text: TCR_Public/050928.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, September 28, 2005, Vol. 9, No. 230 Headlines360NETWORKS: Settles Dispute Over AboveNet Communications' ClaimsACTIVANT SOLUTIONS: Plans $140-Mil. Private Senior Debt PlacementACTIVANT SOLUTIONS: S&P Affirms B+ Sr. Secured Debt RatingADELPHIA COMMS: MacKay Shields Resigns from Creditors CommitteeADELPHIA COMMS: Stipulation on Transfer Accounting Dispute OkayedADELPHIA COMMS: Sells Three Real Estate Parcels for $721,000ALLIED HOLDINGS: Equity Deficit Triples to $127.4MM in Six MonthsAMERICAN EASTERN: Case Summary & 20 Largest Unsecured CreditorsANCHOR GLASS: Panel Opposes Glenshaw's Bid to Recover Glass MoldsAPARTMENTS AT TIMBER: Pleiss Okayed as Ch. 11 Trustee's AccountantAQUILA INC: Selling Selected Utility Assets for $896.7 MillionASARCO LLC: Wants Lehman as Financial Advisor & Investment BankerASARCO LLC: Wants HR&A as Tort Claims ConsultantASARCO LLC: Govt. Wants CERLA Trial Upheld in Idaho District CourtATA AIRLINES: Wants Court Nod on Goodrich Corp. SettlementBEAZER HOMES: Registers $3M+ Convertible Senior Notes for ResaleBELDEN & BLAKE: Extends Tender Offer for Sr. Sec. Notes to Oct. 12BUDGET GROUP: Administrator Asks for Decree Closing Ch. 11 CaseCAPELLA HEALTHCARE: Moody's Junks $58 Million Sr. Sec. Term LoanCAPELLA HEALTHCARE: S&P Junks $58 Mil. Proposed Sr. Secured DebtCATHOLIC CHURCH: Court Sets Status Conference Schedule in PortlandCENTURY/ML: Century & ML Media Inks Estate Administration AccordCENTURY/ML: Court OKs Stipulation on Transfer Accounting DisputeCERVANTES ORCHARDS: Deere Credit Won't Allow Cash Collateral UseCHOICE FINANCIAL: Case Summary & 13 Largest Unsecured CreditorsCOIN BUILDERS: Case Summary & 20 Largest Unsecured CreditorsCOLLINS & AIKMAN: GM Wants to Recover Tooling EquipmentCOMPOSITE TECH: Selling $6 Million Notes Via Private PlacementCORNERSTONE PRODUCTS: Panel Taps FTI as Financial AdvisorCUMMINS INC: Plans to Repay $250 Million 9-1/2% Notes in Dec. 2006DAP HOLDING: Section 304 Petition SummaryDRUGMAX INC: Wells Fargo Commits $65 Million in New FinancingDRUGMAX INC: Has Until Oct. 24 to Comply with Nasdaq RequirementsDURANGO GEORGIA: Paper Mill & Timberland to be Auctioned on Dec. 6DURA OPERATING: Moody's Junks $856 Million Senior Notes' RatingsELITE GAMING: Case Summary & 8 Largest Unsecured CreditorsENRON CORP: Agrees to Allow ECP Claims for $12 MillionENRON CORP: Wants Court Nod on Potomac Settlement AgreementENTERGY NEW ORLEANS: Court Approves Interim DIP FacilityESCHELON TELECOM: Registers 1.6-Mil Common Shares for DistributionFEDERAL-MOGUL: Inks Pact Resolving Dispute with UK AdministratorsFEDERAL-MOGUL: Alan Haughie Appointed as Chief Accounting OfficerFIBERMARK INC: Files Revised Plan to Reflect New Bondholders PactFIDELITY NATIONAL: Schedules Equity Distribution on Oct. 17FLYI INC: Cuts Service & Scours for Financing to Avert BankruptcyFOAMEX INT'L: Final DIP Financing Hearing Set for October 17FOAMEX INT'L: Court Allows Continued Use of Existing Bank AccountsFOAMEX INT'L: Court Okays Continued Use of Cash Management SystemGENERAL MOTORS: Fitch Lowers Rating One Notch to BB From BB+GMAC: Fitch Downgrades Senior Unsecured Rating to BBHEILIG-MEYERS: Wachovia Bank Says Plan Shouldn't Be ConfirmedHILLMAN COS: AMEX Accepts Plan for Continued Listing ComplianceHOME PRODUCTS: McGladrey & Pullen Replaces KPMG as AuditorsHORNBECK OFFSHORE: Selling Debt & Equity in Private & Public DealsINSEQ CORP: Acquires Separation and Recovery in All-Stock DealINTERNATIONAL PAPER: Sells Carter Holt Equity Stake for $1.14BINTERSTATE BAKERIES: Asks Court to Okay Nestle Purina AgreementJACOBS INDUSTRIES: Case Summary & 80 Largest Unsecured CreditorsJERNBERG INDUSTRIES: Retiree Panel Taps Fagelhaber LLC as CounselKAIRE HOLDINGS: Registers 84 Million Common Shares for ResaleKAISER ALUMINUM: Asks Court to Extend Deadline to Remove ActionsKEY3MEDIA GROUP: Wants Until Dec. 31 to Object to ClaimsLEINER HEALTH: Completes Credit Agreement Amendment with LendersLIN TV: Subsidiary Selling $190 Mil. Notes Via Private PlacementMD BEAUTY: S&P Revises Outlook to Negative from StableMEDICALCV INC: Files Supplemental Prospectus on 63 Million SharesMELLON RESIDENTIAL: Fitch Junks Rating on Class B-5 CertificatesMETALFORMING TECHNOLOGIES: Court Approves $25 Mil. Sale to ZoharMETALFORMING TECH: Creditors Must File Proofs of Claim By Oct. 20METROPOLITAN MORTGAGE: Court Approves Amended Disclosure StatementMETROPOLITAN MORTGAGE: SEC Sues Four Former Executives for FraudMETROPOLITAN MORTGAGE: Sues PwC for Negligence in Audit WorkMIRANT CORP: Selling Washington Power Unit to Longview for $17.2MMIRANT CORP: Bowline Gets Court OK to Recover $4.9M from InsurerMOLECULAR DIAGNOSTICS: CFO Dennis L. Bergquist ResignsNATIONAL BENEVOLENT: Sues Weil Gotshal to Reduce Bankruptcy CostsNAVIGATORS GROUP: S&P Assigns Preliminary BB+ Pref. Stock RatingNEIMAN MARCUS: Fitch Places Issuer Default Rating at B-NORTH AMERICAN: Files Amended Plan & Disclosure StatementNORTHWEST AIRLINES: Common Stock Stops Trading on NASDAQNORTHWEST AIRLINES: UST Meeting to Form Committees Friday MorningNORTHWEST AIRLINES: Adjusts CEO Steenland Employment AgreementNRG ENERGY: Continues Stock Repurchase ProgramON TOP: Gets Court Nod to Employ Thomas Lackey as Local CounselPIPE CREEK: Case Summary & 34 Largest Unsecured CreditorsPROTOCOL SERVICES: Unsecured Creditors May Recover 7.5% of ClaimsPROTOCOL SERVICES: Gets Court Nod to Use $3.3 Mil. Cash CollateralPROTOCOL SERVICES: Wants Until Nov. 30 to Assume or Reject LeasesRAVEN MOON: Registers 3.7 Billion Common Shares for ResaleRELIANCE GROUP: Court OKs Gage Spencer as Panel's Special CounselRIVER CITY: Case Summary & 20 Largest Unsecured CreditorsRUSSELL CORP: Moody's Downgrades Sr. Unsecured Debt Rating to B2SAINT VINCENTS: Has Full Access to $100 Million HFG DIP FacilitySANDERS FARMS: Case Summary & 10 Largest Unsecured CreditorsSILICON GRAPHICS: Wants to Save $100 Million Through RestructuringSILICON GRAPHICS: Balance Sheet Upside-Down by $191MM by June 24TECHNEGLAS INC: Ohio EPA Wants Chapter 11 Plan RejectedTOWER AUTOMOTIVE: Inks Settlement Agreement With UNOVA IndustrialTOWER AUTOMOTIVE: Two Utility Companies Press for DepositsTRAINER WORTHAM: Fitch Affirms BB Rating on $16 Mil. Pref. SharesUAL CORP: Contrarian Funds Buys Air Serv's $450,000 ClaimUSA MOTOR: Case Summary & 20 Largest Unsecured CreditorsUS AIRWAYS: Completes Merger With America West AirlinesWESTPOINT STEVENS: Motion to Dismiss Chapter 11 Cases Draws FireWILLIAMS COS: Inks $700-Mil Credit Pacts with Citicorp & CitibankWORLDCOM INC: Asks Court to Reject William Brown's Class ClaimWORLD HEALTH: Warns of Possible Bankruptcy Due to Financial Woes* Juan Manuel Trujillo Joins Sheppard Mullin as NY Finance Partner* Upcoming Meetings, Conferences and Seminars *********360NETWORKS: Settles Dispute Over AboveNet Communications' Claims-----------------------------------------------------------------Before the Petition Date, AboveNet Communications, Inc., formerlyknown as Metromedia Fiber Network Services, Inc., and 360networks(USA), Inc., entered into two agreements: 1. Collocation Agreement, dated July 6, 1998, as amended; and 2. Joint Build Agreement, dated May 1, 2000, together with any and all ancillary or related agreements executed by the parties.Pursuant to the Agreements, the Debtors were obligated to payAboveNet for, among others things, the licensing of dedicatedfiber optic strands upon AboveNet's fiber optic communicationsnetwork, and work related to the construction of portions of afiber optic network.On May 1, 2002, AboveNet filed Claim No. 1037. Pursuant to aprevious Court order, Claim No. 1037 was allowed in a reducedamount equal to $499,173. AboveNet disputed the reduction.On October 2, 2002, the Debtors rejected the Agreements withAboveNet pursuant to a Court order.In accordance with the Debtors' Plan of Reorganization, AboveNetreceived 1,688 shares of the common stock of 360networks(Holdings) Ltd., on account of Claim No. 1037.AboveNet then filed two unsecured non-priority claims aggregatingover $7.62 million.However, the Debtors point out that AboveNet's Additional Claimsinclude duplicative amounts. Furthermore, the Debtors note thatAboveNet's remaining claims in their Chapter 11 cases do notexceed $7.62 million. The Debtors also believe that they haveother defenses to the Additional Claims.To fully resolve the disputes, the parties agree, with theCourt's consent, that: (a) The Additional Claims -- Claim Nos. 1846 and Claim No. 1850 -- will be combined and will be known as Claim No. 1846; (b) Claim No. 1846 will be reduced and allowed as a General Unsecured Claim for $4,000,000; and (c) All other claims that have been or may have been asserted in the Debtors' Chapter 11 cases by AboveNet, excluding Claim No. 1037, are disallowed.Headquartered in Vancouver, British Columbia, 360networks, Inc. --http://www.360.net/-- is a leading independent provider of fiber optic communications network products and services worldwide. TheCompany and its 22 debtor-affiliates filed for chapter 11protection on June 28, 2001 (Bankr. S.D.N.Y. Case No. 01-13721),obtained confirmation of a plan on October 1, 2002, and emergedfrom chapter 11 on November 12, 2002. Alan J. Lipkin, Esq., andShelley C. Chapman, Esq., at Willkie Farr & Gallagher, representthe Company before the Bankruptcy Court. When the Debtors filedfor protection from its creditors, they listed $6,326,000,000 inassets and $3,597,000,000 in liabilities. (360 Bankruptcy News,Issue No. 87; Bankruptcy Creditors' Service, Inc., 215/945-7000)ACTIVANT SOLUTIONS: Plans $140-Mil. Private Senior Debt Placement-----------------------------------------------------------------Activant Solutions Inc. intends to privately place $140 millionprincipal amount of floating rate senior notes due 2010, and thatits parent holding company, Activant Solutions Holdings Inc.,intends to privately place $40 million principal amount of seniorfloating rate pay-in-kind notes due 2011, in each case subject tomarket and other conditions and pursuant to Rule 144A andRegulation S under the Securities Act of 1933, as amended. Theproceeds of the private offerings are expected to be used to repaybridge loans incurred in connection with Activant's acquisition ofProphet 21, Inc., on Sept. 13, 2005.As reported in the Troubled Company Reporter on Sept. 22, 2005,the Company obtained the necessary funds to finance theacquisition by P21 Merger Corporation of Prophet 21 through cashon hand, a capital contribution from Activant Solutions Holdingsand $140 million through borrowings under a senior unsecuredbridge loan.P21 Merger is the Company's wholly owned subsidiary. The totalconsideration paid pursuant to the Agreement and Plan of Mergerwas approximately $215 million.The notes have not been registered under the Securities Act of1933 and may not be offered or sold in the United States, absentregistration or an applicable exemption from such registrationrequirements.Activant Solutions Inc. -- http://www.activant.com/-- is a technology provider of vertical ERP solutions servicing theautomotive aftermarket, hardware and home center, wholesale trade,and lumber and building materials industry segments. Over 20,000wholesale, retail and manufacturing customer locations useActivant to help drive new levels of business performance. Withproven experience and success, Activant is fast becoming anindustry standard for companies seeking competitive advantagethrough stronger customer integration. * * *As reported in the Troubled Company Reporter on Aug. 22, 2005,Moody's Investors Service has placed these ratings of the ActivantSolutions Inc. under review for possible downgrade. * B2 rating on $120 million senior unsecured notes, due 2010 * B2 rating on $157 million (face value) senior unsecured notes due 2011; and * B1 Corporate Family RatingAs reported in the Troubled Company Reporter on Mar. 2, 2005,Standard & Poor's Ratings Services assigned its 'B+' debt ratingto Austin, Texas-based Activant Solutions Inc.'s proposed$120 million senior unsecured floating rate notes.At the same time, Standard & Poor's affirmed its 'B+' corporatecredit and senior unsecured debt ratings.The proposed floating rate notes are rated the same as thecorporate credit rating, because of the minimal amount of secureddebt, a $15 million revolving credit facility, in the capitalstructure. Proceeds from the proposed floating rate notes willprimarily be used to fund the acquisition of SpeedwareCorporation, which was announced in January 2005. S&P says theoutlook is stable.ACTIVANT SOLUTIONS: S&P Affirms B+ Sr. Secured Debt Rating----------------------------------------------------------Standard & Poor's Ratings Services announced that it affirmed its'B+' corporate credit and senior unsecured debt ratings on Austin,Texas-based Activant Solutions Inc.The ratings were removed from CreditWatch, where they were placedwith negative implications on Aug. 17, 2005, following theannouncement that Activant would acquire Prophet 21, a leadingtechnology solutions provider to the wholesale distributionmarket, for approximately $215 million.At the same time, Standard & Poor's assigned its 'B+' debt ratingto the proposed $140 million senior unsecured floating rate notes,which will have essentially the same terms as the existingfloating rate notes, and its 'B-' debt rating to the proposed $40million senior PIK notes, which will be an obligation of ActivantSolutions Holdings Inc., and will be structurally subordinated toall indebtedness of Activant Solutions Inc. The outlook is nownegative."The ratings affirmation reflects Standard & Poor's expectationthat Activant's highly visible and recurring revenue base,combined with consistent EBITDA margins in the mid-20% area, willlead to continued modest free operating cash flow generation andan improved financial profile over the intermediate term," saidStandard & Poor's credit analyst Ben Bubeck.The negative outlook, however, reflects the increased pace ofacquisition activity and inherent integration risks, combined withdebt leverage that is high for the current rating level.The ratings on Activant reflect its narrow business profile,acquisitive growth strategy and limited liquidity. These are onlyoffset partly by a leading position in its addressed verticalmarkets, a significant amount of recurring revenue, and consistentprofitability.Activant is a leading provider of business management software andsolutions to the retail hardware and home centers, lumber andbuilding materials, and wholesale trade markets, along with theautomotive aftermarket.Following the Prophet 21 acquisition (and the Speedwareacquisition earlier this year) the company has established a solidpresence in the wholesale trade vertical. Pro forma for theproposed floating rate notes and senior subordinated PIK notes,the company had approximately $473 million of operating lease-adjusted total debt as of June 2005.ADELPHIA COMMS: MacKay Shields Resigns from Creditors Committee---------------------------------------------------------------Deirdre A. Martini, the United States Trustee for Region 2,advises the U.S. Bankruptcy Court for the Southern District of NewYork that MacKay Shields, LLC, is no longer a member of theOfficial Committee of Unsecured Creditors of AdelphiaCommunications Corp., et al. The Creditors Committee is nowcomposed of eight members: 1. Appaloosa Management, LP 26 Main Street Chatham, NJ 07928 Attn: James Bolin Phone: (973) 701-7000 Fax: (973) 701-7309 2. W. R. Huff Asset Management Co., LLC 67 Park Place Morristown, NJ 07960 Attn: Edwin M. Banks, Senior Portfolio Manager Phone: (973) 984-1233 Fax: (973) 984-5818 3. Law Debenture Trust Company of New York 767 Third Avenue, 31st Floor New York, New York 10017 Attn: Daniel R. Fisher, Senior Vice President Phone: (212) 750-6474 Fax: (212) 750-1361 4. U.S. Bank National Association, as Indenture Trustee One Federal Street Boston, Massachusetts 02110 Attn: Laura L. Moran Phone: (617) 603-6429 Fax: (617) 603-6640 - and - U.S. Bank National Association, as Indenture Trustee 60 Livingstone Avenue St. Paul, Minnesota 55107 Attn: Timothy J. Sandell Phone: (651) 495-3959 Fax: (651) 495-8100 5. Sierra Liquidity Fund, LLC 2699 White Road, Suite 255 Irvine, CA 92614 Attn: Jim Riley, Esq. Phone: (949) 660-1144 Fax: (949) 660-0632 6. Wilmington Trust Company, as Indenture Trustee 1100 North Market Street Wilmington, Delaware 19890 Attn: Suzanne J. MacDonald Phone: (302) 636-6000 Fax: (302) 636-4143 7. Tudor Investment Corporation 15303 Ventura Boulevard, Suite 900 Sherman Oaks, CA 91403 Attn: Mr. Darryl A. Schall Phone: (818) 380-3065 Fax: (203) 552-6248 8. Highfields Capital Management 200 Clarendon Street, 51st Floor Boston, MA 02116 Attn: Mr. Richard Grubman Phone: (617) 850-7500 Fax: (617) 850-7610Headquartered in Coudersport, Pennsylvania, AdelphiaCommunications Corporation (OTC: ADELQ) is the fifth-largest cabletelevision company in the country. Adelphia serves customers in30 states and Puerto Rico, and offers analog and digital videoservices, high-speed Internet access and other advanced servicesover its broadband networks. The Company and its more than 200affiliates filed for Chapter 11 protection in the SouthernDistrict of New York on June 25, 2002. Those cases are jointlyadministered under case number 02-41729. Willkie Farr & Gallagherrepresents the ACOM Debtors. (Adelphia Bankruptcy News, IssueNo. 107; Bankruptcy Creditors' Service, Inc., 215/945-7000)ADELPHIA COMMS: Stipulation on Transfer Accounting Dispute Okayed-----------------------------------------------------------------Adelphia Communications Corp., its wholly owned, indirectsubsidiary Debtor Century Communications Corp., Debtor Century/MLCable Venture, Century/ML Cable Corporation and ML MediaPartners, L.P., want to complete the consolidated auditedfinancial statements of Century/ML, which include the accounts ofCable Corp.On March 28, 2002, approximately $25 million was transferred fromthe bank accounts of Cable Corp. to the bank accounts of Centuryand ACOM. At the time of the Transfer, Century/ML and CableCorp. had consolidated liabilities to Century and ACOM of atleast $25 million.Disputes have arisen between Century and ACOM, on one side, andML Media, on the other, regarding: -- how to account for the Transfer, -- the effect of the Transfer on the Financial Statements, and -- other matters accounted for in the Financial Statements.Century and ML Media, as owners of Century/ML, agreed to adoptcertain proposed accounting treatments in the FinancialStatements for the Transfer Accounting Dispute and the OtherDisputed Matters, subject to, among others, the preparation oflanguage to be included in the notes to the Financial Statementsreasonably acceptable to Adelphia and to ML Media.In a stipulation Judge Gerber of the U.S. Bankruptcy Court for theSouthern District of New York approved, the parties agree that: 1. The Financial Statements, and the representation letters to be delivered by Century, ACOM and ML Media to Century/ML auditors in connection with the Financial Statements, are not intended to and will not preclude any of the parties from maintaining or asserting any claim, defense, or liability against each other; and 2. ML Media, Century and ACOM agree to the Proposed Accounting Treatment for the Transfer Accounting Dispute and waive all claims against each other, Cable Venture or Cable Corp. arising out of the adoption of the Proposed Accounting Treatment for the Transfer Accounting Dispute.Headquartered in Coudersport, Pennsylvania, AdelphiaCommunications Corporation (OTC: ADELQ) is the fifth-largest cabletelevision company in the country. Adelphia serves customers in30 states and Puerto Rico, and offers analog and digital videoservices, high-speed Internet access and other advanced servicesover its broadband networks. The Company and its more than 200affiliates filed for Chapter 11 protection in the SouthernDistrict of New York on June 25, 2002. Those cases are jointlyadministered under case number 02-41729. Willkie Farr & Gallagherrepresents the ACOM Debtors. (Adelphia Bankruptcy News, IssueNo. 106; Bankruptcy Creditors' Service, Inc., 215/945-7000)ADELPHIA COMMS: Sells Three Real Estate Parcels for $721,000------------------------------------------------------------Pursuant to the Court-approved Excess Assets Sale Procedures,Adelphia Communications Corporation and its debtor-affiliatesinform Judge Gerber of the U.S. Bankruptcy Court for the SouthernDistrict of New York that they will sell these real estate parcelsfor $721,000: 1. Property: Lot 376 in the Long Cove development at Hilton Head in South Carolina 29928 Purchaser: Sean Lewis Agent: Charter One Realty Company Amount: $340,000 Deposit: $2,000 Appraised Value: $290,000 2. Property: Lot 461, in the Long cove development at Hilton Head in South Carolina 29928 Purchaser: Robert Blumber Agent: Charter One Realty Company Amount: $340,000 Deposit: $5,000 Appraised Value: $270,000 3. Property: Real Property at 746 North Main St., Coudersport, Pennsylvania 16915 Purchaser: Gary and Jennifer Grupp Agent: Field and Stream Real Estate Amount: $41,000 Deposit: $1,000 Appraised Value: $41,000Headquartered in Coudersport, Pennsylvania, AdelphiaCommunications Corporation (OTC: ADELQ) is the fifth-largest cabletelevision company in the country. Adelphia serves customers in30 states and Puerto Rico, and offers analog and digital videoservices, high-speed Internet access and other advanced servicesover its broadband networks. The Company and its more than 200affiliates filed for Chapter 11 protection in the SouthernDistrict of New York on June 25, 2002. Those cases are jointlyadministered under case number 02-41729. Willkie Farr & Gallagherrepresents the ACOM Debtors. (Adelphia Bankruptcy News, IssueNo. 105; Bankruptcy Creditors' Service, Inc., 215/945-7000)ALLIED HOLDINGS: Equity Deficit Triples to $127.4MM in Six Months-----------------------------------------------------------------Allied Holdings, Inc., delivered its quarterly report onForm 10-Q for the quarter ending June 30, 2005, to the Securitiesand Exchange Commission on Sept. 22, 2005.For the second quarter of 2005, the Company recorded a$75.1 million net loss compared to a net loss of $3.8 million inthe second quarter of 2004.Revenues were $232.6 million in the second quarter of 2005 versusrevenues of $236.6 million in the second quarter of 2004, adecrease of 1.7% or $4.1 million. This decrease was due primarilyto a 9.5% reduction in the number of vehicles delivered in thesecond quarter of 2005 versus the second quarter of 2004.Salaries, wages and fringe benefits decreased from 54.1% ofrevenues in the second quarter of 2004 to 50.8% of revenues in thesecond quarter of 2005 due primarily to a reduction in workers'compensation costs. In the second quarter of 2005, workers'compensation costs were 4% of revenues whereas in the secondquarter of 2004, workers' compensation costs were 6.4% ofrevenues.Operating supplies and expenses increased from 17.5% of revenuesin the second quarter of 2004 to 19.0% of revenues in the secondquarter of 2005. The increase is due primarily to an increase infuel expense, which increased from 5.8% of revenues in the secondquarter of 2004 to 7.7% of revenues in the second quarter of 2005.At June 30, 2005, the Company's balance sheet shows $352,931,000in total assets. Stockholders' deficit tripled to $127,443,000 atJune 30, 2005, from a $41,549,000 deficit at Dec. 31, 2004. DIP Pays Defaulted FacilityAs of June 30, 2005, based on the financial reports delivered onJuly 29, 2005, to the Company's lenders under its PrepetitionFacility, the Company was in default of its Prepetition Facilitydue to a violation of the financial covenant in its PrepetitionFacility related to the minimum consolidated earnings beforeinterest, taxes, depreciation, and amortization, as defined in thePre-petition Facility. Because the violation of the financialcovenant as of June 30, 2005, made the Prepetition Facilitycallable, the Prepetition Facility is considered a short-termobligation and is classified as current portion of long-term debtas of June 30, 2005.On Aug. 1, 2005, the Company obtained DIP Facilities to providedebtor-in-possession financing in connection with its Chapter 11filing. On Aug. 2, 2005, using funds received from its DIPFacilities, the Company repaid all obligations outstanding underthe Prepetition Facility, including the $1.9 million premium duefor prepayment of the facility prior to maturity. Going ConcernAllied's management said the Company's ability to continue as agoing concern is predicated on, among other things: (1) the confirmation of a plan of reorganization; (2) compliance with the provisions of the DIP Facilities; (3) its ability to generate cash flows from operations; and (4) its ability to obtain financing sufficient to satisfy its future obligations.A full-text copy of Allied's latest quarterly report is availableat no charge at http://ResearchArchives.com/t/s?1dbHeadquartered in Decatur, Georgia, Allied Holdings, Inc. --http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers andprovide logistical services. The Company and 22 of its affiliatesfiled for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga.Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., atTroutman Sanders, LLP, represents the Debtors in theirrestructuring efforts. When the Debtors filed for protection fromtheir creditors, they estimated more than $100 million in assetsand debts.AMERICAN EASTERN: Case Summary & 20 Largest Unsecured Creditors---------------------------------------------------------------Debtor: American Eastern Builders, Inc. 3820 Miriam Drive Charlotte, North Carolina 28205Bankruptcy Case No.: 05-34053Type of Business: The Debtor is a general building contractor. See http://www.americaneastern.net/Chapter 11 Petition Date: September 26, 2005Court: Western District of North Carolina (Charlotte)Judge: George R. HodgesDebtor's Counsel: James H. Henderson, Esq. James H. Henderson, P.C. 1201 Harding Place Charlotte, North Carolina 28204-2248 Tel: (704) 333-3444 Fax: (704) 333-5003Estimated Assets: $100,000 to $500,000Estimated Debts: $1 Million to $10 MillionDebtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------Edward Calkins Shareholders loans, $1,692,2047129 Elkston Drive rent, salary, &Charlotte, NC 28210 indemnity claimsBB&T of NC Business Loan Business loan $237,982CenterP.O. Box 580003Charlotte, NC 282580003Ford Motor Credit Company Lease of two 2003 $60,879Commercial Lending Services Ford F350 4X2 trucksP.O. Box 472687Charlotte, NC 282472684Port City Electric Company Electrical supplies $59,982Southeastern Plumbing & Plumbing heating $33,426Heating service/suppliesBinswanger Glass Inc. Supplies $19,265Carolina Sheet Metal Supplies $17,153Century Contracting Inc. Supplies $15,900Besco Electric Corporation Electrical services $11,579Charlotte Glass Cont Supplies $10,695Southern Mechanical Supplies $9,951CM Steel Inc. Supplies $9,074Selective Insurance Insurance $8,968Joe H. Ervin Grading Grading $7,492Johnston Allison & Hord Legal services $7,730Lowes Credit card $6,893Propst Construction Open account $6,669Empire Concrete Construction Conrete supplies $5,790Hartsell Bros Fence Co. Supplies $5,596Weathergard Inc. Open account $5,350ANCHOR GLASS: Panel Opposes Glenshaw's Bid to Recover Glass Molds-----------------------------------------------------------------The Official Committee of Unsecured Creditors of Anchor GlassContainer Corporation asks the U.S. Bankruptcy Court for theMiddle District of Florida to deny GGC LLC's, fka as GlenshawGlass Company, request to compel the Debtor to return some moldsthat it allegedly owns.The Committee asserts that GGC, LLC, has not shown that causeexists to lift the stay in the Debtor's bankruptcy case.Apparently, says Marcy E. Kurtz, Esq., at Bracewell & GuilianiLLP, in Dallas, Texas, no cause exists.GGC has asserted that the lack of adequate protection of itsinterests is a cause to modify the automatic stay. Subsequently,in response to the Court's Order requiring it to identify what itbelieves to be adequate protection of interest, GGC stated thatit is not seeking adequate protection with respect to the molds.Ms. Kurtz contends that by GGC's own admission, no amounts aredue on any of the property it identified as being subject to theMotion. GGC has no use for the property or the glass molds itseeks to recover as its production aspect has been discontinued,and it continues now solely for the purpose of liquidating itsbankruptcy estate. Furthermore, Ms. Kurtz adds that GGC remainsin possession of similar property belonging to the Debtor.The glass molds are essential to the effective reorganization ofthe Debtor, Ms. Kurtz argues. Unlike GGC, the Debtor'smanufacturing operations continue and the molds are still used inthose operations. Lifting the stay at this time to allow GGC torecover and sell property on which no debt is owed and that iscurrently used by the Debtor in its operations is notappropriate.Ms. Kurtz believes that the GGC Motion is an attempt to collecton prepetition debt against the Debtor. GGC does not demonstratethrough its Motion that cause exists to allow it to circumventthe Bankruptcy Code and the priority scheme set out.According to Ms. Kurtz, requiring the Debtor to relinquishpossession of property of a third party to GGC would expose theDebtor to unnecessary litigation. Furthermore, the Debtor cannotturn over property that is not in its possession. Allowing GGCto seek sanctions in the Court for the Debtor's failure to turnover a property that is not in the Debtor's possession is notappropriate and will certainly result in unnecessary expense tothe Debtor should the Court require it to defend against thesanctions by lifting the stay.Judge Paskay will convene a hearing on October 12, 2005, at11:00 a.m., to consider the Committee's response. Anchor Glass Continues to Defend RightMonica Marselli, the Debtor's Associate General Counsel, disclosesthat in a telephone conversation on July 13, 2005, GGC's counsel,Ronald Roteman, agreed to extend the time for the Debtor torespond to GGC's Turnover Complaint. Pursuant to an order enteredby the Pennsylvania Bankruptcy Court, Anchor was to file an answerto the Turnover Complaint by July 15, 2005.Ms. Marselli says that Mr. Roteman granted the extension so thatthe Debtor and GGC could negotiate a resolution to the matter andsave the Debtor the expense of engaging counsel in Pennsylvania.Ms. Marselli, however, says that she did not understand theextension of time to have a finite deadline. During theconversation, she proposed to resolve the dispute and maintainedcorrespondence with Mr. Roteman.Ms. Marselli has continued to believe that the Debtor is notrequired to file a response to the Turnover Complaint because ofthe extension and because of the fact that settlement discussionswere still ongoing.Ms. Marselli asserts that the Debtor would have vigorouslycontested GGC's Turnover Action if the parties did not reach anagreement through negotiation. Moreover, the molds are integralto the Debtor's recovery from the Chapter 11 case.Headquartered in Tampa, Florida, Anchor Glass ContainerCorporation is the third-largest manufacturer of glass containersin the United States. Anchor manufactures a diverse line of flint(clear), amber, green and other colored glass containers for thebeer, beverage, food, liquor and flavored alcoholic beveragemarkets. The Company filed for chapter 11 protection on Aug. 8,2005 (Bankr. M.D. Fla. Case No. 05-15606). Robert A. Soriano,Esq., at Carlton Fields PA, represents the Debtor in itsrestructuring efforts. When the Debtor filed for protection fromits creditors, it listed $661.5 million in assets and $666.6million in debts. (Anchor Glass Bankruptcy News, Issue No. 8;Bankruptcy Creditors' Service, Inc., 215/945-7000)APARTMENTS AT TIMBER: Pleiss Okayed as Ch. 11 Trustee's Accountant------------------------------------------------------------------ The Honorable Timothy J. Mahoney gave Thomas D. Stalnaker, theChapter 11 Trustee appointed in Apartments at Timber Ridge, LP'schapter 11 case, permission to employ Daniel T. Pleiss as hisaccountant.Mr. Pleiss will prepare all necessary tax returns and reports. Hewill also provide other services that may be proper and necessaryfor Mr. Stalnaker's duties as Trustee.Judge Mahoney approved Mr. Stalnaker's request but points outthat: (a) this order is not a determination that the services are necessary; (b) no determination is made that Mr. Pleiss represents no adverse interest; and (c) no fee agreement between Mr. Stalnaker and Mr. Pleiss is binding on the Court.Mr. Stalnaker is responsible for giving notice to parties-in-interest as required by rule or statute.Headquartered in Dallas, Texas, Apartments at Timber Ridge, LP,aka Timber Ridge Apartments, operates a residential apartmentbuilding in Omaha, Nebraska. The Company filed for chapter 11protection on June 3, 2005 (Bankr. D. Nebr. Case No. 05-82135).Howard T. Duncan, Esq., at Duncan Law Office, represents theDebtor in its restructuring efforts. When the Debtor filed forprotection from its creditors, it listed estimated assets anddebts between $10 million to $50 million.AQUILA INC: Selling Selected Utility Assets for $896.7 Million--------------------------------------------------------------Aquila Inc. (NYSE:ILA) signed definitive agreements to sell fourutility businesses identified for potential sale on March 14,2005, for a total of $896.7 million. Proceeds from thetransactions will be used to reduce debt and other liabilities.The sale agreements mark a significant advance in Aquila'spreviously announced repositioning plan. The plan seeks tostrengthen Aquila's balance sheet, improve its credit profile, andposition the company to invest in utility infrastructure toprovide safe and reliable service to customers as an integratednatural gas and electric utility.The transactions include: -- WPS Resources Corporation, a publicly-traded holding company for a number of energy-related subsidiaries based in Green Bay, Wisconsin, will purchase the assets and liabilities of Aquila's natural gas operations in Michigan and Minnesota for a base purchase price of $269.5 million and $288 million, respectively, plus working capital and subject to net plant adjustments. -- The Empire District Electric Company, a publicly-traded electric utility based in Joplin, Missouri, will purchase the assets and liabilities of Aquila's natural gas operations in Missouri for a base purchase price of $84 million, plus working capital and subject to net plant adjustments. -- Mid-Kansas Electric Company (MKEC), a coalition of six consumer-owned cooperatives that also own Sunflower Electric Power Corporation, a regional generation and transmission service provider, will purchase the assets and liabilities of Aquila's electric operations in Kansas for a base purchase price of $255.2 million, plus working capital and subject to net plant adjustments.Following the completion of these sales, Aquila will operate infive states, with natural gas operations in Kansas, Colorado,Nebraska and Iowa and electric operations in Missouri andColorado. Of the utilities identified for potential sale onMarch 14, Aquila will retain ownership of its St. Joseph Light &Power electric operations in Missouri as well as its electricoperations in Colorado as part of its ongoing business. Aquilacontinues to consider the sale of its three merchant peakingplants and Everest Connections, as well as a settlement of itsElwood toll contracts."The execution of these agreements marks a major milestone in ourprogram to reposition Aquila, strengthen the company's financialcondition and improve the financial performance of our regulatedutility business," said Richard C. Green, Aquila chairman andchief executive officer. "Upon completion of these sales, Aquilashould be stronger financially than it has been in recent years.The proceeds are expected to allow us to significantly reduce ourdebt, improve our credit profile and put Aquila on a path toreaching an annual EBIT growth rate of 3 percent to 5 percent onour post-divestiture rate base."Mr. Green said the key elements of Aquila's strategy remain to: -- Maintain its focus on operating an integrated, multi-state utility. -- Significantly reduce Aquila's debt levels and strengthen its credit profile. -- Gain access to the capital markets on improved terms, allowing the company to cost-effectively fund investments in its rate base to meet customer needs. -- Continue to improve operational efficiency and lower earnings variability. -- Actively work with regulators and legislators to address rate and fuel cost issues. HSR Waiting PeriodCompletion of each of these transactions is subject to certainclosing conditions, including the non-occurrence of a materialadverse event, the approval of relevant state utility commissions,the expiration or early termination of any waiting period underthe Hart-Scott-Rodino Antitrust Act, and other closing conditionsset forth in each asset purchase agreement. The closing of theKansas electric operations transaction is also subject to theapproval of the Federal Energy Regulatory Commission and thereceipt of third-party financing by the acquirer.Aquila anticipates receiving timely regulatory approvals for thesetransactions within approximately 12 months.Mr. Green added: "We maintained a disciplined strategic salesapproach that resulted in strong interest from a wide range ofpotential buyers. This allowed us to select offers fromfinancially sound buyers with strong utility experience and acommitment to customer service and reliability. We are confidentthat the quality and commitment of these buyers will set the stagefor a timely and orderly regulatory review and approval process."The Blackstone Group and Lehman Brothers Inc. served as advisorsto Aquila. About the BuyersBased in Joplin, Missouri, The Empire District Electric Company(NYSE:EDE) is an investor-owned utility providing electric serviceto approximately 157,000 customers in southwest Missouri,southeast Kansas, northeast Oklahoma, and northwest Arkansas. Thecompany also provides optic and Internet services, customerinformation software services, and has an investment in close-tolerance, customer manufacturing. Empire provides water servicein three incorporated Missouri communities.Mid-Kansas Electric Company, LLC, is a coalition of six ruralelectric cooperatives serving in 34 western Kansas counties whoorganized themselves for the purpose of acquiring the assets ofAquila's Kansas electric network. The cooperatives also ownSunflower Electric Power Corporation, a generation andtransmission service provider, as well as other businesses thatprovide a wide range of services including water supplies,satellite TV and Internet access, wireless broadband Internetaccess, cellular telephone service, commercial electrical servicesand propane delivery services.WPS Resources Corporation (NYSE:WPS), based in Green Bay,Wisconsin, is a holding company with four major subsidiariesproviding electric and natural gas energy and related services inboth regulated and nonregulated energy markets. Its principalsubsidiary is Wisconsin Public Service Corporation, a regulatedelectric and natural gas utility serving northeastern Wisconsinand a portion of Michigan's Upper Peninsula.Wisconsin Public Service serves more than 421,000 electriccustomers and 305,000 natural gas customers. Another subsidiary,Upper Peninsula Power Company, is a regulated electric utilityserving Michigan's Upper Peninsula. Upper Peninsula Power servesapproximately 52,000 electric customers. WPS Resources' majornon-regulated subsidiaries consist of WPS Energy Services, Inc.and WPS Power Development, LLC.WPS Energy Services is a diversified non-regulated energy supplyand services company serving commercial, industrial and wholesalecustomers and aggregated groups of residential customers. Itsprincipal market is the northeast quadrant of the United Statesand adjacent portions of Canada. Its principal operations in theUnited States are in Illinois, Maine, Michigan, Ohio, Virginia andWisconsin. Its principal operations in Canada are in Alberta,Ontario, and Quebec.WPS Power Development owns and/or operates non-regulated electricgeneration facilities in Wisconsin, Maine, Pennsylvania, New Yorkand New Brunswick, Canada; steam production facilities in Arkansasand Oregon; a partial interest in a synthetic fuel processingfacility in Kentucky; and steam production facilities located inArkansas and Oregon.Headquartered in Kansas City, Mo., Aquila Inc. (NYSE:ILA) -http://www.aquila.com/-- provides electricity and natural gas service to 1.3 million customers in Colorado, Iowa, Kansas,Michigan, Minnesota, Missouri and Nebraska. * * *As reported in the Troubled Company Reporter on Sept. 26, 2005,Standard & Poor's Ratings Services placed its ratings on AquilaInc. on CreditWatch with positive implications. As of June2005, the Kansas City, Missouri-based energy provider had about$2.35 billion in total debt."The placement follows the company's announcement that it hassigned definitive agreements to sell four utility businesses, fora total of $897 million, plus working capital and subject to netplant adjustments," said Standard & Poor's credit analyst JeannySilva.ASARCO LLC: Wants Lehman as Financial Advisor & Investment Banker-----------------------------------------------------------------By this application, ASARCO LLC, asks the U.S. Bankruptcy Courtfor the Southern District of Texas for permission to employ LehmanBrothers Inc. as its financial advisor and investment banker underthe terms of an engagement letter entered into between theparties.Pursuant to the Engagement Letter, dated as of Aug. 30, 2005,ASARCO employed Lehman Brothers to provide financial advisory andinvestment banking services in connection with the assessment ofthe Debtor's financial restructuring or other strategicalternatives, and ASARCO's financial restructuring, whichincludes the plan of reorganization process and a possible sale,merger, consolidation or other transaction involving the transferof ASARCO's business, assets or equity interests.Specifically, Lehman Brothers has agreed to: (a) advise and assist ASARCO in formulating a Plan, and analyzing any proposed Plan, including assisting in the Plan negotiation and confirmation process of a restructuring transaction under Chapter 11; (b) provide financial advice and assistance to ASARCO in structuring any new securities to be issued in a restructuring transaction; (c) participate in negotiations among ASARCO and its creditors, unions, suppliers, lessors and other interested parties relating to the reorganization cases; (d) participate in hearings before the Bankruptcy Court with respect to the matters upon which Lehman Brothers has provided advice, including, as relevant, coordinating with ASARCO's counsel with respect to testimonies; (e) provide expert witness testimony concerning any of the subjects encompassed by the other financial advisory services; (f) upon request, review and analyze any proposals ASARCO receives from third parties in connection with a transaction, including any proposals for debtor-in- possession financing and exit financing; (g) assist ASARCO in connection with its liquidity analysis; (h) review and analyze ASARCO's business, operations, properties, financial condition and prospects and financial projections; (i) evaluate ASARCO's debt capacity in light of its projected cash flows and assist in the determination of an appropriate capital structure; (j) analyze various restructuring scenarios and the potential impact of these scenarios on the recoveries of those stakeholders impacted by any transaction; (k) provide strategic advice with regard to restructuring or refinancing ASARCO's financial obligations; (l) assist in the drafting, preparation and distribution of selected information and other related documentation describing ASARCO and the terms of a potential transaction; (m) assist ASARCO in identifying, contacting and evaluating potential purchasers for any sale transaction; and (n) provide other advisory services as are customarily provided in connection with the analysis and negotiation of a restructuring or sale transaction, as will be requested.ASARCO relates that Lehman Brothers has significant experienceand extensive knowledge in the fields of bankruptcy and mining.ASARCO selected Lehman Brothers after interviewing a number ofinvestment banking firms. Mark Shapiro and Gil Sanborn, themanaging directors of Lehman Brothers who are part of the GlobalRestructuring Group, and who will manage the ASARCO assignment,each have over 15 years of experience in assisting companies,creditors and others in bankruptcy cases. Moreover, RichardTory, an executive director in the firm's Natural ResourcesGroup, has extensive knowledge of the global metals and miningbusiness.ASARCO will pay Lehman Brothers in accordance with these terms: (1) Commencing as of Aug. 30, 2005, and ending as of the termination of the firm's engagement, Lehman Brothers will be entitled to receive a monthly cash fee. The Advisory Fee is equal to $100,000 per month, payable in advance upon execution of the Engagement Letter and on the first day of each succeeding month for 24 months. Thereafter, the Advisory Fee will be reduced to $75,000 per month. If Lehman Brothers' engagement is terminated, the firm will be entitled to any Advisory Fees that are due and owing as of the effective date of the termination. However, in the event Lehman Brothers will terminate the Engagement Letter, the Advisory Fee will be pro-rated for any incomplete monthly period of service, in which case the firm agrees to promptly reimburse ASARCO for any portion of an Advisory Fee paid to Lehman Brothers that is in excess of the pro-rated amount of the Advisory Fee to which Lehman would be entitled for an incomplete monthly period of service. (2) If (i) a Sale Transaction occurs pursuant to which less than all of ASARCO's assets are sold or transferred, or (ii) an agreement is entered into that subsequently results in a Partial Assets Sale Transaction either during the term of Lehman Brothers' engagement or at any time during a period of 12 months following the effective date of termination of Lehman Brothers' engagement, other than termination as a result of Lehman Brothers' material breach, gross negligence or willful misconduct, ASARCO will pay Lehman Brothers a fee equal to 1% of the transaction value, payable in cash on the closing date of the Partial Assets Sale Transaction. (3) If (i) a Sale Transaction occurs pursuant to which all or substantially all of the assets of the company are sold or transferred, or (ii) an agreement is entered into that subsequently results in a Sale of All Assets either during the term of Lehman Brothers' engagement or at any time during the 12-month period following the effective date of termination, other than termination as a result of Lehman Brothers' material breach, gross negligence or willful misconduct, the company will pay Lehman Brothers a fee equal to 1% of the transaction value, payable in cash on the closing date of the Sale of All Assets, provided, however, that the Sale Transaction Fee will not exceed $4 million. (4) If a restructuring effective date occurs during the term of Lehman Brothers' engagement or at any time during the 12-month Tail Period, ASARCO will pay Lehman Brothers a $4 million fee, payable in cash on the Restructuring Effective Date. (5) All Advisory Fees paid, for up to 24 months, and 50% of all Advisory Fees paid subsequently, will be creditable against any Sale Transaction Fee or any Restructuring Transaction Fee paid or payable to Lehman Brothers. Any Sale Transaction Fee paid to Lehman Brothers in a Partial Assets Sale or a Sale of All Assets will be creditable against the Restructuring Transaction Fee paid to Lehman Brothers. However, in the case of a Partial Assets Sale Transaction, only 50% of the Sale Transaction Fee will be creditable against any Restructuring Transaction Fee paid to Lehman Brothers.Mr. Shapiro assures the Court that the firm does not have or doesnot represent any interest materially adverse to the interests ofthe Debtors or their estates, creditors, or interest holders.Moreover, Lehman Brothers is a "disinterested person" as thatterm is defined in Section 101(14) of the Bankruptcy Code.Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. isASARCO's ultimate parent. The Company filed for chapter 11protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel PeterHolzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor inits restructuring efforts. When the Debtor filed for protectionfrom its creditors,it listed $600 million in total assets and $1billion in total debts.The Debtor has five affiliates that filed for chapter 11protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCOPipe Company, Inc., Cement Asbestos Products Company, LakeAsbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details abouttheir asbestos-driven chapter 11 filings have appeared in theTroubled Company Reporter since Apr. 18, 2005.Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.05-21346) also filed for chapter 11 protection, and ASARCO hasasked that the three subsidiary cases be jointly administered withits chapter 11 case. (ASARCO Bankruptcy News, Issue No. 6;Bankruptcy Creditors' Service, Inc., 215/945-7000).ASARCO LLC: Wants HR&A as Tort Claims Consultant------------------------------------------------Hamilton, Rabinovitz & Alschuler, Inc., is a consulting firm thatprovides analytical services focused on the estimation of claimsand the development of claims procedures with regard to paymentsand assets of a claims resolution trust. ASARCO LLC and itsdebtor-affiliates believe that HR&A is well qualified to serve astheir consultant in that, among other things, its members haveassisted and advised numerous chapter 11 debtors and creditors inthe estimation of the value of claims in other mass tortreorganizations.By this application, the Debtors ask Judge Schmidt of the U.S.Bankruptcy Court for the Southern District of Texas for permissionto employ HR&A to provide consulting services needed throughoutthe course of their bankruptcy, including: (a) estimating the number and value of present and future asbestos personal injury claims and silica personal injury claims; (b) formulating the Asbestos and Silica Trust Distribution Procedures; (c) formulating financial models of payments and assets of the Asbestos PI Trust and Silica PI Trust; (d) analyzing and responding to issues related to the provision of notice to asbestos and silica claimants, and assisting in the development of those notice procedures; (e) assisting in negotiations with various parties; (f) rendering expert testimony as required by the Debtors; (g) assisting the Debtors in preparing expert testimony or reports and in the evaluation of those reports by other experts and consultants; and (h) providing other advisory services as may be requested by the Debtors from time to time.The Debtors will pay HR&A on an hourly basis, in accordance withthe firm's normal billing practices: Position Charge per hour -------- --------------- Senior Partners $550 Junior Partners $450 Managing Directors $400 Principals $300 Directors $275 Managers $250 Senior Analysts $200 Analysts $150 Research Associates $100The Debtors will also reimburse the firm for reasonable out-of-pocket expenses incurred in connection with its employment.Francine F. Rabinovitz, a member of HR&A, assures the Court thatthe firm does not have or represent any interest materiallyadverse to the interests of the Debtors or their estates,creditors, or interest holders. Moreover, HR&A is a"disinterested person" as that term is defined in Section 101(14)of the Bankruptcy Code.Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. isASARCO's ultimate parent. The Company filed for chapter 11protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel PeterHolzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor inits restructuring efforts. When the Debtor filed for protectionfrom its creditors,it listed $600 million in total assets and $1billion in total debts.The Debtor has five affiliates that filed for chapter 11protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCOPipe Company, Inc., Cement Asbestos Products Company, LakeAsbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details abouttheir asbestos-driven chapter 11 filings have appeared in theTroubled Company Reporter since Apr. 18, 2005.Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.05-21346) also filed for chapter 11 protection, and ASARCO hasasked that the three subsidiary cases be jointly administered withits chapter 11 case. (ASARCO Bankruptcy News, Issue No. 6;Bankruptcy Creditors' Service, Inc., 215/945-7000).ASARCO LLC: Govt. Wants CERLA Trial Upheld in Idaho District Court------------------------------------------------------------------On March 22, 1996, the United States Government filed an actionagainst ASARCO, Inc., and several other defendants in the UnitedStates District Court for the District of Idaho pursuant toSection 107(a) of the Comprehensive Environmental Response,Compensation and Liability Act, and Section 311 of the CleanWater Act. The Idaho Action was commenced on behalf of theUnited States Department of the Interior, the United StatesDepartment of Agriculture, and the United States EnvironmentalProtection Agency, and was filed in response to many decades ofreleases of hazardous substances from ASARCO's metals mining andsmelting facilities.The Idaho Action seeks to recover around $1.5 billion in responsecosts and natural resource damages. By seeking to hold ASARCOaccountable for the environmental damage, the suit also seeks todeter others from environmental violations.Kelly A. Johnson, Acting Assistant Attorney General of theEnvironment & Natural Resources Division of the U.S. Departmentof Justice, explains that the Idaho Action specifically concernsan area of over 800 square miles. The Idaho District Courtdivided the case so that liability and injury were tried first,and damages and cost issues tried if liability was found.The Phase I trial on liability and injury was held in 2001,wherein the Idaho Court ruled that certain natural resources werelost or injured and that ASARCO and Hecla Mining Company -- theremaining non-debtor defendant in the Idaho Action -- were liablefor response costs and natural resource damages arising frommining contamination in the Coeur d'Alene Basin. Discovery isalmost complete on Phase II issues, and hearings are currentlyscheduled to begin on Jan. 17, 2006, to determine the amountof response costs and natural resource damages for which theDefendants are liable. Essentially, therefore, the Idaho Actionis mid-trial.According to Ms. Johnson, response costs recovered will be paidto the Hazardous Substances Superfund to finance response actionsat the Site or other sites. Any sums recovered for naturalresource damages will be used to restore, replace or acquireequivalent natural resources.After ASARCO LLC's bankruptcy filing, the Idaho Court issued anorder staying the CERLA action against ASARCO because theBankruptcy Court had not yet ruled whether the police andregulatory exception applies.Ms. Johnson notes that Section 362(b)(4) of the Bankruptcy Codeprovides that the automatic stay does not apply to the"commencement or continuation of an action or proceeding by agovernmental unit . . . to enforce such governmental unit's. . . police and regulatory power, including the enforcementof a judgment other than a money judgment." The regulatoryexception is based on the "compelling need for the governmentto continue to protect the public when a debtor files forbankruptcy and to "prevent a debtor from frustrating necessarygovernmental functions by seeking refuge in bankruptcy court."By this motion, the U.S. Government asks Judge Schmidt to issue adeclaration that the Idaho Action is not subject to the automaticstay imposed by the Bankruptcy Code because the Actionconstitutes an exercise of the government's police and regulatorypower.Ms. Johnson contends that, regardless of the applicability of theautomatic stay to the U.S. Government's claims against ASARCO,the Idaho Action will proceed against Hecla. The Idaho Court hasalready ruled on the issue of divisibility between the twocompanies, finding Hecla responsible for 31% of damages andASARCO for 22%. The issues in Phase II of the trial areessentially identical for ASARCO and Hecla, which issuesprimarily concern the amount of damages and response costs thatare recoverable. Therefore, Ms. Johnson believes that it wouldbe much more efficient to hold a single trial to determine thoseissues as to both Defendants as currently scheduled, rather thanstaying the trial as to ASARCO and requiring a second,duplicative trial later.Ms. Johnson relates that the Idaho Court is quite familiar withthe detailed history of the CERCLA case and the issues relatedspecifically to the upcoming Phase II trial. The BankruptcyCourt, on the other hand, would need to ascend the learning curveof the CERCLA case that the Idaho Court has spent nearly a decademastering. Under the circumstances, it makes most sense for theIdaho Court to proceed with its trial as planned. This isespecially true because the determination of the amount ofASARCO's damages and response costs likely would be referred backto the Idaho Court in any event.Headquartered in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. isASARCO's ultimate parent. The Company filed for chapter 11protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207).James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A.Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel PeterHolzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq.,at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor inits restructuring efforts. When the Debtor filed for protectionfrom its creditors,it listed $600 million in total assets and $1billion in total debts.The Debtor has five affiliates that filed for chapter 11protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCOPipe Company, Inc., Cement Asbestos Products Company, LakeAsbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details abouttheir asbestos-driven chapter 11 filings have appeared in theTroubled Company Reporter since Apr. 18, 2005.Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.05-21346) also filed for chapter 11 protection, and ASARCO hasasked that the three subsidiary cases be jointly administered withits chapter 11 case. (ASARCO Bankruptcy News, Issue No. 6;Bankruptcy Creditors' Service, Inc., 215/945-7000).ATA AIRLINES: Wants Court Nod on Goodrich Corp. Settlement----------------------------------------------------------ATA Airlines, Inc., and Goodrich Corporation are parties to awheel and brake service and purchase agreement dated June 23,2000.Goodrich filed Claim Nos. 69, 1354 and 2071, asserting certainamounts the Debtor owed Goodrich under the Agreement.Goodrich also commenced an adversary proceeding against theDebtor, asserting various causes of action.Moreover, Goodrich filed a $2,242,380 administrative expense claimagainst the Debtor.The Debtor argued that Goodrich owed them certain amounts underthe Agreement. The Debtor asserted that it may seek to avoidcertain prepetition payment to Goodrich as preferences.After engaging in arm's-length negotiations, the Debtor andGoodrich agree that: a. They will mutually terminate the prior Agreement and execute a new agreement for the inspection, repair, and replacement of ATA wheels and brakes for all or a portion of ATA's existing or future fleet; b. They will file a joint motion for an order to dismiss with prejudice the Adversary Proceeding; c. They will file a joint motion for an order resolving the Administrative Expense Motion; d. ATA will transfer to Goodrich ownership and possession of: * 737-800 Nose Wheels - 39 units of P/N 3-1559, * 737-800 Main Wheels - 52 units of P/N 3-1558, * 737-800 Brakes - 26 units of P/N 2-1587, * 757-300 Nose Wheels - 9 units of P/N 3-1423-2, * 757-300 Main Wheels - 24 units of 3-1581, and * 757-300 Brakes - 12 units of P/N 2-1617, 2-1617-1; e. Goodrich will withdraw the Wheel and Brake Claims; and f. They will exchange releases of claims and liabilities.Pursuant to Rule 9019 of the Federal Rules of BankruptcyProcedure, ATA Airlines ask the Court to approve its settlementagreement with Goodrich.Terry E. Hall, Esq., at Baker & Daniels, in Indianapolis, Indiana,asserts that absent settlement, ATA may be compelled to expendsubstantial resources and incur unnecessary expenses in defendingits disputes with Goodrich. Debtors File New Agreement Under SealMs. Hall tells the Court that the parties' new wheel and brakeagreement contains confidential and proprietary information.Pursuant to Section 107(b)(1) of the Bankruptcy Code andBankruptcy Rule 9018, the Debtors seek the Court's permission tofile the agreement under seal.Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATAHoldings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) andone of the nation's largest low-fare carriers. ATA has one of theyoungest, most fuel-efficient fleets among the major carriers,featuring the new Boeing 737-800 and 757-300 aircraft. Theairline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over40 business and vacation destinations. Stock of parent company,ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. TheCompany and its debtor-affiliates filed for chapter 11 protectionon Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,represents the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they listed$745,159,000 in total assets and $940,521,000 in total debts.(ATA Airlines Bankruptcy News, Issue No. 35; Bankruptcy Creditors'Service, Inc., 215/945-7000)BEAZER HOMES: Registers $3M+ Convertible Senior Notes for Resale----------------------------------------------------------------Beazer Homes USA, Inc., filed a Registration Statement with theSecurities and Exchange Commission for the resale of $3,042,000of 4-5/8% Convertible Senior Notes due 2024 held by GoldmanSachs & Co. The NotesThe Convertible Senior Notes bear interest at the rate of 4-5/8%per year. Interest on the notes is payable on June 15 andDecember 15 of each year. Beginning with the six-month interestperiod commencing on June 15, 2009, the Company will paycontingent interest during a six-month interest period if theaverage trading price is above a specified level during aspecified period prior to such six-month interest period.The notes are convertible by holders into shares of the Company'scommon stock at an initial conversion rate of 6.48 shares ofcommon stock per $1,000 principal amount of notes (subject toadjustment in certain events), which is equal to an initialconversion price of $154.32 per share, under these circumstances: (1) during any calendar quarter, if the price of the Company's common stock issuable upon conversion reaches specified thresholds during the previous calendar quarter; (2) subject to certain limitations, during the five business day period after any five consecutive trading day period in which the trading price per note for each day of that period was less than 98% of the product of the last reported sales price of the Company's common stock and the conversion rate of the notes for each such day; (3) if the Company calls the notes for redemption; (4) upon the occurrence of specified corporate transactions; (5) during any period in which the credit ratings assigned to the notes are below certain levels.The notes mature on June 15, 2024. The Company may redeem some orall of the notes at any time on or after June 15, 2009.A full-text copy of the Prospectus is available for free athttp://ResearchArchives.com/t/s?1d8The Convertible Notes carry these ratings: Rating Agency Rating ------------- ------ Fitch BB+ Moody's Ba1 S&P BBThe common stock is listed on the New York Stock Exchange underthe symbol "BZH." The Company's common shares traded around$66 per share in early August and have traded between $55.83 and$62.39 this month.A full-text copy of the Registration Statement is available forfree at http://ResearchArchives.com/t/s?1d9Headquartered in Atlanta, Beazer Homes USA, Inc., -- http://www.beazer.com/-- is one of the country's ten largest single-family homebuilders with operations in Arizona, California,Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland,Mississippi, Nevada, New Jersey, New Mexico, New York, NorthCarolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas,Virginia and West Virginia and also provides mortgage originationand title services to its homebuyers. Beazer Homes, a Fortune 500company, is listed on the New York Stock Exchange under the tickersymbol "BZH." * * *As reported in the Troubled Company Reporter on June 7, 2005,Fitch Ratings has assigned a 'BB+' rating to Beazer Homes USA,Inc. (NYSE: BZH) $300 million, 6.875% senior unsecured notes dueJuly 15, 2015. The Rating Outlook is Stable. The issue will beranked on a pari passu basis with all other senior unsecured debt,including the company's unsecured bank credit facility. A portionof the offering proceeds will be used to repay the company'sexisting $200 million term loan due 2008, with the remainder to beused for general corporate purposes.Ratings for Beazer are influenced by the company's operationalrecord during the past decade and the financial progress that thecompany has achieved. Since Beazer went public in 1994, it hasbeen an active consolidator in the homebuilding industry which hascontributed to its above average growth. As a consequence, it hasrealized higher debt levels than its peers in recent years,especially following the Crossmann Communities acquisition.BELDEN & BLAKE: Extends Tender Offer for Sr. Sec. Notes to Oct. 12------------------------------------------------------------------Belden & Blake Corporation has extended the expiration of itstender offer to purchase for cash any and all of its outstanding8.75% Senior Secured Notes due 2012 in the aggregate principalamount of $192,500,000 (CUSIP Number 077447AE0). The Tender Offerwill expire at 9:00 a.m., New York City time on Wednesday,Oct. 12, 2005, unless Belden & Blake extends it further.Requests for documentation may be directed to Global BondholderServices Corporation, at (212) 430-3774 (collect; for banks andbrokers) or (866) 795-2200 (toll free; for all other than banksand brokers).Belden & Blake engages in the exploitation, development,production, operation and acquisition of oil and natural gasproperties in the Appalachian and Michigan Basins (a region whichincludes Ohio, Pennsylvania, New York and Michigan). Belden &Blake is a subsidiary of Capital C Energy Operations, LP, anaffiliate of Carlyle/Riverstone Global Energy and PowerFund II, L.P. * * *As reported in the Troubled Company Reporter on Apr. 7, 2005,Moody's downgraded Belden & Blake's senior implied rating from B3to Caa1 and its note rating from B3 to Caa2. The outlook ischanged to negative. The downgrade, which concludes Moody'sreview that commenced on December 28, 2004, is a result of Moody'sreview of the company's 10-K which confirmed the creditdeterioration through a combination of: * a greater than expected reserve revision; * poor capital productivity evidenced by drillbit F&D of $62.23/boe (excluding revisions) and only replacing 15% of production through extensions and discoveries; * very high leverage on the proved developed (PD) reserves of $7.64/boe; * B&B's very high full cycle costs that are unsustainable long- term; and * the free cash flow drain from currently out-of-the-money hedging that could otherwise be used for debt repayment or reinvestment.The notes are notched down from the senior implied rating due acombination of: * asset deterioration which impacts the coverage for the bondholders; * the increased use of the credit facilities (including L/C's) to support underwater hedging; and * the carveouts in the indenture that could permit additional secured debt to be layered in ahead of the notes.BUDGET GROUP: Administrator Asks for Decree Closing Ch. 11 Case---------------------------------------------------------------Walker, Truesdell & Associates, the Plan Administrator for BRACGroup, Inc., asks the U.S. Bankruptcy Court for the District ofDelaware to enter a final decree closing the Reorganized Debtor'schapter 11 case.BRAC Group is the reorganized entity created pursuant to themerger of Budget Group, Inc., and its debtor-affiliates followingthe confirmation of their Second Amended Joint Liquidating Plan ofReorganization.The Plan Administrator reports that it has distributedapproximately $81 million since the effective date of the Plan andholds approximately $1.1 million in reserves.The Plan Administrator adds that all claims asserted against theReorganized Debtor have either been adjudicated by the Court orresolved by the parties involved, except for: a) Jaeban (U.K.) Limited's $4 million asserted cure claim. The claim is subject to a cure reserve maintained by the U.K. Administrator with Harris Bank having a balance of approximately $4.5 million. The U.K. Administrator is prosecuting defenses to the cure claims and certain counter-claims; and b) four cure claims, covered by a cure reserve with a balance of $927,000 at Sept. 12, 2005, subject to negotiations between the claim holders and Cendant Corporation, the buyer of the Reorganized Debtor's North American assets. 1) $70,000 cure claim of Cintas Corp. 2) $15,000 cure claim of IBM 3) $22,693 cure claim of Jani King 4) $299,000 cure claim of PeopleSoftThe Plan Administrator tells the Bankruptcy Court that the Planhas been substantially consummated and that it does not anticipatefiling any further motions, applications or pleadings except tothe extent necessary to resolve the remaining claims and effect aturnover of the cure reserve to Cendant Corporation.A summary of professional fees paid and distributions made by thePlan Administrator is available for free at: http://researcharchives.com/t/s?1e0A list of outstanding adversary proceedings commenced by the PlanAdministrator and handled by Brown Rudnick Berlack Israels LLP andAshby & Geddes, PA, is available for free at: http://researcharchives.com/t/s?1e1A list of outstanding adversary proceedings commenced by the PlanAdministrator and handled by Gazes LLC and Young Conaway Stargatt& Taylor, LLP, is available for free at: http://researcharchives.com/t/s?1e4Headquartered in Daytona Beach, Florida, Budget Group, Inc.,operates under the Budget Rent a Car and Ryder names -- is theworld's third largest car and truck rental company. The Companyfiled for chapter 11 protection on July 29, 2002 (Bankr. Del. CaseNo. 02-12152). Lawrence J. Nyhan, Esq., and James F. Conlan, Esq.,at Sidley Austin Brown & Wood and Robert S. Brady, Esq., andEdward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor,LLP, represent the Debtors in their restructuring efforts. Whenthe Debtors filed for protection from their creditors, they listed$4,047,207,133 in assets and $4,333,611,997 in liabilities.On April 20, 2004, the Court confirmed the Debtors' JointLiquidation Plan, as modified, in accordance with Sections 1129(a)and (b) of the Bankruptcy Code.CAPELLA HEALTHCARE: Moody's Junks $58 Million Sr. Sec. Term Loan----------------------------------------------------------------Moody's Investors Service assigned first-time ratings to CapellaHealthcare, a start up operator of acute care hospitals. Despitethe strength of the management team, their familiarity with theacquired assets, and opportunities to improve the operatingresults of the company's hospital base, the ratings areconstrained by: * high financial leverage and the expectation of future debt-financed acquisitions; * the absence of a track record of positive free cash flow; * significant concentration of EBITDA in one of the acquired facilities; and * the lack of any meaningful scale or geographic diversity.The proceeds of the proposed offering, along with $66 million ofcommon equity contributed by GTCR Golder Rauner L.L.C. (GTCR) andmanagement, will be used to acquire four hospitals from HCA, Inc.(HCA). Capella was formed through a partnership between seniormembers of the former Province Healthcare management team and GTCRfor the purpose of acquiring and operating non-urban hospitals.Management will own 21% of Capella and made a cash contribution ofapproximately $2 million. The equity will be contributed toCapella Holdings, Inc., a holding company and ultimate parent ofCapella. The debt will be issued by Capella, an intermediateholding company.Ratings assigned to Capella Healthcare: * $40 million senior secured revolving credit facility due 2011, rated B3 * $97 million senior secured 1st lien term loan due 2012, rated B3 * $58 million senior secured 2nd lien term loan due 2013, rated Caa2 * B3 corporate family ratingThe outlook for the ratings is stable.The ratings reflect the company's high leverage after thetransaction. Moody's estimates that pro forma lease-adjusted debtto adjusted EBITDA will be high at 5.8 times by the end of fiscal2005 if expected improvements in EBITDA are realized. Further,Moody's considered the high likelihood that the company will addto this base of hospitals through additional debt-financedacquisitions. The credit facilities allow for up to $60 millionof additional borrowings, which are not yet committed and aresubject to compliance with financial covenants.The ratings also reflect the absence of meaningful cash flow fromthese four facilities in prior periods, and constraints on near-term free cash flow due to the capital investments required toincrease market share and facilitate physician recruiting.Further, the ratings consider: * the concentration of company pro forma EBITDA, as one of the four acquired facilities generates approximately 44% of total EBITDA; * the lack of significant scale, both in total and in any service area, that could improve operating results by leveraging costs and enhancing the company's position in managed care contracting and physician recruiting; and * the lack of geographic diversity.The four acquired facilities are in Tennessee, Washington andOklahoma. Moody's considers Tennessee and Oklahoma particularlysusceptible to changes in Medicaid reimbursement due toinitiatives in those states to reduce the burden of Medicaidcoverage on state budgets. Approximately 71% of the company'stotal net revenue is generated from facilities in Tennessee andOklahoma.The ratings also reflect management's significant experience inacute care hospital operations and in many cases, first-handexperience with the assets being acquired and the markets in whichthey operate. Capella's management team consists predominantly offormer management of Province Healthcare. Further, theexpectation of continued support of the equity sponsor, GTCR,could limit acquisition-driven increases in leverage. Integrationof the four acquired facilities should not present any significantrisks since the hospitals have been operating on the HCA systemsthat Capella will initially use.The stable outlook reflects a stable environment with respect toMedicare reimbursement. Additionally, Moody's believes thecompany will be able to improve the operations of the acquiredfacilities by providing a level of focus that was not providedwhile the facilities operated as part of the much larger HCAsystem. Moody's believes that some of these improvements mayrequire additional investment and time to be realized. However,in the near term, Moody's would not expect any deterioration ofthe historical operating performance of the acquired facilities.If the company shows stability in its operations over the next 12-18 months and does not enter into a transaction that wouldsignificantly increase financial leverage or represent substantialintegration risk, there could be upward pressure on the ratings.For example, if the company is expected to generate sustainableoperating cash flow to adjusted debt in the range of 8%-10% andfree cash flow to adjusted above 6%, Moody's would considerchanging the ratings outlook to positive. However, many factorscurrently constraining the ratings are non-financial measures suchas size and concentration. These factors would also be givensignificant consideration in any rating action.The ratings could come under pressure if Capella were to incuradditional indebtedness for acquisitions or development beyond ourexpectations. If additional financial leverage resulted in theexpectation of a prolonged period of negative free cash flow,Moody's would consider changing the ratings outlook to negative.Pro forma for the proposed transaction, Capella's cash flowcoverage of debt would have been weak. Moody's estimates that forthe year ended December 31, 2004, adjusted operating cash flow toadjusted debt would have approximated break even and adjusted freecash flow to adjusted debt would have been approximately -5%. Proforma EBIT coverage of interest would have been weak atapproximately 0.2 times for the year ended December 31, 2004.Adjusted debt to adjusted book capitalization pro forma for thetransaction would have approximated 71% at December 31, 2004, anddebt to revenues would have been approximately 83%.Moody's expects Capella to have adequate liquidity pro forma forthe transaction. Capella will have approximately $2 million ofcash on hand and access to a $40 million revolving credit facilitythat will be undrawn at closing. As noted above, free cash flowwill be constrained in the near term due to service enhancementinitiatives designed to increase market share and aid in physicianrecruitment. Moody's does not expect the company's access to theundrawn revolver to be constrained by financial covenantsestablished in the new facilities.The B3 rating on the revolver and term loan B reflect the firstlien priority of these instruments and the expectation of adequatecollateral coverage. The term loan B amortizes 1% annually inquarterly installments with the remainder payable in the finalyear. The facility also calls for a 50% excess cash flow sweepwith stepdowns if leverage reaches certain levels. Collateralincludes a first priority security interest on all assets of theborrower (Capella) and guarantors and a first priority pledge ofall capital stock of the borrower. The guarantors include CapellaHoldings and all existing and subsequently acquired or organizedwholly owned subsidiaries of Capella or Capella Holdings.The Caa2 rating on the term loan C, two notches below thecorporate family rating, reflects: * the second lien position of the instrument; * the effective subordination to a sizable amount of first lien debt; and * the likely impairment to holders of the tranche in a distress scenario.Collateral and guarantees are the same as the first lien facility.Headquartered in Brentwood, Tennessee, Capella Healthcare, afterthe closing of the proposed transaction, will operate four acutecare hospitals in three states. For the twelve months ended June30, 2005, the facilities to be acquired generated revenues ofapproximately $198 million.CAPELLA HEALTHCARE: S&P Junks $58 Mil. Proposed Sr. Secured Debt----------------------------------------------------------------Standard & Poor's Ratings Services assigned its 'B' corporatecredit rating to hospital company Capella Healthcare, Inc. Therating outlook is negative.In addition, Capella's proposed $137 million senior secured first-lien credit facility due in 2012 was rated 'B' with a recoveryrating of '2', indicating the expectation for a substantial (80%-100%) recovery of principal in the event of a payment default.The company's proposed $58 million senior secured second-lien termloan due in 2013 was rated 'CCC+' with a recovery rating of '4',indicating the expectation for a marginal (25%-50%) recovery ofprincipal in the event of a payment default. These ratings arebased on preliminary documentation.The company will use the proceeds from the senior secured loans,as well as $66 million in new equity to be provided by GTCR GolderRauner LLC, to finance the purchase of four hospitals from HCAInc. Pro forma for the bank loan transaction, outstanding debtwill be $155 million."The low-speculative-grade ratings reflect the numerous risks thatCapella's experienced management team will have in operating asmall start-up hospital company with no record as an independententity," said Standard & Poor's credit analyst David Peknay. "Theratings also reflect the company's high debt burden."Capella's small, undiversified portfolio of only four hospitalsand disproportionate dependence on one facility for nearly half ofits EBITDA is characteristic of the company's vulnerable businessrisk profile. This lack of diversity presents a large risk,particularly because Capella also will be challenged to establisha corporate infrastructure capable of operating a hospitalportfolio that is now located in only three states (though it willinevitably grow with additional acquisitions). The company willbe highly leveraged following the bank loan transaction, with proforma lease-adjusted debt to EBITDA at about 6.0x. Standard &Poor's expects Capella to remain highly leveraged for the nextseveral years -- even if it has some success in improving theoperating performance of its hospitals -- as future expansion willlikely be financed heavily with debt.CATHOLIC CHURCH: Court Sets Status Conference Schedule in Portland------------------------------------------------------------------The U.S. Bankruptcy Court for the District of Oregon sets thisschedule for the status conference regarding the topic listing for"pattern and practice" witnesses: Date Event ---- ----- September 30, 2005 Deadline for Tort Claimants to amend Topic List October 21, 2005 Levada Scope Objections Due November 18, 2005 Tort Claimant Response Due December 5, 2005 Replies Due December 16, 2005 9:30 a.m. hearingThe Archdiocese of Portland in Oregon filed for chapter 11protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004.Thomas W. Stilley, Esq., and William N. Stiles, Esq., at SussmanShank LLP, represent the Portland Archdiocese in its restructuringefforts. In its Schedules of Assets and Liabilities filed withthe Court on July 30, 2004, the Portland Archdiocese reports$19,251,558 in assets and $373,015,566 in liabilities. (CatholicChurch Bankruptcy News, Issue No. 43; Bankruptcy Creditors'Service, Inc., 215/945-7000)CENTURY/ML: Century & ML Media Inks Estate Administration Accord----------------------------------------------------------------Under the terms of Century/ML Cable Venture's confirmed Plan ofReorganization, on the Effective Date, the management, controland liquidation of the Transferred Assets will become theresponsibility of Century Communications Corp. and ML MediaPartners, L.P.In their desire to establish a Plan Administration Board tomanage, control and liquidate the Transferred Assets and tootherwise administer the estate in lieu of a Plan Administrator,Century and ML Media entered into an Estate AdministrationAgreement on September 7, 2005.The salient terms of the Estate Administration Agreement are: A. Plan Administration Board Century and ML Media will each be entitled to appoint two representatives to the Board, which will administer the estate in accordance with the Century/ML Plan and will perform all duties necessary or appropriate to manage, control and liquidate the Transferred Assets and the Excluded Liabilities and to otherwise administer the estate. Century designates Murray Flanigan and Mark Spiecker to act as initial representatives on the Board. ML Media designates I. Martin Pompadur and Elizabeth McNey Yates. B. Retained Cash Prior to the Effective Date, Century and ML Media will agree on the amount of cash to be initially designated as Retained Cash for the Plan Funding Reserve. C. Century and ML Media will provide or cause its affiliates or third-party service providers to provide transition services including preparation of tax returns, preparation of financial statements, audit of financial statements, management of liabilities of the estate and management of certain lawsuits. Each of the Transition Services will be provided under the overall supervision of the Plan Administration Board. The Third-Party Service Providers are: Third-Party Service Provider Services ---------------------------- -------- Morgan Lewis & Bockius LLP Legal representation Quinones Sanchez & Guzman Legal representation Rodriquez-Parissi Vazquez & Co. Tax representation Fisher & Phillips LLP Legal representation Schuster Usera & Aguilo Legal representation Andrea McDermott Accounting Shawn Gallagher Accounting Frank Lavalle AccountingD. Termination Except as otherwise agreed in writing by Century and ML Media, the Estate Administration Agreement will terminate upon the later to occur of the closing of Century/ML's Chapter 11 case, or the completion of all of the Transition Services as determined by the Administration Board.A full-text copy of the Estate Administration Agreement isavailable for free at http://ResearchArchives.com/t/s?1e7Century Communications Corporation filed for Chapter 11 protectionon June 10, 2002. Century's case has been jointly administered toproceedings of Adelphia Communications Corporation. Centuryoperates cable television services in Colorado, California andPuerto Rico. CENTURY is an indirect wholly owned subsidiary ofACOM and an affiliate of Adelphia Business Solutions, Inc.Lawyers at Willkie, Farr & Gallagher represent CENTURY.Headquartered in Coudersport, Pennsylvania, AdelphiaCommunications Corporation (OTC: ADELQ) is the fifth-largest cabletelevision company in the country. Adelphia serves customers in30 states and Puerto Rico, and offers analog and digital videoservices, high-speed Internet access and other advanced servicesover its broadband networks. The Company and its more than 200affiliates filed for Chapter 11 protection in the SouthernDistrict of New York on June 25, 2002. Those cases are jointlyadministered under case number 02-41729. Willkie Farr & Gallagherrepresents the ACOM Debtors. (Adelphia Bankruptcy News, IssueNo. 106; Bankruptcy Creditors' Service, Inc., 215/945-7000)CENTURY/ML: Court OKs Stipulation on Transfer Accounting Dispute----------------------------------------------------------------Adelphia Communications Corp., its wholly owned, indirectsubsidiary Debtor Century Communications Corp., Debtor Century/MLCable Venture, Century/ML Cable Corporation and ML MediaPartners, L.P., want to complete the consolidated auditedfinancial statements of Century/ML, which include the accounts ofCable Corp.On March 28, 2002, approximately $25 million was transferred fromthe bank accounts of Cable Corp. to the bank accounts of Centuryand ACOM. At the time of the Transfer, Century/ML and CableCorp. had consolidated liabilities to Century and ACOM of atleast $25 million.Disputes have arisen between Century and ACOM, on one side, andML Media, on the other, regarding: -- how to account for the Transfer, -- the effect of the Transfer on the Financial Statements, and -- other matters accounted for in the Financial Statements.Century and ML Media, as owners of Century/ML, agreed to adoptcertain proposed accounting treatments in the FinancialStatements for the Transfer Accounting Dispute and the OtherDisputed Matters, subject to, among others, the preparation oflanguage to be included in the notes to the Financial Statementsreasonably acceptable to Adelphia and to ML Media.In a stipulation Judge Gerber of the U.S. Bankruptcy Court for theSouthern District of New York approved, the parties agree that: 1. The Financial Statements, and the representation letters to be delivered by Century, ACOM and ML Media to Century/ML auditors in connection with the Financial Statements, are not intended to and will not preclude any of the parties from maintaining or asserting any claim, defense, or liability against each other; and 2. ML Media, Century and ACOM agree to the Proposed Accounting Treatment for the Transfer Accounting Dispute and waive all claims against each other, Cable Venture or Cable Corp. arising out of the adoption of the Proposed Accounting Treatment for the Transfer Accounting Dispute.Century Communications Corporation filed for Chapter 11 protectionon June 10, 2002. Century's case has been jointly administered toproceedings of Adelphia Communications Corporation. Centuryoperates cable television services in Colorado, California andPuerto Rico. CENTURY is an indirect wholly owned subsidiary ofACOM and an affiliate of Adelphia Business Solutions, Inc.Lawyers at Willkie, Farr & Gallagher represent CENTURY.Headquartered in Coudersport, Pennsylvania, AdelphiaCommunications Corporation (OTC: ADELQ) is the fifth-largest cabletelevision company in the country. Adelphia serves customers in30 states and Puerto Rico, and offers analog and digital videoservices, high-speed Internet access and other advanced servicesover its broadband networks. The Company and its more than 200affiliates filed for Chapter 11 protection in the SouthernDistrict of New York on June 25, 2002. Those cases are jointlyadministered under case number 02-41729. Willkie Farr & Gallagherrepresents the ACOM Debtors. (Adelphia Bankruptcy News, IssueNo. 106; Bankruptcy Creditors' Service, Inc., 215/945-7000)CERVANTES ORCHARDS: Deere Credit Won't Allow Cash Collateral Use----------------------------------------------------------------The U.S. Bankruptcy Court for the Eastern District of Washingtonapproved the request of Deere Credit, Inc., to prohibit CervantesOrchards and Vineyards LLC's continued access to cash collateralsecuring its prepetition debt.Deere Credit, a secured creditor, holds a fully secured claim forapproximately $4.2 million. The claim arises under several notesexecuted on July 8, 2003, by the Debtor and various non-debtorentities. The notes are currently in default.To secure repayment of notes, the Debtor granted Deere Credit asecurity interest in substantially all of the Debtor's personalproperty. The Debtor continues to operate while disposing of thecash collateral subject to the first priority security interest ofDeere Credit. To date, the Debtor has failed to perform itsobligations.Deere Credit told the Court that the Debtor has failed to provideany financial information or information accounting for the use ofcash collateral.Cervantes is not dependant on Deere for post-petition workingcapital. Cervantes has obtained post-petition DIP Financing fromGilbert Orchards.Headquartered in Sunnyside, Washington, Cervantes Orchards andVineyards LLC, filed for chapter 11 protection on Aug. 19, 2005(Bankr. E.D. Wash. Case No. 05-06600). R. Bruce Johnston, Esq.,at Law Offices of R. Bruce Johnston represents the Debtor in itsrestructuring efforts. When the Debtor filed for protection fromits creditors, it listed estimated assets of $10 million to$50 million and estimated debts of $1 million to $10 million.CHOICE FINANCIAL: Case Summary & 13 Largest Unsecured Creditors---------------------------------------------------------------Lead Debtor: Choice Financial Funding Inc. p/k/a Chase Financial Funding Inc. 21 Brookline Aliso Viejo, California 92656Bankruptcy Case No.: 05-17111Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Chase Enterprises LLC 05-17110Type of Business: The Debtor advertises, solicits, markets, and brokers mortgage loans.Chapter 11 Petition Date: September 26, 2005Court: Central District of California (Santa Ana)Judge: John E. RyanDebtors' Counsel: Leonard Pena, Esq. 555 West Fifth Street, 31st Floor Los Angeles, California 90013 Tel: (213) 966-8336 Fax: (213) 996-8337 Estimated Assets Estimated Debts ---------------- ---------------Choice Financial Funding $1 Million to Less than $50,000Inc. $10 MillionChase Enterprises LLC $1 Million to Less than $50,000 $10 MillionChoice Financial Funding Inc.'s 13 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Mintz Levin Cohen Ferris $100,000 1620 26th Street, Suite 2068N Santa Monica, CA 90404 Collier Shannon & Scott $69,000 Washington Harbour, Suite 400 3050 K Street Northwest Washington, DC 20007 PFE International $60,000 475 Goddard, Suite 150 Costa Mesa, CA 92626 Ricoh Copiers $50,000 Bank of America $11,278 M Power Communications $10,288 CDS Mortgage Reports $4,523 Federal Express $3,200 GE Capital $2,000 SBC $1,350 CR & R $540 SafeGuard $280 Cox $162COIN BUILDERS: Case Summary & 20 Largest Unsecured Creditors------------------------------------------------------------Debtor: Coin Builders, LLC P.O. Box 455 Wisconsin Rapids, Wisconsin 54495-0455Bankruptcy Case No.: 05-18109Type of Business: The Debtor has four subsidiaries that operate in the merchandising, wholesale, restaurant, and aviation sectors. See http://www.coinbuilders.net/Chapter 11 Petition Date: September 26, 2005Court: Western District of Wisconsin (Eau Claire)Debtor's Counsel: George B. Goyke, Esq. Goyke, Tillisch & Higgins LLP 207 Grand Avenue P.O. Box 2188 Wausau, Wisconsin 54402-2188 Tel: (715) 849-8100 Fax: (715) 849-8102Estimated Assets: $1 Million to $10 MillionEstimated Debts: $10 Million to $50 MillionDebtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------7-Eleven Inc. $9,987,8142711 North Haskell AvenueDallas, TX 75204Active Consumer Promotions Inc. $1,850,0001210 West Clay StreetHouston, TX 77019Circle K $1,346,342P.O. Box 52085Tempe, AZ 85281Speedway Superamerica LLC $977,988Attn: TreasuryP.O. Box 7600Springfield, OH 45501Upper Deck Company $799,30113326 Collection Center DriveChicago, IL 606937-Eleven (Canada) $536,2043185 Willington GreenBurnaby, BC V5G 4P3Topps Company Incorporated $363,093P.O. Box 4050 Church Street StationNew York, NY 10261-4050Conoco Phillips $353,995P.O. Box 66Bartellsville, OK 66066Rogers Video $352,442Unit #11, 10991 Shellbridge WayRichmond, BC V6X 3C6Nintendo of America Inc. $236,0024820 150th Avenue NortheastRedmond, WA 980527-Eleven Inc. $230,1752711 North Haskell AvenueDallas, TX 75204Playoff Corporation $202,418P.O. Box 226467Dallas, TX 75222United Parcel Service $197,255Lockbox 577Carol Stream, IL 60132-0577Bandai America Incorporation $176,524P.O. Box 51330Las Angeles, CA 900517-Eleven (Hawaii) $135,0961755 Nuu Anu Avenue 2nd FloorHonolulu, HI 96817Racing Champions $103,5202418 Reliable ParkwayChicago, IL 60686-2418Gas N Shop $81,035P.O. Box 81463Lincoln, NE 68501Ultra Mar $74,1942200 McGill CollegeMontreal, QC H3A 3L3Wizkids, Inc. $59,163P.O. Box 1176Spokane, WA 99210-1176Shop Rite $31,416115 East First StreetCrowley, LA 70526COLLINS & AIKMAN: GM Wants to Recover Tooling Equipment-------------------------------------------------------Before the Petition Date, Collins & Aikman Corporation and itsdebtor-affiliates entered into various purchase orders and supplyagreements with General Motors Corporation, pursuant to which theyagreed to and are obligated to manufacture GM's requirements ofcertain component parts.Scott A. Wolfson, Esq., at Honigman Miller Schwartz and Cohn LLP,in Detroit, Michigan, relates that the Debtors are GM's solesource, just-in-time suppliers of the Component Parts since GMobtains all of its Component Part requirements from the Debtors.Pursuant to the just-in-time supply method, GM does not maintain asignificant inventory of Component Parts and relies on frequent,even daily, shipments of Component Parts to meet production needs.Mr. Wolfson tells Judge Rhodes that due to the Debtors' Chapter11 cases, GM is prompted to prepare for re-sourcing in the eventthat the Debtors are no longer able to provide the parts neededfor its manufacturing processes. That preparation must includeGM's ability to repossess a certain tooling currently used by theDebtors pursuant to bailment agreements.Mr. Wolfson explains that the Component Parts are of a specificmanufacture and design. It is customary in the industry formanufacturers to pay for and own the tooling that is specific tothe manufactured parts unique to their vehicles. Via bailment,GM has provided the Debtors with certain supplies, materials,tools, jigs, dies, gauges, fixtures, molds, patterns, equipment,and other items to enable them to perform the Production PurchaseOrders.GM assures the Court that the company remains committed toproceed, in good faith, with all of the constituencies involvedwith Collins & Aikman Corp. in the pursuit of a successfulconclusion of the Chapter 11 cases. However, GM must prepare forcontingencies and circumstances in which the Debtors cannot orwill not be able to timely deliver the Component Parts to GM,thus placing its assembly operations in jeopardy withconsequential prejudice and actual harm to the company, its over100,000 employees, and the persons and entities who rely on andengage in business with it.Under the Tooling Purchase Orders, upon GM's payment of amountsproperly invoiced by the Debtors and validly due, GM would ownthe Tooling. GM believes that it has paid all the amounts due tothe Debtors. The Tooling is GM's property and the Debtors'obligation to turn the Tooling over to GM is absolute andunconditional, Mr. Wolfson says.Mr. Wolfson contends that the Debtors have no equity in theTooling and GM's repossession will not adversely affect anyreasonable likelihood of the Debtors' pursuit of a successfulconclusion to their Chapter 11 cases.Accordingly, GM asks the Court to lift the automatic stay to takeall necessary actions to: a. recover possession of all Tooling associated with a rejected Production Purchase Order immediately on the rejection date; b. recover possession of all Tooling associated with a facility that the Debtors notify their intent to close; c. recover possession of all Tooling after September 30, 2005, in the absence of a final, non-appealable order approving further financing for the Debtors in amounts adequate to maintain their projected operations or on the cessation of financing under the Final Order; and d. recover possession of all Tooling in the event the Debtors materially interrupt GM's vehicle assembly operations as a result of the Debtors' failure to adequately supply GM its requirements of Component Parts.Although GM is entitled to immediate relief from the automaticstay for cause, Mr. Wolfson clarifies that GM only seeks reliefcontingent on the Debtors' lack of adequate financing to maintainoperations, their rejection of any of the Production PurchaseOrders, their decision to close a facility, or their causing amaterial interruption in its assembly operations."The uncertainties confronting Collins & Aikman are self-evident.They include the limited amount and duration of its Debtor-in-Possession financing, as well as the aggressive combative actionsand the threats of the General Unsecured Creditors Committee toinduce Collins & Aikman to reject executory contracts with GMwithout an agreement to provide a reasonable transitional periodto wind down the particular production and avoid unnecessary harmand damages," Mr. Wolfson says.GM will continue its discussions with Collins & Aikman and otherparties-in-interest in pursuit of the Debtors' efforts to emergefrom Chapter 11 as competitive, viable suppliers or to otherwisedispose of their assets in the best interests of the economicstakeholders. Brown RespondsBrown Corporation is a Tier II supplier for GM. This means thatGM contracted with the Debtors to produce the Component Partspursuant to Production Purchase Orders, and the Debtors, in turn,contracted with Brown to: (a) produce certain component parts; and (b) acquire the tooling to manufacture the Brown Component Parts.Mark L. Collins, Esq., at Varnum, Riddering, Schmidt & HowlettLLP, in Grand Rapids, Michigan, relates that the Debtors issuedpurchase orders directly to Brown for the Brown Component Partsand the Brown Tooling. Brown is the current owner of the BrownTooling.Brown objects to GM's request to the extent that GM maysubsequently attempt to use any order issued by the Court as ameans to obtain possession of the Brown Tooling. While Brownacknowledges that GM may only intend for its request to pertainto its Tooling in the Debtors' possession, Brown says the Requestis ambiguous. GM's Tooling Purchase Orders to the Debtors do notpreempt Brown's ownership of the Brown Tools.Thus, Brown asks the Court to limit the relief requested by GM soas to preclude GM from taking actions to recover possession oftooling which belongs to or is subject to the rights of Brown andother third parties.Headquartered in Troy, Michigan, Collins & Aikman Corporation-- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leadingsupplier of instrument panels, automotive fabric, plastic-basedtrim, and convertible top systems. The Company has a workforce ofapproximately 23,000 and a network of more than 100 technicalcenters, sales offices and manufacturing sites in 17 countriesthroughout the world. The Company and its debtor-affiliates filedfor chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. CaseNo. 