/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070601.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 1, 2007, Vol. 11, No. 129 Headlines AEROFLEX INC: S&P Puts B Corporate Credit Rating on Negative Watch AGFORCE CHEMICAL: Case Summary & 12 Largest Unsecured Creditors ALLIED HOLDINGS: Emerges from Chapter 11 Bankruptcy Protection AMERICAN COMMERCE: Pender Newkirk Raises Going Concern Doubt AMERIQUEST MORTGAGE: Fitch Junks Rating on Two Certificate Classes AMERIQUEST MORTGAGE: S&P Puts D Rating on Class M-4 Certificates ATHEROGENICS INC: Reduces Workforce by 50% ATHEROGENICS INC: March 31 Balance Sheet Upside-Down by $164 Mil. BERRY PLASTICS: Moody's May Cut Low-B Ratings After Review BERRY PLASTICS: S&P Junks Rating on Proposed $500 Million Notes BETH ISRAEL: Taps Besler Consulting as Medicare Consultant CATALYST PAPER: Eliminates 130 Support Positions CENDANT MORTGAGE: S&P Holds Low-B Rating s on Four Transactions CHOICE HOTELS: March 31 Balance Sheet Upside-down by $70.5 Million CINCINNATI BELL: March 31 Balance Sheet Upside-down by $773.1 Mil. CITICORP MORTGAGE: Fitch Rates Class B-5 Certificates at B CLAYMONT STEEL: March 31 Balance Sheet Upside-Down by $49.9 Mil. COMMUNITY HEALTH: Commences Tender Offer for 6-1/2% Senior Notes COMPASS MINERALS: March 31 Balance Sheet Upside-down by $45.5 Mil CONSUMERS ENERGY: To Buy Power Plant with LS Power for $517 Mil. DAVE & BUSTER'S: Debt Reduction Prompts S&P to Lift Rating to B DOLE FOOD: Posts $10.2 Million Net Loss in Qtr. Ended March 24 DUTCH HILL: Moody's Rates $11.8 Million Class D-3 Notes at Ba2 EQUIPMENT FINANCE: Loan Scheme Probe Uncovers Employee Collusion EQUISTAR CHEMICALS: To Redeem $300MM of 10.125% & 10.625% Notes GEMSTONE CDO: Moody's Rates $18.7 Million Class E Notes at Ba1 GLOBAL HOME: Court Extends Exclusive Plan-Filing Period to Oct. 4 GLOBAL POWER: Court Approves BDO Seidman as Auditors GLOBAL POWER: Wants Hogan & Slovacek to Assist BDO Seidman GOODYEAR TIRE: Fitch Lifts Issuer Default Rating to B+ GVI SECURITY: Names Chris Young as Vice President of Finance HALCYON SECURITIZED: Moody's Rates $4 Mil. Class E Notes at Ba1 HEXION SPECIALTY: S&P Holds B- Rating on $825 Million Notes INDUSTRY MORTGAGE: Fitch Holds BB Ratings on 2 Class Certificates INSIGHT HEALTH: Files Prepackaged Chapter 11 in Delaware INSIGHT HEALTH: Case Summary & Eight Largest Unsecured Creditors INSIGHT HEALTH: Bankruptcy Filing Prompts S&P's D Rating INTERSTATE HOTELS: Closes $74MM Acquisition of Westin Atlanta JHCI ACQUISITION: Moody's Junks Rating on $150 Mil. Term Loan JHCI ACQUISITION: S&P Junks Rating on Proposed $150 Mil. Facility JO-ANN STORES: Posts $1.7 Million Net Loss in Quarter Ended May 5 LYONDELL CHEMICAL: Sells $510 Million of 6.785% Senior Notes LYONDELL CHEMICAL: Fitch Rates $500 Million Senior Notes at BB- LYONDELL CHEMICAL: Moody's Rates $500 Million Senior Notes at B1 LYONDELL CHEMICAL: S&P Rates Proposed $500 Million Notes at B+ M. GRANDE RESORT: Case Summary & 20 Largest Unsecured Creditors MEDIACOM COMMS: March 31 Balance Sheet Upside-Down by $110.2 Mil. METROPCS COMMUNICATIONS: S&P Revises Outlook to Positive METROPCS WIRELESS: S&P Holds CCC Rating on $1.3 Billion Notes METROPCS WIRELESS: Moody's Lifts Ratings on Strong Performance MGM MIRAGE: Committee Selects UBS and Weil Gotshal as Advisors MUELLER WATER: Amends Credit Pact with Bank of America, et al. MUZAK HOLDINGS: Moody's Holds Ratings & Says Outlook is Developing NATIONAL CINEMEDIA: March 29 Balance Sheet Upside-Down by $584MM NEUROCHEM INC: March 31 Balance Sheet Upside-Down by CDN$25.2MM NEW YORK RACING: Court Okays Kroll Zolfo as Financial Advisor NEW YORK RACING: Court Okays Whiteman Osterman as Special Counsel NORTHWEST AIRLINES: Emerges from Chapter 11 Bankruptcy Protection NORTHWEST AIRLINES: Celebrates Listing on NYSE NOVELL INC: Posts $2.1 Million Net Loss in Quarter Ended April 30 NPC INTERNATIONAL: Debt Reduction Prompts S&P to Hold B+ Rating PINNACLE ENTERTAINMENT: Fitch Puts B- Rating on $350 Million Notes PUIG INC: Case Summary & 197 Largest Unsecured Creditors RELIANT ENERGY: S&P Rates Proposed $1.25 Billion Notes at B- ROGERS COMMUNICATIONS: Board Approves Annual Divided Increase SAKS INC: Fitch Affirms Issuer Default Rating at B STANADYNE CORP: S&P Revises $65 Million Loans' Rating to B+ STONEPATH GROUP: Wants Involuntary Chapter 7 Case Dismissed STONEPATH GROUP: Contests SBI's Notes Default Issuance TANGER FACTORY: Proxy Proposal Okayed at Shareholders Meeting TRIAD HOSPITALS: Launches Offer for 7% Senior Notes TRIBUNE CO: Names Howard Greenberg as Sun Sentinel Pres. & CEO TRICADIA CDO: Moody's Rates $7 Million Class F Sec. Notes at Ba2 TRM CORP: PricewaterhouseCoopers Raises Going Concern Doubt URS CORP: Moody's May Cut Ba1 Rating on Washington Acquisition WESTCHESTER CLO: S&P Rates $37.5 Million Class E Notes at BB * Barclays Settles SEC Insider Trading Suit * BOOK REVIEW: American Arbitration: Its History, Functions and Achievements ********* AEROFLEX INC: S&P Puts B Corporate Credit Rating on Negative Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B' corporate credit rating on Plainview, New York-based Aeroflex Inc. on CreditWatch with negative implications following the company's announcement that it accepted a higher buyout offer from subsidiaries of Veritas Capital, and terminated its merger agreement with General Atlantic and Francisco Partners. "At the same time, the 'B+'-rated U.S.-based first-lien, the 'B'- rated U.K.-based first-lien, and 'CCC+'-rated second-lien senior secured ratings and all recovery ratings were withdrawn, because the loans will not close and the new capital structure will be revised and have different terms," said Standard & Poor's credit analyst Lucy Patricola. S&P will review the new terms of the transaction to determine the final impact on the rating, focusing specifically on the potential for increased leverage to finance the higher offer. At that time, S&P expects to issue ratings related to the new capital structure. AGFORCE CHEMICAL: Case Summary & 12 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: AgForce Chemical, L.L.C. 2388 Raccoon Road Robinson, KS 66532 Bankruptcy Case No.: 07-21130 Type of Business: The Debtor sells agricultural chemicals. See http://www.agforcechemical.com/ Chapter 11 Petition Date: May 29, 2007 Court: District of Kansas (Kansas City) Judge: Dale L. Somers Debtors' Counsel: Stanley B. Bachman, Esq. 16400 West 118th Street Olathe, KS 66061 Tel: (913) 645-0228 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtors' 12 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Hiawatha National Bank bank loan; $1,350,000 805 1st Street value of Hiawatha, KS 66434 security: $300,000 East Kansas Chemical trade debt $500,000 P.O. Box 725 Wellsville, KS 66092 U.A.P. trade debt $290,259 P.O. Box 847664 Dallas, TX 75284-7664 Helena Chemical trade debt $193,865 AgExplorer trade debt $115,220 Spiner Ag trade debt $98,417 Mycogen Seed trade debt $47,188 International Chemical trade debt $43,888 Flatland Fertilizer trade debt $40,000 Midland Seed trade debt $27,351 Morris County Treasurer taxes $13,023 Bank of America credit card $6,846 Debt ALLIED HOLDINGS: Emerges from Chapter 11 Bankruptcy Protection -------------------------------------------------------------- Allied Systems Holdings, Inc., formerly Allied Holdings, Inc., disclosed that effective May 29, 2007, it has emerged from bankruptcy. The company has substantially consummated the transactions contemplated by its Second Amended Joint Plan of Reorganization that was filed by Allied together with Yucaipa American Alliance Fund I, LP, Yucaipa American Alliance (Parallel) Fund I, LP and the Teamsters National Automobile Transportation Industry Negotiating Committee, on behalf of the International Brotherhood of Teamsters. The joint plan was confirmed by the U.S. Bankruptcy Court for the Northern District of Georgia on May 18, 2007. As part of the joint plan, Allied Holdings, Inc. was merged with and into its subsidiary, Allied Systems Holdings, Inc., with Allied Systems Holdings, Inc. as the surviving corporation. Pursuant to Allied Holdings' plan of reorganization, its pre-plan common stock (which had traded on The Pink Sheets under the symbol AHIZQ.PK) was cancelled and holders of the pre-plan common stock will not receive a distribution of any kind under the joint plan. Allied will issue new shares of common stock in payment of certain bankruptcy claims, however it is not anticipated that these new shares will be listed for trading on any market system or over the counter. Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. At March 31, 2007, Allied Holdings' balance sheet showed $305,572,000 in total assets, $521,078,000 in total liabilities, resulting in a $215,506,000 stockholders' deficit. AMERICAN COMMERCE: Pender Newkirk Raises Going Concern Doubt ------------------------------------------------------------ Pender Newkirk & Company LLP, of Tampa, Fla., expressed substantial doubt about American Commerce Solutions, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Feb. 28, 2007, and 2006. The auditing firm noted that the company incurred a net loss for the year ended Feb. 28, 2007 and has an accumulated deficit and negative working capital at Feb. 28, 2007. Pender Newkirk further stated that the company is in default on several notes payable at Feb. 28, 2007. The company posted a $1,450,388 net loss on $2,351,288 revenue for the year ended Feb. 28, 2007, as compared with a $922,351 net loss on $2,301,574 revenue in the prior year. For the year ended Feb. 28, 2007, the company's selling, general and administrative expenses grew to $2,151,316 from $2,115,724 in the prior year. At Feb. 28, 2007, the company's balance sheet showed $5,433,253 in total assets and $1,590,747 in total liabilities, resulting to $1,944,778 in stockholders' equity. The company also reported strained liquidity in its balance sheet with $457,810 in total current assets and $1,897,728 in total current liabilities. Liquidity and Capital Resources During the fiscal years ended Feb. 28, 2007, and 2006, the company used net cash for operating activities of $576,838 and $254,904, respectively. This increase in cash used by operating activities is primarily due to the overall increase in the net loss from the prior year. During the years ended Feb. 28, 2007, and 2006, the company provided funds of $215,110 and used $102,861 for investing activities, respectively. This increase in cash provided from investing activities is mainly due to the payments received on the notes receivable. During the years ended Feb. 28, 2007, and 2006, the company provided cash from financing activities of $360,226 and $312,391, respectively. The increase in net cash provided by financing activities is due to an increase in the cash received from the issuance of notes payable. A full-text copy of the company's 2006 annual report is available for free at http://researcharchives.com/t/s?2066 About American Commerce Headquartered in Bartow, Fla., American Commerce Solutions, Inc. - - (OTCBB: AACS) -- http://www.aacssymbol.com/-- is primarily a holding company with two wholly owned subsidiaries; International Machine and Welding Inc. is engaged in the machining and fabrication of parts used in industry, and parts sales and service for heavy construction equipment; Chariot Manufacturing Company, Inc., which was acquired on Oct. 11, 2003, from a related party, manufactures motorcycle trailers with fiberglass bodies. AMERIQUEST MORTGAGE: Fitch Junks Rating on Two Certificate Classes ------------------------------------------------------------------ Fitch Ratings has taken rating actions on these Ameriquest Mortgage Securities Inc. home equity issues: Series 2003-1 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A+'; -- Class MF-3, MV-3 affirmed at 'BB'; -- Class M-4 downgraded from 'B' to 'C' and assigned a distressed recovery (DR) rating of 'DR4'; Series 2004-R2 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 downgraded from 'BBB' to 'BB'; Series 2004-R4 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded from 'A' to 'A-'; -- Class M-3 downgraded from 'A-' to 'BB+'; -- Class M-4 downgraded from 'BBB+' to 'BB'; -- Class M-5 downgraded from 'BBB-' to 'B'; -- Class M-6 downgraded from 'BB-' to 'CCC', and assigned a distressed recovery (DR) rating of 'DR1'; Series 2005-R3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB'; -- Class M-9 affirmed at 'BBB-'; -- Class M-10 affirmed at 'BB+'; Series 2004-W8 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB'; -- Class M-9 affirmed at 'BBB-'; -- Class M-10 affirmed at 'BB+'; -- Class M-11 affirmed at 'BB'. The affirmations, affecting approximately $1.4 billion of the outstanding balances, are taken due to a satisfactory relationship of credit enhancement to expected losses. The negative rating actions affect approximately $101.46 million of outstanding certificates. The negative rating actions reflect continued deterioration in the relationship between CE and expected losses. Faster-than-expected prepayment speeds and rising interest rates led to diminished levels of excess spread available to cover losses and maintain OC. In addition, monthly losses have exceeded excess spread in recent months, which has caused deterioration in the OC amount. The underlying collateral consists of fully amortizing 15 to 30 year fixed and adjustable rate mortgages secured by first liens extended to subprime borrowers. As of the April distribution date, the transactions listed above are seasoned from 24 (2005-R3) to 50 (2003-1) months. The pool factors (current principal balance as a percentage of original) range approximately from 9% (2003-1) to 40% (2005-R3). The Ameriquest Securities loans, the retail sector for the Ameriquest Mortgage Securities Inc., were either originated or acquired by Ameriquest Mortgage Company. Ameriquest Mortgage Company serves as the servicer for the loans and is rated 'RPS3+' by Fitch. AMERIQUEST MORTGAGE: S&P Puts D Rating on Class M-4 Certificates ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class M-4 asset-backed pass-through certificates from Ameriquest Mortgage Securities Inc.'s series 2002-3 to 'D' from 'CCC'. At the same time, S&P affirmed its ratings on the other two classes from the same series. In addition, S&P lowered the ratings on three classes from series 2003-1, two of which remain on CreditWatch with negative implications. S&P removed the rating on the third downgraded class from series 2003-1 from CreditWatch negative. Finally, S&P affirmed the ratings on the other two classes from series 2003-1. The downgrades reflect the adverse performance of the mortgage pools backing these two transactions, as monthly net losses continue to significantly exceed monthly excess interest and steadily erode overcollateralization. In fact, losses have reduced the O/C for series 2002-3 to zero, resulting in the downgrade of the most subordinate class, class M-4, to 'D' from 'CCC'. As of the May 2007 distribution period, series 2002-3 had total delinquencies of 24.53% of the current pool balance, with severe delinquencies totaling 14.74%. Cumulative realized losses totaled 2.64% of the original pool balance. The transaction is 55 months seasoned and has paid down to 6.64% of its original size. Losses have eroded the O/C for series 2003-1 to 0.01% of its original pool balance, well below its target of 0.75%. As a result, S&P lowered the rating on class M-4, the most subordinate class, to 'CCC' from 'B'. In addition, S&P lowered the ratings on classes MF-3 and MV-3 to 'B' from 'BBB' and left them on CreditWatch negative. As of the May distribution, series 2003-1 had total delinquencies of 23.58%, with severe delinquencies of 15.81%. To date, this series has cumulative realized losses of 1.95% of its original pool balance. This series is 50 months seasoned and had paid down to 8.93% of its original pool balance. The affirmed ratings reflect adequate actual and projected credit support provided by subordination. The collateral for both series consists of 30-year, fixed- and adjustable-rate subprime mortgage loans secured by first liens on one- to four-family residential properties. Rating Lowered Ameriquest Mortgage Securities Inc. Asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-3 M-4 D CCC Ratings Lowered and Remaining on Creditwatch Negative Ameriquest Mortgage Securities Inc. Asset-backed pass-through certificates Rating Series Class To From ------ ----- -- ---- 2003-1 MF-3, MV-3 B/Watch Neg BBB/Watch Neg Rating Lowered and Removed from Creditwatch Negative Ameriquest Mortgage Securities Inc. Asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-1 M-4 CCC B/Watch Neg Ratings Affirmed Ameriquest Mortgage Securities Inc. Asset-backed pass-through certificates Series Class Rating ------ ----- ------ 2002-3 M-2 A+ 2002-3 M-3 BBB 2003-1 M-1 AA+ 2003-1 M-2 A+ ATHEROGENICS INC: Reduces Workforce by 50% ------------------------------------------ AtheroGenics implemented a restructuring plan that reduced its workforce by approximately 50% to 67 employees from 127. This action was designed to streamline company operations and is the first step of its new strategic plan, focused on advancing development of its novel drug candidate, AGI-1067. In April, AtheroGenics and AstraZeneca Plc ended their collaboration to develop and commercialize AGI-1067, after the drug failed to produce expected results, according to various reports. As a result of this decision, AtheroGenics reacquired all worldwide rights for AGI-1067 and continued to develop the compound. As part of the termination provisions of the agreement, AstraZeneca is responsible for providing transition support to AtheroGenics. Based in Alpharetta, Georgia, AtheroGenics Inc. (NASDAQ: AGIX) -- http://www.atherogenics.com/-- is a pharmaceutical company that focuses on the discovery, development and commercialization of novel drugs for the treatment of chronic inflammatory diseases, including heart disease (atherosclerosis), rheumatoid arthritis and asthma. AtheroGenics also has preclinical programs in rheumatoid arthritis and asthma utilizing its proprietary vascular protectant(R) technology. ATHEROGENICS INC: March 31 Balance Sheet Upside-Down by $164 Mil. ----------------------------------------------------------------- AtheroGenics Inc. released its financial results for the quarter ended March 31, 2007. At March 31, 2007, the company's balance sheet total assets of $157.4 million and total liabilities of $321.5 million, resulting in a $164 million stockholders' deficit. The company reported a $12.6 million net loss on $11.4 million revenues for the quarter ended March 31, 2007, compared to a $19.2 million net loss on $4.1 million revenues for the same period in 2006. Since inception, the company has financed its operations primarily through sales of equity securities and convertible notes. At March 31, 2007, the company had cash, cash equivalents and short- term investments of $130.3 million, compared with $151.8 million at Dec. 31, 2006. Working capital at March 31, 2007 was $105 million, compared to $118.8 million at Dec. 31, 2006. The decrease in cash, cash equivalents and short-term investments and working capital for the three months ended March 31, 2007 is due to the use of funds for operating purposes and capital equipment purchases. Based in Alpharetta, Georgia, AtheroGenics Inc. (NASDAQ: AGIX) -- http://www.atherogenics.com/-- is a pharmaceutical company that focuses on the discovery, development and commercialization of novel drugs for the treatment of chronic inflammatory diseases, including heart disease (atherosclerosis), rheumatoid arthritis and asthma. AtheroGenics also has preclinical programs in rheumatoid arthritis and asthma utilizing its proprietary vascular protectant(R) technology. BERRY PLASTICS: Moody's May Cut Low-B Ratings After Review ---------------------------------------------------------- Moody's Investors Service placed the long-term debt ratings of Berry Plastics Holdings Corporation on review for possible downgrade. The review follows the company's announcement that it intends to enter into a new $500 million senior unsecured term loan facility. The proceeds, along with cash on hand, are expected to be used to fund a special one time dividend. Pro forma for the transaction, Berry's credit metrics are more indicative of a B3 rating rather than a B2. Pro forma metrics are for the 12 months ended March 31, 2007 and include Moody's standard analytical adjustments, but do not include any projected synergies. Pro forma leverage rises to approximately 8.5 times from 7.2 times and the ratio of EBIT to interest declines to 0.6 times from 0.8 times. Berry's rating upon the consummation of the merger with Covalence reflected an expected reduction in debt in the intermediate term to a level more consistent with the B2 rating category. With the addition of $500 million of additional debt, the forecasted free cash flow is expected to be insufficient to improve these metrics to a level consistent with the B2 rating category until at least 2009. The integration of Covalence is not yet complete and risks still remain because of the difference in product lines and size as well as Covalence's historical operating issues. Additionally, the merger synergies represent a substantial portion of the forecasted financial results and are not yet assured given the continuing integration risk. Moody's stated in its credit opinion dated April 11, 2007 that a failure to reduce leverage below 6.5 times in the intermediate term could result in a downgrade. Berry has substantially increased debt twice in the last nine months and the ratings assigned both times were based on the expectation that the company would reduce debt over the intermediate term. Currently, Moody's anticipates that the downgrade of the Corporate Family Rating will be limited to one notch. Changes in instrument ratings and the prospective rating for the new term loan. These ratings of Berry are placed under review for possible downgrade: -- The B2 Corporate Family Rating, expected to be downgraded to B3 upon the close of the transaction; -- The B2 Probability of Default Rating, expected to be downgraded to B3 upon the close of the transaction; -- The Ba3 (LGD 2, 27%) rated $1,200 million senior secured term loan due 2015, expected to be affirmed upon the close of the transaction; -- The B3 (LGD 4, 65%) rated $225 million senior secured second lien FRN's due 2014, expected to be affirmed upon the close of the transaction; -- The B3 (LGD 4, 65%) rated $525 million senior secured second lien notes due 2014, expected to be affirmed upon the close of the transaction; and -- The Caa1 (LGD 6, 90%) rated $265 million senior subordinated notes due 2016, expected to be downgraded to Caa2 upon the close of the transaction. These rating of Berry Plastics Group, Inc. is assigned on a prospective basis: -- $500 million senior unsecured term loan due 2014, Caa2 (LGD 6-93%). The outlook for the prospective rating is stable. The SGL-2 Speculative Grade Liquidity rating is expected to be affirmed upon close of the transaction. The ratings and outlook are subject to the receipt of final documentation. Based in Evansville, Indiana, Berry Plastics Corporation -- http://www.berryplastics.com/-- manufactures and markets rigid plastic packaging products. Berry Plastics provides a wide range of rigid open top and rigid closed top packaging as well as comprehensive packaging solutions to over 12,000 customers, ranging from large multinational corporations to small local businesses. The company has 25 manufacturing facilities worldwide, including in Italy, England and Hong Kong and more than 6,800 employees. Pro forma for the recent merger with Covalence Specialty Materials Corporation, net sales for the twelve months ended March 31, 2007 amounted to approximately $3.0 billion. BERRY PLASTICS: S&P Junks Rating on Proposed $500 Million Notes --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Berry Plastics Holding Corp., a wholly owned subsidiary of Berry Plastics Group Inc., to negative from stable. S&P affirmed all the ratings, including the 'B' corporate credit rating. "The outlook revision follows the announcement that Berry has established a holding company, Berry Plastics Group Inc., and intends to enter into a seven-year $500 million senior unsecured term loan facility," said Standard & Poor's credit analyst Liley Mehta. "Proceeds from the loan along with cash on hand will be used to pay a dividend to its shareholders." S&P assigned a 'CCC+' rating to the proposed $500 million senior unsecured term loan due 2014. The proposed unsecured term loan is rated two notches below the corporate credit rating, based on the lenders' limited prospects for any recovery in the event of a default. Pro forma for the debt-financed dividend distribution, total debt (adjusted to include capitalized operating leases and unfunded postretirement liabilities) was about $3.2 billion at April 3, 2007. The 'B' corporate credit rating reflects Berry's very aggressive financial policy and willingness to incur a significant amount of debt to fund a dividend. These actions result in a highly leveraged capital structure, leaving no cushion for integration challenges related to the recently completed merger with Covalence Specialty Materials Holding Corp., or disappointing operating results at the Covalence legacy operations that would forestall the company's efforts to preserve acceptable liquidity and to gradually improve the financial profile. Following completion of the proposed debt-financed dividend, the company's financial profile will be significantly weakened, and free cash generation will be greatly reduced in 2008 owing to the company's heavy cash interest burden. The company's ability to generate the expected synergies within the expected timeframe is critical to achieving improved earnings and adequate cash generation to meet internal needs in the next few years. The negative outlook indicates that we would lower ratings if market or operating factors forestall improvement in credit metrics or if liquidity levels decline within the next 12 months. With more than $3.2 billion in annual sales pro forma for the merger with Covalence, Berry ranks among the largest packaging companies in North America, with leading positions in both the rigid and flexible plastic packaging segments. Based in Evansville, Indiana, Berry Plastics Corporation -- http://www.berryplastics.com/-- manufactures and markets rigid plastic packaging products. Berry Plastics provides a wide range of rigid open top and rigid closed top packaging as well as comprehensive packaging solutions to over 12,000 customers, ranging from large multinational corporations to small local businesses. The company has 25 manufacturing facilities worldwide, including in Italy, England and Hong Kong and more than 6,800 employees. Pro forma for the recent merger with Covalence Specialty Materials Corporation, net sales for the twelve months ended March 31, 2007 amounted to approximately $3.0 billion. BETH ISRAEL: Taps Besler Consulting as Medicare Consultant ---------------------------------------------------------- Beth Israel Hospital Association of Passaic dba PBI Regional Medical Center asks the United States Bankruptcy Court for the District of New Jersey for permission to employ Besler Consulting as its consultant. The firm will provide professional consulting services to assist the Debtor in preparing and submitting for year ending Dec. 31, 2007, Medicare cost report and Medicare terminating cost report for year end Dec. 31, 2006. The Debtor will pay the firm a fixed fee of $30,000 with 50% to be paid upon commencement of the engagement. The firm's professionals billing rates are: Designation Hourly Rate ----------- ----------- Manager $295 Senior Manager $325 Robert Pezutti, a senior manager of the firm, assures the Court that he does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Pezutti can be reached at: Robert Pezutti Besler Consulting 1215 Livingston Avenue, Suite 210 North Brunswick, New Jersey 08902 Tel: (732) 247-8855 Fax: (732) 545-4024 http://www.besler.biz/ About Beth Israel Headquartered in Passaic, New Jersey, Beth Israel Hospital Association of Passaic, dba PBI Regional Medical Center -- http://www.pbih.org/-- is a 264-bed, non-profit acute care hospital located in the City of Passaic, New Jersey. The Medical Center represents the consolidation of two significant hospitals, namely Passaic Beth Israel Hospital and the General Hospital Center of Passaic, and provides medical and health services including comprehensive cardiac services program, bypass surgery, electrophysiology, off pump surgery, and others. The Company filed for chapter 11 protection on July 10, 2006 (Bankr. D. N.J. Case No. 06-16186). Mark J. Politan, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represent the Debtor in its restructuring efforts. Allison M. Berger, Esq., and Hal L. Baume, Esq., at Fox Rothschild LLP represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it estimated assets and debts between $50 million and $100 million. CATALYST PAPER: Eliminates 130 Support Positions ------------------------------------------------ Catalyst Paper Corp. disclosed Wednesday a series of initiatives in a continuing drive to reduce costs and improve profitability. These include: * Indefinite curtailment of one paper machine effective September 1, 2007; * Elimination of 130 support positions bringing the overall workforce reduction to 480 in 2007; * Relocation of the corporate office from Vancouver to Richmond; and * Centralization of some mill and corporate administrative functions in Nanaimo. An $8 million improvement in annual profitability is expected from the indefinite closure of the Port Alberni Division's No. 4 paper machine. This will displace 134,000 tonnes of the company's least profitable newsprint business, reduce its highest cost fibre requirements and result in the layoff of 185 staff and hourly employees additional to the workforce reductions announced. Lightweight coated and directory capacity will remain unchanged. The overhaul of corporate structure, involving reduction of 130 support positions, centralization of functions and office moves, is expected to deliver annual savings of $16 million with one-time costs of $19 million. "Reducing costs is an immediate priority given the high Canadian dollar and the decline in North American newsprint consumption," said Richard Garneau, president and chief executive officer. "While we regret the strain these cost-saving measures will place on the employees involved, they are necessary to the long term success of our business and our position in key market segments." Catalyst Paper Corporation -- http://www.catalystpaper.com/-- (TSE:CTL), together with its subsidiaries, is a newsprint and specialty ground wood paper producer in North America. The company operates four manufacturing divisions, and one paper recycling division in British Columbia, Canada. The company operates in three business segments: Specialty Papers, engaged in the manufacture and sale of ground wood specialty printing paper; Newsprint, engaged in the manufacture and sale of newsprint, and Pulp, engaged in the manufacture and sale of long and short fiber pulp and containerboard. The primary market for the company's paper products is North America. The primary markets for the company's pulp products are Asia, Australasia and Europe. In a report, Bloomberg says the company has yet to experience an annual profit since 2001. CENDANT MORTGAGE: S&P Holds Low-B Rating s on Four Transactions --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on four classes from Cendant Mortgage Capital LLC's series 2002-1 and 2003-1. At the same time, S&P affirmed its ratings on the remaining classes from these two series, and on three other Cendant Mortgage Capital LLC transactions. Cendant Mortgage Capital LLC changed its name to PHH Mortgage Capital LLC Feb. 24, 2005. The raised ratings reflect the good performance of the loans in the mortgage pools, as well as actual and projected credit support percentages that adequately support the raised ratings. Current credit support for the upgraded classes has increased to an average of 1.79x the level for the new ratings, ranging from 1.74x for class B-3 from series 2003-1 to 1.84x for class B-3 from series 2002-1. The higher credit support percentages are the result of significant paydowns to the senior classes and the shifting interest structure of the transactions. The affirmations on the remaining classes reflect stable pool performance and adequate credit support percentages. Credit support for all of the transactions is provided by subordination. As of April 2007, the pools had total delinquencies ranging from 0.00% (series 2002-1) to 1.94% (2002-8). Due to the nature of the collateral, a majority of the pools had zero cumulative losses. The collateral for these transactions consists of conventional fixed-rate residential mortgage loans. The loans are secured by first liens on one- to four-family residential properties. Ratings Raised Cendant Mortgage Capital LLC Rating ------ Series Class To From ------ ----- -- ---- 2002-1 B-3 AAA AA 2003-1 B-1 AA+ AA 2003-1 B-2 AA- A 2003-1 B-3 BBB+ BBB Ratings Affirmed Cendant Mortgage Capital LLC Series Class Rating ------ ----- ------ 2002-1 A-3, A-4, P, X, B-1, B-2 AAA 2002-8 A-1, A-3, A-4, A-5, A-6, A-7, A-8 AAA 2002-8 A-9, P, X AAA 2003-1 A-1, A-3, A-4, A-5, A-6, A-7, A-8 AAA 2003-1 A-9, A-10, P, X AAA 2003-1 B-4 BB 2003-1 B-5 B 2003-4 I-A-1, I-A-2, I-A-3, I-A-4, I-A-5 AAA 2003-4 I-P, I-X, II-A-1, II-A-2, II-A-3 AAA 2003-4 II-A-4, II-P, II-X AAA 2003-4 B-1 AA 2003-4 B-2 A 2003-4 B-3 BBB 2003-4 B-4 BB 2003-4 B-5 B 2003-6 A-1, A-2, A-3, A-4, A-5, A-6, A-7 AAA 2003-6 P, X AAA 2003-6 B-3 BBB CHOICE HOTELS: March 31 Balance Sheet Upside-down by $70.5 Million ------------------------------------------------------------------ Choice Hotels International Inc.'s balance sheet at March 31, 2007, showed $305.3 million in total assets and $375.8 million in total liabilities, resulting in a $70.5 million total stockholders' deficit. The company's balance sheet at March 31, 2007, also showed strained liquidity with $82.8 million in total current assets available to pay $138 million in total current liabilities. Choice Hotels International Inc. reported net income of $16.3 million on total revenues of $116.2 million for the first quarter ended March 31, 2007, compared with net income of $17.7 million on total revenues of $109.4 million for the same period ended March 31, 2006. Franchising revenues were $53 million for the three months ended March 31, 2007 compared to $50.5 million for the three months ended March 31, 2006. The growth in franchising revenues is primarily due to a 9% increase in royalty revenues offset by a 13% and 17% decline in initial franchise and relicensing fees and other income. Total marketing and reservations revenues were $62 million and $58 million for the three months ended March 31, 2007 and 2006, respectively. The decline in net income for the three months ended March 31, 2007, is primarily attributable to a $2.7 million decline in operating income and a 60 basis point increase in the effective income tax rate to 35.2% offset by a $1 million reduction in interest expense. Operating income decreased as a result of a $5.6 million, or 31% increase in selling, general and administrative expenses partially offset by a $2.5 million increase in franchising revenues. The increase in selling, general and administration expenses was due primarily to executive termination benefits of $3.7 million incurred during the first quarter of 2007 as well as the commencement of direct franchising operations in continental Europe. Net cash provided by operating activities was $20.5 million and $24.5 million for the three months ended March 31, 2007 and 2006, respectively. The decline in cash flows from operating activities primarily reflects the timing of working capital items compared to the prior year. As of March 31, 2007, the total debt outstanding for the company was $184.5 million. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?2073 About Choice Hotels Headquartered in Silver Spring, Maryland, Choice Hotels International Inc. (NYSE: CHH) -- http://www.choicehotels.com/--- franchises more than 5,400 hotels, representing more than 440,000 rooms, in the United States and 39 countries and territories. As of March 31, 2007, 833 hotels are under development in the United States, representing 64,078 rooms, and an additional 70 hotels, representing 6,463 rooms, are under development in more than 15 countries and territories. The company's Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites and Suburban Extended Stay Hotel brands serve guests worldwide. CINCINNATI BELL: March 31 Balance Sheet Upside-down by $773.1 Mil. ------------------------------------------------------------------ Cincinnati Bell Inc.'s balance sheet at March 31, 2007, showed $1.95 billion in total assets and $2.72 billion in total liabilities, resulting in a $773.1 million total stockholders' deficit. Cincinnati Bell Inc. reported net income of $22.6 million for the first quarter ended March 31, 2007, compared with net income of $14.1 million for the same period ended March 31, 2006. "Cincinnati Bell's continued strong performance demonstrates that customers recognize our ability to provide them with superior value, reliable networks and outstanding service," said Jack Cassidy, president and chief executive officer of Cincinnati Bell Inc. "By maintaining a sharp focus on the fundamental metrics of our business, we were able to report improved results in the face of continued intense local competition." Revenue totaled $315 million in the first quarter, up 6 percent from a year ago. Increased contributions from Technology Solutions, Wireless and data services more than offset a year- over-year decline in local voice revenue. Similarly, adjusted EBITDA equaled $117 million, up $5 million, or 4 percent from the first quarter of 2006 due to improved profitability in the Wireless and Technology Solutions operations. "We are pleased with the progress represented by our first quarter performance," said Brian Ross, chief financial officer of Cincinnati Bell. "In addition to strong revenue, EBITDA, and key metrics improvements, we continued to use our strong cash flow to reduce net debt, which we pushed below $2 billion in the quarter. Achieving this milestone demonstrates our continued commitment to our de-lever, defend and grow strategy." Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?2074 About Cincinnati Bell Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/ provides a wide range of telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. CITICORP MORTGAGE: Fitch Rates Class B-5 Certificates at B ---------------------------------------------------------- Fitch rates Citicorp Mortgage Securities, Inc.'s REMIC pass- through certificates, series 2007-4 as: -- $550,574,722 classes IA-1 through IA-16, IA-IO, IIA 1, IIA-IO, IIIA-1, IIIA-IO and A-PO (senior certificates) 'AAA'; -- $9,082,000 class B-1 'AA'; -- $3,122,000 class B-2 'A'; -- $1,703,000 class B-3 'BBB'; -- $1,135,000 class B-4 'BB'; -- $851,000 class B-5 'B'. The $1,136,123 class B-6 is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 3.00% subordination provided by the 1.60% class B-1, the 0.55% class B- 2, the 0.30% class B-3, the 0.20% privately offered class B-4, the 0.15% privately offered class B-5, and the 0.20% privately offered class B-6. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and CitiMortgage, Inc.'s servicing capabilities (rated 'RPS1' by Fitch) as primary servicer. As of the cut-off date, May 1, 2007, the mortgage pool consists of 996 conventional, fully amortizing, 10-30 year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties with an aggregate principal balance of approximately $567,603,895, located primarily in California (25.65%) and New York (22.24%). The weighted average current loan to value ratio (CLTV) of the mortgage loans is 68.29%. Approximately 23.46% of the loans were originated under a reduced documentation program. Condo properties account for 16.34% of the total pool. Cash-out refinance loans represent 23.24% of the pool and 0.30% of the pool are investor properties. The average balance of the mortgage loans in the pool is approximately $569,883. The weighted average coupon of the loans is 6.300% and the weighted average remaining term is 348 months. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, please see the press release issued May 1, 2003, entitled "Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation," available on the Fitch Ratings web site at http://www.fitchratings.com/ The mortgage loans were originated or acquired by CMI and in turn sold to CMSI. A special purpose corporation, CMSI, deposited the loans into the trust, which then issued the certificates. U.S. Bank National Association will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CLAYMONT STEEL: March 31 Balance Sheet Upside-Down by $49.9 Mil. ---------------------------------------------------------------- Claymont Steel Holdings Inc. reported a net loss of $8.9 million on sales of $84.8 million for the first quarter ended March 31, 2007, compared with a net income of $11.4 million on sales of $81.3 million for the same period ended April 1, 2006. The net loss in the quarter ended March 31, 2007, includes $14.6 million of after-tax refinancing related charges in the first quarter. Adjusted EBITDA was $18.3 million up from $15.6 million in the fourth quarter of 2006. "We delivered outstanding results in March and a very solid quarter overall in light of some operational issues relating to energy curtailments early in the period," commented chairman and chief executive officer Jeff Bradley. "In addition to generating a high level of profitability, we continued to make progress on our key strategic initiatives. Our high margin custom burning business more than doubled over the same period last year and we continued to increase the proportion of our overall business directed toward custom versus standard orders." Despite challenges in the plate mill due to reduced 4th quarter melt shop output and lower production due to a natural gas curtailment stemming from extreme winter weather, Claymont's shipments increased slightly in the 1st quarter of 2007 as compared to the 4th quarter of 2006 and 1st quarter 2006. As expected, the melt shop returned to normal operations and produced a near record 119,000 tons, an increase of 15% over the average of the previous two quarters. Average selling price rose 2% from 1st quarter 2006, to $838/ton, down from the 4th quarter of 2006. Gross profit for the first quarter of 2007 was down $4.8 million, or 19%, from the 1st quarter 2006. Partially offset by a $3 million increase in sales, the decline from 1st quarter 2006 was caused by a $5 million increase in scrap costs and $3 million increase in third party slab costs that could not be passed on through increased sales price due to the weaker pricing environment. Selling, general and administrative expenses were $4.2 million for the 1st quarter 2007, an increase of $1.5 million from 1st quarter 2006. The increase from the 1st quarter 2006 is primarily related to costs associated with the refinancing of the company's debt and the increases to support its growth and its public company reporting requirements. The effective tax rate for the company is approximately 35.2% in the 1st quarter of 2007 verses 37.2% in the first quarter of 2006. The effective tax rate has decreased in the first quarter 2007 as a result of the pre-tax losses incurred at the Holding Company, largely as a result of the redemption costs associated with the Holding Company's Senior Secured Pay-in-Kind Notes. In the first quarter 2007, the company incurred $30.8 million in interest expense compared to $5.8 million for the same period a year ago. This included $23.3 million of one-time charges related to redeeming of the company's prior debt and writing off deferred financing fees and original issue discount. Consistent with its multi-year plan, the company made $5 million of capital expenditures in the quarter. As of quarter end, the company had $6.3 million in cash and short term investments and total debt outstanding of $167.9 million. At March 31, 2007, the company's balance sheet showed $149.8 million in total assets and $199.7 million in total liabilities, resulting in a $49.9 million total stockholders' deficit. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?2076 About Claymont Steel Based in Claymont, Delaware, Claymont Steel Holdings Inc. (Nasdaq: PLTE) -- http://www.claymontsteel.com/ -- manufactures and sells custom discrete steel plate in North America. COMMUNITY HEALTH: Commences Tender Offer for 6-1/2% Senior Notes ---------------------------------------------------------------- Community Health Systems, Inc. has commenced a cash tender offer for any and all of its outstanding $300 million aggregate principal amount of 6-1/2% Senior Subordinated Notes due 2012 on the terms and subject to the conditions set forth in the company's Offer to Purchase and Consent Solicitation Statement dated May 31, 2007. The company is also soliciting consents to certain proposed amendments to the indenture governing the Notes to, among other things, eliminate substantially all of the restrictive covenants, eliminate or modify certain events of default and certain conditions to defeasance of the Notes and eliminate or modify related provisions contained in the indenture and the Notes. The tender offer documents more fully set forth the terms of the tender offer and consent solicitation. The tender offer will expire at 12:00 midnight, New York City time, on June 27, 2007, unless extended or earlier terminated by the company. The company reserves the right to terminate, withdraw or amend the tender offer and consent solicitation at any time subject to applicable law. The total consideration for each $1,000 principal amount of Notes validly tendered and not withdrawn prior to the Consent Date described below, and accepted for purchase pursuant to the tender offer will be determined as specified in the tender offer documents and will be equal to the present value, minus accrued interest, on the applicable payment date for the tender of Notes of (i) $1,032.50 and (ii) the remaining scheduled interest payments on such Notes after the payment date for the tender of Notes to December 15, 2008, in each case determined on the basis of a yield to the Redemption Date equal to the sum of (A) the yield on the 3-3/8% U.S. Treasury note due December 15, 2008, as calculated by Credit Suisse Securities (USA) LLC and Wachovia Securities, acting as dealer managers, in accordance with standard market practice, based on the bid side price for the Reference Treasury Security on the price determination date, as described in the tender offer documents, plus (B) a fixed spread of 50 basis points. The company will pay accrued and unpaid interest up to, but not including, the applicable payment date. Each holder who validly tenders its Notes and delivers consents on or prior to 5:00 p.m., New York City time, on June 13, 2007 will be entitled to a consent payment, which is included in the total consideration above, of $30 for each $1,000 principal amount of Notes tendered by such holder if such Notes are accepted for purchase pursuant to the tender offer. Holders who tender Notes are required to consent to the proposed amendments to the indenture and the Notes. Any tender of Notes prior to the Consent Date may be validly withdrawn and consents may be validly revoked at any time prior to the consent date, but not thereafter except under limited circumstances. The proposed amendments will not become effective, however, until a majority in aggregate principal amount of the outstanding Notes, whose holders have delivered consents to the proposed amendments, have been accepted for payment. Holders who tender Notes after the consent date will not be entitled to receive the consent payment. The company has reserved the right to accept for purchase at any time following the Consent Date but prior to the Expiration Date all Notes then validly tendered. If the company elects to exercise this option, it will pay for such Notes on a date promptly following the Early Acceptance Time. On the Early Payment Date, the Company will also pay accrued and unpaid interest up to, but not including, the Early Payment Date on the Notes accepted for purchase. Subject to its right to exercise this early acceptance option, the Company currently expects to accept for purchase, and pay the total consideration, as to all Notes tendered prior to the Consent Date, and the tender offer consideration, which is the total consideration less the cash consent payment, as to all Notes tendered after the Consent Date, with respect to, all validly tendered Notes on a date promptly following the Expiration Date. The company's obligation to accept for purchase, and to pay for, Notes validly tendered and not withdrawn pursuant to the tender offer and the consent solicitation is subject to the satisfaction or waiver of certain conditions, including, among others, the satisfaction of all conditions to the consummation of the merger under the previously announced merger agreement among the company, Triad Hospitals, Inc. and FWCT-1 Acquisition Corporation, the company or one of the company's affiliates having issued up to $3.365 billion of debt, the company having sufficient available funds to pay the total consideration with respect to all Notes and the receipt of sufficient consents with respect to the proposed amendments to the indenture and the Notes. The company intends to finance the purchase of the Notes and related fees and expenses with a portion of the proceeds from the proposed issuance of the New Debt. The complete terms and conditions of the tender offer and the consent solicitation are set forth in the tender offer documents which are being sent to holders of Notes. Holders of Notes are urged to read the tender offer documents carefully. The company has retained Credit Suisse and Wachovia Securities to act as Dealer Managers in connection with the tender offer and consent solicitation. Questions about the tender offer and consent solicitation may be directed to Credit Suisse at (212) 325-7596 (collect) or Wachovia Securities at (866) 309-6316 (toll free) or (704) 715-8341 (collect). Copies of the tender offer documents and other related documents may be obtained from D.F. King & Co., Inc., the information agent for the tender offer and consent solicitation, at (800) 769-7666 (toll free) or (212) 269- 5550 (collect). About Community Health Headquartered in Franklin, Tenn., Community Health Systems Inc. (NYSE: CYH) -- http://www.chs.net/-- is a leading operator of general acute care hospitals in non-urban communities throughout the country. Through its subsidiaries, the company currently owns, leases or operates 80 hospitals in 23 states. Its hospitals offer a broad range of inpatient medical and surgical services, outpatient treatment and skilled nursing care. * * * As reported in the Troubled Company Reporter on March 22, 2007, Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating on Brentwood, Tennessee-based hospital owner and operator Community Health Systems Inc. on CreditWatch with negative implications. COMPASS MINERALS: March 31 Balance Sheet Upside-down by $45.5 Mil ----------------------------------------------------------------- Compass Minerals International Inc.'s balance sheet at March 31, 2007, showed $691.2 million in total assets and $736.7 million in total liabilities, resulting in a $45.5 million total stockholders' deficit. Compass Minerals International Inc. reported net income of $26.1 million for the first quarter ended March 31, 2007, compared with net income of $28.6 million for the same period ended March 31, 2006. Sales increased 21 percent to $264.2 million through volume and price improvements across all product lines, partially offset by particularly mild winter weather in the U.K. This compares with sales of $217.9 million for the quarter ended March 31, 2006. Operating earnings were $49 million compared with $50.8 million in the first quarter of 2006, with the year-over-year decline primarily reflecting a $4.1 million business interruption insurance receipt in the first quarter of 2006, weather-related reductions in rock salt production in the 2007 quarter and the nonrecurring effects of a strike last year at the company's Goderich, Ontario mine. "Sales for the quarter clearly improved over the prior year, as unseasonably mild weather in January was followed by more normal weather during February and March in North America," said Angelo Brisimitzakis, Compass Minerals president and chief executive officer. "Proactive inventory management offset the positive effects of our first-quarter sales growth and one time events in both periods made for a challenging comparison to first-quarter 2006 results. However, underlying volumes and prices improved in each of our product lines, and we are particularly encouraged by strength in our non-winter mineral products. We continue to build a strong, balanced foundation for profitable growth." Selling, general and administrative expenses of $15.6 million for the first quarter of 2007 increased $1.4 million compared to the same period in 2006. Expenses in the 2007 quarter include a $1.6 million charge for the year due to a change in the company's earned-vacation policy; and the selling, general and administrative expenses of the newly consolidated records management business added $600,000 in the quarter. These cost increases were partially offset by a first-quarter reduction in variable compensation in response to milder-than-expected weather. Total debt declined from $585.5 million at Dec. 31, 2006, to $567.2 million at March 31, 2007. During the quarter, the company repaid the $16.3 million that was outstanding on its revolving credit facility and made a $10 million principal payment on its term loan. These reductions were partially offset by accretion on the company's discount notes. Cash flows from operations were $80.4 million in the 2007 quarter compared to $112.6 million in the prior-year quarter primarily reflecting the difference between cash collected in the prior-year quarter from receivables generated by robust sales in the December 2005 quarter compared to cash collected in the March 2007 quarter from receivables generated during the unusually mild December 2006 quarter. This effect was partially offset by reductions in inventory. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?2077 About Compass Minerals Based in the Kansas City metropolitan area, Compass Minerals International Inc. (NYSE: CMP) -- http://www.compassminerals.com/ -- is a leading producer of inorganic minerals, including salt, sulfate of potash specialty fertilizer and magnesium chloride. The company provides highway deicing salt to customers in North America and the United Kingdom, and produces and distributes consumer deicing and water conditioning products, ingredients used in consumer and commercial foods, specialty fertilizers, and products used in agriculture and other consumer and industrial applications. Compass Minerals also provides records management services to businesses throughout the U.K. CONSUMERS ENERGY: To Buy Power Plant with LS Power for $517 Mil. ---------------------------------------------------------------- Consumers Energy has agreed to buy a 946 megawatt natural gas- fired power plant with LS Power Group for $517 Million. Consumers Energy said that it will ask the Michigan Public Service Commission to approve the acquisition. Consumers Energy expects to close the purchase in 2008, subject to MPSC approval and other closing conditions. Consumers Energy's president and chief operating officer, John Russell, said the pending purchase fits in well with the utility's Balanced Energy Initiative, which it filed recently with the MPSC. Consumers Energy said that the balanced energy initiative is the consumer Energy's comprehensive plan to meet the energy needs of its 1.8 million electric customers over the next 20 years. "This plant will help provide the power we need to meet the growing needs of our customers in the most cost-effective way" Russell said. Buying this plant costs less than building a new plant of the same size and it can be available to serve our customers next year." Consumer Energy disclosed that J.P. Morgan Securities Inc. served as its financial adviser for this transaction. A full-text copy of the Purchase and Sale Agreement is available for free at: http://ResearchArchives.com/t/s?2072 About Consumer Energy Headquartered in Jackson, Michigan, Consumers Energy Company (NYSE: CMS-PA, CMS-PB) -- http://www.consumersenergy.com/-- a wholly owned subsidiary of CMS Energy Corporation, is a combination of electric and natural gas utility that serves more than 3.5 million customers in Michigan's Lower Peninsula. * * * As reported in the Troubled Company Reporter on March 14, 2007, Moody's Investors Service upgraded the rating on Consumers Energy's preferred stock to 'BB+' from 'BB-'. DAVE & BUSTER'S: Debt Reduction Prompts S&P to Lift Rating to B --------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on the senior secured credit facility of Dallas-based Dave & Buster's Inc. to 'B' from 'B-', one notch higher than the corporate credit rating on the company. The recovery rating of the facility was raised to '1' from '3', indicating the expectation for full (100%) recovery of principal in the event of default. The upgrade reflects the company's ability to reduce the balance on its $100 million term loan to $79.4 million and thereby affording holders better recovery prospects. At the same time, Standard & Poor's affirmed its other ratings on Dave & Buster's, including the 'B-' corporate credit rating and the 'CCC+' senior unsecured rating. The outlook is negative. "The outlook is negative and indicates that we could lower the ratings if sales trends weaken or operating margins continue to decline," said Standard & Poor's credit analyst Charles Pinson- Rose, "causing the company's credit ratios and liquidity position to weaken." DOLE FOOD: Posts $10.2 Million Net Loss in Qtr. Ended March 24 -------------------------------------------------------------- Dole Food Company Inc. reported a net loss of $10.2 million for the first quarter ended March 24, 2007, compared with a net loss of $5.9 million for the same period in 2006. For the first quarter of 2007, Dole Food Company Inc. and its consolidated subsidiaries generated revenues of $1.6 billion, reflecting a 12% increase compared to revenues of $1.4 billion in the prior year. Higher revenues were reported in the company's fresh fruit, fresh vegetables and packaged foods operating segments. The company earned operating income of $31 million for the first quarter of 2007, compared to $23 million earned in the prior year. The increase in operating income was primarily due to higher worldwide banana and pineapple earnings and higher pricing in the North America commodity vegetables operations. These increases were partially offset by lower operating results in the company's packaged salads business and North America deciduous fruit operations due to lower volumes sold and higher product costs. In addition, the company's North America citrus operations incurred higher product costs from the write-off of citrus crops as result of the California citrus freeze in January 2007. Unfavorable foreign currency exchange movements primarily in the company's sourcing locations also impacted operating results. For the quarter ended March 24, 2007, interest income and other income (expense), net increased to $3.2 million compared to $400,000 in the prior year. The increase was primarily due to a gain of $1.5 million generated on the company's cross currency swap in 2007 compared to foreign currency exchange losses generated on the company's Japanese yen denominated term loan and British pound sterling capital lease vessel obligation of $700,000 and $500,000, respectively, in 2006. Interest expense for the quarter ended March 24, 2007, was $44.2 million compared to $34.4 million in the quarter ended March 25, 2006. Interest expense increased primarily as a result of higher levels of borrowings and higher effective market-based borrowing rates on the company's debt facilities. Fresh fruit revenues for the quarter ended March 24, 2007, increased 17% to $1.05 billion from $900 million for the quarter ended March 25, 2006. The increase in fresh fruit revenues was primarily driven by higher worldwide sales of bananas, higher volumes of pineapples sold in North America and Asia and higher sales in the European ripening and distribution operations. Fresh fruit EBIT for the quarter ended March 24, 2007, increased to $30.7 million from $20.3 million for the quarter ended March 25, 2006. EBIT increased primarily as a result of higher worldwide sales of bananas. This increase in worldwide banana EBIT was principally driven by higher volumes and pricing in North America and Asia as well as by higher volumes in Europe. Fresh vegetables revenues for the quarter ended March 24, 2007, of $244.3 million were up slightly compared to $243.2 million for the quarter ended March 25, 2006. Higher pricing in the North America commodity vegetables business, primarily for celery, iceberg and leaf lettuce, was offset by lower volumes and lower pricing in the packaged salads business. Fresh vegetables EBIT for the quarter ended March 24, 2007, decreased to $2.2 million from $4.6 million for the quarter ended March 25, 2006. The decrease in EBIT was primarily due to lower sales volumes and higher product costs in the packaged salads business. Packaged foods revenues for the quarter ended March 24, 2007, increased 16% to $228.2 million from $195.9 million for the quarter ended March 25, 2006. The increase in revenues was primarily due to higher pricing and volumes of FRUIT BOWLS, canned pineapple, fruit in plastic jars and packaged frozen fruit sold in North America. EBIT in the packaged foods segment for the quarter ended March 24, 2007, remained relatively unchanged at $15.3 million compared to $14.9 million for the quarter ended March 25, 2006. Higher sales were offset by higher product costs and higher selling, marketing and general and administrative costs in both North America and Europe. Fresh-cut flowers revenues for the quarter ended March 24, 2007, decreased to $37 million from $58.2 million for the quarter ended March 25, 2006. The decrease in revenues was due primarily to lower sales volume related to changes in the customer base and product offerings attributable to the implementation of the 2006 restructuring plan. EBIT in the fresh-cut flowers segment for the quarter ended March 24, 2007 remained relatively unchanged from prior year. Corporate EBIT was a loss of $12.9 million for the quarter ended March 24, 2007, compared to a loss of $15.1 million for the quarter ended March 25, 2006. The increase in EBIT for the quarter was primarily due to a gain of $1.5 million related to the company's cross currency swap in 2007 compared to an unrealized foreign currency exchange loss of $700,000 related to the company's Yen loan in 2006. Liquidity and Capital Resources In the quarter ended March 24, 2007, cash flows used in operating activities were $42.1 million compared to cash flows used in operating activities of $109.1 million for the quarter ended March 25, 2006. Cash flows used in operating activities were $67 million lower, primarily due to lower levels of expenditures for inventory, mainly in the packaged foods business, as well as higher accounts payable and accrued liabilities due in part to the timing of payments. The company had a cash balance and available borrowings under the ABL revolver of $96.6 million and $135.4 million, respectively, at March 24, 2007. At March 24, 2007, the company's balance sheet showed $4.65 billion in total assets, $4.28 billion in total liabilities, and $362.6 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended March 24, 2007, are available for free at http://researcharchives.com/t/s?205d About Dole Food Headquartered in Westlake Village, California, Dole Food Company Inc. -- http://www.dole.com/-- is a producer and marketer of fresh fruit, fresh vegetables and fresh-cut flowers, and markets a line of packaged foods. The company has four primary operating segments. The fresh fruit segment produces and markets fresh fruit to wholesale, retail and institutional customers worldwide. The fresh vegetables segment contains operating segments that produce and market commodity vegetables and ready-to-eat packaged vegetables to wholesale, retail and institutional customers primarily in North America, Europe and Asia. The packaged foods segment contains several operating segments that produce and market packaged foods, including fruit, juices and snack foods. Dole's fresh-cut flowers segment sources, imports and markets fresh-cut flowers, grown mainly in Colombia and Ecuador, primarily to wholesale florists and supermarkets in the U.S. * * * As reported in the Troubled Company Reporter on Jan. 31, 2007, Moody's Investors Service downgraded Dole Food Company Inc.'s corporate family rating to B2 from B1; probability of default rating to B2 from B1; senior secured bank credit facilities to Ba3 from Ba2; senior unsecured notes to Caa1 from B3; and various shelf registrations to (P)Caa1 from (P)B3. Moody's said the outlook is stable. On Dec. 11, Standard & Poor's Ratings Services lowered its ratings on Dole Food Co. Inc. and Dole Holding Co. LLC, including its corporate credit rating, to 'B' from 'B+'. DUTCH HILL: Moody's Rates $11.8 Million Class D-3 Notes at Ba2 -------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Dutch Hill Funding II Ltd.: (1) Aaa to the $206,400,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2046; (2) Aaa to the $21,200,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2046; (3) Aa2 to the $64,400,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2052; (4) A2 to the $24,000,000 Class C Mezzanine Secured Floating Rate Deferrable Notes Due 2052; (5) A2 to the $8,000,000 Class C Loan Due 2052; (6) Baa1 to the $15,200,000 Class D-1 Mezzanine Secured Floating Rate Deferrable Notes Due 2052; (7) Baa2 to the $11,800,000 Class D-2 Mezzanine Secured Floating Rate Deferrable Notes Due 2052; and (8) Ba2 to the $11,800,000 Class D-3 Mezzanine Secured Floating Rate Deferrable Notes Due 2052. 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. The ratings are also based upon the transaction's legal structure and the characteristics of the collateral pool. TCW Asset Management Company will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. EQUIPMENT FINANCE: Loan Scheme Probe Uncovers Employee Collusion ---------------------------------------------------------------- An ongoing internal investigation found reported irregularities in certain financing contracts in Equipment Finance LLC as a direct result of collusion by a group of Equipment Finance employees. The investigation, done by Sterling Financial, revealed evidence of a sophisticated loan scheme, orchestrated deliberately by certain EFI officers and employees over an extended period of time, to conceal credit delinquencies, falsify financing contracts and related documents, and subvert Sterling's established internal controls and reporting systems. According to Sterling, the scheme was able to avoid detection until recently due to the depth and breadth of the collusion. In other words, Sterling notes, employees at different seniority levels and functional areas were apparently involved. The deceptive activities were limited to EFI and no customer accounts in Sterling's banks or other affiliates were involved, Sterling said. Management Action and Other Changes Sterling's Board of Directors, upon the recommendation of management, concluded on May 23 that Sterling will be required to record, under U.S. generally accepted accounting principles, a material impairment of certain assets of EFI. The assets include EFI financing contracts, interest associated with those contracts, and potentially goodwill attributable to EFI. While Sterling has not determined the annual periods in which the impairment occurred, Sterling currently expects to record a cumulative after-tax charge to the Dec. 31, 2006 financial statements of approximately $145 million to $165 million, based upon the results of the investigation's preliminary findings. However, at this point in the investigation, Sterling said it has not determined the final financial impact, including any potential recoveries, such as insurance and collateral. Sterling is working closely with its regulators and all appropriate federal authorities on the ongoing investigation. "Our investigation has now revealed evidence that Sterling and its shareholders were subjected to a significant, sophisticated loan scheme, specifically designed to deceive and avoid detection," said J. Roger Moyer, Jr., president and chief executive officer of Sterling Financial Corporation. "Our priority now is to address the problem and continue serving our customers. Decisive actions have been taken to reinforce oversight and centralize operational management at EFI." As a result of the investigation, Sterling implemented immediate changes in EFI's management structure. Five EFI employees have now been terminated, including the Chief Operating Officer and Executive Vice President, and Sterling installed an acting Chief Operating Officer. Further, a special collections team has been deployed to maximize recoveries from the impaired contracts. Sterling moved to centralize management and control of financial, credit and information systems previously managed by EFI. In addition, the Promontory Financial Group, an international financial and regulatory consulting firm with world class expertise in bank control mechanisms, headed by former Comptroller of the Currency Eugene Ludwig, has been engaged to evaluate controls across all of Sterling and make recommendations. Capital Restoration Plan To address the capital issues resulting from the financial irregularities at EFI, Sterling and the Bank have developed a plan to restore the Bank's capital. "Having taken immediate action, we are now focused on developing a long-term plan," Mr. Moyer added. "Sterling, through its affiliates, has a successful history tracing back more than 150 years, and we're currently developing a strategy for the future to rebuild shareholder value." The capital restoration plan includes consolidating four of Sterling's affiliate banks in order to maximize capital. Based on approval of the Office of the Comptroller of the Currency, Bank of Hanover and Trust Company, Pennsylvania State Bank, Bay First Bank, N.A., and Bank of Lancaster County, N.A., all became divisions of BLC Bank, N.A. All branches will continue to operate under their current names, with the same personnel and the same types of products and services that the company's customers know and rely on. The plan also includes halting the payment of dividends to Sterling Financial Corporation shareholders for a period of time, and exploring all strategic options, including raising additional capital, the sla laale of certain assets and/or business units, and entering into a business combination with a strategic partner. Keefe, Bruyette & Woods has been retained to assist Sterling in exploring these options. Mr. Moyer continued, "This has certainly been a difficult time for all of us at Sterling, but among our organization's greatest assets are the more than 1,100 hardworking employees, strong franchises and market position, and loyal customers. All of our banking and other offices continue to provide the same exceptional service that customers have relied on for over 150 years." Probe Background On April 19, 2007, Sterling Financial Corporation received information suggesting irregularities in certain financing contracts at EFI, one of its financial services group companies. EFI provides commercial financing for the soft pulp logging and land-clearing industries, primarily in the southeastern United States. Management moved immediately to notify the Audit Committee and Board of Directors about the information, and the Audit Committee engaged nationally recognized, expert accountants and legal counsel to conduct an independent investigation. Subsequently on April 30, Sterling announced its previously issued financial statements, the reports on the audited financial statements and related internal controls issued by its independent registered public accounting firm, and all earnings releases issued for 2004 through 2006, should no longer be relied upon due to the expected material impact of these irregularities. Sterling expects to restate or amend these financial statements once the final financial impact has been determined. The impact of the irregularities may also be material for years prior to 2004, depending on the results of the investigation. About Equipment Finance Equipment Finance is a wholly owned subsidiary of Sterling Financial Corporation of Lancaster, Pa.'s affiliate bank, Bank of Lancaster County, N.A. Headquartered in Lancaster, Pa., Sterling Financial Corporation (NASDAQ: SLFI) - http://www.sterlingfi.com/-- is a diversified financial services company. Sterling Banking Services Group affiliates offer a full range of banking services in south-central Pennsylvania, northern Maryland and northern Delaware. The group also offers correspondent banking services in the mid-Atlantic region to other companies within the financial services industry, and banking related insurance services. Sterling Financial Services Group affiliates provide specialty commercial financing; fleet and equipment leasing; and investment, trust and brokerage services. EQUISTAR CHEMICALS: To Redeem $300MM of 10.125% & 10.625% Notes --------------------------------------------------------------- Equistar Chemicals LP called $300 million of its 10.125% Senior Notes due 2008 and $300 million of its 10.625% Senior Notes due 2011. The company said that these notes will be redeemed and the respective redemption prices will be paid on June 25, 2007. The company said that the redemption price of the 10.125% Senior Notes due 2008 will be determined on June 22, 2007. The redemption price of the 10.625% Senior Notes due 2011 will Be 105.313% of par. Equistar Chemicals, LP is a wholly owned subsidiary of Lyondell Chemical Company. Headquartered in Houston, Texas, Lyondell Chemical Company manufactures chemicals and plastics, a refiner of heavy, high- sulfur crude oil. The company also produces fuel products like ethylene, polyethylene, styrene, propylene, propylene oxide, titanium dioxide, gasoline, ultra low-sulfur diesel, MTBE and ETBE. * * * As reported in the Troubled Company Reporter on March 7, 2007, Moody's Investors Services affirmed Equistar Chemicals LP's Issuer default rating at 'B+'; Senior secured credit facility at 'BB+/RR1'; and Senior unsecured notes at 'BB-/RR3'. GEMSTONE CDO: Moody's Rates $18.7 Million Class E Notes at Ba1 -------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Gemstone CDO VII Ltd.: (1) Aaa to the $244,000,000 Class A-1a Floating Rate Notes due December 2045; (2) Aaa to the $400,000,000 Class A-1b Floating Rate Notes due December 2045; (3) Aaa to the $159,000,000 Class A-2 Floating Rate Notes due December 2045; (4) Aa2 to the $96,900,000 Class B Floating Rate Notes due December 2045; (5) A2 to the $68,300,000 Class C Floating Rate Deferrable Interest Notes due December 2045; (6) Baa2 to the $55,100,000 Class D Floating Rate Deferrable Interest Notes due December 2045; and (7) Ba1 to the $18,700,000 Class E Floating Rate Deferrable Interest Notes due December 2045. 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. HBK Investments L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. GLOBAL HOME: Court Extends Exclusive Plan-Filing Period to Oct. 4 ----------------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware extended Global Home Products, LLC, and its debtor- affiliates' exclusive period to file a Chapter 11 Plan to Oct. 4, 2007, the Associated Press reports. According to AP, the Debtors had argued that they needed additional time to work out a plan of reorganization. AP further relates that the Debtors have been selling assets since filing for bankruptcy. In previous reports published by the Troubled Company Reporter, the Debtors have sold their: * WearEver cookware and bakeware businesses, composed of Mirro Acquisition, Inc., Mirro PuertoRico, Inc., and Mirro Operating Company LLC, to SEB, S.A. and Groupe SEB USA for approximately $36.5 million; * Burnes Group picture-frame division, composed of Burnes Acquisition, Inc., Intercraft Company, Burnes Puerto Rico, Inc., Picture LLC, and Burnes Operating Company LLC, for $33.6 million to Gibson Inc.; and * Anchor Hocking business, composed of Anchor Hocking Operating Company LLC and Anchor Hocking CG Operating Company LLC, to Monomoy Capital Partners for $75 million. 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 POWER: Court Approves BDO Seidman as Auditors ---------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave Global Power Equipment Group Inc. and its debtor-affiliates authority to employ BDO Seidman LLP as their auditors, nunc pro tunc to April 30, 2007. As reported in the Troubled Company Reporter on May 9, 2007, BDO Seidman is expected to: a. perform a consolidated audit of the financial statements of Global Power and its subsidiaries for the year ended Dec. 31, 2006, including the consolidated balance sheet of Global Power and the related consolidated statements of income and comprehensive income, stockholders' equity, and cash flows; b. express an opinion on the financial statements based on its audit; c. submit to the Debtors a report containing its opinion as to whether the consolidated financial statements, taken as a whole, are fairly presented based on generally accepted accounting principles; and d. inform the Debtors of any material errors, fraud, illegal acts, misstatements, and any other significant deficiencies or material weaknesses that it identifies. Documents submitted to the Court did not disclosed the Firm's hourly rates. To the best of the Debtors' knowledge, the Firm does not hold any interest adverse to the estate and is disinterested pursuant to Sec. 101(14) of the Bankruptcy Code. The Debtors informed the Court that the Firm's retention was subject to certain indemnity and limitation on liability provisions as contained in an engagement letter dated April 20, 2007. Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts Of $123,221,000. GLOBAL POWER: Wants Hogan & Slovacek to Assist BDO Seidman ---------------------------------------------------------- Global Power Equipment Group Inc and its debtor-affiliates ask the United States Bankruptcy Court for the Delaware for permission to employ Hogan & Slovacek PC, as their auditors, nunc pro tunc to April 30, 2007. The firm will assist BDO Seidman in performing a consolidated audit of the financial statements of the Debtors related to the year ended Dec. 31, 2006, including the consolidated balance sheet and consolidated statements of income and comprehensive income, stockholders' equity and cash flows. The firm's professional billing rates are: Designation Hourly Rate ----------- ----------- Partner $267 Senior Manager $167 Exp. Manager $152 New Manager $152 Exp. Senior $122 Exp. Staff $111 New Staff $108 Brenda H. Berry, Tulsa office managing director and chief operating officer at Hogan & Slovacek, assures the Court that she does not hold any interest adverse to the Debtors' estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Court. M. Berry can be reached at: Brenda H. Berry Hogan & Slovacek PC 6120 S. Yale, Suite 1200 Tulsa, Ok 74136-4242 Tel: (918) 496-1080 Fax: (918) 496-7749 http://www.hscpa.com/ Based in Tulsa, Oklahoma, Global Power Equipment Group Inc. aka GEEG Inc. -- http://www.globalpower.com/-- provides power generation equipment and maintenance services for its customers in the domestic and international energy, power and infrastructure and service industries. The company designs, engineers and manufactures a range of heat recovery and auxiliary equipment primarily used to enhance the efficiency and facilitate the operation of gas turbine power plants as well as for other industrial and power-related applications. The company has facilities in Plymouth, Minnesota; Tulsa, Oklahoma; Auburn, Massachusetts; Atlanta, Georgia; Monterrey, Mexico; Shanghai, China; Nanjing, China; and Heerleen, The Netherlands. The company and 10 of its affiliates filed for chapter 11 protection on Sept. 28, 2006 (Bankr. D. Del. Case No 06-11045). Attorneys at White & Case LLP and The Bayard Firm, P.A., represent the Debtors. Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP represents the Official Committee of Unsecured Creditors. As of Sept. 30, 2005, the Debtors reported total assets of $381,131,000 and total debts of $123,221,000. GOODYEAR TIRE: Fitch Lifts Issuer Default Rating to B+ ------------------------------------------------------ Fitch Ratings has upgraded the Issuer Default Rating for The Goodyear Tire & Rubber Company to 'B+' from 'B'. In addition, these debt ratings have been upgraded: The Goodyear Tire & Rubber Company -- Issuer Default Rating 'B+' from 'B'; -- $1.5 billion first lien credit facility to 'BB+/RR1' from 'BB/RR1'; -- $1.2 billion second lien term loan to 'BB+/RR1' from 'BB/RR1'; -- $300 million third lien term loan to 'BB-/RR3' from 'B/RR4'; -- $650 million third lien senior secured notes to 'BB-/RR3' from 'B/RR4'; -- Senior unsecured debt to 'B-/RR6' from 'CCC+/RR6'. Goodyear Dunlop Tires Europe B.V. -- EUR505 million European secured credit facilities to 'BB+/RR1' from 'BB/RR1'. The Rating Outlook is Positive. GT had approximately $5.8 billion of debt outstanding at March 31, 2007. The rating upgrades reflect the positive impact on GT's balance sheet of the recent sale of common stock for approximately $834 million in net proceeds. GT used proceeds from the sale to redeem $175 million of outstanding 8.625% notes due in 2011 and $140 million of 9% notes due in 2015. The ratings and Outlook also incorporate GT's pending sale of its Engineered Products business for nearly $1.5 billion, which was announced in March 2007. The proceeds from both transactions strengthen GT's liquidity as it recovers from the labor strike in 2006, continues with its multi- year program to reduce its cost structure, and further implements its strategy to exit certain segments of the private label tire business and expand its higher-margin premium tire business. GT has made meaningful progress toward its goals but significant challenges remain with respect to high material costs, achieving capacity reductions including the closing of the Tyler Texas plant in 2008, and a highly competitive global tire market. In addition, GT faces substantial cash requirements including its agreement to fund a VEBA trust for $1 billion, rebuild inventory, and fund capital expenditures and pension contributions. The company expects pension contributions to decline after 2007, and GT would realize annual cash savings from the transfer of OPEB liabilities to the VEBA trust assuming it is approved. As a result of ongoing restructuring and other special items such as the VEBA trust, GT's free cash flow in 2007 is likely to remain weak. However, the Positive Outlook incorporates Fitch's view that GT will attain its targeted cost savings that would support stronger cash flow in 2008 and additional debt reduction consistent with the company's goals. The settlement of the labor strike at the end of 2006 reinforced GT's ability to address its high-cost structure in North America. Partly as a result of its new labor agreement, GT expanded its cost reduction program to at least $1.8 billion over a four year period through 2009. The company's ratings and/or Outlook will be contingent on realizing stronger margins in North America, generating higher levels of free cash flow, and maintaining a competitive position in the global tire market. In April 2007, GT restated and extended its bank facilities that provide more flexible terms, although the facilities remain secured. The amounts of the facilities were generally unchanged; however, GT's third-lien bank term loan was not amended and the term loan portion of GDTE's EUR505 million first-lien credit facilities was converted into a revolver. Fitch's recovery ratings for GT's debt remain unchanged with the exception of the third lien debt. The improvement in the recovery rating to 'RR3' reflects expectations for stronger operating results as GT makes further progress in reducing costs and paying down debt. Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. Goodyear maintains Asia-Pacific facilities in Australia, China and Korea. Its European bases are located in Austria, Belgium, France, Germany, Italy, Russia, Spain, and the United Kingdom. Goodyear's Latin American operations are located in Argentina, Brazil, Chile, Colombia, Jamaica, Mexico, and Peru. GVI SECURITY: Names Chris Young as Vice President of Finance ------------------------------------------------------------ GVI Security Solutions Inc. has appointed Chris Young as vice president of Finance. "Now that the company have turned around the company and achieved profitability in the recent quarter, the company has brought in Mr. Young to manage the day-to-day operations of the company's finance and IT departments so that I can devote more time to growing the core business and driving the company's plans to take GVI's success to the next level," Joe Restivo, GVI CFO, stated. "Chris has a great background at i-2 Technologies and GE Capital and the company is pleased to welcome him to GVI." Prior to his appointment as vice president of Finance at GVI, where he will be responsible for managing the daily operations of the Finance and IT/IS departments, Mr. Young served as the director of corporate finance and accounting for i-2 Technologies. He was responsible for performing financial controller duties for corporate groups including research and development, marketing, hr, an India Resource Group, Legal, IT and F&A. Previously, Mr. Young worked for GE Capital as the Finance Operations Manager. At GE, he was responsible for financial oversight, which included income forecasting, expense management, accounts payable and accounts receivable. Mr. Young has a Masters of Business Administration Degree from the University of Illinois and a Bachelor of Arts Degree in Finance from the University of Kentucky. He is also a Certified Public Accountant. About GVI Security Solutions Headquartered in Carollton, Texas, GVI Security Solutions Inc. (OTCBB: GVSS) -- http://www.gviss.com/-- provides video surveillance security solutions to the homeland security, institutional and commercial market segments. The company offers a full suite of video surveillance and integrated security solutions, which enable intelligent video surveillance. GVI offers its products and services through local, regional, and national system integrators and distributors in the North and South America and operates sales and distribution centers in Dallas, Texas, Mexico City, Mexico, Sao Paulo, Brazil, and Bogota, Colombia. Going Concern Doubt Mercadien PC in Hamilton, New Jersey, raised substantial doubt about GVI Security Solutions Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, 2005 and 2004. The auditor pointed to the company's negative cash flow and operating losses, well as losses from discontinued operations, which have resulted in a significant reduction in the company's cash balances. HALCYON SECURITIZED: Moody's Rates $4 Mil. Class E Notes at Ba1 --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Halcyon Securitized Products Investors ABS CDO II Ltd.: (1) Aaa to the $225,000,000 Class A-1(a) Senior Secured Floating Rate Notes Due 2046; (2) Aaa to the $75,000,000 Class A-1(b) Senior Secured Floating Rate Notes Due 2046; (3) Aaa to the $82,500,000 Class A-2 Senior Secured Floating Rate Notes Due 2046; (4) Aa2 to the $36,000,000 Class B Senior Secured Floating Rate Notes Due 2046; (5) A2 to the $27,500,000 Class C Senior Secured Deferrable Interest Floating Rate Notes Due 2046; (6) Baa2 to the $21,500,000 Class D-1 Senior Secured Deferrable Interest Floating Rate Notes Due 2046; (7) Baa3 to the $6,000,000 Class D-2 Senior Secured Deferrable Interest Floating Rate Notes Due 2046; and (8) Ba1 to the $4,000,000 Class E Senior Secured Deferrable Interest Floating Rate Notes Due 2046. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of RMBS Securities and Long Synthetic Securities for which the Reference Obligations are RMBS Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Halcyon Securitized Products Investors, L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. HEXION SPECIALTY: S&P Holds B- Rating on $825 Million Notes ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its loan and recovery ratings on Hexion Specialty Chemicals Inc.'s senior secured first- lien bank credit facilities, including a proposed $200 million add-on to its existing term loan, and a proposed $10 million add-on to its existing synthetic letter of credit facility. Pro forma for the proposed changes to the existing facilities, the senior secured first-lien bank facilities will increase to approximately $2.5 billion, from $2.3 billion. The first-lien bank loan rating is 'B' (the same as the corporate credit rating) and the recovery rating is '2', indicating the expectation for substantial (80%-100%) recovery of principal in the event of a payment default. At the same time, S&P affirmed its ratings on Hexion's $825 million second-lien notes due 2014. The 'B-' notes rating (one notch lower than the corporate credit rating) and '3' recovery rating indicate a meaningful recovery (50%-80%) recovery of principal in the event of a payment default. Ratings List Hexion Specialty Chemicals Inc. Corporate credit rating B/Stable/-- Senior secured first-lien bank credit facilities B Recovery rating 2 $825 million second-lien notes due 2014 B- Recovery rating 3 Based in Columbus, Ohio, Hexion Specialty Chemicals, Inc. - http://www.hexion.com/-- serves the global wood and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Hexion Specialty Chemicals is owned by an affiliate of Apollo Management, L.P. The company has locations in China, Australia, Netherlands, and Brazil. INDUSTRY MORTGAGE: Fitch Holds BB Ratings on 2 Class Certificates ----------------------------------------------------------------- Fitch Ratings has taken these rating actions on the Industry Mortgage Company Home Equity Loan Trust transactions: Series 1997-3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'BB'; -- Class B remains at 'C'/Distressed Recovery (DR) rating revised to 'DR2' from 'DR5'. Series 1997-5 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'BB'; -- Class B remains at 'C/DR2'. Series 1998-1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'BBB-'; -- Class B remains at 'CC/DR2'. Series 1998-5 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A+'; -- Class B affirmed at 'BB-'. The affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $135 million of outstanding certificates. The above transactions are collateralized by fixed-rate, closed- end home equity mortgage loans. As of the April 2007 distribution date, the transactions are seasoned from a range of 103 (1998-5) to 118 months (1997-3), and the pool factors (current collateral balance as a percentage of original collateral balance) range from approximately 3% (1997-3) to 5% (1998-5). The percentage of loans over 60 days delinquent ranges from 17.2% (1997-3) to 22% (1998- 1). The cumulative loss as a percentage of the initial pool balance ranges from 6.6% (1998-5) to 9.6% (1997-5). For series 1997-3, 1997-5 and 1998-1, credit enhancement to the class B bond stands at 0.31%, 0.73% and 0.00% (versus 60+ delinquency rates of 17.2%, 19.6% and 22%, respectively). Each class B bond has incurred a principal writedown in the amount of $16.7 million, $20.3 million and $3.7 million, respectively. All of the above transactions are serviced by IMC Mortgage Company (not rated by Fitch). INSIGHT HEALTH: Files Prepackaged Chapter 11 in Delaware -------------------------------------------------------- InSight Health Services Holdings Corp. and its wholly owned subsidiary InSight Health Services Corp. filed voluntary petitions for chapter 11 protection with the U.S. Bankruptcy Court for the District of Delaware on May 29, 2007. The prepackaged plan of reorganization received the support of holders of more than two-thirds of IHSC's outstanding 9-7/8% senior subordinated notes due 2011, and 100% of InSight's common stockholders. The operating subsidiaries of IHSC, such as InSight Health Corp., are not included in the bankruptcy filing and will continue to maintain normal business operations for their patients, employees, customers and trade creditors nationwide. InSight's prepackaged reorganization plan should allow it to complete as quickly as possible the exchange of approximately $194.5 million of Notes for 90% of InSight's common stock. During the bankruptcy proceedings, InSight does not expect any interruption of its operations and will continue to focus its efforts on providing quality services to patients. InSight has approximately $13 million in cash available as of the date of filing, and has secured a commitment from its lender to continue the revolving credit facility of up to $30 million with IHSC's operating subsidiaries. IHSC's existing $300 million in senior secured floating rate notes due 2011 will remain outstanding following the restructuring. Holders of a majority of the Senior Notes have agreed to support the restructuring. "We are optimistic about the future of our business because the exchange of $194.5 million of debt for equity will dramatically strengthen our balance sheet," Bret W. Jorgensen, InSight's President and Chief Executive Officer stated. "The restructuring is being accomplished through a prepackaged plan because of its efficiency, and we expect a quick confirmation of the plan, which preserves trade creditor claims and protects our customers and employees. Importantly, the process will not interrupt our normal business operations, our employees or the patients, physicians and hospitals we serve. This is a positive step to ensure our long- term financial health. We appreciate the flexibility and cooperation shown by the holders of the Notes and the Senior Notes and our other lenders. Their support is a vote of confidence in our business, superior quality services, dedicated employees and future prospects in a challenging industry." About InSight Health Based in Lake Forest, California, InSight Health Services Holdings Corp. -- http://www.insighthealth.com/-- is a nationwide provider of diagnostic imaging services. It serves managed care entities, hospitals and other contractual customers in over 30 states, including the following targeted regional markets: California, Arizona, New England, the Carolinas, Florida and the Mid-Atlantic states. InSight's network consisted of 109 fixed-site centers and 108 mobile facilities as of Dec. 31, 2006. Insight Health Services Holdings Corp.'s balance sheet at March 31, 2007, showed $342,080,000 in total assets and $551,667,000 in total liabilities, resulting in a $209,587,000 total stockholders' deficit. INSIGHT HEALTH: Case Summary & Eight Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: InSight Health Services Holdings Corp. fdba JWC/Halifax Holdings Corp 26250 Enterprise Court, Suite 100 Lake Forest, CA 92630-840 Bankruptcy Case No.: 07-10700 Debtor affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- InSight Health Services Corp. 07-10701 Type of Business: The Debtor provides diagnostic imaging services. See http://www.insighthealth.com/ Chapter 11 Petition Date: May 29, 2007 Court: District of Delaware (Delaware) Debtors' Counsel: Mark D. Collins, Esq. Richards Layton & Finger, P.A. One Rodney Square PO Box 551 Wilmington, DE 19899 Tel: (302) 651-7531 Fax: (302) 651-7701 Total Assets Total Debts ------------ ----------- InSight Health Services More than More than Holdings Corp. $100 Million $100 Million InSight Health Services More than More than Corp. $100 Million $100 Million A. Insight Health Services Holdings Corp's Two Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Law Debenture Trust senior $194,500,000 Company of New York subordinated (excluding 400 Madison Avenue, notes unpaid 4th Floor accrued New York, NY 10017 interest, c/o Patrick Healy fees and Law Debenture Trust expenses) Company of New York 400 Madison Avenue, 4th Floor New York, NY 10017 Tel: (212) 750-6474 Fax: (212) 750-1361 A.F.C.O. Premium insurance premium $948,053 Acceptance, Inc. financing 655 North Central Avenue, Suite 1550 Glendale, CA 91203 Tel: (818)549-1270 Fax: (818)549-0034 B. Insight Health Services Corp's Six Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Law Debenture Trust senior $194,500,000 Company of New York subordinated (excluding 400 Madison Avenue, notes unpaid 4th Floor accrued New York, NY 10017 interest, c/o Patrick Healy fees and Law Debenture Trust expenses) Company of New York 400 Madison Avenue, 4th Floor New York, NY 10017 Tel: (212) 750-6474 Fax: (212) 750-1361 A.F.C.O. Premium insurance premium $948,053 Acceptance, Inc. financing 655 North Central Avenue, Suite 1550 Glendale, CA 91203 Tel: (818)549-1270 Fax: (818)549-0034 Michael A. Boylan separation $52,881 1005 Putters Place agreement Doylestown, PA 18901 Fax: (215) 343-7067 Acco Engineering Systems litigation unknown Karen Wijangco litigation unknown Mary Jeffers medical unknown Malpractice INSIGHT HEALTH: Bankruptcy Filing Prompts S&P's D Rating -------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on InSight Health Services Corp. to 'D' from 'SD' and its rating on InSight Health's senior secured debt to 'D' from 'CC'. InSight Health Services Holdings Corp. and its wholly owned subsidiary, InSight Health, filed for Chapter 11 protection on May 29 with the U.S. Bankruptcy Court for the District of Delaware. The recovery rating on the company's $300 million senior secured notes remains '3' pending the receipt of more information. "The previously announced prepackaged plan of reorganization received the support of holders of more than two-thirds of Insight Health's 9-7/8% senior subordinated notes due 2011 and all of the parent company's stockholders," explained Standard & Poor's credit analyst Cheryl Richer. "The plan proposes the exchange of about $194 million of notes for 90% of InSight Health's common stock." By filing a prepackaged plan, the company hopes to accomplish the restructuring quickly, with no disruption to its business. At the time of filing, InSight Health had $13 million of cash and a secured commitment from its lender to access $30 million of capacity on its revolving credit facility. If approved by the bankruptcy court, this plan would improve InSight Health's balance sheet. However, leverage would still be aggressive, and industry conditions are difficult. INTERSTATE HOTELS: Closes $74MM Acquisition of Westin Atlanta ------------------------------------------------------------- Interstate Hotels & Resorts closed on the acquisition of the 495- room Westin Atlanta Airport Hotel in Georgia for $74 million, or $149,500 per key, from an affiliate of The Blackstone Group. It is the company's largest asset acquisition and its sixth wholly-owned property under its strategic plan to diversify its revenue base through increased real estate ownership. The company will immediately begin its planned $18 million renovation, to include all rooms and public areas. Concurrently, the company has amended its senior secured credit facility to expand the facility's capacity and provide greater flexibility in certain of its financial covenants. The total facility increased by $75 million to $200 million, the increase consisting of a $50 million term loan and a $25 million revolver. The interest rate of the expanded facility remained at LIBOR plus 275 basis points. The company used the additional $50 million term loan and cash on hand to finance the acquisition of the Westin Atlanta Airport Hotel. "This amendment not only provides the company with the sufficient capacity to acquire the Westin Atlanta Airport Hotel, but more importantly, the flexibility to continue to execute the company's strategic business plans, including the selective acquisition of wholly-owned and joint venture real estate investments," said Bruce Riggins, chief financial officer. "With this amendment the company have the entire $85 million available on its revolving credit facility to fund the company's growth strategy and its operating needs." "This is the company's third acquisition from Blackstone and represents a attractive opportunity to add a major airport property in a key market to the company's owned portfolio at a competitive price," Thomas F. Hewitt, chief executive officer, said. "The planned $18 million in upgrades to all guest rooms and common areas will further enhance its guest appeal and enable this hotel to reach its full potential." About Interstate Hotels Headquartered in Arlington, Virginia, Interstate Hotels & Resorts(NYSE: IHR) -- http://www.ihrco.com/ -- operates 203 hospitality properties with more than 46,000 rooms in 36 states, the District of Columbia, Belgium, Canada, Ireland and Russia, as of April 30, 2007. In addition, Interstate Hotels & Resorts has contracts to manage 13 hospitality properties with 4,000 rooms currently under development. * * * As reported in the Troubled Company Reporter on Feb. 1, 2007, Moody's Investors Service raised the corporate family rating of Interstate Hotels & Resorts to B1, from B2, and revised its rating outlook to stable. JHCI ACQUISITION: Moody's Junks Rating on $150 Mil. Term Loan ------------------------------------------------------------- Moody's Investors Service assigned first time ratings to these credit facilities to be issued by JHCI Acquisition, Inc. -- Ba3 to the $310 million first lien senior secured credit facility ($280 million term loan and $30 million revolver); and -- Caa1 to the $150 million second lien term loan facility to be issued by JHCI Acquisition, Inc. The corporate family rating and the probability of default rating are each B2. The rating outlook is stable. The rated credit facilities plus equity from Oak Hill Capital Partners will fund the acquisition of the Jacobson Companies by Oak Hill. Arnold Logistics, LLC (not rated), a portfolio company of Oak Hill's will be merged into Jacobson. A comparatively strong EBIT margin, relatively predictable revenue from a long-tenured, contracted customer base and the relatively low contribution of truck transportation services to earnings support the B2 rating. "The relatively predictable revenue from the contracted customer base combined with truckload and freight services relatively low contribution to earnings should limit cash flow volatility during periods of weak demand for transportation services," said Jonathan Root, Moody's Analyst. Higher value- added, contract packaging and manufacturing and warehousing services contribute to a higher consolidated EBIT margin relative to certain of Jacobson's peers. These factors, in combination with control over costs should provide Jacobson the ability to meet debt service commitments. The high debt level, exposure of demand to the economic cycle and the expectation of ongoing acquisitions constrain the rating. The ratings assignment reflects the expectation that JHCI will meet the planned de-levering of the capital structure contemplated by its business plan. Debt to EBITDA below 6.0 times and EBIT to Interest of greater than 1.0 time are anticipated at year end 2007, representing modest improvement from the opening levels. Each metric is within the range, but still weaker than other issuers at the B2 rating category. Nevertheless, relatively low capital expenditures and annual amortization of definite-lived intangible assets that do not require replacement should support the generation of operating cash flows. Funds from operations + Interest to Interest expected at about 2.0 times for fiscal year 2007 further supports the ratings assignment as does good liquidity. Cash flow from operations is expected to cover planned capital spending with meaningful cushion, supporting the generation of free cash flow and the planned reduction in debt. Consequently, the $30 million revolver is not expected to be used. Moody's believes that JHCI will seek out acquisitions to further Jacobson's growth. The B2 rating anticipates that JHCI will execute its acquisitive growth in measured steps and that equity could be utilized to temper potential increases in leverage that could result from the sector's high EBITDA purchase multiples. The stable outlook anticipates that demand for the company's core warehousing and packaging services will remain steady over the intermediate term and that Jacobson will restrain capital expenditures and generate steady free cash flow. The ratings could be downgraded if, on a sustained basis, Debt to EBITDA exceeds 6.0 times, Funds from Operations + Interest to Interest is below 2.0 times, or free cash flow is negative. The ratings could also be downgraded if acquisitions indicate a change from JHCI's stated strategy of modest acquisitions in the core business without increasing financial leverage, or if shareholder returns exceed the level contemplated in the business plan. Ratings or the outlook could be upgraded if Debt to EBITDA was sustained below 4.5 times and EBIT to Interest was sustained above 2.0 times. Assignments: * JHCI Acquisition, Inc. -- Probability of Default Rating, Assigned B2; -- Corporate Family Rating, Assigned B2; -- Senior Secured Bank Credit Facility, Assigned a range of 30 - LGD3 to Ba3; -- Senior Secured Bank Credit Facility, Assigned a range of 30 - LGD3 to Ba3; and -- Senior Secured Bank Credit Facility, Assigned a range of 79 - LGD5 to Caa1. JHCI Acquisition is a wholly-owned subsidiary of JHCI Holdings, Inc., the vehicle majority owned by Oak Hill Capital Partners, created to effect the acquisition of Jacobson Holding Co. and the contemporaneous merger of Arnold Logistics, LLC Jacobson Companies, headquartered in Des Moines, Iowa, and Arnold Logistics, LLC, headquartered in Camp Hill, Pennsylvania, are logistics providers, offering warehousing, contract packaging and freight management services. JHCI ACQUISITION: S&P Junks Rating on Proposed $150 Mil. Facility ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to JHCI Acquisition Inc. At the same time, S&P assigned a 'B' rating and a '2' recovery rating, indicating expectations of a substantial (80%-100%) recovery of principal in the event of a payment default, to JHCI Acquisition Inc.'s proposed senior secured first-lien credit facilities, consisting of a $30 million revolving credit facility due 2013 and $280 million term loan B due 2014. S&P assigned a 'CCC+' rating with a '5' recovery rating, indicating expectations of negligible (0-25%) recovery of principal in the event of a payment default, to the company's proposed $150 million second-lien credit facility due 2014. The bank loan and recovery rating are based on preliminary terms and conditions, and could change upon review of final documents. Pro forma for the proposed financing, the Des Moines, Iowa-based logistics company will have about $645 million of lease-adjusted debt. "Ratings reflect JHCI's high debt leverage, competitive end markets, and potential for future debt-financed acquisitions," said Standard & Poor's credit analyst Lisa Jenkins. "Offsetting these risks to some extent is the favorable near- to intermediate- term industry outlook and benefits accruing from the company's nationwide presence and diverse service offerings." JHCI offers various third-party logistics services, including warehousing (accounting for a majority of revenues), freight management, packaging and manufacturing, transportation and brokerage, and staffing. The third-party logistics industry is very fragmented; competitors include divisions of large integrated freight transportation companies, as well as other, smaller logistics providers. Demand for third-party logistics has been growing at a compound average growth rate of more than 10% over the past 10 years, and the near- to intermediate-term outlook for the sector is favorable as companies are expected to continue outsourcing these services to reduce costs, lower capital expenditure requirements, and enhance operating flexibility. However, despite the positive industry outlook, the sector is expected to remain very competitive. Many of the companies competing with JHCI are financially stronger and offer logistics services as part of a broader portfolio of freight services. JHCI has developed its current national footprint and suite of logistics services through a series of acquisitions and is in the process of merging another company into its existing portfolio. JHCI may pursue additional acquisitions to bolster certain geographic regions and to increase penetration of certain end markets. Demand for third-party logistics is expected to remain healthy over the next few years and JHCI is likely to benefit from the favorable industry environment. The company's high leverage coupled with the potential for debt-financed acquisitions will likely preclude a positive outlook or ratings upgrade. Should leverage increase above expected levels, the outlook would likely be revised to negative or the rating could be lowered. JO-ANN STORES: Posts $1.7 Million Net Loss in Quarter Ended May 5 ----------------------------------------------------------------- Jo-Ann Stores, Inc. disclosed financial results for its fiscal 2008 first quarter ended May 5, 2007. Net loss for the first quarter of fiscal 2008 was $1.7 million, compared with a net loss of $6.6 million, in the prior year first quarter. For the first quarter, net sales decreased 0.1% to $424.2 million from $424.7 million last year. Same-store sales increased 1.8% for the quarter, versus a same-store sales decrease of 3.9% in the first quarter last year. At March 5, 2007, the company's balance sheet showed total assets of $827.7 million and total liabilities of $413.7 million, resulting in a $414 million stockholders' equity. Review of Operating Results Gross margins for the first quarter of fiscal 2008 increased 70 basis points to 47.3% from 46.6% primarily due to reduced sales of clearance inventory compared to the prior year. Selling, general and administrative expenses decreased to $185.5 million, or 43.7% of net sales, in the first quarter of fiscal 2008 from $189.7 million, or 44.7% of