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/raid1/www/Hosts/bankrupt/TCR_Public/070124.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 24, 2007, Vol. 11, No. 20 Headlines 155 EAST: NTH Advisory Deal Prompts S&P's Developing CreditWatch 37-02 PLAZA: Case Summary & 20 Largest Unsecured Creditors ABENGOA BIOENERGY: S&P Puts Loan's B Rating on Negative Watch ACE SECURITIES: S&P Cuts Rating on Class B-2 & Puts Negative Watch ACS MEDIA: S&P Affirms Ratings and Removes Negative CreditWatch ADVANCED MARKETING: U.S. Trustee Appoints 5-Member Creditors Panel ADVANCED MARKETING: Wants Until March 29 to File Schedules ADVANCED MICRO: Incurs $574 Million Net Loss in 2006 4th Quarter AIR AMERICA: French Family Eyes in Buying Assets AIRTRAN HOLDINGS: Urges Midwest Shareholders to Mull Merger Offer AK STEEL: Board Authorizes $75 Million Pension Fund Contribution AMERICAN TOWER: Launches Cash Offer for 5% Convertible Notes ANTHONY MARTINEZ: Voluntary Chapter 11 Case Summary BANKRUPTCY MANAGEMENT: S&P Junks Rating on $150 Million PIK Notes CARIBE MEDIA: S&P Holds B Corporate Credit Rating & Removes Watch CBD MEDIA: S&P Holds Corporate Credit Rating at B & Removes Watch CERADYNE INC: Gets $6 Million Body Armor Order from U.S. Army CLEARWATER FUNDING: Moody's Withdraws Ratings on Senior Notes COLLINS & AIKMAN: Creditors Committee Supports Reorganization Plan COMNETIX INC: Board Approves Amended L-1 Identity Agreement COMNETIX INC: Bio-key Commences Competing Offer COMNETIX INC: Shareholders' Meeting Moved to February 2 COMPLETE RETREATS: Wants to Extend Plan-Filing Period to April 19 COOPER COMPANIES: Discloses Planned $1 Billion Refinancing COOPER COMPANIES: Moody's Rates $350 Million Senior Notes at Ba3 COOPER COMPANIES: S&P Rates Proposed $350 Mil. Senior Notes at BB- COVANTA ENERGY: Moody's Rates New $1.3 Billion Sr. Facility at Ba2 COVANTA HOLDING: S&P Rates $1.3 Billion Credit Facilities at BB- CWABS ASSET: Moody's Rates Class B Certificates at Ba1 DAIMLERCHRYSLER: Inks Deal Selling 7.5% EADS Stake DAIMLERCHRYSLER: Chairman Unveils Diesel BLUETEC: Reduces Fuel Use DELTA AIR: Gerald Grinstein Says No Merger Talks with Northwest DELTA AIR: Files Plan and Disclosure Statement Revisions DELTA AIR: Classification & Treatment of Claims Under Revised Plan DIRECT GENERAL: A.M. Best Affirms Ratings & Says Outlook is Stable DURA AUTOMOTIVE: De Minimis Claims Settlement Protocol Approved DURA AUTOMOTIVE: Judge Carey Appoints Warren Smith as Fee Auditor EASYLINK SERVICES: Committee to Evaluate Strategic Alternatives ENESCO GROUP: Inks Asset Purchase Agreement with Tinicum Capital FIDELITY NATIONAL: Completes Refinancing of Credit Facilities FIDELITY NATIONAL: Fitch Rates New $3 Bil. Sr. Facilities at BB+ FLYI INC: Exclusive Plan Solicitation Period Extended to April 30 FLYI INC: Files Schedule of Executory Contracts & Unexpired Leases FORD MOTOR: Losing $1 Billion Annually on Counterfeit Auto Parts FORREST HILL: Case Summary & 20 Largest Unsecured Creditors GARDEN CITY: Moody's Holds Ba1 Rating on $19 Million Bonds GLOBAL POWER: Court Extends Removal Period to March 27 GLOBAL POWER: Walks Away from Heat Recovery Contract GREIF INC: Moody's Rates $300 Mil. Senior Unsecured Notes at Ba2 HOME FRAGRANCE: Wants Court Approval to Reject Unexpired Leases HOMEGOLD FINANCIAL: Former CEO's Securities Fraud Trial Starts JEAN COUTU: Rite Aid Shareholders Approve Drugstores Purchase KOKOPELLI TOURS: Case Summary & Seven Largest Unsecured Creditors LIBERTY SQUARE: Moody's Holds Junk Ratings on $18.25 Million Notes LIBERTY SQUARE: Moody's Junks Rating on $10 Million Class D Notes MALDEN MILLS: Chrysalis Capital Chosen as Stalking Horse Bidder NORTHWEST AIRLINES: Estimates $9.5 Billion in Unsecured Claims ON TOP COMMS: Georgia Asset Sale Hearing Slated for February 8 PACIFIC LUMBER: Has Until Friday to Use Lenders' Cash Collateral PACIFIC LUMBER: Scotia Gets Nod for Interim Use of Cash Collateral PACIFIC LUMBER: Chapter 11 Filing Prompts S&P's Default Rating PACIFIC SHORES: Moody's Upgrades Rating on Class 1 and 2 Shares PILGRIM'S PRIDE: Prices $650 Million of Senior Notes PIRRONE HOLDINGS: Case Summary & Seven Largest Unsecured Creditors R.G. PHARMACY: Case Summary & 20 Largest Unsecured Creditors REFCO INC: Chapter 7 Trustee Objects to FGS' $12 Million Claims RITE AID: Shareholders Okay Purchase of Jean Coutu Drugstore Chain SEA CONTAINERS: Committee Taps Houlihan Lokey as Financial Advisor SEA CONTAINERS: Withdraws Plea for Non-Debtor Assets Sale Protocol SEARS HOLDINGS: C. Monaghan Resigns as Chief Financial Officer SUN MICROSYSTEMS: Inks Landmark Agreement with Intel Corp. THERMOVIEW INDUSTRIES: Discloses Management Buyout by Blackstreet THOMPSON & WALTERS: Can Make $5.5MM Partial Payment to Union Bank TRANSDIGM INC: Fitch Holds B- Rating on Sr. Notes & Removes Watch US INVESTIGATIONS: Moody's B1 Rating on $670 Million Loans VENETO LLC: U.S. Trustee Appoints Three-Member Creditors Committee VESTA INSURANCE: Receiver Can Sell CCP Interest for $6.2 Million WARD PRODUCTS: Files Liquidation Plan and Disclosure Statement WARD PRODUCTS: Taps Amper Politiziner to Prepare Tax Returns WARD PRODUCTS: Wants Biditup to Sell NJ & NY Facilities WASHINGTON MUTUAL: Moody's Rates Class B-2 Certificates at Ba2 YANKEE CANDLE: Moody's Junks Rating on $225 Million Senior Notes * Upcoming Meetings, Conferences and Seminars ********* 155 EAST: NTH Advisory Deal Prompts S&P's Developing CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B-' ratings on casino owner and operator 155 East Tropicana LLC on CreditWatch with developing implications. The CreditWatch listing reflects the company's report that it had signed a letter of intent to be acquired by an investment group led by NTH Advisory Group LLC. Under the terms of the letter, the buyer has offered to purchase all of the outstanding membership interests for a purchase price of $95 million in cash and the payment of certain accrued royalties. In addition, the buyer will be responsible for any repurchases, and related costs, of the company's $130 million in principal amount of 8.75% senior secured notes due 2012 as a result of the proposed change of control of the company. As currently proposed, the transaction is expected to close by June 30, 2007, but under certain conditions may be closed as late as April 30, 2008. The closing will also be subject to the completion of due diligence, financing, and licensing, among other customary conditions. Pursuant to the letter, both parties agreed that the buyer has an exclusive right to negotiate the purchase until March 13, 2007. In resolving its CreditWatch listing, Standard & Poor's will continue to monitor developments associated with a potential acquisition of the company. Should the company's outstanding notes be fully redeemed, Standard & Poor's would withdraw its ratings on Tropicana. However, should some or all of the debt remain outstanding under a more highly leveraged capital structure, ratings could be lowered. 37-02 PLAZA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: 37-02 Plaza LLC 37-02 Main Street Flushing, NY 11354 Bankruptcy Case No.: 07-40313 Type of Business: The Debtor operates a shopping center. Chapter 11 Petition Date: January 22, 2007 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Avrum J. Rosen, Esq. The Law Offices of Avrum J. Rosen 38 New Street Huntington, NY 11743 Tel: (631) 423-8527 Fax: (631) 423-4536 Total Assets: $930,000 Total Debts: $1,478,296 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Genking LLC Rent $160,000 37-02 Main Street Flushing, NY 11354 Perfect Match Furniture Security deposit $50,000 37-02 Main Street Flushing, NY 11354 Heig Sing Jewelry Security deposit $42,796 37-02 Main Street Flushing, NY 11354 NY Electronic Inc. Security deposit $40,000 37-02 Main Street Flushing, NY 11354 D&L Jewelry Security deposit $25,920 Lin Fashion Outlet Security deposit $24,000 Hang Seng Jewelry Security deposit $20,800 Pang Ying Chen Security deposit $14,800 Hai Xuan Inc. Security deposit $13,560 Xla Lin Security deposit $13,520 Skin Station Queens Inc. Security deposit $10,400 Jane Choue Security deposit $9,600 Wai Lin Chen Security deposit $8,000 Pang Yin Chen $7,200 P. Jay Jewelry Corp. Accountants $5,600 Triple Five International Security deposit $5,200 Inc. Con Edison Utilities $5,000 Maggie's Design Workshop Security deposit $4,400 MT International Marketing Security deposit $4,000 618 Gift Shop Security deposit $3,900 ABENGOA BIOENERGY: S&P Puts Loan's B Rating on Negative Watch ------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' rating on Abengoa Bioenergy of Nebraska's $90 million senior secured credit facility on CreditWatch with negative implications. ABNE is constructing and will operate an 88 million gallon per year dry-mill ethanol plant in Ravenna, Nebraska. "The CreditWatch listing reflects our concerns about the Abengoa Bioenergy's ability to service its debt prior to completion of construction," said Standard & Poor's credit analyst Arthur Simonson. The project recently revised its construction schedule, pushing substantial completion back to April 30, 2007 from Feb. 27, 2007. Fru-Con Austin J.V., the engineering, procurement, and construction contractor for the project, remains subject to liquidated damages for up to four months of construction delay beginning in mid-April as opposed to the end of February. However, inclement weather and scarcity of subcontractors could further delay completion. Standard & Poor's said that it will resovle the CreditWatch listing upon substantial completion of the ethanol plant. The rating could be lowered if Abengoa Bioenergy's cash on hand is depleted during construction and can't fulfill its financial obligations to the lenders. Additional construction delays on the order of two to four months could also lead to a rating action. ACE SECURITIES: S&P Cuts Rating on Class B-2 & Puts Negative Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on class B-2 from ACE Securities Corp. Home Equity Loan Trust Series 2005- SL1 to 'B' from 'BB+' and placed it on CreditWatch with negative implications. The lowered rating and CreditWatch placement reflect the deteriorating performance of the collateral in the pool. Credit support for this transaction is derived from a combination of subordination, excess interest, and overcollateralization. Credit enhancement is currently projected to fall significantly below the original credit support amount of 13.15%. While actual credit enhancement is 9.74% of the current pool balance, additional losses resulting from foreclosures and REOs will likely erode much of the $5,251,200 of overcollateralization. Cumulative losses are $9,075,249 for this transaction, or 3.51% of the original pool balance. As of the December 2006 distribution date, total delinquencies, as a percentage of the current pool principal balance, were 12.65%, and 6.49% were categorized as seriously delinquent. The outstanding pool balance of this series is 49.09% of its original size. Standard & Poor's will continue to closely monitor the performance of this transaction. If the delinquent loans translate into realized losses, Standard & Poor's may take further negative rating action on class B-2, depending on the size of the losses and remaining credit support. Rating Lowered And Placed On Creditwatch Negative ACE Securities Corp. Home Equity Loan Trust Series 2005-SL1 Rating ------ Class To From ----- -- ---- B-2 B/Watch Neg BB+ ACS MEDIA: S&P Affirms Ratings and Removes Negative CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on ACS Media LLC, Caribe Media Inc, and CBD Media Holdings LLC, including their 'B' corporate credit ratings. These ratings were removed from CreditWatch where they were placed with negative implications on Dec. 14, 2006. The outlooks for all three entities are stable. The ratings affirmations comes after a review of the planned combination of Local Insight Media LLC and CBD Media LLC, which was reported in December 2006. Local Insight Media is the ultimate holding company of ACS Media and Caribe Media. The agreement calls for 100% of the membership interests of CBD Media Holdings, the parent of CBD Media, to be contributed to Local Insight Media. CBD Media will be operated as a subsidiary of Local Insight Media. Spectrum Equity Investors currently owns about 95% of CBD Media Holdings. Local Insight Media is currently owned by Welsh, Carson, Anderson & Stowe. Upon completion of the transaction, which is expected in the 2007 first quarter, WCAS will own a majority of Local Insight Media, with Spectrum holding a significant minority position. Pro forma revenues for the combined company are about $225 million. ADVANCED MARKETING: U.S. Trustee Appoints 5-Member Creditors Panel ------------------------------------------------------------------ Kelly Beaudin Stapleton, the United States Trustee for Region 3, has appointed five creditors to the Official Committee of Unsecured Creditors in Advanced Marketing Services Inc. and its debtor-affiliates Chapter 11 cases. The Creditors Committee members are: (1) Random House, Inc. 400 Hahn Road Westminster, MD 21157 Attn: William C. Sinnott Tel: (410) 386-7480 Fax: (410) 386-7439 (2) Penguin Group USA Inc. 375 Hudson Street New York, NY 10014 Attn: Alexander Gigante Tel: (212) 366-2959 Fax: (212) 366-2867 (3) Hachette Book Group USA 3 Center Plaza Boston, MA 02108 Attn: Dennis J. Balog Tel: (617) 263-1880 Fax: (617) 263-2852 (4) Grove/Atlantic 841 Broadway New York, NY 10003 Attn: E. Morgan Entrekin, Jr. Tel: (212) 614-7975 Fax: (212) 529-9725 (5) Wisdom Publications, Inc. 199 Elm Street Somerville, MA 02144 Attn: Timothy McNeill Tel: (617) 776-7416 Fax: (617) 776-7841 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Advanced Marketing Based in San Diego, California, Advanced Marketing Services, Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Apr. 28, 2007. (Advanced Marketing Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADVANCED MARKETING: Wants Until March 29 to File Schedules ---------------------------------------------------------- Advanced Marketing Services Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to extend to March 29, 2007, their deadline to file: -- schedules of assets and liabilities; -- a schedule of current income and expenditure; -- a schedule of executory contracts and unexpired leases; and -- a statement of financial affairs. Under Rule 1007(b) of the Federal Rules of Bankruptcy Procedure and Rule 1007-1(b) of the Local Rules of Bankruptcy Practice and Procedure of the U.S. Bankruptcy Court for the District of Delaware, the Debtors are required to file their Schedules and Statements within 30 days after filing their chapter 11 petitions. Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, however, tells Judge Christopher S. Sontchi that because of the substantial size and scope of the Debtors' business, the complexity of their financial affairs, the limited staffing available to perform the required internal review of their accounts and affairs, and the press of business incident to the commencement of their cases, the Debtors were unable to assemble, prior to Dec. 29, 2006, all of the information necessary to complete and file the Schedules and Statements. The Debtors will not be in a position to complete the Schedules and Statements within the time specified in Bankruptcy Rule 1007 and Local Rule 1007-1(b), Mr. Heath relates. Completing the Schedules and Statements for each of the Debtors, Mr. Heath explains, will require the collection, review and assembly of information from multiple locations throughout the United States. About Advanced Marketing Based in San Diego, California, Advanced Marketing Services Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Apr. 28, 2007. (Advanced Marketing Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADVANCED MICRO: Incurs $574 Million Net Loss in 2006 4th Quarter ---------------------------------------------------------------- Advanced Micro Devices Inc. reported financial results for the quarter ended Dec. 31, 2006. As a result of AMD's acquisition of ATI, fourth quarter financial results include the results of the former ATI operations beginning Oct. 25, 2006. Because comparison of fourth quarter consolidated financial results to previous periods do not correlate directly, AMD has provided non-GAAP financial measures for AMD's historical business (pre-acquisition AMD). Management believes this non-GAAP presentation will aid investors by presenting current and historical results in a form that makes it easier to compare current period results with historical results. AMD reported fourth quarter 2006 revenue of $1.77 billion, an operating loss of $527 million, and a net loss of $574 million. These results include acquisition-related and integration charges of $550 million and $27 million of employee stock-based compensation expense. "We believe we once again gained microprocessor unit share in the quarter, as we did in the year, by continuing to execute against our customer acquisition strategy and our product, technology and manufacturing plans," said Robert J. Rivet, AMD's chief financial officer. Excluding the former ATI operations, acquisition-related and integration charges, and employee stock-based compensation expense, AMD reported fourth quarter revenue of $1.37 billion and operating income of $63 million compared with revenue of $1.35 billion and operating income of $272 million for the fourth quarter of 2005. Comparable third quarter 2006 revenue was $1.33 billion and operating income was $142 million. AMD revenue increased 33% to $5.25 billion and operating income increased 9% to $600 million for the year ended Dec. 31, 2006, excluding the former ATI operations, acquisition-related and integration charges, and employee stock-based compensation expense. This compares with revenue of $3.94 billion and operating income of $548 million for the year ended Dec. 25, 2005. Fourth quarter 2006 gross margin was 40%, excluding acquisition- related charges and stock-based compensation expense for the applicable periods, compared to 52% in the third quarter of 2006 and 57% in the fourth quarter of 2005. The decrease from the prior quarter was due largely to significantly lower server processor average selling prices and the inclusion of the former ATI operations. Computation Products Fourth quarter microprocessor unit shipments grew 26% year-over- year and 19% sequentially as customers continued leveraging AMD solutions to provide greater choice to the market. Fourth quarter demand for AMD mobile processors was especially strong, resulting in record unit shipments and revenue. Mobile processor unit shipments and revenue both increased 41 percent quarter-over-quarter. Year-over-year, mobile processor unit shipments increased 76% and revenue increased 85%. Desktop processor revenue was also strong in the quarter, led by demand for AMD Athlon(TM) 64 X2 dual-core processors. Overall server processor unit shipments were essentially flat compared to the third quarter and ASPs were down significantly. AMD commenced first revenue shipments of 65nm processors in December as planned. Graphics and Chipsets, and Consumer Electronics Segments Revenue from Graphics and Chipsets, and Consumer Electronics segments for the period beginning Oct. 25, 2006, was $398 million. Solid demand for chipsets contributed to Graphics and Chipsets segment revenue of $278 million. Revenue of $120 million for the Consumer Electronics segment was driven by demand for handheld products and game console royalties. Additional Highlights -- AMD's acquisition of ATI closed on October 24, joining two industry leading technology companies to create a processing powerhouse. -- AMD demonstrated its next-generation processor code-named "Barcelona", the industry's first native quad-core x86 server processor, in a four-socket system running 64-bit Windows(R) Server 2003. "Barcelona" will deliver significant architectural and performance-per-watt enhancements inside a consistent thermal envelope. -- Customers continued to expand the number of AMD-based solutions targeting the commercial market, including: * Dell launched two new servers powered by AMD Opteron processors and its first AMD-based commercial client desktop and notebook systems. * Sun announced three Sun Fire X4000 servers. * IBM introduced its first AMD-based 1P tower server, the IBM System x3105. * HP expanded its portfolio of AMD-based servers and blades for the datacenter with the addition of the 1U 2-socket HP ProLiant DL365 server and the 4-socket ProLiant BL685c server blade. HP also introduced the HP dx2255 and dx2250 commercial desktops. * Gateway became the latest global computer manufacturer to offer AMD Opteron-based servers, debuting three new rack mount servers. * Samsung introduced the DB-V60 commercial desktop in Korea. -- AMD continues to be a technology partner of choice for an increasing number of enterprises. M&T Bank, ServiceMaster, Sutter Health, and Wyeth Pharmaceuticals, among others, joined the growing ranks of enterprise customers adopting AMD64 technology. -- AMD Opteron processor-based systems remained the fastest growing platform on the TOP500 Supercomputing list. There are 113 AMD Opteron processor-based systems on the list, including three of the top 10, as reported by the TOP500 Organization. -- Nintendo launched the Wii, featuring an ATI graphics processor code-named "Hollywood", helping to enable a next- generation gaming experience for the innovative new gaming console. -- AMD's industry-leading Imageon(TM) family of media processors from ATI for handsets continued to gain momentum in the quarter with more than ten new phone introductions from Motorola, Panasonic Mobile Communications, HTC, O2, Vodaphone, Cingular, Softbank, DoComo, and Chungwa Telecom. New devices include RIZR Z3, the SLVR L7e, Palm Treo 750v, and several Windows Mobile 5.0 based devices launched by global carriers. -- AMD brought multi-GPU technology to the masses with the introduction of the ATI Radeon(TM) X1650 XT featuring CrossFire(TM) technology. With its incredible image quality and strong performance, the ATI Radeon X1650 XT delivers enthusiast-class features at a mainstream price point. About AMD Based in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- designs and produces innovative microprocessor and graphics and media solutions for the computer, communications, and consumer electronics industries. The company has corporate locations in Sunnyvale, California, Austin, Texas, and Markham, Ontario, and global operations and manufacturing facilities in the United States, Europe, Japan, and Asia. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. technology semiconductor and distributor sector, the rating agency affirmed its Ba3 corporate family rating on Advanced Micro Devices, Inc. As reported in the Troubled Company Reporter on Oct. 6, 2006, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on AMD. The rating agency also assigned its 'BB-' bank loan rating, one notch above the corporate credit rating, and a '1' recovery rating to the company's proposed $2.5 billion senior secured term loan, to be used as partial funding of the acquisition. S&P further raised its rating on the company's $600 million ($390 million outstanding) senior notes to 'B+' from 'B'. AIR AMERICA: French Family Eyes in Buying Assets ------------------------------------------------ A New York-area family and its team of investors would likely Purchase Piquant LLC, The Wall Street Journal reports. Citing people familiar with the matter, WSJ relates that the French family of Westchester, New York, owner of New York City- area television concern WRNN, expressed interest in buying the company's assets. The company officials and the French family were not available for comment nor an agreement has been announced. Air America Radio, aka Piquant LLC -- http://www.airamerica.com/- - is a full-service radio network and program syndication service in the United States. The network features discussion and information programs reflecting a liberal, left wing, or progressive point of view. Air America filed a voluntary Chapter 11 petition on Oct. 13, 2006 (Bankr. S.D. N.Y. Case No: 06-12423) Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for bankruptcy, it disclosed total assets of approximately $4.3 million and total debts of over $20 million. AIRTRAN HOLDINGS: Urges Midwest Shareholders to Mull Merger Offer ----------------------------------------------------------------- Joe Leonard, chairman and chief executive officer of AirTran Holdings Inc., and Bob Fornano, president and chief operating officer of AirTran, sent a letter to the shareholders of Midwest Air Group Inc. relating to the exchange offer AirTran has commenced as part of its proposal to combine AirTran with Midwest. According to the letter, AirTran Holdings Inc.'s offer to exchange for $13.25 -- consisting of $6.625 in cash and 0.5884 of a share of AirTran common stock as determined as of the time of its offer -- for each share of Midwest Air Group that shareholders own. The letter provides information, so that shareholders may better understand why AirTran is convinced that it offers superior value for Midwest shareholders' investment. For several months, AirTran has tried to engage Midwest management in discussions concerning the merits of combining the two companies and the benefits it would bring to all Midwest stakeholders. Midwest's Board and management have, however, declined AirTran's requests to explore such a combination. Even after Dec. 13, 2006, when AirTran made its proposal of Oct. 20, 2006 public, the reply was that the "ball was in our court". As AirTran saw it, the next step was to bring its offer directly to the owners of Midwest, so that they would have the opportunity to act in their own financial interests. AirTran's offer not only provides shareholders with a significant premium to Midwest's stock price before AirTran made its offer public, but also that it offers the upside potential of continuing to own shares in a combined AirTran and Midwest. AirTran believes the merged company would be a stronger, truly national low-cost carrier offering a high quality product that would generate improved profit potential through a number of revenue and cost synergies. The combined carrier will be better able to succeed in an increasingly competitive environment; it would expand service in Milwaukee and Kansas City; and provide more low fares to more cities. AirTran also expects the combined company to create more jobs and increase advancement opportunities for employees of both airlines, and increase the economic benefit of travel and tourism to the cities in which AirTran and Midwest currently operate. In the letter, AirTran asked Midwest shareholder to read the strategic plan that Midwest filed on Jan. 10, 2007, which demonstrates the Midwest management's determination to continue Midwest as a standalone carrier. In AirTran's view, this would leave Midwest highly vulnerable to competitive incursions from both larger carriers with costs restructured in bankruptcy and to the inevitable expansion of low cost competition. AirTran believed the effect of these increased levels of competition would be exacerbated by the relatively modest size of Midwest and the increasingly burdensome cost structure that its fleet of older, less fuel-efficient aircraft will entail. Moreover, Midwest's record over the past five years showed that that existing management has been unable to achieve anything approaching consistent profitability. A combination with AirTran will result in a carrier with not only a superior product but the fleet and cost structure to compete with anyone. In the letter, AirTran asked Midwest shareholders to speak directly to the Midwest Board. AirTran urged Midwest shareholders to tender their shares pursuant to AirTran's offer, and to let the Midwest Board negotiate a merger agreement with AirTran. 