05-55927). When the Debtors filed for protection from theircreditors, they listed $3,196,700,000 in total assets and$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News,Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000)COMPOSITE TECH: Selling $6 Million Notes Via Private Placement--------------------------------------------------------------Composite Technology Corporation (OTC Bulletin Board: CPTCQ)entered into an agreement to sell $6 million aggregate principalamount of senior convertible notes due December 2006, with aninterest rate of 6.0% per annum, payable quarterly to certaininstitutional accredited investors in a private placement.The Notes will be convertible into shares of the Company's commonstock at a conversion price of $1.60 per share.The institutional accredited investors will also receive twotranches of warrants, each of which will be exercisable for562,500 shares of the Company's common stock. One such tranche ofwarrants will have an exercise price of $2.00 per share and theother tranche will have an exercise price of $1.84 per share.Both tranches of warrants will have a term of three years. Theplacement of the Notes and Warrants is expected to close on orbefore Sept. 30, 2005, subject to the Bankruptcy Court's approval.A hearing has been scheduled before Judge John E. Ryan, U.S.Bankruptcy Court, at 3:30 pm (PDT) on Sept. 28, 2005, for theCompany to seek approval of this financing.The net proceeds of the offering will be used to pay allowed pre-petition claims and administrative fees and expenses uponconfirmation and consummation of the Company's plan ofreorganization in addition to providing capital for generaloperating purposes. A hearing to consider confirmation of theCompany's plan of reorganization is currently scheduled forOct. 12, 2005.Headquartered in Irvine, California, Composite TechnologyCorporation -- http://www.compositetechcorp.com/-- provides high performance advanced composite core conductor cables for electrictransmission and distribution lines. The proprietary new ACCCcable transmits two times more power than comparably sizedconventional cables in use today. ACCC can solve high-temperatureline sag problems, can create energy savings through less linelosses, and can easily be retrofitted on existing towers toupgrade energy throughput. ACCC cables allow transmission owners,utility companies, and power producers to easily replacetransmission lines without modification to the towers usingstandard installation techniques and equipment, thereby avoidingthe deployment of new towers and establishment of new rights-of-way that are costly, time consuming, controversial and may impactthe environment. The Company filed for chapter 11 protection onMay 5, 2005 (Bankr. C.D. Calif. Case No. 05-13107). Leonard M.Shulman, Esq., at Shulman Hodges & Bastian LLP, represents theDebtor in its restructuring efforts. As of March 31, 2005, theDebtors reported $13,440,720 in total assets and $13,645,199 intotal liabilities.CORNERSTONE PRODUCTS: Panel Taps FTI as Financial Advisor---------------------------------------------------------The U.S. Bankruptcy Court for the Eastern District of Michigangave the Official Committee of Unsecured Creditors of CornerstoneProducts, Inc., permission to retain FTI Consulting, Inc., as itsfinancial advisor.The Committee tells the Bankruptcy Court that FTI Consulting willaid in its assessment and monitoring of the Debtor's efforts tomaximize the value of the estate and achieve a successfulreorganization.In this engagement, FTI Consulting will: a) assist the Committee in the review of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; b) assist the Committee with information and analyses required pursuant to the Debtor's use of cash collateral including preparation for hearings regarding the use of cash collateral; c) assist with a review of the Debtor's short-term cash management procedures; d) assist and advice the Committee with respect to the Debtor's identification of core business assets and disposition of assets or liquidation of unprofitable operations; e) assist with a review of the Debtor's performance of cost/benefit evaluations with respect to the affirmation or rejection of various executory contracts and leases; f) assist in the valuation of the present level of operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; g) assist in the review of financial information distributed by the Debtor to creditors and others, including cash flow projections and budgets, cash receipts and disbursement analysis , analysis of various assets and liability accounts, and analysis of proposed transactions for which Court approval is sought; h) attend meetings and assist in discussions with the Debtor, potential investors, banks, other secured lenders, the Committee and any other official committees organized in this chapter 11 proceeding, the U.S. Trustee, other parties in interest and their professionals; i) assist in the review and preparation of information and analysis necessary for the confirmation of a Plan of Reorganization; j) assists in the evaluation any analysis of avoidance actions, including fraudulent conveyances and preferential transfers; and k) provide litigation advisory services with respect to accounting and tax matters, along with expert witness testimony on case related issues as required by the Committee;The hourly rates for FTI Consulting's professionals are: Designation Hourly Rate ----------- ----------- Senior Managing Directors $560 - $625 Directors and Managing Directors 415 - 560 Associates and Consultants 205 - 385 Administrative and Paraprofessionals 95 - 168The Committee assures the Bankruptcy Court that FTI Consultingdoes not hold any interest adverse to the Debtor or its estate.FTI Consulting -- http://www.fticonsulting.com/-- is a premier provider of problem-solving consulting and technology services tomajor corporations, financial institutions and law firms whenconfronting critical issues that shape their future and the futureof their clients, such as financial and operational improvement,major litigation, mergers and acquisitions and regulatory issues.Located in 24 of the major US cities, London and Melbourne, FTI'stotal workforce of more than 1,100 employees includes numerousPhDs, MBAs, CPAs, CIRAs and CFEs.Headquartered in Plano, Texas, Cornerstone Products, Inc. -- http://www.cornerstoneproducts.com/-- manufactures custom injection molded plastic products. The Company filed forchapter 11 protection on July 5, 2005 (Bankr. E.D. Tex. Case No.05-43533). Frank J. Wright, Esq., at Hance Scarborough WrightGinsberg & Brusilow, L.L.P., represents the Debtor in itsrestructuring efforts. When the Debtor filed for protection fromits creditors, it listed total assets of $59,595,144 and totaldebts of $65,714,015.CUMMINS INC: Plans to Repay $250 Million 9-1/2% Notes in Dec. 2006------------------------------------------------------------------In another move aimed at decreasing its debt and strengthening itsbalance sheet, Cummins Inc. (NYSE:CMI) intends to repay$250 million in 9-1/2 percent notes in December 2006, the firstcall date for the debt. The notes, which were issued in November2002, will be repaid using cash generated from Cummins operations.The Company will also begin to repurchase shares of common stockwith the intent to buy back $100 million worth of Cummins stockwithin two years. This repurchase reflects the Company'scommitment to returning value to its shareholders.Cummins executives, outlined the Company's plans for continuedprofitable growth. The key points are: -- Cummins has improved its cost structure and is more diversified by product and geographic region than during the last peak in the North American heavy-duty truck cycle. As a result, the Company is poised to provide more stable earnings in the future and is better prepared to weather the next downturn in the business cycle. -- Cummins is a strong and growing presence in key emerging markets such as China and India. -- Cummins is focused on cash management and strengthening its balance sheet. -- Cummins has invested in the right technologies to meet global emissions standards.The Company also reaffirmed its 2005 full-year earnings guidanceof $10.10-$10.30 and its third-quarter guidance of $2.40- $2.50 ashare."Over the past five years, we have worked hard to improve our coststructure, strengthen our balance sheet and restructure ourbusinesses to make Cummins a stronger global competitor," said TimSolso, Cummins Chairman and Chief Executive Officer. "In effect,we have created a 'new Cummins' that is well-positioned for thefuture."Cummins reported record earnings and revenues in 2004 and is onpace to do so again in 2005.For the first six months of 2005, Cummins reported net income of$238 million on sales of $4.70 billion - compared to net income of$115 million and sales of $3.90 billion for the same period of2004. The Company raised its 2005 earnings guidance in late Julyto $10.10-$10.30.Debt repayment to strengthen balance sheet, lower future interestexpenseIn repaying the debt at the first call date, the Company will paynote-holders a premium of 4.75 percent, bringing the total cost ofthe repayment to approximately $262 million. That premium,however, will be more than offset by the reduction in futureinterest expense."Reducing debt is a central part of Cummins strategy to strengthenits balance sheet and improve its liquidity," said CumminsChief Financial Officer Jean Blackwell. "We reduced our debt by$258 million early this year, and our continued strong operatingperformance has put us in the position to take further steps tolower our debt levels."Cummins Inc. -- http://www.cummins.com/-- a global power leader, is a corporation of complementary business units that design,manufacture, distribute and service engines and relatedtechnologies, including fuel systems, controls, air handling,filtration, emission solutions and electrical power generationsystems. Headquartered in Columbus, Indiana, (USA) Cummins servescustomers in more than 160 countries through its network of 550Company-owned and independent distributor facilities and more than5,000 dealer locations. With more than 28,000 employees worldwide,Cummins reported sales of $8.4 billion in 2004. * * *As reported in the Troubled Company Reporter on Sept. 20, 2005,Moody's Investors Service raised its rating of Cummins Inc.'s debtsecurities (senior unsecured to Ba1 from Ba2), and also affirmedthe company's Ba1 corporate family rating and SGL-1 speculativegrade liquidity rating. The rating outlook is changed to positivefrom stable.As reported in the Troubled Company Reporter on Aug. 5, 2005,Standard & Poor's Ratings Services raised its rating on the$28,000,000 Structured Asset Trust Unit Repackagings CumminsEngine Co. Debenture-Backed Series 2001-4 certificates to 'BBB-'from 'BB+'.DAP HOLDING: Section 304 Petition Summary-----------------------------------------Petitioner: Hermanus Johannes Touw Director and General Manager DAP Holding, N.V. Debtors Case No. ------- -------- DAP Holding N.V. 05-18816 Achmea Schadeverzekeringen N.V. 05-18820 AEGON Schadeverzekering N.V. 05-18824 Allianz Nederland Schadeverzekering N.V. 05-18825 AMEV Schadeverzekering N.V. 05-18827 Atradius Credit Insurance N.V. 05-18832 AXA Schade N.V. 05-18836 Delta Lloyd Schadeverzekering N.V. 05-18838 Fortis Corporate Insurance N.V. 05-18855 GENERALI Schadeverzekering Maatschappij N.V. 05-18857 Goudse Schadeverzekeringen N.V. 05-18858 N.V. Maatschappij van Assurantie, Discontering en Beleening der Stad Rotterdam Anno 1720 05-18859 N.V. Nationale Borg-Maatschappij 05-18860 N.V. Noordhollandsche Van 1816 Algemene Verzekeringsmaatschappij 05-18861 N.V. Verzekering Maatschappij de Noord-en Zuid-Hollandsche Lloyd 05-18862 Nationale-Nederlanden Internationale Schadeverzekering N.V. 05-18864 Nationale-Nederlanden Schadeverzekering Maatschappij N.V. 05-18865 Vereenigde Assurantiebedrijven "Nederland" N.V. 05-18866Address: Hoogoorddreef 54E 1101 BE Amsterdam The NetherlandsType of Business: The Debtors are insurance companies that participated in a pool of insurers known as the Dutch Aviation Pool, which started operation in 1932. The Pool's business originally consisted of all aviation and aviation-related product liability insurance and reinsurance for airlines (hull and liability), for manufacturers and suppliers, airport liability, hangar keepers and personal accident. In January 1997, the Pool ceased writing new insurance and went into run-off. All Scheme Companies are solvent except DAP. The Scheme Companies wish to avoid prolonging the run-off through the Scheme of Arrangment. Under the Scheme, future and contingent liabilities of the Scheme Companies will be valued and paid earlier than would otherwise be the case under a normal run-off. The Petitioner wants the Scheme to be binding on all Scheme Creditors.Section 304 Petition Date: September 27, 2005U.S. Bankruptcy Court: Southern District of New York (Manhattan)Petitioner's Counsel: Gregory M. Petrick, Esq. Ingrid Bagby, Esq. David Neiman, Esq. Cadwalader, Wickersham & Taft LLP One World Financial Center New York, New York 10281 Tel: (212) 504-6373 Fax: (212) 504-6666Estimated Assets: More than $100 MillionEstimated Debts: More than $100 MillionDRUGMAX INC: Wells Fargo Commits $65 Million in New Financing------------------------------------------------------------- DrugMax, Inc. (Nasdaq: DMAX) signed a commitment letter withWells Fargo Retail Finance, LLC, to underwrite a new $65 millionSenior Secured Revolving Credit Facility. The new creditfacility, which has a maturity of five years, is expected to closeon or before Oct. 30, 2005, and is contingent on executing acustomary final credit agreement.The Company plans to use the proceeds from the new facility toreplace its existing $65 million Senior Credit Facility. DrugMaxhas been in violation of certain covenants of the current CreditFacility since January 2005. In addition to refinancing the oldfacility, the new Wells Fargo facility provides more flexibleterms and additional borrowing availability to allow the Companyto use the facility for growth opportunities and acquisitions."We are pleased to have signed a commitment letter for this newcredit facility with such a prominent bank that understands ourbusiness, has extensive experience in the industry and supportsour post-merger strategy," Jim Searson, Chief Financial Officer ofDrugMax, said. "This credit facility, which has covenantsconsistent with our long-term strategy, provides the Company withadditional liquidity and flexibility to both operate the businessand take advantage of our future growth potential. Movingforward, our improved financial strength will be instrumental aswe continue to strive towards achieving sustained profitablegrowth and position the Company to take advantage of the favorabledynamics in the specialty pharmacy industry."Timothy R. Tobin, Senior Vice President, National DirectorMarketing & Structure, Wells Fargo Retail Finance, added, "We areextremely pleased to establish a relationship with DrugMax andsupport the Company's efforts as it continues to execute itsbusiness strategy and enhance its position within the industry." Senior Credit FacilityOn Dec. 9, 2004, the Company entered into a Second Amended andRestated Credit Agreement with General Electric CapitalCorporation, which increased the facility from $31 million to$65 million. The $65 million of maximum availability was reducedby $5.5 million of permanent availability, until the March 2005Amendment, which increased the permanent availability reduction to$7.5 million. The Senior Credit Facility will mature on Dec. 9,2007. The Senior Credit Facility includes a prepayment penaltyof: (1) $1,300,000 if paid in full before December 9, 2005, (2) $975,000 if paid in full after December 9, 2005 but before December 9, 2006, and (3) $650,000 if paid after December 9, 2006.The Senior Credit Facility is secured by substantially all assetsof the Company. As of April 2, 2005, $48 million was outstandingunder the Senior Credit Facility and $1 million was available foradditional borrowings. Going Concern DoubtIn its Form 10-K filing, Deloitte & Touche LLP, the Company'sindependent registered certified public accounting firm, issued anunqualified audit report with an explanatory paragraph raisingdoubt about the Company's ability to continue as a going concern. About Wells Fargo Retail FinanceWells Fargo Retail Finance, headquartered in Boston, specializesin building relationships and delivering customized, flexiblefinancial solutions to single and multi-channel retailersthroughout North America. It is part of Wells Fargo & Company(NYSE: WFC), a diversified financial services company with $435billion in assets, providing banking, insurance, investments,mortgage and consumer finance to more than 23 Million customersfrom more than 6,000 stores and the Internet -http://www.wellsfargo.com/-- across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only bank in theUnited States to receive the highest possible credit rating,"Aaa," from Moody's Investors Service.DrugMax, Inc. -- http://www.drugmax.com/-- is a specialty pharmacy and drug distribution provider formed by the merger onNovember 12, 2004 of DrugMax, Inc. and Familymeds Group, Inc.DrugMax works closely with doctors, patients, managed careproviders, medical centers and employers to improve patientoutcomes while delivering low cost and effective healthcaresolutions. The Company is focused on building an integratedspecialty drug distribution platform through its drug distributionand specialty pharmacy operations. DrugMax operates two drugdistribution facilities, under the Valley Drug Company and ValleyDrug South names, and 77 specialty pharmacies in 13 states underthe Arrow Pharmacy & Nutrition Center and Familymeds Pharmacybrand names.DRUGMAX INC: Has Until Oct. 24 to Comply with Nasdaq Requirements----------------------------------------------------------------- DrugMax, Inc. (Nasdaq: DMAX) received a letter from Nasdaq onSept. 22, 2005, notifying the Company that it was not incompliance with Marketplace Rule 4310(c)(2)(B). This rulerequires the Company to have a minimum $35 million in market valueof listed securities, $2.5 million in shareholders' equity, or netincome from continuing operations of $500,000 in the most recentlycompleted fiscal year or in two of the last three most recentlycompleted fiscal years. Nasdaq informed the Company that it wouldbe provided until Oct. 24, 2005, to regain compliance with therule.DrugMax believes that it will regain compliance with the continuedlisting requirements of the Nasdaq SmallCap Market by Oct. 24,2005. If the Company does not regain compliance by October 24th,it can request a hearing with Nasdaq. Going Concern DoubtIn its Form 10-K filing, Deloitte & Touche LLP, the Company'sindependent registered certified public accounting firm, issued anunqualified audit report with an explanatory paragraph raisingdoubt about the Company's ability to continue as a going concern.DrugMax, Inc. -- http://www.drugmax.com/-- is a specialty pharmacy and drug distribution provider formed by the merger onNovember 12, 2004 of DrugMax, Inc. and Familymeds Group, Inc.DrugMax works closely with doctors, patients, managed careproviders, medical centers and employers to improve patientoutcomes while delivering low cost and effective healthcaresolutions. The Company is focused on building an integratedspecialty drug distribution platform through its drug distributionand specialty pharmacy operations. DrugMax operates two drugdistribution facilities, under the Valley Drug Company and ValleyDrug South names, and 77 specialty pharmacies in 13 states underthe Arrow Pharmacy & Nutrition Center and Familymeds Pharmacybrand names.DURANGO GEORGIA: Paper Mill & Timberland to be Auctioned on Dec. 6------------------------------------------------------------------Bridge Associates, LLC, will auction the assets held by theBankruptcy Estate of Durango Georgia Paper Company on Dec. 6,2005, at 10:00 a.m. at the Amelia Island Plantation, 6800 FirstCoast Highway in Amelia Island, Florida.The Durango bankruptcy estate includes a "moth-balled" paper millsituated upon approximately 750 acres of marsh and river-frontland that make up the property of Durango Georgia Paper of St.Mary's, Georgia, along with the plant and equipment formerlyoperated as the paper mill and approximately 3,400 acres of timbertracts located near or abutting I-95 in Southeast Georgia,approximately 35 minutes north of Jacksonville, Florida."This property is one of the few remaining large tracks suitablefor resort, mixed use development located on the intercoastalwaterway on the Georgia coast," Anthony Schnelling, the court-appointed Trustee for the Durango estate and a principal of BridgeAssociates, said. "The 'moth-balled' paper mill also presentsunique opportunities for paper producers seeking to expandproduction during the current strong paper market. We stronglyrecommend that any interested parties that are planning to attendthe auction make their reservations well in advance. Since weannounced the selection of the "stalking horse" bidder, there hasbeen considerable interest in the estate's property, and we expecta productive and competitive bidding process."All pre-auction bids must be submitted to the Trustee, so as to bereceived by or before Dec. 1, 2005, 5:00 p.m. EST. Furtherdetails on the auction process will be provided to qualifiedbidders closer to the actual time of the auction.Hilco Real Estate, LLC of Northbrook, Illinois, is the exclusivereal estate advisor to the Durango estate, and the company playeda key role in the process that led to the ultimate selection of a"stalking horse" bidder.Al Lieberman, a Principal with Hilco Real Estate, commented, "Wewere pleased to have been selected for this important assignmentand look forward to a very successful auction sale."On Sept. 19, 2005, St. Mary's Redevelopment Group, LLC, submitteda stalking horse bid in the amount of $15 million, plus 18.5percent of all future gross revenues from development sales andfrom sale of the equipment out of the closed paper mill. St.Mary's, a sister company of RealtiCorp, a Greenville, SouthCarolina commercial real estate development Firm, indicated anintent to redevelop the mill property as a mixed-use resort.The Durango estate has been represented in connection with thistransaction by Bridge Associates, LLC, as Trustee, Hilco RealEstate, LLC of Northbrook, Illinois, as exclusive real estateadvisor, and by Ward Stone, Jr. of Stone & Baxter, LLP, a law firmbased in Macon, Georgia, as counsel.Headquartered in St. Mary's, Georgia, Durango Georgia -- http://www.durangopaper.com/-- was a nationally recognized bleached board and kraft paper producer in the U.S. offeringcoast-to-coast and international service. On Oct. 29. 2002,Durango's creditors filed an involuntary chapter 7 petitionagainst it and the Company consented to the petition. The Companyfiled for chapter 11 relief on Nov. 20, 2002 (Bankr. S.D. Ga. CaseNo. 02-21669). George H. Mccallum, Esq., at Stone & Baxter, LLP,Kate D. Strain, Esq., at Hunter, Maclean, Exley & Dunn, PC, andNeil P. Olack, Esq., at Duane Morris LLP, represent the Debtor inits restructuring efforts. Bridge Associates, LLC, was appointedas Trustee in the Case under the terms of a Plan of Liquidationapproved by creditors and confirmed by the Bankruptcy Court inJune 2004.DURA OPERATING: Moody's Junks $856 Million Senior Notes' Ratings----------------------------------------------------------------Moody's Investors Service downgraded the ratings of Dura OperatingCorp., its direct parent Dura Automotive Systems, Inc., andsubsidiary Dura Automotive Systems Capital Trust. DuraAutomotive's Corporate Family rating has been lowered to B3 fromB2. Dura Operating Corp.'s senior secured second lien ratingswere lowered to B3 from B2; senior unsecured to Caa1 from B3; andsenior subordinated to Caa2 from Caa1. Dura Automotive SystemsCapital Trust's preferred securities were lowered to Caa3 fromCaa2. The speculative grade liquidity rating was affirmed at SGL-2. The outlook is stable.The downgrades were driven by: * the confluence of weak operating results and free cash flow; * high leverage and continuing issues of customer concentration; and * an unfavorable product platform mix.Moody's anticipates a challenging production environment at DuraAutomotive's key customers, ongoing uncertainty of future marketshares for the North American Big 3 and continued demands by OEMsfor price concessions. Weaker operating results combined with thecompany's financial leverage are expected to continue to pressuredebt protection measures over the intermediate term. Free cashflow is expected to be negative for fiscal 2005 with debtpersisting at elevated levels.The rating actions also incorporate the uncertain environment forautomotive production in North America for the balance of 2005 and2006 in the wake of higher petroleum prices, the cessation ofsignificant incentive programs by major OEMs and the impact thesefactors may have on automotive build rates, and in particular someof Dura Automotive's key vehicle platforms, over the intermediateterm. The SGL-2 rating represents good liquidity over the nexttwelve months.Ratings downgraded: Dura Automotive Systems, Inc.: * Corporate Family to B3, from B2 Dura Operating Corp.: * $150 million guaranteed senior secured second-lien term loan due April 2011 to B3 from B2 * $400 million of 8.625% guaranteed senior unsecured notes due April 2012 (consisting of $350 million and $50 million tranches, respectively) to Caa1 from B3; * $456 million of 9% guaranteed senior subordinated notes due May 2009 to Caa2 from Caa1; * ?100 million of 9% guaranteed senior subordinated notes due May 2009 to Caa2 from Caa1 Dura Automotive Systems Capital Trust's: * $55.25 million of 7.5% convertible trust preferred securities due 2028 to Caa3 from Caa2; * Dura Automotive's $175 million guaranteed senior secured first-lien asset-based revolving credit is not rated. * Dura Automotive's Speculative Grade Liquidity Rating has been affirmed at SGL-2The B3 Corporate Family rating incorporates higher leverage andlower debt protection measures which have resulted from weakproduction levels and exposures to several structural challenges.The North American Big 3 OEMs accounted for 51% of the end use ofDura Automotive's revenues in fiscal 2004. Lower OEM productionvolumes, particularly from the Big 3, and uncertainty concerningthe future market share of the Big 3 are expected to negativelyimpact Dura Automotive's operating results. Weak profitability byOEMs has led to a continued demand for price concessions fromsuppliers, including Dura Automotive. Unfavorable customer andplatform mix have also affected Dura Automotive's results as someof the company's customers and product platforms areunderperforming the broader industry.The aforementioned factors have led to a weakening in DuraAutomotive's cash flow, leverage and interest coverage metrics.Dura Automotive's debt/EBITDA (calculated using Moody's standardadjustments) has increased from 6.0x at year-end 2003. Inaddition, with over $80 million of negative free cash flow (aftercapital expenditures) for the first six months of 2005 andchallenging industry conditions, free cash flow is expected to benegative for fiscal year-end 2005. Free cash flow to debt hasdecreased from 4.2% in 2004 to negative 0.6% on an LTM basis atJuly 3, 2005. Dura Automotive's debt/EBITDA credit statisticcould deteriorate to almost 7.0x for fiscal 2005 and EBIT/interestcoverage could fall slightly below 1.0x.Dura Automotive's speculative grade liquidity rating was affirmedat SGL-2 reflecting good liquidity over the next twelve months.Dura Automotive's liquidity position includes an expectation ofnegative free cash flow (after capital expenditures) in fiscal2005, but is offset to an extent by: * an adequate cash balance; * modest pension funding and cash restructuring requirements; and * a $175 million committed revolving credit facility.The revolving credit facility is subject to borrowing baselimitations monitored on a monthly basis. Currently there are nofinancial covenant ratio requirements since the combination ofbalance sheet cash and excess availability is above the $35million threshold. At July 3, 2005 the company had $101.7 millionof cash on its balance sheet.The stable outlook is supported by: * Dura Automotive's geographic, * product and vehicle platform diversification, * cost reduction initiatives, and * good liquidity.In fiscal 2004, approximately 59% and 39% of sales were generatedin North America and Europe, respectively. The company isstrategically focusing on new safety items and electronics. Inaddition, the recreational vehicle part of the business (roughly15% of Dura Automotive's business) offers some diversificationaway from the automotive supplier industry. The company commandsthe leading market position for certain of its product categories.Moody's notes that Dura Automotive's management has takenrestructuring actions to reduce costs. These have allowed thecompany to remain competitive in a cyclical industry. DuraAutomotive's management has implemented steps to further lowercosts by freezing salaried wages through the remainder of 2005,eliminating Dura Automotive's 2005 performance based 401-Kdiscretionary contributions and canceling the 2005 managementbonus program. Other factors contributing to the stable outlookinclude: * the company's efforts to expand further into Eastern Europe and Asia; * its finalization of steel price negotiations with customers; and * its competitive low cost structure versus peers.A limited percentage of Dura Automotive's North American workforceis represented by unions.Developments that could result in lower ratings include: * EBITDA margins falling below 6%; * EBIT margins falling below 2%; * continued negative free cash flow generation, * leverage increasing to over 7.0x; * weakening liquidity; or * EBIT/interest coverage falling well below 1.0x.Factors that could lead to higher ratings include: * EBIT margins sustained at a minimum of 7-8%; * EBITDA margins reaching approximately 7.5%; * Debt/EBITDA falling below 6.0x; * sustaining positive free cash flow; and * an improved liquidity profile.Dura Automotive, headquartered in Rochester Hills, Michigan,designs and manufactures components and systems primarily for theglobal automotive industry including: * driver control systems, * structural door modules, * glass systems, * seating control systems, * exterior trim systems, and * mobile products.Dura Automotive is a public company whose predecessor wasinitially formed in November 1990. Annual revenues approximate$2.4 billion.ELITE GAMING: Case Summary & 8 Largest Unsecured Creditors----------------------------------------------------------Debtor: Elite Gaming LLC dba Barstow Development Associates 2501 East Chapman Avenue, Suite 220 Fullerton, California 92831-3108Bankruptcy Case No.: 05-17156Chapter 11 Petition Date: September 26, 2005Court: Central District of California (Santa Ana)Judge: James N. BarrDebtor's Counsel: Garrick A. Hollander, Esq. Winthrop Couchot, Professional Corporation 660 Newport Beach, California 92660 Tel: (949) 720-4100Total Assets: $2,050,000Total Debts: $1,474,327Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------Daehnke & Cruz Trade & repayment $31,892Attn: Corporate Officer of funds3333 Michelson Drive, #800Irvine, CA 92612Jon Kimbrell Unsecured loan $31,000950 East Katella Avenue,Suite 4Orange, CA 92867Prospectus Printing Trade $13,034Attn: Hellen Brown918 North Morgan StreetOrange, CA 92867Steve Fink, Esq. Trade $12,839Seagroves Studios Trade $10,000Santos Vaquerano Unsecured loan $7,500Airviews Inc. Trade $6,000Diller & Associates Trade $5,000ENRON CORP: Agrees to Allow ECP Claims for $12 Million------------------------------------------------------On Nov. 25, 2002, East Coast Power, LLC, filed Claim Nos.22089 and 22090, each for $6,606,357 against Enron Corp. andEPC Estate Services, Inc., formerly known as National EnergyProduction Corporation.On March 9, 2005, Enron filed an Estimation Objection withrespect to the ECP Claims.ECP was an appellant in an appeal before the Superior Court ofNew Jersey, Appellate Division, pursuant to which, among otherthings, ECP sought to retain up to $2,196,000 from a New Jerseylien pool.Pursuant to a stipulation, the parties agree that: (1) Claim No. 22089 will be allowed as a Class 185 Enron guaranty claim for $6,139,00; (2) Claim No. 22090 will also be allowed as a Class 67 general unsecured claim against NEPCO for $6,139,000; (3) ECP represents and warrants that: (a) the NJ Appellate Court has rendered a final decision against ECP in the NJ Lien Pool Appeal, and (b) ECP has not received and is not party to any agreement or understanding pursuant to which it will receive any portion of the Lien Pool Amount; (4) If ECP receives any amount from the Lien Pool prior to receiving distributions on the Allowed Claims, the amount of each of the Allowed Claims will be reduced by the amount of the Lien Pool Refund. If ECP receives a Refund after receiving the claim distributions, ECP will promptly pay to Enron an amount equal to the difference between: (x) the distribution received by ECP under the Plan on account of the Allowed Claims, and (y) the distribution ECP would have received under the Plan on account of Allowed Claims if the Allowed Claims had been reduced by the amount of the Lien Pool Refund; (5) The Objection will be withdrawn; and (6) They will mutually release each other from any obligations under the ECP Claims.Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditorsand liquidating its remaining operations. Before the companyagreed to be acquired, controversy over accounting procedures hadcaused Enron's stock price and credit rating to drop sharply.Enron filed for chapter 11 protection on December 2, 2001 (Bankr.S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed theCompany's Modified Fifth Amended Plan on July 15, 2004, andnumerous appeals followed. The Confirmed Plan took effect onNov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen,Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors intheir restructuring efforts. (Enron Bankruptcy News, Issue No.159; Bankruptcy Creditors' Service, Inc., 15/945-7000)ENRON CORP: Wants Court Nod on Potomac Settlement Agreement-----------------------------------------------------------Potomac holds 8,929.385 shares of Series A Preferred Stock ofOrganizational Partner, Inc.In connection with its holdings, on October 15, 2002, Potomactimely filed Claim No. 13097 against Enron Corp.Enron objected to the Claim.The Reorganized Debtors and Potomac subsequently asked the Courtto adjourn the hearing on the Objection and agreed to negotiate asettlement.The salient terms of the settlement agreement entered into by theparties, along with Deutsche Bank AG, are: (1) In the event that the Closing Date occurs on or before September 30, 2005, OPI will pay Potomac $13,251,279: -- $10,000,000 represents a return of Potomac's equity investment in OPI, and -- $3,251,278 of which represents unpaid dividends and accrued interest; (2) In the event that the Closing Date occurs on or after October 1, 2005, OPI will pay Potomac the Base Payment, plus an additional $78,404 per month until the Closing Date occurs; (3) Upon payment of the settlement amount, OPI will redeem all of the Potomac Shares; (4) Any and all claims of Potomac or its affiliates related to the Potomac Shares, including but not limited to the Claim, will be deemed withdrawn, with prejudice, and expunged in their entirety, without any further action; and (5) The parties will exchange limited mutual releases.The Reorganized Debtors ask the Court to approve the PotomacSettlement.Headquartered in Houston, Texas, Enron Corporation -- http://www.enron.com/-- is in the midst of restructuring various businesses for distribution as ongoing companies to its creditorsand liquidating its remaining operations. Before the companyagreed to be acquired, controversy over accounting procedures hadcaused Enron's stock price and credit rating to drop sharply.Enron filed for chapter 11 protection on December 2, 2001 (Bankr.S.D.N.Y. Case No. 01-16033). Judge Gonzalez confirmed theCompany's Modified Fifth Amended Plan on July 15, 2004, andnumerous appeals followed. The Confirmed Plan took effect onNov. 17, 2004. Martin J. Bienenstock, Esq., and Brian S. Rosen,Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors intheir restructuring efforts. (Enron Bankruptcy News, Issue No.158; Bankruptcy Creditors' Service, Inc., 15/945-7000)ENTERGY NEW ORLEANS: Court Approves Interim DIP Facility--------------------------------------------------------The U.S. Bankruptcy Court for the Eastern District of Louisianagave Entergy New Orleans interim access to $100 million of DIPfinancing from its parent, Entergy Corporation.The Debtor originally asked the Court for approval to borrow up to$150 million on an interim basis, but contracted its request by$50 million.The DIP loan will enable Entergy New Orleans to meet its near-termobligations, including employee wages and benefits, payments underpower purchase and gas supply agreements, and its current effortsto repair and restore the facilities needed to serve its electricand gas customers.The Debtor will return to Court next month to request access tothe full $200 million DIP Facility on a final basis.Entergy New Orleans, which provides electric and natural gasservice to customers within the city of New Orleans, is thesmallest of Entergy's five utility companies and represented about7% of the consolidated revenues and 3% of its consolidatedearnings in 2004. Neither Entergy Corporation nor any ofEntergy's other utility and non-utility subsidiaries were includedin the bankruptcy filing.As previously reported, the Company's filing for chapter 11protection was intended to address the very legitimate concernexpressed recently in a letter by U.S. Senators Mary Landrieu andDavid Vitter from Louisiana to President Bush that the potentialbankruptcy of Entergy New Orleans would stall or cease restorationefforts in the City as a result of creditor disputes that couldarise in such a filing.Entergy Corporation -- http://www.entergy.com/-- is an integrated energy company engaged primarily in electric power production andretail distribution operations. Entergy owns and operates powerplants with approximately 30,000 megawatts of electric generatingcapacity, and it is the second-largest nuclear generator in theUnited States. Entergy delivers electricity to 2.7 millionutility customers in Arkansas, Louisiana, Mississippi, and Texas.Entergy has annual revenues of over $10 billion and approximately14,000 employees.ESCHELON TELECOM: Registers 1.6-Mil Common Shares for Distribution------------------------------------------------------------------Eschelon Telecom, Inc., registers with the Securities and ExchangeCommission 1,632,414 shares of common stock to be distributedunder the 2002 Stock Incentive Plan.The Company valued the shares at an aggregate of $21,303,002.DLA Piper Rudnick Gray Cary LLP, the Company's counsel, evaluatedthe legal validity of these common shares.The Company's common shares trade at Nasdaq National Market underthe symbol "ESCH"The Company's shares of common stock trade between $11.92 and$12.90 within the month.A full-text copy of the 2002 Stock Incentive Plan is available forfree at http://ResearchArchives.com/t/s?1ddA full-text copy of the Registration Statement is available forfree at http://ResearchArchives.com/t/s?1deEschelon Telecom, Inc., is a facilities-based competitivecommunications services provider of voice and data services andbusiness telephone systems in 19 markets in the western UnitedStates. Headquartered in Minneapolis, Minnesota, the companyoffers small and medium-sized businesses a comprehensive line oftelecommunications and Internet products. Eschelon currentlyemploys approximately 1,134 telecommunications/Internetprofessionals, serves over 50,000 business customers and hasapproximately 400,000 access lines in service throughout itsmarkets in Minnesota, Arizona, Utah, Washington, Oregon, Colorado,Nevada and California.As of June 30, 2005, Eschelon Telecom's equity deficit more thandoubled to $22,980,000 from an $8,180,000 deficit at Dec. 31,2004. * * *As reported in the Troubled Company Reporter on Sept. 5, 2005,Standard & Poor's Ratings Services revised its outlook onMinneapolis, Minnesota-based Eschelon Telecom Inc. to positivefrom developing following the company's consummation of itsinitial public offering, resulting in net proceeds of$69.8 million, of which roughly $51 million will be used toredeem the senior second secured notes due 2010. Additionally,$63 million of preferred stock will be converted to common shares.All ratings, including the company's 'CCC+' corporate creditrating, were affirmed.FEDERAL-MOGUL: Inks Pact Resolving Dispute with UK Administrators----------------------------------------------------------------- Federal-Mogul Corporation (OTCBB:FDMLQ) and various of itsconstituencies in the Chapter 11 proceedings have reachedagreement with the United Kingdom Administrators of Federal-Mogul's UK affiliates. The result of the agreement will allowFederal-Mogul to retain the businesses and other assets of its UKaffiliates in exchange for monetary amounts and reserves that willbe used by the Administrators to provide a distribution to UKcreditors. The agreement, which has been filed with the U.S.Bankruptcy Court in Delaware, is subject to approvals anddeterminations by the UK and U.S. Courts.Federal-Mogul Chairman, President and Chief Executive Officer JoseMaria Alapont said the agreement represents a major step towardthe fulfillment of the Company's intention to emerge reorganizedin a manner that separates the Company's operating potential fromits asbestos liabilities."Federal-Mogul, its employees and stakeholders, as well as theAdministrators, are pleased with the agreement, which brings uscloser to emergence from Chapter 11 in the U.S. and Administrationin the UK," Mr. Alapont added. "On behalf of Federal-Mogul, Iextend my sincere gratitude to our customers and vendors for theirsupport; we are committed to driving global profitable growththrough our leading technology and innovation, world-classportfolio of products and services, and competitive coststructure."Headquartered in Southfield, Michigan, Federal-Mogul Corporation-- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of someUS$6 billion. The Company filed for chapter 11 protection onOct. 