregon; and (2) Judge Lyle C. Velure, Circuit Court Judge of the State of Oregon for Lane County. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CATHOLIC CHURCH: Court to Set Status Hearing on Voth's Claim Soon ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon will set a status hearing on Mr. Voth's Claim Nos. 262 and 324 in either late December or early January 2007. Margaret Hoffman, Esq., at Schwabe, Williamson & Wyatt, PC, in Portland, Oregon, informs Judge Elizabeth L. Perris that Frank Everett Voth's counsel, Gary Bisaccio, Esq., in Portland, Oregon, recently told her that he would no longer represent Mr. Voth. She adds that she doesn't know of any substitution of counsel. She also has no direct correspondence with Mr. Voth. Ms. Hoffman notes that the Archdiocese of Portland in Oregon is not willing to stipulate for relief from stay for Mr. Voth. However, Ms. Hoffman says she is willing to discuss the issue with Mr. Voth when Mr. Bisaccio has formally withdrawn from the case. Accordingly, Judge Perris tells Mr. Voth that Mr. Bisaccio should promptly withdraw as counsel, if he really is planning to do so. As reported in the Troubled Company Reporter on June 9, 2006, Frank Everett Voth asks the Court to: (a) lift the automatic stay pursuant to Section 363(d)(1) of the Bankruptcy Code; and (b) allow a sexual battery lawsuit he filed to be resolved at the earliest time. Mr. Voth asserted $12,000,000 in damages as a result of the abuse. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CENTRIX FINANCIAL: 2nd Hearing on Asset Sale Set for January 11 --------------------------------------------------------------- The Honorable Elizabeth E. Brown of the U.S. Bankruptcy Court for the District of Colorado will convene a second hearing at 9:00 a.m., Mountain Time, on Jan. 11, 2007, to consider the sale of substantially all of Centrix Financial LLC and its debtor- affiliates' assets. The hearing will be held at Courtroom C501, Byron Rogers Courthouse, 1929 Stout Street, in Denver, Colorado. The initial competing bid for the assets under the Auction Protocol is pegged at $26,551,045. The Official Committee of Unsecured Creditors, however, has the right to assert a limited challenge to the calculation of the initial competing bid which, if successful, could be reduced to approximately $24,551,045. As reported in the Troubled Company Reporter on Nov. 24, 2006, Kendrick CF Acquisition Inc. has submitted a bid, which includes a credit bid of secured indebtedness owed to Falcon Mezzanine Partners II LP plus interest at the non-default rate and reasonable costs and fees. To participate in the auction, interested parties must submit their bids no later than 5:00 p.m. on Jan. 8, 2007, providing consideration in an amount equal to: a) the amount of all Falcon Claims used as a credit bid by the Bankruptcy Court; b) any outstanding obligations of the Debtors under any debtor-in-possession financing facility approved by the Bankruptcy Court; c) the assumption of the liability of the Debtors under their key employee retention plan; d) cash sufficient to add to the Debtors' cash at closing such that $5,000,000 remains with the Debtors to pay for administrative expenses; and e) a termination fee payable to Kendrick equal to $300,000 plus Kendrick's reasonable expenses, which will not exceed $200,000. Competing bids must also accompany a $1,000,000 good faith deposit in immediately available funds and provide for payment in full and in cash of any outstanding DIP obligations and termination fee. Objections to the Sale Motion must be filed with the Court by 4:00 p.m., Eastern Time, on Jan. 4, 2007, and served upon: a) Counsel to the Debtors: Craig D. Hansen, Esq. Squire, Sanders & Dempsey LLP Suite 2700 Two Renaissance Square 40 North Central Avenue Phoenix, AZ 85004-4498 b) Counsel to Falcon: Kevin J. Burke, Esq. Cahill Gordon & Reindel LLP 80 Pine Street New York, NY 10005 c) Counsel to Everest Reinsurance Holdings Inc.: David McClain, Esq. McClain, Maney & Patchin PC Suite 3100 711 Louisiana Houston, TX 77002 d) Counsel for the Official Committee of Unsecured Creditors: Michael P. Richman, Esq. John A. Simon, Esq. Foley & Lardner LLP 90 Park Avenue New York, NY 10016 e) United States Trustee: Joanne Speirs, Esq. Office of the U.S. Trustee District of Colorado Suite 1551 999, 18th Street Denver, Colorado 80202 Parties considering submitting a competing bid and desiring to pre-qualify as an approved underwriter were required to submit no later than Dec. 5, 2006, all of the information and materials required in the Auction Protocol available from Everest National Insurance Company's Web site. Everest National will notify the Debtors and the Creditors Committee by Jan. 2, 2007, which prospective competing bidders, if any, Everest National would designate as approved underwriters for purposes of servicing the approximately $1,800,000,000 in sub- prime automobile loans currently being serviced by the Debtors. Any objections to Everest National's determination of whether a prospective competing bidder is an approved underwriter must be filed by Jan. 5, 2007. Copies of the Asset Purchase Agreement and other related documents can be accessed at Kurtzman Carson Consultants LLC's Web site at: http://kccllc.net/centrixfinancial/ About Centrix Financial Headquartered in Reno, Nevada, Centrix Financial LLC provides subprime auto loans. Centrix and its affiliates filed separate Chapter 11 petitions on Sept. 19, 2006 (Bankr. Dist. Nev. Lead Case No. 06-50631). CMGN LLC, one of the affiliates, filed its Chapter 11 petition on Sept. 4, 2006 (Bankr. Dist. Nev. Case No:06-50631). Three of Centrix Financial's creditors, IFC Credit Corporation, Suntrust Leasing, and Wells Fargo Equipment Finance, subsequently filed involuntary chapter 11 petition against the Debtors on Sept. 15, 2006 (Bankr. Dist. Colo. Case No:06-16403) The Creditors assert they are owed more than $4.6 million. Lee M. Kutner, Esq., at Kutner Miller, P.C., and David von Gunten, Esq., at Von Gunten Law LLC, represent the creditor petitioners. The Debtors' cases has been consolidated and transferred on Sept. 27, 2006 (Bankr. Dist. Colo. Case No: 06-16791) Craig D. Hansen, Esq., in Phoenix, Arizona and Elizabeth K. Flaagan, Esq., in Denver, Colorado, represent the Debtors. CITIZENS FINANCIAL: AM Best Affirms Financial Strength Ratings -------------------------------------------------------------- A.M. Best Co. has affirmed the financial strength ratings of B- (Fair) of Citizens Security Life Insurance Company, and its wholly owned subsidiary United Liberty Life Insurance Company, both of Kentucky. The outlook for both ratings is stable. The companies are both subsidiaries of Citizens Financial Corporation [NASDAQ: CNFL]. CNFL is engaged in the business of life, annuities and accident and health insurance through Citizens Security and United Liberty Life. The two life/health subsidiaries maintain an adequate risk-adjusted capital position, improving operating earnings and have reduced their exposure to below investment grade holdings in recent years. Citizens Security has been recording modest increases in its absolute capital position; however, it faces a challenge to maintain adequate levels of risk-adjusted capital. In aggregate, the total value of its equity holdings, real estate and below investment grade holdings pose substantial investment risk. Prior capital increases were largely the result of capital contributions from Citizens Financial Corp., rather than organic growth from earnings. Management has placed an increased emphasis on group accident and health product lines and has tightened its underwriting on existing lines. A.M. Best will continue to monitor the success of this strategy going forward. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. CONSORTIUM SERVICE: Sept. 30 Stockholders' Deficit Narrows to $6MM ------------------------------------------------------------------ Consortium Service Management Group Inc.'s balance sheet at Sept. 30, 2006, showed $1,051,729 in total assets, $6,925,448 in total liabilities, and $206,000 in minority interest, resulting in a $6,079,719 stockholders' deficit. The company's stockholders' deficit at Dec. 31, 2005, stood at $6,311,344. The company's Sept. 30 balance sheet also showed strained liquidity with $970,982 in total current assets available to pay $6,725,448 in total current liabilities. The company reported a net loss of $1,301,246 for the third quarter ended Sept. 30, 2006, compared with a net loss of $332,547 in the comparable quarter in 2005. The company had no revenue in those periods. Full-text copies of the company's third quarter financials are available for free at http://ResearchArchives.com/t/s?16fd Going Concern Doubt As reported in the Troubled Company Reporter on May 4, 2006, Gary Skibicki, CPA, PC, raised substantial doubt about Consortium Service Management Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2004, and 2005. The auditor pointed to the company's recurring losses from operations. About Consortium Service Management Group Headquartered in Corpus Christi, Texas, Consortium Service Management Group Inc. (OTCBB: CTUM) -- http://www.ctum.com/-- is a technology management company that finances, owns, develops, patents, manages, licenses and markets innovative technologies. The company maintains offices in Atlanta, Georgia; Alexandria, Virginia; and Kiev, Ukraine. Technologies invented by scientists and engineers of Ukraine and brought to the U.S. and other countries, include: -- the company's platform, medical, Live Biological Tissue Bonding technology, which bonds human tissue without the use of sutures, staples, sealants or glues. More than 700 successful human surgeries have been performed in clinical trials in Ukraine using more than 30 different types of surgical procedures; -- the 390,000-pound proprietary Landfill Gas Purification System, now being installed at a municipal waste landfill in Chastang, Alabama, that processes raw landfill gas to pipeline quality; and -- the environmentally friendly, large-farm, Anaerobic Animal Waste Processing System. CONTINENTAL AIRLINES: Union Ready to Respond to Likely UAL Merger ----------------------------------------------------------------- In response to the reported Continental Airlines and United Airlines discussion for a possible merger, the International Association of Machinists and Aerospace Workers' general vice president, Robert Roach, Jr., issued this statement: "The Machinists Union has not been contacted by United or Continental about any potential merger. The IAM is fully prepared to defend the wages, contracts, and defined benefit pension plans earned by our 25,000 members at United and Continental. The IAM's Transportation Merger Team is also prepared to respond to any airline merger scenario. In the event a United-Continental merger d[o] occur, United's Flight Attendants could gain the defined benefit pension plan currently enjoyed by our United Airlines members and being ratified by our Continental Flight Attendants." About the IAM The IAM represents 16,000 United Airlines Ramp & Stores, Public Contact, Food Service, Fleet Technical Instructors, Maintenance Instructors, Security Officer and Food Service employees. The Machinists Union also represents more than 9,000 Continental Airlines Flight Attendants. About UAL Corp. Headquartered in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on Feb. 1, 2006. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,200 daily departures throughout the Americas, Europe and Asia, serving 154 domestic and 138 international destinations. More than 400 additional points are served via SkyTeam alliance airlines. With more than 43,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 61 million passengers per year. Continental consistently earns awards and critical acclaim for both its operation and its corporate culture. * * * As reported in the Troubled Company Reporter on Nov. 10, 2006 Moody's Investors Service assigned ratings of Caa1, LDG5-75% to the $200 million of senior unsecured notes issued by Continental Airlines Inc.'s. Moody's affirmed the B3 corporate family rating. The outlook is stable. As reported in the Troubled Company Reporter on Oct. 23, 2006, Standard & Poor's Ratings Services affirmed its ratings, including the 'B' long-term and 'B-3' short-term corporate credit ratings, on Continental Airlines Inc. The outlook is revised to stable from negative. Continental has about $17 billion of debt and leases. At the same time, Fitch Ratings has upgraded Continental Airlines Inc.'s Issuer Default Rating to 'B-' from 'CCC' and Senior Unsecured Debt to 'CCC/RR6' from 'CC/RR6'. Rating outlook was stable. CREDIT SUISSE: S&P Holds Low-B Ratings on Classes J to O Certs. --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three classes of commercial mortgage pass-through certificates from Credit Suisse First Boston Mortgage Securities Corp.'s series 2004-C1. Concurrently, ratings were affirmed on the remaining 17 classes from the same series. The raised and affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The upgrades of several senior certificates reflect the defeasance of $94.5 million in collateral since issuance. As of the Nov. 17, 2006, remittance report, the collateral pool consisted of 261 loans with an aggregate trust balance of $1.56 billion, compared with 262 loans totaling $1.62 billion at issuance. The master servicers, KeyCorp Real Estate Capital Markets Inc. and Midland Loan Services Inc., reported primarily full-year 2005 financial information for 98% of the pool. Based on this information, Standard & Poor's calculated a weighted average debt service coverage of 2.01x, up from 1.73x at issuance. The current DSC figure excludes the loans for the defeased collateral, and the National Consumer Cooperative Bank cooperative loan grouping. There are three loans with the special servicer, LNR Partners Inc. One of the specially serviced loans is 90-plus-days delinquent and has an appraisal reduction amount of $513,287 in effect. All of the remaining loans in the pool are current. To date, the trust has not experienced any losses. The top 10 loans secured by real estate have an aggregate outstanding balance of $538.2 million and a weighted average DSC of 2.05x, compared with 2.04x at issuance. Two of the top 10 loans are on the watchlist and are discussed further below. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans. One property was characterized as "excellent," while the remaining collateral was characterized as "good." Credit characteristics for three of the loans in the pool remain consistent with those of investment-grade obligations. Details of these loans are: -- The second-largest exposure in the pool, the Beverly Center loan, has a trust balance of $99 million and a whole-loan balance of $346.5 million. The pari passu loan is secured by the leasehold interest in an 855,015-sq.-ft. regional mall in Los Angeles, Calif. For the six months ended June 30, 2006, the DSC was 1.70x and occupancy was 99%. Standard & Poor's adjusted net cash flow is comparable to its level at issuance. -- The third-largest loan in the pool, the Stanford Shopping Center loan, has a trust balance of $90 million and a whole-loan balance of $165 million. A $75 million pari passu portion is not included in the trust and supports the certificates in the Credit Suisse First Boston Mortgage Securities Corp 2003-C5 transaction. In addition, $55 million in mezzanine financing is in place. The loan is secured by 534,013 sq. ft. of a 1.4 million-sq.-ft. open-air regional mall in Stanford, CA. The property is subject to ground leases from Stanford University. The sponsor of the loan and manager of the property is Simon Property Group Inc. The property reported a year-end 2005 occupancy of 94%. Standard & Poor's adjusted NCF is 13% above its level at issuance. -- The fourth-largest exposure in the pool, the Mayfair Mall and Office Complex loan, is encumbered by a $193.4 million whole loan. The A-1 note is divided into three pari passu pieces, of which $65.2 million serves as the trust collateral. The loan is secured by 858,165 sq. ft. of the 1,068,879-sq.-ft. Mayfair Mall and four office properties totaling 419,318 sq. ft., all in the Milwaukee suburb of Wauwatosa, Wiscosin. The sponsor of the loan and manager of the property is General Growth Properties Inc. For the six months ended June 30, 2006, the property reported occupancy of 98%. Standard & Poor's adjusted NCF is 12% above its level at issuance. The master servicers reported a watchlist of 37 loans. The seventh-largest exposure, the Red Lion Hotel portfolio, has an outstanding balance of $24 million and is secured by a portfolio of four lodging properties in Washington, Georgia, and Utah with a total of 1,013 units. Two of the cross-collateralized and cross- defaulted loans appear on the watchlist because the properties reported a year-end 2005 DSC below 1x. The four properties reported a weighted average year-end 2005 DSC of 1.28x. The eighth-largest exposure, the Bristol Park at Encino Commons Apartments loan, has an outstanding balance of $23.7 million and is secured by a 324-unit multifamily property in San Antonio, Texas. The loan appears on the watchlist because the property reported a year-end 2005 DSC of 0.97x. The Buckner Village Apartments loan is the largest loan with the special servicer and is in its grace period. The loan is secured by a 172-unit multifamily property in Dallas, Texas. The loan was transferred to the special servicer in March 2006 due to imminent default. LNR will return the loan to the master servicer once the loan has remained current for a three-month period. Catalina Apartments is a 123-unit multifamily property in Dallas, Texas, securing a $2 million loan that is 90 days delinquent. The loan was transferred to LNR in August 2006 due to imminent default. LNR is preparing to foreclose on the loan. An ARA of $513,287 is in effect for this loan. 1-7 Journal Square is an 8,869-sq.-ft. retail property in Jersey City, N.J. The loan was transferred to LNR in August 2006 due to imminent default. The sponsor of the loan and LNR are in negotiations with a local developer to sell the property. Standard & Poor's stressed the loans on the watchlist and other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the raised and affirmed ratings. Ratings Raised CSFB Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates Series 2004-C1 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ B AAA AA 12.21% C AA+ AA- 11.04% D A+ A 8.70% Ratings Affirmed CSFB Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2004-C1 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 15.07% A-2 AAA 15.07% A-3 AAA 15.07% A-4 AAA 15.07% E A- 7.54% F BBB+ 6.11% G BBB 5.07% H BBB- 3.90% J BB+ 3.38% K BB 2.86% L BB- 2.47% M B+ 1.82% N B 1.56% O B- 1.30% A-X AAA N/A A-SP AAA N/A A-Y AAA N/A N/A-Not applicable. CRESCENT REAL: S&P Revises Outlook to Negative from Stable ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Crescent Real Estate Equities Co. and Crescent Real Estate Equities L.P. to negative from stable. In addition, the 'BB-' corporate credit, 'B' senior unsecured debt, and 'B-' preferred stock ratings on Crescent were affirmed. The affirmations affect roughly $625 million of senior unsecured notes and $401 million of preferred stock. "The outlook revision reflects concerns regarding the company's aggressive financial profile, as Crescent remains challenged to fully cover its dividend with operating cash flow," said credit analyst Elizabeth Campbell. "Management has relied on nonrecurring gains from asset sales and its residential development business to fund its dividend shortfall over the past several quarters. These sources of cash are volatile, however, and residential sales have historically been heaviest at year-end, and have been generated from a depleting asset." Current financial measures are aggressive as the company is unable to meet its dividend with operating cash flow. As such, Crescent relies on monetization opportunities to meet a shortfall that we estimate has reached $50 million year-to-date. A significant drop in cash flow from the company's residential development business in its historically strong fourth quarter appears likely, and could cause us to revise our ratings downward. Standard & Poor's would revise its outlook to stable if the company makes progress toward covering its dividend with less variable sources of cash flow or if it creates delevering opportunities via asset sales and/or by reducing large maturities in 2007. CYBER DEFENSE: Sept. 30 Balance Sheet Upside-Down by $14.1 Million ------------------------------------------------------------------ Cyber Defense Systems Inc.'s balance sheet at Sept. 30, 2006, showed $4.3 million in total assets and $18.5 million in total liabilities, resulting in a $14.1 million stockholders' deficit. The company incurred a $15.9 million net loss on $136,137 of net revenues for the three months ended Sept. 30, 2006, compared with a $719,460 net loss on $114,873 million of net revenues for the same period in 2005. The increase in revenues is primarily due to increased sales of the Techsphere Systems International Inc.'s related product and integration services as there was no revenue recognized in the three months ended Sept. 30, 2005, due to Techsphere being acquired on Sept. 19, 2005. Amortization expense for the nine months ended Sept. 30, 2006 was $593,982. On Sept. 30, 2006, the management determined that the value of this asset was impaired. As a result, the company recorded an impairment loss for $11,330,674 as of Sept. 30, 2006. In addition, management determined the estimated remaining useful life to be 7 years. The book value of the asset was reduced to $2,100,000 and the monthly amortization is $25,000. As of Sept. 30, 2006, the company's balance sheet also showed strained liquidity with $1 million in total current assets available to pay $16.8 million in total current liabilities. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?16f9 Going Concern Doubt As reported in the Troubled Company Reporter on May 24, 2006, Hansen, Barnett & Maxwell, in Salt Lake City, Utah, expressed substantial doubt about Cyber Defense Systems, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's working capital deficits and losses from operations. About Cyber Defense Based in St. Petersburg, Florida, Cyber Defense Systems, Inc. -- http://www.cyberdefensesystems.com/-- offers security solutions for the military, government, and the private sector. Cyber Defense manufactures new generation airships for surveillance and communication. CYOP SYSTEMS: Posts $1.1MM Net Loss in Quarter Ended Sept. 30 ------------------------------------------------------------- CYOP Systems International Inc. has filed its quarterly financial statements for the period ended Sept. 30, 2006. The company reported a $1,121,631 net loss on zero revenues for the quarterly period ended Sept. 30, 2006, compared to a net loss of $298,229 on $1,371 of net revenues in the same quarter in 2005. At Sept. 30, 2006, the company's balance sheet showed $1,858,598 in total assets and $3,601,666 in total liabilities, resulting in a $1,393,068 stockholders' deficit. The company had cash and cash equivalents of $1,465 at Sept. 30, 2006 and a working capital deficit of $3,050,228 with the deficiency arising primarily from $1,458,634 in loans from related parties, and a $1,474,557 convertible debenture with Cornell Capital Partners L.P. A full-text copy of the company's financial statements for the quarterly period ended Sept. 30, 2006, is available for free at http://researcharchives.com/t/s?16fa Going Concern Doubt De Leon & Company, P.A., in Pembroke Pines, Florida, raised substantial doubt about CYOP Systems' ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the company's recurring losses from operations and capital deficiency. About CYOP Systems Based in Beverly Hills, California, CYOP Systems International Incorporated and its subsidiaries provide multimedia transactional technology solutions and services for the entertainment industry. The company's range of products and services include financial transaction platforms for on-line video games, licensed online gaming software and integrated e-commerce transaction technology for on-line merchants. DAIMLERCHRYSLER: U.S. Unit Ceases Production on Various Plants -------------------------------------------------------------- The Chrysler Group, the U.S.-based unit of DaimlerChrysler AG, will halt production for more than a month on some of its U.S. plants starting Dec. 22, 2006, to cut piled-up inventory, Jeff Bennett and Alan Ohnsman at Bloomberg News report. According to Bloomberg, Chrysler will stop vehicle production in its Dodge truck plants in St. Louis, Michigan, Newark, and Delaware, minivan plants in Windsor, Ontario, and a jeep plant in Detroit. The company, which depends on light trucks for most of its sales, has cut back its inventory in spite of its U.S. sales plummeting 7.7% during November. The company is trying to shed off units that were not ordered by customers, Bloomberg says. Bloomberg relates that Autodata Corp. stated that light truck sales dropped 5.6%. Large pickup truck sales also dropped 9.1% from last year. In addition, gasoline prices that stayed up for $3 a barrel for most of the year contributed to declining sales. Bloomberg adds that in the second quarter of 2006, Chrysler had planned to cut North American production by 16%. Inventory Plans Automotive News, a Detroit trade publication, has reportedly said that Chrysler had an 81-day supply of light trucks, instead of the standard 60 days. Joe Eberhardt told Bloomberg in an interview that the company's inventory of unsold vehicles was in the low "500,000s". Chrysler will have some plants that will suspend its operations longer than the planned duration, while other Chrysler facilities will be operating longer than usual due to the demand for certain vehicles, Frank Klegon, Chrysler product development head, informed Bloomberg. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DELPHI CORP: Ct. Indefinitely Adjourns Section 1113/1114 Hearing ---------------------------------------------------------------- The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York has indeterminately adjourned the hearing on Delphi Corporation and its debtor-affiliates' Section 1113/1114 Motion in light of the further progress reported by the Debtors at the status conference held on Nov. 30, 2006. The Court held an in-person, in-camera status conference with the Debtors, the Respondents, and the Official Committee of Equity Security Holders on Dec. 13, 2006, regarding the status of negotiations with respect to the consensual resolution of the 1113/1114 Motion. Delphi is seeking to reject its collective bargaining agreements with unions and to modify obligations to provide insurance benefits for its hourly retirees. To restructure its U.S. operations, Delphi is planning to cut 4/5 of its 33,100 U.S. hourly workers, close 21 of its 29 U.S. union plants and slash wages and benefits for workers who stay. The Section 1113-1114 proceedings began May 9, 2006, with opening statements by Delphi, the UAW, other objecting unions -- IUE-CWA, USW, IAM, IBEW and IUOE -- the Official Committee of Unsecured Creditors and others. 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. 50; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: Behind by $1,250,000,000 in Pension Payments --------------------------------------------------------- Delphi Corporation is delinquent by at least $1,250,000,000 in payments to its pension fund since the Petition Date, David Shepardson of The Detroit News reports, citing federal pension regulators. The Pension Benefit Guaranty Corp. told The Detroit News that Delphi's pension fund may be underfunded by as much as $10,600,000,000. Mr. Shepardson discloses that Delphi has already filed a request with the Internal Revenue Service seeking to waive excise taxes it may liable for in connection with its inability to meet the minimum required pension payments. According to Delphi's counsel, the company may stop the pension fund next year, Mr. Shepardson relates. U.S. hourly pension and other post-employment benefits exposed Delphi to approximately $10,700,000,000 in unfunded liabilities at December 31, 2005, according to the company's annual report filed with the U.S. Securities and Exchange Commission in July 2006. Delphi reported that approximately $2,300,000,000 was attributable to unfunded pension obligations and $8,400,000,000 was attributable to OPEB obligations. Before filing for bankruptcy, Delphi projected that cash outflows for hourly pension contributions and OPEB payments through 2007 would approximate $1,900,000,000. Through the Chapter 11 process, however, Delphi is permitted to defer a significant portion of the contributions until it emerges from bankruptcy. During the six months ended June 30, 2006, Delphi contributed $119,000,000 to its U.S. pension plans, according to the company's quarterly report filed in August 2006. The amount represents the portion of the pension contribution attributable to services rendered by Delphi employees in the fourth quarter of 2005 and the first quarter of 2006. Under the Employee Retirement Income Security Act and the U.S. Internal Revenue Code, a $600,000,000 minimum funding payment to the U.S. pension plans was due in the first six months of 2006. As permitted under Chapter 11, Delphi contributed only the portion of the contribution attributable to post-bankruptcy-petition service. Accordingly, Delphi did not meet the minimum funding standards of ERISA and the Internal Revenue Code for its primary U.S. pension plans for the plan years ended Sept. 30, 2005. Delphi said the $173,000,00 underfunded amount was due June 15, 2006. The default triggered a $17,000,000 excise tax. On July 14, 2006, Delphi contributed approximately $60,000,000 to its U.S. pension plans. The amount represents the portion of the pension contribution attributable to services rendered by Delphi employees in the postpetition portion of the second quarter of 2006. Certain of Delphi's non-U.S. subsidiaries also sponsor defined benefit pension plans, which generally provide benefits based on negotiated amounts for each year of service. Delphi's primary non-U.S. plans are located in France, Germany, Luxembourg, Mexico, Portugal, and the United Kingdom. The UK and certain Mexican plans are funded. In addition, Delphi has defined benefit plans in Korea and Italy for which amounts are payable to employees immediately upon separation. 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. 50; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DIAMOND ENTERTAINMENT: Sept. 30 Balance Sheet Upside-down by $1.8M ------------------------------------------------------------------ Diamond Entertainment Corporation reported a $93,922 net loss on $451,350 of revenues for the quarterly period ended Sept. 30, 2006, compared to a net loss of $156,506 on $695,997 of total revenues for the same quarter in 2005. The company's balance sheet at Sept. 30, 2006, showed 1,962,470 in total assets and $3,756,215 in total liabilities, resulting in a $1,793,745 stockholders' deficit. The company's September 30 balance sheet also showed strained liquidity with $1,529,807 in total current assets available to pay $3,754,952 in total current liabilities coming due within the next 12 months. The company has implemented a plan to increase its overall market share of core business and its general merchandise line products, and to expand into the contract replication, duplication and packaging business. The company aims to: -- attain leadership in the market segment of high quality budget priced distribution of videocassettes and DVD titles; -- expand the company's association with firms in China to source and handle QA functions for its general merchandise line of products and market a wide selection of high quality, low price general merchandise and sundry items from China; -- re-establish sales to club type stores with the company's new general merchandise line of products; -- utilize the company's relationship with mass merchandisers to introduce and market its general merchandise line of products; -- continue to seek out additional financing sources to support the expected growth in the company's general merchandise line of products; -- avoid direct competition with larger competitors who sell in the same product categories as the company, by offering higher quality budgeted price products; -- continue to acquire new videocassette and DVD titles for distribution; and -- expand the company's internet e-Commerce. A full-text copy of the company's financial statements for the quarterly period ended Sept. 30, 2006, is available for free at http://researcharchives.com/t/s?16fb Going Concern Doubt Pohl, McNabola, Berg and Company, LLP, raised substantial doubt about Diamond Entertainment's ability to continue as a going concern after auditing the company's financial statements for the years ended March 31, 2006 and 2005. The auditing firm pointed to the company's substantial losses and negative cash flows from operations for the year ended March 31, 2006. About Diamond Entertainment Based in Walnut, California, Diamond Entertainment Corporation, dba e-DMEC, markets and sells a variety of DVD and videocassette titles to the budget home video and DVD market. The Company's wholly owned subsidiary, Jewel Products International Inc., manufactures and distributes general merchandise, children's toy products and other sundry items from U.S. based importers or directly from Asia for distribution to mass merchandisers in the United States. During the years ended March 31, 2006 and 2005, JPI was dormant and did not record sales of its products. DLJ COMMERCIAL: Fitch Junks Rating on $15.5MM Class B-8 Certs. -------------------------------------------------------------- DLJ Commercial Mortgage Corp.'s pass-through certificates, series 1999-CG2, is downgraded and assigned a distressed recovery rating as: -- $15.5 million class B-8 to 'CCC/DR3' from 'B-'. In addition, Fitch affirms these classes: -- $25.9 million class A-1A at 'AAA'; -- $890.2 million class A-1B at 'AAA'; -- Interest-only class S at 'AAA'; -- $69.8 million class A-2 at 'AAA'; -- $81.4 million class A-3 at 'AAA'; -- $19.4 million class A-4 at 'AAA'; -- $58.1 million class B-1 at 'AAA'; -- $23.3 million class B-2 at 'AAA'; -- $38.8 million class B-3 at 'AA-'; -- $31 million class B-4 at 'A-'; -- $15.5 million class B-5 at 'BBB'; -- $19.4 million class B-6 at 'BB+'; and, -- $15.5 million class B-7 at 'B+'. The $27.2 million class C is not rated by Fitch. The rating downgrade is a result of increased loss expectations on the specially serviced loans as a result of recent valuations on specially serviced assets since Fitch's last rating action. As of the December 2006 distribution date, the pool's aggregate certificate balance has been reduced 14.1% to $1.33 billion from $1.55 billion at issuance. Sixty-six loans have defeased since issuance. There are currently four loans in special servicing and significant losses are expected. The largest specially serviced asset is a multifamily property located in Marietta, GA and is currently real estate owned. A purchase and sales agreement is being negotiated. The second largest specially serviced asset is an office property located in King of Prussia, PA, and is currently REO. The property is 100% vacant and is being marketed for lease or sale. The third largest specially serviced asset is a retail property located in Boaz, AL and is currently REO. The property is currently 43% occupied with no prospective tenants. The special servicer continues to market the property for sale or lease. Recent appraisal valuations indicate significant losses upon the liquidation of these assets. Fitch expected losses on the specially serviced loans will ultimately deplete the non-rated class C and negatively impact class B-8. DURA AUTOMOTIVE: Hires Glass & Associates as Financial Advisors --------------------------------------------------------------- DURA Automotive Systems Inc. and its debtor affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Glass & Associates Inc. as their financial advisors. John C. DiDonato, president of Glass & Associates, Inc., relates that since 1986, his firm has acquired significant experience with business assessments, management consulting, interim management, financial consulting, interim management, financial restructuring, litigation consulting, and bankruptcy matters. Glass has served boards of directors, senior management, secured and unsecured lenders, unsecured creditors' committees, and other stakeholders of distressed businesses in more than 750 engagements in approximately 30 different industries, including more than 100 engagements in the automotive supplier sector. Specifically, Glass has acted as financial or operational advisor to Allied Holdings, Inc., Intermet Corporation, CEP Holdings, LLC, General Chemical Group, Inc., Integrated Electrical Services, Inc., Mississippi Chemical Corporation, Railworks Corporation, and Transit Group, Inc., in those debtors' Chapter 11 cases. The firm, Mr. DiDonato says, has also acted as advisors to lenders, acquirers and customers in the Chapter 11 cases of Collins & Aikman Corporation, BBi Enterprises, Inc., Metalforming Technologies, Tower Automotive, Inc., and Trim Trends Co., LLC. According to Keith Marchiando, chief financial officer of Dura Automotive Systems, Inc., the Debtors have selected Glass after reviewing the qualifications and experience of the firm's personnel and because of Glass' diverse knowledge and considerable expertise in assisting restructuring companies both inside and outside of Chapter 11 cases. On Aug. 15, 2006, the Debtors engaged Glass to provide financial advisory services. Since that time, Glass has: (1) developed a weekly liquidity budget, a 13-week cash forecast, and analyzed working capital requirements in both the short-term and the longer-term; (2) assisted the Debtors in developing and implementing cash management strategies, tactics and processes; (3) assisted the Debtors in developing contingency plans in support of operational and financial restructuring efforts; and (4) developed financial projections models, which will be used in coordination with the Company's business plan and valuation to which Glass is also providing assistance. As a result, Glass has developed a great deal of institutional knowledge regarding the Debtors' operations, finance and systems. "Such experience and knowledge will be valuable to the Debtors in their efforts to