/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/061221.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, December 21, 2006, Vol. 10, No. 303 Headlines ADELPHIA COMMS: Files Proposed Changes to Plan of Reorganization AGRICORE UNITED: Investing $4 Million in Dairy Mineral Plant AGRICORE UNITED: Acquires Two Crop Input Retailers in Saskatchewan AIR AMERICA: Court Okays Halperin Battaglia as Panel's Counsel AIR AMERICA: Negotiating Purchase Agreement with Unnamed Buyer ALERIS INT'L: S&P Affirms Corporate Credit Rating at B+ AMERICAN REPROGRAPHICS: Moody's Holds Corporate Ratings at Ba3 AMN HEALTHCARE: Good Performance Prompts S&P's Stable Outlook ASARCO LLC: Court Okays Purchase of Equipment From EntreCap ASARCO LLC: Court Issues Preliminary Injunction on Mineral Park BANCAFE INTERNATIONAL: Chapter 15 Petition Summary BARRAMUNDI CDO: Moody's Rates $19.2-Mil. Class E Notes at Ba3 BEAR STEARNS: Fitch Rates $2.3-Million Class B Certificates at BB BEAZER HOMES: Moody's Revises Outlook to Negative from Stable BOULDER SPECIALTY: S&P Places Corporate Credit Rating at B- BUFFALO COAL: U.S. Trustee Wants Barton's Case Converted to Ch. 7 CALPINE CORP: Fund Advises Unitholders on Harbinger's Offer CAPITAL GUARDIAN: Fitch Junks Rating on $12.9-Mil. Class C Notes CITIZENS COMMS: S&P Rates $400-Mil. Senior Unsecured Notes at BB+ CITIZENS COMMS: Fitch Assigns BB Rating on New $250MM Sr. Notes COMPUTER SCIENCES: Seeks Waiver of Default on $200 Million Notes CONSPIRACY ENT: Sept. 30 Balance Sheet Upside-Down by $3 Million CWALT INC: Moody's Places Low-B Ratings on Two Certificate Classes DELTA AIR: Plan Filing Decision Wins Committee's Support DELTA AIR: Classification and Treatment of Claims Under Plan DELTA AIR: Enterprise Value Estimated at $18.2-$20.8 Billion DELTA AIR: US Airways Rejection Will Not Affect S&P's D Rating DJ WEAVER: Case Summary & Seven Largest Unsecured Creditors DURA AUTOMOTIVE: Wants to Enter Into Sr. Executive Employment Pact DURA AUTOMOTIVE: Gets Final Nod to Pay Non-Debtor Affiliates DURA AUTOMOTIVE: Ch. 11 Filing Prompts Moody's Ratings Withdrawal FBO AIR: Incurs $1.2 Million Net Loss in Quarter Ended Sept. 30 FIRST FRANKLIN: Moody's Rates Class B Certificates at Ba1 FORTIUS II: Moody's Rates $7.5-Million Class E Notes at Ba1 FORT WORTH: Moody's Holds Ba2 Rating on $7.7MM Outstanding Bonds FRASER SULLIVAN: Moody's Rates $17-Million Class E Notes at Ba2 EES COKE: Moody's Withdraw Ba2 Rating on 9.382% Senior Notes EMPIRE RESORTS: Earns $191,000 in Third Quarter Ended Sept. 30 ENTERPRISE PRODUCTS: S&P Lifts BB+ Corporate Credit Rating to BBB- G.M. CROCETTI: Case Summary & 11 Largest Unsecured Creditors GRAMERCY CRE: Fitch Holds Rating on $35-Mil. Class K Notes at B GRAN TIERRA: Posts $66,355 Net Loss in 2006 Quarter Ended Sept. 30 GSAA HOME: Moody's Rates Class B-3 Certificates at Ba2 HAIGHTS CROSS: S&P Junks Rating on Senior Unsecured Debt HIGHWOODS REALTY: Moody's Holds Low-B Ratings with Stable Outlook HOME EQUITY: Moody's Rates Class B-3 Certificates at Ba2 HOME PRODUCTS: Files for Chapter 11 Protection in Delaware HOME PRODUCTS: Plan Proposes to Convert Debt to Equity HOME PRODUCTS: Case Summary & 21 Largest Unsecured Creditors I2 TELECOM: Posts $895,192 Net Loss in 2006 Third Quarter INTERNATIONAL COAL: Moody's Holds Corporate Family Rating at B2 J & M BEAR: Case Summary & Seven Largest Unsecured Creditors LINCOLN DEVELOPMENT: Voluntary Chapter 11 Case Summary MARCAL PAPER: Gets Pledge for $84.5 Mil. DIP Financing from HFC MASTR ASSET: Moody's Rates Class M-11 Certificates at Ba2 MAYPORT CLO: Moody's Rates $20-Million Class B-2L Notes at Ba3 MERIDIAN AUTOMOTIVE: Ct. OKs Rejection of 18 Contracts & Leases MERIDIAN AUTOMOTIVE: Assumes 107 Contracts and Leases MERRILL LYNCH: Fitch Holds Rating on $39-Mil. Class G Certs. at B- MOONLIGHT RESTAURANT: Case Summary & 20 Largest Unsec. Creditors NEWCOMM WIRELESS: Can Access $16 Million of DIP Financing NEWCOMM WIRELESS: Selling Assets to PR Wireless for $103.2 Million NORTEK INC: S&P Holds Corporate Credit Rating at B ONE IP: Files Voluntary Bankruptcy Petition in Connecticut ONE IP: Case Summary & 40 Largest Unsecured Creditors OSPREY CDO: Moody's Rates $9-Million Class B-2L Notes at Ba2 PAMCO CLO: Moody's Lifts Class B Sr. Notes' Rating to Baa2 from B1 PEABODY ENERGY: Moody's Rates Proposed $500MM Debentures at Ba2 PEABODY ENERGY: DBRS Rates New $675-Mil. Junior Notes at B (high) PRC LLC: S&P Holds Rating on $67-Mil. 2nd Lien Term Loan at B- RAYMOND PROFESSIONAL: Case Summary & 20 Largest Unsec. Creditors REALOGY CORP: S&P Pares Corporate Credit Rating to BB+ from 'BBB' SACO I: S&P Removes Watch on Junk Rated Class B-2 Certificates SALTON SEA: S&P Lifts BB+ Rating on $256.8-Mil. Senior Bonds SECURITIZED ASSET: Moody's Rates Class B-4 Certificates at Ba1 SHOSHONE SILVER: Williams & Webster Raises Going Concern Doubt SIERRA PACIFIC: Offers for Up To $110 Million of Sr. Notes Expire SINGA FUNDING: Moody's Rates $2-Mil. Class D Fixed Notes at Ba2 SEARS CANADA: DBRS Holds Term Facilities' Rating at BB SEARS HOLDINGS: Earns $196 Million in Quarter Ended October 28 SMG ENTERTAINMENT: Case Summary & 20 Largest Unsecured Creditors SOLUTIA INC: Receives Commitment for $1.075 Billion DIP Financing SOS REALTY: Files Disclosure Statement in Massachusetts STANLEY-MARTIN: Moody's Pares Corp. Family Rating to B2 from B1 STEINWAY MUSICAL: Selected as Lead Bidder in Woodwind Auction STONE ENERGY: S&P's Neg. Watch on Corp. Credit Rating Continues SUNSET BRANDS: Posts $9.1 Million Net Loss in 2006 Third Quarter SWIFT & COMPANY: Moody's Places Ratings on Review for Upgrade TECH DATA: Earns $9.6 Million in Quarter Ended October 31 TEEKAY SHIPPING: Moody's Pares Corporate Rating to Ba2 from Ba1 TEREX CORPORATION: Moody's Holds Corporate Family Rating at Ba3 TEXAS WESLEYAN: Moody's Retains Ba2 Rating on Series 1997A Bonds TIMKEN CO: Sells Automotive Steering Biz to DriveSol Worldwide TODD MCFARLANE: Can Use BofA's Cash Collateral Until November 2007 TRANSDIGM INC: Improved Results Cue Moody's Stable Outlook TRITON PETROLEUM: Posts $601,193 Net Loss in 2006 Third Quarter U.S. ENERGY: Countryside Loses Right to Convert Claims to Equity UNION CINEMA: Voluntary Chapter 11 Case Summary VESTA INSURANCE: Panel Asks Court to Cancel XL Policy Extension WEST SPEEDWAY: Case Summary & 14 Largest Unsecured Creditors WESTBROOK CLO: Moody's Rates $14-Million Class E Notes at Ba2 WINN-DIXIE: Court Approves Ohio Casualty Insurance Settlement WINN-DIXIE: Wants Coca-Cola & VR Global Settlement Pact Okayed WINDWARD HARBOR: Case Summary & Three Largest Unsecured Creditors WOODWIND & BRASSWIND: Meeting of Creditors Scheduled Tomorrow WOODWIND & BRASSWIND: Court Approves Steinway's Staking-Horse Bid * North American Automotive Output to Decline 1.1% in 2007 * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ADELPHIA COMMS: Files Proposed Changes to Plan of Reorganization ---------------------------------------------------------------- Adelphia Communications Corporation filed proposed changes to the First Modified Fifth Amended Joint Chapter 11 Plan of Reorganization with the U.S. Bankruptcy Court for the Southern District of New York on Dec. 19, 2006, marked to show changes against the version filed with the Bankruptcy Court on Dec. 12, 2006. The proposed modifications reflect additional discussions with the interested parties as well as certain changes resulting from the hearing to consider confirmation of the Plan. The Plan is subject to approval of the Bankruptcy Court. The Confirmation Hearing commenced on Dec. 7, 2006 and ended on Dec. 19, 2006. A full-text copy of the proposed revisions to the Plan are available for free at http://ResearchArchives.com/t/s?1770 Based in Coudersport, Pa., Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision, LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates chapter 11 cases. AGRICORE UNITED: Investing $4 Million in Dairy Mineral Plant ------------------------------------------------------------ Agricore United plans to invest $4 million in a new 100,000 ton dairy mineral manufacturing plant at Hi-Pro Feeds located in Friona, Texas and CDN$5.2 million in a new 60,000 ton specialty oat processing plant at its existing seed cleaning plant in Camrose, Alberta. As reported in the Troubled Company Reporter on Aug. 22, 2006, Agricore United reported the acquisition of Hi Pro Feeds, a Goldsmith Agio Helms client. The Hi Pro transaction was the company's fourth completed sale mandate in the animal nutrition sector for its active agribusiness practice. "Agricore United is committed to growth," says Brian Hayward, Chief Executive Officer, Agricore United. "With our recent refinancing, and five straight years of cash flow growth, we have the financial flexibility to continue to diversify into value- added downstream processing." The dairy industry in New Mexico and the Texas Panhandle market area is experiencing significant growth. The mineral plant expansion, expected to be completed in the fall of 2007, will free production capacity at the existing Friona feed mill and allow Hi-Pro to participate in industry growth and secure additional market share. "This investment reinforces Agricore United's continuing intent to develop its livestock services business segment," says Bill McGill, Vice President, Livestock Services. "The expansion affords Hi-Pro a unique opportunity to extend its leading position in the dairy market, and maintain its growth in other product lines." The new oat plant will begin processing in the spring of 2008 and will replace Agricore United's existing 35,000-tonne Edmonton oat plant. The new plant, which also includes a retrofit of an existing forage seed cleaning plant, will increase Agricore United's production capacity of specialty oats processing and allow it to respond to growing market demands. "The facility will incorporate state of the art processing technologies and automation," says Blair Roth, Manager, Beans and Special Crops. "The commitment to the expansion will also enhance Agricore United's product offerings to meet the demands of end-use customers while expanding the market opportunity for prairie oat growers." About Agricore United Headquartered in Winnipeg, Manitoba, in Canada, Agricore United Limited (TSX: AU) -- http://www.agricoreunited.com/-- is an agri- business with extensive operations and distribution capabilities across western Canada. The Company's operations are diversified into sales of crop inputs and services, grain merchandising, livestock production services and financial services. * * * As reported in the Troubled Company Reporter on Nov. 10, 2006, Moody's Investors Service affirmed all ratings for Agricore United and Agricore United Holdings, but changed the outlook to developing from stable. Moody's also affirmed Agricore's SGL-2 speculative grade liquidity rating. In August 2006, Moody's assigned a Ba3 rating to new senior secured credit facilities for Agricore United and AU Holdings Inc., a Ba2 rating to Agricore United's $525 million senior secured revolving credit, and a Ba3 corporate family rating. Moody's also assigned an SGL-2 speculative grade liquidity rating to Agricore United. The outlook on all ratings is stable. AGRICORE UNITED: Acquires Two Crop Input Retailers in Saskatchewan ------------------------------------------------------------------ Agricore United acquired the key assets of Green Acres Fertilizer Service (Major) Inc., Green Acres Chemical Ltd. and Kerrobert Agro Services Ltd., two full service crop production businesses in western Saskatchewan, effective Dec. 18, 2006. The acquisition will complement Agricore United's existing grain operations at Kindersley, Provost and Wilke, Saskatchewan. Financial terms of the transaction were not disclosed. "Having recently released record year end earnings, Agricore United continues to execute on its commitment to grow for the benefit of Agricore United's stakeholders," says Brian Hayward, Chief Executive Officer, Agricore United. "This acquisition aligns with our strategic intent to enhance Agricore United's grain handling and crop input retail position." Green Acres & Kerrobert offer dry bulk fertilizers, liquid fertilizer, a full line of crop protection products and custom spraying services, a full line of bagged and bulk seed products, and agronomic consulting services. Agricore United will be retaining key staff with strong agronomic backgrounds and experience in grain and agro sales and services. "Green Acres & Kerrobert have been leaders in their marketplace, with a tradition of providing superior customer service and agronomic advice," says Ron Enns, Senior Vice President. "That's a tradition consistent with our own corporate philosophy, as Agricore United continues to deliver on adding value to agricultural production." "We are confident in and excited about the future of agriculture and believe the sale of the crop production businesses to Agricore United will provide Green Acres and Kerrobert Agro customers with a more complete range of services in the future," say the principals of Green Acres and Kerrobert. "We would also like to thank our many customers for their past patronage." About Agricore United Headquartered in Winnipeg, Manitoba, in Canada, Agricore United Limited (TSX: AU) -- http://www.agricoreunited.com/-- is an agri- business with extensive operations and distribution capabilities acrosswestern Canada. The Company's operations are diversified into sales of crop inputs and services, grain merchandising, livestock production services and financial services. * * * As reported in the Troubled Company Reporter on Nov. 10, 2006, Moody's Investors Service affirmed all ratings for Agricore United and Agricore United Holdings, but changed the outlook to developing from stable. Moody's also affirmed Agricore's SGL-2 speculative grade liquidity rating. In August 2006, Moody's assigned a Ba3 rating to new senior secured credit facilities for Agricore United and AU Holdings Inc., a Ba2 rating to Agricore United's $525 million senior secured revolving credit, and a Ba3 corporate family rating. Moody's also assigned an SGL-2 speculative grade liquidity rating to Agricore United. The outlook on all ratings is stable. AIR AMERICA: Court Okays Halperin Battaglia as Panel's Counsel -------------------------------------------------------------- The U.S Bankruptcy Court for the Southern District of New York gave the Official Committee of Unsecured Creditors of Air America Radio, aka Piquant LL, permission to retain Halperin Battaglia LLP as its bankruptcy counsel, nunc pro tunc to Oct. 25, 2006. Halperin Battaglia will: a) advise the Committee with respect to its rights, duties, and powers in the Debtor's case; b) assist the Committee in its consultations with the Debtor relative to the administration of this case; c) assist the Committee in analyzing the claims of the Debtor's creditors and in negotiations with the creditors; d) assist with the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor and the operation of the Debtor's business; e) assist the Committee in its analysis and negotiations with the Debtor or any third party concerning matters related to the realization by creditors of a recovery on claims and other means of realizing value in this case, including, without limitation the proposed debtor-in- possession financing and asset sale; f) review with the Committee whether a plan of reorganization should be filed by the Committee or other third party and, if necessary, draft a plan and disclosure statement; g) assist the Committee with respect to consideration by the Court of any disclosure statement or plan prepared or filed pursuant to Section 1125 or 1121 of the Bankruptcy Code; h) assist and advise the Committee with regard to its communications to the general creditor body regarding the Committee's recommendations on any proposed plan of reorganization or other significant matters in the Debtor's case; i) represent the Committee at all hearings and other proceedings; j) assist the Committee in its analysis of matters relating to the legal rights and obligations of the Debtor in respect of various agreements and applicable laws; k) review and analyze all applications, orders, statements of operations, and schedules filed with the Court and advise the Committee as to its propriety; l) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; and m) perform other legal services as may be required and deemed to be in the interest of the Committee in accordance with its powers and duties as set forth in the Bankruptcy Code. The firm's professionals will charge: Designation Hourly Rate ----------- ----------- Attorneys $395 - $175 Law Clerks $125 - $100 Paraprofessionals $95 - $75 Alan D. Halperin, Esq., a principal at Halperin Battaglia Raicht LLP, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Halperin can be reached at: Alan D. Halperin, Esq. Halperin Battaglia Raicht LLP 555 Madison Avenue-9th Floor New York, NY 10022-3301 Tel: (212) 765-9100 Fax: (212) 765-0964 http://www.halperinlaw.net/ Air America Radio, aka Piquant LLC -- http://www.airamerica.com/- - is a full-service radio network and program syndication service in the United States. The network features discussion and information programs reflecting a liberal, left wing, or progressive point of view. Air America filed a voluntary Chapter 11 petition on Oct. 13, 2006 (Bankr. S.D. N.Y. Case No: 06-12423) Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor. When the Debtor filed for bankruptcy, it disclosed total assets of approximately $4.3 million and total debts of over $20 million. AIR AMERICA: Negotiating Purchase Agreement with Unnamed Buyer -------------------------------------------------------------- Air America Radio has signed a letter of intent with an unnamed buyer and negotiations for a purchase agreement are underway, reports say. Terry Kelly, Air America's former chairman of the board, is part of a group of investors to take over the network. He said a new media partner is the group's potential backer, but he declined to disclose the company, Wisconsin State Journal reported. Air America Radio, aka Piquant LLC -- http://www.airamerica.com/ -- is a full-service radio network and program syndication service in the United States. The network features discussion and information programs reflecting a liberal, left