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 Dec. 15, 2006, 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. 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. AK STEEL: Board Authorizes $75 Million Pension Fund Contribution ---------------------------------------------------------------- The Board of Directors of AK Steel Corp. has authorized the company to make an early $75 million contribution to its pension trust fund. Following this early contribution, which will be made during the 2007 first quarter, AK Steel will have made $434 million in early and voluntary pension fund contributions in the last two years. "Funding our retiree pension obligation continues to be among the highest of our corporate priorities," said James L. Wainscott, chairman, president and CEO. "We are extremely proud that we have been able to continue to fund our retiree health care and pension costs, especially in light of the fact that most of our steel industry competitors have reduced or eliminated their legacy obligations through the bankruptcy process." Headquartered in Middletown, Ohio, AK Steel Corp. (NYSE: AKS) -- http://www.aksteel.com/-- produces flat-rolled carbon, stainless and electrical steels, as well as tubular steel products for the automotive, appliance, construction and manufacturing markets. * * * As reported in the Troubled Company Reporter on Oct. 17, 2006 Moody's Investors Service confirmed its B1 Corporate Family Rating for AK Steel Corporation. AMERICAN TOWER: Launches Cash Offer for 5% Convertible Notes ------------------------------------------------------------ American Tower Corporation commenced a cash tender offer for its 5% Convertible Notes due 2010. The tender offer is intended to satisfy the rights granted to each holder under the indenture for the Notes to require the company to repurchase on Feb. 20, 2007 all or any part of such holder's Notes at a price equal to the issue price plus accrued and unpaid interest, if any, up to but excluding Feb. 20, 2007. Under the terms of the Notes, the company has the option to pay for the Notes with cash, Class A common stock, or a combination of cash and stock. The Company has elected to pay for the Notes solely with cash. As of Jan. 16, 2007, approximately $252.2 million of the Notes were outstanding. If all outstanding Notes are surrendered for repurchase, the aggregate cash repurchase price will be $252.4 million. The company intends to use cash on hand or borrowings under its credit facilities to finance these repurchases of the Notes. The company expects to continue to return capital to its shareholders through its stock repurchase program and anticipates that it will repurchase or refinance a portion of its outstanding indebtedness during 2007. In order to fund such efforts, the company likely will raise additional capital in 2007, which may include a securitization of certain of the company's tower assets, new or incremental credit facilities, or other potential financing transactions. Consistent with the company's financial strategy, any such financing activities would be designed to maintain financial flexibility and reduce the company's cost of capital. In order to surrender Notes for repurchase pursuant to the tender offer and put right, a repurchase notice must be delivered to The Bank of New York Trust Company, N.A., the trustee for the Notes, on or before 5:00 p.m., New York City time, on Feb. 20, 2007. Holders of Notes complying with the transmittal procedures of the Depository Trust Company need not submit a physical repurchase notice to The Bank of New York Trust Company, N.A. Holders may withdraw any Notes previously surrendered for repurchase at any time prior to 5:00 p.m., New York City time, on Feb. 20, 2007. The Notes are convertible into 19.4175 shares of Class A common stock per $1,000 principal amount of the Notes, subject to adjustment under certain circumstances. On Jan. 19, 2007, the last reported sales price of our Class A common stock on the NYSE was $40 per share. About American Tower Headquartered in Boston, Massachusetts, American Tower Corporation (NYSE: AMT) -- http://www.americantower.com/-- is an independent owner, operator and developer of broadcast and wireless communications sites in the United States, Mexico and Brazil. American Tower owns and operates over 22,000 sites in the United States, Mexico, and Brazil. Additionally, American Tower manages approximately 2,000 revenue producing rooftop and tower sites. * * * As reported in Troubled Company Reporter Dec. 13, 2006, Moody's Investors Service placed American Tower Corp.'s Ba2 corporate family rating under review for possible upgrade. ANTHONY MARTINEZ: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Anthony D. Martinez dba Martinez Farms 341 West Brisa Drive Gilbert, AZ 85233 Bankruptcy Case No.: 07-00243 Chapter 11 Petition Date: January 22, 2007 Court: District of Arizona (Phoenix) Debtor's Counsel: Robert M. Cook Law Offices of Robert M. Cook Missouri Commons - Suite #185 1440 East Missouri Phoenix, AZ 85014 Tel: (602) 285-0288 Fax: (602) 285-0388 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million The Debtor did not file a list of his 20 Largest Unsecured Creditors. BANKRUPTCY MANAGEMENT: S&P Junks Rating on $150 Million PIK Notes ----------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'B' corporate credit rating to Irvine, California-based Bankruptcy Management Solutions Inc. The outlook is negative. Standard & Poor's also assigned its 'B' rating with a '2' recovery rating, indicating a substantial recovery of principal in the event of a payment default, to the $235 million, first-lien term loan, and a 'CCC+' with a '5' recovery rating, indicating a negligible recovery of principal, to the $125 million, second-lien term loan. At the same time, Standard & Poor's assigned a 'CCC+' rating to the proposed $150 million in senior unsecured PIK notes to be held at the holding company level. This proposed issue will be used to fund a dividend to the private equity sponsors. Including the proposed PIK notes, financial leverage is now very high for the rating, slightly more than 2x from the September 2006 level. "The ratings reflect the company's narrow business profile, which is geared toward a niche market, exposure to modest interest rate declines, as well as high leverage," said Standard & Poor's credit analyst Stephanie Crane Mergenthaler. These factors are partially offset by a leading position in its market, high customer retention, a recurring contractual revenue stream, as well as continued growth of trustee accounts. BMS provides a complete solution, including hardware, software, and services, to the community of bankruptcy trustees in the United States, to enable them to manage their cases. By contract, the trustees deposit their cash balances with a depository institution selected by BMS. BMS' compensation is linked to the amount of bankruptcy funds held in custody. BMS has a leading share of the bankruptcy trustee market, which amount to over 1,200 active members, each managing over 100 cases. Trustees generate cash balances based on the liquidation of assets, typical of Chapter 7 filings. Over half of BMS' business comes from Chapter 7 filings, with the remainder from assorted cases including Chapter 11 transactions. CARIBE MEDIA: S&P Holds B Corporate Credit Rating & Removes Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on ACS Media LLC, Caribe Media Inc, and CBD Media Holdings LLC, including their 'B' corporate credit ratings. These ratings were removed from CreditWatch where they were placed with negative implications on Dec. 14, 2006. The outlooks for all three entities are stable. The ratings affirmations comes after a review of the planned combination of Local Insight Media LLC and CBD Media LLC, which was reported in December 2006. Local Insight Media is the ultimate holding company of ACS Media and Caribe Media. The agreement calls for 100% of the membership interests of CBD Media Holdings, the parent of CBD Media, to be contributed to Local Insight Media. CBD Media will be operated as a subsidiary of Local Insight Media. Spectrum Equity Investors currently owns about 95% of CBD Media Holdings. Local Insight Media is currently owned by Welsh, Carson, Anderson & Stowe. Upon completion of the transaction, which is expected in the 2007 first quarter, WCAS will own a majority of Local Insight Media, with Spectrum holding a significant minority position. Pro forma revenues for the combined company are about $225 million. CBD MEDIA: S&P Holds Corporate Credit Rating at B & Removes Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on ACS Media LLC, Caribe Media Inc, and CBD Media Holdings LLC, including their 'B' corporate credit ratings. These ratings were removed from CreditWatch where they were placed with negative implications on Dec. 14, 2006. The outlooks for all three entities are stable. The ratings affirmations comes after a review of the planned combination of Local Insight Media LLC and CBD Media LLC, which was reported in December 2006. Local Insight Media is the ultimate holding company of ACS Media and Caribe Media. The agreement calls for 100% of the membership interests of CBD Media Holdings, the parent of CBD Media, to be contributed to Local Insight Media. CBD Media will be operated as a subsidiary of Local Insight Media. Spectrum Equity Investors currently owns about 95% of CBD Media Holdings. Local Insight Media is currently owned by Welsh, Carson, Anderson & Stowe. Upon completion of the transaction, which is expected in the 2007 first quarter, WCAS will own a majority of Local Insight Media, with Spectrum holding a significant minority position. Pro forma revenues for the combined company are about $225 million. CERADYNE INC: Gets $6 Million Body Armor Order from U.S. Army ------------------------------------------------------------- Ceradyne Inc. received a $6 million delivery order from the U.S. Marine Corps, Quantico, Virginia. This order is for Enhanced Small Arms Protective Inserts to be delivered in the first half of 2007. "We are pleased to receive this Marine order as it gives us additional visibility to support our belief that we will meet or exceed our 2007 guidance provided in November 2006" David Reed, Ceradyne's President North American Operations, commented. "Ceradyne is also pleased with the knowledge that we continue to save the lives of American fighting men and women. With our armor facilities in Lexington, Kentucky, and Costa Mesa and Irvine, California, we intend to fully meet the delivery and quality requirements of this new order." Based in Costa Mesa, California, Ceradyne, Inc., (Nasdaq: CRDN) -- http://www.ceradyne.com/-- develops, manufactures and markets advanced technical ceramic products and components for defense, industrial, automotive and consumer applications. * * * Ceradyne's $50 million revolving credit facility due 2009 carries Standard & Poor's BB- rating. The Company's credit rating is also rated BB- by Standard & Poor's. CLEARWATER FUNDING: Moody's Withdraws Ratings on Senior Notes ------------------------------------------------------------- Moody's Investors Service has withdrawn ratings on these notes issued by Clearwater Funding CBO 2000-A, Ltd.: (1) The $265,000,000 Class A Floating Rate Senior Notes Due 2012 -- Prior Rating: Aaa -- Current Rating: WR (2) The $13,500,000 Class B Floating Rate Senior Subordinated Notes Due 2012 -- Prior Rating: Ba1 -- Current Rating: WR According to Moody's, the ratings were withdrawn because the notes were redeemed in full in December 2006. COLLINS & AIKMAN: Creditors Committee Supports Reorganization Plan ------------------------------------------------------------------ Collins & Aikman Corporation advised the U.S. Bankruptcy Court for the Eastern District of Michigan overseeing its cases that it has reached an agreement in principle with the Official Committee of Unsecured Creditors and the unofficial steering committee for the company's senior, secured prepetition lenders regarding the terms of the company's amended plan. The company intends to file a revised disclosure statement and plan reflecting the agreement. "We have recently come to an agreement on the allocation of litigation trust distributions and funding of the litigation trust, which clears the way for a consensual plan," said John Boken, Collins & Aikman's Chief Restructuring Officer. "We are pleased to have reached another major milestone in these cases now that we have the support of our most significant creditor constituencies and our major customers regarding the terms of our plan." Additionally, the company are prepared to move forward on the hearing to approve the disclosure statement's adequacy tomorrow, Jan. 25, 2007, with relatively few objections filed, and the company expects that most of the objections will be resolved prior to the disclosure statement hearing. Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and US$2,856,600,000 in total debts. COMNETIX INC: Board Approves Amended L-1 Identity Agreement ----------------------------------------------------------- ComnetiX Inc. and L-1 Identity Solutions, Inc. have amended the terms of their previously-announced agreement, entered on Nov. 15, 2006, for L-1 to acquire all of the outstanding shares of ComnetiX. Under the amended agreement, which was executed as of Jan. 9, 2007, L-1 will pay ComnetiX shareholders $1.05 per share in cash for all of the issued and outstanding shares of ComnetiX, for a total purchase price of approximately $16 million. The previous purchase price was $0.82 per share. The revised purchase price from L-1 reflects a premium of more than 100% over the price of ComnetiX's shares prior to the initial announcement of L-1's offer in November 2006. The acquisition will remain structured as an arrangement under the Canada Business Corporations Act. The Board of Directors of ComnetiX has confirmed its unanimous approval of the revised arrangement and its determination that the revised arrangement is fair to, and in the best interests of, ComnetiX, its shareholders and warrantholders. The Board of Directors of ComnetiX unanimously recommends that ComnetiX's shareholders and warrantholders vote FOR the special resolution approving the arrangement, as revised. L-1 and ComnetiX also agreed to three technical changes to the proposed arrangement. First, the date by which the arrangement must be completed has been extended to March 29, 2007. Second, the maximum amount payable by ComnetiX to holders of in-the-money stock options has been increased from $160,000 to $285,000. Third, the amount of cash that ComnetiX must deliver at the closing of the transaction has been reduced to $1,025,000, to reflect an increase in payments by ComnetiX to holders of in-the- money stock options and in the expenses of the transaction. ComnetiX will mail an amendment to its management information circular to security holders who are entitled to vote at the annual and special meeting. The amendment to the circular will describe the changes to the arrangement referenced in this press release and will be accompanied by letters from ComnetiX and L-1. All other terms of the arrangement, as described by ComnetiX in its management information circular dated Dec. 18, 2006, remain unchanged. Irrevocable voting agreements in favour of the arrangement have already been signed by directors and officers of ComnetiX, representing approximately 31 percent of the outstanding shares of ComnetiX. Similar agreements have been signed by the holders of approximately 70% of the outstanding warrants. About L-1 Identity Based in Stamford, Connecticut, L-1 Identity Solutions, Inc. (NYSE: ID) -- http://www.l1id.com/- consists of, among other businesses, the historic operations of Viisage Technology, Inc. and Identix Inc., which merged on Aug. 29, 2006. L-1 Identity Solutions, together with its portfolio of companies, offers a comprehensive set of products and solutions for protecting and securing personal identities and assets. Leveraging the industry's most advanced multi-modal biometric platform for finger, face and iris recognition, the company's solutions provide a circle of trust around all aspects of an identity and the credentials assigned to it, including proofing, enrollment, issuance and usage. About ComnetiX Based in Oakville, Ontario, ComnetiX Inc. (TSX: CXI) -- http://www.ComnetiX.com/-- provides secure identification and authentication solutions to both the public and private sectors throughout North America. The company offers multimode biometric identification solutions for use in areas such as applicant screening, financial services, health care, transportation, airlines and airports, casinos and gaming, and energy and utilities. Clients include American Airlines, Lehman Brothers, the New York City Health and Hospital Corporation, and other government services. The company also provides applicant fingerprinting services, facilitating tens of thousands of criminal background checks each year through its chain of ten offices across Canada. * * * As indicated in the going concern paragraphs in its consolidated financial statements for the three-months ended Nov. 30, 2006, Comnetix Inc. had a net loss of $133,186, and an accumulated deficit of $16,124,825 for the fiscal quarter ended Nov. 30, 2006. The company's ability to continue as a going concern is dependent upon the company achieving a profitable level of operations and raising additional financing. COMNETIX INC: Bio-key Commences Competing Offer ----------------------------------------------- Bio-key International, Inc. has published a Notice of Offer to purchase all of the outstanding common shares of ComnetiX, Inc. ComnetiX has not had an opportunity to review and consider the offer from Bio-key. The Board of Directors of ComnetiX will make its recommendation to the shareholders of ComnetiX as soon as possible to allow for review of its recommendation to shareholders. The Notice of Offer indicated that an Offering Circular dated Jan. 17, 2007 would be mailed to ComnetiX shareholders. Details of Bio-Key's Offer BIO-key's offer is open for acceptance until 9:00 p.m. (Toronto time) on Feb. 26, 2007. Under the offer, ComnetiX shareholders will be entitled to receive for each ComnetiX share a number of BIO-key shares that will be determined by dividing $1.29 by the BIO-key Average Trading Price (which will be the volume weighted average trading price of BIO- key shares on the OTC Bulletin Board during the ten trading-day period ending on the second business day prior to the Expiry Time). The value of BIO-key's offer represents a 65% premium to the closing price for ComnetiX shares on Dec. 20, 2006, the last trading day prior to BIO-key's announcement of its offer for ComnetiX. As a result, BIO-key's offer values ComnetiX at $18.2 million. BIO-key believes its proposed offer to acquire all the issued and outstanding common shares of ComnetiX is superior to L-1 Identity Solutions Inc.'s revised proposal as it offers a significantly higher price per ComnetiX share and allows shareholders of ComnetiX to participate in the long-term potential of the combined company. In addition, BIO-key believes that the price offered by L-1 significantly undervalues ComnetiX. Industry comparables are currently commanding a multiple of 4 to 5 times revenue while the revised L-1 offer for ComnetiX remains below 2x revenue. BIO-key believes that the long-term potential of the combined company should be able to command a premium in accordance with industry comparables. Northern Financial Corporation, a Canadian merchant bank, has committed to tender its approximate 12.5% common share interest in ComnetiX into the BIO-key offer, subject to certain limited rights of withdrawal. Including its 12.5% ownership interest, Northern has control or direction over, or has entered into voting agreements in connection with 3,464,138 issued shares of ComnetiX representing approximately 24.5% of the total issued shares of ComnetiX, and intends to vote all such shares against L-1 Identity Solutions' current proposal to acquire ComnetiX. L-1's proposal requires a two-thirds approval by ComnetiX' shareholders and warrant holders for implementation. In connection with the tender offer, BIO-key also intends to proceed with a financing, the proceeds of which will be used for working capital purposes in the combined BIO-key and ComnetiX business. The combined company will carry on business under the name BIO-key International, Inc. ISS' Analysis of the Offer In its Short Form Analysis dated Jan. 2, 2007, Institutional Shareholder Services of Canada Corp., one of Canada's leading authorities on proxy voting and corporate governance issues, stated in response to the announced proposed bid by Bio-key International Inc. on Dec. 21, 2006, "In view of the recent developments, we feel it would be prudent for shareholders to study the offer of Bio-key, when such offer is made. We therefore recommend that shareholders vote against this resolution [approving the Arrangement Agreement]." In its Proxy Alert dated Jan. 11, 2007 in response to the increased offer by L-1 Identity Solutions Inc., ISS stated, "While we are encouraged by the amended L-1 offer, it remains a possibility that the Biokey offer, if made, could be a superior offer. However, due to the lack of sufficient details, we are unable to provide further comments on the Bio-key offer. We keep our recommendation unchanged and will provide updates if warranted by further developments." Bernard Crotty, Chairman and CEO of ComnetiX stated, "I think that the reasonable expectation of the shareholders of ComnetiX as a group is that they will have time to assess the bid that Biokey said it will make, before voting on the L-1 transaction. This is how we interpret the recommendation of ISS and we feel that a postponement of the shareholders meeting is in the best interests of all parties at this time." ComnetiX advises shareholders not deposit any common shares to the Bio-key offer, if and when it commences, and not to take any other action concerning the offer until shareholders have received further communications from the Board of Directors. After commencement of the offer, the Board of Directors will issue a Directors' Circular that will contain important information for shareholders, including the Board's recommendation regarding the Bio-key offer. About Bio-key International Based in Minneapolis, Minnesota, BIO-key International, Inc. (OTC BB: BKYI.OB) -- http://www.bio-key.com/-- develops and delivers advanced identification solutions and information services to law enforcement departments, public safety agencies, and government and private sector customers. BIO-key mobile wireless technology provides first responders with critical, reliable, real-time data and images from local, state and national databases. The company's high-performance, scalable, cost-effective and easy-to- deploy biometric finger identification technology accurately identifies and authenticates users of wireless and enterprise data to improve security, convenience and privacy and to reduce identity theft. Over 2,500 police, fire and emergency services departments in North America use BIO-key solutions. About ComnetiX Based in Oakville, Ontario, ComnetiX Inc. (TSX: CXI) -- http://www.ComnetiX.com/-- provides secure identification and authentication solutions to both the public and private sectors throughout North America. The company offers multimode biometric identification solutions for use in areas such as applicant screening, financial services, health care, transportation, airlines and airports, casinos and gaming, and energy and utilities. Clients include American Airlines, Lehman Brothers, the New York City Health and Hospital Corporation, and other government services. The company also provides applicant fingerprinting services, facilitating tens of thousands of criminal background checks each year through its chain of ten offices across Canada. * * * As indicated in the going concern paragraphs in its consolidated financial statements for the three-months ended Nov. 30, 2006, Comnetix Inc. had a net loss of $133,186, and an accumulated deficit of $16,124,825 for the fiscal quarter ended Nov. 30, 2006. The company's ability to continue as a going concern is dependent upon the company achieving a profitable level of operations and raising additional financing. COMNETIX INC: Shareholders' Meeting Moved to February 2 ------------------------------------------------------- ComnetiX, Inc. decided to postpone the Annual and Special Meeting of Shareholders and Warrantholders scheduled for Jan. 19, 2007. The meeting will be reconvened at 10:00 a.m. on Friday, Feb. 2, 2007, at The First Canadian Place Gallery, 100 King Street West, Toronto, Ontario, to vote on the arrangement, as revised, as well as on other matters. Based in Oakville, Ontario, ComnetiX Inc. (TSX: CXI) -- http://www.ComnetiX.com/-- provides secure identification and authentication solutions to both the public and private sectors throughout North America. The company offers multimode biometric identification solutions for use in areas such as applicant screening, financial services, health care, transportation, airlines and airports, casinos and gaming, and energy and utilities. Clients include American Airlines, Lehman Brothers, the New York City Health and Hospital Corporation, and other government services. The company also provides applicant fingerprinting services, facilitating tens of thousands of criminal background checks each year through its chain of ten offices across Canada. * * * As indicated in the going concern paragraphs in its consolidated financial statements for the three-months ended Nov. 30, 2006, Comnetix Inc. had a net loss of $133,186, and an accumulated deficit of $16,124,825 for the fiscal quarter ended Nov. 30, 2006. The company's ability to continue as a going concern is dependent upon the company achieving a profitable level of operations and raising additional financing. COMPLETE RETREATS: Wants to Extend Plan-Filing Period to April 19 ----------------------------------------------------------------- Complete Retreats LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Connecticut to further extend their exclusive periods to: (a) file a plan of reorganization through and including April 19, 2007; and (b) solicit votes on that plan through and including June 18, 2007. The Debtors have made significant progress toward stabilizing their business operations, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, relates. The Debtors have obtained replacement DIP financing for the duration of their bankruptcy cases. In addition, the Debtors have been investigating and pursuing litigation, with the hope of increasing the ultimate recovery for creditors, Mr. Daman says. In particular, the Debtors, along with the Official Committee of Unsecured Creditors, have filed numerous motions for examinations pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure; have conducted interviews with numerous employees and other parties; and have commenced one, and plan to initiate more, adversary proceedings. The Debtors have also sought and obtained the Court's permission to sell substantially all of their assets to Ultimate Resort, LLC, Mr. Daman points out. Moreover, the Debtors