reorganize," Mr. Marchiando says. Thus, as the Debtors' financial advisors, Glass will: (a) assist the Debtors in the preparation of financial-related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statements of Financial Affairs, and Monthly Operating Reports; (b) assist the Debtors with information and analyses required pursuant to the Debtors' debtor-in-possession financing; (c) assist with the identification and implementation of short-term cash management procedures; (d) assist in responding to and tracking calls received from suppliers in the Debtors' call center, including the production of various management reports reflecting call center activity; (e) advise and assist the Debtors in connection with the development and implementation of key employee retention and other critical employee benefit programs; (f) assist with the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each; (g) assist the Debtors' management team and counsel focused on the coordination of resources related to the ongoing reorganization effort; (h) assist in the preparation of financial information for distribution to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; (i) attend meetings and assist in discussions with potential investors, banks and other secured lenders, any official committee(s) appointed in the Debtors' cases, the United States Trustee, other parties-in-interest, and professionals hired by these parties, as requested; (j) analyze creditor claims by type, entity, and individual claim, including assistance with development of databases, as necessary, to track those claims; (k) assist in the preparation of information and analysis necessary for the confirmation of a plan of reorganization, including information contained in the disclosure statement; (l) assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; (m) provide litigation advisory services with respect to accounting and tax matters, along with expert witness testimony on case related issues as required by the Debtors; and (n) render other general business consulting or other assistance as the Debtors' management or counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals. According to Mr. Marchiando, Glass will also provide assistance in responding to and handling calls received from the Debtors' suppliers in the Debtors' call center, including the production of various management reports reflecting call center activity. In connection with the Vendor Call Center process, Glass' professionals will be performing repetitive tasks in responding to numerous vendor calls including answering incoming calls, communicating relevant factual information regarding the proceedings, negotiating terms of supply and updating the Vendor Call Center database to reflect the outcome of calls received. Given the nature of these tasks and the expected volume of supplier calls, Mr. Marchiando says, it would be impractical and would provide little monitoring insight to various parties-in- interest for the professionals to maintain detailed time records for tasks performed in connection with the Vendor Call Center. Thus, the Debtors ask the Court to allow the Vendor Call Center professionals to submit only summary documentation with the overall Glass applications that provide the hours incurred by level and descriptions of the categories of tasks that were completed by the group during the applicable time period in lieu of providing detailed time records. The Debtors will pay Glass's professionals based on their hourly rates: Professional Hourly Rate ------------ ----------- Principal $375 - $575 Case Director $350 - $500 Senior Consultant $250 - $380 Consultant $200 - $300 Clerical/Administrative $75 - $125 In addition, the Debtors will pay the firm a $1,000,000 completion fee on (a) the effective date of a confirmed Chapter 11 plan of reorganization, or (b) the consummation of a Restructuring Transaction. The term "Restructuring Transaction" means any recapitalization or restructuring of the Debtors' preferred, equity or debt securities, and other indebtedness, obligations or liabilities, including pursuant to a repurchase or exchange transaction, solicitation of consents, waivers, acceptances or authorizations. The Debtors may also, at their sole discretion and subject to the Court's approval, pay Glass on the Effective Date an Incentive Fee of up to $1,000,000 for its role in matters including: (a) obtaining customer price and other concessions; (b) stabilizing and improving vendor relations; (c) developing a liquidation analysis; or (d) any other matters in which Glass provides a benefit to the Debtors. Glass will seek reimbursement for reasonable and necessary expenses incurred in connection with the Debtors' reorganization cases. Mr. Marchiando asserts the fee structure is consistent with Glass' normal and customary billing practices for comparably sized and complex cases. The parties believe the compensation arrangements are both reasonable and market-based. The Debtors will indemnify and hold Glass harmless against liabilities arising out of or in connection with its retention by the Debtors, except for any liability for losses, claims, damages, or liabilities incurred by the Debtors that are finally judicially determined by a court of competent jurisdiction to have primarily resulted from the bad faith, self-dealing, breach of fiduciary duty (if any), gross negligence, or willful misconduct of Glass. According to the firm's books and records, during the 90-day period prior to the Petition Date, Glass received $3,259,512 from the Debtors for professional services performed and expenses incurred. "These payments have been applied to outstanding invoices and applied on account to fees and expenses incurred in providing services to the Debtors in contemplation of, and in connection with, [the] prepetition restructuring activities," Mr. DiDonato says. Glass estimates it has received unapplied advance payments from the Debtors in excess of prepetition billings totaling $500,000. Mr. DiDonato assures the Court that Glass is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. In addition, he says, Glass neither holds nor represents an interest adverse to the Debtors within the meaning of Section 327(a) of the Bankruptcy Code. 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. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DURA AUTOMOTIVE: Gets Court's Final Okay for Customer Programs -------------------------------------------------------------- DURA Automotive Systems Inc. obtained from the U.S. Bankruptcy Court for the District of Delaware final authorization to continue, renew, replace, implement new, or terminate, and perform prepetition obligations under their Customer Programs. As reported in the Troubled Company Reporter on Nov. 23, 2006, the company, pursuant to Sections 105(a), 363, 1107(a), and 1108 of the Bankruptcy Code, obtained, on an interim basis, the Court's authority to: (a) perform their prepetition obligations related to the foregoing Customer Programs; and (b) continue, renew, replace, implement new, or terminate their Customer Programs, in the ordinary course of business, without further application to the Court. The Debtors also sought to continue their Customer Programs as they have proven: (i) successful business strategies in the past; and (ii) responsible for generating valuable goodwill, repeat business, and net revenue increases. 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. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ECOSPHERE TECH: Sept. 30 Balance Sheet Upside-Down by $8.9 Million ------------------------------------------------------------------ Echosphere Techologies Inc., formerly known as Ultrastrip Systems Inc., reported a $929,000 net loss on $1.4 million of revenues for the third quarter ended Sept. 30, 2006, compared with a $1.9 million net loss on $187,402 of revenues for the same period in 2005. At Sept. 30, 2006, the company's consolidated balance sheet showed $1.8 million in total assets and $6.9 million in total debts, $1.1 million in redeemable convertible cumulative preferred stock series A, and $2.7 million in redeemable convertible cumulative preferred stock series B, resulting in total capital deficit of $8.9 million. Additionally, accumulated deficit as Sept. 30, 2006, stood at $45.3 million. The primary causes of the decrease in net loss is higher gross profits from the sale of two robotic systems. Additionally, in 2005 the company expensed, as non-cash compensation expense, the value of options granted to a former chairman, since the former chairman no longer has any relationship with the company. The increase in revenues resulted primarily from the delivery of two robotic systems and related spare parts to an overseas customer for $1.28 million. Additionally, the company generated nearly $80,000 of service revenues by providing coating removal services to a customer at the Port of San Francisco. In the same quarter of 2005, the company recognized $125,000 of revenues in support of the Hurricane Katrina recovery project, had spare part sales of $51,000, and generated commissions of 11,000. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $417,848 in total current assets available to pay $6.5 million in total current liabilities. 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?1709 Net cash used in operating activities was $1.3 million for the nine months ended Sept. 30, 2006, compared to $4.7 million for the nine months ended Sept. 30, 2005. This decrease relates to a reduction in inventories due to the sale of robotic systems, and an increase in accounts payable and accrued expenses during 2006 compared to 2005. The company's net cash used in investing activities was $1.1 million for the nine months ended Sept. 30, 2006 compared to net cash used by investing activities of $61,641 for the nine months ended Sept. 30, 2005. The change in cash is due to a building of two robotic systems for the company's use in coating removal services. Additionally, in 2006 the company constructed a tactical water filtration system which will be used for demonstration purposes. The company's net cash provided by financing activities was $2.3 million for the nine months ended Sept. 30, 2006 compared to $5.1 million for the nine months ended Sept. 30, 2005. The decrease is a result of the company's reduction and ultimate termination of its convertible note program initiated in November 2004 and limited additional borrowings. Going Concern Doubt As reported in the Troubled Company Reporter on June 1, 2006, Tedder, James, Worden & Associates, P.A., in Orlando, Florida, raised substantial doubt about UltraStrip Systems, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's working capital deficit and losses from operations. About Ecosphere Technologies Ecosphere Technologies Inc. fka Ultrastrip Systems Inc. (OTC: ESPH) -- http://www.ecospheretech.com/-- creates patented and engineered solutions for the defense, homeland security and global ship repair markets. It operates through two business units: Ecosphere Technologies (Ecosphere) and Ultrastrip Envirobotics Systems (UES). The Ecosphere business unit provides water filtration systems capable of producing clean drinking water using natural water source. The UES business unit serves the ship repair industry and eliminates environmental damage. It provides ultra high pressure robotic water jetting coating removal products and services that are used to strip coatings from large vessels such as super tankers, cruise ships and military vessels. The company changed its name from UltraStrip Systems, Inc. to Ecosphere Technologies, Inc. on Aug. 10, 2006, upon approval of its stockholders. ELCOM INT'L: Equity Deficit Narrows to $1.2 Mil. at Sept. 30 ------------------------------------------------------------ Elcom International Inc. filed its financial statements for the quarter ended Sept. 30, 2006, with the Securities and Exchange Commission. The company reported a $1,523,000 net loss on $683,000 of net revenues for the three months ended Sept. 30, 2006, versus a $1,115,000 net loss on $547,000 of net revenues for the three months ended Sept. 30, 2005. At Sept. 30, 2006, the company's balance sheet showed a $1,219,000 stockholders' deficit, compared to a positive equity of $1,225,000 at Dec. 31, 2005. Going Concern Doubt Vitale, Caturano & Company, Ltd., expressed raise substantial doubt about Elcom International's ability to continue as a going concern after it audited the company's financial statements for the years ended Dec. 31, 2005. The auditing firm pointed to the company's net losses every year since 1998, has an accumulated deficit of $126,252,000 as of Sept. 30, 2006. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1712 Elcom International, Inc. (OTC Bulletin Board: ELCO and AIM: ELC and ELCS) -- http://www.elcominternational.com/-- operates elcom, inc, an international B2B Commerce Service Provider offering affordable solutions for buyers, sellers and commerce communities to automate many or all of their purchasing processes and conduct business online. PECOS, Elcom's remotely hosted flagship solution, enables enterprises of all sizes to achieve the many benefits of B2B eCommerce without the burden of infrastructure investment and ongoing content and system management. ENER1 INC: September 30 Balance Sheet Upside-Down by $47 Million ---------------------------------------------------------------- Ener1 Inc. filed its financial statements for the quarter ended Sept. 30, 2006, with the Securities and Exchange Commission. The company reported a $6,015,000 net loss on zero sales for the three months ended Sept. 30, 2006, versus a $30,697,000 net loss on $25,000 of net sales for the three months ended Sept. 30, 2005. At Sept. 30, 2006, the company's balance sheet showed a stockholders' deficit of $47,055,000, compared to a deficit of 75,943,000 at Dec. 31, 2005. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1713 Going Concern Doubt Malone & Bailey, PC, expressed substantial doubt about Ener1's ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the company's recurring losses from operations, negative cash flow and accumulated deficit. About Ener1 Ener1 Inc. (OTCBB: ENEI) -- http://www.ener1.com/-- is an alternative energy technology company. Its interests include: EnerDel, a lithium-ion battery company in which Delphi Corp. owns a minority interest, Japan-based Enerstruct, a lithium-ion company in which Ener1 strategic investor ITOCHU Corporation has a major interest; wholly owned subsidiary EnerFuel, a fuel cell products and services company, and wholly owned subsidiary NanoEner, which develops nanotechnology-based materials and manufacturing processes for high-power batteries and other applications. ENTERGY NEW ORLEANS: Parent Plans Delisting from NYSE ARCA ---------------------------------------------------------- Entergy Corporation plans to voluntarily withdraw its securities from listing on NYSE Arca, Inc., formerly the Pacific Exchange. The company's securities will continue to be listed on the New York Stock Exchange. The decision to voluntarily withdraw listing from NYSE Arca was made to eliminate duplicative administrative requirements and costs inherent with dual listings as a result of the NYSE Group's recent merger with Archipelago Holdings, the parent company of NYSE Arca. NYSE Arca will continue trading Entergy's securities on an unlisted trading privilege basis. 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. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ENTERGY NEW: Inks Stipulation on Adequate Protection Payments ------------------------------------------------------------- Entergy New Orleans, Inc.; Entergy Corp., as sole shareholder of ENOI; Financial Guaranty Insurance Company; the Bank of New York, as indenture trustee; and the Ad Hoc Committee of Bondholders have made substantial progress on the terms of a Chapter 11 plan of reorganization that should be acceptable to all parties. The Debtor filed on Dec. 6, 2006, a Second Amended Plan of Reorganization and accompanying Disclosure Statement. The Debtor expects to file a Third Amended Plan in advance of the scheduled hearing on the Disclosure Statement in January 2007. The Third Amended Plan will resolve outstanding issues with respect to the bondholders. ENOI expects that Plan will be confirmed. The parties agree that if and when a Third Amended Plan is filed: (1) ENOI will pay to BNY or FGIC, as applicable, as adequate protection and not as interest, an amount equal to the interest that has accrued on the Bonds from September 23, 2006, through and including the effective date of the Third Amended Plan; (2) after filing the Third Amended Plan, if ENOI either withdraws the Plan, or modifies it in a manner that is otherwise prohibited without the consent of FGIC, BNY, and the Ad Hoc Bondholders Committee, then ENOI's action will constitute the automatic termination of its exclusive right to file and obtain acceptances of a Chapter 11 plan; (3) the stipulation will become effective upon the filing of the Third Amended Plan; (4) within five business days after the Stipulation's Effective Date, ENOI will pay to BNY, as adequate protection and not as interest, an amount equal to the interest that has accrued on the Bonds and that is due to be paid from September 23, 2006, through and including the Stipulation's Effective Date; and (5) ENOI will reimburse FGIC and pay BNY, as adequate protection and not as interest, certain amounts. However, ENOI may cease, at its sole discretion, making the adequate protection payments on the earlier of the date that ENOI withdraws the Third Amended Plan, or the Court denies confirmation of the Third Amended Plan: * ENOI will reimburse FGIC an amount equal to all amounts paid by FGIC pursuant to the Bond Indenture and Mortgage, the FGIC Insurance Agreements, and the Surety Bonds during the Initial Accrual Period in respect of interest on the Insured Bonds; * ENOI will pay BNY an amount equal to all interest accruing on the Bonds when the amounts become due and payable in accordance with the Bond Indenture and Mortgage. The parties further stipulate that with respect to the interest that became due and payable on the Bonds during the period beginning on the Petition Date through Sept. 23, 2006, if the Plan Effective Date has not occurred by June 30, 2007, ENOI will pay to BNY -- or with respect to the portion of the Interest Amount that FGIC paid with respect to the Insured Bonds -- to FGIC, as adequate protection and not as interest, an amount equal to: (a) interest on the Interest Amount at the non-default rate specified in the Bond Indenture and Mortgage; or (b) the interest rate under the FGIC Insurance Agreements, as applicable, for the period beginning July 1, 2007, and ending on the earlier of June 30, 2007, or the date that ENOI withdraws the Third Amended Plan, or the Court denies confirmation of the Third Amended Plan. The payments will be made quarterly, beginning with the quarterly payment due on October 1, 2007. The parties also agree that the Court's August 17, 2006 Fee Order is modified to include The Blackstone Group L.P., as a "Lender Professional" entitled to recover reasonable fees and costs during ENOI's Chapter 11 case. The parties clarify that nothing in their Stipulation will be: (i) deemed to be an amendment, waiver or other modifications of any rights or remedies of FGIC or BNY under the Bonds, Bond Indenture and Mortgage, the FGIC Insurance Agreements, the Surety Bonds, the DIP Financing Order, or the Fee Order, all of which will remain in full force and effect; and (ii) a determination by the Court, or an agreement by any of the parties or with any Bondholder, that the Bond Collateral has a greater value than the principal amount of the Bond Claim, or that interest, attorneys' fees, costs or charges provided for under the Bonds accrue after the Petition Date pursuant to Section 506 of the Bankruptcy Code. 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. 30; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ETHERIDGE CABINET: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Etheridge Cabinet Shop, Inc. 902 East Baldwin Road Panama City, FL 32405 Tel: (850) 769-0201 Fax: (850) 784-7703 Bankruptcy Case No.: 06-50310 Type of Business: The Debtor manufactures custom wooden and laminated cabinets. See http://www.etheridgecabinets.com/ Chapter 11 Petition Date: December 1, 2006 Court: Northern District of Florida (Panama City) Judge: Lewis M. Killian Jr. Debtor's Counsel: Louis L. Long, Jr., Esq. Chesser & Barr, P.A. 1201 Eglin Parkway Shalimar, FL 32579 Tel: (850) 651-9944 Fax: (850) 651-9867 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service $213,000 11601 Roosevelt Boulevard Philadelphia, PA 19255 FL Dept. Revenue-Pensacola $41,000 3670 North "L" Street, Building C Pensacola, FL 32505 McEwen Lumber Trade Debt $21,000 P.O. Box 403653 Atlanta, GA 30384 Carapace LLC Trade Debt $20,553 P.O. Box 630965 Baltimore, MD 21263 AmSouth Bank Line of Credit $16,508 P.O. Box 15469 Wilmington, DE 19886 BEIC Trade Debt $15,277 American International Companies Insurance $14,149 Blue Cross Blue Shield Insurance $12,772 Home Depot Trade Debt $12,423 Hogan Hardwoods Trade Debt $10,500 US Lumber Trade Debt $9,497 Charles Red, Sr. Loan $8,500 Peggy Branon, Tax Collector Taxes Owed $8,838 PPG AF Trade Debt $7,241 Santa Barbara Bank & Trust Lease on Sander $6,876 Charter Industries Trade Debt $6,473 Brackin Coatings Trade Debt $5,769 Harrison Rivard Zimmerman Services Rendered $4,955 Bob Sears $4,735 HGH Hardware Supply Trade Debt $4,716 FEDERAL-MOGUL: Court OKs Inter-company Equity Interest Transfers ---------------------------------------------------------------- Federal-Mogul Corporation and its debtor-affiliates were granted approval by the U.S. Bankruptcy Court for the District of Delaware for the inter-company transfers of equity interests in Federal- Mogul Holding Deutschland GmbH and certain Mexican subsidiaries to Cooperatief Federal-Mogul Dutch Investments U.A., a non-Debtor subsidiary. The equity interests are currently held either directly by Debtors Federal-Mogul Corporation, FM International LLC, and Federal-Mogul Ignition Company, or indirectly through their non-debtor affiliates. The proposed Transfers are part of an international restructuring that the Debtors intend to consummate before year-end to maximize the tax-efficiency of their corporate structure going forward. The restructuring will ultimately result in many of the Debtors' foreign subsidiaries being owned through the F-M Dutch HoldCo structure. F-M Dutch HoldCo, which was formed in connection with the Court-authorized French and Italian Recap, is a Dutch holding company with no current material liabilities and whose only significant assets are its indirect equity holdings in Federal- Mogul Holding Italy S.r.L. The Transfers will result in an estimated annual tax savings aggregating $28,000,000, and will preserve a larger portion of post-tax funds that are repatriated through the F-M Dutch HoldCo structure. German Transfers F-M Germany is currently a wholly owned subsidiary of Federal- Mogul Corp., and is the parent of a number or subsidiaries that constitute about 60% of the Debtors' operations in Europe. The Debtors proposed to transfer ownership of F-M Germany from Federal-Mogul Corp., resulting in F-M Dutch HoldCo directly holding a 90% equity interest in F-M Germany with the remaining 10% held indirectly through a newly formed German partnership. The German Transfer allows the Debtors to effectuate their international restructuring and move funds up the corporate ownership chain to their United States parent companies. The German Transfer must be completed by the end of 2006 to allow the Debtors to take advantage of a number of beneficial tax attributes that are anticipated to result in an aggregate tax savings of approximately $26,000,000. Mexican Transfers The Debtors' Mexican operations consist of 10 directly and indirectly held subsidiaries. None of the Mexican subsidiaries are Debtors in the Chapter 11 proceedings. Servicio de Componente Automotrices, S.A. de C.V., is the principal holding company for the Mexican businesses. The current shareholders of SEDECA are: (1) Debtor F-M International with a current interest of 25.52% interest in SEDECA, (2) Debtor F-M Ignition with a 70.74% interest in SEDECA; and (3) non-Debtor Federal-Mogul Canada Ltd., which is wholly owned by Federal-Mogul Corp., with a 3.74% interest in SEDECA. SEDECA directly or indirectly holds 100% of all of the SEDECA Subsidiaries except: * Servicios Administrativos Industriales, S.A. de C.V.; * Camshafts Castings de Mexico S. de R.L.; and * Federal-Mogul S.A. de C.V. The Debtors proposed to transfer the equity interests of SEDECA and SAISA to F-M Dutch HoldCo, which will permit the Debtors to avail themselves of certain tax advantages under Dutch and Mexican law. As part of the Mexican Transfer, the shareholders of the Mexican Subsidiaries will indirectly contribute their ownership interests in the Mexican Subsidiaries to F-M Dutch HoldCo in exchange for equity interests in F-M Dutch HoldCo. The Mexican Transfer is part of the Debtors' overall tax planning efforts to reduce the tax liability related to their Mexican operations. The Debtors estimate that the Mexican Transfers will result in an ownership structure that will confer a net $2,000,000 annual savings in taxes. Scotta E. McFarland, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in Wilmington, Delaware, explained that by easing the movement of funds in a more tax-efficient structure, the Transfers will ultimately enable the Debtors to deploy their cash in the most efficient manner including paying down certain of their existing inter-company indebtedness, while simultaneously reducing the amount of cash the Debtors will be required to draw down for working capital purposes under the proposed exit financing facility. In addition, the Transfers will serve to help preserve any of the Debtors' existing NOLs. Following the Transfers, the Debtor Shareholders that currently hold direct equity interests in the Restructuring Entities, will own equivalent ownership interests in F-M Dutch HoldCo, which will own the Restructuring Entities. Thus, the Transfers, which will not involve the actual movement of any of the Debtors' cash, will have an economically neutral impact on the Debtors' overall equity structure. F-M Dutch HoldCo and its subsidiary holding companies will remain holding companies with: (i) no third-party liabilities; (ii) certain permitted inter-company loans; and (iii) equity interests in the various Federal-Mogul foreign subsidiaries as their only significant assets. Accordingly, the Transfers should have a minimal impact on the Debtors' rights to their ultimate equity interests in the Restructuring Entities and, correspondingly, will not adversely impact the Debtors' creditors, Ms. McFarland tells the Court. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is an automotive parts company with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. FIRST ACCEPTANCE: A.M. Best Affirms FSR Rating at B (Fair) ---------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of B (Fair) for First Acceptance Insurance Company, Inc. and separately-rated First Acceptance Insurance Company of Georgia, Inc., both members of the First Acceptance Insurance Group of Grand Prairie, Texas. The rating outlook is stable. In addition, A.M. Best has assigned issuer credit ratings of "bb" to the operating insurance subsidiaries of First Acceptance and an ICR of "b-" to First Acceptance Corporation [NYSE: FAC], the publicly-traded holding company. The outlook for these ratings is stable. The ratings reflect First Acceptance's above average underwriting leverage and historical premium growth. These negative rating factors are somewhat mitigated by First Acceptance's profitable business model and conservative investment strategy. First Acceptance has experienced significant premium growth due to increased exposures, higher rate levels, assumed business growth and expansion into new states. Despite the continued strong surplus growth as a result of capital contributions and operating profits, the group maintains an elevated underwriting leverage position, which has constrained overall risk-adjusted capitalization. First Acceptance's market presence has been developed through the extensive utilization of advertising, which has provided strong local brand recognition in its territories of operation. The high traffic environment generated by the company-owned retail offices presents it with opportunities to offer additional products and fee-based services. In recent years, favorable loss experience has been attributed to management's commitment to pricing, growth in its renewal book and more efficient use of technology. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. FOAMEX INTERNATIONAL: Files Supplements to Second Amended Plan -------------------------------------------------------------- Under thier Second Amended Plan, Foamex International Inc. and its debtor-affiliates are authorized to enter into and perform under a commitment letter with certain holders of equity interests in Foamex International and to commence a rights offering. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates it is possible that the outcome of the Rights Offering will result to a change in control, in which case Foamex International could utilize its net operating losses, which could yield a significant tax benefit to reorganized Foamex International and enhance the Debtors' reorganization value. To preserve the value and protect against a change against a change of control after the Effective Date, the Debtors have determined that it would be advisable to restrict trading of Foamex International's common stock. The Trading Restrictions would be included in the Reorganized Debtors' amended and restated certificate of incorporation. The Trading Restrictions will only be necessary, and thus will only be implemented, under certain limited circumstances related to the Rights Offering. Although the Disclosure Statement contemplates the filing of an amended and restated certificate of incorporation, neither the Disclosure Statement nor the Plan specifically identify the possibility of the Trading Restrictions being included in the restated certificate of incorporation. Thus, the Debtors ask the Court to approve a supplemental disclosure regarding the Trading Restrictions as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code. A full-text copy of the First Supplement to the Disclosure Statement is available for free at: http://researcharchives.com/t/s?171f Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The Company also manufactures high- performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The Company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. (Foamex International Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FORD MOTOR: Appoints Mark Fields to Lead Ford of the Americas ------------------------------------------------------------- Ford Motor Company President and CEO Alan Mulally disclosed a realignment of the company's organization that puts additional focus on its worldwide markets and customers while better leveraging the company's global assets and capabilities. Reporting directly to Mr. Mulally under the new structure are the company's three automotive business unit leaders: * Mark Fields, Ford of the Americas; * Lewis Booth, Ford of Europe and the Premier Automotive Group; and * John Parker, Ford of Asia Pacific and Africa, and Mazda. In support of the business units, Derrick Kuzak will lead global product development, and report to Mr. Mulally. He will also continue to be responsible for product development for the Americas. J. Mays, vice-president of design for the Ford Motor Company, continues to lead Ford design and will support Mr. Kuzak. Also now reporting to Mr. Mulally, and similarly focused on using the company's global assets to better support its automotive business units, are: * Tony Brown, purchasing; Bennie Fowler, quality and advanced manufacturing engineering; * Nick Smither, information technology; and * Richard Parry-Jones, chief technical officer. Mr. Mulally's other direct reports remain unchanged. "An integrated, global product development team supporting our automotive business units will enable us to make the best use of our global assets and capabilities and accelerate development of the new vehicles our customers prefer, and do so more efficiently," Mr. Mulally said. "This new leadership will enable us to work together more effectively as one Ford team to continuously improve the quality, productivity and speed of our product development process." About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Company (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 324,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. after the company increased the size of its proposed senior secured credit facilities to between $17.5 billion and $18.5 billion, up from $15 billion. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4' due to the increase in size of both the secured facilities and the senior unsecured convertible notes being offered. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's $3 billion of senior convertible notes due 2036. FOSTER WHEELER: Improved Profile Prompts S&P's Positive Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Foster Wheeler Ltd. to positive from stable. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating and other ratings on the Clinton, New Jersey-based engineering and construction company. The company had about $217 million of total debt at Sept. 29, 2006. "The outlook revision reflects greater-than-expected improvement in the company's financial risk profile resulting from recent debt reduction initiatives, decreased asbestos liability, and a refinancing of its credit facility," said Standard & Poor's credit analyst James Siahaan. The outlook also reflects the company's healthy business prospects, as backlogs in its chemicals, refinery, power, and oil and gas markets have exhibited considerable increases over the past few years. GABRIEL TECHNOLOGIES: Williams & Webster Raise Going Concern Doubt ------------------------------------------------------------------ Williams & Webster, PS, in Spokane, Washington, expressed substantial doubt about Gabriel Technologies Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the fiscal year ended June 30, 2006. The auditing firm pointed to the company's significant operating losses and accumulated deficit at June 30, 2006. Gabriel Technologies reported a $14.5 million net loss on $1.2 million of revenues for the fiscal year ended June 30, 2006, compared with a $3.4 million net loss on $921,976 of revenues in fiscal 2005. The increase in net loss is attributable to the $5.5 million increase in operating expenses, primarily the $3.7 million increase in salaries and wages and the $1.2 million increase in consulting fees, which more than offset the $320,000 increase in sales in 2006. Additionally, the $597,000 increase in financing expense, a loss from disposal of subsidiary of $637,000, and the $1.07 million increase in interest expense contributed to the increase in net loss. The increase in salary and wage expense can be attributed to having more employees in the current fiscal year than during the prior fiscal year, increased rates of pay, and $2.1 million for employee stock options granted in January 2006. Consulting fees totaled $1.6 million as compared to $371,000 for the year ended June 30, 2005. The increase is primarily due to the company entering into a consulting services agreement on Oct. 8, 2005. The consultant and shareholder received 1,500,000 shares of restricted common stock valued at $1.2 million in exchange for providing services including, but not limited to identifying and securing business opportunities, acquisitions and combinations for the company, investment banking advice, marketing advice, interfacing with marketers, all at the direction of the company. The company recognized a loss on derivative transactions of $637,000. In addition the company recorded interest expense of $1.1 million in fiscal year 2006 as compared to $35,261 in fiscal year 2005. The company also incurred financing fees of $1 million in fiscal year 2006 as compared to $440,000 in fiscal year 2005. The increases in the interest and financing expense components are directly related to the costs of raising capital for the company and an increase in debt financing compared to equity financing in the prior year. Such costs include the estimated fair market value of warrants issued in connection with various debt and equity financings. Revenues increased $320,000 in 2006 compared to 2005, with the bulk of the increase, or $194,500, coming from the consumer/other segment, and the balance from the trucking and intermodal/railroad segments. The increase in consumer/other segment revenues is due to the company's development of retail packaging and expanding distribution channels through national retail chains. Consolidated gross profit decreased to 28.4% for the year ended June 30, 2006, from 37.8% for the year ended June 30, 2005. This decrease in gross profit trend is attributed to the increase in sales made to customers who were given a discount for volume sales for the year ended June 30, 2006. At June 30, 2006, the company's balance sheet showed $19.2 million in total assets, $6.6 million in total liabilities, and $12.6 million in total stockholders' equity. Additionally, accumulated deficit stood at $19.4 million at June 30, 2006, compared with $4.8 million at June 30, 2005. Full-text copies of the company's consolidated financial statements for the fiscal year ended June 30, 2006, are available for free at http://researcharchives.com/t/s?16ff At June 30, 2006 and 2005, our cash and cash equivalents totaled $155,423 and $96,257, respectively. Net cash used in operating activities was $5.2 million in fiscal 2006, compared to $3.6 million in fiscal 2005, primarily due to the increase in net loss. Net cash used in investing activities in fiscal 2006 was $869,000 compared to $2.1 million in fiscal 2005. Net cash used in investing activities for the 2006 period was the result of the acquisition of equipment of $262,000, patent costs of $18,800 and software of $588,000. Net cash provided by financing activities was $6.1 million in fiscal 2006 compared to $4.7 million in fiscal 2005. Net cash provided by financing activities in fiscal 2006 was the result of proceeds from the company's line of credit of $752,000, the issuance of common stock and other equity transactions amounting to $2.5 million, and proceeds from notes payable of $3.5 million, offset by repayments of notes payable and a related party note payable, net, of $636,000. About Gabriel Technologies Based in Omaha, Nebraska, Gabriel Technologies Corporation (OTC: GWLK) -- http://www.gabrieltechnologies.com/-- sells locking systems for truck trailers, railcars, and intermodal shipping containers under the WAR-LOK brand name. Its products are manufactured by contractors and distributed from Gabriel's assembly center. Gabriel also offers Trace Location Services, an asset-tracking system for vehicle fleet operators that is based on the Global Positioning System (GPS). The trucking industry accounts for more than 85% of the company's sales. Gabriel added biometric technology to its product mix in 2006 by acquiring a majority stake in Resilent, an Omaha, Nebraska-based company that does business as Digital Defense Group. Gabriel Technologies Corporation is the holding company for two wholly-owned subsidiaries and one majority owned subsidiary. The company was originally incorporated in 1990 as Princeton Video Image, Inc., a Delaware corporation. In 2004, Princeton Video Image, Inc. filed for chapter 11 bankruptcy and emerged as a reorganized company on June 10, 2004. On July 23, 2004, the company changed its name to Gabriel Technologies Corporation. On July 29, 2004, the company entered into a share exchange with Gabriel Technologies, LLC, a Nebraska limited liability company, which became the company's wholly-owned subsidiary. The company also organized Trace Technologies, LLC, a Nevada limited liability company which became wholly-owned on Nov. 19, 2004. GE CAPITAL: Fitch Holds Rating on $9.9-Mil. Class J Certs. at BB+ ----------------------------------------------------------------- Fitch Ratings upgrades and removes from Rating Watch Positive GE Capital's commercial mortgage pass-through certificates, series 2001-1: -- $15.5 million class D to 'AAA' from 'AA+'; -- $15.5 million class E to 'AAA' from 'AA'; -- $15.5 million class F to 'AA+' from 'A+'; -- $14.1 million class G to 'AA-' from 'A-'; -- $25.4 million class H to 'BBB+' from 'BBB'; and, -- $18.3 million class I to 'BBB-' from 'BB+'. In addition, Fitch affirms these ratings: -- $64.6 million class A-1 at 'AAA'; -- $703 million class A-2 at 'AAA'; -- Interest-only classes at 'AAA'. -- $45.2 million class B at 'AAA'; -- $49.4 million class C at 'AAA'; and, -- $9.9 million class J at 'BB+'. Fitch does not rate classes K, L, M or N. The upgrades reflect the increased credit enhancement levels as a result of amortization, paydown and additional defeasance of thirteen loans since Fitch's rating action in March 2006. As of the November 2006 distribution date, the pool's aggregate certificate balance has decreased 10.2% to $1.01 billion from $1.13 billion at issuance. In total, 28 loans, 21.1% of the pool, have defeased. There are currently two assets in special servicing. The largest is secured by a 352 unit multifamily property located in Fort Worth, Texas and is 90 days delinquent. The borrower filed bankruptcy in July 2006. A discounted payoff was approved by the bankruptcy court and must be completed within the approved timeframe. Based on recent appraisal valuations, losses are possible upon the disposition of this asset. The second largest asset is an office property located in Piscataway, New Jersey and is currently real-estate owned. The property remains 100% vacant and the special servicer continues to market the property for lease and sale. Recent appraisal valuations indicate losses are likely upon the disposition of this asset. Fitch reviewed the credit assessment of 59 Maiden Lane, which maintains its investment grade credit assessment. The loan is secured by a 1,000,000 square foot office property located in Manhattan's financial district. As of June 30, 2006, the property was 97% occupied. The stressed debt service coverage ratio for YE 2005 was 3.74x compared to 2.47x at issuance. GENERAL AGENTS: A.M. Best Says Financial Strength is Fair --------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of B (Fair) for General Agents Insurance Company of America, Inc. and MGA Insurance Company, Inc., both members of the General Agents Group of Dallas, Texas. The rating outlook is stable. In addition, A.M. Best has affirmed the issuer credit ratings of "bb" of the operating insurance subsidiaries of General Agents and the ICR of "b-" of GAINSCO, INC. of Dallas, Texas [AMEX: GAN], the publicly-traded holding company. The outlook for these ratings is stable. The ratings reflect General Agents' marginal, although improving, operating performance and elevated underwriting leverage, which has resulted from its strategic business development in the nonstandard personal automobile business. These negative factors are partially offset by General Agents' recent growth in surplus following the completion of a rights offering by the parent company, GAINSCO, INC. in November 2006 and the profitable results emanating from its nonstandard personal auto book of business. General Agents Group provides minimum limit nonstandard private passenger automobile insurance primarily in Florida, which comprises approximately 60% of its direct premium written; the remaining 40% is written in Texas, Arizona, California, Nevada and South Carolina. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. GENERAL MOTORS: Expects $1 Million of Truck Sales in 2007 --------------------------------------------------------- General Motors Corp. anticipates selling more than $1 million pickup trucks in the North America market next year, Reuter reports. According to the source, analysts predict that unstable gasoline prices and slow housing would strike pickup sales in 2007. In addition, GM's competitors Ford Motor Co. and DaimlerChrysler AG's Chrysler Group, are offering heavy discounting and big incentives on their older models. GM product chief Bob Lutz told Reuters that the level of pickups discounting is new territory and said that incentives of $7,000 to $8,000 per vehicle are not sustainable. Mr. Lutz remains confident that GM will able to sell its vehicles at a very good profit. Reuters discloses that GM launched the Chevrolet Silverado and the GMC Sierra in November. Mr. Lutz expects the two models, which boast industry-leading fuel saving features, to sell at a good price for a few months. The company offered cash rebates of $4,000 on its 2006 Silverados and Sierras. Reuters relates that the company plans to recover from a $10.6 billion loss in 2005 by job layoffs and plants shutdown. Improving new products and pickup trucks sales are another step at recovery, Reuter adds. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the world's largest automaker and has been the global industry sales leader since 1931. Founded in 1908, GM employs about 327,000 people around the world. It has manufacturing operations in 33 countries and its vehicles are sold in 200 countries. GM sells cars and trucks under these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. * * * As reported in the Troubled Company Reporter on Nov. 16, 2006, Standard & Poor's Ratings Services assigned its 'B+' bank loan rating to General Motors Corp.'s proposed US$1.5 billion senior term loan facility, expiring 2013, with a recovery rating of '1'. The 'B+' rating was placed on Creditwatch with negative implications, consistent with the other issue ratings of General Motors, excluding recovery ratings. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the proposed US$1.5 billion secured term loan of General Motors Corp. The term loan is expected to be secured by a first priority perfected security interest in all of the US machinery and equipment, and special tools of General Motors and Saturn Corp. GENERAL MOTORS: S&P Holds Corporate Credit Rating at B ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with negative implications, where they were placed March 29, 2006. The outlook is negative. GM's automotive balance sheet debt outstanding totaled $32.8 billion at Sept. 30, 2006. The affirmation reflects Standard & Poor's view that the comprehensive costs of a consensual, rather than court-imposed, resolution of GM's operational and financial exposure to bankrupt former unit Delphi Corp. is well within the scope of GM's liquidity, particularly in light of its recent sale of a 51% stake in GMAC LLC. Still, progress toward a resolution concerning Delphi remains lengthy and complex, involving negotiations among many disparate parties, and no specific outcome is assured. Standard & Poor's affirmation does not incorporate the consequences of an outright collapse in talks or a Delphi strike because Standard & Poor's currently thinks these scenarios are unlikely. If GM were to experience severe Delphi-related operational disruptions, or if GM's payments to resolve Delphi's restructuring were much greater than the rating agency expects, Standard & Poor's would likely review the ratings on GM. Because of the GMAC sale, Standard & Poor's expects GM to end 2006 with a cash and short-term VEBA balance in excess of the level at Sept. 30, 2006, about $20.4 billion, even after a substantial fourth-quarter cash burn that resulted in part from lower North American production. For the first nine months of 2006, GM's automotive operating cash flow was a negative $4.2 billion versus a negative $7.1 billion in the comparable period in 2005. Fourth- quarter 2006 automotive cash flow will be worse than last year's slightly positive results in the same quarter because of a 13% decline in production from 2005. GM still faces daunting near-term and long-term competitive and structural challenges in its North American automotive operations. "We are still concerned about GM's ability to generate adequate profitability and cash flow in this key region for the foreseeable future," said Standard & Poor's credit analyst Robert Schulz, "even if cash use in North America is declining from last year's levels." Although the company has demonstrated progress in reducing its cost base and remains in a solid part of its product launch cycle, Standard & Poor's still considers prospects for a sustainable recovery to be fragile and vulnerable to a host of challenges in 2007, including consumer demand and preferences, raw material costs, and the outcome of the fall 2007 labor negotiations. It would not take a very sharp downturn in the North American market or particularly significant underperformance to reverse any progress the company has made in reducing its cash burn. GM's ratings reflect primarily the lack of intermediate-term visibility for the company's North American automotive operations, given the magnitude of recent losses, negative cash flow generation, and the need to continue implementing its massive cost-cutting program. GM has been hampered by persistent market share erosion and adverse product mix trends in the U.S., most notably a precipitous weakening of sales of midsize and large SUVs--products that had been highly disproportionate contributors to GM's earnings. GM is undertaking yet another significant round of cost reductions to address these challenges, but sustainable improvements in North America will also require success with product acceptance and pricing, in addition to cost reductions. Some, but not all, new products launched in 2006 are selling well. Consumer acceptance of GM's new full-size pickup truck product line and other launches will remain crucial determinants of results into 2007. GM has significantly improved its pension funding position in recent years, but the unfunded retiree medical liability remains onerous, even after significant negotiated reductions. The liability totaled approximately $64 billion at year-end 2005, excluding from offsetting plan assets readily available assets of the VEBA trust. This deficit will decline after GM reduces the liability by $19.9 billion as a result of benefit reductions for hourly and salaried employees, the effect of employee buyouts, and a higher discount rate. These factors will be partly offset by $4 billion in VEBA withdrawals made during 2006. The rating outlook on GM is negative. Prospects for GM's automotive operations remain clouded. The ratings could be lowered further if Standard & Poor's came to expect that GM's substantial cash outflow would fail to continue to moderate due to setbacks, whether GM-specific or stemming from market conditions. GM would need to reverse its current financial and operational trends, and sustain such a reversal, before the rating agency would revise its outlook to stable. GFA HOLDINGS: Boulder Buyout Proposal Cues Moody's Stable Outlook ----------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating to Smart Balance, Inc., as well as a B2 rating for senior secured first lien bank facilities, and a Caa2 rating for senior secured second lien bank facilities to GFA Holdings, Inc. under a full and unconditional guarantee of Smart Balance, Inc. The outlook on all ratings is stable. This represents a first time rating for this issuer. These ratings are being assigned in connection with the planned acquisition of GFA by Boulder Specialty Brands, Inc. for approximately $465 million in cash. Subsequent to the transaction, Boulder will rename itself Smart Balance, Inc. These ratings are contingent upon Moody's receipt and review of final documentation for the planned transaction. GFA is a marketer of margarine and several other packaged food products sold within the functional food category under the Smart Balance and Earth Balance brands. Ratings assigned with a stable outlook: * GFA Holdings, Inc. -- $20 million 6-year senior secured 1st lien revolving credit at B2, LGD3, 36%; -- $120 million 7-year senior secured 1st lien term loan at B2, LGD3, 36%; and -- $40 million 7.5-year senior secured 2nd lien term loan at Caa2, LGD5, 86%. Smart Balance, Inc.: -- Corporate family rating at B3; and -- Probability of default rating at B3. Moody's views GFA as a small, niche marketer of margarine and select other functional food items for the US market. GFA operates within the highly-competitive packaged food industry, with revenues highly concentrated on margarine. Yet despite its size and concentration, GFA has established solid market shares and strong operating margins in the key categories within which it competes. The fact that it outsources all manufacturing to third- party producers presents both benefits as well as risks. GFA faces higher-than-average execution risk as it transitions from a small entrepreneurial firm to a larger, publicly-traded entity. And after its acquisition by Boulder, GFA will be very highly leveraged with limited financial flexibility. "While a relatively small company, GFA has created a solid market position and generated attractive operating margins for its products" stated Moody's Peter Abdill, Senior Vice President. "However these strengths are largely offset by the significant amount of debt being placed on this company as part of the acquisition by Boulder" Mr. Abdill said. The $20 million revolving credit and $120 million term loan will each receive a first priority pledge of substantially all assets and capital stock of the borrower and the guarantors as well as a pledge of 66% of the stock of foreign subsidiaries. The $40 million 7.5-year term loan will receive a second-lien on the same collateral as the first lien facilities. Each of the three facilities will receive downstream guarantees from Boulder, as well as upstream guarantees from each wholly-owned domestic subsidiary. Moody's includes $138.5 million in series-A preferred stock being issued by Boulder as part of the transaction in GFA's overall capital structure, and views it as 75% debt, for analytic purposes. The preferred stock will be a perpetual security which may be converted into common equity by either the holder or Boulder under certain circumstances. The security pays an 8% PIK dividend. And yet while legally perpetual, the security contains a provision whereby the dividend rate steps up after year five by .25% per quarter to a maximum of 11%, and if dividends are not paid in cash after year seven, the PIK rate increases to 15%. This creates -- in Moody's view -- an effective economic maturity, is likely to induce the company to redeem or refinance this preferred, and thus significantly weakens its equity characteristics. The stable outlook on GFAs ratings reflects Moody's view that the current rating adequately captures the risk presented by the company's high leverage, its limited financial flexibility, and the challenges it will fact as it transitions to a publicly- traded, high growth, highly-leveraged company. Specifically, the stable outlook anticipates that GFA will reduce and then maintain Debt/EBITDA to within a 6 -- 8x range, and increase and maintain EBIT/Interest to a 1 -- 1.5x range. Downward rating pressure could build if the company's operating performance falters, its liquidity materially deteriorates, its financial flexibility becomes constrained, or it is unable to materially reduce leverage from existing high levels. Specifically, GFA's ratings could be downgraded if it is unable to reduce Debt/EBITDA to below 8x by Dec. 31, 2007 or is unable to sustain EBIT/interest to above 1x by Dec. 31, 2007. Over time upward rating pressure could build if GFA is successful in growing its size, scale, and diversity, and is able to significantly reduce financial leverage. This would include reducing Debt/EBITDA to below 6x, and increasing EBIT/Interest to above 1.5x. With pro forma revenues of $164 million, GFA is a developer and marketer of margarine and select other products within the healthy/functional foods category. GRANITE BROADCASTING: Seeks Access to Lender's Cash Collateral -------------------------------------------------------------- Granite Broadcasting Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to use the cash collateral securing repayments of its obligations to Bank of New York. Prior to Dec. 11, 2006, Granite Broadcasting Corp., KBWB, Inc., WXON, Inc., and WEEK-TV License, Inc., were parties to two secured financing arrangements: (1) a senior note indenture among Granite, certain of its subsidiaries, and The Bank of New York, dated Dec. 22, 2003, under which 9.75% Debentures in the aggregate principal amount of $405,000,000 are due on Dec. 1, 2010; and (2) a credit and guaranty agreement with various financial institutions, Bank of New York, and Silver Point Finance, LLC, which provides for a $40,000,000 Tranche A term loan and a $30,000,000 convertible Tranche B term loan. As of Debtors' bankruptcy filing, they owe: -- not less than $405,000,000, plus accrued and unpaid interest of at least $20,899,582, plus fees, costs, and expenses incurred under the Senior Notes Indenture; and -- not less than $70,000,000 plus accrued and unpaid interest of at least $273,287, plus fees, costs, and expenses incurred under the Senior Credit Agreement. Bank of New York is the indenture trustee of the Existing Senior Notes and is the collateral agent for the existing senior lenders under the Existing Senior Credit Agreement. Silver Point is the administrative agent for the Existing Senior Lenders. Cash Collateral The Debtors granted first priority liens and security interests in favor of Bank of New York, as the Existing Senior Noteholder Trustee and as the Existing Senior Collateral Agent, on a prepetition collateral. With the exception of the Binghamton assets, the Existing Senior Lender liens are pari passu with the Existing Senior Noteholder liens. The Debtors require the use of the cash collateral pledged to secure repayment of their debt obligations to make payroll and to satisfy other working capital and operational needs. Pursuant to Section 363(c)(2) of the Bankruptcy Code, a debtor-in-possession may not use cash collateral without the consent of the secured party or court approval. Hence, the Debtors seek the Court's authority to use all Cash Collateral existing on or after the Petition Date that may be subject to liens in favor of the Existing Senior Lenders and the Existing Senior Noteholders. Monthly Cash Budget The Debtors will limit their use of Cash Collateral to amounts specified in a Monthly Budget commencing with the calendar month ending Dec. 31, 2006. A copy of that Budget is available at no charge at http://ResearchArchives.com/t/s?1707 The existing senior agents and the existing senior lenders consent to the Debtors' use of Cash Collateral and the priming of their liens, subject to the adequate protection liens and payments. Adequate Protection The Debtors propose to grant Bank of New York replacement liens that will be, and remain subject and subordinate to: (i) postpetition liens and payment of any Debtor-in-Possession obligations on its account; (ii) permitted priority liens; and (iii) during the occurrence and continuance of an event of default payment of the carve-out. The Existing Senior Replacement Liens granted to the Existing Senior Collateral Agent are pari passu with the Existing Senior Replacement Liens granted to the Existing Senior Noteholder Trustee, except that with respect to the Binghamton collateral, the priority of the Existing Senior Replacement Liens among the Existing Senior Collateral Agent and the Existing Senior Noteholder Trustee will be determined in accordance with the existing senior debt documents. Furthermore, the Debtors propose to grant the Existing Senior Agents, the Existing Senior Lenders, the Existing Senior Noteholder Trustee and the Existing Senior Noteholders: * valid, perfected second priority postpetition security interests in and liens on all of the Collateral, to secure an amount equal to the aggregate diminution in the value or amount of their respective interests in the Prepetition Collateral; * an allowed super-priority administrative expense claim, as provided for in Section 507(b), subject only to the payment of the Debtors' DIP Financing obligations, and (b) during the occurrence and continuance of an Event of Default, payment of the Carve-Out; * immediate cash payment of all accrued and unpaid fees, costs and expenses, including reasonable fees and expenses 4of the Existing Senior Agents' and the Existing Senior Noteholder Trustee's counsel; * interest on the Existing Senior Loan Indebtedness or other unpaid amounts to accrue at a default rate set forth in the Existing Senior Credit Agreement if the aggregate value of the Prepetition Collateral provided for the Existing Senior Lenders exceeds the aggregate value of the Existing Senior Loan Indebtedness; and * interest on the Existing Senior Notes Indebtedness or other unpaid amounts to accrue at the default rate set forth in the Existing Senior Notes Indenture, and prepayment premiums owing under the Existing Senior Notes Indenture, to the extent the aggregate value of the Prepetition Collateral provided to the Existing Senior Noteholders exceeds the aggregate value of the Existing Senior Notes Indebtedness. Headquartered in New York, Granite Broadcasting Corp. -- http://www.granitetv.com/-- owns and operates, or provides programming, sales and other services to 23 channels in 11 markets: San Francisco, California; Detroit, Michigan; Buffalo, New York; Fresno, California; Syracuse, New York; Fort Wayne, Indiana; Peoria, Illinois; Duluth, Minnesota-Superior, Wisconsin; Binghamton, New York; Utica, New York and Elmira, New York. The company's channel group includes affiliates of NBC, CBS, ABC, CW and My Network TV, and reaches approximately 6% of all U.S. television households. The Company and five of its debtor-affiliates filed for chapter 11 protection on Dec. 11, 2006 (Bankr. S.D. N.Y. Case No. 06-12984). Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, represents the Debtors in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of $443,563,020 and debts of $641,100,000. GRANITE BROADCASTING: Wants Trumbull Group as Noticing Agent ------------------------------------------------------------ Granite Broadcasting Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ The Trumbull Group, LLC, doing business as Wells Fargo Trumbull, as claims and noticing, and voting and tabulation agent in their Chapter 11 cases. The Debtors believe that employing Trumbull is in the best interests of their estates and all parties-in-interest. Lawrence I. Wills, the Debtors' chief financial officer, relates that Trumbull is a nationally recognized specialist in Chapter 11 administration and has significant experience in performing noticing and claims administration services in other large Chapter 11 cases in this and other districts. Trumbull will: a. prepare and serve required notices in the Debtors' Chapter 11 cases, including: i. a notice of commencement of the Debtors' Chapter 11 cases and the initial meeting of creditors under Section 341(a) of the Bankruptcy Code; ii. a notice of the claims bar date; iii. notices of objections to claims; iv. notices of any hearings on a disclosure statement and confirmation of a plan or plans of reorganization; and v. other miscellaneous notices as the Debtors or Court may deem necessary or appropriate for an orderly administration of the Debtors' chapter 11 cases. b. within five business days after the service of a particular notice, file with the Clerk's Office a certificate or affidavit of service that includes: (i) a copy of the notice served, (ii) an alphabetical list of persons on whom the notice was served, along with their addresses, and (iii) the date and manner of service; c. maintain copies of all proofs of claim and proofs of interest filed in the Debtors' Chapter 11 cases; d. maintain official claims registers in this case by docketing all proofs of claim and proofs of interest in a claims database that includes the these information for each claim or interest asserted: i. the name and address of the claimant or interest holder and any agent thereof, if the proof of claim or proof of interest was filed by an agent; ii. the date the proof of claim or proof of interest was received by Trumbull or the Court; iii. the claim number assigned to the proof of claim or proof of interest; and iv. the asserted amount and classification of the claim. e. implement necessary security measures to ensure the completeness and integrity of the claims registers; f. transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; g. maintain an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and make the list available upon request to the Clerk's Office or any party-in-interest; h. provide access to the public for examination of copies of the proofs of claim or proofs of interest filed in this case without charge during regular business hours; i. record all transfers of claims pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure and provide notice of the transfers as required by Rule 3001(e), if directed to do so by the Court; j. comply with applicable federal, state, municipal, and local statues, ordinances, rules, regulations, orders, and other requirements; k. provide temporary employees and contractors as necessary to process claims, prepare schedules and statements of financial affairs, and other duties as the Debtors may request from time to time; l. promptly comply with further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; m. provide voting solicitation and tabulation services in conjunction with the Debtors' Plan of Reorganization; and n. provide other claims processing and noticing relating administrative services as may be requested from time to time by the Debtors. The Debtors will pay to Trumbull the costs with respect to providing the Bankruptcy Processing Services pursuant to the fee schedule provided in the parties' engagement agreement. A copy of the fee schedule is available for free at: http://ResearchArchives.com/t/s?1702 The hourly rates of Trumbull's employees are: Professional Hourly Rates ------------ ------------ Administrative Support $55 Data Specialist $65-$80 Case Manager $85-$135 Automation Consultant $140-$175 Operations Manager $110-$185 Consultant $225-$295 Ronda K. Collum, vice president and senior consultant of Trumbull Group, assures the Court that the firm (i) has no connection with the Debtors, their creditors, or other parties-in-interest, and (ii) does not hold or represent an interest adverse to the Debtors' estates that would impair Trumbull's ability to perform the services for the Debtors objectively, in accordance with Section 327 of the Bankruptcy Code. Ms. Collum can be reached at: Ronda K. Collum The Trumbull Group 4 Griffin Road North Windsor, CT 06095 Tel: (860) 687-5401 Fax: (860) 683-8697 http://www.trumbullgroup.com/ Headquartered in New York, Granite Broadcasting Corp. -- http://www.granitetv.com/-- owns and operates, or provides programming, sales and other services to 23 channels in 11 markets: San Francisco, California; Detroit, Michigan; Buffalo, New York; Fresno, California; Syracuse, New York; Fort Wayne, Indiana; Peoria, Illinois; Duluth, Minnesota-Superior, Wisconsin; Binghamton, New York; Utica, New York and Elmira, New York. The company's channel group includes affiliates of NBC, CBS, ABC, CW and My Network TV, and reaches approximately 6% of all U.S. television households. The Company and five of its debtor-affiliates filed for chapter 11 protection on Dec. 11, 2006 (Bankr. S.D. N.Y. Case No. 06-12984). Ira S. Dizengoff, Esq., at Akin, Gump, Strauss, Hauer & Feld, LLP, represents the Debtors in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets of $443,563,020 and debts of $641,100,000. GREATWIDE LOGISTICS: Moody's Places B3 Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned ratings to Greatwide Logistics Services, Inc.: -- Corporate Family Rating of B3; and, -- First Lien Senior Secured of B1. The outlook is stable. Greatwide is the successor of Transport Industries Holdings, L.P. presently rated with a B2 Corporate Family Rating. The assignment of the B3 Corporate Family Rating to the proposed new capital structure of Greatwide reflects, when compared to the current capital structure, an increase in debt without a proportionate increase in expected cash flow, and the resultant weakening of leverage and coverage metrics tempered by a significant increase in equity. In addition, Moody's believes Greatwide will continue its debt- financed acquisitive growth strategy, which will limit meaningful improvements in leverage and coverage over the intermediate term. The ratings also reflect the low EBIT margin nature of the company's operations, customer concentration and the risks associated with the truck transportation sector's cyclicality and low margins which offset the higher margin and more stable dedicated transportation segment. Long-tenured relationships with large grocery and consumer products company customers in the dedicated, closed-loop transportation segment support the rating. Customer concentration presents a modest risk to the company's cash flow. The roughly ten percent margins in the dedicated transportation segment offset lower and more volatile margins in the company's other business segments. Overall, Moody's expects modestly positive free cash flow generation but notes that the larger debt burden has increased fixed charges in a potentially volatile industry segment. This risk is somewhat balanced by the no-asset and asset-light business models, which provide a highly variable operating cost structure. Moody's also recognizes the substantial contribution by the new owners of cash equity; however, neither higher earnings nor additional tangible assets accompany the higher debt balances, resulting in the migration of the credit profile and the corporate family rating. Debt to EBITDA and EBIT to Interest at Dec. 31, 2006, are expected at about 6.9x and 0.8x, respectively; levels consistent with the B3 rating category. These compare to 5.8x and 1.3x, respectively, at the prior year-end. Under new ownership, unsecured bank debt replaces preferred stock at the holding company level. Although interest on the holding company debt, which does not have upstream guarantees, is pay-in-kind for the first five years, Moody's includes this issue in its measurement of credit metrics as Greatwide is likely the sole provider of funds for servicing this obligation and notes that debt service becomes payable in cash prior to the maturity of the rated facilities. Formerly, Moody's excluded from its measurement of credit metrics, the debt equivalent of the mandatorily-redeemable preferred stock of Transport Industries Holdings, Inc. due to the optional maturity of this instrument. For comparison, Moody's assesses EBIT to cash interest as approximately 1.1x on a pro forma basis. The stable outlook reflects Moody's view that the potential increase in debt incurred to fund additional acquisitions and the accrual of the unsecured holding company loan obligation should offset reductions in debt resulting from the required application of Excess Cash Flow, resulting in no meaningful migration in the company's credit profile over the intermediate term. The highly- variable cost structure, the stability of the dedicated transportation segment and good liquidity should provide flexibility in a weaker truck transportation cycle and support the stable outlook. The ratings could be upgraded if Greatwide was to sustain Debt to EBITDA below 5.7x or EBIT to Total Interest above 1.3x, particularly while increasing debt or during a pro-longed trough in the truck transportation sector. The ratings could be downgraded if Greatwide's operating performance weakens materially, resulting in EBIT to Total Interest declining to 0.6x or below or Debt to EBITDA being sustained above 8.0x. One or more acquisitions resulting in meaningfully higher debt levels or the loss of Wal-Mart's dedicated transportation business could place downward pressure on the ratings. The notching up of the first lien senior secured credit facility has widened to two notches, and results from the introduction of a significant amount of junior ranking debt obligations in the capital structure. The addition of debt obligations other than first lien bank debt to the capital structure caused Moody's to change the estimated mean family Loss Given Default rate to 50%, from 65% when modeling LGD, and resulted in the Probability of Default rating being maintained at B3. Moody's will withdraw all ratings of Transport Industries, L.P. upon the repayment of the rated debt obligations of Transport, which the planned sale to the new owners contemplates. The ratings assignment of Greatwide also assumes that the terms, covenants and conditions of the final credit agreements and inter- creditor agreement do not differ materially from those outlined in the company's December 2006 information memorandum. Ratings Assigned: * Issuer: Greatwide Logistics Services, Inc. -- Corporate Family, B3; -- Probability of Default, B3; -- First Lien Senior Secured, B1, LGD2, 28%; and -- Second Lien Senior Secured, Caa1, LGD5, 74%. Outlook is Stable. Greatwide Logistics Services, Inc., headquartered in Irving, Texas, is one of the leading non-asset based North American logistics providers of single-source, dedicated "closed loop" transportation services to the grocery and consumer products sectors. The company also provides non-asset-based truckload management, truck brokerage and warehouse and distribution logistics services. Greatwide is a wholly-owned subsidiary of GWLS Holdings, Inc and is the owner of the operating assets of the company. GREENPARK GROUP: Unsec. Creditors to Get Full Payment Under Plan ---------------------------------------------------------------- Greenpark Group LLC and its debtor-affiliate, California/Nevada Development LLC, filed with the U.S. Bankruptcy Court for the Central District of California an Amended Disclosure Statement explaining their Amended Chapter 11 Plan of Reorganization. Overview of the Plan The Debtors disclose that the Plan provides for the liquidation of the Debtors' assets for payments to valid creditors and to the extent possible, equity owners. GreenPark tells the Court that it owns GreenPark Runkle Canyon, LLC. Runkle Canyon expects to close the sale of real property to KB Homes. In connection with this sale, the GreenPark expect to receive an amount in excess of $31 million, specifically: -- $18,000,000 of notes in connection with the Phase III sale; and -- $13,765,000 in connection with the Phase IV sale. GreenPark further says that in order for California/Nevada Development to make distributions under the Plan, it will contribute $25,000 to California/Nevada Development. Treatment of Claims Under the Amended Plan, administrative claims will be paid in full. Holders of Unsecured Claims against GreenPark, totaling $17,890,833, will also be paid in full on the effective date. Holders of Unsecured Claims against California/Nevada, totaling $971,311, will receive a pro rata share of the $25,000 contributed by GreenPark. GreenPark's interest holders will receive payment after all other claims are satisfied. Randy Wheeler, GreenPark's Senior Vice president and secretary, and Peter Kiesecker, a creditor of GreenPark, who are also interest holders of GreenPark, will receive all distributions that they are entitled from the proceeds of the Phase IV sale. California/Nevada's interest holders will not receive anything under the Amended Plan. About GreenPark Group Headquartered in Seal Beach, California, GreenPark Group LLC, is a real estate developer and building contractor. The Company and its affiliate, California/Nevada Developments LLC, filed for chapter 11 protection on June 23, 2006 (Bankr. C.D. Calif. Case Nos. 06-10988 & 06-10989). Alan J. Friedman, Esq., at Irell & Manella, LLP, represents the Debtors. No Official Committee of Unsecured Creditors has been appointed in the Debtors' bankruptcy proceedings. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. GREENPARK GROUP: Disclosure Statement Hearing Set for December 19 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California will consider the adequacy of the Amended Disclosure Statement explaining Greenpark Group LLC and its debtor-affiliate, California/Nevada Development LLC's Amended Chapter 11 Plan of Reorganization, at a hearing on Dec. 19, 2006, 10:30 a.m., at Courtroom 5D, 411 West Fourth Street in Santa Ana, California. Greenpark Group LLC and its debtor-affiliate, California/Nevada Development LLC, filed with the U.S. Bankruptcy Court for the Central District of California an Amended Disclosure Statement explaining their Amended Chapter 11 Plan of Reorganization. Headquartered in Seal Beach, California, GreenPark Group LLC, is a real estate developer and building contractor. The Company and its affiliate, California/Nevada Developments LLC, filed for chapter 11 protection on June 23, 2006 (Bankr. C.D. Calif. Case Nos. 06-10988 & 06-10989). Alan J. Friedman, Esq., at Irell & Manella, LLP, represents the Debtors. No Official Committee of Unsecured Creditors has been appointed in the Debtors' bankruptcy proceedings. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. GS MORTGAGE: Moody's Holds Low-B Ratings on $23.4-Mil. of Debts --------------------------------------------------------------- Moody's Investors Service upgraded the ratings of two classes and affirmed the ratings of 16 classes of GS Mortgage Securities Corporation II, Commercial Mortgage Pass-Through Certificates, Series 2004-C1: -- Class A-1, $398,630,890, Fixed, affirmed at Aaa; -- Class A-2, $190,490,000, Fixed, affirmed at Aaa; -- Class A-1A, $165,454,676,Fixed, affirmed at Aaa; -- Class X, Notional, affirmed at Aaa; -- Class X-2, Notional, affirmed at Aaa; -- Class B, $20,076,000, Fixed, upgraded to Aa1 from Aa2; -- Class C, $7,808,000, Fixed, upgraded to Aa2 from Aa3; -- Class D, $16,730,000, Fixed, affirmed at A2; -- Class E, $12,268,000, Fixed, affirmed at A3; -- Class F, $13,384,000, Fixed, affirmed at Baa1; -- Class G, $7,808,000, Fixed, affirmed at Baa2; -- Class H, $7,807,000, WAC, affirmed at Baa3; -- Class J, $5,577,000, Fixed, affirmed at Ba1; -- Class K, $3,346,000, Fixed, affirmed at Ba2; -- Class L, $3,346,000, Fixed, affirmed at Ba3; -- Class M, $4,461,000, Fixed, affirmed at B1; -- Class N, $3,346,000, Fixed, affirmed at B2; and, -- Class O, $3,346,000, Fixed, affirmed at B3. As of the Dec. 11, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 1.7% to $877.2 million from $892.3 million at securitization. The Certificates are collateralized by 66 mortgage loans ranging in size from less than 1.0% to 6.1% of the pool, with the top 10 loans representing 44.5% of the pool. The pool includes three shadow rated investment grade loans comprising 14.0% of the pool. Four loans, representing 11.3% of the pool balance, have defeased and are collateralized by U.S. Government securities. One loan has been liquidated from the trust resulting in a minimal realized loss. Currently there are no loans in special servicing. Thirteen loans, representing 16.2% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2005 and partial year 2006 operating results for approximately 94.0% and 70.0%, respectively, of the pool. Moody's loan to value ratio for the conduit component is 91.0%, compared to 90.2% at securitization. Moody's is upgrading Classes B and C due to defeasance and stable overall pool performance. The largest shadow rated loan is the Water Tower Place Loan, which is a pari passu interest in a $179.1 million first mortgage loan. The loan is secured by the leasehold interest in an 821,700 square foot vertical mall and office complex located on North Michigan Avenue in downtown Chicago. The retail component is anchored by Macy's and Lord & Taylor. The property is 95% occupied, compared to 96.1% at securitization. Moody's current shadow rating is A3, the same as at securitization. The second shadow rated loan is the DDR Portfolio Loan, which is secured by 10 retail properties located in eight states. The portfolio totals 2.9 million square feet and has good tenant diversity. The largest tenant is Wal-Mart which occupies approximately 5% of the portfolio's GLA. The portfolio is 92% occupied, the same as at securitization. Moody's current shadow rating is A2, the same as at securitization. The third shadow rated loan is the Inland Crossed Properties Loan, which consists of three cross-collateralized loans secured by three shopping centers totaling 301,000 square feet. The properties are located in North Carolina, Georgia and Pennsylvania. The portfolio is 95.0% occupied, compared to 99.7% at securitization. The majority of the decline in occupancy is attributable to the largest property, Meadowmont Village Shopping Center, which is located in Chapel Hill, North Carolina and represents 57% of the allocated loan amount. Moody's current shadow rating is Baa3, the same as at securitization. The top three non-defeased conduit loans represent 15.3% of the outstanding pool balance. The largest conduit loan is the One Briarlake Plaza Loan, which is secured by a 502,000 square foot Class A office building located in the Westchase submarket of Houston, Texas. The largest tenant is Gallagher Healthcare. The property is 87.1% occupied, compared to 92.4% at securitization. Moody's LTV is 86%, the same as at securitization. The second largest conduit loan is the 277 Park Avenue Loan, which is a pari passu interest in a $298.0 million first mortgage loan. The loan is secured by a 1.2 million square foot office building located in the Grand Central District office submarket of New York City. The property is 95% occupied, compared to 100% at securitization. The largest tenants are Credit Suisse Asset Management, and J. Walter Thompson Company. Moody's LTV is 89.3%, the same as at securitization. The third largest conduit loan is the Willow Wood III and IV Loan, which is secured by two Class A office buildings totaling 279,000 square feet and located in Fairfax City, Virginia. The property is 96.0% occupied, compared to 97.3% at securitization. The largest tenants are GSA and Zeta Associates. Performance has improved due to higher income and stable expenses. Moody's LTV is 88.1%, compared to 91.8% at securitization. The pool's collateral is a mix of office, retail, multifamily, U.S. Government securities, industrial and self storage and lodging. The collateral properties are located in 21 states. The highest state concentrations are Texas, New York, California, Illinois and Virginia. All of the loans are fixed rate. HARBORVIEW NIM: DBRS Places Low-B Ratings on 2 Certificate Classes ------------------------------------------------------------------ Dominion Bond Rating Service assigned these ratings to the NIM Notes, Series 2006-10 issued by HarborView NIM CI-6 Corp. -- $42.4 million Class N-1 rated at A (low) -- $21 million Class N-2 rated at BBB (low) -- $10.2 million Class N-3 rated at BB -- $10.7 million Class N-4 rated at B The NIM Notes are backed by a 100% interest in the Class C and Class P Certificates issued by HarborView Mortgage Loan Trust 2006-10. The underlying Class C Certificates will be entitled to receive the excess cash flows and the underlying 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 December 2006. From 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. The mortgage loans in the Underlying Trust were primarily originated or acquired by Bank United, FSB, Paul Financial, LLC, and Residential Mortgage Capital. The loans are first-lien, option adjustable-rate mortgages, primarily indexed to the 12-month treasury average, the Cost of Funds Index, the One-month or Six-month London Interbank Offered Rates, with a negative amortization feature. HARTVILEE GROUP: Incurs $5.7 Mil. Net Loss in 2006 Third Quarter ---------------------------------------------------------------- Hartville Group Inc. has delivered its third quarter financial results to the Securities and Exchange Commission. The company reported a $5.7 million net loss on $975,808 of net revenues for the three months ended Sept. 30, 2006, compared with a $1.8 million net loss on $787,285 million of net revenues for the same period in 2005. The company's balance sheet at Sept. 30, 2006, showed $6.4 million in total assets, $3.5 million in total liabilities and a $2.9 million positive stockholders' equity. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?170f Going Concern Doubt As reported in the Troubled Company Reporter on May 4, 2006, BDO Seidman, LLP, raised substantial doubt about the ability of Hartville Group, Inc., to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2004, and 2005. The auditing firm pointed to the company's recurring losses from operations, substantial accumulated deficit, and impending due dates of some material financial obligations. About Hartville Group A reinsurance company registered in the Cayman Islands, British West Indies, Hartville Group, Inc. (OTCBB:HTVL) -- http://www.hartvillegroup.com/-- is a holding company whose wholly owned subsidiaries include Hartville Re Ltd. and Petsmarketing Insurance.com Agency, Inc. Hartville was formed to reinsure pet health insurance that is being marketed by the Agency. The Agency is primarily a marketing/administration company concentrating on the sale of its proprietary health insurance plans for domestic pets. Its business plan calls for introducing its product effectively and efficiently through a variety of distribution systems. The Company accepts applications, underwrites and issues policies. HEWETT'S ISLAND: Fitch Confirms BB Rating on $3MM Class E Notes --------------------------------------------------------------- Fitch affirms six classes of notes issued by Hewett's Island CDO, Ltd./Corp. These rating actions are effective immediately: -- $188,000,000 class A notes affirmed at 'AAA'; -- $25,000,000 class B notes affirmed at 'AA'; -- $4,249,599 class X notes affirmed at 'A+' -- $7,000,000 class C notes affirmed at 'A+'; -- $15,000,000 class D notes affirmed at 'BBB'; and, -- $3,222,883 class E notes affirmed at 'BB'. Hewett's Island is a collateralized debt obligation managed by CypressTree Investment Management Co., Inc. The collateral underlying Hewett's Island is composed of 86% high yield corporate loans and 14% high yield corporate bonds. The reinvestment period will end Nov. 15, 2007. Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward. These affirmations are the result of stable collateral performance. According to the Nov. 7, 2006 trustee report the Fitch weighted average rating factor has improved slightly to 47.4, from 48.3 at the last review on Oct. 20, 2005 and remains below the trigger of 50. During this same period the A/B, C, D and E overcollateralization and interest coverage ratios have remained stable. Assets rated 'CCC+' or lower represent approximately 3.5% of the portfolio. To date, there is only one defaulted asset representing less than 1% of the portfolio. The ratings of the class A and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the stated maturity date. The ratings of the class X, C, D and E notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the stated maturity date. Fitch will continue to monitor and review this transaction for future rating adjustments. HM RIVERGROUP: S&P Assigns B- Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit ratings and stable outlooks to HM Rivergroup PLC and subsidiary Riverdeep Interactive Learning USA Inc. At the same time, Standard & Poor's assigned a 'B' rating, one notch above the corporate credit ratings on Riverdeep and HM Rivergroup, with a recovery rating of '1', to Riverdeep's $1.82 billion senior secured credit facilities, indicating a high expectation of full recovery of principal in the event of a payment default. The facilities consist of a $250 million revolving credit facility due 2012 and a $1.57 billion term loan B due 2013. Pro forma consolidated total debt and preferred stock at Sept. 30, 2006, was roughly $3.5 billion. Standard & Poor's long-term corporate credit ratings on educational publishers Houghton Mifflin LLC and Riverdeep Holdings PLC remain on CreditWatch with negative implications, where they were originally placed on Oct. 23, 2006. Dublin, Ireland-based HM Rivergroup has agreed to buy Houghton Mifflin for $3.4 billion, consisting of $1.75 billion in cash and assumed net debt. The new company has also agreed to buy Riverdeep Holdings Ltd. in an exchange of stock that values Riverdeep's assets at $1.2 billion, including the assumption of net debt. Standard & Poor's will lower the corporate credit ratings of both companies to 'B-' once the transaction is completed. "The ratings reflect the company's good business positions in the educational publishing industry, offset by heightened financial risk resulting from the leveraged acquisition of Houghton Mifflin," said Standard & Poor's credit analyst Hal F. Diamond. "We are concerned about the deterioration that will occur in the combined group's credit measures, and that challenges may arise in integrating the two businesses." HORIZON LINES: Increases Revolving Credit Facility by $25 Million ----------------------------------------------------------------- Horizon Lines Inc. amended its $250 million senior secured bank facility to: (a) increase the revolving credit facility by $25 million to $75 million; (b) increase the additional term loan borrowing availability by $25 million to $75 million; (c) raise the annual capital spending limit to $40 million, exclusive of vessel and equipment lease buyouts; (e) allow for 100% carryover of unutilized permitted annual capital spending; (f) increase maximum restricted payments on a rolling four quarters basis from $15 million to $36 million; (g) provide 100% credit for voluntary loan prepayments on the required annual excess cash flow sweep now commencing in 2007; and (h) increase permitted acquisitions from $30 million to $120 million annually and from $100 million to $200 million over the life of the facility. The pre-amendment senior credit facility consisted of a $250 million term loan and a $50 million revolving credit facility. "This amendment provides Horizon Lines with the greater flexibility to meet its future growth needs in a cost effective manner," Mark Urbania, senior vice president and chief financial officer, said. "The amendment also serves as recognition of Horizon Lines' improved credit standing brought about by the significant de- leveraging achieved since Horizon Lines' initial public offering in September 2005 through both earnings growth and debt prepayments. We plan to continue to de-leverage in the future via both debt prepayments and earnings growth." Headquartered in Charlotte, North Carolina, Horizon Lines Inc. -- http://www.horizonlines.com/-- is a Jones Act container shipping and integrated logistics company and is the parent company of Horizon Lines Holding Corp. and Horizon Lines LLC. The company accounts for approximately 37% of total U.S. marine container shipments from the continental U.S. to the three non- contiguous Jones Act markets -- Alaska, Hawaii, and Puerto Rico, and to Guam. * * * As reported in the Troubled Company Reporter on Dec. 13, 2006, Moody's Investors Service affirmed Horizon Lines LLC's senior secured rating at Ba2, and LGD2 to 18% from 20%. INTEGRATED HEALTHCARE: Sept. 30 Equity Deficit Rises to $32.5 Mil. ------------------------------------------------------------------ Integrated Healthcare Holdings Inc. delivered its financial statements for the quarter ended Sept. 30, 2006, to the Securities and Exchange Commission. The company reported a $5,490,341 net loss on $87,034,755 of net revenues for the three months ended Sept. 30, 2006, versus a $6,497,640 net loss on $91,620,003 of net revenues for the three months ended Sept. 30, 2005. At Sept. 30, 2006, the company's balance sheet showed a stockholders' deficit of $32,558,495, compared to a deficit of $31,063,614 at Dec. 31, 2005. Covenant Default On or around May 9, 2005, the company received notice that it was in default of a credit agreement comprised of a $50 million acquisition loan and a $30 million working capital line of credit. Outstanding borrowings under the line of credit were $27,330,734 and $25,340,734 as of Sept. 30, 2006 and Dec. 31, 2005, respectively. On Dec. 12, 2005, the company entered into an additional credit agreement for $10,700,000, due Dec. 12, 2006, which included an amendment that: (i) declared cured the aforementioned default, (ii) required the company to pay $5,000,000 against its Acquisition Loan, (iii) required the company to obtain $10,700,000 in additional new capital contributions to pay in full and retire all amounts due and owing under the additional credit agreement and (iv) included certain indemnities and releases in favor of the lender. Accordingly, on Dec. 12, 2005, the company paid $5,000,000 against the Acquisition Loan reducing its outstanding balance to $45 million. As of Sept. 30, 2006, the company had outstanding short-term debt aggregating $83,030,734, of which $10,700,000 is included in warrant liabilities, current. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1714 Going Concern Doubt Ramirez International Financial & Accounting Services, Inc., in Irvine, California, raised substantial doubt about Integrated Healthcare Holdings, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the company's losses, stockholders' deficiency, and need for additional capital to refinance debt. About Integrated Healthcare Holdings Based in Santa Ana, California, Integrated Healthcare Holdings, Inc. (OTC:IHCH) is a predominantly physician-owned company that acquired from Tenet Healthcare Corp. four hospital facilities representing approximately 12% of the hospital beds in Orange County, California: 282-bed Western Medical Center in Santa Ana; 188-bed Western Medical Center in Anaheim; 178-bed Coastal Communities Hospital in Santa Ana; and 114-bed Chapman Medical Center in Orange. INTEGRATED SECURITY: Sept. 30 Balance Sheet Upside-Down by $7.6MM ----------------------------------------------------------------- Integrated Security Systems Inc. reported a $784,271 net loss on $2,888,030 of sales for the three months ended Sept. 30, 2006, versus a $1,702,835 net loss on $2,382,152 of sales for the three months ended Sept. 30, 2005. At Sept. 30, 2006, the company's balance sheet showed a stockholders' deficit of $7,630,017, compared to deficit of $6,983,464 at June 30, 2006. On Oct. 6, 2006, the company issued an unsecured convertible promissory note to each of Renaissance US Growth Investment Trust PLC and US Special Opportunities Trust PLC (formerly known as BFS US Special Opportunities Trust) in exchange for an aggregate $750,000 cash investment. Each of the convertible promissory notes is in the original principal amount of $375,000, mature on Oct. 6, 2009 and bear interest at an annual rate of 6%. Interest to be accrued during the first year the notes are outstanding was paid in cash on the date of issuance of the notes, and interest accruing after the first year will be payable in cash in quarterly installments. The notes are convertible at the option of the holder into shares of our common stock at the then-current market price, subject to standard anti-dilution adjustments upon: * the conversion of all or substantially all of our outstanding convertible indebtedness into shares of our capital stock; or * a change of control of the company. The common stock to be issued upon conversion of the notes is subject to registration rights agreements previously entered into with each of RUSGIT and USSO. Under the registration rights agreements, the company agreed to file a registration statement with the Securities and Exchange Commission to register for resale the shares of common stock issuable to RUSGIT and USSO upon conversion of the notes. Simultaneously with the execution of the notes, the company and its subsidiaries entered into an Amended Royalty Agreement with Renaissance Capital Growth & Income Fund III, Inc., RUSGIT and USSO, replacing the prior Royalty Agreement with Renn III, RUSGIT and USSO entered into on June 16, 2006. Under the terms of the Amended Royalty Agreement, the company and its subsidiaries are to pay the lenders a fixed percentage of sales made from narrowly defined new projects. The total royalty payments cannot exceed $100,000 in any year, or $25,000 in any calendar quarter. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1717 Going Concern Doubt Weaver and Tidwell, LLP, expressed substantial doubt about Integrated Security Systems, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal years ended June 30, 2006 and 2005. The auditing firm pointed to the company's significant losses from operations. About Integrated Security Systems Headquartered in Irving, Texas, Integrated Security Systems, Inc. -- http://www.integratedsecurity.com/-- is a technology company that provides products and services for homeland security needs. ISSI also designs, develops and markets safety equipment and security software to the commercial, industrial and governmental marketplaces. Integrated Security's Intelli-Site(R) provides users with a software solution that integrates existing subsystems from multiple vendors without incurring the additional costs associated with upgrades or replacement. JANESSA INC: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Janessa, Inc. dba Knights Inn 1327 River Valley Boulevard Lancaster, OH 43130 Bankruptcy Case No.: 06-56971 Type of Business: The Debtor operates a hotel in Lancaster, Ohio. Chapter 11 Petition Date: November 30, 2006 Court: Southern District of Ohio (Columbus) Judge: C. Kathryn Preston Debtor's Counsel: Matthew Fisher, Esq. Allen, Kuehnle, Stovall & Neuman LLP 21 West Broad Street, Suite 400 Columbus, OH 43215 Tel: (614) 221-8500 Fax: (614) 221-5988 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wachovia Small Business Capital 1327 River Valley $1,247,133 c/o Michael Barren, Esq. Boulevard Secured: 110 Polaris Parkway, Suite 302 Lancaster, Ohio $700,000 Westerville, OH 43082 Senior Lien: $23,851 Knights Franchise Systems, Inc. Misc. Franchise $114,804 1 Sylvan Way Fees Parsippany, NJ 07054 Treasurer, Fairfield County 2006 County Taxes $50,000 210 East Main Street Lancaster, OH 43130 Internal Revenue Service 1327 River Valley $30,000 c/o Christopher R. Yates Boulevard 303 Marconi Boulevard, Suite 200 Lancaster, Ohio Columbus, OH 43215 State of Ohio Sales Tax $12,839 Department of Taxation 4485 Northland Ridge Boulevard Columbus, OH 43229 U.S. Bank $11,268 Bank of America Trade Debt $11,200 State of Ohio, BWC Premiums $8,500 PitneyBowes Business Trade Debt $7,251 Nauman Communications, Inc. Trade Debt $6,000 AT&T Trade Debt $2,101 City of Lancaster 2005 City Payroll $1,015 Taxes Carlile Patchen & Murphy Legal Fees $510 Secure Tel, Inc. Trade Debt $337 American Hotel Register Trade Debt $301 Carpet Man Cleaning Trade Debt $301 Ecolab Trade Debt $238 KARA HOMES AT ENCLAVE: Case Summary & 20 Largest Creditors ---------------------------------------------------------- Debtor: Kara Homes at Enclave II, LLC 197 Route 18 South, Suite 235S East Brunswick, NJ 08816 Bankruptcy Case No.: 06-22341 Type of Business: The Debtor is an affiliate of Kara Homes, Inc. Kara Homes builds single-family homes, condominiums, townhomes, and active-adult communities. Kara Homes filed for chapter 11 protection on Oct. 5, 2006 (Bankr. D. N.J. Case No. 06-19626). On Oct. 9, 2006, nine affiliates filed for bankruptcy in the same Court. On Oct. 10, 2006, 12 more affiliates filed for chapter 11 protection. Chapter 11 Petition Date: December 8, 2006 Court: District of New Jersey (Trenton) Judge: Michael B. Kaplan Debtor's Counsel: David L. Bruck, Esq. Greenbaum, Rowe, Smith, et al. P.O. Box 5600 Woodbridge, NJ 07095 Tel: (732) 549-5600 Fax: (732) 549-1881 Total Assets: $0 Total Debts: $3,327,404 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ G&R Trimming Contractors, $167,412 Inc. 154 Willow Street East Brunswick, NJ 08816 Sunrise Concrete Company $102,203 P.O. Box 435 911 Millcreek Road Rushland, PA 18956 Manzo-Maroba Construction $101,167 65 Highway 34 Morganville, NJ 07751 Strober Building Supply, Inc. $98,822 Lubrano, Domenico Deposit $97,900 Lubrano, Domenico Deposit $97,900 A-1 Bracket $75,438 Menser's Heating and Air, $71,041 Inc. Fenton Tile Company $65,352 Thelemaque, Anthony and Deposit $59,220 Claire Thelemaque, Anthony and Deposit $59,220 Claire Marchese, Joseph and Nicole Deposit $52,900 Marchese, Joseph and Nicole Deposit $52,900 All County Aluminum Inc. $51,847 Shoreline Plumbing & Heating $50,068 RWZ Inc. Stairs & Rails $49,527 Benchmark Inc. $39,844 Above All Heat $38,604 Michael J. Wright $37,589 Construction Co., Inc. Wagner Electric Corp. $34,949 KRISPY KREME: Delays Filing Report for Third Qtr. Ended Oct. 29 --------------------------------------------------------------- Krispy Kreme Doughnuts Inc. will be unable to timely file a quarterly report on Form 10-Q for the third quarter ended Oct. 29, 2006. The company's filing with the Securities and Exchange Commission on Dec. 11, 2006, disclosed that the delay is due to the substantial resources devoted in completing its annual report on Form 10-K for fiscal 2006, filed on Oct. 31, 2006, and its quarterly reports on Form 10-Q for the first three quarters of fiscal 2006, filed on Nov. 9, 2006. In addition, the company has also been devoting substantial resources to complete its quarterly reports on Form 10-Q for the first two quarters of fiscal 2007. Due to the substantial resources devoted to these reports, the Company was unable to finalize its quarterly report on Form 10-Q for the third quarter of fiscal 2007 before the filing deadline of Dec. 8, 2006. Michael C. Phalen, chief financial officer, also disclosed that the company has not yet filed its Quarterly Reports on Form 10-Q for the first two quarters of fiscal 2007 or the third quarter of fiscal 2005 or its Annual Reports on Form 11-K for the periods ended Dec. 31, 2005 and 2004. Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme (NYSE: KKD) -- http://www.krispykreme.com/-- is a branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. There are currently approximately 320 Krispy Kreme stores and 80 satellites operating systemwide in 43 U.S. states, Australia, Canada, Mexico, the Republic of South Korea and the United Kingdom. Headquartered in Winston-Salem, North Carolina, Freedom Rings LLC is a majority-owned subsidiary and franchisee partner of Krispy Kreme Doughnuts, Inc., in the Philadelphia region. Freedom Rings operates six out of the approximately 360 Krispy Kreme stores and 50 satellites located worldwide. The Company filed for chapter 11 protection on Oct. 16, 2005 (Bankr. D. Del. Case No. 05-14268). M. Blake Cleary, Esq., Margaret B. Whiteman, Esq., and Matthew Barry Lunn, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated $10 million to $50 million in assets and debts. Headquartered in Oak Brook, Illinois, Glazed Investments, LLC, is a 97%-owned unit of Krispy Kreme. Glazed filed for chapter 11 protection on Feb. 3, 2006 (Bankr. N.D. Ill. Case No. 06-00932). The bankruptcy filing will facilitate the sale of 12 Krispy Kreme stores, as well as the franchise development rights for Colorado, Minnesota and Wisconsin, for approximately $10 million to Westward Dough, the Krispy Kreme area developer for Nevada, Utah, Idaho, Wyoming and Montana. Daniel A. Zazove, Esq., at Perkins Coie LLP represents Glazed in its restructuring efforts. When Glazed filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. KremeKo Inc., Krispy Kreme's Canadian franchisee, is currently restructuring under the Companies' Creditors Arrangement Act. Pursuant to the Court's Initial Order, Ernst & Young Inc. was appointed as Monitor in KremeKo's CCAA proceedings. The Monitor is attempting to sell the KremeKo business. The U.S. District Court for the Middle District of North Carolina has set Feb. 7, 2007, as the hearing date for the final approval of the terms of the settlement of the shareholder derivative action entitled Wright v. Krispy Kreme Doughnuts Inc., et al. LEVEL 3: Unit Agrees to Sell $650 Million of 9.25% Senior Notes --------------------------------------------------------------- Level 3 Financing, Inc., a subsidiary of Level 3 Communications, Inc., agreed to sell $650 million aggregate principal amount of 9.25% Senior Notes due 2014 in a private offering to "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933 and outside the United States under Regulation S under the Securities Act of 1933. The senior notes were priced at 101.75% of the principal amount plus accrued interest from Oct. 30, 2006, representing an effective yield of 8.86% to the purchasers of these senior notes. The senior notes represent an additional offering of the 9.25% Senior Notes due 2014 that were issued on Oct. 30, 2006. The notes are being offered as additional notes under the same indenture as the 9.25% Senior Notes issued on Oct. 30, 2006, and will be treated under that indenture as a single series of notes with the outstanding 9.25% Senior Notes. The debt represented by the new notes will be used to: (i) purchase Level 3 Financing's 10.75% Senior Notes due 2011 tendered in a tender offer, which was launched by Level 3 Financing on Dec. 13, 2006, (ii) to the extent that less than all of the 10.75% Senior Notes due 2011 are purchased in the tender offer, to effect a satisfaction and discharge under the indenture governing the 10.75% Senior Notes due 2011 or otherwise repurchase in any lawful manner those 10.75% Senior Notes due 2011 that remain outstanding after the tender offer, and (iii) pay fees and expenses incurred in connection with the foregoing. Gross proceeds from the offering of senior notes that exceed the amount necessary to repurchase or refinance the 10.75% Senior Notes due 2011, will constitute purchase money indebtedness under the existing indentures of Level 3 and will be used solely to fund the cost of construction, installation, acquisition, lease, development or improvement of any Telecommunications/IS Assets, including the cash purchase price of any past, pending or future acquisitions. About Level 3 Financing Level 3 Financing, Inc. is a wholly owned subsidiary of Level 3 Communications, Inc. (Nasdaq: LVLT) -- http://www.leve3.com/-- which provides communications and information services worldwide. * * * As reported in the Troubled Company Reporter - Europe on Oct. 31, 2006, Fitch Ratings assigned a rating of B/RR1 to Level 3 Financing, Inc.'s issuance of $600 million of 9.25% senior notes due 2014. In addition, Fitch affirmed the CCC Issuer Default Rating and each issue rating for Level 3 Communications, Inc. and Level 3 Financing, Inc. The Rating Outlook is Positive. As reported in the Troubled Company Reporter on Oct. 30, 2006, Standard & Poor's Ratings Services assigned its 'CCC-' rating to the $600 million of 9.25% senior notes due 2014 issued by Level 3 Financing Inc., a subsidiary of Broomfield, Colorado-based Level 3 Communications Inc. All ratings on Level 3, including the 'CCC+' corporate credit rating, are affirmed. The outlook is stable. Debt outstanding as of Sept. 30, 2006, totaled approximately $6.6 billion. As reported in the Troubled Company Reporter on Oct. 27, 2006, Moody's Investors Service assigned a B2 rating to Level 3 Financing, Inc.'s new $600 million fixed rate senior notes due 2014. Moody's affirmed Level 3 Communications, Inc.'s corporate family rating at Caa1 with a stable rating outlook, as the pro- forma leverage is expected to remain below the 10x level Moody's previously indicated could put downward pressure on the rating, and as the rating agency continues to expect the company to commence generating free cash flow in 2008. LEVEL 3: Fitch Rates Proposed $500MM Senior Notes Issue at B ------------------------------------------------------------ Fitch Ratings assigned a rating of 'B' to Level 3 Financing, Inc.'s proposed 144A issuance of $500 million of 9.25% senior notes due 2014 as well as a recovery rating of 'RR1'. Fitch has an Issuer Default Rating of 'CCC' for Level 3 Communications, Inc. and Level 3 Financing, Inc. The Rating Outlook is Positive. Level 3 has also initiated a tender offer for Level 3 Financing's 10.75% senior notes due 2011, which has $500 million outstanding. Notes tendered by Dec. 27, 2006 will receive consideration of $1,092.21 per $1,000 principal amount. Notes tendered after Dec. 27 will receive consideration of $1,062.21 per $1,000 principal amount. The tender expiration date is Jan. 11, 2007. Fitch estimates the cost of the tender, if successfully tendered in full early, would approximate $546 million. The new issuance of $500 million of 9.25% notes will be used in part to fund the tender offer. Fitch believes the tender and new issuance reflect the Positive Outlook assigned to the company as, if successful, it will begin to smooth the maturity schedule by reducing the outstanding 2011 maturities to approximately $2.1 billion. In addition, the company will also experience a modest interest expense savings and consent to eliminate certain restrictive covenants associated with that indenture. The Positive Rating Outlook continues to reflect Fitch's belief that the company's acquisitions, including the recently reported Broadwing Corporation acquisition, gives Level 3 a firm path, if successfully integrated, toward de-leveraging its credit profile and achieving positive free cash flow in 2008. The timing of an upgrade of Level 3's IDR is linked to the company's ability to improve free cash flow, materially reduce leverage, generate positive organic revenue growth and improve margins. Additionally, the company will need to maintain liquidity and financial flexibility. The tender offer is scheduled to expire at 5:00 p.m., New York City time, on Jan. 11, 2007, unless extended or earlier terminated. Payment for Notes validly tendered on or prior to the Consent Time and accepted for purchase will be made promptly after the Consent Time. Holders of Notes who validly tender after the Consent Time and on or prior to the Expiration Date, if such Notes are accepted for purchase, will receive the tender offer consideration but will not receive the consent payment. Payment for Notes validly tendered after the Consent Time and on or prior to the Expiration Date and accepted for purchase will be made promptly after the Expiration Date. Accrued interest up to, but not including, the applicable settlement date will be paid in cash on all validly tendered and accepted Notes. Level 3 Financing intends to fund the purchase of the Notes tendered with net proceeds from borrowings under a proposed private debt offering, and may also fund purchases pursuant to the tender offer with cash on hand. Level 3's obligation to purchase Notes pursuant to the tender offer is conditioned on the consummation of the proposed debt offering. The tender offer is also subject to the satisfaction or waiver of certain other conditions as set forth in the Offer to Purchase. The tender offer is not subject to the receipt of any minimum amount of tenders. Copies of the Offer to Purchase and the related Letter of Transmittal may be obtained from the Information Agent for the tender offer: Global Bondholder Services Corporation, Telephone (212) 430-3774 and (866) 389-1500 (toll-free) Questions regarding the tender offer may be directed to the Dealer Manager for the tender offers: Merrill Lynch & Co. Telephone (888) 654-8637 (toll-free) and (212) 449-4914 About Level 3 Financing Level 3 Financing, Inc. is a wholly owned subsidiary of Level 3 Communications, Inc. (Nasdaq: LVLT) -- http://www.leve3.com/-- which provides communications and information services worldwide. * * * As reported in the Troubled Company Reporter - Europe on Oct. 31, 2006, Fitch Ratings assigned a rating of B/RR1 to Level 3 Financing, Inc.'s issuance of $600 million of 9.25% senior notes due 2014. In addition, Fitch affirmed the CCC Issuer Default Rating and each issue rating for Level 3 Communications, Inc. and Level 3 Financing, Inc. The Rating Outlook is Positive. As reported in the Troubled Company Reporter on Oct. 30, 2006, Standard & Poor's Ratings Services assigned its 'CCC-' rating to the $600 million of 9.25% senior notes due 2014 issued by Level 3 Financing Inc., a subsidiary of Broomfield, Colorado-based Level 3 Communications Inc. All ratings on Level 3, including the 'CCC+' corporate credit rating, are affirmed. The outlook is stable. Debt outstanding as of Sept. 30, 2006, totaled approximately $6.6 billion. As reported in the Troubled Company Reporter on Oct. 27, 2006, Moody's Investors Service assigned a B2 rating to Level 3 Financing, Inc.'s new $600 million fixed rate senior notes due 2014. Moody's affirmed Level 3 Communications, Inc.'s corporate family rating at Caa1 with a stable rating outlook, as the pro- forma leverage is expected to remain below the 10x level Moody's previously indicated could put downward pressure on the rating, and as the rating agency continues to expect the company to commence generating free cash flow in 2008. LEVEL 3: Unit Wants to Buy Back $500-Mil. of 10.75% Senior Notes ---------------------------------------------------------------- Level 3 Financing, Inc., a subsidiary of Level 3 Communications, Inc. commenced a tender offer to purchase for cash $500 million in aggregate principal amount of its 10.75% Senior Notes due 2011, representing all of the Notes currently outstanding. In connection with the offer to purchase, Level 3 Financing is soliciting consents to certain proposed amendments to the indenture governing the Notes to eliminate substantially all of the covenants, certain repurchase rights and certain events of default and related provisions contained in the indenture. Holders of Notes validly tendered prior to 5:00 p.m., New York City time on Dec. 27, 2006, unless extended or earlier terminated, if such Notes are accepted for purchase, will receive the total consideration of $1,092.21 per $1,000 principal amount of the Notes, which includes $1,062.21 as the tender offer consideration and $30 as a consent payment. The tender offer is scheduled to expire at 5:00 p.m., New York City time, on Jan. 11, 2007, unless extended or earlier terminated. Payment for Notes validly tendered on or prior to the Consent Time and accepted for purchase will be made promptly after the Consent Time. Holders of Notes who validly tender after the Consent Time and on or prior to the Expiration Date, if such Notes are accepted for purchase, will receive the tender offer consideration but will not receive the consent payment. Payment for Notes validly tendered after the Consent Time and on or prior to the Expiration Date and accepted for purchase will be made promptly after the Expiration Date. Accrued interest up to, but not including, the applicable settlement date will be paid in cash on all validly tendered and accepted Notes. Level 3 Financing intends to fund the purchase of the Notes tendered with net proceeds from borrowings under a proposed private debt offering, and may also fund purchases pursuant to the tender offer with cash on hand. Level 3's obligation to purchase Notes pursuant to the tender offer is conditioned on the consummation of the proposed debt offering. The tender offer is also subject to the satisfaction or waiver of certain other conditions as set forth in the Offer to Purchase. The tender offer is not subject to the receipt of any minimum amount of tenders. Copies of the