wing, or progressive point of view. Air America filed a voluntary Chapter 11 petition on Oct. 13, 2006 (Bankr. S.D. N.Y. Case No: 06-12423) Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for bankruptcy, it disclosed total assets of approximately $4.3 million and total debts of over $20 million. ALERIS INT'L: S&P Affirms Corporate Credit Rating at B+ ------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' loan and '2' recovery ratings on the senior secured first-lien term loan of Aleris International Inc., after the report that the company increased the term loan by $125 million. With the add-on, the total amount of the facility is now $1.23 billion. The secured loan rating is the same as the 'B+' corporate credit rating on Aleris, and the '2' recovery rating indicates the expectation of substantial recovery of principal in the event of a payment default. The term loan is a part of $2.2 billion in financings being used to fund the purchase of Aleris by Texas Pacific Group. Ratings List: * Aleris International Group -- Corporate Credit Rating at B+/Stable/ -- Senior Secured B+ AMERICAN REPROGRAPHICS: Moody's Holds Corporate Ratings at Ba3 -------------------------------------------------------------- Moody's Investors Service affirmed all of the credit ratings of American Reprographics Company, LLC. Outlook remains positive. Moody's affirmed these ratings: -- $30 million senior secured revolving credit facility, at Ba2, LGD2, 21%; -- $261 million term loan facility due 2009, at Ba2, LGD2, 21%; -- Corporate Family Rating, at Ba3; and, -- PDR, at B1. The affirmation of the ratings at the current levels reflects the company's continued strong cash flow, moderate leverage and sound interest coverage metrics. Other factors that support the ratings include the company's leading market position in the reprographic industry and the utilization of superior technology in the execution of its business model. Factors that continue to put downward pressure on the ratings include the company's sensitivity to the health of the non- residential construction segment, which is highly cyclical, low barriers to entry, pricing pressure in the highly fragmented reprographic services market, and geographic concentration of ARC's business with roughly 50% of revenues generated in the state of California. The positive outlook reflects Moody's expectation that the company will continue to report strong revenue gains from both organic growth and acquisition activity. It is also Moody's belief that gross and EBITDA margins will continue to improve as a result of strong contribution from the facilities management business and by further leveraging of the company's fixed cost base. Moody's anticipates that substantial free cash flows will be utilized primarily for debt reduction and opportunistic acquisitions going forward. The ratings could be upgraded if the company's adjusted free cash flow to adjusted debt improves to 15% or more on a sustained basis. Upward pressure could also result if the company sustains an EBIT to interest coverage ratio of 3.5x or better or an EBITDA to interest coverage ratio of 4.7x or better over several quarters. Conversely, the ratings or outlook could change to negative if there is a significant downturn in the AEC industry, causing a decline in revenues, operating margins and free cash flow generation. The ratings could also come under pressure in the event that the company's adopts a more aggressive financial policy. American Reprographics Company is a leading reprographics service company in the U.S. For the last twelve months ended Sept. 30, 2006 the company generated revenues of roughly $570 million. AMN HEALTHCARE: Good Performance Prompts S&P's Stable Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on AMN Healthcare Inc. to stable from negative. Ratings on the company, including the 'BB-' corporate credit rating, were affirmed. "The outlook change reflects AMN's successful integration of the MHA acquisition, strong operating performance in 2006 with an expectation of continued strength, improving supply trends in its travel nurse staffing segment, and a proven willingness and ability to reduce debt," said Standard & Poor's credit analyst Rivka Gertzulin. The rating on AMN, a subsidiary of AMN Healthcare Services Inc., reflects the company's operating concentration in the highly competitive health care staffing industry, the variable demand for outsourced labor from hospital clients, the variable supply of travel nurses, and the company's debt burden. These concerns are partially mitigated by favorable long-term demand for temporary nurses and doctors, the company's position as an industry leader, its stable and growing business of temporary physician staffing, and the company's proven ability and willingness to reduce its outstanding debt. AMN is a leading provider of travel nurse and allied health staffing, and provides locum tenens and permanent placement services. AMN's revenue mix consists of about 70% travel nurse and allied health staffing, 25% temporary physician staffing, and 5% permanent physician staffing. The company recruits nurses, doctors, and other allied health care professionals, and places them on a temporary basis at health care facilities in all 50 states. More than 90% of AMN's travel nurse assignments are at acute care hospitals. Permanent physician staffing accounts for approximately 5% of revenue, and should remain stable in the near term. As of the third quarter of 2006, the company had health care professionals on assignment at more than 1,500 different health care facilities. Total debt outstanding as of Sept. 30, 2006 was $199 million. AMN has made $37 million of unscheduled principal payments since November 2005. The company has upper single-digit EBITDA margins and EBITDA interest coverage of around 4x. AMN's debt to EBITDA ratio is around 4x. ASARCO LLC: Court Okays Purchase of Equipment From EntreCap ----------------------------------------------------------- The Honorable Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi authorized ASARCO LLC to exercise a fixed option under a lease extension with EntreCap Financial Corporation for the purchase of certain Exchange Trucks. As reported in the Troubled Company Reporter on Nov. 20, 2006, in December 1995, ASARCO and EntreCap, formerly known as Pitney Bowes Credit Corporation, entered into an equipment lease agreement. The Equipment Lease provided for the lease of five haul trucks and one electric shovel. In December 2003, EntreCap agreed to exchange two trucks under the Original Lease that were located at the Mission Mine for two similar trucks located at the Ray Mine. The parties also agreed that the lease term for the Exchange Trucks would be extended from Dec. 8, 2005, to Dec. 8, 2006. ASARCO assumed the Lease Agreement, including both the Original Lease and the Lease Extension, on Dec. 30, 2005. The Lease Extension includes a fixed purchase option that must be exercised by Dec. 8, 2006. James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas, contends that the Exchange Trucks, which are being utilized at the Ray mine, are indispensable to the successful operation of ASARCO's mine. In light of the low fixed price to purchase the Exchange Trucks in comparison with the fair market value for similar trucks, ASARCO has decided that it is in its best financial interest to purchase the Exchange Trucks now. To cure its defaults under the Lease, ASARCO will pay Entrecap: -- $25,445 as other fees due under the Lease, -- $59,665 as rent for last quarter, and -- $320,000 as purchase price for the two Exchange Trucks. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection 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 Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled 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 has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). (ASARCO Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Court Issues Preliminary Injunction on Mineral Park --------------------------------------------------------------- ASARCO LLC has alleged that the Mission South Mill was fraudulently transferred to Mineral Park Inc. and has sought to avoid that transfer. The Honorable Richard Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi finds that ASARCO has established a substantial likelihood of success on the merits. The preliminary evidence suggests that the transaction was an improvident sale, without advisors and not in the normal course of business, the Court points out. In support of its finding, Judge Schmidt notes that: -- ASARCO sold the South Mill approximately three weeks before it filed for bankruptcy in August 2005, and the sale was conducted without an appropriate valuation and sale process at a time when ASARCO was experiencing a liquidity crisis; -- ASARCO used a broker's commission listing to select the price and conducted no appraisal of the value of the South Mill prior to the sale; -- ASARCO did not use a professional advisor to market the South Mill as it had done previously with other similar assets; and -- ASARCO did not re-evaluate its decision in light of a drastically changed marketplace for copper from initial marketing to final sale. Judge Schmidt finds that, based on the preliminary evidence, ASARCO's bankruptcy estate did not receive reasonably equivalent value in the sale of the South Mill. The Court states that a determination of reasonably equivalent value under Section 548(a)(1)(B)(i) of the Bankruptcy Code requires that the South Mill be valued from the perspective of ASARCO's bankruptcy estate at the time of the transfer. "ASARCO presented the most credible expert testimony regarding valuation," Judge Schmidt notes. "It is undisputed that the South Mill was operable at the time of the sale and Mineral Park bought it in order to operate it as a mill and not as parts." The Court holds that based on the testimony presented, including that of Mineral Park's valuation experts, it is uncontroverted that as a going concern, the South Mill was worth far more than the sale price of $6,000,000 at the time of the sale in July 2005. "[Moreover,] ASARCO's insolvency at the time of the sale is essentially undisputed," Judge Schmidt adds. There is a substantial threat that ASARCO's bankruptcy estate will suffer irreparable injury if the injunctive relief requested is not granted, the Court holds. "It is uncontroverted that it would cost millions of dollars more to dismantle and move the mill during the pendency of the case than to maintain it in its current mothballed state." In contrast, Mineral Park failed to provide evidence quantifying any harm that may result to it from a preliminary injunction, Judge Schmidt opines. Mineral Park also failed to identify how the public interest would be harmed by the preliminary injunction, Judge Schmidt adds. Thus, Judge Schmidt grants ASARCO's request and issues a preliminary injunction against Mineral Park. Mineral Park is preliminarily enjoined from: (a) transferring, assigning, selling, secreting, hypothecating, mortgaging, encumbering or otherwise disposing the South Mill and any related assets; and (b) dismantling or moving any of the South Mill from ASARCO's property. Mineral Park Wants to File Appeal An immediate appeal is necessary to review the Bankruptcy Court's decision to enjoin relocation of an asset whole sale the parties negotiated in good faith at arm's length for fair market value, Darrell L. Barger, Esq., at Hartline, Dacus, Barger, Dreyer & Kern, in Corpus Christi, Texas, says. Accordingly, Mineral Park seeks leave to appeal the Bankruptcy Court Order granting preliminary injunction. Mr. Barger asserts that the Court disregarded fair market value and applied a going concern valuation to a mothballed mill to determine reasonably equivalent value. The Court also imported the "going concern" concept to a discrete and surplus component of the Mission Mine -- a plant that had been mothballed with no plans for re-use and was treated "as a building, with used equipment." Mr. Barger notes that going concern "indicates the market value of an ongoing business as a whole," rather than "market values attributable to an entity's various assets" on a piecemeal basis. Mr. Barger contends that the Court also disregarded fair market value in favor of ASARCO's calculations of incremental cash flow that hypothetically could be generated by the South Mill, even though it was undisputed that the mill was a non-operating asset that generated no income and was not expected to generate any future income. The income approach to valuation "is appropriate when property would, in the open market, be priced according to the income that it already generates," and a valuation would measure the property's known ability to produce income "in its current state." The Order deprives Mineral Park of its right to finish moving, install, and use its mill while market conditions are favorable, Mr. Barger says. ASARCO Talks Back James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas, points out that the Court's imposition of a preliminary injunction to protect the South Mill from destruction in advance of trial was compelled by the law and the evidence, and is not subject to appellate review under Section 158(a) of the Judicial Procedures Code. Mr. Prince maintains that the evidence presented by both parties to the Court established a substantial likelihood of ASARCO's success on the merits. The balance of harm weighs heavily in ASARCO's favor for it stands to lose $40,000,000 to $50,000,000 in the absence of a preliminary injunction, while Mineral Park will suffer no quantifiable harm from a three-month delay in dismantling the South Mill. Mr. Prince contends that consideration of Mineral Park's appeal will impose unnecessary burden and expense on the parties, and will do nothing to advance the ultimate termination of the litigation. Thus, ASARCO asks the Court to deny Mineral Park's request for leave to appeal. About ASARCO LLC Tucson, Ariz.-based ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection 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 Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services and investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled 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 has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). (ASARCO Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). BANCAFE INTERNATIONAL: Chapter 15 Petition Summary -------------------------------------------------- Petitioner: PriceWaterhouseCoopers EC, Inc. Attn: Marcus A. Wide, Authorized Officer The Financial Services Centre Bishop's Court Hill St. Michael, Barbados BB14004 Debtor: Bancafe International Bank, Ltd. P.O. Box 111 Bridgetown, Barbados Case No.: 06-16712 Type of Business: The Debtor offers financial services. Chapter 15 Petition Date: December 19, 2006 Court: Southern District of Florida (Miami) Judge: Robert A. Mark Petitioner's Counsel: Gregory S. Grossman, Esq. Astigarraga Davis Mullins & Grossman, P.A. 701 Brickell Avenue, 16 Floor Miami, FL 33131 Tel: (305) 372-8282 Fax: (305) 372-8202 Estimated Assets: $1 Million to $10 Million Estimated Debts: More than $100 Million BARRAMUNDI CDO: Moody's Rates $19.2-Mil. Class E Notes at Ba3 ------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Barramundi CDO I Ltd.: -- Aaa to $540,400,000 Class A-1 Senior Secured Floating Rate Notes Due December 2051; -- Aaa to $56,000,000 Class A-2 Senior Secured Floating Rate Notes Due December 2051; -- Aa2 to $76,000,000 Class B Senior Secured Floating Rate Notes Due December 2051; -- A2 to $48,000,000 Class C Secured Deferrable Interest Floating Rate Notes Due December 2051; -- Baa3 to $38,400,000 Class D Secured Deferrable Interest Floating Rate Notes Due December 2051 and -- Ba3 to $19,200,000 Class E Secured Deferrable Interest Floating Rate Notes Due December 2051. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Cash ABS Securities and Synthetic Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. C-BASS Investment Management LLC is the collateral manager. BEAR STEARNS: Fitch Rates $2.3-Million Class B Certificates at BB ----------------------------------------------------------------- Fitch rates Bear Stearns Small Balance Commercial Mortgage Loan Trust, commercial mortgage pass-through certificates, as: -- $87,111,000 class A-IO and A 'AAA'; -- $5,897,000 class M-1 'AA'; -- $3,619,000 class M-2 'A'; -- $6,165,000 class M-3 'BBB'; -- $1,581,000 class M-4 'BBB-'; and -- $2,305,000 class B 'BB'. The 'AAA' rating on the senior securities reflects the 18.75% initial subordination provided by the 5.50% class M-1, the 3.38% class M-2, the 5.75% class M-3, the 1.48% class M-4, the 2.15% class B, and initial overcollateralization of 0.5%. The ratings on the certificates reflect the quality of the underlying collateral and Fitch's level of confidence in the integrity of the legal and financial structure of the transaction. In addition, the ratings reflect the capabilities of Wells Fargo Bank, National Association as servicer and U.S. Bank National Association as trustee. The mortgage pool consists of adjustable-rate mortgage loans secured by senior liens on commercial, multifamily, and mixed-use properties with an aggregate principal balance of $107,213,764.05. As of the cut-off date of Nov. 5, 2006, the mortgage loans had a weighted average combined loan-to-value ratio of 78.03%, weighted average coupon of 9.560%, weighted average remaining term of 287 months and an average principal balance of $1,468,681.70. Property types include hotels and motels, among others with concentrations under 10%. The three largest state concentrations are Florida, California, and Georgia. Distributions of principal and interest will be made on the 25th day of each month commencing in December 2006. Interest will be distributed to all classes sequentially. Principal distributions will be made sequentially. The mortgage loans were originated by Community South Bank which was formed in the state of Tennessee. CSB's Small Business Lending Division was formed in July of 2003 for the purpose of originating and selling small balance commercial mortgage loans. All classes are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 73 floating-rate loans having an aggregate principal balance of approximately $107,213,764, as of the cutoff date. BEAZER HOMES: Moody's Revises Outlook to Negative from Stable ------------------------------------------------------------- Moody's Investors Service affirmed Beazer Homes USA, Inc.'s Ba1 corporate family rating and Ba1 ratings on the company's senior notes. The ratings outlook was changed to negative from stable. The negative ratings outlook is based on: -- Moody's expectation that headroom under the company's interest coverage covenant will narrow significantly in fiscal 2007; -- that other earnings-based metrics will continue to weaken, possibly slipping into low-Ba territory; and, -- that even though cash flow is expected to turn positive in fiscal 2007, this expectation is based in part on a large volume of cancelled homes being moved out of inventory and on the currently high cancellation rates being reduced considerably. The ratings take into consideration Beazer's solid market share positions in its major markets, anticipated positive cash flow generation in fiscal 2007, and geographic diversification. Simultaneously, the ratings consider Beazer's below-peer-group- average margins and returns, the decision to shrink operations and potentially devote excess cash flow to share repurchases, tightness under the company's interest coverage covenant, and the cyclical nature of the homebuilding industry. The outlook could stabilize if the company becomes strongly free cash flow positive, maintains headroom in the interest coverage covenant in its bank credit facility, and reduces debt leverage below 50%. Factors that could stress the outlook and ratings will include Beazer's experiencing considerable tightness under the interest coverage covenant or re-leveraging the balance sheet to above 55% for acquisitions, share repurchases, or because of major impairment or product liability charges. These ratings for Beazer were affirmed: -- Corporate family rating, affirmed at Ba1; -- Probability of Default Rating affirmed at Ba1; and, -- Senior notes ratings, affirmed at Ba1. Headquartered in Atlanta, Georgia, Beazer Homes USA, Inc. is one of the country's ten largest single-family homebuilders with operations in 22 states. Revenues and net income for the fiscal year ended Sept. 30, 2006 were $5.3 billion and $389 million, respectively. BOULDER SPECIALTY: S&P Places Corporate Credit Rating at B- ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Cresskill, New Jersey-based Boulder Specialty Brands Inc. At the same time, Standard & Poor's assigned its 'B-' bank loan and '2' recovery ratings to the proposed $140 million senior secured, first-lien credit facility and its 'CCC' bank loan and '5' recovery ratings to the proposed $40 million senior secured, second-lien term loan. Net proceeds from the bank loans, along with $138.5 million of preferred stock, $107.5 million of common equity and $100 million cash on hand, will be used to finance the purchase of GFA Brands. "The borrower, GFA Holdings Inc, marketer of Smart Balance and Earth Balance margarine and other foods, will be acquired by Boulder Specialty Brands, a publicly traded special purpose acquisition company," said Standard & Poor's credit analyst Alison Sullivan. After the close of the transaction, Boulder will change its name to Smart Balance Inc. and file an application for a listing on the NASDAQ exchange. The ratings are based on preliminary terms and are subject to review upon receipt of final documentation. The outlook is stable. Pro forma for the transaction, Boulder will have about $160 million in total debt outstanding. The ratings reflect the company's leveraged capital structure, narrow product focus and sales concentration, small size relative to financially stronger competitors, and customer concentration. BUFFALO COAL: U.S. Trustee Wants Barton's Case Converted to Ch. 7 ----------------------------------------------------------------- W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, asks the U.S. Bankruptcy Court for the Northern District of West Virginia to convert Barton Mining Company Inc.'s Chapter 11 case to a Chapter 7 liquidation proceeding. Barton's case is consolidated with two other related Chapter 11 cases: Buffalo Coal Company, Inc., and United Energy Coal, Inc. The U.S. Trustee says a conversion to Chapter 7 and the appointment of a Chapter 7 Trustee is necessary for the review of the $10.4 million prepetition sale of Barton's assets to Vindex Energy Corporation and subsequent disbursement of the sale proceeds. Barton's officers, Charles Howdershelt and Gerald Ramsburg, had testified during the first meeting of creditors that the sale proceeds were used to pay for the reclamation claims against Barton and the two other affiliated debtors, including $803,079.23 disbursed to the officers as a "draw". Mr. McDow has raised concerns over the appropriateness of the disbursements and the draw to the officers in light of Barton's financial condition at the time of the sale. The U.S. Trustee says there is a question as to whether Barton was liquid at the time of the disbursement of the sale proceeds, despite assurances from Barton's officers that the Debtor was liquid at that point. The Court will convene a hearing at 11:00 a.m., on Jan. 26, 2007, to consider the U.S. Trustee's request for case conversion. Headquartered in Oakland, Maryland, Buffalo Coal Company, Inc., is engaged in coal mining and processing services. The company filed for chapter 11 protection on May 5, 2006 (Bankr. N.D. W.Va. Case No. 06-00366). David A Hoyer, Esq., at Hoyer, Hoyer & Smith, PLLC, represents the Debtor in its restructuring efforts. Thorp Reed and Armstrong, LLP, represents Buffalo Coal's Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $119,323,183 and total debts of $105,887,321. Barton Mining Company Inc., Buffalo Coal's affiliate originally filed under chapter 7 on July 24, 2006, and was converted to a case under chapter 11 on Aug. 8, 2006 (Bankr. N.D. W.V. Case No. 06-00625). James R. Christie, Esq., at Clarksburg, West Virginia, represents Barton Mining. CALPINE CORP: Fund Advises Unitholders on Harbinger's Offer ----------------------------------------------------------- The Trustees of Calpine Power Income Fund advised unitholders not to take any action until further notice with respect to the announcement made by Harbinger Capital Partners on Dec. 19, 2006, that it intends to make an unsolicited offer for the Fund. "The Board of Trustees will carefully consider any offer by Harbinger, if and when it is made, and will make a recommendation to unitholders in due course," Robert Hodgins, Chairman of the Board of Trustees of the Fund, said. "As a major creditor in San Jose-based Calpine Corporation's insolvency proceedings, Harbinger has a deep understanding of the substantial unrealized value within the Fund and its various claims against Calpine Corporation and its subsidiaries. As trustees for the Fund, we are working to maximize that value for the benefit of our unitholders by, among other things, exploring alternative potential value-maximizing transactions." Mr. Hodgins added, "The Fund's strong performance over the past year positions us well as we go into this process." Since Dec. 22, 2005, the day after Calpine Corporation commenced its voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code, the Fund has maintained its monthly distributions and its units have increased in value by 45.7%, as of the close of market on Dec. 19, 2006. The Fund advises unitholders to not deposit any units to the Harbinger offer, if and when it commences, and to not take any other action concerning the offer until unitholders have received further communications from the Board of Trustees. After the commencement of the offer, the Fund will issue a Directors' Circular that will contain important information for unitholders, including the Board's recommendation regarding the offer. As part of its ongoing program to protect and build unitholder value, the Fund has been working closely with BMO Capital Markets as its financial advisor, and Blake, Cassels and Graydon LLP, as its legal advisor over the past year. Each firm will continue to assist the Fund with respect to the response to any offer and in the consideration by the Board of Trustees of alternative potential transactions. Pursuant to the authority delegated to them by the Fund Delegation Agreement dated Aug. 29, 2002, among Calpine Commercial Trust, the Fund and Computershare Trust Company of Canada, the CCT Board of Trustees has the authority and duty to act on behalf of the Fund undertaking all matters in connection with any take-over bid, business combination or other related matter. Each and all of the five members of the Board of Trustees is independent of the Fund's Manager and is independent of Calpine Corp. Headquartered in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company previously produced a portion of its fuel consumption requirements from its own natural gas reserves. However, in July 2005, the company sold substantially all of its remaining domestic oil and gas assets to Rosetta Resources Inc. The company filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Dec. 19, 2005, the Debtors listed $26,628,755,663 in total assets and $22,535,577,121 in total liabilities. CAPITAL GUARDIAN: Fitch Junks Rating on $12.9-Mil. Class C Notes ---------------------------------------------------------------- Fitch downgrades two and affirms three classes of notes issued by Capital Guardian ABS CDO I, Ltd. These rating actions are effective immediately: -- $18,421,728 class A-1A notes affirmed at 'AAA'; -- $50,241,076 class A-1B notes affirmed at 'AAA'; -- $16,512,567 class A-1C notes affirmed at 'AAA'; -- $70,000,000 class B notes downgraded to 'B' from 'BBB' and assigned a Distressed Recovery rating of 'DR2'; and -- $12,971,063 class C notes downgraded to 'C/DR6' from 'CC/DR5'. Capital Guardian is a collateralized debt obligation that closed Feb. 28, 2002 and is managed by Capital Guardian Trust Company. Capital Guardian's portfolio is composed of residential mortgage- backed securities, commercial mortgage-backed securities, asset- backed securities , CDOs, and corporate debt. Included in this review, Fitch discussed the current state of the portfolio with the asset manager and their portfolio management strategy going forward. In addition, Fitch conducted cash flow modeling utilizing various default timing and interest rate scenarios to measure the breakeven default rates going forward relative to the minimum cumulative default rates required for the rated liabilities. Since Fitch's last rating action in December 2005, the transaction has suffered from severe collateral deterioration in addition to significant par loss after the sale of a defaulted asset. Roughly 18.1% of the assets are rated below 'B-', up from 13.9% at the last review. There are several RMBS securities which have been downgraded within the past year and are now expected to suffer some principal losses. Exposures to manufactured housing bonds and aircraft-related ABS securities have also impaired the transaction. An aircraft lease securitization with a par value of roughly $7.1 million was sold in May for just 2% of its par value, or about $140,000. The magnitude of this realized loss was greater than previously projected by the asset manager. Similarly, another $7.2 million aircraft lease securitization currently contained in the portfolio is expected to have minimal principal recoveries. All coverage tests, which include the class A/B and class C overcollateralization and interest coverage tests, are failing as of the latest trustee report dated Nov. 30, 2006. The reported class A/B OC ratio is 101.7% versus a minimum trigger of 104%, while the class C OC ratio is 93.9% versus a trigger of 101.5%. Typically speaking, an OC ratio of over 100% implies that there is sufficient collateral outstanding to fully cover the related liabilities. However, in this case the calculation of the ratio includes a large portion of assets which are distressed and expected to receive reduced or no principal, including the aforementioned aircraft lease securitization, several RMBS assets, and three manufactured housing bonds. While the OC test does take into account some potential losses on the lower-rated collateral, it underestimates the severity of losses likely to occur. Based on the adjustments to the par values of certain underlying assets, Fitch views the class B notes as being undercollateralized at present. As a result of the collateral deterioration, the realized losses and the expected losses in the portfolio, it is projected that the class B notes will likely suffer some principal loss. The class C interest payments have been paying-in-kind since April 2005 and are likely cut off from any future principal receipts. There remains a slight chance for minimal future interest payments, but only under a benign credit scenario along with better-than- expected recoveries on the distressed assets. The ratings of the class A-1A, A-1B, A-1C, and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The rating of the class C notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. Fitch will continue to monitor and review this transaction for future rating adjustments. CITIZENS COMMS: S&P Rates $400-Mil. Senior Unsecured Notes at BB+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB+' rating to $400 million of 7.875% senior unsecured notes due 2027 issued by Stamford, Connecticut-based Citizens Communications Co. The notes were issued under Rule 144A with registration rights. Standard & Poor's also affirmed all ratings on Citizens, including the 'BB+' corporate credit rating. The outlook remains negative. Pro forma for the acquisition of Commonwealth Telephone Enterprises Inc. total debt is approximately $4.9 billion. Proceeds of the new issue will be used to finance, in part, the Commonwealth acquisition, which was announced on Sept. 18, 2006, and is valued at $1.2 billion, including the assumption of roughly $228 million of Commonwealth net debt. The new issue will also reduce the size of the original $990 million senior unsecured bridge loan. If the Commonwealth transaction were to not close, the new issue proceeds would be used to retire a portion of the Citizen's outstanding debt. "The ratings on Citizens reflect a shareholder-oriented financial policy, a heightened business risk profile resulting from rising competition from cable telephony and wireless substitution, integration risk from the acquisition of Commonwealth, and longer- term risk to regulatory support," said Standard & Poor's credit analyst Allyn Arden. Citizens also lacks a facilities-based video strategy to help combat the triple play bundle offered by some cable operators. Tempering factors include Citizens' status as a well-positioned incumbent local exchange carrier with relatively stable and high margins, primarily in less-competitive, rural areas; growth in high-speed data services; and healthy discretionary cash flow generation. CITIZENS COMMS: Fitch Assigns BB Rating on New $250MM Sr. Notes --------------------------------------------------------------- Fitch Ratings assigned a 'BB' rating to Citizens Communications Company's proposed private placement of $250 million senior unsecured notes due 2027. Citizens intends to use the notes to finance, in part, the acquisition of Commonwealth Telephone Enterprises, Inc. in 2007. If the acquisition is not completed, the proceeds will be used to retire outstanding debt. Citizens' issuer default rating rating is 'BB' as are the ratings of its existing senior unsecured credit facilities and its senior unsecured debt. The Rating Outlook is Stable. Citizens 'BB' rating reflects the relatively stable financial performance of its telecommunications business, which stems from its primarily rural operations. Offsetting factors include the continuing pressure of competition, the slight levering effect of the proposed acquisition of Commonwealth and the company's higher payout of free cash flow in the form of dividends. Citizens reported an agreement to acquire Commonwealth on Sept. 18, 2006. The total value of the transaction is approximately $1.3 billion, including $335 million for the retirement of Commonwealth's debt. The transaction is expected to be financed with approximately 75% cash and 25% equity. Fitch anticipates that Citizen's gross debt-to-EBITDA will rise to approximately 3.7x in 2007 from 3.5x for the trailing 12 months ending Sept. 30, 2006. To finance the transaction, Citizens obtained a $990 million bridge credit facility, and will term out the financing in the public markets. The bridge credit facility commitment will be reduced by the proposed $250 million of 2027 notes. The company expects to obtain approximately $30 million in annual synergies, and will incur approximately $35 million in integration costs. The transaction is expected to be completed in 2007 after the customary regulatory approvals and the Commonwealth shareholder vote. Fitch's believes Citizens proposed acquisition of Commonwealth will be slightly levering for Citizens upon its close, but within the range of the current 'BB' rating category. Moreover, an anticipated dividend payout in the low 60% range is expected to continue to provide Citizens with good financial flexibility. The company's guidance calls for pre-dividend cash flow in the range of $500 million to $525 million in 2006. Liquidity is good with an undrawn, $250 million senior unsecured credit facility in place until October 2009. In addition to the $150 million in cash resulting from a draw on a new term-loan facility in the fourth quarter of 2006 that will be used to retire other debt, the company had $417 million in cash at Sept. 30, 2006. Following a debt-for-debt exchange in the fourth quarter of 2006 of approximately $150 million of 9.0% senior notes due 2031 for $157 million of 7.625% senior notes due 2008, Citizens has approximately $496 million in maturing debt in 2008. In connection with its proposed acquisition of Commonwealth, the company halted its $300 million stock repurchase program, having repurchased $135 million through Sept. 30, 2006, and expects to complete the remaining amount on the stock repurchase program in 2007 following the close of the acquisition. Citizens