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/raid1/www/Hosts/bankrupt/TCR_Public/070125.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, January 25, 2007, Vol. 11, No. 21 Headlines 155 EAST: Moody's Downgrades Ratings & Says Outlook is Developing ACS MEDIA: Planned Debt Issuance Prompts Moody's to Cut Ratings ADVANCED VENDING: Exclusive Plan Filing Period Extended to June 7 ADVANCED VENDING: Has Until March 7 to Decide on Leases AFFINIA GROUP: Moody's Upgrades Rating and Says Outlook is Stable AFFINION GROUP: Moody's Junks Rating on Proposed $300 Million Loan AFFINION GROUP: S&P Rates Proposed $300 Million Senior Loan at B- AMERICAN TOWER: Launches Cash Tender Offer for 5% Notes ARVINMERITOR INC: S&P Lowers Ratings and Removes Negative Watch AUDIOVOX CORP: Earns $3.8 Mil. in Third Fiscal Qtr. Ended Nov. 30 AVENUE FINANCIAL: Will Issue Up to 750,000 Shares to Settle Debt BILLING SERVICES: S&P Places Ratings on Negative CreditWatch BRIGGS & STRATTON: Poor Performance Cues S&P to Cut Rating to BB+ CASH TECH: Posts $312,472 Net Loss in Second Quarter Ended Nov. 30 CATHOLIC CHURCH: Creditors Panel Wants Attorney Hired in Davenport CBA COMMERCIAL: Fitch Holds Rating on Class M-5 Certificates at BB CENTRAL GARDEN: Reports $320 Million Sales in Qtr. Ended Dec. 30 CEP HOLDINGS: Exclusive Plan-Filing Period Extended to March 19 CEP HOLDINGS: Court Sets March 1 as General Claims Bar Date COMPLETE RETREATS: Wants Court to Approve Intagio Settlement CREDIT LINKED: Moody's Upgrades Rating on $15.5 Million Notes CREDIT SUISSE: S&P Puts Default Rating on Class D-B-5 Certificates DADE BEHRING: Likely Strong Cash Flow Cues Moody's to Hold Ratings DAIMLERCHRYSLER: Delaware Gives Incentive Bundle to Chrysler Plant DELTA AIR: CEO Grienstein Testifies at Senate Committee Hearing DLJ COMMERCIAL: Fitch Ups Rating on Class B-5 Certificates to BB+ DURA AUTOMOTIVE: Can Pay $1.1 Million Prepetition Tax Claims DURA AUTOMOTIVE: Judge Carey Approves Lease Rejection Procedures FASSBERG CONSTRUCTION: Court May Convert Case to Chapter 7 FENWAL INC: S&P Rates $400 Million Senior Secured Facilities at B+ FINOVA GROUP: Selling Aviation Assets for $45 Million to FAP LLC FINOVA GROUP: Committee Approves 2007 Annual Incentive Plan FOAMEX INTERNATIONAL: Stockholders Unanimously Support Joint Plan FORD MOTOR: Likely to Report Loss in 2006 Fourth Quarter GENERAL DATACOMM: Inks 8th Amendment to Loan Agreement with Ableco GREAT COMMISSION: Unsecured Creditors to Receive 10% of Claims GREAT COMMISSION: Disclosure Statement Hearing Set on March 8 GREAT COMMISSION: Proofs of Claims Must be Filed by February 12 GREIF INC: S&P Rates Proposed $300 Million Senior Notes at BB- GREYSTONE LOGISTICS: Nov. 30 Balance Sheet Upside-Down by $8.6MM GSAMP TRUST: S&P Places Default Rating on Series 2004-SEA2 Debt HSI ASSET: S&P Affirms Ratings on Seven Certificate Classes INDEPENDENCE TAX: Dec. 31 Balance Sheet Upside-Down by $3.2 Mil. KENTUCKY DATA: Moody's Rates $280 Million Senior Loans at B1 KNIGHT FUNDING: Moody's Lifts Rating on $35 Mil. Sr. Notes to B3 LEVEL 3: Completes $132 Mil. Acquisition of SAVVIS Network Biz LEVEL 3: Exchanges $115 Mil. of 10% Sr. Notes for 36.7 Mil. Shares M. FABRIKANT & SONS: Secures Additional Financing from Lenders MILLS CORP: Has Until Jan. 31, 2008, to Pay Back $1 Billion Loan MOVIE GALLERY: Oct. 1 Balance Sheet Upside-Down by $220.9 Million MOVIE GALLERY: Projects Likely Covenant Non-Compliance in 2007 MTU AERO: S&P Assigns BB- Rating to EUR150 Million Bonds N-45 FIRST: Fitch Holds BB+ Rating on CDN$3.7 Mil. Class E Debt PARKER HUGHES: Files for Chapter 11 Protection in Minnesota PARKER HUGHES: Case Summary & 40 Largest Unsecured Creditors POGO PRODUCING: Quarterly Dividend to be Paid on February 23 POLYAIR INTER: Court Approves Subsidiary's Plan of Arrangement RECKSON OPERATING: Fitch Cuts Sr. Notes' Rating to BB+ from BBB- REDPRAIRIE CORP: Moody's Holds B1 Rating on $190 Million Loans SEA CONTAINERS: Can Employ Appleby Hunter as Special Counsel SEA CONTAINERS: Bingham Tapped as Counsel to Services Committee SEAGATE TECH: Reports $3 Million Revenue in Qtr. Ended Dec. 29 SOUNDVIEW CI-21: DBRS Rates $10.5 Million Class N3 Notes at BB STARINVEST GROUP: Miscor Group Raises $12.5MM in Private Placement STRUCTURED ASSET: Moody's Rates Class B Certificates at Ba1 SUN MICROSYSTEMS: Earns $126 Million in Quarter Ended December 31 SUNGARD DATA: Fitch Affirms Junk Rating on $1 Billion Senior Notes SWIFT & CO: 2nd Fiscal Quarter Net Sales Increase to $2.47 Billion SWIFT & CO: Moody's Pares Corp. Family Rating to B3 from B2 TRANSDIGM INC: Moody's Concludes Review and Affirms Ratings US AIRWAYS: CEO Calls on Senate to Allow Airline Industry Changes WOODWIND & BRASSWIND: Court OKs Sale of All Assets to Musician's WORLD HEALTH: Chapter 7 Trustee Taps Miller Coffey as Accountants W.R. GRACE: Reports $5 Million Net Income in 2006 Fourth Quarter * Chadbourne & Parke Taps R. Simmonds-Watson as Program Manager * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* 155 EAST: Moody's Downgrades Ratings & Says Outlook is Developing ----------------------------------------------------------------- Moody's Investors Service lowered the rating of 155 East Tropicana, LLC's ratings and revised the outlook to developing from stable. The company's corporate family rating and probability of default rating were lowered to Caa1 from B3 while its senior secured note rating was lowered to Caa1/LGD-4 from B3/LGD-4. The company's speculative grade liquidity rating was lowered to SGL-4 from SGL-3. Despite East Tropicana's recent report that it signed a letter of intent to be acquired by an investment group led by NTH Advisory Group, LLC, and that as part of the transaction, NTH will be responsible for any repurchases and related costs of East Tropicana's $130 million senior secured notes, the downgrade to the 'Caa' rating category and SGL-4 considers that the company's fundamental credit profile has deteriorated since the casino opened in February 2006, and that East Tropicana could find it difficult to cover its fixed charges in the next 18-24 months period. The developing outlook reflects the uncertainty related to the transaction closing. No definitive acquisition agreement has been signed and closing will be subject to the completion of due diligence, financing, and licensing, among other customary conditions. According to the letter of intent, NTH has an exclusive right to negotiate the purchase of East Tropicana until March 13, 2007. NTH also has an inspection period of sixty calendar days in which it may terminate the proposed purchase at its sole discretion. According to the letter of intent, NTH has offered to purchase all of the outstanding membership interests of East Tropicana for $95 million in cash and the payment of certain accrued royalties. In addition, NTH 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 acquisition is expected to close by June 30, 2007 but under certain conditions may be closed as late as April, 30, 2008. Moody's most recent action on East Tropicana occurred on Sept. 28, 2006 when PDR ratings and LGD assessments were assigned to the company as part of the implementation of Moody's Loss- Given-Default rating methodology. Moody's initially assigned a B3 corporate family rating to East Tropicana in March 2005. 155 East Tropicana, LLC owns the Hooters Casino Hotel in Las Vegas, Nevada. The property is located one-half block from the intersection of Tropicana Avenue and Las Vegas Boulevard, a major intersection on the Las Vegas Strip. The Hooters Casino Hotel features 696 hotel rooms and an approximately 29,000 square-foot casino. The company generated approximately $54 million of net revenue for the 12-month period ended Sep. 30, 2006. ACS MEDIA: Planned Debt Issuance Prompts Moody's to Cut Ratings --------------------------------------------------------------- Moody's Investors Service downgraded ACS Media LLC's Corporate Family rating to B3 from B2 and CBD Media Holdings LLC's Corporate Family rating to B3 from B2 reflecting the companies' plans to issue $87 million of intermediate holding company debt. Details of the rating action are: Ratings downgraded: * ACS Media LLC's -- Corporate Family Rating lowered to B3 from B2 -- PDR lowered to B3 from B2 -- $10 million senior secured revolving credit facility due 2012 lowered to B2, LGD3, 33% from B1, LGD3, 39% -- $130 million senior secured term loan due 2013 lowered to B2, LGD3, 33% from B1, LGD3, 39% * CBD Media Holdings LLC's -- Corporate Family Rating lowered to B3 from B2 -- PDR lowered to B3 from B2 * CBD Media LLC's -- $5 million senior secured revolving credit facility due 2009 lowered to Ba3, LGD1, 9% from Ba2, LGD2, 13% -- $110 million senior secured term loan D due 2009 lowered to Ba3, LGD1, 9% from Ba2, LGD2, 13% -- $150 million 8.625% senior subordinated global notes due 2011 lowered to B3, LGD3, 45% from B2, LGD4, 56% Ratings affirmed: * CBD Media Holdings LLC's -- $100 million 9.25% senior global notes due 2012 -- Caa1, LGD5, 78% The rating outlook of both CBD and ACS is changed to stable from developing. The ratings downgrades largely reflect an increase in combined debt and leverage which will be supported by the companies after the planned issuance of $87 million of debt by the intermediate holding company, CBD Investor, Inc. According to Moody's standard adjustments, the proposed bridge loan will increase the companies' combined debt to approximately 8.5x EBITDA at the end of fiscal 2006. Moody's expects that combined debt will gradually decline closer to 8x EBITDA by the end of 2008. The ratings continue to reflect the relatively small scale and geographic isolation of the companies' operations, the competition posed by rival directory publishers, and the reliance of both companies primarily upon one outsourcing company for substantially all of their advertising, marketing, sales, production and distribution services. Ratings are supported by the dominant market share commanded by CBD and ACS as the "official" yellow pages in their service areas, their high margins and free cash flow generation, and the diversity of their customer base. The stable outlook incorporates the predictability of ACS and CBD's revenue and cash flow generation and the value conferred by their exclusive multi-year publishing and trademark agreement with the incumbent local telephone companies. On Dec. 14, 2006, ACS's parent, Local Insight Media LLC, and CBD Media Holdings LLC disclosed that they had executed a definitive agreement to merge their business operations. In connection with the merger, a newly-formed intermediate holding company, CBD Investor, Inc., will own the stock of both ACS and CBD. CBD Investor, Inc. plans to draw $87 million under its $188 million senior secured bridge facility to effect an $82 million special dividend to CBD's current owner, Spectrum Equity Investors, and to pay transaction fees and expenses. Headquartered in Anchorage, Alaska, ACS Media LLC is the leading publisher of yellow page directories in Alaska. The company recorded sales of $38 million for the twelve months ended Sept. 30, 2006. Headquartered in Cincinnati, Ohio, CBD Media Holdings LLC is the exclusive telephone directory publisher for Cincinnati Bell-branded yellow pages in the Cincinnati-Hamilton metropolitan area. The company posted $87 million of revenue in the last twelve months ended Sept. 30, 2006. ADVANCED VENDING: Exclusive Plan Filing Period Extended to June 7 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Tennessee, Southern Division, extended until June 7, 2007, the period within which Advanced Vending Systems Inc. can exclusively file a chapter 11 plan of reorganization. The Court also extended the Debtor's exclusive period to solicit acceptances of that plan to Aug. 7, 2007. The Debtor says that it plans to sell its assets under Section 363(f) of the Bankruptcy Code to an entity with which it had been negotiating for over a period of time. The Debtor believes that the expected sale won't take place easily, prompting it to reevaluate its direction in the reorganization. In addition, the Debtor is currently marketing its business through Decosimo Corporate Finance's efforts. The secured lenders need more marketing time to reach potential buyers for the market position held by the Debtor. The extension will provide the Debtors more time to proposed a feasible plan. Headquartered in Ringgold, Georgia, Advanced Vending Systems, Inc. -- http://www.avsvend.com/-- operates snack food vending machines. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Tenn. Case No. 06-12523). Richard C Kennedy, Esq., at Kennedy, Koontz & Farinash, and Thomas L. N. Knight, Esq., at Grisham, Knight and Hooper, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case to date. When the Debtor filed for protection from its creditors, it estimated less than $50,000 in assets and estimated debts between $10 million and $50 million. ADVANCED VENDING: Has Until March 7 to Decide on Leases ------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Tennessee, Southern Division, extended until March 7, 2007, the period within which Advanced Vending Systems Inc. can assume, assume and assign, or reject unexpired leases of nonresidential real property. The Debtor informs the Court that it leases several warehouse locations and its central office complex as part of its vending operations. The leases, which are oral month-to-month leases include: 1) Blue Chip Corp. 11) Haywood Mall P.O. Box 1092 P.O. Box 281484 Greenwood, IN 46142 Atlanta, GA 30384 2) Broadway Ventures, LLC 12) Mall of Georgia, LLC 9650 Shore Drive, Unit 2405 P.O. Box 643741 Myrtle Beach, SC 29572 Pittsburgh, PA 15264 3) Daryl B. Huskey 13) Mall of Georgia/Simon P.O. Box 5097 Property Grp. Greenville, SC 29606 3333 Buford Drive, Suite 1000 4) Frozen Food Service Corp. Buford, GA 30519 Salem Food Service P.O. Box 542 14) Phipps Plaza Salem, IN 47167 P.O. Box 35465 Newark, NJ 07193 5) Moringstar Mini Storage-Charleston 15) Oak Court Mall 3366 Ladson Road 4668 Shopping Center Ass. Ladson, SC 29456 3961 Paysphere Circle Chicago, IL 60674 6) Morrow-Mobley Properties c/o Carol Mobley Morrow, CPA 16) West Oaks Mall 715 West Solomon Street 9401 W. Colonia Drive, Griffin, GA 30223 Ste. 728 Ocoee, FL 34761 7) Plantation Self Storage 4400 Ladson Road 17) West Town Mall Summerville, SC 29485 Management Office 7600 Kingston Pike 8) The McDonough Drive Group LP Knoxville, TN 37919 c/o IPG Management Co., Inc. 5871 Glenridge Dr., Ste. 375 18) West Town Mall Atlanta, GA 30328 9805 West Town Mall Joint Vent. 9) Anderson Mall 7530 Reliable Parkway 3131 N. Main Street Chicago, IL 60686 Anderson, SC 29621 19) Walter Champion 10) Anderson Mall - Nesquik 12811 Scenic Highway P.O. Box 643309 Lookout Mountain, TN 37350 Pittsburgh, PA 15264 The Debtor explores the probable reorganization plan with new equity and working capital being invested for its continued operations and a payment to creditors. The Debtor says it's impossible to propose a plan before the lease decision deadline since a plan will take substantial financial and operational restructuring. Until the plan, the Debtor says, is explored further and compared with a possible sale of its assets; it is impossible to decide which unexpired leases should be assumed. Headquartered in Ringgold, Georgia, Advanced Vending Systems, Inc. -- http://www.avsvend.com/-- operates snack food vending machines. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. E.D. Tenn. Case No. 06-12523). Richard C Kennedy, Esq., at Kennedy, Koontz & Farinash, and Thomas L. N. Knight, Esq., at Grisham, Knight and Hooper, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case to date. When the Debtor filed for protection from its creditors, it estimated less than $50,000 in assets and estimated debts between $10 million and $50 million. AFFINIA GROUP: Moody's Upgrades Rating and Says Outlook is Stable ----------------------------------------------------------------- Moody's Investors Service has upgraded Affinia Group Inc.'s Corporate Family Rating to B2 from B3 and revised the outlook to stable from negative. Ratings on the company's first lien bank obligations and subordinated notes were also raised one notch. The actions reflect progress Affinia has achieved to date in restoring its margins from continuing operations, benefits provided by its liquidity and debt maturity profiles, and lower volatility in demand associated with the bulk of its product offering, which address normal service and maintenance requirements in the automotive aftermarket. While the company's ongoing results will continue to experience restructuring charges and related cash expenditures, Affinia will increasingly realize meaningful savings in operating expenses, and, going forward, those savings will begin to exceed the remaining cash disbursements under the program. Although seasonal working capital swings may require use of external sources before unwinding in subsequent periods, internal resources are expected to finance capital expenditures and restructuring actions over the intermediate period. As a result, lower leverage will evolve and coverage ratios will trend higher, firmly positioning the company in the B2 rating category. Ratings Upgraded: -- Corporate Family Rating to B2 from B3 -- Probability of Default to B2 from B3 -- First lien bank debt to Ba3, LGD2, 27% from B1, LGD2, 27% -- Subordinated Notes to B3, LGD5, 76% from Caa1, LGD5, 76% -- Outlook to stable from negative Ratings affirmed: -- Senior Unsecured Issuer Rating, B3 -- Speculative Grade Liquidity Rating, SGL-2 The last rating action was in September 2006 when Affinia's ratings were adjusted to incorporate Moody's Loss Given Default Methodology. The company's liquidity rating of SGL-2 was affirmed in December 2006. Affinia's debt/EBITDA declined to roughly 4.8x at the end of September 2006, and its EBITA/interest improved to 1.6x on an LTM basis at the same date. While these ratios exclude the impact of non-recurring charges, principally restructuring costs associated with its multi-year program, they are considered reflective of the ongoing return and coverage capacity of the business. To date, the cash portion of the restructuring initiative has not required any external funding. And, going forward, the savings generated by the program are anticipated to reach a point at which they will match or exceed the remaining cash disbursements. Consequently, Affinia's quantitative metrics are anticipated to exhibit improving trends and will be consistent with peers in the B2 Corporate Family Rating category. The stable outlook considers the ongoing level of demand and market share for Affinia's replacement parts and improving operating margins. Demand for Affinia's products are correlated with normal maintenance and wear requirements. This contrasts with repair and warranty requirements which are more influenced by product failure rates which have been affected by general trends in improved quality of original equipment parts. It further recognizes benefits from the company's good liquidity profile, which is supported by access to substantial amounts of external liquidity, and anticipates that the company's restructuring efforts will lead to stronger operating margins and free cash flow over the intermediate period. The Ba3 rating on the first lien bank debt reflects its estimated 26% loss-given-default, which results from the first priority nature of its secured claims, up-streamed guarantees from certain material domestic subsidiaries, and considerable amounts of junior capital. Those amounts include $300 million of senior subordinated notes as well as approximately $61.5 million of accreted notes at a holding company two levels above the issuer, which are both structurally and contractually subordinate to the bank debt. The B3 rating on the subordinated notes reflects their 76% loss-given-default, and their junior status to the bank debt. The $300 million of senior subordinated notes at Affinia benefit from up-streamed guarantees from material domestic subsidiaries and the structural subordination of the aforementioned notes at a higher holding company. The Senior Unsecured Issuer rating of B3, one notch below the Corporate Family Rating, reflects its junior priority to secured bank obligations and its comparable status to the senior subordinated notes. Affinia Group Inc., headquartered in Ann Arbor, Michigan, is a designer, manufacturer and distributor of aftermarket components for passenger cars, sport utility vehicles, light, medium and heavy trucks and off-highway vehicles. The company's product range addresses filtration, brake and chassis markets in North and South America, Europe and Asia. In 2005, the company reported revenues of approximately $2.1 billion. AFFINION GROUP: Moody's Junks Rating on Proposed $300 Million Loan ------------------------------------------------------------------ Moody's Investors Service assigned a Caa1, LGD6,93% to a proposed $300 million senior unsecured term loan to be issued by Affinion Group Holdings, Inc., the parent of Affinion Group, Inc. and upgraded Affinion Opco's senior secured rating to Ba2, LGD2,19% from Ba3, LGD2, 24%. Concurrently, the B2 Corporate Family Rating, B2 Probability of Default Rating and SGL-1 Speculative Grade Liquidity Rating were moved to Affinion from Affinion Opco. Additionally, the B3 rating on Affinion Opco's $304 million senior unsecured notes and the Caa1 rating on its $355 million senior subordinated notes were affirmed. The rating outlook was revised to stable from positive. Proceeds from the new senior unsecured term loan will be used to fund a one-time $206 million dividend, repurchase approximately $77 million in Affinion preferred stock held by Cendant, and fees. Apollo Management V, L.P. holds 97% of Affinion's common stock. The transaction is expected to close in the middle of the first quarter of 2007. The revision of the rating outlook to stable from positive considers the shift in the company's financial policy to a more shareholder friendly stance as evidenced by the dividend to the owners of Affinion from the proceeds of the proposed term loan. Additionally, the stable outlook reflects Moody's expectations that Affinion's debt to EBITDA will remain above 5.5x over the ratings horizon and operating performance is expected to meet Moody's expectations. The company's B2 Corporate Family Rating continues to reflect high leverage, customer churn, moderate revenue concentration, and legal and regulatory risks. Moody's notes that the issuance of the new $300 million senior unsecured term loan will return leverage to the level at the time of the spin-off from Cendant taking into consideration the prepayment of debt by Affinion. Positive rating consideration continues to acknowledge the company's leading market position, affinity partner long-term relationships, recurring revenue base, and operating performance exceeding Moody's expectations. The upgrade of the senior secured ratings reflects the addition of structurally subordinated debt in the form of the proposed $300 million senior unsecured term loan issued by Affinion which provides support to the revolver and term loan at Affinion Opco. Additionally, the Loss Given Default Assessments of both of Affinion Opco's senior unsecured notes and senior subordinated notes improved to LGD4, 59% and LGD5, 80%, respectively, from LGD5, 70% and LGD6, 91%. Moody's previous rating action on Affinion occurred on Dec. 12, 2006 when the company's rating outlook was revised to positive from stable and the company's ratings were affirmed. This rating was assigned: -- Caa1 rating on a proposed $300 million five year senior unsecured term loan. These ratings were upgraded: -- Senior secured revolving credit facility rating to Ba2, LGD2, 19% from Ba3, LGD2, 24%; and, -- Senior secured term loan rating to Ba2, LGD2, 19% from Ba3, LGD2, 24%. These ratings were affirmed: -- B3, LGD4/59% rating on senior unsecured notes due 2013; -- Caa1, LGD5, 80% rating on senior subordinated notes due 2015; -- B2 Probability of Default Rating; -- SGL-1 Speculative Grade Liquidity Rating; and -- B2 Corporate Family Rating. Headquartered in Norwalk, Connecticut, Affinion is a leading direct marketer of membership, insurance and package enhancement programs and services to consumers. For the twelve months ended Sept. 30, 2006, the company generated EBITDA of approximately $273 million on revenues of $1.3 billion. AFFINION GROUP: S&P Rates Proposed $300 Million Senior Loan at B- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B-' rating to the proposed $300 million senior unsecured term loan of Affinion Group Holdings Inc. At the same time, Standard & Poor's affirmed the ratings, including the 'B+' corporate credit rating, on the company's operating subsidiary, Affinion Group Inc., and revised the outlook to negative from stable. "The negative outlook reflects our concern that the proposed transaction represents a change in the company's financial policy away from its initial intention of reducing leverage as rapidly as possible," said Standard & Poor's credit analyst Deborah Kinzer. On a pro forma consolidated basis, direct marketer Affinion had total debt outstanding of approximately $1.7 billion as of year- end 2006. The company will use the proceeds of the proposed new term loan, which the parent holding company is issuing on a senior unsecured basis, to redeem a portion of the preferred stock held by Cendant Corp. successor companies and to pay a shareholder dividend. The company is 97% owned by an affiliate of Apollo Management. The proposed loan contains a pay-in-kind toggle option, whereby the company may elect to pay interest in kind instead of in cash during any given interest period. The rating on Affinion reflects some affinity partner concentration concerns, competitive pressures in the membership marketing business, and high financial risk. These factors are only partially offset by the company's leading market share in membership marketing, recurring revenue streams from renewals, and positive discretionary cash flow. AMERICAN TOWER: Launches Cash Tender Offer for 5% Notes ------------------------------------------------------- American Tower Corp. has 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 the 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. 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 approximately $252.4 million. The company intends to use cash on hand and 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 and refinance a portion of its outstanding indebtedness during 2007. In order to fund the 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 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 company will file a Tender Offer Statement on Schedule TO with the Securities and Exchange Commission later today. The Company will make available to Note holders, through the Depository Trust Company, documents specifying the terms, conditions and procedures for surrendering and withdrawing Notes for repurchase. Note holders are encouraged to read these documents carefully before making any decision with respect to the surrender of Notes, because these documents contain important information regarding the details of the Company's obligation to repurchase the Notes. 