Offer to Purchase and the related Letter of Transmittal may be obtained from the Information Agent for the tender offer: Global Bondholder Services Corporation, Telephone (212) 430-3774 and (866) 389-1500 (toll-free) Questions regarding the tender offer may be directed to the Dealer Manager for the tender offers: Merrill Lynch & Co. Telephone (888) 654-8637 (toll-free) and (212) 449-4914 About Level 3 Financing Level 3 Financing, Inc. is a wholly owned subsidiary of Level 3 Communications, Inc. (Nasdaq: LVLT) -- http://www.leve3.com/-- which provides communications and information services worldwide. * * * As reported in the Troubled Company Reporter - Europe on Oct. 31, 2006, Fitch Ratings assigned a rating of B/RR1 to Level 3 Financing, Inc.'s issuance of $600 million of 9.25% senior notes due 2014. In addition, Fitch affirmed the CCC Issuer Default Rating and each issue rating for Level 3 Communications, Inc. and Level 3 Financing, Inc. The Rating Outlook is Positive. As reported in the Troubled Company Reporter on Oct. 30, 2006, Standard & Poor's Ratings Services assigned its 'CCC-' rating to the $600 million of 9.25% senior notes due 2014 issued by Level 3 Financing Inc., a subsidiary of Broomfield, Colorado-based Level 3 Communications Inc. All ratings on Level 3, including the 'CCC+' corporate credit rating, are affirmed. The outlook is stable. Debt outstanding as of Sept. 30, 2006, totaled approximately $6.6 billion. As reported in the Troubled Company Reporter on Oct. 27, 2006, Moody's Investors Service assigned a B2 rating to Level 3 Financing, Inc.'s new $600 million fixed rate senior notes due 2014. Moody's affirmed Level 3 Communications, Inc.'s corporate family rating at Caa1 with a stable rating outlook, as the pro- forma leverage is expected to remain below the 10x level Moody's previously indicated could put downward pressure on the rating, and as the rating agency continues to expect the company to commence generating free cash flow in 2008. LONG BEACH: Moody's Lowers Rating on Four Tranches -------------------------------------------------- Moody's Investors Service downgraded four tranches issued by Long Beach Mortgage Loan Trust in 2003. The underlying collateral in each deal consists of subprime, adjustable and fixed-rate residential mortgage loans. Each class of certificates being downgraded is backed by collateral which has experienced higher than anticipated loss severities on liquidated loans, causing Moody's to reevaluate its expected loss figures. As a result of high loss severities, the transactions being downgraded have experienced a decline in available support as a result of recent liquidations. All of these transactions are currently passing performance triggers and distributing cash to the junior classes. Passing triggers has allowed overcollateralization to be reduced, thus leaving the downgraded classes less protected against future losses. These are the complete rating actions: * Long Beach Mortgage Loan Trust 2003-1 -- Class M-4, downgraded to B1; previously Baa3. * Long Beach Mortgage Loan Trust 2003-2 -- Class M-5, downgraded to Baa3; previously Baa2. * Long Beach Mortgage Loan Trust 2003-3 -- Class M-4, downgraded to Ba3; previously Baa3. * Long Beach Mortgage Loan Trust 2003-4 -- Class M-6, downgraded to Ba2; previously Baa3. MAKING OUR WAY: Case Summary & Nine Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Making Our Way Better, Inc. 5430 Lemoyne Drive Atlanta, GA 30331 Bankruptcy Case No.: 06-75642 Chapter 11 Petition Date: December 4, 2006 Court: Northern District of Georgia (Atlanta) Judge: Margaret Murphy Debtor's Counsel: Kenneth Mitchell, Esq. Giddens, Davidson & Mitchell P.C. Suite 300-B 5000 Snapfinger Woods Drive Decatur, GA 30034 Tel: (770) 987-7007 Fax: (770) 987-7138 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ JT Lawn Care Service Lawn Care Service $24,000 6250 Ponderosa Court Atlanta, GA 30349 Tamela Harris Loan $15,000 4945 Monarch Cove Lithonia, GA 30038 Beyond Communications Telephone Service $14,492 NCO Financial Systems Inc. 3850 North Causeway Boulevard Suite 200 Metairie, LA 70002 Boykin Insurance Insurance $12,000 1285 R.D. Abernathy Boulevard Southwest Atlanta, GA 30310 Adrian Poplus Loan $5,000 3024 Elmwood Court Atlanta, GA 30349 Praxis3 Marketing Services $3,500 Arlena Stover Loan $3,500 Dave Jordan Loan $3,000 Joyce Brewster-McCarthy Loan $2,400 MAVERICK COUNTY: Fitch Pares Rating on $13MM Debt to BB from BBB ---------------------------------------------------------------- Fitch Ratings downgraded the rating for Maverick County, Texas to 'BB+' from 'BBB'. This action affects $13.8 million in combination tax and revenue certificates of obligation and $1 million in tax notes outstanding. The Rating Outlook is Stable. The rating downgrade results from the county's continued uneven financial performance, as evidenced by a series of operating shortfalls and a growing negative general fund balance. The rating also incorporates the county's limited economic base, high unemployment, and exposure to economic fluctuations in Mexico. A moderate debt burden and growing tax base are positive credit considerations. The county's general fund has reported losses in five of the previous six fiscal years, including sizeable $1.1 million and $1.6 million losses in fiscal 2004 and 2005, respectively. County officials cite a number of factors for the weak performances, including delayed reimbursements from the U.S. government for county expenses related to the prosecution of federal criminal cases in the county court system, less than expected federal prisoner housing revenues, and spending pressures in various departments. Delays in reimbursements for the Southwest Border Prosecution Initiative have grown to nearly $1.7 million over the past three years, as the federal government reportedly has delayed payments to the county and reduced reimbursement amounts. Reduced federal prisoner housing revenues have stemmed from fewer than projected prisoners at various times to delays in anticipated increases in the per diem fee paid to the county by the U.S. Marshals Service. Public safety spending has grown substantially as law enforcement demands have increased. Outlays in this category have climbed from $2.3 million in fiscal 2001 to more than $4.3 million in fiscal 2005. Preliminary fiscal 2006 operating results include another deficit, projected to total nearly $1.1 million, lowering the general fund balance to a negative $3.3 million. Increased property tax and fee revenues contributed to an estimated 11% gain in general fund revenues, and the county was successful in limiting the spending growth in public safety and general administration. A major factor in the loss was an estimated $300,000 increase in non- departmental outlays. The fiscal 2007 budget reflects an effort by county administrators to reverse the negative trend. The county instituted a property tax rate increase of nearly $0.03 per $100 of taxable value, eliminated 40 positions, and has planned for the sale of county property and for a more diligent effort to collect delinquent property taxes and fines. The budget projects an improvement in the general fund balance to less than negative $1 million. In addition, the county's debt profile is favorable. Direct debt is moderate, and the pace of principal retirement is well above average. Located on the U.S.-Mexico border, Maverick County's population has increased steadily during the past decade. The estimated 2005 population of roughly 55,000 is up more than 15% from the 2000 census. Increasing North American Free Trade Agreement related international trade activity has spurred commercial and residential development, resulting in annual average tax base growth since fiscal 2002 of more than 6%. As a result of the expanded commercial activity, job creation in the county has improved. While still well above state and national averages, the county's unemployment rate has declined significantly from annual averages of more than 20% in previous years. The county's 2005 annual unemployment rate was 13.3%, and the October 2006 monthly rate was 10.2%. MERRILL LYNCH: Moody's Holds Low-B Ratings on $15MM of Debentures ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes and affirmed the ratings of 13 classes of Merrill Lynch Financial Assets Inc., Commercial Mortgage Pass-Through Certificates, Series 2003-Canada 10: -- Class A-1, $112,388,306, Fixed, affirmed at Aaa; -- Class A-2, $243,600,000, Fixed affirmed at Aaa; -- Class XP-1, Notional, affirmed at Aaa; -- Class XP-2, Notional, affirmed at Aaa; -- Class XC-1, Notional, affirmed at Aaa; -- Class XC-2, Notional, affirmed at Aaa; -- Class B, $10,300,000, Fixed, upgraded to Aaa from Aa2; -- Class C, $13,300,000, Fixed, upgraded to Aa2 from A2; -- Class D-1, $13,199,000, Fixed, upgraded to Baa1 from Baa2; -- Class D-2, $1,000, Fixed, upgraded to Baa1 from Baa2; -- Class E-1, $5,199,000, Fixed, affirmed at Baa3; -- Class E-2, $1,000, Fixed, affirmed at Baa3; -- Class F, $4,054,000, Fixed, affirmed at Ba1; -- Class G, $4,029,000, Fixed, affirmed at Ba2; -- Class H, $2,302,000, Fixed, affirmed at Ba3; -- Class J, $3,913,000, Fixed, affirmed at B2; and, -- Class K, $1,612,000, Fixed, affirmed at B3. As of the Nov. 14, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 8.8% to $419.9 million from $460.4 million at securitization. The Certificates are collateralized by 55 mortgage loans ranging in size from less than 1% to 7.7% of the pool, with the top 10 loans representing 49.7% of the pool. Three loans, representing 14.9% of the pool, have defeased and are collateralized by Canadian Government securities. The balance of the pool consists of two shadow rated loans, representing 13.0% of the pool, and a conduit component, representing 72.1% of the pool. There have been no realized losses since securitization and no loans are in special servicing. Nine loans, representing 13.3% of the pool, are on the master servicer's watchlist. Moody's was provided with partial or full-year 2005 operating results for 76.4% of the pool. Moody's loan to value ratio is 69.6%, compared to 89.4% at securitization. Moody's is upgrading Classes B, C, D-1, and D-2 due to improved pool performance, defeasance and increased credit support. The largest shadow rated loan is the Sheridan Center Loan. The loan is secured by the borrower's interest in a 548,000 square foot value oriented mixed-use retail and office center located approximately 13 miles west of Toronto in Mississauga, Ontario. The collateral securing the loan consists of 548,000 square feet of retail and office space. The retail portion consists of a community center anchored by Zellers and A&P. Tenants in the office portion include Royal & Sun Alliance and Public Works Canada. Other tenants include Shoppers Drug Mart, Scotiabank, Fabricland, LensCrafters, Chapters, Reitmans and Payless Shoes. The center is 92.3% occupied, compared to 95.1% at securitization. Moody's current shadow rating is A3, compared to Baa2 at securitization. The second largest shadow rated loan is the Richmond Center North Loan. The loan is secured by the borrower's interest in a 331,000 square foot regional mall located approximately seven miles south of Vancouver in Richmond, British Columbia. The center is anchored by The Bay and Shoppers Drug Mart and is shadow anchored by Sears. The center is 100% occupied, compared to 99.7% at securitization. Moody's current shadow rating is Aaa, compared to A1 at securitization. The three largest conduit loans represent 15.3% of the pool. The largest conduit loan is the RioCan Fairgrounds Loan, which is secured by a 266,000 square foot power center located approximately 50 miles northwest of Toronto in Orangeville, Ontario. The center includes Wal-Mart, Commisso's Food Markets, Future Shop, and Galaxy Theatres. Other tenants include Tim Hortons, Wendy's, Scotiabank, Harvey's, Swiss Chalet, Blockbuster Video and The Second Cup. The center is 100% occupied, the same as at securitization. The borrower is a property holding company for RioCan Real Investment Trust, a publicly traded REIT. The loan is full recourse to RioCan. Moody's LTV is 79.4%, compared to 83.5% at securitization. The second largest conduit loan is the The Junction Loan, which is secured by a 194,000 square foot power center located in Mission, British Columbia. There is also subordinate debt in the amount of $7.0 million. Located approximately 45 miles east of Vancouver, occupancy is 97.5%, compared to 99.7% at securitization. The property is anchored by Save-On-Foods and London Drugs. Other tenants include Reitmans Superstore, White Spot, Boston Pizza, Blockbuster Video, TD Canada Trust, Radio Shack, Wendy's, McDonald's and Starbucks. The borrower is Mission Valley Shopping Centre whose original owners Schroeder Properties Ltd. and Schooner Wood Manufacturing Ltd. sold their interest to RioCan REIT and Kimco Realty. Schroeder Properties Ltd. continues to be liable for the debt. Moody's LTV is 59.9%, compared to 82.0% at securitization. The third largest conduit loan is the Lawrence Terrace Loan, which is secured by a 410-unit apartment complex located in Toronto, Ontario. The property is 87.6% occupied, compared to 100.0% at securitization. Built in 1964, rental income and occupancy have declined due to increased competition. The loan is on the master servicer's watchlist due to a decline in debt service coverage. Moody's LTV is in excess of 100%, compared to 86.0% at securitization. The pool's collateral is a mix of retail, industrial and self storage, office and mixed use, Canadian Government securities, multifamily and lodging. The collateral securing the loans is located in seven Canadian provinces. The top concentrations are Ontario, Alberta and British Columbia. All of the loans are fixed rate. Approximately 43% of the pool is full or partial recourse to the respective borrowers. METALS USA: Moody's Junks Rating on Proposed $150-Mil. PIK Notes ---------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Metals USA Holdings Corp.'s proposed $150 million of senior unsecured floating rate PIK notes and assigned B2 corporate family and probability of default ratings to Holdco, which owns Flag International Holdings Corp., which in turn owns Metals USA, Inc, the operating entity. These ratings have a stable outlook. The net proceeds of the Holdco note offering will be used to distribute a dividend to Holdco's equity holders, primarily Apollo Management. In a related action, Moody's affirmed the B3 rating for Metals USA's senior secured notes. If the proposed financing concludes as planned, Moody's will withdraw the existing B1 corporate family rating for Metals USA, Inc. and withdraw Metals USA's SGL-2 speculative grade liquidity rating and assign an SGL-3 to Holdco. Moody's convention is to assign these "issuer" ratings to the highest level in a family's corporate structure that has rated debt. These ratings were assigned: * Metals USA Holdings Corp. -- B2 corporate family rating -- B2 probability of default rating -- Caa1, LGD6, 93% to the $150 million of senior unsecured floating rate PIK notes due 2012 -- SGL-3 speculative grade liquidity rating This rating was affirmed: * Metals USA, Inc. -- B3 to the $275 million of 11.125% guaranteed senior secured notes due 2015 The effective downgrade of the group's corporate family rating reflects the introduction of debt at Holdco and the burden this places on Metals USA to service, via upstream dividends, the high interest cost of the Holdco notes. Interest on the Holdco notes can either be paid in cash or, alternatively, paid in kind at a higher interest rate. Metals USA's operating performance over the last year has been about as expected by Moody's when its B1 CFR was assigned, but the company has not improved its working capital management, which lags its peers in Moody's opinion. Furthermore, Metals USA's debt has risen from $474 million on Dec. 31, 2005, to pro forma $615 million as at Sept. 30, 2006 as a result of approximately $100 million of increases in working capital, $46 million expended for two acquisitions, and a $25 million dividend payment. With the proposed Holdco debt, consolidated adjusted debt will be $852 million, which equates to approximately 6x EBITDA. Given the company's modest progress in earnings power over the last year, a time of generally favorable metal markets, the group's $291 million increase in debt materially erodes its debt protection metrics and makes a B2 corporate family rating appropriate. Moody's continues to be concerned about Metals USA's somewhat limited liquidity. Pro forma asset-backed revolver borrowings will be $333 million and letters of credit usage is about $19 million, whereas the borrowing base currently limits availability to approximately $480 million. Unused availability of $130 million does not provide much financial flexibility to meet possible working capital, interest payment, or other operating needs. Consequently, Moody's assigned an SGL-3 speculative liquidity rating to Holdco. The Caa1 rating for the Holdco notes reflects their 93% loss-given-default, which is a function of the notes' structural subordination to all other obligations at Holdco and Metals USA. The LGD for Metals USA's senior secured notes is 72%, which is somewhat better than the 83% the notes had previously. The improvement reflects the loss absorbing capacity of the new Holdco notes, although this is partially offset by the increased size of Metals USA's asset-backed revolving credit facility. As a result, the B3 rating on the Metals USA notes did not change. Holdco's and Metals USA's ratings positively reflect the company's geographic and customer diversification, favorable steel demand and pricing, and the company's solid financial performance in its metals distribution segments. Furthermore, should metal market conditions weaken, Moody's expects this risk to be mitigated by the countercyclical nature of metal distributors' cash flow. Typically, when a metal distributor enters a cyclical downturn and metals prices and demand fall, it can replace inventory at lower cost and reduce overall purchases, which leads to the generation of cash from working capital reductions. This moderates working capital borrowings and maintains liquidity. Moody's previous rating action for Metals USA was on Nov. 9, 2005, when the current ratings were assigned to Metals USA. Metals USA Holdings Corp., headquartered in Houston, is the parent company of Metals USA, a leading US distributor of carbon steel, stainless steel, aluminum, red metals, and manufactured metal components, operating out of 34 processing and distribution facilities. It also operates a Building Products business, primarily servicing the residential remodeling market and operating out of 44 manufacturing and distribution facilities. METALS USA: S&P Assigns CCC+ Rating to $150MM Senior Unsec. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Metals USA Holdings Corp. and a 'CCC+' to Holdings Corp.'s proposed $150 million senior unsecured floating rate payment-in-kind notes due January 2012. Holdings Corp. will become the parent company to Metals USA Inc. Neither Metals USA Inc. Nor any other subsidiaries guarantees the proposed notes. Proceeds from the notes will be used to finance a special dividend of $144.8 million to the company's private equity holders, Apollo Management LP. Pro forma for the transaction, the operating company will have approximately $821 million of debt, adjusted for operating leases, as of Sept. 30, 2006. The rating on Houston, Texas-based Metals USA Inc. reflect the significant volatility associated with its markets and cash flows, thin margins, and very aggressive financial leverage. The rating also reflect the company's variable cost structure and a fair position in its markets. Ratings List: * Metals USA Inc. -- Corporate Credit Rating at B/Stable/ -- $275 million senior secured notes at B- Rating Assigned: * Metals USA Holdings Corp. -- Corporate Credit Rating at B/Stable -- $150 million senior unsecured notes at CCC+ MGM MIRAGE: Moody's Rates New $750-Million Senior Notes at Ba2 -------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the new $750 million senior unsecured guaranteed notes due 2017, raised the SGL rating to SGL-2 from SGL-3 and affirmed MGM Mirage's other existing ratings. The new notes will rank pari-passu with existing senior unsecured debt and proceeds of the notes will be used to term out existing bank revolver debt. MGM is expected to be a net borrower over the next few years due to high capital spending needs for maintenance, CityCenter in Las Vegas, a permanent gaming facility in Detroit, as well as investment spending for joint venture projects. Nevertheless, Moody's expects that MGM will continue to grow its return on assets and maintain Debt/EBITDA and EBITDA to interest around 5.5x, and 2.5x, respectively, over the next two years. On a last twelve months basis debt to EBITDA and EBITDA to interest stood at about 5.6x and 3.0x, respectively. Pursuant to Moody's published Gaming Rating Methodology, the company's credit metrics and level of geographic diversification are below average for the current rating. However, the company's size, significant and successful development profile and solid EBITDA margins offset these risks. The upgrade of the speculative grade liquidity rating to SGL-2 from SGL-3 is based on the additional liquidty cushion that MGM will have following the $750 million note issuance and the subsequent repayment of outstanding revolver loans. This added liquidity materially helps improve MGM's ability to meet upcoming debt amortizations and capital spending plans with internal cash flow and committed borrowing sources. The rating outlook is stable reflecting the positive operating conditions in the company's primary markets, and Moody's expectation that returns on development spending will be sufficient to maintain the company's current credit profile. The ratings could be downgraded if leverage rises above 6x or if the company pursues significant share repurchases. Upward rating momentum is limited given that the company will be a net borrower over the next several years and is pursuing other potential development opportunities. Rating assigned: -- $750 million senior unsecured guaranteed bonds due 2013 at Ba2, LGD 3, 43%. Rating changed: -- Speculative grade liquidity rating changed to SGL-2 from SGL-3. Headquartered in Las Vegas, Nevada, MGM MIRAGE owns and operates 23 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. MGM MIRAGE also reported plans to develop CityCenter, a multi-billion dollar mixed-use urban development project in the heart of Las Vegas, and has a 50 percent interest in MGM Grand Macau, a hotel-casino resort currently under construction in Macau S.A.R. Consolidated revenue for the twelve month period ended Sept. 30, 2006 was about $7.4 billion. MGM MIRAGE: S&P Puts BB Rating on Proposed $750 Mil. Sr. Notes -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating to MGM Mirage's proposed $750 million senior unsecured notes due 2017, which will be sold pursuant to a prospectus dated May 9, 2006. Proceeds from the proposed offerings will be used to repay amounts outstanding under the company's revolving credit facility and for general corporate purposes. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'BB' corporate credit rating. The outlook is stable. Consolidated debt outstanding at Sept. 30, 2006, was about $13 billion. MRJ LLC: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------- Debtor: MRJ, LLC 1460 Echo Lake Road Watertown, CT 06795 Bankruptcy Case No.: 06-32179 Chapter 11 Petition Date: December 8, 2006 Court: District of Connecticut (New Haven) Judge: Albert S. Dabrowski Debtor's Counsel: Peter L. Ressler, Esq. Groob Ressler & Mulqueen P.C. 123 York Street, Suite 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 Total Assets: $291,000 Total Debts: $1,053,789 Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cadle Scrapyard of CT, Inc. 1460 Echo Lake $565,414 100 North Cetner Street Road, Watertown, Secured: Newton Falls, OH 44444 Connecticut $291,000 Senior Lien: $280,174 Maria Cura 1460 Echo Lake $114,000 72 Westwood Drive Road, Watertown, Middlebury, CT 06762 Connecticut Wachovia Bank 1460 Echo Lake $87,000 60 North Main Street Road, Watertown, Secured: Waterbury, CT 06702 Connecticut $291,000 Senior Lien: $852,789 Sega Ready Mix, Inc. 1460 Echo Lake $7,201 c/o Kenneth W. Merz, AG Road, Watertown, Secured: 519 Danbury Road Connecticut $291,000 New Milford, CT 06776 Senior Lien: $845,588 Aetna Casualty & Surety Co. 1460 Echo Lake Unknown c/o Howard Moreen, AG Road, Watertown, Secured: 151 Farmington Avenue Connecticut $291,000 Hartford, CT 06105 Senior Lien: $939,789 Internal Revenue Service 1460 Echo Lake Unknown Department of Treasury Road, Watertown, Secured: 135 High Treasury, Stop 155 Connecticut $291,000 Hartford, CT 06103 Senior Lien: $852,789 NAPIER ENVIRONMENTAL: Lenders Waive November Interest Payments -------------------------------------------------------------- Napier Environmental Technologies Inc.'s lenders have agreed to waive their rights to interest for the month of November 2006 in an effort to help Napier during this time of re-building their customer base. These interest payments have been waived and the interest otherwise payable shall not be paid or payable currently or in the future. Headquartered in Delta, British Columbia, Napier Environmental Technologies, Inc. (TSX:NIR) -- http://wwwbiowash.com/-- is a Canadian company primarily engaged in the development, manufacture and distribution of a wide range of products utilizing environmentally advanced technology. The product lines include coating removal and wood restoration products for both the industrial/commercial market and the consumer/retail market. Napier is currently operating under the protection of the Canadian Bankruptcy and Insolvency Act. NEWCOMM WIRELESS: Section 341(a) Meeting Slated for January 8 ------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of NewComm Wireless Services Inc.'s creditors at 10:30 a.m., on Jan. 8, 2006, at Choa Building, 500 Tanca Street, First Floor in San Juan, Puerto Rico. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Guaynabo, Puerto Rico, NewComm Wireless Services, Inc., is a PCS company that provides wireless service to the Puerto Rico market. The company is a joint venture between ClearComm, L.P. and Telefonica Larga Distancia. The company filed for chapter 11 protection on Nov. 28, 2006 (Bankr. D. P.R. Case No. 06-04755). Carmen D. Conde Torres, Esq., at C. Conde & Assoc. and Peter D. Wolfston, Esq., at Sonnenschein Nath & Rosenthal LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it reported assets and liabilities of more than US$100 million. NOMURA ASSET: Collateral Losses Cue Fitch's Rating Downgrade ------------------------------------------------------------ Fitch Ratings has taken rating actions on Nomura Asset Acceptance Corp.'s mortgage pass-through securities, series 2001-R1: -- Classes A, R-I, R-P affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; and, -- Class B-3 downgraded to 'B' from 'BB'. The affirmations on the above classes reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $21.75 million of outstanding certificates. The negative rating action on class B-3, affecting $326,658 of outstanding certificates, is the result of higher-than-expected collateral losses to date and reflects deterioration in the relationship between future loss expectations and credit support levels. As of the November 2006 distribution date, the pool has incurred cumulative losses of 0.7% of the original collateral balance, and approximately 25.38% of the remaining pool balance is 90 or more days delinquent. The transaction, comprising FHA and VA loans, has a pool factor of 23% and is 66 months seasoned. The mortgage loans are serviced by Atlantic Mortgage or Select Portfolio Servicing, Inc., rated 'RSS2' by Fitch. Fitch will continue to closely monitor this transaction. OCCAM NETWORKS: Changes Financial Reporting End Dates ----------------------------------------------------- Occam Networks Inc.'s board of directors has approved the changing of the company's financial reporting to calendar year end and quarterly reporting. Historically, the company ended each fiscal quarter and year on the last Sunday of the corresponding calendar quarter and year. Beginning with the company's 2007 fiscal year, each fiscal quarter and fiscal year shall end on the last day of the applicable calendar quarter and year, and its fiscal year end shall be December 31 for each year and its fiscal quarters shall end on March 31, June 30, September 30, and December 31 of each year. Code of Ethics Amendment The company's Board also approved certain amendments to the company's code of business ethics and conduct, which applies to all employees, officers and directors of the company. The revisions consist of amendments to clarify and expand certain sections of the Code, particularly relating to accountability and reporting procedures and conflicts of interest. None of the amendments constituted or affected a waiver of application of any provision of the Code to its principal executive officer, principal financial and accounting officer, or person performing similar functions. A full text-copy of the Code of Business Conduct and Ethics may be viewed at no charge at http://ResearchArchives.com/t/s?16df Based in Santa Barbara, Calif., Occam Networks Inc. (OTCBB:OCNW) -- http://www.occamnetworks.com/-- develops and markets innovative Broadband Loop Carrier networking equipment that enable telephone companies to deliver voice, data and video services. Based on Ethernet and Internet Protocol technologies, Occam's equipment allows telecommunications service providers to profitably deliver traditional phone services, as well as advanced voice-over-IP, residential and business broadband, and digital television services through a single, all-packet access network. Going Concern Doubt PriceWaterhouseCoopers, LLP, expressed substantial doubt about Occam Networks, Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the Company's continued incurrence significant operating losses and negative cash flows from operations since inception. ON THE BAY: Case Summary and Largest Unsecured Creditor ------------------------------------------------------- Debtor: On the Bay Yacht Club, LLP 801 Brickell Bay Drive, Suite 471 Miami, FL 33131 Bankruptcy Case No.: 06-16419 Chapter 11 Petition Date: December 7, 2006 Court: Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Michael A. Frank, Esq. Brooks Frank & De La Guardia 10 Northwest LeJeune Road, Suite 620 Miami, FL 33126 Tel: (305) 443-4217 Fax: (305) 443-3219 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Jerry Gonzalez Professional Fees $35,000 7728 Soutwest 102 Place Miami, FL 33173 PC HOTELS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: PC Hotels, LLC dba Days Inn & Conf. Center of Moorhead dba AmericInn Lodge & Suites of Moorhead 600 30th Avenue South Moorhead, MN 56560 Bankruptcy Case No.: 06-60498 Chapter 11 Petition Date: December 5, 2006 Court: District of Minnesota (Fergus Falls) Judge: Dennis D O'Brien Debtor's Counsel: Joseph W. Dicker, Esq. Joseph W. Dicker PA 1406 West Lake Street Suite 208 Minneapolis, MN 55408 Tel: (612) 827-5941 Fax: (612) 822-1873 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Days Inn International $1,400,000 1 Sylvan Way Parsipany, NJ 07054 Internal Revenue Service $460,000 30 Seventh Street East, Suite 1222 St. Paul, MN 55101 Paul & Cathy Cronen $260,000 2702 Rivershore Drive Moorhead, MN 56560 Days Inn Worldwide Inc. $209,508 Arrowhead $128,360 MN Department of Revenue $120,000 Jerry Knoblauch $115,000 Lyon Financial Services $30,605 Clay County $26,000 Wieland Investments $20,000 John Cronen $10,000 Moorhead Public Service $8,779 Securtais Security $5,158 Rick Electric Inc. $5,043 Ameripride $3,848 World Cinema Inc. $3,696 AAA $3,519 Safe Mark $3,097 Concordia Athletic Department $1,600 WDAY AM $1,510 PEABODY ENERGY: Fitch Rates New $550-Mil. Junior Debt at BB- ------------------------------------------------------------ Fitch rated the $500 million convertible junior subordinated debentures due 2066 at 'BB-'. The ratings of the $650 million senior notes due 2013, the $250 million senior notes due 2016, the $650 million senior notes due 2016, the $250 million notes due 2026, the $1.8 billion revolving credit facility, and the $950 million term loan facility are affirmed at 'BB+'. The Rating Outlook is Stable. The proceeds of new debentures will be used to repay borrowings under the bank facilities used to finance, in part, the acquisition of Excel Coal Limited. Based upon Fitch's hybrid rating criteria published on Sept. 27, 2006, Fitch has assigned the debentures to class C and will allocate 50% of the principal to adjusted equity and 50% to adjusted debt in evaluating the financial leverage of Peabody. Key features supporting the equity credit class of the debentures include the junior subordinate ranking, ten-year cumulative optional deferral of interest payments, a 60-year maturity with restrictions on redemption or repurchasing securities for 30 years except in certain limited circumstances. Without the cash settlement conversion feature upon a non-stock change of control, the debentures would have received 75% equity credit. The ratings reflect Peabody's large, well diversified operations, good control of low cost production, strong liquidity and moderate leverage. The outlook is for coal producers to continue to benefit from a strong pricing environment over the near term. Peabody is the largest US coal producer fueling 10% of domestic electricity generation. Pro forma for the Excel acquisition and completed development, the company will be the fifth largest coal producer in Australia. Peabody's operations are well diversified with new activity concentrated in the Powder River Basin and the Illinois Basin where it dominates. Peabody has over 9 billion tons of coal reserves. PERFORMANCE TRANSPORTATION: Files Schedule of Unexpired Leases -------------------------------------------------------------- Performance Transportation Services, Inc., and its debtor- affiliates filed with the U.S. Bankruptcy Court for the Western District of New York their schedule of executory contracts and unexpired leases, which they seek to assume pursuant to Sections 365 and 1123 of the Bankruptcy Code. Garry M. Graber, Esq., at Hodgson Russ LLP in Buffalo, New York, notes that the Contract/Lease Schedule does not include executory contracts or unexpired lease that have been previously assumed by the Debtors by order of the Court. All the Debtors' executory contracts or unexpired leases not set forth in the Contract/Lease Schedule that were not previously rejected will be deemed rejected as of the Effective Date, Mr. Graber adds. The failure of any non-Debtor party to an executory contract or unexpired lease to file and serve an objection to the cure amount set forth on the Contract/Lease Schedule for the executory contract or unexpired lease by Dec. 18, 2006, at 4:00 p.m., EST, will be deemed a consent to the cure amount. A full-text copy of the Contract/Lease Schedule is available at no charge at http://researcharchives.com/t/s?16ed Headquartered in Wayne, Michigan, Performance Transportation Services, Inc. -- http://www.pts-inc.biz/-- is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America. The Company provides transit stability, cargo damage elimination and proactive customer relations that are second to none in the finished vehicle market segment. The company's chapter 11 case is administered jointly under Leaseway Motorcar Transport Company. Headquartered in Niagara Falls, New York, Leaseway Motorcar Transport Company Debtor and 13 affiliates filed for chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Case No. 06-00107). James A. Stempel, Esq., James W. Kapp, III, Esq., and Jocelyn A. Hirsch, Esq., at Kirkland & Ellis, LLP, and Garry M. Graber, Esq., at Hodgson Russ LLP represent the Debtors in their restructuring efforts. David Neier, Esq., at Winston & Strawn LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets between $10 million and $50 million and more than $100 million in debts. (Performance Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PGMI INC: Reports $727,852 Net Loss in Quarter Ended Sept. 30 ------------------------------------------------------------- PGMI Inc. posted a $727,852 net loss on $5.5 million of net revenues for the three months ended Sept. 30, 2006, compared with $18,101 of net income on $6.3 million of net revenues for the same period in 2005. The increase in net loss, the company said, could be attributed to the decrease of gaming revenue due to the high competition and $325,000 of investor relations fee incurred in the three months ended Sept. 30, 2006. The company's balance sheet at Sept. 30, 2006, showed $61.1 million in total assets, $53.4 million in total liabilities and a $7.6 million positive stockholders' equity. As of Sept. 30, 2006, the company's balance sheet also showed strained liquidity with $9.8 million in total current assets available to pay $14.3 million in total current liabilities. A Full-text copy of the company's first quarter financials is available for free at http://researcharchives.com/t/s?1711 As of Sept. 30, 2006, five new stores were under construction or planning to construct. On Oct. 30, 2006, a new store in Bando- city with 560 machines will be open. The total cost of the Bando store is approximately $9,100,000. The company is currently constructing a new store in Gyoda-city. The Gyoda store is to be opened in December 2006 and the estimated total costs at completion are approximately $9,600,000. $3,200,000 of construction cost for the two new stores incurred during the period ended Sept. 30, 2006, is capitalized as either land or construction in progress. In addition to the Bando and Gyoda stores, the company plans to construct three stores to be opened in 2007 and 2008. These stores will operate between 500 to 800 Pachinko and Pachislot machines each. As of Sept. 30, 2006, the company incurred approximately $1,200,000 of construction in progress costs for these three sites. The company plans to leverage our expertise and capitalize on new development opportunities to expand our operations in Japan. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 10, 2006, McKennon, Wilson & Morgan LLP expressed substantial about PGMI Inc.'s ability to continue as a going concern after auditing the Company's financial statements for the fiscal years ended June 30, 2006 and 2005. The auditing firm pointed to the company's losses, working capital deficiency at June 30, 2006, and commitments to fund new store expansions. About PGMI Inc. PGMI Inc. provides pachinko gaming entertainment in Japan. The company traces its origin to its founder Gakushin Kanemoto's pachinko business in 1951. It later incorporated in Japan as Marugin Co., Ltd in 1972. The management team brings many decades of experience in the pachinko industry to PGMI. Currently the company operates 13 locations in Japan. PLANET TECH: Posts $395,205 Net Loss in Quarter Ended Sept. 30 -------------------------------------------------------------- Planet Technologies Inc. incurred a $395,205 net loss on $1,872,047 of sales for the three months ended Sept. 30, 2006, versus a $280,924 net loss on $1,183,459 of sales for the three months ended Sept. 30, 2005. At Sept. 30, 2006, the company's balance sheet showed $3,673,468 in total assets, $1,818,008 in total liabilities and stockholders' equity of $1,855,460. Website Security Breach On Oct. 11, 2006, the company became aware of a security breach to its website. Upon discovery, the website was immediately taken offline, local and federal law enforcement agencies as well as credit card service providers were notified and an investigation commenced to assess the full extent of the breach. As of this date, the investigation is ongoing and, as such, the company cannot make a determination as to whether any customer financial information has been compromised and to what extent. The company's website was repaired and tested by systems experts and restored to full operation on Oct. 27, 2006. For the period during which customers were unable to place an order on the company's website, it is unknown what effect, if any, this had on company sales. In addition, it is anticipated the Company will incur increased legal, accounting and IT consulting expenses for the fourth quarter of 2006 and perhaps subsequent periods as a result of the breach. At this time, management does not anticipate that either the loss of sales or increased expenses will have a material adverse effect on the results of operations. Going Concern Doubt J.H. Cohn LLP, in Jericho, New York, expressed raise substantial doubt about Planet Technologies' ability to continue as a going concern after it audited the company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the company's recurring net losses resulting in an accumulated deficit of $5,210,891 and working capital deficiency of $303,717 as of Dec. 31, 2005. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1710 Headquartered in Ridgefield, Connecticut, Planet Technologies, Inc. (PLNT.OB) -- http://www.planettechinc.com/-- formerly known as Planet Polymer Technologies, Inc., is engaged in the business of designing, manufacturing, selling and distributing common products for use by allergy sensitive persons, including, without limitation, air filters, bedding, room air cleaners, and related allergen avoidance products. The business strategy is primarily based upon promotion of products directly to the consumer by telemarketing to the company's database of customers who have purchased the Allergy Free Electrostatic Filter. PRESIDENT CASINOS: Court Confirms Subsidiary's Reorganization Plan ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Missouri has entered an order confirming the Chapter 11 plan of reorganization submitted by President Riverboat Casino-Missouri, Inc., a wholly owned subsidiary of President Casinos, Inc., that conducts President's St. Louis, Missouri gaming operations. The plan of reorganization approved by the Court provides that the stock of PRC-MO will be sold to Pinnacle Entertainment, Inc. for approximately $31 million pursuant to the terms of a purchase agreement previously entered into between President and Pinnacle. Upon closing of the transaction, the plan of reorganization calls for the creation of a distribution trust to distribute to creditors the proceeds of the sale and certain other assets of PRC-MO. All priority and administrative claims and claims of unsecured trade creditors will be paid in full pursuant to the plan of reorganization. The plan of reorganization also provides that holders of President's outstanding bonds will be paid the amount of their claims less a $10 million discount (or $50.6 million). An aggregate of $5 million of the $10 million discount will be permanently waived, and the remaining $5 million will be deferred and be payable from one-half of any future amounts in excess of $5 million recovered by President pursuant to certain specified pending litigation and tax refund claims. In addition, under the plan of reorganization the first $5 million from such litigation and tax refund claims and one-half of any recoveries in excess of $5 million will be used first to pay the outstanding bankruptcy claim of John Edward Connelly & Associates and its assignees (in the amount of approximately $3.3 million) with the balance to be distributed to President. The plan of reorganization does not become effective until the closing of the sale of the stock of PRC-MO to Pinnacle Entertainment. The Missouri Gaming Commission has approved the sale of PRC-MO stock to Pinnacle. The closing of the sale transaction remains subject to various closing conditions. Headquartered in St. Louis, Missouri, President Casinos Inc. (OTC:PREZQ.OB) -- http://www.presidentcasino.com/-- currently owns and operates a dockside gaming casino in St. Louis, Missouri through its wholly owned subsidiary, President Missouri. The Debtor filed for chapter 11 protection on June 20, 2002 (Bankr. S.D. Miss. Case No. 02-53055). On July 11, 2002, substantially all of Debtor's other operating subsidiaries filed for chapter 11 protection in the same Court. The Honorable Judge Edward Gaines ordered the transfer of President Casino's chapter 11 cases from Mississippi to Missouri. The case was reopened on Nov. 5, 2002 (Bankr. E.D. Mo. Case No. 02-53005). Brian Wade Hockett, Esq., at Hockett Thompson Coburn LLP, represents the Debtors in their restructuring efforts. David A. Warfield, Esq., at Blackwell Sanders Peper Martin LLP, represents the Official Committee of Unsecured Creditors. Thomas E. Patterson, Esq., and Ronn S. Davids, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP and E. Rebecca Case, Esq., and Howard S. Smotkin, Esq., at Stone, Leyton & Gershman, P.C., represent the Official Committee of Equity Security Holders. PRESTIGE FOODS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Prestige Foods of Iowa, LLC 200 16th Street Sheldon, IA 51201 Bankruptcy Case No.: 06-01585 Type of Business: The Debtor operates a meat processing business. Chapter 11 Petition Date: December 12, 2006 Court: Northern District of Iowa (Sioux City) Debtor's Counsel: Donald H. Molstad, Esq. Molstad Law Firm 701 Pierce Street, Suite 305 Sioux City, IA 51101 Tel: (712) 255-8036 Total Assets: $1,062,700 Total Debts: $5,468,652 The Debtor did not file a list of its 20 Largest Unsecured Creditors. Q-C CARRIAGE: Case Summary & 23 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: Q-C Carriage Hills, LLC 7 West Ridgely Road, #100 Lutherville, MD 21093 Bankruptcy Case No.: 06-18022 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Q-C Catonsville, LLC 06-18024 Type of Business: The Debtors are affiliates of Chesapeake Village, LLC, which filed for chapter 11 Protection on Aug. 24, 2006 (Bankr. D. Md. Case No. 06-15094). Chapter 11 Petition Date: December 12, 2006 Court: District of Maryland (Baltimore) Judge: Nancy V. Alquist Debtors' Counsel: Marc Robert Kivitz, Esq. 201 North Charles Street, Suite 1330 Baltimore, MD 21201 Tel: (410) 625-2300 Fax: (410) 576-0140 Total Assets Total Debts ------------ ----------- Q-C Carriage Hills, LLC $7,500,000 $9,625,732 Q-C Catonsville, LLC $3,000,000 $4,049,548 A. Q-C Carriage Hills, LLC's 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Quillen Development, Inc. $300,000 7 West Ridgely Road, Suite 100 Lutherville, MD 21093 Q-C Enterprises, Inc. $250,000 7 West Ridgely Road, Suite 100 Lutherville, MD 21093 C.J. Johnston, Inc. $10,000 9500 Amberly Lane Perry Hall, MD 21128 Whiteford, Taylor & Preston LLP $5,892 D.S. Thaler & Associates $4,278 The Hartford $4,000 Mayor and City Council of Baltimore $35 H. Eric Chadwick $1 Clark Turner Signature Homes, LLC $1 Erie Insurance $1 Baltimore County, Maryland $1 Attn: Treasurer B. Q-C Catonsville, LLC's 12 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Quillen Development, Inc. $200,000 7 West Ridgely Road, Suite 100 Lutherville, MD 21093 Q-C Enterprises, Inc. $150,000 7 West Ridgely Road, Suite 100 Lutherville, MD 21093 C.J. Johnston, Inc. $10,000 9500 Amberly Lane Perry Hall, MD 21128 The Hartford $4,000 ECS, LLC $3,261 Paul J. Rach, Inc. $2,835 D.S. Thaler & Associates $1,470 Erie Insurance $1 AutoZone Property Management $1 7-Eleven, Inc. $1 Mayor and City Council of Baltimore $1 Baltimore County Office of Finance $1 REFCO INC: Seven Claimants Want Temporary Allowance on Claims ------------------------------------------------------------- Pursuant to Rule 3018(a) of the Federal Rules of Bankruptcy Procedure, seven claimants separately ask the U.S. Bankruptcy Court for the Southern District of New York for temporary allowance of their claims for purposes of voting on Refco, Inc.'s Chapter 11 Plan. The Claimants are: Claimant Claim Amount Asserted Claim Status -------- ------------ --------------------- West Loop Associates, LLC $77,753,268 Unsecured PlusFunds Group, Inc. 220,000,000 Unsecured Gerald M. Sherer 10,597,620 Admin. Expense Stephen Grady 2,069,916 Admin. Expense Nomura International plc 1,406,696 RCM Class 3 FX/ Unsecured Claim RBC Dexia Investor Services 2,999,113 RCM Class 3 FX/ Espana, S.A. Unsecured Claim Ixis Corporate & Investment 4,673,994 RCM Class 3 FX/ Bank Unsecured Claim PlusFunds asserts that it is entitled to an amount precisely equal to a preference cash plus its so-called "enterprise value" of $220,000,000 and unliquidated damages in an amount to be determined at trial related to PlusFunds' lost management fees. PlusFunds contends that its claim reflects the actual amounts owed by the Debtors arising from breach of contract, fraud and related torts committed by the Debtors and their officers and directors. PlusFunds asks the Court for voting ballots for: * Class 5(a) Contributing Debtors General Unsecured Claims, * Class 5(a) FXA General Unsecured Claims, and * Class 3 RCM FX/Unsecured Claims. West Loop asserts: -- a $9,949,142 claim arising under the rejection of Refco Group Ltd.'s lease with West Loop; and -- a $67,695,652 damage incurred upon its purchase of property in reliance on misrepresentations by RGL and other Debtors, including in an estoppel certificate that predated the Debtors' filing for bankruptcy. Ixis and Nomura ask Judge Drain to clarify that their votes will be for voting purposes only and will not affect the ultimate determination and treatment of their claims, and that the elections will apply regardless of the ultimate claims classification. Ixis and Nomura received FX/Unsecured Ballots. The Claimants further insist that allowance of their Claims solely for voting purposes will foster the goals of the Bankruptcy Code by encouraging creditor voting, and will not prejudice any party. To be entitled to vote, a creditor must hold an allowed claim or interest. Bankruptcy Rule 3018(a), however, provides a mechanism to enable a creditor to vote to accept or reject a debtor's plan, prior to allowance of its claim. Rule 3018(a) provides that notwithstanding objection to a claim or interest, the court after notice and hearing may temporarily allow the claim or interest in an amount which the court deems proper for the purposes of accepting or rejecting a plan. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. On Oct. 6, 2006, the Debtors filed their Amended Plan and Disclosure Statement. On Oct. 16, 2006, the gave its tentative approval on the Disclosure Statement and on Oct. 20, 2006, the Court Clerk entered the written disclosure statement order. The hearing to consider confirmation of Refco, Inc., and its debtor-affiliates' plan is set for Dec. 15, 2006. Objections to the plan, if any, must be in by Dec. 1, 2006. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). RCMI's exclusive period to file a chapter 11 plan expires on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Parties Ink Pact Resolving Alqahtani's Claim -------------------------------------------------------- Pursuant to a stipulation approved by the U.S. Bankruptcy Court for the Southern District of New York, Saeed Abdulrahman Alqahtani and Refco F/X Associates agree that FXA will immediately pay $2,300,000, in cash, to Mr. Alqahtani, by wire transfer. Mr. Alqahtani will waive and release all claims, rights, remedies and causes of action that he has or may assert against FXA or any of the other debtors or estates in the Debtors' consolidated Chapter 11 cases or their professionals. Before Refco, Inc., and its debtor-affiliates filed for bankruptcy, Mr. Alqahtani initiated a $3,000,000 wire transfer from his account at Bank Albilad in Riyadh, Saudi Arabia, to a bank account maintained by FXA at Bank of America. J.P. Morgan Chase, the intermediary bank, wired the Funds to BofA through the Fedwire Funds Service, a settlement system administered by Federal Reserve Bank for participating banks. According to the wire transfer detail, JPMorgan issued the applicable payment order to FRB at 9:02 p.m. on October 17, 2005, less than three hours before FXA's commencement of its Chapter 11 case at 11:54 p.m. The Funds were subsequently credited to FXA's BofA account. In a payment advice to FXA, BofA showed acknowledgement of receipt of the Funds in FXA's account at 7:00 a.m. on Oct. 18, 2006. Mr. Alqahtani continued to use FXA's Web site to execute trades postpetition. As a result of those trades, Mr. Alqahtani asserts, the value of his FXA account as of May 25, 2006, was about $5,865,000. Mr. Alqahtani has filed an administrative expense priority claim against FXA in the full amount of the value of his FXA account. FXA does not dispute the asserted claim amount. However, it disputes that the claim is entitled to administrative expense priority and to treatment as a general unsecured prepetition claim, for which Mr. Alqahtani would receive a pro rata distribution like other FXA customers. Mr. Alqahtani and FXA agree on the claim amount, but disagree over whether his claims are entitled to priority as an administrative expense. Mr. Alqahtani argues that his $3,000,000 FXA deposit occurred postpetition and that his claim for its return is entitled to postpetition treatment as an administrative expense. He also contends that his trading gains of $2,865,000 during the Debtors' Chapter 11 case are entitled to administrative expense priority because: -- his claim for the deposit is entitled to that treatment; and -- FXA permitted continued trading in customers' foreign exchange accounts after the Chapter 11 filing and, therefore appeared to continue to conduct its business in the ordinary course under Section 1108. Furthermore, Mr. Alqahtani avers that even if his deposit was made prepetition -- so that his initial account balance was entitled to be allowed as a general unsecured claim -- his postpetition trading gains were incurred in FXA's continued operations in the ordinary course of business, and are therefore entitled to administrative expense priority. However, FXA argues that Mr. Alqahtani's deposit actually occurred when JPMorgan sent the wire to BofA, about three hours prepetition, and that, therefore his deposit claim is a general unsecured prepetition claim. FXA also states that any postpetition foreign exchange trading gains that customers made as a result of FXA keeping the computer trading platform open are entitled only to the same priority as the claims with which the customers traded -- that is, the general unsecured prepetition claims resulting from the prepetition deposits -- and that they should be netted against the customers' Petition Date account balances to arrive at a prepetition claim amount. Mr. Milmoe says that if Mr. Alqahtani is successful in asserting priority for both portions of his claim, the estate would be obligated to pay him more than $5,800,000 in cash. Even if he is successful in asserting priority for only one of the two portions of his claim, the estate would be obligated to pay him from $2,800,000 to $3,000,000 in cash as an administrative expense claim, and a partial distribution on the balance of his claim, which is estimated at 10% to 35%, for a total cash distribution of $3,080,000 to $4,050,000. On the other hand, Mr. Milmoe notes, if FXA is successful in defeating Mr. Alqahtani's claim for priority, FXA would make a partial distribution on the Claim, of $580,000 to $2,030,000. There would also be litigation expense for both sides and substantial delay for Mr. Alqahtani in receiving any distribution, Mr. Milmoe says. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and $16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. On Oct. 6, 2006, the Debtors filed their Amended Plan and Disclosure Statement. On Oct. 16, 2006, the gave its tentative approval on the Disclosure Statement and on Oct. 20, 2006, the Court Clerk entered the written disclosure statement order. The hearing to consider confirmation of Refco, Inc., and its debtor-affiliates' plan is set for Dec. 15, 2006. Objections to the plan, if any, must be in by Dec. 1, 2006. Refco LLC, an affiliate, filed for chapter 7 protection on Nov. 25, 2005 (Bankr. S.D.N.Y. Case No. 05-60134). Refco, LLC, is a regulated commodity futures company that has businesses in the United States, London, Asia and Canada. Refco, LLC, filed for bankruptcy protection in order to consummate the sale of substantially all of its assets to Man Financial Inc., a wholly owned subsidiary of Man Group plc. Albert Togut, the chapter 7 trustee, is represented by Togut, Segal & Segal LLP. On April 13, 2006, the Court appointed Marc S. Kirschner as Refco Capital Markets Ltd.'s chapter 11 trustee. Mr. Kirschner is represented by Bingham McCutchen LLP. RCM is Refco's operating subsidiary based in Bermuda. Three more affiliates of Refco, Westminster-Refco Management LLC, Refco Managed Futures LLC, and Lind-Waldock Securities LLC, filed for chapter 11 protection on June 6, 2006 (Bankr. S.D.N.Y. Case Nos. 06-11260 through 06-11262). Refco Commodity Management, Inc., formerly known as CIS Investments, Inc., a debtor-affiliate of Refco Inc., filed for chapter 11 protection on Oct. 16, 2006 (Bankr. S.D.N.Y. Case No. 06-12436). RCMI's exclusive period to file a chapter 11 plan expires on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) REMY INTERNATIONAL: Moody's Cuts Corporate Family Rating to Caa3 ---------------------------------------------------------------- Moody's Investors Service lowered the ratings of Remy International, Inc.: -- Corporate Family Rating to Caa3 from Caa1 -- Probability of Default Rating to Caa2 from B3; -- second priority secured notes to Caa3 from B3; -- guaranteed senior unsecured notes to Caa3 from Caa1; and -- the guaranteed senior subordinated notes to Ca from Caa2. The downgrades reflect the risks that the continued weakness in the company's credit metrics and cash generation, combined with the ongoing challenges in the automotive parts supply sector, could place considerable stress on the company's near term liquidity and could also limit its ability to fund the maturity of the $145 million of senior notes maturing in December of 2007. Remy reported that it is exploring a range of potential refinancing options, including possible asset sales, that will help address its near term funding requirements. To the extent that Remy is not successful in pursuing these options, it could face the potential of a distressed restructuring of its unsecured obligations. The negative outlook reflects the uncertainty associated with the successful completion of a refinancing initiative. Although Moody's Automotive Supplier Methodology indicates higher ratings on factors such as revenue growth and diversification, the considerable pressure on the company's liquidity and refinancing profile supports a Caa3 corporate family rating. Ratings lowered: -- Corporate Family Rating, to Caa3 from Caa1, -- Probability of Default Rating to Caa2 from B3, -- $125 million of guaranteed second-priority senior secured floating rate notes to Caa3, LGD4, 53% from B3, LGD4, 53%; -- $145 million of 8.625% guaranteed senior unsecured notes to Caa3, LGD5, 71% from Caa1, LGD5, 72%; -- $150 million of 9.375% guaranteed senior subordinated notes to Ca, LGD6, 92% from Caa2, LGD6, 92%; -- $165 million of 11% guaranteed senior subordinated notes to Ca, LGD6, 92% from Caa2, LGD6, 92% The last rating action was on Sept. 22, 2006 when the LGD Methodology was applied. The $80 million senior secured term loan and the senior secured asset based revolving credit facility are not rated by Moody's. For the twelve month period ending Sept. 30, 2006, Debt/EBITDA was 11.0x, and EBIT/Interest approximated 0.5x. Free cash flow was approximately negative $34 million. Availability under the company's asset based revolver was approximately $93 million at Sept. 30, 2006. Balance sheet cash of $27 million was maintained in non-guarantor subsidiaries. Factors that could result in further pressure on the company's rating include evidence that the company is not making adequate progress in pursuing its refinancing initiatives. Additional rating pressure could result from indications that: -- declining automotive volume or market share loss will further erode the company's revenue base; -- the restructuring cost savings are not being adequately realized; and, -- working capital requirements or other needs are resulting in continuing free cash flow deficits. Factors that could contribute to a stabilization of the company's outlook include: -- a successful completion of an adequate refinancing program; and, -- evidence that Remy's restructuring and cost reductions efforts will support significantly improved operating cash flow performance and credit metrics. These metrics would include EBIT/interest expense consistently over 1x and Debt/EBITDA consistently below 6x. Remy International, Inc., is headquartered in Anderson, Indiana. The company is a leading global manufacturer and remanufacturer of aftermarket and original equipment electrical components for automobiles, light trucks, heavy duty trucks and other heavy duty vehicles. Remy International is privately owned in the following approximate percentages by affiliates of Citicorp Venture Capital; Berkshire Hathaway; and management/miscellaneous other investors. Annual revenues over the last twelve months approximated $1.4 billion. RISKMETRICS GROUP: S&P Junks Rating on Proposed $130-Mil. Loan -------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B' corporate credit rating to New York City-based RiskMetrics Group Holdings LLC, a global supplier of risk analytics, data, and processing. The outlook is stable. "At the same time, we assigned our 'B+' bank loan rating, with a recovery rating of '1', to the company's proposed $325 million first priority senior secured bank facility, which will consist of a $300 million term loan (due 2014) and a $25 million revolving credit facility (due 2013), indicating a high expectation of full recovery of principal in the event of a payment default," said Standard & Poor's credit analyst David Tsui. Standard & Poor's assigned its 'CCC+' bank loan rating, with a recovery of '4', to the proposed $130 million second priority term loan, indicating that lenders can expect a marginal recovery of principal in the event of a payment default. All ratings are based on preliminary offering statements and are subject to review upon final documentation. Proceeds from the $300 million first lien term loan and $130 million second lien term loan, along with $80 million cash on hand and $60 million of rollover equity, will be used to fund the purchase of Institutional Shareholder Services, a provider of proxy voting and corporate governance services, refinance existing debt of ISS and pay for transaction-related expenses. The ratings on RiskMetrics Group reflect the company's narrow business profile, short operating track record at current revenue and profitability levels, and high leverage. These factors are partly offset by its predictable and recurring revenue stream stemming from high renewal rates and subscription-based revenues, and favorable business segment growth. RIVIERA HOLDINGS: S&P Holds B Rating with Developing Outlook ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' ratings on Las Vegas-based casino owner and operator Riviera Holdings Corp. and removed the ratings from CreditWatch, where they were placed with developing implications on Nov. 13, 2006. The outlook is developing. Total debt outstanding at Sept. 30, 2006, was about $215 million. The affirmation and CreditWatch resolution comes after the company's report that the 30-day exclusive negotiating agreement, along with approvals and waivers granted by Riviera's board, which the company entered into with Ian Bruce Eichner and a member of the D.E. Shaw group, expired. There continue to be questions about Riviera's long-term operating strategy, given its pursuit of strategic alternatives and the more recent discussions to sell the company. As a result, the outlook is developing. SAINT VINCENTS: Bayonne Takes Over SV Staten Island --------------------------------------------------- The New York State Hospital Review & Planning Council approved, on Dec. 8, 2006, Bayonne Medical Center's proposed takeover of St. Vincent's Hospital in Staten Island, Ronald Leir of The Jersey Journal reports. The State Health Department's Project Review Committee had, on November 30, 2006, given its nod of Bayonne's plan for the hospital. The U.S. Bankruptcy Court for the Southern District of New York had also previously approved the sale. Mr. Leir relates that it is still unclear if the New Jersey Attorney General's Office will intervene to safeguard how Bayonne's charitable assets -- and the hospital's clinic programs serving indigent patients -- would be protected. "We are very pleased everything has progressed on schedule and we look forward to completing the (real estate) closing for the new hospital entity by the end of the month," Mr. Leir quotes Bayonne spokesman Paul Swibinski. Mr. Swibinski further said that he hopes Bayonne's dispute with the New York Department of Education on renaming St. Vincent Staten Island as Richmond University Medical Center would be resolved. The state had objected to the name arguing that the new entity won't confer degrees. Bayonne argued that it should be able to use the name since it is a teaching hospital. New Jersey Health Commissioner Fred Jacobs, and Bayonne Mayor and State Sen. Joseph V. Doria, Jr., have asked representatives of both Bayonne and the Coalition to Save Bayonne Medical Center to get together and work out their differences, Mr. Leir reports. Gideon Barred from Facility Dawn Gideon, executive director of St. Vincent's Hospital in West Brighton, has been forced out by the hospital's parent company due to conflict-of-interest concerns, Lisa Schneider of the Staten Island Advance reports. Ms. Gideon was dismissed due to her involvement in discussions with Bayonne Medical Center in heading the new parent company of Bayonne and the West Brighton Hospitals. When SVCMC learned that Ms. Gideon was involved in the discussions, it "took steps to ensure against a conflict," Ms. Schneider quotes Michael Fagan, an SVCMC spokesman. Preventive steps included contacting the U.S. Trustee, Judge Adlai S. Hardin, the Official Committee of Unsecured Creditors, and the attorney general's office. Although Ms. Gideon was able to retrieve personal belongings left at St. Vincent's through other employees, a memo warned the she "should not enter SVCMC property or try to access the SVCMC computer network until further notice..." Ms. Schneider relates. Ms. Gideon, an employee of Chicago-based Huron Consulting Group, had planned to leave St. Vincent's at the end of December but was pushed out early due to her conversations with Bayonne about potential employment. Ms. Gideon stated that she had engaged in only a few, informal conversations with Bayonne's board chairman about assuming a position with that entity after its former CEO, Robert Evans, unexpectedly resigned in early November. "Dawn Gideon is not a candidate to be CEO of Bayonne Medical Center" Ms. Schneider quotes Paul Swibinski, a Bayonne spokesman. "She has removed herself from consideration," Mr. Swibinski added. When asked whether SVCMC planned to pursue further legal action against Huron, Ms. Schneider quotes Mr. Fagan as saying, "I don't think any determination has been made on that." 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. 40 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SALOMON BROTHERS: Moody's Junks Rating on $15 Mil. of Certificates ------------------------------------------------------------------ Moody's Investors Service upgraded the ratings of five classes, downgraded the ratings of four classes and affirmed the ratings of seven classes of Salomon Brothers Commercial Mortgage Trust 2001- C1, Commercial Mortgage Pass-Through Certificates, Series 2001-C1: -- Class A-2, $34,321,712, Fixed, affirmed at Aaa; -- Class A-3, $514,049,000, Fixed, affirmed at Aaa; -- Class X, Notional, affirmed at Aaa; -- Class X-2, Notional, affirmed at Aaa; -- Class B, $40,490,000, Fixed, upgraded to Aaa from Aa1; -- Class C, $40,489,000, Fixed, upgraded to Aa1 from A;2 -- Class D, $11,909,000, Fixed, upgraded to Aa2 from A3; -- Class E, $14,290,000, Fixed, upgraded to A1 from Baa1; -- Class F, $14,291,000, Fixed, upgraded to Baa1 from Baa2; -- Class G, $14,290,000, Fixed, affirmed at Baa3; -- Class H, $19,054,000, Fixed, affirmed at Ba1; -- Class J, $19,054,000, Fixed, affirmed at Ba3; -- Class K, $7,145,000, Fixed, downgraded to B2 from B1; -- Class L, $7,145,000, Fixed, downgraded to Caa1 from B3; -- Class M, $7,145,000, Fixed, downgraded to C from Caa2; and, -- Class N, $1,090,902, Fixed, downgraded to C from Caa3. As of the Nov. 20, 2006 distribution date, the transaction's aggregate certificate balance has decreased by approximately 21.8% to $744.8 million from $952.7 million at securitization. The Certificates are collateralized by 160 mortgage loans ranging in size from less than 1.0% to 2.4% of the pool, with the top 10 loans representing 18.5% of the pool. Twelve loans, representing 10.1% of the pool, have defeased and have been replaced with U.S. Government securities. Seven loans have been liquidated from the pool resulting in aggregate realized losses of approximately $22.7 million. Currently three loans, representing approximately 2.3% of the pool, are in special servicing. Moody's has estimated aggregate losses of approximately $2.7 million for all of the specially serviced loans. Thirty seven loans, representing 21.2% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2005 and partial year 2006 operating statements for 92.5 and 51%, respectively, of the performing loans. Moody's loan to value ratio is 83.1%, excluding the defeased and specially serviced REO loans, compared to 86.6% at Moody's last full review in January 2005 and compared to 88.1% at securitization. Moody's is upgrading Classes B, C, D, E and F due to improved overall pool performance, defeasance and increased credit subordination levels. Moody's is downgrading Classes K, L, M and N due to realized and expected losses from the specially serviced loans. The top three non-defeased loans represent 6.6% of the pool. The largest loan is the Van Ness Post Centre Loan, which is secured by a 109,000 square foot mixed use property and an adjacent 144-space parking garage located in San Francisco, California. Approximately 70.9% of the property is occupied by Circuit City and 24 Hour Fitness on leases expiring in 2010. The property is 98% occupied, compared to 94% at last review. Moody's LTV is 89%, compared to 93.2% at last review. The second largest loan is the Ironwood Apartments Loan, which is secured by a 288-unit Class A garden apartment complex located in Houston, Texas. The property is 92.7% occupied, essentially the same as last review. Although the property has maintained a stable occupancy, its financial performance has been impacted by weak market conditions. Moody's LTV is in excess of 100%, the same as at last review. The third largest loan is the Union Square Marketplace Shopping Center Loan, which is secured by a 189,000 square foot community shopping center located in approximately 20 miles east of Oakland in Union City, California. The center is anchored by Safeway and Rite Aid and is 99.7% occupied. Moody's LTV is 65.9%, compared to 71.6% at last review. The pool's collateral is a mix of retail, office and mixed use, multifamily, U.S. Government securities, industrial and self storage, lodging and healthcare. The collateral properties are located in 34 states. The top five state concentrations are California, Massachusetts, New York, New Jersey and Texas. SASKATCHEWAN WHEAT: Shareholders Reelect 11 Directors to Board -------------------------------------------------------------- Saskatchewan Wheat Pool Inc. held its annual meeting of common shareholders in Regina, recognizing its first year since becoming a federal corporation governed by the Canada Business Corporations Act. As part of the formal business of the meeting, Pool shareholders re-elected eleven directors of the Board and re-appointed Deloitte & Touche LLP, as the company's auditors. Approximately 44% of the Pool's total shares outstanding were represented at the meeting in person or by proxy. Shareholders voted overwhelmingly in favor of the Board's re- election and for the re-appointment of the company's auditors. The Pool's eleven-member Board consists of: -- Mr. Ryan Anderson, Pool director, is a graduate of the University of Saskatchewan's Agriculture program. He has served as a Pool Director since 1998 and sits on the company's Audit Committee. M r. Anderson operates a grain, oilseed and pulse crop operation near Melfort, Saskatchewan. -- Mr. Terry Baker, Chairman of the Board, has served on the Pool's Board of Directors since 2001. He holds a civil engineering degree from the University of Saskatchewan. Currently, he is the Chairman of the Board and also a member of the Strategic and Business Planning Committee. Mr. Baker runs a mixed farming operation near Denzil, Saskatchewan. -- Mr. Vic Bruce has been a Pool Director since 2002. He has served on various Boards, including the Farm Land Security Board. Mr. Bruce holds a Bachelor of Education degree, majoring in economics at the University of Calgary. He specializes in pedigreed seed production through a family operation located near Tuxford, Saskatchewan. -- Mr. Thomas Birks was elected to the Board in March 2005. Mr. Birks is the President of Birinco Inc., a merchant bank headquartered in Quebec. He received a Bachelor of Arts degree from McGill University and an MBA from Harvard Business School. He serves on the Audit and Nominating/Corporate Governance Committees of the Board. -- Mr. Thomas Chambers joined the Board in June 2006, and serves on the Pool's Audit and Compensation committees. He is an experienced professional accountant, senior executive, corporate Director and business advisor, most notably having served for 26 years as a Partner in Senior management roles with PricewaterhouseCoopers LLP. Through Senior Partner Services Ltd., he acts as an advisor and Director to a number of companies. -- Mr. Dallas Howe joined the Pool's Board in March of 2005 and chairs the Compensation Committee. He is also the Chairman of the Potash Corporation's Board of Directors. Mr. Howe holds a Bachelor of Arts Degree and a Masters in Mathematics from the University of Saskatchewan. -- Mr. Rick Jensen has been a director since March 2004, and serves on the Pool's Compensation committee. He received a diploma in agriculture from the University of Saskatchewan. Mr. Jensen has served in numerous community leadership roles in support of agriculture issues and operates a mixed farm near Webb, Saskatchewan. -- Doug Kitchen, Vice-Chairman of the Board, joined the Pool's Board in July 2000. Mr. Kitchen is a graduate of Kansas State University with specialties in agriculture and business. He is currently Managing Director of Rosenthal Collins, a world leader in futures and foreign exchange execution. Mr. Kitchen is a member of the Pool's Nominating/Corporate Governance Committee of the Board. -- Harold Milavsky has been a Board director since 2003 and is Chairman and Director of Quantico Capital Corporation in Calgary. He holds a Bachelor of Commerce Degree from the University of Saskatchewan and is a member of the Institute of Chartered Accountants of Saskatchewan and Alberta. He has received honorary doctorates from the universities of Calgary and Saskatchewan, and has been recognized for excellence in corporate governance from the Institute of Corporate Directors. Mr. Milavsky chairs the Nominating/Corporate Governance Committee and the Audit Committee of the Board. -- Herb Pinder has been on the Board of Directors of Saskatchewan Wheat Pool since 2003, serving on the Nominating/Corporate Government Committee. He is the President of the Goal Group of Companies, based in Saskatoon, Saskatchewan. A non-practicing lawyer, Mr. Pinder holds an MBA from Harvard Business School. He lives in Saskatoon. -- Mayo Schmidt, the Pool's President and Chief Executive Officer, joined the Board in March 2005. He joined the Pool in 2000 after holding a number of senior executive positions with ConAgra and General Mills Inc. Mr. Schmidt is a member of the Canadian Council of Chief Executive Officers (open to the top 150 corporations), the C.D. Howe Institute, a Director on The Conference Board of Canada and a trustee for The Conference Board Inc. He serves on the Applied Portfolio Management Advisory Board for the Washburn University School of Business. Mr. Schmidt is also a Director of Prairie Malt Ltd. and the Saskatchewan Roughriders. Mr. Schmidt earned his Bachelor of Business Administration Degree from Washburn University, and is a Washburn Alumni Fellow. He resides in Regina. The Pool also acknowledged the contributions of Leonard Haukeness, who this year completed his tenure as a director. About Saskatchewan Wheat Based in Regina, Saskatchewan Wheat Pool Inc. (TSX:SWP) -- http://www.swp.com/-- is a publicly traded agribusiness. Anchored by a prairie-wide grain handling and agri-products marketing network, the Pool channels Prairie