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/raid1/www/Hosts/bankrupt/TCR_Public/070329.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, March 29, 2007, Vol. 11, No. 75 Headlines ABRAXAS PETROLEUM: Dec. 31 Balance Sheet Upside-Down by $21.6 Mil. ABUNDANT LIFE: Case Summary & Three Largest Unsecured Creditors AFFILIATED COMPUTER: Unit Inks Settlement with N.C. Health Dept. AFFILIATED COMPUTER: Buyout Offer Cues Fitch's Neg. Rating Watch AFFILIATED COMPUTER: Moody's Affirms Ba2 Corporate Family Rating AFFILIATED COMPUTER: Buyout Offer Cues S&P's Negative CreditWatch ALASKA COMMS: Dec. 31 Balance Sheet Upside-Down by $24.7 Million AMERICAN AIRLINES: Moody's Lifts Rating on Senior Facility to Ba3 AMERICAN MEDIA: Posts $20.5MM Net Loss in Qtr. Ended Dec. 31, 2005 AMERIGROUP CORP: Moody's Rates Proposed $200 Mil. Facility at Ba3 AMR CORP: Moody's Lifts Corporate Family Rating to B2 from B3 AMTROL INC: Seeks July 16 Extension of Lease Decision Period AMTROL INC: Has Until June 18 to Remove Prepetition Civil Actions APW ENCLOSURE: Court Converts Case to Chapter 7 Liquidation ARROW ELECTRONICS: Moody's Holds Rating on Preferred Stock at Ba2 AUTOMATED BUSINESS: Case Summary & Eight Largest Unsec. Creditors BANGPHAXAY CONSTRUCTION: Case Summary & Two Largest Creditors BARTS INNS: Case Summary & 13 Largest Unsecured Creditors BEAZER HOMES: FBI Conducting Investigation on Lending Practices BEAZER HOMES: CFO James O'Leary Resigns to Join Kaydon BEAZER HOMES: Low Earnings Expectation Cues S&P's Negative Outlook BELL MICROPRODUCTS: Receives Another Nasdaq Delisting Notice BELLE MARMICK: Case Summary & 20 Largest Unsecured Creditors BLOCKBUSTER INC: Good Performance Cues S&P's Ratings' Upgrade BORALEX INVESTMENT: S&P Withdraws B+ Preliminary Term Loan Rating BOWNE & CO: Incurs Net Loss of $1.8 Million in Year Ended Dec. 31 BRESNAN COMMS: Moody's Affirms Junk Rating on Second Lien Loan CAMPMED CASUALTY: A.M. Best Holds B Financial Strength Rating CAROLINA CARE: A.M. Best Says Financial Strength is Weak CENTERSTAGING CORP: Dec. 31 Balance Sheet Upside-Down by $9.6 Mil. CHEMED CORP: Deleveraging Prompts S&P's Positive Outlook CHENIERE ENERGY: Completes Public Offering of 13.5 Million Units CKE RESTAURANTS: Board Approves 50% in Quarterly Cash Dividend CKE RESTAURANTS: S&P Rates $320 Mil. Secured Credit Facility at BB CNA FINANCIAL: S&P Assigns BB Rating on Preferred Stock COMAGRO SE: Case Summary & 20 Largest Unsecured Creditors COMM 2001: Moody's Junks Rating $11 Million Class H Certificates COMPLETE RETREATS: Wants Plan-Filing Period Extend to May 31 CONTINENTAL AIRLINES: Moody's Rates Class C Certificates at B1 CONTINENTAL AIRLINES: S&P Assigns B+ Rating on Class C Certs. DANA CORP: Selling Hose & Tubing Biz to Orhan Holding for $70MM DIASYS CORP: Posts $238,481 Net Loss in 2nd Quarter Ended Dec. 31 DRS TECH: Fitch Holds Issuer Default Rating at B+ ELGIN NATIONAL: Buyout Prompts S&P's Positive CreditWatch ELWOOD INSURANCE: A.M. Best Lifts Financial Strength Rating to B++ EMPIRE RESORTS: Dec. 31 Balance Sheet Upside-Down by $25.7 Million ENERGY PARTNERS: Launches 8-3/4% Senior Notes Cash Offering EVERGREEN ESTATES: Case Summary & 20 Largest Unsecured Creditors FALCON AIR: Court Confirms Second Amended Chapter 11 Plan FINLAY FINE: Moody's Junks Rating on $200 Million Senior Notes FISHER COMMUNICATIONS: Earns $16.9 Million in 2006 Fourth Quarter FONIX CORP: BroadRiver Acquires Assets of Fonix Telecom & LecStar FORREST HILL: Judge Michael Dismisses Chapter 11 Case FREEPORT MCMORAN: Moody's Lifts $6 Bil. Sr. Notes' Rating to Ba3 GETTY IMAGES: New Debt Cues S&P to Retain Developing Watch GLOBAL HOME: Court Approves DIP Financing Agreement Amendments GLOBAL HOME: Can Use Madeleine's Cash Collateral Until April 2 GMAC COMMERCIAL: Moody's Affirms Low-B Ratings on 6 Cert. Classes GOL INTELLIGENT: To Acquire Varig S.A. Shares for $275 Million GOLDEN KNIGHT: Moody's Rates $13 Mil. Class E Junior Notes at Ba2 GOODYEAR TIRE: Moody's Puts Low-B Ratings on $2.7 Billion Loans GRACEWAY PHARMA: Moody's Junks Rating on Proposed $330 Mil. Debt GRACEWAY PHARMA: S&P Rates $330 Million Senior Loan at B- GREENWICH CAPITAL: Moody's Holds Ba1 Rating on Class N-HEI Certs. HEALTH FACILITIES: A.M. Best Says Financial Strength is Weak ITHAKA ACQUISITION: Going Concern Raised Due to Likely Liquidation JOCKS & JILLS: Case Summary & 142 Largest Unsecured Creditors LEAR CORP: Solicitation Period for Alternative Proposals Expires LEASE INVESTMENT: Moody's Reviews Ratings for Possible Downgrade LENOX GROUP: Inks $275 Million Commitment Letter with UBS LENNAR CORP: Fiscal First Quarter Net Income Lowers to $68.62 Mil. LENNOX INT'L: Reduces Outstanding Shares with A.O.C. Agreement LIBERTY UNION: A.M. Best Holds Rating and Says Outlook is Negative LIFE SCIENCES: Dec. 31 Balance Sheet Upside-Down by $5.1 Million LODGENET ENT: Launches Offer to Buy $200 Million of 9-1/2% Notes LODGENET ENT: Tender Offer Cues Moody's to Hold B1 Rating M. FABRIKANT & SONS: Wants Plan Filing Period Extended to June 15 M. FABRIKANT & SONS: Panel Balks at Excl. Period Extension Plea MAGUIRE PROPERTIES: Moody's Rates $825 Mil. Credit Facility at Ba3 MARYSVILLE MUTUAL: A.M. Best Lifts Financial Strength Rating NATIONAL GAS: Court Conditionally Approves Disclosure Statement NEW CENTURY: Terminates Freddie Mac Loan Servicing Agreement NEW CENTURY: Inks Consent Agreements with Four More States NEXSTAR BROADCASTING: Dec. 31 Balance Sheet Upside-Down by $73.3M NORTH COAST: A.M. Best Says Financial Strength is Marginal OMEGA HEALTHCARE: Plans a Public Offer of 6.2 Million Shares ONE COMMUNICATIONS: Moody's Rates $590 Million Loans at B1 PACIFIC LUMBER: Hires Blackstone Group as Financial Advisor PEGASUS SOLUTIONS: High Leverage Prompts S&P's Negative Outlook PHELPS DODGE: Moody's Lifts Rating on $566.7 Mil. Sr. Debt to Ba2 PIXELLIGENT TECH: Case Summary & 14 Largest Unsecured Creditors PLAINS EXPLORATION: 2006 Net Income Increases to $597.5 Million QUEBECOR WORLD: Earns $28.3 Million in Year Ended December 31 RENEE DAVIS: Case Summary & Two Largest Unsecured Creditors S3 INVESTMENT: Posts $594,476 Net Loss in 2nd Qtr. Ended Dec. 31 SAINT VINCENTS: Court Extends Plan Solicitation Period to July 15 SAN FRANCISCO RAWHIDE: Case Summary & 3 Largest Unsec. Creditors SERENITY MANAGEMENT: Sale of 2 Nursing Homes for $12.8 Mil. Okayed SOLUTIA INC: Wants to Acquire Akzo Nobel's 50% Flexsys Stake SOLUTIA INC: Proposes Bidding Procedure for Dequest Sale SOTHEBY'S: S&P Upgrades Corporate Credit Rating to BB+ from BB SUNDOWN ENTERPRISES: Case Summary & Largest Unsecured Creditor SWEETMAN RENTAL: Court Okays Winfree Ruff as Accountant TODD MCFARLANE: Files Third Amended Disclosure Statement TODD MCFARLANE: Disclosure Statement Hearing Scheduled on April 17 TOWER AUTOMOTIVE: Selling Assets to Cerberus Capital TRINSIC INC: Court Approves Sale of Assets to Tide Acquisition TRW AUTOMOTIVE: Earns $176 Million in Year Ended December 31 TXU CORP: Moody's Holds Rating on Senior Unsecured Debt at Ba1 UNIT CORPORATION: Earns $312.2 Million in Year Ended December 31 UNITED AIRLINES: Union Coalition Demands Shared Rewards US AIRWAYS: Completes $1.6 Billion Debt Refinancing Transaction US AIRWAYS: Pilots Protest Management's Negotiating Tactics VANGUARD FIRE: Judge Lewis Orders Liquidation VARIG SA: Selling VRG's Shares to GOL Airlines for $275 Million VICTORY MEMORIAL: Exclusive Plan Filing Period Extended to July 15 VISKASE COMPANIES: Moody's Junks Corporate Family Rating VONAGE HOLDINGS: Citigroup Analyst Reduces Rating to Sell WERNER LADDER: Wants to Sell All Assets for $265 Million WERNER LADDER: Court Enters Formal Bidding Procedures WILLIAMS PARTNERS: Earns $146.9 Million in Year Ended December 31 WINN-DIXIE STORES: Court Closes 23 Subsidiaries' Chapter 11 Cases WINN-DIXIE STORES: Court Compels Discovery from Visagent Corp. YUKOS OIL: Rosneft Oil May Bid for Yukos Transservis Unit YUKOS OIL: Auctioning Two Bank Stakes Next Month * A.M. Best Says 17 Insurers were Financially Impaired in 2006 * Donald Lund & Curt Vazquez Join Cohen & Grigsby as Directors * Winstead PC Attorneys Recognized as Texas Rising Stars * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ABRAXAS PETROLEUM: Dec. 31 Balance Sheet Upside-Down by $21.6 Mil. ------------------------------------------------------------------ Abraxas Petroleum Corporation 's balance sheet at Dec. 31, 2006, showed $117.5 million in total assets and $139.1 million in total liabilities, resulting in a total stockholders' deficit of $21.6 million. The company's balance sheet at Dec. 31, 2006, further showed strained liquidity with $6.7 million in total assets available to pay $10.5 million in total current liabilities. For the year ended Dec. 31, 2006, the company reported net earnings of $1.2 million on revenues of $51.7 million compared with net earnings of $19.1 million on revenues of $48.6 million in 2005. Results for 2005 included net income from discontinued operations of $12.8 million. The company had no income from discontinued operations in 2006. Continuing operations represent financial and operating results from U.S. operations only as all of Grey Wolf Exploration Inc.'s historical performance and results were treated as discontinued operations as a result of the sale of Grey Wolf shares owned by Abraxas in Grey Wolf's initial public offering that closed on Feb. 28, 2005. Abraxas currently owns less than 1% of the outstanding capital stock of Grey Wolf. "I am pleased to announce that in 2006 we increased production, revenue, EBITDA and cash flow over 2005 levels. Net earnings were lower in 2006 due to higher interest and depreciation, depletion and amortization expenses - the higher D/D/A is a direct result of the increased drilling costs that have plagued the industry over the past year. Our preliminary budget for 2007 includes roughly 20 to 30 projects, which will focus on improving our reserve ratio through the conversion of proved undeveloped and probable / possible reserves to the proved developed category. Based on our current plans, coupled with relatively strong commodity prices, I believe we are poised to have a great 2007," commented Bob Watson, Abraxas' president and chief executive officer. "We have begun the initial phase of production testing on the Caprito wells and look forward to definitive results in the near future. In Wyoming, we are very encouraged by the initial results other operators have achieved by drilling horizontally in the Mowry Shale and their stated plans of a continuous drilling program during 2007. We anticipate that our initial drilling permits will be approved by mid-summer, with drilling operations to commence soon thereafter. Lastly, we anticipate that the drilling of the lateral section on the Manzanita #1H well in the Oates SW Field will be underway by next week," commented Bob Watson. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c4e Cash flow from operating activities for the year ended Dec. 31, 2006, was $15.6 million compared with cash provided by operations of $21.1 million during 2005. Expenditures in 2006 of approximately $26.3 million were primarily for the development of natural gas and crude oil properties offset by proceeds from the sale of oil and gas properties of $12.2 million. Financing activities used $1.5 million during 2006, of which $20.4 million was provided from long-term borrowing offset by $22.4 million of payments on long-term debt. About Abraxas Petroleum Headquartered in San Antonio, Texas, Abraxas Petroleum Corp -- http://www.abraxaspetroleum.com/-- is an independent natural gas and crude oil exploitation and production company with operations concentrated in Texas and Wyoming. Abraxas was founded in 1977 and is publicly traded on the American Stock Exchange under the ticker symbol "ABP". ABUNDANT LIFE: Case Summary & Three Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Abundant Life & Restoration Ministries International, Inc. P.O. Box 5318 Tallahassee, FL 32314 Bankruptcy Case No.: 07-40148 Type of Business: The Debtor is a religious institution. See http://www.alarmministries.com/ Chapter 11 Petition Date: March 27, 2007 Court: Northern District of Florida (Tallahassee) Debtor's Counsel: Allen Turnage, Esq. P.O. Box 15219, 2344 Centerville Road, Suite 101 Tallahassee, FL 32317 Tel: (850) 224-3231 Fax: (850) 224-2535 Total Assets: $2,063,000 Total Debts: $1,029,250 Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service withholding $52,500 400 West Bay St., Suite 35045 taxes Jacksonville, FL 32202 Riley Palmer Construction professional $21,250 P.O. Box 12668 Tallahassee, FL 32317 David Melvin Engineers professional $17,500 Attention: Sean Martin services 2931 Kerry Forest Parkway Suite 103 Tallahassee, FL 32309 AFFILIATED COMPUTER: Unit Inks Settlement with N.C. Health Dept. ---------------------------------------------------------------- Affiliated Computer Services Inc. reported that its subsidiaries, ACS State Healthcare LLC, and the North Carolina Department of Health and Human Services, have settled the pending litigation related to the North Carolina Medicaid Management Information System contract. The settlement provides that DHHS withdraw its June 6, 2006, plan to terminate the NCMMIS contract. ACS State Healthcare has agreed, as part of the settlement, to license DHHS certain products in connection with contract. DHHS will pay ACS State Healthcare $10.5 million in installment basis beginning March 31, 2007 until June 30, 2008. Under the new contract, ACS State Healthcare will render service to DHHS, and will be paid based on achieving certain levels of cost savings. About Affiliated Computer Affiliated Computer Services Inc. (NYSE: ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology solutions to world- class commercial and government clients. The company has more than 58,000 employees supporting client operations in nearly 100 countries. AFFILIATED COMPUTER: Buyout Offer Cues Fitch's Neg. Rating Watch ---------------------------------------------------------------- Fitch Ratings placed Affiliated Computer Services, Inc. on Rating Watch Negative after the proposed offer from Darwin Deason, founder and current chairman of ACS, and Cerberus Capital Management L.P. to acquire the company in a leveraged buyout transaction valued at $8.2 billion, including existing debt. Ratings affected: -- Issuer Default Rating 'BB'; -- Senior secured revolving credit facility at 'BB'; -- Senior secured term loan at 'BB'; and -- Senior notes at 'BB-'. Approximately $3.3 billion of debt, including the $1 billion revolving facility, is affected by Fitch's action. Resolution of the Negative Rating Watch is contingent on these factors: -- The decision reached by ACS' Board of Directors to accept or reject the offer following a review of the transaction; -- The degree of leverage utilized in financing the acquisition should the Board approve the transaction; -- The acquirer's ability to arrange what Fitch believes will be approximately $6 billion of debt financing, assuming a 30% equity contribution. Fitch believes ACS' credit metrics proforma for the transaction support an IDR in the 'B' category. Based on the proposed offer price and a 30% equity contribution, Fitch estimates pro forma leverage may increase to 6.3x from 2.8x as of Dec. 31, 2006 due to a projected $3.3 billion increase in outstanding debt to $6 billion in order to finance the transaction. Fitch believes proforma interest coverage may decline to 1.7x from 7.1x for the latest 12 months ended Dec. 31, 2006. Fitch believes the majority of outstanding debt will be refinanced in an LBO transaction. Total debt as of Dec. 31, 2006 was approximately $2.6 billion, consisting primarily of $1.8 billion of secured term loans due 2013, $275 million of borrowings under the revolving credit facility, $250 million of senior notes due June 2010 and $250 million of senior notes due June 2015. Under the terms of the credit facility agreement, consummation of the proposed transaction would be an event of default, requiring immediate repayment of all outstanding borrowings under the facility due to a change of control provision and likely violation of financial covenants in the agreement, including maximum consolidated total leverage ratio of 4x and interest coverage covenant of 4.5x. The indenture governing ACS' $500 million of senior notes offers no protection in the event of an LBO. ACS previously granted equal and ratable liens in favor of the holders of the senior notes in all assets other than accounts receivable when it obtained the current secured credit facility. The 'BB-' rating for the senior notes incorporates the fact that the secured credit facilities have the sole rights to ACS' accounts receivable, which represented approximately 21% of total assets and 43% of tangible assets as of Dec. 31, 2006. Acceleration of principal on the senior notes as a result of ACS' failure to timely file its 10-K for the year ended June 30, 2006, remains uncertain due to the company's pending lawsuit against its Trustee, in which ACS seeks a declaratory judgment affirming its position that no default has occurred under the indenture. However, Fitch believes there is a possibility the senior notes will be refinanced in the proposed transaction to avoid the uncertainty associated with a sizeable contingent payment relative to current liquidity and minimal pro forma free cash flow in a highly leveraged capital structure. AFFILIATED COMPUTER: Moody's Affirms Ba2 Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service confirmed Affiliated Computer Services' Ba2 corporate family rating and assigned a stable rating outlook, following the company's conclusion of an internal investigation into its options granting practices and restoration to current SEC financial reporting. This rating confirmation concludes a review for possible downgrade initiated on Oct. 2, 2006, which was prompted by the company's internal options granting investigation and a related delay in filing its SEC financial statements. ACS' Ba2 rating is supported by the company's size and profitability as measured by its pretax income of $450 million and net profit returns on assets adjusted for pensions and leases of about 4% for LTM December 2006. In addition, the company's business profile, as measured collectively by its geographic, business line, and client diversity, is estimated by Moody's to be greater than certain of its I/T services peers. The rating is constrained by management's aggressive growth goal to achieve $10 billion total revenues for 2010, the company's sluggish internal/organic revenue growth rate, declining commercial operating margins, a legal overhang related to prior improper stock options granting practices, and sizable capital expenditures as a percentage of EBITDA. Moody's believes the company's financial leverage and interest coverage as measured by debt to EBITDA and free cash flow to debt, respectively, may deteriorate as the company pursues further acquisitions and possibly conducts further share repurchases. However, the Ba2 rating assumes that the company's leverage will not exceed 7.2x and that its EBIT to interest ratio will not decline to less than 2x. The stable outlook reflects the company's relatively steady internal revenue growth and healthy operating margins, which are supported by its competitively positioned and well diversified BPO business portfolio. The company's equity value as well as new business award signings has been negatively affected by the stock option backdating investigations and late financial statement filings. The stable outlook assumes that the company's market value and asset book value will converge and that its new business awards will improve over the next twelve months. The ratings could experience upward pressure if the company is able to exhibit continued internal revenue growth, consistent client retention rates, growth of new business signings, and operating margin stability and if its ratio of debt to EBITDA less capital expenditures were to remain below 5.5x. The rating could experience downward pressure if internal revenues and new business signings were to decline or debt to EBITDA less capital expenditures were to increase to over 7.2x, possibly due to realized material legal exposure related to shareholder activity along with acquisition spending and share repurchases. Ratings confirmed include: * Ba2 Corporate Family Rating * $500 million Senior Secured Notes due 2010 and 2015, Ba2 * $3800 million Senior Secured Term Loan facility due 2013, Ba2 * $1000 million Senior Secured Revolving Credit Facility, Ba2 Headquartered in Dallas, Texas, Affiliated Computer Services, with $5.5 billion LTM December 2006 revenues, is a leading provider of business process outsourcing and I/T outsourcing to commercial clients as well as state and local governments. AFFILIATED COMPUTER: Buyout Offer Cues S&P's Negative CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB' corporate credit and senior secured ratings on Dallas, Texas-based Affiliated Computer Services Inc. on CreditWatch with negative implications. "The CreditWatch placement follows the announcement that an investment group led by ACS' founder has offered to buy the company for about $8.2 billion (including the assumption of debt)," said Standard & Poor's credit analyst Philip Schrank. If the LBO is successful, operating lease-adjusted leverage likely will increase from the 5x threshold incorporated into the current rating. Standard & Poor's will monitor any negotiations and respond to any change in the company's business or financial profile. ALASKA COMMS: Dec. 31 Balance Sheet Upside-Down by $24.7 Million ---------------------------------------------------------------- Alaska Communications Systems Group Inc.'s balance sheet at Dec. 31, 2006, showed $562.3 million in total assets and $587 million in total liabilities, resulting in a $24.7 million total stockholders' deficit. The company reported net income of $6.1 million on total operating revenues of $91.7 million for the fourth quarter ended Dec. 31, 2006, compared with a net loss of $4.9 million on total operating revenues of $82.5 million for the same period ended Dec. 31, 2005. Operating income increased to $13.9 million in the fourth quarter of 2006 compared to fourth quarter 2005 operating income of $4.7 million. Net cash provided by operations increased 9% to $26.5 million in the fourth quarter of 2006, compared to net cash provided by operations of $24.3 million during the fourth quarter of 2005. For the year ended Dec. 31, 2006, the company reported net income for 2006 of $20 million, compared with a net loss of $41.6 million in 2005. Total revenues were $349.8 million, which represented a 7 percent increase over 2005 revenues of $326.8 million. Net cash provided by operating activities for 2006 was $90.7 million as compared to net cash provided by operating activities of $56.3 million in 2005. Liane Pelletier, ACS president and chief executive officer, stated, "Once again we have proven that with continued focus on fundamentals, we can achieve superior results. 2006 closed with total financial performance above plan, with liquidity in the stock enhanced through the sale of all remaining private equity interests, with a stronger management team and with many operating components significantly enhanced through process improvement. Over the last two plus years, ACS has continued to exceed its revenue and EBITDA targets, and demonstrated the value of its asset mix. The ACS team concluded the year with annual revenue growth of 7 percent and annual EBITDA growth of 8.5 percent, driving continued expansion in cash flow per share." "Strong organic top line growth coupled with stringent cost containment continues to drive cash flow expansion, with $90.7 million of cash generated from operating activities in 2006, up 61.1 percent over the prior year. We remain well positioned from a liquidity standpoint and exited the year with cash, restricted cash and investments of $38.6 million, down only $5.3 million in a year where we delevered by $9 million and invested $21 million in our pre-funded capex program," added David Wilson, ACS senior vice president and chief financial officer. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c40 About Alaska Communications Alaska Communications Systems Group Inc. (Nasdaq: ALSK) -- http://www.alsk.com/-- is an integrated communications provider in Alaska, offering local telephone service, wireless, long distance, data, and Internet services to business and residential customers throughout Alaska. AMERICAN AIRLINES: Moody's Lifts Rating on Senior Facility to Ba3 ----------------------------------------------------------------- Moody's Investors Service raised the debt ratings of AMR Corporation and its subsidiaries, including the corporate family rating, to B2. Moody's also raised the ratings of most tranches of AMR's Enhanced Equipment Trust Certificates, affirmed the SGL-2 rating, and increased the Loss Given Default rate to 30-LGD3 on the secured debt and to 83-LGD5 on the senior unsecured debt. The outlook is stable. "The rating upgrades follow meaningful improvement to the debt protection metrics of AMR Corp. and American Airlines, Inc. (jointly "American") after a sustained period of free cash flow generation, including American's first full year of net profits since 2000", said George Godlin of Moody's Investors Service. Moody's anticipates continued gains in profits, as management works to implement a number of planned cost saving initiatives. American's long-term debt declined and is not expected to increase in the near term as the company has no mainline or regional aircraft delivering until 2013 and the company improved the funded status of its pension plan in 2006 through excess contributions. Management efforts are ongoing to strengthen the balance sheet, and Moody's expects debt to be paid down during 2007 at least equal to the scheduled debt maturities of $1.35 billion. American has amassed a substantial cash position (about $5.2 billion or approximately 38.7% of gross debt), which is not likely to diminish over the near term because of a strong revenue environment. The company's liquidity rating was affirmed at SGL-2 reflecting American's compliance with the terms of its financial covenants and increased borrowing capacity as the company pays down debt and satisfies pension plan obligations from cash from operations. Despite the fact that a substantial portion of its assets are encumbered, American's ratings acknowledge the company's leadership position in the North American airline industry and its large unrestricted cash and short-term investments to support additional secured borrowings. The rating could be raised further if growth in internally-generated cash flows is sufficient to sustain EBIT to interest greater than 2x and retained cash flow to debt greater than 15%. Downward pressure on the ratings could occur with an EBITDA margin lower than 15%, or if debt to EBITDA exceeds 8x or EBIT to interest expense falls to close to 1x. Upgrades: * AMR Corporation -- Probability of Default Rating, Upgraded to B2 from B3 -- Corporate Family Rating, Upgraded to B2 from B3 -- Senior Unsecured Convertible Bond, Upgraded to Caa1 from Caa2 -- Senior Unsecured Medium-Term Note Program, Upgraded to Caa1 from Caa2 -- Senior Unsecured Regular Bond/Debenture, Upgraded to Caa1 from Caa2 -- Senior Unsecured Shelf, Upgraded to Caa1 from Caa2 * Alliance Airport Authority, Inc. -- Revenue Bonds, Upgraded to Caa1 from Caa2 * American Airlines 1988-A Grantor Trust -- Senior Secured Equipment Trust, Upgraded to B2 from B3 * American Airlines, Inc. -- Senior Secured Bank Credit Facility, Upgraded to Ba3 from B1 -- Senior Secured Enhanced Equipment Trust, Upgraded to a range of Ba3 to Baa1 from a range of B1 to Baa3 -- Senior Secured Equipment Trust, Upgraded to a range of Caa1 to Baa1 from a range of Caa2 to Baa2 -- Senior Secured Regular Bond/Debenture, Upgraded to a range of B1 to Ba1 from a range of B2 to Ba2 -- Senior Secured Shelf, Upgraded to Ba3 from B1 * Chicago O'Hare International Airport, Illinois -- Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 * Dallas-Fort Worth Intl. Airport Facility Imp. Corp. -- Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Secured Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 * Dallas-Fort Worth Texas, Regional Airport -- Revenue Bonds, Upgraded to Caa1 from Caa2 * New Jersey Economic Development Authority -- Revenue Bonds, Upgraded to Caa1 from Caa2 * New York City Industrial Development Agcy, New York -- Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 * Puerto Rico Ports Authority -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 * Raleigh-Durham Airport Authority, North Carolina -- Revenue Bonds, Upgraded to Caa1 from Caa2 * Regional Airports Improvement Corporation, California -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 * Tulsa Oklahoma, Municipal Airport Trust -- Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Secured Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 American, based in Fort Worth, Texas, operates the largest scheduled passenger airline in the world with service throughout North America, the Caribbean, Latin America, Europe and Asia. AMERICAN MEDIA: Posts $20.5MM Net Loss in Qtr. Ended Dec. 31, 2005 ------------------------------------------------------------------ American Media Operations, Inc., filed its fiscal third quarter financial statements for the three months ended Dec. 31, 2005, with the U.S. Securities and Exchange Commission on March 23, 2007. For the third quarter ended Dec. 31, 2005, the company had a net loss of $20.58 million on total operating revenues of $119.26 million, as compared with a net loss of $4.85 million on total operating revenues of $122.41 million for the same quarter a year earlier. For the nine months ended Dec. 31, 2005, the company had a net loss of $34.02 million on total operating revenues of $372.69 million, as compared with a net loss of $5.64 million on total operating revenues of $377.52 million for the same period a year earlier. At Dec. 31, 2005, the company listed $1.41 billion in total assets, $1.27 billion in total liabilities, and $136.46 million in total stockholders' equity. The company had an accumulated deficit of $145.6 million at Dec. 31, 2005. The company's December 31 balance sheet showed strained liquidity with $108.87 million in total current assets available to pay $154.24 million in total current liabilities. Full-text copies of the company's third quarter results are available for free at http://ResearchArchives.com/t/s?1c3e Restatement of Financial Reports In December 2006, the company was previously granted a waiver, under which its lenders agreed to extend the delivery date of the company's amended financial reports for the fiscal quarters beginning Dec. 30, 2005, through March 15, 2007. Based on an evaluation performed by the company's management, a material weakness existed in the company's internal control over financial reporting as of March 31, 2005. It was determined that the material weakness as of March 31, 2005, was related to the company's insufficient complement of personnel with a level of financial reporting expertise that matches with the company's financial reporting requirements to resolve non-routine or complex accounting matters. This material weakness continued to exist as of Dec. 31, 2005. On Feb. 8, 2006, board of directors concluded that the company's previously issued financial statements included or otherwise summarized in its Annual Report on Form 10-K for the fiscal year ended March 31, 2005, and its Quarterly Reports on Form 10-Q for each of the quarters ended June 30, 2005 and Sept. 30, 2005 should no longer be relied upon. About American Media Headquartered in Boca Raton, Florida, American Media Operations Inc., is a publisher of celebrity, health and fitness, and Spanish language magazines, including Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. AMI also owns Distribution Services, Inc. * * * American Media Operations, Inc. carries Moody's Investors Service's B2 ratings on the company's $60 million Senior Secured Revolving Credit Facility Due 2012 and $450 million Senior Secured Term Loan Due 2013. It also carries Moody's Caa3 ratings on its $150 million 8.875% Senior Subordinated Notes Due 2011 and $400 million 10.25% Senior Subordinated Notes Due 2009. AMERIGROUP CORP: Moody's Rates Proposed $200 Mil. Facility at Ba3 ----------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 senior debt rating to AMERIGROUP Corporation's proposed senior secured credit facility consisting of a $150 million synthetic letter of credit and a $50 million revolving credit facility. Letters of credit issued under the Synthetic L/C Facility will be used to facilitate an appeal of the judgment resulting from the Qui Tam litigation against the company's Illinois subsidiary. In conjunction with this rating, Moody's also assigned a Corporate Family Rating of B1 and Ba1 insurance financial strength ratings to four of AMERIGROUP's regulated operating subsidiaries: AMERIGROUP Texas Inc., AMERIGROUP MD Inc., AMERIGROUP FL Inc., and AMERIGROUP NJ. The outlook on the ratings is stable. The rating agency said that the company's ratings are driven by its concentration in the Medicaid market and comparatively low consolidated NAIC risk-based capital level, offset by its multi-state presence, relatively stable financial profile and moderate financial leverage. Moody's stated that with the issuance of the debt, the adjusted financial leverage will be approximately 36%. However, historically, the company has not operated with significant amounts of debt and it intends to repay the debt as quickly as possible. While the company is sufficiently capitalized to meet all state requirements, the consolidated risk-based capital ratio is below 150% of company action level, and is lower than the RBC levels of peer companies in the sector. Moody's added that the ratings assume that no criminal charges will be brought against AMERIGROUP as a result of the Qui Tam litigation in Illinois and that the company will not be barred from participation in any state Medicaid offering as a result of the judgment against the company. Moody's stated that AMERIGROUP is the largest Medicaid pure play healthcare company with the number one or two Medicaid market share position in each of the states in which it currently has a contract. The company currently has contracts in nine states and the District of Columbia. According to the rating agency, there are unique risks associated with the Medicaid managed care business. First, each of the state contracts needs to be renewed on a periodic basis, and the loss of any one of these contracts could have a considerable impact on the revenues and earnings of AMERIGROUP. Each contract contains provisions regarding performance and operational requirements and a failure to meet the requirements in one state could jeopardize the Medicaid contracts in other states, as the Medicaid business is very reliant on reputation. Second, there are concerns with respect to the future level of reimbursements, as the federal government and the states fall under budgetary and political pressures. Finally, the full-risk nature of the Medicaid business requires AMERIGROUP to bear the financial risk of managing healthcare costs for this unique population group within a budget developed several months before the contract year. Offsetting these risks, according to the rating agency, are AMERIGROUP's experience and reputation in the marketplace, and strong centralized management oversight of the financial and operational functions of the company. While AMERIGROUP has been successful in growing membership organically, acquisitions and expansions into new states have been a significant factor in the company's growth, and Moodys' expects that the company will continue to be active in acquisitions and Medicaid expansions as opportunities arise in the future. Moody's commented that acquisitions and expansions are considered to raise the level of operational risk in connection with diverting management's focus and integration issues; however, AMERIGROUP has a proven track record of success in this area. The rating agency stated that the ratings could move up if NAIC RBC rises above 150% of company action level, debt to EBIT is lowered to below 2x, and EBIT interest coverage is at least 8x. Moody's also indicated that the rating could be raised if there is evidence that there are indications that the company is not being eliminated from future Medicaid bids as a result of this judgment. However, if there is a loss or impairment of one or more of AMERIGROUP's Medicaid contracts, EBIT to interest expense falls below 4x, debt to EBIT increases above 4x, or if net after-tax margins fall below 2%, then Moody's said the ratings could be lowered. These ratings were assigned with a stable outlook: * AMERIGROUP Corporation -- senior secured debt rating of Ba3; corporate family rating of B1; * AMERIGROUP Texas, Inc. -- insurance financial strength rating of Ba1; * AMERIGROUP Maryland, Inc. -- insurance financial strength rating of Ba1; * AMERIGROUP Florida, Inc. -- insurance financial strength rating of Ba1; * AMERIGROUP New Jersey, Inc. -- insurance financial strength rating of Ba1. AMERIGROUP Corporation is headquartered in Virginia Beach, Virginia. For 2006, total revenue was $2.8 billion with medical membership of approximately 1.3 million. As of Dec. 31, 2006, the company reported shareholders' equity of $769 million. AMR CORP: Moody's Lifts Corporate Family Rating to B2 from B3 ------------------------------------------------------------- Moody's Investors Service raised the debt ratings of AMR Corporation and its subsidiaries, including the corporate family rating, to B2. Moody's also raised the ratings of most tranches of AMR's Enhanced Equipment Trust Certificates, affirmed the SGL-2 rating, and increased the Loss Given Default rate to 30-LGD3 on the secured debt and to 83-LGD5 on the senior unsecured debt. The outlook is stable. "The rating upgrades follow meaningful improvement to the debt protection metrics of AMR Corp. and American Airlines, Inc. (jointly "American") after a sustained period of free cash flow generation, including American's first full year of net profits since 2000", said George Godlin of Moody's Investors Service. Moody's anticipates continued gains in profits, as management works to implement a number of planned cost saving initiatives. American's long-term debt declined and is not expected to increase in the near term as the company has no mainline or regional aircraft delivering until 2013 and the company improved the funded status of its pension plan in 2006 through excess contributions. Management efforts are ongoing to strengthen the balance sheet, and Moody's expects debt to be paid down during 2007 at least equal to the scheduled debt maturities of $1.35 billion. American has amassed a substantial cash position (about $5.2 billion or approximately 38.7% of gross debt), which is not likely to diminish over the near term because of a strong revenue environment. The company's liquidity rating was affirmed at SGL-2 reflecting American's compliance with the terms of its financial covenants and increased borrowing capacity as the company pays down debt and satisfies pension plan obligations from cash from operations. Despite the fact that a substantial portion of its assets are encumbered, American's ratings acknowledge the company's leadership position in the North American airline industry and its large unrestricted cash and short-term investments to support additional secured borrowings. The rating could be raised further if growth in internally-generated cash flows is sufficient to sustain EBIT to interest greater than 2x and retained cash flow to debt greater than 15%. Downward pressure on the ratings could occur with an EBITDA margin lower than 15%, or if debt to EBITDA exceeds 8x or EBIT to interest expense falls to close to 1x. Upgrades: * AMR Corporation -- Probability of Default Rating, Upgraded to B2 from B3 -- Corporate Family Rating, Upgraded to B2 from B3 -- Senior Unsecured Convertible Bond, Upgraded to Caa1 from Caa2 -- Senior Unsecured Medium-Term Note Program, Upgraded to Caa1 from Caa2 -- Senior Unsecured Regular Bond/Debenture, Upgraded to Caa1 from Caa2 -- Senior Unsecured Shelf, Upgraded to Caa1 from Caa2 * Alliance Airport Authority, Inc. -- Revenue Bonds, Upgraded to Caa1 from Caa2 * American Airlines 1988-A Grantor Trust -- Senior Secured Equipment Trust, Upgraded to B2 from B3 * American Airlines, Inc. -- Senior Secured Bank Credit Facility, Upgraded to Ba3 from B1 -- Senior Secured Enhanced Equipment Trust, Upgraded to a range of Ba3 to Baa1 from a range of B1 to Baa3 -- Senior Secured Equipment Trust, Upgraded to a range of Caa1 to Baa1 from a range of Caa2 to Baa2 -- Senior Secured Regular Bond/Debenture, Upgraded to a range of B1 to Ba1 from a range of B2 to Ba2 -- Senior Secured Shelf, Upgraded to Ba3 from B1 * Chicago O'Hare International Airport, Illinois -- Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 * Dallas-Fort Worth Intl. Airport Facility Imp. Corp. -- Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Secured Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 * Dallas-Fort Worth Texas, Regional Airport -- Revenue Bonds, Upgraded to Caa1 from Caa2 * New Jersey Economic Development Authority -- Revenue Bonds, Upgraded to Caa1 from Caa2 * New York City Industrial Development Agcy, New York -- Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 * Puerto Rico Ports Authority -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 * Raleigh-Durham Airport Authority, North Carolina -- Revenue Bonds, Upgraded to Caa1 from Caa2 * Regional Airports Improvement Corporation, California -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 * Tulsa Oklahoma, Municipal Airport Trust -- Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Secured Revenue Bonds, Upgraded to Caa1 from Caa2 -- Senior Unsecured Revenue Bonds, Upgraded to Caa1 from Caa2 American, based in Fort Worth, Texas, operates the largest scheduled passenger airline in the world with service throughout North America, the Caribbean, Latin America, Europe and Asia. AMTROL INC: Seeks July 16 Extension of Lease Decision Period ------------------------------------------------------------ Amtrol Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for a July 16, 2007, extension of the period within which they can assume, assume and assign, or reject unexpired leases of nonresidential real property. The Debtors' lease decision period expires on April 17, 2007. The Debtors tell the Court that without the extension of the lease decision period, they are at risk of: a) assuming unexpired leases that may later prove to be burdensome, thus creating potential adminstrative claims; or b) rejecting unexpired leases that they may later discover are critical to their businesses. The Debtors assure the Court that the requested extension does not prejudice the landlord parties because each lessor has received and will continue to receive all of the payments available to the lessors under the Bankruptcy Code. The Court is set to decide on the matter on April 11, 2007. Objections, if any, to the motion are due on April 4, 2007. Plan Update The Court is set to consider approval of the disclosure statement describing the plan of reorganization co-proposed by Amtrol Inc. and the Official Committee of Unsecured Creditors on April 11, 2007. As reported in the Troubled Company Reporter on Mar. 8, 2007, Amtrol anticipates that the requisite number and amount of its Senior Subordinated Notes will vote in favor of the Plan and, pursuant to the Plan, the Notes will be exchanged for substantially all of the equity in the reorganized company, thereby reducing the company's debt by approximately 40% and greatly improving its long-term financial stability. The Plan provides for all pre-filing trade liabilities to be paid in full. The company's domestic operations are being financed under Chapter 11 with a $115 million debtor-in-possession facility provided by Barclays Capital, the investment banking division of Barclays Bank PLC. The company has received a number of commitments to repay the DIP facility with long-term, low-cost financing as it completes the reorganization. The company anticipates that the reorganization will result in a reduction in total annual interest cost of more than 50%. AMTROL has continued to operate in the normal course of business and has experienced no disruptions during the Chapter 11 reorganization process. All of the company's manufacturing and distribution facilities remain open and are continuing to serve customers. The company also continues to honor all commitments to its customers, including warranties and the payment of sales rebates, pay all wages and benefits to employees and independent sales representatives and pay suppliers for goods and services provided under Chapter 11, all in the normal course. The company's foreign operations are not involved in the reorganization. The company expects to complete the reorganization and emerge from Chapter 11 in the second quarter of this year. The Debtors' exclusive period to file a chapter 11 reorganization plan expires on April 17, 2007. About Amtrol Inc. Headquartered in West Warwick, Rhode Island, Amtrol Inc. -- http://www.amtrol.com/-- manufactures and markets water storage and pressure control products, water heaters and cylinders. The company's major products include pressure tanks used in well water, hydronic heating and potable hot water applications, indirect-fired water heaters, and both LPG and disposable refrigerant gas cylinders. The company and three of its affiliates filed for chapter 11 protection on Dec. 18, 2006 (Bankr. D. Del. Lead Case No. 06-11446). Douglas Gray, Esq., Stuart J. Brown, Esq., and William E. Chipman Jr., Esq., at Edwards Angell Palmer & Dodge LLP, represent the Debtors. The Debtors' financial advisor is Miller Buckfire & Co., LLC. Kara Hammond Coyle, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Official Committee of Unsecured Creditors. As of Apr. 1, 2006, the Debtors' consolidated financial condition showed $229,270,000 in total assets and $235,802,000 in total debts. AMTROL INC: Has Until June 18 to Remove Prepetition Civil Actions ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware gave Amtrol Inc. and its debtor-affiliates until June 18, 2007, to file notices of removal with respect to prepetition civil actions. In addition, the Court authorized the Debtors to file notices of removal with respect to postpetition civil actions until the later of: 1) June 18, 2007; or 2) the shorter of 30 days after receipt of a copy of the initial pleading stating the claim or cause of action sought to be removed, or 30 days after receipt of the summons if the initial pleading has been filed with the court but not served with the summons. The Court notes that the order is without prejudice to the Debtors' right to seek further extension of the removal period. Since their bankruptcy filing, the Debtors have devoted most of their time to transition into chapter 11 and establish a bar date for claims against their estates. The Debtors are also preparing their schedules of assets and liabilities and statements of financial affairs. The Debtors have not had the time to determine if a Notice of Removal of any action would benefit their estates and creditors. The Debtors want more time to make fully informed decisions concerning the removal of any civil actions. Plan Update The Court is set to consider approval of the disclosure statement describing the plan of reorganization co-proposed by AMTROL Inc. and the Official Committee of Unsecured Creditors on April 11, 2007. As reported in the Troubled Company Reporter on Mar. 8, 2007, AMTROL anticipates that the requisite number and amount of its Senior Subordinated Notes will vote in favor of the Plan and, pursuant to the Plan, the Notes will be exchanged for substantially all of the equity in the reorganized company, thereby reducing the company's debt by approximately 40% and greatly improving its long-term financial stability. The Plan provides for all pre-filing trade liabilities to be paid in full. The company's domestic operations are being financed under Chapter 11 with a $115 million debtor-in-possession facility provided by Barclays Capital, the investment banking division of Barclays Bank PLC. The company has received a number of commitments to repay the DIP facility with long-term, low-cost financing as it completes the reorganization. The company anticipates that the reorganization will result in a reduction in total annual interest cost of more than 50%. AMTROL has continued to operate in the normal course of business and has experienced no disruptions during the Chapter 11 reorganization process. All of the company's manufacturing and distribution facilities remain open and are continuing to serve customers. The company also continues to honor all commitments to its customers, including warranties and the payment of sales rebates, pay all wages and benefits to employees and independent sales representatives and pay suppliers for goods and services provided under Chapter 11, all in the normal course. The company's foreign operations are not involved in the reorganization. The company expects to complete the reorganization and emerge from Chapter 11 in the second quarter of this year. The Debtors' exclusive period to file a chapter 11 reorganization plan expires on April 17, 2007. About Amtrol Inc. Headquartered in West Warwick, Rhode Island, Amtrol Inc. -- http://www.amtrol.com/-- manufactures and markets water storage and pressure control products, water heaters and cylinders. The company's major products include pressure tanks used in well water, hydronic heating and potable hot water applications, indirect-fired