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. ARVINMERITOR INC: S&P Lowers Ratings and Removes Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on automotive components supplier ArvinMeritor Inc., including its long-term corporate credit rating to 'BB-' from 'BB'. In addition, Standard & Poor's removed the ratings from CreditWatch, where they had been placed on Sept. 26, 2006, with negative implications. The 'B-1' short-term corporate credit rating on the Troy, Michigan-based company was affirmed. The outlook is stable. "The downgrade reflects our expectations that ARM's financial profile will remain weak during the next fiscal year or perhaps longer, as it continues to face challenges in both its light vehicle and commercial vehicle segments. However, the stable outlook incorporates the company's success in nearly eliminating debt maturities until after 2011, adequate available sources of liquidity, and expectations for some improvements in profitability and cash flow generation due to enhanced management focus," said Standard & Poor's credit analyst Robert Schulz. AUDIOVOX CORP: Earns $3.8 Mil. in Third Fiscal Qtr. Ended Nov. 30 ----------------------------------------------------------------- Audiovox Corporation has reported results for its fiscal 2006 third quarter and nine months ended Nov. 30, 2006. Audiovox changed its fiscal year from November 30 to February 28. As such, fiscal 2006 third quarter results will be compared to the prior year period ended Nov. 30, 2005, which was the company's fiscal 2005 fourth quarter. Additionally, results for the fiscal 2006 nine months will be compared to the fiscal 2005 second, third, and fourth quarters ended May 31, August 31, and Nov. 30, 2005, respectively. The company reported net sales for the fiscal 2006 third quarter of $151.833 million, a decrease of 2.9% compared with $156.290 million reported in the comparable prior year quarter. Net income from continuing operations for the fiscal 2006 third quarter was $3.848 million. This compares with a net loss from continuing operations of $8.306 million in the comparable prior year period. Including discontinued operations, the company reported net income of $3.854 million in the quarter ended Nov. 30, 2006, as compared with a net loss of $10.296 million in the similar 2005 period. Mobile Electronics sales, which represented 58.3% of net sales, were $88.6 million, a decrease of 4.9% compared with sales of $93.2 million reported in the comparable prior year period. Mobile sales were impacted by the absence of Prestige Audio and Video-in-a-Bag sales, which were the result of the company's decision to exit those product lines at the end of 2005. Mobile sales were also adversely affected by lower average selling prices in its mobile multi media line due to the maturing of the category and increased competition in the market. These decreases were partially offset by increases in XM satellite radio sales, the company's car audio business and higher sales of Code Systems products. Consumer Electronics sales, which represented 41.7% of sales, were $63.3 million, an increase of 0.2% compared with net sales of $63.1 million reported in the comparable period last year. Unit sales in both the portable DVD and LCD categories increased, however, the increases were partially offset by lower average selling prices. In addition, the company continued to pass on low margin retail programs. Gross margins for the period ended Nov. 30, 2006, were 16.7% compared with 6.2% reported in the prior year period. Gross margins were favorably impacted by an increase in margins in all mobile electronic product categories, reduced freight costs, improved buying programs and inventory management. Gross margins for the comparable 2005 period were negatively impacted by a $9 million inventory write-down, which adversely impacted gross margins by 5.9%. Operating expenses for the fiscal 2006 third quarter were $23.7 million as compared with $23.2 million in the comparable fiscal 2005 quarter, an increase of 2.1% primarily due to a non- cash stock-based compensation expense of $373,000 included in operating expenses for the 2006 period. "Although sales were down slightly from the November quarter last year, our profits increased significantly and we have reduced overhead to a level that we believe is necessary to support the additional volume being brought on by the previously announced acquisition of the Consumer Electronics Accessory business of Thomson. That being said, we continue to monitor all expense categories for additional savings and productivity gains," Audiovox president and chief executive officer Patrick Lavelle stated. "The pending acquisition of the RCA brand for accessory products as well as the addition of the other accessories lines and brands greatly strengthens our growing portfolio. We maintain significant financial resources at our disposal to pursue both organic growth and growth via acquisition and we continue to be active on the M & A front," Mr. Lavelle concluded. Nine Months Results The company reported net sales for the fiscal 2006 nine months ended Nov. 30, 2006, of $360.6 million, a decrease of 14.9% compared with $423.7 million reported in the comparable prior year period. Net income from continuing operations for the fiscal 2006 nine months was $4 million compared with a net loss from continuing operations of $6.1 million in the comparable prior year-period. Including discontinued operations, the company reported net income of $3.4 million for the nine months ended Nov. 30, 2006, compared with a net loss of $8.4 million in the comparable nine-month period. For the fiscal 2006 nine-month period, Mobile Electronics represented 66.3% of net sales or $239.0 million. This was a decrease of 9.7% compared with sales of $264.7 million reported in the comparable prior year period. Consumer Electronics sales were $121.6 million, a decrease of 23.6% compared with net sales of $159.1 million reported in the comparable period last year and comprised the remaining 33.7%. Gross margins for the nine-month period ended Nov. 30, 2006, were 17.0% compared with 10.6% reported in the nine-month period last year. Operating expenses for the fiscal 2006 nine-month period were $63.7 million, a decrease of 4.4% compared with $66.7 million in the comparable fiscal 2005 period. Balance Sheet At Nov. 30, 2006, the company's balance sheet showed $478.491 million in total assets, $78.180 million in total liabilities, and $400.311 million in total stockholders' equity. As of Nov. 30, 2006, the company had $149.7 million in cash and short-term investments and during the nine-month period, repurchased 305,100 shares of its Class A common stock. Full-text copies of the company's third fiscal quarter are available for free at http://ResearchArchives.com/t/s?18ee About Audiovox Audiovox Corp. (Nasdaq: VOXX) -- http://www.audiovox.com-- is an international supplier and value added service provider in the consumer electronics industry. The company conducts its business through subsidiaries and markets mobile and consumer electronics products both domestically and internationally under several of its own brands. It also functions as an original equipment manufacturer supplier to a wide variety of customers, through several distinct distribution channels. * * * Audiovox Corp.'s issuer rating carries Moody's Investors Service's B2 rating while its bank loan debt carries Moody's B1 rating. AVENUE FINANCIAL: Will Issue Up to 750,000 Shares to Settle Debt ---------------------------------------------------------------- Avenue Financial Corporation will settle an aggregate of $128,880 of indebtedness owed by the company to arm's length creditors. The company is proposing to issue up to 750,000 common shares to settle the indebtedness. Completion of the debt settlement is subject to regulatory approval, including satisfaction of the requirements of the TSX Venture Exchange. The company has 144,188,053 of remaining shares outstanding. Based in Ontario, Canada, Avenue Financial Corporation (TSX: AFC) -- http://www.avenuefinancialcorp.com/-- designs and develops investment products which are sold only by registered brokers and dealers for investors and select institutions. * * * In its interim financial statements for the nine-month period ended Sept. 30, 2006, Avenue Financial Corp.'s balance sheet indicated total assets of $630,124, total liabilities of $2,707,145, and a stockholders' deficit of $2,077,021. BILLING SERVICES: S&P Places Ratings on Negative CreditWatch ------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B+' corporate credit and senior secured debt ratings on Glenview, Illinois-based Billing Services Group Ltd. on CreditWatch with negative implications. The CreditWatch listing is driven by a recent press release by the company stating that it is in preliminary, early-stage discussions concerning numerous potential strategic options. Standard & Poor's will monitor any developments and determine the extent to which, if any, our ratings on the company could be affected. BRIGGS & STRATTON: Poor Performance Cues S&P to Cut Rating to BB+ ----------------------------------------------------------------- Standard and Poor's Ratings Services lowered its corporate credit and senior unsecured ratings for Wauwatosa, Wisconsin-based Briggs & Stratton Corp. to 'BB+' from 'BBB-'. The ratings were removed from CreditWatch, where they were placed with negative implications on Oct. 20, 2006, due to weaker-than- expected operating performance and credit protection measures that are below Standard & Poor's expectations for the 'BBB-' rating. The outlook is stable. "The downgrade reflects Briggs & Stratton's weakened financial performance, growing price pressure as lower cost offshore manufacturers begin penetrating the mass merchant segment of the market, and credit measures that continue to remain below our expectations for a 'BBB-' credit," said Standard & Poor's credit analyst Christopher Johnson. The ratings on Briggs & Stratton Corp. reflect the mature and competitive nature of the company's end markets and the high degree of seasonality in its businesses, which are susceptible to adverse weather conditions. These factors are somewhat offset by the company's strong market position as a leading producer of air- cooled gasoline engines and engine-powered outdoor equipment, in addition to its broad product portfolio. Briggs & Stratton's financial performance has been challenged by reduced demand from original equipment manufacturers, a product mix shift to lower horsepower engines, and the inherent volatility of weather-dependant generator sales and cyclicality of lawn and garden engine sales. "Despite a challenging operating environment, Briggs & Stratton's market share remains strong," added Mr. Johnson. CASH TECH: Posts $312,472 Net Loss in Second Quarter Ended Nov. 30 ------------------------------------------------------------------ Cash Technologies Inc. reported a $312,472 net loss on $81,782 of net revenues for the second quarter ended Nov. 30, 2006, compared with a $1.1 million on $23,525 of net revenues for the same period in 2005. Net loss from continuing operations was $922,052 in the quarter ended Nov. 30, 2006, compared with $927,480 in the same period in 2005. The decrease in net loss is primarily attributable to income from discontinued operations of $609,589 in the quarter ended Nov. 30, 2006, compared with a net loss of $210,951 in the same period in 2005. The 2006 quarter income from discontinued operations included a $1.5 million gain from disposition of subsidiary's assets, compared to none in the 2005 quarter. Sale of Tap Holdings Assets In October 2006, TAP Holdings LLC sold most of its assets to Champion Parts Inc. The initial cash payment from Champion was paid to TAP's secured lender to allow TAP's assets to be transferred to Champion. The remainder of the purchase price is in the form of a $9.1 million promissory note with a term of 11 years, monthly payments for which are calculated based on a percentage of the total carburetor sales by Champion. TAP has closed its Los Angeles factory and terminated any remaining employees. At Nov. 30, 2007, the company's balance sheet showed $17.9 million in total assets, $10.2 million in total liabilities, negative $87,052 in total minority interest, and $7.7 million in total stockholders' equity. The company's balance sheet at Nov. 30, 2006, also showed strained liquidity with $2.9 million in total current assets available to pay $10.2 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Nov. 30, 2006, are available for free at http://researcharchives.com/t/s?18e3 Going Concern Doubt Vasquez & Company LLP, in Los Angeles, California, expressed substantial doubt about Cash Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended May 31, 2006, and 2005. The auditing firm pointed to the company's significant recurring losses. About Cash Technologies Cash Technologies, Inc. (AMEX: TQ) -- http://www.cashtechnologies.com/-- develops and markets innovative data processing solutions in the healthcare and financial services industries. CATHOLIC CHURCH: Creditors Panel Wants Attorney Hired in Davenport ------------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in the Diocese of Davenport's Chapter 11 case has asked the U.S. Bankruptcy Court for the Southern District of Iowa for authority to employ a California law firm, the Associated Press reports. AP says that the creditors' committee, which includes people claiming priests sexually abused them, would help decide how the Diocese distributes its assets. Richard A. Davidson, Esq., at Lane & Waterman LLP, told AP that the Diocese would wait to file its chapter 11 reorganization plan until after the committee hired an attorney. The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on October 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. CBA COMMERCIAL: Fitch Holds Rating on Class M-5 Certificates at BB ------------------------------------------------------------------ Fitch Ratings upgrades CBA Commercial, series 2004-1, commercial mortgage pass-through certificates as: -- $3.6 million class M-2 to 'AA' from 'AA-'. In addition, Fitch affirms these certificates: -- $34.5 million class A-1 at 'AAA'; -- $15.1 million class A-2 at 'AAA'; -- $8.1 million class A-3 at 'AAA'; -- Interest-only class at 'AAA'; -- $2.9 million class M-1 at 'AAA'; -- $3.7 million class M-3 at 'BBB+'; and, -- $770,000 class M-5 at 'BB'. Classes M-4, M-6, M-7 and M-8 are not rated by Fitch. The upgrades are a result of increased credit enhancement due to additional paydown since Fitch's last rating action in June 2006. As of the December 2006 distribution date, the pool's aggregate collateral balance has been reduced 25.5% to $76.1 million from $102 million at issuance. Currently nine loans are being specially serviced. Of the nine loans, four loans are current and pending return to the master servicer, three loans are real-estate owned and two are 60 days delinquent. Losses are expected on four of the nine specially serviced loans. Fitch expects a loss on the multifamily loan in Oklahoma City. The property is currently 10% occupied, suffers from significant deferred maintenance. The special servicer has engaged a property manager to secure the property and the property is being marketed for sale. Fitch expected losses on the specially serviced loans will deplete the non-rated class M-8 and reduce the balance of the non-rated class M-7. CENTRAL GARDEN: Reports $320 Million Sales in Qtr. Ended Dec. 30 ---------------------------------------------------------------- Central Garden & Pet Co. reported an approximately $320 million sales on its preliminary results for fiscal first quarter ended Dec. 30, 2006. This compares to the previous guidance of approximately breakeven for the quarter. "The reasons for the earnings outlook revision for the quarter were a late quarter shift in seasonal purchases by lawn and garden retailers, lower sales and mix shift within pet bird and small animal products and higher-than-previously anticipated grain costs," commented Glenn Novotny, President and Chief Executive Officer of Central Garden & Pet Company. "These three factors resulted in lower-than-anticipated sales and gross profit contribution. Overall, we have strong listings for 2007, we believe we are continuing to take market share and we are continuing to implement price increases to offset rising grain costs." Headquartered in Walnut Creek, California, Central Garden & Pet Company (NASDAQ: CENT) -- http://www.central.com/-- markets and produces branded products for the lawn & garden and pet supplies markets. Products are sold to specialty independent and mass retailers. The company also provides a host of other regional and application-specific garden and pet brands and supplies. The company has approximately 5,000 employees, primarily in North America and Europe. * * * As reported in the Troubled Company Reporter on Sept. 28, 2006, Moody's Investors Service affirmed its Ba3 corporate family rating for Central Garden and Pet Company. Additionally, Moody's held its Ba2 probability-of-default rating on the company's $350 million senior secured revolver. CEP HOLDINGS: Exclusive Plan-Filing Period Extended to March 19 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Ohio extended until March 19 2007, the period within which CEP Holdings LLC and its debtor-affiliates have the exclusive right to file a plan of reorganization. The Court also extended, until May 18, 2007, the period within which the Debtors have the exclusive right to solicit acceptances of the plan. When the Debtors filed for bankruptcy, they operated 10 manufacturing facilities in Ohio, Michigan, Alabama, South Carolina and Mexico, employed approximately 1,106 employees in the United States and supplied custom molders and extruders of rubber and plastic products to General Motors, Delphi Corporation, Visteon, Nissan, Daimler-Chrysler, Honda and GKN Automotive. The gross sales of the Debtors' business were projected to be approximately $190 million for fiscal 2006. Additionally, the Debtors' cases have been complex, involving a complicated DIP facility that has successfully balanced the demands of the Committee with the needs of the Debtors' major customers. Accordingly, the Debtors disclosed that the size and complexity of their businesses and these cases justify the requested extension of the Exclusive Periods. The Debtors related that the extension of the exclusive periods requested will not harm the Debtors' creditors or other parties in interest and will be used for a proper purpose -- to formulate a liquidating plan that is fair to all parties in interest. Based in Akron, Ohio, CEP Holdings, LLC, manufactured hard, molded rubber products and extruded plastic materials for companies in the automotive, construction, and the medical industries. The Company and two of its subsidiaries filed for chapter 11 protection on Sept. 20, 2006 (Bankr. N.D. Ohio Case No. 06-61796). McGuireWoods LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. CEP HOLDINGS: Court Sets March 1 as General Claims Bar Date ----------------------------------------------------------- The U.S Bankruptcy Court for the Northern District of Ohio set March 1, 2007, at 5:00 p.m., as the deadline for all creditors owed money by CEP Holdings LLC and its debtor-affiliates, on account of claims arising prior to Sept. 20, 2006, to file their proofs of claim. Creditors must file written proofs of claim on or before the March 1 Claims Bar Date to the claims, balloting and noticing agent: The BMC Group, Inc. 3343 Peachtree Road Northeast, Suite 200 Atlanta, GA 30326 For governmental units, the Claims Bar Date is set for March 19, 2007, at 5:00 p.m. Based in Akron, Ohio, CEP Holdings, LLC, manufactured hard, molded rubber products and extruded plastic materials for companies in the automotive, construction, and the medical industries. The Company and two of its subsidiaries filed for chapter 11 protection on Sept. 20, 2006 (Bankr. N.D. Ohio Case No. 06-61796). McGuireWoods LLP represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. COMPLETE RETREATS: Wants Court to Approve Intagio Settlement ------------------------------------------------------------ Complete Retreats LLC, its debtor-affiliates and Intagio Corporation ask the U.S. Bankruptcy Court for the District of Connecticut to approve a Settlement. On behalf of Intagio, Louis J. Testa, Esq., at Neubert, Pepe & Monteith, P.C., in New Haven, Connecticut, relates that Intagio strongly disagrees with the Court's basis on overruling its objection to the Debtors' request to sell substantially all of their assets. Consequently, Intagio has indicated to the Debtors and Ultimate Resort LLC that it intends to appeal the Sale Order. Subsequent to the Sale Hearing, the Debtors, Ultimate and Intagio, with the assistance of counsel for the Official Committee of Unsecured Creditors, entered into negotiations for purposes of settling all outstanding disputes between them with respect to the Sale, Joel H. Levitin, Esq., at Dechert LLP, in New York, tells the Court, on the Debtors' behalf. Intagio, Ultimate, and the Debtors have agreed to a settlement that would obviate Intagio's need to appeal the Sale Order and resolve all issues among the parties, Mr. Levitin informs the Court. Terms of the Settlement The Intagio Settlement provides that Ultimate and Intagio will enter into a membership agreement and a media contract. Under the Membership Agreement, Intagio will receive a Lifetime Corporate Membership in Ultimate Resort ELITE, along with credit redeemable to pay for four calendar years of annual fees. Under the Media Contract, Intagio will provide Ultimate with media agency services. A full-text copy of the Intagio Membership Agreement is available for free at http://ResearchArchives.com/t/s?18e4 A full-text copy of the Intagio Media Contract is available for free at http://ResearchArchives.com/t/s?18e5 The Debtors and Intagio further agree that Claim No. 1752 for $1,754,122 will be reduced and allowed as an unsecured claim for $1,500,000, which will be the only claim Intagio will have against the Debtors and their estates. Intagio agrees to withdraw Claim No.1349 for $1,754,122. Mr. Levitin asserts that the Intagio Settlement is appropriate for these reasons: -- The significant cost and expense to be incurred by each party in the presence of material disputes of the law, facts and issues raised in Intagio's Objection, and the possibility of an appeal by Intagio; -- The future cost and expense to be borne by the Debtors' estates obviating the need to object to and litigate the nature and amount of Intagio's claim against the Debtors; and -- The delay and disruption in the administration of the bankruptcy estates. No party-in-interest will suffer prejudice or injury as a result of the Settlement and the Settlement does not create an undue burden or hardship to the Debtors, Mr. Levitin maintains. Intagio had asked the Court to extend the time for it to file a notice of appeal from the Sale Order to the earlier of: (i) the date the Court denies the Joint Settlement Motion; or (ii) the effective date of the Settlement. Mr. Testa relates that Intagio agrees not to file a notice of appeal pending the Settlement's documentation if the deadline were extended to not require it. 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). CREDIT LINKED: Moody's Upgrades Rating on $15.5 Million Notes ------------------------------------------------------------- Moody's upgraded Credit Linked Notes Ltd. 2004-1. Rating action: * The $15,500,000 Credit Linked Notes due 2008 -- Previous Rating: Ba3 and on watch for possible upgrade -- Current Rating: Baa3 According to Moody's, the upgrade was primarily a result of the shortened duration of the portfolio, and, therefore, reducing the expected default rate of the portfolio. CREDIT SUISSE: S&P Puts Default Rating on Class D-B-5 Certificates ------------------------------------------------------------------ Standard and Poor's Ratings Services lowered its rating on class D-B-5 from CSFB Mortgage-Backed Trust Series 2003-1 to 'D' from 'CCC'. Class D-B-5 receives its interest and principal distributions from loan groups 1 and 2, which are cross-collateralized. The classes with the 'III' prefix get interest and principal distributions from loan group 3. The downgrade reflects $268,955 in losses incurred during the December 2006 distribution period, which completely eroded the class' credit support. To date, the cross-collateralized groups have realized over $3.0 million in losses, representing approximately 0.86% of the original principal balance. In addition, total delinquencies were 14.40%, with severe delinquencies of 9.87% for the cross-collateralized groups, which were 46 months seasoned and had a pool factor of approximately 12%. Credit support for the cross-collateralized groups is provided solely by subordination. The collateral backing the crossed- collateralized groups consists primarily of 30-year, fixed-rate, first-lien prime mortgage loans secured by residential properties. Ratings Lowered CSFB Mortgage-Backed Trust Series 2003-1 Mortgage Backed Pass-Through Certificates Series 2003-1 Rating ------ Class To From ----- -- ---- D-B-5 D CCC DADE BEHRING: Likely Strong Cash Flow Cues Moody's to Hold Ratings ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Dade Behring, Inc. The outlook on Dade's ratings remains stable. Despite the increase in financial leverage to finance a more aggressive financial policy, Moody's is affirming Dade's existing ratings given the expectation of continued strong cash flow coverage of debt. For the next twelve months, Moody's projects that Dade should generate between approximately $300 million and $350 million in operating cash flow and roughly $105 to $135 million in free cash flow. As such, Moody's expects Dade's operating cash flow coverage of adjusted long-term debt to be in the range of 35% to 40% in 2007 with free cash flow coverage of adjusted long-term debt to be in the range of 12% to 17%. Moody's, however, believes that the company's margins will likely contract in the next 12 months based on increased competition and greater pricing pressures. Further, in order to support a successful launch to its new product, Dimension Vista, Dade is expected to ramp up operating expenses, including sales and marketing, support and maintenance, and other items. While Dimension Vista should drive incremental equipment revenue and recurring reagent and consumable revenue over time, leading to margin expansion, Moody's expects that the initial launch will constrain the level of profit growth in the short-term. Moody's also notes that the since the middle of 2005, the company has used cash to finance the repurchase of common stock and the payment of a small dividend. After a significant drop between 2002 to the middle of 2005, long-term debt has stabilized in the $400 million range. Further, Moody's anticipates that gross long- term debt will increase to a range of $500 million to $520 million in 2007 as the company continues to complete additional share repurchases. Moody's also affirmed the speculative grade liquidity rating of SGL-1 for Dade, reflecting the expectation that the company should maintain very good operating and free cash flow to meet its obligations, such as capital expenditures and working capital, over the next twelve months. The SGL-1 rating also reflects the company's minimal near-term debt service requirements, good liquidity with ready access to a committed credit facility and sufficient cushion under its bank facility's covenants. Moody's does note, however, that the company's liquidity rating could be affected by its more aggressive financial policy given heightened share repurchases. These ratings were affirmed: -- $600 million Senior Unsecured First Lien Revolver, due 2010, Ba1, LGD4, 52%; -- Corporate Family Rating, Ba1; -- Probability of Default Rating, Ba1; and, -- Speculative Grade Liquidity Rating, SGL-1. Dade Behring, Inc., based in Deerfield, Illinois, is a leading manufacturer and distributor of in vitro diagnostic products and services to clinical laboratories. The company's revenues for the twelve months ended Sept. 30, 2006 were approximately $1.7 billion. DAIMLERCHRYSLER: Delaware Gives Incentive Bundle to Chrysler Plant ------------------------------------------------------------------ The state of Delaware has given DaimlerChrysler AG's Chrysler Group a package of incentives and tax breaks to keep the company from closing a plant in Newark, Del., Gina Chon of the Wall Street Journal reports. The Newark plant makes sport-utility vehicles, has made 80,000 vehicles in 2006, operates one shift a day, and has 2,100 employees. Chrysler CEO Tom LaSorda is expected to unveil a restructuring plan on Feb. 14, 2007. Delaware Governor Ann Minner has signed a bill that will save employers more than $30 million. Gov. Minner hopes that this will convince Chrysler that the state is serious in saving the plant and keeping the jobs of 2,100 employees, Ms. Chon said. 