1,2001 (Bankr. Del. Case No. 01-10582). Lawrence J. NyhanEsq., James F. Conlan Esq., and Kevin T. Lantry Esq., at SidleyAustin Brown & Wood, and Laura Davis Jones Esq., at Pachulski,Stang, Ziehl, Young, Jones & Weintraub, P.C., represent theDebtors in their restructuring efforts. When the Debtors filedfor protection from their creditors, they listed US$10.15 billionin assets and US$8.86 billion in liabilities. At Dec. 31, 2004,Federal-Mogul's balance sheet showed a US$1.925 billionstockholders' deficit. At Mar. 31, 2005, Federal-Mogul's balancesheet showed a US$2.048 billion stockholders' deficit, compared toa US$1.926 billion deficit at Dec. 31, 2004. Federal-MogulCorp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,Bradford.FEDERAL-MOGUL: Alan Haughie Appointed as Chief Accounting Officer-----------------------------------------------------------------John J. Gasparovic, Federal-Mogul Corporation's Senior VicePresident and General Counsel, informs the Securities and ExchangeCommission that Michael Widgren submitted his resignation,effective Sept. 30, 2005, to pursue an opportunity at anothercorporation. At the time of his resignation, Mr. Widgren was theCompany's Chief Accounting Officer.The Company has appointed Alan Haughie to the position of ChiefAccounting Officer, effective on Sept. 26, 2005. Mr. Haughie willcontinue to serve as Vice President and Controller. Any change inMr. Haughie's compensation will be determined at a later date.Headquartered in Southfield, Michigan, Federal-Mogul Corporation-- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some US$6billion. The Company filed for chapter 11 protection on Oct. 1,2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq.,James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley AustinBrown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang,Ziehl, Young, Jones & Weintraub, P.C., represent the Debtors intheir restructuring efforts. When the Debtors filed forprotection from their creditors, they listed US$10.15 billion inassets and US$8.86 billion in liabilities. At Dec. 31, 2004,Federal-Mogul's balance sheet showed a US$1.925 billionstockholders' deficit. At Mar. 31, 2005, Federal-Mogul's balancesheet showed a US$2.048 billion stockholders' deficit, compared toa US$1.926 billion deficit at Dec. 31, 2004. Federal-MogulCorp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill,Bradford.FIBERMARK INC: Files Revised Plan to Reflect New Bondholders Pact-----------------------------------------------------------------FiberMark, Inc. (OTCBB: FMKIQ) has filed a revised Plan ofReorganization reflecting the settlement reached among FiberMarkand its top three bondholders: * AIG Global Investment Corp., * Post Advisory Group, LLC, and * Silver Point Capital, L.P.The agreement was reached in response to the findings andrecommendations of the independent examiner. Key provisions ofthe revised Plan include: (1) To settle potential causes of action by unsecured creditors against AIG and Post and litigation rights held by FiberMark against AIG and Post, bondholders and all other unsecured creditors-excluding the top three bondholders- will receive an all-cash payment estimated to provide a 70% recovery of claim amounts, which was the estimated recovery under FiberMark's initial plan of reorganization and compares favorably with the 54% estimated recovery levels under the plan filed in August. Alternatively, unsecured creditors interested in receiving an equity position in the reorganized company may elect a distribution that includes new common stock along with a partial cash payment, which would provide an estimated 62% recovery of claim amounts. Under both options, the recovery estimates assume that the current value of the allowed claims remains unchanged. AIG and Post will contribute to the funding of the cash payments 8% of unsecured claims, not to exceed $4.2 million. For unsecured creditors receiving the all-cash payment, a portion of the cash will be provided by Silver Point, which will effectively purchase the stock otherwise allocable to those creditors. (2) Silver Point will purchase the claims of AIG and Post for a negotiated amount. As a result of the purchase, AIG and Post will have no ownership interest in the reorganized company. (3) AIG, Post and Silver Point have agreed to vote in favor of the company's revised Plan. (4) The potential causes of action held by unsecured creditors against AIG and Post and litigation rights held by FiberMark against AIG and Post will be released and extinguished under the revised Plan. As a result, the Plan will contain no mechanism for litigating any such causes of action. However, the Plan does not abridge the rights of persons who hold individual causes of action, as defined in the Plan. (5) AIG, Post and Silver Point will split the cost of the examiner's investigation three ways, subject to a cap totaling $1.75 million.The settlement relates to the treatment of unsecured claims underthe company's Plan of Reorganization. Shares held by currentstockholders will be cancelled, as detailed in the initial plan.The previously approved disclosure statement has been modified toconform to the revised Plan and the company must now obtain Courtapproval to submit the Disclosure Statement and Plan to itscreditors for voting. The company also expects the date for theconfirmation hearing that will follow the voting process to befinalized shortly. The company continues to expect that it willhave a confirmed Plan of Reorganization before the end of 2005.A full-text copy of the Revised Plan is available for free athttp://ResearchArchives.com/t/s?1e8Headquartered in Brattleboro, Vermont, FiberMark, Inc. -- http://www.fibermark.com/-- produces filter media for transportation applications and vacuum cleaning; cover stocks andcover materials for books, graphic design, and office supplies andbase materials for specialty tapes, wall coverings and sandpaper.The Company filed for chapter 11 protection on March 30, 2004(Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D.J.f, Esq., David M. Turetsky, Esq., and Rosalie Walker Gray,Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent theDebtors in their restructuring efforts. When the Debtors filedfor protection from their creditors, they listed $329,600,000 intotal assets and $405,700,000 in total debts.FIDELITY NATIONAL: Schedules Equity Distribution on Oct. 17-----------------------------------------------------------Fidelity National Financial, Inc. (NYSE: FNF) disclosed finalterms and set the record date and distribution date for thedistribution of Fidelity National Title Group, Inc. (PendingNYSE: FNT) common stock to FNF stockholders.Under the terms of the distribution of FNT common stock, FNFstockholders will receive 0.175 shares of common stock of FNT foreach share of common stock of FNF that they own on the recorddate. No fractional shares of FNT common stock will be issued,but new FNT stockholders will receive cash in lieu of anyfractional shares. No action is required by FNF stockholders toreceive their shares of FNT common stock or the cash in lieu ofany fractional shares. After the completion of the distributionof FNT common stock, FNT will trade on the New York Stock Exchangeunder the trading symbol 'FNT'.The distribution will be made on Oct. 17, 2005 to FNF stockholdersof record as of Oct. 6, 2005. Because of the nature of thedistribution of FNT common stock, the New York Stock Exchange hasdetermined that the ex- dividend date will be Oct. 18, 2005, thebusiness day following the distribution date for the common stockof FNT. FNF stockholders of record on the Oct. 6, 2005 recorddate who subsequently sell their shares of FNF common stockthrough the Oct. 17, 2005, distribution date will also be sellingtheir right to receive the distribution of FNT common stock.Investors are encouraged to consult with their financial advisorsregarding the specific implications of the deferral of the ex-dividend date and the selling of shares of FNF common stockthrough the distribution date for the common stock of FNT. Thedistribution of FNT common stock to FNF stockholders is expectedto be taxable to FNF stockholders at the dividend tax rate.Stockholders are encouraged to consult with their financialadvisors regarding the circumstances of their individual taxsituation.As previously disclosed, FNT intends to pay an annual cashdividend of $1.00 per common share, payable quarterly. The recordand payable dates for the initial $0.25 per common share quarterlycash dividend are expected to be declared at the October meetingof the FNT Board of Directors. Additionally, FNT has paid thepreviously disclosed $295 million dividend to FNF. This wasaccomplished through a $150 million intercompany note and$145 million in an extraordinary dividend paid by an insurancesubsidiary of FNT. The $150 million intercompany note will berepaid through $150 million in borrowings under a $300 million FNTbank credit facility at the time of the distribution of FNT commonstock to FNF stockholders, or shortly thereafter.FNT intends to issue two $250 million intercompany notes payableto FNF, with terms that mirror the existing FNF $250 million 7.30%notes due in August 2011 and the $250 million 5.25% notes due inMarch 2013. FNT may make an exchange offer in which it wouldoffer to exchange the outstanding FNF notes for notes that FNTwould issue having the same interest rates, redemption terms andpayment and maturity dates. If the exchange offer occurs, theintercompany notes payable will be retired.Fidelity National Financial, Inc. -- http://www.fnf.com/-- number 261 on the Fortune 500, is a provider of products and outsourcedservices and solutions to financial institutions and the realestate industry. FNF had total revenue of nearly $8.3 billion andearned more than $740 million in 2004, with cash flow fromoperations of nearly $1.2 billion for that same period. FNF isthe nation's largest title insurance company, with nearly 31percent national market share, and is also a provider of otherspecialty insurance products, including flood insurance,homeowners insurance and home warranty insurance. Through itsmajority-owned subsidiary Fidelity National Information Services,Inc., the Company is a leading provider of technology solutions,processing services and information services to the financialservices and real estate industries. FIS' software processesnearly 50 percent of all U.S. residential mortgages, it hasprocessing and technology relationships with 45 of the top 50 U.S.banks and more than 2,800 small and mid-sized U.S. financialinstitutions and it has clients in more than 50 countries who relyon its processing and outsourcing products and services. FIS alsoprovides customized business process outsourcing related toaspects of the origination and management of mortgage loans tonational lenders and servicers. FIS offers information services,including property data and real estate-related services that areused by lenders, mortgage investors and real estate professionalsto complete residential real estate transactions throughout theU.S. * * *As reported in the Troubled Company Reporter on May 20, 2005,Fitch Ratings has placed the 'A-' insurer financial strengthratings of the title insurance underwriting subsidiaries ofFidelity National Financial, Inc., and the 'BBB-' long-term issuerrating of FNF on Rating Watch Negative. In addition, the 'BB-'rating on the senior secured credit facility of FNF's subsidiary,Fidelity National Information Services, is affirmed.FLYI INC: Cuts Service & Scours for Financing to Avert Bankruptcy-----------------------------------------------------------------Mary Schlangenstein at Bloomberg News reports that FLYi Inc., theparent company of Independence Air, is erasing nine airports fromits route map and preparing to reduce flights by 36%. These costcutting measures run in tandem with FLYi's continuing search foradditional funding sources in order to avert a bankruptcy filing,reported in The Wall Street Journal and elsewhere. If the Companyfails to obtain additional funding, it could become the nextairline after Delta and Northwest to file for bankruptcy courtprotection, according to several press sources.For the past several months, the Company has been losing largesums of money because of the greater crisis facing the airlineindustry, which is mainly caused by high fuel costs and intensecompetition from low-priced airlines. Since the beginning of theyear, the Company's stock price has fallen nearly 90%, due tofears of a bankruptcy filing.In its Form 8-K filed with the SEC on Aug. 11, 2005, the carrierreported a net loss of $98.5 million for second quarter 2005,compared to second quarter 2004 net loss of $27.1 million.Revenue fell 24% to $117.5 million, and the Company's unrestrictedcash was down to $66 million, from $107 million at the start ofthe quarter and $169 million at the end of 2004.At June 30, 2005, FLYi, Inc.'s balance sheet showed a $29,383,000stockholders' deficit, compared to $167,134,000 of positive equityat Dec. 31, 2004.As reported in the Troubled Company Reporter on Aug. 12, 2005,Standard & Poor's Ratings Services revised the implications of itsCreditWatch review on FLYi Inc. (CC/Watch Neg/--) to negative fromdeveloping."The revision in CreditWatch status follows FLYi's second-quarter10-Q filing, which continued to indicate substantial doubt aboutthe airline's ability to continue as a going concern," saidStandard & Poor's credit analyst Betsy Snyder.The company disclosed in its second-quarter 10-Q report with theSEC that it has engaged advisers and is making contingency plansfor a potential Chapter 11 bankruptcy filing.Headquartered in Dulles, Virginia, FLYi Inc., --http://www.flyi.com-- is the parent of Independence Air Inc., a small airline based at Washington Dulles International Airport.Independence Air offers low fares every day to a total of 45destinations across America with comfortable leather seats andTender Loving Service(SM).FOAMEX INT'L: Final DIP Financing Hearing Set for October 17------------------------------------------------------------ As previously reported in the Troubled Company Reporter onSept. 23, 2005, Bank of America, N.A., as administrative agent andas lender, agreed to make a debtor-in-possession financingfacility available to Foamex L.P. Other lenders include: -- General Electric Capital Corporation -- JPMorgan Chase Bank, N.A. -- Congress Financial Corporation Central -- State of California Public Employees' Retirement System -- PNC Bank, National Association -- Wells Fargo Foothill, LLCThe DIP Revolving Credit Lenders will make revolving loans andother extensions of credit available to Foamex L.P. up to amaximum outstanding principal amount of $240 million -- includinga $40 million sub-limit for letters of credit.The Honorable Judge Walsh of the U.S. Bankruptcy Court for theDistrict of Delaware entered an Interim DIP Financing Order onSept. 20, 2005. Judge Walsh allowed Foamex International Inc.,and its debtor-affiliates to access up to $221 million of the $240million DIP Revolving Credit Facility arranged by Bank of Americaand obtain a new $80 million DIP Term Loan from Silver PointFinance, LLC.A copy of the order is available for free athttp://bankrupt.com/misc/foamexDIPorder.pdfJudge Walsh will convene a Final DIP Financing Hearing onOct. 17, 2005, at 1:30 p.m. in Delaware.Objections, if any, must be received no later than Oct. 11, 2005,and served to: Counsel for the Debtors: Alan W. Kornberg, Esq. Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas New York, New York 10019 Local counsel for the Debtors: Pauline K. Morgan, Esq. Young Conaway Stargatt & Taylor LLP The Brandywine Building 1000 West Street, 17th Floor Wilmington, Delaware 19801 Counsel for Bank of America, as DIP Revolving Credit Agent: Albert Fenster, Esq. Kaye Scholer LLP 425 Park Avenue New York, New York 10022-3598 Louis DeLucia, Esq. Marc Rosenberg and Buchanan Ingersoll The Nemours Building 1007 North Orange Street, Suite 1110 Wilmington, Delaware 19801 Counsel for Silver Point, as Administrative Agent: Frederic Ragucci, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Counsel of the Ad Hoc Committee of Senior Secured Noteholders: Adam Harris, Esq. O'Melveny & Myers LLP Times Square Tower 7 Times Square New York, New York 10036 The United States Trustee: Kelly Beaudin Stapleton, Esq. Office of the U.S. Trustee 833 Chestnut Street, Suite 500 Philadelphia, Pennsylvania 19107Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion andautomotive markets. The Company also manufactures high-performance polymers for diverse applications in the industrial,aerospace, defense, electronics and computer industries. TheCompany and eight affiliates filed for chapter 11 protection onSept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,represent the Debtors in their restructuring efforts. Houlihan,Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising thead hoc committee of Senior Secured Noteholders. As of July 3,2005, the Debtors reported $620,826,000 in total assets and$744,757,000 in total debts. (Foamex International BankruptcyNews, Issue No. 2; Bankruptcy Creditors' Service, Inc.,215/945-7000)FOAMEX INT'L: Court Allows Continued Use of Existing Bank Accounts------------------------------------------------------------------ To supervise the administration of Chapter 11 cases, the Officeof the U.S. Trustee requires a Chapter 11 debtor to close allexisting bank accounts and open new bank accounts. Therequirement is designed to provide a clear line of demarcationbetween a debtor's prepetition and postpetition transactions andoperations, and prevent the inadvertent postpetition payment ofprepetition claims.Currently, Foamex International Inc., and its debtor-affiliatesmaintain 24 bank accounts: * five controlled disbursement accounts in Bank of America, N.A., and one in Citibank, N.A.; * three lock box accounts in Bank of America, one lock box account in Citibank and one lock box account in JP Morgan Chase; * eight checking accounts -- one each in Wachovia Corporation, Bank of America, Wells Fargo Indiana, Wells Fargo New Mexico, PNC Bank, Renasant Bank, National Bank of Indiana and Susquehanna; * two Master Funding Accounts in Bank of America; * one Master Collection Account in Bank of America; * one local depository account in Wachovia; and * one wire transfer account in Citibank.To require the Debtors to use new accounts would disrupt theirbusiness and would impair their efforts to maximize the value oftheir estates and reorganize their business, Joseph M. Barry,Esq., at Young Conaway Stargatt & Taylor, in Wilmington,Delaware, asserts.Moreover, Mr. Barry continues, opening new accounts wouldunnecessarily distract the Debtors' key accounting and financialpersonnel whose efforts are more appropriately focused onassisting with the reorganization. The Debtors believe that anydelays or disruption in the payment of wages and other employee-related expenses resulting from changing bank accounts woulderode employee morale at this critical time, and would cause theemployees to suffer great hardship. This, in turn, could resultin their departure, an outcome, which would severely hamper theDebtors' reorganization efforts.Accordingly, the Debtors ask the Honorable Peter J. Walsh of theU.S. Bankruptcy Court for the District of Delaware for permissionto continue using their existing bank accounts.Maintenance of the Bank Accounts will ensure a smooth transitioninto Chapter 11, Mr. Barry maintains. * * *Judge Walsh grants the Debtors' request.Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion andautomotive markets. The Company also manufactures high-performance polymers for diverse applications in the industrial,aerospace, defense, electronics and computer industries. TheCompany and eight affiliates filed for chapter 11 protection onSept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,represent the Debtors in their restructuring efforts. Houlihan,Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising thead hoc committee of Senior Secured Noteholders. As of July 3,2005, the Debtors reported $620,826,000 in total assets and$744,757,000 in total debts. (Foamex International BankruptcyNews, Issue No. 2; Bankruptcy Creditors' Service, Inc.,215/945-7000)FOAMEX INT'L: Court Okays Continued Use of Cash Management System----------------------------------------------------------------- Foamex International Inc., and its debtor-affiliates maintain acentralized integrated cash management system in the operation oftheir business, Joseph M. Barry, Esq., at Young Conaway Stargatt &Taylor, in Wilmington, Delaware, relates.The Debtors deposit checks and receive wire transfers through sixdifferent accounts. Checks from customers on account ofoutstanding accounts receivable are deposited into one of fiveaccounts. Wire transfers and automated clearinghouse credits arereceived by the Debtors into two accounts. The Debtors'remaining deposit account is with Wachovia Corporation and isused by Foamex L.P. to deposit non-accounts receivable checksfor, among other things, rent receipts and vendor refunds.The amounts in the deposit accounts, except the Wachovia account,are swept daily into a Master Collection Account that is a"blocked account". Foamex LP typically sweeps the amounts in theWachovia account into the Master Collection Account. Bank ofAmerica, N.A., in turn, then sweeps the Master Collection Accountdaily and applies the funds swept from the Master CollectionAccount to reduce the amount outstanding under the $190 millionrevolving credit facility.Each day a report is prepared that identifies checks that will bedrawn from the Debtors' accounts at the end of the day. Based onthis report and the Debtors' calculation of their other cashneeds for the day, the Debtors determine their aggregate cashneeds for the date and initiate a draw on the Bank Facility.BofA then transfers the amount requested by Foamex L.P. first toa master fund account and then into one of six disbursementaccounts, as necessary, to cover the Debtors' checks or wiretransfers.Mr. Barry points out that the Debtors maintain current andaccurate accounting records of their daily cash transactions.The Debtors' cash management procedures are ordinary, usual andessential business practices. They are similar to those used byother large corporate enterprises and provide significantbenefits to the Debtors, including the ability to: (a) accurately and immediately report receipts and expenditures; (b) control corporate funds centrally; (c) ensure the availability of funds when necessary; and (d) reduce administrative expenses by centralizing the movement of funds.At the Debtors' request, the U.S. Bankruptcy Court for theDistrict of Delaware authorizes them to maintain their existingCash Management System, provided that no prepetition check,drafts, wire transfers or other forms of tender that have not yetcleared as of the Petition Date will be honored unless authorizedby a Court order.The Court also permits the Debtors to preserve various reportingand accounting mechanisms, like signatory authorizations andaccounting systems central to the maintenance of the bankaccounts.Among others, the Debtors assure the Court that they willmaintain records of all transfers within the Cash ManagementSystem so that all transfers and transactions will be documentedin their books and records to the same extent the information wasmaintained prior to the Petition Date.Headquartered in Linwood, Pa., Foamex International Inc. -- http://www.foamex.com/-- is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion andautomotive markets. The Company also manufactures high-performance polymers for diverse applications in the industrial,aerospace, defense, electronics and computer industries. TheCompany and eight affiliates filed for chapter 11 protection onSept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05-12693).Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP,represent the Debtors in their restructuring efforts. Houlihan,Lokey, Howard and Zukin and O'Melveny & Myers LLP are advising thead hoc committee of Senior Secured Noteholders. As of July 3,2005, the Debtors reported $620,826,000 in total assets and$744,757,000 in total debts. (Foamex International BankruptcyNews, Issue No. 2; Bankruptcy Creditors' Service, Inc.,215/945-7000)GENERAL MOTORS: Fitch Lowers Rating One Notch to BB From BB+------------------------------------------------------------Fitch Ratings has downgraded the ratings of General Motors Corp.,GMAC and related subsidiaries to 'BB' from 'BB+' due to a lack oftangible progress in reducing its fixed cost structure (includingescalating health care costs and liabilities), the incrementallynegative effect on GM's core large vehicles resulting frompersistently high gas prices and heightened financial risks to GMassociated with resolution of the Delphi restructuring.In addition, recent incentive programs have established lowermarket pricing that makes GM increasingly vulnerable to volumedeclines which could occur as a result of a decline in economicconditions or simply a sustained falloff following recent industrysales spikes. Given continued top-line pressures, financialstresses in the supplier base and numerous impediments toachieving significant structural cost reductions (legacy cost andlabor contract restrictions), opportunities for cost reductionshave continued to narrow.Persistently high gas prices are also expected to incrementallyreduce demand for GM's large vehicles, where GM isdisproportionately exposed in terms of volumes and profitability,and where its new product introductions are concentrated.Industry sale volumes in this segment saw a sharp decline in early2005, which is likely to mute the volume impact and pricingpotential of GM's new GMT-900 product series.In the absence of significant structural cost reductions, Fitchexpects that negative operating cash flow (ex-working capitaladjustments) is likely to deteriorate further in 2006, heighteningthe risks of a more fundamental restructuring and reducedliquidity (including long-term VEBA holdings) from currentlyhealthy levels.Fitch has become increasingly concerned with the near-termfinancial costs that could fall on GM as part of Delphi'srestructuring. Although the restructuring, in or out of court, isnot currently expected to result in any interruption of suppliesto GM, the risks of disruption during the adjustment processcannot be ruled out. The risk of a work stoppage could arise,however, in the event that GM does not, in the UAW's view, fullymeet the obligations that GM may have to Delphi workers. The bulkof the restructuring costs, within or outside of bankruptcy, areexpected to fall on the UAW through headcount reductions, facilityclosures and wage and benefit reductions.Although GM will benefit over the longer term by Delphi's expectedlower cost structure and the ability to re-source product awayfrom Delphi, Fitch is concerned about the short-term costs orother forms of financial support necessary to restore Delphi'sfinancial position to viability. Of concern to Fitch is arevision of existing pricing wherein GM is forced to absorbmeaningfully higher costs on a significant portion of its supplychain. Restructuring benefits would largely accrue to Delphi inthe near term, with GM benefiting only over an extended timeperiod. Fitch believes that GM could utilize a portion of itsliquidity to accelerate workforce reductions at Delphi.In the event of a Delphi bankruptcy, Fitch expects that GM wouldalso be absorbing substantial Delphi legacy costs in the form ofpension and OPEB obligations. OPEB-related cash outflows arerelatively modest (projected at $216 million in 2005) butaccelerate sharply over the next four years. The ultimate costand timing of Delphi's pension obligations that would be absorbedby GM is unknown. Due to the fact that GM is behind the PBGC, itis Fitch's assumption that GM will not absorb the plans (or therequired contributions) but would be contingently liable formeeting certain benefit levels.Fitch expects that cash outflows associated with these obligationswould be very long-term in nature. Pension benefits paid out byDelphi are projected at $556 million in 2006, growing rapidlythrough 2009. OPEB and pension benefit outflows at Delphi and GMwill be further increased as headcount reductions are acceleratedat both entities. Reducing the OPEB liability is clearly a toppriority for GM in the short term and in the 2007 UAW contractnegotiations. Because the pension and OPEB obligations are long-term in nature (and because the OPEB obligations are likely to memodified during this time), Fitch believes that GM could allow aDelphi bankruptcy and absorb these longer-term liabilities if GMis able to benefit on the cost side in exchange.Although GM is currently well-funded in its U.S. pension plans,several years of low asset returns could result in an underfundedposition due to high level of benefits outflows. In addition,pending pension legislation could result in a re-measurement ofliabilities and higher required contributions.Regarding GM's negotiations with the UAW regarding health care,Fitch believes that there may be progress in working toward anegotiated solution. Fitch expects that modest progress will bemade in the short term, but that the more significant event willbe the 2007 contract negotiations, at which point event risk couldbe high. Given Fitch's expectation of negative cash flows through2006, even significant progress in reducing the cash outflowsrelated to health care liabilities will be unlikely to restore GMto cashflow breakeven levels.GM retained liquidity of approximately $20.2 billion in cash andshort-term VEBA at June 30, 2005, plus $16.2 billion currentlyheld in long-term VEBA. GM's liquidity profile also benefits fromsubstantial cash holdings at GMAC, and the ability to shrinkGMAC's balance sheet or monetize assets. Although liquiditycurrently remains healthy, Fitch expects that negative operatingcash flows (ex working capital) will deteriorate further in 2006due to reduced unit sales, continuing price erosion and adversemix. Coupled with any cash applied to resolve the Delphi andhealth care issues, long-term VEBA could be reduced meaningfullyas GM applies these funds to permitted expenditures.Fitch is also concerned with the potential reduction in creditavailable to the automotive sector. Extended payment terms havelong been an industry practice, and trade credit has become acritical part of the liability structure of the OEMs and theirsuppliers. Suppliers have also traditionally relied on theability to finance OEM receivables. As the automotive supplychain comes under increasing financial stress and financialintermediaries limit credit exposures throughout the industry,restrictions on access to external financing and trade creditcould have significant repercussions on GM and throughout theindustry.Ratings lowered with a Negative Rating Outlook: General Motors Corp. General Motors Acceptance Corp. GMAC International Finance B.V. General Motors Acceptance Corp., Australia General Motors Acceptance Corp. of Canada Ltd. GMAC Bank GmbH General Motors of Canada Limited General Motors Acceptance Corp. (N.Z.) Ltd. GMAC Commercial Funding Asia K.K. (formerly GMAC Commercial Mortgage Japan K.K.) -- Senior debt to 'BB' from 'BB+'. Residential Capital Corp. GMAC Bank -- Senior debt to 'BBB-' from 'BBB'.S-T ratings lowered: Residential Capital Corp. GMAC Bank -- Short-term to 'F3' from 'F2'.Ratings affirmed: General Motors Corp. General Motors Acceptance Corp. GMAC International Finance B.V. General Motors Acceptance Corp., Australia General Motors Acceptance Corp. of Canada Ltd. GMAC Bank GmbH General Motors of Canada Limited General Motors Acceptance Corp. (N.Z.) Ltd. GMAC Commercial Funding Asia K.K. (formerly GMAC Commercial Mortgage Japan K.K.) General Motors Acceptance Corp. (U.K.) Plc GMAC Australia Finance -- Short-term 'B'. GMAC Bank -- Individual 'B/C'.Rating Watch revised to Positive from Evolving: GMAC Commercial Mortgage Bank -- Long-term deposits 'BB+'; -- Senior debt 'BB+' ; -- Short-term deposits 'B'; -- Short-term 'B'; -- Individual 'B/C'; -- Support '3'. GMAC Commercial Mortgage Bank Europe, plc -- short-term ratings 'F3'. GMAC Commercial Mortgage Funding, plc -- Long-term ratings 'BB+'.New rating assigned: GMAC Bank -- Long-term deposits 'BBB';GMAC: Fitch Downgrades Senior Unsecured Rating to BB----------------------------------------------------Concurrent with Fitch Ratings' downgrade of General Motors Corp.,Fitch has downgraded GMAC's senior unsecured debt rating to 'BB'from 'BB+'.In addition, Fitch has downgraded Residential Capital Corp.'ssenior unsecured rating to 'BBB-' from 'BBB'. Fitch has affirmedthe short-term 'B' ratings of GMAC and lowered the short-termratings of ResCap to 'F3' from 'F2'.Lastly, Fitch has revised the Rating Watch status on GMACCommercial Mortgage Bank to Positive from Evolving. The RatingOutlook for GMAC, ResCap and related entities remains Negative.Approximately $104 billion of senior unsecured debt is affected bythis action.Monday's action on GMAC solely reflects its linkages with GM.Despite competitive and structural issues at GM, GMAC's ownoperating performance has fared much better, reflecting in part,the benefits of diversification from its mortgage and insurancebusinesses. In addition, Fitch recognizes GMAC's relatively soundliquidity profile over the near term, augmented by GMAC's recentwhole-loan agreement with Bank of America.The rating action on ResCap solely reflects its ownership by GMAC.While Fitch continues to believe that ResCap maintains investmentgrade fundamentals, its ownership by GMAC is a limiting factor interms of rating notching. At present, Fitch would allow for up totwo notches between the ratings of ResCap and GMAC. AlthoughFitch does not differentiate the ratings of GM and GMAC currently,Fitch would consider a ratings distinction similar to ResCap inaccordance with Fitch's criteria for parent and financialsubsidiary relationships.The Rating Watch status on GMAC Commercial Mortgage Bank wasrevised to Positive from Evolving reflecting the expected partialspin-off from GMAC and Fitch's view of the resulting financialprofile of GMAC Commercial Holding Corp., the parent company ofGMAC Commercial Mortgage Bank. Fitch anticipates resolving theRating Watch on GMAC Commercial Mortgage Bank at the time thespin-off closes, expected later this year.Ratings lowered with a Negative Rating Outlook: General Motors Acceptance Corp. GMAC International Finance B.V. General Motors Acceptance Corp., Australia General Motors Acceptance Corp. of Canada Ltd. GMAC Bank GmbH General Motors Acceptance Corp. (N.Z.) Ltd. GMAC Commercial Funding Asia K.K. (formerly GMAC Commercial Mortgage Japan K.K.) -- Senior debt to 'BB' from 'BB+'. Residential Capital Corp. GMAC Bank -- Senior debt to 'BBB-' from 'BBB'.S-T ratings lowered: Residential Capital Corp. GMAC Bank -- Short-term to 'F3' from 'F2'.Ratings affirmed: General Motors Acceptance Corp. GMAC International Finance B.V. General Motors Acceptance Corp., Australia General Motors Acceptance Corp. of Canada Ltd. GMAC Bank GmbH General Motors Acceptance Corp. (N.Z.) Ltd. GMAC Commercial Funding Asia K.K. (formerly GMAC Commercial Mortgage Japan K.K.) General Motors Acceptance Corp. (U.K.) Plc GMAC Australia Finance -- Short-term 'B'. GMAC Bank -- Individual 'B/C'.Rating Watch revised to Positive from Evolving: GMAC Commercial Mortgage Bank -- Long-term deposits 'BB+'; -- Senior debt 'BB+' ; -- Short-term deposits 'B'; -- Short-term 'B'; -- Individual 'B/C'; -- Support '3'. GMAC Commercial Mortgage Bank Europe, plc -- short-term ratings 'F3'. GMAC Commercial Mortgage Funding, plc -- Long-term ratings 'BB+'.New rating assigned: GMAC Bank -- Long-term deposits 'BBB';HEILIG-MEYERS: Wachovia Bank Says Plan Shouldn't Be Confirmed-------------------------------------------------------------Wachovia Bank, N.A., acting as administrative agent for banklenders and as collateral agent for prepetition secured creditorsof Heilig-Meyers Company and its debtor-affiliates, tells the U.S.Bankruptcy Court for the Eastern District of Virginia, RichmondDivision, that it doesn't want the Debtors' Second Amended andRestated Joint Liquidating Plan to be confirmed. Wachovia's ObjectionsFirst, the Bank says that the Plan improperly classifies thedeficiency claims of the lenders in the same class as theunsecured claims of the bondholders. This scheme results to aninferior recovery for the lenders.Second, the Plan depends upon the substantive consolidation of theDebtors' estates. The Bank says that this is only a "pretend-form" because differing treatments among unsecured creditors,based on their separate claims against different Debtors, wouldcontinue to be recognized.Third, the liquidating Plan incorrectly treats the Lenders'secured claims as unimpaired and having been paid in full.Wachovia refutes this characterization. Currently, the Lendershave a pending appeal before the U.S. District Court for theEastern District of Virginia seeking to remove the $128.5 millioncollateral cap enforced on the Lenders' claims. If the DistrictCourt will not affirm the cap, then, the Plan's treatment of theLenders' secured claims will be insufficient. Wachovia surmisesthat after more than five years in bankruptcy, the Debtors hopethat simple fatigue with the process will cause the Court tooverlook fatal legal deficienies in the Plan.Heilig-Meyers Company filed for chapter 11 protection onAug. 16, 2000 (Bankr. E.D. Va. Case No. 00-34533), reporting$1.3 billion in assets and $839 million in liabilities. When theCompany filed for bankruptcy protection it operated hundreds ofretail stores in more than half of the 50 states. In April 2001,the company shut down its Heilig-Meyers business format. InJune 2001, the Debtors sold its Homemakers chain to Rhodes, Inc.GOB sales have been concluded and the Debtors are liquidatingtheir remaining Heilig-Meyers assets. Bruce H. Matson, Esq., TroySavenko, Esq., and Katherine Macaulay Mueller, Esq., at LeClairRyan, P.C., in Richmond, Va., represent the Debtors.HILLMAN COS: AMEX Accepts Plan for Continued Listing Compliance---------------------------------------------------------------The Hillman Companies, Inc. (Amex: HLM_P), the parent company ofThe Hillman Group Inc., disclosed that its plan of compliance hadbeen accepted by the American Stock Exchange.The Company received a letter from AMEX on Aug. 24, 2005, advisingthat the Company is not in compliance with the AMEX requirementsas set forth in Section 1101 of the Amex Company Guide for failureto file with the Securities and Exchange Commission its quarterlyreport on Form 10-Q for the quarter ended June 30, 2005.In addition, the letter advised the Company that as a result ofthe restatement of its financial statements as disclosed on a Form8-K filed with the SEC on Aug. 23, 2005, the Company was not incompliance with the requirements of its listing agreement. Thecompliance letter gives the Company until Sept. 7, 2005, to submita plan of action that the Company has taken, or will take, tobring it into compliance no later than Oct. 4, 2005.The Company submitted its plan of compliance on Sept. 7, 2005.On Sept. 9, 2005, the plan was accepted by AMEX, and the Companywas granted an extension until Oct. 4, 2005, to regain compliancewith the continued listing standards. The Company will be subjectto periodic review to determine whether progress consistent withthe plan is being made. If the Company is not in compliance withthe continued listing standards by Oct. 4, 2005, or does not makeprogress consistent with the plan during the plan period,delisting procedures would be initiated.The Hillman Companies, Inc., manufactures key making equipment anddistributes key blank, fasteners, signage and other small hardwarecomponents. The Company sells and markets to hardware stores,home centers and mass merchants in the United States, Canada,Mexico and South America. * * *As reported in the Troubled Company Reporter on Aug. 26, 2005,Standard & Poor's Ratings Services placed its 'B' corporate creditand senior secured bank loan ratings on Hillman Group Inc. onCreditWatch with negative implications.Total debt outstanding was about $378 million as of March 31,2005, for this Cincinnati, Ohio-based manufacturer and distributorof fasteners and other hardware to the retail trade.HOME PRODUCTS: McGladrey & Pullen Replaces KPMG as Auditors-----------------------------------------------------------Home Products International, Inc., dismissed KPMG LLP as itsprincipal accountants on Sept. 20, 2005.The Audit Committee of the Company's Board of Directors approvedthis action.In connection with the audits of the two fiscal years endedJan. 1, 2005, and Dec. 27, 2003, and the subsequent interim periodthrough Sept. 20, 2005, there were no disagreements between theCompany and KPMG on any matter of accounting principles orpractices, financial statement disclosure, or auditing scope orprocedures. Material Weakness in Internal ControlsOn Sept. 14, 2005, KPMG issued a letter to the Audit Committee tocommunicate a control deficiency that was considered to be amaterial weakness. KPMG indicated, and the Company agreed, thatthe Company did not maintain effective controls over thedetermination of the provision for income taxes and relateddeferred income tax accounts.The material weakness arose from a lack of sufficient knowledge ofthe detailed technical requirements related to the accounting forthe increase in the deferred tax asset valuation allowance thatresults from the inability to offset the deferred tax liabilityrelated to goodwill, which has an indefinite life, againstdeferred tax assets that are created by other deductible temporarydifferences. As a result of this error in the application of U.S.generally accepted accounting principles related to accounting forincome taxes, the Company determined it was appropriate to restateits consolidated financial statements as of and for the fiscalyear ended January 1, 2005, and as of and for the quarterly periodended April 2, 2005 to reflect the appropriate deferred taxliability and income tax expense in the consolidated financialstatements. Hires McGladrey & PullenEffective September 20, 2005, the Company's Audit Committee of theBoard of Directors appointed McGladrey & Pullen, LLP as theCompany's independent registered public accounting firm, subjectto McGladrey & Pullen's completion of their normal clientacceptance procedures.Home Products International, Inc., is an international consumerproducts company specializing in the manufacture and marketing ofquality diversified housewares products. The Company sells itsproducts through national and regional discounters includingKmart, Wal-Mart and Target, hardware/home centers, food/drugstores, juvenile stores and specialty stores.As of July 2, 2005, Home Products' equity deficit widened to$11,203,000 from a $907,000 deficit at Jan. 1, 2005.HORNBECK OFFSHORE: Selling Debt & Equity in Private & Public Deals------------------------------------------------------------------Hornbeck Offshore Services, Inc. (NYSE: HOS) commenced a publicoffering of 4,750,000 shares of common stock plus an additional2,000,000 shares to be sold by a selling stockholder. Theunderwriters have been granted an option by the Company topurchase up to an additional 1,012,500 shares.In addition, the Company intends to sell in a private placement anadditional $75,000,000 aggregate principal amount of its 6.125%Senior Notes due 2014 under its indenture dated as of Nov. 23,2004.The Company intends to use the proceeds from the offerings topartially fund the construction of new OSVs, ocean-going tugs andocean-going, double-hulled tank barges and the retrofit orconversion of certain existing vessels, including MPSVs. Inaddition, the combined proceeds may be used in connection withpossible future acquisitions and additional new vesselconstruction programs, as well as for general corporate purposes.Pending these uses, the Company will repay debt under itsrevolving credit facility, which may be reborrowed.Goldman, Sachs & Co. and Jefferies & Company, Inc. will act asjoint book-running managers for the Offering. Lehman Brothers,Bear, Stearns & Co. Inc., Johnson Rice & Company L.L.C., Simmons &Company International, Hibernia Southcoast Capital, Inc. andPritchard Capital Partners LLC will act as co-managers. TheOffering is being made only by means of a prospectus and relatedprospectus supplement, copies of which may be obtained fromGoldman, Sachs & Co., 85 Broad Street, New York, NY 10004, (212)902-1171.Hornbeck Offshore Services, Inc., provides technologicallyadvanced, new generation offshore supply vessels in the U.S. Gulfof Mexico, Trinidad and other select international markets, and isa leading transporter of petroleum products through its fleet ofocean-going tugs and tank barges, primarily in the northeasternU.S. and in Puerto Rico. Hornbeck Offshore currently owns andoperates a fleet of over 50 U.S.