water heaters, and both LPG and disposable refrigerant gas cylinders. The company and three of its affiliates filed for chapter 11 protection on Dec. 18, 2006 (Bankr. D. Del. Lead Case No. 06-11446). Douglas Gray, Esq., Stuart J. Brown, Esq., and William E. Chipman Jr., Esq., at Edwards Angell Palmer & Dodge LLP, represent the Debtors. The Debtors' financial advisor is Miller Buckfire & Co., LLC. Kara Hammond Coyle, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Official Committee of Unsecured Creditors. As of Apr. 1, 2006, the Debtors' consolidated financial condition showed $229,270,000 in total assets and $235,802,000 in total debts. APW ENCLOSURE: Court Converts Case to Chapter 7 Liquidation ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware converted the case of APW Enclosure Systems Inc. from a Chapter 11 reorganization to a chapter 7 liquidation, Bill Rochelle of Bloomberg News reports. Andrew R. Vara was appointed as Chapter 7 Trustee. According to Bloomberg, APW sought the conversion of its case because it had not generated an annual profit since 2002. Headquartered in Anaheim, California, APW Enclosure Systems Inc. designed, manufactured, and integrated electronic enclosures, racks, chassis, backplanes, power supplies, thermal management products and related services for the computer, networking, medical, telecom, semiconductor and embedded computer device industries. The company filed for chapter 11 protection on Dec. 4, 2006 (Bankr. D. Del. Case No. 06-11378). Christopher Martin Winter, Esq., Frederick Brian Rosner, Esq., and Frederick Brian Rosner, Esq., at Duane Morris LLP represented the Debtor in its restructuring efforts. Lawyers at Ashby & Geddes P.A. represent the Official Committee of Unsecured Creditors. When the Debtor sought protection from its creditors, it listed estimated assets and debts between $1 million and $100 million. ARROW ELECTRONICS: Moody's Holds Rating on Preferred Stock at Ba2 ----------------------------------------------------------------- Moody's Investors Service affirmed the Baa3 senior long-term debt rating of Arrow Electronics, Inc. and revised the outlook to positive from stable. "The positive outlook reflects our expectation that Arrow's operating performance will continue to benefit from the secular outsourcing trend underway in the semiconductor space, favorable product mix, an expanded line card from recent acquisitions and increasing geographic diversity that collectively support operating margins above 4%," according to Moody's Vice President & Senior Analyst Gregory Fraser, CFA. "The positive outlook also considers realized operating efficiency improvements that have resulted in sustained operating margin and ROA expansion, improved credit protection measures, higher gross cash flow levels and an enhanced business model that has the propensity to deliver operating margin stability and consistent levels of positive free cash flow especially during periods of industry weakness," Fraser added. Standard & Poor's expects Arrow to continue to maintain focused on balance sheet de-leveraging via free cash flow generation targeted towards debt reduction and/or higher operating cash flow. The outlook revision also recognizes the company's improved operating leverage and enhanced market position as the leading distributor of enterprise product solutions for both IBM and Hewlett-Packard following the planned acquisition of the Agilysys KeyLink Systems Group. It is Moody's understanding that the $485 million KeyLink acquisition will be funded through a combination of debt and cash. Although debt will increase, the purchase is not expected to materially weaken Arrow's credit protection measures and internal liquidity given the additive cash flow from KeyLink. The positive outlook considers the company's de-leveraging track record and reflects Moody's expectations that free cash flow will be used to reduce debt incurred for the KeyLink acquisition with leverage migrating to a range of 1.6x to 2.2x. Affirmed: -- Senior unsecured debt at Baa3 -- senior unsecured stock at Baa3 -- senior subordinated stock at Ba1 -- senior preferred stock at Ba2 Arrow Electronics, Inc., headquartered in Melville, New York, is one of the world's largest distributors of electronic components and computer products to industrial and commercial customers. Revenues and EBITDA for the twelve months ended Dec. 31, 2006, were $13.6 billion and $720 million, respectively. AUTOMATED BUSINESS: Case Summary & Eight Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Automated Business Systems & Services, Inc. 4500 Forbes Boulevard, Suite 120 Lanham, MD 20706 Bankruptcy Case No.: 07-12827 Type of Business: The Debtor provides networking, communication, and web content products and services. See http://www.abssinc.com/ Chapter 11 Petition Date: March 27, 2007 Court: District of Maryland (Greenbelt) Debtor's Counsel: Judy Nicks, Esq. 9344 Lanham-Severn Road, Suite 214 Lanham, MD 20706 Tel: (301) 577-5758 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtor's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Acacia Federal Savings Bank Trade Debt $5,500,000 c/o Ober Kaler Grimers & Shriver 120 East Baltimore Street Baltimore, MD 21202 IRS-Department of Treasury Taxes $650,000 31 Hopkins Plaza Baltimore, MD 21201 Comptroller of Maryland Taxes $275,000 Revenue Administration Division Annapolis, MD 21411 Harbor Bank of Maryland Bank Loan $220,000 RMP Associates Trade Debt $200,000 Bank of America Bank Loan $30,991 Randstad N.A. Trade Debt $10,450 Chevy Chase Bank Trade Debt $5,128 BANGPHAXAY CONSTRUCTION: Case Summary & Two Largest Creditors ------------------------------------------------------------- Debtor: Bangphaxay Construction dba Bangphaxay Plumbing dba Bangphaxay Electric dba R & B Plumbing 124 Blue Ribbon Trail Christiana, TN 37037 Bankruptcy Case No.: 07-02154 Chapter 11 Petition Date: March 28, 2007 Court: Middle District of Tennessee (Nashville) Debtor's Counsel: Steven L. Lefkovitz, Esq. Law Offices of Lefkovitz & Lefkovitz 618 Church Street, Suite 410 Nashville, TN 37219 Tel: (615) 256-8300 Fax: (615) 250-4926 Total Assets: $1,585,000 Total Debts: $754,200 Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Canceled Check $31,000 P.O. Box 21126 Philadelphia, PA 19114 Rutherford Bank & TR Overdraft Checking $200 P.O. Box 1120 Greeneville, TN 37744 BARTS INNS: Case Summary & 13 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Barts Inns, LLC dba The NuWray Inn 4 Hollyberry Woods Clover, SC 29710 Bankruptcy Case No.: 07-30653 Type of Business: The Debtor has been operating the NuWray Inn since 1833. See http://www.nuwrayinn.com/ Chapter 11 Petition Date: March 27, 2007 Court: Western District of North Carolina (Charlotte) Judge: J. Craig Whitley Debtor's Counsel: James H. Henderson, Esq. James H. Henderson, P.C. 1201 Harding Place Charlotte, NC 28204-2248 Tel: (704) 333-3444 Fax: (704) 333-5003 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ NC Department of Revenue Sales Tax 2006 $22,886 P.O. Box 1168 Raleigh, NC 27602 Institution Food House Open Account $8,444 P.O. Box 2947 Hickory, NC 28603 SYSCO Food Services of Open Account $8,066 Charlotte LLC P.O. Box 96 Concord, NC 28026-0096 Foodman Hunter & Karres PLLC Legal Services $6,955 Sams Oil Open Account $2,181 Blossman Gas Gas $1,320 Verizon South Wireless Phone $691 French Broad Electric Utility Service $350 Membership Corp. Town of Burnsville Water/Sewer $125 Charter Communications Cable Services $84 Pepsi-Cola Bottling Company Open Account $45 Advantage-NC Web site $36 maintenance contract GDS - Spruce Pine Trash Collection $11 BEAZER HOMES: FBI Conducting Investigation on Lending Practices --------------------------------------------------------------- Home builder Beazer Homes USA Inc. confirmed federal officials were conducting an inquiry into its mortgage-lending business, the Wall Street Journal reports. The company's executive however say that the investigation was merely a request for documents and that the company is cooperating adding that there are no allegations of wrongdoing. WSJ relates that the Federal Bureau of Investigation had earlier said it was conducting a joint investigation with the Department of Housing and Urban Development and the Internal Revenue Service on the mortgage-lending practices of Beazer Homes. According to WSJ, the probe also comes at a time when mortgage lenders have come under scrutiny by regulators due to a rise on defaults on subprime loans to borrowers with sketchy credit histories. Charlotte Observer Allegations WSJ says that the company was recently a subject of a series of stories from the Charlotte Observer who disclosed allegations of lending practices and unusually high foreclosure rates in some of Beazer Home's North Carolina developments. Though the company did not confirm if it was indeed the target of investigations, it however said that it had conducted its own internal investigations but didn't find any evidence to support the Observer's allegations. About Beazer Homes Headquartered in Atlanta, Beazer Homes USA, Inc., (NYSE: BZH) -- http://www.beazer.com/-- is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia and also provides mortgage origination and title services to its homebuyers. * * * As reported in the Troubled Company Reporter on Dec. 21, 2006, Moody's Investors Service affirmed Beazer Homes USA Inc.'s Ba1 corporate family rating and Ba1 ratings on the company's senior notes. Moody's said the ratings outlook was changed to negative from stable. BEAZER HOMES: CFO James O'Leary Resigns to Join Kaydon ------------------------------------------------------ Beazer Homes USA, Inc., disclosed that James O'Leary, the company's executive vice president and chief financial officer, had resigned effective March 23, 2007. Mr. O'Leary is leaving the company to become president and chief executive officer of Kaydon Corp., where he has been a member of the Board of Directors since 2005. Until a replacement is named, all corporate functions previously reporting to Mr. O'Leary will report directly to President and Chief Executive Officer, Ian J. McCarthy. To assist with the transition, Mr. O'Leary has agreed to be available to the company on an advisory basis until May 1, 2007. "Jim has played a significant role in Beazer Homes' success over the past five years and has been instrumental in numerous corporate initiatives aimed at profitable growth and maximizing shareholder value," Mr. McCarthy said. "While we will miss him and his broad business and financial experience, this is an excellent move for Jim, and one for which he is well-suited. We wish him all the best as he moves on to this new opportunity," Mr. McCarthy added. "I am extremely excited about the opportunities that lie ahead in assuming the leadership of Kaydon," Mr. O'Leary said. "However, the decision to leave Beazer Homes has been an extremely difficult one. I appreciate the opportunities and experience Ian, Brian Beazer and our Board of Directors have provided for me. I am also extremely grateful for the hard work and loyalty exhibited over the past five years by my many friends and coworkers at Beazer Homes, who will continue to make significant contributions to the success of the Company." Mr. O'Leary joined Beazer Homes in 2002 as Executive Vice President responsible for corporate development and supply chain and national purchasing initiatives, and was appointed Chief Financial Officer in 2003. Beforejoining Beazer Homes, he was Chairman and Chief Executive Officer of the LCA Group, Inc., a global lighting subsidiary of U.S. Industries. About Beazer Homes Headquartered in Atlanta, Beazer Homes USA, Inc., (NYSE: BZH) -- http://www.beazer.com/-- is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia and also provides mortgage origination and title services to its homebuyers. * * * As reported in the Troubled Company Reporter on Dec. 21, 2006, Moody's Investors Service affirmed Beazer Homes USA Inc.'s Ba1 corporate family rating and Ba1 ratings on the company's senior notes. Moody's said the ratings outlook was changed to negative from stable. BEAZER HOMES: Low Earnings Expectation Cues S&P's Negative Outlook ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Beazer Homes USA Inc. to negative from stable. At the same time, the 'BB' corporate credit rating and the 'BB' ratings on $1.6 billion of senior unsecured notes were affirmed. "The outlook revision reflects our expectation for sharply lower earnings in 2007, which raises the potential that coverage measures could fall below covenanted levels governing the company's unsecured line of credit," explained Standard & Poor's credit analyst George Skoufis. "Should rising foreclosures and tightening credit standards further pressure sales of Beazer's more narrowly targeted product and materially erode coverage measures, we will lower the ratings." The outlook revision does not reflect Standard & Poor's opinion on the validity of a possible federal investigation into the company's mortgage subsidiary, but it acknowledges potential distractions that may arise related to this matter. Despite challenging market conditions, the ratings remain supported at this time by positive cash flow generation and management's focus on strengthening the balance sheet. The negative outlook anticipates weaker near-term earnings as a consequence of the housing downturn, along with the likely need to modify EBITDA-based bank loan covenants. If coverage measures weaken materially, Standard & Poor's will lower the rating. Positive ratings momentum is precluded at this time by the prospect for a prolonged recovery in the nation's housing market. BELL MICROPRODUCTS: Receives Another Nasdaq Delisting Notice ------------------------------------------------------------ Bell Microproducts Inc. has received a Nasdaq Staff Determination notice because the company did not file its Annual Report 10-K for the period ended December 31, 2006. The Nasdaq Listing and Hearing Review Council expects a response to why the company failed to file its annual report. As reported, Nasdaq initially informed the Company in a notice dated Nov. 14, 2006, that its securities will be delisted due to delay in filing of its Quarterly Report for the period ended Sept. 30, 2006. Nasdaq Listing Qualifications Panel extended until May 22, 2007, the company's request for continued listing. The company said that it will file its Annual Report, as well as its Quarterly Report, as soon as practicable. About Bell Microproducts Headquartered in San Jose, California, Bell Microproducts, Inc. (Nasdaq: BELM) -- http://www.bellmicro.com/-- is an international, value-added distributor of high-tech products, solutions and services, including storage systems, servers, software, computer components and peripherals, as well as maintenance and professional services. Bell is a Fortune 1000 company that has operations in Argentina, Brazil, Chile and Mexico. * * * As reported in the Troubled Company Reporter on Jan. 3, 2007, Holders of $109,475,000 aggregate principal amount of the outstanding 3-3/4% Convertible Subordinated Notes have consented to a waiver of defaults arising from the failure to file all reports and other information and documents which it is required to file with the SEC and the trustee. Further, these holders have agreed to amend the indenture to eliminate any provision that would trigger a default for the failure to file or deliver any reports required to be filed with the SEC or the trustee, and to add a provision for a special interest payment to holders of Notes if an eligible tender offer for the outstanding Notes is not completed prior to Feb. 1, 2007. BELLE MARMICK: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Belle Marmick, Inc. dba Amigos Flooring dba Amigos Flooring Super Warehouse dba Amigos Flooring Monster dba Amigos Carpet Seconds 13406 Saticoy Street, North Hollywood, CA 91605 Bankruptcy Case No.: 07-10887 Type of Business: The Debtor is a retail flooring & carpeting liquidator. See http://www.amigosflooring.com/ Chapter 11 Petition Date: March 22, 2007 Court: Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Steven M. Spector, Esq. Jeffer, Mangels, Butler & Marmaro, L.L.P. 1900 Avenue Of The Stars, 7th Floor Los Angeles, CA 90067 Tel: (310) 203-8080 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Neo-Tech trade debt $232,551 12810 East Florence Ave. Santa Fe Springs, CA 90670 Cintek System, Inc. trade debt $195,697 c/o SulmeryerKupetz 333 South Hope Street, 35th Floor Los Angeles, CA 90071-1406 Circuit City Stores, Inc. trade debt $181,522 Balterio U.S., Inc. trade debt $147,103 Lamipro trade debt $136,715 Rye Canyon Gateway Plaza LLC trade debt $101,107 6400 Warner Atrium, L.P. trade debt $100,282 CBS Infinity/KTWV-FM trade debt $99,729 LODGI North America, Inc. trade debt $91,286 Ace Bapaz trade debt $75,579 L.A. Times trade debt $71,523 Daily News Los Angeles trade debt $65,404 KFRG-FM trade debt $64,617 The Press-Enterprise trade debt $62,530 Diamond W Floor Covering trade debt $59,086 CIT Group trade debt $57,895 Shaw Industries trade debt $57,518 Old Master Products trade debt $57,501 KRTH-FM trade debt $56,627 Advo, Inc. trade debt $56,539 BLOCKBUSTER INC: Good Performance Cues S&P's Ratings' Upgrade ------------------------------------------------------------- Standard & Poor's Ratings Services raised the ratings on Dallas-based Blockbuster Inc. to 'B' from 'B-'. This action reflects the improved operating performance and improved credit protection metrics for the company. At the same time, Standard & Poor's raised the recovery rating on the bank facility to '3' from '5', indicating the expectation for meaningful recovery of principal in the event of payment default. Standard & Poor's affirmed the stable outlook. The ratings reflect its participation in the declining video rental industry, extremely competitive home entertainment market, operational challenges as the company diversifies its distribution channels, dependence on decisions made by the movie studios, and highly leveraged capital structure. "Cash flow protection measures have strengthened and are adequate for the rating category," said Standard & Poor's credit analyst David Kuntz, "but Blockbuster will be challenged to increase movie rental sales, given the industry's weak fundamentals and strong competition." BORALEX INVESTMENT: S&P Withdraws B+ Preliminary Term Loan Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B+' preliminary rating on Boralex Investment L.P.'s term loan. The rating, which was assigned in October 2006, was withdrawn because the transaction has not closed. BOWNE & CO: Incurs Net Loss of $1.8 Million in Year Ended Dec. 31 ----------------------------------------------------------------- Bowne & Co. Inc. reported a net loss of $1.8 million on revenue of $832.2 million for the year ended Dec. 31, 2006, compared with a net loss of $604,000 on revenue of $666.9 million for the year ended Dec. 31, 2005. Income from continuing operations was $12.1 million in 2006, as compared to a loss from continuing operations of $123,000 in 2005. For the fourth quarter of 2006, revenue increased 21.7% to $191.1 million from revenue of $157 million in the same period in 2005. Net income was $2.2 million in the fourth quarter of 2006, compared with a net loss of $7.9 million for the same period in 2005. Income from continuing operations was $142,000 in the fourth quarter of 2006, versus a loss from continuing operations of $7.1 million in the fourth quarter of 2005. "These results in 2006 reflect a year of significant accomplishment for Bowne -- a year of strong operating results and tangible, sustainable progress in reshaping the company to further strengthen our leadership position," said Bowne chairman, president and chief executive officer David J. Shea. "Our clients' needs have evolved, and so have we. Over the past few years, we've introduced new technology based products and services, such as Bowne Virtual Dataroom (TM), Pure Compliance(TM), FundAlign(TM), 8-K Express(TM) and XBRL expertise, to enable our clients to more effectively communicate with their shareholders and clients. To better reflect the full range of our value-added services, we are re-branding our Financial Print business as Financial Communications." Discontinued Operations Loss from discontinued operations, net of tax, was $13.8 million in 2006. This includes: a $2.3 million loss on the sale of DecisionQuest in September 2006, a $5.1 million charge for the costs associated with exiting the leased facilities of DecisionQuest and Bowne Business Solutions, a $6.1 million gain on the sale of CaseSoft, and a $10.6 million goodwill impairment charge related to DecisionQuest. This compares with a net loss from discontinued operations of $481,000 in 2005. The company reported income from discontinued operations of $2.1 million in the fourth quarter of 2006, primarily the result of an increase in the estimated tax benefit from the DecisionQuest sale. This compares to a loss from discontinued operations of $815,000 in the 2005 fourth quarter. For the year ended Dec. 31, 2006, cash and marketable securities declined $101.7 million. This decline includes the funding of $68.6 million in stock repurchases, $32.9 million for acquisitions and $28.7 million in capital expenditures (including $5.6 million related to the integration of the Vestcom acquisition, $3.3 million related to the relocation of the London facility and $2.7 million related to the 55 Water Street facility). The company had no borrowings outstanding under its $150 million five-year senior, unsecured revolving credit facility as of Dec. 31, 2006. At Dec. 31, 2006, the company's balance sheet showed $515.4 million in total assets, $278.7 million in total liabilities, and $236.7 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c46 About Bowne & Co. Inc. Based in New York City, Bowne & Co. Inc. (NYSE: BNE) -- http://www.bowne.com/-- is a printing company, which specializes in financial documents such as prospectuses, annual and interim reports, and other paperwork required by the SEC. Bowne also handles electronic filings via the SEC's EDGAR system and provides electronic distribution and high-volume mailing services. The financial printing business accounts for the bulk of the company's sales. Bowne also offers marketing and business communications services and litigation support software. The cCompany has 3,200 employees in 60 offices around the globe. * * * As reported in the Troubled Company Reporter on Jan. 11, 2007, Moody's Investors Service affirmed the Ba3 corporate family rating, Ba3 probability of default rating and B2 Convertible Subordinated Notes Rating, LGD5, 87% of Bowne & Co. Inc. The outlook remains positive. BRESNAN COMMS: Moody's Affirms Junk Rating on Second Lien Loan -------------------------------------------------------------- Moody's affirmed Bresnan Communications, LLC's B2 corporate family rating, B2 probability of default rating and stable outlook, following the company's proposed redemption of approximately $240 million of preferred equity financed by an increase in the first lien loan. In addition, Moody's downgraded the company's first lien loan rating to B2 from B1 and affirmed its second lien loan rating Caa1 in line with Moody's Loss Given Default Methodology and due to the significant increase in the first lien debt relative to its overall capitalization. As a result of the transaction, the company's leverage is expected to increase to 7.3x debt-to-EBITDA as of year end 2006 and incorporating standard Moody's adjustments; however, Moody's expects that the company will de-lever to below 7 times by the end of 2007, as Bresnan's revenues and EBITDA are likely to continue to grow given the increasing penetration of advanced services. The B2 corporate family rating incorporates Bresnan's substantial financial risk, including high leverage, weak fixed charge coverage and negative free cash flow. In addition, lack of scale and weak EBITDA margins relative to its incumbent cable peers constrain the rating. Potential for expanding revenues and EBITDA through penetration of advanced services, the more benign RBOC competitive environment in Bresnan's footprint relative to most incumbent cable peers, attractive market for cable assets, and the benefits garnered through Comcast Corporation's interest in Bresnan, however, support the rating. Affirm: -- Corporate Family Rating B2 -- Probability of Default Rating B2 -- Outlook Stable -- Second Lien Loan Rating Caa1, LGD6, 94% Downgrade: -- First Lien Credit Facility downgraded to B2, LGD3, 44% from B1 Bresnan Communications, LLC is a broadband communications company serving over 300,000 customers across Colorado, Montana, Wyoming, and Utah. The company's revenue was approximately $292 million in 2006. CAMPMED CASUALTY: A.M. Best Holds B Financial Strength Rating ------------------------------------------------------------- A.M. Best Co. has assigned a financial strength rating of C (Weak) and an issuer credit rating of "ccc" to Health Facilities Insurance Corporation, Ltd. of Hamilton, Bermuda. Concurrently, A.M. Best has affirmed the FSR of B (Fair) and assigned an ICR of "bb" to Campmed Casualty & Indemnity Company, Inc. of Maryland of Brunswick, Maryland, an affiliate of HFIC. The outlook for all ratings is stable. The ratings assigned to HFIC reflect the company's weak capitalization exhibited by its highly elevated underwriting leverage measures, significant risk tolerance (relative to capital) and limited business scope, which is solely dependent on CampMed as its sole source of revenue. HFIC acts solely as a reinsurer of CampMed and provides quota share coverage of 25% on a $500,000 limit. HFIC also has 29% participation on excess of loss coverage, the first layer being $500,000 excess, $500,000 with a $3 million annual reinsured limit on policies with $500,000 limits, and the second layer being $1 million excess, $1 million with a $2 million annual reinsured limit on policies with $1 million limits. As a reinsurer of CampMed, HFIC's operating results have been favorable. However, surplus generation has been minimized by the establishment of contingency reserves and return of capital to the parent holding company. HFIC's rating outlook assumes no material changes to the company's business strategy, operating earnings and capitalization. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. CAROLINA CARE: A.M. Best Says Financial Strength is Weak -------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to C (Weak) from C++ (Marginal) and assigned an issuer credit rating of "ccc" to Carolina Care Plan, Inc. of Columbia, South Carolina. The outlook for both ratings is negative. The FSR downgrade is due to Carolina Care's greater than expected deterioration of its financial condition for full year 2006. Carolina Care reported a statutory net loss of $14.5 million. This drop in earnings translates into a substantial decline in the organization's capital and surplus to an extremely low level. A.M. Best is concerned about Carolina Care's ability to sustain any additional losses. In addition, Carolina Care has limited access to additional capital, putting further pressure on the company's capital position. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. CENTERSTAGING CORP: Dec. 31 Balance Sheet Upside-Down by $9.6 Mil. ------------------------------------------------------------------ CenterStaging Corp.'s balance sheet at Dec. 31, 2006, showed $6,973,041 in total assets, $16,021,743 in total liabilities, and $604,662 in minority interests, resulting in a $9,653,364 stockholders' deficit. The company's Dec. 31 balance sheet also showed strained liquidity with $878,715 in total assets available to pay $9,813,219 in total current liabilities. For the fiscal second quarter ended Dec. 31, 2006, the company reported a $3,743,876 net loss on $1,741,626 of revenues, compared with a $2,801,037 net loss on $1,559,792 of revenues in the prior year period. The company said the increase in revenues was due to increased production services, studio and equipment rentals. Full-text copies of the company's fiscal second quarter financials are available for free at http://ResearchArchives.com/t/s?1c4f Sale of Securities Pursuant to a securities purchase agreement entered into on Jan. 16, 2007, the company issued to two institutional investors in a private placement for a total purchase price of $3,000,000 and net proceeds of $2,690,000: (i) 10% Convertible Debentures due Dec. 31, 2008, in the principal amount of $3,000,000, and (ii) warrants to purchase 3,000,000 shares of the company's common stock for $1.10 per share. Of the net proceeds of the offering, the company may use $1,200,000 to pay debt (provided that no more than $500,000 can be used to pay debt held by affiliates of the company) with the balance for working capital. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 10, 2006, Stonefield Josephson expressed substantial doubt about CenterStaging Corp, fka Knight Fuller, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended June 30, 2006. The auditor pointed to the company's substantial net losses and stockholders' deficit. About CenterStaging Based in Burbank, Calif., CenterStaging Corp. is the parent company of CenterStaging Musical Productions, Inc., and its division rehearsals.com. The company provides production and support services for live musical performances at major televised award shows like Academy Awards, GRAMMY Awards, Super Bowl halftime show and presidential inaugurations; rents its studio facilities to musicians for rehearsal, production and recording; and rents musical instruments and related equipment for use at its studios and other venues. The company owns CenterStaging Burbank is a 150,000 sq. foot facility located near Bob Hope Airport in Burbank, Calif. It has a soundstage, 11 studios, editing rooms, state of the art high-definition broadcast center, thousands of musical instruments and backline equipment. CHEMED CORP: Deleveraging Prompts S&P's Positive Outlook -------------------------------------------------------- Standard & Poor's Rating Services revised its outlook on Cincinnati, Ohio-based hospice and plumbing/drain-cleaning services provider Chemed Corp. to positive, from stable, and affirmed its existing ratings on Chemed, including the 'BB-' corporate credit rating. "The outlook revision reflects the fact that Chemed has meaningfully deleveraged over the past year, through both earnings improvements and debt repayment," said Standard & Poor's credit analyst Alain Pelanne. The rating continues to overwhelmingly reflect the company's exposure to third-party reimbursement rate reductions and caps imposed by Medicare on hospice care providers. Reimbursement caps require them to return funds to the government that are in excess of permissible billings. Also, the industries it competes in are highly competitive. These concerns are only partially mitigated by Chemed's industry-leading positions in its two businesses, its ability to generate significant operating cash flows, and the positive near- and long-term growth potential for the hospice industry. Chemed is the industry leader in two disparate business segments: hospice-care services and plumbing/drain cleaning. Chemed offers physician and nursing care, social services, bereavement support, and other palliative services to approximately 11,000 terminally ill patients and their families. The majority of the company's revenues and EBITDA come from hospice services. Chemed also provides plumbing and drain cleaning services under the Roto-Rooter name to residential and commercial customers. CHENIERE ENERGY: Completes Public Offering of 13.5 Million Units ---------------------------------------------------------------- Cheniere Energy Inc. completed the initial public offering of 13,500,000 common units representing limited partner interests in Cheniere Energy Partners L.P. at a price of $21 per common unit. Cheniere Energy Partners sold 5,054,164 units while Cheniere LNG Holdings LLC sold 8,445,836 units. Cheniere LNG granted the underwriters a 30-day option to purchase up to 2,025,000 common units to cover over-allotments. About Cheniere Energy Inc. Based in Houston, Texas, Cheniere Energy, Inc. (AMEX: LNG) -- http://www.cheniere.com/-- operates a network of three, 100-percent owned, onshore LNG receiving terminals, and related natural gas pipelines, along the Gulf Coast of the U.S. The company is in the early stages of developing a business to market LNG and natural gas. To a limited extent, it is also engaged in oil and natural gas exploration and development activities in the Gulf of Mexico. The company operates four business segments, LNG receiving terminal; natural gas pipeline; LNG and natural gas marketing; and oil and gas exploration and development. * * * Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Cheniere Energy, Inc. and affirmed its 'BB' rating on the $600 million term B bank loan at Cheniere LNG Holdings LLC, an indirectly owned, 100% subsidiary of Cheniere Energy. The outlook is stable. CKE RESTAURANTS: Board Approves 50% in Quarterly Cash Dividend -------------------------------------------------------------- CKE Restaurants Inc.'s Board of Directors declared a first quarter dividend of $0.06 per share of common stock to its stockholders, which is to be paid on June 11, 2007. The company reported that it had 67,198,004 shares of common stock issued and outstanding as of March 20, 2007. "Our Board of Directors' approval of a 50% increase in our quarterly cash dividend reflects both the Board's and my increased confidence in the continued financial stability of our Company and the potential of our future growth plans," Andrew F. Puzder, president and chief executive officer said. "Over the past two years, we have returned more than $102 million to our shareholders through quarterly cash dividends and share repurchases. This dividend increase further underscores our commitment to returning capital to our stockholders." On 2007 third quarter, the company, through its subsidiaries, has 3,113 franchised restaurants in 43 states and in 14 countries. About CKE Restaurants Headquartered in Carpinteria, California, CKE Restaurants Inc. (NYSE: CKR) -- http://www.ckr.com/-- through its subsidiaries, franchisees and licensees, operates some of the most popular U.S. regional brands in quick-service and fast-casual dining, including the Carl's Jr.(R), Hardee's(R), La Salsa Fresh Mexican Grill(R) and Green Burrito(R) restaurant brands. CKE RESTAURANTS: S&P Rates $320 Mil. Secured Credit Facility at BB ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Carpinteria, California-based CKE Restaurants Inc. The outlook is stable. At the same time, Standard & Poor's assigned a 'BB' rating to CKE's $320 million secured revolving credit facility. The loan is comprised of a $200 million revolver five-year loan and a $120 million six-year term loan. The credit facility is rated 'BB', one notch higher than the corporate credit rating on CKE, with a recovery rating of '1', indicating the expectation for full recovery of principal in the event of a payment default. Proceeds from the loan will be used primarily to refinance the existing credit facility and for working capital, LOCs, capital expenditures, and general corporate purposes. "Improved operating performance at both concepts," said Standard & Poor's credit analyst Diane Shand, "together with a healthier balance sheet, should offer rating stability and provide the company with the flexibility to continue to reinvest in its brands." CNA FINANCIAL: S&P Assigns BB Rating on Preferred Stock ------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'BBB-' senior debt rating, 'BB+' subordinated debt rating, and 'BB' preferred stock rating to CNA Financial Corp.'s recently filed universal shelf registration. CNA has no immediate plans to issue securities under this shelf. However, the shelf gives the company the flexibility to issue new debt or equity securities to meet its capital needs, including the replacement of existing notes as they come due. The company has no debt maturing in 2007. About $2.16 billion of total debt was outstanding at CNA as of Dec. 31, 2006, up from $1.7 billion at year-end 2005. On Aug. 8, 2006, the company issued $750 million of senior notes. CNA used part of the proceeds to repay $250 million of senior notes that matured on Nov. 15, 2006. Debt leverage as of Dec. 31, 2006, was 18.8%, up from 16.5% at Dec. 31, 2005. Financial leverage improved to a conservative 19.0% on Dec. 31, 2006, from 23.8% at year-end 2005. The company redeemed its $750 million, 8% Series H preferred stock held by Loews Corp., which owns 89% of CNA's common stock. "The terms of the preferred issue qualified it for treatment as equity rather than debt under our criteria," noted Standard & Poor's credit analyst John Iten. CNA also paid about $243 million of cumulative but undeclared preferred dividends owed to Loews. CNA is an insurance holding company, the primary insurance subsidiary of which is Continental Casualty Co. CCC in turn owns a number of other primary property/casualty insurance companies. CNA has divested most of its life insurance operations and its reinsurance business and is now focused solely on the commercial lines market. The group is the seventh-largest U.S. commercial lines property/casualty insurer in the U.S. based on 2005 statutory net premiums written. COMAGRO SE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Comagro Se P.O. Box 25009 San Juan, PR 00928 Bankruptcy Case No.: 07-01591 Chapter 11 Petition Date: March 27, 2007 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Charles Alfred Cuprill, Esq. Charles Alfred Cuprill, P.S.C. 356 Calle Fortaleza, 2nd Floor San Juan, PR 00901 Tel: (787) 977-0515 Total Assets: $0 Total Debts: $5,726,959 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Banco Popular Credit Line $2,520,150 P.O. Box 25009 San Juan, PR 00928 BBVA Credit Line $685,000 P.O. Box 36475 San Juan, PR 00936-4745 A&A Engineering Corp. Electrical Services $316,604 Suite 216, Edif. La Electronic Calle Bori #1608 San Juan, PR 00927 AR Camps-Demolition & Others $163,498 SM Electrical Contractors, SE $156,653 Corporacion Fondo del Seguro $145,148 del Estado Glasstra Aluminum, Inc. $120,469 BBVA Credit Line $111,000 Municipio de Guaynabo $103,191 Gamaire Refrigeracion $100,000 American Agencias Co., Inc. $83,441 Internal Revenue Service $79,517 Avanti Kitchens Inc. $69,821 Deya Elevators Service, Inc. $67,045 Central Industrial Services, inc. $65,847 CDC Global Group $51,985 A.E.E. Electrical Services $51,121 Romandeka $50,782 Santiago Metal Manufacturing Corp. $48,979 Roque Perez Frangia, PE $42,411 COMM 2001: Moody's Junks Rating $11 Million Class H Certificates ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of seven classes, downgraded the rating of one class and affirmed the ratings of eight classes of COMM 2001-J2, Commercial Mortgage Pass-Through Certificates: -- Class A-1, $217,123,226, Fixed, affirmed at Aaa -- Class A-1F, $23,146,757, Floating, affirmed at Aaa -- Class A-2, $405,000,000, Fixed, affirmed at Aaa -- Class A-2F, $420,000,000, Floating, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class XC, Notional, affirmed at Aaa -- Class XP, Notional, affirmed at Aaa -- Class B, $91,840,000, Fixed, affirmed at Aaa -- Class C, $115,910,000, Fixed, upgraded to Aaa from A2 -- Class D, $31,636,000, Other Non-Fixed, upgraded to Aaa from Baa1 -- Class E, $27,639,000, Other Non-Fixed, upgraded to A1 from Baa3 -- Class E-CS, $10,000,000, Fixed, upgraded to A1 from Baa3 -- Class E-IO, Notional, upgraded to A1 from Baa3 -- Class F, $13,550,000, Other Non-Fixed, upgraded to A2 from Ba1 -- Class G, $33,201,000, Other Non-Fixed, upgraded to Baa2 from Ba3 -- Class H, $11,969,332, Fixed, downgraded to Caa1 from B1 The Certificates are collateralized by 10 fixed rate mortgage loans secured by 13 properties. As of the March 16, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 7.0% to $1.41 billion from $1.51 billion at securitization as a result of scheduled loan amortization. Moody's is upgrading Classes C, D, E, E-CS, E-IO, F and G due to the defeasance of the AT&T Building Loan at $213.2 million (15.1%) on March 7, 2007. The loan, which was previously shadow rated B2 by Moody's, had been the poorest performing loan in the pool. Moody's is downgrading Class H due to unreplenished interest shortfalls caused by special servicing fees related to a prior modification of the AT&T Building Loan. Moody's last comprehensive review of this transaction was in November 2006. The performance of the loans has not materially changed since last review. COMPLETE RETREATS: Wants Plan-Filing Period Extend to May 31 ------------------------------------------------------------ Complete Retreats LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Connecticut to further extend the exclusive period for them to: (a) file a plan through and including May 31, 2007; and (b) solicit votes on that plan through and including July 31, 2007. An extension of the Exclusive Periods is justified by the progress the Debtors have made in their Chapter 11 cases and in attempting to formulate and develop an exit strategy, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, asserted. Since filing for bankruptcy, the Debtors have made significant progress toward stabilizing their business operations, Mr. Daman averred. Among others, the Debtors have been successful in obtaining a replacement DIP financing facility from Ableco Finance, LLC. The Debtors have also conducted numerous depositions and interrogatories on certain employees and other parties. Most importantly, Mr. Daman noted, the Debtors have sought and obtained the Court's approval to sell substantially all of their assets for $98,000,000 to Ultimate Resort, LLC. Early this month, the Official Committee of Unsecured Creditors said that the Global Asset Sale was scheduled to close by March 16, 2007. However, Mr. Daman said, the Debtors are still in the process of attempting to close the Sale. An extension, Mr. Daman explained, will afford the Debtors time to: (1) close the Sale; (2) continue to sell properties not included in the Asset Sale; and (3) finalize discussions and negotiations with the Creditors Committee regarding a consensual liquidating plan of reorganization and the appropriate procedure to wind-down the Debtors' estates and affairs. The Debtors are hopeful that they will finalize and file a consensual reorganization plan prior to May 31, 2007. "Extending the Exclusive Periods is also warranted because the Debtors have generally been paying their postpetition debts as they become due," Mr. Daman told the Court. Mr. Daman also reminded the Court that the Debtors' cases are large and complex with more than 60 Debtors, and $130,000,000 in total consolidated assets and $400,000,000 in total consolidated debts as of the Petition Date. A further extension of the Exclusive Periods will not harm the Debtors' creditors or other parties-in-interest, Mr. Daman assured the Court. In light of the complexity of the bankruptcy cases and the significant issues that must be resolved before a consensual plan can be finalized, filed, and confirmed, it is unlikely that the Debtors' creditors or any other party-in- interest would be in a position to propose a competing plan of reorganization before May 31, 2007, he said. "Accordingly, the Debtors' request will not delay the reorganization process." 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. 23; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). CONTINENTAL AIRLINES: Moody's Rates Class C Certificates at B1 -------------------------------------------------------------- Moody's Investors Service assigned ratings of Baa1 to the Class A, Ba2 to the Class B and B1 to the Class C Certificates of the Continental Airlines Pass Through Certificates, Series 2007-1. Property of the Trust will be Equipment Notes to be issued by Continental Airlines, Inc. which will be secured by an interest in the aircraft being financed by this transaction The ratings of the Certificates consider the credit quality of Continental as obligor under the Notes, the value of the aircraft pledged as security for the Notes, the credit support provided by the liquidity facilities on the Class A and Class B Certificates, and the additional structural features of the transaction. The ratings assigned reflect Moody's opinion of the ability of the Pass Through Trustees to make timely payment of interest and the ultimate payment of principal at a date no later than April 2022 for the Class A and B Certificates, which is the final maturity date. Moody's also notes that this transaction includes two features not found in previous Continental EETCs. The first feature provides for cross-collateralization of the aircraft securing the individual notes underlying the transaction, which enhances the potential recovery for investors in the event of default. Second, there is a revised waterfall which, under certain circumstances could permit the Class C Certificates to receive interest before the Class A Certificates receive principal payments. Any future changes in the underlying credit quality or ratings of Continental, or material changes in the value of the aircraft pledged as collateral, or changes in the status of the liquidity facilities or the credit quality of the liquidity provider for the benefit of the Class A and Class B Certificates could cause a change in the ratings assigned. Proceeds from the sale of the Certificates will be used to purchase Notes to finance 10 B737-800 and 15 B737-900ER aircraft scheduled to deliver beginning in January 2008 and ending in September 2008. Proceeds from the Certificates will be held in escrow until aircraft deliveries to Continental actually occur. Until the aircraft are delivered, the Certificates will be secured by the cash held in escrow, and the risk of the difference between the coupon rate on the Certificates and the investment rate on the cash held in escrow is borne by the Depositary, Credit Suisse, to which Moody's has assigned a long term unsecured debt rating of Aa3. The Certificates issued to finance the aircraft are not obligations of, nor are they guaranteed by, Continental. However, the amounts payable by Continental under the Notes will be sufficient to pay in full all principal and interest on the Certificates when due. The Notes will be secured by a perfected security interest in the aircraft. It is the opinion of counsel to Continental, that the Notes will be entitled to benefits under Section 1110 of the U.S. Bankruptcy Code. Under Section 1110 of the U.S. Bankruptcy Code, if Continental fails to pay its obligations under the Notes, the collateral trustee has the right to repossess any aircraft which have been rejected by Continental. The Class C Certificates rank junior in priority to the Class B Certificates and the Class B Certificates rank junior to the Class A Certificates Interest on the Class A Certificates and Class B Certificates will be supported by liquidity facilities intended to pay up to three semi-annual interest payments in the event Continental defaults on its obligations under the Notes. The liquidity facilities do not provide for payments of principal due, nor are the liquidity facilities available to the Class C Certificates. The liquidity provider is RZB Finance LLC, the obligations of which are guaranteed by Raiffeisen Zentralbank Oesterreich Aktiengesellschaft which has a Moody's short-term rating of P-1. The liquidity provider has a priority claim on proceeds from liquidation ahead of any of the holders of the Certificates and is also the controlling party following default. The ratings of all Certificates benefit from the cross collateralization of the Notes because Moody's believes this feature potentially enhances recovery in the event of default. The structure provides that, in the event all aircraft are sold, any surplus proceeds are made available to cover shortfalls due under the Notes related to the sale of any other aircraft. Importantly, all surplus proceeds are retained until maturity of the financing or the indentures are cancelled. Moody's believes expected recovery is enhanced because of the number of aircraft, that no single aircraft type comprises a substantial portion of the equipment pool and that, while there is some correlation between the values of the aircraft types, there is sufficient diversity to produce a benefit given cross collateralization. This transaction was accorded the maximum rating benefit from the existence of cross collateralization because of the number of aircraft and different types of aircraft. Moody's notes that the waterfall of payments for this transaction differs from previous Continental EETCs. The indenture and intercreditor agreements provide that, under certain circumstances, the Class C Certificates could receive interest before the Class A Certificates are repaid principal. While beneficial for the Class C Certificates, Moody's does not believe this revised waterfall provides the same level of certainty for full payment of interest and, particularly, whether payment is made on a timely basis as would be the case with a liquidity facility. Accordingly, Moody's did not provide any lift to the ratings for this revised waterfall. Following a default by Continental, in the case where certain aircraft are rejected and those aircraft are sold at a loss, the Class B Certificates and then the Class C Certificates would receive interest based on the amount recovered through the sale before the Class A and then Class B receives principal. The benefit of this mechanism, in addition to receipt of some cash payments by the Class C and the Class B Certificates, is to permit possibly greater recovery for the Class C Certificates from the operation of the cross collateralization. While there is some commonality between the 737-800 and 737-900ER as they are both members of Boeing's 737 family of commercial jet aircraft, they have different utility. The 737-800 is one of the most widely accepted narrow-body aircraft among commercial airlines, and is generally used for shorter-range flights. The 737-900ER, a next-generation extended range version of Boeing's 737-900 model, has longer range, more seats and better fuel efficiency than the -800 model particularly for longer-range flights. Production of the 737-900ER has just started and there are only 33 orders but the utility of the 900ER should broaden its user base over time as it is a natural replacement aircraft for certain long range aircraft now in use. Ratings assigned: * Continental Airlines, Inc.'s Enhanced Equipment Trust Certificates Series 2007-1 -- Class A at Baa1 -- Class B at Ba2 -- Class C at B1 Continental Airlines, Inc. is headquartered in Houston Texas. CONTINENTAL AIRLINES: S&P Assigns B+ Rating on Class C Certs. ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'A' rating to Continental Airlines Inc.'s series 2007-1 Class A pass-through certificates, its preliminary 'BBB-' rating to the Class B certificates, and its preliminary 'B+' rating to the Class C certificates. The expected maturity for the Class A and Class B certificates is April 19, 2022, and the expected maturity for the Class C is April 19, 2014. The final legal maturities will be 18 months after the expected maturities for the Class A and Class B certificates only. The issues are a drawdown under a Rule 415 shelf registration. Final ratings will be assigned upon conclusion of a legal review of the documentation. "The preliminary ratings are based on Continental's credit quality, substantial collateral coverage by desirable aircraft, and on legal and structural protections available to the pass-through certificates," said Standard & Poor's credit analyst Philip Baggaley. "Proceeds of the offering are being used to acquire 10 B737-800 and 15 B737-900ER aircraft being delivered to Continental this year and next." The pass-through certificates are a form of enhanced equipment trust certificate, and benefit from legal protections afforded under Section 1110 of the federal bankruptcy code and, in the case of the Class A and Class B certificates, by liquidity facilities provided by RZB Finance LLC, guaranteed by Raiffeisen Zentralbank Oesterreich. The liquidity facilities are intended to cover up to three semi-annual interest payments, a period during which collateral could be repossessed and remarketed following any default by the airline. As with other EETCs, the Class A certificates rank senior to the Class B certificates, which in turn rank senior to the Class C certificates. The preliminary ratings apply to a unit consisting of the certificates and escrow receipts. The latter represents an interest in escrow deposits, pending delivery of the aircraft being financed. The certificates are secured by 10 B737-800 and 15 B737-900ER aircraft. The initial loan-to-value of the Class A certificates is 47.4%, of the Class B certificates 61.3%, and of the Class C certificates 71.9%. The maximum loan-to-values over the life of the certificates are slightly higher using the depreciation assumptions in the offering memorandum. However, Standard & Poor's uses more conservative depreciation assumptions, so that the maximum loan-to-value is higher, about 57% for the Class A certificates, 74% for the Class B certificates, and 77% for the Class C certificates. The notes secured by aircraft are cross-collateralized, which is not typical in a EETC. This provides some added protection, because a shortfall in value realized on one repossessed plane could be offset by better realization on other aircraft. The 'B' corporate credit rating on Continental Airlines reflects its participation in the high-risk airline industry and a heavy debt and lease burden, but also better-than-average operating performance among its peer large U.S. hub-and-spoke airlines. Continental, the fourth-largest U.S. airline, serves markets mainly in the southern and eastern U.S. from hubs at Houston; Newark, N.J.; and Cleveland, Ohio. International routes serve the central Pacific, selected Asian destinations, Latin America, and Europe. DANA CORP: Selling Hose & Tubing Biz to Orhan Holding for $70MM --------------------------------------------------------------- Dana Corporation has entered into a stock and asset purchase agreement for the sale of Dana's non-core fluid products hose and tubing business to Orhan Holding, A.S., a Turkish industrial firm and joint venture partner of Dana. The agreement provides for Orhan and certain of its affiliates to acquire certain assets of Dana's fluid products hose and tubing business and the stock of certain Dana affiliates engaged in the business. The assets to be sold are located in three plants in the United States and one each in Mexico and the United Kingdom. Dana will also sell its stock in three companies in France, Slovakia, and Spain and interests in three joint ventures with Orhan Holdings, which include one operation in France and two in Turkey. The operations being sold reported consolidated revenues of $266 million in 2006. The aggregate purchase price will be $70 million, subject to usual closing adjustments, and the buyers will assume certain liabilities of the business at closing. Closing of the transaction is subject to the approval of the United States Bankruptcy Court for the Southern District of New York, which has jurisdiction over Dana's Chapter 11 reorganization proceedings; government regulatory approvals; and customary closing conditions. As a standard element of the bankruptcy process, Dana has filed a motion with the Bankruptcy Court seeking approval of procedures that will provide an opportunity for competitive bids on the hose and tubing business and the remaining coupled products portion of the fluid products business before the sale is approved by the Court. Dana expects to complete the bidding process and to close the sale of the entire fluid products business in the second quarter of 2007. Fluid Products Hose & Tubing Business The fluid products hose and tubing plants and/or assets proposed to be sold to Orhan are located in: Vitry, France; San Luis Potosi, Mexico; Dolny Kubin, Slovakia; Barcelona, Spain; Birmingham, U.K.; and Archbold, Ohio; Paris, Tennessee; and Rochester Hills, Michigan. Collectively, the operations manufacture fuel lines; power-assisted steering products; heating, ventilation, and air conditioning under body products; engine and transmission cooling lines; exhaust gas recirculation tubes; and airbag fill tubes. These operations employ approximately 1,800 people in seven countries. Dana announced its intention to sell its fluid products business in late 2005. The fluid products business is composed of the fluid products hose and tubing business involved in the proposed Orhan sale, as well as the company's coupled products business, which includes six additional facilities. Dana is also seeking a buyer for its coupled products assets. About Dana Corp. Toledo, Ohio-based Dana Corp. -- http://www.dana.com/-- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. The company and its affiliates filed for chapter 11 protection on Mar. 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Sept. 30, 2005, the Debtors listed $7,900,000,000 in total assets and $6,800,000,000 in total debts. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors' exclusive period to file a plan expires on Sept. 3, 2007. They have until Nov. 2, 2007, to solicit acceptances of that plan. DIASYS CORP: Posts $238,481 Net Loss in 2nd Quarter Ended Dec. 31 ----------------------------------------------------------------- DiaSys Corp. reported a net loss of $238,481 on net sales of $424,994 for the second quarter ended Dec. 31, 2006, compared with a net loss of $238,880 on net sales of $347,372 for the same period in 2005. The increase in net sales was primarily due to the timing of the orders received by the company. At Dec. 31, 2006, the company's balance sheet showed $2,519,254 in total assets, $1,827,735 in total liabilities, and $691,519 in total stockholders' equity. The company's balance sheet at Dec. 31, 2006, also showed strained liquidity with $626,419 in total current assets, available to pay $1,827,735 in total current liabilities. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c34 Going Concern Doubt As reported in the Troubled Company Reporter on Dec. 5, 2006, Deloitte & Touche LLP expressed substantial doubt about DiaSys Corporation's ability to continue as a going concern after auditing the company's financial statements for the fiscal years ended June 30, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations, cash used by operating activities, negative working capital, and accumulated deficit. * * * Headquartered in Waterbury, Connecticut, DiaSys Corporation -- http://www.diasys.com/-- designs, develops, manufactures and distributes proprietary medical laboratory equipment, consumables and infectious disease test-kits to healthcare & veterinary laboratories worldwide. The company operates in Europe through its wholly owned subsidiary based in Wokingham, England and through distributors in South America. DRS TECH: Fitch Holds Issuer Default Rating at B+ ------------------------------------------------- Fitch Ratings has affirmed DRS Technologies, Inc. credit ratings: -- Issuer Default Rating 'B+'; -- Senior secured revolving credit facility 'BB+'/'Recovery Rating (RR) 1'; and -- Senior secured term loan 'BB+/RR1'. In addition, Fitch has upgraded these ratings: -- Senior unsecured notes to 'BB+/RR1' from 'BB/RR2'; -- Senior unsecured convertible notes to 'BB+/RR1' from 'BB/RR2'; -- Senior subordinated notes to 'B/RR5 from 'B-/RR6'. Approximately $1.9 billion of outstanding debt is affected by these actions. The Rating Outlook is Stable. The ratings are supported by continued high levels of defense spending, strong organic growth, good free cash flow generation, DRS' proven ability to increase margins at acquired companies, expected growth in homeland security spending, and healthy EBITDA margins. The ratings also consider the company's diversification within the defense and homeland security arena, and the alignment between DRS' products and services and expected Department of Defense and Homeland Security needs, all of which were aided by the Engineered Support Services, Inc. acquisition in January 2006. Concerns center on: * future acquisition plans; * limited financial flexibility due to high debt levels; * potential changes in longer-term priorities in the DoD budget due to the recent change in control in Congress and the new Secretary of Defense, as well as overall budgetary pressures due to the federal budget deficit; and * SEC and U.S. Attorney investigations of ESSI. The ratings and Stable Outlook incorporate expectations for deployment of free cash flow toward some modest debt reduction in the current quarter with the expectation that free cash flow in fiscal 2008 will be utilized for bolt-on acquisitions with any remainder targeted at debt reduction. In addition, the Outlook is based on the expectation of continued strong if moderating base defense budgets and the continuing benefits of supplemental budgets. The changes in the Recovery Ratings were driven by a review of Fitch's recovery model and by Fitch's expectation that the $250 million accordion feature of DRS' senior secured credit facility would most likely not be utilized in a distressed scenario. As such, the $250 million is no longer being included in the recovery rating analysis resulting in improved recovery prospects for the unsecured debt. The expected recoveries for the senior secured debt remain unchanged at 100%, while expected recoveries for the senior unsecured debt improved to the 91%-100% range and recoveries for the senior subordinated debt increased to the 11%-30% range. The Recovery Ratings for the senior secured and senior unsecured debt benefit from substantial amounts of subordinated debt and equity. ESSI results in fiscal 2007 were hampered earlier in the year by delays and shifts in funding and a contract loss. As a result DRS will not meet the original cash flow guidance provided at the time of the ESSI acquisition. Part of the cash shortfall was due to a timing issue that benefited the prior fiscal year. DRS used this cash generated in fiscal 2006 to pay down ESSI acquisition debt. Results for revenue and EBITDA were also below the guidance provided at that time, with ESSI's lower than expected results more than offsetting higher than projected growth at DRS' legacy business. Most of the shortfall, however, is expected to be 'made-up' by the end of fiscal 2008. Supporting the likelihood of strong revenue growth in fiscal 2008 is a book-to-bill ratio that was almost 1.4x for the first nine months of fiscal 2007. To further enhance performance, DRS recently split the former ESSI businesses into two segments and engaged in some restructuring as well as changes in management at the former ESSI. Management has made it clear that DRS plans to continue making acquisitions so long as the price and fit are right. After the ESSI acquisition, management stated that it would not make acquisitions for at least a year, while it digested ESSI. This time has now passed, but given that DRS' debt-to-EBITDA leverage is still significantly above its target of 3.0x-3.5x, Fitch does not expect that DRS will engage in anything but bolt-on acquisitions in the near term. Should DRS decide, however, to make a large acquisition, Fitch expects that equity could be issued, as DRS has done in the past, to mitigate the impact on credit metrics and maintain its ratings. DOD spending remains at high levels supporting DRS' credit quality. Should budgetary pressures result in the cancellation or delay of big-ticket platforms, Fitch would expect DRS to see additional upgrade and modernization business for existing platforms, offsetting any likely impact. As for the possibility of the withdrawal from Iraq or Afghanistan, Fitch expects that DRS would benefit from the need to reset equipment and to a lesser extent a potential increase in homeland security spending. The SEC and U.S. Attorney investigations of ESSI relate to trading in ESSI stock around earnings releases, the adequacy of disclosures of third-party transactions, proper disclosure of a stop-work order by the DOD, insider trading, and the backdating of options - all of which occurred prior to ESSI being acquired by DRS. ESSI's former controller recently plead guilty to one count of making false statements to the U.S. Government relating to options backdating, and the former CFO was indicted for the same yesterday. Although ESSI and DRS have been subpoenaed, the investigations appear to be targeted at the individuals involved. Fitch does not expect that the results of these investigations will be a credit issue for DRS. Liquidity as of Dec. 31, 2006, totaled approximately $330 million, consisting of $50 million in cash, $286 million in revolving credit facility availability, less current maturities of $5 million. DRS' credit ratios are weak for the rating category but have shown improvements on a quarter-by-quarter basis since the acquisition of ESSI. Interest coverage as defined by operating EBITDA to interest was 3.1x in the latest 12 months ending Dec. 31, 2006, vs. 3.8x in fiscal 2006. Leverage as defined by debt to operating EBITDA was 5.1x in the LTM vs. 7.6x in fiscal 2006, which was distorted by the debt associated with the ESSI acquisition, but only benefited from two months of ESSI-related EBITDA. Free cash flow, cash flow from operation less capital expenditures less dividends, is expected to be in the range of $85 million-$110 million this year, which is distorted by a timing issue that resulted in $30 million to $40 million of free cash aiding fourth-quarter fiscal 2006 results instead of first-quarter fiscal 2007. Fitch expects DRS to increase free cash flow generation in fiscal 2008. ELGIN NATIONAL: Buyout Prompts S&P's Positive CreditWatch --------------------------------------------------------- Standard & Poor's Ratings Services placed its 'CCC+' corporate credit rating on Elgin National Industries Inc. on CreditWatch with positive implications following the company's report that third party buyers, consisting of private equity funds, are acquiring Elgin in a transaction scheduled to close on March 29, 2007. The 'CCC-' rating on Elgin's 11% senior notes due 2007 was affirmed and is not on CreditWatch, because Standard & Poor's expects that change in control language in the bond indenture provide notes holders the right to require Elgin to repurchase all or any part of the notes at 101% of their principal amount. ELWOOD INSURANCE: A.M. Best Lifts Financial Strength Rating to B++ ------------------------------------------------------------------ A.M. Best Co. has upgraded the financial strength rating to B++ (Good) from B+ (Good) of Elwood Insurance Limited of Hamilton, Bermuda, and assigned an issuer credit rating of "bbb". The outlook for both ratings is stable. Elwood's rating recognizes its excellent capitalization level, history of positive operating performance, conservative reserve practices and effective management of exposures. Over the past five years, return on surplus has averaged 24.5%, while surplus levels have increased at a compound annual growth rate of 29.2% through the accumulation of net profits. Partially offsetting these positive rating factors is A.M. Best's concern with the high balance sheet leverage of Elwood's ultimate parent, Celanese Corp. [NYSE: CE], which could negatively impact the operations of its captive. Additional offsetting rating factors are Elwood's exposure to some low frequency, high severity hazards in its risk profile, coupled with high limits and high net retentions. The risk management team of Celanese takes an enterprise-wide approach to managing its risks and utilizing the captive as an integral tool in this process. Elwood's management also has demonstrated its ability to avoid the mass market of unrelated business. Instead, Elwood utilizes its relationships and those of Celanese to develop a variety of unique and non-correlating accounts, which provide a favorable enhancement to its overall book of business. Nonetheless, Elwood's long-term growth opportunities primarily depend on Celanese's business success. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. EMPIRE RESORTS: Dec. 31 Balance Sheet Upside-Down by $25.7 Million ------------------------------------------------------------------ Empire Resorts Inc.'s balance sheet at Dec. 31, 2006, showed $60.6 million in total assets and $86.3 million in total liabilities, resulting in a stockholders' deficit of $25.7 million. The company's balance sheet at Dec. 31, 2006, also showed strained liquidity with $18 million in total current assets, available to pay $21.3 million in total current liabilities. The company reported a net loss of $5.1 million on net revenues of $20.8 million for the fourth quarter ended Dec. 31, 2006, compared with a net loss of $11.7 million on net revenues of $22.5 million for the fourth quarter ended Dec. 31, 2005. Revenue from racing declined by approximately $1.3 million, or 25%, reflecting decreased revenue allocations from off-track betting facilities, while revenue from the company's video gaming machine (VGM) business fell by approximately $400,000, or 2%, due to increased competition in the region. Empire's VGM operations experienced a slight decline in daily visits of roughly 2%, and the daily win per unit also fell 2% to $110.76 for the quarter from $113.34 in the fourth quarter of 2005. The company's operating loss for the quarter was $3.4 million versus an operating loss of $10.1 million in the prior-year period, which included a $11.9 million impairment charge related to deferred development costs. SG&A expense rose to $7.1 million in the fourth quarter of 2006 from $3.4 million in 2005, primarily due to an increase in stock-based compensation of $3.5 million associated with the modification of the option agreement with Concord Associates. For fiscal 2006, Empire reported record net revenue of $98.1 million versus $86.8 million in the same period last year, reflecting growth in the company's racing and VGM operations. Empire's net loss for 2006 was $7.1 million, versus a net loss of $18.5 million for 2005. Included in the 2005 results are $14.3 million of impairment charges for deferred development costs. "This year was one of significant progress for Empire Resorts," commented David Hanlon, chief executive officer and president. "In the past twelve months, we saw our Monticello operations post record revenue even as we took the final steps towards building a world-class casino in the Catskills with our partners, the St. Regis Mohawks. At the end of 2006, the Department of the Interior finally issued a Finding of No Significant Impact, or FONSI, regarding this monumental endeavor, and, more recently, Governor Spitzer gave his concurrence to move forward while also approving the Tribal-State Compact Amendment, authorizing gaming at Monticello. We now await a decision regarding putting our land into trust, and we are optimistic that this will take place in the near future." Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c57 About Empire Resorts Inc. Headquartered in Monticello, New York, Empire Resorts Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- operates the Monticello Raceway and is involved in the development of other legal gaming venues. Empire's Monticello Gaming & Raceway now features over 1,500 video gaming machines and amenities including a 350-seat buffet and live entertainment. Empire is also working to develop a "Class III" Native American casino and resort on a site adjacent to the Raceway and other gaming and non-gaming resort projects in the Catskills region and other areas. ENERGY PARTNERS: Launches 8-3/4% Senior Notes Cash Offering ----------------------------------------------------------- Energy Partners Ltd. has commenced a cash tender offer to purchase any and all of its outstanding 8-3/4% Senior Notes due 2010, and related consent solicitation to amend the indenture. The Offer will expire on April 20, 2007, at 12:00 midnight, New York City time, unless extended or terminated by the company. The consent solicitation will expire on April 9, 2007, at 5:00 p.m., New York City time. After the Consent Payment Deadlines, tendered Notes will not be withdrawn and revoked. The company said that valid tendered notes will be calculated on the present value of the sum of $1,043.75, and interest payments through Aug. 1, 2007. The company is soliciting consents to proposed amendments to the indenture governing the notes that will eliminate substantially all restrictive covenants and events of default in the indenture. The company is also offering consent payment of $300 per $1,000 principal amount of Notes to holders who validly tender their notes and deliver their consents before the Consent Payment Deadline. The Offer is subject to waiver of certain conditions, including the closing of the company's equity self-tender offer, the consummation of the requisite financing to purchase the notes, receipt of consents from holders representing a majority in principal amount of the outstanding Notes, and customary conditions. About Energy Partners Ltd. Headquartered in New Orleans, La., Energy Partners Ltd. (NYSE: EPL) -- http://www.eplweb.com/-- is an independent oil and natural gas exploration and production company. Founded in 1998, the company's operations are focused along the U. S. Gulf Coast, both onshore in south Louisiana and offshore in the Gulf of Mexico. * * * As reported in the Troubled Company Reporter on Mar. 14, 2007, Moody's Investors Service downgraded Energy Partners, Ltd.'s Corporate Family Rating to B3 from B2 and its Probability of Default Rating to B3 from B2. EVERGREEN ESTATES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Evergreen Estates LDHALP 19201 Votrobeck Detroit, MI 48219-1636 Bankruptcy Case No.: 07-46014 Chapter 11 Petition Date: March 28, 2007 Court: Eastern District of Michigan (Detroit) Debtor's Counsel: Wallace M. Handler, Esq. Debra B. Pevos, Esq. Sullivan Ward Asher & Patton, P.C. 25800 Northwestern Highway, Suite 1000 Southfield, MI 48075 Tel: (248) 746-0700 Fax: (248) 746-2760 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Board of Water Commission $77,806 P.O. Box 32711 Detroit, MI 48232 Vern Kirk Painting $64,210 18310 Cherrylawn Detroit, MI 48221-1059 Racon Enterprises $41,946 P.O. Box 700924 Plymouth, MI 48170-0956 Private Sector Investigations $30,813 Management Systems, Inc. $19,980 Treas, Detroit Fire Department $19,630 Mahoning Security Company $19,608 Rockdale Facilities Management $6,095 Republic Waste Services $5,601 Wilmar $5,445 DTE Energy $3,967 City of Detroit Building & Safety $3,885 Haig's Sales & Service $3,180 Rontgrow, Inc. $2,676 Fairlane Landscaping & Lawn $2,545 Packaged Odd Jobs $2,435 DTE Energy $2,384 Pat's Landscaping $2,031 Detroit Housing Commission $1,745 Midwest Carpet/Property Maintenance $1,502 FALCON AIR: Court Confirms Second Amended Chapter 11 Plan --------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, Miami Division, approved the Disclosure Statement and confirmed the Second Amended Chapter 11 Plan filed by SkyValue Airlines Inc. and Kenneth A. Welt, the chapter 11 trustee for Falcon Air Express, Inc. Mr. Welt is appointed as the Disbursing Agent. The Court ordered Mr. Welt to submit a final report on or before May 7, 2007. The Chapter 11 Trustee and SkyValue entered into a Stock Issuance and Plan Funding Agreement, wherein, at closing, SkyValue will pay the estate $3.8 million and the Trustee will issue 100% of the capital stock of Reorganized Falcon Air to SkyValue. SkyValue will own and control Reorganized Falcon Air. Assets that will not vest in Reorganized Falcon Air will be transferred to a liquidating trust. Treatment of Claims Under the Second Amended Plan, allowed administrative claims, ordinary course liabilities, professional claims, U.S. Trustee fees, priority tax claims, priority non-tax claims, secured claim held by the Defense Finance and Accounting Service, secured claim held by the United States Department of Agriculture, security deposit claims, secured financing claims, and other secured claims will be paid in full. The U.S. Department of Justice, on behalf of holder of the DOJ Trust Fund Claims, will (i) receive a portion of the distribution payable to the Internal Revenue Service, (ii) retain recovery rights, and (iii) hold an allowed general unsecured claim for the outstanding balance of the Allowed DOJ Trust Fund Claims. JetGlobal LLC will receive $300,000 on account of its alleged Secured DIP Financing Claim. Holders of Allowed General Unsecured Claims will receive a pro rata distribution from 90% of the net proceeds of the liquidation of the Liquidating Trust Assets. Holders of equity interests will receive nothing under the Plan. A full-text copy of the Second Amended Plan is available for free at http://ResearchArchives.com/t/s?1c53 About Falcon Air Headquartered in Miami, Florida, Falcon Air Express Inc. -- http://www.falconairexpress.net/-- is a small and low-cost airline company that provides charter service and renders foreign and U.S. carriers sub-services on schedules routes. The Debtor and its affiliate, MAJEL Aircraft Leasing Corp., filed for chapter 11 protection on May 10, 2006 (Bankr. S.D. Fla. Case Nos. 06-11877 & 06-11878). Brian G. Rich, Esq., at Berger Singerman, P.A., represents the Debtors in their restructuring efforts. Peter D. Russin, Esq., and Michael S. Budwick, Esq., at Meland Russin & Budwick, P.A., represent the Official Committee of Unsecured Creditors. On June 26, 2006, Kenneth A. Welt was appointed as the Debtor's Chapter 11 Trustee. Ariel Rodriguez, Esq., and Frank P. Terzo, Esq., at Katz Barron Squitero Faust, represent the Chapter 11 Trustee. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. FINLAY FINE: Moody's Junks Rating on $200 Million Senior Notes -------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of Finlay Fine Jewelry Corporation to B3 and the company's senior unsecured notes rating to Caa1 with a negative rating outlook. The downgrade is prompted by the erosion in the company's credit metrics as a result of several negative business pressures: * lower than expected Holiday sales, * additional host door closings, and * weaker margin performance. In addition, the downgrade reflects the modest erosion in liquidity as a result of increased borrowings under its revolving credit facility to finance the termination of its leased gold consignment program. These ratings are downgraded: * Corporate family rating to B3 from B2; * Probability of default rating to B3 from B2; and * $200 million senior unsecured notes to Caa1, LGD5, 76% from B3, LGD5, 74%. The company's poor operating performance was driven by an erosion in both sales and margins. Sales have eroded due to the discontinued host doors and they were also lower than expected due to disappointing performance in Holiday 2006 at the 236 former May doors because of lower promotional activity under Federated's ownership. During 2006, the company reported additional door closings at both Belk and Parisian. In addition, operating margins declined as a result of higher gold costs, higher LIFO charges, and lower vendor concessions. As reported EBIT and EBIT margin declined to $12 million and 1.6% for the fiscal year ended Feb. 3, 2007, from $51 million and 5% for the fiscal year ended Jan. 28, 2006. As a result, EBIT/Interest Expense fell to 0.8x for the fiscal year ended Feb. 3, 2007, from 1.34x for the fiscal year ended Jan. 28, 2006, and Debt/EBITDA rose to 8.2x from 6.4x over the corresponding period. The B3 corporate family rating reflects the company's very weak credit metrics, its very thin profitability, and its limited ability to regain the revenues lost from the discontinued host doors at Federated, Belk, and Parisian. The rating is also constrained by the company's significant concentration with Federated as well as by its continued vulnerability to changes in its department store hosts' strategies toward leasing versus self-operated jewelry departments. While the company has taken steps to diversify its revenue stream by acquiring two small specialty jewelry retail chains, nearly 85% of its revenue is generated from its leased jewelry departments located within its department store hosts. The corporate family rating considers the company's small scale with annual revenues from continuing operations of approximately $762 million and its very high seasonality with a large portion of its revenue and the majority of its cash from operations being generated during the fourth quarter Holiday selling season. Balancing out these weaknesses is the company's still adequate liquidity as provided by its $225 million asset based revolver; under which its one financial covenant is only tested when availability falls below certain thresholds. In addition the rating is supported by the company's national scale and its dominant position as the largest operator of leased jewelry departments in department stores. The negative outlook reflects Moody's expectation that the company will maintain very weak credit metrics as operating income and free cash flow generation will likely be constrained over the intermediate term given its current business pressures and the limited opportunities to regain the lost revenue from the closed doors at Federated, Belk, and Parisian. Ratings could be downgraded should the company's business model come under additional pressure that causes further weakening of credit metrics, should liquidity deteriorate, or should the company be unable to achieve break even free cash flow generation. The rating on the senior unsecured notes reflects both the overall probability of default of the company, to which Moody's assigns a PDR of B3, and a loss given default of LGD 5. The Caa1 rating of the senior unsecured notes reflects its junior position in the capital structure behind the $225 million senior secured asset based revolving credit facility, full guarantees of existing and future domestic subsidiaries, and the senior notes size and scale within the capital structure. Finlay Fine Jewelry Corporation, headquartered in New York City, operates 720 leased jewelry departments in major retailers as well as 38 Carlyle and Congress Jewelers specialty jewelry stores. For the year ended Feb. 3, 2007, revenues from continuing operations were nearly $762 million. FISHER COMMUNICATIONS: Earns $16.9 Million in 2006 Fourth Quarter ----------------------------------------------------------------- Fisher Communications Inc. reported net income of $16.9 million on revenue of $44.7 million for the fourth quarter ended Dec. 31, 2006, compared with net income of $1.9 million on revenue of $36.3 million for the fourth quarter of 2005. Political advertising contributed to the revenue increase as well as improved local advertising initiatives for both the English and Spanish language stations. Fourth quarter income from operations increased to $12.1 million from a loss of $228,000 in the same quarter of 2005. Year to date income from operations increased to $19 million from a loss of $5.6 million in 2005. Fourth quarter 2005 selling, general and administrative expenses include a $4.3 million non-cash charge to third-party agency commissions. The non-cash contract termination charge was a result of Fisher's decision in December 2005 to change its national advertising sales agency for television operations. The termination amount will be amortized over the five-year term of the agreements with the successor agency as a decrease to agency expense. During the fourth quarter of 2006, the company closed on the sale of 18 out of 24 small-market radio stations located in Montana and Eastern Washington for $26.1 million. The remaining six stations were excluded from the original sale in order to secure FCC approval, but continue to be held for sale. The operating results for this group of stations are reported as discontinued operations. In the fourth quarter 2006, the company finalized its purchase of two Oregon television stations for $19.3 million, affected through a like kind exchange of the sold radio properties mentioned above. This transaction was initially announced in December 2005 and included the purchase of two Idaho television stations that was finalized in May 2006. Income from discontinued operations in the fourth quarter of 2006 was $9.9 million, reflecting the after-tax sale gain of $10 million, compared to income from discontinued operations of $321,000 in the fourth quarter of 2005. During the fourth quarter of 2005, the company dissolved certain wholly owned inactive subsidiaries and recognized a corresponding tax benefit of $3.4 million. Fisher Communications Inc. reported net income of $16.8 million on revenue of $154.7 million for the year ended Dec. 31, 2006, compared with a net loss of $5.1 million on revenue of $137.1 million for the year ended Dec. 31, 2005. Income from continuing operations for the full year ended Dec. 31, 2006, was $6.3 million, compared to a loss from continuing operations for the year ended Dec. 31, 2005, of $6.1 million. Income from 2006 discontinued operations was $10.6 million, which includes an after-tax gain of $10 million, compared to income from 2005 discontinued operations of $1.1 million. "We are pleased with the outcome of a year filled with aggressive initiatives. The 2006 results and asset alignment have set the foundation for Fisher to build on an attractive business structure going forward," stated Colleen Brown, president and chief executive officer of Fisher Communications. At Dec. 31, 2006, the company's balance sheet showed $497.6 million in total assets, $258 million in total liabilities, and $239.6 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c51 Net cash provided by operating activities during 2006 was $24.7 million, compared to net cash provided by operations of $5.6 million in 2005. About Fisher Communications Fisher Communications Inc. (NASDAQ: FSCI) -- http://www.fsci.com/ -- is a Seattle-based communications company that owns or manages twelve full power and seven low power television stations and nine radio stations in the Pacific Northwest. The company owns and operates Fisher Pathways, a satellite and fiber transmission provider, and Fisher Plaza, a media, telecommunications, and data center facility located near downtown Seattle. * * * As reported in the Troubled Company Reporter on Oct. 3, 2006, Moody's Investors affirmed its B2 rating on Fisher Communications Inc.'s 8.625% senior notes due 2014. Additionally, Moody's assigned an LGD4 rating to the notes suggesting noteholders will experience a 56% loss in the event of a default. FONIX CORP: BroadRiver Acquires Assets of Fonix Telecom & LecStar ----------------------------------------------------------------- BroadRiver, Inc., has acquired substantially all of the assets of Fonix Corp.'s subsidiaries, LecStar Telecom Inc. and its affiliate Fonix Telecom Inc., pursuant to Section 363(b) of the U.S. Bankruptcy Code. The transaction was approved by the U.S. Bankruptcy Court for the District of Delaware. As part of the transaction, BroadRiver will receive all of LecStar and Fonix Telecom's intellectual property including its trademarks, domains and technology portfolio. BroadRiver is not assuming any of LecStar and Fonix Telecom's liabilities. LecStar Telecom, Inc. and Fonix Telecom Inc., both facilities- based telecom providers in Georgia, filed for bankruptcy protection on Oct. 2, 2006, pursuant to Chapter 7 under the United States Bankruptcy Code. "The acquisition of the LecStar and Fonix Telecom assets will help BroadRiver accelerate our deployment of a new business class, SIP-based Voice over Internet Protocol expanded service offering from our new 15,000 sq. ft. managed data center in Atlanta," Gregory P. McGraw, President & Chief Executive Officer of BroadRiver, Inc., said. "These newly acquired technology assets will also provide greater redundancy and bundled service capabilities already built into our network infrastructure for our customers throughout the Southeast. Consistent with our growth strategy, we will continue to aggressively pursue expansion opportunities locally and through acquisitions regionally." Based in Salt Lake City, Utah, Fonix Corp. is a communications and technology company that provides integrated telecommunications services through Fonix Telecom, Inc., LecStar Telecom, Inc. and value-added speech technologies through Fonix Speech, Inc. FORREST HILL: Judge Michael Dismisses Chapter 11 Case ------------------------------------------------------ The Hon. Terrence L. Michael of the U.S. Bankruptcy Court for the Eastern District of Oklahoma dismissed the chapter 11 case of Forrest Hill Funeral Home & Memorial Park - East, LLC, on March 26, 2007. The motion to dismiss was requested by the Office of the Attorney General for the State of Tennessee on behalf of the Tennessee Department of Commerce & Insurance - Burial Services Division. The attorney general had asked that in the alternative, the Debtor's case should be transferred to the U.S. Bankruptcy Court for the Western District of Tennessee. The attorney general contended that there is already a state court action pending which has been hindered due the filing of the bankruptcy. The attorney general said that the Debtor and its creditors would fare better in a state court citing that: * due to the specialized nature of the cemetery business and the regulation thereof, the state court is more economically suited and equipped to efficiently deal with this specific Debtor, given that the mechanics are already in motion; * the State of Tennessee has already begun supervising the operation and management of the Debtor; * the foundation and framing are complete in the state court and the receivership is waiting in the wings; and * the action in state court is a civil proceeding that was brought by an agency of the state to enforce its regulations governing the operation of a funeral home and three cemeteries that are located withing its borders. State Court Action On Jan. 8, 2007, the Commissioner of the Tennessee Department of Commerce & Insurance and William L. Gibbons, District Attorney General of the 30th Judicial District of Tennessee, filed a verified complaint in the Chancery Court for Shelby County, Tennessee, seeking a Temporary Restraining Order protecting the assets and records of Forest Hill. In order to protect the ongoing operations of the cemetery company and funeral homes, to protect the trust funds from further waste and the pre-need clients from further loss, Tennessee also sought the establishment of a receivership and the appointment of a receiver for Forest Hill. The Chancery Court entered a Temporary Restraining Order on Jan. 8, 2007 and set a hearing on the Motion for Appointment of Receiver and Application for Temporary Injunction on Jan. 23, 2007. The TRO was amended twice, on January 10 and January 18, by Agreed Order to enable the cemeteries and funeral homes to continue in operation. Undisclosed to the State of Tennessee during the agreed order negotiations, on January 15, Clayton Smart and Stephen Smith executed the "Resolution of the Members of Forrest Hills, LLC" appointing Bill Koehler as the sole manager and chief reorganization officer of Forest Hill. The document further resolved that the members of Forest Hill, Messrs. Smart and Smith, would not "henceforth take any action to interfere with Bill Koehler's exclusive domination and control of the company." On or around January 17, Stephen Smith approached Armstrong Bank seeking a cashier's check issued to Smith and Clayton Smart for all the funds held in that bank. The hearing on the Chancery Court matters was set for 10:00 a.m. on Jan. 23, 2007 in the Chancery Court. On the afternoon of Jan. 22, 2007, the Debtor filed its voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. About Forrest Hill Based in Tulsa, Okla., Forrest Hill Funeral Home & Memorial Park - East, LLC, operates funeral homes. The company consists of three separate cemeteries, three funeral homes and three mausoleums located in Memphis, Tennessee. The three locations are Forest Hill Funeral Home & Memorial Park - East, Forest Hill Funeral Home and Memorial Park - Midtown, and Forest Hill Funeral Home and Memorial Park - South. The company filed for chapter 11 protection on Jan. 22, 2007 (Bankr. E.D. Okla. Case No. 07-870056). When the Debtor filed for protection from its creditors, it listed estimated assets between $1 million and $100 million. The Debtor's exclusive period to file a chapter 11 plan of reorganization expires on May 22, 2007. FREEPORT MCMORAN: Moody's Lifts $6 Bil. Sr. Notes' Rating to Ba3 ---------------------------------------------------------------- Moody's Investors Service upgraded Freeport-McMoRan Copper & Gold Inc.'s corporate family rating to Ba2 from Ba3 and undertook a number of related rating actions: * upgraded to Baa2 from Baa3 the senior secured rating on Freeport's $500 million secured revolver; * upgraded to Baa3 from Ba2 the senior secured ratings on each of Freeport's $1 billion secured revolver, $2.5 billion secured Term Loan A, $7.5 billion secured Term Loan B, and each of Freeport's existing 6.875%, 10.125% and 7.20% senior secured notes; and * upgraded to Ba3 from B2 Freeport's $6 billion senior unsecured notes. Moody's also upgraded to Ba2 from B1 the ratings on Phelps Dodge's secured Cyprus Amax notes and on Phelps Dodge's other existing notes. The rating actions are based on Freeport's pending issuance of approximately $2.5 billion of common equity and $2.5 billion of mandatorily convertible preferred stock and a potential overallotment, the proceeds of which will be used to reduce Term Loans A and B. In considering Freeport's capital structure, Moody's treats the mandatorily convertible preferreds as equity. The ratings reflect the overall probability of default of Freeport, to which Moody's assigns a PDR of Ba2. The rating outlooks for Freeport, Phelps Dodge and Cyprus Amax are stable. The Ba2 corporate family rating reflects Freeport's high debt level of approximately $13 billion and what Moody's believes will be a protracted time frame for debt reduction in the face of softening metals prices and continued high cost challenges. The rating also considers the high concentration in copper and resultant variability in earnings and cash flow, significant capital expenditures, and a high level of reliance on the Grasberg mine in Indonesia. The rating also reflects the cultural challenges inherent in the acquisition of the larger Phelps Dodge by Freeport, and the execution and political risk of Phelps Dodge's development project in the Congo. The Ba2 rating favorably considers the company's leading positions in copper and molybdenum, a significant amount of gold production, the low cost, long-life reserves at PT-FI, and improved operating and political diversity. These are the rating actions: * Freeport-McMoRan Copper & Gold Inc. -- Corporate Family Rating, to Ba2 from Ba3 -- Probability of Default Rating; to Ba2 from Ba3 -- $0.5 billion Senior Secured Revolving Credit facility, to Baa2, LGD1, 2% from Baa3 -- $1.0 billion Senior Secured Revolving Credit Facility, to Baa3, LGD2, 22% from Ba2 -- $2.5 billion Senior Secured Term Loan A, to Baa3, LGD2, 22%, from Ba2 -- $7.5 billion Senior Secured Term Loan B, to Baa3, LGD2, 22%, from Ba2 -- $340 million 6.875% Senior Secured Notes due 2014, to Baa3, LGD2, 22%, from Ba2 -- $272 million 10.125% Senior Secured Notes due 2010, to Baa3, LGD2, 22%, from Ba2 -- $0.2 million 7.20% Senior Secured Notes due 2026, to Baa3, LGD2, 22%, from Ba2 -- Senior Unsecured Notes: to Ba3, LGD5, 83%, from B2 * Cyprus Amax Minerals Company -- $60.1 million 7.375% Senior Notes due 2007, to Ba2, LGD3, 48%, from B1 * Phelps Dodge Corporation -- $107.9 million 8.75% Senior Notes due 2011, to Ba2, LGD3, 48%, from B1 -- $115 million 7.125% Senior Notes due 2027, to Ba2, LGD3, 48%, from B1 -- $150 million 6.125% Senior Notes due 2034, to Ba2, LGD3, 48%, from B1 -- $193.8 million 9.50% Senior Notes due 2031, to Ba2, LGD3, 48%, from B1 Moody's last rating action on Freeport was to affirm its Ba3 corporate family rating in February 2007 in connection with Freeport's acquisition of Phelps Dodge. Freeport-McMoRan Copper & Gold Inc. is a Phoenix based producer of copper, gold and molybdenum and had revenue in 2006 of $5.8 billion. GETTY IMAGES: New Debt Cues S&P to Retain Developing Watch ---------------------------------------------------------- Standard & Poor's Ratings Services reported that the ratings on Getty Images Inc., including the 'B+' corporate credit rating, remain on CreditWatch with developing implications, following the company's report that it had obtained a $350 million revolving credit facility. The ratings were placed on CreditWatch on Dec. 4, 2006, after the company reported that it had received notices from bondholders that its delayed third-quarter SEC Form 10-Q filing constituted an event of default. Developing implications indicate the possibility of upward or downward movement in the ratings. Getty could use borrowings under the facility to acquire MediaVast Inc. or to fund its convertible bond obligation should these bonds be accelerated. Separately, the cure period for the company to resolve its alleged event of default with its bondholders has passed; the company's bondholders may demand immediate payment of the principal and any accrued interest of the convertible notes at any time. The new facility gives Standard & Poor's Ratings Services some comfort that bank lenders are willing to support the company's growth plans and provide the company with additional liquidity despite the delayed filing. "We will monitor the situation closely," said Standard & Poor's credit analyst Tulip Lim. "If the filing is delayed further, we could lower the rating again. If the company becomes current with its required quarterly and annual filings, we will reassess the company for an upgrade." GLOBAL HOME: Court Approves DIP Financing Agreement Amendments -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved amendments to a debtor-in-possession financing agreement between Global Home Products LLC, its debtor-affiliates and Wachovia Bank, N.A., as agent for the lenders, dated May 4, 2006. The Debtors related to the Court that under a Third Ratification Amendment, the Termination Date of Financing Agreement will be extended to April 2, 2007. The Debtors also submit that the calculation of a Loan Extension and Amendment Fee of $250,000 is reasonable under the circumstances where the lenders' over advance is increased from the contemplated $5,000,000 amount under the First Ratification Amendment to potentially $10,000,000 under the Third Ratification Amendment. The Debtors tells the Court that they have an immediate need to continue their use of postpetition financing in order to permit the orderly continuation of their operations, to minimize the disruption of their operations, and to manage, preserve and permit the sale of assets of the their estates maximizing the recovery of all estate creditors. A full-text copy of the Ratification and Amendment Agreement and the Loan and Security Agreement is available for free at: http://ResearchArchives.com/t/s?1c4d Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on April 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at Lowenstein Sandler, P.C., and David M. Fournier, Esq., at Pepper Hamilton LLP represent the Official Committee of Unsecured Creditors. Huron Consulting Group LLC gives financial advice to the Committee. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and estimated debts of more than $100 million. GLOBAL HOME: Can Use Madeleine's Cash Collateral Until April 2 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Global Home Products LLC and its debtor-affiliates authority to continue using the cash collateral securing repayment of their obligations to Madeleine LLC until April 2, 2007. The Debtors' authority to use the cash collateral expired on Feb. 28, 2007. The Debtors will use the funds to meet payroll and other operating expenses and to maintain vendor support. Madeleine is a creditor holding approximately $200,000,000 in secured claims. As adequate protection, the Debtors grant Madeleine a valid, perfected and enforceable lien upon all of their assets and superpriority administrative claim over any and all administrative expenses. A full-text copy of the Budget is available for free at: http://ResearchArchives.com/t/s?1c4a Headquartered in Westerville, Ohio, Global Home Products, LLC -- http://www.anchorhocking.com/and http://www.burnesgroup.com/ -- sells houseware and home products and manufactures high quality glass products for consumers and the food services industry. The company also designs and markets photo frames, photo albums and related home decor products. The company and 16 of its affiliates, including Burnes Puerto Rico, Inc., and Mirro Puerto Rico, Inc., filed for Chapter 11 protection on April 10, 2006 (Bankr. D. Del. Case No. 06-10340). Laura Davis Jones, Esq., Bruce Grohsgal, Esq., James E. O'Neill, Esq., and Sandra G.M. Selzer, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub LLP, represent the Debtors. Bruce Buechler, Esq., at Lowenstein Sandler, P.C., and David M. Fournier, Esq., at Pepper Hamilton LLP represent the Official Committee of Unsecured Creditors. Huron Consulting Group LLC gives financial advice to the Committee. When the company filed for protection from their creditors, they estimated assets between $50 million and $100 million and estimated debts of more than $100 million. GMAC COMMERCIAL: Moody's Affirms Low-B Ratings on 6 Cert. Classes ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of three classes and affirmed the ratings of 17 classes of GMAC Commercial Mortgage Securities, Inc., Commercial Mortgage Pass-Through Certificates, Series 2004-C2: -- Class A-1, $35,408,774, Fixed, affirmed at Aaa -- Class A-1A, $103,799,927, Fixed, affirmed at Aaa -- Class A-2, $104,953,000, Fixed, affirmed at Aaa -- Class A-3, $86,536,000, Fixed, affirmed at Aaa -- Class A-4, $428,386,000, WAC Cap, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class B, $25,678,000, WAC Cap, upgraded to Aa1 from Aa2 -- Class C, $10,504,000, WAC Cap, upgraded to Aa2 from Aa3 -- Class D, $18,675,000, WAC Cap, upgraded to A1 from A2 -- Class E, $12,839,000, WAC Cap, affirmed at A3 -- Class F, $10,504,000, WAC Cap, affirmed at Baa1 -- Class G, $15,173,000, WAC Cap, affirmed at Baa2 -- Class H, $14,006,000, WAC, affirmed at Baa3 -- Class J, $5,836,000, WAC Cap, affirmed at Ba1 -- Class K, $5,836,000, WAC Cap, affirmed at Ba2 -- Class L, $4,669,000, WAC Cap, affirmed at Ba3 -- Class M, $2,334,000, WAC Cap, affirmed at B1 -- Class N, $3,502,000, WAC Cap, affirmed at B2 -- Class O, $3,501,000, WAC Cap, affirmed at B3 As of the March 12, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 3.1% to $905.0 million from $933.7 million at securitization. The Certificates are collateralized by 74 mortgage loans ranging in size from less than 1.0% to 9.3% of the pool, with the top 10 loans representing 54.8% of the pool. The pool includes three shadow rated loans, representing 23.7% of the pool. Four loans, representing 11.6% of the pool, have defeased and are secured by U.S. Government securities. There have been no losses since securitization. Currently there is one loan, representing less than 1.0% of the pool, in special servicing. Moody's is estimating a loss of approximately $3.1 million for this specially serviced loan. Eleven loans, representing 10.3% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2005 and partial-year 2006 operating results for approximately 88.1% and 77.9%, respectively, of the pool. Moody's loan to value ratio for the conduit component is 94.2%, compared to 96.4% at securitization. Moody's is upgrading Classes B, C and D due to improved overall pool performance, defeasance and increased credit support. The largest shadow rated loan is the 111 Eighth Avenue Loan at $84.5 million (9.3%), which represents a 19.0% participation interest in a $445.9 million first mortgage loan. The loan is secured by a 2.9 million square foot office and telecom building located in the Chelsea submarket of New York City. The property was 99.2% leased as of November 2006, compared to 90.0% at securitization. Major tenants include: * Google (11.1% NRA; lease expiration February 2021), * Sprint (7.3% NRA; lease expiration December 2014), and * CCH Legal Information (6.9% NRA; lease expirations in July 2015 and February 2019). The property is also encumbered by a B Note, which is held outside the trust. The loan sponsors are Jamestown and the New York Common Retirement Fund. Moody's current shadow rating is Baa2, the same as at securitization. The second shadow rated loan is the Jersey Gardens Loan at $81.4 million (9.0%), which represents a 51.5% participation interest in a $158.3 million first mortgage loan. The loan is secured by the borrower's interest in a 1.3 million square foot outlet mall located in Elizabeth, New Jersey. The largest tenants are: * Loews Theatres (8.5% GLA; lease expiration December 2020), * Burlington Coat Factory (6.2% GLA; lease expiration January 2020), and * Filene's Basement/DSW (4.6% GLA; lease expiration October 2011). The property was 99.7% occupied as of December 2006, compared to 91.8% at securitization. Financial performance has improved due to increased rental revenues and loan amortization. The loan sponsor is Glimcher Realty Trust. Moody's current shadow rating is Baa1, compared to Baa3 at securitization. The third largest shadow rated loan is the 731 Lexington Avenue Loan at $48.5 million (5.4%), which represents a 15.9% participation interest in the senior portion of a first mortgage loan totaling $304.8 million. The loan is secured by a 694,000 square foot office condominium situated within a 1.4 million square foot complex in midtown Manhattan. Built in 2005, the condominium is 100.0% leased to Bloomberg, LP through 2028. The property is also encumbered by $86.0 million of subordinate debt that is held outside of the trust. Moody's current shadow rating is A3, the same as at securitization. The top three conduit loans represent 17.8% of the outstanding pool balance. The largest conduit loan is the Parmatown Shopping Center Loan at $67.0 million (7.4%), which is secured by the borrower's interest in a 1.2 million square foot regional mall located approximately 10 miles south of downtown Cleveland in Parma, Ohio. The center is anchored by Macy's, J.C. Penney and Wal-Mart. The center was 90.1% occupied as of October 2006, essentially the same as at securitization. Moody's LTV is 92.4%, compared to 93.5% at securitization. The second largest conduit loan is the Military Circle Mall Loan at $59.3 million (6.6%), which is secured by the borrower's interest in a 942,700 square foot regional mall located in Norfolk, Virginia. The property is anchored by J.C. Penney, Macy's and Sears. The center was 95.2% occupied as of December 2006, essentially the same as at securitization. Financial performance has been impacted by increased operating expenses. Moody's LTV is 86.2%, compared to 79.7% at securitization. The third largest conduit loan is the Janns Marketplace Loan at $34.2 million (3.8%), which is secured by a 423,000 square foot retail center located approximately 42 miles northwest of downtown Los Angeles in Thousand Oaks, California. The largest tenants include Mervyn's, Toys"R"Us and Linen-n-Things. The center was 90.4% occupied as of December 2006, compared to 95.9% at securitization. Financial performance has improved since securitization due to increased rental revenues and loan amortization. Moody's LTV is 88.7%, compared to 100.7% at securitization. GOL INTELLIGENT: To Acquire Varig S.A. Shares for $275 Million -------------------------------------------------------------- GOL Intelligent Airlines aka GOL Linhas Aereas Inteligentes, controlling shareholder of GOL Transportes Aereos S.A. and Brazil's low-cost, low-fare airline, has agreed with VarigLog and Volo, the controlling shareholders of VRG Linhas Aereas S.A. and airline that operates the Varig S.A. brand, to acquire the total share capital of VRG. The total consideration offered for the shares of VRG is approximately $275 million, consisting of $98 million of cash, and approximately 6.1 million non-voting shares issued by GOL, with various sale restrictions for up to 30 months. With the assumption of BRL100 million ($45 million) of debentures, the total aggregate value of the transaction is approximately $320 million. This closing is conditioned on obtaining all the customary regulatory approvals from the authorities, including the Brazilian Antitrust Agency and the National Civil Aviation Agency; GOL will keep investors informed of approvals. VRG will be acquired by GTI S.A., a wholly owned subsidiary of GOL Intelligent Airlines. The companies will keep separate financials and will be managed according to best practices in corporate governance and internal controls. VRG will operate with its own VARIG brand, differentiated services, incorporating the low-cost business model from GOL, and independent administration, separate from GOL's operating subsidiary GOL Transportes Aereos S.A, which will continue to invest in its unique low-cost operating model. GOL and VRG will be managed as independent companies with focused business models. GOL will maintain focus on its low-cost, low- fare business model, with a single-class of service in the Brazilian domestic market and South America. The company maintains its commitment to popularizing air travel, making low- fare flights more accessible to a larger portion of the population. VARIG will offer differentiated services, with direct flights and a mileage program, which currently serves more than 5 million clients. On long-haul international routes, VARIG will offer two service classes: coach and business. In the domestic market, VARIG will operate with a single-class of service, prioritizing flights between the main economic centers of Brazil, with principal bases of operation at Congonhas, Guarulhos, Santos Dumont and Galeao airports. Both companies will explore synergies resulting from gains in efficiency, quality and competitiveness. The complementary networks of the two operating subsidiaries will permit wide feeder and distribution of VARIG's international flights, offering passengers arriving or departing from Brazil numerous and flexible connection options. The combined strength of GOL and VARIG will establish a Brazilian airline group with a growing passenger base of over 20 million annually, capable of competing on the South American and world stages against other large international airlines. GOL and VARIG together, through higher efficiencies generated to the market and consumers, will be ready to assume leadership of domestic and international flights among Brazilian carriers. The combination of these two companies will provide the ability to increase the number of seats offered at low fares and will stimulate growth in air travel. The acquisition represents the best opportunity for operations under the VARIG brand to remain a Brazilian-managed and controlled airline, fully focused on the strategic objectives of growth, job creation, and competitiveness, while remaining a strong Brazilian flag carrier. GOL believes there are opportunities to maximize the purchasing power of the two subsidiaries to further reduce operating costs, increase efficiencies, continue to innovate the Brazilian market for air travel, and pass on the benefits of synergies between the companies to the traveling public. VARIG will incorporate modern concepts of efficient administration, asset optimization, intensive use of technology, efficient and economic fleet, transparency, innovation and employee motivation, which will make the company competitive, profitable, financially sound, and capable of sustained growth. VRG's fleet, currently operating with 17 aircraft, will be increased to 34 Boeing aircraft composed of a simplified fleet of 20 737 and 14 767 aircraft. This fleet will permit VARIG to serve more than ten international destinations in Europe, North America, and South America. "GOL intends to provide VARIG with the necessary ambition, management expertise, financial strength and cost base to compete with South American and world competitors," Constantino de Oliveira Junior, GOL's Chief Executive Officer, said. "With this acquisition, Brazil will maintain an important flag in global aviation, the industry will benefit from an increase in jobs and demand will be better served. We are confident that throughout this acquisition GOL will continue its mission of popularizing air travel and consolidate its position as one of the leading low-cost carriers in the world. We will work so that our companies become the Brazilian carriers of choice for both domestic and international passengers." In summary, GOL will offer a financially secure future for VARIG through its strategy, which includes: * maintenance of the VARIG brand and the operation the two airlines separately; * improving the service offering under the VARIG brand, including the Smiles mileage program, and increasing the quantity of direct flights; * expanding service to routes not currently operated; * reducing VARIG's operating costs through improved efficiencies, superior purchasing power and lower overhead; * facilitating the expansion of the fleet operating the under the VARIG brand, by providing it with modern and efficient aircraft, low-cost leasing and financing facilities, and using purchasing power to negotiate lower costs; * improving the quality of the long-haul fleet operating the VARIG brand, and updating and innovating its long-haul product. VRG is a company based on the Isolated Productive Unit of VARIG, created in the Bankruptcy Recovery Plan of VARIG, Rio Sul and Nordeste and acquired by VarigLog in the Judicial Auction realized on July 7, 2006. Under the Brazilian Company Recovery Law of 2005, the UPI was created and sold fully free of liabilities of any nature (civil, labor, tax, pension, etc.), and upon completion of the conditions established in the Auction Edital, so to assure payment to creditors and the continued existence of the Recovering Companies. With the acquisition, GOL fully assumes the obligation to assure that VRG completes, in the strictest terms, all of the terms of the Auction Edital, including: (a) honor the two debentures already issued in the value of BRL50 million each, with 10-year maturities, (b) the hiring of the services of the Varig Training Center with a minimum value of BRL1 million, and (c) the rental at market rates of some fixed assets from VARIG. About Varig Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in- possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In his capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. Volo do Brasil, which purchased VARIG's cargo unit, VARIG Logistica S.A., and partially controlled by U.S. investment fund MatlinPatterson Global Advisors, bought VARIG for $600 million in July 2006. About GOL Intelligent Airlines Based in Sao Paulo, Brazil, GOL Intelligent Airlines aka GOL Linhas Areas Inteligentes S.A. (NYSE: GOL and Bovespa: GOLL4) -- http://www.voegol.com.br-- through its subsidiary, GOL Transportes Aereos S.A., provides airline services in Brazil, Argentina, Bolivia, Uruguay, and Paraguay. The company's services include passenger, cargo, and charter services. As of March 20, 2006, Gol Linhas provided 440 daily flights to 49 destinations and operated a fleet of 45 Boeing 737 aircraft. The company was founded in 2001. * * * On March 7, 2007, Fitch Ratings assigned its BB+ rating to GOL Intelligent Airlines' senior unsecured debt. GOLDEN KNIGHT: Moody's Rates $13 Mil. Class E Junior Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Golden Knight II CLO, Ltd.: * Aaa to the $292,500,000 Class A First Priority Senior Floating Rate Notes Due 2019; * Aa2 to the $40,000,000 Class B Second Priority Senior Floating Rate Notes Due 2019; * A2 to the $18,250,000 Class C Third Priority Senior Subordinate Deferrable Interest Floating Rate Notes Due 2019; * Baa2 to the $14,000,000 Class D Fourth Priority Subordinate Deferrable Interest Floating Rate Notes Due 2019; and * Ba2 to the $13,000,000 Class E Fifth Priority Junior Subordinate Deferrable Interest Floating Rate Notes Due 2019. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. Lord, Abbett & Co. LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. GOODYEAR TIRE: Moody's Puts Low-B Ratings on $2.7 Billion Loans --------------------------------------------------------------- Moody's Investors Service affirmed Goodyear Tire & Rubber Company's Corporate Family Rating of B1 but raised the outlook to positive. In addition, a Ba1 rating was assigned to Goodyear's new $1.5 billion first lien revolving credit facility and a Ba2 rating was assigned to the company's new $1.2 billion second lien term loan. At the same time, a Ba1 rating was assigned to Goodyear Dunlop Tyres Europe's new first lien credit facilities for EUR505 million (approximately $650 million). The Speculative Grade Liquidity rating of SGL-2 was also affirmed . Amounts being refinanced are identical to current facilities, relative priorities are unchanged, but maturity profiles have been extended under improved terms. Accordingly, the composition of the company's capital structure and the impact on respective recovery expectations are essentially unchanged. Goodyear is amending, restating and extending the maturity of its $1.5 billion first lien revolving credit facility. The facility will have a maturity in April 2013 compared to the current 2010. The facility will continue as an asset backed arrangement with first liens over the parent's and its guaranteeing subsidiaries current assets, trademark and other intangibles, shareholdings in subsidiaries and certain other assets. Similarly, Goodyear is also amending and restating the terms of its $1.2 billion second lien term loan whose new maturity will be April 2014 compared to the current April 2010. The restated facility will have an option to include a Luxembourg or a Canadian subsidiary as borrowers under a Goodyear guarantee. The term loan will continue with a second priority lien over the collateral package pledged to the domestic revolving credit facility and up-streamed North American subsidiary guarantees. GDTE is also amending, restating and extending the maturities of its bank credit facilities. These currently consist of EUR350 million of revolving credit facilities and a term loan to its German subsidiary of EUR155 million. The new facilities will consist of a EUR350 million revolving credit facility available to GDTE and several of its subsidiaries and a separate EUR155 million revolving credit facility to a German subsidiary. The facilities continue with their respective first lien collateral packages and cross-guarantees as in the current arrangements. The new maturity will be April 2012. An unsecured guarantee from Goodyear will also remain in place. The B1 Corporate Family Rating recognizes strong scores for several factors in Moody's Automotive Supplier Methodology. These include the company's substantial scale, global brands with refreshed product offerings, leading market share, diversified geographic markets, lengthened debt maturities and continuing solid liquidity profile. Scores for those qualitative attributes would normally track to a higher Corporate Family rating. However, the B1 rating also considers Goodyear's substantial leverage, low EBIT returns and weak coverage ratios, which were affected by the recent strike in North America as well as un-recouped raw material costs and weak replacement tire demand in that region. Scores from these factors counter qualitative strengths and position the overall rating in the high B category. Nonetheless, debt levels should crest during 2007 and leverage measurements should begin to decline as savings are realized from an improved cost structure, rationalized manufacturing footprint, pricing actions, and ultimate recovery in unit demand in the critical North American tire market. The pending sale of its Engineered Products business for $1.475 billion could also provide substantial capacity for the company's pension contributions and potential contributions to a VEBA trust, which would address union retirement health care liabilities. "The change in outlook reflects several positive trends which should develop over the intermediate term" said Ed Wiest, VP and Senior Analyst at Moody's. "Among these are resumption of modest growth in replacement tire demand in select North American markets, improved cost structure and operating flexibility in the region following resolution of its labor contract, and higher global utilization rates in its manufacturing footprint over the next 12 months as rationalization efforts are completed." In addition, Goodyear should benefit from healthier margin realization upon pricing actions, introduction of new tire models, and moderation in raw material costs. The company may fund up to $1 billion into a VEBA structure for its post retirement obligations to hourly employees in the United States in 2007. Additionally, it is likely the peak in pension funding requirements will occur in 2007 with significant declines occurring in subsequent years. Accordingly, Moody's would expect Goodyear's debt burden to be lower by the end of the coming year. Stronger coverage ratios and free cash flow metrics should emerge in the second half of 2007. The Speculative Grade Liquidity rating of SGL-2 liquidity rating, designating good liquidity over the coming year, reflects significant internal and external resources as well as increased flexibility in financial covenants under the refinanced bank obligations. Although Goodyear will incur meaningful working capital requirements as production levels recover following the labor settlement in North America, and it may need to fund up to $1 billion into a VEBA for retirement health care liabilities for its USW employees as well as $700-$750 million of global pension contributions, the company finished 2006 with roughly $2.8 billion in un-restricted cash pro forma for repayments under its domestic and GDTE's German revolving credit facilities in early January. The report of an agreement to sell its Engineered Products business for $1.475 billion may also add substantial liquidity in the coming year. Upon closing of the new facilities, Goodyear would have roughly $1.0 billion of unused and available capacity under its domestic revolving credit facility and the majority of the European revolving credit facilities. Going forward, Goodyear will have improved covenant flexibility. The Ba1, LGD1, 4% rating assigned to the new first lien revolving credit facility at Goodyear incorporates the benefits of its first priority liens over substantial collateral as well as the sizable amount of liabilities junior to its claims. The Ba2, LGD2, 20% rating assigned to the new second lien term loan results from its second priority claims against the identical collateral package as well as the level of junior capital beneath it. The higher rating and improved recovery on the second lien facility compared to the current second lien term loan reflects a reassessment of its collateral position which, in turn, yielded a lower modeled deficiency claim. The Ba1, LGD1, 4% rating assigned to the European facilities of GDTE recognizes the benefits of liens over substantially all tangible and intangible assets in the borrowing and guaranteeing group of GDTE entities. Ratings assigned: * Goodyear Tire & Rubber Company -- $1.5 billion first lien revolving credit facility, Ba1, LGD1, 4% -- $1.2 billion second lien term loan, Ba2, LGD2, 20% * Goodyear Dunlop Tyres Europe B.V. and certain subsidiaries -- EUR505 million of first lien revolving credit facilities, Ba1, LGD1, 4% Ratings changed: * Goodyear Tire & Rubber Company -- Outlook, to positive from stable Ratings affirmed and applicable Loss Given Default Assessments: * Goodyear Tire & Rubber Company -- Corporate Family Rating, B1 -- Probability of Default, B1 -- third lien secured term loan, B2 with LGD assessment changed to LGD4, 59% from LGD4, 63% -- 11% senior secured notes, B2 with LGD assessment changed to LGD4, 59% from LGD4, 63% -- floating rate senior secured notes, B2 with LGD assessment changed to LGD4, 59% from LGD4, 63% -- 9% senior notes, B2 with LGD assessment changed to LGD4, 59% from LGD4, 63% -- 8 5/8 % senior unsecured notes due 2011, B2 with LGD assessment changed to LGD4, 59% from LGD4, 63% -- floating rate unsecured note due 2009, B2 with LGD assessment changed to LGD4, 59% from LGD4, 63% -- 6 3/8% senior notes, B3, LGD6, 94% -- 7 6/7% senior notes, B3, LGD6, 94% -- 7% senior notes, B3, LGD6, 94% -- senior unsecured convertible notes, B3, LGD6, 94% Speculative Grade Liquidity rating, SGL-2 The last rating action was on Jan. 10, 2007, at which time Goodyear and GDTE ratings were affirmed and the outlook was changed to stable from negative. Upon closing of the new facilities, ratings on Goodyear's existing first and second lien facilities will be withdrawn as will the ratings on GDTE's existing bank credit facilities. Goodyear Tire & Rubber Company, based in Akron, Ohio, is one of the world's largest tire companies with more than 90 facilities in 28 countries around the world. Products include tires, engineered rubber products, and chemicals. Revenues in 2006 were approximately $20.3 billion. GRACEWAY PHARMA: Moody's Junks Rating on Proposed $330 Mil. Debt ---------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating of Graceway Pharmaceuticals, LLC to B2 from B1. At the same time, Moody's assigned a Ba3 rating to Graceway's proposed new $600 million senior secured first lien facility and a Caa1 rating to its proposed new $330 million senior secured second lien facility. Moody's has not assigned a rating to Graceway's proposed new senior unsecured mezzanine term loan of $120 million. The rating outlook remains stable. The downgrade primarily reflects incremental financial risk not previously anticipated by Moody's. The recapitalization strategy also includes the retirement of Graceway's preferred stock units. At the conclusion of Graceway's recapitalization, Moody's anticipates withdrawing the ratings on Graceway's existing credit agreements. Graceway's B2 Corporate Family Rating reflects high financial leverage, significant product concentration risk, the company's reliance on life cycle management strategies, a potential near-term launch of a direct branded competitor to Aldara, and some anticipation of acquisitions to diversify and bolster its product portfolio. According to the Moody's Global Pharmaceutical Rating Methodology, Graceway has below-average scores in size and scale, product concentration risk, and cash coverage of debt. The stable rating outlook reflects Moody's expectation that Graceway's overhead cost structure has been reasonably estimated, that positive sales trends will continue for its core products, and that any incremental debt associated with product acquisitions will be offset by positive earnings and cash flow from the target. Ratings downgraded: -- Corporate Family Rating to B2 from B1 -- Probability of Default Rating to B2 from B1 Ratings assigned: -- Ba3, LGD2, 27% first lien senior secured Term Loan of $600 million due 2012 -- Ba3, LGD2, 27% first lien senior secured revolving credit facility of $30 million due 2012 -- Caa1 second lien senior secured credit facility of $330 million due 2013, LGD5, 78% Ratings expected to be withdrawn at the conclusion of the recapitalization: -- Ba3, LGD3, 35% first lien senior secured Term Loan of $500 million due 2011 -- Ba3, LGD3, 35% first lien senior secured revolving credit facility of $30 million due 2011 -- B3 second lien senior secured Term Loan of $210 million due 2012, LGD5, 88% Headquartered in Bristol, Tennessee, Graceway Pharmaceuticals, LLC is a specialty pharmaceutical company focused on the dermatology, respiratory, and women's health markets. GRACEWAY PHARMA: S&P Rates $330 Million Senior Loan at B- --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Graceway Pharmaceuticals LLC and revised its outlook on the company to negative from stable. Standard & Poor's also assigned Graceway's $630 million first-lien credit facility maturing 2012, consisting of a $30 million evolver and a $600 million term loan B, a 'BB-' senior secured debt rating and recovery rating of '1', indicating the expectation of full recovery of principal in the event of a payment default. The loan rating is rated one notch higher than the corporate credit rating. Graceway's $330 million senior secured second-lien term loan was assigned a 'B-' loan rating with a recovery rating of '4', indicating the expectation of marginal recovery of principal in the event of a payment default. "The rating actions reflect Graceway's use of proceeds from the new senior secured credit facility, as well as $120 million in new mezzanine debt, to refinance existing debt and fund a $300 million dividend to sponsors," said Standard & Poor's credit analyst Arthur Wong. "We believe that the company has exhibited a financial aggressiveness, highlighted by the funding of such a significant dividend so soon after the acquisition, that we did not factor into the original stable outlook. This is especially a concern given our expectations that Graceway will be acquisitive over the intermediate term," Mr. Wong continued. The ratings on Bristol, Tennessee-based specialty pharmaceutical company Graceway reflect the company's limited size, heavy reliance on one niche product and substantial debt leverage. These factors are partially offset by the company's expected solid free cash flows. The outlook is negative. The $300 million debt-financed dividend does not leave much cushion at the current ratings level for the company to conduct large product acquisitions. Standard & Poor's expects future product acquisitions will be funded with a large component of equity. In the meantime, Graceway will have to execute on its sales plan. With EBITDA margins of over 50%, a sales shortfall may lead to significant negative swings in earnings and cash flows. The ratings will be lowered should debt to EBITDA surpass 7x due to a dropoff in EBITDA or significant increase in debt. The outlook will likely be revised to stable should Graceway execute on its sales plans and fund future large product acquisitions with a significant equity component. GREENWICH CAPITAL: Moody's Holds Ba1 Rating on Class N-HEI Certs. ----------------------------------------------------------------- Moody's Investors Service upgraded the rating of one class and affirmed the ratings of 14 classes of Greenwich Capital Commercial Funding Corp., Commercial Mortgage Pass-Through Certificates, Series 2005-FL3: -- Class A1, $110,127,974, Floating, affirmed at Aaa -- Class A2, $101,231,180, Floating, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class B, $14,299,000, Floating, affirmed at Aaa -- Class C, $16,221,000, Floating, upgraded to Aaa from Aa1 -- Class G-AON, $3,770,000, Floating, affirmed at A3 -- Class H-AON, $3,750,000, Floating, affirmed at Baa1 -- Class K-AON, $4,450,000, Floating, affirmed at Baa2 -- Class M-AON, $4,430,000, Floating, affirmed at Baa3 -- Class M-HJ, $3,300,000, Floating, affirmed at Baa3 -- Class H-LH, $5,904,000, Floating, affirmed at Baa1 -- Class K-LH, $3,946,500, Floating, affirmed at Baa2 -- Class M-LH, $3,969,500, Floating, affirmed at Baa3 -- Class M-HEI, $1,700,000, Floating, affirmed at Baa3 -- Class N-HEI, $1,093,926, Floating, affirmed at Ba1 The Certificates are collateralized by eight senior mortgage loan participations. As of the March 7, 2007, distribution date, the transaction's aggregate certificate balance has decreased by approximately 49.0% to $679.5 million from $1.3 billion at securitization as a result of the payoff of six loans initially in the pool. The remaining loans range in size from 2.5% to 30.1% of the pool. Moody's is upgrading Class C due to increased credit support from the loan payoffs as well as stable pool performance. The PDG Portfolio Loan at $104.8 million (30.1%) is supported by 12 anchored shopping centers containing approximately 1.6 million square feet of rentable area. Eleven of the centers are located in the Phoenix area while one is located in Tucson, Arizona. As of September 2006 occupancy was 86.9%, compared to 82.9% at securitization. The loan sponsors are repositioning and renovating the portfolio. Moody's current net cash flow and loan to value ratio are $15.2 million and 60.9%, respectively, the same as at securitization. Moody's current shadow rating is Baa3, the same as at securitization. The Aon Center Loan at $68.6 million (19.7%) is supported by a Class A office building located in the central business district of Los Angeles, California. Major tenants include AON Risk Services and Wells Fargo Bank, N.A. Occupancy as of December 2006 was 81.5%, compared to 78.0% at securitization. The loan sponsor is Broadway Real Estate Partners LLC. Moody's current net cash flow and LTV are $12.0 million and 48.5%, respectively, the same as at securitization. Moody's current shadow rating is A2, the same as at securitization. Non-pooled classes G-AON, H-AON, K-AON and M-AON are secured solely by the Aon Center Loan. The Hyatt Regency Jacksonville Loan at $50.0 million (14.4%) is supported by a 966-room full service hotel located in Jacksonville, Florida. The hotel is undergoing a $15.0 million renovation which has impaired performance in the short term but which should improve performance in the long term. Performance for calendar year 2006 has improved over calendar year 2005. The loan sponsors are Longwing Real Estate Ventures LLC and Oxford Lodging. Moody's current shadow rating is Baa2, the same as at securitization. Non-pooled Class M-HJ is secured solely by the Hyatt Regency Jacksonville Loan. The Carroll Gardens Loan at $40.7 million (11.7%) is supported by a 184-unit condominium conversion property located in the Carroll Gardens submarket of Brooklyn, New York. Thirty-three units have sold since securitization with an additional 10 units under contract. Unit sales have slowed considerably since securitization. The loan sponsors are Metropolitan Housing Partners, The Dermot Co. Inc. and Apollo Real Estate Advisors. Moody's current shadow rating is Ba3, compared to Baa3 at securitization. The Lowell Hotel Loan at $30.0 million (8.6%) is secured by a 70-room luxury hotel located in New York City. RevPAR and net cash flow for the first 11 months of 2006 has declined from the same period in 2005 although the property is currently undergoing a $6.0 million renovation. Moody's anticipates that performance will improve to expected levels after completion of the renovation. The loan sponsors are Nabil and Fouad Chartouni. Moody's current shadow rating is A3, the same as at securitization. Non-pooled Classes H-LH, K-LH and M-LH are secured solely by the Lowell Hotel Loan. The HEI Portfolio Loan at $23.7 million (6.8%) is secured by two full service hotels - the 233-room Renaissance Ft. Lauderdale and the 221-room Hilton Indianapolis. Collateral performance for calendar year 2006 met Moody's expectations. The loan sponsor is HEI Hospitality Fund. Moody's current shadow rating is Baa2, the same as at securitization. Non-pooled Classes M-HEI and N-HEI are secured solely by the HEI Portfolio Loan. The Azzurra 3 Loan at $8.7 million (2.5%) is supported by a 450-unit condominium conversion loan located in Marina del Ray, California. Renovation is complete and 355 units have been sold since securitization. An additional six units are under contract. The loan sponsor is Colony Capital LLC. Moody's current shadow rating is A3, compared to Baa3 at securitization. HEALTH FACILITIES: A.M. Best Says Financial Strength is Weak ------------------------------------------------------------ A.M. Best Co. has assigned a financial strength rating of C (Weak) and an issuer credit rating of "ccc" to Health Facilities Insurance Corporation, Ltd. of Hamilton, Bermuda. Concurrently, A.M. Best has affirmed the FSR of B (Fair) and assigned an ICR of "bb" to Campmed Casualty & Indemnity Company, Inc. of Maryland of Brunswick, Maryland, an affiliate of HFIC. The outlook for all ratings is stable. The ratings assigned to HFIC reflect the company's weak capitalization exhibited by its highly elevated underwriting leverage measures, significant risk tolerance (relative to capital) and limited business scope, which is solely dependent on CampMed as its sole source of revenue. HFIC acts solely as a reinsurer of CampMed and provides quota share coverage of 25% on a $500,000 limit. HFIC also has 29% participation on excess of loss coverage, the first layer being $500,000 excess, $500,000 with a $3 million annual reinsured limit on policies with $500,000 limits, and the second layer being $1 million excess, $1 million with a $2 million annual reinsured limit on policies with $1 million limits. As a reinsurer of CampMed, HFIC's operating results have been favorable. However, surplus generation has been minimized by the establishment of contingency reserves and return of capital to the parent holding company. HFIC's rating outlook assumes no material changes to the company's business strategy, operating earnings and capitalization. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. ITHAKA ACQUISITION: Going Concern Raised Due to Likely Liquidation ------------------------------------------------------------------ Goldstein, Golub, Kessler LLP raised substantial doubt about Ithaka Acquisition Corp.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditor pointed to the company's likely mandatory liquidation by Aug. 23, 2007, if a business combination is not consummated. Alsius Merger On Oct. 3, 2006, the company entered into an Agreement and Plan of Merger with Alsius Corp. and certain of Alsius' shareholders. On Oct. 2, 2006, the company formed a wholly owned subsidiary, Ithaka Sub Acquisition Corp., to effectuate the transactions contemplated by the Agreement. Alsius will be the surviving corporation in the Merger, becoming the company's wholly owned subsidiary. The company expects that merger will be consummated shortly after its stockholders' special meeting to approve the transaction. The date of this meeting is still to be determined but the company expects to hold it early in the second quarter of 2007. The company's Certificate of Incorporation, as amended, provides for mandatory liquidation of the company in the event that it does not consummate a Business Combination within 18 months from the date of the consummation of the Offering, or 24 months from the consummation of the Offering if certain extension criteria have been satisfied. 2006 Financials For the year ended Dec. 31, 2006, Ithaka Acquisition had a net income of $206,631 on zero revenue, as compared with a net income of $165,779 on zero revenue for the period from the company's inception on April 4, 2006, to Dec. 31, 2005. The company's balance sheet at Dec. 31, 2006, showed total assets of $49,757,373, total liabilities of $10,432,249, and total stockholders' equity of $39,325,124. About Alsius Corp. Alsius Corp. is a privately owned commercial-stage medical device company that develops, manufactures and sells products that control patient temperatures in hospital critical care settings. Alsius markets its products to acute-care hospitals and critical care physicians through its direct sales force in the U.S. and independent distributors in international markets. It has FDA clearance to market its products in the U.S. for fever control in certain neuro-intensive care patients and temperature management in cardiac and neurosurgery patients, and is exploring ways to obtain clearance for cardiac arrest. It has broader clearance to market its products in Europe, Canada and Australia than in the U.S., including clearance for cardiac arrest, and is in the process of obtaining clearances to sell its products in China, Japan and other Asian countries. About Ithaka Acquisition Located in Miami, Florida, Ithaka Acquisition Corp. (OTC BB: ITHK) -- http://www.ithakacorp.com/-- is a blank check company formed on April 4, 2005, to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business in the healthcare industry. JOCKS & JILLS: Case Summary & 142 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Jocks & Jills Restaurants, L.L.C. Suite 1500 400 Colony Square 1201 Peachtree Street Atlanta, GA 30361 Bankruptcy Case No.: 07-64355 Debtor-affiliates filing separate chapter 11 petitions on March 19, 2007: Entity Case No. ------ -------- Jocks & Jills Restaurants, LLC 07-64355 Jocks & Jills Charlotte, Inc. 07-64356 Jocks & Jills CNN, Inc. 07-64358 Jocks & Jills Duluth, Inc. 07-64360 Jocks & Jills Galleria, Inc. 07-64363 Jocks & Jills Prado, Inc. 07-64365 Jocks & Jills, Inc. 07-64367 Divine Events Transportation, Inc. 07-64369 Divine Events Catering, Inc. 07-64370 Debtor-affiliate filing separate chapter 11 petition on March 27, 2007: Entity Case No. ------ -------- Jocks & Jills Norcross, Inc. 07-64368 Type of Business: The Debtors own and operate a chain of casual sports-themed restaurants. See http://www.jocksandjills.com/ Court: Northern District of Georgia (Atlanta) Judge: Margaret Murphy Debtor's Counsel: G. Frank Nason, IV, Esq. Lamberth, Cifelli, Stokes & Stout, P.A. Suitte 550 3343 Peachtree Road Northeast Atlanta, GA 30326 Tel: (404) 262-7373 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million A. Jocks & Jills Restaurants, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tracey L. Tomczyk civil judgment $1,050,000 37 Picketts Forge Drive in USDC civil Acworth, GA 30101 action file no. 1:00-cv-3417-JOF Frank Thomas $500,000 3101 Towercreek Parkway Suite 560 Atlanta, GA 30339 Joe Atkinson $489,965 1100 Riverbend Club Drive Atlanta, GA 30339 Janet Mertz $250,000 3348 Peachtree Road Northeast Suite 500 Atlanta, GA 30326 Sana S. Thomas $250,000 3101 Towercreek Parkway Suite 500 Atlanta, GA 30339 Ted W. Gibson $150,000 Shanaz Rastegar $100,000 Dara Rastegar $100,000 Lela Brown $100,000 E.W. Brown Jr. $100,000 Javelin Southeast Inc. $50,000 W. Bradford Kacher $50,000 Mel Vukas $50,000 Wells Fargo business credit $40,319 Card Holman and Company $15,970 Blue Cross Blue Shield group insurance $11,857 of Georgia Copy Cat Printing $1,615 Slaughter & Virgin $1,422 Citysearch $1,310 Bell South $901 B. Jocks & Jills Charlotte, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tracey L. Tomczyk $1,050,000 37 Picketts Forge Drive Acworth, GA 30101 U.S. Foods Service $43,398 7950 Spence Road Fairburn, GA 30213 Duke Energy $3,047 P.O. Box 1090 Charlotte, NC 28201 Alsco $1,962 Mecklenberg County $1,818 Trinity Mech. Systems $1,654 City of Charlotte - Water & Sewerage $790 Allied Waste $571 Public Storage $407 The Brickman Group $375 Knight Cleaning $300 Ecolab $291 Citysearch $280 Ecolab Pest $214 NuCo2 $138 Payphone Partners $130 Earthlink $104 MJM Sports $95 Facilitec $92 Sedgefield Interiors $90 C. Jocks & Jills CNN, Inc.'s Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tracey L. Tomczyk $1,050,000 37 Picketts Forge Drive Acworth, GA 30101 U.S. Foods Service $132,781 7950 Spence Road Fairburn, GA 30213 Grime Busters $1,710 3283 La Ventura Drive Atlanta, GA 30341 Classic Commercial Services $410 Sparkling Image $195 Everclear Enterprises $150 The Blade-Smith, LLC $104 Training Institute $50 Humitech $30 D. Jocks & Jills Duluth, Inc.'s 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tracey L. Tomczyk $1,050,000 37 Picketts Forge Drive Acworth, GA 30101 U.S. Foods Service $36,932 7950 Spence Road Fairburn, GA 30213 Georgia Power $3,941 11675 Wills Road Alpharetta, GA 30004 MX Energy $2,370 Fulton County $1,398 Alsco $1,218 Comcast $849 Universal Entertainment $450 Waste Management/Atl North $380 Ackerman Security $228 ADP, Inc. $212 Sparkling Image $212 Real Clean $200 Steritech $180 The Blade-Smith, L.L.C. $116 Ecolab $111 Cintas $108 Cecil, Inc. $102 Humitech $60 E. Jocks & Jills Galleria, Inc.'s 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tracey L. Tomczyk $1,050,000 37 Picketts Forge Drive Acworth, GA 30101 U.S. Foods Service $48,807 7950 Spence Road Fairburn, GA 30213 MX Energy $1,929 P.O. Box 4911 Houston, TX 77210-4911 ADP, Inc. $1,289 Retail Data Systems $1,059 Industrial Stearn Cleaning/Atl $328 Steritech $258 The Blade-Smith, L.L.C. $98 Customer Security Services $60 Humitech $60 Sunshine Window Cleaning $35 F. Jocks & Jills Prado, Inc.'s 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tracey L. Tomczyk $1,050,000 37 Picketts Forge Drive Acworth, GA 30101 U.S. Foods Service $61,968 7950 Spence Road Fairburn, GA 30213 Retail Data Systems $4,279 1341 Capital Circle South Suite E Marietta, GA 30067 MX Energy $1,853 Comcast $1,010 DirecTV $387 NuCo2 $273 Apex $135 Sign A Rama $130 United Draft Services $100 Ecolab $76 G. Jocks & Jills Inc.'s 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tracey L. Tomczyk $1,050,000 37 Picketts Forge Drive Acworth, GA 30101 U.S. Foods Service $38,959 7950 Spence Road Fairburn, GA 30213 Georgia Power Company #79438-71008 $3,520 805-BRD Abernathy Boulevard ($1,071); #04678- Atlanta, GA 30310 7200($398); #04888- 7200($1,535); #46888-72008(515) MX Energy $1,757 Retail Data Systems $1,038 United Waste Service $618 Comcast $366 City of Atlanta $351 Infinite Energy, Inc. $328 Apex $195 Sparkling Image $160 NuCo2 $142 Ecolab $76 The Blade-Smith, L.L.C. $71 Steritech $56 Humitech $50 H. Divine Events Transportation, Inc.'s Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tracey L. Tomczyk $1,050,000 37 Picketts Forge Drive Acworth, GA 30101 I. Divine Events Catering, Inc.'s 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tracey L. Tomczyk $1,050,000 37 Picketts Forge Drive Acworth, GA 30101 U.S. Foods Service $27,774 7950 Spence Road Fairburn, GA 30213 Georgia Power Company $2,123 6317 Peachtree Industrial Boulevard Atlanta, GA 30360 MX Energy Natural Gas $898 Retail Data Systems $550 Concit Carpet Care $389 Dekalb County Government $370 Apex $300 Ecolab $190 ADP $125 Allgood Pest Solutions $115 DirecTV, Inc. $103 The Cleaning Authority $82 Sunshine Window Cleaning $60 Ackerman Security Systems $57 J. Jocks & Jills Norcross, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Tracey L. Tomczyk civil judgment $1,050,000 37 Picketts Forge Drive Acworth, GA 30101 U.S. Foods Service $52,571 7950 Spence Road Fairburn, GA 30213 Georgia Power Company #79438-71008 $5,123 805-BRD Abernathy Boulevard ($1,071); #04678- Atlanta, GA 30310 7200($398); #04888- 7200($1,535); #46888-72008(515) MX Energy $1,976 Hall's Produce $1,610 Gwinnett County Dept. Water $1,385 Resource Buckhead Beef $835 Eagle Rock $771 Comcast $717 United Distributors $710 Southern Pier Seafood Co. $667 Alsco $657 Alejandra Sanchez $600 Advanced Disposal $503 Engelman's Bakery $455 Restaurant Technologies, Inc. $437 National Distributing $423 Classic Commercial Services $399 Northeast Sales $396 DirecTV $365 LEAR CORP: Solicitation Period for Alternative Proposals Expires ---------------------------------------------------------------- Lear Corporation disclosed that the solicitation period under its merger agreement with American Real Estate Partners, L.P., an affiliate of Carl C. Icahn, has expired, without Lear Corp. having received an acquisition proposal from another party. As permitted by the merger agreement, Lear will continue on-going discussions with certain parties who had expressed an interest in exploring a possible acquisition proposal prior to the expiration of the solicitation period. No assurance can be given that such discussions will result in an alternative acquisition proposal. In addition, Lear Corp. was notified that the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act for the review of the proposed merger with AREP has expired. Headquartered in Southfield, Michigan, Lear Corporation (NYSE: LEA) -- http://www.lear.com/-- supplies automotive interior systems and components. Lear provides complete seat systems, electronic products, electrical distribution systems, and other interior products. The company has 104,000 employees at 275 locations in 33 countries. * * * As reported in the Troubled Company Reporter on Feb. 7, 2007, Moody's Investors Service placed the long-term ratings of Lear Corporation, corporate family rating at B2, under review for possible downgrade. The company's speculative grade liquidity rating of SGL-2 was affirmed. LEASE INVESTMENT: Moody's Reviews Ratings for Possible Downgrade ---------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade its ratings on seven classes of notes issued by Lease Investment Flight Trust. These are the rating actions: * Lease Investment Flight Trust, Series 2001-1 -- Class A-1 Floating Rate Notes due July 15, 2031, rated Baa2, on review for possible downgrade; -- Class A-2 Floating Rate Notes due July 15, 2031, rated Baa2, on review for possible downgrade; -- Class A-3 Floating Rate Notes due July 15, 2016, rated Baa1, on review for possible downgrade; -- Class B-1 Floating Rate Notes due July 15, 2031, rated B3, on review for possible downgrade; -- Class B-2 Fixed Rate Notes due July 15, 2031, rated B3, on review for possible downgrade; -- Class C-1 Floating Rate Notes due July 15, 2031, rated Caa3, on review for possible downgrade; and -- Class C-2 Fixed Rate Notes due July 15, 2031, rated Caa3, on review for possible downgrade. LIFT has seen steady depletion of its deal reserves over the past two years, a process which has been accelerated by fleet expenses in certain periods. In March, due to expenses, the Third Collection Top-Up account, which supported payments of Class B Minimum Principal and Class C Interest, was fully depleted, and no payments were made at these points in the waterfall. Also during March, the Second Collection Top-Up account, which supports payments of Class A Minimum Principal and Class B interest, was reduced from $20 million to $16.2 million. The Second Collection Top-Up account is likely to eventually be exhausted; timing will depend in part on future expenses. Moody's review will focus on the current status of the LIFT fleet, expected portfolio income and expenses, and the level of remaining reserves available to provide structural support to noteholders. LENOX GROUP: Inks $275 Million Commitment Letter with UBS --------------------------------------------------------- Lenox Group Inc. has entered into a commitment letter with UBS Loan Finance LLC and UBS Securities LLC for two new credit facilities in an aggregate amount of $275 million. The company intends using the proceeds of the UBS facilities to refinance its existing revolving credit and term loan facilities -- approximately $106.1 million as of March 23, 2007 -- and to fund its working capital requirements. The company expects the closing on the new facilities before April 30, 2007. "We are pleased to be able to put this loan agreement in place on terms that will provide the Company with greater flexibility to finance its ongoing operations," Interim Chief Executive Officer Marc L. Pfefferle said. "We are also making progress on a number of critical fronts to improve our operations, business opportunities and financial performance. This commitment letter, in combination with our new business plan, puts us closer to establishing a more stable financial platform for the company's growth and sustained profitability," Mr. Pfefferle added. "We have already begun taking significant actions to restructure the business, including refining our brand strategies, developing a new strategic plan for D56, reducing our work force and implementing other improvements and efficiency initiatives at our fine bone china manufacturing facility in Kinston, NC. We have also been improving sourcing performance, consolidating our Rogers, MN warehouse operations into our distribution center in Hagerstown, MD, and developing a plan for integrating and simplifying our IT platforms. "Going forward, we have and will continue to identify ways to enhance efficiency and take expense out of the business as we implement a brand-focused organizational structure to support future top line growth. I believe Lenox Group and its brands are on the way to delivering value for all of our shareholders." About Lenox Group Based in Eden Prarie, Minnesota, Lenox Group Inc (NYSE: LNX) was formed on Sept. 1, 2005, when Department 56 Inc., a designer, wholesaler and retailer of collectibles and giftware products purchased Lenox Inc., a designer, manufacturer and marketer of fine china, dinnerware, silverware, crystal, and giftware products. The company sells its products through wholesale customers who operate gift, specialty and department store locations in the United States and Canada, company-operated retail stores, and direct-to-the-consumer through catalogs, direct mail, and the Internet. Going Concern Doubt As reported in the Troubled Company Reporter on March 20, 2007, Deloitte & Touche, LLP, in Minneapolis, Minnesota, raised substantial doubt about Lenox Group Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2006. The auditor pointed to the company's difficulties in meeting its loan agreement covenants and financing needs. LENNAR CORP: Fiscal First Quarter Net Income Lowers to $68.62 Mil. ------------------------------------------------------------------ Lennar Corp. reported results for the first quarter ended Feb. 28, 2007, with $68.62 million of net income, as compared with $258.05 million of net income in the prior year period. Highlights for the current quarter were: -- total revenues of $2.79 billion, down from $3.24 billion during the same quarter of the previous year; -- home building operating earnings of $139.97 million, down from $450.87 million during the same quarter a year ago; -- financial services operating earnings of $15.86 million, up $5.24 million, from $10.62 million for the same quarter a year earlier; -- home building debt decreased to $2.58 billion from $3.12 billion during the same period a year ago; -- new orders of 7,132 homes, down from 9,793 orders for the same period a year earlier. At Feb. 28, 2007, the company had $5.77 billion in total stockholders equity as compared with $5.55 billion equity at Feb. 28, 2006. "The housing market continues to demonstrate overall weakness. While some markets are performing better than others, the typically stronger spring selling season has not yet materialized. These soft market conditions have been exacerbated by the well- publicized problems in the subprime lending market," Lennar President and Chief Executive Officer Stuart Miller said. "As weak market conditions have persisted, we have continued to focus on our 'balance sheet first' strategy. Since early 2006, we have focused on fortifying our balance sheet by carefully managing inventory levels (converting both land and home inventory to cash) and significantly reducing land purchases and starts. Concurrently, we have adjusted our land assets where appropriate while we have written-off option deposits and pre-acquisition costs on land we no longer desire to close. "Additionally, we completed the LandSource transaction this quarter, further strengthening our balance sheet with the receipt of approximately $700 million of cash during the quarter. The strong sponsorship of LandSource, coupled with the land availability primarily created by builders walking away from option deposits, positions us for new opportunities to purchase favorably-priced, larger land parcels within LandSource. "While we are primarily focused on fortifying our balance sheet, we are concurrently focused on rebuilding our profit margins. Given current market conditions, we are continuing to pursue cost reductions, SG&A savings, product redesign and proper land pricing in order to see margin improvement starting in the second half of 2007. Until we see prices stabilize, however, we will not be able to project the timing or the scope of margin recovery, or set earnings goals for the company. "We are very pleased that we ended our first quarter with our net homebuilding debt to total capital at 28.6%. Our strong balance sheet will position us well for success as market conditions recover. In the interim, we will continue to manage our business with day-by-day focus on maintaining a very low inventory balance and a consistent pressure on reducing costs as we rebuild our margins. "Given the state of the market, we do not expect to achieve our previously stated 2007 earnings goal, and we are not comfortable providing a new earnings goal at this time. Our company remains focused on managing through this downturn with a balance sheet first strategy, maintaining ample liquidity to position us well for future opportunities," Mr. Miller, concluded. About Lennar Corp. Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/ -- founded in 1954, builds affordable, move-up and retirement homes primarily under the Lennar name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance, and closing services for both buyers of the company's homes and others. * * * Lennar Corp. carries Moody's Investors Service senior subordinated debt rating at Ba1. LENNOX INT'L: Reduces Outstanding Shares with A.O.C. Agreement -------------------------------------------------------------- Lennox International Inc. has entered into an agreement with A.O.C. Corporation under which it would acquire 2,695,770 shares of Lennox common stock owned by A.O.C. in exchange for 2,239,589 newly issued Lennox' common shares. The effect of this transaction would be to reduce the number of outstanding shares of Lennox common stock by 456,181 shares, at minimal cost to Lennox. Thomas W. Booth, Stephen R. Booth, John W. Norris, III, and Jeffery D. Storey, M.D., each a member of Lennox' Board of Directors, well as other Lennox stockholders who are their immediate family members, are, individually or through trust arrangements, shareholders of A.O.C. A.O.C.'s assets consist solely of 2,695,770 shares of our common stock and cash. Following this transfer, A.O.C. would liquidate and distribute the newly issued Lennox stock to its shareholders. The transaction is subject to the satisfaction of certain conditions, including the approval of Lennox's shareholders and the receipt of a private letter ruling from the Internal Revenue Service that the transaction would qualify as a tax-free reorganization. Lennox intends to seek stockholder approval for the issuance of these shares at its 2007 Annual Meeting of Stockholders to be held on May 17, 2007 and to file a preliminary proxy statement regarding this proposal with the Securities and Exchange Commission. Stockholders are advised to read the proxy statement when it becomes available because it will contain important information. About Lennox Based in Richardson, Texas, Lennox International, Inc. (NYSE: LII) -- http://www.lennoxinternational.com/-- manufactures and markets a broad range of products for heating, ventilation, air conditioning, and refrigeration (HVACR) markets, including residential and commercial air conditioners, heat pumps, heating and cooling systems, furnaces, prefabricated fireplaces, chillers, condensing units, and coolers. Lennox has solid positions in its equipment markets, with well-established brand names, as well as products spanning all price points. * * * Moody's Investors Service's assigned 'Ba2' on Lennox International, Inc.'s LT Corporate Family rating and Probability of Default. The outlook is positive. Standard & Poor's assigned 'BB-' on its LT foreign and Local Issuer Credit rating. LIBERTY UNION: A.M. Best Holds Rating and Says Outlook is Negative ------------------------------------------------------------------ A.M. Best Co. has affirmed the financial strength rating of B (Fair) and assigned an issuer credit rating of "bb" to Liberty Union Life Assurance Company (Liberty Union) of Madison Heights, Michigan. The outlook has been revised to negative from stable. The negative outlook reflects Liberty Union's very low risk- adjusted capital position, negative underwriting income in 2006 and increasing competition in its core small group major medical business in Michigan. Prior to 2006, Liberty Union had regularly reported underwriting gains. The company relies upon the volatile small group major medical business in Michigan for both premium income and profits. A .M. Best also notes large managed care companies have become more active in that market in recent years. If Liberty Union's risk-adjusted capital position were to deteriorate further, A.M. Best would likely downgrade its ratings. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. LIFE SCIENCES: Dec. 31 Balance Sheet Upside-Down by $5.1 Million ---------------------------------------------------------------- Life Sciences Research Inc.'s balance sheet at Dec. 31, 2006, showed $230.6 million in total assets and $235.7 million in total liabilities, resulting in a $5.1 million total stockholders' deficit. The company reported a net loss of $14.9 million on revenues of $192.2 million for the year ended Dec. 31, 2006, compared with net income of $1.5 million on revenue of $172 million for the year ended Dec. 31, 2005. The growth in revenues reflects the increase in orders and, consequently, backlog over the year, principally from the pharmaceutical industry. Operating income decreased to $9.6 million in 2006 from operating income of $21 million in 2005. The decrease was mainly due to $7.7 million of warrant costs and $1 million of flotation expenses associated with the listing of the company's shares on the NYSE Arca and $1.8 million litigation and other expenses associated with the Animal Rights campaign against the company. The net loss of $14.9 million in 2006 was mainly due to the decrease in operating income, the increase in net interest expense, and the $20.7 million loss, net of income tax benefit of $22.2 million, on deconsolidation of Alconbury Estates Inc. and subsidiaries, related to the sale and leaseback of the company's three operating facilities in Huntingdon and Eye, England and East Millstone, New Jersey. Alconbury is controlled by LSR's chairman and chief executive officer, Andrew Baker. The total consideration paid by Alconbury for the three properties was $40 million, consisting of $30 million in cash and a five year, $10 million variable rate subordinated promissory note, which Alconbury paid in full on June 30, 2006, together with accrued interest of $600,000. Net interest expense increased to $12.6 million in 2006, from net interest expense of $8 million in 2005. This increase was due to the additional principal being borrowed and the higher rates of interest associated with the $70 million New Financing with a third party lender. Taxation benefit on losses for the year ended Dec. 31, 2006, was $6.9 million compared to a taxation expense of $4.1 million for the year ended Dec. 31, 2005. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c54 About Life Sciences Research With principal office at East Millstone, New Jersey, Life Sciences Research Inc. (NYSE Arca: LSR) -- http://www.lsrinc.net/ -- is a global contract research organization providing product development services to the pharmaceutical, agrochemical and biotechnology industries. LSR operates research facilities in the United States (the Princeton Research Center, New Jersey) and the United Kingdom (Huntingdon and Eye, England). LODGENET ENT: Launches Offer to Buy $200 Million of 9-1/2% Notes ---------------------------------------------------------------- LodgeNet Entertainment Corporation is offering to purchase for cash any and all of its outstanding $200 million aggregate principal amount of 9-1/2% Senior Subordinated Notes due 2013, on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated March 26, 2007, and the accompanying Letter of Transmittal and Consent. The company is also soliciting consents from holders of the Notes to, among other things, eliminate the covenants in the indenture under which the Notes were issued. The tender offer and consent solicitation is conducted with the company's pending acquisition of Ascent Entertainment Group, Inc., the parent of On Command Corporation. The consent solicitation will expire on April 9, 2007, unless earlier terminated or extended. The tender offer will expire on April 23, 2007, unless terminated or extended. The total consideration to be paid for each $1,000 in principal amount of Notes validly tendered and accepted for purchase, subject to the terms and conditions of the tender offer and consent solicitation, will be paid in cash and will be calculated based on a fixed spread pricing formula. The total consideration will be determined on April 9, 2007 based, in part, upon a fixed spread of 50 basis points over the yield on the 4.875% U.S. Treasury Note due May 31, 2008. The total consideration includes a consent payment equal to $30.00 per $1,000 in principal amount of Notes. To facilitate the funding of the Tender Offer, the company has determined to increase the size of the term loan component of its senior secured credit facilities it expects to enter into in connection with the Acquisition. The term loan component of the senior credit facilities will increase from $400 million to $625 million, of which $400 million will be funded immediately in order to refinance the company's existing credit facility and to fund the Acquisition. The remaining $225 million will be available as a delayed draw term loan on or before April 27, 2007, for the funding of the Tender Offer. The closing of the senior secured credit facilities will be subject to customary closing conditions. Holders who validly tender their Notes by the Consent Time will be eligible to receive the total consideration. Holders who validly tender their Notes after the Consent Time, but on or prior to the Expiration Time, will be eligible to receive the total consideration less the Consent Payment. In either case, all Holders who validly tender their Notes will receive accrued but unpaid interest up to but not including the date of settlement. Holders who tender their Notes must consent to the proposed amendments. Tendered Notes may not be withdrawn and consents may not be revoked after the Consent Time, subject to limited exceptions. The tender offer is subject to the satisfaction of certain conditions, including receipt of consents sufficient to approve the proposed amendments to the indenture, the increase in the term loan component of the senior secured credit facilities, the closing of the senior secured credit facilities transaction and the closing of the Acquisition having occurred or occurring substantially concurrent with the expiration of the Tender Offer and certain other general conditions. The proposed amendments to the Indenture for which consents are solicited will be set forth in a supplemental indenture and are described in more detail in the Offer Documents. The supplemental indenture will not be executed unless the company has received consents from Holders of a majority in principal amount of the Notes outstanding, and the amendments will not become operative unless the company has accepted for purchase at least a majority in principal amount of the Notes pursuant to the Offer Documents. Bear, Stearns & Co. Inc. and Credit Suisse Securities LLC are acting as Dealer Managers for the tender offer and as the Solicitation Agents for the consent solicitation. Copies of the Offer Documents and other related documents might be obtained from the Information Agent: D.F. King & Co., Inc. No. 48 Wall Street, 22nd Floor New York, NY 10005 Tel: +1 212 269 5550 Fax: +1 212 269 2798 About LodgeNet Entertainment Based in Sioux Falls, South Dakota, LodgeNet Entertainment Corporation (Nasdaq: LNET) -- http://www.lodgenet.com/-- provides cable, video-on-demand and video game entertainment services to the lodging industry. LODGENET ENT: Tender Offer Cues Moody's to Hold B1 Rating --------------------------------------------------------- Moody's affirmed LodgeNet's B1 corporate family rating following the company's reported tender offer for up to $200 million of its 9-1/2% senior subordinated bonds utilizing an additional $225 million under its new senior secured term loan. If successful, the tender will eliminate the junior debt in the company's capital structure as well as lower the company's debt service costs. As a consequence, Moody's would lower the bank rating to B1; same as LodgeNet's corporate family rating, from Ba3, as the senior secured debt would be the only debt in the capital structure and consistent with Moody's expectation of higher loss severity under its Loss Given Default methodology. These are the rating actions: * Corporate Family Rating affirmed at B1 * Probability of Default Rating affirmed at B1 * Outlook Stable * Senior Secured Credit Facility affirmed at Ba3, LGD3, 32% * 9.5% Senior Sub Notes B3, LGD5, 86% LodgeNet Entertainment Corporation provides cable, video-on-demand and video game entertainment services to the lodging industry. LodgeNet maintains its headquarters in Sioux Falls, South Dakota. M. FABRIKANT & SONS: Wants Plan Filing Period Extended to June 15 ----------------------------------------------------------------- M. Fabrikant & Sons, Inc. and its debtor affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to extend, until June 15, 2007, the exclusive period in which they could file a plan of reorganization. Additionally, they asked the Court to set Aug. 14, 2007 as the deadline to solicit acceptances of that plan. The Debtors explain that further extension of the exclusive period is warranted because of the size and complexity of their operations, and that they are still developing a strategy to serve as the basis for a plan of reorganization. Based 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. Alan D. Halper, Esq., at Halperin Battaglia Raicht LLP, and Christopher J. Caruso, Esq., at Moses & Singer, LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. M. FABRIKANT & SONS: Panel Balks at Excl. Period Extension Plea --------------------------------------------------------------- The Official Committee of Unsecured Creditors of M. Fabrikant & Sons, Inc. and its debtor affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to deny the Debtors' request for an extension of its exclusive periods. The Committee wants to terminate the plan-filing extension in order for other parties-in-interest to exercise their right in filing their own plans of reorganization. The Committee relates that on March 12, 2007, a proposed order was circulated to the Committee that provided both the Debtors and Wilmington Trust Co., the agent for holders of the Debtors' asserted senior secured debt, the exclusive right to file plans of reorganization. The Committee suspects that the Debtors, and their shareholders' counsel, Arent Fox PLC, appear to be "more interested" in protecting the debtor-affiliates' and shareholders' interests. The Committee contends that it was being put in a disadvantageous position when the Debtors agreed to share exclusivity with their Secured Creditors, but not with the Committee. Accordingly, the Committee pleads with the Court to terminate the extension to create a "level field" for all parties-in-interest. Based 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. Alan D. Halper, Esq., at Halperin Battaglia Raicht LLP, and Christopher J. Caruso, Esq., at Moses & Singer, LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. MAGUIRE PROPERTIES: Moody's Rates $825 Mil. Credit Facility at Ba3 ------------------------------------------------------------------ Moody's Investors Service has assigned a Ba3 rating with a stable outlook to the proposed issuance of $825 million senior secured credit facility by Maguire Properties, Inc. This secured credit facility consists of a $625 million secured term loan due 2012 issued by Maguire Properties Holdings III, LLC, and a $200 million secured revolving credit facility issued by Maguire Properties, L.P. due 2011. Maguire Properties, L.P., the REIT's operating partnership, is a guarantor of the term loan. Moody's also assigned a corporate family rating of Ba2 to Maguire Properties, Inc. This transaction will replace Maguire Properties' $100 million secured revolving credit facility, which was part of the REIT's $550 secured credit facility issued in March 2005. This secured credit facility included a $450 million secured term loan, which was paid off in October 2006. Moody's expects to withdraw its Ba2 rating on the secured revolving credit facility upon its replacement with this new facility. Maguire Properties is the largest owner and operator of Class A office properties in the Los Angeles CBD, and is focused on operating high quality office properties in Southern California. On Feb. 20, 2007, Maguire Properties reported the acquisition of twenty-four office properties from the Blackstone Group for $2.875 billion. The debt now being rated is part of a larger debt package to finance the acquisition of these office properties from Blackstone. Moody's stated that the Ba2 corporate family rating reflects Maguire Properties' defensible position as a leading owner and operator of class A high-rise office properties in Southern California, especially in the Los Angeles CBD and Orange County, stable occupancy levels in Maguire's office properties, as well as a well-laddered lease rollover schedule and debt maturity profile. The secured credit facility is secured by Plaza Las Fuentes and the Westin Pasadena hotel, both located in Pasadena, California, as well as several parcels of land, the aggregate values of which are well below the loan amount. The Ba3 rating of the secured credit facility reflects the value of the collateral supporting the loan, the high level of secured debt and overall debt in the REIT's capital structure, and the short-term impact of the housing finance cycle on the REIT's Orange County properties. "Maguire Properties is a well regarded leader in its market," noted Brian Harris, the lead analyst for Maguire Properties at Moody's. "The credit issues at the REIT are ones of leverage, capital structure and concentrations." The rating agency said that Maguire Properties' challenges include its significant geographic concentrations in Southern California - - especially in downtown Los Angeles and Orange County -- low fixed charge coverage of 1.69x, as well as high effective leverage and secured debt. Moody's expects these metrics to deteriorate further as a result of the property acquisition from Blackstone. However, effective leverage should improve as the previously reported sale of seventeen properties occurs, and Moody's expects effective leverage to decline below 75% by the end of 2007 or early 2008. The stable rating outlook reflects Moody's expectation of a successful integration of the Blackstone office assets, as well as the timely sale of approximately $2 billion of assets. An upgrade is unlikely given Maguire Properties' overall risk appetite and aggressive use of secured leverage; these would need to change materially. A downgrade could result from deteriorating operating performance as indicated by fixed charge coverage consistently below 1.3x, or a material leveraged acquisition. Moody's would also be concerned if occupancy in Maguire Properties' core portfolio does not exceed 90% by the end of 2007 or early 2008. The last rating action was in March 2005, when Moody's assigned a Ba2 rating to Maguire's current $550 million senior secured credit facility. These ratings were assigned with a stable outlook: * Maguire Properties, Inc. -- Corporate family rating at Ba2 * Maguire Properties Holdings III, LLC -- Senior secured term loan at (P)Ba3 * Maguire Properties, L.P. -- Senior secured revolving credit facility at (P)Ba3 Maguire Properties, Inc., based in Los Angeles, California, USA, is a REIT specializing in class A office properties in Southern California. As of Dec. 31, 2006, the REIT had $3.9 billion in gross GAAP assets. MARYSVILLE MUTUAL: A.M. Best Lifts Financial Strength Rating ------------------------------------------------------------ A.M. Best Co. has upgraded the financial strength rating to B++ (Good) from B+ (Good) and assigned an issuer credit rating of "bbb" to Marysville Mutual Insurance Company of Marysville, Kansas. The outlook for both ratings is stable. The ratings of Marysville Mutual are based on its strong risk- adjusted capitalization, trend of improved operating performance and favorable balance sheet liquidity. The improved operating performance results from management's initiatives, which include homeowners and farm owners rate increases, higher wind/hail deductibles, a property re-inspection program that insured certain levels of replacement cost and agency management strategies. Partially offsetting these positive rating factors are the company's single-state concentration in Kansas, which exposes its surplus to catastrophic weather events, its limited product offerings and a dependence upon reinsurance to mitigate the impact of frequent and severe storm activity. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. NATIONAL GAS: Court Conditionally Approves Disclosure Statement --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina conditionally approved the Disclosure Statement explaining the Plan of Liquidation filed by Richard M. Hutson, II, the chapter 11 trustee for National Gas Distributors LLC. The Plan contemplates that the best disposition of the Debtor's estate would involve: (i) the sale of substantially all of the Debtor's assets; (ii) collection or recovery of cash on hand, funds on deposit, and accounts receivable; and (iii) pursuit of any causes of action or claims, which the Trustee could assert pursuant to Chapter 5 of the Bankruptcy Code. The primary assets of the Debtor's estate consist of: (i) accounts receivable having an estimated value of $2,000,000 subject to liens; (ii) funds on deposit aggregating to $1,900,000, of which $634,000 is subject to setoff rights and about $1,126,360 is subject to a lien or a constructive trust claim; and (iii) actual or potential recoveries on the Bankruptcy Causes of Action, in a range of $10,000,000 to $30,000,000, and all of which the Trustee believes are or will be unencumbered. Treatment of Claims Under the Plan, administrative and priority tax will be paid in full. First-Citizens Bank and Trust Company asserts three secured claims totaling $15,300,000. The Trustee believes that First-Citizens Bank has a lien on funds on deposit in the Debtor's bank accounts. The Trustee disputes the contention that First-Citizens Bank has a lien on recoveries made by the Trustee. Branch Banking & Trust Company asserts a setoff right in the amount of $638,250 against the $1,516,095 on deposit in the Debtor's BB&T bank accounts. The Trustee doesn't contest BB&T's setoff right. Chatham Investment Fund QP II, LLC, and Chatham Investment Fund II, LLC, assert a $17,000,000 secured claim. Chatham will receive cash equal to the net sale or collection proceeds derived from the liquidation of the assets securing the claim. INVISTA S.a.r.l. asserts a constructive trust. The Trustee disputes Invista's constructive trust and any contention that Invista has a lien on any of the recoveries made by the Trustee. These creditors will receive payment as allowed by the Court. Holders of allowed priority unsecured claims and allowed unsecured claims will be paid in full or pro rata depending on the amount of Available Cash. The Trustee estimates that Priority Unsecured Claims will not exceed $60,000 while Unsecured Claims total $67,000,000. The Trustee projects that the eventual distribution on Allowed Unsecured claims may range from 11% to 22%. Paul Lawing, Jr., the sole equity holder, will receive no distribution under the Plan. Confirmation Hearing and Objection Deadline The Court will convene a hearing on May 9, 2007, at 10 a.m. to consider confirmation of the Plan. Objections to the approval of the Disclosure Statement and confirmation of the Plan must be filed on or before May 1, 2007. A full-text copy of the Disclosure Statement and Liquidation Plan is available for free at http://ResearchArchives.com/t/s?1c55 About National Gas National Gas Distributors, LLC -- http://www.gaspartners.com/-- supplied natural gas, propane, and oil to industrial, municipal, military, and governmental facilities. As of mid-December 2005, the Company effectively ceased business operations due to inadequate remaining capital and its inability to arrange for the purchase and delivery of natural gas to its customers. The Company filed for bankruptcy on January 20, 2006 (Bankr. E.D.N.C. Case No. 06-00166). Ocie F. Murray, Jr., Esq., at Murray Craven & Inman LLP, represented the Debtor in its restructuring efforts. Richard M. Hutson, II, serves as the Chapter 11 Trustee, and is represented by Emily C. Weatherford, Esq., and John A. Northen, Esq., at Northen Blue LLP. When the Debtor filed for bankruptcy, it estimated between $1 million to $10 million in assets and $10 million to $50 million in debts. NEW CENTURY: Terminates Freddie Mac Loan Servicing Agreement ------------------------------------------------------------ New Century Financial Corporation disclosed Wednesday in a regulatory filing with the Securities and Exchange Commission that on March 26, 2007, it notified the Federal Home Loan Mortgage Corp., that it was voluntarily terminating its eligibility with Freddie Mac. As a result of the termination, the company and its subsidiaries are no longer able to sell mortgage loans directly to Freddie Mac or act as the primary servicer of any mortgage loans for Freddie Mac. The company previously received default and acceleration notices from all of its lenders under its repurchase credit facilities. Several of these lenders have further notified the company of their intent to sell the outstanding mortgage loans that have been financed by the respective lender and offset the proceeds from the sale against the company's purported obligations to the lender, while reserving their purported rights to seek recovery of any remaining deficiency from the company. The company has notified these lenders of its concerns that any sale be conducted in an appropriate manner, in accordance with applicable law and in accordance with the terms of the applicable financing agreement between the parties. Looming Bankruptcy Filing Analysts, as cited by The Wall Street Journal Monday, speculated that New Century will likely file for bankruptcy. The analysts, WSJ said, are pointing to the latest move by two of the company's major bank lenders -- Barclays Bank PLC and Morgan Stanley Mortgage Capital Inc. -- to take possession of loans previously used to secure their financing. Morgan Stanley Sells Loans As reported in the Troubled Company Reporter on Mar. 27, 2007, Morgan Stanley said it will be selling at a public auction a portfolio of approximately 13,200 residential mortgage loans originated by New Century and its subsidiaries. The loans have an aggregate unpaid principal balance of approximately $2.48 billion. Barclays Ends MRA Barclays terminated its master repurchase agreement dated March 31, 2006, as amended to date, with the company, certain of its subsidiaries, and Sheffield Receivables Corporation. On March 12, 2007, the company received a notice of default and reservation of rights from Barclays, alleging that certain events of default, as defined in the Master Repurchase Agreement have occurred. The company subsequently received a combined Notice of Event of Default, Notice of Repurchase Date and Notice of Termination Date from Barclays, dated March 13, 2007. The March 13 notice reiterates Barclays' allegations that certain Events of Default have occurred and purports to accelerate to March 14, 2007, the obligation of the company's subsidiaries to repurchase all outstanding mortgage loans financed under the Barclays Agreement and to terminate the Barclays Agreement as of that same date. Under the Barclays Agreement, the acceleration would require the immediate repayment of the repurchase obligation on March 14, 2007. The company estimates that the aggregate repurchase obligation of its subsidiaries under the Barclays Agreement was approximately $900 million as of March 12, 2007. The company is a guarantor under the Barclays Agreement. About New Century Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/ -- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. * * * As reported in the Troubled Company Reporter on Mar. 13, 2007, Standard & Poor's Ratings Services lowered its counterparty credit rating on New Century Financial Corp. to 'D' from 'CC'. The ratings on the senior unsecured debt and preferred stock remain on CreditWatch with negative implications. In addition, Dominion Bond Rating Service downgraded the Issuer Rating of New Century Financial Corporation to C from CCC. The rating remains Under Review with Negative Implications. As reported in the Troubled Company Reporter on Mar. 9, 2007, Fitch Ratings downgraded New Century Mortgage Corporation's, a subsidiary of New Century Financial Corp., residential primary servicer rating for subprime product to 'RPS4' from 'RPS3+', and places the rating on Watch Negative. According to Fitch, an 'RPS4' rated servicer may not be acceptable for new residential mortgage-backed security transactions unless additional support or structural features are incorporated. The Rating Watch Negative indicates that further downgrades are possible, depending upon the stability of the servicer's portfolio and financial condition and the company's ability to obtain satisfactory amendments to or waivers of the covenants in its financing arrangements from a sufficient number of its lenders, or obtain alternative funding. NEW CENTURY: Inks Consent Agreements with Four More States ---------------------------------------------------------- New Century Financial Corporation disclosed Wednesday in a regulatory filing with the Securities and Exchange Commission that on March 27, 2007, it signed consent agreements with the State of Idaho's Department of Finance, the State of Iowa's Superintendent of Banking, the State of Michigan's Office of Financial and Insurance Services and the State of Wyoming's Banking Commissioner. New Century says that although the company has signed the additional consent agreements and expects to comply with their terms, the company has not yet received counterpart signatures from the respective states and accordingly the additional consent agreements may not be binding on the respective states. Last week, New Century and certain of its subsidiaries entered into a consent agreement with the State of Maine's Office of Consumer Credit Regulation. The company had previously received cease and desist orders from and entered into consent agreements with several states. Consistent with the previous orders and consent agreements, New Century relates that the additional consent agreements contain allegations that certain of the company's subsidiaries have engaged in violations of state law, including, among others, failure to fund mortgage loans after closing. Additionally, the additional consent agreements restrain the company's subsidiaries from taking certain actions, including, among others, engaging in alleged violations of state law and taking new applications for mortgage loans in the relevant jurisdiction. The additional consent agreements also compel the subsidiaries to affirmatively take certain actions, including: -- the creation of escrow accounts to hold any up front fees collected in connection with pending mortgage applications; -- the transfer to other lenders of the outstanding mortgage applications and unfunded mortgage loans held by the subsidiaries; and -- the provision of regular information to the state regulators regarding the subsidiaries' activities in the applicable state, including the status of all outstanding mortgage applications and unfunded mortgage loans in that state. The company anticipates that cease and desist orders will continue to be received by the company and its subsidiaries from additional states in the future and that the company and its subsidiaries may enter into additional consent agreements similar to the consent agreements already entered into by the company. The company does not undertake, and expressly disclaims, any obligation to update the disclosure for any additional cease and desist orders or consent agreements or for any developments with respect to the additional consent agreements. The company intends to continue to cooperate with its regulators in order to mitigate the impact on consumers resulting from the company's funding constraints. About New Century Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/ -- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. * * * As reported in the Troubled Company Reporter on Mar. 13, 2007, Standard & Poor's Ratings Services lowered its counterparty credit rating on New Century Financial Corp. to 'D' from 'CC'. The ratings on the senior unsecured debt and preferred stock remain on CreditWatch with negative implications. In addition, Dominion Bond Rating Service downgraded the Issuer Rating of New Century Financial Corporation to C from CCC. The rating remains Under Review with Negative Implications. As reported in the Troubled Company Reporter on Mar. 9, 2007, Fitch Ratings downgraded New Century Mortgage Corporation's, a subsidiary of New Century Financial Corp., residential primary servicer rating for subprime product to 'RPS4' from 'RPS3+', and places the rating on Watch Negative. According to Fitch, an 'RPS4' rated servicer may not be acceptable for new residential mortgage-backed security transactions unless additional support or structural features are incorporated. The Rating Watch Negative indicates that further downgrades are possible, depending upon the stability of the servicer's portfolio and financial condition and the company's ability to obtain satisfactory amendments to or waivers of the covenants in its financing arrangements from a sufficient number of its lenders, or obtain alternative funding. NEXSTAR BROADCASTING: Dec. 31 Balance Sheet Upside-Down by $73.3M ----------------------------------------------------------------- Nexstar Broadcasting Group Inc.'s balance sheet at Dec. 31, 2006, showed $724.7 million in total assets and $798 million in total liabilities, resulting in a $73.3 million total stockholders' deficit. Nexstar Broadcasting Group Inc. reported net income of $4.6 million on net revenue of $77.2 million for the fourth quarter ended Dec. 31, 2006, compared with a net loss of $6.1 million on net revenue of $62.3 million in the fourth quarter of 2005. Income from operations for the fourth quarter of 2006 grew 173.3% and totaled $18.9 million compared with $6.9 million in the same period in 2005. During the fourth quarter of 2006, the company incurred $300,000 of non-cash employee stock option expense pursuant to its adoption of SFAS No. 123(R) on Jan. 1, 2006. The company did not incur any employee stock option expense in the fourth quarter of 2005. Total interest expense in the fourth quarter of 2006 was $13.2 million, compared to $11.9 million for the same period in 2005. The increase is primarily attributable to higher interest rates under the company's senior credit facilities. Cash interest for the fourth quarter of 2006 was $9.6 million, compared to $8.7 million for the same period in 2005. Cash interest excludes non-cash interest expense related to amortization of debt financing costs and accretion of the discount on Nexstar's 11.375% senior discount notes and 7% senior subordinated notes. For the full year 2006, the company reported a net loss of $9 million on net revenue of $265.2 million, compared with a net loss of $48.7 million on net revenue of $228.9 million in 2005. Perry A. Sook, chairman, president and chief executive officer of Nexstar Broadcasting Group Inc., commented, "Concluding what was already an impressive year, Nexstar generated a 24% increase in fourth quarter revenue, which again significantly exceeded growth in the industry and consensus expectations. Strong political spending in our markets, the ongoing benefits of retransmission consent revenues and gains in local ad sales were all drivers of our top line performance during the period." Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1c49 Completed Acquisition On Dec. 31, 2006, the company closed on its acquisition of WTAJ- TV, the CBS affiliate serving the Johnstown/Altoona, Pennsylvania market, and WLYH-TV, the CW affiliate serving the Harrisburg/ Lancaster/ Lebanon/York, market, for $55.8 million, exclusive of closing adjustments and transaction costs, from Television Station Group Holdings LLC. WLYH-TV is programmed by a third party under a time brokerage agreement that extends until 2015. The acquisition complements the company's current Pennsylvania television station cluster located in Wilkes Barre/Scranton and Erie. Outstanding Debt The company's total debt at Dec. 31, 2006, was $681.1 million, compared to $646.5 million at Dec. 31, 2005. As of Dec. 31, 2006, and 2005, total bank debt under Nexstar's and Mission Broadcasting Inc.'s senior credit facilities was $370.1 million and $347.6 million, respectively. About Nexstar Broadcasting Group Headquartered in Irving, Texas, Nexstar Broadcasting Group Inc. (NasdaqGM: NXST) -- http://www.nexstar.tv/-- currently owns, operates, programs or provides sales and other services to 49 television stations in 29 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama and New York. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches approximately 8.25% of all U.S. television households. NORTH COAST: A.M. Best Says Financial Strength is Marginal ---------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of C++ (Marginal) and has assigned an issuer credit rating of "b+" to North Coast Life Insurance Company of Spokane, Washington. The outlook for both ratings is stable. The assigned ratings reflect North Coast Life's low level of risk- adjusted capitalization, elevated level of below investment grade bond holdings and a decline in its new premium production. Partially offsetting these rating factors are the continued positive net operating gains and recent restructuring of North Coast Life's investment portfolio. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. OMEGA HEALTHCARE: Plans a Public Offer of 6.2 Million Shares ------------------------------------------------------------ Omega Healthcare Investors, Inc. plans to publicly offer 6,200,000 shares of its common stock from its registration statement on Form S-11. In addition, the company intends to grant the underwriters a 30-day option to purchase up to an additional 930,000 shares of common stock to cover over-allotments, if any. UBS Investment Bank is acting as sole book-running manager for the offering. Banc of America Securities LLC, Deutsche Bank Securities and Stifel Nicolaus are acting as co-managers for the offering. A preliminary prospectus relating to these securities has been filed with the Securities and Exchange Commission. The preliminary prospectus may be obtained from: UBS Investment Bank Prospectus Department 299 Park Avenue New York, NY 10171 Headquartered in Timonium, Maryland, Omega HealthCare Investors, Inc. (NYSE:OHI) -- http://www.omegahealthcare.com/-- is a real estate investment trust investing in and providing financing to the long-term care industry. At Dec. 31, 2006, the company owned or held mortgages on 239 skilled nursing facilities and assisted living facilities with approximately 27,302 beds located in 27 states and operated by 32 third-party healthcare operating companies. * * * The company's 7% Senior Notes due 2014 has been assigned a Ba3 rating by Moody's Investors Service, and a BB rating by Standard & Poor's and Fitch Ratings. ONE COMMUNICATIONS: Moody's Rates $590 Million Loans at B1 ---------------------------------------------------------- Moody's Investors Service has affirmed One Communications Corp.'s B1 corporate family rating and changed the rating outlook to negative. As part of the rating action, Moody's has assigned a B1 rating to One Communications' proposed $560 million first lien term loan and the $30 million revolving credit facility. The company will use the proceeds from the new facility to repay all amounts outstanding under its existing bank facilities. Moody's will withdraw the ratings of existing bank facilities at closing of the transaction. Moody's has taken these actions: * One Communications Corp. -- Corporate Family Rating, Affirmed B1 -- Probability of Default Rating, Downgraded to B2, from B1 -- New Senior Secured Revolving Credit Facility, Assigned B1, LGD3, 32% -- New 1st Lien Term Loan, Assigned B1, LGD3, 32% -- Existing Senior Secured Revolving Credit Facility, Affirmed Ba3, to be withdrawn -- Existing 1st Lien Term Loan, Affirmed Ba3, to be withdrawn -- Existing 2nd Lien Term Loan, Affirmed B3, to be withdrawn -- Outlook changed to Negative from Stable The B1 corporate family rating reflects the Company's moderate financial risk and free cash flow generation, in addition to the company's larger operating scale in the northeastern USA, relative to its CLEC peers. The ratings are tempered by the highly competitive operating environment for CLECs, the ongoing integration of three companies with distinct corporate cultures and operating systems, and the potential for further acquisitions, which may postpone debt reduction. One Communications was formed via a combination of Choice One Communications, CTC Communications and Conversent Communications in July 2006. Moody's changed the rating outlook to negative from stable, reflecting lower-than-expected revenue growth and free cash flow generation. Although the company continues to realize expected cost synergies, higher-than-anticipated churn in its sales staff led to lower revenues. Moody's now expects the company to maintain revenue growth of about 5% over the rating horizon and generate free cash flow of 6% relative to its debt in 2007, compared to the previously indicated targets of over 7% and 11%, respectively. In addition, Moody's expects the increasingly competitive operating environment, particularly in the company's northeastern markets, and the continued use of debt financing by CLECs to fund acquisitions and drive shareholder returns to sustain the pressure on the company's B1 rating. In accordance with Moody's Loss Given Default Methodology, Moody's has downgraded the company's probability of default rating to B2, from B1, as the average probable recovery under the methodology has improved to 65% from 50% due to the single class of debt being raised. One Communications is a CLEC with executive management based in Rochester, New York, Waltham, Massachusetts, and Marlborough, Massachusetts. The company serves 160,000 customers in 16 states in the Northeast, Mid-Atlantic and Upper Midwest regions of the United States and generated $800 million in annualized revenue. PACIFIC LUMBER: Hires Blackstone Group as Financial Advisor ----------------------------------------------------------- The Hon. Judge Richard S. Schmidt of the United States Bankruptcy Court for the Southern District of Texas has authorized The Pacific Lumber Company to employ and retain Blackstone Group LP as its financial advisor as of Jan. 18, 2007. All objections to the extent not resolved or withdrawn are overruled. Blackstone Group will only be entitled to the Restructuring Fee if PALCO's proposed plan, or a joint plan in which PALCO is a proponent, is confirmed, the Court ruled. Blackstone's compensation is subject to review under Section 328(a) of the Bankruptcy Code. The United States Trustee alone has the right to object to Blackstone's compensation on any basis, the Court ordered. Judge Schmidt permits Blackstone to maintain time records in one hour increments for services rendered, and will not be required to maintain receipts for individual expenses for less than $75. All expense reimbursement, however, are subject to review. Pursuant to the Blackstone Agreement, PALCO is authorized to indemnify Blackstone for any claim arising from the firm's services, or any postpetition performance of any services. PALCO, however, does not have the obligation to indemnify, contribute or reimburse Blackstone for any claim or expense resulting from the firm's bad faith, gross negligence or willful misconduct. As reported in The Troubled Company Reporter on March 15, 2007, Judge Richard S. Schmidt gave Pacific Lumber Company and its debtor-affiliates authority, on an interim basis, to employ The Blackstone Group L.P. as its financial advisor. Blackstone's Scope of Employment As reported in the Troubled Company Reporter on Feb. 22, 2007, Blackstone Group will: (a) assist in the evaluation of PALCO's businesses and prospects; (b) assist in the development of PALCO's long-term business plan and related financial projections; (c) assist in the development of financial data and presentations to the Court, the Board of Directors, various creditors and other third parties; (d) analyze PALCO's financial liquidity; (e) evaluate PALCO's debt capacity and alternative capital structures; (f) analyze various restructuring scenarios and the potential impact of these scenarios on the ability to maximize PALCO's estate; (g) provide strategic advice with regard to the Plan; (h) assist in the evaluation of and raising of debt and equity as new financing; (i) participate in negotiations among the Debtors and its creditors, suppliers, lessors and other interested parties, as appropriate; (j) value securities offered by PALCO in connection with a plan; (k) provide expert witness testimony as needed; and (l) provide other advisory services as are customarily provided in connection with the analysis and negotiation of a plan as requested and mutually agreed. Blackstone's anticipated services do not encompass: (a) other investment banking services or transactions that may be undertaken at PALCO's request; (b) responsibility for designing or implementing any initiatives to improve PALCO's operations, profitability, cash management or liquidity; (c) representations or warranties about PALCO's ability to successfully improve its operations, maintain or secure sufficient liquidity to operate its business, raise new financing on any particular set of terms or successfully consummate a plan. After considering various alternative candidates, Nathaniel Peter Holzer, Esq., at Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in Corpus Christi, Texas, related that PALCO selected Blackstone as its financial advisor because of the firm's diverse experience and extensive knowledge in the fields of advisory services and bankruptcy. PALCO will pay Blackstone these fees for the financial advisory services contemplated: 1. A $50,000 monthly advisory fee commencing on the Effective Date, and payable on each monthly anniversary of the Effective Date with the final payment due on March 18, 2007; 2. An ongoing monthly fee based on the level of work required of Blackstone payable commencing on April 18, 2007; 3. A $850,000 restructuring fee payable after the consummation of a plan; 4. A debt financing fee of 2% of the total facility size of any debt financing arranged by Blackstone; and 5. An equity financing fee of 4% of the total equity capital secured by Blackstone from third party sources. Steven Zelin, senior managing director of Blackstone, relates that the firm was retained by PALCO on a prepetition basis to represent it in its restructuring and reorganization efforts, and was paid a $200,000 retainer and a $25,000 expense advance. In January 2007, the Firm received an additional $39,133 for actual out-of-pocket expenses. Mr. Zelin assured the Court the Blackstone is a "disinterested person" as defined under Section 101(14) of the Bankruptcy Code. Blackstone's members and employees are not: -- creditors, equity security holders or insiders of PALCO; and -- and were not directors, officers or employees of PALCO, within two years before the Petition Date. Official Committee's Objections As reported in the Troubled Company Reporter on March 1, 2007, the Official Committee of Unsecured Creditors asked the Court to deny the Debtors' request to hire Blackstone Group for these reasons: 1. There is no urgency to retain the services of Blackstone. 