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: CEO Grienstein Testifies at Senate Committee Hearing --------------------------------------------------------------- Gerald Grinstein, Chief Executive Officer of Delta Air Lines Inc., appeared before the U.S. Senate Committee on Commerce, Science and Transportation to provide testimony to the full committee about the state of the airline industry and the potential impact of airline mergers and industry consolidation. In his remarks, Grinstein discussed the enormous progress Delta people have achieved over the past 16 months in transforming the airline into a strong, healthy and vibrant competitor. He noted that the company is poised to exit bankruptcy this spring as one of the best-positioned airlines in the country based on financial strength, profit potential and a cost structure among the lowest of any traditional network carrier. In his testimony, Grinstein also addressed the unsolicited takeover proposal made by US Airways Group Inc. As reported in the Troubled Company Reporter on Dec. 1, 2006, Delta's Board of Directors rejected the initial proposal made by US Airways on Nov. 15, 2006 and concluded that the company's standalone Plan of Reorganization will provide creditors with superior value as well as a faster recovery and much greater certainty of execution. The Delta Board will review the revised proposal made by US Airways earlier this month. "The stage is set for Delta to emerge as a powerful, competitive force to be reckoned with -- unless US Airways' takeover bid is allowed to derail our momentum and jeopardize our hard-won gains," Mr. Grinstein told the Senate committee. Mr. Grinstein said that a primary reason for Congress to examine the competitive impact of the US Airways proposal deal is that if the merger were to go forward, it would trigger broad industry consolidation. He said, "Almost every day brings a new media report on potential mergers in the airline industry, most of which are stated openly as direct reactions to US Airways' bid. And if this anticompetitive proposed merger gains approval despite its substantial adverse impacts on competition, consumers, communities and employees, virtually any other airline merger would likely pass regulatory muster. In our view, the likely outcome of follow-on consolidation would be to leave the combined Delta and US Airways as the weakest carrier, with little West Coast and Asian presence and a staggering debt load." In his remarks, Grinstein made these observations: * Delta is poised to emerge from bankruptcy as a strong airline. While many companies use the bankruptcy process simply to shore up their balance sheet and reduce debt, Delta undertook a top-to-bottom transformation that touched every aspect of how it does business. It is using the bankruptcy process to improve and strengthen the airline. * Delta people deserve to determine their own destiny. Delta people are united in their strong opposition to US Airways' proposal, representing as it does the worst possible combination with the most negative impact on virtually all constituencies. * US Airways' proposal fails absolutely to meet antitrust standards and would reduce competition and harm consumers. US Airways' principal goal in its hostile takeover attempt is to eliminate its key competitor. Delta is the airline with which US Airways' network overlaps most, with the highest number of overlapping markets and hubs. No merger with anywhere near this degree of network redundancy has ever been approved by the Department of Justice in the history of this industry. * The proposed merger would make Delta a weaker and less competitive carrier. The combined company would have a staggering debt burden of $24 billion, which would place the merged US Airways-Delta one crisis away from financial collapse. "We believe US Airways' unsolicited and anticompetitive proposal does not meet antitrust standards, and would harm employees, consumers and communities," Mr. Grinstein concluded. "It would create a much weaker combined carrier that would threaten the future stability of our nation's air transportation industry. It would reverse the remarkable progress Delta has made. Let me be clear -- this is a hostile takeover bid; not a consensual merger." A full-text copy of Mr. Grinstein's testimony at the Senate Commerce, Science and Transportation Committee hearing is the available for free at http://ResearchArchives.com/t/s?18fa 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. DLJ COMMERCIAL: Fitch Ups Rating on Class B-5 Certificates to BB+ ----------------------------------------------------------------- Fitch Ratings upgrades DLJ Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 1998-CF2, as: -- $52.6 million class B-3 to 'A+' from 'A-'; -- $11.1 million class B-4 to 'A-' from 'BBB'; and, -- $22.2 million class B-5 to 'BB+' from 'BB'. In addition, Fitch affirms these classes: --$572.3 million class A-1B at 'AAA'; --Interest-only class S at 'AAA'; --$55.4 million class A-2 at 'AAA'; --$60.9 million class A-3 at 'AAA'; --$13.8 million class A-4 at 'AAA'; --$41.5 million class B-1 at 'AAA'; --$16.6 million class B-2 at 'AAA'; and, --$13.8 million class B-6 at 'B-'. Fitch does not rate the $15.3 million class C certificates. Class A-1A has paid in full. The rating upgrades are primarily due to defeasance since Fitch's last rating action. To date, 55 loans have defeased, including six of the top 10 loans. As of the January 2007 distribution date, the pool has paid down 21% to $875.4 million from $1.11 billion at issuance. There are currently 10 loans in special servicing, nine of which are current and one of which is 90 days delinquent. The largest of the specially serviced loans is collateralized by a hotel in Louisville, Kentucky. The borrower has extended the hotel franchise agreement and the required property improvement plan is currently ahead of schedule. The 90 day delinquent loan is collateralized by a multifamily property in Commerce, Texas. Losses on the specially serviced loans are expected and anticipated to be fully absorbed by the unrated class C certificate. DURA AUTOMOTIVE: Can Pay $1.1 Million Prepetition Tax Claims ------------------------------------------------------------ The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized Dura Automotive Systems Inc. and its debtor-affiliates to pay, in their sole discretion, the undisputed prepetition claims of certain governmental units in respect of real and personal property taxes in an aggregate amount not to exceed $1,100,000. As reported in the Troubled Company Reporter on Dec. 29, 2006, the Debtors own real and personal property in at least 12 U.S. states and Canadian provinces. Under applicable law, state, provincial, and local governments in the jurisdictions where the properties are located are granted the authority to levy taxes against the real and personal property. The Debtors typically pay taxes on their Owned Properties in the ordinary course as the taxes are invoiced, which typically covers taxes for the prior year, or quarter, depending on how the applicable tax is assessed. Thus, as of their bankruptcy filing, the Debtors owed taxes that accrued with respect to the Owned Properties for some portions of the 2006 calendar year. While the Bankruptcy Code does not require the Debtors to pay the Property Taxes at this time, nonpayment or late payment of certain prepetition Property Taxes will, among others: (i) likely subject the Debtors to above-market interest rates and penalties in certain circumstances; (ii) cause Taxing Authorities' county or municipal to suffer a significant gross revenue cutback, in turn leading to reduced funding of public schools, fire and police departments, and other municipal services from which the Debtors and their employees enjoy the benefits; (iii) unnecessarily divert the Debtors' attention away from the operations of their businesses and the reorganization process in the event the Taxing Authorities would cause the Debtors to be audited; and (iv) result in the creation of statutory liens on the Owned Properties, which creation and perfection does not violate the automatic stay under Section 362 of the Bankruptcy Code. 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. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Judge Carey Approves Lease Rejection Procedures ---------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware approved Dura Automotive Systems Inc. and its debtor-affiliates' procedure for rejecting executory contracts and unexpired leases of personal and non-residential real property: a. The Debtors will file a notice to reject any executory contract, lease or sublease, or interest in the lease or sublease, pursuant to Section 365 and will serve the Notice, as well as the deadlines and procedures for filing objections to the Notice, via overnight delivery service upon: (i) the United States Trustee; (ii) counsel to the agent to the Debtors' prepetition secured lenders; (iii) counsel to the agent to the Debtors' postpetition secured lenders; (iv) counsel to the Official Committee of Unsecured Creditors; (v) the contract counter-party or landlord(s) affected by the Notice, and (vi) any other parties-in-interest to the executory contract or lease, including subtenants, if any, sought to be rejected by the Debtors. If the Notice is issued by the Debtors prior to the effective date of a plan of reorganization, the affected executory contract, lease, sublease or interest in the lease or sublease will be deemed to be subject to a motion to reject for all purposes. b. The Notice will set forth this information, to the best of the Debtors' knowledge, as applicable: (i) the street address of the real property underlying the lease or sublease, the interest in the personal property lease or sublease or the type of executory contract which the Debtors seek to reject; (ii) the Debtors' monthly payment obligation, if any, under the contract, lease or sublease or interest in the lease or sublease; (iii) the remaining term of the contract, lease or sublease or interest in the lease or sublease; (iv) the name and address of the contract counterparty, landlord or subtenant; (v) a general description of the terms of the executory contract or lease; and (vi) a disclosure describing the procedures for fling objections, if any. c. Should a party-in-interest object to the proposed rejection by the Debtors of an executory contract, lease or sublease, or interest in the lease or sublease, the party must file and serve a written objection so that the objection is filed with the Court and is actually received by these parties no later than 10 days after the date the Debtors serve the Notice: (i) counsel to the Debtors: Kirkland & Ellis LLP, 200 East Randolph Drive, Chicago, Illinois 60601, Attn: Ryan Blaine Bennett, Esq., and Richards, Layton & Finger, One Rodney Square, 920 N, King Street, Wilmington, Delaware 19801, Attention: Daniel J. DeFranceschi, Esq.; (ii) counsel to the Creditors Committee; and (iii) the Office of the United State Trustee. d. Absent an objection, the rejection of the executory contract, lease or sublease, or interest in the lease or sublease, will become effective 10 days from the date the Notice was served on the Service Parties without further notice, hearing or order of the Court; provided, however, that with respect to leases or subleases for non- residential real property, the rejection will become effective on the later of: (x) the Rejection Date or (y) the date the Debtors unequivocally relinquished control of the premises to the affected landlord by turning over keys or "key codes" to the affected landlord. e. If a timely objection is filed that cannot be resolved, the Court will schedule a hearing to consider the objection only with respect to the rejection of any executory contract, lease or sublease, or interest in the lease or sublease, as to which an objection is properly filed and served. If the Court upholds the objection and determines the effective date of rejection of the executory contract, lease or sublease, or interest in the lease or sublease, that date will be the rejection date. If the objection is overruled or withdrawn or the Court does not determine the date of rejection, the rejection date of the lease, sublease or interest will be deemed to have occurred on the Rejection Date or NRP Lease Rejection Date, as applicable. f. If the Debtors have deposited funds with a lessor or contract counterparty as a security deposit or other arrangement, the lessor or contract counterparty may not set-off for otherwise use the deposit without the prior authority of the Court. g. With respect to any personal property of the Debtors located at any of the premises subject to any Notice, the Debtors will remove the property prior to the expiration of the period within which a party must file and serve a written objection. If they determine that the value of the property at a particular location has a de minimis value or cost of removing the property exceeds the value of the property, the Debtors will generally describe the property in the Notice and, absent a timely objection, the property will be deemed abandoned pursuant to Section 554, as is, where is, effective as of the date of the rejection of the underlying unexpired lease. Counterparties to executory contracts, leases or subleases, or interests in the leases and subleases that are rejected pursuant to the Rejection Procedures are required to file a proof of claim relating to the rejection of the executory contract, lease or sublease, or interest in the lease or sublease, if any, by the later of: (a) the claims bar date established in the Chapter 11 cases, if any; and (b) 30 days after the Rejection Date. The Debtors believed that the Rejection Procedures provide a fair and efficient manner for rejecting contracts, leases, subleases, and interests in leases and subleases. 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. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). FASSBERG CONSTRUCTION: Court May Convert Case to Chapter 7 ---------------------------------------------------------- The Honorable Geraldine Mund of the U.S. Bankruptcy Court for the Central District of California, San Fernando Valley Division, directs Fassberg Construction Company to show cause why its chapter 11 bankruptcy case should not be converted into a chapter 7 proceeding. Judge Mund explains that the Debtor's case has been pending for 20 months with no disclosure statement being approved by the Court and no Plan of Reorganization submitted to the creditors for voting purposes. Judge Mund has scheduled the "order to show cause hearing" on Jan. 30, 2007, 10:00 a.m., at Courtroom No. 303, 21041 Burbank Boulevard in Woodland Hills, Calif. Before the Court's show cause order, Barbizon Hotel-Apartments LP, a creditor, sought conversion of the Debtor's case to a chapter 7 liquidation proceeding, arguing that it is clear that the Debtor is never going to propose a confirmable Plan of Reorganization. Amended Plan In September 2006, the Debtor delivered a third amended chapter 11 plan of reorganization and an accompanying disclosure statement describing that plan. The Official Committee of Unsecured Creditors in Fassberg's case then sought amendments to the Third Amended Plan and Disclosure Statement. The Committee argued that the Disclosure Statement lacks adequate information including a description on the proceeds of the "additional potential recoveries" payable to subcontractors or Fidelity & Deposit Company of Maryland as secured creditors. The Committee asserted that the description must distinguish between recoveries subject to Fidelity's security interest and recoveries available to the estate and all creditors. Under the Third Amended Plan, the claim of Fidelity, which is secured by all of the Debtor's assets, will receive an estimated payout of $184,000 with zero percent interest beginning on the first quarter of 2008, and continuing until the fourth quarter of the same year. Fidelity's lien on the Debtor's assets will be reduced by the Debtor's payments to subcontractors as projects are completed. The unsecured claims of subcontractors to the Debtor on bonded projects have secondary source of payment depending on the outcome of all matters upon completion. The claimants can assert payment of their claims directly against Fidelity under performance or completion bonds. Payments to general unsecured claims based on sale of goods and delivery of services, including the claims of insiders Housing Authority of the City of Los Angeles and Paul Lax, will be under a special interest bearing account, to be accumulated and held until their claims are allowed, otherwise, the funds which have been accumulated will be paid pari pasu to all other creditors whose clams have been allowed. Fidelity's claim will be treated as unsecured to the extent Fidelity is required to fund any expense related to payment of performance bonds or any expense of the estate, and to extent the total collateral securing Fidelity's claim is less than the amount of its claim. Holders of Class 2 General Unsecured Bonded Claims are guaranteed by Fidelity, hence, their claims will be paid from non-estate funds, 10 days after the effective date of the Plan. Class 3 General Unsecured Non-Bonded Claims are entitled to a Class 3 Claim status on account of its deficiency claim. The claims will be paid based on recoveries received, with total payout ranging from $0 to $1,870,000. For any proceeds recovered that will go to the Class 3 claimants, the first $150,000 will be paid to other members of Class 3 before Fidelity participates. Abaraham Fassberg's 100% interest in the company will not receive any consideration under the Plan. Plan Funding Distribution to the Debtor's creditors under the Amended Plan will be funded by: a) any recoveries from avoidance actions on non-bonded project funds; b) the Debtor's malpractice claim against Paul Lax; c) any recovery of contract sums in the Debtor's litigation with Corteen Village LP; and d) Fidelity & Deposit Company of Maryland, who will be a source of capital but only in the form of payments by Fidelity under payment bonds or cash collateral advanced by Fidelity. Disbursements will be made by Fidelity to cover Priority Taxes, Class 2 bonded claims and administrative claims of the estate. A full-text copy of the Debtor's amended disclosure statement explaining its third amended chapter 11 plan of reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=060927020542 About Fassberg Construction Headquartered in Encino, California, Fassberg Construction Company is a full service general contracting and construction management firm. The company filed for chapter 11 protection on April 1, 2005 (Bankr. C.D. Calif. Case No. 05-11957). Douglas M. Neistat, Esq., at the Law Offices of Greenberg & Bass, serves as counsel in the Debtor's bankruptcy case. David B Golubchik, Esq., at Levene, Neale, Bender, Rankin & Brill LLP, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it had assets of $15,267,175 and debts of $6,758,113. FENWAL INC: S&P Rates $400 Million Senior Secured Facilities at B+ ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Round Lake, Illinois-based commercial blood collection supplier Fenwal Inc. The rating outlook is negative. At the same time, Standard & Poor's assigned its loan and recovery ratings to Fenwal Inc.'s $400 million senior secured first-lien credit facilities, consisting of a $300 million term loan B, a $50 million delayed draw facility, and a $50 million revolving credit facility. The term loan is due in 2014 and the revolving credit in 2013. The facilities were rated 'B+' with a recovery rating of '3', indicating the expectation for meaningful recovery of principal in the event of a payment default. In addition, Standard & Poor's assigned its loan and recovery ratings to Fenwal's $75 million second-lien term loan maturing in 2014. The second-lien loan was rated 'B-' with a recovery rating of '5', indicating the expectation for negligible recovery of principal in the event of a payment default. All ratings are based on preliminary offering statements and are subject to review upon final documentation. Proceeds of the term loan B and second-lien facility, in combination with sponsor equity of $220 million, will be used to finance the purchase of Fenwal from Baxter International Inc. "The 'B+' corporate credit rating reflects Fenwal's single business focus, the risks associated with transitioning to an independent company, the necessity of retaining and capturing manual red blood cell collection customers as the business shifts to automated blood collection, and pricing pressures," said Standard & Poor's credit analyst Cheryl Richer. "In addition, debt leverage is initially aggressive, and the company is not expected to be free cash flow positive for at least a year. These risks are partly offset by the stable global demand for blood collection, Fenwal's leadership position in manual red blood cell collection, and a high proportion of revenues derived from disposable products." Debt leverage will initially be high, and is expected to approximate 5.5x by year-end 2007 due to the high level of debt and a decline in EBITDA resulting from the renegotiation of a large contract. EBITDA interest coverage is expected to be only about 2x. Thereafter, mid-single-digit or better sales growth, combined with cost-containment initiatives, should drive improvement in revenues, operating margins, and profitability. By 2009, debt leverage and EBITDA interest coverage should be less than 4x and more than 3x, respectively. FINOVA GROUP: Selling Aviation Assets for $45 Million to FAP LLC ---------------------------------------------------------------- FINOVA Group Inc. entered into a definitive agreement to sell certain of its aviation assets for a total purchase price of $45 million pursuant to a Purchase and Sale Agreement by and among FINOVA Capital Corporation and AIRCRAFT 48008/48009, LLC (each a subsidiary of the company) as sellers and FAP, LLC (an affiliate of Compass Capital Corporation) as buyer. The aviation assets included in the Sale consist of 15 aircraft either owned by FINOVA or which secure financing obligations (i.e. loans and direct financing leases) and 8 owned engines. Proceeds from the Sale will exceed the company's Sept. 30, 2006 carrying value of these assets by approximately $11 million. The Sale is expected to take place in multiple closings, with the first of these closings anticipated by or about Jan. 31, 2007. In October 2006, the company entered into a non-binding letter of intent to sell to Compass Capital Corporation or its assignee, subject to execution of a definitive agreement and completion of due diligence, including inspection of the equipment and review of records, certain of its aviation assets. The proceeds from the Sale will be used to fund internal cash reserves and debt service. A full-text copy of the Aircraft Engine Bid and Purchase Agreement is available for free at http://ResearchArchives.com/t/s?18f6 About Finova Headquartered in Scottsdale, Arizona, The Finova Group, Inc., provides commercial financing to small and mid-sized businesses; other services include factoring, accounts receivable management, and equipment leasing. The firm has three segments: Commercial Finance, Specialty Finance, and Capital Markets. FINOVA targets such markets as transportation, wholesaling, communication, health care, and manufacturing. Loan write-offs had put the firm on shaky ground. The company and its debtor-affiliates and subsidiaries filed for Chapter 11 protection on March 7, 2001 (U.S. Bankr. Del. 01-00697). Pachulski, Stang, Ziehl, Young & Jones P.C. and Wachtell, Lipton, Rosen & Katz represent the Official Committee of Unsecured Creditors. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., represents the Debtors. FINOVA has since emerged from Chapter 11 bankruptcy. Financial giants Berkshire Hathaway and Leucadia National Corporation (together doing business as Berkadia) own FINOVA through the almost $6 billion lent to the commercial finance company. Finova is winding up its affairs. Going Concern Doubt As reported in the Troubled Company Reporter on May 16, 2006, Ernst & Young LLP expressed substantial doubt about The Finova Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's negative net worth as of Dec. 31, 2005 as well as its limited sources of liquidity to satisfy its obligations. At Sept. 30, 2006, the company's balance sheet showed $473.55 million in total assets and $1,076.45 million in total liabilities, resulting in a $602.90 million stockholders' deficit. FINOVA GROUP: Committee Approves 2007 Annual Incentive Plan ----------------------------------------------------------- The Human Resources Committee of FINOVA Group's Board of Directors approved adoption of the 2007 Annual Incentive Plan. The Plan operates in the same manner as the annual incentive plans implemented for 2002-2006. Under each of those plans, including the one for 2007, employees are required to fulfill objectives based on individual job responsibilities. Each employee is given a target bonus, generally based on grade level and criticality to the company. The Company will pay bonuses ranging from 0% to 200% of the employee's target bonus, based on the employees' contribution to the continued wind-down of the Company, the achievement of the business unit's objectives, and the employee's personal performance, in the complete discretion of the company. Certain employees are also awarded additional severance compensation equivalent to 25% of the employee's annual bonus award. The additional severance is subject to the terms of the existing severance plan, which permits additional grants of severance to employees. A full-text copy of FINOVA's 2007 ANNUAL INCENTIVE PLAN is available for free at http://ResearchArchives.com/t/s?18f2 About Finova Headquartered in Scottsdale, Arizona, The Finova Group, Inc., provides commercial financing to small and mid-sized businesses; other services include factoring, accounts receivable management, and equipment leasing. The firm has three segments: Commercial Finance, Specialty Finance, and Capital Markets. FINOVA targets such markets as transportation, wholesaling, communication, health care, and manufacturing. Loan write-offs had put the firm on shaky ground. The company and its debtor-affiliates and subsidiaries filed for Chapter 11 protection on March 7, 2001 (U.S. Bankr. Del. 01-00697). Pachulski, Stang, Ziehl, Young & Jones P.C. and Wachtell, Lipton, Rosen & Katz represent the Official Committee of Unsecured Creditors. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., represents the Debtors. FINOVA has since emerged from Chapter 11 bankruptcy. Financial giants Berkshire Hathaway and Leucadia National Corporation (together doing business as Berkadia) own FINOVA through the almost $6 billion lent to the commercial finance company. Finova is winding up its affairs. Going Concern Doubt As reported in the Troubled Company Reporter on May 16, 2006, Ernst & Young LLP expressed substantial doubt about The Finova Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's negative net worth as of Dec. 31, 2005 as well as its limited sources of liquidity to satisfy its obligations. At Sept. 30, 2006, the Company's balance sheet showed $473.55 million in total assets and $1,076.45 million in total liabilities, resulting in a $602.90 million stockholders' deficit. FOAMEX INTERNATIONAL: Stockholders Unanimously Support Joint Plan ----------------------------------------------------------------- Stockholders of Foamex International Inc. voted to unanimously to accept the company's Second Amended Joint Plan of Reorganization. "We are pleased to have received the unanimous support of the equityholders who voted on the Plan," Raymond E. Mabus, Jr., Chairman and Chief Executive Officer of Foamex, said. "Over the past several months, we have worked diligently to address the interests of all our stakeholders in an effort to achieve the most value possible for all stakeholders. The announcement, along with the previously reported Plan acceptance by the Senior Secured Noteholders, reflects real progress towards our emergence, which we continue to expect to occur in the first quarter of 2007." The company filed a supplement to the Plan with the United States Bankruptcy Court for the District of Delaware. As anticipated by the Plan, the Plan Supplement contains information and materials relating to implementation of the Plan, including proposed forms of agreements that may be entered into upon the Company's exit from bankruptcy. Among other things, the Plan Supplement discloses the identity of individuals proposed to become directors of the company upon the effective date of the Plan. The company's proposed directors are subject to change prior to confirmation of the Plan by the Court. The proposed new directors are: * Mr. Robert B. Burke, Founder and Chief Executive Officer of Par IV Capital Management, LLC; * Mr. Seth Charnow of the D. E. Shaw Group; and * Mr. Eugene I. Davis, Chairman and Chief Executive Officer of PIRINATE Consulting Group, LLC. The proposed continuing directors are: * Mr. Raymond E. Mabus, Jr.; * Mr. Gregory J. Christian, the Company's Executive Vice President, Chief Restructuring Officer, Chief Administrative Officer, and General Counsel who will assume the role of President of the reorganized company; and * Mr. Thomas M. Hudgins, Retired Partner, Ernst & Young LLP. In addition, Mr. Gregory J. Corona, Chairman of Lakewood Capital, LLC and Accubuilt, Inc., is expected to be invited to serve on the board of directors of Reorganized Foamex International as of the Effective Date. The Plan Supplement contains additional information concerning potential transactions and agreements to be entered into in connection with the consummation of the Plan, including, without limitation, information concerning the proposed exit facility, the equity investment commitment, the proposed corporate governance documents and the proposed executive officers, all of which are subject to revision and modification prior to the company's emergence from bankruptcy in accordance with the Plan. A hearing to consider confirmation of the Plan is scheduled for Feb. 1, 2007. Headquartered in Linwood, Pennsylvania, Foamex International Inc. (FMXIQ.PK) -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets. The company also manufactures high-performance polymers for diverse applications in the industrial, aerospace, defense, electronics and computer industries. The company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693). Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, represent the Debtors in their restructuring efforts. Houlihan, Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising the ad hoc committee of Senior Secured Noteholders. Kenneth A. Rosen, Esq., and Sharon L. Levine, Esq., at Lowenstein Sandler PC and Donald J. Detweiler, Esq., at Saul Ewings, LP, represent the Official Committee of Unsecured Creditors. As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. On Nov. 27, 2006, the Court approved the adequacy of the Debtors' Second Amended Disclosure Statement. A hearing is set on Feb. 1, 2007, to consider confirmation of the Debtors' Second Amended Plan of Reorganization. FORD MOTOR: Likely to Report Loss in 2006 Fourth Quarter -------------------------------------------------------- Rising interest rates, higher gas prices, and a shift away from high-margin trucks may hurt Ford Motor Company's 2006 earnings, Reuters reports. Analysts, Reuters says, expect Ford to detail a record loss in its fourth-quarter and full-year 2006 results. Ford, which lost $7 billion through the first nine months of 2006, is expected to lose another $4.86 billion in the fourth quarter as it booked costs to close plants and cut jobs, according to Wall Street estimates tracked by Reuters Estimates. "The basic story of Ford's stunning collapse in its home-market profitability remains the same," David Healy, Burnham Securities analyst, told Reuters. "Ford's finances were wrecked by the collapse in volume and pricing of its most profitable truck models." Ford's 2006 financial results are expected to be filed today. As reported in the Troubled Company Reporter on Jan. 4, 2007, Ford's dealers delivered 233,621 new vehicles to U.S. customers in December, down 13% compared with a year ago. Lower F-Series sales (down 21% compared with last December's near-record month) and lower sales for the discontinued Taurus and Freestar minivan more than accounted for the decline. Full year sales totaled 2.9 million, down 8% compared with full year 2005. Car sales were 5% higher than a year ago. It was the second year in a row of higher car sales and the first back-to- back increase since 1993-1994. Ford's new mid-size sedans were the major factors behind the increase as combined sales for the Ford Fusion, Mercury Milan, and Lincoln MKZ totaled 211,469. Awareness and demand for these award-winning products continues to grow. In December, Fusion sales were up 67%, Milan sales were up 36%, and MKZ sales were up 78%. MKZ sales of 3,795 were the highest for any month. Full year truck sales were down 14% as higher gasoline prices and long-term demographic trends drove SUV sales lower and a soft housing industry weighed on full-size truck sales. Ford believes these factors will continue to weigh on these segments in 2007. New products should help mitigate these factors. The company's new full-size SUVs, Ford Expedition and Lincoln Navigator, closed 2006 by posting higher sales each month in the fourth quarter. The company will soon introduce a new Super Duty F-Series pickup truck. This model accounts for about 40% of total F-Series sales. Conversely, passenger car sales and crossover utility vehicles should continue to benefit from demographic trends (notably the aging of the baby boomer generation) and higher gasoline prices. In December, the company expanded its CUV line with the introduction of the Ford Edge and Lincoln MKX. In addition, the company will introduce a redesigned Ford Escape and Mercury Mariner early this year. Escape has been the best-selling CUV since it was introduced in late 2000. Land Rover was the company's only brand to post higher sales in 2006. Land Rover's full year sales totaled 47,774 -- a new calendar year sales record. Although Lincoln's overall sales were down 2%, sales to individual retail customers rose 4%. U.S. Inventories Lower At the end of December, Ford, Lincoln and Mercury inventories were estimated at 590,000 units. This level is 143,000 units lower than a year ago. The company estimates less than 10% of the total inventory is 2006 models. 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. GENERAL DATACOMM: Inks 8th Amendment to Loan Agreement with Ableco ------------------------------------------------------------------ General DataComm Industries Inc. and Ableco Finance LLC have entered on Jan. 17, 2007, into an eight amendment and waiver to a loan agreement. These changes include: (a) reducing the principal amortization of the Term Obligation (and thereafter, the PIK Obligation) to $100,000 a month commencing Jan. 15, 2007; (b) reducing and fixing the outstanding amount of the PIK Obligation, including principal and interest, at $3,000,000 as of Jan. 16, 2007; (c) providing further reduction of the PIK Obligation by 50%, or $1,500,000, if both the Term Obligation and $1,500,000 of the PIK Obligation are repaid by Dec. 31, 2007; (d) extending the maturity date of the Loan Agreement from Dec. 31, 2007, to Dec. 31, 2008, and to extend dates in the existing warrants issued to Ableco Affiliates from Dec. 31, 2007, to Dec. 31, 2008; (e) eliminating minimum EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) financial covenant; (f) waiving any prior defaults related to required loan amortization payments and to satisfying the minimum EBITDA financial covenant; (g) providing certain affiliates of Ableco to sell Debentures with a face value approximating $2,471,000 to the company for consideration of $1.00; and (h) permitting Howard S. Modlin, the company's CEO, to make up to $2,000,000 in additional loans to the company; repayment of principal of all such loans requires Ableco approval; As a result of the changes to the Loan Agreement and the Debenture purchase, the company expects to record a gain on restructuring of debt in the approximate amount of $4,060,000 in the quarter ending March 31, 2007. Certain provisions of this amendment are subject to court approval in the U.S. Bankruptcy Court for the District of Delaware, which had retained jurisdiction to finally determine the amount of the PIK Obligation. The company has no reason to believe such court approval will not be obtained. The amendment eliminates the loan default referred to in its Form 10-KSB Report for the year ended Sept. 30, 2006, as filed with the Securities and Exchange Commission. As permitted by the Loan Agreement as amended, Howard S. Modlin made a demand loan of $125,000 to the company. Such loan is without interest and is intended to be a short-term loan. A full-text copy of the waiver and amendment is available for free at http://ResearchArchives.com/t/s?18f1 About General DataComm Based in Naugatuck, Conn., General DataComm Industries Inc. (Other OTC: GNRD.PK) -- http://www.gdc.com/-- provides networking and telecommunications products, services, and solutions. The company designs, assembles, markets, installs and maintains products that enable telecommunications common carriers, corporations, and governments to build, improve and more cost effectively manage their global telecommunications networks. The company and its debtor-affiliates filed for chapter 11 protection on Nov. 2, 2001. On Sept. 15, 2003, General DataComm Industries, Inc. emerged from bankruptcy. Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 22, 2007, Eisner LLP in New York expressed substantial doubt about General DataComm Industries Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Sept. 30, 2006, and 2005. The auditing firm cited that the company has both a working capital and stockholders' deficit at Sept. 30, 2006, has limited ability to obtain new financing, and has defaulted under its senior secured debt. GREAT COMMISSION: Unsecured Creditors to Receive 10% of Claims -------------------------------------------------------------- The Great Commission Care Communities Inc., dba The Woods at Cedar Run filed its Plan of Reorganization and Disclosure Statement explaining that plan with the U.S. Bankruptcy Court for the Middle District of Pennsylvania in Harrisburg on Jan. 12, 2007. Treatment of Claims Under the Plan, all professional administrative claimants will be paid in cash on or before the plan's confirmation date or as agreed by the firm and the Debtor. All holders of administrative claims, except professionals, will be paid within 60 days after the plan effective date in the ordinary course of business. The Debtor believes that there are no priority tax claims. In the event that claims exist, holders will be paid in 54 equal monthly installments of principal with interest of 8% annually on the unpaid tax balance. Interest will accrue on the plan effective. Manufacturers & Traders Trust Company, a secured creditor, will be paid $3,578.79 in equal monthly installments of principal and interest at 7.68% annually. The plan provides that M&T will be fully paid on or before March 6, 2008. Holders of the 1998 Bonds will be paid in full of all principal and a portion of the accrued interest. Under the plan, Michael J. Levitt, Donald J. Reape, the estate of Herbert Barness, and Cedar Run Associates LLP, collectively known as Levitt, are secured creditors. Levitt entered into a subordination agreement that its subordinated note will not be paid unless and until all costs of operation were paid. Levitt will be paid 10% of its allowed $1,000,000 claim in four equal annual installments beginning on November 2035. Under the plan, holders of unsecured claims will be divided into two. Creditors with allowed claims of $2,500 or less, known as convenience class, will receive 25% of their allowed claim within three months of the plan effective date. All unsecured creditors who are not members of the convenience class will be paid 10% of their allowed claim, which is payable in five equal annual installments. The first installment is due on Nov. 1, 2007. There are no equity holders of the Debtor since it is a non-stock, non-member, and non-profit corporation. New Bonds The Debtor had financing arrangement in 1998 for Series A and Series B bonds aggregating $14,360,000. After the Series B were retired, the Debtor says the current balance of the principal of Series A Bonds is $13,445,000. There's also an accrued and unpaid interest of $14,000,000. The plan modifies the payment terms of the 1998 bonds and restructures the bonds into Series A Senior Bonds and Series B Subordinate Bonds. The New Senior Bonds will total $5,652,000 in principal and will have varying interest rates of 5.25% to 5.85% and matures from 2007 through 2035. The New Subordinate Bonds will total $9,000,220 and will not bear interest. The New Subordinate Bonds will include $1,400,000 in accrued and unpaid interest on the 1998 Bonds. According to the Plan, the New Senior Bonds are subject to discretionary redemption beginning on Nov. 1, 2008. Through Oct. 31, 2010, the New Senior Bonds are subject to redemption at a slight premium. After that, the New Senior Bonds are discretionarily redeemable at par. The New Bonds will be issued to existing bondholders as of the Distribution Record Date to be established by the Court. The New Bonds will be exchanged for outstanding 1998 Bonds. New Senior Bonds will be exchanged for 42% of principal of the 1998 Bonds. The remaining principal of the 1998 Bonds will be exchanged for New Subordinate Bonds. Each bondholder will also receive a pro rata share of the $1.4 million accrued interest included in the New Subordinate Bonds. Objections to the disclosure statement, if any, must be submitted by Feb. 23, 2007. The court will convene a hearing on the adequacy of the disclosure statement at 9:30 a.m. on March 8, 2007. A full-text copy of the disclosure statement is available for a fee at: http://www.researcharchives.com/bin/download?id=070124220243 Headquartered in Camp Hill, Pennsylvania, The Great Commission Care Communities, Inc., dba The Woods at Cedar Run -- http://www.woodsatcedarrun.com/-- is a non-profit retirement community providing independent housing and assisted living services. The company filed for chapter 11 protection on May 10, 2006 (Bankr. M.D. Penn. Case No. 06-00914). Robert E. Chernicoff, Esq., at Cunningham and Chernicoff, P.C., represents the Debtor. Timothy E. Dixon, Esq., represents the Debtor in bond matters. Michael B. Schaedle, Esq., at Blank Rome LLP represents the Official Committee of Unsecured Creditors. Howard S. Cohen, CPA, at Parente Randolph LLC gives financial advice to the Committee. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million and $50 million. GREAT COMMISSION: Disclosure Statement Hearing Set on March 8 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Pennsylvania set a hearing on Mar. 8, 2007, to consider the adequacy of the Disclosure Statement explaining The Great Commission Care Communities Inc., dba The Woods at Cedar Run's Plan of Reorganization. Objections to the disclosure statement, if any, must be submitted by Feb. 23, 2007. Headquartered in Camp Hill, Pennsylvania, The Great Commission Care Communities, Inc., dba The Woods at Cedar Run -- http://www.woodsatcedarrun.com/-- is a non-profit retirement community providing independent housing and assisted living services. The company filed for chapter 11 protection on May 10, 2006 (Bankr. M.D. Penn. Case No. 06-00914). Robert E. Chernicoff, Esq., at Cunningham and Chernicoff, P.C., represents the Debtor. Timothy E. Dixon, Esq., represents the Debtor in bond matters. Michael B. Schaedle, Esq., at Blank Rome LLP represents the Official Committee of Unsecured Creditors. Howard S. Cohen, CPA, at Parente Randolph LLC gives financial advice to the Committee. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debts between $10 million and $50 million. GREAT COMMISSION: Proofs of Claims Must be Filed by February 12 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Pennsylvania set on Feb. 12, 2007, as the deadline for all creditors owed money by The Great Commission Care Communities Inc. dba The Woods at Cedar Run on account of claims arising before May 10, 2006, to file their proofs of claim. Creditors must file written proofs of claim on or before the Feb. 12 Claims Bar Date and those forms must be delivered to: Clerk of Court U.S. Bankruptcy Court for The Middle District of Pennsylvania Ronald Reagan Federal Building P.O. Box 908 3rd & Walnut Streets Harrisburg, PA 17101 Headquartered in Camp Hill, Pennsylvania, The Great Commission Care Communities Inc. dba The Woods at Cedar Run -- http://www.woodsatcedarrun.com/-- is a non-profit retirement community providing independent housing and assisted living services. The company filed for chapter 11 protection on May 10, 2006 (Bankr. M.D. Penn. Case No. 06-00914). Robert E. Chernicoff, Esq., at Cunningham and Chernicoff, P.C., represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets between $1 million and $10 million and debtsbetween $10 million and $50 million. GREIF INC: S&P Rates Proposed $300 Million Senior Notes at BB- -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' ratings to Greif Inc.'s proposed $300 million senior unsecured notes due 2017. The proceeds from the notes will be used to retire approximately $248 million in existing senior subordinated notes due 2012 and for general corporate purposes. The new senior notes issue is contingent upon consummation of the tender offer for the senior subordinated notes. In addition, Standard & Poor's affirmed its 'BB+' corporate credit rating on the Delaware, Ohio-based company. The outlook is stable. "The speculative-grade ratings on Greif reflect the company's business profile, which Standard & Poor's considers to be weak. This factor is mitigated to some extent by the company's intermediate financial policies, satisfactory liquidity, and fair credit protection measures. Although it has leading positions in niche markets, the company competes in cyclical, commodity-like sectors that experience intense pricing pressures, and its business units have significant operating leverage," said Standard & Poor's credit analyst Dan Picciotto. GREYSTONE LOGISTICS: Nov. 30 Balance Sheet Upside-Down by $8.6MM ---------------------------------------------------------------- Greystone Logistics Inc. reported a $989,940 net loss on $2.6 million of sales for the second quarter ended Nov. 30, 2006, compared with a $616,048 net loss on $4.2 million of sales for the same period in 2005. At Nov. 30, 2006, the company's balance sheet showed $9 million in total assets, $17.6 million in total liabilities, resulting in a $8.6 million total stockholders' deficit. The company's balance sheet at Nov. 30, 2006, also showed strained liquidity with $859,540 in total current assets available to pay $7 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Nov. 30, 2006, are available for free at http://researcharchives.com/t/s?18e8 The decrease in sales is the result of a reduction in pallet sales to one major customer. The increase in net loss is due to the decrease in sales. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 11, 2006, Murrell, Hall, Mcintosh & Co. PLLP, in Oklahoma City, Oklahoma, expressed substantial doubt about Greystone Logistics Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal year ended May 31, 2006. The auditing firm pointed to the company's significant losses from operations, lack of adequate funding to maintain working capital and stockholders' deficit at May 31, 2006. About Greystone Logistics Headquartered in Tulsa, Oklahoma, Greystone Logistics, Inc. (OTCBB: GLGI) -- http://greystonelogistics-glgi.com/-- manufactures plastic pallets and injection molding systems for a variety of commercial applications. GSAMP TRUST: S&P Places Default Rating on Series 2004-SEA2 Debt --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on class B-1 issued by GSAMP Trust 2004-SEA2 to 'D' from 'CCC'. Concurrently, the ratings on classes M-3, M-4, and M-5 remain on CreditWatch with negative implications, where they were placed Nov. 21, 2006. In addition, four ratings from various GSAMP Trust transactions were placed on CreditWatch with negative implications. At the same time, the ratings from various GSAMP Trust transactions were affirmed. The downgrade of class B-1 from series 2004-SEA2 reflects the $311,273 principal write-down in December 2006. Cumulative losses amount to $26.65 million, or 4.29% of the original pool balance. Realized losses have been outpacing the excess interest spread, causing overcollateralization as well as class B-2, the most subordinated class, to completely deplete. As of the December remittance period, total delinquencies and severe delinquencies constituted 38.92% and 18.75% of the current pool balance, respectively. The CreditWatch placements reflect the deteriorating performance of the collateral pools backing these transactions. Realized losses have been outpacing excess interest spread and eroding O/C periodically. If current loss trends continue, credit enhancement for these classes will not be sufficient to support the current ratings. As of the December 2006 remittance, for the three deals with ratings placed on CreditWatch, cumulative losses ranged from 1.54% to 1.95% of the original pool balances; total delinquencies ranged from 17.46% to 32.61% of the current pool balances; and severe delinquencies ranged from 9.03% to 19.55% of the current pool balances. The ratings on classes M-3, M-4, and M-5 from series 2004-SEA2 remain on CreditWatch negative due to our concerns over continuing erosion of credit support. Standard & Poor's will continue to closely monitor the performance of these classes. If the delinquent loans cure to a point at which monthly excess interest begins to outpace monthly net losses, thereby allowing O/C to build and provide sufficient credit enhancement, Standard & Poor's will affirm the ratings and remove them from CreditWatch. Conversely, if delinquencies cause substantial realized losses in the coming months and continue to erode credit enhancement, Standard & Poor's will take further negative rating actions on these classes. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. As of the December remittance date, total delinquencies ranged from 4.22% to 50.18% of the current pool balances, and severe delinquencies ranged from 1.43% to 33.86% of current pool balances. Credit support for these transactions is provided through a combination of subordination, excess spread, and O/C. The underlying collateral consists of conventional, fully amortizing, 30-year fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties. Ratings Lowered GSAMP Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-SEA2 B-1 D CCC Ratings Placed on Creditwatch Negative GSAMP Trust Rating ------ Series Class To From ------ ----- -- ---- 2002-HE2 B-2 A+/Watch Neg A+ 2003-HE1 B-2 BBB-/Watch Neg BBB- 2006-S3 B-1 BB+/Watch Neg BB+ 2006-S3 B-2 BB/Watch Neg BB Ratings Remaining on Creditwatch Negative GSAMP Trust Series Class Rating ------ ----- ------ 2004-SEA2 M-3 A/Watch Neg 2004-SEA2 M-4 BB/Watch Neg 2004-SEA2 M-5 B/Watch Neg Ratings Affirmed GSAMP Trust Series Class Rating ------ ----- ------ 2002-HE M-1 AA+ 2002-HE M-2 A 2002-HE B-1 BBB+ 2002-HE B-2 BBB 2002-HE2 A-1, A-2 AAA 2002-HE2 B-1 AA 2002-NC1 A-2 AAA 2002-NC1 M-1 AA+ 2002-NC1 M-2 A 2002-NC1 B-1 BBB 2002-WF A-1, A-2B AAA 2002-WF M-1 AA+ 2002-WF M-2 A 2002-WF B-1 BBB 2003-AHL A-1, A-2B AAA 2003-AHL M-1 AA 2003-AHL M-2 A 2003-AHL B-1 BBB 2003-AHL B-2 BBB- 2003-FM1 M-1 AA+ 2003-FM1 M-2 A 2003-FM1 B-1 BBB+ 2003-FM1 B-2 BBB- 2003-HE1 M-1 AA+ 2003-HE1 M-2 A 2003-HE1 M-3 BBB+ 2003-HE1 B-1 BBB 2003-HE2 A-1A, A-1B, A-2, A-3A, A-3C AAA 2003-HE2 M-1 AA+ 2003-HE2 M-2 AA 2003-HE2 M-3 A+ 2003-HE2 M-4 A- 2003-HE2 B-1 BBB+ 2003-HE2 B-2 BBB- 2003-NC1 M-1, M-2, M-3 AAA 2003-NC1 B-1 AA 2003-NC1 B-2 A 2004-AHL A-1A, A-1B, A-2B, A-2C, A-2D AAA 2004-AHL M-1 AA+ 2004-AHL M-2 A+ 2004-AHL M-3 A 2004-AHL B-1 A- 2004-AHL B-2 BBB+ 2004-AHL B-3 BBB 2004-AHL B-4 BBB- 2004-AR1 A-1A AAA 2004-FM1 M-1 AA 2004-FM1 M-2 A 2004-FM1 M-3 A- 2004-FM1 B-1 BBB+ 2004-FM1 B-2 BBB 2004-FM1 B-3 BBB- 2004-FM2 M-1 AA 2004-FM2 M-2 A 2004-FM2 M-3 A- 2004-FM2 B-1 BBB+ 2004-FM2 B-2 BBB 2004-FM2 B-3 BBB- 2004-FM2 B-4 BB+ 2004-HE1 A-1A, A-1B, A-2B, A-IO, A-INV AAA 2004-HE1 M-1 AA+ 2004-HE1 M-2 A+ 2004-HE1 M-3 A 2004-HE1 M-4 A- 2004-HE1 B-1 BBB+ 2004-HE1 B-2 BBB 2004-HE1 B-3 BBB- 2004-HE2 A-1, A-2, A-3A, A-3C AAA 2004-HE2 M-1 AA 2004-HE2 M-2 AA- 2004-HE2 M-3 A 2004-HE2 M-4 A- 2004-HE2 B-1 BBB+ 2004-HE2 B-2 BBB 2004-HE2 B-3 BBB- 2004-HE2 B-4 BB+ 2004-NC1 M-1 AA 2004-NC1 M-2 A 2004-NC1 M-3 A- 2004-NC1 B-1 BBB+ 2004-NC1 B-2 BBB 2004-NC1 B-3 BBB- 2004-NC2 A-1A, A-1B, A-2B, A-2C AAA 2004-NC2 M-1 AA 2004-NC2 M-2 A 2004-NC2 M-3 A- 2004-NC2 B-1 BBB+ 2004-NC2 B-2 BBB 2004-NC2 B-3 BBB- 2004-OPT A-1, A-2, A-3, A-4 AAA 2004-OPT M-1 AA+ 2004-OPT M-2 AA 2004-OPT M-3 AA- 2004-OPT B-1 A+ 2004-OPT B-2 A 2004-OPT B-3 BBB+ 2004-OPT B-4 BBB 2004-SD1 M-1 AA 2004-SD1 M-2 A 2004-SD1 B-1 BBB+ 2004-SD1 B-2 BBB 2004-SD1 B-3 BBB- 2004-SEA1 A-1A, A-1B, A-2 AAA 2004-SEA1 M-1 AA 2004-SEA1 M-2 A 2004-SEA1 B-1 BBB+ 2004-SEA1 B-2 BBB 2004-SEA1 B-3 BBB- 2004-SEA2 A-1, A-2A, A-2B, M-1 AAA 2004-SEA2 M-2 AA+ 2004-WF A-1A, A-1B, A-2A, A-2B, A-2C, A-2D AAA 2004-WF M-1 AA 2004-WF M-2 A 2004-WF M-3 A- 2004-WF B-1 BBB+ 2004-WF B-2 BBB 2004-WF B-3 BBB- 2004-WF B-4 BB+ 2005-AHL A-1, A-2, A-3, R-1,R-2 AAA 2005-AHL M-1 AA 2005-AHL M-2 A 2005-AHL M-3 A- 2005-AHL M-4 BBB+ 2005-AHL M-5 BBB 2005-AHL M-6, B-1 BBB- 2005-AHL B-2 BB+ 2005-AHL2 A-1A, A-1B, A-2A, A-2B, A-2C, A-2D AAA 2005-AHL2 R-1, R-2, R-3 AAA 2005-AHL2 M-1 AA 2005-AHL2 M-2 AA- 2005-AHL2 M-3, M-4 A 2005-AHL2 M-5 A- 2005-AHL2 B-1 BBB+ 2005-AHL2 B-2, B-3 BBB- 2005-AHL2 B-4 BB+ 2005-HE1 A-1A, A-1B, A-2B, A-2C, A-2D AAA 2005-HE1 M-1 AA+ 2005-HE1 M-2 A+ 2005-HE1 M-3 A+ 2005-HE1 B-1 A- 2005-HE1 B-2 BBB+ 2005-HE1 B-3 BBB+ 2005-HE1 B-4 BBB- 2005-HE2 A-2, A-3, R-1, R-2 AAA 2005-HE2 M-1 AA 2005-HE2 M-2 A+ 2005-HE2 M-3 A 2005-HE2 B-1 A- 2005-HE2 B-2 BBB+ 2005-HE2 B-3 BBB 2005-HE2 B-4 BBB- 2005-HE3 A-1A, A-1B, A-2B, A-2C, R-1, R-2 AAA 2005-HE3 M-1 AA 2005-HE3 M-2 A+ 2005-HE3 M-3 A 2005-HE3 M-4 A- 2005-HE3 B-1 BBB+ 2005-HE3 B-2 BBB 2005-HE3 B-3 BBB- 2005-HE4 A-1, A-2A, A-2B, A-2C, R-1, R-2, R-3 AAA 2005-HE4 M-1, M-2 AA+ 2005-HE4 M-3 AA 2005-HE4 M-4 AA- 2005-HE4 M-5 A+ 2005-HE4 M-6 A 2005-HE4 B-1 A- 2005-HE4 B-2 BBB+ 2005-HE4 B-3 BBB 2005-HE4 B-4 BBB- 2005-HE5 A-1, A-2A, A-2B, A-2C, A-2D AAA 2005-HE5 R-1, R-2, R-3 AAA 2005-HE5 M-1, M-2, M-3 AA+ 2005-HE5 M-4 AA 2005-HE5 M-5 AA- 2005-HE5 M-6 A+ 2005-HE5 M-7 A 2005-HE5 M-8 A- 2005-HE5 B-1 BBB+ 2005-HE5 B-2 BBB 2005-HE6 A-1, A-2A, A-2B, A-2C, R-1, R-2, R-3 AAA 2005-HE6 M-1, M-2 AA+ 2005-HE6 M-3, M-4 AA 2005-HE6 M-5 AA- 2005-HE6 M-6 A+ 2005-HE6 M-7 A 2005-HE6 M-8 A- 2005-HE6 B-1, B-2 BBB+ 2005-NC1 A-2, A-3 AAA 2005-NC1 M-1 AA 2005-NC1 M-2 A 2005-NC1 M-3 A- 2005-NC1 B-1 BBB+ 2005-NC1 B-2 BBB 2005-NC1 B-3 BBB- 2005-NC1 B-4 BB+ 2005-SD1 A AAA 2005-SD1 M-1 AA 2005-SD1 M-2 A+ 2005-SD1 M-3 A- 2005-SD1 B-1 BBB+ 2005-SD1 B-2 BBB- 2005-SD1 B-3 BBB- 2005-SD1 B-4 BB+ 2005-SD2 A, R-1, R-2 AAA 2005-SD2 M-1A, M-1B, M-2 AA 2005-SD2 M-3 A 2005-SD2 B-1, B-2 BBB+ 2005-SD2 B-3, B-4 BBB- 2005-SEA1 A, M-A, R-1, R-2 AAA 2005-SEA1 M-1 AA 2005-SEA1 M-2 A 2005-SEA1 B-1 BBB+ 2005-SEA1 B-2 BBB 2005-SEA1 B-3 BBB- 2005-SEA2 A-1, A-2, R-1, R-2 AAA 2005-SEA2 M-1 AA+ 2005-SEA2 M-2 AA- 2005-SEA2 B-1 BBB+ 2005-SEA2 B-2 BBB- 2005-WMC1 A-1, A-2, A-3, A-4 AAA 2005-WMC1 M-1 AA+ 2005-WMC1 M-2 AA 2005-WMC1 M-3 AA- 2005-WMC1 M-4 A+ 2005-WMC1 M-5 A 2005-WMC1 M-6 A- 2005-WMC1 B-1, B-2 BBB+ 2005-WMC1 B-3 BBB 2005-WMC1 B-4 BBB- 2005-WMC1 B-5 BB+ 2005-WMC2 A-1A, A-1B, A-2A, A-2B, A-2C AAA 2005-WMC2 M-1 AA+ 2005-WMC2 M-2 AA 2005-WMC2 M-3 AA- 2005-WMC2 M-4 A+ 2005-WMC2 M-5 A 2005-WMC2 M-6 A- 2005-WMC2 B-1, B-2 BBB+ 2005-WMC3 A-1A, A-1B, A-2A, A-2B, A-2C AAA 2005-WMC3 M-1 AA+ 2005-WMC3 M-2 AA 2005-WMC3 M-3 AA- 2005-WMC3 M-4 A+ 2005-WMC3 M-5 A 2005-WMC3 M-6 A- 2005-WMC3 B-1, B-2 BBB+ 2005-WMC3 B-3 BBB 2006-HE1 A-1, A-2A, A-2B, A-2C, A-2D AAA 2006-HE1 R, RC, RX AAA 2006-HE1 M-1 AA+ 2006-HE1 M-2 AA 2006-HE1 M-3 AA- 2006-HE1 M-4 A+ 2006-HE1 M-5 A 2006-HE1 M-6, M-7, M-8 A- 2006-HE1 B-1 BBB+ 2006-HE1 B-2 BBB 2006-HE1 B-3 BBB- 2006-HE2 A-1, A-2, A-3, M-1 AAA 2006-HE2 M-2, M-3 AA+ 2006-HE2 M-4, M-5 AA 2006-HE2 M-6 AA- 2006-HE2 B-1 A+ 2006-HE2 B-2 A 2006-HE2 B-3, B-4 BBB+ 2006-HE2 B-5 BBB 2006-NC1 A-1, A-2, A-3 AAA 2006-NC1 M-1, M-2 AA+ 2006-NC1 M-3, M-4 AA 2006-NC1 M-5 AA- 2006-NC1 M-6 A+ 2006-NC1 B-1 A 2006-NC1 B-2 A- 2006-NC1 B-3 BBB+ 2006-NC1 B-4 BBB 2006-NC1 B-5 BBB- 2006-S2 A-1A, A-1B, A-2, A-3 AAA 2006-S2 M-1 AA 2006-S2 M-2 AA- 2006-S2 M-3 A 2006-S2 M-4 A- 2006-S2 M-5 BBB+ 2006-S2 M-6 BBB 2006-S2 B-1 BB+ 2006-S2 B-2 BB 2006-S3 A-1, A-2, A-3 AAA 2006-S3 M-1 AA 2006-S3 M-2 AA- 2006-S3 M-3 A 2006-S3 M-4 A- 2006-S3 M-5 BBB+ 2006-S3 M-6 BBB 2006-S3 M-7 BBB- 2006-SD1 A-1, A-2, R-1, R-2 AAA 2006-SD1 M-1 AA 2006-SD1 M-2 A 2006-SD1 B-1 BBB+ 2006-SD1 B-2 BBB 2006-SD1 B-3, B-4 BBB- HSI ASSET: S&P Affirms Ratings on Seven Certificate Classes ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 121 classes from eight transactions issued by HSI Asset Securitization Corp. Trust. The affirmations are based on current credit enhancement percentages that are sufficient to support the certificates at their current rating levels. As of the December payment period, the mortgage pools backing the certificates with affirmed ratings had experienced realized losses ranging from 0.00% to 0.05% of the original pool balances. Severe delinquencies ranged from 2.91% to 5.36% of the current pool balances. Credit support for these transactions is provided by subordination, excess interest, and overcollateralization. The underlying collateral backing the certificates consists primarily of adjustable-rate, first-lien mortgage loans secured by one- to four-family residential properties. Ratings Affirmed HSI Asset Securitization Corp. Trust Residential Mortgage Backed Certificates Series Class Rating ------ ----- ------ 2005-I1 I-A, II-A-1, II-A-2, II-A-3, II-A-4 AAA 2005-I1 M-1 AA+ 2005-I1 M-2 AA 2005-I1 M-3 AA- 2005-I1 M-4 A+ 2005-I1 M-5 A 2005-I1 M-6 A- 2005-NC1 I-A-1, I-A-2, II-A-1, II-A-2, II-A-3 AAA 2005-NC1 II-A-4 AAA 2005-NC1 M-1, M2 AA+ 2005-NC1 M-3, M4 AA 2005-NC1 M-5 AA- 2005-NC1 M-6 A+ 2005-NC1 M-7 A 2005-NC1 M-8, M-9 A- 2005-NC1 M-10 BBB+ 2005-NC1 M-11 BBB 2005-NC1 M-12 BBB- 2005-NC1 M-13 BB+ 2005-NC1 M-14 BB 2005-NC2 I-A-1, II-A-1, II-A-2, II-A-3, II-A-4 AAA 2005-NC2 M-1 AA+ 2005-NC2 M-2 AA 2005-NC2 M-3 AA- 2005-NC2 M-4 A+ 2005-NC2 M-5 A 2005-NC2 M-6 A- 2005-NC2 M-7, M-8 BBB+ 2005-NC2 M-9, M-10, M-11 BBB- 2005-NC2 M-12 BB+ 2005-OPT1 A-1, A-2, A-3, A-4 AAA 2005-OPT1 M-1 AA+ 2005-OPT1 M-2 AA 2005-OPT1 M-3 AA- 2005-OPT1 M-4 A+ 2005-OPT1 M-5 A 2005-OPT1 M-6 A- 2006-NC1 I-A, II-A AAA 2006-NC1 M-1 AA+ 2006-NC1 M-2 AA 2006-NC1 M-3 AA- 2006-NC1 M-4 A+ 2006-NC1 M-5 A 2006-NC1 M-6 A- 2006-NC1 M-7 BBB+ 2006-NC1 M-8 BBB 2006-NC1 M-9 BBB- 2006-NC1 M-10 BB+ 2006-NC1 M-11 BB 2006-OPT1 I-A, II-A-1, II-A-2, II-A-3, II-A-4 AAA 2006-OPT1 M-1, M-2 AA+ 2006-OPT1 M-3, M-4 AA 2006-OPT1 M-5 AA- 2006-OPT1 M-6 A+ 2006-OPT1 M-7 A 2006-OPT1 M-8 A- 2006-OPT1 M-9 BBB+ 2006-OPT1 M-10 BBB 2006-OPT1 M-11, M-12 BBB- 2006-OPT2 I-A, II-A-1, II-A-2, II-A-3, II-A-4 AAA 2006-OPT2 M-1, M-2 AA+ 2006-OPT2 M-3 AA 2006-OPT2 M-4 AA- 2006-OPT2 M-5, M-6 A 2006-OPT2 M-7 A- 2006-OPT2 M-8 BBB+ 2006-OPT2 M-9, M-10 BBB- 2006-OPT2 M-11 BB+ 2006-OPT3 I-A, II-A, III-A-1, III-A-2, III-A-3 AAA 2006-OPT3 III-A-4 AAA 2006-OPT3 M-1, M-2 AA+ 2006-OPT3 M-3, M-4 AA 2006-OPT3 M-5 AA- 2006-OPT3 M-6 A 2006-OPT3 M-7 A- 2006-OPT3 M-8 BBB+ 2006-OPT3 M-9, M-10 BBB 2006-OPT3 M-11 BB+ INDEPENDENCE TAX: Dec. 31 Balance Sheet Upside-Down by $3.2 Mil. ---------------------------------------------------------------- Independence Tax Credit Plus LP reported an $896,139 net loss on $5.7 million of revenues for the third quarter ended Dec. 31, 2006, compared with a $1.1 million net loss on $5.8 million of revenues for the same period in 2005. At Dec. 31, 2006, 2006, the limited partnership's balance sheet showed $127.6 million in total assets, $125.5 million in total liabilities, $5.3 million in minority interests, resulting in a partners' deficit of $3.2 million. Rental income decreased $144,416 primarily due to a decrease in occupancy at one local partnership offset by rental rate increases. Other income increased approximately $19,000. Total expenses decreased $355,011, primarily due to decreases in repairs and maintenance expenses. Full-text copies of the limited partnership's financial statements for the quarter ended Dec. 31, 2006, are available for free at: http://researcharchives.com/t/s?18dd Beneficial Assignment Certificates On July 1, 1991, the company commenced a public offering of Beneficial Assignment Certificates representing assignments of limited partnership interests in the company. The company received $76,786,000 of gross proceeds from the offering from 5,351 investors and no further issuance of these certificates is anticipated. As of Dec. 31, 2006, the company has invested all of its net proceeds in 28 other partnerships. Approximately $8,600 of the purchase price remains to be paid to the other partnerships. The company and Beneficial Assignment Certificates holders began to recognize the tax credits with respect to a property when the period of the company's entitlement to claim tax credits (for each property generally ten years from the date of investment or, if later, the date the property is placed in service) for such property commenced. Because of the time required for the acquisition, completion and rent-up of properties, the amount of tax credits per Certificate gradually increased over the first three years of the company's existence. Tax credits not recognized in the first three years will be recognized in the 11th through 13th years. The company generated $17,573, $1,051,548 and $7,001,508 of tax credits during the 2005, 2004 and 2003 tax years, respectively. Mortgage Notes Payable At Dec. 31, 2006, the company had outstanding mortgage notes payable of $85,263,257. Annual principal payment requirements, as of Dec. 31, 2006, for each of the next five fiscal years and thereafter, are: Fiscal Year Amount 2006 $ 852,297 2007 5,624,460 2008 3,427,744 2009 7,551,584 2010 7,247,436 Thereafter 60,559,736 ----------- $85,263,257 =========== About Independence Tax Independence Tax Credit Plus LP is a limited partnership which has investments in 28 other subsidiary partnerships owning leveraged complexes that are eligible for the low-income housing tax credit. The company's investment in each of these other partnerships represents from 98% to 98.99% of the company's interests in these other partnerships. Independence Tax Credit Plus LP's general partner is Related Independence Associates LP. Related Independence Associates LP is also the general partner of Independence Tax Credit Plus LP II. In turn, Related Independence Associates Inc. is the general partner of Related Independence Associates LP. Opa-Locka, one of the subsidiary partnerships, is in default on its third and fourth mortgage notes and continues to incur significant operating losses. Independence Tax Credit's investment in Opa-Locka at Dec. 31, 2006, was approximately $2,827,000. KENTUCKY DATA: Moody's Rates $280 Million Senior Loans at B1 ------------------------------------------------------------ Moody's Investors Service assigned a B1 corporate family rating to Kentucky Data Link with a stable outlook. The ratings agency also assigned a B1, LGD3 -30% rating to the $240 million senior secured term loan and a B1, LGD3 -30% rating to the $40 million senior secured revolving credit facility. The company plans to use the borrowings under the term loan to fund the purchase of Norlight Telecomunications from Journal Communications and refinance KDL's existing debt. Moody's has taken these ratings actions: * Kentucky Data Link -- Corporate Family Rating, Assigned B1 -- Probability of Default Rating, Assigned B2 -- Senior Secured Revolving Credit Facility, Assigned B1, LGD3, 30% -- 1st Lien Senior Secured Term Loan, Assigned B1, LGD3, 30% The outlook is stable. The corporate family rating reflects KDL's modest free cash flow, high pro forma leverage, greater likelihood of increased competition as the company grows, and the complexity of integrating Norlight within its operations. The ratings are tempered by KDL's track record of profitability, which is largely attributed to the company's strong position as the only alternative to the incumbent ILEC in the 2nd and 3rd tier markets in the Midwest and the Southeast US. The stable outlook reflects Moody's views that KDL will be successful in achieving synergies from the Norlight acquisition, and the expectation that should acquisition activity continue, it will not materially impact the company's credit profile. KDL is a wholesale transport service provider in the Midwest and the Southeast US. The company's headquarters are located in Evansville, Indiana. KNIGHT FUNDING: Moody's Lifts Rating on $35 Mil. Sr. Notes to B3 ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings on the notes issued in 1999 by Knight Funding Ltd. a collateralized bond obligation issuer: * The $45,000,000 Class A-2 Floating Rate Senior Notes due 2010 -- Prior Rating: A1, on watch for possible upgrade -- Current Rating: Aa2 * The $25,000,000 Class B-1 Floating Rate Senior Subordinate Notes due 2010 -- Prior Rating: Caa2, on watch for possible upgrade -- Current Rating: B3 * The $10,000,000 Class B-2 Fixed Rate Senior Subordinate Notes due 2010 -- Prior Rating: Caa2, on watch for possible upgrade -- Current Rating: B3 The rating actions reflect the improvement in the credit quality of the transaction's underlying collateral portfolio as well as the ongoing delevering of the transaction, according to Moody's. LEVEL 3: Completes $132 Mil. Acquisition of SAVVIS Network Biz -------------------------------------------------------------- Level 3 Communications, Inc. completed its acquisition of the Content Delivery Network services business of SAVVIS, Inc. Pursuant to the definitive agreement, dated Dec. 23, 2006, Level 3 has paid $132.5 million in cash to acquire certain assets, including network elements, customer contracts, and intellectual property used in SAVVIS's CDN business. "The opportunities presented by delivering rich media applications over the Internet continue to increase, and the addition of CDN capabilities to our service portfolio will enable Level 3 to better address this important market," said Kevin O'Hara, president and chief operating officer of Level 3. "This acquisition does not require the type of physical integration associated with the metro and backbone transactions we announced in 2006. We are confident in our ability to incorporate this key capability into our service portfolio." About SAVVIS Inc. Headquartered in Town & Country, Missouri, SAVVIS, Inc. (NASDAQ: SVVS) -- http://www.savvis.net/-- provides managed and outsourced IT services that focuses exclusively on IT solutions for businesses. With an IT services platform that extends to 47 countries, SAVVIS has over 5,000 enterprise customers and leads the industry in delivering secure, reliable, and scalable hosting, network, and application services. These solutions enable customers to focus on their core business while SAVVIS ensures the quality of their IT systems and operations. SAVVIS' strategic approach combines virtualization technology, a global network and 25 data centers, and automated management and provisioning systems. SAVVIS's CDN services business, based in Thousand Oaks, California, with approximately 50 employees and over 100 customers, provides solutions that improve performance, reliability, scalability and reach of customers' online content. Initially developed in 1996 as Sandpiper Networks, the division developed, deployed and operated a content delivery network. It has a globally distributed infrastructure in more than 20 countries. About Level 3 Headquartered in Bloomfield, Colorado, Level 3 Communications, Inc. (Nasdaq: LVLT) -- http://www.Level3.com/-- an international communications company, provides Internet connectivity for millions of broadband subscribers. The company provides a comprehensive suite of services over its broadband fiber optic network including Internet Protocol services, broadband transport and infrastructure services, colocation services, voice services and voice over IP services. * * * As reported in the Troubled Company Reporter on Dec. 20, 2006, Standard & Poor's Ratings Services affirmed all ratings on Level 3, including the 'CCC+' corporate credit rating. LEVEL 3: Exchanges $115 Mil. of 10% Sr. Notes for 36.7 Mil. Shares ------------------------------------------------------------------ Pursuant to an exchange agreement, certain institutional investors exchanged approximately $115 million aggregate principal amount of Level 3 Communications, Inc.'s 10% Convertible Senior Notes due 2011 for a total of approximately 36.7 million shares of Level 3's common stock, equivalent to approximately 318.9 shares per $1,000 note, and the payment of accrued and unpaid interest on the notes to the closing date. The shares of common stock issued under this agreement are exempt from registration pursuant to Section 3(a)(9) under the Securities Act of 1933, as amended. The notes were convertible into shares of Level 3's common stock at a rate of 277.77 shares per $1,000 note. As a result of the exchange, the company reduced its 2007 cash interest expense by approximately $11 million. The notes are callable by the company on May 1, 2009. "This transaction, along with the previously announced exchange last week, is positive for our company as it helps us continue to reduce debt and interest expense," said Sunit S. Patel, CFO of Level 3. "Throughout 2007, we expect to continue taking steps operationally and financially to improve our financial position. About Level 3 Headquartered in Bloomfield, Colorado, Level 3 Communications, Inc. (Nasdaq: LVLT) -- http://www.Level3.com/-- an international communications company, provides Internet connectivity for millions of broadband subscribers. The company provides a comprehensive suite of services over its broadband fiber optic network including Internet Protocol services, broadband transport and infrastructure services, colocation services, voice services and voice over IP services. * * * As reported in the Troubled Company Reporter on Dec. 20, 2006, Standard & Poor's Ratings Services affirmed all ratings on Level 3, including the 'CCC+' corporate credit rating. M. FABRIKANT & SONS: Secures Additional Financing from Lenders -------------------------------------------------------------- M. Fabrikant & Sons Inc. has negotiated additional financing arrangements with its senior secured lenders, while the company continues to actively pursue a full range of strategic alternatives, including the sale, refinancing, or reorganization of the firm. Fabrikant believes that its Chapter 11 proceedings currently provide the best opportunity to maximize the value of its assets and its business for all stakeholders. "We are thrilled to announce that our new lenders are supportive of our reorganization process and willing to provide us with additional liquidity," Matthew Fortgang, CEO of Fabrikant said. "This makes it possible to get back to levels of service our customers have come to expect and trust from Fabrikant." Headquartered in New York City, M. Fabrikant & Sons, Inc. -- http://www.fabrikant.com/-- sells diamonds and jewelries. The Company and its affiliates, Fabrikant-Leer International, Ltd., filed for chapter 11 protection on Nov. 17, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12737 & 06-12739). Mitchel H. Perkiel, Esq., at Troutman Sanders LLP, represent the Debtors. 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 Mar. 17, 2007. MILLS CORP: Has Until Jan. 31, 2008, to Pay Back $1 Billion Loan ---------------------------------------------------------------- The Mills Corporation has received an extension until Jan. 31, 2008, to pay back its $1 billion loan that was warned to force the company into chapter 11 bankruptcy protection, the Baltimore Business Journal reports. According to the report, the loan, which is a part of an amended credit agreement with Goldman Sachs Mortgage Co., could be extended to April 30, 2008, if the termination date of the merger agreement with Brookfield Asset Management Inc. is similarly extended. The Mills, the Journal says, took out the loan with Goldman Sachs in May 2006 with a maturity date at the end of March. Brookfield has agreed to take on the company's loan. As reported in the Troubled Company Reporter on Jan. 18, 2007, The Mills and Brookfield entered into a definitive agreement pursuant to which Brookfield will acquire The Mills for cash at a price of $21 per share, representing a total transaction value of approximately $1.35 billion for all of the outstanding common stock of The Mills and common units of The Mills Limited Partnership, and approximately $7.5 billion including assumed debt and preferred stock. Brookfield is a global asset manager focused on property and other infrastructure assets with over $50 billion of assets under management. Under the terms of the agreement, The Mills will merge into a newly formed subsidiary of Brookfield, and The Mills common stockholders will receive $21 in cash for each share of Mills common stock. About The Mills Corporation Headquartered in Chevy Chase, Maryland, The Mills Corporation (NYSE: MLS) -- http://www.themills.com/-- develops, owns, manages retail destinations including regional shopping malls, market dominant retail and entertainment centers, and international retail and leisure destinations. The Company owns 42 properties in the U.S., Canada and Europe, totaling 51 million square feet. In addition, The Mills has various projects in development, redevelopment or under construction around the world. * * * As reported in the Troubled Company Reporter on Jan. 10, 2007, The Mills Corp. issued a warning in a Securities and Exchange Commission filing saying that it could file for bankruptcy protection if it cannot sell all or part of the company amidst accounting errors and speculations of possible executive misconduct. MOVIE GALLERY: Oct. 1 Balance Sheet Upside-Down by $220.9 Million ----------------------------------------------------------------- Movie Gallery Inc. reported results for the third quarter of 2006, which ended Oct. 1, 2006. The company filed its quarterly report on Form 10-Q for the third quarter of fiscal 2006 on Jan. 19, 2007. For the quarter ended Oct. 1, 2006, the company reported a net loss of $36,111,000 on $582,989,000 of total revenue. This compares to a net loss of $12,469,000 on $572,442,000 of total revenue for the quarter ended Oct. 2, 2005. At Oct. 1, 2006, the company's balance sheet showed total assets of $1,165,927,000 and total liabilities of $1,386,827,000, resulting in a total stockholders' deficit of $220,900,000. At Jan. 1, 2006, the company's stockholders' deficit stood at $212,818,000. The company's Oct. 1 balance sheet also showed strained liquidity with $215,353,000 in total current assets available to pay $1,031,798 in total current liabilities. A full-text copy of the company's Form 10-Q for the quarter ended Oct. 1, 2006, is available for free at: http://ResearchArchives.com/t/s?18f3 SFAS 143 Review Concluded The company had delayed its Form 10-Q filing for the quarter ended Oct. 1, 2006, as a result of a review of the Company's accounting treatment for end of term store lease obligations. During this process, Movie Gallery reviewed over 5,000 store leases and worked with its independent auditor to ensure compliance with Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations. As a result, the Company increased property, furnishings and equipment by $1.4 million, other long-term accrued liabilities by $8.7 million and store operating expenses by $7.3 million. The impact on previously reported financial results was immaterial, and therefore no restatement of prior period financial results was required. Liquidity As of Jan. 19, 2006, Movie Gallery had no borrowings on its revolving credit facility. With approximately $51 million in available borrowings under this facility, management believes that the company has sufficient cash and availability under the revolver to meet working capital needs. The company and its advisors are working diligently on projects to improve the capital structure of the company for the long-term and expect to provide further details later in the first quarter. Nasdaq Update As disclosed on Nov. 21, 2006, Movie Gallery received a NASDAQ Staff Determination letter indicating Movie Gallery is not in compliance with the filing requirement for continued listing as set forth in Marketplace Rule 4310(c)(14) due to the delayed filing of its Quarterly Report on Form 10-Q for the quarter ended Oct. 1, 2006 with the Securities and Exchange Commission. With the review of the company's accounting treatment for end of term store lease obligations concluded and the company's third quarter Form 10-Q now on file with the SEC, Movie Gallery is now in full compliance with Nasdaq rules. About Movie Gallery Movie Gallery, Inc. (Nasdaq: MOVI) -- http://www.moviegallery.com/ -- is the second largest North American video rental company with over 4,600 stores located in all 50 U.S. states and Canada operating under the brands Movie Gallery, Hollywood Video and Game Crazy. The Game Crazy brand represents 643 in-store departments and 17 free-standing stores serving the game market in urban locations across the Untied States. Since Movie Gallery's initial public offering in August 1994, the company has grown from 97 stores to its present size through acquisitions and new store openings. * * * As reported in the Troubled Company Reporter on Nov. 24, 2006, Moody's Investors Service placed the long-term ratings of Movie Gallery Inc. on review for possible downgrade following the company's announcement that it would not be able to file it third quarter 10-Q with the SEC on a timely basis. These ratings were placed on review for possible downgrade: Corporate family rating at Caa1; Probability of default rating at B3; Senior secured credit facilities at B3, LGD-3-41%; Senior unsecured guaranteed notes at Caa2, LGD5-88%. MOVIE GALLERY: Projects Likely Covenant Non-Compliance in 2007 -------------------------------------------------------------- In a regulatory filing with the U.S. Securities and Exchange Commission, Movie Gallery Inc., discloses that as of Oct. 1, 2006, it was in compliance with its Credit Facility financial covenants, as amended, and anticipates compliance at each test date through the remainder of fiscal 2006. However, the company says that unless it is successful in obtaining an additional amendment to the financial covenants in its Credit Facility, its projected operating results indicate that the company will fail the more restrictive financial covenant tests effective as of April 1, 2007. As a result, in accordance with EITF 86-30, "Classification of Obligations When a Violation is Waived by a Creditor," all amounts outstanding under the Credit Facility have been classified as current liabilities as of Oct. 1, 2006. In line with the company's disclosure, three analysts said the company faced a rising risk of bankruptcy unless its creditors agree to a new waiver and the company moves more aggressively to cut store expenses, Reuters reports. The analysts however differed on whether creditors would take another chance on Movie Gallery after a year of declining rental revenues and increased competition from Blockbuster Inc. and and Netflix Inc., Reuters further relates. Credit Facility The Credit Facility, which the company entered into in connection with our acquisition of Hollywood Entertainment Corporation, provides for aggregate borrowings of $836.4 million, consisting of a five-year $75.0 million revolving credit facility due April 27, 2010 (and two term loans in an aggregate principal amount of $761.4 million as of Oct. 1, 2006. Term Loan A is a $71.5 million loan that matures on April 27, 2010, and Term Loan B is a $689.9 million loan that matures on April 27, 2011. At Oct. 1, 2006, the company had $43.8 million drawn under the Revolver, comprised of $23.8 