expects to complete its previously announced $150 million debt reduction in conjunction with the financing of the transaction. In the intermediate term, there is some uncertainty regarding revenues and cash flows due to potential longer-term reforms of the universal service fund program and the intercarrier compensation structure. Policymakers are generally supportive of rural carriers but the outcome of reforms is uncertain. COMPUTER SCIENCES: Seeks Waiver of Default on $200 Million Notes ---------------------------------------------------------------- Computer Sciences Corp. is soliciting consents from the holders of its $200 million aggregate outstanding principal amount of its 6-1/4% Notes due 2009 for a one-time waiver, to be effective through March 9, 2007, of any default or event of default under the reporting requirements in the indentures governing the Notes. The company disclosed that it received, on Dec. 8, 2006, notices of default from Citibank N.A., acting as trustee, with respect to its default under the reporting provision, and also as the trustee under the indentures that govern the company's three other outstanding series of notes with respect to default under the reporting requirements in the indentures. The approval of the proposed waiver would extend the existing 30-day cure period in the indenture by 60 days with respect to the reporting provision, which is consistent with the cure period for the reporting requirements under the indentures that govern its three other outstanding series of notes and similar to the cure period provided in the waiver of default granted on Nov. 17, 2006, by the company's lenders under its $1 billion credit agreement for failure to comply with the reporting covenant in the credit agreement. CSC is offering an initial consent fee of a $1.25 in cash for each $1,000 in principal amount of the Notes to all holders of record on Dec. 11, 2006, who properly execute and deliver a letter of consent on or prior to Dec. 21, 2006. If the company has not filed its Quarterly Report with the SEC on or before 5:30 p.m., New York City time, on Jan. 5, 2007, it will pay to each consenting holder an additional $1.25 in cash for each $1,000 in principal amount of Notes. The proposed waiver will become effective promptly after receiving valid and unrevoked consents from holders representing a majority of the outstanding aggregate principal amount of the Notes. The consent solicitation will expire at 5:00 p.m., New York City time, on Dec. 21, 2006. Holders may submit their Letters of Consent to the Tabulation Agent at any time on or prior to the expiration date. Holders may revoke their consents prior to the effectiveness of the proposed waiver. Global Bondholder Services Corporation has been retained to serve as its Tabulation Agent for the consent solicitation. Requests for documents should be directed to Global Bondholder Services at (866) 470-3800 or (212) 430-3774. Merrill Lynch & Co. was also retained as solicitation agent for the consent solicitation. Questions regarding the terms of the consent solicitation should be directed to the Solicitation Agent at (888) 654-8637 or (212) 449-4914 (collect). Headquartered in El Segundo, Calif., Computer Sciences Corporation (NYSE: CSC) -- http://www.csc.com/-- is an information technology services company. The company's services include systems design and integration; IT and business process outsourcing; applications software development; Web and application hosting; and management consulting. CONSPIRACY ENT: Sept. 30 Balance Sheet Upside-Down by $3 Million ---------------------------------------------------------------- Conspiracy Entertainment Holdings Inc. posted a $174,134 net loss on $272,500 of net revenues for the three months ended Sept. 30, 2006, compared with $55,257 of net income on $110,850 of net revenues for the same period in 2005. The company's balance sheet at Sept. 30, 2006, showed $1.2 million in total assets and $4.3 million in total liabilities, resulting in a $3 million stockholders' deficit. As of Sept. 30, 2006, the company's balance sheet also showed strained liquidity with $460,999 in total current assets available to pay $4.3 million in total current liabilities. A full-text copy of the company's third quarter financials is available for free at http://researcharchives.com/t/s?1768 Going Concern Doubt As reported in the Troubled Company Reporter on June 5, 2006, Chisholm, Bierwolf & Nilson, LLC, in Bountiful, Utah, raised substantial doubt about Conspiracy Entertainment Holdings, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the Company's recurring operating losses and lack of working capital. About Conspiracy Entertainment Conspiracy Entertainment Holdings, Inc., develops, publish, and markets interactive video games software. The company also publishes titles for hardware platforms like Sony's PlayStation, Nintendo 64 and Nintendo's Game Boy Color and Game Boy Advance. CWALT INC: Moody's Places Low-B Ratings on Two Certificate Classes ------------------------------------------------------------------ Moody's Investors Service assigned Aaa and Aa1 ratings to the senior certificates issued by Alternative Loan Trust 2006-39CB and ratings ranging from Aa2 to Ba2 to the subordinate certificates in the deal. The securitization is backed by Countrywide Home Loans Inc fixed- rate, Alt-A mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination. Moody's expects collateral losses to range from 0.6% to 0.8%. Countrywide Home Loans Servicing LP will act as master servicer. These are the rating actions: * CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-39CB -- Class 1-A-1, Assigned Aaa -- Class 1-A-2, Assigned Aaa -- Class 1-A-3, Assigned Aaa -- Class 1-A-4, Assigned Aaa -- Class 1-A-5, Assigned Aaa -- Class 1-A-6, Assigned Aaa -- Class 1-A-7, Assigned Aaa -- Class 1-A-8, Assigned Aaa -- Class 1-A-9, Assigned Aaa -- Class 1-A-10, Assigned Aaa -- Class 1-A-11, Assigned Aaa -- Class 1-A-12, Assigned Aaa -- Class 1-A-13, Assigned Aaa -- Class 1-A-14, Assigned Aaa -- Class 1-A-15, Assigned Aaa -- Class 1-A-16, Assigned Aaa -- Class 1-A-17, Assigned Aaa -- Class 1-A-18, Assigned Aaa -- Class 1-A-19, Assigned Aa1 -- Class 1-A-20, Assigned Aaa -- Class 2-A-1, Assigned Aaa -- Class 2-A-2, Assigned Aaa -- Class 2-A-3, Assigned Aaa -- Class 2-A-4, Assigned Aaa -- Class 2-A-5, Assigned Aa1 -- Class 2-X, Assigned Aaa -- Class 1-X, Assigned Aaa -- Class A-R, Assigned Aaa -- Class PO, Assigned Aaa -- Class M-1, Assigned Aa2 -- Class M-2, Assigned Aa3 -- Class M-3, Assigned A2 -- Class M-4, Assigned A3 -- Class M-5, Assigned Baa1 -- Class M-6, Assigned Baa2 -- Class M-7, Assigned Baa3 -- Class B-1, Assigned Ba1 -- Class B-2, Assigned Ba2 DELTA AIR: Plan Filing Decision Wins Committee's Support -------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Delta Air Lines Inc. and its debtor affiliates' Chapter 11 cases supported Delta's decision to file its proposed Plan of Reorganization and accompanying Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York on Dec. 20, 2006. A number of issues, including those left open in the Plan of Reorganization, will be the focus of continuing discussions between the Committee and Delta over the coming weeks. At the same time, the Committee will continue to consider potential alternatives in order to maximize the ultimate recoveries for the unsecured creditors in the Delta bankruptcy. Headquartered in Atlanta, Georgia, Delta Air Lines (OTC: DALRQ) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. DELTA AIR: Classification and Treatment of Claims Under Plan ------------------------------------------------------------ Delta Air Lines, Inc., and its debtor-affiliates filed a standalone Plan and a related Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York and intends to emerge from Chapter 11 in the spring of 2007, related the Troubled Company Reporter on Dec. 20, 2006. The Debtors' Plan of Reorganization is premised upon the limited and separate consolidation of: (i) the estates of the Delta Debtors, which comprise: -- ASA Holdings, Inc., -- Crown Rooms, Inc., -- DAL Aircraft Trading, Inc., -- DAL Global Services, LLC, -- DAL Moscow, Inc., -- Delta Air Lines, Inc., -- Delta Benefits Management, Inc., -- Delta Corporate Identity, Inc., -- Delta Loyalty Management Services, LLC, -- Delta Technology, LLC, -- Delta Ventures III, LLC, -- Epsilon Trading, LLC, -- Kappa Capital Management, Inc., and -- Song, LLC (ii) the estates of the Comair Debtors, which consist of: -- Comair, Inc., -- Comair Holdings, LLC, -- Comair Services, Inc., -- Delta AirElite Business Jets, Inc., and -- Delta Connection Academy, Inc. Each consolidation will be effected solely for purposes of actions associated with the confirmation of the Plan and the occurrence of the Effective Date, including voting, confirmation and distribution. If one or more Delta Debtors and one or more Comair Debtors are obligated for a given Claim, the holder thereof will be deemed to have one Claim against the Delta Debtors and one Claim against the Comair Debtors for purposes of Confirmation and distributions. The Debtors note that if the Court does not approve one or both Plan Consolidations: (a) the Claims against the relevant Debtors will be treated as separate Claims with respect to the relevant Debtor's estate for all purposes, and will be administered as provided in the applicable Plan Consolidation; and (b) the Debtors will not, or will they be required to, re-solicit votes with respect to the Plan or any applicable Plan Consolidation. The votes will be counted as a vote in a single, respective, separate Class with respect to the appropriate Plan Consolidation. Consistent with the requirements of the Bankruptcy Code, Delta's Plan of Reorganization generally provides for holders of Allowed Administrative Claims to receive cash in an amount equal to those Claims. Allowed Priority Tax Claims will be paid: (a) a single Cash distribution equal to that Claim; (b) equal Cash payments on the fifth and the sixth anniversary of the date of assessment in an aggregate amount equal to that Claim, together with interest compounded semi-annually from the Effective Date on any outstanding balance calculated at a rate equal to the yield published in The Wall Street Journal, Eastern Edition on the Effective Date for a United States Treasury note with a maturity closest to five years; or (c) other recovery as may be determined by the Court to provide the claimholder deferred Cash payments having a value, as of the Effective Date, equal to that Claim. The classification and treatment of other claims against the Delta Debtors under the Plan of Reorganization are summarized as: Class Description Recovery Claim Treatment ----- ----------- -------- --------------- 1 Other Priority 100% Payment in full in Cash, or other Claims treatment that will render the Claim unimpaired. Unimpaired. Deemed to accept. 2 Secured 100% (a) Payment in full in Cash; Aircraft (b) Reinstatement of the legal, Claims equitable and contractual rights of the claimholder; (c) payment of the proceeds of the sale or disposition of the Collateral securing the Claim to the extent of the value of the holder's secured interest in the Collateral; (d) return of Collateral securing the Claim; or (e) other treatment rendering the Claim unimpaired. Unimpaired. Deemed to accept. 3 Other Secured 100% (a) Payment in full in Cash; Claims (b) Reinstatement of the legal, equitable and contractual rights of the claimholder; (c) payment of the proceeds of the sale or disposition of the Collateral securing the Claim to the extent of the value of the holder's secured interest in the Collateral; (d) return of Collateral securing the Claim; or (e) other treatment rendering the Claim unimpaired. Unimpaired. Deemed to accept. 4 General 63%-80% New Delta Common Stock equal to Unsecured pro rata share of Delta Unsecured Claims Allocation. Opportunity to participate in New Equity Investment Rights Offering. Impaired. Entitled to vote. 5 Non- 63%-80% (a) New Delta Common Stock equal Convenience to pro rate share of Delta Class Retiree Unsecured Allocation; or Claims (b) if elected on Ballot, Cash proceeds from sale of pro rata share of Delta Unsecured Allocation. Impaired. Entitled to vote. 6 Convenience 63%-80% Cash determined with reference to Class Claims the midpoint of the range of recovery estimates for General Unsecured Claims against the Delta Debtors. Impaired. Entitled to vote. 7a Interests 0% No distribution. in Delta Impaired. Deemed to reject. 7b Interests Retained Reinstatement of Interests. in the Delta Unimpaired. Deemed to accept. Subsidiary Debtors 8 Securities 0% No distribution. Litigation Impaired. Deemed to reject. Claims The projected recovery range for Delta Classes 4, 5 and 6 is based on: (i) a consolidated valuation of the Delta Debtors together with the Comair Debtors; and (ii) estimated total Allowed Unsecured Claims of $15,000,000,000 against the Delta Debtors and Comair Debtors. According to the Debtors, Delta Classes 4, 5 and 6's recovery range is subject to change based, inter alia, on: (a) the fact that actual recoveries to holders of Unsecured Claims will be based on separate valuations of the Comair Debtors and the Delta Debtors, and separate estimates of Allowed Claims against each; (b) the possible dilutive effects of the Compensation Programs; and (c) further refinements to the estimates of total Allowed Claims as the Debtors Claims reconciliation and objection process continues. The Debtors define "Non-Convenience Class Retiree Claim" as a Claim against Delta in an amount greater than $2,000 but less than or equal to $100,000 arising from: -- the modification of retiree health or welfare benefits as reflected in a Retiree Term Sheet; or -- the termination of any non-qualified defined benefit pension plan of the Debtors. A "Convenience Class Claim" is a Claim, other than a Claim based on an Old Note, against any of the Debtors that would otherwise be a General Unsecured Claim, and is greater than $0 and less than or equal to $2,000 in Allowed amount. A General Unsecured Claim or a Non-Convenience Class Retiree Claim originally Allowed in an amount in excess of $2,000 may not be sub-divided into multiple Claims of $2,000 or less for purposes of receiving treatment as a Convenience Class Claim. The classification and treatment of other claims against the Comair Debtors under the Plan of Reorganization are summarized as: Class Description Recovery Claim Treatment ----- ----------- -------- --------------- 1 Other Priority 100% Payment in full in Cash, or other Claims treatment that will render the Claim unimpaired. Unimpaired. Deemed to accept. 2 Secured 100% (a) Payment in full in Cash; Aircraft (b) Reinstatement of the legal, Claims equitable and contractual rights of the claimholder; (c) payment of the proceeds of the sale or disposition of the Collateral securing the Claim to the extent of the value of the holder's secured interest in the Collateral; (d) return of Collateral securing the Claim; or (e) other treatment rendering the Claim unimpaired. Unimpaired. Deemed to accept. 3 Other Secured 100% (a) Payment in full in Cash; Claims (b) Reinstatement of the legal, equitable and contractual rights of the claimholder; (c) payment of the proceeds of the sale or disposition of the Collateral securing the Claim to the extent of the value of the holder's secured interest in the Collateral; (d) return of Collateral securing the Claim; or (e) other treatment rendering the Claim unimpaired. Unimpaired. Deemed to accept. 4 General -- New Delta Common Stock equal to Unsecured pro rata share of Comair Claims Unsecured Allocation. Opportunity to participate in New Equity Investment Rights Offering. Impaired. Entitled to vote. 5 Convenience -- Cash determined with reference to Class Claims the midpoint of the range of recovery estimates for General Unsecured Claims against the Delta Debtors. Impaired. Entitled to vote. 6 Interests Retained Reinstatement of Interests. in the Comair Unimpaired. Deemed to accept. Debtors 7 Securities 0% No distribution. Litigation Impaired. Deemed to reject. Claims The Debtors clarify that the projected recovery range for Comair Classes 4 and 5 will be included in a revised Plan and Disclosure Statement to be filed with the Court prior to the Disclosure Statement hearing. The Comair Classes 4 and 5's projected recovery range will be based on a separate valuation of the Comair Debtors and a separate estimate of Allowed Claims against the Comair Debtors. The projected recovery range for holders of Unsecured Claims against the Comair Debtors may differ substantially from: (i) the projected recovery range for Delta Classes 4, 5 and 6; or (ii) any subsequently revised projected recovery range for Unsecured Claims against the Delta Debtors. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: Enterprise Value Estimated at $18.2-$20.8 Billion ------------------------------------------------------------ The Blackstone Group, L.P., Delta Air Lines, Inc., and its debtor- affiliates' financial advisor, has undertaken a valuation analysis for purposes of: (i) estimating value available for distribution to creditors pursuant to the Debtors' Joint Plan of Reorganization, filed on December 19, 2006, and to analyze the relative recoveries to creditors thereunder; and (ii) evaluating whether the Plan meets the so-called best interests test under Section 1129(a)(7) of the Bankruptcy Code. According to Blackstone, the adjusted enterprise value of the consolidated Reorganized Debtors is estimated to range from $18,200,000,000 to $20,800,000,000. This estimated Consolidated Adjusted Enterprise Value range assumes an Effective Date of April 30, 2007 and reflects the going concern value of the Reorganized Debtors after giving effect to the implementation of the Plan. The common equity value of the consolidated Reorganized Debtors is estimated to range from approximately $9,400,000,000 to $12,000,000,000. The Consolidated Equity Value range reflects the difference between the Consolidated Adjusted Enterprise Value and the total amount of net debt that is estimated to be outstanding at the Effective Date after giving effect to the Plan. Based on the Consolidated Equity Value estimates and an estimated consolidated pool of Unsecured Claims for the Debtors of $15,000,000,000, Blackstone estimates the recovery to the holders of consolidated Debtors Unsecured Claims to be 63% to 80%. These recoveries do not take into account any dilution or other financial effects that may occur pursuant to implementation of the Compensation Programs. The Consolidated Valuation is based on numerous qualifications and contingencies, including but not limited to: (i) the Debtors' ability to achieve all aspects of their Financial Projections, (ii) the state of the capital and credit markets as of the Effective Date, (iii) the Debtors' ability to raise and maintain sufficient capital to implement the business plan on which the Financial Projections are based, (iv) no material adverse change to the industry or in the Debtors' operations due to economic slowdowns, (v) volatility in fuel prices, and (vi) the effect of exogenous events, including terrorist attacks and the Debtors' ability to maintain and utilize net operating losses, as well as other unexpected events not forecasted by the Debtors. A copy of the Valuation Analysis is available for free at: http://ResearchArchives.com/t/s?176d * * * Prior to the hearing to approve the Disclosure Statement accompanying the Plan, the Debtors intend to submit a revised valuation analysis that will include separately valuation analysis with respect to the Delta Debtors and valuation analysis with respect to the Comair Debtors. Headquartered in Atlanta, Georgia, Delta Air Lines -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 502 destinations in 88 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. The Company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. As of June 30, 2005, the Company's balance sheet showed $21.5 billion in assets and $28.5 billion in liabilities. (Delta Air Lines Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELTA AIR: US Airways Rejection Will Not Affect S&P's D Rating -------------------------------------------------------------- Delta Air Lines Inc. has filed a proposed plan of reorganization, targeting emergence from bankruptcy in 2007 as an independent entity. Delta disclosed also that its Board of Directors had rejected an acquisition proposal by US Airways Group Inc. Standard & Poor's Ratings Services said its ratings on Delta, including the 'D' corporate credit rating, are not affected. Ratings on enhanced equipment trust certificates remain on CreditWatch with developing implications, excepting 'AAA' rated, insured EETCs, which are not on CreditWatch. If Delta is successful in its proposed plan of reorganization, ratings on EETCs that are on CreditWatch would likely be affirmed or raised, as the airline plans to affirm or repay aircraft obligations securing the certificates. If Delta enters into a merger, the effect on ratings of EETCs would depend on the credit quality of the combined airline and its decisions as to whether to affirm the aircraft financings. "Delta's proposed reorganization plan involves less risk than US Airways' merger proposal in that it would not face antitrust review by the Department of Justice, would not involve potentially difficult labor integration, and would not require the issuance of $4 billion in acquisition debt," said Standard & Poor's credit analyst Philip Baggaley. "However, Delta's stand-alone plan foregoes potentially significant merger synergies and, like US Airways' acquisition forecast, rests on assumptions, some of which appear overly optimistic." Delta's reorganization plan estimates an equity value of $9.4 billion to $12 billion, and a recovery to unsecured creditors of 63 cents to 80 cents on the dollar. The estimated valuation is somewhat above the alternative US Airways' offer worth about $8.6 billion. Delta disclosed also its analysis of the US Airways' proposal, challenging some of the synergy assumptions. Delta's five-year forecast included in a disclosure statement accompanying the proposed plan of reorganization projects much improved earnings and cash flow, and a substantially reduced debt burden achieved through the bankruptcy process. Based on changes achieved in bankruptcy and recent earnings and cash flow trends, it is reasonable to anticipate substantially improved operating performance. Still, some of Delta's forecast assumptions and plans carry risks. In particular, the assumptions that Delta will fully close its historical gap in revenue generation against peer "legacy carriers" may prove challenging, given that its disproportionate exposure to competitive domestic leisure markets and ongoing improvements at its competitors. Also, Delta foresees further reductions in its non-fuel expenses, maintaining its lead as the lowest-cost of the legacy carriers. Still, Delta should emerge with greatly reduced debt and leases, which would leave it with more manageable financial burden than it would carry in the partly debt-financed acquisition by US Airways. The competing proposals will be considered by Delta's unsecured creditors' committee, which will make a recommendation to unsecured creditors. It is possible that either Delta or US Airways may amend their proposals, or that another airline could make a competing bid for Delta if it appears that unsecured creditors favor a sale of the company. DJ WEAVER: Case Summary & Seven Largest Unsecured Creditors ----------------------------------------------------------- Debtor: DJ Weaver Development Co., LLC dba The Gazebo at Waterford Cove 1849 Kelton Lane Maryville, TN 37803 Bankruptcy Case No.: 06-33059 Chapter 11 Petition Date: December 19, 2006 Court: Eastern District of Tennessee (Knoxville) Debtor's Counsel: Thomas Lynn Tarpy, Esq. Hagood, Tarpy & Cox PLLC Suite 2100, Riverview Tower 900 South Gay Street Knoxville, TN 37902-1537 Tel: (865) 525-7313 Fax: (865) 525-0858 Total Assets: $8,759,866 Total Debts: $7,942,082 Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ WECO Construction Construction of $1,300,000 1849 Kelton Lane Waterford Cove Maryville, TN 37801 Loan for $222,000 Development Costs Dennis and Jana Weaver Loan for $226,725 1849 Kelton Lane Development Costs Maryville, TN 37801 Doris Weaver Loan for $160,000 12315 Willow Ridge Way Development Costs Knoxville, TN 37922 McWilliams Co., CPA Accounting $11,455 Barnes Insurance Insurance $5,000 Zurich Insurance Builders Risk $3,800 Insurance Michael Brady Architect, Inc. Architectural $3,000 Redesign Work DURA AUTOMOTIVE: Wants to Enter Into Sr. Executive Employment Pact ------------------------------------------------------------------ DURA Automotive Systems Inc. and its debtor affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to enter into an employment agreement with a senior executive who will report to their chief executive officer. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, relates that the Debtors have discussed the need to retain the senior executive, and the contemplated terms of employment with the ad hoc committee of certain of the Prepetition Second Lien Lenders, and the Official Committee of Unsecured Creditors. The Debtors have also discussed their request to employ a senior executive with the U.S. Trustee. Pursuant to Section 107(b) of the Bankruptcy Code, as amended, and Rule 9018 of the Federal Rules of Bankruptcy Procedure, the Debtors also ask Judge Carey to enter a protective order authorizing them to file their Employment Agreement Motion and related documents under seal. Mr. DeFranceschi explains that the Employment Agreement Motion and its exhibits contain confidential information that, if revealed, could jeopardize the Debtors' ability to effectively recruit and implement effective management -- a critical component of their efforts to reorganize. In addition, the Debtors ask the Court to set an expedited hearing on their request to enter into the Employment Agreement. Mr. DeFranceschi tells Judge Carey that the senior executive will fill an unidentified void in Dura's senior management structure, thereby materially assisting with ongoing restructuring efforts. U.S. Trustee Objects To Seal Motion & Motion to Shorten Kelly Beaudin Stapleton, the United States Trustee for Region 3, says, other than convenience and the Debtors' desire to control the dissemination of information related to the timing of the announcement of the hiring, there does not appear to be any valid reason for the lack of disclosure. In fact, she avers, the Debtors most likely will disclose the information in a future filing with the Securities and Exchange Commission or otherwise. The U.S. Trustee believes that the Seal Motion: (i) is not supported by the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure; and (ii) violates the policy of public access to bankruptcy proceedings and records. William K. Harrington, trial attorney at the Office of the U.S. Trustee, notes, among others, In Nixon v. Warner Communications, Inc., 435 U.S. 589, 591 (1978), the Supreme Court stated, "[i]t is clear that the courts of this country recognize a general right to inspect and copy public records and documents, including judicial records and documents." Mr. Harrington also notes, pursuant to Section 107(b) of the Bankruptcy Code, "On request of a party in interest, the bankruptcy court . . . may (1) protect an entity; with respect to a trade secret or confidential research, development, or commercial information; or (2) protect a person with respect to scandalous or defamatory matter contained in a paper filed in a case under this title." In addition, Rule 9018 of the Federal Rules of Bankruptcy Procedure provides, " . . . governmental matters that are made confidential by statute or regulation" to the type of matters subject to seal. There is no showing that any of the information sought to be protected falls within any of the enumerated categories under Bankruptcy Rule 9018 and Section 107(b), Mr. Harrington points out. Mr. Harrington asserts that the entirety of the Employment Agreement should not be sealed when a carefully circumscribed redaction of the appropriate provisions of the Agreement may protect the items falling within the purview of the applicable Code Section or Rule. The U.S. Trustee also opposes the Debtors' request to have their Employment Motion heard on four days' notice. Mr. Harrington notes that (i) the Seal Motion and Motion are devoid of any information necessary for the parties-in-interest to properly evaluate the relief sought in the Employment Motion; and (ii) the Debtors have provided no evidence that there is any critical urgency to have their request heard on an expedited basis. Accordingly, the U.S. Trustee insists that the Motion to Shorten should be vacated so all parties-in-interest will have an opportunity to properly digest the information contained in the Debtors' request. The U.S. Trustee is cognizant of the Debtors' need to effectively recruit qualified individuals for their management team and has no general objection to the Debtors' request to hire a senior executive. The U.S. Trustee, however, believes that certain specific terms of the Employment Agreement run afoul of the limitations provided for in Section 503(c)(1) and (2) of the Bankruptcy Code. While the U.S. Trustee has been provided copies of the Employment Motion and the Employment Agreement, the Debtors filed the documents under seal and provided the documents to the U.S. Trustee on a confidential basis under Section 107(c). The Court has not yet ruled on the seal issue. Accordingly, in lieu of filing her response under seal, the U.S. Trustee reserves her right to raise substantive issues related to the specific terms of the Employment Agreement at the hearing. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on October 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Gets Final Nod to Pay Non-Debtor Affiliates ------------------------------------------------------------ DURA Automotive Systems Inc. and its debtor affiliates' request to pay their prepetition payables to foreign non-debtor affiliates were granted, on a final basis, by the Honorable Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware. The Debtors owed prepetition payables to the Foreign Non-Debtor Affiliates of approximately $625,000. The Prepetition Payables are the result of inter-company transactions made in the ordinary course of business, including receipts from customers accepted by the Debtors on behalf of Foreign Non-Debtor Affiliates and payments for services rendered or products supplied by the Foreign Non-Debtor Affiliates to the Debtors. The Court also authorized the Debtors to loan estate property to the foreign non-debtor affiliates provided that: (a) the amounts loaned will be recorded on the Debtors' books and records as loans; and (b) the Debtors will provide three business days' written notice to the U.S. Trustee and the Official Committee of Unsecured Creditors prior to transferring any funds to the Foreign Non-Debtor Affiliates. The Court rules that the amounts recorded as loans should not, at any time, exceed $10,000,000 in aggregate amounts outstanding. The loan periods should not exceed 120 days. Judge Carey directs the Debtors and their advisors to cooperate with the Creditors Committee, the Committee of Second Lien Lenders, and their advisors, to provide reasonable information to assist with understanding the Foreign Non-Debtor Affiliates' financial information and business plans. The Debtors' equity interests in, and intercompany claims against, the Foreign Non-Debtor Affiliates are some of the most valuable assets of their estates, Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, related. The Debtors project the Foreign Non-Debtor Affiliates' aggregate 2006 EBITDA will be approximately $81,000,000. Due to country-specific restrictions and procedures, the Foreign Non-Debtor Affiliates may be unable to transfer funds, including where short-term financing is required by a Foreign Non-Debtor Affiliate, between and amongst themselves on a timely basis or upon short notice. "If one or more of those Foreign Non-Debtor Affiliates does not receive required short-term financing on a timely basis from either the Debtors or other Foreign Non-Debtor Affiliates, it could become subject to foreign insolvency proceedings, thereby endangering the Debtors' valuable equity interests in the Foreign Non-Debtor Affiliates," Mr. DeFranceschi said. Without that short-term financing, especially in the event of foreign insolvency proceedings, Mr. DeFranceschi says, the Foreign Non-Debtor Affiliates could be unable to satisfy their commitments to existing original equipment manufacturers and first-tier supplier customers. "Any such inability would, aside from endangering the value of the Debtors' equity interests in the Foreign Non-Debtor Affiliates, jeopardize the Debtors' relationships with OEMs and first-tier supplier customers worldwide." Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The Debtors filed for chapter 11 petition on Oct. 30, 2006 (Bankr. District of Delaware Case No. 06-11202). Richard M. Cieri, Esq., Marc Kieselstein, Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., of Kirkland & Ellis LLP are lead counsel for the Debtors' bankruptcy proceedings. Mark D. Collins, Esq., Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., of Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsel. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of July 2, 2006, the Debtor had $1,993,178,000 in total assets and $1,730,758,000 in total liabilities. (Dura Automotive Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Ch. 11 Filing Prompts Moody's Ratings Withdrawal ----------------------------------------------------------------- Moody's Investors Service withdrew the ratings for of Dura Automotive Systems, Inc. and Dura Operating Corp. in conjunction with the company and its U.S. and Canadian subsidiaries having filed for Chapter 11 protection of the U.S Bankruptcy Code on October 30, 2006. Moody's has withdrawn the rating because the issuer has entered bankruptcy. Ratings withdrawn: * Dura Automotive Systems, Inc. -- Corporate Family Rating, Ca; and, -- Probability-of-Default, D. Outlook is Stable. SGL-4 Speculative Grade Liquidity Rating. * Dura Operating Corp. -- $150 million guaranteed senior secured second-lien term loan due 2011, Caa2, LGD2, 23%; -- $75 million guaranteed senior secured second-lien add-on term loan due 2011, Caa2, LGD2, 23%; -- $400 million of 8.625% guaranteed senior unsecured notes due 2012, Ca , LGD4, 52%; -- $456 million of 9% guaranteed senior subordinated notes due 2009, C, LGD5, 89%; -- EUR100 million of 9% guaranteed senior subordinated notes due 2009, C, LGD5, 89%. Outlook is Stable. * Dura Automotive Systems Capital Trust -- $55.25 million of 7.5% convertible trust preferred securities due 2028, C, LGD6, 98% Outlook is Stable. Dura Automotive's $175 million guaranteed senior secured first- lien asset-based revolving credit is not rated by Moody's. The last rating action was on Oct. 18, 2006 when the ratings were lowered. Dura Automotive, headquartered in Rochester Hills, Michigan, designs and manufactures components and systems primarily for the global automotive industry including driver control systems, structural door modules, glass systems, seating control systems, exterior trim systems, and mobile products. Annual revenues approximate $2.2 billion. FBO AIR: Incurs $1.2 Million Net Loss in Quarter Ended Sept. 30 --------------------------------------------------------------- FBO Air Inc. reported a $1.2 million net loss on $10.1 million of net revenues for the three months ended Sept. 30, 2006, compared with a $473,820 net loss on $3.4 million of net revenues for the same period in 2005. The company's balance sheet at Sept. 30, 2006, showed $12.7 million in total assets, $6.2 million in total liabilities and a $6.5 million stockholders' equity. On Sept. 1, 2006, the company closed a private placement and sold 50.25 units at $100,000 per unit. Each unit consisted of 166,700 shares of the common stock, $0.001 per value, and a warrant expiring Aug. 31, 2011, to purchase 100,000 shares of the common stock. The company realized gross proceeds of $5,025,000 from the offering and, in connection therewith, issued 8,376,675 shares of the common stock. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?1767 Going Concern Doubt As reported in the Troubled Company Reporter on May 22, 2006, Marcum & Kliegman LLP in New York raised substantial doubt about FBO Air, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditor pointed to the company's significant operating losses since inception. About FBO Air FBO Air Inc. (OTCBB: FBOR.OB) is an aviation services company with operations in the aircraft charter management and fixed base operations segments of the general aviation industry. The company has two segments -- FirstFlight segment, which provides on-call passenger and cargo air transportation, and Tech Aviation, which provides services like fueling, hangaring, maintenance and repair to private and general aviation aircraft operators. FIRST FRANKLIN: Moody's Rates Class B Certificates at Ba1 --------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by First Franklin Mortgage Loan Trust 2006-FF17, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by First Franklin-originated adjustable-rate and fixed-rate subprime mortgage loans acquired by First Franklin Financial Corporation and Lehman Brothers Holdings Inc. The ratings are based primarily on the credit quality of the loans, and on the protection offered by subordination, overcollateralization and excess spread, and a swap agreement and rate cap between the trust and ABN Amro Bank N.V. Moody's expects collateral losses to range from 3.95% to 4.45%. National City Home Loan Services, Inc. will service the loans. Aurora Loan Services LLC will act as master servicer. Moody's has assigned National City Home Loan Services, Inc. its servicer quality rating of SQ1- as a primary servicer of subprime loans. Moody's also assigned Aurora Loan Services, LLC its servicer quality rating of SQ1- as a master servicer. These are the rating actions: * First Franklin Mortgage Loan Trust 2006-FF17 * Mortgage Pass-Through Certificates, Series 2006- FF17 Class A1, Assigned Aaa Class A2, Assigned Aaa Class A3, Assigned Aaa Class A4, Assigned Aaa Class A5, Assigned Aaa Class A6, Assigned Aaa Class M1, Assigned Aa1 Class M2, Assigned Aa2 Class M3, Assigned Aa3 Class M4, Assigned A1 Class M5, Assigned A2 Class M6, Assigned A3 Class M7, Assigned Baa1 Class M8, Assigned Baa2 Class M9, Assigned Baa3 Class B, Assigned Ba1 FORTIUS II: Moody's Rates $7.5-Million Class E Notes at Ba1 ----------------------------------------------------------- Moody's assigned ratings to eight classes of notes issued by Fortius II Funding, Ltd. Moody's Ratings: -- Aaa to the $12,700,000 Class S Floating Rate Notes Due 2010; -- Aaa to the $325,000,000 Class A-1 Floating Rate Notes Due 2042; -- Aaa to the $50,000,000 Class A-2 Floating Rate Notes Due 2042; -- Aa2 to the $45,000,000 Class B Floating Rate Notes Due 2042; -- A2 to the $20,000,000 Class C Deferrable Floating Rate Notes Due 2042; -- Baa2 to the $27,500,000 Class D Deferrable Floating Rate Notes Due 2042; -- Ba1 to the $7,500,000 Class E Deferrable Floating Rate Notes Due 2042; and, -- Aa3 to the $10,000,000 Combination Notes Due 2042. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of cash RMBS securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. The collateral manager is Aladdin Capital Management LLC. FORT WORTH: Moody's Holds Ba2 Rating on $7.7MM Outstanding Bonds ---------------------------------------------------------------- Moody's Investors Service affirmed the Ba2 rating on Texas Wesleyan University's Series 1997A bonds, with $7.7 million outstanding. The rating outlook is stable. Strengths: -- Rebounding enrollment, reaching 2,700 full-time equivalent students for Fall 2006 after dipping to a low of 2,235 students in 2004 due to accrediting scrutiny in the earlier part of the decade. All accrediting issues are now resolved. Located in Fort Worth, approximately half of Texas Wesleyan's students are undergraduates, with the remaining students at the law school and in some graduate programs. A significant portion of TWU's undergraduate enrollment is derived from transfer students. -- Law school in Fort Worth continues to generate growing enrollment and positive financial results, now contributing notably to the University's credit profile, although the purchase of the law school in the 1990s, and subsequent investment to attain accreditation led to the University's currently weak financial condition. -- Multi-year trend of improving operational performance and strengthening cash flow, driven by good tuition revenue growth and close expense monitoring. The University achieved a 5% operating margin and 12.6% operating cash flow margin in 2006, resulting in 2.4x coverage of annual debt service requirements. -- Management team is highly focused on generating positive operating results, given limited financial reserves, and on rebuilding liquidity. University plans to retain all unrestricted gifts rather than using for operations and has limited endowment spending to a fixed rate of $2.5 million until liquidity is improved. Challenges: -- University has no unrestricted financial resources and would be highly vulnerable to any enrollment declines or unexpected expense spikes. Total financial resources are in excess of $30 million, but all funds are externally restricted. -- TWU faces strong competition from multiple public universities and community colleges in the area, many of which are investing in smaller class sizes and facilities and becoming more attractive choices themselves. High reliance on student charges leads to need for careful enrollment and financial aid management. University of North Texas is discussing opening a law school in the area- such action would likely take multiple years but could be a competitive threat if it occurs. -- Continued need for capital investment to enhance the appeal of the campus and remain competitive. University currently does not plan on any additional borrowing but rather to fund projects through gifts and operations. Residence facility financed by $6.5 million private placement in 2003 is open and reportedly generating positive cash flow. Outlook: -- The stable outlook is based on the College's enrollment rebound and positive operating performance, offset by no financial reserves. What could change the rating-up Improvement in the College's liquidity position. What could change the rating-down Enrollment declines or operating deficits. Key data and ratios (Fiscal year 2006 financial data; fall 2006 enrollment data): -- Total Enrollment: 2,696 full-time equivalent students -- Total Debt: $20.8 million -- Total Resources: $30.0 million -- Unrestricted Resources to Debt: 0.0x -- Unrestricted Resources to Operations: 0.0x -- Total Resources per Student: $11,497 -- Average Actual Debt Service Coverage: 2.1x FRASER SULLIVAN: Moody's Rates $17-Million Class E Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Fraser Sullivan CLO II Ltd.: -- Aaa to $242,400,000 Class A-1a Senior Secured Floating Rate Term Notes due 2020; -- Aaa to $50,000,000 Class A-1b Senior Secured Floating Rate Revolving Notes due 2020; -- Aaa to $51,600,000 Class A-2 Senior Secured Floating Rate Notes due 2020; -- Aa2 to $33,000,000 Class B Senior Secured Floating Rate Notes due 2020; -- A2 to $32,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2020; -- Baa2 to $33,000,000 Class D Senior Secured Deferrable Floating Rate Notes due 2020 and -- Ba2 to $17,000,000 Class E Senior Secured Deferrable Floating Rate Notes due 2020. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting mainly of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Fraser Sullivan Investment Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. EES COKE: Moody's Withdraw Ba2 Rating on 9.382% Senior Notes ------------------------------------------------------------ Moody's Investors Service withdrew the Ba2 rating assigned to the 9.382% senior secured Notes due 2007 issued by EES Coke Battery Company, Inc., as the company has repaid all outstanding indebtedness. EES Coke Battery Company Inc. is an indirect wholly-owned subsidiary of DTE Energy Services and is based in Ann Arbor, Michigan. EMPIRE RESORTS: Earns $191,000 in Third Quarter Ended Sept. 30 -------------------------------------------------------------- Empire Resorts, Inc. filed its third quarter financial statements for the three-month period ended Sept. 30, 2006. The company earned a net income of $191,000 on $29,740,000 of revenues for the quarterly period ended Sept. 30, 2006, compared to a net loss of $1,194,000 on $26,170,000 of total revenues for the same period in 2005. Net revenues increased approximately $3.1 million for the quarter ended Sept. 30, 2006 compared to the same quarter in 2005. Revenue from racing increased by approximately $452,000, revenue from VGM operations increased by approximately $2.5 million, and food, beverage and other revenue increased by approximately $600,000. Complimentary expenses increased by approximately $500,000. The VGM operations experienced an increase in daily visits. The company attributes much of the improvement in VGM revenues to its continuing marketing efforts in the geographical areas served by its facility. The increase in racing revenues is primarily a result of more racing days at its facility in the three months ended Sept. 30, 2006 than in the corresponding period in 2005. At Sept. 30, 2006, the company's balance sheet showed $60,838,000 in total assets and $85,848,000 in total liabilities, resulting in a $25,010,000 stockholders' deficit. At Dec. 31, 2005, the company had $57,245,000 in total assets, $84,460,000 in total liabilities and $27,215,000 in stockholders' deficit. The company's September 30 balance sheet also showed strained liquidity with $18,886,000 in total current assets available to pay $20,848,000 in total current liabilities coming due within the next 12 months. Empire Resorts believes that it has access to sources of working capital that are sufficient to fund its operations for the twelve months ended Sept. 30, 2007. The results of operations of the company's video gaming machine facility have been improved by the changes in the amount of revenue retained by VGM agents. The company has approximately $2.4 million available from its revolving credit facility. Any significant capital requirements associated with its development projects can be met by additional debt or equity issues, if available. A full-text copy of the company's financial statements for the quarterly period ended Sept. 30, 2006, is available for free at http://researcharchives.com/t/s?1759 About Empire Resorts Empire Resorts, Inc. -- http://www.empireresorts.com/-- operates the Monticello Raceway and is involved in the development of other legal gaming venues. Empire's Mighty M Gaming facility features over 1,500 video gaming machines and amenities including a 350- seat buffet and live entertainment. Empire is also working to develop a $500 million "Class III" Native American casino and resort on a site adjacent to the Raceway and other gaming and non-gaming resort projects in the Catskills region and other areas. * * * At June 30, 2006, the company's balance sheet showed $61.9 million in total assets and $88.1 million in total liabilities, resulting in a $26.2 stockholders' deficit. ENTERPRISE PRODUCTS: S&P Lifts BB+ Corporate Credit Rating to BBB- ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit ratings on midstream energy master limited partnership Enterprise Products Partners L.P. and Enterprise Products Operating L.P. to 'BBB-' from 'BB+'. Standard & Poor's also raised its corporate credit rating on EPCO Holdings Inc. to 'BB-' from 'B+'. The rating on Enterprise's outstanding junior subordinated notes was raised two notches to 'BB' because of different notching guidelines applied to the securities of investment-grade entities. The outlook on all entities is stable. Enterprise and Holdings, both based in Houston, Texas, have about $4.9 billion and $1.6 billion of debt, respectively. The ratings on the Enterprise entities reflect the MLP's improved credit protection measures and its greater business-mix diversity developed over the past few years. Holdings is a substantial owner of Enterprise's general partner and limited partnership units, and its credit quality directly benefits from Enterprise's improved creditworthiness. "Since the purchase of GulfTerra Energy Partners in 2004, Enterprise has performed above expectations, both operationally and financially, and has improved its credit quality," said Standard & Poor's credit analyst Todd Shipman. "With some major capital projects poised to begin generating cash and earnings, we see reduced pressure on the partnership's distribution coverage over time," said Mr. Shipman. G.M. CROCETTI: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: G.M. Crocetti Flooring, Inc. 3960 Merritt Avenue The Bronx, NY 10466 Bankruptcy Case No.: 06-12946 Type of Business: The Debtor is a tile contractor and offers floor furnishing services. Chapter 11 Petition Date: December 6, 2006 Court: Southern District of New York (Manhattan) Judge: Burton R. Lifland Debtor's Counsel: Jerold Rotbard, Esq. Harold, Salant, Strassfield & Spielberg 81 Main Street, Suite 205 White Plains, NY 10601 Tel: (914) 683-2500 Fax: (914) 683-1279 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hoboken Floors Materials $1,007,993 70 Dernarest Drive Wayne, NJ 07470 Internal Revenue Service Form 941 Taxes, $1,006,161 1200 Waters Place Interest & Penalty Suite 108 The Bronx, NY 10461 NYC District Council Carpenter Fringe Benefit $459,000 Benefit Funds Funds 395 Hudson Street New York, NY 10014 NYS Dept. of Taxation & Finance Withholding Tax $177,590 TSRD-Business Corp. Tax WA Harriman Campus Albany, NY 12227-0001 Sales $123,817 WT-DOL $8,371 Withholding Tax $7,417 Withholding Tax $887 Withholding Tax $435 Pro-Tile Distributors, Inc. Materials $367,771 798 Pelham Parkway Pelham, NY 10803 Eastside Floor Supplies Materials $202,415 Architectural Systems, Inc. Materials $36,950 Atlas Carpet Mills, Inc. Materials $8,921 Shaw Industries, Inc. Materials $8,588 Dykes Lumber Materials $8,208 Mason Mercer Materials $7,203 GRAMERCY CRE: Fitch Holds Rating on $35-Mil. Class K Notes at B --------------------------------------------------------------- Fitch affirms all classes of Gramercy CRE CDO 2005-1, Ltd. notes as: -- $513,000,000 Class A-1 floating-rate affirmed at 'AAA'; -- $57,000,000 Class A-2 floating-rate affirmed at 'AAA'; -- $102,500,000 Class B floating-rate affirmed at 'AA'; -- $47,000,000 Class C floating-rate affirmed at 'A+'; -- $12,500,000 Class D floating-rate affirmed at 'A'; -- $16,000,000 Class E floating-rate affirmed at 'A-'; -- $16,000,000 Class F floating-rate affirmed at 'BBB+'; -- $18,500,000 Class G floating-rate affirmed at 'BBB; -- $28,000,000 Class H floating-rate affirmed at 'BBB-'; -- $49,500,000 Class J floating-rate affirmed at 'BB'; and, -- $35,000,000 Class K floating-rate affirmed at 'B'. Deal Summary: Gramercy Real Estate CDO 2005-1 is a revolving commercial real estate cash flow collateralized debt obligation that closed on July 14, 2005. It was incorporated to issue $1 billion of floating-rate notes and preferred shares. As of Nov. 30, 2006, the CDO invests in a portfolio of unrated commercial mortgage whole loans and A-notes, B-notes, and commercial real estate mezzanine loans. The CDO is also permitted to invest in corporate debt of real estate operators and retailers, commercial real estate collateralized debt obligation securities, commercial mortgage-backed securities, and preferred equity. As of Nov. 30, 2006 the CDO is invested in loans and cash. The portfolio was selected and is monitored by GKK Manager, LLC. Gramercy 2005-1 has a five-year reinvestment period during which, if all reinvestment criteria are satisfied, principal proceeds may be used to invest in substitute collateral. The reinvestment period ends in July 2010. The collateral manager has the ability to sell 15% of the collateral per year on a discretionary basis during the reinvestment period and may sell defaulted and credit risk securities at any time. Asset Manager: Founded in 2004, Gramercy Capital Corp. is a national commercial real estate specialty finance company organized as a REIT and externally managed by GKKM, the collateral manager for Gramercy Real Estate CDO 2005-1. GKK was sponsored by SL Green, which maintains a 25% equity ownership stake of the REIT and 66% of GKKM. GKK's core assets are direct originations of first mortgage loans, mortgage participations, mezzanine financing, preferred equity investments, bridge and permanent loans and credit tenant lease investments. As of November 2006, GKK's total assets under management totaled approximately $2.3 billion. Gramercy 2005-1, which is GKK's first CDO transaction, serves as a source of match- funded, term financing for the company's investment portfolio. Performance Summary: Since closing and as of the November 2006 trustee report, the CDO has performed better than expected. The Fitch poolwide expected loss is 24.25% as of Nov. 30, 2006, compared to 28% at close. As a result, the reinvestment cushion versus the modeled PEL of 34.5% has increased to 10.25% from 6.5%. The three primary reasons for the increase are the improvement in the loan type composition, more favorable leverage characteristics of the pool and a trend towards cash flow stabilization. Since close, the pool has less B notes, second mortgages and mezzanine debt and more whole loans. Several properties are achieving their business plans on or ahead of schedule. Many loans within the pool have been identified as imminent refinance candidates for conduit programs during the first quarter of 2007. As expected, with the increase in whole loans, the weighted average spread has decreased to 3.631% from 4.9% since close; however, the WAS remains above the covenanted WAS of 2.75%. The weighted average coupon has increased since close to 8.251% from 7.7% and continues to remain above the 7% covenant. 