have filed motions to sell the properties not included in the Global Asset Sale, three of which have been granted by the Court. Once the Global Asset Sale has closed, the Debtors will be in a position to file a liquidating plan of reorganization, which will likely include a litigation trust to pursue actions to recover assets of the Debtors' estates for the benefit of the creditors and other parties-in-interest, Mr. Daman tells the Court. The Debtors have been drafting a liquidating plan that they intend to negotiate with the Committee, in the hopes of reaching a consensus. The Debtors are hopeful that they will finalize and file a consensual plan prior to April 19, 2007. The Exclusive Periods should therefore be extended to enable the Debtors to close the Global Asset Sale and to negotiate, finalize, and file a consensual liquidating Chapter 11 plan, Mr. Daman maintains. About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor- affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). COOPER COMPANIES: Discloses Planned $1 Billion Refinancing ---------------------------------------------------------- The Cooper Companies, Inc. disclosed a proposed refinancing which includes a $650 million revolving credit facility and a proposed private offering of $350 million aggregate principal amount of senior notes due 2015. Cooper intends to use borrowings under the new revolving credit facility and the net proceeds of the notes offering to repay in full its $250 million term loan and all outstanding borrowings under its existing $750 million syndicated bank credit facility, which will be terminated. The new revolving credit facility will be unsecured and will include customary guarantees from domestic subsidiaries and negative pledges on assets. The exact terms and timing of the new financing will depend on market conditions and other factors. Cooper's proposed new financing is designed to: * lock in long-term capital with attractive pricing; * provide enhanced strategic and operational flexibility with fewer and less restrictive covenants; * generate greater borrowing capacity with lower pricing and lower fees and eliminate existing debt amortization. "This new financing is intended to serve our financing needs for the foreseeable future," Steven M. Neil, Cooper's Chief Financial Officer said. "We are pleased to be working with a bank syndicate that recognizes our improving financial position, our favorable operational outlook and the significant progress we have made integrating Ocular Sciences into CooperVision." About Cooper Companies The Cooper Companies, Inc. (NYSE:COO) -- http://www.coopercos.com/ -- manufactures and markets specialty healthcare products through its CooperVision and CooperSurgical units. Corporate offices are in Lake Forest and Pleasanton, Calif. CooperVision -- http://www.coopervision.com/-- manufactures and markets contact lenses and ophthalmic surgery products. Headquartered in Lake Forest, Calif., it manufactures in Albuquerque, N.M., Juana Diaz, Puerto Rico, Norfolk, Va., Rochester, N.Y., Adelaide, Australia, Hamble and Hampshire England, Ligny-en-Barrios, France, Madrid, Spain and Toronto. CooperSurgical -- http://www.coopersurgical.com/-- manufactures and markets diagnostic products, surgical instruments and accessories to the women's healthcare market. With headquarters and manufacturing facilities in Trumbull, Conn., it also manufactures in Pasadena, Calif., North Normandy, Ill., Fort Atkinson, Wis., Montreal and Berlin. Proclear(R) and Biomedics(R) are registered trademarks and Biomedics XC(TM) and Biofinity(TM) are trademarks of The Cooper Companies, Inc., and its subsidiaries or affiliates. COOPER COMPANIES: Moody's Rates $350 Million Senior Notes at Ba3 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3, LGD3, 45% rating to The Cooper Companies, Inc.'s $350 million senior unsecured notes due 2015. Proceeds from the notes, along with a new $650 million five year revolving credit facility, will be used to refinance the company's existing bank credit facilities comprised of a $500 million revolver and a $250 million term loan, which will be terminated. The proposed revolver will contain a $250 million accordion that will be available throughout the life of the facility. Concurrently, Moody's assigned a Ba3 Corporate Family Rating, Ba3 Probability of Default Rating, SGL-1 Speculative Grade Liquidity Rating, and a stable ratings outlook. The Ba3 Corporate Family Rating primarily reflects the company's size, moderate amount of debt and stable free cash flow. "Based on Moody's Medical Products and Device Rating Methodology, the company's revenue size at $859 million for the twelve months ended October 31, 2006 maps it to the middle of the 'Ba' rating category", said Sidney Matti, Analyst at Moody's. "Moody's expects that the company's revenue size will grow over the next few years, which will move it toward the upper end of the 'Ba' rating category", said Mr. Matti. With minimal increases in debt as part of the proposed transaction, pro forma adjusted debt to EBITDA will remain at 3.7x. Moody's expects that the company's adjusted leverage position will decline to below 3.5x by Oct. 31, 2007. The Corporate Family Rating reflects the recent changes to Cooper's 2007 revenue guidance, its highly acquisitive nature and the competitiveness of the contact lens market. The company has guided projected revenues for fiscal year 2006 and fiscal year 2007 downward over the past few quarters because of ramp-up issues related to the silicon hydrogel product and the introduction of the strip blister packaging in Japan. Matti also stated that, "Over the past two and a half years, Cooper has spent approximately $680 million in debt-financed acquisitions in order to strengthen its position in both the contact lens and women's healthcare divisions." Moody's expects Cooper to continue to engage in acquisitions within the women's healthcare division with limited acquisition opportunities in the contact lens arena. Currently, the four largest players in the contact lens market have an estimated combined 96% market share, according to Moody's. The stable ratings outlook anticipates the contact lens and women's healthcare markets will continue to grow as the need for each product increases driven by changing demographics. With its position within both segments, Cooper should benefit from this growth. The outlook also considers that the company will not engage in a material acquisition over the ratings horizon. The SGL-1 rating recognizes that over the next twelve months ended Oct. 31, 2007, Moody's expects Cooper to generate cash flow from operations sufficient to cover the company's capital spending needs. Additionally, the company will have material availability under the proposed $650 million revolving credit facility and adequate cushion under the revolver covenants. These ratings were assigned: -- Ba3, LGD3, 45% $350 million senior unsecured note rating; -- Ba3 Probability of Default rating; -- SGL-1 Speculative Grade Liquidity rating; and, -- Ba3 Corporate Family Rating. Headquartered in Pleasanton, California, The Cooper Companies, Inc., through its principal business units, develops, manufactures and markets healthcare products. Cooper reported total revenues for the year ended Oct. 31, 2006 of $859 million. COOPER COMPANIES: S&P Rates Proposed $350 Mil. Senior Notes at BB- ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Lake Forest, California-based Cooper Companies Inc. to 'BB-' from 'BB'. The rating was removed from CreditWatch, where it was placed Dec. 14, 2006, with negative implications as a result of continued earnings weakness. The rating outlook is stable. In addition, Standard & Poor's assigned its 'BB-' rating to Cooper's proposed $350 million senior unsecured notes due 2015. "Cooper has experienced a loss of market share due to its late entry into the silicone hydrogel soft contact lens market," said Standard & Poor's credit analyst Cheryl Richer. While the company rolled out its Biofinity silicone hydrogel monthly sphere in 2006, production of this product remains limited, and commercialization of other key products are not slated until later in 2007. "Given the high proportion of new patients being fitted with silicone hydrogel lenses and the potential conversion of existing customers to this newer lens material, we remain concerned about Cooper's ability to enter these markets quickly and stem further share erosion," added Ms. Richer. Cooper manufactures and markets a broad range of soft contact lenses, including value-added specialty products, such as toric lenses, as well as more commodity-like spherical contact lenses. COVANTA ENERGY: Moody's Rates New $1.3 Billion Sr. Facility at Ba2 ------------------------------------------------------------------ Moody's Investors Service has assigned a Ba2 rating to Covanta Energy Corporation's new $1.3 billion senior secured credit facility and a B1 rating to Covanta Holding Corporation's $325 million convertible debentures. The Ba2 rating assigned to the new credit facility is effectively a two-notch upgrade from the B1 rating assigned to Covanta's current first lien credit facility. With the convertible debenture offering, Moody's has reassigned the Corporate Family Rating to Covanta Holding Corporation from its subsidiary, Covanta Energy Corporation. Concurrently, the CFR has been upgraded to Ba2 from Ba3. Moody's has also upgraded the ratings of various industrial revenue bonds guaranteed by Covanta ARC LLC, a subsidiary of Covanta Energy. In addition, Moody's affirmed the company's SGL-1 speculative grade liquidity rating, which has also been reassigned to Covanta Holding from Covanta Energy. The outlook remains stable. The new credit facility includes a $680 million dollar term loan, a $320 million synthetic letter of credit facility, and a revolver that has been increased to $300 million from $100 million. Proceeds of the new term loan and the convertible notes, together with a planned $125 million equity issuance and $170 million in cash, will be used to repay Covanta's existing $367 million first lien and $260 million second lien term loans, along with $612 million of debt currently outstanding at three intermediate holding companies. The upgrade of the CFR reflects the strengthening of the company's consolidated balance sheet and significant improvement in pro forma credit metrics driven by the current proposed transaction, which is expected to result in a $235 million decrease in consolidated debt and an approximate $50 million reduction in annual interest expense. Moody's calculates that the ratio of Funds from Operations to Interest increases to 4.0x for 2006 on a pro forma basis from an estimated actual result of 2.8x, while FFO to Debt improves to 13.7% from 10.9%. These ratios are consistent with a Ba category rating for a company with Covanta's fundamental business risk profile. Moody's notes that the company's financial performance had already considerably improved in 2006, with FFO/Debt and FFO/interest ratios increasing from 6.6% and 2.4x, respectively, in 2005. Further improvements in financial performance are expected as project debt continues to amortize and the amount of the term loan is reduced by the 50% cash sweep required by the credit facility. The company may pay down the term loan more rapidly than required if investment opportunities do not arise, though Moody's expects that the company may seek to re-lever at some point over the next few years if debt reduction exceeds a certain level. The Ba2 rating assigned to the new credit facility further reflects the reduction in structural subordination achieved through the expected elimination of intermediate holding company debt at MSW Energy Holdings LLC, MSW Energy Holdings II LLC and Covanta ARC LLC and the resulting improvement in loss given default rates to a range of 30%-50%, LGD3 from a range of 50% to 70%, LGD4 previously. In addition, the repayment of the MSW debt, which had a bullet maturity in 2010, also substantially reduces the company's exposure to refinancing risk. The new credit facility will be secured by a pledge of stock of Covanta's subsidiaries, most of which are separately financed with non-recourse project debt. As a result, project debt holders have a prior claim on virtually all of Covanta's hard assets, primarily consisting of waste-to- energy facilities. The convertible debentures will be unsecured obligations of Covanta Holdings and as such are structurally subordinated to all of the company's other indebtedness. Ratings Affected Include: Upgrades: * Covanta Holding Corporation -- Corporate Family Rating, Reassigned from Covanta Energy Corporation, Upgraded to Ba2 from Ba3 Guarantor: Covanta ARC LLC -- Hempstead Industrial Development Agency, NY 5% IRBs due 2010, Upgraded to Baa3, 22%, LGD2 from Ba1 -- Niagara County Industrial Devel. Agency, NY, Series 2001 IRBs, Upgraded to Baa2, 07%, LGD1 from Baa3 -- Delaware County Industrial Dev. Auth., PA, Series 1997-A IRBs, Upgraded to Ba1, 27% LGD2 from Ba2, 28%, LGD2 -- Connecticut Resources Recovery Authority, Ser. A and Ser. 1992 A IRBs, Upgraded to Ba1, 27%, LGD2 from Ba2, 28%,LGD2 Assignments: * Covanta Energy Corporation -- Senior Secured Bank Credit Facility, Assigned Ba2, 48%, LGD3 * Covanta Holding Corporation -- Senior Unsecured Conv./Exch. Bond/Debenture, Assigned B1 89%, LGD5 Primarily a waste-to-energy company with a client base composed largely of local municipal governments, Covanta Holdings is headquartered in Fairfield, New Jersey with revenues of approximately $1.3 billion. COVANTA HOLDING: S&P Rates $1.3 Billion Credit Facilities at BB- ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB-' corporate credit rating to Covanta Holding Corp. and a 'B' issue rating to the company's $325 million senior unsecured convertible bonds. At the same time, Standard & Poor's also raised the corporate credit rating on subsidiary Covanta Energy Co., to 'BB-' from 'B+' and assigned a 'BB-' issue rating, with a '2' recovery rating to its proposed $1.3 billion credit facilities consisting of a $680 million, first-lien secured term loan, $320 million in funded LOCs, and $300 million in revolving credit facilities. The outlook remains stable. As of Sept. 30, 2006, Fairfield, New Jersey-based Covanta Holding had about $2.6 billion of debt on a consolidated basis. Covanta Holding also plans to issue about $125 million in common equity along with the new financing. The Covanta Energy upgrade follows the proposed recapitalization: proceeds of the new debt issue will be used to refinance existing indebtedness of Covanta Holding and its subsidiaries, as well as pay related fees, premiums, and expenses associated with the debt issuance. "The stable outlook on Covanta Holding reflects predictable cash flow from waste disposal and power contracts," said Standard & Poor's credit analyst Chinelo Chidozie. "It also reflects the expectation that consolidated credit metrics should improve over the medium term, as mandatory amortizations, cash sweeps, and scheduled step-downs in LOC requirements result in company deleveraging," she continued. The possibility of an upgrade is limited, given the company's level of leverage. Continued strength in operations and significant deleveraging would be necessary for the rating to gain some positive momentum. On the other hand, the failure to meet forecasts, which could result from operating problems or a weaker pricing environment for power and waste disposal, could negatively affect the rating. CWABS ASSET: Moody's Rates Class B Certificates at Ba1 ------------------------------------------------------ Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by CWABS Asset-Backed Certificates Trust 2006- 24 and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Countrywide Home Loans, Inc. originated, adjustable-rate and fixed-rate, subprime residential mortgage loans acquired by Countrywide Financial Corporation. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination, overcollateralization, excess spread and primary mortgage insurance provided by Mortgage Guaranty Insurance Corporation and Republic Mortgage Insurance Company. The ratings also benefit from an interest-rate swap agreement provided by Deutsche Bank AG. After taking into consideration the coverage of the primary mortgage insurance, Moody's expects collateral losses to range from 4.05% to 4.55%. Countrywide Home Loans Servicing LP will act as master servicer. These are the rating actions: * CWABS Asset-Backed Certificates Trust 2006-24 * Asset-Backed Certificates, Series 2006-24 Class 1-A, Assigned Aaa Class 2-A-1, Assigned Aaa Class 2-A-2, Assigned Aaa Class 2-A-3, Assigned Aaa Class 2-A-4, Assigned Aaa Class A-R, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa2 Class M-9, Assigned Baa3 Class B, Assigned Ba1 The Class B Certificate was sold in a privately negotiated transaction without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. DAIMLERCHRYSLER: Inks Deal Selling 7.5% EADS Stake -------------------------------------------------- DaimlerChrysler AG will sign this month a contract to sell its 7.5% stake in European Aeronautic Defence & Space Co. to a consortium of financial institutions organized by the German government, WirtschaftsWoche reports. In a TCR-Europe report on Jan. 16, the consortium -- comprising of Credit Suisse Group, Morgan Stanley, Goldman Sachs Group Inc., Deutsche Bank AG and Commerzbank AG, insurer Allianz SE, government-backed KfW Banking Group and banks of German federal states -- would buy the stake using derivatives for EUR1.5 billion based on EADS's stock-market value, the Wall Street Journal relates. The 7.5% stake would be carved into: -- 60% for Credit Suisse, Morgan Stanley, Goldman Sachs, Deutsche Bank and Commerzbank; -- 13% for KfW Group; -- 10% for Hamburg; -- 5% for Baden-Wuerttemberg; -- 5% for Bavaria; -- 5% for Lower Saxony; and -- 2% for Bremen. Daimler, which repurchased the stake after four years, would remain a shareholder and keep its voting rights for the entire stake of 22.5%, WSJ cites a source privy to the matter. The German government has been looking for a solution to safeguard its interest in EADS as well as to allow Daimler to cut its stake without risking the balance between German and French interests in the aeronautics firm, WSJ relays. 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. DAIMLERCHRYSLER: Chairman Unveils Diesel BLUETEC: Reduces Fuel Use ------------------------------------------------------------------ At the Washington (D.C.) Auto Show, Dr. Dieter Zetsche, Chairman of the Board of Management of DaimlerChrysler AG and the Head of Mercedes Car Group, called the nation's attention to the new generation of clean diesels -- branded BLUETEC -- while encouraging U.S. lawmakers to set regulations that support a diversity of approaches to reducing the country's dependence on foreign oil. To emphasize the point, he introduced the 2007 Dodge Ram 2500 and 3500 with 6.7-liter Cummins turbodiesel engine offered with B5 and B20 biodiesel, available to consumers in March. The first to do so and three years before the deadline, the heavy- duty truck will meet stringent 2010 truck emissions standards in all 50 states. He also announced the Dodge Ram clean, light-duty turbodiesel engine that will provide up to 30% improved fuel economy, meet 50-state, 2010 emissions standards, available after 2009. With fuel economy improvements of 20% to 40% and a reduction of oxides of nitrogen by as much as 90%, Dr. Zetsche stressed that clean diesel technology is a viable solution to reducing dependence on oil and improving air quality. Dr. Zetsche also urged U.S. policymakers to stimulate greater demand and consumer choice for fuel-saving technologies -- such as diesel -- by providing equal incentives on powertrains that achieve lower fuel consumption with clean emissions. "American policy-makers must adopt a new and unique formula ... that encourages more technologies and more (customer) choice," Dr. Zetsche said. "I've always thought CAFE -- in the country that is the world's model for a free-market economy -- to be a bit of a contradiction. It's an attempt to regulate supply and not to use market forces to stimulate demand for more fuel-efficient vehicles." Dr. Zetsche reasoned that "trying to sell people what they don't want is not a winnable business proposition. And it is that 'anti-free market element' of CAFE that makes life difficult for us. We've learned to live with CAFE and its modest increases." He added that we would be open to revisiting the CAFE discussion for cars, as they did recently for trucks and make the regulation "size based" and not "fleet based." Zetsche offered that the automotive companies should "look to innovation, and to increasingly substituting petroleum products with biofuels." He pointed to the modern diesel engine which has "plenty of the former, and great potential for the latter." He mentioned a current study that expects diesel takes rates in the U.S. to hit 15% by 2015. Dr. Zetsche also detailed the significant advantages of modern diesel engines where the ultra- modern BLUETEC diesel vehicles provide their owners with clean and economical performance. The Mercedes brand has been pioneering BLUETEC in Europe, where it's been on the road for several years. Since 2005, the company has sold more than 40,000 BLUETEC Mercedes-Benz trucks and buses in Europe, "where they've performed exceptionally well in everyday heavy-duty service," Dr. Zetsche added. Mercedes-Benz intends to systematically broaden its BLUETEC portfolio. In addition to the recently introduced Mercedes E 320 BLUETEC, three additional BLUETEC models will join the line-up, the R-Class, the ML-Class and the GL Class that will all be assembled at the company's plant in Alabama. He also submitted that DaimlerChrysler "is not pursuing diesel to the exclusion of other alternate fuel technologies." Dr. Zetsche listed many on-going initiatives including the company's fuel cell activities where DaimlerChrysler has invested more than $1 billion and has more fuel-cell vehicles on the road today than any other manufacturer. The company also has about 1,500 Orion VII diesel-electric buses in service or on order for municipal fleets in Toronto, San Francisco and New York City/New Jersey. And, working with General Motors Corp. and BMW, DaimlerChrysler is jointly developing a state-of-the-art, two-mode, full hybrid propulsion architecture for applications in Chrysler Group, Mercedes Car Group, GM, and BMW vehicles. The first DaimlerChrysler vehicle to use this system will be the Dodge Durango, coming in 2008. Unveiled during Dr. Zetsche's keynote address, and available in dealerships next month, was the new Dodge Ram Heavy Duty BLUETEC featuring an all-new 6.7-liter Cummins turbodiesel engine, the first to meet 2010 truck emissions standards in all 50 states. It is the first BLUETEC vehicle from the Chrysler Group. "Several years ago, when the EPA set stringent 2010 diesel emissions standards for heavy-duty pickup trucks, we didn't shake our heads and say 'no'," Dr. Zetsche said. "We went to work with Cummins, the long-time diesel engine partner for Dodge Ram heavy-duty three-quarter and one-ton pickup trucks, to meet the challenge." The new 2007 Dodge Ram Heavy Duty engine uses a diesel particulate filter to virtually eliminate particulate matter emissions and an absorber catalyst to reduce NOx by as much as 90% and virtually eliminate particulate matter emissions. In addition to the heavy-duty pick up truck, DaimlerChrysler revealed another addition to its diesel lineup. Tom LaSorda, Chrysler Group President and CEO, announced an all-new diesel engine for its light duty Dodge pickup trucks that will be available after 2009. Armed with new Cummins clean-diesel technology, the new engine will provide a dramatic increase in low-end torque, up to a 30% improvement in fuel efficiency and a 20% reduction in carbon dioxide emissions when compared to an equivalent gasoline engine. The new clean turbodiesel engine will meet 50-state emissions standards for 2010. Mr. LaSorda also announced pricing on the 2007 Jeep(R) Grand Cherokee, 3.0-liter common rail turbodiesel that will begin to arrive at Jeep dealerships in March. The Manufacturer's Suggested Retail Price for the Jeep Grand Cherokee Limited CRD will begin at $38,475, including $695 destination. The 3.0-liter CRD engine will be available on the Jeep Grand Cherokee Limited and Overland 4x2 and 4x4 models. BLUETEC represents the cleanest diesel vehicles in the world. These next-generation vehicles meet the most stringent emissions regulations worldwide, including emissions standards in all 50 U.S. states. BLUETEC is the DaimlerChrysler-owned brand name that stands for the cleanest diesel engines in their respective classes, i.e., those that meet 50-state emissions standards. BLUETEC is just one of the many fuel saving technologies from DaimlerChrysler, including advanced gasoline, Flex-Fuel, hybrids and zero-emission fuel-cell vehicles. 