net sales, in the first quarter last year. Operating profit for the first quarter was $100,000, versus an $8.8 million operating loss for the prior year first quarter. "The first quarter produced an important milestone, as we achieved positive same-store sales for the first time in six quarters, and also expanded our gross margin rate," Darrell Webb, chairman, president, and chief executive officer, said. "Our strategic plan is on-track and we continue to execute the initiatives designed to generate profitable and sustainable sales growth over the long term. While it is still early in the fiscal year, I am pleased with the progress we have made to improve the customer shopping experience, enhance our marketing and merchandising programs, and refine our capital investment strategy." Store Openings and Closings During the first quarter of fiscal 2008, the company opened two superstores and one traditional store and closed 10 traditional stores. For the balance of the year, the Company expects to open three superstores and close 13 traditional stores and one superstore. About Jo-Ann Stores Headquartered in Hudson, Ohio, Jo-Ann Stores, Inc. (NYSE: JAS) -- http://www.joann.com/-- is a specialty retailer of fabrics and crafts, serving customers in 47 U.S. states. * * * Moody's Investors Service downgraded Jo-Ann Stores Inc.'s corporate family rating and probability-of-default rating to B1 from B3 and the $100 million senior subordinated note (2012) to Caa2 from B3 in November 2006. LYONDELL CHEMICAL: Sells $510 Million of 6.785% Senior Notes ------------------------------------------------------------ Lyondell Chemical Company has sold $510 million of 6.875% senior unsecured notes in an offering. The notes will mature on June 15, 2017. Lyondell will use the net proceeds, together with available cash, to redeem in full the $500 million outstanding principal amount of its 10.875% senior subordinated notes, which mature May 1, 2009. The offering is expected to close today, June 1, 2007. The group of underwriters for the offering is led by Citigroup Global Markets Inc. Copies of the prospectus relating to the offering may be obtained from: Citigroup Global Markets Inc., Prospectus Department, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220 or by calling toll-free 1-877-858- 5407. Headquartered in Houston, Texas, Lyondell Chemical Company (NYSE:LYO) -- http://www.lyondell.com/-- is North America's third-largest independent, publicly traded chemical company. Lyondell manufactures chemicals and plastics, a refiner of heavy, high-sulfur crude oil and a significant producer of fuel products. Key products include ethylene, polyethylene, styrene, propylene, propylene oxide, gasoline, ultra low-sulfur diesel, MTBE and ETBE. The company also has locations in Austria, France, Italy, The Netherlands, Belgium, Germany, Spain, United Kingdom, Brazil, China, Japan, Taiwan, India and Singapore. LYONDELL CHEMICAL: Fitch Rates $500 Million Senior Notes at BB- --------------------------------------------------------------- Fitch Ratings expects to assign a 'BB-' rating to Lyondell Chemical Company's $500 million announced offering of senior unsecured notes due 2017. Proceeds from this offering are expected to fully repay the existing $500 million, 10.875% senior subordinated notes due 2009. Fitch has also affirmed Lyondell's other ratings as: -- Issuer Default Rating at 'BB-'; -- Senior secured credit facility and term loan at 'BB+'; -- Senior secured notes at 'BB+'; -- Senior unsecured notes at 'BB-'; -- Debentures at 'BB-'; Additionally, Fitch has affirmed and withdrawn its 'B' rating on Lyondell's senior subordinated notes. The Rating Outlook for Lyondell remains Positive. Approximately $5 billion of debt is affected by these actions. The affirmation of Lyondell's ratings and assignment of 'BB-' rating to the new senior unsecured notes are supported by the company's debt reduction efforts, lower average cost of borrowings and improved financial flexibility. Lyondell continues to benefit from multiple operational cash streams as well as cash from the recent Inorganics sale. Fitch expects debt reduction will accelerate in the near-term as the sale of its Inorganics business was completed in mid-May. Proceeds from the asset sale are expected to primarily fund the repayment of Millennium America Inc.'s remaining $373 million, 9.25% senior notes due 2008, Equistar Chemicals, LP's $300 million, 10.125% senior notes due 2008 and $300 million, 10.625% senior notes due 2011. Fitch also continues to expect Lyondell's debt reduction targets to be met during 2008 and high probability of additional debt repayment to occur thereafter. In addition, Lyondell's 'BB-' Issuer Default Rating incorporates the company's highly integrated businesses in refining, petrochemicals and performance products. Lyondell's size, liquidity and access to capital markets support the rating. The Positive Rating Outlook reflects continued relatively favorable business conditions for the markets Lyondell participates in, and the expectation that Lyondell and its subsidiaries will accelerate their debt reduction efforts in the next year. Fitch also expects that energy and raw material prices will continue to be volatile however average prices are expected to trend lower. Strong operations from petrochemical and refining operations are likely to offset more cyclical businesses within the portfolio. Lyondell holds leading global positions in propylene oxide and derivatives, as well as leading North American positions in ethylene, propylene, polyethylene, aromatics, acetic acid, and vinyl acetate monomer. The company also has substantial refining operations located in Houston, Texas. The company benefits from strong technology positions and high barriers to entry in its major product lines. Lyondell owns 100% of Equistar; 70.5% directly and 29.5% indirectly through its wholly owned subsidiary Millennium. For the latest three months ending March 31, 2007, Lyondell and its subsidiaries generated $2.37 billion of EBITDA on $23.3 billion in sales. LYONDELL CHEMICAL: Moody's Rates $500 Million Senior Notes at B1 ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to $500 million of new guaranteed senior unsecured notes due 2017 to be issued by Lyondell Chemical Company. Moody's also affirmed the company's Ba3 corporate family rating as well as the existing ratings on its other secured and unsecured debt. The new unsecured notes will be ed to refinance $500 million of subordinated notes due in 2009; Lyondell recently received approval from existing note-holders to allow the refinancing of these subordinated notes with new unsecured notes. The outlook on Lyondell's ratings is stable. Ratings assigned: * Issuer: Lyondell Chemical Company -- $500 million Guaranteed Senior Unsecured Notes due 2017 at B1, LGD5 73% Ratings affirmed: Issuer: Lyondell Chemical Company -- Corporate Family Rating, Confirmed at Ba3; -- Probability of Default Rating at Ba3; -- Guaranteed Senior Secured Revolving Credit Facility and Term Loan at Ba1, LGD2 28%; -- Guaranteed Senior Secured Notes at Ba1, LGD2 28%; -- Guaranteed Senior Unsecured Notes/Debentures at B1, LGD5 73%; -- Senior Subordinated Notes at B2, LGD6 95%*. * these ratings will be withdrawn upon repayment of the debt The assignment of the B1 ratings on the new unsecured notes and the affirmation of Lyondell's Ba3 corporate family rating reflect the benefits from generally solid earnings and cash flow at its refinery (first quarter results were weaker than normal due to a turnaround at the facility) and higher than expected profitability at Equistar in 2007. Moody's also noted that crack spreads and the light-sweet/heavy-sour differential indicate that profitability at the refinery in the second quarter should be annually strong. The combination of improved results at the refinery and Equistar could enable Lyondell to repay more debt in 2007 than was expected. The stable outlook reflects the anticipation for meaningful debt reduction and relatively strong financial metrics at the consolidated company over the next year. Moody's could make a positive change to the outlook or ratings, if debt is reduced to below $6 billion and the outlook for the company financial performance remains stronger than previously anticipated. The company's outlook or ratings could be affected negatively by a weakening of cash flow at its refinery combined with the failure to reduce debt below $7 billion in 2007; with announced debt repayments at Millennium, Equistar and Lyondell, the consolidated company should be close to this level by the end of the second quarter. Headquartered in Houston, Texas, Lyondell Chemical Company manufactures propylene oxide, MTBE and butanediol, as well as a major producer of co-product styrene. Equistar Chemicals LP, Millennium Chemicals Inc, and Houston Refining are wholly owned subsidiaries of Lyondell. Equistar is a leading North American producer of commodity petrochemicals and plastics. Millennium Chemicals is among the largest global producers of titanium dioxide pigments and VAM. Houston Refining is a refinery that has the unique ability to process 100% heavy sour crude oil from Venezuela. These combined entities reported revenues of roughly $24 billion for the LTM dated March 31, 2007 LYONDELL CHEMICAL: S&P Rates Proposed $500 Million Notes at B+ -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to the proposed Lyondell Chemical Co.'s $500 million of unsecured notes due 2017, issued pursuant to Lyondell's Rule 415 shelf registration. At the same time, S&P affirmed its corporate credit rating on Lyondell (BB-/Stable/B-1). The outlook is stable. Lyondell will use proceeds from the proposed notes offering, together with cash on hand, to refinance the existing $500 million of 10.875% senior subordinated notes, which mature May 1, 2009. "We view this financing as a favorable step to extend the debt maturity profile and fully consistent with Lyondell's objective to improve its overall financial profile during the current business cycle," said Standard & Poor's credit analyst Kyle Loughlin. Lyondell is the world's largest producer of propylene oxide (PO), with about 30% of global production capacity. Generally favorable business conditions in petrochemicals and meaningfully higher contributions from the refining business are likely to provide the free cash flow necessary to improve Lyondell's highly leveraged capital structure, even if petrochemical business conditions begin to deteriorate somewhat during the next few years. Mr. Loughlin said, "If Lyondell maintains a strong focus on debt reduction and continues to extend its debt maturity profile, credit metrics could improve to levels considered strong for the ratings. If we conclude that Lyondell can sustain these improvements, we could revise the outlook to positive within the next 12 months." On the other hand, faster-than than-expected deterioration of the chemicals business cycle would limit debt reduction somewhat. "But ratings are not likely to come under pressure unless the refining cycle weakens unexpectedly or management again departs from its stated objectives to reduce debt," Mr. Loughlin said. M. GRANDE RESORT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: M. Grande Resort, L.L.C. 2701 South Ocean Boulevard Myrtle Beach, SC 29577 Bankruptcy Case No.: 07-02867 Type of Business: The Debtor owns and operates an oceanfront 16-story hotel. See http://www.mgranderesort.com/ Chapter 11 Petition Date: May 30, 2007 Court: District of South Carolina (Columbia) Debtors' Counsel: G. William McCarthy, Jr., Esq. Robinson, Barton, McCarthy, Calloway & Johnson 1715 Pickens Street (29201) P.O. Box 12287 Columbia, SC 29211 Tel: (803) 256-6400 Total Assets: $22,627,475 Total Debts: $7,972,412 List of Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ M. Grand Resort H.O.A. $550,000 2701 South Ocean Boulevard Myrtle Beach, SC 29577 Horry County Treasurer $311,000 P.O. Box 1237 Conway S.C. 29528-1237 Quadron Holdings, L.L.C. $65,000 299 West John Street Hicksville, NY 11801 Bonitz Flooring Group, Inc. $54,795 Anichini 570 $45,748 Merlin Manufacturing $37,156 M.B.R. Stone, Inc. $36,454 M.B.N.A. $27,472 Cherie Taylor $25,594 Vishal Jain $19,500 Bank of America C.C. $17,140 Myrtle Beach Lodging $15,106 Cooperative Megasys Hospitality $14,245 Systems, Inc. Freedman Goldberg $13,214 Asheville Tile $12,744 General Electric Co. $10,673 American Express $10,500 Barakat Prempeh and $10,000 Jacobs P.L. Cushman and Wakefield, Inc. $9,500 George Kovacs $9,312 MEDIACOM COMMS: March 31 Balance Sheet Upside-Down by $110.2 Mil. ----------------------------------------------------------------- Mediacom Communications Corporation had total assets of $3.6 billion, total liabilities of $3.7 billion, and total stockholders' deficit of $110.2 million at March 31, 2007. First Quarter 2007 Financial Highlights include: -- Revenues of $307.9 million, an increase of 6.4% over the first quarter 2006; -- Adjusted operating income before depreciation and amortization of $107.4 million, a decrease of 0.1% compared to first quarter 2006; -- Operating income of $52.3 million, a decrease of 0.7% from first quarter 2006; -- Net loss of $16.9 million, versus net loss in first quarter 2006 of $37.2 million; -- Capital expenditures of $49.9 million; -- Average monthly revenue per basic subscriber of $74.85, an increase of 10.4% over first quarter 2006; and -- Total revenue generating units of 2,615,000, a gain of 24,000 during the quarter. Revenues rose to $307.9 million for the first quarter of 2007, reflecting strong contributions from Mediacom's data and phone businesses. Total operating costs grew 10.3%, or $18.7 million, for the first quarter of 2007, primarily due to: (i) delivery and customer support expenses related to unit growth in the company's phone and data services; (ii) higher programming unit costs, bad debt expense and telecommunications charges in the company's customer call centers; and (iii) additional marketing expenses. Contributing to this increase in total operating costs was $2.4 million of one-time expenses relating to the Sinclair dispute and the ice storms during the first quarter of 2007. Liquidity and Capital Resources The company had a negative working capital of $269.5 million at March 31, 2007, as compared with a negative working capital of $265.6 million at Dec. 31, 2006. Significant sources of cash for the three months ended March 31, 2007 were generation of net cash flows from operating activities of $48.8 million and sale of cable systems for $22.9 million. Significant uses of cash for the three months ended March 31, 2007 were capital expenditures of about $49.9 million; and purchase of a cable system for $7.3 million. Free cash flow was negative $1.4 million for the three months ended March 31, 2007, as compared to positive $4.2 million in the prior year period. Financial Position At March 31, 2007, the company had total debt outstanding of $3,134.4 million, a decrease of $10.2 million since Dec. 31, 2006. As of the same date, the company had unused credit facilities of about $818.7 million, of which about $635.8 million could be borrowed and used for general corporate purposes based on the terms and conditions of the company's debt arrangements. As of the date of this press release, about 64% of the company's total debt is at fixed interest rates or subject to interest rate protection. "As we disclosed in our last earnings call, it was expected that our results for the first quarter of 2007 would be impacted by the retransmission consent dispute with Sinclair Broadcasting, severe ice storms that hit our midwest systems and the delay of annual basic rate increases until the second quarter," said Rocco B. Commisso, Mediacom's chairman and chief executive offier. "These factors combined to slow year-over-year revenue and cash flow growth. Given the current trajectory of our overall business, we expect to deliver sequential revenue and Adjusted OIBDA growth of at least 5% and 8%, respectively, in the second quarter and remain confident that we will achieve our full-year guidance for 2007," concluded Mr. Commisso. Cable System Transactions In February 2007, the company sold cable systems serving 7,500 basic subscribers for $22.9 million and recorded a gain on sale of $10.8 million. In March 2007, the company purchased a cable system serving 4,200 basic subscribers for $7.3 million. About Mediacom Communications Mediacom Communications Corporation (Nasdaq: MCCC) -- http://www.mediacomcc.com/-- is the nation's 8th largest cable television company and a cable operator focused on serving the smaller cities and towns in the United States. Mediacom Communications offers broadband products and services, including traditional video services, digital television, video-on-demand, digital video recorders, high-definition television, and high- speed Internet access and phone service. METROPCS COMMUNICATIONS: S&P Revises Outlook to Positive -------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Dallas- based MetroPCS Communications Inc. to positive from stable, and affirmed its 'CCC' rating on subsidiary MetroPCS Wireless Inc.'s $1.3 billion of 9.25% senior unsecured notes due 2014. This debt includes $300 million to be issued as an add-on to the $1 billion note issue. All other ratings on MetroPCS and related subsidiaries, including the 'B-' corporate credit rating, are affirmed. Proceeds from the add-on will be used by MetroPCS, a wireless carrier, to fund potential purchases under the FCC's upcoming 700 MHz auction, as well as for general corporate purposes. Pro forma total debt will be about $2.9 billion. "The outlook revision reflects the company's continued progress in growing its overall revenues and EBITDA from the wireless markets it established since 2002," said Standard & Poor's credit analyst Catherine Cosentino. If the company is able to replicate these results in its new markets over the next couple of years, it should be able to meaningfully reduce leverage from the current 6x debt to EBITDA, which would support an upgrade. The rating reflects MetroPCS' inherently challenging business model, which targets a lower-income customer niche; a highly competitive environment; and high leverage. The company's subscriber base has significantly higher churn (about 4%) than the industry average, exposing the company to subscriber losses if it is not able to replace lost customers through aggressive selling efforts to new customers. Given this high churn, the company's cost per gross addition, which is around $108, or one-third of that incurred by wireless carriers that target the more conventional postpaid customer segment, must continue to be closely managed and controlled. MetroPCS is a wireless provider serving seven fairly dense markets, including San Francisco, Dallas/Fort Worth, Atlanta, Georgia; Detroit, Michigan; Miami, Orlando, and Tampa, Florida; and Sacramento, California. It also plans to launch service in Los Angeles. Total licensed population equivalents for these markets are about 66 million. METROPCS WIRELESS: S&P Holds CCC Rating on $1.3 Billion Notes ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Dallas- based MetroPCS Communications Inc. to positive from stable, and affirmed its 'CCC' rating on subsidiary MetroPCS Wireless Inc.'s $1.3 billion of 9.25% senior unsecured notes due 2014. This debt includes $300 million to be issued as an add-on to the $1 billion note issue. All other ratings on MetroPCS and related subsidiaries, including the 'B-' corporate credit rating, are affirmed. Proceeds from the add-on will be used by MetroPCS, a wireless carrier, to fund potential purchases under the FCC's upcoming 700 MHz auction, as well as for general corporate purposes. Pro forma total debt will be about $2.9 billion. "The outlook revision reflects the company's continued progress in growing its overall revenues and EBITDA from the wireless markets it established since 2002," said Standard & Poor's credit analyst Catherine Cosentino. If the company is able to replicate these results in its new markets over the next couple of years, it should be able to meaningfully reduce leverage from the current 6x debt to EBITDA, which would support an upgrade. The rating reflects MetroPCS' inherently challenging business model, which targets a lower-income customer niche; a highly competitive environment; and high leverage. The company's subscriber base has significantly higher churn (about 4%) than the industry average, exposing the company to subscriber losses if it is not able to replace lost customers through aggressive selling efforts to new customers. Given this high churn, the company's cost per gross addition, which is around $108, or one-third of that incurred by wireless carriers that target the more conventional postpaid customer segment, must continue to be closely managed and controlled. MetroPCS is a wireless provider serving seven fairly dense markets, including San Francisco, Dallas/Fort Worth, Atlanta, Georgia; Detroit, Michigan; Miami, Orlando, and Tampa, Florida; and Sacramento, California. It also plans to launch service in Los Angeles. Total licensed population equivalents for these markets are about 66 million. METROPCS WIRELESS: Moody's Lifts Ratings on Strong Performance -------------------------------------------------------------- Moody's Investors Service upgraded all ratings of MetroPCS Wireless Inc. including the company's corporate family rating to B2 from B3, reflecting the meaningful primary equity proceeds MetroPCS' parent, MetroPCS Communications Inc., received from its recent initial public offering and Moody's belief that company's strong operating momentum is likely to continue through the next couple of years, enabling its pro-forma adjusted leverage of roughly 6x to continue improving despite continuing high levels of cash consumption. Moody's also upgraded MetroPCS' senior secured rating to Ba3 from B1 and its senior unsecured rating to Caa1 from Caa2. Finally, Moody's assigned MetroPCS' $300 million senior unsecured add-on notes offering a rating of Caa1 and assigned the company a liquidity rating of SGL-1, indicating a very good liquidity position, in Moody's opinion. The long term ratings reflect a B2 probability of default and loss given default assessments of LGD 2, 25% for the senior secured facilities and LGD 5, 79% for the senior unsecured notes. Ratings Upgraded: -- Corporate family rating to B2 from B3; -- Probability of default rating to B2 from B3; -- $1.7 billion senior secured bank facility to Ba3, LGD2, 25% from B1 LGD 2, 26%; -- $1.0 billion senior unsecured notes to Caa1, LGD5, 79% from Caa2 LGD5, 80%; Ratings Assigned: -- $300 million senior unsecured add-on notes at Caa1, LGD5, 79%; -- SGL-1 speculative grade liquidity rating. The B2 corporate family rating considers Moody's expectations that MetroPCS' rapid growth plans will consume a significant amount of cash for the next few years as it seeks to build-out wireless networks and launch service in several additional markets, more than doubling the size of its network footprint by the end of 2009, in Moody's opinion. The company's differentiated service offering, which offers unlimited calling and data plans for a flat fee and requires no signed contract has exceeded Moody's expectations over the past several quarters. The B2 rating nonetheless considers Moody's views that MetroPCS' execution risks to ongoing new market builds are significant and that industry price competition is likely to intensify as the national wireless penetration rate approaches 80%. MetroPCS Wireless Inc., a wholly owned subsidiary of MetroPCS Communications Inc., provides unlimited e wireless service for a flat monthly fee with no signed contract in major metropolitan markets. The company is based in Dallas, Texas. MGM MIRAGE: Committee Selects UBS and Weil Gotshal as Advisors -------------------------------------------------------------- The Transactions Committee of MGM MIRAGE's Board of Directors, which was formed on May 22, 2007 to consider the amended Schedule 13D filed by Tracinda Corporation and strategic alternatives available to MGM MIRAGE, has engaged UBS Investment Bank, as its financial advisor, and Weil, Gotshal & Manges LLP, as its legal advisor, to assist it in the process. As reported in the Troubled Company Reporter on May 24, 2007, the company's board formed an independent committee to study Kirk Kerokrian's offer to buy the Bellagio Hotel and Casino, and City Center properties. Mr. Kerkorian's Offer Mr. Kerkorian, who owns 56% of MGM Mirage shares through Tracinda, entered into negotiations with the company to purchase the properties. In addition, Mr. Kerkorian said he also intends to pursue strategic alternatives to its investment in MGM MIRAGE, which may include financial restructuring transactions involving all or a substantial portion of the remainder of the company. Rating Agencies Take Action The proposed transaction prompted Standard & Poor's Ratings Services to place its ratings for MGM MIRAGE, including the 'BB' corporate credit rating, on CreditWatch with negative implications. Additionally, Fitch placed MGM MIRAGE's ratings on Rating Watch Negative, including the company's 'BB' Issuer Default Rating; 'BB' Senior credit facility; 'BB' Senior notes; and 'B+' Senior subordinated notes. About MGM Mirage Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 19 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. MUELLER WATER: Amends Credit Pact with Bank of America, et al. -------------------------------------------------------------- Mueller Water Products Inc. disclosed in a regulatory filing with the Securities and Exchange Commission that on May 24, 2007, it entered into an amended and restated credit agreement with Mueller Group LLC, as prior borrower, Bank of America, N.A., as Administrative Agent, Swing Line Lender, and an L/C Issuer, JPMorgan Chase Bank, N.A., as Syndication Agent and an L/C Issuer and the lenders party to the agreement. The senior credit facilities under the Amended Credit Facility include: * an amortizing term loan A facility in an initial aggregate principal amount of $150.0 million; * an amortizing term loan B facility in an initial aggregate principal amount of $565.0 million; and * a $300.0 million revolving credit facility with a sub-limit for multi-currency loans and letters of credit. Letters of credit will reduce availability for borrowings under the revolving credit facility. The revolving credit facility terminates on May 24, 2012, the term loan A facility matures on May 24, 2012 and the term loan B facility matures on May 24, 2014. Term loan B borrowings under the Amended Credit Facility bear interest, at the company's option, at LIBOR plus 175 basis points, or an alternate base rate plus 75 basis points. The applicable margin for term loan A borrowings and revolving credit borrowings are subject to adjustments based on the leverage ratio, which measures the ratio of consolidated total debt to consolidated EBITDA of the Company and its subsidiaries. The initial applicable margin is LIBOR plus 150 basis points, or the alternate base rate plus 50 basis points. The company will also pay a commitment fee on the unused portion of the revolving credit facility. This fee is payable quarterly in arrears and upon the maturity or termination of the revolving credit facility. The fee is subject to adjustment based on the leverage ratio. The initial fee is 0.375%. The company is required to repay: (1) the term loan A facility in 11 consecutive quarterly installments equal to $3,750,000 on the last business day of each March, June, September and December, commencing in September 2009, with the remaining amount payable on the maturity date of the term loan A facility; and (2) the