2. The Debtors' applications to retain Blackstone should be considered at the same time. 3. The proposed compensation structure in favor of Blackstone appears to be overly generous. LaSalle's Objections LaSalle Business Credit LLC and LaSalle Bank National Association also opposed the Debtors' request to hire Blackstone citing: 1. The fact that Scotia Pacific Company LLC has also sought to retain Blackstone as a financial advisor to perform a virtually identical list of services presents significant, inherent conflicts. 2. The size of the fees sought by Blackstone and about pre- determining them at this early stage of PALCO's cases when it is unclear what value Blackstone will be able to add to the Debtors' efforts to reorganize. Hiring Blackstone as advisor for Scopac and for the PALCO Debtors is not a good idea because Blackstone would be compromised by the need to serve two masters with divergent interests, Henry J. Haim, Esq., at Bracewell & Giuliani LLP, in Houston, Texas, pointed out. Blackstone's hands will be tied by its conflicting duties almost whenever it is called to assist the Debtors' most pressing business issues, Mr. Haim adds. Furthermore, the pre-approval of the reasonableness of Blackstone's Success Fees prejudices LaSalle and other creditors from dissenting to its appropriateness in the future, Mr. Haim contended. Accordingly, LaSalle asked Judge Richard S. Schmidt to deny the Application or, at least make the payment of any Success Fees subject to Court approval. Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on May 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 10, http://bankrupt.com/newsstand/or 215/945-7000). PEGASUS SOLUTIONS: High Leverage Prompts S&P's Negative Outlook --------------------------------------------------------------- Standard & Poor's Rating Services revised its outlook on Dallas, Texas-based Pegasus Solutions Inc. to negative from stable. The outlook revision reflects variability in its operating performance, as well as increased debt and leverage from a refinancing and a dividend. The corporate credit rating was affirmed at 'B'. At the same time, Standard & Poor's assigned its 'B+' rating and '1' recovery rating--indicating the expectation for full recovery of principal in the event of a payment default--to the company's proposed $100 million senior secured credit facility, which includes a $10 million revolver, a $60 million term loan B, and a $30 million term loan B delayed draw. Standard & Poor's also assigned a 'CCC+' rating to $120 million in senior unsecured notes. In addition to refinancing its existing senior secured facility amounting to $109 million, the additional debt will pay a $60 million dividend. The $30 million, delayed-draw term loan B will be used to finance two small proposed acquisitions. "Our rating on Pegasus Solutions reflects the company's small scale, volatile operating performance, an increasingly competitive market place, and high pro forma leverage around 5.2x," said Standard & Poor's credit analyst Stephanie Crane Mergenthaler. These factors partly are offset by a leading position in a niche market and solid EBITDA margins in the mid 20% range. The $30 million delayed-draw term loan facility will go toward the proposed purchase of two small strategic acquisitions. The delayed-draw term loan facility may be borrowed in up to two draws within six months of the date of the closing of the credit agreement. Pegasus Solutions provides technology, software, and services to the hotel industry and travel distributors. The company's software products and electronic 'switch' technology facilitates the flow of reservation information between hotels and travel agents. Pegasus' target market is the travel agencies and the hotel industry in North America and Europe. Competition is concentrated with a few leading companies, as well as home grown solutions by the leading hotel chains. Through four business segments Pegasus provides outsourcing services to over 60,000 hotels, as well as travel agents, and wholesale tour operators. PHELPS DODGE: Moody's Lifts Rating on $566.7 Mil. Sr. Debt to Ba2 ----------------------------------------------------------------- Moody's Investors Service upgraded Freeport-McMoRan Copper & Gold Inc.'s corporate family rating to Ba2 from Ba3 and undertook a number of related rating actions: * upgraded to Baa2 from Baa3 the senior secured rating on Freeport's $500 million secured revolver; * upgraded to Baa3 from Ba2 the senior secured ratings on each of Freeport's $1 billion secured revolver, $2.5 billion secured Term Loan A, $7.5 billion secured Term Loan B, and each of Freeport's existing 6.875%, 10.125% and 7.20% senior secured notes; and * upgraded to Ba3 from B2 Freeport's $6 billion senior unsecured notes. Moody's also upgraded to Ba2 from B1 the ratings on Phelps Dodge's secured Cyprus Amax notes and on Phelps Dodge's other existing notes. The rating actions are based on Freeport's pending issuance of approximately $2.5 billion of common equity and $2.5 billion of mandatorily convertible preferred stock and a potential overallotment, the proceeds of which will be used to reduce Term Loans A and B. In considering Freeport's capital structure, Moody's treats the mandatorily convertible preferreds as equity. The ratings reflect the overall probability of default of Freeport, to which Moody's assigns a PDR of Ba2. The rating outlooks for Freeport, Phelps Dodge and Cyprus Amax are stable. The Ba2 corporate family rating reflects Freeport's high debt level of approximately $13 billion and what Moody's believes will be a protracted time frame for debt reduction in the face of softening metals prices and continued high cost challenges. The rating also considers the high concentration in copper and resultant variability in earnings and cash flow, significant capital expenditures, and a high level of reliance on the Grasberg mine in Indonesia. The rating also reflects the cultural challenges inherent in the acquisition of the larger Phelps Dodge by Freeport, and the execution and political risk of Phelps Dodge's development project in the Congo. The Ba2 rating favorably considers the company's leading positions in copper and molybdenum, a significant amount of gold production, the low cost, long-life reserves at PT-FI, and improved operating and political diversity. These are the rating actions: * Freeport-McMoRan Copper & Gold Inc. -- Corporate Family Rating, to Ba2 from Ba3 -- Probability of Default Rating; to Ba2 from Ba3 -- $0.5 billion Senior Secured Revolving Credit facility, to Baa2, LGD1, 2% from Baa3 -- $1.0 billion Senior Secured Revolving Credit Facility, to Baa3, LGD2, 22% from Ba2 -- $2.5 billion Senior Secured Term Loan A, to Baa3, LGD2, 22%, from Ba2 -- $7.5 billion Senior Secured Term Loan B, to Baa3, LGD2, 22%, from Ba2 -- $340 million 6.875% Senior Secured Notes due 2014, to Baa3, LGD2, 22%, from Ba2 -- $272 million 10.125% Senior Secured Notes due 2010, to Baa3, LGD2, 22%, from Ba2 -- $0.2 million 7.20% Senior Secured Notes due 2026, to Baa3, LGD2, 22%, from Ba2 -- Senior Unsecured Notes: to Ba3, LGD5, 83%, from B2 * Cyprus Amax Minerals Company -- $60.1 million 7.375% Senior Notes due 2007, to Ba2, LGD3, 48%, from B1 * Phelps Dodge Corporation -- $107.9 million 8.75% Senior Notes due 2011, to Ba2, LGD3, 48%, from B1 -- $115 million 7.125% Senior Notes due 2027, to Ba2, LGD3, 48%, from B1 -- $150 million 6.125% Senior Notes due 2034, to Ba2, LGD3, 48%, from B1 -- $193.8 million 9.50% Senior Notes due 2031, to Ba2, LGD3, 48%, from B1 Moody's last rating action on Freeport was to affirm its Ba3 corporate family rating in February 2007 in connection with Freeport's acquisition of Phelps Dodge. Freeport-McMoRan Copper & Gold Inc. is a Phoenix based producer of copper, gold and molybdenum and had revenue in 2006 of $5.8 billion. PIXELLIGENT TECH: Case Summary & 14 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Pixelligent Technologies LLC 387 Technology Drive, Suite 3122 College Park, MD 20742-0001 Tel: (301) 405-9284 Bankruptcy Case No.: 07-12791 Type of Business: The Debtor manufactures semiconductors and related electronic devices. Chapter 11 Petition Date: March 27, 2007 Court: District of Maryland (Greenbelt) Judge: Wendelin I. Lipp Debtor's Counsel: Daniel Mark Litt, Esq. Dickstein Shapiro, LLP 1825 Eye Street Northwest Washington, DC 20006 Tel: (202) 420-2200 Fax: (202) 420-2201 Total Assets: $6,109,587 Total Debts: $1,859,605 Debtor's 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DLA Piper Rudnick Gray Cary Legal Services $88,068 c/o Jeff Lehrer, Esq. 1775 Wiehle Avenue Suit 400 Reston, VA 20190 Shulman, Rogers, Gandal, Legal Services $61,408 Pordy, and Ecker c/o Chris Roberts, Esq. 11921 Rockville Pike Rockville, MD 90852 Department of Business and Convertible Loan $50,000 Economic Development c/o Raymar Dizon Maryland Venture Fund 217 East Redwood Street Baltimore, MD 21202 Nixon & Vanderhye P.C. Legal Services $48,995 University of Maryland Unpaid TAP License $17,343 Technology Advancement Agreement Fees Program North Carolina State University Research Contract $16,935 Fee Balance FOReTEL Associates, Ltd. Management $6,792 Consulting Fees Fish & Richardson Legal Services $5,107 University of Maryland Research Contract $4,000 Office of Technology Fee Balance Commercialization Mary Kate Boggiano Unpaid Salary $1,154 Zehra Serpil Gonen Williams Unpaid Salary $1,154 Zhiyun Chen Unpaid Salary $1,154 IPSS L.P. Reimbursement of $843 Expenses Relating to Consulting Services Bean Kinney & Korman P.C. Legal Services $315 PLAINS EXPLORATION: 2006 Net Income Increases to $597.5 Million --------------------------------------------------------------- Plains Exploration & Production Co. disclosed financial and operating results for the fourth quarter and full year 2006. Highlights for the year 2006 and early 2007 include: * Reported $597.5 million of net income for the year, versus a $214 million net loss in 2005; * repurchased about $300 million of stock in 2006 or roughly 6.6 million of its common shares outstanding. Year-end basic share count for was 72.4 million shares; * reduced long-term debt from $797.4 million at year-end 2005 to $235.5 million at year-end 2006; * company's exploration investment in Gulf of Mexico Miocene trend prospects yielded three discoveries: Big Foot Prospect and Caesar Prospect, sold for $706 million, and the Friesian Prospect in Green Canyon Area, OCS 599, is awaiting development and further delineation drilling; * expanded the exploration prospect portfolio in the Gulf of Mexico Miocene trend. The current inventory includes up to 30 high-impact prospects in various water depths. Fourth Quarter 2006 For the fourth quarter of 2006, the company reported $383.6 million of net income on $207.6 million of revenues, as compared with $70.8 million of net income on $274.4 million of revenues in the prior year period. Net income for the periods includes a significant gain on the sale of oil and gas properties, a charge for extinguishment of debt, and other items. Full Year 2006 For the full year 2006, the company reported $597.5 million of net income on $1 billion of revenues, as compared with a $214 million net loss on $944.4 million of revenues. Net income for the periods includes a significant gain on the sale of oil and gas properties, losses on mark-to-market derivative contracts, a charge for extinguishment of debt, and other items. At Dec. 31, 2006, the company had total assets of $2.4 billion, total liabilities of $1.3 billion, and total stockholders' equity of $1.1 billion. The company's balance sheet at Dec. 31, 2006, showed strained liquidity with total current assets of $184.8 million available to pay total current liabilities of $460.2 million. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c48 Liquidity and Capital Resources In September 2006 and November 2006, the company completed property sales that generated about $1.6 billion of cash proceeds. The company used the proceeds to repay the then outstanding balance on its senior revolving credit facility and short-term credit facility, redeem all $250 million outstanding principal of its 7.125% Senior Notes, purchase $274.9 million of the $275 million outstanding principal of its 8.75% Senior Subordinated Notes, and settle the $605 million liability associated with its 2007 and 2008 crude oil collars. The company's primary sources of liquidity are cash generated from its operations and its revolving credit facility. At Dec. 31, 2006, the company had about $504 million of availability under its revolving credit facility. At Dec. 31, 2006, the company had a working capital deficit of about $275 million. As of Dec. 31, 2006, the company had net short-term liabilities of $64 million and $35 million for derivatives and stock appreciation rights, respectively. In addition, the company had $94 million of current income taxes payable as of Dec. 31, 2006, primarily as a result of the oil and gas property sales that the company completed during 2006. Divestitures Effective Sept. 1, 2006, the company closed the sale of certain non-producing oil and gas properties to Statoil. The company received about $706 million in cash proceeds and recognized a $638 million pre-tax gain. Effective Oct. 1, 2006, the company closed the sale of oil and gas properties to subsidiaries of Occidental. The company received about $864 million in cash proceeds and recognized a $345 million pre-tax gain. About Plains Exploration Headquartered in Houston, Plains Exploration & Production Co. has about 95% of its reserves located in onshore California in the Los Angeles Basin and San Joaquin Valley Basin, with additional reserves in offshore California in the Santa Maria Basin as well as in the GOM. It also conducts a large non-operated exploration effort to the deep geologic horizons beneath the GOM and in the deepwater regions of the GOM. * * * As reported in the Troubled Company Reporter on Mar. 12, 2007, Moody's Investors Service affirmed Plains Exploration & Production's Ba2 corporate family rating. Under its Loss Given Default methodology, Moody's also assigned a Ba3, LGD5, 79% to the company's pending $300 million 10-year senior unsecured notes. QUEBECOR WORLD: Earns $28.3 Million in Year Ended December 31 ------------------------------------------------------------- Quebecor World, Inc. had revenues of $6.1 billion for the full year 2006, down from $6.3 billion in 2005. The company had a net income of $28.3 million for the year ended Dec. 31, 2006, as compared with a net loss of $162.6 million a year ago. Operating income before impairment of assets, restructuring and other charges and before goodwill impairment charge was $241.5 million in 2006, as compared with $357.5 million in 2005. Impairment of assets, restructuring and other charges for 2006 were $111.3 million, as compared with $94.2 million last year. Fourth Quarter 2006 The company recorded for the fourth quarter 2006, a net income of $11.4 million, as compared with a net loss of $210.6 million for the same quarter in 2005. Revenues for the quarter were $1.6 billion, as compared with $1.7 billion in the fourth quarter of 2005. Net income from continuing operations for the fourth quarter of 2006 was $11.6 million, as compared with a net loss from continuing operations of $205 million in the fourth quarter of last year. Fourth quarter 2006 results incorporate impairment of assets, restructuring and other charges of $46.2 million, as compared with $11.9 million in 2005. On the same basis, operating income in the fourth quarter was $74.2 million, as compared with $87.3 million during the fourth quarter last year reflecting the higher depreciation expense. As of Dec. 31, 2006, the company had total assets of $5.8 billion and total liabilities of $3.8 billion, resulting to total stockholders' equity of $2 billion. The company had a negative working capital of $76 million as of Dec. 31, 2006, as compared with a negative working capital of $100.4 million a year ago. Actions on Five-Point Transformation Plan Customer Value In February 2007, the company renewed a significant multi-year contract with Williams-Sonoma to continue to provide an integrated print solution for a majority of its catalogs. In March, the company renewed a long-term agreement to be the exclusive supplier for Harlequin paperback books. Best People The company recently made leadership moves to improve its performance, including the addition of proven operation, sales, and marketing executives as well as the reassignment of other key managers to focus on specific projects to enhance customer and shareholder value. In addition, the company continues to implement its comprehensive people development program through training, improved processes, and building new capabilities. Great Execution In the fourth quarter, the company launched a Continuous Improvement Program across its North American platform. With the current and planned continuous improvement projects the company is making progress towards its target of $100 million in annualized cost savings, run rate by the end of 2008. Retooling Program The company's three-year retooling program is being accelerated in order to be completed before its customers' busy season in the third quarter of 2007. In order to finalize the retooling program before the 2007 busy season, Quebecor World is starting up six new presses in the first half of 2007, as compared with four new presses during the same period last year. These and other retooling initiatives should be completed on time for the third and fourth quarters of 2007. Balance Sheet In 2006, the company initiated a number of financing activities to improving its financial flexibility. In particular, the company issued $850 million of Senior unsecured notes of which $400 million were issued in December, which helped to significantly increase liquidity. At year-end the company had more than $900 million undrawn capacity on its $1 billion unsecured revolving credit facility. Fourth Quarter Restructuring In the fourth quarter, the company recorded impairment of assets restructuring and other charges of $46.2 million, which are composed of cash items related to workforce reductions at facilities in Europe and North America and the impairment of long- lived assets. This included the approval of the closure of one facility in the U.S. and one facility in Canada as well as employee severances in Lille, France. The cash costs of these initiatives were estimated at $26.8 million of which $19.3 million were recorded in the fourth quarter. The company also recorded $1.8 million related to previous workforce reduction initiatives. The balance of the restructuring charge is related to the impairment of long-lived assets in North America. About Quebecor World Quebecor World, Inc. (TSX: IQW) (NYSE: IQW) -- http://www.quebecorworld.com/-- provides print solutions to publishers, retailers, catalogers and other businesses with marketing and advertising activities. Quebecor World has about 29,000 employees working in more than 120 printing and related facilities in the U.S., Canada, Argentina, Austria, Belgium, Brazil, Chile, Colombia, Finland, France, India, Mexico, Peru, Spain, Sweden, Switzerland and the U.K. * * * As reported in the Troubled Company Reporter on Oct. 20, 2006, Moody's Investors Service downgraded the Corporate Family Rating of Quebecor World (USA), Inc. to B1 from Ba3, and moved this benchmark rating to the parent company, Quebecor World, Inc. Related ratings were impacted. Moody's said the outlook for all ratings is negative. RENEE DAVIS: Case Summary & Two Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Renee Watts Davis 3030 Hartswood Drive Allison Park, PA 15101 Bankruptcy Case No.: 07-30105 Chapter 11 Petition Date: March 28, 2007 Court: Southern District of West Virginia (Huntington) Debtor's Counsel: Joseph W. Caldwell, Esq. Caldwell & Riffee P.O. Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 Fax: (304) 925-2193 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Capital One Mastercard Credit Card Purchases $8,597 P.O. Box 26074 Richmond, VA 23260 John Deere Credit, Inc. Stolen Tractor $7,600 P.O. Box 4450 Carol Stream, IL 60197-4450 S3 INVESTMENT: Posts $594,476 Net Loss in 2nd Qtr. Ended Dec. 31 ---------------------------------------------------------------- S3 Investment Company, Inc., reported a $594,476 net loss on $619,761 of total revenues for the fiscal second quarter ended Dec. 31, 2006, compared with $540,337 of net income on $932,835 of total revenues in the prior year period. At Dec. 31, 2006, the company's balance sheet showed $2,918,302 in total assets, $1,487,569 in total liabilities, $662,480 in minority interest, and $768,253 in total stockholders' equity. The company's accumulated deficit at Dec. 31, 2006, stood at $6,686,166. Full-text copies of the company's fiscal second quarter financials are available for free at http://ResearchArchives.com/t/s?1c4c Unregistered Sales of Equity Securities During fiscal second quarter ended Dec. 31, 2006, the company had these common stock transactions: -- The company agreed to cancel 4,000,000,000 warrants that were issued on June 2, 2006. As consideration to the holder of the warrants, the company agreed to repay $100,000 that the warrant holder had advanced to the company under the warrant contract and issue 100,000,000 shares of restricted common stock. The company executed a promissory note for the $100,000 that is due in four equal monthly payments of $25,000 starting on Feb. 1, 2007, and ending on May 1, 2007. In addition, the warrant holder retained the 100,000,000 shares of common stock previously issued as collateral against the monies advanced. As a result of this transaction, the company recorded $210,000 as a financing expense for the value of the shares issued and reclassified the $100,000 previously received as a promissory note payable. -- The company issued 200,000,000 shares of common stock registered under Form S-8 to Javelin Advisory Group, Inc., in consideration for services previously rendered. The company retains Javelin to provide corporate secretary, bookkeeping, financial reporting and other administrative functions for which it would otherwise have to hire additional staff. In connection with the issuance of the shares, the company recorded Administrative Expenses of $90,000. -- In October 2006, the company issued warrants to purchase 105,000,000 shares of common stock to Merriman, Curhan and Ford as part of a consulting compensation agreement. The warrants are exercisable at $0.0008, which was the closing bid price of the company's stock on the date the warrants were granted. The warrants expire October 1, 2011. In connection with the issuance of the warrants, the company recorded derivative liability and expense of $73,175, which reflects the present value of the warrants based on historic volatility of the company's stock price as required by EITF 00-19. Going Concern Doubt Chisholm Bierwolf & Nilson, LLC, in Bountiful, Utah, raised substantial doubt about S3 Investment Company, Inc.'s ability to continue as a going concern after auditing financial statements for the years ended June 30, 2006, and 2005. The auditor pointed to the company's working capital deficit, dependence on financing to continue operations, and recurring losses. About S3 Investment Company S3 Investment Co. Inc. -- http://www.s3investments.com/-- two subsidiaries: Redwood Capital, Inc. and Sino UJE, LTD. Redwood Capital, a wholly owned subsidiary, is privately held investment advisory group that specializes in investment banking for privately-held Chinese companies. Redwood Capital has offices in China and the United States. Hong Kong-based Sino, a 51%-owned subsidiary, has an extensive distribution network in China. It distributes medical and industrial supplies for a group of original equipment manufacturers in Europe and the US that are exclusively represented in China. SAINT VINCENTS: Court Extends Plan Solicitation Period to July 15 ----------------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York and its affiliated debtors obtained from the U.S. Bankruptcy Court for the Southern District of New York an extension through July 15, 2007, of their exclusive period for soliciting acceptances on their plans of reorganization and liquidation. The Debtors, on Feb. 9, 2007, filed a plan providing for the reorganization for SVCMC and the liquidation of the other Debtors, and a disclosure statement explaining the terms of the Plan. To permit the opportunity for certain contingencies to be limited or eliminated and for the Plan and Disclosure Statement to be amended appropriately as a result, the Debtors had scheduled the hearing on the Disclosure Statement for April 20, 2007. The timeline, however, left only 18 days for the Debtors to complete solicitation of votes on the Plan before expiration of the current exclusive solicitation period on May 8. Andrew M. Troop, Esq., at the Weil, Gotshal & Manges LLP in New York, told Judge Adlai S. Hardin, Jr. that 18-day period was insufficient for the Debtors to solicit votes on the Plan, creditors to make a decision with respect to the Plan, and for Debtors to receive, process, and tabulate votes on the Plan. The Debtors contemplate that, if the Disclosure Statement, as it may be amended from time to time, is approved on April 20, a hearing on confirmation of the Plan, as it may be amended from time to time, will be scheduled in June 2007. Mr. Troop claimed that, in the light of the potential schedule and to permit ample time for the Debtors to complete the mechanics of the solicitation process and creditors and others to participate in that process, the Debtors' request for a brief extension was warranted. About Saint Vincents Headquartered in New York, New York, Saint Vincents Catholic Medical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. The hospital group consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The Company and six of its affiliates filed for chapter 11 protection on July 5, 2005 (Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). Gary Ravert, Esq., and Stephen B. Selbst, Esq., at McDermott Will & Emery, LLP, filed the Debtors' chapter 11 cases. On Sept. 12, 2005, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP took over representing the Debtors in their restructuring efforts. Martin G. Bunin, Esq., at Thelen Reid & Priest LLP, represents the Official Committee of Unsecured Creditors. As of Apr. 30, 2005, the Debtors listed $972 million in total assets and $1 billion in total debts. (Saint Vincent Bankruptcy News, Issue No. 51 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SAN FRANCISCO RAWHIDE: Case Summary & 3 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: San Francisco Rawhide, Inc. 280 Seventh Street San Francisco, CA 94103 Bankruptcy Case No.: 07-30351 Chapter 11 Petition Date: March 27, 2007 Court: Northern District of California (San Francisco) Debtor's Counsel: Sheila Gropper Nelson, Esq. 456 Montgomery Street, Suite 1700 San Francisco, CA 94104 Tel: (415) 362-2221 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Walter Schivo Jr. disputed personal unknown c/o James D. Rohde injury claim 165 North Redwood Dr., Suite 110 San Rafael, CA 94903 Goldstein Gellman attorneys' fees $46,000 1388 Sutter St., Suite 1000 San Francisco, CA 94109 Charles W. Roth accounting $3,000 385 Hayes Street services San Francisco, CA 94102 SERENITY MANAGEMENT: Sale of 2 Nursing Homes for $12.8 Mil. Okayed ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas in Dallas approved the sale of two nursing homes owned by Serenity Management Services Inc. to Southwest LTC for $12.8 million, Bill Rochelle of Bloomberg News reports. The report says that the two nursing homes are part of the four nursing homes required of the Debtor to sell under its $17 million debtor-in-possession financing agreement. The two remaining nursing homes in Palestine and Tyler, Texas, did not attract buyers, the source relates. Headquartered in Arlington, Tex., Serenity Management Services Inc. dba Serenity Management Services of America operates nursing homes in Texas. The company filed a chapter 11 petition on January 17, 2007 (Bankr. N.D. Tex. Case No. 07-30269). On the same date, 22 affiliates filed separate chapter 11 petitions (Bankr. N.D. Tex. Case Nos. 07-30230 through 07-30268) Deirdre B. Ruckman, Esq., Michael P. Cooley, Esq., and Michael S. Haynes, Esq., at Gardere, Wynne & Sewell represent the Debtors. Atropos Inc. serves as the Debtors' restructuring consultants. In their Operating Report for February 2007, the Debtors listed $29,427,998 in total assets and $34,512,163 in total liabilities. SOLUTIA INC: Wants to Acquire Akzo Nobel's 50% Flexsys Stake ------------------------------------------------------------ Solutia Inc. seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to acquire Akzo Nobel N.V.'s interest in Flexsys pursuant to the terms of a transaction agreement, and provide Flexsys with a subordinated intercompany loan up to $150,000,000 for the acquisition of Akzo Nobel's interest in Flexsys. Solutia and Akzo Nobel have been partners in Flexsys, a successful rubber chemicals business with 13 manufacturing facilities worldwide, with approximately 1,000 employees, and annual revenues in fiscal year 2006 of about $600,000,000. Flexsys was formed in 1995 as a 50/50 joint venture between Akzo Nobel and Monsanto Company. Solutia was created in 1997 by Pharmacia Corp., then known as Monsanto, pursuant to a spin-off transaction. In connection with the spin-off, Solutia received Pharmacia's interest in Flexsys. Flexsys is not a debtor in the Debtors' Chapter 11 cases. Flexsys is headquartered in Brussels, Belgium, and is comprised of three primary legal entities: (a) Flexsys Holding B.V., (b) Flexsys America LP, and (c) Flexsys Rubber Chemicals Ltd. By late 2005, Akzo Nobel had decided to exit the rubber chemicals business to focus on its other chemicals and coating businesses, and asked Solutia if it would consent to a sale of Akzo Nobel's 50% interest in Flexsys. Solutia relates that following a year-long process resulting in three binding bids, it concluded that it would not be in the estates' best interest to sell Solutia's stake in Flexsys at the prices and on the terms and conditions set forth in the bids submitted. Solutia management, with input from its operational consultants, CRA International, formerly Charles River Associates, undertook a strategic review options with respect to Flexsys on the summer of 2006. As a result of the review, Solutia's Board of Directors determined that the best course of action would be to seek to purchase Akzo Nobel's 50% in Flexsys on favorable terms. Proposed Transaction On Feb. 27, 2007, after several months of arm's-length negotiations, Solutia and Akzo Nobel reached an agreement on the terms of Solutia's proposed acquisition of the remaining 50% interest in Flexsys. Under the terms of the Transaction Agreement, the Flexsys entities will repurchase Akzo Nobel's interests in Flexsys for $212,500,000, subject to certain deductions and adjustments. Upon the closing of the proposed transaction, the Flexsys Entities will become wholly-owned subsidiaries of Solutia. However, they will remain separate and distinct legal entities from Solutia and its affiliated subsidiary debtors. Akzo Nobel will continue to be responsible for certain legacy environmental liabilities. To provide Flexsys with sufficient funds for its general corporate and other working capital needs, the Flexsys Entities have negotiated a commitment from KBC Bank N.V. and Citigroup Global Markets Limited for $200,000,000. The credit facility will be secured solely with the assets of the Flexsys Entities and will not result in any additional obligations on Solutia or any of its Debtor-subsidiaries. As previously reported, Solutia has amended its debtor-in- possession financing facility to provide up to $150,000,000 as an intercompany loan to the Flexsys Entities, to finance the proposed transaction. The intercompany loan will be subordinate to the financing obtained directly by the Flexsys Entities; have an initial term of six years; be non-amortizing; and will be provided on customary market rates and terms for debt of this kind. No interest will be paid to Solutia on account of the subordinated intercompany loan until Solutia emerges from Chapter 11 and certain other conditions have been satisfied. The subordinated intercompany loan will be subject to an intercreditor agreement among Solutia, KBC Bank, and Citigroup. Under the Transaction Agreement, Akzo Nobel and its affiliates will agree to a five-year, worldwide non-compete in the Field of Agreement, subject to limited exceptions. The Akzo Nobel entities will not solicit or hire any employees of the Flexsys Entities for three years after closing, subject to customary exceptions. The Akzo Nobel Entities will reimburse Flexsys for 50% of the cost of the "disentanglement transactions," which refers to certain transactions designed to separate the operations of the Flexsys Entities from the Akzo Nobel Entities, incurred after the Closing or incurred but not paid as of immediately before Closing. To the extent the Akzo Nobel Entities will continue providing services to the Flexsys Entities at certain sites after the Closing, the parties will enter into services agreements before Closing that will have substantially similar terms as the operating agreements that govern the services before the Closing. The services will generally be provided on the same economic terms as they are provided under the current operating agreements. The Transaction Agreement also contains customary covenants regarding access to books and records; efforts to obtain financing; cooperation regarding certain material litigation; cooperation regarding intellectual property transfer; tax matters; and termination of certain affiliate arrangements. A summary of proposed transaction terms is available for free at: http://researcharchives.com/t/s?1c5f James M. Sullivan, senior vice president and chief financial officer of Solutia, states that as a condition to the proposed transaction to acquire the rights to manufacture and market certain Flexsys products in Asia, the Flexsys Entities, along with their Japanese affiliate Flexsys KK, will enter into an equity purchase agreement and an asset purchase agreement, pursuant to which the Kashima Buyers will purchase all of Akzo Nobel's Crystex(R) business in Japan from affiliates of Akzo Nobel. Under the Kashima Purchase Agreements, the Kashima Buyers will acquire all of the outstanding shares of Crystex Japan K.K., which are owned by Akzo Nobel K.K.; and all of the assets owned by Akzo Nobel Kashima K.K. that relate to its Crystex business and to assume the liabilities related to the assets. Neither Solutia nor any of its Debtor-affiliates will participate in the Kashima Transactions. Jonathan S. Henes, Esq., at Kirkland & Ellis LLP, in New York, states that the structure of the lending transaction provides tax and financing benefits to Solutia, including allowing the repayment of the intercompany financing without triggering a United States taxable income inclusion. Mr. Henes asserts that Solutia's acquisition of Akzo Nobel's 50% stake in Flexsys and the provision of a subordinated intercompany loan to Flexsys is in the best interest of Solutia's estates, its stakeholders, and all other parties-in-interest because: (a) Solutia has the opportunity to create additional value for its estates as the sole owner of Flexsys. Solutia is acquiring Akzo Nobel's interest in Flexsys at an attractive price when compared to the acquisition prices for comparable specialty chemical companies. Like Solutia, Flexsys is a global specialty chemicals business that specializes in the "know how" of manufacturing market-leading products, Mr. Henes says. Solutia continues to experience improved financial performance during the Chapter 11 cases as a result of implementing new business strategies, disposing of underperforming assets and shutting down unprofitable businesses, Mr. Henes notes. Solutia believes that the implementation of many of the same strategies similarly would improve Flexsys' businesses to the benefit of all of Solutia's stakeholders. (b) The proposed transaction allows Solutia to retain and possibly enhance the value of its existing interest in Flexsys. Solutia believes that the proposed transaction would resolve the divergent business interests of Solutia and Akzo Nobel and present significant opportunities for Flexsys to be more profitable and competitive in the future. Under the status quo, Solutia believes substantial value would remain trapped in a joint venture that lacks one dedicated owner or a viable exit strategy, thereby eroding the value of Solutia's existing investment in Flexsys. (c) The proposed transaction will be accretive to Solutia's earnings and cash flow, and will enhance Solutia's credit metrics by decreasing Solutia's debt-to-EBITDAR ratio. (d) The acquisition will diversify Solutia's cash flows. Solutia should be authorized to enter into the Proposed Transaction, including implementation of certain organizational changes in connection with the acquisition, because Solutia has demonstrated that good business reasons support acquiring Akzo Nobel's interests in Flexsys, Mr. Henes tells the Court. Solutia believes that the Proposed Transaction presents the optimal way for Akzo Nobel to exit the Flexsys joint venture, while at the same time allowing Solutia to maximize value for its interest in Flexsys. Organizational Changes In connection with Solutia's acquisition of Flexsys, James R. Voss, Solutia's senior vice president of Business Operations, has been named president of Flexsys and senior vice president of Solutia. He will assume general management responsibilities for the Flexsys business. Robert T. DeBolt, Solutia's vice president of Strategy, has been named senior vice president of Business Operations for Solutia. He will retain responsibility for the corporate strategy function and will assume responsibility for four additional corporate functions -- environmental, safety & health; human resources; procurement; and information technology. Solutia will enter into new employment agreements with Messrs. Voss and DeBolt. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 82; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). In February 2007, the Honorable Prudence Carter Beatty entered a bridge order extending the Debtors' exclusive period to file a plan until April 30, 2007. SOLUTIA INC: Proposes Bidding Procedure for Dequest Sale -------------------------------------------------------- Solutia Inc. and its debtor-affiliates filed with the U.S. Bankruptcy Court for the Southern District of New York their proposed bidding procedure for the sale of their water treatment phosphonates business. The Debtors have significantly enhanced their businesses by continuing to groom their asset portfolio, developing new robust business strategies, and making selective strategic investments, M. Natasha Labovitz, Esq., at Kirkland & Ellis LLP, in New York, relates. Solutia continued to analyze its businesses and has determined that Dequest(R), its water treatment phosphonates business, is a non-core asset that should be divested. Dequest operates within Solutia's specialty products and services business segment and is a leader in the production and sale of phosphonates and phosphonates-based specialty additives that enhance water quality for industrial and domestic use. Solutia has marketed the Dequest business to chemical industry players with a strategic advantage in one or more of the major raw materials used in the business. Thermphos Trading GmbH, a Swiss corporation, emerged with a very attractive bid for the business. After several months of intensive negotiations, on March 11, 2007, Thermphos and Solutia entered into a purchase agreement. Solutia believes that it is appropriate to further market-test the purchase price and other terms of the proposed Thermphos transaction by holding an auction, with Thermphos as a "stalking horse" bidder, whose Purchase Agreement will set a bidding floor to ensure Solutia will receive the best offer in the Auction. Due to the fact that Solutia has a definitive, binding agreement with Thermphos to purchase the Dequest business at a very attractive price, conducting a full, public auction process now no longer poses as much risk of erosion of vendor, customer and employee confidence in Dequest that existed before Solutia entered into the Purchase Agreement, Ms. Labovitz tells the Court. Any risk to Solutia of having a public auction at this stage is outweighed by the significant potential upside if a higher purchase price is obtained through the auction process, Ms. Labovitz says. Purchase Agreement Thermphos has agreed to purchase the business free and clear of liens, encumbrances, claims and other interests, for $67,000,000, subject to certain adjustments based on an agreed upon working capital and inventory value as of the closing date, subject to better offers in an auction process to be conducted in accordance with the proposed bidding procedures. The Debtors propose to sell assets that are used exclusively in the Dequest business, including fixed assets; inventory; contracts; intellectual property; permits; books and records; credits; prepaid expenses; security deposits; all prepayments or deposits in respect of orders or product to be shipped after the closing date; technology; and a number of Microsoft licenses equal to the number of employees of Solutia and its affiliates, who will be transferred to the buyer or accept the buyer's offer of employment pursuant to the Purchase Agreement and actually commence active employment with the buyer or its affiliate on or after the closing date. To the fullest extent permitted by the Court, the Transferred Assets are to be transferred free and clear of any charge, claim, mortgage, lien, option, pledge, security interest, lease, levy, right of first refusal, right of first offer, restriction on voting or transfer or encumbrances, other than permitted encumbrances and assumed liabilities. The excluded assets include: -- all cash and cash equivalents of the Solutia and its affiliates; -- the land; -- originals of books and records, records of internal corporate proceedings, tax records, work papers, and books and records of Solutia and its affiliates they are required by law to retain, provided that copies are made available to the purchaser; -- all rights in the names and marks; -- all of the bank accounts; and -- any insurance policies and rights, claims or cause of action. Among the liabilities the purchaser will assume are: * taxes arising from or with respect to the Transferred Assets or the operation of the Dequest business occurring after the closing date; * all liabilities under the business contracts and the business permits that accrue or are to be performed on or after the closing date, other than any liability resulting from a breach before closing; and * all buyer environmental liabilities. Solutia will assign to Thermphos the certain contracts, and it will assume all obligations required to be performed subsequent to the closing. Solutia will pay the cure costs as and when finally determined by Court order. The Purchase Agreement may be terminated by mutual written consent; if the non-terminating party is in breach of the representations, warranties or covenants of the party and the breach would give rise to a failure of a condition precedent that cannot be cured within 15 days of written notice; if the closing will not have occurred by 120 days after the execution of the Purchase Agreement; and if any government authority has enjoined or otherwise prohibited the sale by final, non-appealable order. Thermphos may terminate the Purchase Agreement if the bidding procedures order have not been entered and become a final order on or before May 3, 2007; and the sale order have not been entered and become a final order on or before June 17, 2007. Solutia has agreed to pay, pursuant to separate agreements, five key Dequest employees each a closing bonus aggregating $231,298, to further Solutia's interest in obtaining the highest possible sales value for the Dequest business and to maintain the value of the business for and ensure the orderly transition of the business to Thermphos. A copy of the Purchase Agreement is available for free at: http://researcharchives.com/t/s?1c61 Sale Procedure To participate in the bidding process and to receive non-public information concerning the Transferred Assets, each entity must deliver to Solutia's counsel and counsel for the Official Committee of Unsecured Creditors on or before the proposed bid deadline of April 30, 2007: -- an executed non-binding indication of interest; -- an executed confidentiality agreement in form and substance containing terms no less favorable to Solutia than the terms of confidentiality agreement entered into with Thermphos; and -- written evidence, including audited financial statements or other form of financial disclosure, of the potential bidder's financial ability to complete the contemplated transactions, the adequacy of which Solutia and its advisors will determine in their sole discretion. A bid is a Qualified Bid if, among others, it: (a) is equal or exceed the sum of (i) the purchase price, (ii) the minimum overbid increment that is 3% of the purchase price, (iii) a break-up fee payable to Thermphos that is 3% of the base purchase price, and (iv) up to $1,000,000 for reimbursement of actual and reasonable documented out- of-pocket costs and expenses incurred by Thermphos in connection with negotiating and preparing for the Sale; (b) provides payment of the Break-Up Fee and Expense Reimbursement; and (c) is accompanied by a deposit of 10% of the cash purchase price specified in the Bid. If more than one Qualified Bid is received, Solutia will conduct an auction on May 2, 2007, at 10:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP, at 153 East 53rd Street, New York. On May 1, Solutia will provide each Qualified Bidder a written notice of the auction, a copy of the Qualified Bid that Solutia and the Creditors Committee believe constitutes the best offer and with which it intends to commence the auction. If no Qualified Bid is received by the Bid Deadline, Thermphos' bid will be deemed the best offer and an auction will not be conducted. At the close of the auction, Solutia, in its sole discretion and after consultation with the Creditors Committee, will identify the best bidder. The auction will not close unless and until Qualified Bidders, who were not chosen as the successful bidder, have been given a reasonable opportunity to submit an overbid at the auction to the then existing Overbid, if any, and the Successful Bidder has submitted a fully executed purchase agreement memorializing the terms of the Successful Bid. After announcing the Successful Bidder and alternate bidder, Solutia will declare the auction closed. An Alternate Bidder will be required to keep the alternate bid open, binding and irrevocable until the closing of the Sale. If for any reason, the Successful Bidder fails to consummate the purchase of the Transferred Assets within the time permitted in the Purchase Agreement, the Alternate Bidder with the second highest or otherwise best bid for the Transferred Assets will automatically be deemed to have submitted the best bid, and Solutia will be authorized, but not required, after consultation with the Creditors Committee, to consummate the Sale with the Alternate Bidder without further Court order. If Solutia sells any or all of the Transferred Assets to a Successful Bidder other than Thermphos, Solutia will pay the Break-Up Fee and the Expenses Reimbursement to Thermphos upon the closing of the Sale. Thermphos will have an allowed claim for an administrative expense in the Debtors' Chapter 11 cases in an amount equal to the sum of the Break-Up Fee and the Expense Reimbursement. Solutia asks that a Sale hearing be held on May 4, 2007. At the Sale Hearing, if no other Qualified Bid is received, Solutia will seek entry of the Sale order authorizing and approving the sale of the Transferred Assets to Thermphos, or if a Qualified Bid is identified as the Successful Bid, to the Successful Bidder. Bid Protections Under the Purchase Agreement, Solutia has agreed to pay Thermphos a Break-Up Fee that is 3% of the base purchase price and an Expense Reimbursement of Thermphos' actual, reasonable and documented out-of-pocket costs and expenses up to $1,000,000. Thermphos has repeatedly informed Solutia that it was reluctant to become a stalking horse bidder and expose its bid to additional market-testing in an auction process, Ms. Labovitz relates. Accordingly, the Bid Protections were material inducements for, and conditions of, Thermphos' agreement to enter into the Purchase Agreement, she adds. Assumption and Assignment of Contracts The Purchase Agreement requires Solutia to assume and assign certain contracts, which may include curing any defaults under them to the extent required by Section 365 of the Bankruptcy Code. Solutia believes it is appropriate to establish a process by which Solutia and the counterparties to the Assumed Contracts can establish the amount of cure costs, if any, and for the counterparties to assert any objections they may have to the assumption and assignment of the Assumed Contracts. Solutia will file and serve a cure notice to the Bidding Procedures order to each non-Debtor counterparty to an Assumed Contract no later than April 16, 2007. The Cure Notice will include a schedule of the cure costs associated with each Assumed Contract. Counterparties will have 10 days from the service of the Cure Notice to object to the proposed assumption and assignment of the applicable Assumed Contract and the proposed cure cost. If there are no objections, the Assumed Contract will be assumed by Solutia and assigned to Thermphos or the Successful Bidder, subject to the occurrence of the closing date of the Sale. If the objection to the cure cost cannot be resolved consensually before the Sale Hearing, Solutia, in consultation with Thermphos, will determine whether to: -- request approval of the assignment of the Assumed Contract, provided that the disputed portion of the cure cost will be held in escrow pending resolution of the dispute; and -- withdraw the request that the Court approve assumption and assignment of the Assumed Contract. If parties are unable to resolve the disputed cure cost in connection with the Assumed Contract, a hearing will be held at a date and time determined by the Court. If there is no objection to a cure cost, Solutia will pay each Assumed Contract Counterparty the cure costs on the later of the closing date and the actual date of assignment of the Assumed Contract. Solutia asks the Court to approve the Bidding Procedures; Assumption and Assignment Procedures; form and manner of the sale notice; and schedule a Sale Hearing to approve a Sale of the Dequest business to Thermphos. Solutia also seeks the Court's authority, at the Sale Hearing, to sell the Transferred Assets free and clear of liens, encumbrances, claims and other interests, on substantially the terms and conditions set forth in the Purchase Agreement; and assume and assign the Assumed Contracts. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 82; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). In February 2007, the Honorable Prudence Carter Beatty entered a bridge order extending the Debtors' exclusive period to file a plan until April 30, 2007. SOTHEBY'S: S&P Upgrades Corporate Credit Rating to BB+ from BB -------------------------------------------------------------- Standard & Poor's Rating Services raised its corporate credit and senior unsecured debt ratings on Sotheby's to 'BB+' from 'BB'. The outlook is stable. New York City-based Sotheby's had about $100 million of debt outstanding at Dec. 31, 2006. The upgrade reflects substantially improved credit metrics resulting from very strong profitability and cash flow. The improvement stems from a burgeoning international art market. "Our assessment of the company's credit profile," said Standard & Poor's credit analyst John Thieroff, "has also been bolstered by a continuation of rather conservative practices around its complementary financial services business. Further, we expect the company to benefit from increased buyer's premiums on a portion of its auction sales." SUNDOWN ENTERPRISES: Case Summary & Largest Unsecured Creditor -------------------------------------------------------------- Debtor: Sundown Enterprises, L.L.C. aka Sundown Mobile Home Park 24820 Jo Mary Court Hayward, CA 94541 Bankruptcy Case No.: 07-40909 Chapter 11 Petition Date: March 27, 2007 Court: Northern District of California (Oakland) Judge: Edward D. Jellen Debtor's Counsel: Basil J. Boutris, Esq. Vaught & Boutris, L.L.P. 80 Swan Way, Suite 320 Oakland, CA 94621 Tel: (510) 430-1518 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ PG&E utility $23,400 P.O. Box 997300 Sacramento, CA 95899-7300 SWEETMAN RENTAL: Court Okays Winfree Ruff as Accountant ------------------------------------------------------- Sweetman Rental, LLC, dba Sweetman Music obtained permission from the U.S. Bankruptcy Court for the Southern District of Ohio to employ Winfree, Ruff and Associates, Ltd., as its accountant. Winfree Ruff is expected to: a) serve as representatives for the Debtor on its Chapter 11 case; b) oversee all accounting functions and services; c) provide tax preparation, tax planning and tax consulting services to the Debtor; d) assist in the preparation of monthly operating reports and any additional financial documentation required by the U.S. Trustee and the Local Bankruptcy Rules; and e) provide or assist in the preparation of financial analyses used in the Debtor's bankruptcy case. C. Woodson Winfree, CPA, a shareholder at Winfree, Ruff and Associates, Ltd., tells the court that the firm received a $1,000 prepetition retainer fee. Mr. Winfree added that the firm's professionals bill: Professional Hourly Rate ------------ ----------- C. Woodson Winfree, CPA $135 Gary Bower, CPA $125 Tony Alfauo, CPA $125 Mr. Winfree assures the Court that the Firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Lancaster, Ohio, Sweetman Rental, LLC dba Sweetman Music -- http://www.sweetmanmusic.com/-- sells musical instruments in Central and Southeastern Ohio, and offers repair services on musical instruments. The company filed for Chapter 11 protection on Jan. 9, 2007 (Bankr. S.D.OH. Case No. 07-50116). Matthew Fisher, Esq. of the Allen, Kuehnle, Stovall & Neuman LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated assets between $100,000 and $1 million and estimated debts between $1 million and $100 million. TODD MCFARLANE: Files Third Amended Disclosure Statement -------------------------------------------------------- Todd McFarlane Productions Inc. filed with the U.S. Bankruptcy Court for the District of Arizona a Third Amended Disclosure Statement explaining its Third Amended Chapter 11 Plan of Reorganization. Plan Funding The Debtor tells the court that the Plan will be funded by cash from (i) Debtor's operations on and after the Plan effective date, (ii) travelers settlement proceeds after the Plan effective date, and (iii) Gaiman Insurance Proceeds and Gaiman Litigation Bond. The Debtor tells the Court that only the Gaiman Claim will be paid from the Gaiman Insurance Proceeds and Gaiman Litigation Bond. Twist Settlement On Feb. 15, 2007, the Court approved the settlement agreement that Hanover Insurance Company, Citizens Insurance Company of America, and General Star Indemnity Company will pay Toni Twist $5 million in exchange for the release of all liens and claims concerning any obligations the insurance companies might have to indemnify the Debtor or Todd MacFarlane for the $15 million Twist Settlement Agreement. Under the agreement, Mr. Twist will file a satisfaction of judgment and a dismissal with prejudice of all remaining claims. Treatment of Claims Under the Third Amended Plan, Administrative Claims and Priority Claims will be paid in full. Holders of General Unsecured Claims and Affiliate Claims will also be paid in full. Secured Lender Claim holders will be paid in full in cash and will retain the liens securing its claims until all valid claims have been paid. Each holder of Other Priority Claims will be paid in full equal to the unpaid portion of its claims. Neil Gaiman will be paid in full equal to the unpaid portion of his claim, plus interest. Travelers Indemnity Company of America Claims will be reinstated on the Plan effective date. Equity Interest holders will remain in full force and effect. Tony Twist will not receive any distribution and have waived the right to seek any recovery from the Debtor under the Plan. A full-text copy of Todd MacFarlane's Third Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=070328024359 The Court will convene a hearing at 2:30 p.m. on April 17, 2007, to consider the adequacy of the Debtor's Third Amended Disclosure Statement. The hearing will take place at Courtroom 601, U.S. Bankruptcy Court, 230 North First Avenue in Phoenix, Ariz. Headquartered in Tempe, Arizona, Todd McFarlane Productions, Inc. -- http://www.spawn.com/-- publishes comic books including Spawn, Hellspawn, and Sam and Twitch. The Company filed for chapter 11 protection on Dec. 17, 2004 (Bankr. D. Ariz. Case No. 04-21755). Josefina F. McEvoy, Esq., and Kelly Singer, Esq., at Squire Sanders & Dempsey, LLP, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Company filed for protection from its creditors, it listed more than $10 million in assets and more than $50 million in debts. TODD MCFARLANE: Disclosure Statement Hearing Scheduled on April 17 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Arizona set a hearing on April 17, 2007, at 2:30 p.m., to consider the adequacy of the Third Amended Disclosure Statement explaining Todd McFarlane Productions Inc.'s Third Amended Chapter 11 Plan of Reorganization. Headquartered in Tempe, Arizona, Todd McFarlane Productions, Inc. -- http://www.spawn.com/-- publishes comic books including Spawn, Hellspawn, and Sam and Twitch. The Company filed for chapter 11 protection on Dec. 17, 2004 (Bankr. D. Ariz. Case No. 04-21755). Josefina F. McEvoy, Esq., and Kelly Singer, Esq., at Squire Sanders & Dempsey, LLP, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Company filed for protection from its creditors, it listed more than $10 million in assets and more than $50 million in debts. TOWER AUTOMOTIVE: Selling Assets to Cerberus Capital ---------------------------------------------------- Tower Automotive Inc. has filed a restructuring term sheet with the U.S. Bankruptcy Court for the Southern District of New York to sell substantially all of its assets through a Chapter 11 Plan to funds and accounts to be designated by Cerberus Capital Management, L.P. The proposed transaction, among other things, provides for payment in full of obligations under Tower's Debtor-in-Possession credit facility and second lien loan facility, assumption of the company's pensions, and certain recovery for unsecured creditors. Tower's Unsecured Creditors Committee supports the transaction and has signed the term sheet. "We have accomplished a tremendous amount during the last few years to revitalize Tower so the company can strongly compete in today's global automotive marketplace," Kathleen Ligocki, President and Chief Executive Officer, said. "During its reorganization process, Tower diversified its customer portfolio, sold non-core businesses, consolidated the North American manufacturing footprint and negotiated settlements with all 10 U.S.-based labor unions to drive the profitability needed to attract new investment to the company. "The recapitalization of the company is the last major milestone in our restructuring process. We are excited to have the support of an investor like Cerberus Capital Management, L.P., a group dedicated to investing in the automotive sector for the long term." The term sheet anticipates Tower will file a Chapter 11 Plan by April 20, 2007. It also specifies a marketing process under which qualified parties may submit competing bids by June 15, 2007. If competing bids are received, the company proposes to conduct an auction on June 21, 2007 to determine the highest and best bid. The company would then ask the Bankruptcy Court to confirm Tower's Plan and approve a transaction on June 22, 2007, with a closing to occur by July 31, 2007. Headquartered in Grand Rapids, Michigan, Tower Automotive Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. The Debtors' exclusive plan-filing deadline is extended to March 21, 2007, pending a hearing on that date. TRINSIC INC: Court Approves Sale of Assets to Tide Acquisition -------------------------------------------------------------- Trinsic Inc. obtained authority Friday last week from the U.S. Bankruptcy Court for the Southern District of Alabama to sell its assets for $25.5 million to Tide Acquisition Corp., Bill Rochelle of Bloomberg News reports. According to the source, Tide's offer topped American Communications Network Inc.'s initial bid of $8.6 million plus assumption of certain debts. Based in Tampa, Florida, Trinsic, Inc. and its debtor-affiliates -- http://www.ztel.com/and http://www.trinsic.com/-- offer competitive local-exchange carrier services to residential and business customers. They lease network assets from incumbent carriers to offer alternative local and long-distance voice and data services. The companies operate 189,000 residential local access lines and 40,000 business lines. Trinsic Communications, Inc. is the principal operating subsidiary of the companies. Trinsic, Inc. and its debtor-affiliates, Trinsic Communications, Inc., Touch 1 Communications, Inc., Z-Tel Network Services, Inc., and Z-Tel Consumer Services, LLC filed for Chapter 11 protection n February 7, 2007 (Bankr. S.D. Ala. Case No. 07-10320 through 07-10324). Christopher S. Strickland, Esq., at Levine, Block & Strickland, LLP, and Donald M. Wright, Esq., at Sirote & Permutt, P.C., represent the Debtors in their restructuring efforts. When Trinsic, Inc. filed for protection from its creditors, it listed total assets of $27,581,354 and total liabilities of $48,287,786. TRW AUTOMOTIVE: Earns $176 Million in Year Ended December 31 ------------------------------------------------------------ TRW Automotive Holdings Corp. reported fourth-quarter and year-end 2006 financial results for the period ended Dec. 31, 2006. Full year net earnings in 2006 were $176 million, which compares to $204 million in the 2005 period. For full-year 2006, the company reported sales of $13.1 billion, an increase of $501 million, as compared with prior period sales of $12.6 billion. The current year benefited from incremental sales related to the acquisition of Dalphimetal. Additionally, sales benefited from increased safety product sales and foreign currency translation, partially offset by a decline in North American customer vehicle production and price reductions provided to customers. Net earnings in 2006 and 2005 were impacted by certain non- recurring items, including 2006 expenses of $57 million, or $40 million after-tax, related to the Lucas bond tender transaction. The 2005 results included net income of $28 million comprised of a one-time tax gain of $17 million stemming from a tax law change in Poland and the litigation reserve adjustment of $18 million, offset partially by debt retirement expenses of $7 million. Net earnings excluding these items from both periods were $216 million in 2006, which compares to $176 million in 2005. As of Dec. 31, 2006, the company had $11.1 billion in total assets, $8.6 billion in total liabilities, and $109 million in minority interests, resulting to $2.4 billion in total stockholders' equity. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c4b Fourth Quarter 2006 The company reported fourth-quarter 2006 sales of $3.3 billion, an increase of $136 million over the prior year period. The 2006 quarter benefited from the positive effect of foreign currency translation, incremental sales related to the acquisition of Dalphimetal in October 2005, and growth from safety products and modules. These positives were partially offset by historically low customer vehicle production volumes in North America and price reductions provided to customers. The company reported fourth-quarter 2006 net earnings of $33 million, which compares to $59 million in the 2005 period. Fourth quarter 2006 net earnings excluding the $17 million tax benefit discussed previously were $16 million. In comparison, net earnings for the 2005 period excluding the one-time litigation reserve adjustment of $18 million were $41 million. "Despite facing significant second half operating challenges, we are pleased to report solid 2006 financial results that exceeded the business objectives we set at the beginning of the year," said John Plant, president and chief executive officer. "The company performed well in a difficult business environment, especially in North America where sustained pressures from domestic OEM market share losses and commodity inflation have taken a heavy toll on the industry. Our steady financial performance over the past few years can be attributed to the strength of our safety portfolio, together with industry leading diversification and extensive cost reduction actions. Additionally, we are making considerable investments to enhance our technology and our global presence in the marketplace, with the ultimate goal of growing the company profitably and competitively over the long term," Mr. Plant, continued. Cash Flow and Capital Structure Net cash provided by operating activities during the fourth quarter and full year was $397 million and $649 million, respectively. In the comparable 2005 period, the company's cash flow from operating activities was $380 million in the fourth quarter and $502 million for the full year. Fourth quarter capital expenditures were $195 million compared to $222 million in 2005. For the year 2006, capital expenditures were $529 million, which compares to $503 million in the previous year. On Nov. 10, 2006, the company repurchased Northrop Grumman Corporation's remaining ownership position of 9.7 millions shares of TRW's common stock. Separately, on the same day, TRW sold 6.7 million of its common stock through a public offering. Proceeds generated from the offering were used to fund a portion of the Northrop Grumman stock repurchase. The net cash impact to the company as a result of the stock transactions, which resulted in a 3 million decline in shares outstanding, was $56 million. As of Dec. 31, 2006, the company had $3 billion of debt and $589 million of cash and marketable securities, resulting in net debt of $2.4 billion. The year-end 2006 net debt level decreased $117 million, as compared with the year-end 2005 level, which represents solid progress considering 2006 cash outflows related to the Lucas bond tender transaction premiums of $57 million and $56 million related to the November 2006 stock transactions. About TRW Automotive Headquartered in Livonia, Michigan, TRW Automotive Holdings Corp. (NYSE: TRW) -- http://www.trwauto.com/-- is an automotive supplier. Through its subsidiaries, the company employs about 63,800 people in 26 countries including Brazil, China, Germany and Italy. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems, electronics, engine components, fastening systems and aftermarket replacement parts and services. * * * Fitch Ratings affirmed TRW Automotive Holdings Corp.'s BB Issuer Default Rating, BB+ Senior secured bank lines, BB- Senior unsecured notes, and B+ Senior subordinated unsecured Notes on September 2006. TXU CORP: Moody's Holds Rating on Senior Unsecured Debt at Ba1 -------------------------------------------------------------- The proposed acquisition of TXU Corp. by a consortium of private equity investors will likely lead to a period of aggressive financing that could make TXU a deeply speculative-grade rated company, Moody's Investors Service says in a new report exploring the proposed transaction's credit implications. Currently, only TXU's senior unsecured debt, at Ba1, is rated non-investment grade. "We believe private equity investors do not represent natural long-term owners of the businesses and assets of TXU," says Moody's Vice President and Senior Credit Officer Jim Hempstead. "Accordingly, we believe the company will exhibit a very high tolerance for financial risk through the aggressive use of leverage to boost near-term returns." In general, Moody's says that leveraged buyouts of utility companies encompass an extraordinarily high amount of execution risk, and introduce transaction event risk that could have devastating effects on a company's credit profile. In the report, Moody's says TXU's financial profile is likely to deteriorate materially even if the reported transaction is not completed. Moody's expects negotiations with regulatory and legislative authorities to be protracted and as possibly leading to changes in the transaction as proposed. "We view the board of director's acceptance of the buyout as a clear indication of the company's bias toward meeting shareholder needs to the obvious detriment of bondholders," says Hempstead. "In our opinion, the board of directors of TXU has clearly demonstrated its willingness to allow a much higher degree of financial risk to be applied to its business than we had previously been incorporating into our rating assessment." As currently planned, the proposed acquisition of TXU Corp. by a consortium of private equity investors would likely cause the credit ratings of TXU Corp. and several of its subsidiaries to be downgraded by one or more notches, making TXU a deeply speculative grade rated company, Moody's says. On Feb. 26, 2006, the day the TXU reported that it had agreed to be acquired by the consortium, Moody's placed the TXU's Ba1 senior unsecured rating and the ratings of its primary operating subsidiaries, Baa2-rated TXU Electric Delivery Company and Baa2-rated TXU Energy Company, and its holding company, Baa3-rated TXU US Holdings Company, on review for possible downgrade. At the time, Moody's said there was a reasonable expectation of a multi-notch downgrade at one or more of these rated entities. UNIT CORPORATION: Earns $312.2 Million in Year Ended December 31 ---------------------------------------------------------------- Unit Corp. disclosed its financial and operational results for the fourth quarter and year-end 2006. The company had a net income for the three months ended Dec. 31, 2006, of $81.2 million on revenues of $299.3 million, as compared with net income of $84.5 million on revenues of $293.1 million for the fourth quarter of 2005. Net cash provided by operating activities in the fourth quarter was $157.1 million, as compared with $127.9 million reported during the same time period in 2005. The quarter-over-quarter results were primarily impacted by lower natural gas price received for Unit's record-setting fourth quarter 2006 production. For the year ended 2006, Unit posted a company-record of $1,162.4 million in total revenues, higher than the $885.6 million reported for 2005. Net income for 2006 was $312.2 million, a significant increase compared to 2005's year-end net income of $212.4 million. Net cash provided by operating activities for the year 2006 was $506.7 million, as compared with $317.8 million recorded in 2005. Increased oil and natural gas production and strong dayrates for Unit's growing rig fleet, partially offset by lower natural gas prices and higher operating costs, all contributed to increases in Unit's year-end 2006 results. The company ended the year with working capital of $72 million, long-term debt of $174.3 million, and a debt to capitalization ratio of 13 percent. As of Dec. 31, 2006, Unit had $100.7 million of borrowing capacity based on the borrowing base associated with its current credit facility. The company's balance sheet as of Dec. 31, 2006, showed total assets of $1.8 billion and total liabilities of $176 million, resulting to total shareholders' equity of $1.1 billion. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c52 "Despite a downward shift in natural gas prices during the last half of the year, we are pleased with our results and with the records we have achieved in company revenues, contract drilling operating margins, and oil and natural gas production. Based on current market conditions, we believe that in 2007 Unit will set new operating marks in reserves and production levels for our oil and natural gas operations, Superior Pipeline, our mid-stream subsidiary, will gather record-levels of natural gas and add to its 600-plus mile system, Unit Drilling will expand its very active and very profitable rig fleet, and that Unit should report for the 24th consecutive year our replacing more than 150 percent of its annual production. I believe our commitment to excellence and consistent carrying out of our growth strategies will continue to provide good returns for our shareholders," Larry Pinkston, Unit Corp.'s chief executive officer and president, said. Credit Facility On Dec. 31, 2006, the company had a revolving credit facility, under which borrowings are limited to a commitment amount. On Oct. 10, 2006, the company signed a third amendment to its credit facility, which raised the commitment amount from $235 million to $275 million. On Jan. 25, 2007, the company signed a fourth amendment to its credit facility, which extended the maturity date of the credit facility to May 31, 2008. The company was charged a commitment fee of 0.375 of 1 percent on the amount available but not borrowed. The company incurred origination, agency and syndication fees of $515,000 at the inception of the agreement, $40,000 of which will be paid annually and the remainder of the fees amortized over the life of the agreement. At Dec. 31, 2006, and Feb. 16, 2007, the company's borrowings were $174.3 million and $160.5 million, respectively. On Dec. 31, 2006, we were in compliance with the covenants contained in the credit facility. About Unit Corp. Unit Corp. (NYSE: UNT) -- http://www.unitcorp.com/-- is a Tulsa- based, publicly held energy company that, through its subsidiaries in oil and gas exploration, produces, contracts, drills and processes gas. * * * Unit Corp.'s preferred stock carries Standard & Poor's B3 rating. UNITED AIRLINES: Union Coalition Demands Shared Rewards ------------------------------------------------------- Angered that management has been enriching itself in the face of life-changing sacrifices made on the part of workers at United Airlines Corp., the majority of United's unionized employees have formed the "Union Coalition at United Airlines" to demand their fair share in the financial rewards that management currently enjoys. Because of the sacrifices and efforts of United's employees, United Airlines avoided liquidation during its three- year bankruptcy. The union leaders call on management to, among other issues, make immediate, tangible improvements to the compensation and success sharing program for all employees, address quality of work-life issues, and move up Contract bargaining dates. "The employees of United Airlines are inexorably linked to the future and success of our airline," the Coalition said in a statement signed by Greg Davidowich of the Association of Flight Attendants, Lou Lucivero of the International Federation of Professional and Technical Engineers, Jim Seitz of the Aircraft Mechanics Fraternal Association, Craig Symons of the Professional Airline Flight Control Association and Mark Bathurst of the Air Line Pilots Association. "Throughout United's bankruptcy, 'shared sacrifice' was the mantra employees heard frequently from upper management. But executives have failed to lead by example as employees have watched these same individuals collect millions of dollars worth of stock, pay raises and bonuses. On Monday, the full extent of upper management's 2006 profit package was revealed in the Proxy Statement filed by United. Unionized employees are outraged. Management continues lining its pockets with millions of dollars while its employees still struggle under the same working agreements and wages implemented during United's bankruptcy. Clearly, United management values the concept of 'sharing' as a public relations tactic to extract billions of dollars in concessions rather than a principle by which they should live and manage. United's employees don't subscribe to management's philosophy that sharing ends at the sacrifice stage." Through concessions, nearly $5.5 billion was extracted from labor during United's stay in bankruptcy. "The dedication, sweat and sacrifice of all United employees have led United Airlines on the road toward sustained profitability," the union leaders said. "Management already is reaping the rewards of United's new found financial health. It is time the efforts of the airline's most important stakeholders -- the employees -- are recognized and respected. Shared sacrifice should equal shared rewards. "It is not unreasonable to demand our fair share in the financial rewards that management currently enjoys. Standing together and speaking with one voice, United Airlines' unionized employees will work aggressively to force management to recognize our part in transforming our airline." Combined, the coalition's five labor unions represent more than 30,000 United employees. About UAL Corp. Headquartered in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. Judge Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The Company emerged from bankruptcy protection on Feb. 1, 2006. * * * As reported in the Troubled Company Reporter on Jan. 19, 2007, Moody's Investors Service assigned B1, LGD-3 42% ratings to the United Air Lines Inc. $2.1 billion Senior Secured Revolving Credit and Term Loan. Moody's also assigned the B2 corporate family and probability of default rating and a stable outlook at UAL Corporation. At the same time, Moody's withdrew its corporate family and probability of default ratings assigned at the United level and affirmed its SGL-2 speculative grade liquidity rating. Moody's will withdraw the ratings on United's existing $3 billion of revolving credit and term loans once the new Bank Facilities close. The rating outlook is stable. US AIRWAYS: Completes $1.6 Billion Debt Refinancing Transaction --------------------------------------------------------------- US Airways Group, Inc., has completed a $1.6 billion debt refinancing transaction. The new loan, which was arranged by Citigroup Global Markets Inc. and Morgan Stanley Senior Funding, Inc., as joint lead arrangers, will bear interest at LIBOR plus 2.5%. The applicable margin is reduced as the loan is paid down or as the company's credit rating improves. It can be low as LIBOR plus 2% if the loan balance is under $600 million or the loan facility credit rating, as determined by Moody's Investor Services which assigned a 'Ba3' rating and Standard & Poor's which assigned a 'BB-' rating. The term of the loan is seven years with substantially all of the principal amount payable at maturity. The loan requires the company to maintain a minimum level of unrestricted cash and a minimum collateral coverage ratio. The refinancing improves liquidity over the next seven years by reducing principal payments and lowering near-term interest expense. Upon funding, the company extinguished two separate debt facilities: (i) a $1.25 billion senior secured credit facility, and (ii) a $325 million unsecured debt facility. The additional $25 million will be used for general corporate purposes. The new loan will reduce the blended interest margin by over 100 basis points. The refinancing will reduce the company's debt amortization by $92 million annually from 2008 to 2010 and $1.234 billion in 2011. In addition, interest expense will be reduced by $14 million in 2007 and $13 million in 2008. "The company is pleased with the outcome of this refinancing," Senior Vice President and Chief Financial Officer Derek Kerr said. "The refinancing enables the company to continue to strengthen its balance sheet as the company works to complete its integration and meet its primary objectives of reducing borrowing costs, deferring debt maturities and reducing its covenant package. Completing this transaction provides further evidence of the financial market's confidence in the new US Airways." About US Airways Headquartered in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -- http://www.usairways.com/-- 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. * * * As reported in the Troubled Company Reporter on March 19, 2007, Fitch Ratings has upgraded its ratings on US Airways Group, Inc. as: (i) Issuer Default Rating to 'B-' from 'CCC'; (ii) Secured term loan rating to 'BB-/RR1' from 'B/RR1'; and (iii) Senior unsecured rating to 'CCC/RR6' from 'CC/RR6'. Fitch's ratings apply to $1.9 billion in outstanding debt. In addition, Fitch has assigned a rating of 'BB-/RR1' to US Airways' new $1.6 billion secured term loan facility. The Rating Outlook is Positive. US AIRWAYS: Pilots Protest Management's Negotiating Tactics ----------------------------------------------------------- As negotiations for a single pilot contract continue to drag on after a year and a half, the pilots of US Airways Group Inc. and America West Inc. are demonstrating their frustration with US Airways management's behavior at the bargaining table and the airline's deteriorating operations by picketing on March 27, 2007, at the Pittsburgh International Airport. The pilot groups, both of whom are represented by the Air Line Pilots Association, Int'l, have been waiting for US Airways' management to put forward proposals that reflect US Airways' successful position in the industry, rather than insisting on cramming down bankruptcy- driven proposals that were put in place so that the company could survive after the post-9/11 industry downturn. Instead, US Airways CEO Doug Parker is repeatedly stating to both pilots and the media that he will continue to "just say no" at the negotiating table, contending that the pilots are overreaching during talks, although management is using over-inflated dollar amounts to make these claims. US Airways management is also unfairly demanding that the pilots shoulder the burden of the costs incurred by the US Airways and America West merger. Instead of US Airways assuming the costs of equalizing pre-merger pay and benefits, as management proposed in the failed take-over attempt of Delta Air Lines, they are trying to shift the associated merger costs to the pilots at the negotiating table, further exaggerating the differences at the table. "Whether management is publicly whitewashing their operational issues or the ongoing pilot negotiations, the US Airways pilots will not stand idly by and let their investments go unrecognized," Captain Jack Stephan, US Airways MEC Chairman, said. "We're not paying for management's continuing operational blunders, and we're not paying for the cost of integrating two airlines. That's their responsibility, and any attempts to pass those costs off onto the pilots, who gave up billions to save US Airways, will end in failure. Perhaps it's time for management to begin promoting a realistic business plan instead of expecting the pilots to subsidize their operations." "It is time for our former America West management to step up and recognize the value of our contribution in making this merger work thus far," Captain John McIlvenna, America West Chairman, said. "But, our patience is running very thin. Our pilots will not stand for the continued attacks on their work rules and benefits, and they demand a contract that is fair and equitable and in line with our very profitable airline." A single contract would be a significant step toward completing the US Airways-America West merger and combining the two airlines, making it easier for both US Airways to manage its operational problems and for the passengers traveling on US Airways. Founded in 1931, Air Line Pilots Association, International -- http://alpa.org/-- represents 60,000 pilots at 40 airlines in the U.S. and Canada. About US Airways Headquartered in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) -- http://www.usairways.com/-- 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. VANGUARD FIRE: Judge Lewis Orders Liquidation --------------------------------------------- Vanguard Fire & Casualty Co. will be undergoing liquidation, the Tampa Bay Business Journal reports. Leon County Circuit Court Judge Terry P. Lewis ordered the company to undergo liquidation, effective march 26, 2007, to ensure that the claims held by policyholders will be paid. As a result of Judge Lewis' order, homeowner policies will be cancelled at 12:01 a.m. on April 25. According to the report, the Department of Financial Services has paid more than $6 million in claims using the company's assets. The Business Journal cites DFS spokeswoman Nina Banister as saying that DFS determined that the company's cash and reserves weren't enough to keep up with the claims. In a statement, Florida Chief Financial Officer Alex Sink said that "[g]etting the company into the liquidation process will allow us to immediately begin paying claims from the state's Florida Insurance Guaranty Association." "Our top priority is to take care of policyholders and ensure their claims are paid," she added. Replacement Coverage The Business Journal relates that DFS has asked the court for permission to offer replacement coverage for the company's approximately 57,000 homeowner policyholders by either Royal Palm Insurance Co. or Security First Insurance Co. If approved, the replacement coverage will be effective at the earlier of April 25 or expiration of the policyholder's Vangurad coverage. Receivership According to the Business Journal, the company had stopped writing new coverage in early January and said that it would no longer renew coverage after April 19. The company was placed into receivership for rehabilitation on January 19. About Vanguard Fire Vanguard Fire & Casualty -- http://http://www.vanguardfc.com/-- is a property and casualty insurance company based in Maitland, Florida. The company specializes in personal property lines of insurance for Florida residents, which are sold by its network of independent insurance agents throughout the state. The company was founded based on the need to provide Florida residents with a new homeowners insurance source, after many companies stopped underwriting policies in Florida in the aftermath of Hurricane Andrew. VARIG SA: Selling VRG's Shares to GOL Airlines for $275 Million --------------------------------------------------------------- GOL Intelligent Airlines aka GOL Linhas Aereas Inteligentes, controlling shareholder of GOL Transportes Aereos S.A. and Brazil's low-cost, low-fare airline, has agreed with VarigLog and Volo, the controlling shareholders of VRG Linhas Aereas S.A. and airline that operates the Varig S.A. brand, to acquire the total share capital of VRG. The total consideration offered for the shares of VRG is approximately $275 million, consisting of $98 million of cash, and approximately 6.1 million non-voting shares issued by GOL, with various sale restrictions for up to 30 months. With the assumption of BRL100 million ($45 million) of debentures, the total aggregate value of the transaction is approximately $320 million. This closing is conditioned on obtaining all the customary regulatory approvals from the authorities, including the Brazilian Antitrust Agency and the National Civil Aviation Agency; GOL will keep investors informed of approvals. VRG will be acquired by GTI S.A., a wholly owned subsidiary of GOL Intelligent Airlines. The companies will keep separate financials and will be managed according to best practices in corporate governance and internal controls. VRG will operate with its own VARIG brand, differentiated services, incorporating the low-cost business model from GOL, and independent administration, separate from GOL's operating subsidiary GOL Transportes Aereos S.A, which will continue to invest in its unique low-cost operating model. GOL and VRG will be managed as independent companies with focused business models. GOL will maintain focus on its low-cost, low- fare business model, with a single-class of service in the Brazilian domestic market and South America. The company maintains its commitment to popularizing air travel, making low- fare flights more accessible to a larger portion of the population. VARIG will offer differentiated services, with direct flights and a mileage program, which currently serves more than 5 million clients. On long-haul international routes, VARIG will offer two service classes: coach and business. In the domestic market, VARIG will operate with a single-class of service, prioritizing flights between the main economic centers of Brazil, with principal bases of operation at Congonhas, Guarulhos, Santos Dumont and Galeao airports. Both companies will explore synergies resulting from gains in efficiency, quality and competitiveness. The complementary networks of the two operating subsidiaries will permit wide feeder and distribution of VARIG's international flights, offering passengers arriving or departing from Brazil numerous and flexible connection options. The combined strength of GOL and VARIG will establish a Brazilian airline group with a growing passenger base of over 20 million annually, capable of competing on the South American and world stages against other large international airlines. GOL and VARIG together, through higher efficiencies generated to the market and consumers, will be ready to assume leadership of domestic and international flights among Brazilian carriers. The combination of these two companies will provide the ability to increase the number of seats offered at low fares and will stimulate growth in air travel. The acquisition represents the best opportunity for operations under the VARIG brand to remain a Brazilian-managed and controlled airline, fully focused on the strategic objectives of growth, job creation, and competitiveness, while remaining a strong Brazilian flag carrier. GOL believes there are opportunities to maximize the purchasing power of the two subsidiaries to further reduce operating costs, increase efficiencies, continue to innovate the Brazilian market for air travel, and pass on the benefits of synergies between the companies to the traveling public. VARIG will incorporate modern concepts of efficient administration, asset optimization, intensive use of technology, efficient and economic fleet, transparency, innovation and employee motivation, which will make the company competitive, profitable, financially sound, and capable of sustained growth. VRG's fleet, currently operating with 17 aircraft, will be increased to 34 Boeing aircraft composed of a simplified fleet of 20 737 and 14 767 aircraft. This fleet will permit VARIG to serve more than ten international destinations in Europe, North America, and South America. "GOL intends to provide VARIG with the necessary ambition, management expertise, financial strength and cost base to compete with South American and world competitors," Constantino de Oliveira Junior, GOL's Chief Executive Officer, said. "With this acquisition, Brazil will maintain an important flag in global aviation, the industry will benefit from an increase in jobs and demand will be better served. We are confident that throughout this acquisition GOL will continue its mission of popularizing air travel and consolidate its position as one of the leading low-cost carriers in the world. We will work so that our companies become the Brazilian carriers of choice for both domestic and international passengers." In summary, GOL will offer a financially secure future for VARIG through its strategy, which includes: * maintenance of the VARIG brand and the operation the two airlines separately; * improving the service offering under the VARIG brand, including the Smiles mileage program, and increasing the quantity of direct flights; * expanding service to routes not currently operated; * reducing VARIG's operating costs through improved efficiencies, superior purchasing power and lower overhead; * facilitating the expansion of the fleet operating the under the VARIG brand, by providing it with modern and efficient aircraft, low-cost leasing and financing facilities, and using purchasing power to negotiate lower costs; * improving the quality of the long-haul fleet operating the VARIG brand, and updating and innovating its long-haul product. VRG is a company based on the Isolated Productive Unit of VARIG, created in the Bankruptcy Recovery Plan of VARIG, Rio Sul and Nordeste and acquired by VarigLog in the Judicial Auction realized on July 7, 2006. Under the Brazilian Company Recovery Law of 2005, the UPI was created and sold fully free of liabilities of any nature (civil, labor, tax, pension, etc.), and upon completion of the conditions established in the Auction Edital, so to assure payment to creditors and the continued existence of the Recovering Companies. With the acquisition, GOL fully assumes the obligation to assure that VRG completes, in the strictest terms, all of the terms of the Auction Edital, including: (a) honor the two debentures already issued in the value of BRL50 million each, with 10-year maturities, (b) the hiring of the services of the Varig Training Center with a minimum value of BRL1 million, and (c) the rental at market rates of some fixed assets from VARIG. About GOL Intelligent Airlines Based in Sao Paulo, Brazil, GOL Intelligent Airlines aka GOL Linhas Areas Inteligentes S.A. (NYSE: GOL and Bovespa: GOLL4) -- http://www.voegol.com.br-- through its subsidiary, GOL Transportes Aereos S.A., provides airline services in Brazil, Argentina, Bolivia, Uruguay, and Paraguay. The company's services include passenger, cargo, and charter services. As of March 20, 2006, Gol Linhas provided 440 daily flights to 49 destinations and operated a fleet of 45 Boeing 737 aircraft. The company was founded in 2001. About Varig Headquartered in Rio de Janeiro, Brazil, VARIG S.A. is Brazil's largest air carrier and the largest air carrier in Latin America. VARIG's principal business is the transportation of passengers and cargo by air on domestic routes within Brazil and on international routes between Brazil and North and South America, Europe and Asia. VARIG carries approximately 13 million passengers annually and employs approximately 11,456 full-time employees, of which approximately 133 are employed in the United States. The Company, along with two affiliates, filed for a judicial reorganization proceeding under the New Bankruptcy and Restructuring Law of Brazil on June 17, 2005, due to a competitive landscape, high fuel costs, cash flow deficit, and high operating leverage. The Debtors may be the first case under the new law, which took effect on June 9, 2005. Similar to a chapter 11 debtor-in- possession under the U.S. Bankruptcy Code, the Debtors remain in possession and control of their estate pending the Judicial Reorganization. Sergio Bermudes, Esq., at Escritorio de Advocacia Sergio Bermudes, represents the carrier in Brazil. Each of the Debtors' Boards of Directors authorized Vicente Cervo as foreign representative. In his capacity, Mr. Cervo filed a Sec. 304 petition on June 17, 2005 (Bankr. S.D.N.Y. Case Nos. 05-14400 and 05-14402). Rick B. Antonoff, Esq., at Pillsbury Winthrop Shaw Pittman LLP represents Mr. Cervo in the United States. As of March 31, 2005, the Debtors reported BRL2,979,309,000 in total assets and BRL9,474,930,000 in total debts. Volo do Brasil, which purchased VARIG's cargo unit, VARIG Logistica S.A., and partially controlled by U.S. investment fund MatlinPatterson Global Advisors, bought VARIG for $600 million in July 2006. VICTORY MEMORIAL: Exclusive Plan Filing Period Extended to July 15 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of New York extended, until July 15, 2007, the exclusive period in which Victory Memorial Hospital and its debtor-affiliates can file a plan of reorganization. The Court also gave the Debtors until Sept. 15, 2007 to solicit acceptances of that plan. The Debtors explain that they need additional time to complete their analysis and negotiations concerning the plan. In addition, the Debtors intend to comply with the Berger Recommendations Law that took effect on Jan. 1, 2007, which advocated for the closure of the Debtors' acute-care facilities and a continuation of the facilities' skilled nursing, ambulatory, and home health care programs. About Victory Memorial Based in Brooklyn, New York, Victory Memorial Hospital is a non- profit, full service acute care voluntary hospital with approximately 241 beds and a skilled nursing unit with 150 beds. Victory Hospital provides a full range of medical services with a focus on community care and a program of community outreach to the Brooklyn community. Victory Ambulance Services, Inc. a for-profit subsidiary, provides Victory Hospital with ambulance services. Victory Pharmacy, Inc., a for-profit subsidiary, does not have any employees or assets. The company and its two-subsidiaries filed for chapter 11 protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387 through 06-44389). Timothy W. Walsh, Esq., and Jeremy R. Johnson, Esq., at DLA Piper US LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on July 15, 2007. VISKASE COMPANIES: Moody's Junks Corporate Family Rating -------------------------------------------------------- Moody's Investors Service downgraded all the credit ratings of Viskase Companies, Inc. The rating outlook was changed to stable from negative. Moody's downgraded these ratings: * $90 million 11.5% senior secured notes due 2011, downgraded to B3, LGD3, 37% from B1, LGD3, 32% * Corporate family rating, downgraded to Caa1 from B2 * Probability of default rating, downgraded to Caa1 from B2 The downgrade of the corporate family rating to Caa1 reflects the deterioration in financial metrics and a weak liquidity profile. The company has been negatively affected by better capitalized competitors, a reduction in capacity stemming from moving its Indiana manufacturing facility to Mexico and restructuring costs. Sustained negative cash flow generation and a modest cash balance have resulted in an increased reliance on a $20 million committed revolver to fund peak working capital needs and capital expenditures. Moreover, increased usage of the revolver triggers restrictive financial covenants and is limited by the borrowing base of inventory and accounts receivable. The rating is further limited by the absence of contracted business for the majority of the company's small revenue base, reliance on predominantly one product line and intense competition. The rating benefits from the company's global presence and established clientele. Headquartered in Darien, Illinois, Viskase Companies, Inc., is a producer of cellulose, fibrous and plastic casings for hot dogs and sausages, lunch meats, hams and other processed meat and poultry products. Revenues for the twelve months ended Sept. 30, 2006, were $208.5 million. VONAGE HOLDINGS: Citigroup Analyst Reduces Rating to Sell --------------------------------------------------------- Citigroup Inc. analyst Michael Rollins reduced his rating from "hold" to "sell" for Vonage Holdings Corp.'s stock, saying the company may be headed for "a financial restructuring or bankruptcy in the 2008 or 2009 timeframe," various news agencies report. Mr. Rollins' move follows the action of Bear Stearns Cos. analyst Mike McCormack who downgraded Vonage's shares to "underperform." Mr. McCormack said, "the Vonage brand and the company's ability to regain robust subscriber growth has become impaired," Amy Thomson of Bloomberg reports. The two analysts' actions were made because of the company's ongoing patent dispute with Verizon Communication Inc. As reported in the Troubled Company Reporter on March 12, 2007, a federal jury found that Vonage infringed on three key patents owned by Verizon and ordered the company to pay $58 million in past damages and a 5.5% royalty rate on sales going forward. Citigroup is the lead underwriter for Vonage's initial public offering together with Deutsche Bank AG and UBS AG. Deutsche Bank started covering the Vonage stock in August 2006 and still has a "hold" rating on the shares. UBS, on the other hand, started covering Vonage in July 2006 and has a "neutral" rating, Light Reading reports. Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- is a provider of broadband telephone services with over 1.4 million subscriber lines as of February 8, 2006. Utilizing its voice over Internet protocol technology platform, the company offers feature- rich, low-cost communications services with a call quality comparable to traditional telephone services. While customers in the United States represent over 95% of its subscriber lines, Vonage continues to expand internationally, having launched its service in Canada in November 2004, and in the United Kingdom in May 2005. WERNER LADDER: Wants to Sell All Assets for $265 Million -------------------------------------------------------- Werner Holding Co. (DE) Inc. aka Werner Ladder Company and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve the sale of substantially all of their assets, free and clear of liens, claims, encumbrances and interests, to New Werner Holding Co. (DE), LLC, for $265,000,000. New Werner is the acquisition vehicle formed by BDCM Opportunity Fund II, L.P., BDC Finance, L.L.C. and Brencourt BD, LLC, to acquire the Debtors' Assets under Section 363 of the Bankruptcy Code. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, tells the Court that the Sale will allow for successful conclusion of the Debtors' bankruptcy cases by: (i) permitting their business to exit from Chapter 11 before the end of the second quarter of 2007; and (ii) creating enough value to fund a significant portion of administrative expense and priority claims of their estates, as well as secured claims, which will permit the Debtors to file and confirm a liquidating plan of reorganization. The salient terms of the Debtors' Asset Purchase Agreement with New Werner are: (1) New Werner will purchase the Debtors' Assets for approximately $265,000,000, comprised of: (a) cash sufficient to pay the DIP Financing Payoff Amount, plus a wind-down amount and a Letter of Credit; (b) a credit bid; and (c) the assumption by New Werner of the assumed liabilities, valued at approximately $37,000,000, subject to higher or otherwise better offers. (2) New Werner will acquire all of the Debtors' right, title and interest in, to, or under all of their properties and assets of every kind and description. (3) The Debtors will retain all of their right, title, and interest in the Excluded Assets, which include, among others: * any shares of capital stock or other equity interest of any Debtor or any securities convertible into, exchangeable or exercisable for shares of capital stock or other equity interest; * all avoidance actions, including proceeds; and * all receivables, claims or causes of action related primarily to any excluded asses. (4) New Werner will assume no liabilities of the Debtors, except for, among others, all liabilities under certain seller agreements and assumed leases; all liabilities under capitalized leases; and all liabilities existing immediately before the closing and arising from the sale of products in the ordinary course of business. (5) In the event that the Purchase Agreement is terminated by the Debtors under certain circumstances, New Werner will pay a $7,000,000 termination fee to the Debtors. (6) The Debtors will reimburse the reasonable costs and expenses incurred by New Werner or the Buyer Control Parties in connection with the execution and delivery of the Purchase Agreement. A full-text copy of the Debtors' Asset Purchase Agreement with is available at no charge at http://researcharchives.com/t/s?1c5e Pursuant to the Court's order approving the bidding procedures in connection with the Sale, the Debtors will provide New Werner with an expense reimbursement not to exceed $1,000,000, for all its reasonable costs and expenses incurred in connection with the Purchase Agreement and consummation of the Sale. To facilitate and effect the Sale Transaction or the competing transaction, the Debtors seek to assume and assign certain executory contracts and unexpired leases to New Werner, or as applicable, the Successful Bidder or the next highest bidder. The Debtors have already provided New Werner with a good-faith estimate of the required cure amounts in connection with the assumption of those contracts and leases. The Court will convene a hearing on April 25, 2007, at 11:00 a.m. Eastern Time, to consider the Debtors' Sale Motion. Objections, if any, to the Sale must be filed no later than April 18 at 4:00 p.m. About Werner Holding Co. Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or (215/945-7000) The Debtors' exclusive period to file a plan expires on April 10, 2007. WERNER LADDER: Court Enters Formal Bidding Procedures ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has entered a formal written order (i) approving bidding procedures in connection with the sale of substantially all of Werner Holding Co. (DE) Inc. aka Werner Ladder Company and its debtor-affiliates' assets, including break-up fee and expense reimbursement, and (ii) establishing procedures to determine cure amounts and deadlines for objections for certain contracts and leases to be assumed and assigned by the Debtors. The Honorable Kevin J. Carey ruled that the transaction contemplated by the Asset Purchase Agreement, dated March 20, 2007, among the Debtors and New Werner Holding Co. (DE), LLC, BDCM Opportunity Fund II, L.P., BDC Finance, L.L.C., and Brencourt BD, LLC, is designated as the "Stalking Horse Bid." Auction Set for April 23 Judge Carey authorized the Debtors to conduct an Auction on April 23, 2007, at 4:00 p.m. Eastern Time, at Willkie Farr & Gallagher LLP, 787 Seventh Avenue, in New York. The Debtors may select, in their business judgment, the highest or otherwise best offer and the successful bidder. The Debtors may also reject any bid that is: -- inadequate or insufficient; -- not in conformity with the requirements of the Bankruptcy Code, the Bankruptcy Rules, or the Bidding Procedures; or -- contrary to the best interests of the Debtors and their estates, creditors, interest holders, or other parties-in- interest. If no Qualified Bids are received by 3:00 p.m. on April 20, the Debtors will cancel the Auction on notice to the parties. The Debtors will also seek approval of the Stalking Horse Purchase Agreement at a hearing to be held on April 25, at 11:00 a.m. Bidding Protections Pursuant to Section 105,363, 503 and 507 of the Bankruptcy Code, Judge Carey authorized the Debtors to pay the Expense Reimbursement to the Stalking Horse Bidder. The payment will be deemed as allowed superpriority administrative expense claim in each of the Debtors' Chapter 11 cases, with priority over any and all administrative expense claims, without further Court order. Judge Carey rules that the Expense Reimbursement will be the sole remedy of the Stalking Horse Bidder if the Stalking Horse Purchase Agreement is terminated under circumstances where the Reimbursement is payable. The Stalking Horse Bidder will have no other remedy against the Debtors or their board of directors. Sale Hearing on April 25 The Court will hold a Sale Hearing on April 25 at 11:00 a.m., or as soon as counsel and interested parties may be heard. The Sale Hearing may be adjourned from time to time without further notice. Objections, if any, to the Sale must be filed no later than April 18 at 4:00 p.m. Cure Procedures Judge Carey requires the Debtors to prepare and distribute to non-Debtor parties a notice listing the anticipated subject contracts and cure amounts, if any, no later than April 5. A notice of assignment will be sent to non-Debtor parties to non- residential real property leases previously assumed by the Debtors. If the Stalking Horse Bidder is not the successful bidder at the Auction, the Debtors will send a subsequent contract notice to all non-Debtor parties to executory contracts or unexpired leases, to be assigned to the Successful Bidder that were not Anticipated Subject Contracts. The non-Debtor parties to the Anticipated Subject Contracts will have until April 18 to object to the Cure Amounts and proposed assumption and assignment of those contracts in connection with the Sale. About Werner Holding Co. Based in Greenville, Pennsylvania, Werner Holding Co. (DE) Inc. aka Werner Ladder Co. -- http://www.wernerladder.com/-- manufactures and distributes ladders, climbing equipment and ladder accessories. The company and three of its affiliates filed for chapter 11 protection on June 12, 2006 (Bankr. D. Del. Case No. 06-10578). The Debtors are represented by the firm of Willkie Farr & Gallagher LLP as lead counsel and the firm of Young, Conaway, Stargatt & Taylor LLP as co-counsel. Rothschild Inc. is the Debtors' financial advisor. The Official Committee of Unsecured Creditors is represented by the firm of Winston & Strawn LLP as lead counsel and the firm of Greenberg Traurig LLP as co-counsel. Jefferies & Company serves as the Creditor Committee's financial advisor. At March 31, 2006, the Debtors reported total assets of $201,042,000 and total debts of $473,447,000. (Werner Ladder Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or (215/945-7000) The Debtors' exclusive period to file a plan expires on April 10, 2007. WILLIAMS PARTNERS: Earns $146.9 Million in Year Ended December 31 ----------------------------------------------------------------- Williams Partners LP disclosed a net income of $146.9 million for the year ended Dec. 31, 2006, as compared with a 2005 net income of $118.4 million. For fourth-quarter 2006, Williams Partners reported net income of $32.2 million, as compared with 2005 fourth quarter net income of $32.2 million. Quarter-over-quarter and year-over-year comparisons throughout this release are based on restated results following the Dec. 13, 2006, close of the partnership's acquisition of the remaining 74.9 percent interest in Williams Four Corners LLC from Williams. Distributable cash flow for Williams Partners and its 40 percent interest in Discovery totaled $184.4 million for 2006, compared to $166.4 million for 2005. For the fourth quarter of 2006, the partnership totaled $42.3 million in distributable cash flow, compared with $43.2 million for fourth-quarter 2005. The improved results in 2006 are due primarily to the strong performance in the Gathering and Processing - West segment, which includes the Four Corners asset. Also driving the positive results were higher equity earnings from our investment in Discovery, which is part of the Gathering and Processing - Gulf segment, and higher storage revenues at Conway within the NGL Services segment. Total enterprise value grew to $2.3 billion by the end of 2006, as compared with about $300 million at the time of the partnership's initial public offering. As of Dec. 31, 2006, the partnership listed total assets of $933.1 million and total liabilities of $797.7 million, resulting to total stockholders' equity of $135.4 million. Cash and cash equivalents as of Dec. 31, 2006, were $57.5 million, up from $6.8 million a year ago. A full-text copy of the partnership's annual report is available for free at http://ResearchArchives.com/t/s?1c47 "The partnership's full-year results were driven by the strong performance of our core assets, in terms of both record-level [natural gas liquid] margins and increasing fee-based revenues," Alan Armstrong, chief operating officer of the general partner of Williams Partners, said. "For 2007 we anticipate solid growth of our base assets. This year we expect an unprecedented number of well connects for our operations in the Four Corners area. In addition, our Discovery partnership began laying 35 miles of pipeline in the deepwater Gulf of Mexico to extend our existing system out to the Tahiti prospect in 4,400 feet of water." Cash Distribution Subsequent to the close of the fourth quarter, the board of directors of the general partner of Williams Partners increased the quarterly cash distribution payable to unitholders to 47 cents from 45 cents. This was the fourth consecutive quarter the partnership increased its cash distribution, reflecting the continued strong performance of its asset base. Credit Facilities The partnership may borrow up to $75 million under its $1.5 billion revolving credit facility, which is available for borrowings and letters of credit. Borrowings under this facility mature on May 1, 2009. At Dec. 31, 2006, letters of credit totaling $29 million had been issued on behalf of Williams by the participating institutions under this facility and no revolving credit loans were outstanding. The partnership also has a $20 million revolving credit facility with Williams as the lender. The facility was amended and restated on Aug. 7, 2006. The facility is available exclusively to fund working capital borrowings. Borrowings under the amended and restated facility will mature on June 29, 2009. The partnership is required to reduce all borrowings under this facility to zero for a period of at least 15 consecutive days once each 12-month period prior to the maturity date of the facility. As of Dec. 31, 2006, the partnership had no outstanding borrowings under the working capital credit facility. On Dec. 13, 2006, the partnership and Williams Partners Finance issued $600 million aggregate principal of 7.25% senior unsecured notes due Feb. 1, 2017, in a private debt placement. Interest is payable semi-annually in arrears on February 1 and August 1 of each year, beginning on Aug. 1, 2007. About Williams Partners Williams Partners LP is a publicly traded master limited partnership that gathers, transports, and processes natural gas and the fractionation and storage of natural gas liquids. The partnership's current asset base includes a 25.1% interest in Williams Four Corners LLC, 40% interest in the Discovery system offshore Louisiana, midstream assets at Conway, Kansas and the Carbonate Trend gathering pipeline offshore Alabama. * * * As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings affirmed the Issuer Default Rating and senior unsecured debt rating of Williams Partners LP at 'BB' after the disclosure that the partnership has reached an agreement with its sponsor, The Williams Companies, to acquire the remaining 74.9% interest in Williams Four Corners LLC from WMB that WPZ does not already own for consideration of $1.2 billion. Fitch also assigned a 'BB' rating to the partnership's proposed offering of $600 million of senior unsecured notes, which will be used to finance a portion of the acquisition. WINN-DIXIE STORES: Court Closes 23 Subsidiaries' Chapter 11 Cases ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York entered a final decree closing all of the 23 subsidiary Chapter 11 cases -- Case Nos. 05-03818 through 05-03840 -- of Winn-Dixie Stores, Inc., and its debtor-affiliates, effective March 31, 2007. Case No. 05-03817, In re Winn-Dixie Stores, Inc., et al., will remain open pending further Court order. Judge Funk retains the right under Section 350(b) to reopen the Closed Cases if circumstances so require. The Order is without prejudice to any parties' right to reopen any case. The Subsidiary Debtors are: Astor Products, Inc. Crackin' Good, Inc. Deep South Distributors, Inc. Deep South Products, Inc. Dixie Darling Bakers, Inc. Dixie-Home Stores, Inc. Dixie Packers, Inc. Dixie Spirits, Inc. Economy Wholesale Distributors, Inc. Dixie Stores, Inc. Kwik Chek Supermarkets, Inc. Foodway Stores, Inc. Sunbelt Products, Inc. Winn-Dixie Montgomery, Inc. Table Supply Food Stores Co., Inc. Superior Food Co. WD Brand Prestige Steaks, Inc. Winn-Dixie Handyman, Inc. Winn-Dixie Logistics, Inc. Sundown Sales, Inc. Winn-Dixie Procurement, Inc. Winn-Dixie Raleigh, Inc. Winn-Dixie Supermarkets, Inc. As reported in the Troubled Company Reporter on March 13, 2007, Cynthia C. Jackson, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, told the Court that the remaining proceedings in the Reorganized Debtors' Chapter 11 cases essentially consist of matters relating to claims allowance, distributions with respect to allowed claims, and other aspects of implementation of their confirmed Plan of Reorganization. Ms. Jackson states that none of the remaining bankruptcy matters involves issues that would require separate proceedings by any particular Debtor in the separate case of a particular Debtor. Ms. Jackson states that the claims objection process for the Subsidiary Debtors in the jointly administered case has been, and will continue to be, administered by the Winn-Dixie management. She relates that no claims objection proceedings have been brought, and none will be needed, in any separate case of any of the Subsidiary Debtors. Headquartered in Jacksonville, Florida, Winn-Dixie Stores Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. The Honorable Jerry A. Funk confirmed Winn-Dixie's Joint Plan of Reorganization on Nov. 9, 2006. Winn-Dixie emerged from bankruptcy on Nov. 21, 2006. (Winn-Dixie Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WINN-DIXIE STORES: Court Compels Discovery from Visagent Corp. -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York directed Visagent Corp. to provide complete answers to disputed interrogatories, and to produce all documents in response to discovery requests of Winn-Dixie Stores, Inc., and 23 of its subsidiaries and affiliates. The Reorganized Debtors had sought and obtained a protective order under Rules 26(c)(2) and (d) of the Federal Rules of Civil Procedure regarding Visagent's deposition of Winn-Dixie's witnesses. David L. Gay, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida, told the Court that Visagent operated an electronic exchange for diverting of groceries. He explained that "diverting" is the secondary market for groceries, in which sales do not involve an original manufacturer. Diverters included brokers of diverted groceries and retailers like Winn-Dixie. Mr. Gay related that Visagent asserted a $131,875,000 claim -- Claim No. 9953 -- against the Reorganized Debtors for breach of the parties' June 2001 Service Agreement and other statutory and tort claims. Under the Agreement, Winn-Dixie had agreed to use Visagent's exchange for diversions using Internet or similar electronic means. The Debtors had denied the alleged breach of duty to Visagent, and had argued that the claimant failed to adequately perform under the Agreement. Visagent had insisted, however, that the Debtors had breached the Agreement by underutilizing the Visagent exchange, and ultimately causing the claimant to go out of business. The Debtors had asserted that Visagent's exchange was not useful because there were not enough diverters using the exchange, and diverters did not use the exchange because Visagent's senior employees were operating a competing diverting business during the course of the Agreement. Furthermore, Mr. Gay noted, Visagent represented to Winn-Dixie and other diverters that "Visagent has no ownership or affiliated interest with any manufacturer, retailer or diverter organization." Interrogatories & Document Requests In August 2006, the Debtors had served on Visagent certain interrogatories and document requests. Visagent then served its responses to the Debtors' discovery requests. By a letter dated Dec. 7, 2006, the Debtors had notified Visagent that its responses were insufficient, and had requested that Visagent indicate by Dec. 15, 2006, whether it would provide sufficient responses by Jan. 5, 2007. Visagent did not respond to Debtors' letter. On Dec. 19, 2006, the Debtors, out of consideration to Visagent's attorney, had extended those deadlines and had requested that Visagent indicate by Dec. 26, 2006, whether it would provide adequate responses. Visagent did not respond to that letter either, Mr. Gay recounted. Mr. Gay stated that some of the Debtors' discovery requests in dispute concerned: a. the total annual dollar volume of all purchases and sales of consumer packaged goods under the Agreement, transacted through or in relation to the Grocery Exchange from 2001 through the present; b. the total dollar volume of all purchases and sales of full or truckload quantities of consumer packaged goods, and those of less than full or truckload quantities of consumer-packaged goods; c. all officers, directors, and managers of Visagent for the period 2001 though the present, including their position, job description, and identify for each affiliations to any company or other legal entity involved in the diverting of grocery products; d. all officers, directors, and managers of Global Food from 2001 though the present, who were involved in diverting grocery products; e. all facts, events, circumstances, and all documents supporting Visagent's complaint that Winn-Dixie breached its contractual obligation to exclusively utilize Visagent's services for eCommerce under the Agreement; f. all facts, events, and documents supporting Visagent's claim that it suffered damages aggregating 2% of all transactions in which Winn-Dixie has participated in the purchase or sale of goods in the secondary market, other than those through the Exchange; g. all facts, events, circumstances, and documents supporting Visagent's allegations that Winn-Dixie was obligated to utilize the services of Visagent for the procurement and sale of all merchandise acquired or sold from or through the secondary market; h. all facts and documents supporting Visagent's statement that Winn-Dixie intentionally, fraudulently or negligently induced Visagent to continue to provide development, training and services toward the development of Outside Sales Catalog and other trading programs, despite the fact that Winn-Dixie had no intention to use Visagent exchange as promised; and i. all facts and documents supporting Visagent's statements that the Agreement precluded Winn-Dixie from transacting purchases or sales of goods in the secondary market through electronic transmission, other than through Visagent's Grocery Exchange. A complete list of the Interrogatories is available at no charge at http://ResearchArchives.com/t/s?1c41 Moreover, the Debtors' Document Requests to Visagent included documents evidencing: -- allegations in Visagent's Complaint; -- the damages that Visagent alleged in its Complaint; -- statements under Visagent's response, including averments in I. Mark Rubin's affidavit; -- statements under Visagent's amended statement of Claim; -- any purchases or sales of any goods listed in or sold through the Grocery Exchange from Jan. 1, 2001, to Aug. 31, 2004; and -- any portion of the $131,875,000 Visagent Claim in its Amended Statement of Claim that Winn-Dixie owes Visagent. The Debtors had demanded production of all complaints by anyone about the Grocery Exchange for the period Jan. 1, 2001, to Aug. 31, 2004. A complete list of the Document Requests is available at no charge at http://ResearchArchives.com/t/s?1c42 Visagent's Objections to Discovery Requests Overruled The Court overruled Visagent's objections to the Debtors' Discovery Requests. According to Mr. Gay, Visagent complained that: * it did not have immediate access to the answer for a specific interrogatory; * it will research and supplement its response as soon as the information is available for certain Interrogatories; * some interrogatories are unintelligible as stated; overbroad; compound as to requested time frames; and vague as to the terms "affiliations," "relationship" and "diverting of grocery products"; and In addition, Visagent had objected to each of the Document Requests on the grounds that they are overly broad and vague, and that they seek privileged attorney-client or attorney work-product materials. Visagent had further opposed to the definitions and instructions as overly broad and inconsistent with the Civil Rule requirements. Headquartered in Jacksonville, Florida, Winn-Dixie Stores Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. The Honorable Jerry A. Funk confirmed Winn-Dixie's Joint Plan of Reorganization on Nov. 9, 2006. Winn-Dixie emerged from bankruptcy on Nov. 21, 2006. (Winn-Dixie Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). YUKOS OIL: Rosneft Oil May Bid for Yukos Transservis Unit --------------------------------------------------------- OAO Rosneft Oil Co. may bid for OAO Yukos Oil Co.'s Transservis unit after signing an oil delivery contract with China International United Petroleum & Chemicals Co. Ltd., the trading unit of China Petroleum & Chemical Corp., Kommersant reports. Under the contract, Rosneft will deliver three million tons of oil annually through the Sino-Russo border of Naushki, Kommersant relates. Rosneft delivered via the Transbaikal-Manchuria border crossing 8.9 million of the 10.3 million tons of oil that China received from Russia in 2006. Russia agreed in 2004 to supply China around 15 million tons of oil in 2006. The deal, however, failed after OAO Yukos Oil Co. ceased supplying oil to the Asian country in the autumn of 2006. The paper notes that Rosneft would face difficulties in shipping oil through Naushki without Yukos Transservis, which handles 13% of all Russian train oil shipment. The paper said Eduard Rebgun, Yukos' bankruptcy receiver will likely place Yukos Transservis on the auction block. Rosneft may have to shell around RUR8 billion to RUR10 billion to acquire the unit, which posted EUR1 billion in net profit in 2006. If Rosneft decides to bid for Yukos Transservis, it might face Severstaltrans, which was reportedly interested in acquiring it, Kommersant relates. About Rosneft Headquartered in Moscow, Russia, OAO Rosneft Oil Co. -- http://ns.roilcom.ru/english/-- produces and markets petroleum products. The Company explores for, extracts, refines and markets oil and natural gas. Rosneft produces oil in Western Siberia, Sakhalin, the North Caucasus, and the Arctic regions of Russia. About Yukos Oil Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for Chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A few days later, the Russian Government sold its main production unit Yugansk to a little-known firm Baikalfinansgroup for $9.35 billion, as payment for $27.5 billion in tax arrears for 2000-2003. Yugansk eventually was bought by state-owned Rosneft, which is now claiming more than US$12 billion from Yukos. On March 10, 2006, a 14-bank consortium led by Societe Generale filed a bankruptcy suit in the Moscow Arbitration Court in an attempt to recover the remainder of a $1 billion debt under outstanding loan agreements. The banks, however, sold the claim to Rosneft, prompting the Court to replace them with the state- owned oil company as plaintiff. On April 13, 2006, court-appointed external manager Eduard Rebgun filed a chapter 15 petition in the U.S. Bankruptcy Court for the Southern District of New York (Bankr. S.D.N.Y. Case No. 06-0775), in an attempt to halt the sale of Yukos' 53.7% ownership interest in Lithuanian AB Mazeikiu Nafta. On May 26, 2006, Yukos signed a $1.49 billion Share Sale and Purchase Agreement with PKN Orlen S.A., Poland's largest oil refiner, for its Mazeikiu ownership stake. The move was made a day after the Manhattan Court lifted an order barring Yukos from selling its controlling stake in the Lithuanian oil refinery. On Aug. 1, 2006, the Hon. Pavel Markov of the Moscow Arbitration Court upheld creditors' vote to liquidate OAO Yukos Oil Co. and declared what was once Russia's biggest oil firm bankrupt. YUKOS OIL: Auctioning Two Bank Stakes Next Month ------------------------------------------------ The Russian Federal Property Fund said OAO Yukos Oil Co.'s stakes in two banks will be auctioned off next month, AFX News Limited states. According to the report, the assets to be sold will include: -- a 7.69% stake in VTB Bank Deutschland to be auctioned on April 25, 2007, for a EUR6.7 million ($8.9 million) starting price; and -- a 1.998% stake in Khanty-Mansiisk Bank to be auctioned on April 26, 2007, for a EUR4.7 million ($6.3 million) starting price. As widely reported, Yukos auctioned off its first set of assets, which include its 9.44% stake in state-owned Rosneft Oil and promissory notes issued by Yuganskneftegaz, Yukos' former main production unit, yesterday for a RUR195.5 billion ($7.47 billion) starting price. Meanwhile, its 20% stake in Gazprom Neft, along with Yukos' ArcticGaz unit and 20 other assets in one lot, will carry a RUR145-billion starting price during the April 4, 2007, auction. The bidding for the assets started March 19, 2007. Other auction details show: Bidding Auction Starting Bid Increment Assets Deadline Date Price (RUR) (RUR) ------ -------- ------- -------------- -------------- Lot 4 Apr. 13 Apr. 17 2.64 billion 26.39 million Lot 5 Apr. 16 Apr. 18 992.31 million 9.92 million Lot 6 Apr. 18 Apr. 20 3.12 million 31,000 An unidentified source tells Interfax that assets under Lot 4, which will feature Yukos's stakes in various energy companies, include: -- ZAO Energy Service Co. (100%), -- ESKOM- EnergoTrade (100%), -- Belgorodenergo (25.73%), -- Tambovenergo (25.15%), -- Tambov Energy Sales Company (25.15%), -- Tambov Trunk Grid Company (25.15%), -- Belgorod Trunk Grid Company (25%), -- Belgorod Sales Company (25%), -- Corporate Service Systems (25%), and -- Territorial Generation Company No. 4 (3.18%). RBC says the fifth lot will be comprised of nine assets while the sixth would include eight non-core assets of the bankrupt oil firm. Mr. Rebgun has estimated Yukos' assets between $25.6 billion and $26.8 billion, minus a possible liquidation discount of not more than 30%. As of Jan. 31, 2007, claims against Yukos filed by 68 creditors reached RUR709 billion ($26.8 billion). Rosneft Oil and Gazprom are seen as the most likely bidders for the bulk of the nearly 200 Yukos assets up for liquidation, which Mr. Rebgun aims to sell by August 2007. Aside from being a potential buyer, Rosneft also holds a RUR264.6 billion ($10 billion) claim against Yukos, which entitled Rosneft a seat in the firm's creditors' committee. About Yukos Oil Headquartered in Moscow, Yukos Oil -- http://yukos.com/-- is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for Chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742), but the case was dismissed on Feb. 24, 2005, by the Hon. Letitia Z. Clark. A few days later, the Russian Government sold its main production unit Yugansk to a little-known firm Baikalfinansgroup for $9.35 billion, as payment for $27.5 billion in tax arrears for 2000-2003. Yugansk eventually was bought by state-owned Rosneft, which is now claiming more than $12 billion from Yukos. On March 10, 2006, a 14-bank consortium led by Societe Generale filed a bankruptcy suit in the Moscow Arbitration Court in an attempt to recover the remainder of a $1 billion debt under outstanding loan agreements. The banks, however, sold the claim to Rosneft, prompting the Court to replace them with the state- owned oil company as plaintiff. On April 13, 2006, court-appointed external manager Eduard Rebgun filed a chapter 15 petition in the U.S. Bankruptcy Court for the Southern District of New York (Bankr. S.D.N.Y. Case No. 06-0775), in an attempt to halt the sale of Yukos' 53.7% ownership interest in Lithuanian AB Mazeikiu Nafta. On May 26, 2006, Yukos signed a $1.49 billion Share Sale and Purchase Agreement with PKN Orlen S.A., Poland's largest oil refiner, for its Mazeikiu ownership stake. The move was made a day after the Manhattan Court lifted an order barring Yukos from selling its controlling stake in the Lithuanian oil refinery. On Aug. 1, 2006, the Hon. Pavel Markov of the Moscow Arbitration Court upheld creditors' vote to liquidate OAO Yukos Oil Co. and declared what was once Russia's biggest oil firm bankrupt. * A.M. Best Says 17 Insurers were Financially Impaired in 2006 -------------------------------------------------------------- Seventeen U.S. insurance companies became financially impaired in 2006, despite a respite for property/casualty insurers from two consecutive turbulent hurricane seasons and more diversified asset portfolios among life/health insurers, according to two new A.M. Best Co. special reports, "2007 Annual U.S. Life/Health Impairments" and "2007 Annual U.S. Property/Casualty Impairments." The property/casualty report found 15 insurers in those lines of business became impaired last year, a rate of 1-in-233 companies. While any impairment can be a hardship to policyholders and employees, 2006's impairment rate is half the historical rate of the past 38 years. So far in 2007, A.M. Best has identified one public impairment: Vanguard Fire & Casualty Co. Florida; regulators placed that company in rehabilitation in January. Vanguard Fire & Casualty was never rated by A.M. Best. The majority of last year's impaired property/casualty companies were affiliated with either Poe Financial Group or Vesta Insurance Group. Of the two life/health companies identified as impaired in 2006, one is a known confidential supervision. The other impairment is Security General Life Insurance Co., which was issued a cease-and- desist order by the Oklahoma Insurance Department last September. It was placed in rehabilitation in November. The company was not rated by A.M. Best at the time of impairment. 2006's impairment rate of 1-in-769 life/health companies continues a seven-year trend of below-average impairment rates. "We have a circumstance with confidential supervision," said John Williams, senior business analyst at A.M. Best. "The states take action to try to prevent problems for companies that they see in financial trouble. We picked up three additional impairments for 2005 and there's a fair shot that you'll see a fair jump in the 2006 numbers as we go forward-enough that they won't be the lowest numbers on record." "What we found with most of these companies, both in property/casualty and in life/health, the impaired companies and those that became impaired either had vulnerable A.M. Best ratings, or were not rated at all by A.M. Best," said Williams. A.M. Best designates an insurer financially impaired as of the first official regulatory action taken by an insurance department. That marks the point when an insurer's ability to conduct normal insurance operations is adversely affected, capital and surplus have been deemed inadequate to meet legal requirements, or the company's general financial condition has triggered regulatory concern. The financially impaired companies identified in these studies might not technically have been declared insolvent. The definition of financially impaired is broader than that of a Best's Rating of E (under regulatory supervision), which is assigned only when an insurer is no longer allowed to conduct normal ongoing insurance operations. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. * Donald Lund & Curt Vazquez Join Cohen & Grigsby as Directors -------------------------------------------------------------- Donald M. Lund and Curt Vazquez have joined Cohen & Grigsby, P.C. Donald M. Lund joins the firm as a director in the Litigation Group. He focuses his practice in the areas of complex commercial litigation (sale of asset disputes, unfair competition, Lanham Act, construction claims, Internet service disputes, civil RICO actions, business tort actions, partnership disputes) and product defect claims. He received his J.D. from the University of Pittsburgh School of Law in 1992 and his B.S. from Yale University in 1989. He is admitted to practice in Pennsylvania. Prior to joining Cohen & Grigsby, Mr. Lund was with the law firm of Jones Day in its Pittsburgh Office. He resides in Upper St. Clair, Pennsylvania. Curt Vazquez joins the firm as a director in the Litigation Group. With wide experience in a variety of commercial litigation matters, he focuses his practice in the areas of insurance coverage and counselling, consumer class action defense, and accounting malpractice. He received his J.D. from Yale Law School in 1985 and his B.S. from the University of Colorado in 1982. He is admitted to practice in Pennsylvania and Colorado. Prior to joining Cohen & Grigsby, Mr. Vazquez was Counsel with the law firm of Jones Day in Pittsburgh. He lives in Fox Chapel, Pennsylvania. Headquartered in Pittsburgh, Pennsylvania, Cohen & Grigsby P.C. -- www.cohenlaw.com/ -- offers legal services to private and publicly held businesses, nonprofits, multinational corporations, individuals and emerging companies. It has experience in bankruptcy, business, tax, employee benefits, estates, trusts, immigration, intellectual property, international business, litigation, labor and employment, and real estate. The firm has offices in Naples, Florida and Bonita Springs, Florida. * Winstead PC Attorneys Recognized as Texas Rising Stars -------------------------------------------------------- About 23 dynamic attorneys from Winstead PC were recognized as Texas Rising Stars and will be featured in the April 2007 Texas Monthly magazine. Nominated by members of the prestigious Texas Super Lawyers list, the Texas Rising Star honor is reserved for the top Texas attorneys who are 40 years old or younger, or have been in practice fewer than 10 years. Only 2.5% of eligible Texas attorneys receive this honor each year. "Winstead has several bright and talented attorneys on our staff who represent the next generation of success and growth for the firm," Winstead Chairman and CEO Denis Braham said. "They have exceptional business minds and their tireless dedication and commitment to the business of our clients is commendable. We are honored that 23 of them were selected as Rising Stars, and proud to have them on the Winstead team." These are the Winstead attorneys, by office location and area of practice, who earned a spot among the 2007 Texas Rising Stars: * Austin Alexander R. Allemann -- Corporate/Securities Trek C. Doyle -- Litigation/Dispute Resolution Jason Roy Flaherty -- Tax David J. Muckerheide -- Insurance, Corporate/Regulatory Melissa A. Lorber -- Litigation/Dispute Resolution Alexander S. Valdes -- Litigation/Dispute Resolution * Dallas Natalie M. Brandt -- Litigation/Dispute Resolution Louisa Ann Brunenn -- Banking Eli O. Columbus -- Bankruptcy Noelle L. Garsek -- Real Estate Tanya D. Henderson -- Litigation/Dispute Resolution Laurie C. Jardine -- Litigation/Dispute Resolution Allan S. Katz -- Real Estate Phillip L. Lamberson -- Bankruptcy Richard C. Leucht II -- Banking Sean C. Urich -- Labor & Employment * Fort Worth David Fowler Johnson -- Appellate * Houston Ricardo Garcia-Moreno -- Corporate/Securities Joshua L. Lebar -- Real Estate Demetra L. Liggins -- Bankruptcy Derrick Mitchell -- Corporate/Public Finance Jack W. Perry -- Real Estate David F. Staas -- Real Estate Winstead PC -- http://www.winstead.com/-- is a business law firms in Texas, representing major companies regionally and nationally in the real estate, financial services and technology industries. Winstead attorneys and consultants serve as trusted advisors to mid-market and large businesses, providing a core range of legal services that are critical to their operation and success. From its broad corporate practice to high-stakes litigation and appellate matters, Winstead has the power to perform for your business. Winstead has offices in Austin, Dallas, Fort Worth, Houston, San Antonio, and The Woodlands, Texas; and Washington D.C. * 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 Headliners Entertainment Group Inc. Bankr. D. N.J. Case No. 07-12947 Chapter 11 Petition filed March 2, 2007 See http://bankrupt.com/misc/njb07-12947.pdf In re Choe Enterprises, Inc. Bankr. W.D. Tex. Case No. 07-50697 Chapter 11 Petition filed March 20, 2007 See http://bankrupt.com/misc/txwb07-50697.pdf In re DeVallis Realty Trust, Inc. Bankr. D. Mass. Case No. 07-40928 Chapter 11 Petition filed March 20, 2007 See http://bankrupt.com/misc/mab07-40928.pdf In re Jeanne Marie Donia Bankr. D. Ariz. Case No. 07-00422 Chapter 11 Petition filed March 20, 2007 See http://bankrupt.com/misc/azb07-00422.pdf In re Neo Technologies, Inc. Bankr. W.D. N.Y. Case No. 07-00995 Chapter 11 Petition filed March 20, 2007 See http://bankrupt.com/misc/nywb07-00995.pdf In re Amdal In-Home Care, Inc. Bankr. E.D. Calif. Case No. 07-10811 Chapter 11 Petition filed March 21, 2007 See http://bankrupt.com/misc/caeb07-10811.pdf In re Bryce Childrens' Irrevocable Trust Bankr. D. Ariz. Case No. 07-00427 Chapter 11 Petition filed March 21, 2007 See http://bankrupt.com/misc/azb07-00427.pdf In re A.G. Mack Contracting Co., Inc. Bankr. E.D. Mo. Case No. 07-41764 Chapter 11 Petition filed March 22, 2007 See http://bankrupt.com/misc/moeb07-41764.pdf In re Alfred's Fabric Centers, Inc. Bankr. N.D. N.Y. Case No. 07-10810 Chapter 11 Petition filed March 22, 2007 See http://bankrupt.com/misc/nynb07-10810.pdf In re Badeau Properties, LLC Bankr. D. R.I. Case No. 07-10479 Chapter 11 Petition filed March 22, 2007 See http://bankrupt.com/misc/rib07-10479.pdf In re James Allen Fritz, Sr. Bankr. M.D. Tenn. Case No. 07-02004 Chapter 11 Petition filed March 22, 2007 See http://bankrupt.com/misc/tnmb07-02004.pdf In re Pizzeria La Ferlita, Inc. Bankr. D. Ariz. Case No. 07-00455 Chapter 11 Petition filed March 22, 2007 See http://bankrupt.com/misc/azb07-00455.pdf In re Starfire Limousine Services, LLC Bankr. E.D. Mich. Case No. 07-45591 Chapter 11 Petition filed March 22, 2007 See http://bankrupt.com/misc/mieb07-45591.pdf In re Timothy E. Listenbee, Sr. Bankr. W.D. Wis. Case No. 07-11040 Chapter 11 Petition filed March 22, 2007 See http://bankrupt.com/misc/wiwb07-11040.pdf In re Turmeko Properties Inc. Bankr. C.D. Calif. Case No. 07-12300 Chapter 11 Petition filed March 22, 2007 See http://bankrupt.com/misc/cacb07-12300.pdf In re Universal Broadcasting, Inc. Bankr. D. Nev. Case No. 07-50278 Chapter 11 Petition filed March 22, 2007 See http://bankrupt.com/misc/neb07-50278.pdf In re Cedar Wood Acres Development Co., Inc. Bankr. W.D. Mo. Case No. 07-60361 Chapter 11 Petition filed March 23, 2007 See http://bankrupt.com/misc/mowb07-60361.pdf In re Tri-State Traffic Control, Inc. Bankr. W.D. Mo. Case No. 07-60364 Chapter 11 Petition filed March 23, 2007 See http://bankrupt.com/misc/mowb07-60364.pdf In re VF Corporation Bankr. M.D. Ala. Case No. 07-30433 Chapter 11 Petition filed March 23, 2007 See http://bankrupt.com/misc/almb07-30433.pdf In re Secure Car Armor Corp. Bankr. N.D. Tex. Case No. 07-31392 Chapter 11 Petition filed March 25, 2007 See http://bankrupt.com/misc/txnb07-31392.pdf In re 18th & Rittenhouse Square Restaurant, LLC Bankr. E.D. Pa. Case No. 07-11737 Chapter 11 Petition filed March 26, 2007 See http://bankrupt.com/misc/paeb07-11737.pdf In re FLL, LLC Bankr. E.D. Va. Case No. 07-10704 Chapter 11 Petition filed March 26, 2007 See http://bankrupt.com/misc/vaeb07-10704.pdf In re Gasche Electric & Control, Inc. Bankr. S.D. Iowa Case No. 07-00889 Chapter 11 Petition filed March 26, 2007 See http://bankrupt.com/misc/iasb07-00889.pdf In re Kerry Allan Kruszewski Bankr. M.D. Tenn. Case No. 07-02089 Chapter 11 Petition filed March 26, 2007 See http://bankrupt.com/misc/tnmb07-02089.pdf In re Seal-Tec, Inc. Bankr. S.D. Ind. Case No. 07-90557 Chapter 11 Petition filed March 26, 2007 See http://bankrupt.com/misc/insb07-90557.pdf In re Winchester Constructors LLC Bankr. M.D. Tenn. Case No. 07-02091 Chapter 11 Petition filed March 26, 2007 See http://bankrupt.com/misc/tnmb07-02091.pdf In re BMN Inc. Bankr. S.D. Calif. Case No. 07-01485 Chapter 11 Petition filed March 27, 2007 See http://bankrupt.com/misc/casb07-01485.pdf In re Bishop Wright P.C. Bankr. N.D. Tex. Case No. 07-31408 Chapter 11 Petition filed March 27, 2007 See http://bankrupt.com/misc/txnb07-31408.pdf In re Charlie Duane Barkley, Jr. Bankr. W.D. La. Case No. 07-50357 Chapter 11 Petition filed March 27, 2007 See http://bankrupt.com/misc/lawb07-50357.pdf In re Feja's Hair Design & Wellness Spa, LLC Bankr. D. Md. Case No. 07-12775 Chapter 11 Petition filed March 27, 2007 See http://bankrupt.com/misc/mdb07-12775.pdf In re Medicalt Corporation Bankr. M.D. Fla. Case No. 07-02345 Chapter 11 Petition filed March 27, 2007 See http://bankrupt.com/misc/flmb07-02345.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, Jason A. Nieva, Cherry A. Soriano-Baaclo, Melvin C. Tabao, Melanie C. Pador, Ludivino Q. Climaco, Jr., Tara Marie A. Martin, Frauline S. Abangan, 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 ***