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. DELTA AIR: Gerald Grinstein Says No Merger Talks with Northwest --------------------------------------------------------------- Delta Air Lines Inc. chief executive officer Gerald Grinstein denies merger talks with rival Northwest Airlines Corp., Reuters reports. "At the behest of our creditors' committee, we recently retained an investment banker to obtain information from Northwest, a far cry from negotiating for a merger with them," said Mr. Grinstein in a newsletter sent to employees Tuesday. Mr. Grinstein commented that he was not against consolidation in the industry, but called a potential deal with US Airways "the poster child of the worst kind of a merger." The Wall Street Journal reports that Delta had previously rejected U.S. Airways' $8.4 billion bid and filed a stand-alone plan with the U.S. Bankruptcy Court for the Southern District of New York. Delta said that the offer would result in substantially inferior value for creditors compared with its standalone Plan. US Airways, which raised its offer to $10.2 billion last week, has set until Feb. 1, 2007, the deadline for Delta's creditors to back its offer, Reuters says. Earlier Tuesday, US Airways CEO Doug Parker, who told Reuters that it did not have any other merger deal in mind should its bid for Delta fail, said reports about Delta-Northwest merger were inaccurate. About Delta Air Headquartered in Atlanta, Georgia, Delta Air Lines (OTC: DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. DELTA AIR: Files Plan and Disclosure Statement Revisions -------------------------------------------------------- Delta Air Lines Inc. and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York revisions to their Joint Plan of Reorganization, filed on Dec. 19, 2006, and its related disclosure statement. The revised Plan and the Disclosure Statement provides updates with regards to certain issues, including: (a) the Court-approved agreement dated December 28, 2006, between Comair, Inc., and the Air Line Pilots Association, International. The parties agreed that before February 2, 2007: * Comair will not implement certain changes to its collective bargaining agreement with its pilots; and * ALPA will not call a strike of Comair pilots; (b) Delta Air Lines, Inc.'s pending request to approve its letter agreement with Bombardier, Inc., pursuant to which, among other things, Delta will purchase from Bombardier 30 new Canadian Regional Jet Series 900 aircraft, with an option to purchase additional 30 aircraft; (c) Delta's entry of an agreement with the U.S. Pension Benefit and Guaranty Corporation and the Official Committee of Unsecured Creditors to settle outstanding issues in connection with the termination of the Delta Pilots Retirement Plan; and (d) U.S. Airways Group, Inc.'s revised offer to merge with the Debtors, under which the Debtors' unsecured Creditors would receive $5,000,000,000 in cash and 89,500,000 shares of US Airways stock. New Delta Common Stock As previously reported, the Plan contemplates that all of the prepetition obligations owed to any unsecured Creditors of the Debtors will, as a general matter, be converted into New Delta Common Stock to be issued by Reorganized Delta. Reorganized Delta expects to have 1,500,000,000 authorized shares of common stock, $0.0001 par value. In connection with the Plan, Reorganized Delta will issue shares of New Delta Common Stock for: (a) distribution to holders of Allowed Unsecured Claims; and (b) distribution under the Compensation Programs -- the Directors and Management Compensation Program, and the Non-Pilot Compensation Program -- at or contemporaneously with the Effective Date. Additional shares will be issued or reserved to: (i) establish disputed claims reserves; and (ii) satisfy additional distributions under the Compensation Programs. New Equity Investment Rights Offering As previously reported, Delta and the Creditors Committee entered into a New Equity Investment Rights Offering Term Sheet relating to a possible rights offering to be made as part of the Plan. Delta and the Creditors Committee have jointly determined not to conduct a rights offering at this time. If Delta and the Creditors Committee decide to pursue a rights offering prior to the Effective Date, the terms and conditions of the rights offering would be specified in a Plan Supplement. Allocation of Plan Shares Reorganized Delta will issue, or reserve for issuance, the shares of new Delta common stock to be issued under the Plan. The actual number of Plan Shares will be determined by the Debtors in consultation with their financial advisors based on a variety of considerations. The Plan Shares will be divided into the Delta Allocation and the Comair Allocation based on the mid-point of the equity valuation range for the Comair Debtors -- $730,000,000 -- relative to the mid-point of the equity valuation range for the Delta Debtors -- $10,000,000,000. The Delta Allocation will be reduced by the number of Plan Shares that will be issuable under the compensation programs at or contemporaneously with the Effective Date, not subject to vesting or other restrictions, to derive the Delta Unsecured Allocation. The Comair Allocation, however, will not be subject to that reduction. Treatment of Intercompany Claims In accordance with Section 1124(1) of the Bankruptcy Code, intercompany claims are unimpaired by the Plan. However, the Debtors, in their sole discretion, retain the right to eliminate or adjust any Intercompany Claims as of the Effective Date by offset, cancellation, distribution or contribution of Claims or otherwise. The Plan provides that Intercompany Claims between the Comair Debtors and the Delta Debtors, other than trade payables and receivables and other current accounts, will, for purposes of the Valuation Analyses and the division of the Plan Shares, receive the same treatment and recovery as similar third-party claims. Trade payables and receivables and other current accounts between the Comair Debtors and the Delta Debtors will continue to be settled in the ordinary course consistent with past practice. A blacklined copy of the Plan is available for free at: http://ResearchArchives.com/t/s?18e0 A blacklined copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?18e1 About Delta Air Headquartered in Atlanta, Georgia, Delta Air Lines (OTC: DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Classification & Treatment of Claims Under Revised Plan ------------------------------------------------------------------ Delta Air Lines, Inc. and its debtor-affiliates' revised Joint Plan of Reorganization, filed January 18, 2007, provides changes to the projected recovery for certain classes of claims. The Debtors also deleted provisions providing an opportunity to holders of general unsecured claims to participate in a New Equity Investment Rights Offering. The Plan is premised upon the limited and separate consolidation of the estates of the Delta Debtors and the Comair Debtors. A. Classification and Treatment of Claims and Interests in the Delta Debtors The classification and treatment of other claims against the Delta Debtors under the Plan are summarized as: Class Description Recovery Claim Treatment ----- ----------- -------- --------------- 1 Other Priority 100% Payment in full in Cash, or other Claims treatment that will render the Claim unimpaired. Unimpaired. Deemed to accept. 2 Secured 100% (a) Payment in full in Cash; Aircraft (b) Reinstatement of the legal, Claims equitable and contractual rights of the claimholder; (c) payment of the proceeds of the sale or disposition of the Collateral securing the Claim to the extent of the value of the holder's secured interest in the Collateral; (d) return of Collateral securing the Claim; or (e) other treatment rendering the Claim unimpaired. Unimpaired. Deemed to accept. 3 Other Secured 100% (a) Payment in full in Cash; Claims (b) Reinstatement of the legal, equitable and contractual rights of the claimholder; (c) payment of the proceeds of the sale or disposition of the Collateral securing the Claim to the extent of the value of the holder's secured interest in the Collateral; (d) return of Collateral securing the Claim; or (e) other treatment rendering the Claim unimpaired. Unimpaired. Deemed to accept. 4 General 62%-78% New Delta Common Stock equal to Unsecured pro rata share of Delta Unsecured Claims Allocation. Impaired. Entitled to vote. 5 Non- 62%-78% (a) New Delta Common Stock equal Convenience to pro rate share of Delta Class Retiree Unsecured Allocation; or Claims (b) if elected on Ballot, Cash proceeds from sale of pro rata share of Delta Unsecured Allocation. Impaired. Entitled to vote. 6 Convenience 62%-78% Cash determined with reference to Class Claims the midpoint of the range of recovery estimates for General Unsecured Claims against the Delta Debtors. Impaired. Entitled to vote. 7a Interests 0% No distribution. in Delta Impaired. Deemed to reject. 7b Interests Retained Reinstatement of Interests. in the Delta Unimpaired. Deemed to accept. Subsidiary Debtors 8 Securities 0% No distribution. Litigation Impaired. Deemed to reject. Claims The projected recovery ranges for Delta Classes 4, 5 and 6 are estimates that are derived from the financial projections and other assumptions, including an estimated $14,200,000,000 of unsecured claims. These projected recoveries do not take into account shares issued under the Compensation Programs that are to be deducted in calculating the Delta Unsecured Allocation. B. Classification and Treatment of Claims and Interests in the Comair Debtors The classification and treatment of other claims against the Comair Debtors under the Plan are summarized as: Class Description Recovery Claim Treatment ----- ----------- -------- --------------- 1 Other Priority 100% Payment in full in Cash, or other Claims treatment that will render the Claim unimpaired. Unimpaired. Deemed to accept. 2 Secured 100% (a) Payment in full in Cash; Aircraft (b) Reinstatement of the legal, Claims equitable and contractual rights of the claimholder; (c) payment of the proceeds of the sale or disposition of the Collateral securing the Claim to the extent of the value of the holder's secured interest in the Collateral; (d) return of Collateral securing the Claim; or (e) other treatment rendering the Claim unimpaired. Unimpaired. Deemed to accept. 3 Other Secured 100% (a) Payment in full in Cash; Claims (b) Reinstatement of the legal, equitable and contractual rights of the claimholder; (c) payment of the proceeds of the sale or disposition of the Collateral securing the Claim to the extent of the value of the holder's secured interest in the Collateral; (d) return of Collateral securing the Claim; or (e) other treatment rendering the Claim unimpaired. Unimpaired. Deemed to accept. 4 General 76% - 100% New Delta Common Stock equal to Unsecured pro rata share of Comair Claims Unsecured Allocation. Impaired. Entitled to vote. 5 Convenience 76% - 100% Cash determined with reference to Class Claims the midpoint of the range of recovery estimates for General Unsecured Claims against the Delta Debtors. Impaired. Entitled to vote. 6 Interests Retained Reinstatement of Interests. in the Comair Unimpaired. Deemed to accept. Debtors 7 Securities 0% No distribution. Litigation Impaired. Deemed to reject. Claims The projected recovery ranges for Comair Classes 4 and 5 are estimates that are derived from the Financial Projections and other assumptions, including an estimated $800,000,000 of Unsecured Claims against the Comair Debtors. Recovery Ranges Subject to Change According to the Debtors, the recovery ranges of Delta Classes 4, 5 and 6, and Comair Classes 4 and 5 are subject to change based upon, among other things: (a) the market price of the shares of New Delta Common Stock; (b) the dilutive or accretive effects of the issuance of shares of New Delta Common Stock by the Reorganized Delta; and (c) as the Debtors Claims objection and reconciliation process continues: * the actual amount of Allowed Claims against the Delta Debtors for Delta Classes 4, 5 and 6; and * the actual amount of Allowed Claims against the Comair Debtors for Comair Classes 4 and 5. About Delta Air Headquartered in Atlanta, Georgia, Delta Air Lines (OTC: DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DIRECT GENERAL: A.M. Best Affirms Ratings & Says Outlook is Stable ------------------------------------------------------------------ A.M. Best Co. has affirmed the financial strength ratings of B (Fair) and the issuer credit ratings of "bb+" for the following members of Direct General Group's property/casualty companies. The outlook for these ratings has been revised to stable from positive. These rating actions apply to Direct General Insurance Group (Tennessee), Direct Insurance Company (Nashville, TN), Direct General Insurance Company (Aiken, SC) and its wholly-owned separately rated subsidiary, Direct General Insurance Company of Mississippi (Jackson, MS). A.M. Best has also affirmed the FSR of B (Fair) and the ICR of "bb" for Direct General Insurance Company of Louisiana (Baton Rouge, LA). The outlook for these ratings is stable. Additionally, A.M. Best has affirmed the ICR of "b" of the publicly-traded holding company, Direct General Corporation (Direct General) (Nashville, TN) [NASDAQ: DRCT]. The outlook for this rating has been revised to stable from positive. The rating affirmations reflect Direct General's elevated underwriting leverage and prior year adverse reserve development trends. These negative rating factors are partially offset by improved risk-adjusted capitalization, favorable underwriting results in recent years, elimination of quota share reinsurance and a conservative investment profile. The revised outlook contemplates the impact of future business plans and dividend projections provided by management. The revised outlook is consistent with A.M. Best's comments regarding the pending acquisition of Direct General by Elara Holdings, Inc., as outlined in a December 6, 2006 A.M. Best news release. A.M. Best's view of the FSRs is contingent upon Direct General's sustained operating performance trends despite evidence of increased competition in the non-standard automobile market. A.M. Best will continue to monitor Direct General's risk-adjusted capitalization, financial leverage and reserve adequacy with the expectation that these measures will remain within acceptable ranges to support all the ratings. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. DURA AUTOMOTIVE: De Minimis Claims Settlement Protocol Approved --------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware approves Dura Automotive Systems Inc. and its debtor-affiliates' uniform procedures for settling certain de minimis claims and causes of action brought by or against them in a judicial, administrative, arbitral or other proceeding. The proposed omnibus settlement procedures are modified to provide that: (a) with respect to any settled amount equal to or less than $50,000, the affected Debtor may agree to settle a claim or cause of action on any reasonable terms. The Debtor may enter into, execute and consummate a written settlement agreement that will be binding on it and its estate without notice to any third party or further Court action; and (b) With respect to any settled amount greater than $50,000 but does not exceed $1,000,000, the Debtor may agree to settle the claim or cause of action only if it provides written notice to, and the terms are not objected by: * the United States Trustee for the District of Delaware; * counsel to the agent for the Debtors' prepetition First Lien Secured Lenders; * counsel to the agent for the Debtors' postpetition Second Lien Secured Lenders; * counsel to the ad hoc committee of senior subordinated noteholders; and * any official committee appointed by the U.S. Trustee in the Debtors' Chapter 11 cases. About DURA Automotive Systems Inc. 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. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Judge Carey Appoints Warren Smith as Fee Auditor ----------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware has appointed Warren H. Smith & Associated, P.C., as fee auditor and as his special consultant for professional fee and expense review and analysis. In his administrative order, Judge Carey notes that the size, complexity and duration of Dura Automotive Systems Inc. and its debtor-affiliates' jointly administered bankruptcy cases will result in the filing of a number of interim applications of professional fees and reimbursement of expenses in significant amounts. Hence, he has determined that the appointment of a fee editor is in the best interests of the Debtors' estates and parties-in-interest in the Debtors' cases. The Debtors and the Official Committee of Unsecured Creditors have conferred and reached agreement with respect to the appointment of the fee auditor. Warren H. Smith will review the fee applications of all professionals employed in the Debtors' bankruptcy cases except the ordinary course professionals. However, to the extent that the fees and expenses of any ordinary course professional exceed the compensation caps, the Fee Auditor will review the OCPs' fees and expenses. Specifically, Warren H. Smith will: (a) review all fee applications filed by estate professionals in the Bankruptcy Cases; (b) review any documents filed in the Bankruptcy Cases; (c) serve an initial report on each professional to communicate questions, issues or disputes regarding the fee applications; (d) within 10 days after the service of the initial report, engage in an informal process with each professional, to resolve matters raised in the Fee Auditor's initial report; (e) conclude the informal response period by filing with the Court a final report with respect to each fee application; and (f) serve each Final Report to the U.S. Trustee, counsel for the Committee and the Debtors, and each professional whose fees and expenses are addressed in the Final Report. The total fees paid to Warren H. Smith for its services will be charged at its ordinary hourly rates for services of the same nature. The firm's fees and expenses are subject to application and review pursuant to Federal Rule of Evidence 706(b) and will be paid from the Debtors' estates as an administrative expense under Section 503(b)(2). About DURA Automotive Systems Inc. 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. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EASYLINK SERVICES: Committee to Evaluate Strategic Alternatives --------------------------------------------------------------- The Board of Directors of EasyLink Services Corp. has formed a committee of independent directors to evaluate strategic alternatives for the company, which could include a potential business combination transaction. On December 22, the company hired Americas Growth Capital as its financial advisor. As part of this process, numerous parties have expressed interest in potentially acquiring the business. The company has received unsolicited indications of interest from Internet Commerce Corporation for a transaction that would provide consideration of stock and cash with a nominal value of $5 per share. The Committee believes that given the early stage of the process it has undertaken it would be premature to enter into exclusive discussions with ICC, and will continue to pursue all interested parties to maximize value for stockholders. Headquartered in Piscataway, New Jersey, Easylink Services Corporation (NASDAQ: EASY) -- http://www.EasyLink.com/-- provides outsourced business process automation services to medium and large enterprises, including 60 of the Fortune 100, to improve productivity and competitiveness by transforming manual and paper- based business processes into efficient electronic business processes. Going Concern Doubt As reported in the Troubled Company Reporter on May 16, 2006, Grant Thornton LLP expressed substantial doubt about Easylink's ability to continue as a going concern after it audited the Company's financial statement for the year ended Dec. 31, 2005. The accounting firm pointed to the Company's history of operating losses, accumulated deficit and negative working capital. ENESCO GROUP: Inks Asset Purchase Agreement with Tinicum Capital ---------------------------------------------------------------- Enesco Group, Inc., and an affiliate of Tinicum Capital Partners II, L.P., a private investment partnership, have entered into a definitive asset purchase agreement, which provides for the Tinicum affiliate to purchase substantially all of the assets of Enesco and to assume certain of Enesco's unsecured liabilities. Under the agreement, the purchase price for Enesco's business, operations and assets would be paid by the repayment of all or substantially all of Enesco's senior secured debtor-in-possession financing facility, the forgiveness of certain obligations owed to Tinicum or its affiliates, the assumption of certain of Enesco's liabilities, and the payment in cash of $600,000. After the transaction, substantially all of Enesco's assets would be owned by the Tinicum affiliate, a private company. As reported in the Troubled Company Reporter on Jan. 15, 2007, Enesco does not anticipate there would be any distribution to its stockholders from the transaction, which remains subject to approval by the U.S. Bankruptcy Court for the Northern District of Illinois. On Jan. 22, 2007, the Court entered an order establishing certain procedures to govern the sale process and setting a hearing for Feb. 15, 2007 to consider the proposed Tinicum transaction. DIP Financing Interim Approval Enesco also disclosed that the Court gave interim approval on Jan. 22, 2007 to its Debtor-In-Possession financing arrangement with Wells Fargo Foothill, part of Wells Fargo & Company. The financing arrangement, in which Tinicum has purchased a 100% participation interest, provides for a revolving loan facility of up to $65 million, the proceeds of which will be used to pay off Enesco's existing senior secured debt and to provide working capital for the period prior to the closing of the sale to the Tinicum affiliate. Final approval of the facility is expected to come at a hearing before the Court on Feb. 7, 2007. "This transaction with Tinicum will represent a new era for Enesco," Basil Elliott, President and CEO of Enesco Group, Inc., said. "Smooth and continuous operations are critical to Enesco's success and we greatly appreciate the efforts of all our employees and partners through this transitional phase. We look forward to continuing this strong relationship with all our partners. The employees of Enesco, our retail customers and vendors are eagerly anticipating the partnership with Tinicum to springboard us into a profitable, innovative and exciting future." "The passion, loyalty, and determination of the employees, vendors and licensors have been both compelling and overwhelming," Terence M. O'Toole, co-managing partner of Tinicum added. "We are looking forward to becoming an integral part of the Enesco family and the future growth trajectory of the company." About Enesco Group Headquartered in Itasca, Illinois, Enesco Group, Inc. --- http://www.enesco.com/-- is a producer of giftware, and home and garden d,cor products. Enesco's product lines include some of the world's most recognizable brands, including Disney, Heartwood Creek, Nickelodeon, Cherished Teddies, Lilliput Lane, Border Fine Arts, among others. Enesco distributes products to a wide array of specialty gift retailers, home d,cor boutiques and direct mail retailers, as well as mass-market chains. The company serves markets operating in Europe, Australia, Mexico, Asia and the Pacific Rim. With subsidiaries in Europe, Canada and a business unit in Hong Kong, Enesco's international distribution network leads the industry. Enesco Group and its two affiliates, Enesco International Ltd. and Gregg Manufacturing, Inc., filed for chapter 11 protection on Jan. 12, 2007 (Bankr. N.D. Ill. Lead Case No. 07-00565). Shaw Gussis Fishman Glantz Wolfson & Tow and Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors. The Debtors' financial condition as of Nov. 30, 2006, showed total assets of $155,350,698 and total debts of $107,903,518. FIDELITY NATIONAL: Completes Refinancing of Credit Facilities ------------------------------------------------------------- Fidelity National Information Services, Inc., completed the refinancing of its principal credit facilities. The new facilities include a $900 million five-year unsecured revolving credit facility and a $2.1 billion five-year unsecured amortizing term loan facility. The initial borrowing rate for the facilities will be LIBOR plus 100 basis points, in accordance with the company's current leverage ratio. As of the closing date, the $2.1 billion term loan was fully drawn and $557 million was borrowed under the revolving loan. The combined net proceeds of $2.7 billion were used to retire the outstanding indebtedness on the former facilities and to fund the cost of establishing the new facilities. The company expects to incur a pre-tax non-cash charge of approximately $27.3 million in the first quarter of 2007 in conjunction with the unamortized costs associated with the prior facilities. Based in Jacksonville, Florida, Fidelity National Information Services, Inc. (NYSE: FIS) -- http://www.fidelityinfoservices.com/ -- provides core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals. FIS has processing and technology relationships with 35 of the top 50 global banks, including nine of the top ten. Nearly 50% of all US residential mortgages are processed using FIS software. FIS maintains a strong global presence, serving over 7,800 financial institutions in more than 60 countries worldwide, including Brazil. FIDELITY NATIONAL: Fitch Rates New $3 Bil. Sr. Facilities at BB+ ---------------------------------------------------------------- Fitch Ratings has assigned a senior unsecured rating of 'BB+' for Fidelity National Information Services' new $3 billion senior unsecured credit facilities. The facilities consist of a $2.1 billion term loan and a $900 million revolving credit facility. The company used the proceeds to refinance existing debt. Fidelity's Issuer Default Rating remains at 'BB+'. The Rating Outlook is Stable. The ratings recognize the company's ability to generate strong free cash flow, its strong market position in core businesses, diversified product offering, solid client retention, counter- cyclical revenue streams, and recurring revenue base from long- term processing agreements. The ratings also recognize the benefits realized by Fidelity from its acquisition of Certegy Inc. in early 2006. Fitch believes the strong operating performance of Fidelity as a stand alone company, the operating strength and business diversification brought from Certegy, sound liquidity, and improved leverage also support the ratings. Credit concerns include Fidelity's history of debt-financed acquisitions, well-capitalized significant industry competitors, the ongoing consolidation of its financial institution customer base, and event risk associated with two private equity firms that have a combined equity stake of approximately 15%. Fitch believes that potential acquisitions also remain a risk but expects the company will have the financial flexibility and capacity to manage its leverage accordingly. Incorporating incremental EBITDA from Certegy, pro forma 2006 leverage was approximately 2.5x, which is within the rating agency's expectations and comfortably within the 3.5x leverage covenant of the new unsecured credit facilities. Liquidity is adequate and supported by cash balances of $174.6 million at 3rd quarter ended Sept. 30, 2006 as well as approximately $286 million of availability under its revolving credit facilities. For 2007, liquidity is expected to remain adequate with cash balances and free cash flow similar to historical levels and availability under the new unsecured credit facilities of approximately $340 million. Total debt for 2006 is expected to be in the range of $2.7 billion-$2.9 billion and management has stated its plans to reduce debt over the next few years. The company has a $200 million share repurchase program which will utilize some of Fidelity's free cash flow. Fitch believes approximately $100 million will likely be repurchased in 2007. FLYI INC: Exclusive Plan Solicitation Period Extended to April 30 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware to further extend FLYi Inc., and its debtor-affiliates' exclusive period to solicit acceptances of a Chapter 11 plan from Dec. 29, 2006, through and including April 30, 2007. As reported in the Troubled Company Reporter on Jan. 3, 2007, M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, related that the Debtors filed their plan of liquidation on August 15, 2006, however, certain complex creditor negotiations and related discovery issues have delayed the confirmation process. The Creditors Committee has indicated that it fully supports the Plan. The disclosure statement accompanying the Plan was approved on November 21, 2006, with the confirmation hearing scheduled on March 12, 2007. The Debtors are now in the Plan solicitation process, Mr. Cleary informs the Court. The voting deadline for the Plan is January 29, 2007, and the objection deadline for the Plan is February 12, 2007. The Debtors need an extension of the Exclusive Solicitation Period to complete the solicitation process and seek confirmation for their Plan. They request the extension out of an abundance of caution, Mr. Cleary told the Court. The requested extension will not result in delay of the Plan process; rather, it will simply allow the completion of process as scheduled, consistent with the Congressional intent underlying Section 1121 of the Bankruptcy Code, Mr. Cleary said. The extension will also not prejudice the legitimate interests of any creditor, he assured the Court. The Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases does not oppose the requested extension. Headquartered in Dulles, Virginia, FLYi Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. Brett H. Miller, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. (FLYi Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FLYI INC: Files Schedule of Executory Contracts & Unexpired Leases ------------------------------------------------------------------ FLYi, Inc., and its debtor-affiliates filed with the United States Bankruptcy Court for the District of Delaware a nonexclusive schedule of preserved rights of action, and a schedule of executory contracts and unexpired leases. Pursuant to their First Amended Joint Plan of Reorganization, the Debtors will assume certain contracts with American Home Assurance Co.; Chubb; Lloyds of London & ACE; Federal Aviation Administration; National Fire & Marine Insurance Co.; National Union Fire Insurance Co. of Pitts., Pennsylvania; Travelers Indemnity (St. Paul Travelers); U.S. Fire Insurance Co. (Crum & Forster); and XL Specialty Insurance Co. A list of the assumed executory contracts and unexpired leases is available for free at http://ResearchArchives.com/t/s?18de The Schedule of Preserved Rights of Action is a list of currently pending actions and claims brought by one or more Debtors. It does not include causes of action in which the Debtors may be cross-claimants or counter-claimants. The Preserved Rights of Action include any and all claims against UAL Corp. and any of its affiliates, or United States Aircraft Insurance Group or any of its affiliates, or both; Bloomington- Normal Airport Authority, doing business as Central Illinois Regional Airport; Legion Insurance Company Ltd. and any of its affiliate; Aon Corp.; breach of contract, indemnity obligations, coverage or similar causes of action; and insiders. A list of the Preserved Rights of Action is available for free at: http://ResearchArchives.com/t/s?18df Headquartered in Dulles, Virginia, FLYi Inc., aka Atlantic Coast Airlines Holdings, Inc. -- http://www.flyi.com/-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport. The Debtor and its six affiliates filed for chapter 11 protection on Nov. 7, 2005 (Bankr. D. Del. Case Nos. 05-20011 through 05-20017). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., and Matthew Barry Lunn, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. Brett H. Miller, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C., represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors listed assets totaling $378,500,000 and debts totaling $455,400,000. (FLYi Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FORD MOTOR: Losing $1 Billion Annually on Counterfeit Auto Parts ---------------------------------------------------------------- Ford Motor Co. loses about $1 billion annually from counterfeit auto parts, according to a study by the U.S. Chamber of Commerce. "The growing problem of counterfeiting and piracy threatens businesses and consumers in nearly every region of the world," according to the study, which will be released this week. The study also looked at counterfeiting problems for office equipment company Xerox Corp., pharmaceutical company Merck & Co. Inc., athletic shoe maker New Balance, and brake and friction material supplier Bendix Commercial Vehicle Systems LLC, Reuters says. 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. FORREST HILL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Forrest Hill Funeral Home & Memorial Park - East, LLC dba Forest Hill Funeral Home and Memorial Park - Midtown dba Forest Hill Funeral Home and Memorial Park - South dba Memorial Park dba Edgewood Memorial Park dba Arlington Park Cemetery c/o J. Bill Koehler, CRO 2431 East 51st Street, Suite 603 Tulsa, OK 74105 Bankruptcy Case No.: 07-80056 Type of Business: The Debtor operates funeral homes. Chapter 11 Petition Date: January 22, 2007 Court: Eastern District of Oklahoma (Okmulgee) Debtor's Counsel: Mark A. Craige, Esq. Morrel Saffa Craige Hicks Barnhart & Brunton Inc 3501 South Yale Avenue Tulsa, OK 74135-8014 Tel: (918) 664-0800 Fax: (918) 663-1383 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 ------ --------------- ------------ First Hope Bank, Trustee Guaranty of Trust $10,719,400 Attn: President or Credit Funds related to Manager Forest Hill preneed P.O. Box 296 funeral trust Hope, NJ 07844 Stewart & Irwin PC Professional fees $91,684 Attn: President or Credit Manager 251 East Ohio Street Suite 1100 Indianapolis, IN 46204 Horseman Interiors Trade debt $79,501 Attn: President or Credit Manager 3143 No. 32nd Street Muskogee, OK 74401 The York Group Inc. Trade debt $78,332 Tennessee Granite and Bronze Trade debt - $65,978 LLC Monuments Blue Cross/Blue Shield Insurance $63,348 Mikocem LLC Trade debt $44,423 Adams & Reece LLP Trade debt/ $40,970 Attorney's fees State of Tennessee Sales, franchise & $40,258 excise taxes Matthews International Trade debt $35,582 Wyatt Tarrent & Combs LLP Professional fees $32,517 Ionic Services Inc. Trade debt $20,747 Bay Monument Company Trade debt $15,294 Memphis Light Gas & Water Trade debt $14,059 Batesville Casket Co. Trade debt $11,189 Memphis Burial Vault Trade debt $11,100 Bell South Trade debt - $10,531 Telephone Nation Mortuary Shipping Trade debt $8,410 Tennessee Dept. of Revenue Audit fees & $8,250 license renewals Edison Financial Inc. Trade debt $6,073 GARDEN CITY: Moody's Holds Ba1 Rating on $19 Million Bonds ---------------------------------------------------------- Moody's Investors Service has affirmed Garden City Hospital's Ba1 rating on bonds issued through the Garden City Hospital Finance Authority. This rating action affects approximately $19 million of outstanding Series 1998A bonds. The outlook remains stable. The affirmation is in conjunction with GCH's plan to issue approximately $36 million of fixed rate bonds in the first quarter of calendar year 2007. Moody's has not been asked to rate this transaction. Proceeds from the Series 2007 bond issuance are expected to: -- finance various capital projects; -- highlighted by the construction of a new and more efficiently-designed surgical facility attached to GCH's main hospital building; and, -- refinance approximately $4 million of outstanding unrated Series 1996A letter of credit-backed VRDBs. GCH also plans to prepay its taxable Series 1997 VRDBs. Legal security: The Series 1998A bonds are an obligation of the Garden City Hospital Obligated Group, of which GCH currently is the only member. GCH is a member of Garden City Hospital and Subsidiaries. GCH accounts for approximately 95% of system assets and 91% of system revenues. The Series 1998A Bonds are, and the Series 2007 Bonds are expected to be, secured by a security interest in Gross Revenues and a mortgage and pledge of tangible and intangible property of GCH. Interest rate derivatives: None. Strengths: -- Rebound in operating performance in fiscal year 2006, after soft FY 2005 -- Refinancing of Series 1996A and prepayment of Series 1997 bonds eliminate LOC renewal risk and variable rate risk and enable GCH to reduce its principal repayments through 2012 substantially -- GCH has started to reinvest in physical plant after years of modest capital spending that had been necessary to rebuild balance sheet strength Challenges: -- The expected financing represents a material increase in GCH's debt load (approximately 104% increase), though maximum annual debt service is expected to decrease as a result of a restructuring of the overall debt -- Standalone facility in competitive and economically challenged southeastern Michigan market -- Surgical volume decline in recent years, due in part to operating room capacity constraints that are to be addressed by upcoming capital projects Recent developments: Moody's views GCH's position as a standalone hospital in the competitive and economically challenged Detroit metropolitan area with concern. GCH, an 11,000-admission hospital located in the western suburbs of Detroit, faces stiff competition from 33,000-admission Oakwood Hospital and Medical Center and 11,000-admission Oakwood Annapolis Hospital in Wayne, 13,000- admission St. Mary's Mercy Hospital in Livonia, and 16,000- admission Botsford General Hospital in Farmington Hills. GCH holds a steady 20-22% market share of its primary service area, which covers a seven mile radius surrounding GCH, including Garden City and neighboring communities. GCH's financial performance has been variable in recent years, although operating results rebounded in FY 2006 after a weak FY 2005. In unaudited FY 2006, the GCH system recorded an operating income of $3.5 million and operating cash flow of $9.6 million. In FY 2005, the system recorded an operating loss of $757,000 and operating cash flow of $4.8 million. Prior to FY 2005, the system recorded favorable operating results in fiscal years 2002 through 2004, which followed a period of weak performance, particularly FY 2001 when the system recorded an operating loss of -2.5% and operating cash flow of only 3.7%. The improvement in FY 2006 over FY 2005 is due to a number of factors, including: -- a reduction of previously overbooked contractual allowances; -- labor expense controls, as GCH has not implemented a general wage increase in over one year; -- a $1 million reduction in malpractice expense in FY 2006 after a one-time increase in FY 2005; -- an increase in case mix index; and, -- increases in various outpatient service volumes, particularly vascular surgery and sleep lab studies. Growth in these outpatient service volumes helped to offset a decline in inpatient surgical volumes. Despite the volume gains in vascular surgery, GCH's surgical volumes have declined in each year since FY 2003. This trend is due in part to operating room capacity constraints, which are to be addressed with the construction of the planned new operating room facility. As a result of improved cash flow generation in unaudited FY 2006, the GCH system's debt measures improved. In FY 2006, debt-to-cash flow improved to a favorably low 2.8 times from a weaker 6.3x in FY 2005, while maximum annual debt service coverage improved to 2.4x from a thin 1.4x. Factoring in the planned Series 2007 bonds, debt-to-cash flow weakens to 5.9x while, due to a leveling of debt service, MADS coverage strengthens modestly to 2.7x. Despite improved cash flow generation, and after four consecutive years of cash growth, GCH's absolute liquidity declined in FY 2006. As of unaudited fiscal year end 2006, GCH's absolute unrestricted cash and investments totaled $26.9 million, compared to $28.9 million at FYE 2005, though some of this difference is attributable to CMS' hold back on Medicare reimbursement at the end of the federal fiscal year. As a result of the cash decline and modest operating expense growth, GCH's cash on hand decreased to 68 days in FY 2006 from 74 days in FY 2005. As principal payments on long-term debt exceeded the decline in absolute cash, cash-to-debt increased slightly to a good 98% at FYE 2006 from 94% at FYE 2005. Factoring in the planned Series 2007 bonds, cash-to- debt measures a more modest 48%. Moody's expects GCH's absolute liquidity to grow in the coming years as the capital projects are financed with bond proceeds and principal repayments on debt are reduced. Outlook: The stable outlook reflects Moody's belief that GCH will continue to maintain the current level of cash flow generation and add unrestricted liquidity to the balance sheet as the system supports upcoming capital projects with debt financing. What could change the rating -- up Improved and consistent cash flow generation, leading to improved debt coverage and liquidity ratios; material market share gain in profitable service lines What could change the rating -- down Materially increased competitive pressure from nearby hospitals leading to volume decline and market share loss; weaker operating performance and thinner liquidity and debt ratios; new debt beyond the expected Series 2007 issuance without commensurate increase in cash flow generation key indicators: Assumptions & Adjustments: -- Based on Garden City Hospital and Subsidiaries consolidated financial statements -- First number reflects audited FY 2005 for the year ended Sept. 30, 2005 -- Second number reflects pro forma on unaudited FY 2006 for the year ended Sept. 30, 2006 -- Pro forma assumes $36 million Series 2007 bond issuance including refunding of approximately $4 million of Series 1996A VRDBs and the prepayment of approximately $3 million of taxable Series 1997 VRDBs -- Investment returns reclassified to non-operating revenue and smoothed at 6% -- Inpatient admissions: 10,338; 10,858 -- Total operating revenues: $145.0 million; $151.2 million -- Moody's-adjusted net revenues available for debt service: $6.6 million; $11.5 million -- Total debt outstanding: $30.7 million; $56.1 million -- Maximum annual debt service: $4.8 million; $4.3 million -- MADS Coverage with reported investment income: 1.18x; 2.49x -- Moody's-adjusted MADS Coverage with normalized investment income: 1.38x; 2.67x -- Debt-to-cash flow: 6.27x; 5.88x -- Days cash on hand: 74.3 days; 68.3 days -- Cash-to-debt: 94.0%; 47.9% -- Operating margin: -0.5%; 2.1% -- Operating cash flow margin: 3.3%; 6.4% Rated debt: * Garden City Hospital Finance Authority -- Revenue Bonds: Series 1998A; Ba1 rating GLOBAL POWER: Court Extends Removal Period to March 27 ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware extended until March 27, 2007, the period within which Global Power Equipment Group and its debtor-affiliates can remove civil actions. As reported in the Troubled Company Reporter on Jan. 4, 2007, the Debtors told the Court that they are currently focusing on responding to information requests submitted by the Official Committee of Unsecured Creditors, preparing schedules of assets and liabilities and statements of financial affairs and other critical issues relating to its chapter 11 case. Headquartered in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The Company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The Company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The Company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected Landis Rath & Cobb LLP as its counsel. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. The Debtors' exclusive period to filed a chapter 11 plan expires on Jan. 26, 2007. GLOBAL POWER: Walks Away from Heat Recovery Contract ---------------------------------------------------- The U.S Bankruptcy Court for the District of Delaware gave Global Power Equipment Group and its debtor-affiliates permission to reject certain executory contracts and unexpired leases of real property. As reported in the Troubled Company Reporter on Jan. 4, 2007, the Debtors experienced considerable losses from its Heat Recovery Steam Generation business and predict a future negative cash usage of approximately $22 million for the completion of the business. The Debtors also tell the Court that they will have no further use of the property covered by the lease after Dec. 31, 2006. Headquartered in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The Company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The Company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The Company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected Landis Rath & Cobb LLP as its counsel. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. The Debtors' exclusive period to filed a chapter 11 plan expires on Jan. 26, 2007. GREIF INC: Moody's Rates $300 Mil. Senior Unsecured Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service has upgraded the ratings of Greif, Inc., a leading global provider of industrial packaging products and service, and assigned a first time rating to the company's new senior unsecured notes. The rating outlook is stable. The rating on the new senior unsecured notes remains subject to review of the final financing documentation. Ratings upgraded: -- Corporate Family Rating, to Ba1 from Ba2, -- Probability-of-default rating, to Ba1 from Ba2, Ratings assigned: -- $300 million senior unsecured notes due 2017 at Ba2, LGD5, 75%. In addition, the company speculative-grade liquidity rating of SGL-1 has been affirmed. The rating upgrade reflects the significant improvement in the company's financial performance and credit profile. The ratings also reflect the company's leading market position in global industrial packaging, its geographic, customer and end market diversity as well as the meaningful financial flexibility provided by its holdings of a large amount of unencumbered timber assets. On the other hand, the ratings continue to be constrained by the cyclicality in the company's industrial shipping container and paper packaging businesses, declining demand for steel and fibre drum products, its modest profit margins due to the mostly commodity nature of its products, and considerable exposure to volatile raw material prices. The rating outlook is stable. Factors that could favorably impact the ratings include: 1) sustained improvement in the credit profile, through margin expansion and cash flow generation; 2) demonstrated commitment to maintaining Moody's adjusted debt to EBITDA below 2.0x; and, 3) further successful reduction of costs through strategic sourcing and operational excellence. Factors that could negatively impact the ratings include deteriorating revenues due to substitution or market share shift away from the company, declining profit margins, or large debt- financed acquisitions. Moody's also affirmed Greif's speculative-grade liquidity rating of SGL-1, which indicates very good liquidity and reflects Moody's expectation that the company's operating cash flow, together with its cash balance and availability under its committed revolver and A/R securitization facility, should be more than sufficient to cover its capital spending and other operational needs over the next 12 months. The Ba2 rating on the senior unsecured notes reflects an LGD5 loss given default assessment that reflects its contractual subordination to all of Greif's senior secured creditors. The notes will rank pari passu in right of payment to Greif's existing and future senior debt and will be senior to all existing and future senior subordinated debt. The proceeds from the senior unsecured notes will be used to fund the purchase of Greif's 8.875% senior subordinated notes due 2012. Moody's will withdraw the ratings on the senior subordinated notes upon the successful issuance of the senior unsecured notes. Greif, Inc., headquartered in Delaware, Ohio, is engaged in industrial packaging products and services. The Company provides extensive expertise in steel, plastic, fibre, corrugated and multi-wall containers for a wide range of industries. Greif also produces containerboard and manages timber properties in the United States. For fiscal year 2006, the company generated approximately $2.6 billion in net sales and $326 million in EBITDA. HOME FRAGRANCE: Wants Court Approval to Reject Unexpired Leases --------------------------------------------------------------- Home Fragrance Holdings Inc. asks the U.S. Bankruptcy Court for the Southern District of Texas for authority to reject executory contracts and unexpired non-residential real property leases. The Debtor tells the Court that it is currently in the process of liquidating its assets under a Chapter 11 Plan, which will require returning unnecessary equipment and terminating associated contracts and leases. A full-text copy of Home Fragrance Inc.'s Executory Contracts is available for free at http://ResearchArchives.com/t/s?18ce Headquartered in Houston, Texas, Home Fragrance Holdings Inc. -- http://www.hfh.cc/-- designs, manufactures and sells candles. The Company filed for chapter 11 protection on Oct. 23, 2006 (Bankr. S.D. Tex. Case No. 06-35661). Elizabeth Carol Freeman, Esq., and Thomas H. Grace, Esq., at Locke Liddell, et al. represent the Debtor in its restructuring efforts. Thomas S. Henderson, III, Esq., in Houston, Texas, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $1 million and $100 million. HOMEGOLD FINANCIAL: Former CEO's Securities Fraud Trial Starts -------------------------------------------------------------- HomeGold Financial Inc. former chief executive officer Ronald J. Sheppard's securities fraud trial started last week in Lexington, South Carolina, reports say. Mr. Sheppard is charged with three counts of securities fraud in the state's largest bankruptcy case, officials say. About 8,000 investors lost $275 million when HomeGold and its affiliate, Carolina Investors Inc., closed in March 2003. Mr. Sheppard was indicted in November 2005 as a result of the 36-month grand jury investigation, which also indicted five other executives. Four of those officers have been convicted and one is currently awaiting trial, American Bankruptcy Institute reports. According to Aiken Standard, the four executives are: -- Carolina Investors former president Larry Owen pleaded guilty in July 2004 to 22 counts of securities fraud. He is serving an eight-year sentence, -- Carolina Investors former vice president Anne Owen, wife of Mr. Owen, pleaded guilty in July and was sentenced to 10 years, suspended to 90 days with five years probation, home detention, and electronic monitoring for 18 months, -- Carolina Investors former chairman and former Lt. Gov. Earle Morris was convicted in November 2004 of 22 counts of securities fraud. He was sentenced to 44 months in prison and is out on bail while he appeals, and -- HomeGold former chief financial officer Karen Miller pleaded guilty in September to one count of conspiracy. Her sentence is deferred since she's cooperating with the investigation. HomeGold Financial Inc. originated and sold residential mortgages to homebuyers with credit problems. HomeGold Financial and HomeGold Inc. filed for chapter 11 protection on March 31, 2003 (Bankr. D. S.C. Case No. 03-03865). William E. Calloway, Esq., at Robinson, Barton, McCarthy, Calloway & Johnson, P.A., represented the Debtors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. JEAN COUTU: Rite Aid Shareholders Approve Drugstores Purchase ------------------------------------------------------------- Stockholders of Rite Aid Corp. approved, on Jan. 18, 2007, a definitive agreement to acquire approximately 1,850 Brooks and Eckerd drugstores and distribution centers from The Jean Coutu Group Inc. for 250 million shares of Rite Aid common stock, $1.45 billion in cash and the intended assumption of $850 million of The Jean Coutu Group's long term debt. More than 97% of the 414,298,141 votes cast was in favor of the transaction based on the preliminary tally. Approval to issue the 250 million shares of Rite Aid's common stock to The Jean Coutu Group required that a majority of the votes cast be in favor of the proposal and that the total votes cast on the proposal represent more than 50% of the shares entitled to vote. "We are very pleased with the outcome of Rite Aid's stockholders meeting," Jean Coutu, Chairman, President and CEO of The Jean Coutu Group, said. "The result of [Thurs]day's vote demonstrate that Rite Aid stockholders support Rite Aid's management team and are confident that it has the skills and experience to leverage its capabilities across a larger network." Rite Aid stockholder approval of the acquisition satisfies one of the remaining conditions to the closing of the transaction. The transaction, which is subject to review under the Hart-Scott- Rodino Antitrust Improvements Act of 1976 and other customary closing conditions, is expected to close shortly after the end of The Jean Coutu Group's third quarter and Rite Aid's fourth quarter, which both end March 3, 2007. About Rite Aid Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE, PCX: RAD) -- http://www.riteaid.com/-- runs a drugstore chain with fiscal 2006 revenues of $17.3 billion and 3,322 stores in operation in 27 states and the District of Columbia. About The Jean Coutu Group The Jean Coutu Group (PJC) Inc. is a drugstore chain in North America and in the eastern United States and Canada. The company and its combined network of 2,186 corporate and franchised drugstores employ more than 61,000 people. The Jean Coutu Group's United States operations employ 46,000 people and comprise 1,859 corporate owned stores located in 18 states of the Northeastern, mid-Atlantic and Southeastern United States. The Jean Coutu Group's Canadian operations and franchised drugstores in its network employ over 15,000 people and comprise 327 PJC Jean Coutu franchised stores in Quebec, New Brunswick and Ontario. * * * As reported in the Troubled Company Reporter on Oct. 30, 2006, Moody's Investors Service's held its B2 rating on The Jean Coutu Group Inc.'s $350 million Guaranteed Senior Secured Revolver. KOKOPELLI TOURS: Case Summary & Seven Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Kokopelli Tours, Inc. dba Harris Tours dba Home Escapes 72 Emerald Glen Lane Salem, CT 06420 Bankruptcy Case No.: 07-30107 Chapter 11 Petition Date: January 19, 2007 Court: District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: Peter L. Ressler, Esq. Groob Ressler & Mulqueen 123 York Street, Suite 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 Total Assets: $1,492,440 Total Debts: $1,447,769 Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Volvo Financial Services $1,000,000 7025 Albert Pick Road Suite 105 P.O. Box 26131 Greensboro, NC 27402 Motor Coach Industries $284,000 1700 East Golf Road Suite 300 Schaumburg, IL 60173 Bank of America Line of credit $94,545 P.O. Box 26078 Greensboro, NC 27420 Amerada Hess Corporation Fuel $50,000 c/o Polivy & Rice, LLC P.O. Box 230294 Hartford, CT 06123 First Insurance Funding Corp. $16,534 135 South LaSalle Street Department 8075 Chicago, IL 60674 Financial Pacific Leasing $2,360 LLC P.O. Box 4568 Federal Way, WA 98063 Abco $330 P.O. Box 296 Waterford, CT 06385 LIBERTY SQUARE: Moody's Holds Junk Ratings on $18.25 Million Notes ------------------------------------------------------------------ Moody's Investors Service confirmed the ratings on notes issued in 2001 by Liberty Square CDO I Ltd, a high-yield collateralized debt obligation issuer: (1) The $7,250,000 Class D-1 Floating Rate Notes Due 2013 -- Prior Rating: Caa2, on watch for possible downgrade -- Current Rating: Caa2 (2) The $11,000,000 Class D-2 Floating Rate Notes Due 2013 -- Prior Rating: Caa2, on watch for possible downgrade -- Current Rating: Caa2 The removal of the Class D notes from watch for possible downgrade is primarily due to the diversion of excess Interest Proceeds to pay down the Class D notes. As reported in the December 2006 trustee report, the D OC was failing marginally at 102.11 versus a trigger level of 102.5. LIBERTY SQUARE: Moody's Junks Rating on $10 Million Class D Notes ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings on notes issued in 2001 by Liberty Square CDO II, Limited, a managed high yield structured finance collateralized bond obligation issuer: (1) The $140,000,000 Class A-1 Floating Rate Notes Due 2013 -- Prior Rating: Aaa, on watch for possible downgrade -- Current Rating: Aa1 (2) The $30,000,000 Class A-2 Floating Rate Notes Due 2013 -- Prior Rating: Aaa, on watch for possible downgrade -- Current Rating: Aa1 (3) The $22,500,000 Class B Floating Rate Notes Due 2013 -- Prior Rating: Aa3, on watch for possible downgrade -- Current Rating: A2 (4) The $25,000,000 Class C Floating Rate Notes Due 2013 -- Prior Rating: Baa3, on watch for possible downgrade -- Current Rating: B1 (5) The $10,000,000 Class D Floating Rate Notes Due 2013 -- Prior Rating: Ba3, on watch for possible downgrade -- Current Rating: Caa3 (6) The $30,000,000 Class 1 Combination Notes Due 2013 -- Prior Rating: Aaa, on watch for possible