production to end-use markets in North America and around the world. * * * As reported in the Troubled Company Reporter on Nov. 13, 2006, Dominion Bond Rating Service placed the ratings of Saskatchewan Wheat Pool Inc's Senior Secured Debt at Positive BB (low) and Senior Unsecured Notes at Positive B (high). Under Review with Positive Implications. As reported in the Troubled Company Reporter on Nov. 10, 2006, Standard & Poor's Ratings Services placed its ratings on Saskatchewan Wheat Pool on CreditWatch with positive implications, including the 'B+' long-term corporate credit rating. SCOTTS MIRACLE: S&P Places BB Rating on Negative CreditWatch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings for lawn and garden care products supplier The Scotts Miracle-Gro Co., including the 'BB' corporate credit rating, on CreditWatch with negative implications, indicating that the ratings could be lowered or affirmed after the completion of its review. Marysville, Ohio-based Scotts had about $481.2 million of total debt outstanding as of Sept. 30, 2006. The CreditWatch listing reflects the company's increasingly aggressive financial policy after its disclosure that it plans to return $750 million to its shareholders through a $500 million special one-time cash dividend and fund share repurchases of up to $250 million via a "Dutch auction" tender offer, expected to be launched in January 2007. The proposed recapitalization is subject to final approval from the company's board of directors. The company plans to fund the share repurchase and dividend through a proposed $2.1 billion senior secured credit facility. As part of the plan, the company intends to launch a tender offer to repurchase its existing $200 million of 6.625% senior subordinated notes. Upon a successful completion of the tender, Standard & Poor's would withdraw the 'B+' rating on the company's subordinated notes. Scotts expects to complete the recapitalization by March 31, 2007. "We expect credit protection measures to weaken as a result of Scotts' more aggressive financial policy," said Standard & Poor's credit analyst Mark Salierno. "Specifically, we expect lease- and pension-adjusted average total debt to EBITDA to be more than 3.5x, compared with adjusted average debt leverage in the 2.0x-2.5x area currently." Standard & Poor's will meet with management and review the company's pro forma capital structure and outlook for fiscal 2007 before resolving the CreditWatch listing. SHERRITT INT'L: DBRS Holds Sr. Unsec. Debt Rating's at BB (high) ---------------------------------------------------------------- Dominion Bond Rating Service confirmed the ratings of Sherritt International Corporation, with the Senior Unsecured Debt rated at BB (high) and the Convertible Subordinated Debentures at BB. The trends are Stable. The confirmation incorporates Sherritt's excellent financial performance that has benefited from higher pricing reflective of top-of the-cycle conditions in the Company's businesses. While the majority of Sherritt's earnings base is volatile, the Company nonetheless has a diversified product mix that has helped generate a consistent profitability record and lower earnings volatility over time. In June 2006, Sherritt, along with its partner, the Ontario Teachers' Pension Plan, spun off the thermal Coal Prairie mines assets, generating proceeds of $128 million. Sherritt continues to operate the assets and maintains a 41.2% interest in the divested entity, the Royal Utilities Income Fund. The asset sale proceeds and primarily continued strong earnings have enabled Sherritt to progressively de-leverage its balance sheet and effectively attain its targeted capital structure; gross debt-to-total capital improved from 53% as of year-end 2002 to 27% as of Sept. 30, 2006. Leverage and other credit metrics of Sherritt are readily above those normally associated with the assigned ratings, which remain constrained by the Company's significant presence in Cuba; the resulting uncertainty over that nation's transitioning government and future direction further compound the issue. Notwithstanding the RUIF spinoff, the Company maintains vast coal assets in western Canada and remains committed to developing new applications for these reserves, such as coal gasification. Similarly, in Oil and Gas, enhanced recovery technologies are continuously being explored. Sherritt is also pursuing ambitious growth objectives in the Power and Metals businesses; details are provided in the linked report in the Description of Operations section. Capital expenditures associated with the above growth initiatives will be readily absorbed by strong cash flows, with Sherritt continuing to accumulate cash. Accordingly, the Company repurchased 5 million common shares in 2005 and recently announced another offer, expiring on Dec. 22, 2006, to potentially repurchase a further 7.5 million shares. Given the present consolidation activity in the mining industry, another potential use of cash could be in the form of some acquisition; Sherritt's Cuban operations render it a somewhat unlikely target for acquisition. SMART BALANCE: Moody's Assigns B3 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating to Smart Balance, Inc., as well as a B2 rating for senior secured first lien bank facilities, and a Caa2 rating for senior secured second lien bank facilities to GFA Holdings, Inc. under a full and unconditional guarantee of Smart Balance, Inc. The outlook on all ratings is stable. This represents a first time rating for this issuer. These ratings are being assigned in connection with the planned acquisition of GFA by Boulder Specialty Brands, Inc. for approximately $465 million in cash. Subsequent to the transaction, Boulder will rename itself Smart Balance, Inc. These ratings are contingent upon Moody's receipt and review of final documentation for the planned transaction. GFA is a marketer of margarine and several other packaged food products sold within the functional food category under the Smart Balance and Earth Balance brands. Ratings assigned with a stable outlook: * GFA Holdings, Inc. -- $20 million 6-year senior secured 1st lien revolving credit at B2, LGD3, 36%; -- $120 million 7-year senior secured 1st lien term loan at B2, LGD3, 36%; and -- $40 million 7.5-year senior secured 2nd lien term loan at Caa2, LGD5, 86%. Smart Balance, Inc.: -- Corporate family rating at B3; and -- Probability of default rating at B3. Moody's views GFA as a small, niche marketer of margarine and select other functional food items for the US market. GFA operates within the highly-competitive packaged food industry, with revenues highly concentrated on margarine. Yet despite its size and concentration, GFA has established solid market shares and strong operating margins in the key categories within which it competes. The fact that it outsources all manufacturing to third- party producers presents both benefits as well as risks. GFA faces higher-than-average execution risk as it transitions from a small entrepreneurial firm to a larger, publicly-traded entity. And after its acquisition by Boulder, GFA will be very highly leveraged with limited financial flexibility. "While a relatively small company, GFA has created a solid market position and generated attractive operating margins for its products" stated Moody's Peter Abdill, Senior Vice President. "However these strengths are largely offset by the significant amount of debt being placed on this company as part of the acquisition by Boulder" Mr. Abdill said. The $20 million revolving credit and $120 million term loan will each receive a first priority pledge of substantially all assets and capital stock of the borrower and the guarantors as well as a pledge of 66% of the stock of foreign subsidiaries. The $40 million 7.5-year term loan will receive a second-lien on the same collateral as the first lien facilities. Each of the three facilities will receive downstream guarantees from Boulder, as well as upstream guarantees from each wholly-owned domestic subsidiary. Moody's includes $138.5 million in series-A preferred stock being issued by Boulder as part of the transaction in GFA's overall capital structure, and views it as 75% debt, for analytic purposes. The preferred stock will be a perpetual security which may be converted into common equity by either the holder or Boulder under certain circumstances. The security pays an 8% PIK dividend. And yet while legally perpetual, the security contains a provision whereby the dividend rate steps up after year five by .25% per quarter to a maximum of 11%, and if dividends are not paid in cash after year seven, the PIK rate increases to 15%. This creates -- in Moody's view -- an effective economic maturity, is likely to induce the company to redeem or refinance this preferred, and thus significantly weakens its equity characteristics. The stable outlook on GFAs ratings reflects Moody's view that the current rating adequately captures the risk presented by the company's high leverage, its limited financial flexibility, and the challenges it will fact as it transitions to a publicly- traded, high growth, highly-leveraged company. Specifically, the stable outlook anticipates that GFA will reduce and then maintain Debt/EBITDA to within a 6 -- 8x range, and increase and maintain EBIT/Interest to a 1 -- 1.5x range. Downward rating pressure could build if the company's operating performance falters, its liquidity materially deteriorates, its financial flexibility becomes constrained, or it is unable to materially reduce leverage from existing high levels. Specifically, GFA's ratings could be downgraded if it is unable to reduce Debt/EBITDA to below 8x by Dec. 31, 2007 or is unable to sustain EBIT/interest to above 1x by Dec. 31, 2007. Over time upward rating pressure could build if GFA is successful in growing its size, scale, and diversity, and is able to significantly reduce financial leverage. This would include reducing Debt/EBITDA to below 6x, and increasing EBIT/Interest to above 1.5x. With pro forma revenues of $164 million, GFA is a developer and marketer of margarine and select other products within the healthy/functional foods category. STONEBRIDGE HOMES: Involuntary Chapter 11 Case Summary ------------------------------------------------------ Alleged Debtors: Stonebridge Homes L. L.C. c/o Stephen A. Wexler, Receiver 8230 Leesburg Pike Suite 610 Vienna, VA 22182 Involuntary Petition Date: December 4, 2006 Case Number: 06-11665 Chapter: 11 Court: Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Petitioners' Counsel: James P. Campbell, Esq. Campbell Miller Zimmerman, P.C. 19 East Market Street Leesburg, VA 20176 Tel: (703) 771-8344 Fax: (703) 777-1485 Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ James B Madigan, Jr. Loans $158,162 42076 Sweetspring Lane Leesburg, VA 20176 STRATOS GLOBAL: Weak Results Cue S&P's Negative CreditWatch ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Canada- based remote telecommunications service provider Stratos Global Corp., including the long-term corporate credit and the senior secured bank loan ratings to 'B' from 'B+', and placed the ratings on CreditWatch with negative implications. At the same time, the bank loan recovery ratings of '3' were affirmed. "The one-notch downgrade reflects weaker-than-expected operating results for the nine months ended Sept. 30, 2006, and concerns that Stratos' profitability, credit measures, and financial flexibility will remain weak in the near term," said Standard & Poor's credit analyst Madhav Hari. "The CreditWatch placement reflects additional near-term concerns with respect to Stratos' ability to meet its financial covenants under its senior secured credit facility," Mr. Hari added. Specifically, in the first quarter of 2007, several financial covenants under the company's senior secured bank debt agreement are expected to become more restrictive. In particular, the minimum EBITDA-to-cash interest ratio and the minimum fixed-charge ratio covenant are expected to step up; based on Standard & Poor's calculations, Stratos will at best have minimum flexibility in meeting these covenants. Should operating performance deteriorate further, or the 2007 covenants not be modified, the ratings could be lowered further; therefore, liquidity could be severely constrained under such a scenario. In resolving its CreditWatch listing, Standard & Poor's will focus its review primarily on Stratos' operating performance; its ability to deliver on the Xantic BV integration and other cost savings as planned; and the company's ability to demonstrate that it will remain compliant with its financial covenants on a sustained basis. TIVO INC: Posts $11.1 Million Net Loss in 2006 Third Quarter ------------------------------------------------------------ TiVo Inc. recently filed its financial statements for the third quarter ended Oct. 31, 2006. TiVo reported a net loss of $11.1 million on net revenues of $65.7 million for the quarter ended Oct. 31, 2006, compared to a net loss of $14.2 million on net revenues of $49.6 million for the third quarter of last year. The decrease in net loss is primarily due to the $16 million increase in net revenues, partially offset by the $12.6 million increase in cost of revenues. Service and technology revenues for the quarter increased 22% to $52.6 million, compared with $43.2 million for the same period last year. The increase was primarily a result of an increase of $6.7 million in subscription revenue due to continued growth in the subscription base and the recognition of Comcast development revenue of $2.9 million. Hardware revenues also increased due to the rollout of the new TiVo Series2(TM) DT Box(dual tuner model) and Tivo Series3(TM) HD Digital Media Recorder coupled with a decrease in rebates, revenue shares, and other payments to channel. "Given our efforts to differentiate TiVo, we are pleased that we were able to build momentum relative to last year, with TiVo-Owned subscription gross addition growth up 10% at 101,000 compared to 92,000 in the third quarter of last year. Overall TiVo-Owned subscriptions were up 24% year-over-year to 1.6 million. As expected, TiVo reported a net decline in the number of DIRECTV TiVo subscriptions during the period as DIRECTV deployed fewer TiVo boxes. Cumulative total subscriptions as of Oct. 31, 2006, were up slightly from last quarter to 4.4 million, and up 11% over the year-ago subscription totals." Rogers added, "On the sales and marketing front, we continued to see strong results from our online channel, which we believe are directly attributable to the compelling pricing changes we made in the first quarter of this year and our ability to leverage results from this very efficient sales channel. Online sales increased sequentially as a percentage of total sales from 33% last quarter to 43% this quarter." Total costs of revenues increased by $12.6 million or 38% during the three months ended Oct. 31, 2006. The cost of service and technology revenues for the three months ended Oct. 31, 2006 increased by $5.3 million, or 63%, compared to the same prior-year period primarily as a result of the recognition of Comcast development cost of revenues of $2.9 million and incremental costs associated with a larger subscription base. The cost of hardware revenues for the three months ended Oct. 31, 2006 increased by $7.3 million or 29%, compared to the same prior-year period, and this increase is a result of the company's full recognition of hardware costs associated with its bundled sales coupled with the higher costs associated with the new Series3(TM) HD Digital Media Recorder. Operating expenses, including research and development, sales and marketing, and general and administrative expenses, increased $735,000 or 2% during the three months ended Oct. 31, 2006 compared to the same prior-year period. These costs remained relatively flat, despite an increase in costs associated with increased headcount related expenses of $2.1 million coupled with increased stock-based compensation expense of $3.6 million. These costs were partially offset by a decrease of $4.0 million largely due to the decrease in expenses related to the EchoStar litigation. At Oct. 31, 2006, the company's balance sheet showed $201.7 million in total assets, $171.2 million in total liabilities, and $30.6 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Oct. 31, 2006 are available for free at http://researcharchives.com/t/s?16fc Net cash used in operating activities for the nine months ended Oct. 31, 2006 was $55.2 million, as compared to $12.3 million used in operating activities for the same prior-year period. This increase in cash flows used in operating activities is due to an increase in net loss of $12.3 million, increased inventory expenditures of $14.1 million in preparation for the holiday season and a decrease in deferred revenues of $17.9 million due to the discontinuation of the lifetime subscription plan. The net cash used in investing activities was approximately $28.4 million during the nine months ended Oct. 31, 2006, an increase of approximately $25.8 million from a use of $2.6 million in the same prior-year period. This increase was largely due to purchases of property and equipment for $6.1 million to support the company's business growth, $1.1 million used to purchase technology utilized within the new TiVo Series2 DT box (dual tuner model), $12.0 million for acquisition of intellectual property rights, and $13.5 million for purchases of short-term investments. This usage was offset by the sale of short-term investments of $4.4 million. The net cash provided by financing activities was approximately $77.2 million during the nine months ended Oct. 31, 2006, an increase of approximately $73 million from the net cash provided of $4.2 million during the same prior-year period. The principal source of cash generated from financing activities related to the issuance of common stock, of which $64.5 million was the net proceeds of the company's Sept. 5, 2006 underwritten public offering, $8.6 million was related to stock option exercises, $3.3 million was issuances related to warrant exercises and $1.3 million was issuances related to the company's employee stock purchase plan. About TiVo Inc. Alviso, Calif.-based TiVo Inc. -- http://www.tivo.com/ -- provides technology and services for digital video recorders. The subscription-based TiVo provides consumers a way to record, watch, and control television. TiVo also provides a unique platform for the television industry, including advertisers and audience research. This concludes the Troubled Company Reporter's coverage of TiVo Inc. until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. TOTAL FITNESS: Case Summary & 187 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Total Fitness Systems, LLC dba World Gym of Huntsville dba World Gym of Huntsville University dba World Gym of Huntsville #2 dba World Gym 7105 Moore Lane, Suite A6 Brentwood, TN 37027 Bankruptcy Case No.: 06-07270 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Fitness Express of Clarksville, LLC 06-07271 Fitness Express LLC of Spring Hill 06-07272 Fitness Express of Smyrna Corporation 06-07273 Fitness Express, LLC 06-07274 Fitness Express LLC of Gallatin 06-07275 Fitness Express, LLC of Mount Juliet 06-07276 Bahama Mammas of Cool Springs, LLC 06-07277 Fitness Express Mgt of Nashville LLC 06-07279 Fitness Express of Chattanooga, LLC 06-07280 Fitness Express of Jenkins Rd., LLC 06-07281 Type of Business: The Debtors operate fitness centers. Chapter 11 Petition Date: December 6, 2006 Court: Middle District of Tennessee (Nashville) Judge: George C Paine II Debtors' Counsel: G. Rhea Bucy, Esq. Gullett, Sanford, Robinson, Martin P.O. Box 198888 NASHVILLE, TN 37219-8888 Tel: (615) 244-4994 Fax: (615) 256-6339 Estimated Assets Estimated Debts ---------------- --------------- Total Fitness Systems, LLC Less than $50,000 $1 Million to $10 Million Fitness Express of Less than $50,000 Less than $50,000 Clarksville, LLC Fitness Express LLC of Less than $50,000 Less than $50,000 Spring Hill Fitness Express of Smyrna Less than $50,000 Less than $50,000 Corporation Fitness Express, LLC Less than $50,000 $100,000 to $500,000 Fitness Express LLC of Less than $50,000 Less than $50,000 Gallatin Fitness Express, LLC of Less than $50,000 Less than $50,000 Mount Juliet Bahama Mammas of Cool Less than $50,000 Less than $50,000 Springs, LLC Fitness Express Mgt of Less than $50,000 $100,000 to Nashville LLC $500,000 Fitness Express of Less than $50,000 Less than $50,000 Chattanooga, LLC Fitness Express of Less than $50,000 Less than $50,000 Jenkins Rd., LLC A. Total Fitness Systems, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Main Street Bank Huntsville $717,187 P.O. Box 203909 Houston, TX 77216-3909 Main Street Bank Huntsville #2 $324,372 P.O. Box 203909 Houston, TX 77216-3909 Built More Huntsville $675,000 702 Brentridge Place Antioch, TN 37013 Built More Huntsville #2 $365,000 702 Brentridge Place Antioch, TN 37013 John R. Cheadle $57,009 Card Services Huntsville $12,905 The Design Works $10,000 Card Services Huntsville $7,490 Inergi Huntsville $5,130 Inergi Huntsville $5,130 Brian P. Mickles $3,094 Lang Sign $2,342 BellSouth Huntsville #2 $1,133 Stove House 5 Huntsville #2 $625 Stove House 5 Huntsville $625 Huntsville Utilities Huntsville $547 Huntsville Utilities Huntsville #2 $334 BellSouth Huntsville $324 POS Supplies Huntsville $309 Yellow Pages Huntsville $298 B. Fitness Express of Clarksville, LLC's 16 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Tennessee Investment Properties $14,787 c/o F&M Bank 322 Main Street Clarksville, TN 37040 Lester Plumbing $1,166 1430 New Ashland City Road Clarksville, TN 37040 City of Clarksville $995 P.O. Box 31389 Clarksville, TN 37040 Transworld Systems $795 American Paper & Twine $730 Ketsan Think Clean $645 Roto-Rooter of Clarksville $531 BFT Financial Services $356 Clarksville Disposal $356 Gale Way Plumbing $262 The Chamber $260 D&H Electronics Systems, Inc. $238 Pitney Bowes Credit $106 Mid-South Plumbing & Lighting $75 Glics Cycling & Fitness $43 Lyons Pest Control $25 C. Fitness Express LLC of Spring Hill's 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Reed Family Real Estate $23,929 1634 Wexford Drive Murfreesboro, TN 37129 Stevens & James, Inc. $3,663 P.O. Box 149 Harrington, DE 19952 CMS $3,657 9302 North Meridian Street, Suite 335 Indianapolis, IN 46260 MTCN $3,510 P.O. Box 331608 Nashville, TN 37203-7515 Lee Company $1,783 Cedarwood Publications $1,182 Solutia Health TAS, Inc. $1,182 American Paper & Twine $680 Kelsan, Inc. $619 Dell Financial Services $558 Receivable Management Services $272 BellSouth $237 Frank and Waynes $168 Telcom Directories $157 BMI General Licensing $141 Atmos Energy $119 Willow Advertising & Publishing $115 D. Fitness Express of Smyrna Corporation's 14 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Wayne & Kathy Qualls $16,525 2295 Sweets Drive Carbondale, IL 62901 Kelsan, Inc. $1,613 P.O. Box 60038 Charlotte, NC 28260 Kelsan, Inc. $1,613 P.O. Box 60038 Charlotte, NC 28260 Pitney Bowes $1,115 Pitney Bowes $1,115 American Paper & Twine $722 The Company Corporation $448 Birch Telecom $426 Dell Financial Services $312 Fitness Systems, Inc. $274 Tenn-Star Fire Protection & Safe $159 Middle Tennessee Carpet Care $158 Priority Pest Protection, LLC $120 Photocopy $44 E. Fitness Express, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Muzak $64,771 4754-B North Royal Atlanta Drive Tucker, GA 30084 Eatherly Properties Cool Springs $20,806 1700 Hayes Street, Suite 104 Nashville, TN 37203 Accounts Research $20,421 P.O. Box 22782 Knoxville, TN 37933-0782 National Credit System $14,223 Joseph Mann & Creed Cool Springs $11,500 Fleischmann & Fleischmann $7,200 Publix Super Markets, Inc. $6,282 BellSouth Advertising & Cool Springs $5,595 Publishing Focus Receivables Management $4,824 VGM Financial Services Cool Springs $4,325 CMS Cool Springs $3,447 Prism Business Media Cool Springs $3,250 Brentwood Comfort Control Cool Springs $3,215 Brian Mickles $3,094 Stevens & James, Inc. Cool Springs $2,996 Voice Scape, Inc. Cool Springs $2,799 Abrams & Abrams Cool Springs $2,414 Lang Signs Cool Springs $2,342 Middle Tennessee Electric Cool Springs $2,315 Accountemps $2,123 F. Fitness Express LLC of Gallatin's 14 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ B&W Joint Venture $17,271 c/o Pro Venture Commercial RE 750 Old Hickory Boulevard, Suite 230 Brentwood, TN 37027 Checkvolicity $2,386 P.O. Box 331067 Nashville, TN 37203-7508 Gallatin Dept. of Electric $1,960 P.O. Box 1555 Gallatin, TN 37066-1555 Ketsan, Inc. $1,042 P.O. Box 60038 Charlotte, NC 28260 BellSouth $910 American Paper & Twine Co. $696 Allied Waste Services $498 Giass & More $484 Comcast $461 The Company Corporation $448 Republic Plumbing Heating & Cooling $219 Pitney Bowes $120 Digital Business Machines, USA, Inc. $63 Westmoreland Observer $46 G. Fitness Express, LLC of Mount Juliet's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Stevens & James, Inc. $12,200 P.O. Box 149 Harrington, DE 19952 Buttonwood Investments $4,313 c/o Preston Oil Company 1717 Woodstead Court, Suite 207 Spring, TX 77380 Publix $3,105 P.O. Box 32009 Lakeland, FL 33802-2009 AC Service & Installation $917 Commercial Recovery Corporation $917 NPI $765 TDS Telecom $753 Pitney Bowes $690 Display Advertising $620 The Chronicle of Mt. Juliet $620 Kelsan Think Clean $577 Janiro & Horn Door $500 Glass Contractors of Tennessee $460 Republic Plumbing $445 Air Temp Inc. $403 American Paper & Twine $372 Town Square Graphics $340 Pitney Bowes $293 Benjamin Refrigeration Services $256 D&H Electronic Systems, Inc. $238 H. Bahama Mammas of Cool Springs, LLC's Six Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Card Services $13,556 Bank of Nashville P.O. Box 23061 Columbus, GA 31902-2181 Card Services $7,490 Bank of Nashville P.O. Box 23061 Columbus, GA 31902-2181 Capital Corporation $5,937 80 Cude Lane Madison, TN 37115 American Mail and Insert $960 POS Supplies $359 Birch Telecom $249 Atmos Energy $41 I. Fitness Express Mgt of Nashville LLC's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Muzak $64,771 4754-B North Royal Atlanta Drive Tucker, GA 30084 Accounts Research $20,421 P.O. Box 22782 Knoxville, TN 37933-0782 National Credit System, Inc. $14,223 117 East 24th Street 5th Floor New York, NY 10016 Fleischmann & Fleischmann $7,200 Publix Super Markets, Inc. $6,282 Focus Receivables Management $4,824 Brian Mickles $3,094 Stevens & James, Inc. $2,996 Accountemps $2,123 CISCO, Inc. $1,605 National Print Group $1,605 Dell Financial Services $1,216 RMS - Accounting Department $709 Newman Printing $538 BFT Financial Services $513 BellSouth $392 Verizon $289 Allied Waste $279 Global Financial Services $263 T Mobile $241 J. Fitness Express of Chattanooga, LLC's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Fletcher Bright $6,649 537 Market Street, Suite 400 Chattanooga, TN 37402 Chattanooga City Treasurer $5,575 P.O. Box 191 Chattanooga, TN 37401-0191 Kelsan Think Clean $2,658 5109 National Drive Knoxville, TN 37914 Sunny 92.3 Chattanooga's ESPN $2,167 Buffalow & Associates $2,040 Lathrop & Gage DC Law Offices $2,040 EPB $1,979 CISCO, Inc. $1,605 National Posters Digital $1,605 Billy T. & Tom Signs $1,459 Chattanooga Business $870 Crystal Springs $831 Expert Service $415 Pitney Bowes $394 American paper & Twine Co. $358 Purity Drinking Water $329 Purity Drinking Water $329 Data Direct $325 AAA Lock & Key Shop $171 BMI General Licensing $145 K. Fitness Express of Jenkins Rd., LLC's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Jenkin Road Partners $21,733 Attn: Steve Bovell 3804 St. Elmo Avenue, Suite 103 Chattanooga, TN 37914 Morgan Construction Company $6,236 P.O. Box 60038 Charlotte, NC 28260 PBCC Pitney Bowes Credit Corp. $3,094 P.O> box 856460 Louisville, KY 40285-6460 EPB Electric Power $2,016 Chattanooga Business $1,735 Kelsan Think Clean $1,334 Kelsan, Inc. $1,334 Richardson Window Tinting $1,000 SCR Electric, Inc. $850 Court Lind Woodworks, Inc. $748 Wallace Tile, Inc. $723 American Paper & Twine $716 SCR Electric, Inc. $676 Yellow Pages $594 Tennessee American Water $400 Bock Construction, Inc. $300 GE Capital $226 Nationwide Credit, Inc. $145 Comcast $80 Tennessee American Water $56 TROUTMAN'S EMPORIUM: Creditors' Panel Wins Alamo Group Litigation ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Troutman's Emporium's bankruptcy case secured winning verdicts in two separate cases. The first involved the Alamo Group, which ultimately purchased some of the company's assets in bankruptcy. The second was brought against Ron Troutman, one of the company's former officers. Cooley Godward Kronish's Bankruptcy & Restructuring practice group obtained a verdict valued at over $2M in the action against Alamo and approximately $250,000 in the matter against Mr. Troutman. The case against the Alamo Group was founded upon a breach of the Designation Rights Agreement through which Alamo acquired the assets of Troutman's Emporium. The case against Mr. Troutman was based upon non-payment of various receivables due and owing to the company in bankruptcy. "We are very pleased with the outcome of both trials in the Troutman bankruptcy case," said Jay R. Indyke, the Bankruptcy & Restructuring partner who led the Committee in the Troutman's Emporium bankruptcy. "These verdicts enhance the prospect of an even larger return for the unsecured creditors, who have already received cash distributions totaling 65% of allowed claims in the case." The Cooley trial team for the Alamo matter included partner Ronald R. Sussman and associate Jeff Cohen. The trial team for the Ron Troutman case included both Mr. Sussman and associate Gregory Plotko. About Cooley Godward Kronish Cooley Godward Kronish's -- http://www.cooley.com/-- 580 attorneys have an entrepreneurial spirit and deep, substantive experience and are committed to solving clients' most challenging legal matters. From small companies with big ideas to international enterprises with diverse legal needs, Cooley Godward Kronish has the breadth of legal resources to enable companies of all sizes to seize opportunities in today's global marketplace. The firm represents clients across a broad array of dynamic industry sectors, including technology, life sciences, financial services, retail and energy. The firm has full-service offices in major commercial, government and technology centers: Palo Alto, California; New York City; San Diego, California; San Francisco, California; Reston, Virginia; Broomfield, Colorado and Washington, DC. About Troutman's Emporium Headquartered in Eugene, Oregon, Troutman's Emporium was a privately held family department store operator. The Company filed for protection under Chapter 11 of the Federal Bankruptcy Code on Jan. 14, 2003 (Bankr. D. Ore. Case No. 02-69650). The bankruptcy filing covered the Troutman Investment Company (dba Troutman's Emporium) TRUE TEMPER: Moody's Downgrades Corp. Family Rating to B3 from B2 ----------------------------------------------------------------- Moody's downgraded True Temper Sports Inc.'s corporate family rating to B3 from B2. Moody's also downgraded the company's senior secured credit facilities to Ba3 from Ba2, and its senior subordinated notes to Caa2 from Caa1. The outlook remains stable. The downgrade was prompted by True Temper's disclosure that it is seeking to expand its existing credit facility through the issuance of a proposed $45 million second lien term loan due 2011. The company will use proceeds from the second lien term loan to refinance a portion of first lien term debt and fund domestic and international investment opportunities. The downgrade reflects Moody's concern that the company is increasing leverage in the wake of a negative cycle in the golf equipment market that has weakened the company's credit profile. Moody's estimates that pro forma leverage was 7.6x for the LTM ended Sept. 30, 2006. Although new OEM product launches and relatively lean distribution channels should contribute to stronger earnings in 2007, Moody's is concerned that volatile raw material prices and potential softness in consumer spending could dampen the strength of a recovery. Additionally, prospects for near-term debt reduction are limited given an anticipated increase in spending for strategic initiatives. These ratings were downgraded: -- Corporate family rating, to B3 from B2; -- Probability-of-default rating, to B3 from B2; -- $125 million senior subordinated notes due 2011, to Caa2, LGD5, 79% from Caa1; -- $20 million senior secured revolving credit facility due 2009, to Ba3, LGD2, 15% from Ba2; and, -- $111 million senior secured term loan B due 2011, to Ba3 LGD2, 15% from Ba2. True Temper's B3 corporate family rating is primarily driven by the company's weak financial flexibility reflected by pro forma credit metrics that are largely consistent with a Caa credit profile. Concerns over the company's quantitative profile are further compounded by business risks, including the company's modest size, limited product diversification, some customer concentration, and sensitivity to commodity price fluctuations. Notwithstanding these concerns, the rating is supported by True Temper's favorable qualitative profile with a dominant share in the steel shaft market, material share within the graphite shaft market, strong brand equity within the trade, long-stand relationships with key OEM customers, and strong operating margins in the mid-teens. The proposed second lien term loan will benefit from subsidiary guarantees and a second lien secured interest in substantially all of the company's domestic assets. The stable outlook reflects Moody's expectation that new OEM product launches and relatively lean distribution channels will translate into improved earnings, such that True Temper's debt to EBITDA will remain below 8.0 times for 2007. The outlook also reflects Moody's expectation that the company will sustain breakeven or slightly negative cash flow for 2007 despite potentially higher spending levels. Additionally, the stable outlook assumes the company will successfully amend the financial covenants governing its first lien senior secured credit facilities in the short-term, given the limited flexibility under its existing covenants. Headquartered in Memphis, Tennessee, True Temper Sports, Inc. is the leading manufacturer of steel golf club shafts. The company also participates in the premium-end of the graphite golf shaft market and manufactures tubular components for other recreational sports including hockey and bicycling. Sales were approximately $111 million for the LTM ended Oct. 1, 2006. UAL CORP: Union Ready to Respond to Possible Continental Merger --------------------------------------------------------------- In response to the reported Continental Airlines and United Airlines discussion for a possible merger, the International Association of Machinists and Aerospace Workers' general vice president, Robert Roach, Jr., issued this: "The Machinists Union has not been contacted by United or Continental about any potential merger. The IAM is fully prepared to defend the wages, contracts, and defined benefit pension plans earned by our 25,000 members at United and Continental. The IAM's Transportation Merger Team is also prepared to respond to any airline merger scenario. In the event a United-Continental merger d[o] occur, United's Flight Attendants could gain the defined benefit pension plan currently enjoyed by our United Airlines members and being ratified by our Continental Flight Attendants." About the IAM The IAM represents 16,000 United Airlines Ramp & Stores, Public Contact, Food Service, Fleet Technical Instructors, Maintenance Instructors, Security Officer and Food Service employees. The Machinists Union also represents more than 9,000 Continental Airlines Flight Attendants. About Continental Airlines Continental Airlines Inc. (NYSE: CAL) -- http://continental.com/ -- is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 3,200 daily departures throughout the Americas, Europe and Asia, serving 154 domestic and 138 international destinations. More than 400 additional points are served via SkyTeam alliance airlines. With more than 43,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with Continental Express, carries approximately 61 million passengers per year. Continental consistently earns awards and critical acclaim for both its operation and its corporate culture. About UAL Corp. Headquartered in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on Feb. 1, 2006. * * * Moody's Investors Service assigned ratings in July 2006 to United Air Lines Inc.'s Pass Through Trust Certificates, Series 2000-1: Ba3 rating to $233,244,336 Class A-1 Certificates; Ba3 rating to $324,913,300 Class A-2 Certificates; and B3 rating to $186,368,450 Class B Certificates. UNITED COMPONENTS: S&P Cuts Corp. Credit Rating to B from B+ ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on automotive aftermarket supplier United Components Inc., including its corporate credit rating to 'B' from 'B+'. The outlook is negative. In addition, Standard & Poor's assigned its 'B' corporate credit rating to UCI Holdco Inc., the indirect parent company of UCI. At the same time, Standard & Poor's assigned its 'CCC+' debt rating to the proposed $235 million floating rate senior PIK notes due 2013 to be issued by Holdco. Proceeds of the notes offering will be combined with up to $36 million of balance sheet cash to pay a $260 million dividend to the shareholders. The downgrade reflects UCI's very aggressive leverage and reduced financial flexibility that will result from the proposed Holdco debt issuance and use of existing cash at UCI to fund a cash distribution to UCI's financial sponsor. UNITED SOILS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: United Soils, Inc. 16171 31 Mile Road Ray, MI 48096 Bankruptcy Case No.: 06-58171 Type of Business: The Debtor sells farm supplies. Chapter 11 Petition Date: December 7, 2006 Court: Eastern District of Michigan (Detroit) Judge: Steven W. Rhodes Debtor's Counsel: Michael I. Zousmer, Esq. Nathan, Neuman, Nathan & Zousmer, P.C. 29100 Northwestern Highway, Suite 260 Southfield, MI 48034 Tel: (248) 351-0099 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ BLW $182,623 P.O. Box 550 Richmond, MI 48062 Monicattis Shelby Oil Co. $143,370 47030 Ryan Road Utica, MI 48317 Corrigon Oil Co. $45,854 775 North 2nd Street Brighton, MI 48116 Freeman, Colton & Norris, P.C. $31,550 Platinum Plus 8662 $26,209 State Auto $23,245 C.A.R.D. Properties $22,604 Balance Consulting, Inc. $16,872 Dell Financial Services $16,125 Waste Management $16,000 Joe Sirianni $15,650 