-flagged vessels primarily servingthe energy industry. * * *Hornbeck Offshore's 6-1/8% senior notes due 2014 carry Moody'sInvestors Service's Ba3 rating and Standard & Poor's BB- rating.INSEQ CORP: Acquires Separation and Recovery in All-Stock Deal--------------------------------------------------------------INSEQ Corporation (OTC Bulletin Board: INSQ) has acquiredSeparation and Recovery Technologies, Inc., from UTEK Corporation(AMEX: UTK; LSE-AIM: UTKA), in an all-stock transaction.Pursuant to the terms of it agreement with UTEK, INSEQ acquiredSRT, a 100% owned subsidiary of UTEK, in a tax-free stock-for-stock exchange through which INSEQ issued 434,782,608 unregisteredshares of common stock to UTEK in exchange for 100% of the issuedand outstanding shares of SRT.SRT holds certain exclusive rights to a new patented technologyfor the separation of plastics from solid wastes and non-exclusiverights to the technology for the separation of plastics fromelectronic equipment and white appliances. Argonne NationalLaboratory developed the new technology under a contract with theU.S. Department of Energy. In addition to the Argonne technology,SRT's assets at closing also included several hundred thousanddollars in working capital that INSEQ will use as seed capital asit commercializes the Argonne technology."The Argonne technology enables the cost-effective preferentialseparation and recovery of specific targeted plastics from a mixedplastics stream, "said Kevin Kreisler, INSEQ's chairman. "This hascompelling implications in a number applications, but INSEQ ispredominantly interested in manufacturing systems that apply thistechnology at centralized solid waste processing facilities, atconsumer electronics recycling facilities, and at targetedplastics manufacturers with the goal of separating key targetedplastics for recycling and reuse, and INSEQ hopes that thistechnology will result in a significant contribution to INSEQ'srevenue and earnings as the first systems become operational."Mr. Kreisler continued, "Having the capability to separatetargeted plastics from wastes streams provides value to recyclingefforts. More importantly however, the Argonne separationtechnology allows for more efficient conversion of mixed plasticwastes into fuels such as diesel fuel. This can be achieved todayby using this technology in conjunction with conventional refiningtechnologies such as thermal deploymerization and we plan to steerour initial applications of the Argonne technology in thisdirection."A full-text copy of the Acquisition Agreements is available forfree at http://ResearchArchives.com/t/s?1e6Inseq Corporation -- http://www.inseq.com/-- through its wholly owned subsidiary, Warnecke Design Service, Inc., designs, builds,and installs manufacturing equipment used in industry. Projectsites are located throughout the United States, but areconcentrated in the states of Kansas and Ohio.INSEQ is 70% owned by GreenShift Corporation (OTC Bulletin Board:GSHF), a business development corporation whose mission is todevelop and support companies and technologies that facilitate theefficient use of natural resources and catalyze transformationalenvironmental gains.As of June 30, 2005, Inseq's total liabilities exceed its totalassets by $414,700. Going Concern DoubtThe Company's external auditors -- Rosenberg, Rich, Baker,Berman & Company -- raised going concern doubts after reviewingthe company's 2004 financial statements.The Company incurred a loss of $1,346,773 for the six months endedJune 30, 2005. As of June 30, 2005, the Company had $105,066 incash, and current liabilities exceeded current assets by$455,606.INTERNATIONAL PAPER: Sells Carter Holt Equity Stake for $1.14B--------------------------------------------------------------International Paper (NYSE: IP) has completed the sale of its50.5% stake in Carter Holt Harvey Ltd. to Rank Group InvestmentsLtd. for NZ$2.50 per share, per the lock-in agreement signed byboth companies on Aug. 16. Proceeds of the sale totaled US$1.14billion, and will be used primarily to reduce debt.The Company's acceptance of the offer satisfies the minimumshareholder acceptance condition of the full takeover offer,launched Sept. 14, 2005."This is an important first step in IP's transformation plan, andI'm pleased with how quickly we completed the transaction. It'san indication that we are serious and focused on getting value andexecuting our strategy," said John Faraci, IP's chairman and chiefexecutive officer. "While we remain confident in CHH's leadershipand strategy to grow and improve, our priorities have evolved andthe business climate has changed. The timing was right for us todivest our interests."International Paper -- http://www.internationalpaper.com/-- is the world's largest paper and forest products company. Businessesinclude paper, packaging, and forest products. As one of thelargest private forest landowners in the world, the companymanages its forests under the principles of the SustainableForestry Initiative (R) (SFI) program, a system that ensures thecontinual planting, growing and harvesting of trees whileprotecting wildlife, plants, soil, air and water quality. * * *As reported in the Troubled Company Reporter on July 22, 2005,Moody's Investors Service placed International Paper Company'sratings on review for possible downgrade.International Paper Company: * Senior Unsecured Baa2 * Subordinate Shelf (P)Baa3 * Preferred Shelf (P)Ba1 * Commercial Paper P-2International Paper Capital Trust II: * Bkd Preferred Stock Baa3 * International Paper Capital Trust III: * Bkd Preferred Shelf Baa3International Paper Capital Trust IV: * Bkd Preferred Shelf (P) Ba1 * International Paper Capital Trust VI: * Bkd Preferred Shelf (P) Ba1Champion International Corporation: * Senior Unsecured Baa2 * Federal Paper Board Co., Inc. * Senior Unsecured Baa2Union Camp Corporation: * Senior Unsecured Baa2INTERSTATE BAKERIES: Asks Court to Okay Nestle Purina Agreement---------------------------------------------------------------On July 22, 1995, Interstate Bakeries Corporation and its debtor-affiliates, Continental Baking Company, VCS Holding Company andRalston Purina Company executed a Tax Sharing Agreement, whichaddressed certain tax issues arising under a related Sale andPurchase Agreement between the Debtors, Continental Baking andRalston.Ralston Purina Company is now known as Nestle Purina PetcareCompany.Pursuant to the Tax Agreement, the parties allocated certain taxbenefits and burdens among themselves, J. Eric Ivester, Esq., atSkadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois,relates.The Tax Agreement required the Debtors to pay Ralston in theevent that an Internal Revenue Service audit resulted in a shiftof certain tax deductions, leading to a tax benefit to InterstateBrands Corporation and a tax liability to Ralston. As a resultof IRS audits, the Debtors made yearly Shifted DeductionPayments, aggregating $2,037,299, to Ralston from 1998 to 2003.However, on March 7, 2002, the IRS issued new regulations, whichallowed certain losses previously disallowed by the IRS. Thesenew regulations called into question whether Ralston trulysuffered a tax liability as a result of shifted deductions. Theparties disputed whether the tax liability truly existed.Mr. Ivester argues that to the extent there was no tax liability,as the Debtors contend, Nestle must reimburse the Debtors$2,037,299 for the Shifted Deduction Payments. In contrast, ifthe tax liability existed, as Nestle contends, the Debtors mightowe Nestle up to an additional $388,207 for unpaid ShiftedDeduction Payments, which includes future liabilities.Pursuant to the Tax Agreement, the Debtors also made payments toRalston totaling $4,890,323, which represented the value ofcertain income tax benefits enjoyed by the Debtors as a result ofcertain employee severance payments made by Ralston after theclosing of the Sales Transaction.However, the Debtors contend that Ralston was not entitled toretain the Severance Pay Tax Reimbursements due to the fact thatRalston received significant tax benefits as a result of makingthe post-closing severance payments. The Debtors further assertthat Nestle is required to reimburse them for the Severance PayTax Reimbursements.To avoid the expense, delay, and uncertainty of litigation, theparties entered into a settlement agreement to resolve theirdisputes.The salient terms of the Settlement Agreement are: (a) Nestle holds the sole right, title and interest in and to all rights to reimbursement and recovery of all claims under the Tax Agreement originally held by Ralston or VCS; (b) Nestle will pay Interstate Brands $2,750,000, representing reimbursement of certain payments previously made by the Debtors to Nestle or Ralston under the Tax Agreement; (c) When Interstate Brands receives the Nestle Payment, Nestle will withdraw all of its claims against the Debtors relating to the Tax Agreement; and (d) The parties will execute mutual releases.The Debtors ask Judge Venters to approve their SettlementAgreement with Nestle.Headquartered in Kansas City, Missouri, Interstate BakeriesCorporation is a wholesale baker and distributor of fresh bakedbread and sweet goods, under various national brand names,including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),Merita(R) and Drake's(R). The Company employs approximately32,000 in 54 bakeries, more than 1,000 distribution centers and1,200 thrift stores throughout the U.S.The Company and seven of its debtor-affiliates filed for chapter11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., atSkadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors intheir restructuring efforts. When the Debtors filed forprotection from their creditors, they listed $1,626,425,000 intotal assets and $1,321,713,000 (excluding the $100,000,000 issueof 6.0% senior subordinated convertible notes due August 15, 2014,on August 12, 2004) in total debts. (Interstate BakeriesBankruptcy News, Issue No. 28; Bankruptcy Creditors' Service,Inc., 215/945-7000)JACOBS INDUSTRIES: Case Summary & 80 Largest Unsecured Creditors----------------------------------------------------------------Lead Debtor: Jacobs Industries, Inc. P.O. Box 9 Fraser, Michigan 48026Bankruptcy Case No.: 05-72613Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- CEN Industries, Inc. 05-72619 Lightning Enterprises, Inc. 05-72623 PMG Enterprises 05-72624Type of Business: The Debtor manufactures automotive interiors and specializes in roll forming and channel, stampings and assembled product.Chapter 11 Petition Date: September 26, 2005Court: Eastern District of Michigan (Detroit)Judge: Thomas J. TuckerDebtors' Counsel: Charles J. Taunt, Esq. Erika D. Hart, Esq. Charles J. Taunt & Associates, P.L.L.C. 700 East Maple Road, Second Floor Birmingham, Michigan 48009-6359 Tel: (248) 644-7800 Total Assets Total Debts ------------ -----------Jacobs Industries, Inc. $19,513,913 $21,413,576CEN Industries, Inc. $16,654 $94,977Lightning Enterprises, Inc. $13,099 $46,792PMG Enterprises $10,372 $84,245A. Jacobs Industries, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------Daimler Chrysler Corporation $1,341,949OL-4740401P.O. Box 98298Chicago, IL 60693JYCO Sealing Technologies $327,844UPS #WA03053995 Boul. IndustrielSherbrooke, PQJ1L 2S7, CAD&N Bending Corp. Trade debt $308,913101 East PondRomeo, MI 48065MST Steel Corp. $262,27824417 Groesbeck HighwayWarren, MI 48089-4786Paul McCaulley Unpaid salary $263,268[address not provided]Shores Engineering $254,13934632 NovaClinton Township, MI 48035Slidematic Products $223,411Johnston Steel Service Inc. $218,291Macsteel Service Centers USA $215,859City of Fraser - Taxes Trade debt $205,386Horizon Steel Company $188,695Allison Engineering Inc. Trade debt $179,720Timothy Kirby Unpaid salary $179,046Preferred Industries $144,342United States Steel $133,179General Motors Powertrain $123,381GDX Automotive - Magog $114,046Powder Cote II, Inc. $102,821Fabristeel Manufacturing $96,057Blue Cross Blue Shield Trade debt $94,737B. CEN Industries, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Jacobs Industries, Inc. $94,977 34675 Commerce Fraser, MI 48026-0009 Adkins, Annetta Unknown 8414 Ashton Street Detroit, MI 48228 Adkins-Grayson, Michael Unknown 8414 Ashton Street Detroit, MI 48224 Allen, Christopher Unknown 9130 Bishop Street Detroit, MI 48224 Allen, Kieyana Unknown 15852 Faircrest Detroit, MI 48205 Alvarez-Ramirez, Oralia Unknown 5420 Proctor Street Detroit, MI 48210 Alvarez-T, Lucio Unknown 2539 Inglis Detroit, MI 48209 Arcos, Sebastian Unknown 8191 Lafayette Detroit, MI 48209 Avendano, Esteban Unknown 2607 Inglis Detroit, MI 48209 Avendano-Bautista, David Unknown 2607 Inglis Detroit, MI 48209 Badillo, Vicente-Argimiro Unknown 23179 Woodrow Wilson Warren, MI 48091 Baker, Gloria Unknown 12135 Minden Detroit, MI 48205 Balderrama-Tellez, Jacinto Unknown 294 West Grand Boulevard Detroit, MI 48216 Ballesteros-Mercado, Maria Unknown 1501 Cavalry Detroit, MI 48209 Berduo, Herelin Unknown 5833 Trenton Street Detroit, MI 48210 Betz, Wendy Lou Unknown 8350 Lane Street Detroit, MI 48209 Beverly, Lamark Unknown 14736 Rosemary Detroit, MI 48213 Bonacorsi, Robert Unknown 8833 Cologne Sterling Heights, MI 48314 Brown, Leroun Unknown 6280 Holcomb Detroit, MI 48213 Burris, Jervon Unknown 18312 Faust Avenue Detroit, MI 48219C. Lightning Enterprises, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Jacobs Industries, Inc. $46,792 34675 Commerce Fraser, MI 48026-0009 Angeles, Gudelia Unknown 5208 Daniels Detroit, MI 48210 Benson, Malcolm Unknown 13893 Pinewood Detroit, MI 48205 Campbell, Clarissa Unknown 20274 Goulburn Detroit, MI 48205 Cooper, Devin Unknown 6628 Mc Clellan Detroit, MI 48213 Dela Rosa Zetina, Ernesto Unknown 35321 Wee Care Drive #1 Clinton TWP, MI 48035 Eiland, Rosalyn Unknown 4124 Alter Road Detroit, MI 48215 Eliasz, Robert Unknown 50014 Degas Chesterfield, MI 48051 Ervin, Shaun Unknown 30545 Sandhurst Drive, Apartment 103 Roseville, MI 48066 Escorcia-Vazquez, Cristina Unknown 2003 Green Detroit, MI 48210 Gregorio-Rodriguez, Simon Unknown 4144 North Campbell Street Detroit, MI 48210 Herrera-Avalos, Marlon Ivan Unknown 3915 Tren Detroit, MI 48210 Holbdy, Chauncey Unknown 9226 Bishop Detroit, MI 48224 Lima, Ruben Unknown 15806 Marentette Clinton TWP, MI 48038 Matthew, Sumoth Unknown 25611 Thomas Drive Warren, MI 48091 Oropeza, Florencio Unknown 6409 Pelouze Detroit, MI Ortiz, Amparo Unknown 5623 Lumley Detroit, MI 48210 Parker, Ora Unknown 4358 Nottingham Detroit, MI 48224 Rafael, Julio Unknown 5229 Daniels Detroit, MI 48210 Reyes-Rodriguez, Bernardo Unknown 4144 North Campbell Detroit, MI 48210D. PMG Enterprises' 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Jacobs Industries, Inc. $84,245 34675 Commerce Fraser, MI 48026-0009 Abraham, James Unknown 24085 Almond East Pointe, MI 48021 Adair, Roger Unknown 24170 Denise Road, Apartment 49B Clinton TWP, MI 48036 Aguilar, Elizabeth Esquivel Unknown 46220 Chadsworth, Lot 348 Macomb, MI 48044 Alexander, Eugene Unknown 17233 Patton Street Detroit, MI 48219 Anderson, Douglas Unknown 5231 East 10 Mile Road, #206 Warren, MI 48091 Anderson, Tiffany Unknown 8104 Marion Detroit, MI 48213 Buckwalter, Judith Unknown 23191 Hoover, Apartment 2A Warren, MI 48089 Burns, Cynthia Unknown 5071 Iroquois Detroit, MI 48213 Carreon, Maricela Unknown 7092 West Lafayette Detroit, MI 48209 Chris, Benny Unknown 25581 Cole Roseville, MI 48066 Clayton, Michael Unknown 12637 Barlow Detroit, MI 48205 Cleary, Mark Unknown 3962 Lake Forest Sterling Heights, MI 48314 Delgado, Olivia Unknown 3455 Alvina Avenue Warren, MI 48091 Dexter, Robert L. Unknown 21404 Lasalle Warren, MI 48089 Dixon, Camaro Unknown 6155 Crane Detroit, MI 48213 Dobine, Adrienne Unknown 19324 Ryan Road Detroit, MI 48234 Duran, Jose I. Unknown 2055 Vinewood #14 Detroit, MI 48216 Espinoza, Elfego Unknown 1472 Hubbard Street Detroit, MI 48209 Espitia, Pablo Corona Unknown 2055 Vinewood Detroit, MI 48216JERNBERG INDUSTRIES: Retiree Panel Taps Fagelhaber LLC as Counsel----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinoisgave the Committee of Non-Union Retirees of Jernberg Industries,Inc., and its debtor-affiliates permission to employ the Law Firmof Fagelhaber LLC as its counsel.The Court approved the appointment of the members of the RetireesCommittee on Aug. 22, 2005. The Retirees Committee is comprisedof Clarence M. Berblinger, Howard C. Campbell and Leonard M.Lipinski.Fagelhaber LLC will: a) negotiate and the Debtors' and the Unsecured Creditors Committee's professionals or representatives concerning the administration of the non-union retiree benefits; b) prepare and review pleadings, motions and correspondences in the Debtors' chapter 11 cases; c) appear at and represent the Retirees Committee in proceedings held before the Bankruptcy Court; d) provide legal advice to the Retirees Committee in the Debtors' actions concerning non-union retiree benefits and any other matters relevant to the non-union retiree benefits, and any other matters relevant to the non-union retirees in the Debtors' chapter 11 cases; and e) provide all other legal services to the Retirees Committee, including any actions by the Debtors or the Unsecured Creditors Committee in the Debtors' chapter 11 cases pursuant to Section 1114 of the Bankruptcy Code.Lauren Newman, Esq., an Associate at Fagelhaber LLC, is one of thelead attorneys for the Retirees Committee. Ms. Newman charges$250 per hour for her services.Ms. Newman reports Fagelhaber LLC's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Dennis E. Quaid Partner $395 Clinton P. Hansen Associate $225 Christina M. Berish Associate $165 Wenette Bradford Paralegal $140 Designation Hourly Rate ----------- ----------- Partners $315 - $395 Associates $165 - $275 Paralegals $100 - $150Fagelhaber LLC assures the Court that it does not represent anyinterest materially adverse to the Retirees Committee, the Debtorsor their estates.Headquartered in Chicago, Illinois, Jernberg Industries, Inc., --http://www.jernberg.com/-- is a press forging company that manufactures formed and machined products. The Company and itsdebtor-affiliates filed for chapter 11 protection on June 29, 2005(Bankr. N.D. Ill. Case No. 05-25909). Jerry L. Switzer, Jr.,Esq., at Jenner & Block LLP represents the Debtors in theirrestructuring efforts. When the Debtors filed for protection fromtheir creditors, they estimated assets and debts of $50 million to$100 million. CM&D Management Services, LLC's A. Jeffery Zapponeserves as the Debtors' Chief Restructuring Officer. CM&D JosephM. Geraghty sits as Cash and Restructuring Manager and Joshua J.Siano, Gerald B. Saltarelli and J. David Mathews serve as Cash andRestructuring Support personnel.KAIRE HOLDINGS: Registers 84 Million Common Shares for Resale-------------------------------------------------------------Kaire Holdings, Inc., filed a Registration Statement with theSecurities and Exchange Commission to allow the resale of commonstock issuable upon the conversion of convertible notes and theexercise of warrants of up to 84,469,729 shares, including: (1) up to 22,685,185 shares of common stock issuable to Alpha Capital Aktiengesellschaft upon the conversion of $350,000 in secured convertible debentures and 1,944,444 shares from the exercise of warrants; (2) up to 34,277,066 shares of common stock issuable to Longview Fund, L.P., upon the conversion of $525,000 in secured convertible debentures and 6,652,778 shares from the exercise of warrants; (3) up to 11,778,846 shares of common stock issuable to Longview Equity Fund, L.P., upon the conversion of $175,000 in secured convertible debentures and 875,000 shares from the exercise of warrants; (4) up to 5,048,077 shares of common stock issuable to Longview Equity Fund, L.P., upon the conversion of $75,000 in secured convertible debentures and 375,000 shares from the exercise of warrants; and (5) 833,333 shares of common stock to Bicoastal Consulting Group from the exercise of warrants.The holders of the 8% convertible debentures may not convert itssecurities into the Company's common shares if after theconversion holder would beneficially own over 9.9% of theCompany's outstanding shares.The Company's common stock is quoted on the OTC bulletin boardunder the symbol "KAIH". The Company's common shares tradedbetween $0.023 and $0.033 this month.Kaire's shares of common stock are "penny stocks" as defined inthe Securities Exchange Act. As a result, an investor may find itmore difficult to dispose of or obtain accurate quotations as tothe price of the shares of the common stock being registeredhereby. In addition, the "penny stock" rules adopted by theCommission under the Exchange Act subject the sale of the sharesof the common stock to certain regulations which impose salespractice requirements on broker-dealers.A full-text copy of the Registration Statement is available forfree at http://ResearchArchives.com/t/s?1dcKaire Holdings, Inc., delivers specialized programs and servicestargeted areas within the senior and chronic health care market.As of June 30, 2005, Kaire Holdings' balance sheet reflected a$1,790,816 stockholders' deficit compared to a $1,558,716 deficitat Dec. 31, 2004.KAISER ALUMINUM: Asks Court to Extend Deadline to Remove Actions----------------------------------------------------------------Kaiser Aluminum Corporation and its debtor-affiliates are partiesto a wide-variety of non-asbestos prepetition litigation. KaiserAluminum & Chemical Corporation is also a party to a significantnumber of prepetition asbestos-related proceedings that arepending in various courts throughout the country.Due to several factors, including the number of Actions involvedand the complex nature of the Actions, the Debtors have not yetdetermined which, if any, of the Actions should be removed and, ifappropriate, transferred to the District of Delaware.Hence, the Debtors ask the U.S. Bankruptcy Court for the Districtof Delaware to further extend the time within which they mayremove the Actions pursuant to Section 1452 of the JudiciaryProcedures Code and Rule 9027 of the Federal Rules of BankruptcyProcedure, to the later of 30 days after the: (a) effective Date of the Plan; or (b) entry of an order terminating the automatic stay with respect to a particular Action sought to be removed.Kimberly Newmarch, Esq., at Richards, Layton & Finger, inWilmington, Delaware, tells the Court that the Extension willprotect the Debtors' valuable right economically to adjudicatelawsuits under Section 1452 of the Judiciary Procedures Code ifthe circumstances warrant removal. Absent an extension mayfrustrate the potential consolidation of the Debtors' affairs intoone court. It may also force the Debtors to address claims andproceedings in a piecemeal fashion to the detriment of theircreditors.Ms. Newmarch assures the Court that the Extension will notprejudice: -- the plaintiffs in the stayed Actions because the parties may not prosecute the Actions absent relief from the automatic stay; and -- any party to an Action that the Debtors seek to remove from pursuing remand under Section 1452(b).Judge Fitzgerald will convene a hearing on October 24, 2005, at1:30 p.m. to consider the Debtors' request. By application ofDel.Bankr.LR 9006-2, the Removal Period is automatically extendedthrough the conclusion of that hearing.Headquartered in Foothill Ranch, California, Kaiser AluminumCorporation -- http://www.kaiseraluminum.com/-- is a leading producer of fabricated aluminum products for aerospace and high-strength, general engineering, automotive, and custom industrialapplications. The Company filed for chapter 11 protection onFebruary 12, 2002 (Bankr. Del. Case No. 02-10429), and has soldoff a number of its commodity businesses during course of itscases. Corinne Ball, Esq., at Jones Day, represents the Debtorsin their restructuring efforts. On June 30, 2004, the Debtorslisted $1.619 billion in assets and $3.396 billion in debts.(Kaiser Bankruptcy News, Issue No. 79; Bankruptcy Creditors'Service, Inc., 215/945-7000)KEY3MEDIA GROUP: Wants Until Dec. 31 to Object to Claims--------------------------------------------------------Reorganized Key3Media Group, Inc., and its affiliates asks theU.S. Bankruptcy Court for the District of Delaware to extend,until Dec. 31, 2005, the period within which they, or the CreditorRepresentative appointed under their confirmed chapter 11 plan,can object to proofs of claims.As previously reported in the Troubled Company Reporter, thereorganized Debtors have substantially completed the review andreconciliation of approximately 380 claims filed against theirestates. The extension will give the reorganized Debtors moretime to review and reconcile remaining claims that are potentiallyobjectionable.Headquartered in Los Angeles, California, Key3Media Group, Inc.,produces, manages and promotes a portfolio of trade shows,conferences and other events for the information technologyindustry. The Company and its debtor-affiliates filed for chapter11 protection on Feb. 3, 2003 (Bankr. D. Del. Case No. 03-10323).Christina M. Houston, Esq., at Richards, Layton & Finger, P.A.,and David M. Friedman, Esq., at Kasowitz, Benson, Torres &Friedman, LLP, represent the Debtor. When the Debtors filed forprotection from their creditors, they listed $241,202,000 in totalassets and $441,033,000 in total liabilities. The Court confirmedthe Debtors' First Amended Joint Plan of Reorganization on June 4,2003, and the Plan took effect on June 20, 2003.LEINER HEALTH: Completes Credit Agreement Amendment with Lenders---------------------------------------------------------------- Leiner Health Products Inc. obtained consent from its securedlenders to amend its Credit Agreement. The amendment will enhancethe company's flexibility to manage the business and support theacquisition of assets from Pharmaceutical Formulations, Inc.The Credit Agreement amendment revises required minimumConsolidated Indebtedness to Credit Agreement EBITDA LeverageRatio and Credit Agreement EBITDA to Consolidated Interest ExpenseRatio, commencing with the second quarter of fiscal 2006, endedSept. 24, and extending throughout the term of the CreditAgreement."We are pleased with the support and confidence our lenders haveshown us in granting the amendment which will provide additionalflexibility as we continue to navigate the transitions in productlandscape," said Robert Kaminski, Chief Executive Officer. PFI AcquisitionLeiner completed its transaction to purchase substantially all ofthe assets related to PFI's solid dose pharmaceutical productsbusiness for $23 million in cash. The purchase price was fundedwith $13 million in new equity from Leiner's equity sponsors and$10 million drawn on Leiner's revolving credit facility. Theacquisition excludes PFI's manufacturing facilities and itsbranded fiber business, Konsyl Pharmaceuticals, Inc."We are especially excited that the acquisition of PFI assetsgives us the opportunity to be a leader in pain managementproducts across both the VMS and OTC categories as 40 millionAmericans turn 50 over the next 20 years," Mr. Kaminski said."The acquisition also allows us to enhance our contractmanufacturing capabilities and expands our OTC product offeringand customer base."Founded in 1973, Leiner Health Products, headquartered in Carson,Calif., is America's leading manufacturer of store brand vitamins,minerals, and nutritional supplements and its second largestsupplier of over-the-counter pharmaceuticals in the food, drug,mass merchant and warehouse club (FDMC) retail market, as measuredby retail sales. Leiner provides nearly 40 FDMC retailers withover 3,000 products to help its customers create and market highquality store brands at low prices. It also is the largestsupplier of vitamins, minerals and nutritional supplements to theUS military. Leiner markets its own brand of vitamins underYourLife(R) and sells over-the-counter pharmaceuticals under thePharmacist's Formula(R) name. Last year, Leiner produced 27billion doses that help offer consumers high quality, affordablechoices to improve their health and wellness. * * *As reported in the Troubled Company Reporter on Aug. 19, 2005,Moody's Investors Service lowered the long and short-term ratingsof Leiner Health Products Inc. by one notch and placed the long-term ratings on review for further possible downgrade. The ratingaction follows the sharp decline in first quarter profits that hasresulted in negative free cash flow and has forced the company toseek an amendment to its bank credit agreement. Credit measuresand liquidity have weakened beyond levels consistent with theprevious ratings, and could be further constrained by ongoingindustry and cost pressures or by the company's plannedacquisition of Pharmaceutical Formulations Inc.These ratings were downgraded and placed under review for furtherpossible downgrade: * Corporate family rating (formerly called "senior implied rating"), to B2 from B1; * $50 million senior secured revolving credit facility due 2009, to B2 from B1; * $240 million senior secured term loan facility due 2011, to B2 from B1; * $150 million 11% senior subordinated notes due 2012, to Caa1 from B3.These rating was downgraded: * Speculative grade liquidity rating, to SGL-4 from SGL-3.LIN TV: Subsidiary Selling $190 Mil. Notes Via Private Placement----------------------------------------------------------------LIN Television Corporation, a wholly owned subsidiary of LIN TVCorp. (NYSE: TVL), entered into an agreement to sell $190 millionaggregate principal amount of 6.5% Senior Subordinated Notes due2013.The Notes will be issued at a discount to their aggregateprincipal amount at maturity and will generate gross proceeds toLIN Television Corporation of $175.3 million. The yield tomaturity of the Notes is 7.875% (computed on a semi-annual bondequivalent basis), calculated from Sept. 29, 2005.The Notes will be guaranteed by LIN TV Corp. The proceeds fromthe sale of the Notes will be used to repay the $170 million termloan under LIN Television Corporation's credit facility with thebalance, if any, to repay a portion of the outstanding revolvingindebtedness under LIN Television Corporation's existing creditfacility. The offering is expected to close on September 29,2005, subject to customary closing conditions.The Notes will be issued in private placements and are expected tobe resold by the initial purchasers to qualified institutionalbuyers under Rule 144A of the Securities Act of 1933 and outsideof the United States in accordance with Regulation S under theSecurities Act of 1933.The Notes have not been registered under the Securities Act of1933 and may not be offered or sold in the United States absentregistration or an applicable exemption from registrationrequirements.LIN TV Corp., headquartered in Providence, Rhode Island, pro formafor the acquisition owns and operates 30 television stations in 14markets. In addition, the company also owns approximately 20% ofKXAS-TV in Dallas, Texas and KNSD-TV in San Diego, Californiathrough a joint venture with NBC. LIN TV is a 50% investor inBanks Broadcasting, Inc., which owns KWCV-TV in Wichita, Kansasand KNIN-TV in Boise, Idaho. * * *As reported in the Troubled Company Reporter on Aug. 29, 2005,Standard & Poor's Ratings Services lowered its ratings on LIN TVCorp., including lowering its long-term corporate credit rating to'B+' from 'BB-'. S&P said the outlook is stable.On Aug. 23, 2005, Moody's Investors Service placed the ratings ofLIN TV Corp., including the Ba2 corporate family rating, on reviewfor possible downgrade following the company's announcement thatit has entered into a definitive agreement to acquire fivetelevision station from Emmis Communications Corp. for$260 million with cash.MD BEAUTY: S&P Revises Outlook to Negative from Stable------------------------------------------------------Standard & Poor's Ratings Services revised its outlook on MDBeauty Inc. to negative from stable.In addition, Standard & Poor's affirmed all of its existingratings on the company, including its 'B' corporate credit rating.About $398 million of pro forma debt is affected by this action.The revised outlook reflects MD Beauty's very aggressive financialpolicy because it intends to use the proceeds from the planned$177 million increase in its first and second lien bank facilityto pay a substantial dividend to shareholders. This dividend isin addition to a $100 million dividend paid to shareholders inFebruary 2005.As a result, pro forma debt leverage will increase to levels abovethe February 2005 transaction. While the company's operationscontinue to trend favorably, MD Beauty is in the process onenhancing its infrastructure with: * newly retained management; * a recently opened distribution facility; and * new operating systems that will be in place over the next year."We view this transaction as limiting the company's flexibility towithstand any significant operating issue in the near term withinthe current rating category," said Standard & Poor's creditanalyst Patrick Jeffrey.MEDICALCV INC: Files Supplemental Prospectus on 63 Million Shares-----------------------------------------------------------------MedicalCV, Inc., filed a Prospectus Supplement with the Securitiesand Exchange Commission relating to the sale from time to time ofup to 63,122,500 shares of its common stock to incorporate thelatest financial information.As reported in the Troubled Company Reporter on Sept. 20, 2005,the Company reported $5,070,184 of net income for the quarterending July 31, 2005, after recognizing a $6.4 million gain onaccount of decreased warrant-related liability. At July 31, 2005,the Company's balance sheet showed $10,972,691 in total assets anda $14,059,307 stockholders deficit.The Company's shares of common stock are quoted on the OTCBulletin Board and trade under the ticker symbol "MDCV." TheCompany's common shares traded between $0.70 and $0.90 this month.A full-text copy of the Prospectus Supplement is available forfree at http://ResearchArchives.com/t/s?1dfMedicalCV, Inc., is a cardiothoracic surgery device manufacturer.Previously, its primary focus was on heart valve disease. Itdeveloped and marketed mechanical heart valves known as theOmnicarbon 3000 and 4000. In November 2004, after an exhaustiveevaluation of the business, MedicalCV decided to explore optionsfor exiting the mechanical valve business. The Company intends todirect its resources to the development and introduction ofproducts targeting treatment of atrial fibrillation.At July 31, 2005, the Company's balance sheet showed $10,972,691in total assets and a $14,059,307 stockholders deficit.MELLON RESIDENTIAL: Fitch Junks Rating on Class B-5 Certificates----------------------------------------------------------------Fitch Ratings has affirmed and taken rating action on these MellonResidential Funding Corp issues: Series 1998-A -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AA'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'B'; -- Class B-5 downgraded to 'C' from 'CCC'. Series 1998-2 -- Classes A-11, A-12 affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AAA'; -- Class B-4 affirmed at 'AAA'; -- Class B-5 upgraded to 'AA+' from 'AA'. Series 1998-TBC1 -- Class A-3 affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AAA'. Series 1999-TBC1 -- Class A-3 affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AAA'. Series 1999-TBC2 -- Class A-3 affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 affirmed at 'AAA'; -- Class B-5 upgraded to 'AA+' from 'AA'. Series 1999-TBC3 -- Class A-2 affirmed at 'AAA'; -- Class B-1 affirmed at 'AAA'; -- Class B-2 affirmed at 'AAA'; -- Class B-3 upgraded to 'AA+' from 'AA'; -- Class B-4 upgraded to 'AA-' from 'A+'; -- Class B-5 upgraded to 'BBB+' from 'BBB'.The affirmations on the above classes reflect adequaterelationships of credit enhancement to future loss expectationsand affect approximately $258 million of certificates.The upgrades reflect an improvement in the relationship of CE tofuture loss expectations and affect $4.43 million of certificates.Currently, the B-5 classes of series 1998-2 and series 1999-TBC2are benefiting from 7.02% and 3.21% CE (originally 0.30% and0.25%), respectively, and the B-3, B-4 and B-5 classes for series1999-TBC3 are benefiting from 2.47%, 1.34% and 0.67% CE(originally 1.1%, 0.60% and 0.30%), respectively, in the form ofsubordination.The negative rating action on class B-5 of series 1998-A,affecting $1.18 million of outstanding certificates, is the resultof higher-than-expected collateral losses to date and reflects theexhaustion of credit support to that class. As of the August 2005distribution, the pool has incurred cumulative losses of 0.89% andapproximately 4.14% of the remaining pool balance is more thanninety days delinquent.The above deals have pool factors (i.e., current mortgage loansoutstanding as a percentage of the initial pool) ranging from 1%to 45%.The collateral for series 1998-A consists of Alt-A 30-year fixed-rate mortgage loans secured by first liens on one- to four-familyresidential properties. The mortgage loans are master serviced byAlliance Mortgage Company.The collateral of series 1998-2 consists of prime 20- to 30-yearfixed-rate, fully amortizing, first lien, one- to four-familyresidential mortgage loans. The weighted average loan-to-valueratio is approximately 74.4%. The three states that represent thelargest portion of mortgage loans in Pool 1 are California,Massachusetts and New Jersey. The mortgage loans are masterserviced by Atlantic Mortgage & Investment Corp.The collateral of the remaining transactions consist of hybridadjustable-rate, 30-year fully amortizing mortgage loans securedby first liens on one- to four-family residential properties. Theweighted average LTV for the transactions ranges from 66.42% to68.70%. The three states that represent the largest portion ofmortgage loans are California, Massachusetts and New York. Themortgage loans are master serviced by The Boston Safe Deposit andTrust Co., a wholly owned subsidiary of Mellon Bank Corp.METALFORMING TECHNOLOGIES: Court Approves $25 Mil. Sale to Zohar----------------------------------------------------------------The Hon. Mary F. Walrath of the U.S. Bankruptcy Court for theDistrict of Delaware approved the sale of MetalformingTechnologies, Inc., and its debtor-affiliates' Lexington businessassets to Zohar Tubular Acquisition, LLC.As reported in the Troubled Company Reporter, Zohar Tubularoffered to buy the Debtors' operating assets for $25 million plusthe assumption of all postpetition liabilities.The asset sale includes the Debtors': a) structural and tubular business; b) Saline and Milan plants; and c) Metalform's 49% equity interests in the Lexington Joint Venture and the Engineered Systems business. GE AssetsIn connection with the asset sale, GE Commercial Finance agrees tosell equipment, currently leased by the Debtors, to Zohar Tubularfor $780,000. With the sale of the GE assets, GE and the Debtorswaive all claims against each other in connection with the leasecontract.Judge Walrath further allows the Debtors to assume and assignunexpired leases and executory contracts associated with theLexington assets to Zohar Tubular, including all of JohnsonControl Inc.'s purchase orders and related agreements. TheBankruptcy Court will hear objections to the proposed cure amountsfor the Lexington contracts at 4:00 p.m. on Oct. 4, 2005.Headquartered in Chicago, Illinois, Metalforming Technologies,Inc., and its debtor-affiliates manufacture seating components,stamped and welded powertrain components, closure systems, airbaghousings and charge air tubing assemblies for automobiles andlight trucks. The Company and eight of its affiliates, filed forchapter 11 protection on June 16, 2005 (Bankr. D. Del. Case Nos.05-11697 through 05-11705). Joel A. Waite, Esq., Robert S. Brady,Esq., and Sean Matthew Beach, Esq., at Young Conaway Stargatt &Taylor, represent the Debtors in their restructuring efforts. Asof May 1, 2005, the Debtors reported $108 million in total assetsand $111 million in total debts.METALFORMING TECH: Creditors Must File Proofs of Claim By Oct. 20-----------------------------------------------------------------The U.S. Bankruptcy Court for the District of Delaware setOct. 20, 2005 at 4:00 p.m., as the deadline for all creditors owedmoney by Metalforming Technologies, Inc., and its debtor-affiliates on account of claims arising prior to June 16, 2005, tofile formal written proofs of claim.Governmental Units have until Dec. 13, 2005 to file formal writtenproofs of claim.Original proofs of claims must be delivered to: Metalforming Technologies, Inc. Claims Processing Center P.O. Box 5115, FRD Station New York, New York 10150-5115or to the Debtors' claims agent at: Metalforming Technologies, Inc. Claims Processing Center c/o Bankruptcy Services LLC 757 Third Avenue, 3rd Floor New York, New York 10017Creditors wishing to receive confirmation of the claims agents'receipt of their proof of claim must submit, along with theiroriginal proof of claim: a) a copy of the submitted proof of claim; and b) self-addressed, stamped, return envelope.Headquartered in Chicago, Illinois, Metalforming Technologies,Inc., and its debtor-affiliates manufacture seating components,stamped and welded powertrain components, closure systems, airbaghousings and charge air tubing assemblies for automobiles andlight trucks. The Company and eight of its affiliates, filed forchapter 11 protection on June 16, 2005 (Bankr. D. Del. Case Nos.05-11697 through 05-11705). Joel A. Waite, Esq., Robert S. Brady,Esq., and Sean Matthew Beach, Esq., at Young Conaway Stargatt &Taylor, represent the Debtors in their restructuring efforts. Asof May 1, 2005, the Debtors reported $108 million in total assetsand $111 million in total debts.METROPOLITAN MORTGAGE: Court Approves Amended Disclosure Statement------------------------------------------------------------------ The Honorable Patricia C. Williams of the U.S. Bankruptcy Courtfor the Eastern District of Washington approved the adequacy ofthe Third Amended Disclosure Statement explaining the ThirdAmended Joint Plan of Reorganization filed by MetropolitanMortgage & Securities Co., Inc., and its debtor-affiliate, SummitSecurities Inc. Judge Williams put her stamp of approval on theAmended Disclosure Statement on Sept. 26, 2005.The Debtors are now authorized to send copies of the AmendedDisclosure Statement and Amended Joint Plan to creditors andsolicit their votes in favor of the Plan. Summary of the Amended Joint PlanThe Amended Joint Plan focuses upon maximizing and expeditingdistributions to creditors through the efficient liquidation ofall remaining assets of the Debtors. Because the amount owing onthe Debtors' Debt Securities, which total approximately $470million far exceeds the likely total value of the Debtors'combined remaining assets, the main focus of the Plan is tomaximize the percentage recovery of Debt Security holders andother unsecured creditors from the limited pool of remainingassets.The Plan contemplates that after payment of secured claims,priority claims and administrative expenses, only certainunsecured creditors will receive distributions under the Plan.The holders of Equity Securities will have their securitiescanceled and will receive no distributions under the Plan orinterests in the Creditors' Trusts.The Plan provides for the establishment of two trusts: 1) the Metropolitan Creditors' Trust, whose sole beneficiaries are certain unsecured creditors of Metropolitan, primarily the holders of Metropolitan's Debt Securities; and 2) the Summit Creditors' Trust, whose sole beneficiaries are certain unsecured creditors of Summit Securities, primarily the holders of Summit's Debt Securities. Projected Plan Distributions to General Unsecured CreditorsWithin the next year, beneficiaries of the Metropolitan Creditors'Trust may receive up to 14 cents for every dollar of their claimsfrom the net proceeds of Metropolitan Core Assets andbeneficiaries of the Summit Creditors' Trust may receive up to 14cents for every dollar of their claims from the net proceeds ofSummit Core Assets.Beneficiaries of the Creditors' Trusts may receive an additionalestimated 15-18 cents for every dollar of their claims fromrecovery from the D&O Policies, Avoidance Actions and the sale ofthe Insurance Companies. In addition, there may be otherdistributions in the next year to beneficiaries of the Creditors'Trusts from other Causes of Action, excluding Avoidance Actions. Treatment of General Unsecured Claims for Metropolitan Mortgage and Summit SecuritiesGeneral Unsecured Claims of Metropolitan Mortgage, totalingapproximately $357,245,839, will receive a Pro Rata beneficialinterest in the Metropolitan Creditors' Trust, with that Pro Ratabeneficial interest to be determined as if Metropolitan Mortgage'sGeneral Unsecured Claims and Intercompany Affiliate Claims were asingle Class.General Unsecured Claims of Summit Securities, totalingapproximately $157,909,000 will receive a Pro Rata beneficialinterest in the Summit Creditors' Trust, with that Pro Ratabeneficial interest to be determined as if Summit Securities'General Unsecured Claims and Intercompany Affiliate Claims were asingle Class.A full-text copy of the Third Amended Disclosure Statement isavailable for a fee at:http://www.researcharchives.com/bin/download?id=050927230200All ballots must be returned by Nov. 18, 2005. Objections to theAmended Plan, if any must be filed and served by Nov. 28, 2005.Judge Williams will convene a confirmation hearing to consider themerits of the Amended Plan at 9:00 a.m., on Dec. 13, 2005, and at9:00 a.m., on Dec. 14, 2005.Headquartered in Spokane, Washington, Metropolitan Mortgage &Securities Co., Inc., owns insurance businesses. Metropolitanfiled for Chapter 11 protection (Bankr. E.D. Wash. Case No.04-00757), along with Summit Securities Inc., on Feb. 4, 2004.Bruce W. Leaverton, Esq., at Lane Powell Spears Lubersky LLP andDoug B. Marks, Esq., at Elsaesser, Jarzabek, Anderson, Marks,Elliot & McHugh represent the Debtors in their restructuringefforts. When Metropolitan Mortgage filed for chapter 11protection, it listed total assets of $420,815,186 and total debtsof $415,252,120.METROPOLITAN MORTGAGE: SEC Sues Four Former Executives for Fraud----------------------------------------------------------------The Securities and Exchange Commission filed civil fraud chargesagainst former executives and third party business associates ofMetropolitan Mortgage and Securities Co., Inc., a long-standingSpokane, Washington finance and real estate company that collapsedin 2004. Metropolitan filed for bankruptcy in February 2004,devastating nearly 10,000 investors throughout the PacificNorthwest who had invested approximately $450 million in the oncehigh-flying real estate company.The SEC's civil complaint, filed in the U.S. District Court forthe Western District of Washington, alleges that Metropolitan'smanagement falsified the company's 2002 financial results byreporting profits from circular real estate sales whereMetropolitan purported to sell property to buyers who, in fact,received all of the money to pay for the purchase fromMetropolitan or its affiliates. The fraud made Metropolitan appearprofitable -- facilitating further sales of its bonds andpreferred stock to investors -- when in reality the company wasencountering its third straight year of mounting losses andverging on financial collapse. The ComplaintA full-text copy of the Complaint is available at no charge athttp://ResearchArchives.com/t/s?1ebNamed in the complaint are: -- former Chief Executive Officer C. Paul Sandifur, Jr., 63, of El Centro, California; -- former executive Thomas G. Turner, 54, of Sparks, Nevada; and -- former Controller Robert Ness, 41, of Bellevue, Washington; as well as -- former Vice President Thomas R. Masters, 54, of Spokane, Washington, who is alleged to have participated in one of the fraudulent transactions. RabbitsAccording to the Commission's complaint, the bogus deals -- knowninternally as "rabbits" (as in, pulling a rabbit out of a hat) -- all materialized in the final days of Metropolitan's fiscal year2002, allowing the company to report a profit rather than the lossit had anticipated. In the largest of these deals, Metropolitanreported a $10 million gain by completely financing the purchaseof property by customer Trillium Corporation, a private companybased in Bellingham, Washington. In order to evade accountingprinciples prohibiting companies from reporting profits from suchsales, Metropolitan and Trillium agreed to make it appear that theproperty was being purchased by an unrelated third party, JeffProperties -- in reality a shell company set up by an eighteenyear old high school student, the son of a Trillium creditor, inexchange for a motorcycle. In addition to charges againstMetropolitan's officers, the Commission's complaint levels fraudcharges against Trillium, its President and CEO David Syre, 64, ofBellingham, Washington, and Trillium creditor Dan Sandy, 50, ofRochester, Washington.Among other claims, the Commission's complaint alleges that byengaging in the conduct described above, each of the defendantscommitted or aided and abetted violations of the antifraudprovisions of the federal securities laws and aided and abettedMetropolitan's violations of reporting requirements. Specifically,the complaint alleges that Sandifur, Turner, Ness and Mastersdirectly violated Section 17(a) of the Securities Act of 1933 andSection 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also alleges that Sandy, Syre,Trillium, Turner, Ness and Masters aided and abettedMetropolitan's violations of Section 10(b) of the Exchange Act andRule 10b-5 thereunder. All of the defendants are alleged to haveaided and abetted Metropolitan's violations of the reportingrequirements of Section 13(a) of the Exchange Act and Rules 12b-20and 13a-1 thereunder, and Sandifur, Turner and Ness are alsoalleged to have aided and abetted Metropolitan's violations ofRule 13a-13 under the Exchange Act. Further, Sandifur, Turner,Masters and Ness are alleged to have violated Section 13(b)(5) ofthe Exchange Act and Rule 13b2-1 thereunder, and aided and abettedMetropolitan's violations of Sections 13(b)(2)(A) and 13(b)(2)(B)of the Exchange Act. The complaint alleges that Sandifur, Turnerand Ness violated Exchange Act Rule 13b2-2, and that through theircertifications of Metropolitan's 2002 year-end false financialstatements, Sandifur and Ness violated Exchange Act Rule 13a-14.Finally, the complaint charges Sandifur as a control person forMetropolitan's violations of Sections 10(b), 13(a), 13(b)(2)(A)and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1and 13a-13 thereunder.The Commission's action seeks civil monetary penalties andinjunctive relief from all defendants, as well as disgorgementfrom Sandifur, Turner, Ness and Masters, and orders barringSandifur, Turner and Ness from serving as officers or directors ofpublic companies. Thomas Turner IndictedIn a separate action, the Criminal Division of the United StatesDepartment of Justice and the Spokane Office of the Federal Bureauof Investigation announced the filing of criminal charges againstThomas Turner. Additional details about that criminal proceedingwere not available at press time. * * *Nicholas K. Geranios, writing for the Associated Press, recallsthat the company's collapse last year cost more than 10,000investors to lose $450 million.Headquartered in Spokane, Washington, Metropolitan Mortgage &Securities Co., Inc., owns insurance businesses. It filed forChapter 11 protection (Bankr. E.D. Wash. Case No. 04-00757), alongwith Summit Securities Inc., on Feb. 4, 2004. Bruce W. Leaverton,Esq., of Lane Powell Spears Lubersky LLP and Doug B. Marks, Esq.,of Elsaesser, Jarzabek, Anderson, Marks, Elliot & McHugh representthe Debtors in their restructuring efforts. When MetropolitanMortgage filed for chapter 11 protection, it listed assets of$420,815,186 and debts of $415,252,120. The Company is subjectto numerous ongoing investigations by state and federalregulators, including the U.S. Securities and Exchange Commission.METROPOLITAN MORTGAGE: Sues PwC for Negligence in Audit