million in letters of credit and $20 million in borrowings. On Mar. 15, 2006, the company executed a second amendment to the Credit Facility, effective through the fourth quarter of 2006 that relaxed financial covenants, increased restrictive operating covenants and increased interest rate margins. The quarterly financial covenants revert to the original covenants commencing with the first quarter of 2007. About Movie Gallery Movie Gallery, Inc. (Nasdaq: MOVI) -- http://www.moviegallery.com/ -- is the second largest North American video rental company with over 4,600 stores located in all 50 U.S. states and Canada operating under the brands Movie Gallery, Hollywood Video and Game Crazy. The Game Crazy brand represents 643 in-store departments and 17 free-standing stores serving the game market in urban locations across the Untied States. Since Movie Gallery's initial public offering in August 1994, the company has grown from 97 stores to its present size through acquisitions and new store openings. * * * As reported in the Troubled Company Reporter on Nov. 24, 2006, Moody's Investors Service placed the long-term ratings of Movie Gallery Inc. on review for possible downgrade following the company's announcement that it would not be able to file it third quarter 10-Q with the SEC on a timely basis. These ratings were placed on review for possible downgrade: Corporate family rating at Caa1; Probability of default rating at B3; Senior secured credit facilities at B3, LGD-3-41%; Senior unsecured guaranteed notes at Caa2, LGD5-88%. MTU AERO: S&P Assigns BB- Rating to EUR150 Million Bonds -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' senior unsecured debt rating to the EUR150 million in convertible bonds guaranteed by MTU Aero Engines Holding AG and issued through the wholly-owned subsidiary MTU Aero Engines Finance B.V. The issue size could be raised to EUR180 million, depending on demand and the exercise of a EUR15 million green-shoe option. The bonds are due in February 2012. "MTU will use the proceeds from the convertible issue to fund the early redemption of the outstanding high-yield senior notes issued in March 2004," said Standard & Poor's credit analyst Werner Staeblein. The notional amount of outstanding senior notes is EUR165 million. The redemption price including the call premium is about EUR182 million. Convertible debt generally does not attract any specific equity credit in Standard & Poor's methodology for corporate hybrid instruments. They are therefore essentially viewed as debt, except on rare occasions in which a conversion in the near term is extremely likely. Subject to the share price development of MTU's ordinary shares, the convertible bond can be called no sooner than three years after issuance. The ratings continue to reflect the group's relatively weak business profile, which is constrained by its reliance on the cyclical civil aviation industry, vulnerability to the weakness of the U.S. dollar, and its relatively modest size compared with OEMs. Nevertheless, MTU benefits from its leading positions in niche markets and is protected by its long-term strategic alliance with Pratt & Whitney engines, its participation in engine programs through a number of risk and revenue-sharing partnerships; and its role as a strategic partner for the German Air Force. N-45 FIRST: Fitch Holds BB+ Rating on CDN$3.7 Mil. Class E Debt --------------------------------------------------------------- Fitch Ratings places two classes of N-45 First CMBS Issuer Corporation, series 2003-3 on Rating Watch Positive: -- CDN$47.6 million class B to 'AA'; and, -- CDN$31.4 million class C to 'A'. In addition, Fitch affirms these classes: -- CDN$92.8 million class A-1 at 'AAA'; -- CDN$228.5 million class A-2 at 'AAA'; -- Interest only class IO at 'AAA'; -- CDN$31.4 million class D at 'BBB-'; and -- CDN$3.7 million class E at 'BB+'. The placement of the classes on Rating Watch Positive is due to the amortization of the loans and improved performance of the collateral. Since issuance, the deal has paid down 5.8% to its current balance of CDN$435.5 million as of the December 2006 remittance period. Performance of all three of the loans in the transaction has consistently improved since issuance through Year End 2005. If the improved performance continues as of YE 2006, it is highly likely that classes B and C could be upgraded. All three of the loans maintain investment grade credit assessments. The Place Bell loan is the largest in the transaction at 34.8% of the balance. Located in Ottawa, Ontario, Canada, the loan is secured by a 989,802-square foot class A office building built in 1971 and renovated in the late 1990s. The Place Bell loan is full recourse to the sponsor. As of February 2006, Place Bell was 99.3% occupied compared to 98.9% at issuance. Bell Canada, the largest tenant, at 48.6% of the net rentable area, is on a long- term lease until 2022. Fifth Avenue Place, the second-largest loan in the transaction at 34.4%, is secured by two 34-story office towers totaling 1.5 million square feet in downtown Calgary. Approximately 48,000 sf of the properties consist of retail and storage space. The tenant base is concentrated in the oil and gas industry, such as Devon Estates, which is owned by Imperial Oil Limited, Anadarko Canada, and Enbridge, Inc. Occupancy remained unchanged from issuance at 99.6% as of March 2006. The final loan in the transaction is the Tour Bell loan at 30.8% of the pool. The Tour Bell loan is secured by two, 28-story office towers located in Montreal containing 975,661 sq. ft. of office space and 40,227 sq. ft. of connected underground retail space along with a 693-space parking facility. Of the retail space and parking, 79.2% and 63.0%, respectively, serve as collateral for the loan. The Tour Bell building houses Bell Canada's Canadian headquarters while the other tower is primarily occupied by National Bank of Canada's headquarters. As anticipated at issuance, Bell Canada exercised early termination rights on two portions of its space, known as Block A and Block B, totaling 307,258 sq. ft. PARKER HUGHES: Files for Chapter 11 Protection in Minnesota ----------------------------------------------------------- Parker Hughes Institute, dba Parker Hughes Cancer Center, and Parker Hughes Clinics filed for chapter 11 protection in the U.S. Bankruptcy Court for the District of Minnesota on Jan. 23, 2007. The clinic said it will continue treating patients during its stay in bankruptcy. Parker Hughes and its founder, Dr. Fatih Uckun, have allegedly provided excessive or inappropriate cancer care to patients. A group of patients have defended the clinic saying it fights for cancer patients when others don't, Jerymy Olson of Pioneer Press reports. The Minnesota Board of Medical Practice suspended last year the medical license of Dr. Uckun, Steve Karnowski of the Associated Press reports. A permanent decision on the case is still pending. It's financial problems started when its practices came to light, and when Blue Cross and Blue Shield of Minnesota and Medica stopped coverage of cancer patients in 2003. Parker Hughes said it will ask the Bankruptcy Court to appoint somebody to ensure that patients' rights are protected, Mr. Karnowski added. Parker Hughes Institute, dba Parker Hughes Cancer Center -- http://www.ih.org/-- and Parker Hughes Clinics -- http://www.parkerhughes.org/-- are non-profit research organizations in the United States devoted to the development of new drugs for the treatment of chronic and life-threatening illnesses. The drug discovery program at Parker Hughes Institute has been awarded numerous patents for multiple anti-cancer and anti-HIV drugs that are at various stages of development. PARKER HUGHES: Case Summary & 40 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Parker Hughes Institute dba Parker Hughes Cancer Center fka Hughes Institute fka Wayne Hughes Institute fka Drug Discovery Enterprises fka Biotherapy Corporation 2665 Long Lake Road, Suite 110 Roseville, MN 55113 Tel: (651) 628 0098 Bankruptcy Case No.: 07-30237 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Parker Hughes Clinics 07-30238 Type of Business: The Debtors are non-profit research organizations in the United States devoted to the development of new drugs for the treatment of chronic and life-threatening illnesses. The drug discovery program at Parker Hughes Institute has been awarded numerous patents for multiple anti-cancer and anti-HIV drugs that are at various stages of development. See http://www.ih.org/and http://www.parkerhughes.org/ Chapter 11 Petition Date: January 23, 2007 Court: District of Minnesota (St. Paul) Judge: Robert J. Kressel Debtors' Counsel: Kenneth Corey-Edstrom, Esq. Larkin Hoffman Daly and Lingren Ltd. 1500 Wells Fargo Plaza 7900 Xerxes Avenue South Bloomington, MN 55431-1194 Tel: (952) 835-3800 Fax: (952) 896-3333 Estimated Assets Estimated Debts ---------------- --------------- Parker Hughes Less than $10,000 $100,000 to Institute $1 Million Parker Hughes Less than $10,000 $1 Million to Clinics $100 Million A. Parker Hughes Institute's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Roseville Properties Management $179,313 2575 North Fairview Avenue Suite 2250 Roseville, MN 55113 Rosedale Properties LLC $97,309 P.O. Box 84-5402 Boston, MA 02284-5402 Xcel Energy $27,898 P.O. Box 9477 Minneapolis, MN 55484-9477 Dex Media East $22,211 P.O. Box 78041 Phoenix, AZ 85062-8041 McGladrey & Pullen, LLP $17,000 5155 Paysphere Circle Chicago, IL 60674 Beckman Coulter $7,760 Twin City Oxygen Co. $5,043 Matrix Business Technologies $4,796 Southern Research Institute $4,000 William Mork & Co. $3,900 Lakeview Associates $3,147 Abbott Laboratories $2,718 Qwest $2,157 Onvoy $1,229 Jason's Dry Ice $1,086 University of Iowa $1,030 IOS $881 Gephart Electric $765 Primus $726 Jr. Appliance Disposal $688 B. Parker Hughes Clinics's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Imaging Solutions, Inc. $880,540 2829 University Drive South Fargo, ND 58103-6029 Oncology Therapeutics Networks $840,731 23442 Network Place Chicago, IL 60673-1234 Henson & Efron, P.A. $629,340 220 South 6th Street Suite 1800 Minneapolis, MN 55401-2496 Blue Cross Blue Shield $174,148 Wilson McShane 3001 Metro Drive, Suite 500 Bloomington, MN 55425 Parker Hughes Institute $60,408 2641 Patton Road Roseville, MN 55113 WCCO $52,985 Acordia $36,050 McGladrey & Pullen, LLP $33,858 Roseville Properties Management Co. $28,048 Nuaire Inc. $23,720 Virtual DX Radiology $23,345 McKesson $22,435 Klodt Inc. $21,916 TAP Pharmaceuticals Inc. $15,331 Cardinal Health Nuclear Pharmacy Services $14,721 Cardinal Distribution-Hudson Division $14,042 INFOSYS $11,938 Philips Medical Capital $11,390 Medica $11,188 Mercury Travel $10,904 POGO PRODUCING: Quarterly Dividend to be Paid on February 23 ------------------------------------------------------------ The Board of Directors of Pogo Producing Company declared a regular quarterly cash dividend of $0.075 per share on Pogo's outstanding common stock, to be paid on Feb. 23, 2007 to shareholders of record as of Feb. 9, 2007. About Pogo Producing Headquartered in Houston, Texas, Pogo Producing Company (NYSE: PPP) -- http://www.pogoproducing.com/-- explores for, develops and produces oil and natural gas. Pogo owns approximately 4,000,000 gross leasehold acres in major oil and gas provinces in North America, 3,119,000 acres in New Zealand and 1,480,000 acres in Vietnam. * * * As reported in the Troubled Company Reporter on Sept. 25, 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. and Canadian Exploration and Production sector last week, the rating agency confirmed its Ba3 Corporate Family Rating for Pogo Producing Company. POLYAIR INTER: Court Approves Subsidiary's Plan of Arrangement -------------------------------------------------------------- The Plan of Arrangement of Cantar Pool Products Limited, a Canadian pool subsidiary of Polyair Inter Pack Inc., was approved at a meeting of creditors and by the Ontario Supreme Court of Justice. The subsidiary, which ceased operations in October 2006, had sought protection under Polyair's Creditors Arrangement Act in order to complete the sale of its remaining operating assets and to put forward to its creditors a Plan of Arrangement which would provide for a settlement of their claims. The approved Plan of Arrangement is expected to be implemented shortly. The Plan of Arrangement does not affect Polyair's packaging business, which continues to operate as a standalone business through separate subsidiaries in the normal course. About Polyair Inter Pack Headquartered in Toronto, Ontario, Polyair Inter Pack Inc. (TSX: PPK)(AMEX: PPK) -- http://www.polyair.com/-- manufactures and distributes packaging products. These products are sold to distributors and retailers across North America. The company operates nine manufacturing facilities, seven of which are in the US where it generates the majority of its sales. RECKSON OPERATING: Fitch Cuts Sr. Notes' Rating to BB+ from BBB- ---------------------------------------------------------------- Given the upcoming consummation of SL Green Realty Corp.'s merger with Reckson Associates Realty Corp., Fitch has downgraded Reckson Operating Partnership, L.P.'s Issuer Default Rating, senior unsecured notes, and senior unsecured convertible notes to 'BB+' from 'BBB-'. These ratings remain on Rating Watch Negative. Approximately $1.25 billion of securities are affected. In addition, Fitch has withdrawn the IDR of 'BBB-' for Reckson Associates Realty Corp. and the 'BBB-' rating for Reckson Operating Partnership L.P.'s unsecured credit facility, which will be retired when the merger closes. Fitch's downgrade of Reckson Operating Partnership, L.P. centers on several factors. After the merger, giving effect to the sale of Reckson Associates Realty Corp.'s Long Island and New Jersey office properties to an investor group that includes Reckson senior management, Reckson OP's pro forma EBITDA coverages decline significantly. The assets acquired by the investor group are almost entirely unencumbered, reducing the remaining unencumbered asset support of unsecured debt at Reckson OP. In addition, Reckson OP's liquidity and financial flexibility will weaken due to the retirement of its unsecured revolving credit facility. Fitch does acknowledge that SL Green has the ability to utilize its access to unsecured borrowings via its revolving credit facility and term loan facilities to service Reckson OP debt. Furthermore, Reckson OP's geographic concentration increases after the sale of assets to the investor group, reducing Reckson OP's property portfolio footprint to office properties in only New York City, Connecticut and Westchester, New York. The sustained Rating Watch Negative status acknowledges the potential for Reckson OP's IDR and bonds to migrate below 'BB+', considering the absence of structural firewalls to support Reckson OP's unsecured bondholders. Should parent SL Green face a severe deterioration in liquidity and transfer assets from Reckson OP to SL Green, Reckson OP would be exposed to further credit erosion. Fitch expects to resolve the Negative Watch once Reckson OP files its March 31, 2007 quarterly financial information with the Securities and Exchange Commission. SL Green is a self-administered and self-managed real estate investment trust that predominantly acquires, owns, repositions and manages a portfolio of office properties mostly in New York City. The company has substantial experience as an owner and operator of office properties in the New York metropolitan area, as well as proven access to unsecured capital through term loans, revolving credit agreements and trust preferred securities. REDPRAIRIE CORP: Moody's Holds B1 Rating on $190 Million Loans -------------------------------------------------------------- Moody's Investors Service affirmed RedPrairie Corporation ratings after the company's disclosure of its intentions to offer a one time debt financed $25 million dividend to its equity sponsors. The new debt will increase the size of RedPrairie's second lien borrowings from $45 million to $70 million. Moody's notes that this additional financing when coupled with RedPrairie's previously stated intentions to increase the size of its first lien borrowings to $170 million for the acquisition of StorePerform does not change the company's B2 corporate family rating, the individual loan ratings, or its stable outlook. However, Moody's notes that the increase in leverage to approximately 5.2x places the company closer to the lower end of the B2 rating category. Additionally, the company is following up a relatively soft third quarter and does not yet have audited financials available for the fourth quarter. These ratings are affirmed: -- Corporate Family Rating, B2 -- $20 million Senior Secured Revolving Credit Facility due in 5 years, B1, LGD3, 33% -- $170 million Senior Secured First Lien due in 6 years, B1, LGD3, 33% -- $70 million Senior Secured Second Lien due in 6.5 years, Caa1, LGD5, 84% RedPrairie, headquartered in Waukesha, Wisconsin, is a provider of warehouse management, labor management, transportation management and store operations software solutions. SEA CONTAINERS: Can Employ Appleby Hunter as Special Counsel ------------------------------------------------------------ Sea Containers, Ltd. and its debtor-affiliates obtained permission from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to employ Appleby Hunter Bailhache as their special counsel for Bermuda legal matters, nunc pro tunc to Oct. 15, 2006. As reported in the Troubled Company Reporter on Dec. 5, 2006, Edwin S. Hetherington, vice president, general counsel, and secretary of Sea Containers Ltd., related that Appleby has served as the Debtors' outside Bermudian counsel on matters including corporate and securities law and general litigation since 1974. Mr. Hetherington told Judge Carey that that the firm's professionals have become very familiar with the Debtors and their business affairs, and have gained extensive experience in most aspects of the Debtors' general legal work and needs. Specifically, the Firm is expected to: -- continue to advise and represent SCL in accordance to its prior representation; and -- advise and represent the Debtors with respect to SCL's Bermuda insolvency proceeding and other matters that may arise in the Debtors' Chapter 11 cases or the Bermuda proceeding in the ordinary course of operations. Appleby will be paid for its services based on the firm's customary hourly rates: Professionals Hourly Rate ------------- ----------- Partners $400 - $625 Associates $200 - $590 Paraprofessionals $125 - $260 The firm will also be reimbursed for necessary out-of-pocket expenses. Mr. Hetherington relates that Appleby has received a replenishing prepetition retainer with a remaining balance of $183,856 for providing the Debtors with representation on Bermuda legal matters prior to the Petition Date. In addition to the retainer, Appleby has also received $205,941 from the Debtors on account of services rendered regarding the Bermuda legal matters. Jennifer Yolande Fraser, Esq., a partner at Appleby, assures the Court that her firm does not hold any interest adverse to Debtors or their estates with respect to the matters on which it is to be employed. 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: Bingham Tapped as Counsel to Services Committee --------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Sea Containers Ltd. and its debtor-affiliates' chapter 11 cases seeks authority from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to retain Bingham McCutchen, Morris, Nichols, Arsht & Tunnell LLP, as its counsel serving in the Services Committee, nunc pro tunc to Oct. 26, 2006. As reported in the Troubled Company Reporter on Dec. 7, 2006, the Creditors Committee sought Court approval to retain Bingham McCutchen LLP as counsel to its financial members sub-committee. The U.S. Trustee indicated concerns as to the sub-committee structure described in that application. The amended application supersedes the Original Application in all respects. The Services Committee Bingham McCutchen and counsel to certain other Creditors Committee members met with the U.S. Trustee to discuss the concerns raised and to attempt to resolve them. As a result of the discussions and in light of the U.S. Trustee's reservations about the proposed sub-committee structure, the Creditors Committee requested the appointment of a separate committee to represent the interests of the unsecured creditors of Sea Containers Services Ltd. The U.S. Trustee has indicated that it would be appointing a Services Committee. Andrew B. Cohen, managing director of Dune Capital LLC, relates that Bingham McCutchen is well suited for the representation required by the Creditors Committee. The firm is experienced in all aspects of the law that are likely to arise in the Debtors' bankruptcy cases. From May 2006, Bingham McCutchen represented an ad hoc committee of 10-3/4% senior notes due 2006, 7-7/8% senior notes due 2008, 12-1/2% senior notes due 2009, and 10-1/2% senior notes due 2012 issued by Sea Containers Ltd. Bingham McCutchen reviewed and analyzed the Debtors, their financial situation, and their operations. As a result, the firm is already very familiar with the Debtors' financial and operational situations, material constituencies, and issues requiring resolution in order to reorganize. Among other things, Bingham McCutchen will: a. provide legal advice with respect to the Creditors Committee's rights, powers, and duties in the bankruptcy cases; b. represent the Creditors Committee at all hearings and other proceedings; c. advise and assist the Creditors Committee in discussions with the Debtors and other parties-in-interest, as well as professionals retained by any of the parties, regarding the overall administration of the bankruptcy cases; d. assist the Creditors Committee in analyzing the claims of the Debtors' creditors and in negotiating with those creditors; e. assist with the Creditors Committee's investigation of the assets, liabilities, and financial condition of the Debtors and of the operations of their businesses; f. assist the Creditors Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, formulating the terms of a plan or plans of reorganization for the Debtors; g. assist and advise the Creditors Committee with respect to their communications with the general creditor body regarding matters in the bankruptcy cases; h. review and analyze on behalf of the Creditors Committee all pleadings, orders, statements of operations, schedules, and other legal documents; i. prepare on behalf of the Creditors Committee of all pleadings, orders, reports and other legal documents as may be necessary in furtherance of the Creditors Committee's interests and objectives; and j. perform all other legal services for the Creditors Committee that may be necessary and proper to facilitate the Committee's discharge of its duties in the bankruptcy cases and any related proceedings. Since the formation of the Creditors Committee, Bingham McCutchen has acted to protect and advance the interests of all general unsecured creditors in the Debtors' Chapter 11 cases. The firm's services on and following the Petition Date have materially benefited unsecured creditors of the Debtors' estates, and have served to protect their rights until Bingham McCutchen's formal retention. Bingham McCutchen's services will be paid according to its customary hourly rates: U.S.