term loan B facility in 27 consecutive quarterly installments equal to $1,412,500 on the last business day of each March, June, September and December, commencing in September 2007, with the remaining amount payable on the maturity date of the term loan B facility. The senior credit facilities are subject to mandatory prepayment with the net cash proceeds of the sale or other disposition of any property or assets of the company and its subsidiaries, subject to permitted reinvestments and other specified exceptions. All mandatory prepayment amounts are applied to the prepayment of the term loans pro rata between the term loan A facility and the term loan B facility to reduce the remaining amortization payments of each term loan facility. All of the company's material direct and indirect domestic restricted subsidiaries, and all of the company's subsidiaries that guarantee the Notes, are guarantors of the Amended Credit Facility. The company's obligations under the Amended Credit Facility are secured by: -- a first priority perfected lien on substantially all of the existing and after-acquired personal property of the Company and each guarantor, a pledge of all of the stock or membership interest of all of the company's existing or future domestic restricted subsidiaries (including of each guarantor), a pledge of no more than 65% of the voting stock of any first-tier foreign restricted subsidiary held by the company or a guarantor and a pledge of all intercompany indebtedness in favor of the company or any guarantor; -- first-priority perfected liens on all of the Company and the guarantors' material existing and after-acquired real property fee interests, subject to customary permitted liens described in the Amended Credit Facility; and -- a negative pledge on all of the Company and its restricted subsidiaries' assets, including our Intellectual property. The senior credit facilities contain customary negative covenants and restrictions on the company's ability to engage in specified activities and contain financial covenants requiring the company to maintain (a) a specified consolidated leverage ratio of not more than 5.25 to 1.00 and decreasing over time and (b) an interest charge coverage ratio of not less than 2.50 to 1.00. Borrowings under the revolving credit facility are subject to significant conditions, including compliance with the financial ratios included in the Amended Credit Facility and the absence of any material adverse change. A copy of the Amended and Restated Credit Agreement is available for free at http://researcharchives.com/t/s?2075 About Mueller Water Products Based in Atlanta, Georgia Mueller Water Products Inc. (NYSE: MWA, MWA.B) -- http://www.muellerwaterproducts.com/-- is a North American manufacturer and marketer of infrastructure and flow control products for use in water distribution networks and treatment facilities. Its product portfolio includes engineered valves, hydrants, pipefittings and ductile iron pipe, which are used by municipalities, well as the commercial and residential construction, oil and gas, HVAC and fire protection industries. The company is comprised of three main operating segments: Mueller Co., U.S. Pipe and Anvil. The company employs approximately 7,000 people. * * * As reported in the Troubled Company Reporter on May 16, 2007, Moody's Investors Service assigned Ba3 ratings to various tranches of Mueller Water Products Inc.'s proposed $1.09 billion senior secured credit facility and a B3 rating to the company's proposed $350 million of senior subordinated notes. Mueller's corporate family rating was affirmed at B1. MUZAK HOLDINGS: Moody's Holds Ratings & Says Outlook is Developing ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Muzak Holdings, LLC and those of Muzak's wholly-owned subsidiary, Muzak LLC and changed the outlook to developing from negative. The change in outlook follows the company's recent announcement that it is considering a future consolidation or combination with DMX, Inc., a major competitor of Muzak. The combination would be contingent on a sale of the combined entity to an as yet unidentified third party buyer following clearance by federal regulators. The companies have submitted a Hart-Scott-Rodino filing seeking clearance for such a transaction with the Department of Justice. Until a final determination by the DOJ is made, a buyer for the combined entities and a financing structure identified, the companies will each continue to operate as independent entities. Muzak has incurred costs of approximately $0.8 million in fees associated with this potential merger which have been incurred through the end of the first quarter. Moody's acknowledges the improved financial profile of the company over the last several quarters, the lower customer churn rate and the successful renegotiation of the company's senior secured term loan (not rated by Moody's) that has resulted in lower pricing and an extension of the underlying maturity of the facility to January 2009. In view of the preliminary nature of the merger with DMX that is under consideration, the forthcoming sales process together with the pending DOJ approval, there is considerable uncertainty with respect to whether the merger will in fact proceed. The directionality of the rating outlook is therefore uncertain at this time. Ratings affirmed: * Muzak LLC: -- $220 million, 10.0% senior unsecured notes due 2009, rated Caa1 (LGD3, 45%); -- $115 million 9.875% senior subordinated notes due 2009, rated Caa3 (LGD5, 86%); Ratings affirmed with a developing outlook: * Muzak Holdings, LLC (Muzak LLC's direct parent): -- 13% senior discount notes due 2010, rated Caa3 (LGD6, 96%); -- Corporate Family Rating, rated Caa1; -- Probability of Default Rating, rated Caa1; The ratings outlook is changed to developing from negative. Muzak Holdings, LLC provides business music programming to clients through its integrated national network of owned operations and franchises. Revenue for the 12 months ended March 31, 2007 was approximately $251 million. NATIONAL CINEMEDIA: March 29 Balance Sheet Upside-Down by $584MM ---------------------------------------------------------------- National CineMedia Inc. had total stockholders' deficit of $584.8 million, from total assets of $400.6 million and total liabilities of $985.4 million as of March 29, 2007. Total revenue for the first quarter 2007 pre-initial public offering period was $23.6 million and $32.4 million for the post- IPO period, compared to $27.4 million in the entire first quarter of 2006. Total advertising revenue for the first quarter 2007 pre-IPO period was $20.6 million and $29 million for the post-IPO period, compared to $23.1 million in the entire first quarter of 2006. The year-over-year quarterly increase in advertising revenue was driven by an increase in inventory utilization or sell-thru and national cost per thousand, initiation of payments associated with founding member beverage agreements, the conversion of founding member legacy contracts to NCM LLC contracts, and a 17.1% increase in the average number of theatre screens included in the NCM LLC network. National advertising inventory sell-thru was 66.2% compared to 46.7% in the first quarter of 2006 and average national advertising CPMs increased 6.8% from the first quarter 2006. Net loss for the first quarter 2007 pre-IPO was $4.2 million and net income for the post-IPO period was $1 million, compared to a net loss of $9.4 million in the entire first quarter of 2006. Liquidity and Capital Resources The company's primary sources of liquidity and capital resources are cash flows generated by its operating subsidiary, NCM LLC, and availability of up to $80 million under NCM LLC's senior secured revolving credit facility entered into in February 2007. The amount outstanding as of March 29, 2007, and May 2, 2007, on the company's revolving credit facility was $51 million and $26 million, respectively. The available cash distribution for the 2007 post-IPO period was about $9.7 million, of which $4.4 million was the company's portion. Capital expenditures for the 2007 post-IPO period were $1.1 million, while capital expenditures were $600,000 for the 2007 pre-IPO period and $1.3 million for the quarter ended March 30, 2006. Commenting on the company's 2006 results, chairman and chief executive officer Kurt Hall said, "I am very proud of our management group and staff as we were able to successfully complete our IPO, while at the same time exceeding our first quarter internal revenue and EBITDA growth targets. Our continued focus on building market demand for the cinema medium and establishing new client relationships paid-off as we increased our national advertising sell-thru during the usually slow first quarter period, while also increasing national CPMs. We also made great progress expanding our meeting and events business with revenue up by over 120% over the first quarter of 2006." Mr. Hall concluded by saying, "We remain optimistic about the remainder of the year and the future of the cinema advertising medium. We continue to expand and strengthen our theatre network and marketers continue to move media budgets to new more effective mediums, such as NCM's." Initial Public Offering The company completed its IPO of stock and NCM LLC completed its debt financing on Feb. 13, 2007, and thus these historical results for the current quarter are divided into two periods, pre-IPO from Dec. 29, 2006 thru Feb. 12, 2007 for its predecessor NCM LLC, and post-IPO from Feb. 13, 2007, thru March 29, 2007, for its consolidated results after acquisition of its interest in NCM LLC. The pre-IPO results do not reflect the agreements and transactions associated with the IPO and debt financing. About National CineMedia Headquartered in Centennial, Colorado, National CineMedia Inc. (NASDAQ: NCMI) -- http://www.ncm.com/-- is the managing member and owner of 44.8% of National CineMedia LLC, the operator of the digital in-theatre network in North America. The company sells, distributes, produces, and develops on-screen cinema advertising through its network of screens, and provides promotional services to advertisers in theater lobbies. National CineMedia is one of the in-theater networks in North America, with 30-year contracts with the three largest national movie exhibitors in the U.S.: Regal, AMC, and Cinemark. NEUROCHEM INC: March 31 Balance Sheet Upside-Down by CDN$25.2MM --------------------------------------------------------------- Neurochem Inc.'s balance sheet showed total assets of CDN$61,096,000, total liabilities of CDN$85,670,000, and total shareholders' deficiency of CDN$25,296,000 as of March 31, 2007. The company reported a net loss of CDN$24,618,000 for the quarter ended March 31, 2007, compared to CDN$17,134,000 for the same period the previous year. The increase is primarily due to research and development expenses which amounted to CDN$19,712,000 this quarter, compared to CDN$13,726,000 for the same period the previous year, relating to the development of tramiprosate, ALZHEMED(TM), for the ongoing Phase III clinical trial in Europe and the North American open-label extension of the Phase III study, as well as a conduct of a QT cardiac status Phase I study. Tramiprosate, ALZHEMED(TM), is the company's investigational product candidate for the treatment of Alzheimer's disease (AD). For the quarter and year ended March 31, 2007, R&D expenses also included costs incurred to support the North American Phase III clinical trial for tramiprosate ALZHEMED(TM), the ongoing open- label extension of the eprodisate, KIACTA(TM), Phase II/III study, as well as ongoing drug discovery programs. As at March 31, 2007, the company had available cash, cash equivalents and marketable securities of CDN$35,470,000, compared to CDN$56,821,000 on Dec. 31, 2006. The decrease is primarily due to funds used in operating activities. On May 2, 2007, Neurochem entered into a private placement of US$80,000,000 aggregate principal amount of convertible notes, consisting of US$40,000,000 of 6% senior convertible notes due in 2027 and US$40,000,000 of 5% senior subordinated convertible notes due in 2012. The latter shall be subject to mandatory conversion into common shares of Neurochem within 5 days of the effectiveness of a registration statement registering the underlying securities. In connection with this transaction, Neurochem issued warrants to purchase an aggregate of 2,250,645 common shares of Neurochem until May 2, 2012. Neurochem and Immtech Case In January 2007, the litigation between Neurochem and Immtech Pharmaceuticals Inc., formerly known as Immtech International Inc., came to a conclusion when Immtech, the University of North Carolina at Chapel Hill, and Georgia State University Research Foundation Inc. filed with the Federal District Court for the Southern District of New York, U.S.A. a Notice of Voluntary Dismissal. The plaintiffs voluntarily dismissed their complaint against Neurochem without any payment, license, business agreement, concession or compromise by Neurochem. The dispute concerned an agreement entered into between Immtech and Neurochem in April 2002 under which Neurochem had the right to apply its proprietary anti-amyloid technology to test certain compounds to be provided by Immtech. About Neurochem Inc. Neurochem Inc. -- http://www.neurochem.com/ -- develops and commercializes innovative therapeutics to address critical unmet medical needs. Eprodisate (KIACTA(TM)) is currently being developed for the treatment of Amyloid A (AA) amyloidosis, and is under regulatory review for marketing approval by the United States Food and Drug Administration and European Medicines Agency. Tramiprosate (ALZHEMED(TM)), for the treatment of Alzheimer's disease, has completed a Phase III clinical trial in North America and is currently in a Phase III clinical trial in Europe, while tramiprosate (CEREBRIL(TM)), for the prevention of Hemorrhagic Stroke caused by Cerebral Amyloid Angiopathy, has completed a Phase IIa clinical trial. NEW YORK RACING: Court Okays Kroll Zolfo as Financial Advisor ------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York gave The New York Racing Association Inc. permission to employ Kroll Zolfo Cooper LLC, as its consultant and special financial advisor, nunc pro tunc March 30, 2007. The firm is expected to: a. advise and assist the Debtor in forecasting, planning, controlling and other aspects of managing cash, and, if necessary, obtaining additional debtor in possession and exit financing; b. advise the Debtor in interfacing with the Creditors' Committee, regulators, other constituencies and its professionals, including the preparation of financial and operating information required by the parties and the Bankruptcy Court; c. advise the Debtor with respect to resolving claim disputes and otherwise managing the claims process; d. advise and assist the Debtor in developing and negotiating a Chapter 11 plan with the various creditor and other constituencies; e. render expert testimony, as requested, concerning the feasibility of a chapter 11 plan and other matters that may arise in the case; and f. provide other services as may be required by the Debtor. The firm's professional billing rates are: Designation Hourly Rate ----------- ----------- Managing Directors $635 - $760 Professional Staff $125 - $630 Support Personnel $50 - $225 Scott W. Winn, a managing director of the firm, assures the Court that he does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Winn can be reached at: Scott W. Winn Kroll Zolfo Cooper LLC 900 Third Avenue, 6th Floor New York, NY 10022 Tel: (212) 561-4000 Fax: (212) 213-1749 http://www.krollzolfocooper.com/ Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed a chapter 11 petition on November 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618) Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP represents the Debtor in its restructuring efforts. Edward M. Fox, Esq., Eric T. Moser, Esq., Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Official Committee of Unsecured Creditors. When the Debtor sought protection from its creditors, it listed more than $100 million in total assets and total debts. NEW YORK RACING: Court Okays Whiteman Osterman as Special Counsel ----------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York gave The New York Racing Association Inc. permission to employ Whiteman Osterman & Hanna LLP as its special counsel. The firm is expected to perform necessary legal service to the Debtor. The Debtor tells the Court that the firm charges the Debtor $119,162 for this engagement. Debtor said that the fees will be paid in equal monthly installments. William Y. Crowell, III, Esq., a partner of Whiteman Osterman, assures the Court that he does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Crowell can be reached at: William Y. Crowell, III, Esq. Whiteman Osterman & Hanna LLP One Commerce Plaza Albany, New York 12260 Tel: (518) 487-7600 Fax: (518) 487-7777 http://www.woh.com/ Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed a chapter 11 petition on November 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618) Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP represents the Debtor in its restructuring efforts. Edward M. Fox, Esq., Eric T. Moser, Esq., Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Official Committee of Unsecured Creditors. When the Debtor sought protection from its creditors, it listed more than $100 million in total assets and total debts. NORTHWEST AIRLINES: Emerges from Chapter 11 Bankruptcy Protection ----------------------------------------------------------------- Thirteen Northwest Airlines (NYSE:NWA) employees rang the opening bell today on the New York Stock Exchange (NYSE), signaling the completion of the airline's restructuring process as well as its recommitment to customers and employees. The thirteen employees, representing the company's various work groups, are recipients of the President's Award, the highest honor bestowed on a Northwest Airlines employee. Nominated by their peers, the President's Award winners were recognized for their ongoing dedication to Northwest and its customers. Assisting the employees on the NYSE bell podium was Doug Steenland, Northwest Airlines president and chief executive officer. After ringing the opening bell, the Northwest CEO made the first "buy" of new "NWA" common stock. "[Yester]day [wa]s a landmark day in the 81 year history of Northwest Airlines. We have successfully repositioned the company as a stronger, globally-focused airline with a great route network, a revitalized fleet, a competitive cost structure and a recapitalized balance sheet," Mr. Steenland said. "Going forward, we intend to build on our core assets and increase our focus on our customers and employees." Discussing the airline's fleet, Mr. Steenland said, "We are continuing to spend more than $6 billion to renew our fleet. Our international fleet now features the Airbus A330, which replaced the DC10 on European and Asian routes. We are proud to be the first North American carrier to operate the new Boeing 787, which we plan to place into commercial service in the fall of 2008." "Domestically, we will be introducing the first of 72, dual-class regional jetliners to our customers next week. These new, fuel- efficient jets, which will be flown by Northwest subsidiaries Compass Airlines and Mesaba Airlines, allow us to offer first class seating to more customers while permitting Northwest to open up new routes that were not feasible to operate with larger aircraft." Discussing the airline's route network, the Northwest CEO added, "While Northwest has one of the largest U.S., Canadian and Asia Pacific route networks, we continue to expand our reach through our joint venture partnership with KLM Royal Dutch Airlines and the SkyTeam alliance. In addition, our domestic marketing agreements with Alaska Airlines, Continental and Delta allow us to offer unparalleled schedule convenience to our customers." "One of our key focus areas is the continual improvement of our customers' travel experiences. We plan to spend at least $50 million during the year on product enhancements that we believe our customers will value." Mr. Steenland added, "We believe the work that was accomplished during our restructuring: achieve a competitive cost structure, develop a more efficient business model and recapitalize our balance sheet will clearly benefit our shareowners. We believe that we have a viable business plan that will continue to deliver profits in the future." Discussing employees, the company's most important asset, Mr. Steenland added, "The past 20 months of restructuring, with all the change that the restructuring process entailed, has certainly been difficult for our employees. However, over the past year and a half, NWA's employees have continued to deliver excellent service to our customers. Without the assistance of our employees, we could not have completed our restructuring in near- record time." "Because of their involvement, I am pleased that our employees are already realizing financial benefit in the forms of unsecured claims and profit sharing. In total, we hope to be able to share with employees some $1.6 billion through unsecured claims and profit sharing payments through 2010." Restructuring On May 18, Northwest completed its restructuring process when Judge Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York signed the order confirming Northwest's Plan of Reorganization. On May 9, Northwest had announced that 98.4% of the dollar amount of claims that voted and 96.9% of the airline's creditors who voted, approved the Northwest Plan. In preparation for its emergence, the company had announced a new board of directors and it was approved to trade its new common stock on the New York Stock Exchange under the ticker symbol "NWA." Trading on the NYSE commenced May 21, on a "when issued" basis (Ticker Symbol: NWA WI). The company began "regular way" trading on May 31, 2007. Northwest emerged from Chapter 11 protection Thursday after meeting the closing conditions of the Plan and receiving the proceeds from its $750 million new equity rights offering. In accordance with Northwest's prior announcements, and as required by the Plan of Reorganization approved by the Bankruptcy Court, the outstanding common stock traded under the ticker symbol NWACQ.PK, and the preferred stock of the company has been cancelled for no consideration, and, therefore, the company's former stockholders no longer have any interest as stockholders in the company. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan will took effect May 31, 2007. * * * As reported in the Troubled Company Reporter on May 25, 2007, Standard & Poor's Ratings Services expects to assign its 'B+' corporate credit rating to Northwest Airlines Corp. and subsidiary Northwest Airlines Inc. (both rated 'D') upon their emergence from bankruptcy on May 31, 2007. NORTHWEST AIRLINES: Celebrates Listing on NYSE ---------------------------------------------- Northwest Airlines Corporation yesterday rang The Opening Bell(SM) at the New York Stock Exchange, a subsidiary of NYSE Euronext (NYSE: NYX), to celebrate the company's listing on the NYSE and emergence from bankruptcy. "We extend a warm welcome to Northwest Airlines Corporation as it joins our family of NYSE-listed companies," said NYSE Euronext CEO and Director John A. Thain. "We look forward to a strong and lasting partnership with the company and to providing them with the superior market quality and unsurpassed brand visibility of the New York Stock Exchange." Northwest Airlines, one of the world's largest airlines with a market cap of $7.1 billion, began regular-way trading Thursday on the NYSE under the ticker symbol "NWA." Northwest Airlines joins other NYSE-listed companies in the airline sector including Delta Air Lines (NYSE: DAL) which celebrated its re-listing on May 3 after successfully emerging from bankruptcy. Other NYSE-listed airline companies include Southwest Airlines Co. (NYSE: LUV) with a market cap of $12 billion and Air France KLM (NYSE: AKH) with a market cap of $11.5 billion. This brings the total number of airlines companies listed on the NYSE to 16 with a total market cap of over $66 billion. "Northwest Airlines is pleased to be trading once again on the NYSE," said Doug Steenland, Northwest Airlines President and Chief Executive Officer. "It is appropriate that we trade in the market under the ticker symbol "NWA" which is the well-known symbol for Northwest Airlines which our customers see on our aircraft, at the airport, on our web site, and now investors will recognize it as it crosses the ticker tape at the New York Stock Exchange." About NYSE Euronext NYSE Euronext, a holding company created by the combination of NYSE Group, Inc. and Euronext N.V., commenced trading on April 4, 2007. NYSE Euronext (NYSE Euronext: NYX) operates the world's largest and most liquid exchange group and offers the most diverse array of financial products and services. NYSE Euronext, which brings together six cash equities exchanges in five countries and six derivatives exchanges in six countries, is a world leader for listings, trading in cash equities, equity and interest rate derivatives, bonds and the distribution of market data. Representing a combined $28.5 trillion/EUR21.5 trillion total market capitalization of listed companies and average daily trading value of approximately $123.4 billion/EUR92.4 billion (as of March 31, 2007), NYSE Euronext seeks to provide the highest standards of market quality and integrity, innovative products and services to investors, issuers, and all users of its markets. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan will took effect May 31, 2007. * * * As reported in the Troubled Company Reporter on May 25, 2007, Standard & Poor's Ratings Services expects to assign its 'B+' corporate credit rating to Northwest Airlines Corp. and subsidiary Northwest Airlines Inc. (both rated 'D') upon their emergence from bankruptcy on May 31, 2007. NOVELL INC: Posts $2.1 Million Net Loss in Quarter Ended April 30 ----------------------------------------------------------------- Novell, Inc. disclosed financial results for its second fiscal quarter ended April 30, 2007. The company reported a net loss of $2.1 million for the quarter ended April 30, 2007, compared to a net income of $3.3 million for the same period in 2006. For the quarter, Novell reported net revenue of $239 million, compared to net revenue of $233 million for the second fiscal quarter 2006. The loss available to common stockholders from continuing operations in the second fiscal quarter 2007 was $110,000. This compares to income available to common stockholders from continuing operations of $2 million for the second fiscal quarter 2006. Foreign currency exchange rates favorably impacted total revenue by approximately $4 million and negatively impacted net income by $2 million year-over-year. "We were pleased with the overall results this quarter. We saw continued strength in our Linux business, improvement in our Identity business and better-than-expected results in Workgroup," Ron Hovsepian, President and CEO of Novell, said. "Additionally, we benefited from the impact of cost control measures. While there remains a lot of work ahead of us, our business is moving in the right direction and we believe we are on track to achieve our fiscal 2007 exit rate operating margin target." At April 30, 2007, the company's balance sheet showed total assets of $2.7 billion and total liabilities of $1.5 billion, resulting in a stockholders' equity of $1.1 billion. Cash, cash equivalents and short-term investments were $1.8 billion at April 30, 2007, consistent with last quarter. Days sales outstanding in accounts receivable was 64 days at the end of the second fiscal quarter 2007, down from 66 days in the year ago quarter. Total deferred revenue was $700 million at the end of the second fiscal quarter 2007, up $354 million, or 102%, from the prior year. Cash flow from operations was a negative $29 million for the second fiscal quarter 2007, compared to a negative $24 million in the second fiscal quarter 2006. About Novell Headquartered in Waltham, Massachusetts, Novell, Inc. (Nasdaq: NOVL) -- http://www.novell.com/-- delivers infrastructure software for the Open Enterprise based on Linux. With more than 50,000 customers in 43 countries, Novell helps customers manage, simplify, secure and integrate their technology environments by leveraging best-of-breed, open standards-based software. Novell has sales offices in Argentina, Brazil and Colombia. * * * Novell Inc.'s subordinated debt carries Moody's Investors Service's B1 rating. NPC INTERNATIONAL: Debt Reduction Prompts S&P to Hold B+ Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit and senior secured ratings on NPC International Inc., along with the subordinated debt rating of 'B-'. At the same time, S&P raised the recovery rating on the NPC's senior secured credit facility to '2' from '3', indicating the expectation for substantial (80%-100%) recovery of principal in the event of default. The change reflects a reduction on the balance of its $300 million term loan to $250 million, and thereby affording holders better recovery prospects. The ratings on the Overland Park, Kansas-based NPC reflect the company's participation in the highly competitive pizza sector of the restaurant industry, vulnerability to cost increases, recent declines in operating performance, and a significantly leveraged capital structure. NPC is the largest Pizza Hut Inc. (a unit of Yum! Brands Inc.) franchisee in the U.S., with 872 units in 24 states as of March 27, 2007, which represents 13% of all domestic Pizza Hut locations. The restaurants are primarily in the Midwest, South, and Southeast in rural communities and therefore have limited competition. "If leverage increases because of an acquisition or if EBITDA is negatively affected by rising costs, we could lower the ratings," said Standard & Poor's credit analyst Charles Pinson-Rose. PINNACLE ENTERTAINMENT: Fitch Puts B- Rating on $350 Million Notes ------------------------------------------------------------------ Fitch Ratings has assigned a rating of 'B-/(Recovery Rating) RR5' to Pinnacle Entertainment's $350 million senior subordinated notes due 2015. Pinnacle's credit ratings are: -- Issuer Default Rating 'B'; -- Bank facility 'BB/RR1'; -- Senior Subordinated notes 'B-/RR5' The Rating Outlook is Stable. Pinnacle's 'B' IDR benefits from solid current credit metrics for the rating category, one of the strongest growth pipelines in the industry, which will meaningfully increase diversification, and a demonstrated willingness to issue equity to help fund its development plans. Primary credit concerns include an expected increase in leverage during its expansion and acquisition/event risk, particularly with respect to a Las Vegas opportunity. Based on Fitch's estimate of recovery in the event of default, Pinnacle's credit facility is revised upward to 'BB' while its sub notes are revised down 1 to 'B-'. The 2015 notes will rank equally with $436 million of Pinnacle's other senior subordinated debt including its 8.25% senior sub notes due 2012 ($303 million outstanding) and 8.75% senior sub notes due 2013 ($133 million outstanding). Pinnacle will use the proceeds to term out $275 million of its existing term loan in its credit facility and to help fund its current projects. In addition to the $275 million term loan, its $1 billion credit facility consists of a $625 million revolver ($18 million drawn as of March 31, 2007) and a $100 million undrawn delayed-draw term loan (expires July 2, 2007). Pro-forma Credit Metrics Fitch calculates total debt and cash pro forma for this offering as of the end of Q1 2007 are $789 million and $508 million, respectively, thus pro forma net debt is only $281 million. Based on Latest 12 Months adjusted EBITDA of $186.8 million: Pro forma LTM debt/EBITDA is 4.2 times, but pro forma LTM net debt/EBITDA is only 1.5x. Pro forma LTM EBITDA/gross interest expense coverage could be in the 2.6x range; however, PNK's coverage could dip below 2x with additional debt incurred to fund near-term capital expenditures for its expansions and St. Louis projects. Larger Permitted Indebtedness Bucket The 2015 notes include a much larger permitted indebtedness bucket than Pinnacle's existing debt to allow for funding of Pinnacle's strong growth pipeline. The 2015 notes allow for the greater of $1.5 billion in senior debt or 2.5x Consolidated EBITDA. The company's existing debt allows for senior indebtedness of $350 million in its most restrictive indenture (the 8.75% notes due 2013) and for $475 million of senior indebtedness in its other indenture (the 8.25% notes due 2012). In addition to those permitted indebtedness buckets, the indentures allow for additional indebtedness related to debt refinancing and additional indebtedness based on a 2.0x coverage test. Since the coverage ratio may go below 2.0x and given the senior debt restrictions in the existing sub notes, Pinnacle's ability to tap the full $725 million available under its credit facility could be limited. However, the company should be able to fund near-term capital expenditures from its cash balance and available credit to complete Lumiere Place in St. Louis, which is expected to open in Q4 2007. Pinnacle has minimal maturities prior to 2010 and will need to secure additional financing to fund its project pipeline, which is expected to cost more than $3 billion. Atlantic City Becomes a Guarantor Pinnacle's Atlantic City site, which was not previously a guarantor of its existing debt, will become a guarantor of these notes as well as Pinnacle's existing debt. The AC site was placed in an unrestricted subsidiary due to claims on the assets from previous bankruptcy proceedings that have since been resolved. Pinnacle's primary subsidiaries that are currently unrestricted or non-guarantors include its international subsidiaries, President Casino in Missouri, and its St. Louis condo subsidiaries. Potential Drivers of Changes to Ratings Pinnacle's ratings could improve as the development pipeline unfolds, since it will significantly increase the company's diversification. Pinnacle's three Louisiana properties accounted for 76% of the company's Adjusted Property EBITDA in 2006. That concentration is expected to drop meaningfully in the next six to 18 months as Pinnacle enters the St. Louis market with large-scale developments, and as the New Orleans market continues to moderate relative to elevated operating levels in 2006 due to reduced competition from hurricanes in 2005. Pinnacle's ratings would also likely benefit from additional equity issuance to help fund development plans. Pinnacle raised $353 million in net proceeds from an equity issuance in Q1 2007, which is the fourth time since the beginning of 2004 that Pinnacle has issued equity. Fitch believes that Pinnacle's event/acquisition risk remains high, particularly given MGM MIRAGE's potential to restructure, which could increase the availability of certain Las Vegas Strip assets. Although Fitch believes that Pinnacle would prefer to build rather than buy in order to enter the Las Vegas market, recent LV Strip land transactions close to $35 million per acre indicate that the cost of LV Strip land continues to escalate, which could make buying an existing property a more viable option. The 2015 notes are scheduled to price on June 5, 2007, and also include these features: -- a change of control put at 101; -- a 35% equity clawback option through 2010; -- the notes are callable at a premium through 2013, then callable at par. Headquartered in Las Vegas, Nevada, Pinnacle Entertainment Inc. (NYSE: PNK) -- http://www.pnkinc.com/-- owns and operates casinos in Nevada, Louisiana, Indiana and Argentina, owns a hotel in Missouri, receives lease income from two card club casinos in the Los Angeles metropolitan area, has been licensed to operate a small casino in the Bahamas, and owns a casino site and has significant insurance claims related to a hurricane-damaged casino previously operated in Biloxi, Mississippi. Pinnacle opened a major casino resort in Lake Charles, Louisiana in May 2005 and a new replacement casino in Neuquen, Argentina in July 2005. PUIG INC: Case Summary & 197 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Puig, Inc. 6060 West 21st Court, Unit 606 Hialeah, FL 33016 Bankruptcy Case No.: 07-14026 Debtor affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Puig Development Corporation 07-14027 JEP Investments, L.L.C. 07-14029 Park View @ Palm Beach, L.L.C. 07-14030 Sonoma Park, L.L.C. 07-14031 Summerlin at Winter Park, L.L.C. 07-14032 Venetia Country Club, L.L.C. 07-14033 Arbor Heights, L.L.C. 07-14034 The Residences at Whispering Pines, 07-14035 L.L.C. The Laurels at Sherwood, L.L.C. 07-14036 Silverado Park, L.L.C. 07-14038 Sunset Pointe at Ft. Myers, L.L.C. 07-14039 Type of Business: The Debtor is engaged in real estate development. Chapter 11 Petition Date: May 29, 2007 Court: Southern District of Florida (Miami) Judge: Robert A. Mark Debtors' Counsel: Jordi Guso, Esq. Berger Singerman, P.A. 200 South Biscayne Boulevard, Suite 1000 Miami, FL 33131 Tel: (305) 755-9500 Total Assets Total Debts ------------ ----------- Puig, Inc. Less than $1 Million to $10,000 $100 Million Puig Development Corporation Less than $1 Million to $10,000 $100 Million JEP Investments, L.L.C. $1 Million to $1 Million to $100 Million $100 Million Park View @ Palm Beach, $1 Million to $1 Million to L.L.C. $100 Million $100 Million Sonoma Park, L.L.C. $100,000 to $100,000 to $100 Million $100 Million Summerlin at Winter Park, Less than $1 Million to L.L.C. $10,000 $100 Million Venetia Country Club, L.L.C. $1 Million to $1 Million to $100 Million $100 Million Arbor Heights, L.L.C. $100,000 to $100,000 to $100 Million $100 Million The Residences at $1 Million to $1 Million to Whispering Pines, L.L.C. $100 Million $100 Million The Laurels at Sherwood, $1 Million to $1 Million to L.L.C. $100 Million $100 Million Silverado Park, L.L.C. $1 Million to $1 Million to $100 Million $100 Million Sunset Pointe at Fort $1 Million to $1 Million to Myers, L.L.C. $100 Million $100 Million A. Puig Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dajo Investments, L.L.C. $5,973,000 9700 Northwest 17th Street Miami, FL Sugar Tree Investors, $2,755,000 L.L.C. 1320 South Dixie Highway, Suite 781 Miami, FL Jerry Marc Palm View, $2,000,000 L.L.C. 2843 South Bayshore Drive, Suite 12 F Miami, FL Coral Club Investors, $1,435,000 L.L.C. 1320 South Dixie Highway, Suite 781 Miami, FL 33156 Micar Investments $1,000,000 473 Sunset Drive Hallandale, FL 33009 Darin & Michelle Avick $1,000,000 189 Montclair Drive Weston, FL 33326 R.J.L. Prestige Consulting, $500,000 L.L.C. 109 Northeast 12th Avenue Fort Lauderdale, FL 33301 Raul and Milagros Arias $300,000 8322 Dundee Terrace Hialeah, FL 33016 Paola Padovan $250,000 696 Frenwood Road Key Biscayne, FL 33149 Maria Rodriguez $200,000 The Grand Pianist, L.L.C. $190,000 Estaban S. Somoano $175,000 Moshe Stern $150,000 Jesus Albanez and $150,000 Dorothy Donatelli Total Cool Air $137,750 Conditioning and Refrigeration Juan F. Sootolongo $125,000 Triple Rosenbaum $100,000 Investments, L.L.C. Robert Novigrod $100,000 My Footy Investments, $100,000 L.L.C. Moshe & Esther Stern $100,000 B. Puig Development Corporation's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Milton's Siding $259,688 2200 Holiday Drive Raleigh, NC 27610 Coldwell Banker $180,933 Residential Real Estate 8240 Mills Drive Miami, FL 33183 West Coast Master $169,867 Painters 3608 West Euclid Avenue Tampa, FL 33629 Creative Mindworks $167,781 Pathman Lewis, L.L.P. $138,347 Total Cool & Air $137,750 Conditioning and Refrigeration Skinee Dip Pools & $134,674 Renovations Rainbow Kitchen Cabinets, $133,623 Inc. Seagull Floors of Florida, $128,884 L.L.C. The Home Depot Supply $121,095 Sears Commercial One $119,661 M.J. Roofing, Inc. $112,700 Ana Reis $106,828 Mc Connie Fence $102,205 A.T.&L. Granite & Marble, $98,176 Inc. Cuccina Oulin, Inc. $78,339 Masterpiece Roofing $66,016 A.A.A. Supply $63,286 Alex Sprinkler, Inc. $58,187 House of Floors $57,169 C. JEP Investments, LLC's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Iglesia Presbiteriana El $2,000,000 Redentor 6971 Red Bug Lake Road Oviedo, FL 32765 S.&G. Financial Services $1,300,000 of South Florida 3800 Bird Avenue Miami, FL 33134 Miami-Dade Tax Collector $24,776 140 West Flagler Street Room 101 Miami, FL 33130 J.C.S. Consulting, Inc. unknown D. Park View @ Palm Beach, LLC's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Palm Beach County Tax $10,103 Collector P.O. Box 3353 West Palm Beach, FL 33416-4740 Jorge Perez $2,950 2215 West 64 Street, Suite 201 Miami, FL 33016 Juan Perez $2,875 8185 Northwest 7, Street Aparment 504 Miami, FL 33126 Alvarez & Mendoza, P.A. $2,000 Quality Products $412 Broward County Security Co. $150 E. Sonoma Park, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Seagull Floors of Florida, $50,968 L.L.C. Department A.T. 952104 Atlanta, GA 31192-2104 Creative Mindworks $45,216 14160 Northwest 77th Court, Suite 11 Hialeah, FL 33016 Cuccina Oulin, Inc. $37,783 3651 Northwest 79th Avenue Tampa, FL 33619 Premium Assignment Corp. $32,398 Mc Connie Fence $31,045 Florida Closet Design, $29,600 Inc. A.A.A. Supply $24,218 A.&W. Coatings $19,440 Skinee Dip Pools & $18,853 Renovations Garrity Decking $17,872 Emerald Roofing $17,500 U.S.A. Tile & Marble $13,783 Sears Commercial One $12,315 Miami Art of Stone, L.L.C. $11,646 Teco Tampa Electric $11,538 Elliobe Granite $11,404 Garden Lights Design $10,887 Erealsoft Corp. $8,880 D.M. Industries $7,985 Brick Plaver Sealer $7,459 Services F. Summerlin at Winter Park, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ H.H.H. Savannah Fund, $2,600,000 L.L.C. 2206 West Atlantic Avenue, Suite 201 Delray Beach, FL 33445 D.A.J.O. Investments, $1,320,000 L.L.C. 9700 Northwest 17 Street Miami, FL Premium Assignment Corp. $63,715 P.O. Box 3100 Tallahassee, FL 32315-3100 West Coast Master Painters $43,175 Cuccina Oulin, Inc. $33,656 Rapco Supply $24,617 Playgrounds Plus, Inc. $16,827 Three B Marble & Granite $14,439 Elliobe Granite $13,192 Sears Commercial One $13,012 Creative Mindworks $11,500 Ereal Interactive Media Corp. $11,300 Barefoot Flooring of Central $11,179 Florida, Inc. Miami Art of Stone, L.L.C. $9,528 Florida Closet Design, Inc. $8,800 Portofino Flooring $8,165 Erealsoft Corp. $7,680 Depalmco Landscape, Inc. $5,250 Elias Souza $4,900 Engage Technologies, Inc. $4,782 G. Venetia Country Club, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Coldwell Banker $89,941 Residential Real Estate 8240 Mills Drive Miami, FL 33183 Premium Assignment $54,487 Corporation P.O. Box 3100 Tallahassee, FL 32315-3100 Diane Nelson $37,320 Tax Collector P.O. Box 10832 Clearwater, FL 33757-8832 Manolo's Carpentry $26,300 HI-Tech Electric & $23,750 Fire Corp. Ultimate Pest & Termite $21,289 Control Seagull Floors of $14,380 Florida, L.L.C. Rainbow Kitchen $13,850 Cabinets U.S.A. Tile & Marble $13,484 Ana Reis $7,986 Sears Commercial One $5,465 Vision Concepts, Inc. $4,612 A.T.&L. Granite & Marble, Inc. $4,418 The Home Depot Supply $4,322 Miami Art of Stone, L.L.C. $2,402 Jorge Martinez $2,280 Great American Business Products $1,700 Alberto Valdez $1,400 A.A.A. Supply $1,242 City of Largo $892 H. Arbor Heights, LLC's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.P.A.C. $145,292 P.O. Box 212516 Kansas City, MO 64121-2516 A.T.&L. Granite & Marble $23,418 1779 Red Cedar, Suite 10 Fort Meyers, FL 33907 Sears Commercial One $19,173 4740 121 Street Urbandale, IA 50323 Seagull Floors of Florida, $18,550 L.L.C. Pinellas County Tax $10,284 Collector Rainbow Kitchen Cabinets $9,850 Corp. The Home Depot $5,620 Vision Concepts $4,612 Alberto Valdes $3,858 A.A.A. Supply $3,158 Depalmco Landscape, Inc. $2,457 Ana Reis $1,592 Excelsior Defense, Inc. $1,070 Quality Products $546 Sunshine Skyway Ace $12 Hardware I. The Residences at Whispering Pines, LLC's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ P.H. Property Fund $3,550,000 Trident Trust Company One Capital Place, 4th Floor P.O. Box GT Grand Cayman, Cayman, VI Michael Richards $1,000,000 11451 Katry Freeway Suite 200 Houston, TX 77079 Big Idea Investments, $338,096 Ltd. 1/F Willshire Park 12-14 McDonald Road Central Hongkong Honorable Doris Malloy $215,226 New South Systems, Inc. $28,640 Sears Commercial One $20,645 M.G.M. Master Granite & $19,393 Marble North Florida Contract $15,453 Carpert, Inc. Rainbow Kitchen Cabinets $15,100 Vision Concepts, Inc. $7,209 Servpro $5,388 Carpet One $3,896 A-1 Service, L.L.C. $2,700 The Home Depot Supply $996 Gyaca Advertising $780 Pamela Smith $750 Crowder $650 A.A.A. Window & Glass Repair $648 Quality Products $588 J. The Laurels at Sherwood, LLC's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Allen R. and Jill F. $732,500 Greenwald 7301 Southwest 57th Court, Suite 565 Miami, FL 33143 D.A.J.O. Investments, $550,000 L.L.C. 9700 Northwest 17th Street Miami, FL Creative Mindworks $19,222 14160 Northwest 77th Court, Suite 11 Miami Lakes, FL 33016 Palm Beach County Tax $14,394 Collector A.A.A. Supply $10,476 B.&M. Mechanical Contractor $5,760 Alvarez & Mendoza, P.A. $4,000 Sandra Rojas $2,500 Quality Products $1,484 Sears Commercial One $938 Professional Gold Car $841 Buckeye Plumbing $618 Palm Beach County Water $335 Utilities Dept. Florida Power & Light $210 Office Xpress Supply $32 K. Silverado Park, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ North Florida Contract $6,577 Carpet, Inc. 5032-1 Tennessee Capital Boulevard Tallahassee, FL 32303 Carpet One $2,690 3333 Capital Circle Northeast Tallahassee, FL 32308 City of Tallahassee $2,290 600 North Monroe Street Tallahassee, FL 32301-1262 The Home Depot Supply $2,185 Swain Pools and Spas $1,068 Brooks, Lebeuf, Bennett, $1,012 Foster & Gwarney Gyaca Advertising $780 Anna Rodebush $600 Tony Kelley, Inc. $575 Robert Ash $500 Brandon Buchman/ $500 Thomas Graham Brooks Air Systems, $420 Inc. Shirina Thurman $400 Michael Quinn $400 Mark Froelich/ $400 Jonathan Caro Jeff Adams $400 Duy Loc T. Hoang $400 Deborah Asbey/ $400 Jerome Asbey Bradley Bowling $400 Bill Chalek $400 L. Sunset Pointe at Fort Myers, LLC's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dajo Investments, L.L.C. $803,000 9700 Northwest 17th Street Miami, FL Allen R. Greenwald, Trustee $524,065 1320 South Dixie Highway, Suite 781 Miami, FL 33134 Adolfo Perez $35,000 10704 Southwest 59 Terrace Miami, FL 33173 A.A.A. Supply $1,391 Sears Commercial One $955 Carlos A. Triay, P.A. $950 Quality Products $546 Florida Power & Light $204 RELIANT ENERGY: S&P Rates Proposed $1.25 Billion Notes at B- ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' rating to the proposed $1.25 billion senior unsecured notes at Reliant Energy Inc. (B/Positive/B-2). The proceeds of the notes, along with cash on hand, will be used to pay down the $550 million senior secured notes due 2010, the $550 million senior secured notes due 2013, and the $400 million term loan B. "The 'B-' rating is one notch below Reliant's corporate credit rating of 'B', reflecting the notes' subordination to secured debt, including the bank credit facilities," said Standard & Poor's credit analyst Swami Venkataraman. "These priority obligations are between 15% and 30% of Reliant's total assets, allowing the unsecured notes to be rated one notch below the corporate credit rating." The corporate credit rating on Reliant Energy Inc. reflects the consolidated credit profiles of the company's retail electricity supply operations, conducted through Reliant Energy Retail, and wholesale electricity generation operations, conducted through Reliant Energy Mid-Atlantic Power Holdings LLC and Orion Power Holdings Inc. These operations have been challenged in the past few years, both from an operational and regulatory perspective. Reliant's retail supply business serves about 1.9 million primarily retail customers in Texas and contributed about 50% of operating income during 2006. About two-thirds of the customers are in the Houston metropolitan area, which demonstrates attractive demographic characteristics. The primary challenge for Reliant Energy's retail business is to consistently generate sufficient gross margins while maintaining or expanding its customer base. The wholesale business contributed about 50% of operating income during 2006, before accounting for the effect of historical wholesale hedges. Reliant's commercial capacity factor improved to 85.1% in 2006 from 82.3% in 2005, with the largest improvement coming from coal assets in Midwest Independent System Operator region. The commercial capacity factor is an indication of how much the plants actually run when it is economical to do so. ROGERS COMMUNICATIONS: Board Approves Annual Divided Increase ------------------------------------------------------------- Rogers Communications Inc.' Board of Directors has approved an increase in its annual dividend from CDN$0.16 to CDN$0.50 per share effective immediately. "This very significant increase in our annual dividend reflects our Board of Directors' continued confidence in the strategies that we have employed to position Rogers as a rapidly growing and increasingly profitable communications company," said Edward Rogers, President and CEO of Rogers Communications Inc. "These actions also recognize the importance of returning meaningful portions of the growing cash flows being generated by our business to our shareholders." The Board has approved an increase in the annual dividend from CDN$0.16 to CDN$0.50 per Class A Voting and Class B Non-Voting share effective immediately. The new quarterly dividend will be CDN$0.125 per each outstanding Class B Non-Voting share and Class A Voting share. The quarterly dividends are only payable as and when declared by the company's Board. The Board declared the first quarterly dividend at the increased rate of CDN$0.125 per share for each of the outstanding Class B Non-Voting shares and Class A Voting shares. The quarterly dividend will be paid on July 3, 2007 to shareholders of record on June 14, 2007. "The significantly increased dividends, our implementation of cash settlement for stock options and continued debt reductions combine to provide for a balanced, tax efficient and shareholder friendly allocation of a large portion of the free cash flows we expect to generate this year," said Bill Linton, Chief Financial Officer of Rogers Communications Inc. "These initiatives, together with the recently announced simplification of our legal entity structure, result in a meaningfully delevered balance sheet, the return of increasing amounts of free cash flow to shareholders, a streamlined corporate structure and the flexibility to support our continued rapid growth." About Rogers Communications Rogers Communications Inc. (NYSE: RG) -- http://www.rogers.com/-- operates as a communications and media company in Canada. It owns all of Rogers Cable Inc., a cable company, Rogers Wireless Inc., wireless operator, and Rogers Media Inc., which owns radio, TV, sports and publishing assets. All companies are headquartered in Toronto, Ontario, Canada. * * * As reported in the Troubled Company Reporter on May 18, 2007, Dominion Bond Rating Service placed BB (high) rating on Rogers Communications' Issuer Rating. SAKS INC: Fitch Affirms Issuer Default Rating at B -------------------------------------------------- Fitch Ratings has affirmed its Issuer Default Rating of Saks Incorporated at 'B' and its rating of the company's secured bank credit facility at 'BB/RR1'. In addition, Fitch has upgraded the company's senior unsecured notes to 'B+/RR3' from 'B/RR4'. The Rating Outlook has been revised to Stable from Negative. Saks had $517 million of senior unsecured notes and no bank debt outstanding as of May 5, 2007. The affirmations reflect the company's improving operating trends, recent debt reduction, and internationally recognized luxury franchise balanced against the competitive operating environment and the cyclical nature of luxury retailing. The upgrade of the senior unsecured notes reflects the improvement in the expected recovery on the notes as a result of the repayment of $96 million of the notes in a tender offer. The revision of the Outlook to Stable from Negative reflects the expectation that sales trends will remain solid and that profitability will continue to recover from currently depressed levels. Saks reported comparable store sales growth of 4.9% in 2006 and a strong 14.4% in first quarter 2007. Behind this improvement is an effort to broaden the merchandise mix by expanding the lower priced 'Saks Fifth Avenue' label, more effectively catering assortments by market, and substantially increasing inventory levels. Profitability remains sub par, with the operating margin at 0.3% in the twelve months ended May 5, 2007, but is improving as a result of merchandising improvements and cost reductions. The company has been streamlining its organizational structure, and has centralized its headquarters in New York City. Along with its corporate restructuring, Saks has reduced debt levels to bring them in line with a lower level of revenues and EBITDA. In April 2007, Saks successfully completed a tender offer for half of its $190 million of 8.25% notes due 2008, which was financed with cash on hand. Fitch expects the leverage measured by adjusted debt/EBITDAR will improve from its current level of 6 times, driven by a combination of strengthening profitability and further debt repayment. The ratings of the $500 million secured bank facility and senior unsecured notes reflect their recovery prospects. Fitch's recovery analysis assumes a liquidation value in a distressed scenario of $994 million. Applying this value across the capital structure results in outstanding recovery prospects (over 90%) for the bank facility, which is secured by inventories and certain receivables. The recovery prospects for the senior unsecured notes are good (50%-70%). Based in Birmingham, Alabama, Saks Incorporated (NYSE: SKS) -- http://www.saksincorporated.com/-- operates Saks Fifth Avenue Enterprises, which consists of 55 Saks Fifth Avenue stores, 50 Saks Off 5th stores, and Saks.com. The Company also operates 39 Parisian stores and 57 Club Libby Lu specialty stores. STANADYNE CORP: S&P Revises $65 Million Loans' Rating to B+ ----------------------------------------------------------- Standard & Poor's Ratings Services revised its ratings on Stanadyne Corp.'s $65 million term loan due 2010. The bank loan rating was revised to 'B+' (one notch above the corporate credit rating) from 'B-', and the recovery rating was revised to '1' from '3', indicating S&P's expectation that these lenders would receive full recovery in a payment default. A reassessment of some of the assumptions used in S&P's approach including a change in valuation methodology to enterprise value from discrete assets and the paydown of a portion of the term loan -- to $21 million as of March 31, 2007, from $65 million initially -- prompted these rating changes. The 'B+' bank loan rating and '1' recovery rating on Stanadyne's $35 million revolving credit facility remain unchanged. The corporate credit rating on Stanadyne is B/Stable/--. The rating reflects the company's highly leveraged financial profile and its position in cyclical and competitive markets. Ratings List Stanadyne Corp. Corporate credit rating