Work------------------------------------------------------------The Directors of Metropolitan Mortgage & Securities Co., Inc., andits affiliate, Summit Securities Inc., filed a lawsuit againsttheir former accountants and auditors, PricewaterhouseCoopers LLC,over audit work performed in 1999 and 2000 that failed to warn thetwo companies were on the verge of bankruptcy.The lawsuit was filed in the U.S. District Court in Spokane,Washington, on Sept. 21, 2005, according to a report by theAssociated Press and other published reports.The two companies assert in their lawsuit that PWC was negligentin its duties as their independent auditors by misrepresenting thetruth in the Firm's audit reports that Metropolitan and Summitwere in deep financial trouble.The lawsuit also alleges that PwC advised Metropolitan and Summitto set up a questionable tax shelter plan that was laterdisallowed by the Internal Revenue Service, which further drovethe two companies into filing for bankruptcy.Headquartered in Spokane, Washington, Metropolitan Mortgage &Securities Co., Inc., owns insurance businesses. Metropolitanfiled for Chapter 11 protection (Bankr. E.D. Wash. Case No. 04-00757), along with Summit Securities Inc., on Feb. 4, 2004. BruceW. Leaverton, Esq., at Lane Powell Spears Lubersky LLP and Doug B.Marks, Esq., at Elsaesser, Jarzabek, Anderson, Marks, Elliot &McHugh represent the Debtors in their restructuring efforts. WhenMetropolitan Mortgage filed for chapter 11 protection, it listedtotal assets of $420,815,186 and total debts of $415,252,120.MIRANT CORP: Selling Washington Power Unit to Longview for $17.2M-----------------------------------------------------------------Mint Farm Generation, LLC, owns a partially constructed gas-firedcombined-cycle electric generating power facility and relatedassets in Longview, Washington. Mint Farm was originally awholly owned subsidiary of Avista Power, LLC, formed for thepurpose of developing the Facility.On July 30, 2001, Mirant Corporation purchased Mint Farm and allof its assets from Avista. After the sale, Mirant immediatelymade arrangements for the construction of the Facility. However,because of Mirant's financial situation, construction of theFacility was suspended.Stone & Webster, the construction contractor, continues toprovide maintenance and certain other services relating to theFacility under an existing construction contract.The total budget to maintain the Facility in its presentcondition, including property taxes, is $2 million per year.The Debtors analyzed the economics of owning, maintaining andoperating the Facility both over the short and long-term future.The Debtors realized that they would not realize economicbenefits because they: -- were not dedicating resources to support trading in the market where the Facility and related assets are located; -- did not own additional assets in that market; and -- did not desire to expand in the market.The Debtors determined that the incremental cost to construct,own, maintain and operate the Facility exceeded the risk adjustedpresent value of the cash flows that would be generated by theFacility.Accordingly, the Debtors concluded that provided appropriateconsideration could be obtained, the sale of the Facility,together with certain real property and contracts, represents thehighest and best use for the property. Marketing ProcessAlmost a year after the construction was suspended, the Debtorsengaged in efforts to sell the Facility. In March 2004, theDebtors enlisted the assistance of The Blackstone Group L.P. torun a formal marketing process.The Debtors received numerous indicative offers. Blackstone andthe Debtors continued to facilitate due diligence with theinterested bidders during the first quarter of 2005. The biddersused the time to arrange financing, line-up power purchasers andcomplete due diligence.In late March 2005, the Debtors received definitive offers fromtwo of the bidders, and the negotiation of a model asset purchaseagreement began with both parties.The Debtors, in consultation with their advisors, concluded thatLongview Generation LLC's bid represented a commerciallyreasonable offer for the Facility. Purchase AgreementOn Sept. 13, 2005, Mirant Corporation and Mint Farm enteredinto an Asset Purchase Agreement with Longview Generation.A full-text copy of the Asset Purchase Agreement is available atno cost at http://ResearchArchives.com/t/s?1e9The salient terms of the Longview Agreement are: a. Mint Farm will sell the Facility and related assets to Longview Generation for $17,200,000, subject to certain adjustments; b. At the Closing, Longview Generation will pay, satisfy, perform and discharge all Assumed Liabilities provided in the Agreement, arising out of the ownership or operation of the Facility that arise or accrue after the Closing, including all liabilities and obligations arising or accruing under the Assumed Contracts listed in the Agreement; c. The Debtors will use commercially reasonable efforts to obtain the Court's approval of a Bid Procedures Order. The Approval Order must be entered on or before December 8, 2005; d. Longview Generation has provided the Debtors with $1,720,000 as earnest money deposit. Mint Farm will retain the Deposit as its sole and exclusive remedy in the event that Mint Farm terminates the Agreement due to a material breach committed by Longview Generation; and e. In the event that Longview Generation terminates the Agreement in accordance with the terms of the Agreement or if Mint Farm sells the Assets to an entity or entities other than Longview or any of its affiliates -- an Upset Sale -- then Longview Generation's sole and exclusive remedies will be limited to: -- the return of the Deposit; -- the payment of the Buyer Expense Reimbursement; and -- the payment of the Buyer Break-up Fee under certain circumstances.The Debtors ask the U.S. Bankruptcy Court for the NorthernDistrict of Texas to approve: (i) the Asset Purchase Agreement, free and clear of all liens, claims, encumbrances and interests, to Longview Generation or to any other party submitting the highest or otherwise best bid for the Purchased Assets at a scheduled Auction; and (ii) the assumption or assignment of certain executory contracts and permits. * * *Judge Lynn directs the Debtors to provide the Court, on or beforeSeptember 29, 2005, with a Schedule identifying the contracts tobe assumed and assigned and the permits to be assigned under theAsset Sale Agreement, and the corresponding cure amounts for theAssumed Contracts, if any, that the Debtors may seek to assume orassign to Longview or to any Successful Bidder.The Court further directs the Debtors to send a notice to thenon-Debtor parties to the Assumed Contracts and Permits to givethem an opportunity to object to the assumption and assignment,the Cure Amount relating to the Assumed Contracts or both.The Court rules that if no objection is timely received: -- the Cure Amount in the Schedule will be controlling; and -- each non-Debtor party to the Assumed Contract will be barred from asserting any other claim arising prior to the assignment against the Debtors or Longview Generation or any Successful Bidder as to the Assumed Contract.The Court has set a sale hearing for October 19, 2005, toconsider the Debtors' request.Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean,and the Philippines. Mirant owns or leases more than 18,000megawatts of electric generating capacity globally. MirantCorporation filed for chapter 11 protection on July 14, 2003(Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White &Case LLP, represents the Debtors in their restructuring efforts.When the Debtors filed for protection from their creditors, theylisted $20,574,000,000 in assets and $11,401,000,000 in debts.(Mirant Bankruptcy News, Issue No. 77; Bankruptcy Creditors'Service, Inc., 215/945-7000)MIRANT CORP: Bowline Gets Court OK to Recover $4.9M from Insurer----------------------------------------------------------------The U.S. Bankruptcy Court for the Northern District of Texas gaveMirant Bowline, LLC, a Mirant Corporation debtor-affiliates,permission to execute documents necessary and proper to securepayment of $4,889,764, representing the outstanding sum of thecovered losses.As reported in the Troubled Company Reporter on Aug. 16, 2005,Unit 2 at the facility of Bowline suffered a serious equipmentfailure that forced the unit offline on January 17, 2004. Bowlinesubmitted a claim pursuant to its all risk property insurancepolicy to certain insurers, including Underwriters at Lloyd's andCompanies Collective. An adjuster was assigned to evaluate theclaim.Michelle C. Campbell, Esq., at White & Case LLP, in Miami,Florida, related that the Adjuster's March 10, 2004, report tothe Insurers estimated repair costs at $2,000,000, which is belowthe Policy's $5,000,000 property damage deductible. Thus, repaircosts sought in the Claim were determined to be unrecoverable.However, the time required to repair and restore the unit toservice exceeded the Policy's 60-day business interruptiondeductible, Ms. Campbell relates. So, Bowline also submitted aninterruption claim for losses suffered in excess of the 60-daydeductible to the Insurers. The claim was assigned to theAdjuster.In January 2004, the Debtors began meeting with the Adjuster todiscuss the validity and amount of the Interruption Claim. Ms.Campbell reports that the Debtors were successful indemonstrating to the Adjuster an Interruption Claim for$6,537,022, representing: -- $1,086,145 in energy payment losses; -- $120,504 in ancillary service payment losses; and -- $5,330,373 in capacity payment losses.The Adjuster issued a report to the Insurers recommending paymentof the entire amount without reduction. Underwriters at Lloyd's,as Lead Insurer, accepted and approved the Adjuster'srecommendation on July 13, 2005.Ms. Campbell noted that the Insurers have tendered to Bowline a$1,647,259 partial payment.Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- is a competitive energy company that produces and sells electricity in North America, the Caribbean,and the Philippines. Mirant owns or leases more than 18,000megawatts of electric generating capacity globally. MirantCorporation filed for chapter 11 protection on July 14, 2003(Bankr. N.D. Tex. 03-46590). Thomas E. Lauria, Esq., at White &Case LLP, represents the Debtors in their restructuring efforts.When the Debtors filed for protection from their creditors, theylisted $20,574,000,000 in assets and $11,401,000,000 in debts.(Mirant Bankruptcy News, Issue No. 76; Bankruptcy Creditors'Service, Inc., 215/945-7000)MOLECULAR DIAGNOSTICS: CFO Dennis L. Bergquist Resigns------------------------------------------------------David Weissberg, M.D., Molecular Diagnostics, Inc.'s ChiefExecutive Officer, informed the Securities and Exchange Commissionin an 8-K filing that Dennis L. Bergquist resigned as ChiefFinancial Officer of the Company on Sept. 20, 2005.Molecular Diagnostics, Inc. -- http://www.molecular-dx.com/-- formerly Ampersand Medical Corporation, is a biomoleculardiagnostics company focused on the design, development andcommercialization of cost-effective screening systems to assist inthe early detection of cancer. MDI has currently curtailed itsoperations focused on the design, development and marketing of itsInPath(TM) System and related image analysis systems, and expectsto resume such operations only when additional capital has beenobtained by the Company. The InPath System and related productsare intended to detect cancer and cancer-related diseases, and maybe used in a laboratory, clinic or doctor's office.As of June 30, 2005, Molecular Diagnostics' balance sheet showed a$12,998,000 equity deficit, compared to a $12,123,000 deficit atDec. 31, 2004.NATIONAL BENEVOLENT: Sues Weil Gotshal to Reduce Bankruptcy Costs-----------------------------------------------------------------The St. Louis Business Journal reports that the NationalBenevolent Association filed an adversary proceeding with the U.S.Bankruptcy Court for the Western District of Texas, San AntonioDivision, against its lead bankruptcy counsel, Weil Gotshal &Manges LLP. The suit alleges that the high-profile New York lawfirm misled the organization to file for bankruptcy, withdisastrous results.National Benevolent is the social- and health-services division ofthe Christian Church (Disciples of Christ). The organizationseeks unspecified punitive damages, fee forfeiture and other costsit incurred by hiring Weil Gotshal. The organization claims itpaid the law firm more than $10 million in fees for itsprofessional services during National's restructuring, the Journalrelates. The organization further alleges it suffered"unnecessary" professional fees of at least $40 million because ofthe law firm's alleged breach of fiduciary duty.The St. Louis newspaper relates that the move is unusual becausethe organization is suing a law firm that helped it emerge frombankruptcy shedding about $230 million in liabilities. Somecorporate restructuring observers shake their heads and say thelawsuit's absurd on its face.Daniel Sheehan, Esq., at Daniel Sheehan & Associates LLP,represents National Benevolent.A full-text copy of the Complaint, filed Sept. 14, 2005, isavailable at no charge at: http://bankrupt.com/misc/04-50948-2162.pdfWeil's time to file a motion to dismiss, answer, or otherresponsive pleading has not expired.Headquartered in Saint Louis, Missouri, The National BenevolentAssociation of the Christian Church (Disciples of Christ) -- http://www.nbacares.org/-- manages more than 70 facilities financed by the Department of Housing and Urban Development andowns and operates 18 other facilities, including 11 multi-levelolder adult communities, four children's facilities and threespecial-care facilities for people with disabilities. The non-profit organization filed for chapter 11 protection on February16, 2004 (Bankr. W.D. Tex. Case No. 04-50948). Alfredo R. Perez,Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors intheir restructuring efforts. When the Debtor filed for protectionfrom its creditors, it listed more than $200 million in debts andassets at that time. The organization emerged from chapter 11protection on April 15, 2005.NAVIGATORS GROUP: S&P Assigns Preliminary BB+ Pref. Stock Rating----------------------------------------------------------------Standard & Poor's Ratings Services assigned its preliminary 'BBB'senior debt, 'BBB-' subordinated debt, and 'BB+' preferred stockratings to Navigators Group Inc.'s (NASDAQ:NAVG; BBB/Negative/--)$250 million multipurpose shelf.The company intends to use the proceeds for general corporatepurposes, which could include downstreaming funds to its insurancecompanies.NAVG's operating performance was strong in 2004 and in the firsthalf of 2005, with $51 million and $30 million, respectively, inpretax operating income. Despite the pre-Katrina/Rita softeningof the overall pricing environment of the property/casualtyindustry, NAVG generated strong earnings as it continued tobenefit from moderate rate increases across its business lines.As a result, the company produced strong RORs of 15.0% and 16.5%in the same periods.NAVG's negative outlook reflects the company's short track recordin new lines of business such as directors and officers and errorsand omissions. This diversification strategy outside marineinsurance, which is NAVG's longstanding area of specialization,was initiated in 2001 and has not yet been tested in a difficultcycle. Standard & Poor's expects that NAVG's debt-to-capitalratio will be consistent with the rating.NEIMAN MARCUS: Fitch Places Issuer Default Rating at B--------------------------------------------------------Fitch Ratings has assigned prospective ratings to the bankfacilities and notes being issued by The Neiman Marcus Group,Inc.: -- Issuer default rating (IDR) 'B-'; -- $600 million secured revolving credit facility 'BB-/R1'; -- $1 billion secured term loan facility 'B/R3'; -- $850 million secured notes 'B/R3'; -- $750 million senior unsecured notes 'CCC+/R5'; -- $575 million senior subordinated notes 'CCC/R6'.Fitch has also assigned a rating of 'B/R3' to NMG's $125 millionof 7.125% debentures due 2028. The Rating Outlook is Stable.The ratings reflect the significant increase in leverage expectedwith the pending completion of the $5.1 billion buy-out of thecompany by Texas Pacific Group and Warburg Pincus. Following thebuy-out, the company expects to have debt of approximately $3.3billion, which implies adjusted debt/EBITDAR of 6 times (x)-7x.The financing for the buy-out, which totals $5.5 billion includingtransaction costs and the refinancing of an existing note issue,includes cash of $825 million, new equity of $1.5 billion, and newdebt of $3.2 billion. The new debt consists of a $1 billion termloan facility maturing in 2013, $850 million of new secured notesmaturing in 2013, $750 million of new senior unsecured notesmaturing in 2015, and $575 million of new senior subordinatednotes maturing in 2015.The term loan facility is secured by a first lien on fixed assetsand a second lien on inventories. The secured notes are expectedto have the same security package as the term loan. In addition,the company has a commitment for a $600 million five-yearrevolver, secured by a first lien on inventories and a second lienon fixed assets. NMG also has two existing senior unsecured noteissues of $125 million each, expiring in 2008 and 2028. Thecompany plans to refinance the 2008 maturity but to keep thelonger dated issue, which will then be equally and ratably securedwith the collateral backing the secured notes. All debt will beat the Neiman Marcus Group, Inc. level.The ratings further reflect NMG's leadership position within theluxury retail segment and its well regarded management team.These factors are balanced against the cyclical nature of, andfashion risk associated with, luxury apparel retailing.NMG is currently operating at a high level, with strong comparablestore sales increases and robust margin expansion. NMG had astrong fiscal 2005 (year ending July 31, 2005) as comparable storesales were up 9.9% and the EBIT margin expanded to 11.2% from 9.9%in fiscal 2004. Looking ahead, while the near-term outlook forthe luxury segment remains solid, Fitch expects NMG's comparablestore sales will gradually moderate from their current highsingle-digit pace given increasingly difficult comparisons withprior-year periods.NMG is a luxury retailer with 35 Neiman Marcus stores, twoBergdorf Goodman stores, and 17 clearance centers. The companyalso has a direct business - catalogs and online operations -under the Neiman Marcus, Horchow, and Bergdorf Goodman names. Inaddition, the company owns a 51% interest in Gurwitch Products,which markets the Laura Mercier cosmetics line, and 56% of KateSpade.NORTH AMERICAN: Files Amended Plan & Disclosure Statement---------------------------------------------------------North American Refractories Company and its affiliated operatingcompanies, A.P. Green Refractories Company, ANH RefractoriesCompany and Harbison-Walker Refractories Company, filed theirFirst Amended Plans of Reorganization with the U.S. BankruptcyCourt for the Western District of Pennsylvania on Sept. 15, 2005.The next step in the process is for the Bankruptcy Court todetermine that the Plans meet applicable legal requirements.Thereafter, the Debtors will solicit votes for the Plans frominterested parties. The Plans, CEO Guenter Karhut said, provide afair and balanced treatment for all interested parties. Mr.Karhut says the Debtors look forward to the solicitation andconfirmation process, emerging from Chapter 11 protection andcontinuing to be a leading provider of refractory products andservices to their loyal customer base.As reported in the Troubled Company Reporter on Sept. 15, 2005,the Debtors asked the Court to extend, until Jan. 31, 2006, theexclusive period within which they may solicit acceptances fortheir proposed Amended Reorganization Plans.The extension will provide the Debtors the time they need tofinalize the negotiation, revisions, and solicitation of the Planthat has been agreed to in principle by the major creditorconstituencies.The Debtor's exclusive period to solicit plan acceptances has beenextended nine times since the Plan was filed on July 31, 2003.The Debtor sought bankruptcy protection in early 2002 aftersuffering a slump in the domestic economy and encountering anoverwhelming number of claims from individuals asserting injuriesor illnesses caused by exposure to asbestos containing products itmanufactured.Headquartered in Pittsburgh, Pennsylvania, North AmericanRefractories Company, was engaged in the manufacture and non-retail sale of refractory bricks and related products. TheCompany filed for chapter 11 protection on January 4, 2002 (Bankr.W.D. Pa. Case No. 02-20198). Paul M. Singer, Esq., of Pittsburghrepresents the Debtor. When the Debtor filed for protection fromits creditors, it listed $27,559,000,000 in assets and$18,634,000,000 in debts.NORTHWEST AIRLINES: Common Stock Stops Trading on NASDAQ--------------------------------------------------------Northwest Airlines Corporation (Nasdaq: NWAC) announced that itscommon stock stopped trading on the NASDAQ stock market, effectivewith the opening of business on September 26, 2005.Northwest received written notification on September 15,2005, from NASDAQ that its common stock would be delisted inaccordance with Marketplace Rules 4300, 4450(f) and IM-4300.Because of the exchange notification, the fifth character "Q"has been added to the company's trading symbol. The symbolchanged to NWACQ as of the opening of business on September 19,2005. Following delisting from the NASDAQ, shares now trade inthe "over-the-counter" market.Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit,Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, andapproximately 1,400 daily departures. Northwest is a member ofSkyTeam, an airline alliance that offers customers one of theworld's most extensive global networks. Northwest and its travelpartners serve more than 900 cities in excess of 160 countries onsix continents. The Company and 12 affiliates filed for chapter11 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 inWashington represent the Debtors in their restructuring efforts.When the Debtors filed for protection from their creditors, theylisted $14.4 billion in total assets and $17.9 billion in totaldebts. (Northwest Airlines Bankruptcy News, Issue No. 3;Bankruptcy Creditors' Service, Inc., 215/945-7000)NORTHWEST AIRLINES: UST Meeting to Form Committees Friday Morning-----------------------------------------------------------------Deirdre A. Martini, the U.S. Trustee for Region 2, will convenean organizational meeting of Northwest Airlines Corporation andits debtor-affiliates' largest unsecured creditors on September30, 2005, at 10:00 a.m. The meeting will be held at Sheraton NewYork Hotel and Towers, at 811 7th Avenue (near 53rd Street), inNew York City.Brian A. Masumoto, Esq., trial attorney for the U.S. Trustee,explains that the sole purpose of the meeting will be to form acommittee or committees of unsecured creditors in the Debtors'cases. This is not the meeting of creditors pursuant to Section341 of the Bankruptcy Code, Mr. Masumoto emphasizes.Mr. Masumoto relates that a representative of the Debtors willattend and provide background information regarding the Chapter11 petitions.Creditors who want to serve on the Committee are required tocomplete an acceptance form, disclosing information regarding thecreditors' connections or relationships to other U.S. airlinebankruptcy cases."The disclosure of any such information and/or relationship willnot necessarily form the basis for disqualification as a proposedcommittee member, but may be relevant in determining whether thecreditor can fulfill its fiduciary duties on the Creditors'Committee" Mr. Masumoto says.The U.S. Trustee reserves the right to seek Court authorizationfor the maintenance of certain information barriers andrestrictions with respect to committee members who serve on morethan one official committee of creditors in the U.S. airlinebankruptcy cases currently pending in federal courts in theUnited States, Mr. Masumoto notes.Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit,Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, andapproximately 1,400 daily departures. Northwest is a member ofSkyTeam, an airline alliance that offers customers one of theworld's most extensive global networks. Northwest and its travelpartners serve more than 900 cities in excess of 160 countries onsix continents. The Company and 12 affiliates filed for chapter11 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 inWashington represent the Debtors in their restructuring efforts.When the Debtors filed for protection from their creditors, theylisted $14.4 billion in total assets and $17.9 billion in totaldebts. (Northwest Airlines Bankruptcy News, Issue No. 3;Bankruptcy Creditors' Service, Inc., 215/945-7000)NORTHWEST AIRLINES: Adjusts CEO Steenland Employment Agreement--------------------------------------------------------------Northwest Airlines, Inc., the principal operating subsidiary ofNorthwest Airlines Corporation, entered into a new ManagementCompensation Agreement with its president and chief executiveofficer, Douglas M. Steenland, on September 14, 2005.The new agreement largely restates provisions contained in Mr.Steenland's prior Management Compensation Agreement, includingprovisions relating to term, termination, severance and otherbenefits.The company is required to seek Bankruptcy Court approval toassume the new agreement.The new agreement contains a one-year non-compete provision thatwould prevent Mr. Steenland from leaving the company to joinanother commercial airline, according to documents the bankruptcarrier filed with the Securities and Exchange Commission."The Company believes that it is critically important to maintainthe continuity of its management team during these challengingtimes and that Mr. Steenland's agreement to the one-year non-compete provision is one factor in achieving this goal," saysMichael L. Miller, Northwest's vice president, law and secretary.The new agreement also updates Mr. Steenland's prior ManagementCompensation Agreement to reflect Mr. Steenland's election aspresident and CEO of NWA Corp. and Northwest Airlines effectiveOctober 1, 2004. In addition, given the current financialcondition of the company and the airline industry generally, theprior agreement was revised to include certain provisionsapplicable should Northwest file for bankruptcy.In connection with the pay and benefit reductions implemented formanagement employees in 2004, Mr. Steenland's base salary andincentive compensation were reduced effective December 1, 2004.The new agreement does not make any changes in Mr. Steenland'soverall level of compensation. The agreement provides for thesame base salary and the same target level of incentivecompensation that Mr. Steenland was entitled to under his prioragreement.The agreement also continues Mr. Steenland's arrangement underNorthwest's Supplemental Executive Retirement Plan on the sameterms and conditions as his current arrangement under that plan.Mr. Steenland has agreed to participate in future labor costreductions imposed by Northwest, including reductions in his basesalary and incentive compensation.Northwest Airlines Corporation -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit,Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, andapproximately 1,400 daily departures. Northwest is a member ofSkyTeam, an airline alliance that offers customers one of theworld's most extensive global networks. Northwest and its travelpartners serve more than 900 cities in excess of 160 countries onsix continents. The Company and 12 affiliates filed for chapter11 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 inWashington represent the Debtors in their restructuring efforts.When the Debtors filed for protection from their creditors, theylisted $14.4 billion in total assets and $17.9 billion in totaldebts. (Northwest Airlines Bankruptcy News, Issue No. 2;Bankruptcy Creditors' Service, Inc., 215/945-7000)NRG ENERGY: Continues Stock Repurchase Program----------------------------------------------On August 11, 2005, NRG Energy, Inc., closed its previouslyDisclosed convertible perpetual preferred stock issuance and, ina related transaction, completed a $250 million accelerated sharerepurchase of its common stock, in each case with an affiliate ofCredit Suisse First Boston.As part of the Preferred Stock Purchase Agreement between NRG andCSFB, NRG issued and sold $250 million in new 3.625% convertibleperpetual preferred stock to CSFB in a private transaction.Additional terms agreed by the parties are: -- The preferred stock may be settled at the option of either party during a 90-day period commencing August 11, 2015. Upon settlement, NRG will pay CSFB $250 million in cash plus accrued and unpaid dividends, if any, to redeem the preferred stock; -- If the market value of the underlying NRG common shares is in excess of $59.09 (150% of the closing price on August 10, 2005), NRG will pay CSFB the net difference in cash or shares of NRG common stock; -- If the Company's common share price at settlement is lower than $39.39, CSFB will pay NRG the net difference in cash or shares of NRG common stock; and -- Only common shares equal to the value of the security in excess of $59.09, may be included in the earnings per share dilution calculation, if dilutive.NRG expects to use the cash proceeds from the preferred stockissuance to repurchase approximately $229 million of its 8%second priority senior secured notes at 108% of par which willbring the total amount of our 8% notes redeemed or repurchased to$645 million during 2005. After the redemption, NRG says that itwill have approximately $1.08 billion in aggregate principalamount of notes outstanding.NRG expects to complete the redemption of the 8% notes inSeptember 2005."This accelerated share repurchase provides an efficient,meaningful and immediate return of capital to shareholders whilemaintaining, and even enhancing, our capital structure," DavidCrane, NRG president and chief executive officer, said. "Whilewe expect to be able to reinvest our capital in enhancing ourasset portfolio, this decision to repurchase shares and notes isa sensible and efficient use of capital at this time."Issuing the preferred stock gave NRG the capacity, under its debtinstruments, to use existing cash to fund the $250 millionaccelerated share repurchase program. NRG purchased 6,346,788shares of common stock from CSFB at a price of $39.39 per share.Under the terms of the accelerated share repurchase agreementwith CSFB, NRG will have fixed its price risk under the agreementat 97%-103% ($38.21 - $40.57 per share) of the common share priceat execution. As a result of this transaction, NRG's outstandingshares have decreased to approximately 80,700,000. * * *As reported in the Troubled Company Reporter on Aug. 23, 2005,Moody's Investors Service has affirmed all of the debt ratings ofNRG Energy, Inc., (NRG: B1 Corporate Family Rating (formerly knownas Senior Implied Rating) following the Company's announcement toutilize cash on hand to repurchase $250 million of NRG's commonstock and to use the proceeds of a $250 million privately placedconvertible preferred offering to repurchase a portion of NRG's8.0% $1.35 billion in second lien secured notes. Moody's said therating outlook is stable.ON TOP: Gets Court Nod to Employ Thomas Lackey as Local Counsel---------------------------------------------------------------The Honorable Paul Mannes of the U.S. Bankruptcy Court for theDistrict of Maryland gave On Top Communications, LLC, and itsdebtor-affiliates permission to employ Thomas L. Lackey, Esq., astheir local bankruptcy counsel.The Debtors selected Mr. Lackey because of his extensiveexperience in representing debtors and creditors in bankruptcy andother commercial matters.Mr. Lackey will: (a) advise the Debtor with respect to its powers and duties as debtors-in-possession in the continued operation of their business; (b) formulate a plan of reorganization and obtaining confirmation of that plan; (c) prepare and file on behalf of the Debtors all necessary applications, motions, orders, reports, adversary proceedings and other pleadings and documents; (d) appear in Court and protect the interests of the Debtors before the Court; and (e) perform all other legal services that may be necessary in the Debtors' chapter 11 cases.Mr. Lackey discloses that his Firm received $5,000 retainer. Asthe principal lawyer in the Debtors' cases, he will bill $200 perhour. The paraprofessionals will bill $80 to $110 per hour.The Debtors believe that Thomas L. Lackey, Esq., and his Firm aredisinterested as that term is defined in Section 101(14) of theU.S. Bankruptcy Code.Mr. Lackey's address is: Thomas L. Lackey 4201 Northview Drive, Suite 407 Bowie, MD 20716Headquartered in Lanham, Maryland, On Top Communications, LLC, andits affiliates acquire, own and operate FM radio stations locatedin the Southeastern United States. The Company and its debtor-affiliates filed for chapter 11 protection on July 29, 2005(Bankr. D. Md. Case No. 05-27037). When the Debtors filed forprotection from their creditors, they estimated assets and debtsof $10 million to $50 million.PIPE CREEK: Case Summary & 34 Largest Unsecured Creditors---------------------------------------------------------Debtor: Pipe Creek Transport, Inc. 7270 South Warren Road Warren, Indiana 46792Bankruptcy Case No.: 05-15201Type of Business: The Debtor offers trucking services.Chapter 11 Petition Date: September 27, 2005Court: Northern District of Indiana (Fort Wayne)Judge: Robert E. GrantDebtor's Counsel: Daniel Serban, Esq. 1016 Standard Federal Plaza 200 East Main Street Fort Wayne, Indiana 46802Total Assets: $1,220,037Total Debts: $1,394,843Debtor's 34 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------Robert L. Alspach $92,7582090 South Warren RoadHuntington, IN 46750Ronald Pearson $75,0005574 N-200 WestHuntington, IN 46750Internal Revenue Service $65,069Cincinnati, OH 45999Internal Revenue Service $65,069Cincinnati, OH 45999Larry and Loxie Hite $50,000Indiana Dept. of Revenue $36,941Indiana Dept. of Revenue $36,941Xtra $30,838Crazy D's $26,000First Federal Savings Bank Value of security: $21,931 $258,680Zurcher Tires $20,147G.E. Finance Value of security: $15,000 $25,000G.E. Finance Value of security: $15,000 $25,000Christen and Heather $9,600KauffmanKey Equipment Finance $5,457Darla Kingrey $5,041Vomac Truck Sales 7 Service $4,472Truck Pro $4,424Paschall Truck Lines, Inc. $3,543Mid-States Power and $1,943RefrigerationFort Wayne Truck Center $1,842J.J Keller & Associates $1,074Navistar Value of security: $1,012 $90,000American Transport Group $852Cintas Location #338 $676Interstate Battery of $608Northeast IndianaNendels Motel $516Fedex $423Quality Glass Service $386United Directories of $350AmericaUnited Directories of $350AmericaTranscore $291Redimed $112Star Press $159PROTOCOL SERVICES: Unsecured Creditors May Recover 7.5% of Claims-----------------------------------------------------------------Protocol Services, Inc., and its debtor-affiliates delivered theirJoint Chapter 11 Plan of Reorganization and an accompanyingDisclosure Statement to the U.S. Bankruptcy Court for the SouthernDistrict of California. Mezzanine NotesIn August 2002, the Debtors issued a 13% Series A Senior SecuredSubordinated Noted due 2008 to the Mezzanine A Lenders in theprincipal amount of $40,947,514. The Mezzanine A Notes wereissued in exchange for preexisting 13% Series A Senior SecuredSubordinated Notes due 2007.Also that same date, the Debtors issued a 30% Series B SeniorSecured Subordinated Notes due 2008 to the Mezzanine B Lenders inthe principal amount of $14,168,869. These notes were issued inconnection with a transaction in which the Mezzanine B Notes, theSeries Z Redeemable Preferred Stock, and the Series B Warrantswere issued in exchange for the cancellation of certainpreexisting Tranche D Notes for $7,087,739 and cash totaling$16,250,000. Plan StructureThe Debtors believe that Mezzanine A Lenders and Mezzanine BLenders will vote in favor of the Plan. Also, the Debtors ink asettlement pact with the Mezzanine lenders which subordinatestheir claims to holders of general unsecured claims. Withoutthese lenders' consent, general unsecured creditors are in dangerof not recovering anything under the Plan.The Debtors don't think the Senior Lenders will vote in favor ofconfirmation. However, the Debtors are relying on Section1129(b)(2)(A) to "cram down" the Senior Lenders objections, ifany.These creditors assert claims purportedly secured by substantiallyall of the Debtors' assets: Creditors Claims --------- ------ Senior Lenders $119,403,515 Mezzanine A $61,736,530 Mezzanine B $34,614,677The Debtors believe that their estates' enterprise value is inexcess of their major creditors' claims.Senior lenders will receive in exchange for their claims, NewSenior Tranche A Note and New Senior Tranche B Note.The Mezzanine A and B lenders' secured claims will be convertedinto common equity of Reorganized Protocol.The Debtors believe that the Mezzanine lenders will agree toprovide general unsecured creditors with beneficial interests inan Unsecured Creditors Trust which will receive a New UnsecuredNote for $1.2 million, provided that these creditors will vote toaccept the Plan, otherwise, they'll get nothing. Unsecuredcreditors' recovery will be approximately 7.5% if their aggregatetotal allowed claim won't exceed $16.2 million.Old Protocol common stock and other interests will cancelled.Headquartered in Deerfield, Illinois, Protocol Services, Inc., andits subsidiaries offers agency services, database development andmanagement, data analysis, direct mail printing and lettershops,e-marketing, media replication, and inbound and outboundteleservices. Protocol has offices and operations inCalifornia, Colorado, Illinois, Louisiana, Florida, Michigan,North Carolina, New York, Massachusetts, Connecticut and Canadaand employs over 4,000 individuals. The Company and itsaffiliates -- Protocol Communications, Inc., Canicom, Inc., MediaExpress, Inc., and 3588238 Canada, Inc. -- filed for chapter 11protection on July 26, 2005 (Bankr. S.D. Calif. Case Nos. 05-06782through 05-06786). Bernard D. Bollinger, Jr., Esq., and JeffreyK. Garfinkle, Esq., at Buchalter, Nemer, Fields & Younger,represent the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they estimatedmore than $100 million in assets and debts.PROTOCOL SERVICES: Gets Court Nod to Use $3.3 Mil. Cash Collateral------------------------------------------------------------------The Honorable James W. Meyers of the U.S. Bankruptcy Court for theSouthern District of California gave Protocol Services, Inc., andits debtor-affiliates permission to access up to $3.3 million ofcash collateral on a final basis.On Aug. 6, 2002, the Debtors entered into a Fifth Amended andRestated Credit Agreement with these Senior Lenders: -- Canadian Imperial Bank of Commerce, as Administrative Agent, -- ING Capital LLC, as syndication agent and co-book runner, & -- LaSalle Bank National Association, as documentation agent.The Credit agreement amounted to $122 million. As of the petitiondate, the Senior Lenders allege that the Debtors are indebted for$119 million.The Debtors also issued two notes: -- 13.5% Series A Senior Secured Subordinated Notes due 2008 for $41 million, and -- 30% Series B Senior Secured Subordinated Notes due 2008 for $14 million.The Second Lienholders allege that the Debtors are indebted for$96 million as of the petition date.The Senior Lenders assert a first priority security interest insubstantially all of the Debtors' personal property and otherassets, including all cash of the Debtors. The Second Lienholdersassert second priority liens in the prepetition collateral,including cash.As adequate protection required under Sections 361(2) and 363(e)under the U.S. Bankruptcy Code for any diminution in the value oftheir collateral, the Debtors will grant the Senior Lendersreplacement liens on all postpetition proceeds and allpostpetition assets, excluding all claims, causes of action andproceeds arising from avoidance actions and customer deposits.The Debtors will use the cash collateral to fund its operations,payroll, and other operating expenses that are necessary tomaintain the value of their estates.The Debtors are authorized to use the cash collateral so long astheir total disbursements don't exceed 20% of their monthlybudget.Headquartered in Deerfield, Illinois, Protocol Services, Inc.,and its subsidiaries offers agency services, database developmentand management, data analysis, direct mail printing andlettershops, e-marketing, media replication, and inbound andoutbound teleservices. Protocol has offices and operations inCalifornia, Colorado, Illinois, Louisiana, Florida, Michigan,North Carolina, New York, Massachusetts, Connecticut and Canadaand employs over 4,000 individuals. The Company and itsaffiliates -- Protocol Communications, Inc., Canicom, Inc., MediaExpress, Inc., and 3588238 Canada, Inc. -- filed for chapter 11protection on July 26, 2005 (Bankr. S.D. Calif. Case Nos. 05-06782through 05-06786). Bernard D. Bollinger, Jr., Esq., and JeffreyK. Garfinkle, Esq., at Buchalter, Nemer, Fields & Younger,represent the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they estimatedmore than $100 million in assets and debts.PROTOCOL SERVICES: Wants Until Nov. 30 to Assume or Reject Leases-----------------------------------------------------------------Protocol Services, Inc., and its debtor-affiliates ask the U.S.Bankruptcy Court for the Southern District of California forpermission to extend until November 30, 2005, the period withinwhich they can decide whether to assume, assume and assign, orreject their unexpired nonresidential real property leases.The Debtors have focused on resolving issues relating to thebankruptcy cases and have not been able to make a decision withrespect to each unexpired lease.The Debtors believe that the extension period will allow them tomaximize the value of their assets and avoid the incurrence ofadministrative expenses and other claims on their assets.A list of the Debtors' unexpired nonresidential real propertyleases is available for free at: http://ResearchArchives.com/t/s?1eaHeadquartered in Deerfield, Illinois, Protocol Services, Inc.,and its subsidiaries offers agency services, database developmentand management, data analysis, direct mail printing andlettershops, e-marketing, media replication, and inbound andoutbound teleservices. Protocol has offices and operations inCalifornia, Colorado, Illinois, Louisiana, Florida, Michigan,North Carolina, New York, Massachusetts, Connecticut and Canadaand employs over 4,000 individuals. The Company and itsaffiliates -- Protocol Communications, Inc., Canicom, Inc., MediaExpress, Inc., and 3588238 Canada, Inc. -- filed for chapter 11protection on July 26, 2005 (Bankr. S.D. Calif. Case Nos. 05-06782through 05-06786). Bernard D. Bollinger, Jr., Esq., and JeffreyK. Garfinkle, Esq., at Buchalter, Nemer, Fields & Younger,represent the Debtors in their restructuring efforts. When theDebtors filed for protection from their creditors, they estimatedmore than $100 million in assets and debts.RAVEN MOON: Registers 3.7 Billion Common Shares for Resale----------------------------------------------------------Raven Moon Entertainment, Inc., filed a Registration Statementwith the Securities and Exchange Commission to allow the resale of3,697,766,666 shares of its common stock by these SellingShareholders: Selling Shareholders Common Shares -------------------- ------------- Gina D, Inc. 873,600,000 MG Studios, Inc. 2,680,000,000 David D. Mouery. P.L. 96,000,000 Role Entertainment 48,000,000 Big Apple Consulting USA, Inc. 166,666Of the shares offered, 1.6 billion shares are issuable uponexercise of options.The Company will not receive proceeds from the sale of the sharesby the Selling Stockholders. However, it will receive proceedsequal to the exercise price, if the options held by the sellingstockholders are exercised.The Company's common stock is traded on the over-the-counterbulletin board operated by the National Association of SecuritiesDealers, Inc., under the symbol "RVMN". The Company's commonshares have traded between $0.004 and $0.0125 this month. Going Concern DoubtAt June 30, 2005, the Company has $26,442 in cash, and totalassets of $27,442. At June 30, 2005 Raven Moon's liabilitiestotaled $1,661,290. These circumstances raise substantial doubtabout the Company's ability to continue as a going concern. TheCompany's ability to continue as a going concern is dependent uponpositive cash flows from operations and ongoing financial support.Adequate funds may not be available when needed or may not beavailable on terms favorable to the Company. If the Company isunable to secure sufficient funding, the Company may be unable todevelop or enhance its products and services, take advantage ofbusiness opportunities, respond to competitive pressures or growthe Company's business in the manner that the Company's managementbelieves is possible. This could have a negative effect on theCompany's business, financial condition and results of operations.Without such support, the Company may not be able to meet itsworking capital requirements and accordingly the Company and itssubsidiaries may need to reorganize and seek protection from itscreditors.Raven Moon Entertainment, Inc. -- http://www.ravenmoon.net/-- develops and produces children's television programs and videos,CD music, and Internet websites focused on the entertainmentindustry. Raven Moon talks about music publishing and talentmanagement on its Web site. Raven Moon indicates in its latestquarterly report that it wants to enter the plush toy market too.RELIANCE GROUP: Court OKs Gage Spencer as Panel's Special Counsel-----------------------------------------------------------------The U.S. Bankruptcy Court for the Southern District of New Yorkgave the Official Unsecured Creditors' Committee seeks the U.S.Bankruptcy Court for the Southern District of New York's authorityto retain Gage, Spencer & Fleming, LLP, as its special litigationcounsel, nunc pro tunc to Aug. 25, 2005.Gage Spencer is a law firm devoted to the litigation of complexcivil and criminal matters. The firm's practice emphasizessecurities, accounting, employment and white-collar criminallitigation. Gage Spencer has tried a wide variety of criminaloffenses, including securities, financial fraud, racketeering andtax offenses, and is experienced in the use of privateinvestigators and coordinating civil litigation with state andfederal prosecutors and regulatory agencies.Gage Spencer will be paid based on an agreed reduced feearrangement. Pursuant to the contingency aspect of the feearrangement, Gage Spencer will be paid only 60% of its feesunless money is recovered, plus 100% of actual expenses. Thisarrangement, Mr. Gulkowitz says, provides Gage Spencer with theincentive to maximize the dollar amount of recovery, which willfinancially benefit the estates.The firm's hourly rates before discounts are: G. Robert Gage, Jr. $525 William B. Fleming $425 Laura M. Rizzo $265 Associates $325 - $195 Legal Assistants $100 - $60The Creditors' Committee has provided Gage Spencer with a$100,000 retainer, which will be applied against time charges anddisbursements. Any balance remaining upon termination will berefunded. Gage Spencer may retain a forensic accountant or otherexpert to assist in the case and to serve as an expert witness attrial. The Creditors' Committee is responsible for retaining andpaying any local or specialty counsel.RGH will first use the funds from any recovery to pay GageSpencer the difference between 60% of normal hourly rates and100% of normal hourly rates from the retention date until thedate of payments, plus any unpaid disbursements. If the recoveryexceeds the discrepancy between 60% and 100% of hourly rates, apercentage of the excess will be paid to the firm equal to: -- 15% of the next $1,000,000; -- 12.5% of the next $4,000,000; and -- 10% of any amount over $5,000,000.Gage Spencer will cap its fees at $1,000,000 if there is norecovery.Mr. Gulkowitz tells Judge Gonzalez that these terms are fair andbeneficial to the estate, as the Creditors' Committee isretaining Gage Spencer on a win/win basis. If matters aresuccessfully resolved, Gage Spencer will receive full payment forits services and has the potential to receive a premium. Ifmatters are unsuccessfully resolved, Gage Spencer will onlyreceive 60% of normal hourly rates, subject to the $1,000,000 capthat will limit the loss to the estates and creditors.G. Robert Gage, Jr., a member of the firm, assures the Court thatGage Spencer is "disinterested" as defined in Sections 101(14)and 101(31) of the Bankruptcy Code, and as modified by Section1103. Gage Spencer does not represent or hold any interestadverse to RGH or its estate.Headquartered in New York, New York, Reliance Group Holdings, Inc.