-based UK-based Hourly Rates Hourly Rates ------------ --------------- Partners and Of Counsel $445 - $850 GBP400 - GBP540 Counsel and Associates $175 - $535 GBP210 - GBP390 Paraprofessionals $100 - $315 GBP110 - GBP130 The principal attorneys and paralegal designated to represent the Debtors and their current hourly rates are: Professional Designation Hourly Rate ------------ ----------- ----------- Barry G. Russell Partner GBP535 Ronald J. Silverman Partner $750 Tom Bannister Partner GBP460 Abigail Milburn Counsel GBP255 Scott K. Seamon Associate $470 Stacy A. Lopez Associate GBP240 Flora Ahn Associate $265 The firm will also be reimbursed for actual and necessary expenses incurred in accordance with its retention. Bingham McCutchen received an advance payment retainer for GBP75,000 on June 7, 2006, in respect of its representation of the Ad Hoc Committee. Bingham McCutchen applied the Retainer to anticipated fees and expenses it incurred on behalf of the Ad Hoc Committee for the period from the Petition Date through the date of appointment of the Creditors Committee, which amount totaled GBP74,065. The firm will apply the remaining amount of GBP934 to fees and expenses of the Creditors Committee. Ronald L. Silverman, Esq., a partner of Bingham McCutchen, assures the Court that his firm is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code. Bingham McCutchen does not hold or represent any interest adverse to the Debtors' estates with respect to the matters for which it is to be retained. About 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) SEAGATE TECH: Reports $3 Million Revenue in Qtr. Ended Dec. 29 -------------------------------------------------------------- Seagate Technology reported revenue of $3 billion for the quarter ended Dec. 29, 2006. Included in the $3 billion of revenue is approximately $200 million from legacy Maxtor designed products. Net income and diluted earnings per share includes approximately $76 million of charges directly associated with the Maxtor acquisition and $19 million for the early retirement of the 8% notes. For the six months ended Dec. 29, 2006, Seagate reported revenue of $5.8 billion. Net income and diluted earnings per share includes charges of approximately $158 million directly associated with the Maxtor acquisition, $19 million for the early retirement of the 8% notes and a $3 million favorable adjustment to the restructuring reserve. Adjustments made to GAAP net income and diluted earnings per share can be found with the financial statements included with this press release. "Seagate just delivered the industry's first $3 billion quarter, and 30% growth over our year-ago quarter," Seagate chief executive officer Bill Watkins said. "These results are driven by the explosive growth in digital content and the resulting growth in demand for storage, as well as by our ability to deliver a broadening suite of products to a growing set of customers. "This solid quarter reflects better than expected desktop pricing during the quarter, the successful transition of Maxtor customers to more cost-effective, higher margin Seagate products, and continued operational excellence. "With the Maxtor integration substantially complete and exciting new products hitting the market in the current quarter, Seagate is on a path to further increase profitability in the traditionally slower back half of the fiscal year. "During the December quarter, we shipped a record 7 million disc drives for consumer electronics applications, increased our shipments into the mobile compute market by 52% year-over-year, and continued to solidify our substantial lead in the enterprise and desktop markets. "Additional highlights of the quarter include the start of OEM qualification of Seagate's 1.8-inch products; the successful launch of the re-branded Seagate and Maxtor external storage products which included four new Seagate external storage solutions; and the expansion of Seagate's services business with the announced acquisition of EVault, Inc. "Our employees have much to be proud of as I believe Seagate's product and operational execution, as well as the company's market presence and visibility, have never been stronger. We have laid the foundation for continued success and growing profitability in 2007." Headquartered in Scotts Valley, Ca., Seagate Technology (NYSE: STX) -- http://www.seagate.com/-- designs, manufactures and markets hard disc drives. The company provides products for a wide-range of Enterprise, Desktop, Mobile Computing, and Consumer Electronics applications. * * * As reported in the Troubled Company Reporter on Sept. 13, 2006, Moody's Investors Service affirmed the Ba1 Corporate Family Rating of Seagate Technology HDD Holdings. At the same time, Moody's assigned new ratings to a proposed new debt issuance of $1.25 billion to finance Seagate's recently announced $2.5 billion stock buyback program, as well as refinance Seagate's existing $400 million 2009 notes. Ratings assigned include a Ba1 rating on Floating rate notes due 2009, Ba1 rating on Senior notes due 2011 and 2016. SOUNDVIEW CI-21: DBRS Rates $10.5 Million Class N3 Notes at BB -------------------------------------------------------------- Dominion Bond Rating Service assigned these ratings to the NIM Notes, Series 2006-WF2 issued by Soundview CI-21. -- $35.2 million Class N1 rated at A (low) -- $7.2 million Class N2 rated at BBB -- $10.5 million Class N3 rated at BB The NIM Notes are backed by a 100% interest in the Class C and Class P Certificates issued by Soundview Home Loan Trust 2006-WF2. The Class C Certificates will be entitled to all excess interest in the Underlying Trust, and the Class P Certificates will be entitled to all prepayment premiums or charges received in respect of the mortgage loans. The NIM Notes will also be entitled to the benefits of a NIM Interest Rate Cap Agreement with the Royal Bank of Scotland plc. The Trust will receive funds should LIBOR exceed 5.350% per annum subject to a ceiling of 9.50% per annum. In addition, the Notes will benefit from an underlying swap agreement, an underlying interest rate cap agreement and an underlying basis risk cap agreement with the Royal Bank of Scotland plc. Payments on the NIM Notes will be made on the 25th of each month commencing in January 2007. Class N4 are Accrual Notes as their interest payment amounts are paid as principal to Class N1 through N3 Notes, and such accrued amount is added to the principal balance of Class N4 Notes. On each payment date, Interest payments will be distributed sequentially to the holders of Class N1 through N3 Notes, followed by principal payments distributed sequentially to the holders of Class N1 through N3 Notes until the Note balance of such class has been reduced to zero. Interest followed by principal payments will then be distributed to Class N4 Notes. Any remaining amounts will be distributed to the Issuer, the Indenture Trustee and holders of preference shares. Class N4 is not rated by DBRS. All mortgage loans in the Underlying Trust were originated or acquired by Wells Fargo Bank, N.A. STARINVEST GROUP: Miscor Group Raises $12.5MM in Private Placement ------------------------------------------------------------------ One of StarInvest Group, Inc.'s portfolio companies, Miscor Group, Ltd., a provider of electrical contracting and industrial services, raised $12.5 million through the private placement of 62.5 million shares of its common stock to Tontine Capital Partners, L.P. and Tontine Capital Overseas Master Fund, L.P. Miscor will use the proceeds from the sale to pay off $10 million of senior secured debt and for general working capital purposes. StarInvest Group, Inc. currently holds $800,000 Convertible Debenture and 845,834 shares of common stock of Miscor. StarInvest Group, Inc. does not expect Miscor to use the proceeds from the sale to pay off their debt. About StarInvest Group Based in Midland, Texas, StarInvest Group Inc. fka Exus Global Inc. -- http://www.starinvestgroup.com/-- provides capital and other assistance to small- and medium-sized technology companies. Going Concern Doubt Larry O'Donnell, CPA, P.C., raised substantial doubt about StarInvest Group, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's negative working capital and accumulated deficit. STRUCTURED ASSET: Moody's Rates Class B Certificates at Ba1 ----------------------------------------------------------- Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by Structured Asset Securities Corporation Mortgage Loan Trust, Series 2006-BC6 and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by BNC Mortgage, Inc., Option One Mortgage Corporation, and EquiFirst Corporation originated, adjustable-rate and fixed-rate, subprime mortgage loans acquired by Lehman Brothers Holdings Inc. The ratings are based primarily on the credit quality of the loans and on protection against credit losses by lender paid mortgage insurance provided by Mortgage Insurance Guaranty Corporation and PMI Mortgage Insurance Co. The ratings also benefit from the subordination, excess spread, and overcollateralization. Further, the ratings benefit from the interest-rate swap agreement provided by IXIS Financial Products, Inc. After taking into consideration the benefit of the mortgage insurance, Moody's expects collateral losses to range from 4.10% to 4.60%. JPMorgan Chase Bank and Wells Fargo Bank, N.A. will service the mortgage loans and Aurora Loan Services LLC will act as master servicer to the mortgage loans. Moody's has assigned JPMorgan its servicer quality rating SQ1 as a servicer of subprime mortgage loans. Moody's has assigned Aurora its servicer quality rating SQ1- as a master servicer of mortgage loans. These are the rating actions: * Structured Asset Securities Corporation Mortgage Loan Trust, Series 2006-BC6 * Mortgage Pass-Through Certificates, Series 2006-BC6 Class A1, Assigned Aaa Class A2, Assigned Aaa Class A3, Assigned Aaa Class A4, Assigned Aaa Class A5, Assigned Aaa Class M1, Assigned Aa1 Class M2, Assigned Aa2 Class M3, Assigned Aa3 Class M4, Assigned A1 Class M5, Assigned A2 Class M6, Assigned A3 Class M7, Assigned A3 Class M8, Assigned Baa1 Class M9, Assigned Baa3 Class B, Assigned Ba1 The Class B 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. SUN MICROSYSTEMS: Earns $126 Million in Quarter Ended December 31 ----------------------------------------------------------------- Sun Microsystems Inc. disclosed financial results for its fiscal second quarter ended Dec. 31, 2006. Revenues for the second quarter of fiscal 2007 were $3.566 billion, an increase of 7% as compared with $3.337 billion for the second quarter of fiscal 2006. The year-over-year revenue increase was due to sales of SPARC(R) chip multithreading (CMT) servers and x64-based servers as well as the increased acceptance of the Solaris(TM) 10 Operating System. Computer Systems products revenues increased 14% year-over-year, the fourth consecutive quarter of year-over-year revenue growth. Net income for the second quarter of fiscal 2007 on a GAAP basis was $126 million as compared with a net loss of $223 million for the second quarter of fiscal 2006. GAAP net income for the second quarter of fiscal 2007 included: $58 million of stock-based compensation charges, $26 million of restructuring and related impairment of assets charges and a related tax benefit of $4 million. Cash generated from operations for the second quarter of fiscal 2007 was $153 million, and cash and marketable debt securities balance at the end of the quarter was $4.837 billion. "Sun's financial performance this quarter demonstrates that our strategy and discipline are paying off," said Jonathan Schwartz, CEO of Sun Microsystems. "The steady increase in adoption of our key developer platforms, the outstanding performance of our systems group, coupled with yesterday's endorsement of Solaris by Intel and today's landmark investment by KKR Private Equity Investors, L.P., are all validation of our momentum, and key drivers behind our push towards sustained growth and profitability." 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. SUNGARD DATA: Fitch Affirms Junk Rating on $1 Billion Senior Notes ------------------------------------------------------------------ Fitch has affirmed these ratings for SunGard Data Systems Inc.: -- Issuer Default Rating at 'B'; -- $1 billion senior secured revolving credit facility due 2011 at 'BB-/RR2'; -- $3.9 billion senior secured term loan due 2013 at 'BB-/RR2'; -- $250 million 3.75% senior notes due 2009 at 'B/RR4'; -- $250 million 4.875% senior notes due 2014 at 'B/RR4'; -- $2 billion senior unsecured notes due 2013 at 'B-/RR5'; and, -- $1 billion 10.25% senior subordinated notes due 2015 at 'CCC+/RR6'. The Rating Outlook is Stable. The ratings reflect: (a) SunGard's significant debt levels and debt service requirements; (b) Fitch's expectation that meaningful debt reduction is unlikely over the foreseeable future, given limited debt amortization requirements over the next few years; (c) pressured operating EBITDA margins due in part to aggressive pricing related to retaining long-term customer contracts; and, (d) integration risks resulting from the company's historical bias toward augmenting mature organic revenue growth rates with acquisitions. The ratings are supported by SunGard's: (a) leading positions in each of its businesses with significant scale and product breadth; (b) strong recurring revenue profile driven by longer-term contracts and significant switching costs; (c) consistent free cash flow; and, (d) well-diversified customer portfolio. The Stable Rating Outlook reflects Fitch's expectations that, despite the aforementioned margin erosion, SunGard's operating performance and credit protection measures should remain consistent, driven primarily by higher revenues. SunGard's longer-term customer contracts and a recurring revenue stream that represents almost 90% of total revenues are also expected to continue contributing to its consistent operating performance. Total adjusted leverage should remain above 6.5x with interest coverage at just under 2x. While organic growth rates for all three of its segments - financial systems, availability services, and higher education and public sector systems - are anticipated to be in the low- to mid- single digits over the next several years, SunGard will continue to augment more mature market growth rates via smaller tuck-in acquisitions, particularly in the more fragmented FS and HEPS segments, and some share gains. Fitch believes SunGard will continue to generate free cash flow approximating $150 million annually, of which the company is required to use 50% of these annual amounts not reinvested as of year end for reducing term loan balances. The Recovery Ratings reflect Fitch's belief that SunGard would be reorganized rather than liquidated in a bankruptcy scenario, given Fitch's estimates that the company's ongoing concern value of $5.7 billion is significantly higher than its projected liquidation value of approximately $251 million, due mostly to the significant value associated with SunGard's intangible assets. In estimating ongoing concern value, Fitch assumes a 7x multiple and discounts SunGard's normalized operating EBITDA by 30%, reflecting some concentration to FS and annual rollover risk of 25% of the company's long-term contract portfolio. After reductions for administrative and cooperative claims, Fitch arrived at an adjusted reorganization value of approximately $4.9 billion. Based upon these assumptions, the senior secured debt, including $1 billion revolving credit and nearly $4 billion of term loan facilities recover 88%, resulting in 'RR2' ratings for both tranches of debt. The senior notes' 'RR4' recovery rating reflects the partial security these notes received during the leveraged buyout process and Fitch's belief that the secured bank debt is in a superior position due to its right to the company's intellectual property. The 'RR5' recovery rating for the $1.6 billion senior unsecured debt reflects Fitch's estimate that 11%-30% recovery is reasonable, while the 'RR6' recovery rating for the $1 billion of subordinated debt reflects Fitch's belief that negligible recovery would be achievable due to its deep subordination to other securities in the capital structure. As of Sept. 30, 2006, Fitch believes SunGard's liquidity position was sufficient and supported by: (a) approximately $268 million of cash; (b) $1 billion of senior secured revolving credit facilities expiring 2011; and, (c) a $450 million accounts receivable securitization program expiring 2011. As of Sept. 30, 2006, total on-balance-sheet debt was approximately $7.4 billion and consisted primarily of: (a) $3.9 billion of senior secured term loans expiring 2013; (b) approximately $250 million of 3.75% senior notes due 2009; (c) approximately $250 of 4.875% senior notes due 2014; (d) $1.6 billion of 9.125% senior unsecured notes due 2013; (e) $400 million of floating-rate senior unsecured notes due 2013; and, (f) $1.0 billion of 10.25% of senior subordinated notes due 2015. Debt amortization requirements under the term loans are only $40 million in each of the next two fiscal years. SWIFT & CO: 2nd Fiscal Quarter Net Sales Increase to $2.47 Billion ------------------------------------------------------------------ Swift & Company has reported net sales of $2.47 billion for its fiscal second quarter ended Nov. 26, 2006, up 6.9% from net sales of $2.31 billion in the comparable prior-year period. The company's net sales increase reflects a 6.3% net sales increase in Swift Beef, a 15.9% net sales increase in Swift Australia, and a 0.6% net sales increase in Swift Pork. Swift Australia net sales benefited from a 1% increase in the U.S. dollar to Australian dollar exchange rate compared to the prior- year period. The company's second-quarter EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was $32 million, up from $2 million in the prior-year period. EBITDA improvements in Swift Australia and Swift Beef accounted for the year-over-year increase. At the end of the second quarter, Swift & Company's borrowing capacity under its $550 million revolving credit facility stood at $266 million. The company ended the second quarter with $67 million of cash on hand and $818 million of total debt outstanding. "Our operational initiatives are delivering the kinds of improvements we had planned," Swift & Company president and chief executive officer Sam Rovit said. "Our Australian management team was able to capitalize on both improved cattle supplies and continued strong international customer demand. Swift Pork's performance continued in line with historical norms and met our profitability expectations. Finally, we improved the operational and financial performance of Swift Beef versus last year despite challenging market conditions in the fall." Mr. Rovit added, "Operational excellence and financial fitness remain top priorities for the entire Swift team. Multiple initiatives are currently underway to improve our operational effectiveness and cost competitiveness. These initiatives will further assist in our recovery from recent business disruptions caused by the widely reported government raids on our production facilities at the beginning of our third quarter." Swift Beef Swift Beef's second-quarter net sales increased 6.3% to $1.43 billion compared with $1.34 billion in the prior-year period. Selling price increases of 5.2% were accompanied by volume increases of 1.1%. Swift Beef's second-quarter EBITDA improved to a loss of $18 million from a loss of $30 million in the prior-year period. The EBITDA improvement resulted from a net sales increase reflecting the selling price and volume increases, which more than offset higher raw material costs. EBITDA in the current year was also affected by increases in freight and packaging costs that were more than offset by reductions in workers compensation and employee medical costs based on receipt of updated actuarial reports, as well as reductions in management incentive accruals and lower utility costs. Selling, general, and administrative costs were lower year-over- year, principally reflecting reduced professional fees and the previously mentioned reduction in management incentive accruals. Swift Pork Swift Pork's second-quarter net sales increased 0.6% to $544 million compared with $541 million in the prior-year period. Average selling prices increased 1.4% while sales volumes declined by 0.8%. Swift Pork's second-quarter EBITDA remained relatively flat at $26 million compared to the prior-year period. EBITDA results reflect decreased sales volume coupled with increases in transportation and packaging costs that more than offset reductions in workers compensation and employee medical costs based on receipt of updated actuarial reports, as well as reductions in management incentive accruals and lower utility costs. Selling, general, and administrative costs were lower year-over- year, principally reflecting the previously mentioned reduced management incentive accruals that more than offset higher certain one-time professional and consulting fees. Swift Australia Swift Australia's second-quarter net sales increased 15.9% to $511 million compared with $441 million in the prior-year period. Average selling prices remained nominally flat and sales volumes increased 15.5%. Sales prices benefited from a 1.0% increase in the U.S. dollar to Australian dollar exchange rate compared to the prior-year period. Sales volumes increased in both the grass-fed and grain-fed businesses due to increased cattle availability and customer demand, respectively. Swift Australia's second-quarter EBITDA increased to $25 million from $6 million in the comparable prior-year period. The EBITDA increase primarily resulted from improved gross margins, principally in the grass-fed business, reflecting greater cattle availability at favorable prices coupled with higher sales volumes and nominally flat sales prices. ICE Investigation Agents from the U.S. Department of Homeland Security's Immigration and Customs Enforcement division and other law enforcement agencies conducted on Dec. 12, 2006, on-site employee interviews at all of Swift & Company's domestic production facilities except Louisville, Ky., and Santa Fe Springs, Calif., in connection with an investigation of the immigration status of an unspecified number of Swift's workers. Approximately 1,300 individuals were detained by ICE and removed from Swift's domestic labor force. No civil or criminal charges have been filed by the government against Swift & Company or any of its current or former management employees. After a six to seven hour suspension of operations due to the employee interview process, Swift resumed production at all facilities but at reduced output levels. Output levels are expected to be below historical levels over the near term. While the company is still evaluating the financial impact, the preliminary estimate of the one-time impact on Swift's full year ended May 27, 2007, is expected to be approximately $20 million resulting primarily from lost operating efficiency as new employees are re-trained, plus up to an additional expected total of $10 million for employee retention and hiring incentives required to re-staff the facilities with production employees. The company does not believe there will be a continuing effect on its business, financial condition, results of operations, and cash flows beyond the current fiscal year. About Swift & Company With more than $9 billion in annual sales, Swift & Company -- http://www.swiftbrands.com/-- is the world's second-largest processor of fresh beef and pork. Founded in 1855 and headquartered in Greeley, Colo., Swift processes, prepares, packages, markets, and delivers fresh, further-processed and value-added beef and pork products to customers in the United States and international markets. SWIFT & CO: Moody's Pares Corp. Family Rating to B3 from B2 ----------------------------------------------------------- Moody's Investors Service lowered the ratings of Swift & Company, including its corporate family rating which was downgraded from B2 to B3, and assigned a stable outlook. The downgrade reflected Moody's concern that the challenges in the US beef industry are likely to preclude material improvement in the company's weak debt protection measures, in the near term, to levels consistent with its prior rating, which Moody's had previously expected to be achieved by this time. This rating action concludes the review for possible downgrade begun on Dec. 19, 2006. Ratings lowered: -- Corporate family rating to B3 from B2; -- Probability of default rating to B3 from B2; and, -- Senior unsecured notes to Caa1, LGD4, 59% from B3 LGD4, 61%. Rating confirmed: -- Senior subordinated notes at Caa1, LGD5, 76%. Swift's B3 corporate family reflects the company's highly volatile earnings and cash flow, very high enterprise leverage, low margins and weak credit metrics, and the continuing challenging conditions in the volatile US beef industry overall. Swift's ratings are supported by its scale as the third largest beef and pork processor in the US, by its strong Australian operations, and by the company's comfortable liquidity. Moody's analyzes Swift's operations in the context of the Rating Methodology for Global Natural Product Processors -- Protein and Agriculture. Using the 22 rating factors cited in this methodology, Swift's rating would score a B2 -- one notch higher than the company's actual B3 rating. The company's actual rating reflects the significant weight that Moody's placed on Swift's very high leverage and continuing weak operating performance. The stable rating outlook is based on Moody's expectation that earnings will modestly rebound as beef volumes continue to recover in the US and Australia, and that the company's liquidity position remains strong during this difficult period. The rating outlook anticipates no further labor disruption at Swift. Given the recent downgrade, an upgrade is unlikely in the near term. Over the longer term, an upgrade would require that Swift sustain three-year average Debt to EBITDA below 5x, and LTM Debt to EBITDA below 6x in a downturn; and maintain three-year average EBIT to Interest above 1.5x, and LTM EBIT to Interest above 1x in a downturn. Ratings could be lowered should liquidity be seriously eroded, should the company's financial flexibility become limited or should LTM Debt to EBITDA likely to be sustained above 9x. Headquartered in Greeley, Colorado, Swift & Company is one of the world's leading beef and pork processing companies. Its largest business segments are domestic beef processing, domestic pork processing and beef operations in Swift Australia. Swift's parent S&C Holdco 3 is owned by a limited partnership formed by equity sponsors HM Capital Partners LLC and Booth Creek Management Corporation. Consolidated sales for the twelve months ended Nov.26, 2006 exceeded $9.6 billion. TRANSDIGM INC: Moody's Concludes Review and Affirms Ratings ----------------------------------------------------------- Moody's Investors Service has confirmed all ratings of TransDigm, Inc., including the Corporate Family Rating of B1, the Ba3 rating on the amended bank credit facilities, and the B3 rating on the company's senior subordinated notes. The ratings outlook is negative. Moody's has taken these ratings actions in consideration of the company's disclosure of financing plans related to its acquisition of Aviation Technologies Inc. This concludes the review commenced on Jan. 10, 2007. The ratings reflect the company's substantial debt levels and high leverage, increased with the debt-financed acquisition of ATI, as well as uncertainty about the size and funding of potential future acquisitions and the potential use of additional debt for equity distributions. The ratings also consider TransDigm's history of stable profit margins and revenue growth in an improving commercial aerospace environment, as well as the company's stable free cash flow. On Jan. 9, 2007, TransDigm reported that it had entered into a definitive agreement to purchase ATI for approximately $430 million in cash. To finance the acquisition of ATI, the company expects to amend its term loan facility, increasing its borrowings by $180 million to $830 million. TransDigm also plans to issue $250 million of senior subordinated notes, as a tack-on to the $275 million notes offering of June 2006. The company also expects to increase its revolving credit facility by $50 million, to $200 million, through the amendment to its back credit facility. This would result in an increase in debt of about 46% over September 2006 levels, with a corresponding increase in leverage from about 4.8x Debt/EBITDA to an estimated pro forma 5.5x. Such leverage is more typical in lower-rated entities. However, Moody's believes that near-term prospects for good interest coverage and free cash flow generation made possible by strong operating margins will mitigate much of the weakened credit profile implied by the increased leverage. The negative outlook takes into account Moody's concerns regarding risk associated with the ATI acquisition, the company's largest acquisition over recent years. Debt holders also face the risk that the company may increase its risk profile if the size of the ATI purchase is indicative of an acceleration of TransDigm's acquisition pace and its propensity to use substantial amounts of debt to finance potential purchases. The negative outlook also reflects Moody's expectations that leverage will remain high relative to the B1 rating category through FY 2007, despite a continued strong commercial aviation aftermarket environment. Although TransDigm is expected to be free cash flow positive over the near term, Moody's does not anticipate that the company will substantially repay debt over the next 12 months. These ratings have been confirmed: -- Senior secured revolving credit facility at Ba3, LGD3, 31% -- Senior secured term loan at Ba3, LGD3, 31% -- Senior subordinated notes at B3, LGD5, 85% -- Corporate Family Rating of B1 -- Probability of Default Rating of B1 Headquartered in Cleveland, Ohio, TransDigm Inc. is a leading manufacturer of highly engineered aerospace components to commercial airlines, aircraft maintenance facilities, original equipment manufacturers and various agencies of the U.S. Government. The company had Fiscal Year 2006 revenues of $435 million. US AIRWAYS: CEO Calls on Senate to Allow Airline Industry Changes ----------------------------------------------------------------- The Chairman and Chief Executive Officer of US Airways Group Inc., Doug Parker, testified at the Senate Commerce, Science and Transportation Committee hearing on "The State of the Airline Industry: the Potential Impact of Airline Mergers and Industry Consolidation," calling upon the Senate to allow market forces to continue to bring about positive change for the airline industry. When Mr. Parker last addressed the Committee, shortly after the tragic events of Sept. 11, 2001, the airline industry was in a precipitous financial situation. At that time, Members of the Committee and others in Congress stood with the industry by demonstrating leadership and conviction in enacting legislation to provide much needed liquidity to our industry. The measures passed by Congress -- direct