14.11% of the loans in the pool are fixed rate loans. The weighted average life has decreased to 1.48 years from 3 years since close, implying that the loans will fully turnover during the reinvestment period. The over-collateralization and interest coverage ratios of all classes have improved and are within their covenants, as of the November 2006 trustee report. Although the composition of the pool has improved, upgrades during the reinvestment period are unlikely given that the pool could still migrate to the modeled PEL. The Fitch PEL is a measure of the hypothetical loss inherent in the pool at the 'AA' stress environment before taking into account the structural feature of the CDO liabilities. Fitch PEL encompasses all loan, property, and poolwide characteristics modeled by Fitch. Collateral Analysis: The pool consists of 95.21% loans and 4.79% cash. Of the pool, the exposure to whole loans and A notes increased by 14%. The CDO loan collateral has migrated away from B notes. Mezzanine debt has increased to 22.64% from 12% at presale; preferred equity and CMBS are no longer in the pool. Since close, the largest percent of non-traditional assets continues to be hotels, and the portfolio's exposure to this property type has increased to 10.41% from 7.2%. The office property type still remains the largest percentage (54.46%) of the loan portfolio. The pool composition is within its covenanted guidelines. The pool has comparable loan diversity relative to other CRE CDOs. LDI is currently 401 versus its covenant of 500. The largest two loans each represent less than 10% of the ramped portfolio. The pool also has geographic concentration, with 26.46% located in New York and 19.96% of the pool located in California; however the CDO is well within all of its covenants. The Largest Loans: The largest loan in the pool is a first mortgage on Atlantic Yards, a land assemblage in Brooklyn. The strategy for this asset is to acquire the necessary parcels for development of an 800M sf arena for the New Jersey Nets and a mixed-use development that includes office, residential and retail space. During Q4 2004, the loan commitment was increased and in Q2 2006, Gramercy syndicated a portion of the increased loan amount to two institutional investors. To date 89% of the total committed loan has been funded. As of Q3 2006, the asset is meeting original underwritten expectations as the continued acquisition of identified parcels and approval hurdles progress. The borrower, Forest City Ratner, has reached a Memorandum of Understanding with the City, State, and MTA to acquire certain key development rights and receive public funding for the infrastructure improvements. The project was recently approved by the Empire State Development Corp, which authorized the option of eminent domain if needed to acquire any of the final properties identified for the master planned footprint. The remaining funding will be used to acquire outlier sites, which are not critical to the footprint. The second largest loan in the pool is a whole loan on an office building with basement, first and second floor retail space in Washington, D.C. The property is centrally located four blocks east of the White House. The borrower purchased the property in 1998 and performed significant renovations to convert the interior to class A office and retail space while also adding two additional stories to the building. This first mortgage was used to refinance the renovation loan while the property leased up. The building is reaching stabilization with 87% leased and 64% occupied. Credit tenants have signed leases and occupy 50.7% of total gross leasable area. None of the leases in place expire during the initial or fully extended term of the loan and no rollover is scheduled until 2013. The non-leased space is primarily in the retail portion. The borrower is currently in negotiations with two separate prospective retail tenants. In lieu of a reserve, the loan is recourse to the sponsor for debt service. Several conduit lenders are in discussions with the borrower to refinance this loan. This loan is one of three assets with the same sponsorship, representing 11.4% of the pool. This sponsor was recently tried on seven counts in a federal court. Although he was cleared of six of the charges, he was found guilty on one count of wire fraud. The sponsor is expected to be sentenced on April 16, 2007; however, he is appealing the judgment. Fitch will continue to monitor the sponsor's ongoing proceedings. Fitch Loans of Concern: The asset manager recently purchased a loan of concern from the pool per the indenture as a credit risk security. Although the pari passu participation of a $26.3MM first mortgage was current, sales of the Kailua-Kona, HI home site had slowed. The property was fully entitled for future development of 179 one-acre home sites, 110 of which were to be located around a golf course. Given that general market conditions have worsened for home site development, the borrower was not meeting its sales projections. GKK purchased the loan at par plus accrued and plans on restructuring the loan outside the CDO. One of Fitch's highest loan level expected losses is associated with a second mortgage position on a home site land loan in Southern California. This second mortgage credit facility was funded by GKK to provide for infrastructure development of 5,449 acres of land. The site work includes site preparation and grading, street improvements, water improvements, utilities, sewers and drainage. As of Sept. 30, 2005, 84.6% of the land was entitled and the remainder is in the process of entitlements. Upon completion, the borrower intends to sell the finished lots to homebuilders on a bulk basis, as part of four master planned communities in Southern California. There is $235 million of debt senior to this pari passu second position. SunCal Companies is California's largest private developer of master planned communities. Home site sales have slowed given declining housing starts. Another Fitch loan of concern is a whole loan secured by a luxury boutique hotel in San Jose, California. The Fitch stressed debt service is 0.55x and stressed loan to value is 169%. The borrower received tax credits through a program for qualified rehabilitation costs associated with certified historic structures. Proceeds of the tax credits have been used to amortize the loan as well as fund a liquidity reserve. The initial liquidity reserve has been depleted and the borrower is funding shortfalls out of equity. The strategy of this acquisition was to reposition this boutique hotel and boost occupancy through aggressive marketing efforts. The year to date through August revenue per available room is $90.58 versus the year to date August 2005 RevPar of $65.34. Rating Definitions: The ratings of the class A and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class C, D, E, F, G, H, I, J and K notes address the likelihood that investors will receive ultimate interest and deferred interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. Ongoing Surveillance: Fitch will continue to monitor and review this transaction for future rating adjustments. GRAN TIERRA: Posts $66,355 Net Loss in 2006 Quarter Ended Sept. 30 ------------------------------------------------------------------ Gran Tierra Energy Inc. reported a $66,355 net loss on $5.4 million of total revenues for the quarter ended Sept. 30, 2006, compared with a $284,644 net loss on $349,263 of revenues for the same period in 2005. The decrease in net loss is mainly due to higher oil and natural gas sales of $5.2 million in the current quarter compared to $349,263 in the comparable period in 2005. In addition, the company recorded interest revenue of $175,641 in the current quarter versus none in the 2005 quarter. These increases in revenue were offset by higher expenses of $4.7 million compared to $626,537 in the 2005 quarter and higher income tax expense of $848,200 in the current quarter compared to $7,369 in the 2005 third quarter. The income tax expense is mainly due to the $1.1 million in tax losses in other jurisdictions which were not recognized in computing the amount of income tax payable by the company. At Sept. 30, 2006, the company's balance sheet showed $99.2 million in total assets, $19 million in total liabilities, and $80.2 million in stockholders' equity. Production after royalties in Argentina averaged 338 barrels per day for the third quarter of 2006 including 295 barrels per day from Palmar Largo and 43 barrels per day from El Vinalar. Oil sales in Argentina averaged 422 barrels per day for the third quarter of 2006 including 376 barrels per day for Palmar Largo and 46 barrels per day for El Vinalar. Production after royalties in Colombia averaged 704 barrels per day for the third quarter of 2006. Oil sales were 684 barrels per day on average during that period and were hampered by a temporary shut-down of pipeline facilities in July, 2006. As the Argosy acquisition was made in June 2006, no production was recorded in the prior year. In Argentina, net revenue for the third quarter of 2006 was $1.6 million with an average sales price at $41.27 per barrel. In Colombia, the company recorded production beginning June 21, 2006 in conjunction with its acquisition of Argosy Energy. Net revenue was $3.6 million for the third quarter and $4.0 million for the period from June 21 to September 30, 2006, reflecting royalty rates of 20% for the Santana block and 8% for the Guayuyaco block. Average sales price for the quarter was $57.47. Net Revenue for the third quarter of 2005 was $349,263, reflecting one month of sales from Palmar Largo. No revenue was recorded for the first half of 2005. Full-text copies of the company's consolidated financial statements are available for free at: http://researcharchives.com/t/s?1763 Capital Expenditures Gross capital expenditures for the three months ended Sept. 30, 2006, were $4.6 million, and for nine months ended Sept. 30, 2006 were $6 million. Capital expenditures for the quarter were predominantly for development activity at Palmar Largo, for the purchase of El Vinalar, drilling activities in Colombia, and office equipment and leasehold improvements in both Calgary and Argentina. Capital expenditures in the first nine months of 2005 were $6.9 million which included the purchase of Palmar Largo, Nacatimbay and Ipaguazu interests in Argentina. During the first three quarters of 2006, the company funded the majority of its capital expenditures and operating expenditures from cash balances existing at the end of 2005 and via private placements which closed in June, 2006. In total, the company raised $75 million from the sale of securities, less issue costs of $6.0 million for net proceeds of $69 million. The company's cash balance at Sept. 30, 2006 was $18,796,084 compared to $2,221,456 at Dec. 31, 2005 and $21,263,776 at June 30, 2006. Acquisition of Argosy Energy International Gran Tierra entered into a Securities Purchase Agreement dated May 25, 2006 with Crosby Capital LLC to acquire all of the limited partnership interests of Argosy Energy International and all of the issued and outstanding capital stock of Argosy Energy Corp. On June 20, 2006 Gran Tierra closed the Argosy acquisition and paid consideration to Crosby consisting of $37.5 million cash, 870,647 shares of the company's common stock and overriding and net profit interests in certain of Argosy's assets valued at $1 million. All of Argosy Energy International's assets are in Colombia. About Gran Tierra Gran Tierra Energy Inc. (OTCBB: GTRE.OB) -- http://www.grantierra.com/-- is an international oil and gas exploration and development company headquartered in Calgary, Canada, incorporated and traded in the United States and operating in South America. The company currently holds interests in producing and prospective properties in Argentina, Colombian and Peru. * * * Management disclosed that the company's ability to continue as a going concern is dependent upon obtaining the necessary financing to acquire oil and natural gas interests and generating profitable operations from its oil and natural gas interests in the future. The company incurred a net loss of $1.9 million for the nine-month period ended Sept. 30, 2006, and, as at Sept. 30, 2006, had an accumulated deficit of $4.1 million. GSAA HOME: Moody's Rates Class B-3 Certificates at Ba2 ------------------------------------------------------ Moody's Investors Service assigned an Aaa rating to the senior certificates issued by GSAA Home Equity Trust 2006-18, and ratings ranging from Aa1 to Ba2 to the mezzanine and subordinate certificates in the deal. The securitization is backed by fixed-rate Alt-A mortgage loans originated by First National Bank of Nevada, Wells Fargo Bank, N.A., Goldman Sachs Mortgage Company, and various other originators, none of which originated more than 10% of the mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, and excess spread. Moody's expects collateral losses to range from 1.65% to 1.85%. Avelo Mortgage, LLC, and Wells Fargo Bank, N.A. will service the loans. Wells Fargo Bank, N.A. will also act as master servicer. Moody's has assigned Wells Fargo Bank, N.A. its top servicer quality rating of SQ1 as primary servicer of prime loans and master servicer, respectively. These are the rating actions: * GSAA Home Equity Trust 2006-18 * Asset-Backed Certificates, Series 2006-18 Class AV-1, Assigned Aaa Class AF-2A, Assigned Aaa Class AF-2B, Assigned Aaa Class AF-3A, Assigned Aaa Class AF-3B, Assigned Aaa Class AF-4A, Assigned Aaa Class AF-4B, Assigned Aaa Class AF-5A, Assigned Aaa Class AF-5B, Assigned Aaa Class AF-6, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class B-1, Assigned Baa2 Class B-2, Assigned Baa3 Class B-3, Assigned Ba2 HAIGHTS CROSS: S&P Junks Rating on Senior Unsecured Debt -------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Haights Cross Communications Inc. to 'CCC+' from 'B-', and the senior unsecured rating to 'CCC-' from 'CCC'. Standard & Poor's also lowered its senior unsecured rating for Haights Cross Operating Co. to 'CCC-' from 'CCC'. At the same time, Standard & Poor's assigned a recovery rating of '1' and affirmed its 'B' bank loan rating on Haights Cross Operating Co.'s outstanding $30 million revolving credit facility due 2008, which is rated two notches above the corporate credit rating. Also, Standard & Poor's assigned a recovery rating of '1' and affirmed its 'B-' secured loan rating on Haights Cross Operating Co.'s outstanding $126.5 million second-priority senior secured term loan due 2008, which is rated one notch above the corporate credit rating. The recovery rating of '1' indicates a high expectation of full recovery of principal in the event of a payment default. The rating outlook is negative. As of Sept. 30, 2006, debt was roughly $400 million, and debt-like preferred stock was $145 million. White Plains, New York-based HCC is a supplemental education publisher serving the school and library markets. "The downgrade reflects our expectations of lower EBITDA in the fourth quarter, our concerns about earnings prospects for the company's supplemental publishing unit specifically, rising debt leverage with very high interest costs, and the shortening window before refinancing requirements in 2008," said Standard & Poor's credit analyst Hal F. Diamond. "A refinancing, unless it includes an equity injection, is unlikely to alleviate the company's onerous leverage and cost of debt." HIGHWOODS REALTY: Moody's Holds Low-B Ratings with Stable Outlook ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Highwoods Realty Limited Partnership, with a stable outlook. Highwoods has successfully completed all of its delayed SEC filings, and as of 3Q06 is current and in compliance with its financial reporting covenants under its borrowing agreements. In addition, the SEC recently closed its investigation prompted by Highwoods' recent accounting difficulties. During these challenging past few years, Moody's believes senior management has made good progress in addressing its accounting, systems and control challenges, while maintaining a focus on driving the business. Moody's notes that although Highwoods' operating performance has been steadily improving, its fixed charge coverage remains low at 1.96X at Sept. 30, 2006, and may not improve much over the intermediate term as Highwoods further repositions its portfolio. Highwoods has reduced its secured debt recently, with further progress likely, though it is unlikely that such improvement will be material. At Sept. 30, 2006, its leverage was 49%, and its secured debt was 21%, exclusive of joint ventures. Such measures are consistent with a noninvestment-grade rating. Moody's stated that upward rating movement would require: (1) positive earnings momentum, with improvement of fixed charge coverage closer to 2.25X; (2) a reduction of secured debt levels below 20%; and, (3) steady growth in its property portfolio. The rating agency also stated that a deterioration in operating performance or a shift in funding strategy, with total leverage and secured debt above 60% and 30%, respectively, would have negative consequences to the rating. These securities were affirmed with a stable outlook: * Highwoods Realty Limited Partnership -- Senior debt at Ba1, Senior debt shelf at Ba1 * Highwoods Properties, Inc. -- Preferred stock at Ba2, Preferred stock shelf at Ba2 Highwoods Properties, Inc., headquartered in Raleigh, North Carolina, USA, is a Real Estate Investment Trust and one of the largest developers and owners of Class A suburban office and industrial properties in the Southeastern USA. As of Sept. 30, 2006, Highwoods owned or had an interest in 414 in-service office, industrial and retail properties encompassing approximately 35 million square feet. Highwoods also owns 798 acres of development land. HOME EQUITY: Moody's Rates Class B-3 Certificates at Ba2 -------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by Home Equity Asset Trust 2006-8 and ratings ranging from Aa1 to Ba2 to subordinate certificates in the deal. The securitization is backed by OwnIt Mortgage Solution, Inc., Encore Credit Corp., Lime Financial Services, Decision One Mortgage Company, Accredited Home Lenders Inc., and other mortgage lenders originated, adjustable-rate and fixed-rate, subprime mortgage loans acquired by DLJ Mortgage Capital, Inc. The ratings are based primarily on the credit quality of the loans and on protection against credit losses by subordination, excess spread, and overcollateralization. The ratings also benefit from the interest-rate cap and swap agreement provided by Credit Suisse International. Moody's expects collateral losses to range from 4.6% to 5.1%. Select Portfolio