Robert Half Management Resources $14,374 ExxonMobil $13,363 Edw. C. Levy Co. $12,043 Michigan Conference of Teamsters Welfare $11,535 Scott Tire Sales, Inc. $10,041 McDonald Hopkins $9,560 Leslie Tire $8,771 Delecke Welding, Inc. $8,670 Kustom Truck & Trailer $6,819 VENETO LLC: Court OKs Stephen Wade as Bankruptcy Counsel -------------------------------------------------------- The Honorable Meredith A. Jury of the U.S. Bankruptcy Court for the Central District of California in Riverside has authorized Veneto LLC to employ the law offices of Stephen R. Wade as its general insolvency counsel. As reported in the Troubled Company Reporter on Oct. 12, 2006, Mr. Wade will charge $315 per hour for his services while his paralegals will bill at $85 per hour. The Debtor has also agreed to pay the firm a $10,000 retainer from the capital contribution of its principal. Mr. Wade's employment is effective as of Aug. 3, 2006. Rancho Mirage, California-based real estate company Veneto LLC, fka L'Veneto LLC, filed for a chapter 11 petition on July 12, 2006 (U.S. Bankr. C.D. Cal. Case No. 06-11744). No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor sought protection from its creditors, it listed total assets of $23,499,000 and total debts of $11,443,889. WEB-IDEALS LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Web-Ideals LLC 4095 Ferry Road, Suite 2A Doylestown, PA 18901 Tel: (215) 340-2500 Fax: (215) 230-1660 Bankruptcy Case No.: 06-15643 Type of Business: The Debtor is organized as an application service provider. The company deploys, manages and remotely hosts its software applications through servers on both coasts of the U.S. See http://www.web-ideals.com/ Chapter 11 Petition Date: December 1, 2006 Court: Eastern District of Pennsylvania (Philadelphia) Judge: Stephen Raslavich Debtor's Counsel: Albert A. Ciardi, III, Esq. Ciardi & Ciardi, P.C. One Commerce Square 2005 Market Street, Suite 2020 Philadelphia, PA 19103 Tel: (215) 557-3550 Fax: (215) 557-3551 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Mentor Capital Partners, Ltd. $150,000 P.O. Box 560 Morrisville, PA 19067-8560 Amerinet $56,000 14715 Soutwest Peachtree Drive Portland, OR 97224-1486 David Brodess $44,075 3001 South Lamar Boulevard, Suite 350 Austin, TX 78704 Broadwing Telecom, Inc. $32,910 P.O. Box 790036 St. Louis, MO 63179-0036 American Express Corporate Card $31,952 P.O. Box 114 Newark, NJ 07101-0114 Contact One Call Center $30,197 Qwest $26,392 M&N Investments, L.P. $8,607 Paymentech $4,510 PECO Energy $3,828 Verizon - Old Account $2,844 The Haltzman Law Firm $2,450 Expert Technology $2,096 Capital One, F.S.B. $1,971 B.G. Balmer & Co. $982 Holicong Security $733 T-Mobile $495 CSC $324 Verizon fka Bell Atlantic PA $231 United Parcel Service P.A. $143 WERNER LADDER: Wants Loughlin Meghji to Serve as New CEO -------------------------------------------------------- Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to: (1) terminate Loughlin Meghji's employment as the Debtors' restructuring consultants in their Chapter 11 cases; and (2) pursuant to Sections 105 and 363 of the Bankruptcy Code, approve the letter agreement between Loughlin Meghji and the Debtors, under which the Firm has agreed to (a) make Mr. Loughlin available to serve as the Debtors' Interim CEO/CRO, and (b) provide additional temporary staff to serve as the Debtors' executive officers and employees. In October and November 2006, the Debtors started negotiating the extensions of their exclusivity periods with the agent for the First Lien Credit Agreement dated June 11, 2003, and the Ad Hoc Committee of Second Lien Lenders under the Credit Agreement dated May 10, 2005. The Senior Lenders advised the Debtors that as a condition for their support for granting the extensions, the Senior Lenders required the designation and employment of James J. Loughlin, Jr., as the Debtors' chief restructuring officer. In November 2006, Steven Richman resigned as the Debtors' chief executive officer. To satisfy the request of the Senior Lenders and to replace Mr. Richman, the Debtors selected Mr. Loughlin as their interim CEO and chief restructuring officer, and Edward Gericke as their president. Messrs. Loughlin and Gericke are connected with Loughlin Meghji + Company Associates, Inc., the Debtors' restructuring consultants. According to Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor, LLP in Wilmington, Delaware, the most appropriate way to transition Mr. Loughlin and other Loughlin employees to their roles as executive officers and employees of the Debtors, is to terminate Loughlin Meghji's retention effective contemporaneously with the Court's approval of the Firm's new role in the Debtors' Chapter 11 cases. The Temporary Staff, initially anticipated to consist of nine people, includes Patrick J. Fodale, Tom Hsien-Chieh Wang and Orlando C. Taylor, who will each hold the title of vice president and assistant restructuring officer. Mr. Brady assures the Court that Mr. Loughlin and the Temporary Staff are qualified to serve as officers and employees since they have been assisting the Debtors in their restructuring efforts. Pursuant to the Letter Agreement between the Debtors and Loughlin Meghji, Mr. Loughlin will perform the ordinary course duties as the interim CEO/CRO. Mr. Loughlin, the Officers and the other Temporary Staff will also: (1) analyze, develop and implement all aspects of the Debtors' operational turnaround plan, including: (a) expansion and improvement of the Debtors' manufacturing capabilities in Juarez, Mexico; (b) customer pricing, product and service strategies to improve performance, including the SKU profitability improvement and reduction; (c) corporate-wide expense management and reduction initiatives; and (d) vendor and other supplier issues, and employee-related matters; (2) monitor the progress being made to achieve the operational restructuring plan and report the results to the Debtors' management and board of directors; (3) develop the Debtors' 2007 operating business plans and budget; (4) develop the underlying assumptions for the short-term business plans and financial forecasts, including sales plans by customer and product, manufacturing costs and efficiency improvements, working capital requirements and cash flow forecasts, and analyses of various alternative operating scenarios; (5) prepare and update financial forecasts relative to the Debtors' financing requirements in Chapter 11; and (6) develop a long-term strategic business plan and financial forecast, by: (a) reviewing various operating alternatives and analyzing alternative operating scenarios; (b) developing and leading the implementation of customer and product sales and margin plans; and (c) developing a detailed assessment of the Debtors' operations, a detailed action plan to reduce costs and restructure operations, and pro-forma projections premised upon the assumptions. The Loughlin Meghji Agreement provides that the Debtors will provide Mr. Loughlin, the Officers, and any other Temporary Staff eligible to be indemnified under the Debtors' by-laws and other applicable organizational documents with first dollar director and officer insurance coverage. Mr. Loughlin, the Officers, and the Temporary Staff will be entitled to the benefit of the most favorable indemnities provided by the Debtors to their officers and directors. Pursuant to the terms in the Loughlin Meghji Agreement, the hourly rates for the Firm's professionals are: Designation Hourly Rate ----------- ----------- Partners $595 Managing Directors $475 - $575 Directors $375 - $450 Associates $295 - $350 Professional fees incurred by Loughlin Meghji personnel on matters related to the Debtors' Chapter 11 cases are subject to an average monthly cap of $400,000. Loughlin Meghji will also receive reimbursement of all reasonable out-of-pocket expenses incurred in connection with the Loughlin Meghji Agreement. Additionally, Loughlin Meghji will be entitled to a contingent value added fee of $500,000, to be awarded and paid upon the earlier of: (i) the consummation of a plan of reorganization for the Debtors, or (ii) the consummation of a sale of all or substantially all of the Debtors' assets through one or a series of sale transactions. Loughlin Meghji will file with the Court quarterly statements for services rendered and expenses incurred, and the Debtors will be authorized to pay the Firm without a Court order. But the U.S. Trustee and the Official Committee of Unsecured Creditors have the right to object to Loughlin Meghji's fees and expenses. Headquartered in Greenville, Pennsylvania, Werner Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The firm of Willkie Farr & Gallagher LLP serves as the Debtors' counsel. Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors as its co-counsel. The Debtors have retained Rothschild Inc. as their financial advisor. Greenberg Traurig LLP is counsel to the Official Committee of Unsecured Creditors. Jefferies & Co serves as the Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WERNER LADDER: Wants More Time to Remove Civil Actions ------------------------------------------------------ Werner Holding Co. (DE), Inc., aka Werner Ladder Company, and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to grant an extension without prejudice to: (a) any position they may take regarding whether Section 362 of the Bankruptcy Code applies to stay any given civil action pending against them; and (b) their right to seek further extensions of the period in which they may remove civil actions pursuant to Bankruptcy Rule 9027. Kara Hammond Coyle, Esq., at Young, Conaway, Stargatt & Taylor, LLP in Wilmington, Delaware, relates that since the Petition Date, the Debtors have been focused on implementing an operational restructuring plan pursuant to which, they are in the process of moving over 80% of their unit production to facilities in Juarez, Mexico, and sourcing their products from China. The Debtors have also been working diligently to produce a 2007 operating budget two months earlier than their normal budgeting process, Ms. Coyle says. Additionally, the Debtors have been reviewing their operations to identify, among other things, additional ways to streamline their business operations, eliminate unprofitable operations, and increase the profitability of their businesses. Moreover, Ms. Coyle attests, the Debtors have been required to respond to time-consuming diligence requests, litigation and discovery demands. Ms. Coyle says the Debtors have not had an opportunity to fully investigate all of the State Court Actions to determine whether removal is appropriate. Thus, the requested extension is necessary to ensure that the Debtors' decisions are fully informed and consistent with the estates' best interests. Ms. Coyle assures the Court that the extension would not prejudice any party to a proceeding, that the Debtors may ultimately seek to remove, from seeking the remand of the action under 28 U.S.C. Section 1452(b) at the appropriate time. The deadline to file objections to the Debtors' extension request is on Jan. 23, 2007, at 4:00 p.m. (E.T.) The Court will convene a hearing on Jan. 30, 2007, to consider the Debtors' request. By application of Rule 9006-2 of the Local Rules of Bankruptcy Practice and Procedures of the United States Bankruptcy Court for the District of Delaware, the Debtors' Removal Period is automatically extended through the conclusion of that hearing. Headquartered in Greenville, Pennsylvania, Werner Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The firm of Willkie Farr & Gallagher LLP serves as the Debtors' counsel. Kara Hammond Coyle, Esq., Matthew Barry Lunn, Esq., and Robert S. Brady, Esq., Young, Conaway, Stargatt & Taylor, LLP, represents the Debtors as its co-counsel. The Debtors have retained Rothschild Inc. as their financial advisor. Greenberg Traurig LLP is counsel to the Official Committee of Unsecured Creditors. Jefferies & Co serves as the Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) WESTWAYS FUNDING: Fitch Rates $40-Million Income Notes at BB ------------------------------------------------------------ Fitch assigns these ratings to Westways Funding IX, Ltd. and Westways Funding IX, Inc.'s notes, which are due Nov. 30, 2011: -- $232,000,000 Class A Floating Rate Senior Notes 'AAA'; -- $33,000,000 Class LA Senior Loan Interests 'AAA'; -- $16,000,000 Class B Floating Rate Senior Subordinate Notes 'AA'; -- $16,000,000 Class C Floating Rate Subordinate Notes 'A'; -- $5,000,000 Class LC Subordinate Loan Interests 'A'; -- $16,000,000 Class D Floating Rate Junior Subordinate Notes 'BBB'; -- $12,000,000 Class LD Junior Subordinate Loan Interests 'BBB'; and, -- $40,000,000 Income Notes 'BB'. WINDSTREAM CORP: Fitch's Issuer Default Rating Remains at BB+ ------------------------------------------------------------- Fitch Ratings does not believe Windstream Corporation's proposed split-off of its directory publishing business will have a material effect on its credit profile. Windstream's Issuer Default Rating is 'BB+' and the Rating Outlook is Stable for all ratings. Windstream has reported that it will split-off its directory publishing business in a tax-free transaction. The total value of the transaction is $525 million and will consist of up to $250 million of debt and an exchange for approximately $275 million in common stock. The company has entered into an agreement with Welsh, Carson, Anderson & Stowe, a private equity firm, that currently owns approximately 4.1% of Windstream. As part of the transaction, Windstream in effect will exchange shares in the directory business for this stake. The value of the transaction is approximately 7.8x directory publishing's EBITDA for the twelve month period ending Sept. 30, 2006. Prior to the close of the transaction, the publishing subsidiary will distribute to Windstream approximately $220 million of debt, and pay a $30 million special dividend. Windstream will exchange all or a portion of the debt for existing debt, which will be retired. The $30 million from the special dividend, which represents the tax basis in the directory business, will be used to retire debt or repurchase common equity. To comply with existing indentures, the transaction will take place in two stages. The first share exchange will incorporate 80% of the Windstream shares held by Welsh Carson and take place in the second quarter of 2007. The second exchange for the remaining shares will take place in the fourth quarter of 2007. Fitch believes the transaction will have a neutral to slightly delevering effect on Windstream. In addition, cash flow will be slightly reduced as the directory business generated approximately $67 million in EBITDA for the latest twelve months. The after-tax contribution to Windstream's cash flow by the directory business is somewhat less and the effect of its loss on free cash flow will be mitigated by lower interest expense as well as a reduced dividend requirement. Windstream's 'BB+' IDR and Stable Rating Outlook incorporate Fitch's expectations for Windstream to generate strong operating cash flow, stable credit-protection metrics as well as have access to ample liquidity. Fitch's primary concern is the company's dependence on voice service revenues in an environment of increasing competition. The company's financial performance is expected to be relatively stable due to its primarily rural operations. Contributing to its strong operating cash flow are EBITDA margins that Fitch believes will be in the upper end of a 45%-50% range. Fitch forecasts Windstream's dividend payout ratio as a percentage of its net free cash flow in the 70%-75% range. Fitch expects the company to maintain a stable leverage ratio, with debt-to-EBITDA in the 3.2x -3.3x range over the next few years. Liquidity is supported by the company's $500 million revolving credit facility, which will be in place until July 2011. Debt maturities in the next several years, including the required amortization of its credit facilities, are nominal. WINN-DIXIE: To Distribute Common Stock Under Plan on December 21 ---------------------------------------------------------------- Winn-Dixie Stores, Inc. has begun advising its prepetition unsecured creditors entitled to receive its new common stock that it currently anticipates the initial distribution of the common stock under Winn-Dixie's Plan of Reorganization will occur on Dec. 21, 2006. Winn-Dixie has selected American Stock Transfer & Trust Company to serve as the Transfer Agent for the New Common Stock to be distributed to holders of allowed unsecured claims under Winn- Dixie's Plan of Reorganization. Winn-Dixie also has elected to use the Direct Registration System to record ownership interests in the New Common Stock. The Direct Registration System is a form of electronic registration that enables stockholders to be directly registered on the books of the issuing company, through the Transfer Agent, with no need for physical stock certificates (although certificates can be obtained upon request). Creditors entitled to receive shares through direct registration will be receiving further information by mail concerning the distribution. Noteholders will receive their distribution of shares through the facilities of the Depository Trust Company, based on instructions from the indenture trustee. Under the Plan of Reorganization, Winn-Dixie has until Jan. 5, 2007 to distribute its common stock, and there can be no assurance that the scheduled December 21 distribution will not be delayed. In addition, certain persons entitled to shares (who have been notified by mail) are required to take certain actions prior to receiving shares (such as providing a required tax form or reimbursing the company for employee withholding tax). Such persons are encouraged to carefully review the instructions previously provided to them. Winn-Dixie emerged from bankruptcy on Nov. 21, 2006. The common stock currently trades on the Nasdaq Global Market on a when- issued basis under the symbol WINNV. American Stock Transfer & Trust Company may be reached at: American Stock Transfer & Trust Company Operations Center 6201 15th Avenue Brooklyn, NY 11219 Toll-free (888) U-CALL-WD (888-822-5593) World Wide (718) 921-8347 Headquartered in Jacksonville, Florida, Winn-Dixie Stores Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. WILLOWBEND NURSERY: Trustee Taps Vincent Gaudio CPA as Accountant ----------------------------------------------------------------- Andrew Suhar, the Chapter 11 Trustee appointed in Willowbend Nursery Inc. and its debtor-affiliates' bankruptcy cases, asks the Arthur I Harris of the U.S. Bankruptcy Court for the Northern District of Ohio in Cleveland for authority to employ Vincent Gaudio, CPA, as his accountant. Vincent Gaudio, CPA, will assist in preparing payroll, payroll taxes, general corporate accounting, and corporate taxes. Mr. Gaudio bills at $135 per hour. Mr. Gaudio assures the Court that he does not hold any interest adverse to the Debtors or their estates. Headquartered in Perry, Ohio, Willowbend Nursery, Inc. -- http://www.willowbendnursery.com/-- owns and operates a nursery and grow quality bareroot plants & shrubs. The company and its affiliates filed for chapter 11 protection on Sept. 20, 2006 (Bankr. N.D. Ohio Case No. 06-14353). When the Debtors filed for protection from their creditors, they listed estimated assets between $1 million and $10 million and estimated debts between $10 million and $50 million. YUVAL RAN: Chapter 15 Petition Summary -------------------------------------- Petitioner: Zuriel Lavie Trustee of Case No. 399/97 in the Israeli District Court of Tel-Aviv-Jaffa Debtor: Yuval Ran 1004 Pauline Street Bellaire, TX 77401 Case No.: 06-37067 Type of Business: Yuval Ran, a resident of Israel, in April 1997, became insolvent, having accrued debts totaling many million New Israeli sheqel. Mr. Ran then relocated to Houston, Texas, with his family, leaving his debts behind. On July 10, 1997, Hapoalim Bank, a creditor, Commenced bankruptcy proceedings against Ran by filing a motion for receivership order in the Israeli Court. On the same day, Zuriel Lavie was appointed the temporary receiver over Mr. Ran's assets. At the time the bankruptcy proceedings commenced, Mr. Ran's main interests were still centered in Israel. On Nov. 18, 1998, the Israeli Court granted a permanent receivership order against Mr. Ran, appointed an official receiver, and appointed Mr. Lavie as the Special Administrator. On Oct. 28, 1999, the Israeli Court granted the bankruptcy order against Mr. Ran and appointed Mr. Lavie as the Trustee. On Feb. 24, 2000, Mr. Lavie requested the Israeli Court's approval for the commencement of ancillary Mr. in a United States bankruptcy court. On Feb. 29, 2000, the Israeli Court granted the Trustee permission to commence ancillary proceedings and to retain an attorney in the United States for that purpose, all subject to the Israeli Court's approval. On May 14, 2006, the Israeli Court approved Mr. Lavie's request to engage the Sheiness Scott et al., for the purpose of commencing ancillary proceedings against Mr. Ran. Chapter 15 Petition Date: December 11, 2006 U.S. Bankruptcy Court: Southern District of Texas (Houston) Petitioner's Counsel: H. Miles Cohn, Esq. Sheiness Scott et al 1001 McKinney Suite 1400 Houston, TX 77002 Tel: (713) 374-7020 Fax: (713) 374-7049 Total Assets: Not Provided Total Debts: Not Provided * Six Ulmer & Berne LLP Attorneys Named as 2007 Leading Lawyers --------------------------------------------------------------- Six attorneys from the Cincinnati office of Ulmer & Berne LLP, one of Ohio's largest law firms with four offices across the Midwest, have been named 2007 Leading Lawyers by Cincy Business magazine. Cincy Business' list of Leading Lawyers includes attorneys considered to be among the most prominent and powerful legal minds of the Greater Cincinnati area. All winners were nominated by colleagues outside their firms and chosen by a panel of their peers. Ulmer & Berne attorneys recognized this year include: * Reuel D. Ash -- Banking * B. Scott Boster -- Mergers & Acquisitions * Tiffany Reece Clark -- Class Actions/Product Liability * Scott P. Kadish -- Real Estate * Michael A. Marrero -- Intellectual Property/Entertainment * Joseph P. Thomas -- Biotechnology Reuel D. Ash focuses his practice on bankruptcy, insolvency, creditors' rights and commercial litigation. In businesses as diverse as real estate, retail, construction, manufacturing and restaurants, he represents individuals and corporate debtors, creditors' committees and secured creditors in Chapter 11 reorganizations and liquidations. His expertise includes sales and purchases of assets from bankruptcy estates and composition agreements and non-bankruptcy workouts. Mr. Ash has presented cases in bankruptcy courts and state courts throughout the region. B. Scott Boster focuses on advising businesses and their owners, corporate transactions, estate planning and probate matters. In corporate transactions, he negotiates and drafts documents for both stock and asset transactions for the sale and purchase of businesses. He also prepares incorporations, limited liability company formations, dissolutions, reorganizations and implementation strategies to minimize federal and state taxes. Mr. Boster offers estate planning and counsel on a variety of trust instruments. He also probates and administers estates in Ohio and Kentucky. Tiffany Reece Clark focuses her practice on product liability defense, drug and medical device defense, and environmental litigation. She handles complex civil, commercial, environmental, and other types of mass tort litigation at both the state and federal level. She has experience with class actions and multidistrict litigation. She has experience with all aspects of complex litigation, including removal, fact and expert discovery, motion practice, and trial preparation. She also has experience in resolving cases through alternative dispute resolution, including arbitration and mediation. Scott P. Kadish, partner-in-charge of the Cincinnati office, is responsible for its leadership, operations, business development and client relationships. He is also a member of the firm's Management Committee. Mr. Kadish chairs the Shopping Center Group as the result of his nationwide representation of landlords and tenants in the development and lease up of shopping centers. Additionally, Mr. Kadish counsels clients on other real estate and business transactions and general business law. Michael A. Marrero focuses his practice on trademarks, copyrights and licensing, business planning, shareholder and investor relations, acquisitions/divestitures/mergers, advertising and promotional law and administrative law. He has extensive experience representing closely held corporations in business matters, venture capital funding, acquisitions and divestitures. He was in-house counsel with a Fortune 500 company for more than 10 years in intellectual property, acquisitions, divestitures, administrative law and truth-in-advertising matters. Joseph P. Thomas, chair of the Life Sciences Group, focuses his practice on scientifically complex litigation. He holds undergraduate and doctorate degrees in pharmacy, has conducted clinical research and has published in scientific literature. He also is a member of the patent bar. Recent national counsel engagements have included the fen/phen, PPA, ephedra, antidepressant and hormone-replacement-therapy litigations, among others. His experience includes class actions, MDL litigation, mass torts and catastrophic-injury litigation. Ulmer & Berne LLP -- http://www.ulmer.com/-- established in 1908, is one of Ohio's largest law firms, as well as one of the fastest growing in the Midwest. A full-service firm with approximately 185 attorneys in Cleveland, Columbus, Cincinnati and Chicago, Ulmer & Berne represents publicly traded and privately held companies, financial institutions, pharmaceutical companies, family businesses, international joint ventures and affiliations, investor groups, start-ups and emerging businesses, public bodies, and nonprofit organizations. * SEC to Propose Guidance for Sarbanes-Oxley 404 Implementation --------------------------------------------------------------- The Securities and Exchange Commission voted, on Dec. 13, 2006, to propose for public comment interpretive guidance for managements regarding their evaluations of internal control over financial reporting. The Commission also proposed amendments to Rules 13a- 15 and 15d-15 that would make it clear that a company choosing to perform an evaluation of internal control in accordance with the interpretive guidance would satisfy the annual evaluation required by those rules. Finally, the Commission proposed amendments to Regulation S-X to clarify the auditor's reporting requirement pursuant to Section 404(b) of the Sarbanes-Oxley Act. "We are proposing this interpretative guidance to help management make their evaluation process more efficient and cost-effective," said SEC Chairman Christopher Cox. "In the absence of guidance, management has looked to the PCAOB's auditing standard to conduct their evaluations, which is not what was intended. With this guidance, management will be able to scale and tailor their evaluation procedures to fit their facts and circumstances, and investors will benefit from reduced compliance costs. While the guidance is intended to help public companies of all sizes, smaller companies should particularly benefit from its scalability and flexibility. We believe that [the] proposed guidance, along with the Public Company Accounting Oversight Board's new auditing standard to be proposed next week, will result in significant improvements in the implementation of Sox 404." "The guidance proposed is an important step in the roadmap the Commission laid out in May for improving the implementation of Section 404 for all issuers," said John W. White, Director of the SEC's Division of Corporation Finance. "The proposed interpretive guidance should reduce uncertainty about what constitutes a reasonable approach to management's evaluation while maintaining flexibility for companies that have already developed their own assessment procedures and tools that serve the company and its investors well. Companies will be able to continue using their existing procedures if they choose, provided, of course, those meet the standards of Section 404 and our rules. At the same time, the guidance maintains the important investor protection objectives of bringing information about material weaknesses into public view and fostering the preparation of reliable financial statements in an effective and efficient manner." "Our proposed guidance is focused on risk and materiality. We have worked hard to ensure that the proposed guidance will not disrupt best practices already in place, or that may be evolving, while at the same time ensuring that it would be scalable to companies of all sizes," said Conrad Hewitt, Chief Accountant. "In particular, the top-down, risk-based guidance would allow for effective, and, importantly, efficient, methods and procedures for conducting evaluations at smaller companies. It is also intended to rebalance control over the process by providing management with its own guidance -- without the need to look to auditing standards -- for evaluating internal control over financial reporting. Although our guidance is directed to management and the expected proposal from the PCAOB is directed to auditors, we encourage respondents to take advantage of the proposals' overlapping comment periods to consider whether the proposals, if adopted, will ensure an appropriate balance between management's evaluation process and the audit process. We encourage feedback on all aspects of our proposal." Section 404(a) of the Sarbanes-Oxley Act Section 404(a) of the Sarbanes-Oxley Act directed the Commission to adopt rules requiring each annual report of a company, other than a registered investment company, to contain (a) a statement of management's responsibility for establishing and maintaining an adequate internal control structure and procedures for financial reporting; and (b) management's assessment, as of the end of the company's most recent fiscal year, of the effectiveness of the company's internal controls structure and procedures for financial reporting. On June 5, 2003, the Commission adopted such rules implementing Section 404(a) with regard to management's obligations to report on its internal control over financial reporting. The final rules did not prescribe any specific method or set of procedures for management to follow in performing its evaluation. The proposal would amend the Commission's rules adopted in 2003 to state that an evaluation conducted in accordance with the interpretive guidance would satisfy the Commission's rules. However, in order to retain the flexibility that was desired by the 2003 rules, the amendments proposed today would afford management the latitude to either follow the interpretive guidance or to develop and use other methods that achieve the objectives of the Commission's 2003 rules. Proposed Guidance for Internal Control over Financial Reporting The proposed guidance is principles-based guidance that is organized around two important principles: (a) First, management should evaluate the design of the controls that it has implemented to determine whether there is a reasonable possibility that a material misstatement in the financial statements would not be prevented or detected in a timely manner. This principle promotes efficiency by allowing management to focus on those controls that are needed to prevent or detect material misstatement in the financial statements. (b) Second, management should gather and analyze evidence about the operation of the controls being evaluated based on its assessment of the risk associated with those control. The principle allows management to align the nature and extent of its evaluation procedures with those areas of financial reporting that pose the greatest risks to reliable financial reporting. By following these two principles, we believe that companies of all sizes and complexities will be able to implement our rules more effectively and efficiently. As smaller public companies often have less complex internal control systems than larger public companies, this proposed approach would enable smaller public companies in particular to scale and tailor their evaluation methods and procedures to fit their own facts and circumstances. The proposed guidance describes a risk-based approach and addresses many of the concerns that have been raised to the Commission including: * excessive testing of controls generally; * excessive documentation of processes, controls, and testing; and * the ability to scale the evaluation to smaller companies. The guidance addresses four specific areas including: (a) Identification of risks to reliable financial reporting and the related controls that management has implemented to address those risks. The proposed guidance describes a risk-based approach that would require the use of judgment to determine those areas that are both material and which pose a risk to reliable financial reporting. Management then would identify the controls that address those risks, including the risk of material misstatement due to fraud. The guidance would not require that every control in a process be identified. Once those controls are identified that adequately address the risk of material misstatement in the financial statements, it would be unnecessary to include additional controls within management's evaluation. b) Evaluation of the operating effectiveness of controls. Once management has determined the controls within the scope of its evaluation, management would then gather and analyze evidence about the operation of those controls. The proposed guidance provides for a risk-based approach that would require the use of judgment to direct management's evaluation efforts towards those areas that pose greatest risk to reliable financial reporting based on the company's unique facts and circumstances. The proposed guidance would allow management to support its evaluation in a variety of ways and illustrates how management can consider and utilize its existing daily interaction with its business, self-assessment, and other ongoing monitoring activities to support its evaluation. c) Reporting the overall results of management's evaluation. Once management has completed its evaluation, management must decide if any identified control deficiencies are material weaknesses. The proposed guidance provides management with a framework, outside of the auditing literature, for making these judgments and includes situations that are considered strong indicators that a material weakness exists. The guidance describes the factors that management should consider to evaluate the severity of a deficiency. If the deficiency is a material weakness, consistent with the Commission's existing rules, management must conclude that internal control over financial reporting is not effective and management has reporting responsibilities surrounding that material weakness. In addition, the guidance addresses the disclosure requirements for internal control reports in situations such as scope limitations and restatements. d) Documentation. The proposed guidance explains the nature and extent of evidential matter that management must maintain in support of its assessment including how management has flexibility in approaches to documentation. The proposed guidance indicates that such documentation can take many forms, can be presented in a number of ways, and does not need to include all controls within a process that impacts financial reporting. The proposed guidance provides that the evidential matter maintained in support of the assessment would also include the methods and procedures it utilizes to gather and evaluate evidence and the basis for its conclusions about the controls related to individual financial reporting elements. The proposed guidance indicates that in those situations in which management is able to rely on its daily interaction with its controls as a basis for its assessment, management may have limited documentation created specifically for the evaluation beyond documentation regarding how its interaction provided it with sufficient evidence. Public Company Accounting Oversight Board Coordination Although the issuance of the proposed interpretive release is a major milestone in the improvement of the implementation of Section 404, the Commission remains committed to all of the steps set forth in the roadmap that was released entitled "Next Steps for Sarbanes-Oxley Implementation." In that regard, the Commission and its staff have also been working closely with the Public Company Accounting Oversight Board over the past few months in their work to develop a new auditing standard that would supersede Auditing Standard No. 2, the Board's existing auditing standard on internal control over financial reporting. The proposed standard is expected to provide for more efficient, risk- based, scalable audits of internal control over financial reporting while retaining the important investor protection benefits. The proposed amendments to Regulation S-X are intended to clarify the auditor-reporting requirement in a consistent manner with the anticipated proposed new auditing standard. The Board has disclosed that it intends to consider proposing the new auditing standard at the Board's open meeting to be held next week on Tuesday, Dec. 19, 2006. * BOOK REVIEW: Cardozo and Frontiers of Legal Thinking: With Selected Opinions ------------------------------------------------------------ Author: Beryl H. Levy Publisher: Beard Books Paperback: 336 pages List Price: $34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1893122689/internetbankrupt Cardozo and Frontiers of Legal Thinking, by Beryl H. Levy portrays Justice Cardozo, a lawyer and philosopher, as concerned with harmonizing legal rules with social values and the demands of stability with changes in the law. In this scholarly but eminently readable tome, Beryl H. Levy focuses on the law that is made by judges in the higher courts when an appeal is taken from the trial court. He specifically addresses closely contested cases where convincing briefs have been presented by both sides and where the judges on the appellate court are likely to be divided. The point of departure is the thinking of Justice Benjamin Cardozo, who recognized emerging trends and forces in the country and made public law more responsive to them. ********* 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 ***