cash transfers, the creation of a loan stabilization board, and relief on war risk insurance premiums, among other actions -- enabled the industry to cover its basic operating expenses, including paying employees and serving communities at a time when commercial loans and financing were unavailable at any cost. In his testimony, Mr. Parker said, "All of us in the industry were grateful for the help of the nation. And we all knew that the industry, like America, had been changed forever. But none of us could have foreseen the severity and duration of the crisis that faced airlines. Since 2001 there have been 24 Chapter 11 filings and 5 liquidations, $35 billion in cumulative losses; and 154,000 airline industry employees who have lost their jobs. The severe impact of multiple shocks to the aviation industry caused the industry to repeatedly come back to Congress for help on a regular basis. While Congress did help, we also heard the message -- and appropriately so -- that federal support should be the exception, and not the rule -- and that it was time, as an industry, that we got our own house in order. At America West -- now US Airways -- we took that message to heart." According to Mr. Parker's testimony, aggressive cost management and consumer friendly policies and pricing allowed America West to return to profitability. The merger of America West and US Airways in 2005 further accelerated both profitability and benefits to employees and consumers. US Airways posted a profit excluding special items for the first three quarters of 2006, and is one of the only network carriers to project a profit for the fourth quarter. "The frontline employees of US Airways and America West who sacrificed so much to turn around and then merge our companies will receive 2006 profit sharing payments in March," Mr. Parker said. "In fact, year-to-date through September 2006, our total accrual for profit sharing was $48 million. We fully anticipate that amount to increase after we report our fourth quarter results next week." Consumers have benefited from popular fare reductions in diverse markets such as Augusta, Georgia; Huntsville, Alabama; Huntington, West Virginia; Syracuse, New York, Willimington, North Carolina; Harrisburg, Pennsylvannia; and most recently, Charlottesville, Virginia. In total, US Airways has lowered fares by as much as 83 percent in over 1,100 markets. US Airways' proposed merger with Delta Air Lines Inc. provides an opportunity to replicate and exceed the success of the America West/US Airways merger, and create one of the most financially stable airlines in the industry; an airline that can compete successfully against all carriers: low-cost, traditional, and international mega-carriers. All domestic airports that have US Airways or Delta service will be served by the new Delta after the merger. In his remarks, Mr. Parker testified, "With the ability to lower costs, gain efficiencies and adjust flying to better align demand and capacity, we believe we can lower fares in dozens of new markets and communities, just as we are doing at US Airways today. Moreover, passengers will benefit from the ability to get to more destinations via more routings; it is far more likely that thanks to the new Delta more passengers will be able to get to their destination at a time convenient for them and at a price that is reasonable, than would be possible under either stand-alone Delta or US Airways." Mr. Parker pledged to the Committee members, "We will not furlough any frontline employees of Delta or US Airways as part of this merger. We will align the work group cost structures between current US Airways and Delta employees, and going forward we will move to the higher cost scale. In fact, the day after the merger closes Delta employees won't notice any changes-not even a change to the name of the airline. Over time, we will seek to take the best practices from either Delta or US Airways and standardize them across the new combined airline. Our ultimate goal is to build a stronger and more secure future for all of our stakeholders." "The airline industry remains extremely fragmented with substantial levels of excess capacity. Even after the merger, and the announced capacity reductions, our industry will remain highly-competitive, and consumers will continue to enjoy high- service levels and low fares. We have put forth a fair and equitable proposal, which we have enhanced to make even more compelling, to merge with Delta while the carrier is still in bankruptcy, and to make the combination of Delta and US Airways into a stronger, more competitive carrier than either carrier can become on its own," testified Mr. Parker. Mr. Parker's remarks concluded, "Our industry stands at a crossroads. We can continue down the current path of boom and bust uncertainty, or we can chart a new course. The question that legislators and policymakers face is simple; shall we embrace change to better serve our customers, employees and communities, or are we content with a future of continued financial uncertainty and government bailouts? We believe -- and our experience has proven -- that we have to break with the failed policies of the past in order to provide a more sustainable future for all stakeholders." About US Airways Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. (US Airways Bankruptcy News, Issue No. 135; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Nov. 21, 2006, Fitch Ratings has affirmed its ratings of US Airways Group, Inc., as: Issuer Default Rating (IDR) at 'CCC'; Secured Term Loan Rating at 'B/RR1'; and Senior Unsecured Rating at 'CC/RR6'. Fitch's ratings apply to approximately $1.4 billion in debt obligations. The Rating Outlook has been revised to Stable from Positive. As reported in the Troubled Company Reporter on Nov. 17, 2006, Standard & Poor's Ratings Services placed its ratings on US Airways Group Inc., including the 'B-' corporate credit ratings on US Airways Group Inc. and its major operating subsidiaries America West Holdings Corp., America West Airlines Inc., and US Airways Inc., on CreditWatch with developing implications. WOODWIND & BRASSWIND: Court OKs Sale of All Assets to Musician's ---------------------------------------------------------------- The Hon. Harry C. Dees, Jr., of the U.S. Bankruptcy Court for the Northern District of Indiana gave Dennis Bamber Inc. dba The Woodwind & The Brasswind authority to sell substantially all of its assets, free and clear of liens, claims and interests, to Musician's Friends Inc., an affiliate of Guitar Center Inc. Musician's Friends agreed to buy the Debtor's assets for $37,000,000 pursuant to an asset purchase agreement dated Nov. 22, 2006. The Debtor tells the Court that Musician's Friends' offer is the highest and best offer to purchase the transferred assets; and provides the best opportunity to initiate a sale process that will maximize the creditors recoveries. The Debtor further tells the Court that it does not have the financial access to capital necessary to produce materials and inventories. The Debtor's financial condition has caused it to be in jeopardy of losing its clients. Thus, the sale of the transferred assets is the most viable option for maximizing the value of its assets. A full-text copy of Musician's Friend Inc.'s Assets Purchase Agreement is available for free at: http://ResearchArchives.com/t/s?18e7 Headquartered in South Bend, Indiana, The Woodwind & the Brasswind -- http://www.wwbw.com/-- sells musical instruments and accessories. The Company filed for chapter 11 protection on Nov. 24, 2006 (Bankr. N.D. Ind. Case No. 06-31800). Chad H. Gettleman, Esq., Henry B. Merens, Howard L. Adelman, Esq., and Nathan Q. Rugg, Esq., at Adelman, Gettleman, Ltd., represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected James M. Carr, Esq., at Baker & Daniels LLP as its counsel. When the Debtor filed for protection from its creditors, they estimated assets and debts between $1 million and $100 million. WORLD HEALTH: Chapter 7 Trustee Taps Miller Coffey as Accountants ----------------------------------------------------------------- George L. Miller, the appointed Chapter 7 Trustee for World Health Alternatives Inc. and its debtor-affiliates' bankruptcy cases, asks the U.S. Bankruptcy Court for the District of Delaware for permission to employ Miller Coffey Tate LLP, as his accountants, nunc pro tunc to Dec. 26, 2006. Miller Coffey will: a) provide general accounting and tax advisory services to the Trustee regarding the administration of the bankruptcy estates; b) review and assist in the preparation and filing of any tax returns, any assistance regarding existing and future IRS examinations and any and all other tax assistance as may requested from time to time; c) interpret and analyze financial materials, including accounting, tax, statistical, financial and economic data, regarding the Debtors and other relevant parties; d) analyze the Debtors' books and records regarding potential avoidance actions; e) analyze and advise regarding additional accounting, financial, valuation and related issues that may arise in the course of these proceedings; f) assist the Trustee's attorneys in the preparation and evaluation of any potential litigation, as requested; g) provide testimony on various matters, as requested; and h) perform all other services for the Trustee which are appropriate and proper in these Chapter 7 cases, as requested. The Trustee's application did not disclose the firm's compensation fee. To the best of the Trustee's knowledge the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Pittsburgh, Pennsylvania, World Health Alternatives, Inc. -- http://www.whstaff.com/-- is a premier human resource firm offering specialized healthcare personnel for staffing and consulting needs in the healthcare industry. The company and six of its affiliates filed for chapter 11 protection on Feb. 20, 2006 (Bankr. D. Del. Case Nos. 06-10162 to 06-10168). Stephen M. Miller, Esq., at Morris, James, Hitchens & Williams LLP, represents the Debtors in their restructuring efforts. Lawyers at Young, Conaway, Stargatt & Taylor, LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. W.R. GRACE: Reports $5 Million Net Income in 2006 Fourth Quarter ---------------------------------------------------------------- W. R. Grace & Co. disclosed financial results for the fourth quarter and full year ended Dec. 31, 2006. Highlights are: -- Sales for the fourth quarter were $697.4 million compared with $636.4 million in the prior year quarter, a 9.6% increase (7% before the effects of currency translation). The increase was attributable primarily to added sales volume in most geographic regions and higher selling prices in response to cost inflation. Sales increased 8.6% for the Grace Davison operating segment and 10.7% for the Grace Performance Chemicals operating segment. -- Net income for the fourth quarter was $5 million compared with a net loss of $600,000 in the prior year quarter. The 2006 and 2005 fourth quarters were unfavorably affected by costs of Chapter 11, litigation and other matters not related to core operations. Excluding such costs and after tax effects, net income would have been $22.4 million for the fourth quarter of 2006 compared with $20.3 million calculated on the same basis for the fourth quarter of 2005, a 10.3% increase. -- Pre-tax income from core operations was $50.6 million in the fourth quarter compared with $46.1 million in the prior year quarter, a 9.8% increase. Pre-tax operating income of the Grace Davison operating segment was $44 million, up 11.4% compared with the fourth quarter of 2005, attributable principally to sales increases across all product groups and to lower manufacturing costs. Pre-tax operating income of the Grace Performance Chemicals operating segment was $36.5 million, up 12% compared with the fourth quarter of 2005, attributable primarily to higher sales of construction and packaging products in all geographic regions. Corporate operating costs were $3.9 million higher than the fourth quarter of 2005 due primarily to an increase in performance- based compensation reflecting the better year-over-year results from core operations and from higher insurance costs. -- Sales for the year ended Dec. 31, 2006, were $2.9 billion compared with $2.6 billion for the prior year, a 10% increase (9.9% before the effects of currency translation). Net income for 2006 was $18.3 million compared with net income in 2005 of $67.3 million. The lower net income in 2006 was principally caused by a $32.7 million increase in defense costs for the criminal proceeding related to Grace's former vermiculite mining operations in Montana, and a $19 million increase in Chapter 11-related expenses. Excluding noncore and Chapter 11-related costs and income (and after tax effects), net income would have been $113.7 million for the year ended Dec. 31, 2006, compared with $96.4 million calculated on the same basis for 2005, an 18% increase. Pre-tax income from core operations was $240.2 million for the year, a 19.2% increase over 2005, primarily attributable to higher sales volume in all geographic regions, higher selling prices to offset cost inflation, and lower overall pension costs. "I am very pleased with our fourth quarter results," said Grace's President and Chief Executive Officer Fred Festa. "We finished 2006 with consistently good performance from our core operations. Our business teams continued to grow our sales base despite a downturn in U.S. residential construction and also achieved our high cash return targets. We are well positioned to continue our growth into 2007." Core Operations Grace Davison Fourth quarter sales for the Grace Davison operating segment, which includes silica- and alumina-based catalysts and materials used in a wide range of industrial applications, were $367.4 million, up 8.6% from the prior year quarter. The primary factors contributing to the sales increase were: (1) selling price increases implemented to partially offset natural gas and raw material cost inflation; (2) higher volume of silica-based engineered materials in all geographic regions from stronger economic activity and from success in strategic growth initiatives; and (3) higher volume of specialty catalysts from a recent acquisition. Pre-tax operating income of the Grace Davison operating segment for the fourth quarter was $44 million compared with $39.5 million in the prior year quarter, an 11.4% increase. Operating margin was 12%, compared with 11.7% in the prior year quarter. The improvement in operating income and margin is attributable to higher sales volume and selling prices, and lower operating expenses as a percentage of sales, reflecting successful growth and productivity initiatives. Sales of the Grace Davison operating segment for the year ended Dec. 31, 2006, were $1.5 billion, up 9.5% from 2005. Full year pre-tax operating income was $171.9 million compared with $157.1 million for the prior year, a 9.4% increase, with operating margins of 11.5%, equal with last year. Full year operating results reflect higher volume and selling prices in most geographic regions and product groups. Other positive factors include the containment of fixed operating costs as a percentage of sales and the recovery from the hurricanes in the Gulf of Mexico in the latter half of 2005. Grace Performance Chemicals Fourth quarter sales for the Grace Performance Chemicals operating segment, which includes specialty chemicals and building materials used in commercial and residential construction and sealants and coatings used in rigid food and beverage packaging, were $330 million, up 10.7% from the prior year quarter. The primary factors contributing to the sales increase were: (1) higher volumes and selling prices of commercial construction products in each major geographic region, (2) added distribution channels for residential building materials in the United States, which partially offset the impact of a decline in new residential construction; and (3) higher volume and selling prices for Darex packaging technologies worldwide. Pre-tax operating income for the Grace Performance Chemicals operating segment was $36.5 million compared with $32.6 million for the fourth quarter of 2005, a 12% increase. Operating margin of 11.1% compared with 10.9% in the fourth quarter of 2005. The higher operating income and margin was primarily a result of sales volume growth in all geographic regions and selling price increases in response to raw material cost inflation, partially offset by softness in U.S. residential construction. Sales of the Grace Performance Chemicals operating segment for the year ended Dec. 31, 2006 were $1.3 billion, up 10.6% from 2005. Full year pre-tax operating income was $175.7 million compared with $151.1 million for the prior year, a 16.3% increase, with operating margin increasing 0.7 percentage points to 13.3%. The increase in operating income reflects higher sales volume globally, selling price increases, and positive results from productivity and cost containment initiatives, partially offset by raw material cost inflation. Corporate Operating Costs Corporate costs related to core operations were $29.9 million in the fourth quarter of 2006 compared with $26 million in the prior year quarter, and $107.4 million for the full year 2006 compared with $106.7 million for 2005. The increase for the full year is attributable to higher performance-based compensation and healthcare expenses, partially offset by lower pension costs from the effect of contributions made to defined benefit pension plans in recent years. Pre-Tax Income (Loss) From Noncore Activities Noncore activities comprise events and transactions not directly related to the generation of operating revenue or the support of core operations. The pre-tax loss from noncore activities was $(8.8) million in the fourth quarter of 2006 compared with $(27.6) million in the prior year quarter, and $(97.7) million for the full year compared with $(30.3) million in 2005. The full year loss is principally due to revised estimates of environmental remediation costs ($30 million) and higher legal defense costs ($32.7 million), both related to issues arising from Grace's former vermiculite mining operations in Montana. Interest And Income Taxes Interest expense was $18.7 million for the quarter ended Dec. 31, 2006, and $73.2 million for the year, compared with $14 million and $55.3 million, respectively, for the comparable periods in 2005. The increases are principally attributable to a change in the annual interest rate on pre-petition bank debt and the effects of compounding interest over the course of Chapter 11. The weighted average interest rate on pre-petition obligations for the full year 2006 was 6.7%. Income taxes are recorded at a global effective rate of 35%, applied to pre-tax income adjusted for non-deductible items, principally Chapter 11 expenses. Income taxes related to foreign jurisdictions are generally paid in cash, while income taxes in the United States are generally offset by available net operating loss carryforwards. During the fourth quarter of 2006, Grace reassessed the recoverability of recorded tax assets and concluded that a valuation allowance was no longer required. Also in the fourth quarter, Grace reassessed its financing plan for satisfying Chapter 11-related obligations and concluded that it will likely access additional cash and debt capacity from certain foreign subsidiaries, requiring an accrual for taxes in anticipation of additional repatriated funds. The net effect of these two reassessments was to reduce Grace's income tax expense by $6 million in the fourth quarter of 2006. Chapter 11 Proceedings On April 2, 2001, Grace and 61 of its United States subsidiaries and affiliates, including its primary U.S. operating subsidiary W. R. Grace & Co.-Conn., filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware in order to resolve Grace's asbestos-related liabilities. In January 2005, Grace filed an amended plan of reorganization and related documents with the Bankruptcy Court. As part of determining the confirmability of the Plan, the Bankruptcy Court has approved a process and timeline, which extends into mid-2007, for estimating the cost to resolve asbestos-related property damage and personal injury claims. Expenses (net of interest income) related to Grace's Chapter 11 proceedings were $17.7 million in the fourth quarter and $49.9 million for the year, compared with $11 million and $30.9 million for the fourth quarter and full year in 2005, respectively, reflecting a higher level of activity in the bankruptcy proceeding related to claims adjudication and estimation. Most of Grace's noncore liabilities and contingencies (including asbestos-related litigation, environmental claims and other obligations) are subject to compromise under the Chapter 11 process. The Chapter 11 proceedings, including related litigation and the claims valuation process, could result in allowable claims that differ materially from recorded amounts. Grace will adjust its estimates of allowable claims as facts come to light during the Chapter 11 process that justify a change, and as Chapter 11 proceedings establish court-accepted measures of Grace's noncore liabilities. Cash Flow and Liquidity Grace's net cash flow from operating activities for the full year of 2006 was $152.7 million, compared with $67.3 million for 2005. The change in cash flow from operating activities is principally attributable to improved core operating results and positive working capital changes in 2006. Other major factors affecting the change include the non-recurring payment of $119.7 million to settle tax and environmental contingencies in 2005 and an increase in 2006 of $73.8 million to fund defined benefit pension arrangements. Full year pre-tax income from core operations before depreciation and amortization was $353.7 million, 9.7% higher than in the prior year, a result of the higher pre-tax income from core operations described above. Cash used for investing activities was $129.4 million for the full year of 2006, which included the expansion of production facilities for waterproofing membranes and hydroprocessing catalysts, the acquisition of catalyst assets and technology, and capital for facilities maintenance. At Dec. 31, 2006, Grace had available liquidity in the form of cash and cash equivalents ($536.3 million), net cash value of life insurance ($89.2 million) and available credit under its debtor- in-possession facility ($175 million). Grace believes that these sources and amounts of liquidity are sufficient to support its business operations, strategic initiatives and Chapter 11 proceedings for the foreseeable future. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan LLP represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Anderson Kill & Olick, P.C., represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Martin W. Dies, III, Esq., at Dies & Hile L.L.P., and C. Alan Runyan, Esq., at Speights & Runyan,to represent it. Lexecon, LLP, provided asbestos claims consulting services to the Official Committee of Equity Security Holders. * Chadbourne & Parke Taps R. Simmonds-Watson as Program Manager --------------------------------------------------------------- Rachel V. Simmonds-Watson has joined the international law firm of Chadbourne & Parke LLP as its first Manager of Diversity Initiatives. Chadbourne's diversity program involves both recruiting a diverse workforce and supporting a diverse workplace environment. The Firm has, for example, signed the Association of the Bar of the City of New York's 2003 Statement of Diversity Principles and taken part in the association's Committee on the Recruitment and Retention of Lawyers' Fellowship program, which places minority law school students in clerkships at participating firms. Workplace initiatives include networking meetings, sensitivity training and same-sex domestic partner benefits. "Rachel is the ideal professional to fill this important role at Chadbourne," said Managing Partner Charles K. O'Neill. "Her decade of experience in recruiting and diversity will help the Firm maintain momentum in achieving a diverse workplace." "Chadbourne has actively supported a range of diversity programs for traditionally underrepresented groups," added partner Anthony Roncalli, chair of Chadbourne's Diversity Committee. "Rachel will bring a sharper focus to our efforts and enhance their impact." Ms. Simmonds-Watson joined Chadbourne from New York University's School of Law, where she started in 1996. She most recently served as Assistant Director, Recruiting and Marketing, in the Office of Career Services. Among her responsibilities, Ms. Simmonds-Watson managed on- and off-campus recruitment programs for over 1,000 legal employers and 1,400 law students. She also worked with employers to establish measurements of progress for law firms' recruiting practices and diversity initiatives. Prior to joining New York University, Ms. Simmonds-Watson was Legal Recruitment Coordinator for Ropes & Gray in Boston and Recruitment Assistant for Fried, Frank, Harris, Shriver & Jacobson in New York. She holds a B.A. degree in international studies from New York University's School of Continuing and Professional Studies, where she was a Founder's Day Scholar. About Chadbourne & Parke LLP Chadbourne & Parke LLP -- http://www.chadbourne.com/-- an international law firm headquartered in New York City, provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, energy, communications and technology, commercial and products liability litigation, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, employment law and ERISA, trusts and estates and government contract matters. Major geographical areas of concentration include Central and Eastern Europe, Russia and the CIS, and Latin America. The Firm has offices in New York, Washington, DC, Los Angeles, Houston, Moscow, St. Petersburg, Warsaw (through a Polish partnership), Kyiv, Almaty, Tashkent, Beijing, and a multinational partnership, Chadbourne & Parke, in London. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re AMM, LLC Bankr. Western District of Tennessee Case No. 07-20520 Chapter 11 Petition filed January 16, 2007 See http://bankrupt.com/misc/tnwb07-20520.pdf In re BK Marketing Group, LLC Bankr. Eastern District of New York Case No. 07-70130 Chapter 11 Petition filed January 16, 2007 See http://bankrupt.com/misc/nyeb07-70130.pdf In re Cribbs Timber, Inc. Bankr. Southern District of Georgia Case No. 07-50034 Chapter 11 Petition filed January 16, 2007 See http://bankrupt.com/misc/gasb07-50034.pdf In re Dondra Maza Bankr. District of Arizona Case No. 07-00170 Chapter 11 Petition filed January 16, 2007 See http://bankrupt.com/misc/azb07-00170.pdf In re Gardens of All Seasons, LLC Bankr. District of Colorado Case No. 07-10334 Chapter 11 Petition filed January 16, 2007 See http://bankrupt.com/misc/cob07-10334.pdf In re Richard E. Osterwalder Bankr. Northern District of Ohio Case No. 07-30139 Chapter 11 Petition filed January 16, 2007 See http://bankrupt.com/misc/ohnb07-30139.pdf In re Todd Richard Lhamon Bankr. Northern District of Ohio Case No. 07-30134 Chapter 11 Petition filed January 16, 2007 See http://bankrupt.com/misc/ohnb07-30134.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Jason A. Nieva, Melvin C. Tabao, Lucilo M. Pinili, Jr., 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 ***