downgrade -- Current Rating: Aa1 The rating actions reflect the deterioration in the credit quality of the transaction's underlying collateral portfolio, consisting primarily of high yield debt securities, as well as the occurrence of asset defaults and par losses, according to Moody's. As reported in the December 2006 trustee report, the weighted average rating factor of the portfolio was 2917 versus the transaction's trigger level of 1920. MALDEN MILLS: Chrysalis Capital Chosen as Stalking Horse Bidder --------------------------------------------------------------- Chrysalis Capital Partners was chosen as the "stalking horse bidder" for Malden Mills Industries Inc. over Gordon Brothers Group, the Associated Press reports. Chrysalis will open the bidding at $44 million. As reported in the Troubled Company Reporter on Jan. 16, 2007, the Debtors' board of directors unanimously approved sale of the company to Gordon Brothers Group for $44 million. As reported in the Troubled Company Reporter on Jan. 17, 2007, Chrysalis said that the sale wasn't complete and that it continued to be interested in purchasing the assets of Malden Mills and operating the company. AP relates that Gordon Bros had asked for a $1.2 million breakup fee and up $700,000 in expenses whereas Chrysalis only wanted $500,000 in expense reimbursement. Bids are due Feb. 6. Headquartered in Lawrence, Massachusetts, Malden Mills Industries, Inc. -- http://www.polartec.com/-- develops, manufactures, and markets Polartec(R) performance fabrics. Polartec(R) products range from lightweight wicking base layers to insulation to extreme weather protection and are utilized by the best clothing brands in the world. In addition, Polartec(R) fabrics are used extensively by all branches of the United States military, including the Army, Navy, Marine Corps, Air Force, and Special Operations Forces. The company also has operations in Germany, Spain, France and the U.K. The company previously filed for chapter 11 protection on Nov. 29, 2001 (Bankr. Mass. Case No. 01-47214). The company and four of its affiliates filed for their second chapter 11 petitions on Jan. 10, 2007 (Bankr. D. Del. Case Nos. 07-10048 through 07-10052). Laura Davis Jones, Esq., and Michael Seidl, Esq., at Pachulski, Stang, Ziehl Young, Jones & Weintraub, PC, represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets between $1 million to $100 million and estimated debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on May 10, 2007. NORTHWEST AIRLINES: Estimates $9.5 Billion in Unsecured Claims -------------------------------------------------------------- Northwest Airlines Corporation and its affiliated debtors in the jointly administered bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code pending in the U.S. Bankruptcy Court for the Southern District of New York provide information on the aggregate dollar amount of general unsecured claims that are expected to be allowed against the Debtors in the bankruptcy cases. Currently, the dollar amount of all unsecured claims filed against the Debtors, as reflected on the claims register, totals approximately $129 billion. The Debtors believe that many of these claims are subject to objection as being duplicative, overstated, based upon contingencies that have not occurred, or because they otherwise do not state a valid claim. The foregoing amount does not include claims that were filed without a specified dollar amount, referred to as unliquidated claims, and claims that were filed after the bar date for claims filing set by the Court. The Debtors are currently in the process of resolving claims in accordance with the claims resolution procedures approved by the Court; however, completion of this process will likely occur well after confirmation of the Debtors' plan of reorganization. The Debtors believe that the aggregate dollar amount of unsecured claims currently appearing on the claims register far exceeds the total dollar amount of unsecured claims that will ultimately be allowed against the Debtors in the cases. Although the ultimate dollar amount of these claims is not known at this time, the Debtors estimate that the amount will be between $8.75 billion and $9.5 billion. This estimate is subject to significant uncertainties relating to the resolution of various claims, including the resolution of contingent and unliquidated claims such as litigation. As a result, there can be no assurances that the ultimate amount of these allowed claims will not exceed $9.5 billion. This estimate does not include any amounts for post-petition interest on such claims and also excludes administrative, priority and secured claims. As reported in the Troubled Company Reporter on Jan. 17, 2007, the Debtors continue to believe that there will be no recovery in respect of outstanding equity interests in the Debtors under the Debtors' plan of reorganization. Further and updated information regarding these matters will be included in the Debtors' disclosure statement, which will be the definitive source for such information when it is approved by with the Bankruptcy Court. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. ON TOP COMMS: Georgia Asset Sale Hearing Slated for February 8 -------------------------------------------------------------- The Honorable Paul Mannes of the U.S. Bankruptcy Court for the District of Maryland will convene a hearing at 3:00 p.m. on Feb. 8, 2007, to consider the sale of On Top Communications LLC and its debtor-affiliates' stations and related assets in Georgia to Educational Media Foundation. Educational Media agreed, pursuant to an asset purchase agreement dated Dec. 28, 2006, to buy the assets for $615,000. The Debtor asserts that the assets were fully marketed and the purchase price to be paid by Educational Media is fair and reasonable and reflects the highest and best value for the assets. Educational Media has deposited $61,500 with Debtors' counsel, which deposit upon approval of the sale of the assets will be transferred to an interest-bearing escrow account and, together with any interest earned, will be held by an escrow agent. Pursuant to the Asset Purchase Agreement, Educational Media will not assume any of the Debtors' debts, liabilities and other obligations with respect to the Georgia Stations, and the Debtors will assign the lease on the stations to Educational Media. Headquartered in Lanham, Maryland, On Top Communications LLC and its affiliates acquire, own and operate FM radio stations located in the Southeastern United States. The company and its debtor- affiliates filed for chapter 11 protection on July 29, 2005 (Bankr. D. Md. Case No. 05-27037). Thomas L. Lackey, Esq., of Bowie, Maryland, represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for protection from their creditors, they estimated assets and debts of $10 million to $50 million. PACIFIC LUMBER: Has Until Friday to Use Lenders' Cash Collateral ---------------------------------------------------------------- The Pacific Lumber Company, and its debtor-affiliates, excluding Scotia Pacific Company LLC, obtained authority from the United States Bankruptcy Court for the Southern District of Texas to use the Lenders' cash collateral, through Jan. 26, 2007, as outlined in a budget. Prior to filing for bankruptcy, Pacific Lumber Britt Lumber Co., Inc., borrowed money under two credit agreements: (a) a July 18, 2006 Revolving Credit Agreement, with LaSalle Bank National Association, LaSalle Business Credit, LLC, and Marathon Structured Finance Fund, L.P., with $40 million outstanding as of the bankruptcy filing; and (b) a July 18, 2006 Term Loan Agreement with Marathon with outstanding amount of $84 million. The Debtors' obligations are guaranteed by Scotia Development LLC, Salmon Creek LLC and Scotia Inn Inc. The Lenders have asserted that the Debtors' obligations under the Credit Agreements are secured by a jointly held senior lien on substantially all of the Debtors' assets pursuant to a Guarantee and Collateral Agreement dated as of July 18, 2006. The Debtors need about $2,070,000 for operating and other business expenses during the week ending January 26, 2007, Harlin C. Womble, Jr., Esq., at Jordan, Hyden, Womble, Culbreth, & Holzer, P.C., in Corpus Christi, Texas, the Debtors' proposed bankruptcy counsel, relates. The Debtors intend to use cash resources as of the Petition Date of approximately $268,000 and anticipated cash generated from operations aggregating approximately $2,140,000. Section 363(c) of the Bankruptcy Code provides that a debtor may use cash collateral if all interested entities consent or the court, after notice and a hearing, authorizes that use. Section 363(e) requires that the use of cash collateral be prohibited or conditioned as is necessary to provide adequate protection to persons that have an interest in cash collateral. Mr. Womble emphasizes that a sufficient equity cushion adequately protects the Lenders. The Lenders' equity cushion is approximately 100%, as their collateral is conservatively valued at more than $250,000,000, while the aggregate amount owed to them by the Debtors under the Credit Agreements is less than $125,000,000. Moreover, the Debtors propose to grant a replacement lien for the Lenders' benefit in collateral acquired postpetition, Mr. Womble adds. The amount secured by the Replacement Lien will be equal to any diminution of the Lenders' Cash Collateral interest existing as of the Petition Date. "The combination of [the Debtors'] Replacement Lien and equity cushion provides more than adequate protection of the Lenders' interest in Cash Collateral," Mr. Womble maintains. The Court will convene a hearing today, Jan. 24, 2007, regarding the Debtors' continued use of the Cash Collateral. Cash Collateral Budget Palco/Britt/Salmon Creek/ Scotia Inn Cash Flow For The Week Ending January 26, 2007 Beginning Cash $268,242 Cash In Lumber Receivables 1,227,410 Power Receivables - Chips, BP & Other 267,944 Log Sales 380,000 Receivables Adj/Britt A/R 270,000 Total Cash In 2,145,354 Operating Expenses SCOPAC Payments - Logging Contractor Payments 632,338 Power Plant 126,998 Town 39,851 Trucking 35,000 Parts/Maintenance 90,000 Roads 120,666 Britt Expenses 100,000 Scotia Development Expenses 57,000 Other/One Time/Cap Expenses 37,500 Payroll & Benefits Net Payroll 340,000 Payroll Taxes/401K 306,000 Britt Payroll - Medical 65,000 Pharmacy - Severance 122,000 Total Expenses 2,072,352 Net Cash Flow 73,002 Ending Cash $341,244 Based in Oakland, CA, The Pacific Lumber Company -- http://www.palco.com/-- produces redwood lumber, plants one million seedlings a year, holds 220,000 acres of timberland in Humboldt County, California, and operates sawmills in Scotia and Fortuna, California. The company and five of its affiliates filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on April 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PACIFIC LUMBER: Scotia Gets Nod for Interim Use of Cash Collateral ------------------------------------------------------------------ The United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, has granted authority to Scotia Pacific Company LLC, on an interim basis, to: (a) use cash collateral in which Bank of America National Trust and Savings Association and Bank of New York Trust each possess an interest, including funds in the SAR Account; and (b) provide adequate protection to both banks to the extent of any diminution in the value of their interests in the Prepetition Collateral. John F. Higgins, Esq., at Porter & Hedges, L.L.P., in Houston, Texas, Scopac's proposed counsel, told the court that the company required immediate access to Cash Collateral for, among other things, the funding of payroll obligations and payment of necessary operating expenses. Until the Court enters a final order, Scopac may use Cash Collateral solely in accordance with a budget. First Priority Liens As adequate protection of the interests, if any, of BofA and BoNY in the Prepetition Collateral and Cash Collateral, the Court granted each of BofA and BoNY first priority, perfected replacement liens and security interests in all the Prepetition Collateral and the Cash Collateral of Scopac, to the extent of the diminution of their interests in the Prepetition Collateral and the Cash Collateral. BofA and BoNY are also each granted a superpriority cost of administrative priority claim under Section 507(b) of the Bankruptcy Code to the extent of the diminution of their interests in the Prepetition Collateral and the Cash Collateral. BofA's and BoNY's superpriority administrative claims, if any, will be subject to the fees and expenses of the Office of the U.S. Trustee and the Clerk of the Bankruptcy Court. Reporting Requirements The Court required Scopac to deliver to each of BofA and BoNY and their counsel: -- on a monthly basis, a financial report consisting of Scopac's balance sheet and income statement as of the end of that period; -- copies of all reports filed with the office of the U.S. Trustee within two days after that filing; and -- on a weekly basis, a report of the difference between budgeted and expended Cash Collateral. Timber Notes In 1998, Scotia Pacific Company LLC issued $867,200,000 aggregate principal amount of secured notes -- the Timber Notes -- which are governed by the Indenture dated July 20, 1998, by and between Scopac and the U.S. Bank & Trust. Bank of New York Trust Company, NA, has since replaced U.S. Bank as indenture trustee. As of the Scotia's bankruptcy filing, approximately $713,800,000 in principal was outstanding on the Timber Notes. In addition, Scopac borrowed under a one-year, renewable line of credit pursuant to a Credit Agreement dated July 20, 1998, with Bank of America National Trust and Savings Association, as lender and agent for itself and any other lender parties. Scopac used advances under the Line of Credit to finance up to one year's interest payments due on the Timber Notes. As of the Petition Date, the maximum amount available under the Scopac Line of Credit is approximately $17,279,085 and $36,214,344 in borrowings was outstanding. BofA and BoNY asserted that Scopac's obligations under the Indenture and the Scopac Line of Credit are secured by perfected, jointly held senior liens and security interests in substantially all of Scopac's assets pursuant to the Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Proceeds dated as of July 20, 1998, from Scopac to Fidelity National Title Insurance Company for the Benefit of the Trustee including (i) the Scopac Timber Property, (ii) the Scopac Timber Rights, (iii) certain computer hardware and software, (iv) the Scheduled Amortization Reserve Account, and (v) certain other assets -- the Prepetition Collateral. Based in Oakland, CA, The Pacific Lumber Company -- http://www.palco.com/-- produces redwood lumber, plants one million seedlings a year, holds 220,000 acres of timberland in Humboldt County, California, and operates sawmills in Scotia and Fortuna, California. The company and five of its affiliates filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr. , Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on April 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PACIFIC LUMBER: Chapter 11 Filing Prompts S&P's Default Rating -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Scotia, Califoria-based Pacific Lumber Co. to 'D' from 'CCC'. "The rating action followed Pacific Lumber's announcement that it filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code," said Standard & Poor's credit analyst Pamela Rice. The company, which produces redwood and Douglas-fir lumber, said that because of regulatory limitations, annual timber harvest volumes at its subsidiary, Scotia Pacific Co. LLC, and cash flows from operations are substantially below the levels necessary to meet the companies' debt-service obligations. PACIFIC SHORES: Moody's Upgrades Rating on Class 1 and 2 Shares --------------------------------------------------------------- Moody's Investors Service upgraded these classes of notes issued by Pacific Shores CDO, Ltd.: (1) The $28,000,000 Class C Mezzanine Secured Floating Rate Notes Due 2037 -- Prior Rating: Baa2, on watch for possible upgrade -- Current Rating: Baa1 (2) The 21,500 Class 1 Preference Shares with an Aggregate Liquidation Preference of $21,500,000 -- Prior Rating: Ba2, on watch for possible upgrade -- Current Rating: Baa2 (3) The 7,000 Class 2 Preference Shares with an Aggregate Liquidation Preference of $7,000,000 -- Prior Rating: Ba2, on watch for possible upgrade -- Current Rating: Baa2 Moody's has also confirmed the ratings on these classes of notes issued by Pacific Shores CDO, Ltd.: (1) The $96,000,000 Class B-1 Second Priority Senior Secured Floating Rate Notes Due 2037 -- Prior Rating: Aa1, on watch for possible upgrade -- Current Rating: Aa1 (2) The $16,000,000 Class B-2 Second Priority Senior Secured Floating Rate Notes Due 2037 -- Prior Rating: Aa1, on watch for possible upgrade -- Current Rating: Aa1 Moody's noted that the rating action was primarily due to the ongoing delevering of the transaction. PILGRIM'S PRIDE: Prices $650 Million of Senior Notes ---------------------------------------------------- Pilgrim's Pride Corporation priced the sale of $400 million of its 7-5/8% senior notes due 2015 and $250 million of its 8-3/8% senior subordinated notes due 2017. The $650 million aggregate principal amount of the notes is an increase from the $450 million offering amount by Pilgrim's Pride. The closing of the offering of the notes is expected to occur today, Jan. 24, 2007, subject to customary conditions. Pilgrim's Pride plans to use the net proceeds from the offering to refinance indebtedness incurred in connection with the acquisition of Gold Kist Inc. and to repurchase certain of its outstanding senior subordinated notes. Lehman Brothers Inc. and Credit Suisse Securities (USA) LLC are joint book running managers for this offering. BMO Capital Markets Corp., Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc. are senior co-managers, and Banc of America Securities LLC, Stephens Inc. and Stifel, Nicolaus & Company, Incorporated are co- managers for the offering. ADP Prospectus Services Attn: Shawn Leandre Lehman Brothers 1155 Long Island Avenue Edgewood, NY 11717 Toll-Free 1-888-603-5847 About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corp. (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the United States, Mexico and in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * As reported in the Troubled Company Reporter on Jan. 18, 2007, Moody's Investors Service downgraded the senior unsecured credit rating for Pilgrim's Pride Corp. to B1 from Ba3, its senior subordinated notes to B2 from B1, and its corporate family ratings to Ba3 from Ba2. Moody's also assigned a B1 rating to PPC's planned new $250 million senior unsecured notes and a B2 to its new $200 million senior subordinated notes. The outlook on all ratings is stable. Standard & Poor's Ratings Services reported that the corporate credit rating on the largest U.S. poultry processor, Pilgrim's Pride Corp., was lowered to 'BB-' from 'BB'. PIRRONE HOLDINGS: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Pirrone Holdings Corp. 3 Tudor Road Old Tappan, NJ 07675 Bankruptcy Case No.: 07-RG Chapter 11 Petition Date: January 19, 2007 Court: District of New Jersey (Newark) Judge: Rosemary Gambardella Debtor's Counsel: Nancy Isaacson, Esq. Goldstein Isaacson, PC 100 Morris Avenue, 3rd Floor Springfield, NJ 07081 Tel: (973) 258-0500 Total Assets: $1,515,000 Total Debts: $2,347,751 Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Yellow Funding, Inc. 3 Tudor Road $2,100,000 625 West 51th Old Tappan, NJ New York, NY 10019 Value of security: $1515,000 Peter J. Unahue & 3 Tudor Road $130,000 Kimberly D. Unanue Old Tappan, NJ 26 Sunden Court 07675 Old Tappan, NJ 07675 Value of security: $1,515,000 Senior lien: $2,100,000 Monarch Capital Corporation 3 Tudor Road $55,000 1120 Bloomfield Avenue Old Tappan, NJ Wet Caldwell, NJ 07006 07675 Value of Security: $1,515,000 Senior lien; $2,281,000 James & Carol Hamilton 3 Tudor Road $51,000 45 Old Hook Road Old Tappan, NJ Dumont, NJ 07628 07675 Value of Security: $1,515,000 Senior lien: $2,230,000 Borough of Old Tappan $10,994 227 Old Tappan Road Westwood, NJ 07675 Borough of Old Tappan Sewer Debt $756 227 Old Tappan Road Westwood, NJ 07675 GMAC Truck Unknown P.O. Box 3100 Midland, TX 79702 R.G. PHARMACY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: R.G. Pharmacy, Inc. dba The Medicine Shoppe 348 Main Street Manchester, CT 06040 Bankruptcy Case No.: 07-20082 Type of Business: The Debtor is a Medicine Shoppe franchisee. Chapter 11 Petition Date: January 19, 2007 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtor's Counsel: Elizabeth J. Austin, Esq. Jessica Grossarth, Esq. Pullman and Comley 850 Main Street P.O. Box 7006 Bridgeport, CT 06601-7006 Tel: (203) 330-2000 Fax: (203) 257-0993 Total Assets: $3,989,807 Total Debts: $4,703,678 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Cardinal Health $1,611,668 Bank One, Columbus, NA 100 East Broad Street Columbus, OH 43271 Invacare Supply Group $14,905 P.O. Box 642878 Pittsburgh, PA 15264-2878 Automed Technologies, Inc. $9,532 Dept. 77-52226 Chicago, IL 60678-2226 Anda Inc. $4,286 Hanover Label and Packaging, Inc. $2,840 FLA Orthopedics Inc. $2,805 Alimed, Inc. $1,975 Roche Diagnostics $1,499 Juzo $1,224 Opus Systems $1,192 The Guardian $1,068 BSN-Jobst, Inc. $1,067 Med-Pass Inc. $736 Team DME $546 Apothecary Products $543 Sigvaris, Inc. $425 Nextel Communications $415 eRx Netwrok, LLC $411 Express Direct Services LLC $400 Journal Inquirer $400 REFCO INC: Chapter 7 Trustee Objects to FGS' $12 Million Claims --------------------------------------------------------------- Albert Togut, the Chapter 7 Trustee overseeing the liquidation of the Refco, LLC estate, asks the U.S. Bankruptcy for the Southern District of New York to disallow and expunge Claim Nos. 41 and 42 filed by FGS Refco Acquisition Co. against the Debtor, each asserting approximately $6,000,000 as administrative expense and general unsecured claims. Mr. Togut asserts that the FGS Claims are: -- excessive in amount, -- legally impermissible, and -- not supported by the documentation provided. Mr. Togut adds that the FGS Claims are virtually identical to, and thus duplicative of, the administrative expense request pursuant to Section 503(b) of the Bankruptcy Code made by FGS in Refco, Inc.'s Chapter 11 cases. To avoid duplication and promote judicial economy, the Chapter 7 Trustee insists that his objection to the FGS Claims in the Debtor's case should be consolidated by the Court for hearing together with the FGS Administrative Expense Request, which is set for hearing in Refco's Chapter 11 cases at a later date. About Refco Inc. Headquartered in New York City, Refco Inc. (OTC: RFXCQ) -- 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. 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). (Refco Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) Plan Update On Sept. 14, 2006, Refco, Inc., and 25 of its subsidiaries, along with Marc S. Kirschner, the Chapter 11 Trustee for the estate of Refco Capital Markets, Ltd., delivered a Chapter 11 plan of reorganization and accompanying Disclosure Statement to the Court. On Oct. 10, 2006, the Debtors filed an Amended Plan and Disclosure Statement and on Oct. 13, filed a Modified Amended Disclosure Statement. On Oct. 16, 2006, the Court gave its tentative approval on the Disclosure Statement and the Court Clerk entered an order on Oct. 20, 2006. On Dec. 15, the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates LLC, was confirmed by the Court. That Plan became effective on Dec. 26, 2006. RITE AID: Shareholders Okay Purchase of Jean Coutu Drugstore Chain ------------------------------------------------------------------ Stockholders of Rite Aid Corp., on Jan. 18, 2007, approved a definitive agreement to acquire approximately 1,850 Brooks and Eckerd drugstores and distribution centers from The Jean Coutu Group Inc. for 250 million shares of Rite Aid common stock, $1.45 billion in cash and the intended assumption of $850 million of The Jean Coutu Group's long term debt. More than 97% of the 414,298,141 votes cast was in favor of the transaction based on the preliminary tally. Approval to issue the 250 million shares of Rite Aid's common stock to The Jean Coutu Group required that a majority of the votes cast be in favor of the proposal and that the total votes cast on the proposal represent more than 50% of the shares entitled to vote. "We are very pleased with the outcome of Rite Aid's stockholders meeting," Jean Coutu, Chairman, President and CEO of The Jean Coutu Group, said. "The result of [Thurs]day's vote demonstrate that Rite Aid stockholders support Rite Aid's management team and are confident that it has the skills and experience to leverage its capabilities across a larger network." Rite Aid stockholder approval of the acquisition satisfies one of the remaining conditions to the closing of the transaction. The transaction, which is subject to review under the Hart-Scott- Rodino Antitrust Improvements Act of 1976 and other customary closing conditions, is expected to close shortly after the end of The Jean Coutu Group's third quarter and Rite Aid's fourth quarter, which both end March 3, 2007. About The Jean Coutu Group The Jean Coutu Group (PJC) Inc. is a drugstore chain in North America and in the eastern United States and Canada. The company and its combined network of 2,186 corporate and franchised drugstores employ more than 61,000 people. The Jean Coutu Group's United States operations employ 46,000 people and comprise 1,859 corporate owned stores located in 18 states of the Northeastern, mid-Atlantic and Southeastern United States. The Jean Coutu Group's Canadian operations and franchised drugstores in its network employ over 15,000 people and comprise 327 PJC Jean Coutu franchised stores in Quebec, New Brunswick and Ontario. About Rite Aid Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE, PCX: RAD) -- http://www.riteaid.com/-- runs a drugstore chain with fiscal 2006 revenues of $17.3 billion and 3,322 stores in operation in 27 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Oct. 25, 2006, Moody's Investors Service confirmed the ratings of Rite Aid Corporation's $300 million 2nd-lien secured notes due 2011 and $357 million 2nd-lien secured notes due 2011 at B2. SEA CONTAINERS: Committee Taps Houlihan Lokey as Financial Advisor ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in Sea Containers, Ltd. and its debtor-affiliates' chapter 11 case ask authority from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to employ Houlihan Lokey Howard & Zukin Capital, Inc. as financial advisor, nunc pro tunc to Oct. 26, 2006. In addition, the Debtors ask the Judge Carey to approve the terms of employment and the compensation of Houlihan Lokey at the expense of the Debtor's estate set forth in an engagement letter, and approve that Houlihan Lokey be excused from maintaining time records with respect to the services it will render in the bankruptcy case. Before the Debtors filed for bankruptcy, Houlihan Lokey was the special financial advisor to the ad hoc committee of holders of public debt securities issued by SCL. As a result, the firm is already very familiar with the Debtors' financial and operational situation, material constituencies, and issues requiring resolution in order to reorganize, and has become uniquely situated to increase the likelihood of a successful restructuring, Andrew B. Cohen, managing director of Dune Capital LLC, discloses. Houlihan Lokey is an international investment banking and financial advisory firm, which provides corporate finance and financial advisory services, as well as execution capabilities, in a variety of areas, including financial restructuring. Mr. Cohen adds that the firm's financial restructuring group has advised on over 400 transactions, valued in excess of $200,000,000,000, over the past 10 years. Houlihan Lokey will: -- evaluate the assets and liabilities of Sea Containers and its subsidiaries; -- analyze and review the financial and operating statements of the group; -- analyze the business plans and forecasts of the Group; -- evaluate all aspects of the Group's near-term liquidity, including various financing alternatives available to the Group and, if required, any exit financing in connection with any plan of reorganization filed by the Debtors or any other plans and any related budgets; -- provide specific valuation or other financial analyses as the Creditors' Committee may require; -- assist the Creditors Committee in negotiations with the Company, its advisors, and other interested third parties; -- help with the claim resolution process and related distributions; -- develop, evaluate, and assess the financial issues and options concerning any proposed transaction; -- prepare, analyze, and explain the Plan and the Transaction to various constituencies; -- provide testimony in court on behalf of the Creditors Committee if necessary or as reasonably requested by the Committee; and -- undertake any other analysis and advisory work as may be requested from time to time by the Creditors Committee, Bingham McCutchen LLP or Morris, Nichols, Arsht & Tunnell LLP and which are consistent with Houlihan Lokey's capabilities. The Debtors will pay Houlihan Lokey a fee of $150,000 per month beginning Oct. 26, 2006, and after that on the 26th day of each subsequent month until termination or expiration of the agreement. Upon consummation of any Transaction, Houlihan Lokey will be paid in cash an additional fee of $2,100,000, offset by $50,000 of each Monthly Fee, if any, earned and paid on or after March 26, 2007. Houlihan Lokey will also seek reimbursement for reasonable out-of-pocket expenses incurred in connection with its engagement. Mr. Cohen tells the Court that the complexity, intense activity, and speed that have characterized the Debtors' case have necessitated that Houlihan Lokey focus its immediate attention on time-sensitive matters, and devote substantial resources to the Creditors Committee's affairs. Chris Di Mauro, managing director of Houlihan Lokey, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Houlihan Lokey does not represent any party with an interest materially adverse to the Debtors or the estate, Mr. Mauro says. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. (NYSE: SCRA, SCRB) -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On October 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Withdraws Plea for Non-Debtor Assets Sale Protocol ------------------------------------------------------------------ Sea Containers, Ltd. and its debtor-affiliates filed, but immediately withdrew, without prejudice, a request for approval of procedures for selling or transferring certain assets owned by their various non-debtor subsidiaries without any need for further Court-approval of the transactions. The Debtors did not divulge the reasons for the withdrawal in their notice filed with the U.S. Bankruptcy Court for the District of Delaware. Non-Debtor Asset Sale Procedures Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, said, although those assets do not constitute property of their estates, (i) the Debtors may be required by third parties to provide shareholder consent before consummation of any sale, and (ii) certain buyers may also be concerned that Court approval is necessary to consummate the sale. Under the procedures, the Debtors will notify the U.S. Trustee and the Official Committee of Unsecured Creditors of any proposed sale or transfer of the Non-Debtor Subsidiary Assets. Absent any objections by either party, the Debtors will pursue the sale without a request for Court-approval of the sale. Mr. Brady narrated that the Debtors have been working with the Official Committee of Unsecured Creditors in its bankruptcy case to craft their proposal in a mutually acceptable manner. Although no definitive agreement has been reached, the Debtors continue to work with the Committee and anticipate that the Committee will support the request, Mr. Brady said in the Motion. A non-exhaustive list of various Non-Debtor Assets is available for free at http://researcharchives.com/t/s?18d5 About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. (NYSE: SCRA, SCRB) -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On October 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported US$1.7 billion in total assets and US$1.6 billion in total debts. (Sea Containers Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEARS HOLDINGS: C. Monaghan Resigns as Chief Financial Officer -------------------------------------------------------------- Sears Holdings Corp. disclosed that Craig T. Monaghan, executive vice president and chief financial officer, will leave the company at the end of the month to return to Florida where his family still resides. William C. Crowley, chief administrative officer, executive vice president and a director, will assume the additional responsibility of interim chief financial officer until a replacement can be named. Mr. Crowley had served as chief financial officer of the company prior to the arrival of Mr. Monaghan in September 2006. The company will commence a search to fill the chief financial officer position immediately. Hoffman Estates, Illinois-based Sears Holdings Corp. (NASDAQ: SHLD) -- http://www.searsholdings.com/-- is the nation's third largest broadline retailer, with approximately US$55 billion in annual revenues, and with approximately 3,800 full-line and specialty retail stores in the United States, Canada and Puerto Rico. Sears Holdings is a home appliance retailer as well as a retailer of tools, lawn and garden, home electronics, and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including well-known labels as Lands' End, Jaclyn Smith, and Joe Boxer, as well as the Apostrophe and Covington brands. * * * As reported in the Troubled Company Reporter on June 23, 2006, Standard & Poor's Ratings Services revised its outlook on Sears Holdings Corp. to stable from negative. All ratings, including the 'BB+' corporate credit rating, and the 'B-1' short-term rating for Sears Roebuck Acceptance Corp., are affirmed. As reported in the Troubled Company Reporter on Jun 22, 2006, Fitch affirms its ratings of Sears Holdings Corp. including its Issuer Default Rating (IDR) at 'BB'; Senior notes at 'BB'; and Secured bank facility at 'BBB-'. SUN MICROSYSTEMS: Inks Landmark Agreement with Intel Corp. ---------------------------------------------------------- Sun Microsystems Inc. and Intel Corporation entered into a broad strategic alliance centered on Intel's endorsement of the Solaris Operating System and Sun's commitment to deliver a comprehensive family of enterprise and telecommunications servers and workstations based on Intel Xeon processors. The scope of the agreement spans Solaris, Java and NetBeans software and Intel Xeon microprocessors, as well as other Intel and Sun enterprise-class technologies. The alliance also includes joint engineering, design and marketing efforts. Intel is embracing Solaris as a mainstream OS and the enterprise class, mission critical UNIX OS for Intel Xeon processor-based servers. Intel also endorses Sun's Solaris, Java and NetBeans products and will actively support the OpenSolaris and open Java communities from which they continue to evolve. Sun is committed to leading on performance and energy efficiency in its server product line. After a comprehensive evaluation of industry platform solutions, Sun has decided to complement its current offerings with platforms based on Intel Architecture optimized for Solaris beginning in the first half of 2007. Sun believes Intel's model of alternating new microarchitectures with new process technologies on an annual basis will offer outstanding building blocks for Sun's customers. Sun plans to deliver a comprehensive family of Intel-based systems with uni-, dual- and multi-processor based servers and workstations supporting Solaris, Windows and Linux. Intel and Sun will also collaborate around greater than four processor scale-up systems optimized for the Solaris OS. "We're excited about Intel's long term Xeon road map and the performance we're seeing with Solaris and Sun Java on the Xeon platforms," said Jonathan Schwartz, president and CEO, Sun Microsystems. "And Intel's endorsement for and agreement to OEM Solaris opens markets for both of us across the world. This is truly a landmark relationship for the industry." "We're thrilled to be working with Sun to make Solaris on Intel Xeon processors a great solution for our enterprise customers worldwide," said Paul Otellini, president and CEO, Intel. "Bringing together the best technologies from both Sun and Intel will result in innovative products for years to come." As part of this alliance, Intel has signed a Solaris OEM agreement enabling Intel to distribute and support the Solaris OS to its customers as market opportunities may arise and consistent with Intel's product strategies. Intel and Sun will strongly encourage independent software vendors and system providers to expand their offerings for Solaris on Intel-based systems, and Intel will support Sun in its efforts to optimize applications for Solaris on Intel Xeon processor-based systems. Intel and Sun also believe that the combination of Sun's open source Solaris and Java development environments and the Intel architecture provide a solid platform for ISVs to develop and deliver applications and web services to deliver outstanding differentiated value to enterprise customers. The Solaris platform is supported by more than 2000 ISVs on 800+ platforms that deliver the essential scaling, functionality and security capable of handling explosive network growth. Both companies expect this alliance to expand the reach of Intel Xeon processor and Solaris OS based solutions. Solaris adoption will be driven by the Intel Xeon processor's significant market presence and in turn Solaris will give Intel a broader presence in the datacenter, virtualization and high performance computing space. The two companies will also work together on the rapid adoption of key enterprise-class Intel and Sun technologies for Sun's systems based on Intel Xeon processors including Intel Virtualization Technology, Intel IO Acceleration Technology and Intel Demand Based Switching. About Intel Headquartered in Santa Clara, California, Intel Corporation -- http://www.intel.com/-- manufactures computer, networking, and communications products. About Sun Microsystems Headquartered in Santa Clara, California, Sun Microsystems, Inc. (Nasdaq: SUNW) -- http://www.sun.com/-- provides products and services for network computing. It provides network computing infrastructure solutions that consist of computer systems, network storage systems, support services, and professional and knowledge services. * * * Sun Microsystems, Inc.'s 7.65% Senior Notes due Aug. 15, 2009, carry Moody's Investors Service's Ba1 rating and Standard & Poor's BB+ rating. THERMOVIEW INDUSTRIES: Discloses Management Buyout by Blackstreet ----------------------------------------------------------------- ThermoView Industries, Inc., and its subsidiaries has been acquired in a management buyout led by Chief Executive Officer, Larry Smith, from Blackstreet Capital Management, LLC (formerly Milestone Capital Management), a Washington, DC based private equity firm. Blackstreet Capital Management purchased ThermoView while it was reorganizing under Chapter 11 of the U.S. Bankruptcy Code. "We have completed the restructuring of ThermoView and in the last year have seen tremendous performance," Ric Miller, ThermoView's Chairman, said. "We are confident that under management's ownership that ThermoView will continue to thrive. This transaction benefits all of ThermoView's constituents." "We are pleased to conclude the sale of ThermoView," said Murry N. Gunty, Managing Partner of Blackstreet Capital Management, LLC, the owner of ThermoView. "As a result of the efforts of the management team, this concludes a very successful investment for our fund. We are confident that under Larry's guidance that ThermoView will continue to grow stronger." About Blackstreet Capital Blackstreet Capital Management, LLC is a Washington, DC based private equity firm with $88 million of capital under management. Blackstreet focuses on control buyouts of companies that are either underperforming, in out-of-favor industries or are undergoing some form of transition. Blackstreet seeks investments in a range of industries, including manufacturing/distribution, restaurants, specialty retail business services and health care. About ThermoView Headquartered in Louisville, Kentucky, ThermoView Industries, Inc. -- http://www.thv.com/-- designs, manufactures, markets and installs replacement windows and doors for residential homeowners. The Company and its subsidiaries filed for chapter 11 protection on Sept. 26, 2005 (Bankr. W.D. Ky. Case Nos. 05-37123 through 05-37132). David M. Cantor, Esq., at Seiller Waterman LLC represents the Debtors. Cathy S. Pike, Esq., represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $3,043,764 in total assets and $34,104,713 in total debts. On Oct. 3, 2006, the Court converted the Debtor's chapter 11 case to a chapter 7 liquidation proceeding. Thomas Frentz, Esq., was appointed as the Chapter 7 trustee. THOMPSON & WALTERS: Can Make $5.5MM Partial Payment to Union Bank ----------------------------------------------------------------- Thompson & Walters Nursery LLC obtained authority from the U.S. Bankruptcy Court for the District of Oregon to make a $5,500,000 partial payment to Union Bank of California, N.A. relating to the Debtor's $10,000,000 loan with the bank. The loan is secured by all of the Debtor's assets. In the aggregate, as of Sept. 30, 2006, the outstanding balance on the loan was $8,908,165 including $220,806 in accrued interest. The Debtor tells the Court that following the partial payment, the estate will posses approximately $4,600,000, an amount estimated to be sufficient to pay all remaining claims. The remaining claims exclude the claims of Union Bank and general unsecured creditors, the latter of which will be determined by the claims process pursuant to the Bankruptcy Code. A list of remaining claims entitled to the $4,600,000 fund is available for free at http://researcharchives.com/t/s?18d7 Headquartered in Cornelius, Oregon, Thompson & Walters Nursery LLC wholesales and retails nursery stock. The Company filed for chapter 11 protection on Oct. 5, 2006 (Bankr. D. Or. Case No. 06-33096). Jeanette L. Thomas, Esq., at Perkins Cole LLP represents the Debtor. Jeffrey C. Misley, Esq. at Sussman Shank LLP represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets of 24,538,461 and debts of $27,187,244. TRANSDIGM INC: Fitch Holds B- Rating on Sr. Notes & Removes Watch ----------------------------------------------------------------- TransDigm Group's subsidiary TransDigm Inc.'s senior subordinated notes have been affirmed at 'B-/RR5' and removed from Rating Watch Negative by Fitch Ratings. The notes were initially placed on Rating Watch Negative on Jan. 11, 2007 as the result of TDG's report that debt would be issued to fund most of its planned $430 million acquisition of Aviation Technologies Inc. Fitch has also affirmed these ratings: TransDigm Group -- Issuer Default Rating 'B'. TransDigm Inc. -- Issuer Default Rating 'B'; -- Senior secured bank debt 'BB-/RR2'. The Rating Outlook for Transdigm's senior subordinated notes is Negative. Fitch has also revised the Rating Outlook on TransDigm's outstanding ratings to Negative from Stable. The senior secured bank debt and the senior subordinated notes ratings also apply to TDI's proposed new debt offerings, consisting of $250 million of senior subordinated notes, a $180 million add-on to TDI's existing term loan, and a $50 million add-on to TDI's existing revolving credit facility. Assuming the additional debt is issued as planned, these ratings affect approximately $1.4 billion of debt. Should the total amount of debt issued change or allocations between tranches change, further ratings actions may be necessary. The existing and proposed senior subordinated notes were affirmed and removed from Rating Watch Negative based on the mix of debt TDG plans to use for the ATI acquisition. Fitch estimates that the expected recovery for the senior subordinated notes on a pro forma basis is currently close to Fitch's guidelines for a recovery rating of 'RR5' and Fitch believes that expected recovery will return to within the guidelines by year-end. The revision of the Rating Outlook to Negative from Stable is based on the high pro forma leverage for the rating category. Fitch also believes there is a possibility that TDG will use excess cash to fund acquisitions instead of retiring debt or engage in further debt financed acquisitions. The ratings are supported by: -- TDG's strong free cash flow; -- TDG and ATI's diverse portfolio of products found on most commercial jet aircraft, as well as a number of U.S. military platforms; -- their roles as sole source providers for the bulk of their respective sales; -- aftermarket and military business for both companies that account for more than half of sales and which help to offset the cyclicality of commercial jet manufacturing; and, -- TDG management's history of successful acquisitions and managing a leveraged business. TDG's position in the aerospace and defense markets currently benefits from the strong environment for commercial and military aircraft production and continued growth in the aftermarket due to increasing air travel and continued high operational tempo for the U.S. military. Concerns focus on: -- TDG's high leverage; -- the price being paid for ATI at about 12x EBITDA; -- the size of this acquisition, as well as potential acquisitions going forward and the success that TDG will have in integrating them; and the possibility of exogenous shocks to the commercial aerospace market. Mitigating some of the ATI risks is the fact that TDG's CEO and a TDG director are both on ATI's board of directors, giving them good insight into ATI. The RRs and notching of the debt tranches reflect Fitch's recovery expectations under a scenario in which distressed enterprise value is allocated to the various debt classes. The analysis was based on an ongoing concern scenario as it exceeds likely liquidation values. This results in expected recovery in the 70%-90% range for the senior secured debt. Given the significant recovery prospects of the senior secured debt, Fitch allocated essentially all expected concession payments entirely to the senior subordinated notes. This results in an expected recovery of approximately 10% for the senior subordinated notes. Because the expected recovery is very near the 'RR2' range of 11%-30% and there is the likelihood that TDG will continue to see increasing EBITDA, Fitch does not believe it is appropriate to lower the recovery rating at this time. Fitch's Recovery Ratings are a relative indicator of creditor recovery prospects on a given obligation within an issuers' capital structure in the event of a default. US INVESTIGATIONS: Moody's B1 Rating on $670 Million Loans ---------------------------------------------------------- Moody's affirmed the B2 Corporate Family Rating and other ratings of US Investigations, LLC after the company's disclosure that it is increasing the size of the revolving credit facility to $90 million from $60 million and issuing an additional $75 million in WCAS mezzanine notes to the financial sponsors. The ratings outlook remains stable. Moody's took these rating actions: -- Affirmed B1, $90 million (originally $60 million) senior secured 1st lien revolver due Oct. 14, 2011, LGD3, changed to 35% from 38% -- Affirmed B1, $400 million Senior Secured 1st Lien Term Loan B due Oct. 14, 2012, LGD3, changed to 35% from 38% -- Affirmed B1, $150 million 1st Lien Term Loan C due Oct. 14, 2012, LGD3, changed to 35% from 38% -- Affirmed B1, $30 million term loan D due Oct. 14, 2012, LGD3, changed to 35% from 38% -- Affirmed B2, Corporate Family Rating -- Affirmed B2, Probability of Default Rating The ratings outlook remains stable. Effective November 2006, the U.S. government Office of Personnel Management changed the structure of its contract with USIS and ceased procedures allowing cases to be closed pending minor follow up items and submitted for payment. Additionally, OPM's case review backlog now is expected to increase to 60 days from three days as the result of contract terminations with other service providers which will further delay payment from OPM. The net result of these changes is an increase working capital requirement. USIS is increasing its revolver and issuing additional mezzanine notes to cope with an expected increase in working capital required to service the OPM contract under its new terms as well as fund other contract pricing revision payments to the U.S. government. Moody's expects the increased working capital burden on USIS to amount to about $50 million over the next year. The factor weighing most heavily on the Corporate Family Rating is USIS's financial leverage. Moody's estimates that pro forma for the transaction and adjusted for operating leases total debt to EBITDA will be over 6x. Free cash flow is likely to be negative for fiscal years ending Sept. 30, 2007 due to the working capital adjustment resulting from the change in terms of the OPM contract and current case review backlog. Excluding the effects of the change in working capital usage, Moody's estimates USIS's adjusted pro forma free cash flow to debt to be in the mid single digit range. Moody's expects USIS to achieve EBIT margins in the low double digit range and to maintain EBIT interest coverage of 1.5x. The stable outlook is predicated on USIS maintaining its present operating, competitive and liquidity profile. US Investigations Services, LLC, with corporate headquarters in Falls Church, Virginia, is a leading provider of background investigation and security services to the United States Government and to the commercial sector. Total revenues for the twelve months ended Sept. 30, 2006 were approximately $782 million. VENETO LLC: U.S. Trustee Appoints Three-Member Creditors Committee ------------------------------------------------------------------ The United States Trustee for Region 16 appointed three creditors to serve on an Official Committee of Unsecured Creditors in Veneto LLC's bankruptcy case: 1. Arthur Zavala P.O. Box 52073 Irvine, CA 92619 (949) 413-3915 2. Dr. Herbert Gaurano Suite 120 635 E. First Street Tustin, CA 92780 (714) 493-5953 3. Michael La Salla Kathleen La Salla Suite 1 4435 Alla Road Marina Del Rey, CA 90292 (213) 880-3444 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. 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). Jack F. Fitzmaurice, Esq., at Fitzmaurice, Demergian & Palaganas and the firm of Stephen R. Wade serve as the Debtor's general insolvency counsel. When the Debtor sought protection from its creditors, it listed total assets of $23,499,000 and total debts of $11,443,889. VESTA INSURANCE: Receiver Can Sell CCP Interest for $6.2 Million ---------------------------------------------------------------- Prime Tempus, Inc., Special Deputy Receiver under contract to the Commissioner of Insurance for the State of Texas, and Permanent Receiver of the Texas Insurance Companies -- Vesta Fire Insurance Corporation, Vesta Insurance Corporation, Shelby Casualty Insurance Company, The Shelby Insurance Company, Texas Select Lloyds Insurance Company, and Select Insurance Services, Inc. -- obtained authority from the U.S. Bankruptcy Court for the Northern District of Alabama to sell an asset of the receivership, in the form of a limited partnership interest in Century Capital Partners III, L.P. Before the District Court of Travis County, Texas, entered its June 28, 2006 Order Appointing Liquidator and Permanent Injunction that placed the Texas Insurance Companies into permanent receivership for purposes of rehabilitation, three of the companies -- Vesta Fire, Shelby Casualty, and Shelby Insurance -- invested in the CCP private equity fund. The Special Deputy Receiver relates that the agreement between CCP and the three receivership companies was for stepped capital contributions with a total capital contribution commitment of $10,000,000. The receivership's outside accountant, who was assigned to review and analyze the investment, determined that the net total capital invested in CCP by the receivership companies is approximately $6,700,000, stemming from actual cash contributions prior to receivership of approximately $7,500,000. Based on this, it appears that the receiverships have a remaining capital commitment of approximately $2,500,000. The Agreement contains specific language regarding capital contribution calls, including the required timing of payments of calls and remedies for defaults of non-payment of calls. The Agreement specifically requires payment of capital calls within 30 days of mailing of notice. Currently, the three receiverships are in default of their capital call demand, the Special Deputy Receiver informs the Court. The CCP term is 10 years covering the periods 2002 through 2011. Distributions may occur during this term; however, due to the nature of the CCP's investments in insurance related companies, the fund is not intended to be liquid until the end of its term. Based upon the status of the CCP, including the current capital calls and anticipated future calls, the fund's long term investment horizon and the receivership's sensitivity to substantial investment risk, the receivership's outside accountant commenced discussions with CCP's General Partner regarding the sale of the receivership companies' interests in CCP to a third party, Brian E. Riewe, Esq., at Brian E. Riewe, P.C., in Austin, Texas, attorney for the Special Deputy Receiver, tells the Court. With the General Partner's cooperation, the receivership had discussions with multiple parties, resulting in an offer from Landmark Equity Advisors LLC for $6,205,399. Purchase And Sale Agreement Prime Tempus entered into an agreement with Landmark Equity Partners XIII, L.P., a Delaware limited partnership, for Landmark to acquire the receivership companies' interest, together with all rights of first refusal, inspection, board representation, visitation, and other rights associated with the interest, whether under the partnership agreement of the partnership or otherwise. Accordingly, Landmark will assume the obligations under the Partnership Documents. (1) Purchase Price Landmark will pay $6,205,399, subject to adjustments, to Prime Tempus on December 31, 2006, the closing date. The purchase price will be increased by an amount equal to all additional capital contributions to the Partnership, which have been paid by Prime Tempus after March 31, 2006. Before the Closing Date, the price will be reduced by an amount equal to the sum of the aggregate amount of all distributions of cash and cash equivalents, and the value of all securities