B/Stable/-- Ratings Revised To From Term loan rating B+ B- Recovery rating 1 3 STONEPATH GROUP: Wants Involuntary Chapter 7 Case Dismissed ----------------------------------------------------------- Stonepath Group Inc. asks the Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware to dismiss an involuntary Chapter 7 case filed by three creditors, the Associated Press reports. As reported in the Troubled Company Reporter on May 11, 2007, the three petitioning creditors -- Spherion Corp., Custom Transfer Inc., and Overby Transport Inc. -- also sought the appointment of an interim trustee. According to AP, the company contends that dismissal is warranted since the petition was filed in bad faith citing that the petitioners are not even creditors of Stonepath. The company states that the three petitioners are creditors of MGR Inc. MGR is owned by Stonepath Logistics Domestic, which in turn is owned by Stonepath Group. The company also requests the Court hand an order that the petitioners pay the company's legal fees as well as any damages it may have suffered as a result of the involuntary petition, AP says. About Stonepath Group Inc. Headquartered in Seattle, Washington, Stonepath Group Inc. (OTC:SGRZ) -- http://www.stonepath.com/-- provides transportation and logistics services worldwide. The company offers various supply chain solutions to a diverse client base, including manufacturers, distributors, and retail chains. Stonepath serves a customer base of manufacturers, distributors and retail chains through its offices in 21 areas in North America, 17 in the Asia Pacific region and six in Brazil, as well as a network of international independent carriers and service partners. STONEPATH GROUP: Contests SBI's Notes Default Issuance ------------------------------------------------------ Stonepath Group, Inc., disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that it is contesting the legality of all or parts of the transactions that resulted in the issuance of the promissory notes default asserted by SBI Brightline, LLC. On April 30, 2007, the company received a notice of disposition of collateral under the Security Agreement, dated as of Aug. 31, 2005, among the company, various of its subsidiaries including Stonepath Logistics Domestic Services, Inc., and Laurus Master Fund Limited. The Notice was delivered by counsel to Mass Financial Corp., which replaced Laurus as lender under the Security Agreement by virtue of an Assignment of Loans, Liens and Loan Documents, dated as of Feb. 9, 2007. Pursuant to the Assignment, Mass Financial purchased and assumed all of Laurus's right, title and interest in and to Laurus' loans to Stonepath and the loan documents entered into in connection with such loans, together will all attendant liens, rights, claims, title, assignments and interests, including security interests, pertaining to or arising from the Loan Documents. The Notice advised that Mass Financial is in the process of negotiating specific sales of collateral foreclosed upon in connection with the April 17, 2007 notice of default under the Security Agreement. This collateral consists inter alia of the shares of Stonepath Logistics in and the assets of two subsidiaries of SLDS, United American Freight Services, Inc. and Stonepath Logistics Government Services, Inc. On May 2, 2007, the company received a notice of appointment of receivers and managers from SBI Brightline relating to the shares of Stonepath in its subsidiary Stonepath Holdings (Hong Kong) Limited. The company also relates that it has engaged legal counsel in Hong Kong. About Stonepath Group Inc. Headquartered in Seattle, Washington, Stonepath Group Inc. (OTC:SGRZ) -- http://www.stonepath.com/-- provides transportation and logistics services worldwide. The company offers various supply chain solutions to a diverse client base, including manufacturers, distributors, and retail chains. Stonepath serves a customer base of manufacturers, distributors and retail chains through its offices in 21 areas in North America, 17 in the Asia Pacific region and six in Brazil, as well as a network of international independent carriers and service partners. TANGER FACTORY: Proxy Proposal Okayed at Shareholders Meeting ------------------------------------------------------------- Tanger Factory Outlet Centers, Inc. disclosed that at its Annual Meeting of Shareholders reconvened Wednesday, May 30, 2007, proposal #4 to amend the company's articles of incorporation creating four new classes of preferred shares, each class having four million shares with a par value of $.01 per share, was approved by a majority of the votes cast by the holders of its common shares and a majority of the votes cast by the Class C Preferred Shares voting as a class. As previously disclosed, the Annual Meeting of Shareholders had been adjourned in order to give all shareholders the benefit of additional time to vote. Due to the non-routine nature of this proposal, brokers were not allowed to vote on behalf of their clients. Headquartered in Greensboro, North Carolina, Tanger Factory Outlet Centers, Inc. (NYSE: SKT) -- http://www.tangeroutlet.com/-- is an integrated, self-administered and self-managed publicly traded REIT. At Dec. 31, 2006, the company had 30 wholly owned centers in 21 states totaling 8.4 million square feet of total gross leasable area, as compared with 31 centers in 22 states totaling 8.3 million square feet of GLA as of Dec. 31, 2005. * * * Tanger Factory Outlet Centers Inc. carries Moody's Ba1 preferred stock rating. TRIAD HOSPITALS: Launches Offer for 7% Senior Notes --------------------------------------------------- Triad Hospitals, Inc. has commenced a cash tender offer for any and all of its outstanding: (i) $600 million aggregate principal amount of 7% Senior Notes due 2012 and (ii) $600 million aggregate principal amount of 7% Senior Subordinated Notes due 2013, on the terms and subject to the conditions set forth in the company's Offer to Purchase and Consent Solicitation Statement dated May 31, 2007. The company is also soliciting consents to certain proposed amendments to the indentures governing the Notes to, among other things, eliminate substantially all of the restrictive covenants, eliminate or modify certain events of default and certain conditions to defeasance of the Notes and eliminate or modify related provisions contained in the indentures and the Notes. The tender offer documents more fully set forth the terms of the tender offer and consent solicitation. The tender offer and the consent solicitation are being made in connection with, and are conditioned upon, among other things, the consummation of the merger under the previously announced merger agreement among the Company, Community Health Systems, Inc. and FWCT-1 Acquisition Corporation. The tender offer will expire at 12:00 midnight, New York City time, on June 27, 2007, unless extended or earlier terminated by the company. The company reserves the right to terminate, withdraw or amend the tender offer and consent solicitation at any time subject to applicable law. The total consideration for each $1,000 principal amount of Notes validly tendered and not withdrawn prior to the Consent Date, and accepted for purchase pursuant to the tender offer will be determined as specified in the tender offer documents and will be equal to the present value, minus accrued interest, on the applicable payment date for the tender of Notes of, (a) with respect to the Senior Notes, (i) $1,035.00 and (ii) the remaining scheduled interest payments on such Senior Notes after the payment date for the tender of Senior Notes to May 15, 2008, in each case determined on the basis of a yield to the Senior Notes Redemption Date equal to the sum of (A) the yield on the 5.625% U.S. Treasury note due May 15, 2008, as calculated by Credit Suisse Securities (USA) LLC and Wachovia Securities, acting as dealer managers, in accordance with standard market practice, based on the bid side price for the Senior Notes Reference Treasury Security on the price determination date, as described in the tender offer documents, plus (B) a fixed spread of 50 basis points, and (b) with respect to the Senior Subordinated Notes, (i) $1,035.00 and (ii) the remaining scheduled interest payments on such Senior Subordinated Notes after the payment date for the tender of Senior Subordinated Notes to November 15, 2008, in each case determined on the basis of a yield to the Senior Subordinated Notes Redemption Date equal to the sum of (A) the yield on the 4.375% U.S. Treasury note due November 15, 2008, as calculated by Credit Suisse and Wachovia Securities, acting as dealer managers, in accordance with standard market practice, based on the bid side price for the Senior Subordinated Notes Reference Treasury Security on the price determination date, as described in the tender offer documents, plus (B) a fixed spread of 50 basis points. The company will pay accrued and unpaid interest up to, but not including, the applicable payment date. Each holder who validly tenders its Notes and delivers consents on or prior to 5:00 p.m., New York City time, on June 13, 2007 will be entitled to a consent payment, which is included in the total consideration above, of $30 for each $1,000 principal amount of Notes tendered by such holder if such Notes are accepted for purchase pursuant to the tender offer. Holders who tender Notes are required to consent to the proposed amendments to the indenture and the Notes. Any tender of Notes prior to the Consent Date may be validly withdrawn and consents may be validly revoked at any time prior to the Consent Date, but not thereafter except under limited circumstances. The proposed amendments will not become effective, however, until at least a majority in aggregate principal amount of the outstanding Notes, whose holders have delivered consents to the proposed amendments, have been accepted for payment. Holders who tender Notes after the Consent Date will not receive the consent payment. Pursuant to the tender offer and consent solicitation documents, the company has reserved the right to accept for purchase at any time following the Consent Date but prior to the Expiration Date all Notes then validly tendered. If the company elects to exercise this option, it will pay for such Notes on a date promptly following the Early Acceptance Time. On the Early Payment Date, the Company will also pay accrued and unpaid interest up to, but not including, the Early Payment Date on the Notes accepted for purchase. Subject to its right to exercise this early acceptance option, the Company currently expects to accept for purchase, and pay the total consideration, as to all Notes tendered prior to the Consent Date, and the tender offer consideration, which is the total consideration less the cash consent payment, as to all Notes tendered after the Consent Date, with respect to, all validly tendered Notes on a date promptly following the Expiration Date. The company's obligation to accept for purchase, and to pay for, Notes validly tendered and not withdrawn pursuant to the tender offer and the consent solicitation is subject to the satisfaction or waiver of certain conditions, including, among others, the satisfaction of all conditions to the consummation of the merger under the Merger Agreement and consummation thereof, CHS or an affiliate of CHS having issued up to $3.365 billion of debt, the company having sufficient available funds to pay the total consideration with respect to all Notes and the receipt of sufficient consents with respect to the proposed amendments to the indentures and the Notes. Following the consummation of the merger, the company intends to finance the purchase of the Notes and related fees and expenses with a portion of the proceeds from the proposed issuance of the New Debt by CHS or an affiliate of CHS. The complete terms and conditions of the tender offer and the consent solicitation are set forth in the tender offer documents which are being sent to holders of Notes. Holders of Notes are urged to read the tender offer documents carefully. Credit Suisse and Wachovia Securities have been retained to act as Dealer Managers in connection with the tender offer and consent solicitation. Questions about the tender offer and consent solicitation may be directed to Credit Suisse at (212) 325-7596 (collect) or Wachovia Securities at (866) 309- 6316 (toll free) or (704) 715-8341 (collect). Copies of the tender offer documents and other related documents may be obtained from D.F. King & Co., Inc., the information agent for the tender offer and consent solicitation, at (800) 967-7921 (toll free) or (212) 269-5550 (collect). About Triad Hospitals Triad Hospitals Inc. (NYSE TRI) -- http://www.triadhospitals.com/ -- through its affiliates, owns and manages hospitals and ambulatory surgery centers in small cities and selected larger urban markets. The company currently operates 54 hospitals (including one under construction) and 13 ambulatory surgery centers in 17 states and Ireland with approximately 9,855 licensed beds. In addition, through its QHR subsidiary, the company provides management and consulting services to independent general acute care hospitals located throughout the United States. * * * As reported in the Troubled Company Reporter on March 22, 2007, Standard & Poor's reported that its B+ corporate credit rating on Triad Hospitals Inc. remains on CreditWatch with negative implications, where it was originally placed on Feb. 5, 2007. TRIBUNE CO: Names Howard Greenberg as Sun Sentinel Pres. & CEO -------------------------------------------------------------- Tribune Company's division, Tribune Publishing has named Howard Greenberg as president and chief executive officer of Sun Sentinel Company, and publisher of the South Florida Sun-Sentinel. Mr. Greenberg succeeds Robert Gremillion, who has been promoted to executive vice president of Tribune Publishing. The changes are effective immediately. Greenberg has served as senior vice president/general manager at Sun-Sentinel Company since April 2005, overseeing the circulation, marketing, operations, technology, niche publications and finance and planning divisions. Recently, he has also been responsible for overseeing the company's advertising and human resources divisions. "Howard's talent, dedication and familiarity with the Sun-Sentinel and South Florida, established during 23 years with the newspaper, make him the ideal person to step into this position," said Mr. Gremillion. "He has the respect of his colleagues, and he knows and understands the community." Greenberg held a variety of management positions in circulation and operations at the Sun-Sentinel between 1984 and 2005, when he was named to his current role. "I'm excited to have the opportunity to lead an organization that is valued in the community," Mr. Greenberg said. "I look forward to working with the entire Sun-Sentinel team in serving the company's readers and advertisers." As executive vice president/Tribune Publishing, Mr. Gremillion will oversee four of the company's newspapers: South Florida Sun- Sentinel, Orlando Sentinel, Baltimore Sun and Hartford Courant. He will report directly to Dennis FitzSimons, Tribune's chairman, president and chief executive officer. "These last 10 years have been the most exciting of my career," Mr. Gremillion said. "I will miss waking up every day as the publisher of the Sun-Sentinel. I'm gratified, though, to leave it in good hands with Howard and the strong team we've developed there." Gremillion has served as president, publisher and chief executive officer of Sun-Sentinel Company since April 1997; he took on oversight responsibility for the Baltimore Sun and the Hartford Courant in May 2005. Prior to that, he was vice president and general manager of Tribune Regional Programming from 1990 to 1997, and oversaw the launch of CLTV in Chicago, one of the nation's first 24-hour local news and information cable channels. Mr. Gremillion joined Tribune in 1983 when the company acquired WGNO- TV in New Orleans. He served as WGNO's station manager from 1985 to 1992. "Bob's forward-looking leadership at the Sun-Sentinel produced outstanding results," FitzSimons said. "In addition, the experience he's gained in 23 years as a key member of the company's publishing, interactive and broadcast groups makes him uniquely qualified for this important new role." About Tribune Company Headquartered in Chicago, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is one of the country's top media companies, operating businesses in publishing, interactive and broadcasting. It reaches more than 80% of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, Newsday (Long Island, NY), The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant. The company's broadcasting group operates 23 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. * * * As reported in the Troubled Company Reporter on April 25, 2007, Moody's Investors Service downgraded Tribune Company's Corporate Family rating to Ba3 from Ba1, existing senior unsecured notes to B2 from Ba1, and subordinated notes to B2 from Ba2. The rating actions reflect the significant increase in leverage that will result from Tribune's repurchase of approximately $4.2 billion of common stock through a tender offer in the first step of its plan to go private, and that the increase in leverage is occurring at a time of pressure on Tribune's advertising revenue and operating margins. TRICADIA CDO: Moody's Rates $7 Million Class F Sec. Notes at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Tricadia CDO 2007-8, Ltd.: (1) Aaa to the $328,000,000 Class A-1VF Variable Funding Senior Secured Floating Rate Notes Due 2052; (2) Aaa to the $7,700,000 Class A-X Notes Due 2014; (3) Aaa to the $65,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2052; (4) Aa2 to the $43,000,000 Class B Senior Secured Floating Rate Notes Due 2052; (5) A2 to the $25,000,000 Class C Secured Floating Rate Deferrable Notes Due 2052; (6) Baa2 to the $19,000,000 Class D Secured Floating Rate Deferrable Notes Due 2052; (7) Baa3 to the $7,200,000 Class E Secured Floating Rate Deferrable Notes Due 2052; and (8) Ba2 to the $7,000,000 Class F Secured Floating Rate Deferrable Notes Due 2052. 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. The ratings are also based upon the transaction's legal structure and the characteristics of the collateral pool. Tricadia CDO Management, LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. TRM CORP: PricewaterhouseCoopers Raises Going Concern Doubt ----------------------------------------------------------- PricewaterhouseCoopers LLP raised substantial doubt about TRM Corporation's ability to continue as a going concern. The auditors related to a net loss for 2006 resulting in the company's inability to meet certain financial covenants of its financing agreement with GSO Origination Funding Partners LP and other lenders. The going concern was also based on the company's projections that it does not expect to meet the required financial covenants during 2007, which may render the debt callable by the lenders and trigger the cross-default provisions in TRM Funding Trust's Loan and Serving Agreement. During January 2007, the company sold its Canadian, United Kingdom and German ATM businesses and its United States photocopy business and used $98.5 million from the proceeds of those sales to make principal and interest payments under the GSO loans, leaving a remaining balance of principal plus accrued interest of $2 million. Additionally, on May 15, 2007, the company entered into a waiver with the lenders under the financing agreement with GSO whereby the lenders waived the consolidated EBITDA requirements for the calendar months ended Dec. 31, 2006, Jan. 31, 2007, Feb. 28, 2007, and March 31, 2007. About TRM Corporation Headquartered in Portland, Oregon, TRM Corporation (Nasdaq: TRMM) -- http://www.trm.com/-- is a consumer services company that provides convenience ATM services in high-traffic consumer environments. TRM's ATM customer base is widespread, with retailers throughout the United States. URS CORP: Moody's May Cut Ba1 Rating on Washington Acquisition -------------------------------------------------------------- Moody's Investors Service placed the Ba1 Corporate Family Rating and other instrument ratings of URS Corporation on review for downgrade following its announcement that a definitive agreement for the acquisition of Washington Group International, Inc. was signed. The cash and stock transaction valued at approximately $2.6 billion is expected to close in the second half of 2007. While the details of the financing package have not been finalized, it is expected to contain a significant amount of debt and have a substantial negative impact on credit metrics. Preliminary pro forma estimates for the transaction indicate leverage increasing to over 3.0 times and total debt increasing to approximately $1.5 billion prior to Moody's adjustments. Moody's review will focus primarily on the financing for the transaction, impact on credit metrics and liquidity, and the plan for integration and debt reduction. These ratings were placed under review for downgrade: -- The Baa3 $300 million senior secured revolver due 2010 (LGD2, 20%); -- The Baa3 $350 million senior secured term loan due 2011 (LGD2, 20%); -- The Ba1 Corporate Family Rating; -- The Ba1 Probability of Default Rating. The SGL-1 Speculative Grade Liquidity Rating will be reviewed upon the close of the transaction. Based in San Francisco, California, URS Corporation is an engineering firm that provides a range of professional planning, design, program and construction management, and operations and maintenance services. Revenues for the twelve months ended March 30, 2007 were approximately $4.4 billion. Based in Boise, Idaho, Washington Group International, Inc. provides design, engineering, construction, facilities and operations management, environmental remediation, and mining services to public and private sector clients in the United States and internationally. It operates through six segments: Power, Infrastructure, Mining, Industrial/Process, Defense, and Energy & Environment. Revenues for the 12 months ended March 30, 2007 were approximately $3.4 billion. WESTCHESTER CLO: S&P Rates $37.5 Million Class E Notes at BB ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary ratings to Westchester CLO Ltd./Westchester CLO Corp.'s $920 million floating-rate notes. The preliminary ratings are based on information as of May 30, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The credit enhancement provided to each class of notes through the subordination of cash flows to the more junior classes and preference shares; -- The transaction's cash flow structure, which was subjected to various stresses requested by Standard & Poor's; -- The collateral manager's experience; and -- The transaction's legal structure, including the issuer's bankruptcy remoteness. Preliminary Ratings Assigned Westchester CLO Ltd./Westchester CLO Corp. Class Rating Amount ----- ------ ------ A-1-A AAA $570,500,000 A-1-B AAA $142,500,000 B AA $80,000,000 C A $53,500,000 D BBB $36,000,000 E BB $37,500,000 Preference NR $80,000,000 shares NR - Not rated. * Barclays Settles SEC Insider Trading Suit ------------------------------------------- Barclays Bank PLC and Steven J. Landzberg, a former proprietary trader for Barclays' U.S. Distressed Debt Desk, has agreed to settle a civil action filed by the U.S. Securities and Exchange Commission. The complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Barclays and Mr. Landzberg engaged in securities fraud through a pattern of illegal insider trading. According to the complaint, Barclays and Mr. Landzberg illegally traded millions of dollars of bond securities over 18 months, while aware of material nonpublic information received through six creditors committees. Mr. Landzberg simultaneously served as Barclays' representative on the creditors committees and as its proprietary trader. Mr. Landzberg signed confidentiality agreements and committee bylaws on Barclays' behalf, and received material nonpublic information concerning the financial condition and prospects of the issuers, their most recent business plans, detailed management projections, contemplated financing alternatives, proprietary advisor analyses, and the timing and terms of proposed plans of reorganization. Between March 2002 and September 2003, the repeated illegal insider trading by Barclays and Mr. Landzberg breached fiduciary and other duties of trust or confidence. The complaint alleges that Barclays and Mr. Landzberg misappropriated material nonpublic information by failing to disclose any of their trades to the creditors committees, issuers, or other sources of such information. In a few instances, Mr. Landzberg used purported "big boy letters" to advise his bond trading counterparties that Barclays may have possessed material nonpublic information. However, in no instance did Barclays or Mr. Landzberg disclose the material nonpublic information received from creditors committees to their bond trading counterparties. Three of the six committees were official unsecured creditors committees appointed by the Office of the United States Trustee under the auspices of the federal bankruptcy courts. Barclays served as "Chair" of two of these bankruptcy committees at the time of its illegal insider trading. The complaint further alleges that Barclays' senior management authorized Mr. Landzberg to buy and sell securities for Barclays' account while he served on bankruptcy creditors committees. Barclays' Compliance personnel failed to prevent the illegal insider trading, despite receiving notice that the proprietary desk had nonpublic information and should have been restricted from trading. Barclays and Mr. Landzberg each consented, without admitting or denying the allegations in the Commission's complaint, to entry of final judgments permanently enjoining them from violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. To settle the SEC's insider trading charges, Barclays also consented to entry of a court order requiring it to pay over $10.94 million: disgorgement of $3,971,736, prejudgment interest of $971,825, and a civil money penalty of $6,000,000. To settle the Commission's charges against him, Mr. Landzberg further consented to be permanently enjoined from participation in any creditors committee in any federal bankruptcy proceeding involving an issuer of securities, and to pay a civil money penalty of $750,000. * BOOK REVIEW: American Arbitration: Its History, Functions and Achievements --------------------------------------------------------------- Author: Frances Kellor Publisher: Beard Books Paperback: 280 pages List Price: $34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1893122581/internetbankrupt The book American Arbitration: Its History, Functions and Achievements is written by Frances Kellor. It covers the rise of the American Arbitration Association and the beginnings of the important role that arbitration has come to play in the commercial arena. This book makes for interesting reading as it traces the two pioneer organizations that consolidated in 1926 to form the American Arbitration Association. The role and influence of the Association in its first twenty years of existence are noteworthy as the book covers the practice of American arbitration and the American concept and organization of international commercial arbitration. The final chapter is devoted to the builders of American arbitration. ********* 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, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, John Paul C. Canonigo, 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 ***