-- http://www.rgh.com/-- is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, inturn, owns 100% of Reliance Insurance Company. The holding andintermediate finance companies filed for chapter 11 protection onJune 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing$12,598,054,000 in assets and $12,877,472,000 in debts. Theinsurance unit is being liquidated by the Insurance Commissionerof the Commonwealth of Pennsylvania. (Reliance Bankruptcy News,Issue No. 81; Bankruptcy Creditors' Service, Inc., 215/945-7000)RIVER CITY: Case Summary & 20 Largest Unsecured Creditors---------------------------------------------------------Debtor: River City Plastic, Inc. 55232 Franklin Drive Three Rivers, Michigan 49093Bankruptcy Case No.: 05-14113Type of Business: The Debtor manufactures molded plastic products. See http://www.rcplastic.com/Chapter 11 Petition Date: September 26, 2005Court: Western District of Michigan (Grand Rapids)Judge: James D. GreggDebtor's Counsel: Robert Bassel, Esq. Kemp Klein 201 West Big Beaver, 6th Floor Troy, Michigan 48084 Tel: (248) 528-1111 Fax: (248) 528-5129Estimated Assets: $1 Million to $10 MillionEstimated Debts: $1 Million to $10 MillionDebtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------Poly One Trade debt $415,003Dept. CH 14046Palatine, IL 60055-4046GE Polymerland Trade debt $260,075Polymerland Service CenterP.O. Box 641071Pittsburg, PA 641071Lear Kitchener Trade debt $244,746P.O. Box 1354Detroit, MI 48231Southco Trade debt $152,313JLJ Properties, Inc. Building rent $89,835Rocket Expedited Services Trade debt $48,829TMG, LLC Trade debt $46,662Marshall Sales Inc. Trade debt $44,622Northpointe Plastics Corp. Trade debt $39,949Uniform Color Company Trade debt $36,840Vandorn Demag Trade debt $36,102Accu Mold Trade debt $35,743M. Holland Company Trade debt $35,600Michael Day Enterprises Trade debt $35,091Plastic Services of Michigan Trade debt $33,937Meadwestvaco Corporation Trade debt $32,141Weber Specialties Company Trade debt $26,604Tecumseh Corrugated Trade debt $21,287Peterson Spring-Cima Trade debt $19,942W.S. Bell Cartage Trade debt $19,225RUSSELL CORP: Moody's Downgrades Sr. Unsecured Debt Rating to B2----------------------------------------------------------------Moody's Investors Service downgraded the debt ratings of RussellCorp. The rating action reflects the medium term impact onRussell's financial position of lowered performance guidance forthe seasonally important second half of this year, following anunexpectedly weak second quarter. The actions also reflect: * potentially longer term margin pressure as a result of increased production and distribution costs; * a more competitive pricing environment; and * lower sales volume to Wal-Mart in 2006.Wal-Mart, which accounted for over 20% of Russell's 2004 sales,notified the company that it would replace Russell with anothervendor for its boys apparel. A failure to replace Wal-Mart wouldreduce sales by over 3% and could reduce profit margins as aresult of lower operating leverage.These ratings were downgraded: * Corporate family rating to B1 from Ba3, * Senior secured debt rating to Ba3 from Ba2, * Senior unsecured debt rating to B2 from B1,The outlook is stable.Russell's ratings had been weakly positioned with little cushionfollowing an anticipated series of debt-financed acquisitions, themost recent being the acquisition of Brooks in 2004. As a result,Russell's debt rose by more than 25% from the end of fiscal year2002 to $398 million at the end of 2004. Net cash flow (cash fromoperations less capex) was expected to remain fairly stablethrough 2005. Moody's expected that debt metrics would improve asfree cash flow was used to reduce debt and operating marginsstabilized following a series of acquisitions and a five-year planto improve production costs.Russell's margins have been negatively impacted throughout 2004and into 2005 by pricing pressure. In the first half of 2005,margins and top line were further pressured by the cost of meetingvolatile demand for its products. The company recently announcedthat Hurricane Katrina will increase the cost of doing businessbecause of disruptions to operations, and could result in lostsales during a key season because of unavailability of product.In addition, the sustained high cost of oil will increase the costof fleece and polyesters in the future.The new rating levels reflect Russell's anticipated weaker creditmetrics through the near term, as well as the positives of thecompany's size and market position. Free cash flow available torepay debt is now expected to be negligible this year, and couldremain below 10% of debt balances next year. Moody's expects debtto EBITDA to likely remain at or above 2.5 times over the next twoyears, and that EBIT to interest will likely be below 2.0 timesfor the next twelve months. Russell has experienced top line andmargin volatility in the past, which is typical of an apparelmanufacturer.Russell's rating outlook is stable, but the ratings are weaklypositioned. There is only modest cushion for negativedevelopments, such as a further sizable revision in earningsexpectations or future damage to customer relationships as aresult of recent problems. Recent events have the potential todisrupt relationships with longstanding customers, and effectscould be long term.An additional risk includes the potential for Russell's costs ofproduction and delivery to stabilize at levels higher than theyhave been in the past. Ratings could fall if free cash flow todebt is expected to stay at or below 6% for the medium term, or ifthe company has difficulty negotiating covenant relief or maturityextension for the revolving credit facility which matures in 2007.Ratings could stabilize or rise if the effects of weather-relateddisruptions prove to be short-lived, and if the company canrestore operating profitability above 7% and free cash flow todebt to 10%.Russell Corp, headquartered in Atlanta, Georgia, is a major U.S.manufacturer and distributor of athletic apparel and equipment.Brands include: * American Athletic, * Huffy Sports, * Brooks, and * Spalding.Revenues were $1.4 billion for the twelve months endedJuly 1, 2005.SAINT VINCENTS: Has Full Access to $100 Million HFG DIP Facility----------------------------------------------------------------The U.S. Bankruptcy Court for the Southern District of New Yorkallowed Saint Vincents Catholic Medical Centers of New York andits debtor-affiliates to obtain $100 million financing from HFGHealthco-4 LLC. The Court also directs the Debtors to immediatelypay the $150,000 balance of the commitment fee to HFG.The Hon. Prudence Carter Beatty previously gave the Debtorsauthority, on an emergency basis, to draw up to $15 million underthe HFG DIP Financing agreement.As reported in the Troubled Company Reporter, HFG agreed toprovide the Debtors with up to $100 million of revolving debtor-in-possession credit.CMC Physician Services, P.C., CMC Radiological Services P.C., andCMC Cardiology Services P.C. guarantees repayment of SVCMC'sobligations under the DIP Agreement. Maturity DateThe DIP Facility is scheduled to expire on January 5, 2007. TheDebtors can elect to terminate the facility on July 5, 2006, bydelivering a notice to that effect by May 5, 2006. The Debtorscan extend the maturity date to July 5, 2007, by filing a plan ofreorganization acceptable to the DIP Lenders. Interest and FeesSVCMC will pay interest at a rate of 350 basis points over LIBORon every dollar borrowed from the DIP Lenders. In the event of adefault, the interest rate payable on DIP Loans jumps 2.5%.SVCMC promises to pay the DIP Lenders a variety of fees as well: -- a 0.50% annual Commitment Fee on every dollar not borrowed from the DIP Lenders; -- a 0.20% monthly Collateral Manager's Fee on every dollar borrowed; -- a one-time $375,000 Facility Fee; -- an additional $125,000 Facility Fee on the date that the Borrowing Limit exceeds $75,000,000; -- a $250,000 Facility Extension Fee if the facility is extended beyond July 5, 2006; -- a $250,000 Facility Extension Fee if the facility is extended beyond January 7, 2007; -- $25,000 quarterly Agent Fees; -- a $1,000,000 Exit Fee payable on the Maturity Date (which may be credited dollar-for-dollar against new fees payable under an exit facility extended by the DIP Lenders).The DIP Loan is granted superpriority administrative expensestatus pursuant to Section 364(c)(1) of the Bankruptcy Code,subject to the carve-out for professional fees.Parties-in-interest have until September 30, 2005, to initiate anaction challenging the validity, enforceability, perfection andpriority of the Prepetition Debt, the DIP Agent's securityinterest and Liens on the Prepetition Collateral, the Lender Debtand any Lien or security interest granted.The Official Committee of Unsecured Creditors has until 60 daysafter the entry of an order approving the retention of counsel forthe Committee to commence a Challenging Action.Headquartered in New York, New York, Saint Vincents CatholicMedical Centers of New York -- http://www.svcmc.org/-- the largest Catholic healthcare providers in New York State, operatehospitals, health centers, nursing homes and a home health agency.The hospital group consists of seven hospitals located throughoutBrooklyn, Queens, Manhattan, and Staten Island, along with fournursing homes and a home health care agency. The Company and sixof its affiliates filed for chapter 11 protection on July 5, 2005(Bankr. S.D.N.Y. Case No. 05-14945 through 05-14951). GaryRavert, Esq., and Stephen B. Selbst, Esq., at McDermott Will &Emery, LLP, represent the Debtors in their restructuring efforts.As of Apr. 30, 2005, the Debtors listed $972 million in totalassets and $1 billion in total debts. (Saint Vincent BankruptcyNews, Issue No. 10; Bankruptcy Creditors' Service, Inc.,215/945-7000)SANDERS FARMS: Case Summary & 10 Largest Unsecured Creditors------------------------------------------------------------Debtor: Sanders Farms aka Sanders Grain Farms 549 West, 800 South Burley, Idaho 83318Bankruptcy Case No.: 05-42338Chapter 11 Petition Date: September 26, 2005Court: District of Idaho (Twin Falls)Judge: Jim D. PappasDebtor's Counsel: Brent T. Robinson, Esq. P.O. Box 396 Rupert, Idaho 83350 Tel: (208) 436-4717Estimated Assets: $1 Million to $10 MillionEstimated Debts: $1 Million to $10 MillionDebtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------Ag Tech, Inc. Fertilizer $225,0001247 West MainBurley, ID 83318G.J. Verti-Line Pumps, Inc. Parts and repairs $54,745P.O. Box 892Twin Falls, ID 83303-0892Pioneer Equipment Parts and repairs $13,011Adams Petroleum Petroleum products $12,264Butte Irrigation Sprinkler parts and $11,884 repairsTires West Les Schwab Tires and repairs $5,972Gene's Repair & Irrigation Equipment parts and $1,229 repairsBuckhorn Electric Electrical parts and $678 repairsA.M.I. Supply Parts and repairs $312Mini-Cassia Equipment Co. Equipment parts and $236 repairsSILICON GRAPHICS: Wants to Save $100 Million Through Restructuring------------------------------------------------------------------Silicon Graphics, Inc., approved a restructuring plan and began toimplement a reduction in its workforce with notifications toaffected employees in North America and certain other locations onSept. 1, 2005. The balance of the notifications will follow overa reasonable period, consistent with business and local legalrequirements in other parts of the world.In addition to the headcount reductions, the restructuring planincludes initiatives to reduce expenses in other areas, includingprocurement costs for goods and services, consolidation andreorganization of operations in several locations, focusingmarketing spending on the highest priority activities and benefitsand other spending controls. The anticipated benefits of thisrestructuring plan are expected to be experienced beginning in thesecond quarter of fiscal 2006 with increasing benefits over thefiscal year. AlixPartners on BoardThe Company retained the turnaround firm AlixPartners LLC in thefourth quarter of fiscal 2005, to advise it regarding furtherexpense reductions, increasing revenue, improving liquidity andour intentions to initiate restructuring actions in the firstquarter of fiscal 2006. $80 to $100 Million Savings GoalThe goal of the Company's fiscal 2006 restructuring plan is toachieve $80 to $100 million in annualized cost savings when fullyrealized. The benefits are expected to be reflected in acombination of lower operating expenses and improved grossmargins. The Company expects savings from these initiatives tobegin to be realized in the second quarter of fiscal 2006 withincreasing benefits over the remainder of fiscal 2006.Approximately 60% to 70% of the savings are expected to resultfrom reductions in the number of employee and contractor positionswith the Company. The Company currently estimates that the totalcosts to be incurred in connection with these restructuringactions will be less than $20 million, principally relating toseverance benefits. Substantially all of these costs will requirethe outlay of cash, although our severance programs providewherever practical for payments to be made over the same period inwhich the payroll expenses otherwise would have been incurred,with the objective of minimizing the acceleration of cashexpenditures. The Company expects the majority of therestructuring charges to be reflected in our financial results forthe quarter ending December 30, 2005, and the restructuring to belargely completed by the end of the fiscal quarter ending March31, 2006. Any forecast of operating results is inherentlyuncertain, and although the Company will seek to implement theseactions in a manner that does not materially reduce revenue, it iscannot be certain that it will achieve this objective.Silicon Graphics, Inc. -- http://www.sgi.com/-- is a leader in high-performance computing, visualization and storage. SGI'svision is to provide technology that enables the most significantscientific and creative breakthroughs of the 21st century.Whether it's sharing images to aid in brain surgery, finding oilmore efficiently, studying global climate, providing technologiesfor homeland security and defense or enabling the transition fromanalog to digital broadcasting, SGI is dedicated to addressing thenext class of challenges for scientific, engineering and creativeusers. * * *As reported in the Troubled Company Reporter on Apr. 25, 2005,Standard & Poor's Ratings Services affirmed its 'CCC+' corporatecredit rating on Mountain View, California-based Silicon Graphics,Inc. (SGI), and revised its outlook to negative from developing.The outlook revision reflects weak revenues and operatingperformance in the March 2005 quarter, and limited liquidity."The ratings on Silicon Graphics reflect a leveraged financialprofile, declining annual revenues, and negative free operatingcash flow. While SGI has a good technology position in high-endcomputing and graphics solutions, the company has been strugglingto establish revenue stability and profitability in the highlycompetitive technical workstation, server and storage markets,"said Standard & Poor's credit analyst Martha Toll-Reed. Thecompany's efforts have been hampered by reduced growth rates ininformation technology spending, particularly for high-endequipment, and a highly competitive industry environment.SILICON GRAPHICS: Balance Sheet Upside-Down by $191MM by June 24----------------------------------------------------------------Silicon Graphics, Inc., delivered its annual report on Form 10-Kfor the fiscal year ending June 24, 2005, to the Securities andExchange Commission on Sept. 22, 2005.Total revenue in fiscal 2005 decreased $112 million or 13%compared with fiscal 2004, and fiscal 2004 revenue decreased$55 million or 6% compared with fiscal 2003.Overall gross profit margin declined to 36.3% in fiscal 2005 from41.5% in fiscal 2004. Product and other gross profit margin infiscal 2005 decreased 6.8 percentage points compared with fiscal2004.Total fiscal 2005 operating expenses decreased $53 million or 13%compared with fiscal 2004. Fiscal 2005 operating expensesincluded $24 million of charges for restructuring and assetimpairment costs.At June 24, 2005, the Company's unrestricted cash and cashequivalents and marketable investments totaled $64 millioncompared with $157 million at June 25, 2004.Cash used in the Company's operating activities from continuingoperations increased by $36 million from fiscal 2004 to fiscal2005, which is primarily due to the Company's revenue decreasingmore rapidly than it was able to adjust its operating expenses.The Company has incurred net losses and negative cash flows fromoperations during each of the past several fiscal years. AtJune 24, 2005, the Company's principal sources of liquidityincluded unrestricted cash and marketable investments of $64million, down from $157 million at June 25, 2004. Currently, itscash level is inadequate to support its operations and the Companyexpects to continue consuming cash from operations in at least thefirst half of fiscal 2006.The Company reported a $76,008,000 net loss on $729,965,000 of netrevenues for the fiscal year ending June 24, 2005. At June 24,2005, the Company's balance sheet shows $452,125,000 in totalassets and a $191,188,000 stockholders deficit.Ernst & Young LLP, the Company's auditor, expressed substantialdoubt on the company's ability to continue as a going concern,pointing to the Company's: * recurring operating losses, * negative cash flows, and * stockholders' deficit.A full-text copy of the regulatory filing is available at nocharge at http://ResearchArchives.com/t/s?1d5Silicon Graphics, Inc. -- http://www.sgi.com/-- is a leader in high-performance computing, visualization and storage. SGI'svision is to provide technology that enables the most significantscientific and creative breakthroughs of the 21st century.Whether it's sharing images to aid in brain surgery, finding oilmore efficiently, studying global climate, providing technologiesfor homeland security and defense or enabling the transition fromanalog to digital broadcasting, SGI is dedicated to addressing thenext class of challenges for scientific, engineering and creativeusers. * * *As reported in the Troubled Company Reporter on Apr. 25, 2005,Standard & Poor's Ratings Services affirmed its 'CCC+' corporatecredit rating on Mountain View, California-based Silicon Graphics,Inc. (SGI), and revised its outlook to negative from developing.The outlook revision reflects weak revenues and operatingperformance in the March 2005 quarter, and limited liquidity."The ratings on Silicon Graphics reflect a leveraged financialprofile, declining annual revenues, and negative free operatingcash flow. While SGI has a good technology position in high-endcomputing and graphics solutions, the company has been strugglingto establish revenue stability and profitability in the highlycompetitive technical workstation, server and storage markets,"said Standard & Poor's credit analyst Martha Toll-Reed. Thecompany's efforts have been hampered by reduced growth rates ininformation technology spending, particularly for high-endequipment, and a highly competitive industry environment.TECHNEGLAS INC: Ohio EPA Wants Chapter 11 Plan Rejected-------------------------------------------------------The Ohio Environmental Protection Agency tells the U.S. BankruptcyCourt for the Southern District of Ohio, Eastern Division, thatthe discharge provision discussed in Techneglas, Inc.'s FirstAmended Joint Plan of Reorganization is overbroad.The Agency asserts that the Plan violates 11 U.S.C. Section1129(a)(1),(2),(3) and 28 U.S.C. Section 959(b). Remediation IssuesOn its Amended Disclosure Statement, Techneglas admits that theColumbus plant used lead, petroleum products and other materialsof environmental concern.It is unclear to the Environmental Agency if the sale of theDebtor's real estate assets will generate sufficient fund to meetall future environmental obligations.The Plan doesn't state how the Debtor will fund the potentialground water contamination and decommissioning cost arising fromcontamination in the buildings and equipment. 28 U.S.C. Sec. 959(b) ViolationUnder this section, the Debtor is required to manage and operateits estate according to the requirements of the laws of the Stateof Ohio.The State mandates the Debtor to cleanup, abate and remediate allcontamination at its Columbus Techneglas Plant. However, theDebtor's Plan transfers its remediation responsibility to a realestate entity. Also, the Plan provides that after the real estateentity disposes the Debtor's real estate assets, no one will beliable for the environmental-related claims channeled to the realestate firm.The government contends that this is a clear violation of theprovisions of Section 959(b) of Title 28 of the United StatesCode.The Third Circuit states that a governmental unit may force adebtor to comply with applicable environmental laws by remedyingan existing hazard.The terms of the Debtor's Plan prevents the government agency fromcommencing an action to enforce an environmental law or to abate ahazardous situation.To prevent discharge from its environmental responsibilities, theAgency urges the Court to reject the Debtor's Plan. About the PlanThe Amended Joint Plan consists of five components.The first component provides Techneglas with the option of: a) creating a single Post Confirmation Entity for liquidating through prosecution, settlement or other disposition, Claims, Causes of Action, receivables, rights to payment of Techneglas, and other non-real estate assets; or b) liquidating its non-real estate assets directly through Reorganized Techneglas. The Post Confirmation Entity or Reorganized Techneglas will fund distributions to all Techneglas Non-NEG Creditors.The second component provides for the establishment of NEGDistribution NewCo, which will be created in the discretion ofTechneglas as an ongoing business, wholly owned by NEG, created onthe Effective Date that will: a) receive the Distribution Assets, and b) except as otherwise provided in the Plan, receive all of the assets that remain in the Reorganized Techneglas or Post Confirmation Entity, including any residual assets from the Real Estate Entity, following distributions to Techneglas Non-NEG Creditors; provided, however, in the event that there are no assets that are Distribution Assets, all assets that would otherwise be distributed to NEG Distribution NewCo will be distributed to NEG.The third component is the creation of a Real Estate Entity, towhich Techneglas will transfer, for use and disposition, realestate assets that have not sold as of the Effective Date and thatmay potentially be subject to environmental liability and certainther assets sufficient to manage that real estate pending itssale.The fourth and fifth components are the continuation of thebusinesses of NEG Ohio and NEG America, as Reorganized NEG Ohioand Reorganized NEG America, which will fund distributions toall NEG Ohio Creditors and NEG America Creditors, respectively. Treatment of Claims and Interests for Techneglas Inc.Secured Claims, Other Priority Claims and Union Priority Claimswill be paid in full after the Effective Date. PBGC Claims willbe paid after the Effective Date, a distribution of Cash amountingto 100% of $34,530,000 minus any amounts received by the PBCG orcontributed to the Hourly Plan pursuant to any Court order enteredprior to the Distribution Date.Other Unsecured Claims will be paid: 1) 63.5% of the amount of their Allowed Claims; plus 2) 3.5% of the Allowed Claim, if the Plan is confirmed prior to Sept. 15, 2005 or if there is a Court order entered prior to Sept. 15, 2005, in the Techneglas chapter 11 case that has not been stayed, authorizing the contribution of $17 million into the Hourly Plan or the payment of that amount to the PBGC; plus 3) if the total amount of Other Unsecured Claim Allowed Claims is less than $23,630,000; the difference between $23,630,000 and the total amount of Other Unsecured Claim Allowed Claims, multiplied by the percentage of the dollar amount of Other Unsecured Allowed Claims held by Third Party Claimants, multiplied by 63.5% if the condition of subparagraph (2) has not been satisfied, and 67% if that condition has been satisfied.Headquartered in Columbus, Ohio, Techneglas, Inc. -- http://techneglas.com/-- manufactures television glass (CRT panels, CRT funnels, solder glass and specialty glass), dopantsources, glass resins and specialty bulbs. The Company and itsdebtor-affiliates filed for chapter 11 protection on Sept. 1, 2004(Bankr. S.D. Ohio Case No. 04-63788). David L. Eaton, Esq., KellyK. Frazier, Esq., and Marc J. Carmel, Esq., at Kirkland & Ellis,and Brenda K. Bowers, Esq., Robert J. Sidman, Esq., at Vorys,Sater, Seymour and Pease LLP, represent the Debtors in theirrestructuring efforts. When the Debtors filed for protection fromtheir creditors, they listed total assets of $137 million andtotal debts of $336 million.TOWER AUTOMOTIVE: Inks Settlement Agreement With UNOVA Industrial----------------------------------------------------------------- In May 2002, Tower Automotive Inc. and its debtor-affiliates fileda complaint against UNOVA Industrial Automation Systems, Inc., andits corporate parent, UNOVA, Inc., in the Circuit Court of KentCounty, Michigan. The Debtors asserted damages for IAS' breach ofcontract, breach of warranty, promissory estoppel, and fraud, inconnection with a $45 million commercial agreement between theDebtors and IAS for the turnkey design, manufacture, andinstallation of an automated assembly line system at the Debtors'manufacturing facility in Corydon, Indiana, for the production ofvehicle frames for the Ford Explorer.In the Complaint, the Debtors alleged that IAS: -- had certain binding legal obligations as to the Corydon Assembly Line, particularly with respect to the installation and utilization of certain robotic material handling services and specialized welding operations systems; -- was obligated to produce the Corydon Assembly Line in compliance with certain capacity specifications and output capabilities consistent with the Debtors' operating schedules of six days per week, and 20 hours per day; -- caused them to (x) incur significant additional expenses associated with IAS' attempts to re-work the Corydon Assembly Line and (y) expend additional labor hours in connection with operating the line to meet their customers' requirements for the U-152 Frames;Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois,relates that the Debtors demanded approximately $50 million indamages from excess labor costs and related overhead, and anadditional $6 million in necessary capital improvements andrelated expenses for improving and supplementing the CorydonAssembly Line's production. "IAS denied (and continues to deny)these allegations and has vigorously defended against them."IAS has filed a counterclaim against the Debtors for $2 millionalleging unpaid services related to the Corydon Assembly Line. Litigation & Settlement ProcessThe Kent County Action was set for trial on September 13, 2005,and was anticipated to last approximately three months. InAugust 2005, less than one month prior to the scheduled trialdate, IAS filed an interlocutory appeal with the Michigan Courtof Appeals seeking a stay of the Kent County Action pending anappeal of a partial summary judgment order issued by the trialcourt in favor of the Debtors regarding the terms and conditionsof the agreement with IAS.During the pre-trial period, the parties participated in court-ordered mediation conferences on July 29, 2005, and August 5,2005, each of which lasted several hours Although settlementoffers were exchanged on both occasions, the parties did notresolve the dispute. The trial court then ordered a settlementconference among the parties' respective chief executive officersand lead trial counsel. This settlement conference occurred onAugust 31, 2005. After approximately seven hours ofnegotiations, a settlement agreement was reached in principle andplaced upon the record. The terms and conditions of thesettlement are embodied in the Settlement Agreement..The salient terms of the Settlement Agreement are: (1) IAS and UNOVA agree to, jointly and severally, pay $13,500,000 to the Debtors no later than 11 days following the date on which the Court enters a final, non-appealable order approving the Settlement Agreement; (2) Each party agrees to execute and file all pleadings necessary to effect a dismissal with prejudice and without costs of all claims and counterclaims in the Kent County Action; (3) All documents and information generated or exchanged by the parties in connection with the formation and implementation of the Settlement Agreement will remain confidential information, which must not be used for any purpose other than fulfilling or enforcing the terms of the Settlement Agreement; and (4) the parties execute mutual releases."The Settlement Agreement resolves all of the outstanding claimsbetween the Debtors, IAS and UNOVA arising from or relating tothe Corydon Assembly Line without the need for furtherance ofcostly and time-consuming negotiations and additional uncertainlitigation," Mr. Sathy tells Judge Gropper. "Absentauthorization to enter into the Settlement Agreement, the Debtorsand IAS and UNOVA would continue to proceed along a litigious andtime-consuming path with respect to the disputes at issue."The Official Committee of Unsecured Creditors does not object tothe approval of the Settlement Agreement, Mr. Sathy adds. Varnum Contingency FeeThe Debtors intend to pay a contingency fee to the law firm ofVarnum, Riddering, Schmidt & Howlett LLP in consideration for thefirm's services as trial counsel in the Kent County Action.The Debtors ask the U.S. Bankruptcy Court for the SouthernDistrict of New York to approve the Settlement Agreement andVarnum's Contingency Fee.Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.-- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used byevery major automotive original equipment manufacturer,including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda,Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Productsinclude body structures and assemblies, lower vehicle frames andstructures, chassis modules and systems, and suspensioncomponents. The Company and 25 of its debtor-affiliates filedvoluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y.Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq.,Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq.,and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, representthe Debtors in their restructuring efforts. When the Debtorsfiled for protection from their creditors, they listed$787,948,000 in total assets and $1,306,949,000 in totaldebts. (Tower Automotive Bankruptcy News, Issue No. 19;Bankruptcy Creditors' Service, Inc., 215/945-7000)TOWER AUTOMOTIVE: Two Utility Companies Press for Deposits---------------------------------------------------------- As previously reported, Tower Automotive Inc. and its debtor-affiliates claim that American Electric Power and DTE EnergyCompany are adequately protected because their financial conditionhas continuously improved.Contrary to the Debtors assertion, the two utility companies tellthe U.S. Bankruptcy Court for the Southern District of New Yorkthat their financial state has not remained stable since theirbankruptcy filing.Thomas R. Slome, Esq., at Scarcella Rosen & Slome LLP, inUniondale, New York, on behalf of American Electric Power and DTEEnergy Company, notes that the Debtors have incurred net losses ofover $301 million since the Petition Date and their disbursementsof $1.33 billion greatly exceed their $1.042 billion in revenue."Although the Debtors have availability under their DIP Facilityit has been substantially reduced as a result of their continuedpost-petition losses," Mr. Slome points out. "As of July 31,2005, the availability had been reduced to $194,714,000($530,286,000 in DIP borrowings as of July 31, 2005). With theDebtors' monthly expenditures ranging from $144,415,404 (February2005) to $285,699,491 (June 2005), the $194,714,000 inavailability provides the Utilities with very little cushion,especially if the DIP Lender revokes the financing."According to Mr. Slome, the Debtors must provide adequateassurance of payment to American Electric and DTE for thepostpetition utility services they have rendered to the Debtorsbecause: (a) as set forth in the Debtors' Monthly Operating Reports from February through July 2005, the Debtors have incurred total disbursements of over $1.33 billion, with an aggregate net loss of over $301 million since the Petition Date; (b) as of July 31, 2005, the Debtors availability under their DIP Facility was only $194,714,000, which appears to be significantly less than their monthly expenses, plus applicable carve-out for professionals; (c) all of the Debtors' assets and proceeds are secured by first and superpriority security interests and liens; (d) during the postpetition period, the Debtors have shown a preference to favor certain "critical vendors," certain high-level employees and professionals, including the Debtors' counsel, to the detriment of their other postpetition creditors; (e) the Debtors have reduced their postpetition letter of credit availability by providing Entergy Mississippi, Inc., with adequate assurance of payment in the form of an $82,842 letter of credit; (f) the Debtors belong to a group of auto suppliers who are experiencing pressure from auto manufacturers that are demanding lower prices to offset incentives and other costs in a highly competitive market; (g) with higher prices for materials like steel contributing to the Debtors' seeking bankruptcy protection, the Debtors and other suppliers are hurt because they have no way to pass their costs to their customers, coupled with a drop in automaker production volumes; (h) Tower is among the medium-size auto suppliers -- between $500 million and $2 billion in annual revenues -- that filed for bankruptcy in the last five years, and experts predict that the universe of auto suppliers will contract significantly in the next decade, resulting in an industry in which domestic automakers rely less on U.S.-based parts suppliers and more on overseas companies that will be able to deliver products more cheaply.American Electric and DTE ask the Court to compel the Debtors toprovide them with adequate assurance in the form of semi-monthlyadvance payments.Headquartered in Grand Rapids, Michigan, Tower Automotive, Inc.-- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used byevery major automotive original equipment manufacturer,including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda,Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Productsinclude body structures and assemblies, lower vehicle frames andstructures, chassis modules and systems, and suspensioncomponents. The Company and 25 of its debtor-affiliates filedvoluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y.Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq.,Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq.,and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, representthe Debtors in their restructuring efforts. When the Debtorsfiled for protection from their creditors, they listed$787,948,000 in total assets and $1,306,949,000 in totaldebts. (Tower Automotive Bankruptcy News, Issue No. 19;Bankruptcy Creditors' Service, Inc., 215/945-7000)TRAINER WORTHAM: Fitch Affirms BB Rating on $16 Mil. Pref. Shares-----------------------------------------------------------------Fitch Ratings affirms all classes of notes issued by TrainerWortham First Republic CBO III, Ltd. These affirmations are theresult of Fitch's review process, and are effective immediately: -- $195,000,000 class A-1 notes at 'AAA'; -- $60,750,000 class A-2 notes at 'AAA'; -- $9,000,000 class B notes at 'AA'; -- $8,000,000 class C notes at 'A'; -- $13,651,023 class D notes at 'BBB'; -- $16,000,000 preference shares at 'BB'.Trainer Wortham III is a collateralized bond obligation managed byTrainer Wortham & Company, Inc., which closed Feb. 19, 2003. Thenotes issued by Trainer Wortham III are supported by a portfoliocomposed of 75% residential mortgage-backed securities, 5%commercial mortgage-backed securities, 3% asset-backed securities,3% corporate debt, and 5% collateralized debt obligations.Included in this review, Fitch discussed the current state of theportfolio with the asset manager and their portfolio managementstrategy going forward. In addition, Fitch conducted cash flowmodeling utilizing various default timing and interest ratescenarios. As a result of this analysis, Fitch has determinedthat the current ratings assigned to all classes of notes stillreflect the current risk to noteholders.Since the last rating action on Aug. 20, 2004, Trainer Wortham IIIhas sold two distressed securities at significant losses but hasmaintained coverage levels and improved the weighted averagespread and coupon of the portfolio. Over that time period, theclass A/B and class D overcollateralization ratios have remainednearly unchanged at 111.5% and 103.1%, respectively, and are bothin compliance with their triggers of 103.5% and 101.75%, as of theAug. 15, 2005, note valuation report. The weighted average spreadof the portfolio increased to 2.77% from 2.25% at the last review,bringing it back into compliance with its trigger of 2.45%.Similarly, the weighted average coupon of the portfolio increasedto 6.57% from 6.37%, and is currently above its trigger of 6.45%.While Trainer Wortham III currently has no defaulted assets in itsportfolio, it does hold two manufactured housing securities thatcould pose a credit concern. In addition, the deal is currentlyholding approximately $30.4 million in principal cash, which themanager plans to reinvest in additional collateral prior to theend of the reinvestment period on Feb. 19, 2006. For purposes ofcash flow modeling, Fitch assumed a minimal level of recovery foreach of the distressed assets and created various scenarios forthe treatment of the cash balance. During simulations, the dealwas able to withstand these stresses at its current ratings.Trainer Wortham III has several structural features, which Fitchbelieves will aid the deal's future performance. During thereinvestment period, there is an additional collateral coveragetest, which if activated, would divert interest proceeds towardsthe purchase of new collateral. Also during the reinvestmentperiod, the distributions to equity are limited to a 20% dividendyield and any excess interest proceeds are then used to redeem theclass D notes. To date, approximately $1.6 million has beenapplied to redeem the class D notes through this mechanism.The ratings of the class A-1, A-2, and B notes address thelikelihood that investors will receive full and timely payments ofinterest, as per the governing documents, as well as the statedbalance of principal by the legal final maturity date. Theratings of the class C and class D notes address the likelihoodthat investors will receive ultimate and compensating interestpayments, as per the governing documents, as well as the statedbalance of principal by the legal final maturity date. The ratingof the preference shares addresses the likelihood that investorswill ultimately receive the stated balance of principal by thelegal final maturity date.Fitch will continue to monitor and review this transaction forfuture rating adjustments. Additional deal information andhistorical data are available on the Fitch Ratings web site athttp://www.fitchratings.com/ For more information on the Fitch VECTOR Model, see 'Global Rating Criteria for Collateralized DebtObligations' dated Sept. 13, 2004, available on Fitch's web siteat http://www.fitchratings.com/UAL CORP: Contrarian Funds Buys Air Serv's $450,000 Claim---------------------------------------------------------Certain trade creditors assigned six claims to Contrarian Funds,Revenue Management, Inc., and Newstart Factors: Transferor Transferee Claim No. Claim Amount ---------- ---------- --------- ------------ Air Serv Contrarian Funds 29945 $452,874 Advanced Ground Systems Engineer Newstart Factors unspecified 50,312 J Frank Associates Revenue Management 10063 $22,500 Premier Catering Revenue Management unspecified 69,097 Sky Caterers Revenue Management unspecified 106,715 Skytronics Revenue Management unspecified 42,228Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largestair carrier. The Company filed for chapter 11 protection onDecember 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M.Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq.,and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent theDebtors in their restructuring efforts. When the Debtors filedfor protection from their creditors, they listed $24,190,000,000in assets and $22,787,000,000 in debts. (United AirlinesBankruptcy News, Issue No. 101; Bankruptcy Creditors' Service,Inc., 215/945-7000)USA MOTOR: Case Summary & 20 Largest Unsecured Creditors--------------------------------------------------------Lead Debtor: USA Motor Express, Inc. 4050 Helton Drive Florence, Alabama 35630Bankruptcy Case No.: 05-85110Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- USA NationaLease, Inc. 05-85111Type of Business: The Debtor is a service truckload and expediter carrier. See http://www.usamotorex.com/Chapter 11 Petition Date: September 26, 2005Court: Northern District of Alabama (Decatur)Debtors' Counsel: Garland C. Hall, III, Esq. Chenault, Hammond & Hall P.O. Box 1906 Decatur, Alabama 35602 Tel: (256) 353-7031 Total Assets Total Debts ------------ -----------USA Motor Express, Inc. Not provided $500,000 to $1 MillionUSA NationaLease, Inc. Not provided Not providedList of 20 Largest Unsecured Creditors of: -- USA Motor Express, Inc. -- USA NatinaLease, Inc. Entity Claim Amount ------ ------------ J&P Trucking $81,450 c/o Corporate Billing P.O. box 2219 Decatur, AL 356029 Southern Freight Inc. $73,150 99 University Avenue Atlanta, GA 30315 United States Trustee $48,079 Internal Revenue Service P.O. Box 105421 Atlanta, GA 30348-5421 Arthur J. Gallagher & Co. $44,955 David K. Wilson $39,865 Communications $36,271 Rocky Top Carriers $34,300 Multimedia Advertising $32,102 A.I. Credit Corp. $31,827 Tidwell Dewitt LLC $25,316 Kottke Trucking Inc. $21,575 LogicGroup $20,900 Trucking $17,450 CEF 2002 LLC $17,159 Premier Distribution $15,400 American Marazzi Tile $14,743 BNSF Logistices $14,600 Michael Short Trucking $13,715 Twin City trailer Sales $11,241 Ashe & Wright PC $9,762US AIRWAYS: Completes Merger With America West Airlines-------------------------------------------------------US Airways Group, Inc., (NYSE: LCC), effective yesterday, hasfinalized its transaction enabling America West and US Airways tobegin operating as one carrier -- US Airways. Customers shouldcontinue to book directly with US Airways or America West as theydid before the merger. The airlines' Web sites -http://www.americawest.com/and http://www.usairways.com/-- will operate separately in the short term, as well as the two airlines'reservations systems.The new US Airways, which began trading yesterday on the New YorkStock Exchange under the LCC symbol, represents the nation'slargest full-service, low-cost, low-fare airline. Companyofficials and representatives from the airline's labor groups joinUS Airways Chairman, President and CEO Doug Parker at yesterday'sopening bell ceremony at the New York Stock Exchange."Today we start a new chapter in aviation history," said Mr.Parker. "The new US Airways combines our airlines' proud heritagewith our employees' passionate commitment to provide our customerswith friendly service and low fares. This is a great day for theemployees of America West and US Airways as well as for the peoplein the hundreds of communities we serve."Benefits of the America West/US Airways merger include: -- US Airways will continue to operate hubs in Charlotte, N.C., Phoenix and Philadelphia, with secondary hub/focus cities in Las Vegas, Pittsburgh, Boston, New York (LaGuardia) and Washington (Ronald Reagan National Airport). In addition, two wholly owned subsidiaries operating as US Airways Express will continue to provide additional service to an expansive network. -- Extensive Dividend Miles frequent flyer program with the ability to earn and redeem miles for travel in destinations throughout the globe. Reciprocal frequent flyer benefits will begin on Oct. 5, 2005. -- First class cabins on both domestic and international flights, with advance seating assignments and in-flight amenities that include audio and video entertainment selections. -- Hourly US Airways Shuttle service between Boston, New York and Washington. -- Participation in the Star Alliance, the first truly global airline alliance comprising 16 of the world's most prominent airlines. Overall, the Star member carriers offer more than 15,000 daily flights to 795 destinations in 139 countries. Star Alliance benefits will be phased in over the next six months. -- 17 US Airways Clubs, providing a quiet and comfortable place to work or relax with personal travel assistance from professional Club representatives. -- Financial strength with more than $2.5 billion in restricted and unrestricted cash. -- Nearly 38,000 employees dedicated to service excellence."We are confident that the enthusiasm and professionalism of ouremployees, combined with the experienced leadership team we haveselected to run the new airline will give us greater financialstability and competitive strength in the marketplace," continuedMr. Parker. "Our business model will enable us to competeaggressively with any airline, legacy or low-cost, in terms ofreliability, amenities and affordability."While the merged airline will operate under the US Airways name,America West and US Airways will maintain separate operatingcertificates for approximately two to three years. Once FAA(Federal Aviation Administration) approvals have been granted, thetwo airlines' operating certificates will be combined onto one.America West Airlines initiated service in 1983 with threeaircraft and 280 employees. America West grew rapidly, and by1990, was the first airline formed since industry deregulation toachieve major-airline status. America West served 94 destinationsacross the U.S., Mexico, Canada and Costa Rica with more than 900daily departures.US Airways began operations in 1939 as All American Aviation,bringing the first airmail service to many small communities inWestern Pennsylvania and the Ohio Valley. Its history includesmergers with North Carolina's Piedmont Airlines, California's PSAAirlines, and now Arizona's America West Airlines. Prior to themerger, US Airways operated approximately 3,300 daily flights to183 communities in the U.S., Europe, Canada, Mexico and theCaribbean.US Airways and America West have joined together to create thefifth largest domestic airline employing nearly 38,000 aviationprofessionals. US Airways, US Airways Shuttle and the US AirwaysExpress operate approximately 4,000 flights per day and serve morethan 225 communities in the U.S., Canada, Europe, the Caribbeanand Latin America.US Airways is a member of the Star Alliance, which was establishedin 1997 as the first truly global airline alliance to offercustomers global reach and a smooth travel experience. The othermembers are Air Canada, Air New Zealand, ANA, Asiana Airlines,Austrian, bmi, LOT Polish Airlines, Lufthansa, ScandinavianAirlines, Singapore Airlines, Spanair, TAP Portugal, Thai AirwaysInternational, United and VARIG Brazilian Airlines. South AfricanAirways and SWISS will be integrated during the course of the next12 months. Overall, the member carriers offer more than 15,000daily flights to 795 destinations in 139 countries.Headquartered in Arlington, Virginia, US Airways' primary businessactivity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC.Under a chapter 11 plan declared effective on March 31, 2003,USAir emerged from bankruptcy with the Retirement Systems ofAlabama taking a 40% equity stake in the deleveraged carrier inexchange for $240 million infusion of new capital.US Airways and its subsidiaries filed another chapter 11 petitionon September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). BrianP. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning,Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., andDouglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtorsin their restructuring efforts. In the Company's secondbankruptcy filing, it lists $8,805,972,000 in total assets and$8,702,437,000 in total debts.WESTPOINT STEVENS: Motion to Dismiss Chapter 11 Cases Draws Fire----------------------------------------------------------------As reported in the Troubled Company Reporter on August 16, 2005,WestPoint Stevens, Inc., and its debtor-affiliates asked the U.S.Bankruptcy Court for the District of New York to dismiss theirchapter 11 cases.The Debtors inform the Court that they have no ongoing businessoperations and are administratively insolvent, thus, confirmationof a chapter 11 plan is impossible in accordance with theBankruptcy Code. The Debtors believe that a chapter 7 conversionis not advisable because it will increase administrative cost tothe estate and require the appointment of a chapter 7 trustee. Objections(1) Second Lien Agent and FundsAsserting that their estates are administratively insolvent withno hope or prospect of reorganization, the Debtors sought todismiss their Chapter 11 cases to prevent any additional lossesand incurrence of expenses. While GSC Partners, Pequot CapitalManagement, Inc., and Perry Principals LLC -- the Funds -- do notchallenge the solvency of the Debtors' estates, they believe thatdismissal at this juncture is premature and is not in the bestinterest of all parties.Gordon Z. Novod, Esq., at Kramer Levin Naftalis & Frankel LLP, inNew York, points out that there is at least one active majorlitigation in the Court -- the adequate protection escrowlitigation -- and a number of other litigations that are active orpotentially could come before the Court. The Court may berequired to review and consider several factual and legal issues,including new issues not previously decided on, as a result ofthese litigations. Accordingly, the Motion should be, at minimum,adjourned for a reasonable period of time until the docket in theDebtors' bankruptcy cases becomes reasonably clearer.Moreover, Wilmington Trust Company, as Second Lien Agent, and theFunds believe that the various claims identified in the DismissalMotion as rendering their estates administratively insolvent are,in essence, "sunk costs" that will remain the same or increaseonly modestly before the appeals process is completed. In themeantime, Mr. Novod suggests that the Debtors can progress towardrecovery on the Excluded Assets and Avoidance Actions, which haveabout $6.2 million in aggregate value.Mr. Novod explains that though the Debtors' remaining assets haverelatively small value in comparison to the alleged aggregateadministrative expenses, there is no rational justification forabandoning that value, which is sufficient at least to fundChapter 7 expenses and conceivably make a distribution on thesubstantial superpriority administrative expenses accrued in thesecases.If the Dismissal Motion goes forward, the Second Lien Agent andthe Funds ask the Court to converting the Debtors' cases toChapter 7 to permit the Debtors to continue to pursue recovery onthe Excess Assets and Avoidance Actions.(2) San Marcos CityThe City of San Marcos and San Marcos CISD, assert that if theDebtors' Chapter 11 cases are to be dismissed, all jurisdictionover the payment of tax claims should and must revert to the statecourts of appropriate jurisdiction under applicable non-bankruptcylaw. The Taxing Authorities want this clarification to beincluded in any dismissal order entered by the Court.The Taxing Authorities believe that the Debtors want to berelieved of their obligations and duties, which move would beinherent in concluding the bankruptcy processes while obtainingall of the rights and benefits which they would be allowed if theprocesses were brought to finality. The Taxing Authorities saythat they have endured the delays to payment of their claims byvirtue of the Debtors' bankruptcy cases, and should not be forcedto adjudicate issues related to their claims in a foreign forum,particularly if the debtor is dismissed from the Court'sjurisdiction.(3) PBGCAs statutory trustee of the Pension Plans, Pension BenefitGuaranty Corporation is authorized to pursue the claims and rightsof those plans. Joan Segal, Esq., in Washington, D.C., explainsthat the Pension Plans' claims may include causes of action underTitle I of ERISA for violations of its fiduciary standard of care.A pension plan's fiduciaries are personally liable for any lossesthat the pension plan suffers from violations of the prescribedstandard of care.At this stage of processing the Pension Plans, Ms. Segal relatesthat the PBGC is not aware that there has been any fiduciarybreach associated with the Pension Plans. Yet, the PBGC's abilityto recover any amounts rightfully due the Pension Plans from non-debtors should not be extinguished by an order dismissing theDebtors' Chapter 11 proceedings.Ms. Segal notes that the Dismissal Motion includes a far-reaching"Injunctive Relief" section that could operate to relieve a non-debtor fiduciary of the Pension Plans from liability imposed byERISA for the protection of the Pension Plans.In the Dismissal Motion, the Debtors have supported their requestfor a permanent injunction by asserting that "the success of theDebtors' sale process could not have been achieved if not for thesubstantial efforts of the Exculpated Parties. . . ." TheDebtors further stated that it would be "inequitable to subjectthe . . . [Exculpated Parties] to continued exposure after theirsubstantial efforts contributed to the successful sale of theDebtors' businesses." However, Ms. Segal observes, the Debtors donot suggest that anything unique has been contributed by theExculpated Parties. The Exculpated Parties presumably did theirjobs with respect to furthering the sale, but that is a far cryfrom the extraordinary situation required by the law to justifynon-debtor releases, Ms. Segal contends.Moreover, Ms. Segal asserts that it is unlikely that the PBGC, asubstantial creditor of the Debtors, will receive any benefit fromthe "successful sale." The PBGC is statutorily obligated to paybenefits to over 30,000 participants in the Pension Plans, whichare significantly under-funded. The PBGC will pay benefits to thePension Plans' participants using about $260,000,000 of its ownfunds.According to Ms. Segal, although the PBGC has filed claims in theDebtors' Chapter 11 proceedings, it will probably not receive anydistribution. It is difficult to see how the anticipated outcomeof the Debtors' Chapter 11 cases can be characterized as asuccess. Ms. Segal argues that to permit the injunction againstnon-debtors would not only be contrary to bankruptcy law, but italso has the potential of effecting a serious inequity againstcreditors like the PBGC. Creditors may be precluded from seekingrecoveries to which they are entitled by law."The Debtors' Motion glosses over the fact that an integralprinciple of bankruptcy law is that the discharge of debtsavailable to debtors is the result of a confirmed plan ofreorganization that provides for the reorganized debtor tocontinue in business postconfirmation," Ms. Segal says. "Theinjunction sought by the Debtors is identical in its effect to adischarge, but it carries with it none of the protections of aplan of reorganization that has been subject to the voting andconfirmation process. [The] Debtors identify no legal basis forgranting a discharge in a dismissed Chapter 11 case."Therefore, the PBGC asks the Court to deny the Dismissal Motion tothe extent that it precludes it from pursuing its statutory rightand obligation to pursue recovery on behalf of the Pension Plansagainst non-debtor parties.(4) 1st Lien AgentBeal Bank, S.S.B., in its capacity as Successor First Lien Agentand Collateral Trustee, objects to the Dismissal Motion,specifically these broad and sweeping "Other Relief" requests: (i) rejection of unassumed executory contracts and leases; (ii) abandonment of property as burdensome or of little value; (iii) payment of professional fees and wind-down costs; (iv) termination of employee benefit and retirement plans; (v) filing of final tax returns and dissolution of corporate entity; (vi) dismissal of avoidance actions; and (vii) broad injunctive relief to third parties."Simply stated, the Debtors have not met their burden of proof toestablish that 'cause' exists under Section 1112(b) of theBankruptcy Code to allow the Dismissal Motion," Gregory G. Hesse,Esq., at Jenkens & Gilchrist, in Dallas, Texas, says.Mr. Hesse argues that dismissing of the Debtors' Chapter 11 caseswould not be in the best interest of their creditors and theestate. By application of Section 1112(b) of the BankruptcyCode, the Debtors' cases are not a candidate for dismissal where"cause" has not been established and the "best interest ofcreditors" test is not met.Furthermore, Mr. Hesse maintains that the Debtors' request formodification of the effects of dismissal is exceedingly overbroad.In addition, the Court should refrain from dismissing the Debtors'Chapter 11 cases where a large amount of property remains to beadministered.Ms. Hesse notes that the proposed injunctions as to would-beExculpated Parties are without precedent in the absence of aconfirmed plan. Also, the Debtors have not filed an adversaryproceeding and have chosen to request injunctive relief outsidethe context of a plan. Mr. Hesse says the Debtors' proposeddismissal order would eviscerate the "bothersome" portions ofSection 349 of the Bankruptcy Code and impermissibly expand thegrant of power in Section 105 of the Bankruptcy Code.(5) AretexWhile Aretex LLC, WestPoint International, Inc., and WestPointHome, Inc., do not object in principle to the dismissal of theDebtors' administratively insolvent cases, they have not yet beenprovided a draft of the proposed dismissal order and want toconfirm that the following items are being addressed to theirreasonable satisfaction: -- Continuing jurisdiction of the Bankruptcy Court to enforce and interpret its orders, especially the July 8, 2005, sale order and other sale related matters; -- The resolution and disbursement of the adequate protection escrow, which Aretex has either a 52% interest in, as a holder of the Second Lien Debt, or a 40% interest, as a holder of the First Lien Debt; -- Sale or collection of the excluded assets, including the European proceeds, and their appropriate application to secured claims; -- Dismissal or other disposition of the adversary proceeding brought by the Steering Committee against Aretex and the Second Lien Agent and the pending motions to dismiss the complaint with prejudice; and -- WestPoint Home, Inc., acquired all of the Debtors' reversionary interest in the approximately $1 million held in escrow pursuant to the Key Employee Retention program. The applicable escrow agreement provides that the escrow is to be returned to the Debtors -- now to Purchaser -- unless a Chapter 11 plan is confirmed by December 31, 2006. Given that with dismissal of the Debtors' cases that a confirmation clearly will not occur, the dismissal order should provide and immediately direct the escrow agent to release such funds to Purchaser concurrently with the dismissal order.(6) Steering CommitteeContrarian Funds, LLC, Satellite Senior Income Fund, LLC, CPCapital Investments, LLC, Wayland Distressed Opportunities FundI-B, LLC, and Wayland Distressed Opportunities Fund I-C, LLC,agree with the First Lien Agent and the Second Lien Agent that theDismissal Motion is premature because numerous legal issues remainunresolved and the outcome could affect the distribution of theestate's remaining assets. The Steering Committee also believesthat the requests by various professionals retained by the Debtorsand the Creditors Committee for payment of holdback amounts fromthe Carve-Out or otherwise is also premature as there may besecured claims that attach to the property remaining in theestate.Sidney P. Levinson, Esq., at Hennigan, Bennett & Dorman LLP, inNew York, argues that the requests are also premature, in largepart, because the District Court has not yet decided the SteeringCommittee's appeal of the Sale Order. If the District Courtultimately affirms the Sale Order in its entirety, the SteeringCommittee's interest in the Debtors' cases may be confined to itspending motion for payment of attorney's fees incurred in theDebtors' Chapter 11 cases. On the other hand, if the DistrictCourt reverses the Sale Order, the Steering Committee may havesecured claims collaterized by a substantial portion of theestate's remaining assets.The Steering Committee believes that no meaningful prejudice willresult from deferring a ruling until after the District Courtissues its opinions.(7) Various PlaintiffsDebra McConnell, Angela Davidson and Horace Willis each have apending lawsuit against the Debtors for various types ofemployment discrimination.Ann C. Robertson, Esq., at Wiggins, Childs, Quinn & Pantazis,LLC, in Birmingham, Alabama, notes that it is unclear whether theDismissal Motion seeks -- without confirming a plan -- to enjointhe Plaintiffs from pursuing their Lawsuits and having theirclaims adjudicated in front of a jury as is their right.The Plaintiffs have no objection to an injunction against claimsarising solely from the administration of the Chapter 11 cases orfrom the sale, Ms. Robertson clarifies. However, if theDismissal Motion seeks a broader injunction, the arguments made bythe Debtors to enter an injunction against those Lawsuits might beappropriate in the context of a proposed plan. Ms. Robertsonobserves that the Dismissal Motion, at times, seems to suggestthat what the Debtors have accomplished is equivalent to aconfirmation of a plan. However, Ms. Robertson notes that nothingin the law or in the equities would make a broader injunctionappropriate.(8) HSBC ObjectsHSBC Bank U.S.A., National Association, objects to the Debtors'request to dismiss their Chapter 11 cases to the extent it seeksthe: (a) dismissal of avoidance actions, without providing a basis for the Debtors' conclusory statement that they expect to recover only $2.3 million in actions seeking to recover in excess of $41 million; (b) entry of an Order granting, in essence, a general release to the Debtors and others; and (c) entry of an Order authorizing the destruction of the majority of the Debtors' records.HSBC currently wants the Debtors to pay its administrative expenseclaim against them.Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --http://www.westpointstevens.com/-- is the #1 US maker of bed linens and bath towels and also makes comforters, blankets,pillows, table covers, and window trimmings. It makes the Martex,Utica, Stevens, Lady Pepperell, Grand Patrician, and Velluxbrands, as well as the Martha Stewart bed and bath lines; otherlicensed brands include Ralph Lauren, Disney, and Joe Boxer.Department stores, mass retailers, and bed and bath stores are itsmain customers. (Federated, J.C. Penney, Kmart, Sears, and Targetaccount for more than half of sales.) It also has nearly 60 outletstores. Chairman and CEO Holcombe Green controls 8% of WestPointStevens. The Company filed for chapter 11 protection onJune 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J.Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents theDebtors in their restructuring efforts. (WestPoint BankruptcyNews, Issue No. 56; Bankruptcy Creditors' Service, Inc.,215/945-7000)WILLIAMS COS: Inks $700-Mil Credit Pacts with Citicorp & Citibank-----------------------------------------------------------------The Williams Companies, Inc., entered into: * a $500 million Five Year Credit Agreement, and * a $200 million Five Year Credit Agreement,with Citicorp USA, Inc., as the initial issuing bank and initiallender, and Citibank, N.A., as agent.The Credit Agreements provide for both borrowings and issuances ofletters of credit, but the Company expects to utilize the CreditAgreements primarily for issuances of letters of credit. Williamsis required to pay fixed facility fees at a rate of 2.025% on thetotal committed amount of the $500 Million Credit Agreement and2.00% on the total committed amount of the $200 Million CreditAgreement. In addition, Williams will pay interest on anyborrowings (including unreimbursed draws under letters of credit)under the Credit Agreements at either: * a floating base rate equal to the higher of: (a) Citibank, N.A.'s publicly announced base rate; or (b) 50 basis points above the federal funds rate; or * a floating LIBOR rate.Upon the occurrence of an event of default under a CreditAgreement or certain other events, Citicorp USA, Inc., as theinitial lender, can deliver the Credit Agreement to theinstitutional investors to which Citicorp USA, Inc., hassyndicated its associated credit risk under the Credit Agreements,whereby the institutional investors will replace Citicorp USA,Inc. as lender under the Credit Agreement. Upon such occurrence,the Company will continue to pay the fixed facility fees it waspreviously obligated to pay and will also pay the institutionalinvestors interest at these rates per annum: * on any borrowings under the $500 Million Credit Agreement, a fixed rate of 4.35%; and * on any borrowings under the $200 Million Credit Agreement, a floating LIBOR rate.The Credit Agreements contain covenants that restrict theCompany's ability to incur liens or merge, consolidate, or sellsubstantially all of its assets.Any borrowings under the Credit Agreements are to be repaid by theCompany on the earlier of October 1, 2010, and the date on whichCitibank, N.A., as agent, declares any such borrowings to beaccelerated as a result of an event of default under the relevantcredit agreement. Events of default under the Credit Agreementsinclude: -- the Company's failure to pay any principal of any borrowing under the Credit Agreements when it becomes due or the Company's failure to pay any interest or other amounts due under the Credit Agreements within 30 days after it becomes due and payable; -- the Company's failure to comply with the restriction on its ability to incur liens or merge, consolidate, or sell substantially all of its assets or the Company's failure for 60 days after notice to observe any other term, covenant, or agreement contained in the Credit Agreements; -- the Company's failure to pay final judgments aggregating in excess of $100 million, which judgments are not paid, discharged, or stayed for a period of 60 days; and -- certain bankruptcy related events.The Williams' Companies, Inc. -- http://www.williams.com/-- through its subsidiaries, primarily finds, produces, gathers,processes and transports natural gas. The company also manages awholesale power business. Williams' operations are concentratedin the Pacific Northwest, Rocky Mountains, Gulf Coast, SouthernCalifornia and Eastern Seaboard.A full-text copy of the $500 Million Five-Year Credit Agreement isavailable for free at http://ResearchArchives.com/t/s?1e2A full-text copy of the $200 Million Five-Year Credit Agreement isavailable for free at http://ResearchArchives.com/t/s?1e3 * * *As reported in the Troubled Company Reporter on Jan. 24, 2005,Standard & Poor's Ratings Services assigned its 'B+' rating to TheWilliams Cos., Inc., Credit-Linked Certificate Trust IV's$100 million floating-rate certificates due May 1, 2009.The rating reflects the credit quality of The Williams Cos., Inc.,('B+') as the borrower under the credit agreement and CitibankN.A. ('AA/A-1+') as seller under the subparticipation agreementand account bank under the certificate of deposit.The rating addresses the likelihood of the trust making paymentson the certificates as required under the amended and restateddeclaration of trust.WORLDCOM INC: Asks Court to Reject William Brown's Class Claim--------------------------------------------------------------On Jan. 20, 2003, William J. Brown filed Claim No. 15494, apurported class proof of claim, seeking recovery "in excess of$100,000,000" on behalf of a putative class of MCI customers whoallegedly were improperly assessed a $10 per month charge by theDebtors.Timothy W. Walsh, Esq., at DLA Piper Rudnick Gray Cary US, LLP, inNew York, contends that Claim No. 15949 mimics allegationspreviously made in a civil action pending against MCI, Inc., inthe United States District Court for the Central District ofCalifornia."Mr. Brown never moved to certify the putative class in thefederal district court, and no motion for class certification hasbeen filed in the 31 months that the Claim has been pending," Mr.Walsh argues.Mr. Brown has also made no meaningful effort to move the caseforward, at least in the past year, Mr. Walsh adds.Mr. Walsh notes that Mr. Brown's Claim suggests that MCIerroneously billed certain customers a $10 monthly fee where the"account did not have a phone line assigned." Mr. Brown seeksrelief under Federal Communications Act for the supposedovercharges.The Debtors ask the Court to disallow and expunge Claim No.15494.Mr. Walsh states that for a class action to proceed in bankruptcy: -- a court must direct Rule 23 of the Federal Rules of Civil Procedure to apply; -- the claim must satisfy the requirements of Rule 23; and -- the benefits generally supporting class certification must be realizable in the bankruptcy.Mr. Walsh contends that Mr. Brown has not met the proceduralrequirements.Thus, the Court should use its discretion to deny class status toMr. Brown's claim pursuant to Rule 7023 of the Federal Rules ofBankruptcy Procedure, Mr. Walsh asserts.In addition, Mr. Walsh points out that neither Mr. Brown nor hiscounsel can qualify as authorized agents pursuant to BankruptcyRule 3001(b). Furthermore, even assuming arguendo that they couldbe considered authorized agents, both have failed to file averified statement to comply with the requirements of BankruptcyRule 2019(a), Mr. Walsh avers.The Debtors believe that the face value of Mr. Brown's individualclaim is worth approximately $10."Allowing Brown to transform his potential $10 claim into amassive $100 million class claim would be a wholly inappropriateuse of the class action mechanism under Rule 7023," Mr. Walshmaintains.Headquartered in Clinton, Mississippi, WorldCom, Inc., now knownas MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries andmaintaining one of the most expansive IP networks in the world.The Company filed for chapter 11 protection on July 21, 2002(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, theDebtors listed $103,803,000,000 in assets and $45,897,000,000 indebts. The Bankruptcy Court confirmed WorldCom's Plan onOctober 31, 2003, and on April 20, 2004, the company formallyemerged from U.S. Chapter 11 protection as MCI, Inc. (WorldComBankruptcy News, Issue No. 101; Bankruptcy Creditors' Service,Inc., 215/945-7000)WORLD HEALTH: Warns of Possible Bankruptcy Due to Financial Woes----------------------------------------------------------------World Health Alternatives, Inc., may file for bankruptcyprotection after a California shareholder dropped plans to buy thetroubled medical staffing company, Kathy Robertson and Kris Mamulaof MSNBC.com reported Sunday.Eric Allison, a multimillionaire who sold Pulse HealthcareStaffing to World Health for more than $16 million last year,offered to buy back the Company but received no response to histwo offers made early this month. He told Ms. Robertson and Ms.Mamula that he has abandoned plans to buy part of World Health, orraise money to keep it afloat in the short term. Palisades DefaultThe Company is currently in default of a $4 million bridge loanfrom Palisades Master Fund LLP, which bears an 18% interest andwas due and payable on Aug. 31, 2005. In addition, the Companyreceived a $2,000,000 cash infusion from Palisades on Aug. 24,2005, which the Company was unable to repay. Convertible Notes in DefaultOn Sept. 19, 2005, the Company received a notice of default underits Convertible Debentures and related warrants to purchase commonstock from Bristol Investment Fund, Ltd., due to alleged breachesby the Company of the terms of the Debenture and PurchaseAgreement between the Company and Bristol. Bristol demanded a$6.29 million payment under the Debentures plus interest and anycosts of collection.The Company has withdrawn its previously disclosed offer for astandstill agreement with Palisades and Bristol.Due to the Company's liquidity situation, the Company has engagedseparate bankruptcy counsel to advise the Company on all of itsoptions. Forbearance AgreementThe Company and certain of its subsidiaries entered into anAmended and Restated Forbearance and Modification Agreement, datedas of Sept. 15, 2005, with CapitalSource Finance LLC.CapitalSource is the lender under the Company's Revolving CreditAgreement dated as of Feb. 14, 2005.Pursuant to the Revised Forbearance Agreement, CapitalSource hasagreed until Dec. 15, 2005, to forbear exercising its rights andremedies under the Credit Agreement arising from the Company'sprior noncompliance with certain terms of the Credit Agreement.The Revised Forbearance Agreement requires the Company to abide bythe terms of the Credit Agreement and to satisfy additionalrequirements set forth in the Revised Forbearance Agreement.The Company may request a 30-day extension to the RevisedForbearance Agreement, if on Dec. 15, 2005, the Company is in fullcompliance with the Revised Forbearance Agreement and otherwisesatisfies the additional requirements set forth in the RevisedForbearance Agreement.A full-text copy of the Amended and Restated Forbearance Agreementis available at no charge at http://ResearchArchives.com/t/s?1e5 Class Action SuitsThe Company faces three purported class action suits in the UnitedStates District Court for the Western District of Pennsylvania.The lawsuits alleged that the Company: -- made irregular reports to its lenders, resulting in excess funding which may have resulted in breaches of its financing agreements; -- had underpaid certain tax liabilities; and -- had not properly reported and/or accounted for all of its outstanding shares. Executive ChangesOn Aug. 16, 2005, the Company disclosed the resignation of RichardE. McDonald as its President and Chief Executive Officer due tofamily and health reasons. Three days later, on Aug. 19, 2005,the Company said it expected to restate its prior financialstatements, that an independent investigation had been commenced,and that it had terminated its engagement with Daszkal Bolton LLP,its outside auditors.The Company has retained Alvarez & Marsal LLC early this month towork closely with the Company's board of directors and managementteam to evaluate the business plan and strategic capital structureof the organization. In light with this engagement, John Sercuhas resumed his prior position of Chief Operating Officereffective Sept. 15, 2005.Scott Phillips, an A&M managing director, has been named chiefrestructuring officer. In addition, Dr. David Friend, an A&Mmanaging director with an extensive background as a physicianexecutive, has been named an executive officer. The A&M team willbe responsible for reviewing and strengthening, where necessary,the company's infrastructure, with a primary focus on banking andfinancial areas.Headquartered in Pittsburgh, Pa., World Health Alternatives, Inc.(OTCBB:WHAIE) -- http://www.whstaff.com/-- is a premier medical staffing company that provides medical, professional andadministrative staffing services to the healthcare industry.The Company places its experienced personnel on a project,temporary, permanent, or temporary-to-permanent basis. Theseoptions allow clients to control the expenses associated with newstaff while also giving them the unique opportunity to evaluate acandidate's performance essentially risk-free. The Companyprovides services from locations in Birmingham, Ala., Mobile,Ala., Roseville, Calif., Boca Raton, Fla., Sanford, Fla., Atlanta,Ga., Danvers, Mass., Morrisville, N.C., Nashua, N.H., Cincinnati,Ohio, Cleveland, Ohio, Portland, Ore., Murray, Utah, Bellevue,Wash., and Seattle, Wash.* Juan Manuel Trujillo Joins Sheppard Mullin as NY Finance Partner------------------------------------------------------------------ Juan Manuel Trujillo has joined the New York office of Sheppard,Mullin, Richter & Hampton LLP as a partner in the Finance &Bankruptcy practice group. Mr. Trujillo, most recently withGibson, Dunn & Crutcher in New York, specializes in international,cross-border and corporate transactions and foreign investment.James J. McGuire, managing partner of the firm's New York office,said, "We are delighted to have Juan join the firm. He willstrengthen our finance practice firmwide and extend the firm'sHispanic/Latino Business group to a national platform.""I am excited at the prospect of joining Sheppard Mullin, with itsgrowing finance practice in the New York office and dedication toa firmwide Latin business specialization," commented Mr. Trujillo.Mr. Trujillo brings project, structured, cross-border and generalfinance experience. He has participated in the areas of power andinfrastructure with different clients throughout Latin America,with a focus on Mexico, Brazil and Argentina. Mr. Trujillo hasrepresented clients from the water, power generation, gastransportation and airport industries before commercial lenders,multi-lateral agencies and multiple governmental agencies.Additionally, Mr. Trujillo has distressed debt and restructuringexperience in the United States and in emerging markets, includingthe representation of institutional creditors and investors inconnection with restructuring proceedings. He has represented theNational Law Center for Inter-American Free Trade as a permanentmember of the United Nations Commission on International Trade Lawin the UNCITRAL's model law on security interests project and aspart of the working group of advisors on security interests to theOffice of Legal Advisor of the Department of State. Mr.Trujillo's corporate practice includes extensive experience in M&Atransactions and in joint-ventures throughout Latin America andthe United States.Mr. Trujillo received his law degree from Instituto Tecnologico yde Estudios Superiores de Monterrey (Monterrey, Mexico) in 1993where he was ranked first in his class. In 1994, Mr. Trujilloreceived the "Mexico's Top Students" award from the President ofMexico. In 1995, he received his LL.M. degree in InternationalTrade Law from the University of Arizona.Sheppard, Mullin, Richter & Hampton LLP -- http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm with 435 attorneys in nine offices located throughout Californiaand in New York and Washington, D.C. The firm's Californiaoffices are located in Los Angeles, San Francisco, Santa Barbara,Century City, Orange County, Del Mar Heights and San Diego.Sheppard Mullin provides legal expertise and counsel to U.S. andinternational clients in a wide range of practice areas, includingAntitrust, Corporate and Securities; Entertainment and Media;Finance and Bankruptcy; Government Contracts; IntellectualProperty; Labor and Employment; Litigation; Real Estate/Land Use;Tax/Employee Benefits/Trusts & Estates; and White Collar Defense.* Upcoming Meetings, Conferences and Seminars---------------------------------------------September 28, 2005 NEW YORK STATE SOCIETY OF CPAs Half- Day Bankruptcy Conference 19th Floor, FAE Conference Center 3 Park Avenue, at 34th Street, New York, New York Contact: 1-800-537-3635; http://www.nysscpa.org/September 28, 2005 TURNAROUND MANAGEMENT ASSOCIATION Joint CFA/RMA/TMA Networking Reception Woodbridge Hilton, Iselin, New Jersey Contact: 908-575-7333; http://www.turnaround.org/September 28-30, 2005 PRACTISING LAW INSTITUTE Tax Strategies for Corporate Acquisitions, Dispositions, Spin-Offs, Joint Ventures, Financings, Reorganizations & Restructurings New York, New York Contact: http://www.pli.edu/September 28, 2005 TURNAROUND MANAGEMENT ASSOCIATION The 2005 Bankruptcy Amendments Seminar: The Law of Intended and Unintended Consequences Woodbridge Hilton, Iselin, New Jersey Contact: http://www.turnaround.org/September 28, 2005 CONTINUING EDUCATION OF THE BAR Bankruptcy Reform: Changing the Ground Rules for Personal & Small Business Bankruptcy Practice San Diego, California Contact: http://www.ceb.com/;1-800-232-3444 September 29, 2005 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS West Coast Corporate Restructuring Conference Grand Hyatt on Union Square, San Francisco, California Contact: http://www.airacira.org/October 1, 2005 CONTINUING EDUCATION OF THE BAR Bankruptcy Reform: Changing the Ground Rules for Personal & Small Business Bankruptcy Practice Sacramento, California Contact: http://www.ceb.com/;1-800-232-3444 October 1, 2005 CONTINUING EDUCATION OF THE BAR Selected Issues in Bankruptcy Practice Sacramento, California Contact: http://www.ceb.com/;1-800-232-3444 October 5, 2005 TURNAROUND MANAGEMENT ASSOCIATION Kurt Eichenwald, Author of Enron: Conspiracy of Fools Detroit, Michigan Contact: 248-593-4810 or http://www.turnaround.org/October 6, 2005 FINANCIAL RESEARCH ASSOCIATES LLC Distressed Debt Summit New York, New York Contact: http://www.frallc.com/October 7, 2005 AMERICAN BANKRUPTCY INSTITUTE Views from the Bench Georgetown University Law Center, Washington, D.C. Contact: 1-703-739-0800; http://www.abiworld.org/October 12, 2005 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Hotel, Tyson's Corner, Virginia Contact: 703-912-3309; http://www.turnaround.org/October 14, 2005 TURNAROUND MANAGEMENT ASSOCIATION TMA UK Annual Conference: Management & Teamwork in Stressful Situations Renaissance Chancery Court Hotel, London, UK Contact: 312-578-6900; http://www.turnaround.org/October 17-18, 2005 AMERICAN CONFERENCE INSTITUTE Airline Restructuring Park Central New York, New York Contact: http://www.americanconference.com/October 18, 2005 TURNAROUND MANAGEMENT ASSOCIATION TBA [Upstate New York] Rochester, New York Contact: 716-440-6615; http://www.turnaround.org/October 19, 2005 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner Venue to be announced Contact: http://www.turnaround.org/October 19-23, 2005 TURNAROUND MANAGEMENT ASSOCIATION 2005 Annual Convention Chicago Hilton & Towers, Chicago, Illinois Contact: 312-578-6900; http://www.turnaround.org/October 20, 2005 TURNAROUND MANAGEMENT ASSOCIATION Colorado TMA Breakfast The Oxford Hotel, Denver, Colorado Contact: 303-457-2119; http://www.turnaround.org/October 25, 2005 TURNAROUND MANAGEMENT ASSOCIATION Tampa Luncheon Centre Club, Tampa, Florida Contact: http://www.turnaround.org/October 27, 2005 TURNAROUND MANAGEMENT ASSOCIATION Informal Networking *FREE Reception for Members* The Davenport Press Restaurant, Mineola, New York Contact: 516-465-2356; http://www.turnaround.org/November 1-2, 2005 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC 2005 Fall Conference San Antonio, Texas Contact: http://www.iwirc.com/November 2, 2005 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS AIRA/NCBJ Dessert Reception Marriott Riverwalk Hotel, San Antonio, Texas Contact: 541-858-1665 or http://www.airacira.org/November 2-4, 2005 PRACTISING LAW INSTITUTE Tax Strategies for Corporate Acquisitions, Dispositions, Spin-Offs, Joint Ventures, Financings, Reorganizations & Restructurings Beverly Hills, California Contact: http://www.pli.edu/November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, Texas Contact: http://www.ncbj.org/November 3-4, 2005 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Second Annual Conference on Physician Agreements and Ventures Successful Strategies for Negotiating Medical Transactions and Investments The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/November 7-8, 2005 STRATEGIC RESEARCH INSTITUTE Seventh Annual Distressed Debt Investing Forum West Venetian Resort Hotel Casino, Las Vegas, Nevada Contact: http://www.srinstitute.com/November 9, 2005 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting The Center Club, Baltimore, Maryland Contact: 703-912-3309; http://www.turnaround.org/November 10, 2005 TURNAROUND MANAGEMENT ASSOCIATION Second Annual Australian TMA Conference Sebel Pier One, Sydney, Australia Contact: http://www.turnaround.org/November 10, 2005 TURNAROUND MANAGEMENT ASSOCIATION Second Annual Australian TMA Conference Sydney, Australia Contact: 9299-8477; http://www.turnaround.org/November 11, 2005 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Workshop Wayne State University, Detroit, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/November 11-13, 2005 AMERICAN BANKRUPTCY INSTITUTE Corporate Restructuring Competition Kellogg School of Management, NWU, Evanston, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/November 14, 2005 TURNAROUND MANAGEMENT ASSOCIATION Workout Workshop Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/November 14-15, 2005 AMERICAN CONFERENCE INSTITUTE Insurance Insolvency The Warwick, New York, New York Contact: http://www.americanconference.com/November 15, 2005 TURNAROUND MANAGEMENT ASSOCIATION Bankruptcy Judges Panel Pittsburgh, Pennsylvania Contact: http://www.turnaround.org/November 15, 2005 TURNAROUND MANAGEMENT ASSOCIATION Speaker/Dinner Event Fairmont Royal York Hotel, Toronto, ON Contact: http://www.turnaround.org/November 17, 2005 TURNAROUND MANAGEMENT ASSOCIATION TBA [Upstate New York] Buffalo, New York Contact: 716-440-6615; http://www.turnaround.org/November 17, 2005 TURNAROUND MANAGEMENT ASSOCIATION Colorado TMA Breakfast The Oxford Hotel, Denver, Colorado Contact: 303-457-2119; http://www.turnaround.org/November 17, 2005 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS Networking Cocktail Reception New York, New York Contact: 541-858-1665 or http://www.airacira.org/November 28-29, 2005 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Twelfth Annual Conference on Distressed Investing Maximizing Profits in the Distressed Debt Market The Essex House, New York, New York Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/November 29, 2005 TURNAROUND MANAGEMENT ASSOCIATION State of Banking 2006 and Beyond - Economy, Climate for Turnaround Industry, Banking Relationships Tournament Players Club at Jasna Polana, Princeton, New Jersey Contact: 312-578-6900; http://www.turnaround.org/November 29, 2005 TURNAROUND MANAGEMENT ASSOCIATION Orlando Luncheon Citrus Club, Orlando, Florida Contact: http://www.turnaround.org/December 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Fundamentals: Nuts & Bolts for Young Practitioners Hyatt Grand Champions Resort, Indian Wells, California Contact: 1-703-739-0800; http://www.abiworld.org/December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, California Contact: 1-703-739-0800; http://www.abiworld.org/December 5-6, 2005 MEALEYS PUBLICATIONS Asbestos Bankruptcy Conference Ritz-Carlton, Battery Park, New York, New York Contact: http://www.mealeys.com/December 8, 2005 TURNAROUND MANAGEMENT ASSOCIATION Holiday Gathering & Help for the Needy *FREE to Members* Mack Hall at Hofstra University, Hempstead, New York Contact: 516-465-2356; http://www.turnaround.org/December 8, 2005 TURNAROUND MANAGEMENT ASSOCIATION Annual Board of Directors Meeting Rochester, New York Contact: 716-440-6615; http://www.turnaround.org/December 12-13, 2005 PRACTISING LAW INSTITUTE Understanding the Basics of Bankruptcy & Reorganization New York, New York Contact: http://www.pli.edu/December 14, 2005 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting Marriott Hotel, Tyson's Corner, Virginia Contact: 703-912-3309; http://www.turnaround.org/January 5, 2006 TURNAROUND MANAGEMENT ASSOCIATION NJTMA Holiday Party Iberia Tavern & Restaurant, Newark, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/January 26, 2006 TURNAROUND MANAGEMENT ASSOCIATION PowerPlay - TMA Night at the Thrashers Philips Arena, Atlanta, Georgia Contact: 678-795-8103 or http://www.turnaround.org/January 26-28, 2006 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/February 9-10, 2006 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Eden Roc, Miami, Florida Contact: 1-703-739-0800; http://www.abiworld.org/March 2-3, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS Legal and Financial Perspectives on Business Valuations & Restructuring (VALCON) Four Seasons Hotel, Las Vegas, Nevada Contact: http://www.airacira.org/March 2-5, 2006 NATIONAL ASSOCIATION OF BANKRUPTCY TRUSTEES 2006 NABT Spring Seminar Sheraton Crescent Hotel, Phoenix, Arizona Contact: http://www.pli.edu/March 9, 2006 AMERICAN BANKRUPTCY INSTITUTE Nuts & Bolts for Young Practitioners Century Plaza, Los Angeles, California Contact: 1-703-739-0800; http://www.abiworld.org/March 10, 2006 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Century Plaza, Los Angeles, California Contact: 1-703-739-0800; http://www.abiworld.org/March 22-25, 2006 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Desert Ridge, Phoenix, Arizona Contact: http://www.turnaround.org/March 30 - April 1, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Scottsdale, Arizona Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/April 5-8, 2006 MEALEYS PUBLICATIONS Insurance Insolvency and Reinsurance Roundtable Fairmont Scottsdale Princess, Scottsdale, Arizona Contact: http://www.mealeys.com/April 6-7, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES The Seventh Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures, and Restructurings The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/April 18-22, 2006 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting JW Marriott, Washington, D.C. Contact: 1-703-739-0800; http://www.abiworld.org/May 4-6, 2006 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Fundamentals of Bankruptcy Law Chicago, Illinois Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/May 8, 2006 AMERICAN BANKRUPTCY INSTITUTE NYC Bankruptcy Conference Millennium Broadway, New York, New York Contact: 1-703-739-0800; http://www.abiworld.org/May 18-19, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Third Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel, London, UK Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/May 22, 2006 TURNAROUND MANAGEMENT ASSOCIATION LI TMA Annual Golf Outing Indian Hills Golf Club, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/June 7-10, 2006 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 22nd Annual Bankruptcy & Restructuring Conference Grand Hyatt, Seattle, Washington Contact: http://www.airacira.org/June 15-18, 2006 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/June 22-23, 2006 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel, Chicago, Illinois Contact: 903-595-3800; 1-800-726-2524; http://www.renaissanceamerican.com/July 13-16, 2006 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Newport Marriott, Newport, Rhode Island Contact: 1-703-739-0800; http://www.abiworld.org/July 26-29, 2006 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz Carlton Amelia Island, Amelia Island, Florida Contact: 1-703-739-0800; http://www.abiworld.org/September 7-9, 2006 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Wynn Las Vegas, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/October 11-14, 2006 TURNAROUND MANAGEMENT ASSOCIATION 2006 Annual Conference Milleridge Cottage, Long Island, New York Contact: 312-578-6900; http://www.turnaround.org/October 25-28, 2006 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/February 2007 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium San Juan, Puerto Rico Contact: 1-703-739-0800; http://www.abiworld.org/April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, Florida Contact: http://www.ncbj.org/October 22-25, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott, New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place, Boston, Massachusetts Contact: 312-578-6900; http://www.turnaround.org/October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/The Meetings, Conferences and Seminars column appears in theTroubled Company Reporter each Wednesday. Submissions via e-mailto firstname.lastname@example.com are encouraged. *********Monday's edition of the TCR delivers a list of indicative pricesfor bond issues that reportedly trade well below par. Prices areobtained by TCR editors from a variety of outside sources duringthe prior week we think are reliable. Those sources may not,however, be complete or accurate. The Monday Bond Pricing tableis compiled on the Friday prior to publication. Prices reportedare not intended to reflect actual trades. Prices for actualtrades are probably different. Our objective is to shareinformation, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy orsell any security of any kind. It is likely that some entityaffiliated 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 withinsolvent balance sheets whose shares trade higher than $3 pershare in public markets. At first glance, this list may look likethe definitive compilation of stocks that are ideal to sell short.Don't be fooled. Assets, for example, reported at historical costnet of depreciation may understate the true value of a firm'sassets. A company may establish reserves on its balance sheet forliabilities that may never materialize. The prices at whichequity securities trade in public market are determined by morethan a balance sheet solvency test.A list of Meetings, Conferences and Seminars appears in eachWednesday's edition of the TCR. Submissions about insolvency-related conferences are encouraged. Send announcements firstname.lastname@example.com/Each Friday's edition of the TCR includes a review about a book ofinterest to troubled company professionals. All titles areavailable at your local bookstore or through Amazon.com. Go tohttp://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday editionof the TCR.For copies of court documents filed in the District of Delaware,please contact Vito at Parcels, Inc., at 302-658-9911. Forbankruptcy documents filed in cases pending outside the Districtof 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 NTroubled Company Reporter is a daily newsletter co-published byBankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P.Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence PatrickF. Casquejo, Christian Q. Salta, Jason A. Nieva, Lucilo Junior M.Pinili, and Peter A. Chapman, Editors.Copyright 2005. All rights reserved. ISSN: 1520-9474.This material is copyrighted and any commercial use, resale orpublication in any form (including e-mail forwarding, electronicre-mailing and photocopying) is strictly prohibited without priorwritten permission of the publishers. Information containedherein is obtained from sources believed to be reliable, but isnot guaranteed.The TCR subscription rate is $675 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firmfor the term of the initial subscription or balance thereof are$25 each. For subscription information, contact Christopher Beardat 240/629-3300. *** End of Transmission ***