or other in-kind distributions received by Prime Tempus from the Partnership after March 31 and up to and including the Closing Date; and the aggregate amount of any capital contributions, if any, due to the Partnership as of March 31, which remain unpaid as of December 31. For any in-kind distribution, Landmark may direct Prime Tempus to hold the In-kind Distribution and to transfer it in kind to Landmark at the Closing. The transfer will be in lieu of a purchase price reduction. (2) Representations and Warranties The Interest represents Prime Tempus' interest in the Partnership: Entity Capital Commitment ------ ------------------ Vesta Fire $5,200,000 Shelby Insurance 3,800,000 Shelby Casualty 1,000,000 ---------- $10,000,000 ========== Prime Tempus owns, and on the Closing Date will own, all right, title and interest -- legal and beneficial -- in and to the Interest, without restrictions, other than that on future transfer set forth in Partnership Documents or arising under federal and state securities laws. Upon delivery of the assignment documents to Landmark, and payment of the Purchase Price, Landmark will acquire the Interest free and clear of all liens, charges and encumbrances, other than restrictions set forth in the Partnership Documents, and restrictions under federal and state securities laws, Mr. Riewe states. Landmark attests it is acquiring the Interest for its own account, for investment purposes, and not with a view toward any resale or distribution of the Interest. Landmark understands that it must bear the economic risk of an investment in the Interest for an indefinite period of time because, among other reasons, the offering and sale of the Interest has not been registered under the securities Act of 1933. Furthermore, Landmark agrees and understands that the Interest cannot be resold, except in accordance with an effective registration or exemption from registration under the Securities Act. Landmark is an accredited investor and a qualified purchaser, as defined in Rule 501(a) of Regulation D under the Securities Act and Section 2(a)(51) of the Investment Company Act of 1940. (3) Conditions To Obligations Both parties will comply with all of the provisions of the Partnership Documents with respect to the assignment of the Interest to Landmark and all approvals required to make the transfer. Landmark will obtain a certification in writing from the Partnership, or other reasonably satisfactory evidence, regarding the exemption available to the Partnership from the treatment of the Partnership's assets as "plan assets" within the meaning of the United States Department of Labor "Final Regulation on the Definition of Plan Assets" promulgated under the Employee Retirement Income Security Act of 1974, as amended on November 13, 1986 and codified at 29 C.F.R. Section 2510.3-101. The receivership companies will provide the necessary assistance. (4) Covenants Prime Tempus will not: (a) dispose, liquidate, mortgage or sell the Interest; (b) consent to amend or modify the Partnership Documents; (c) make any voluntary capital contributions or fail to make any required capital contributions to the Partnership; (d) create or permit to exist any lien on the Interest; and (e) take any action the effect of which would be to cause Prime Tempus to incur a penalty or other specified consequence under the Partnership Documents, including the conversion of the Interest to a fixed obligation. Prime Tempus also agrees that it will not, and it will cause its affiliates, agents and representatives not to, initiate contact with, solicit any inquiry or proposal by or enter into discussions with, or disclose any information regarding the Interest, or afford access to its properties, books or records relating to the Interest to any other corporation, general or limited partnership, limited liability company, person or other entity or group in connection with any proposed sale or transfer of the Interest, other than pursuant to the Sale Agreement. Furthermore, Prime Tempus will not disclose the existence or terms of the transactions contemplated by the Sale Agreement to any other party, except as may be required by the Partnership Documents, by law or fiduciary duty, or as necessary to carry out the terms of the Sale Agreement. Prime Tempus will give prompt notice and provide Landmark with copies, if available, of: (a) any notice or other communication received by Prime Tempus relating to a default or event which, with notice or lapse of time or both, would become a default, under the Partnership Documents; (b) any material notice or other communication from or on behalf of the Partnership or any partner or securities holder of the Partnership received by Prime Tempus; (c) any notice or other communication received by Prime Tempus relating to any contemplated or pending claim, action, suit, proceeding or investigation by any governmental department, commission, board, agency, instrumentality or authority involving or relating to the Partnership or the Interest; and (d) any matter which would cause any material change with respect to any representations or warranties made by the receivership companies in the Sale Agreement. The Sale Agreement may be terminated and the transactions contemplated by it abandoned by notice from a non-breaching party to the other parties in the event of a material breach by either party, as applicable, of any representation, warranty, agreement or indemnity contained in the Sale Agreement, which cannot be cured within 30 days after written notice of the breach is given to the party committing the breach; or if the Closing does not occur on or before December 31, 2006 and is not extended. Prime Tempus will be solely responsible for the costs, fees and expenses payable to the General Partners of the Partnership or to the Partnership pursuant to the provisions of the Partnership Documents in connection with the assignment of the Interest. All other costs and expenses incurred in connection with the transactions contemplated by the Sale Agreement will be borne by the party incurring the cost or expense. Landmark may assign its rights and obligations to an affiliate provided that upon the assignment, Landmark will not be relieved of or released from any of its obligations, including, without limitation, payment of the Purchase Price, under the Sales Agreement. About Vesta Insurance Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines, Inc., is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered the Order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. (Vesta Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WARD PRODUCTS: Files Liquidation Plan and Disclosure Statement -------------------------------------------------------------- Ward Products LLC delivered a chapter 11 plan of liquidation accompanying a disclosure statement explaining that plan to the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit. The Plan is premised upon the continued orderly wind down and liquidation of the Debtor, its estate and assets. It is anticipated that the majority of the Debtor's assets will be liquidated by mid-March 2007. Treatment of Claims The Debtor proposes to pay Class 1 Priority Claims on the later of: (i) the date funds are available from avoidance action recoveries after payment in full of all professional fees and expenses; and (ii) the date the priority claim becomes an allowed claim, and after full payment of Allowed Administrative Expense Claims and Class 2 Allowed Claims. The Class 2 Claims of Harris N.A. -- the Debtor's prepetition secured lender -- is entitled to an allowed secured claim of $6,314,134 reflecting the Debtor's Nov. 29, 2006 full payment of its prepetition obligation to Harris including professional fees and expenses incurred after. The Debtor reserved $15,500 to secure payment of potential additional fees and other costs that may be incurred by Harris after Nov. 29, 2006. In the event Harris incurs any further professional fees and expenses after Nov. 29, 2006, then it may assert claims against the collateral. The Class 3 Claim of Purchase Money Security Interest Holders will, at the sole discretion of the Debtor: -- retain its lien and security interest in its collateral until such time as its collateral is sold by the Debtor, at which time the Allowed Class 3 Claim will be paid the value of the claimant's interest in the estate's interest in the collateral in accordance with Section 506(a) of the Bankruptcy Code; or -- receive the surrender of the collateral security of its Allowed Class 3 Claim on the effective date of the Plan. Holders of Class 4 Customers' Prepetition Subordinated Participation Interest Claims will receive payment only after: -- payment of the carve-out (for the benefit of professionals) and permitted liens to the extent they existed and were valid, enforceable and non avoidable as of Aug. 7, 2006, and were permitted to be prior to the lien of Harris. -- payment to Harris of any portion of the prepetition obligations that remains outstanding as of Feb. 28, 2007, if any; -- payment to debtor-in-possession financing lenders -- Ford Motor Company and DaimlerChrysler Corporation -- of the amount necessary to reduce the principal amount of the DIP Loans outstanding. Class 5 Non-Priority General Unsecured Claims will receive a pro- rata distribution of the first $500,000 available from the proceeds of the DIP Lenders' collateral only after payment: a) of carve-out and permitted liens; b) to Harris of any portion of the prepetition obligations that remains outstanding as of Feb. 28, 2007, if any; and c) to the DIP Lenders of the amount necessary to reduce the principal amount of the DIP Loans outstanding. Holders of equity interests in the Debtor will receive nothing under the Plan, their interests will be deemed cancelled. Based in Royal Oak, Michigan, Ward Products LLC manufactures receiving antennas. The company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Mich. Case No. 06-50527). Jay L. Welford, Esq., Judith Greenstone Miller, Esq., Paige E. Barr, Esq., and Richard E. Kruger, Esq., at Jaffe Franklin Heuer & Weis, P.C., and Mark E. Freedlander, Esq., at McGuireWoods, L.L.P, represent the Debtor. Glass & Associates Inc. is the Debtor's restructuring advisor. Christopher J. Battaglia, Esq., at Halperin Battaglia Raicht, LLP, and Andrew Kochanowski, Esq, at Sommers & Schwartz, P.C., represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Debtor listed $81,489,758 in total assets and $29,586,153 in total debts. WARD PRODUCTS: Taps Amper Politiziner to Prepare Tax Returns ------------------------------------------------------------ Ward Products, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit for permission to employ Amper, Politiziner & Mattia, PC, as its accountants. Amper Politiziner will prepare the Debtor's: * Federal; * New York; * New Jersey; * Michigan; and * California tax returns for the years ended Dec. 31, 2006, and the final 2007 returns. The firm estimates a fee ranging from $24,000 to $30,000 for the preparation of all the tax returns, which will be paid in monthly installments of $5,000 per month starting in January 2007. The firm will also receive a $10,000 retainer. To the best of the Debtor's knowledge, Amper Politiziner does not have an interest adverse to the Debtor or its estate. Headquarted in Royal Oak, Michigan, Ward Products, L.L.C., manufactures receiving antennas. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Mich. Case No. 06-50527). Jay L. Welford, Esq., Judith Greenstone Miller, Esq., Paige E. Barr, Esq., and Richard E. Kruger, Esq., at Jaffe Franklin Heuer & Weis, P.C., and Mark E. Freedlander, Esq., at McGuireWoods, L.L.P, represent the Debtor. Christopher J. Battaglia, Esq., at Halperin Battaglia Raicht, LLP, and Andrew Kochanowski, Esq, at Sommers & Schwartz, P.C., represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Debtor listed $81,489,758.70 in total assets and $29,586,153.44 in total debts. WARD PRODUCTS: Wants Biditup to Sell NJ & NY Facilities ------------------------------------------------------- Ward Product LLC asks the U.S. Bankruptcy Court for the Eastern District of Michigan for permission to employ Biditup Auctions Worldwide Inc., as its auctioneer. The firm is expected to liquidate the Debtor's facilities at 633 Nassau Street, North Brunswick in New Jersey and 61 Edson Street, 49 Park Street and 10 Straton Road, Amsterdam in New York. As set forth in the Asset Marketing Agreement, the firm will also act as an auctioneer for the sale of the Debtor's machine and equipment under these terms and conditions: a) minimum guaranty of $912,000 regardless of actual auctions results; b) up to the next $90,000 will be retained, in the event the auction gross in excess, by the firm as an expense reimbursement; c) Biditup will be able to charge and retain for its own account and industry standard buyer's premium not to exceed 15%. To the best of the Debtor's knowledge the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" within the meaning of Section 327 of the Bankruptcy Code. Headquarted in Royal Oak, Michigan, Ward Products, L.L.C., manufactures receiving antennas. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Mich. Case No. 06-50527). Jay L. Welford, Esq., Judith Greenstone Miller, Esq., Paige E. Barr, Esq., and Richard E. Kruger, Esq., at Jaffe Franklin Heuer & Weis, P.C., and Mark E. Freedlander, Esq., at McGuireWoods, L.L.P, represent the Debtor. Christopher J. Battaglia, Esq., at Halperin Battaglia Raicht, LLP, and Andrew Kochanowski, Esq, at Sommers & Schwartz, P.C., represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Debtor listed $81,489,758.70 in total assets and $29,586,153.44 in total debts. WASHINGTON MUTUAL: Moody's Rates Class B-2 Certificates at Ba2 -------------------------------------------------------------- Moody's Investors Service has assigned a rating of Aaa to the senior certificates issued by Washington Mutual Asset-Backed Certificates, WMABS Series 2007-HE1 Trust, and ratings ranging from Aa1 to Ba2 to the mezzanine and subordinate certificates in the deal. The securitization is backed by CIT Group/Consumer Finance, Inc., Master Financial, Inc., People's Choice Home Loan, Inc., and other originators' originated adjustable-rate and fixed-rate subprime mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, and an interest rate swap agreement provided by The Bank of New York. Moody's expects collateral losses to range from 6.20% to 6.70%. Washington Mutual Bank will service the loans. Moody's has assigned Washington Mutual Bank its servicer quality rating of SQ2 as a primary servicer of subprime residential mortgage loans. These are the rating actions: * Washington Mutual Asset-Backed Certificates, WMABS Series 2007-HE1 Trust Class I-A, Assigned Aaa Class II-A-1, Assigned Aaa Class II-A-2, Assigned Aaa Class II-A-3, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa2 Class M-9, Assigned Baa3 Class B-1, Assigned Ba1 Class B-2, Assigned Ba2 The Class B-1 and Class B-2 certificates were sold in privately negotiated transactions without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. YANKEE CANDLE: Moody's Junks Rating on $225 Million Senior Notes ---------------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating and SGL-2 liquidity rating to Yankee Candle Company, Inc. Moody's also rated Yankee Candle's proposed secured term loan at Ba3, LGD2, 28%, the senior notes at B3, LGD5, 76%, and the senior subordinated notes at Caa1, LGD6, 92%. Proceeds from the new debt, together with common equity from the new owner Madison Dearborn, will be used to finance the leveraged buyout of Yankee Candle for total consideration of approximately $1.6 billion. The rating outlook is stable. This is the first time that Moody's has rated Yankee Candle. Ratings assigned: -- $775 million senior secured term loan at Ba3, LGD2, 28%; -- $300 million eight-year senior notes at B3, LGD5, 76%; -- $225 million ten-year senior subordinated notes at Caa1, LGD6, 92%; -- Corporate family rating at B2; -- Probability-of-default rating at B2; and, -- Speculative Grade Liquidity rating at SGL-2. The corporate family rating assignment of B2 reflects the balance of certain qualitative rating drivers that have low investment grade characteristics with important quantitative attributes that are solidly noninvestment grade. In particular, driving down the rating with B or Caa attributes are the weak post-transaction credit metrics reflecting high leverage, low fixed charge coverage, and limited free cash flow. Also constraining the rating with B characteristics are the company's relatively small size and aggressive financial policy, in which forward financial flexibility is being severely diminished for the benefit of pre-transaction shareholders. Partially offsetting these risks are Moody's expectation that the company will generate discretionary cash flow and use a significant portion of that cash flow to repay debt ahead of schedule, Yankee Candle's leading market position in the narrow premium candle segment, and the revenue balance between wholesale and retail operations. The stable outlook anticipates that the company will steadily grow revenue and cash flow. The outlook also considers Moody's expectation that the company's policy with respect to uses of discretionary cash flow will be measured, resulting in balance sheet improvement. In addition, Moody's also expects that the company will maintain solid liquidity through moderation of planned growth capital investment if operating results fall below plan. Ratings could eventually move upward if the company maintains steady sales at existing stores; if the up to thirty new stores per year profitably open; and if financial flexibility sustainably strengthens such that EBIT coverage of interest expense approaches 1.5x, leverage falls toward 6x, and Free Cash to Debt approaches 5% on a sustainable basis. A permanent decline in revolving credit facility availability, inability to improve comparable store sales and operating margins, or an aggressive financial policy action could cause the ratings to be lowered. Specifically, ratings would to be lowered if operating performance falters such that debt to EBITDA is permanently above 7x, EBIT to interest expense falls to 1 time, or free cash flow to debt becomes negative. Yankee Candle Company, Inc, with headquarters in South Deerfield, Massachusetts, operates 420 retail stores the sell scented candles and other home fragrance products. The company also distributes candles to more than 17,000 wholesale customers. Revenue for the twelve months ending Sept. 30, 2006 was $650 million. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- January 25-27, 2007 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Hyatt Regency, Denver, CO Contact: 1-703-739-0800 or http://www.abiworld.org/ January 29, 2007 TURNAROUND MANAGEMENT ASSOCIATION Men's College Basketball & Networking Wachovia Center, Philadelphia, PA Contact: 215-657-5551 or http://www.turnaround.org/ January 30-31, 2007 EUROMONEY INSTITUTIONAL INVESTOR Korea Securitisation and Structured Credit Summit JW Marriott Hotel, Seoul, South Korea Contact: http://www.euromoneyplc.com/ January 31 to February 1, 2007 EUROMONEY INSTITUTIONAL INVESTOR Asia M&A Forum Island Shangi-La, Hong Kong Contact: http://www.euromoneyplc.com/ February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800 or http://www.abiworld.org/ February 5, 2007 STRATEGIC RESEARCH INSTITUTE 3rd Annual Tranche B & 2nd Lien Financing Summit Scottsdale, AZ Contact: http://www.euromoneyplc.com/ February 8-9, 2007 EUROMONEY CONFERENCES 2nd Philippine Investment Conference Cebu Convention Center, Cebu, Philippines Contact: http://www.euromoneyplc.com/ February 8-9, 2007 EUROMONEY Leverage Finance Asia JW Marriott Hong Kong Contact: http://www.euromoneyplc.com/ February 8-11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Certified Turnaround Professional (CTP) Training NY/NJ Contact: http://www.turnaround.org/ February 15, 2007 TURNAROUND MANAGEMENT ASSOCIATION Men's College Basketball & Networking Wachovia Center, Philadelphia, PA Contact: 215-657-5551 or http://www.turnaround.org/ February 16, 2007 TURNAROUND MANAGEMENT ASSOCIATION Wharton Restructuring Conference The Wharton School Philadelphia, PA Contact: http://www.turnaround.org/ February 21-22, 2007 EUROMONEY Euromoney Pakistan Conference Perceptions & Realities Marriott Hotel, Islamabad, Pakistan Contact: http://www.euromoneyplc.com/ February 22, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA PowerPlay - Atlanta Thrashers Philips Arena, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ February 22, 2007 EUROMONEY 2nd Annual Euromoney Japan Forex Forum Mandarin Oriental, Tokyo, Japan Contact: http://www.euromoneyplc.com/ February 25-26, 2007 NORTON INSTITUTES Norton Bankruptcy Litigation Institute Marriott Park City, UT Contact: http://www2.nortoninstitutes.org/ February 27, 2007 TURNAROUND MANAGEMENT ASSOCIATION Devil Rays Turnaround Centre Club, Tampa, FL Contact: http://www.turnaround.org/ February 27-28, 2007 EUROMONEY INSTITUTIONAL INVESTOR 5th Annual Corporate Restructuring Summit Sheraton Park Lane Hotel, London, UK Contact: http://www.euromoneyplc.com/ March 1, 2007 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - West Regency Beverly Wilshire, Los Angeles, CA Contact: http://www.abiworld.org/ March 2, 2007 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Bankruptcy Battleground West Regency Beverly Wilshire, Los Angeles, CA Contact: http://www.abiworld.org/ March 15, 2007 TURNAROUND MANAGEMENT ASSOCIATION Martini Madness Cocktail Reception with Geraldine Ferraro Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ March 15-18, 2007 NATIONAL ASSOCIATION OF BANKRUTPCY TRUSTEES NABT Spring Seminar Ritz-Carlton Buckhead, Atlanta, GA Contact: http://www.NABT.com/ March 18-21, 2007 INSOL Annual Europe, Africa & Middle East Conference Cape Town, South Africa Contact: http://www.insol.org/CapeTown07/ March 21, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ March 21-22, 2007 EUROMONEY 2nd Annual Vietnam Investment Forum Melia, Hanoi, Vietnam Contact: http://www.euromoneyplc.com/ March 21-22, 2007 EUROMONEY Euromoney Indian Financial Market Congress Grand Hyatt, Mumbai, India Contact: http://www.euromoneyplc.com/ March 22-23, 2007 EUROMONEY INSTITUTIONAL INVESTOR Euromoney Indonesian Financial Markets Congress Bali, Indonesia Contact: http://www.euromoneyplc.com/ March 27, 2007 TURNAROUND MANAGEMENT ASSOCIATION "The Six Keys of Sustained Profitable Growth" Rodney Page, Senior Partner of Blue Springs Partners Citrus Club, Orlando, FL Contact: http://www.turnaround.org/ March 27-31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spring Conference Four Seasons Las Colinas, Dallas, Texas Contact: http://www.turnaround.org/ March 29-31, 2007 ALI-ABA Chapter 11 Business Reorganizations Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ April 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL Contact: 561-882-1331 or http://www.turnaround.org/ April 12, 2007 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - East JW Marriott, Washington, DC Contact: http://www.abiworld.org/ April 20, 2007 TURNAROUND MANAGEMENT ASSOCIATION Breakfast meeting with Chapter President, Bruce Sim Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ April 24, 2007 TURNAROUND MANAGEMENT ASSOCIATION "Why Prospects Become Clients" Mark Fitzgerald, President of Sales Training Institute Inc Centre Club, Tampa, FL Contact: http://www.turnaround.org/ April 26-27, 2007 TURNAROUND MANAGEMENT ASSOCIATION 1st Annual Credit & Bankruptcy Symposium Mohegan Sun, Uncasville, CT Contact: http://www.turnaround.org/ April 26-28, 2007 ALI-ABA Fundamentals of Bankruptcy Law Philadelphia, PA Contact: http://www.ali-aba.org April 29 - May 1, 2007 INTERNATIONAL BAR ASSOCIATION International Insolvency Conference Zurich, Switzerland Contact: http://www.ibanet.org/ May 4, 2007 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - NYC Alexander Hamilton US Custom House, SDNY New York, NY Contact: http://www.abiworld.org/ May 7, 2007 AMERICAN BANKRUPTCY INSTITUTE 9th Annual New York City Bankruptcy Conference Millennium Broadway Hotel & Conference Center New York, NY Contact: http://www.abiworld.org/ May 14, 2007 TURNAROUND MANAGEMENT ASSOCIATION Annual TMA Atlanta Golf Outing White Columns, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ May 16, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ June 6-8, 2007 TURNAROUND MANAGEMENT ASSOCIATION 5th Annual Mid-Atlantic Regional Symposium Borgata Hotel Casino & Spa, Atlantic City, NJ Contact: http://www.turnaround.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ June 28 - July 1, 2007 NORTON INSTITUTES Norton Bankruptcy Litigation Institute Jackson Lake Lodge, Jackson Hole, WY Contact: http://www2.nortoninstitutes.org/ July 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL Contact: 561-882-1331 or www.turnaround.org July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, RI Contact: 1-703-739-0800; http://www.abiworld.org/ July 18, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ July 25-28, 2007 AMERICAN BANKRUPTCY INSTITUTE 12th Annual Southeast Bankruptcy Workshop The Sanctuary, Kiawah Island, SC Contact: http://www.abiworld.org/ August 9-11, 2007 AMERICAN BANKRUPTCY INSTITUTE 3rd Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, MD Contact: http://www.abiworld.org/ September 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Southwest Bankruptcy Conference Four Seasons Las Vegas, NV Contact: http://www.abiworld.org/ September 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/ October 11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL Contact: 561-882-1331 or http://www.turnaround.org/ October 16-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ October 30, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, FL Contact: 561-882-1331 or http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ December 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ TBA 2008 INSOL Annual Pan Pacific Rim Conference Shanghai, China Contact: http://www.insol.org/ January 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ April 3-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 26th Annual Spring Meeting The Renaissance, Washington, DC Contact: http://www.abiworld.org/ June 4-7, 2008 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 24th Annual Bankruptcy & Restructuring Conference JW Marriott Spa and Resort, Las Vegas, NV Contact: http://www.airacira.org/ June 12-14, 2008 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, MI Contact: http://www.abiworld.org/ August 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, FL Contact: http://www.abiworld.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/ December 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, AZ Contact: http://www.abiworld.org/ June 21-24, 2009 INSOL 8th International World Congress TBA Contact: http://www.insol.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergers - the New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Contact: http://www.beardaudioconferences.com 240-629-3300 BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Contact: http://www.beardaudioconferences.com 240-629-3300 The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Melvin C. Tabao, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Jason A. Nieva, Tara Marie A. Martin, and Peter A. Chapman, Editors. Copyright 2007. 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 $775 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 ***