Servicing, Inc. and Wells Fargo Bank, N.A. will service the mortgage loans. Moody's has assigned SPS its servicer quality rating of SQ2- as a servicer of subprime mortgage loans. Moody's has assigned Wells Fargo its servicer quality rating of SQ1 as a servicer of subprime mortgage loans. These are the rating actions: * Home Equity Asset Trust 2006-8 * Home Equity Pass-Through Certificates, Series 2006-8 Class 1-A-1, Assigned Aaa Class 2-A-1, Assigned Aaa Class 2-A-2, Assigned Aaa Class 2-A-3, Assigned Aaa Class 2-A-4, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa2 Class B-1, Assigned Baa3 Class B-2, Assigned Ba1 Class B-3, Assigned Ba2 The Class B-3 Certificates were sold in privately negotiated ransactions without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. HOME PRODUCTS: Files for Chapter 11 Protection in Delaware ---------------------------------------------------------- Home Products International Inc. and its affiliate, Home Products International-North America Inc., filed chapter 11 petitions on Dec. 20, 2006, in the U.S. Bankruptcy Court for the District of Delaware. The filing comes a day after the company disclosed plans to shutter its production and distribution plant in El Paso, Texas. The company said it failed to make a $5.6 million interest payment last month because of cash shortage. The company has asked the court to convert more than $116 million in public debt to equity. A month ago, Home Products reached an agreement with some noteholders to convert their debt holdings in the company for 95% of equity. The company will continue operating while under bankruptcy protection, provide employment to their 700 employees, pay suppliers, and provide quality products to customers, chief financial officer Donald Hotz said in a court filing. As of Dec. 2, 2006, the company had $172.2 million in assets and $217.4 million in liabilities. Investor Sam Zell's Equity Group Investments LLC owns more than 90% of Home Products. Home Products International Inc. -- http://www.hpii.com/and http://www.homz.biz/-- is an international consumer products company which designs and manufactures houseware products. The company sells its products through national and regional discounters including Kmart, Wal-Mart and Target, hardware/home centers, food/drug stores, juvenile stores and specialty stores. HOME PRODUCTS: Plan Proposes to Convert Debt to Equity ------------------------------------------------------ Home Products International, Inc., and its debtor-affiliate, Home Products International-North America, Inc., filed a Disclosure Statement explaining their Chapter 11 Plan of Reorganization with the U.S. Bankruptcy Court for the District of Delaware. The Debtors say that the primary purpose of the Plan is to effectuate a restructuring of their outstanding indebtedness and resolve liquidity problems. The Plan is a product of extensive negotiations among the Debtors, the Ad Hoc Committee of Noteholders, and Storage Acquisition Company, LLC, a majority interest holder in Home Products International. Under the Plan, Administrative Claims, Priority Tax Claims, Priority Non-tax Claims, and Prepetition Lender Secured Claims, will be paid in full. Holders of Miscellaneous Secured Claims and General Unsecured Claims, at the option of the Reorganized Debtors, on the effective date, will either: * have their legal, equitable and contractual rights remain unaltered; or * other treatment that will render their claims unimpaired. Noteholders, on the effective date, will receive their pro rata share of 95% of the new Home Products International stock issued subject to dilution by the Management Incentive Plan Share and Options. Provided however, that no distributions will be made on account of Noteholder claims that the Debtors hold, which arise out of any notes held. Noteholders receiving new stock pursuant to the plan will be deemed party to and subject to the Stockholders Agreement and the Registration Rights Agreement. Interest in Home Products, on the effective will cancelled. If Noteholders and Home Products Interest Holders vote to accept the Plan, Home Products Interest holders will receive their pro rata share of the remaining 5% of the new stock. Interests in Home Products-North America will not be cancelled and holders will retain their interest. A full-text copy of the Debtors' disclosure statement is available for a fee at: http://www.researcharchives.com/bin/download?id=061220212256 Home Products International, Inc. -- http://www.hpii.com/and http://www.homz.biz/-- is an international consumer products company which designs and manufactures houseware products. The Company sells its products through national and regional discounters including Kmart, Wal-Mart and Target, hardware/home centers, food/drug stores, juvenile stores and specialty stores. The company has operations in Mexico. HOME PRODUCTS: Case Summary & 21 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Home Products International, Inc. 4501 West 47th Street Chicago, IL 60632 Bankruptcy Case No.: 06-11457 Debtor-affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Home Products International- 06-11458 North America, Inc. Type of Business: The Debtors design, manufacture, and market ironing boards, covers, and other non-electric consumer houseware products. The Debtors' product lines include laundry management products, bath and shower organizers, hooks, hangers, home and closet organizers, and food storage containers. Their products are sold under the HOMZ brand name, and are distributed to hotels, discounters, and other retailers such as Wal-Mart, Kmart, Sears, Home Depot, and Lowe's. See http://www.hpii.com/ Chapter 11 Petition Date: December 20, 2006 Court: District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtors' Counsel: Eric D. Schwartz, Esq. Morris, Nichols, Arsht & Tunnell 1201 North Market Street P.O. Box 1347 Wilmington, DE 19801 Tel: (302) 658-9200 Fax: (302) 658-3989 Debtors' Financial Advisor: Morris Anderson & Associates, Ltd. 55 West Monroe Street, Suite 2500 Chicago, IL 60603 Tel: (312) 254-0880 Fax: (312) 727-0180 Debtors' Claims and Noticing Agent: The BMC Group, Inc. 875 Third Avenue, 5th Floor New York, NY 10022 Tel: (212) 310-5900 Fax: (888) 316-2354 Estimated Assets Estimated Debts ---------------- --------------- Home Products $100,000 to More than International, Inc. $1 Million $100 Million Home Products $1 Million to More than International- $100 Million $100 Millions North America, Inc. A. Home Products International, Inc.'s Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ HSBC as Agent for Bondholders Money Loaned $122,217,971 c/o Harold Kaplan Gardner Carton & Douglas LLP 191 North Wacker Drive Suite 3700 Chicago, IL 60606-1698 B. Home Products International - North America, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ HSBC as Agent for Bondholders Money Loaned $122,217,971 c/o Harold Kaplan Gardner Carton & Douglas LLP 191 North Wacker Drive Suite 3700 Chicago, IL 60606-1698 Formosa Plastics SPE LLC Goods, Services, $5,375,237 100 Berwyn Park Suit Trade Berwyn, PA 19312 Entec Distribution LLC Goods, Services, $4,400,087 1210 Washington Street Trade Newton, MA 02465 Basell USA Goods, Services, $1,507,885 912 Appleton Road Trade Elkton, MD 21921 Li & Fung (Trading) Ltd. Goods, Services, $1,005,210 Lifung Tower, 888 Cheung Trade Sha Wan Road Kowloon, Hong Kong Clathermo Plastics Goods, Services, $838,707 2660 Townsgate Road, Suite 150 Trade Westlake Village, CA 91361 Colors for Plastics, Inc. Goods, Services, $461,372 2245 Pratt Boulevard Trade Elk Grove Village, IL 60007 United Polychem Goods, Services, $439,405 26400 La Alameda, Suite 112 Trade Mission Viejo, CA 92691 Paramount PL. Goods, Services, $435,048 15160 South New Avenue Trade Lockport, IL 60441-2244 Perry Machine & Die, Inc. Goods, Services, $392,963 P.O. Box 270 Trade 27124 Highway J Perry, MO 63462 Design Molding, Inc. Goods, Services, $383,204 600 Factory Road Trade Addison, IL 60101-4413 Smurfit-Stone Container Goods, Services, $363,311 Enterprises Trade 9600 South Harlem Avenue Bridgeview, IL 60455 A-1 Tool Corporation Goods, Services, $362,716 8609 West Port Avenue Trade Milwaukee, WI 53224 Plasticos Promex USA, Inc. Goods, Services, $353,316 1220 Baranca Building Trade Suite 4C El Paso, TX 79935 Performance Polymers Goods, Services, $329,855 13009 Collections Court Trade Chicago, IL 60693 Makray Manufacturing Goods, Services, $321,909 4400 North Harlem Avenue Trade Norridge, IL 60706-4710 Weber Distribution Warehouse Goods, Services, $285,013 13530 Rosecrans Avenue Trade Santa Fe Springs, CA 90670 Macsteel Goods, Services, $279,466 Department CH 10367 Trade Palatine, IL 60055-0367 The Royal Group Goods, Services, $248,131 2318 Paysphere Circle Trade Chicago, IL 60674 Rapid Industrial Plastic Goods, Services, $203,986 13 Linden Avenue East Trade Jersey City, NJ 07305 I2 TELECOM: Posts $895,192 Net Loss in 2006 Third Quarter --------------------------------------------------------- I2 Telecom International Inc. reported an $895,192 net loss on $252,546 of revenues for the quarter ended Sept. 30, 2006, compared with a $2.3 million net loss on $49,851 of revenues for the same period in 2005. Net loss for the third quarter of 2006 decreased due to the company's continued reduction in operating costs. The increase in revenues was driven by the company's reorganization focusing from product to service offerings. Gross profit for the third quarter of 2006 was $86,474 as compared to a gross loss of $319,641 for the third quarter of 2005. Sales, general and administrative expenses for the third quarter of 2006 were $822,864 as compared to $2.3 million for the same period in 2005. This decrease was attributable to reductions of payroll and related expenses including the closing of the company's Redwood City, California office and the downsizing of its Atlanta office. At Sept. 30, 2006, the company's balance sheet showed $5.3 million in total assets and $8.2 million in total liabilities, resulting in a $2.9 million stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $919,192 in total current assets available to pay $6.7 million in total current liabilities Going Concern Doubt Freedman & Goldberg CPAs, in Farmington Hills, MI raised substantial doubt about I2 Telecom International's ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005, 2004 and 2003. The auditing firm pointed to the company's ongoing losses from operations since its inception and the uncertain conditions that the company faces relative to its ongoing debt and equity fund- raising efforts. About I2 Telecom Headquartered in Atlanta, GA, I2Telecom International Inc. (OTCBB: ITUI) -- http://www.i2telecom.com/-- provides high-quality international and domestic long distance calling services to subscribers at a fraction of the cost of traditional carriers by leveraging the power of the internet. The company's patents-pending VoiceStick(TM) device enables any telephone or business phone system (PBX) to access the company's global network and advanced routing technologies to complete most of the call over the internet, paying only for the last leg of the connection. INTERNATIONAL COAL: Moody's Holds Corporate Family Rating at B2 --------------------------------------------------------------- Moody's Investors Service lowered International Coal Group's speculative grade liquidity rating to SGL-4 from SGL-3 indicating the company's weak liquidity. The SGL-4 rating reflects Moody's belief that ICG may need covenant relief by the first quarter of 2007 as it pertains to the 4.0x interest coverage requirement. Moody's SGL ratings and SGL rating methodology do not assume that borrowers will be able to obtain waivers or amendments, which implies that the banks could demand full repayment of the bank facility term loans and revolver within the time horizon of the SGL rating. Further, Moody's notes that if the company is able to obtain covenant relief the SGL rating will likely return to SGL-3. ICG was in compliance with its financial covenants as of Sept. 30, 2006, but Moody's believes that the company may breach its interest coverage covenant, particularly if EBITDA comes below the forecasted level. Given the uncertainty associated with achieving expected production volume and higher costs, there is a possibility that the company will not reach its EBITDA goal, and may require covenant relief by the first quarter of 2007 to maintain continued access to its funding lines. The company has a significant capex program underway and there is high likelihood that the company will need to utilize its revolver to fund the program. ICG's B2 corporate family rating reflects the significant challenges facing ICG in meeting its aggressive production targets and the significant capex and resultant negative free cash flow that will be associated with these targets, in addition to the capex needed to continue to upgrade the existing equipment fleet. While the company's leverage is reasonable today, Moody's anticipates that the debt level will increase significantly as the company funds its development program and deals with lower than expected cash flow from its existing mines, which in Moody's view are likely to continue to provide operating challenges. The ratings favorably reflect the company's ownership of the majority of its reserves, and its relatively low level of reclamation, workers' compensation, black lung and other legacy liabilities. Moody's last rating action on ICG was, in September 2006, to raise to Ba3 the rating on the company's Gtd. Senior Secured Facility due 2011, and to lower to Caa1 the rating on the company's Gtd. Senior Unsecured Notes due 2014. These actions were taken in accordance with the introduction of Moody's LGD methodology. International Coal Group, headquartered in Scott Depot, West Virginia, is engaged in the mining and marketing of coal, and had revenues in the fiscal year ended Dec. 31, 2005 of $648 million. J & M BEAR: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------ Debtor: J & M Bear Creek Trucking, Inc. dba Rolling Rock 5380 County Road 45 Auburn, IN 46706 Bankruptcy Case No.: 06-12335 Chapter 11 Petition Date: December 15, 2006 Court: Northern District of Indiana (Fort Wayne Division) Judge: Robert E. Grant Debtor's Counsel: Scot T. Skekloff, Esq. Skekloff, Adelsperger & Kleven, LLP 927 South Harrison Street Fort Wayne, IN 46802 Tel: (260) 407-7000 Fax: (260) 407-7137 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Seven Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Stone Street Quarries $998,000 5536 Hoagland Road Hoagland, IN 46745 Garrett State Bank $749,880 120 West King Street Garrett, IN 46738 Hixson Sand & Gravel $26,283 6178 Co Road 7 Garrett, IN 46738-9740 Farm Bureau Insurance $13,365 McIntosh Energy $4,579 Eilbacher Fletcher $4,351 North Central Co-op $1,791 LINCOLN DEVELOPMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Lincoln Development LLC c/o Robert D. Steinberg 6523 California Avenue Southwest P.O. Box 326 Seattle, WA 98136 Bankruptcy Case No.: 06-14464 Type of Business: The Debtor's owner, Paramjeet S. Malhotra, filed for chapter 11 protection on June 8, 2006 (Bankr. W.D. Wash. Case No. 06-11810). Robert D. Steinberg was appointed as the Chapter 11 Trustee in Mr. Malhotra's bankruptcy case. Chapter 11 Petition Date: December 15, 2006 Court: Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Timothy W. Dore, Esq. Ryan Swanson & Cleveland, PLLC 1201 3rd Avenue, Suite 3400 Seattle, WA 98101-3034 Tel: (206) 464-4224 Fax: (206) 621-7568 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million The Debtor does not have any creditors who are not insiders. MARCAL PAPER: Gets Pledge for $84.5 Mil. DIP Financing from HFC --------------------------------------------------------------- Subject to court approval, Marcal Paper Mills, Inc., has secured a loan commitment for up to $84.5 million Debtor-in-Possession financing from HFC, with immediate availability of up to $20 million. This financing package will allow the company to use all of its cash balances and provide it with greater liquidity to fund normal business operations during the restructuring process. "This is an important step in the restructuring process," Company Chairman and CEO Nicholas Marcalus said. "Our core business is strong, and with this financing in place, we expect to emerge from the reorganization as a stronger and healthier company and to forge even better business relationships with our customers, vendors and employees." Headquartered in Elmwood Park, NJ, Marcal Paper Mills, Inc. -- http://www.marcalpaper.com/-- produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from-home use in hotels, restaurants, hospitals offices and factories. Marcal, founded in 1932, is a privately-held, fourth generation family business. It employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtor. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. MASTR ASSET: Moody's Rates Class M-11 Certificates at Ba2 --------------------------------------------------------- Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by MASTR Asset Backed Securities Trust 2006- HE4, and ratings ranging from Aa1 to Ba2 to the mezzanine certificates in the deal. The securitization is backed by adjustable-rate and fixed-rate subprime mortgage loans acquired by UBS Real Estate Securities Inc. The collateral was originated by First NLC Financial Services, LLC, Meritage Mortgage Corporation, Decision One Mortgage Company, EquiFirst Corporation, OwnIt Mortgage Solutions, Inc., First Street Financial, Inc. and LIME Financial Services, Ltd. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, an interest rate swap and cap agreement between the trust and Swiss Re Financial Products Corporation. Moody's expects collateral losses to range from 5.1% to 5.6%. Barclays Capital Real Estate Inc. and Wells Fargo Bank, N.A. will service the loans, and Wells Fargo Bank, N.A. will also act as master servicer. Moody's has assigned Barclays Capital Real Estate Inc. its servicer quality rating of SQ1- as primary servicer of subprime loans. Furthermore, Moody's has assigned Wells Fargo Bank, N.A. its top servicer quality rating of SQ1 as primary servicer of subprime loans and as master servicer respectively. These are the rating actions: * MASTR Asset Backed Securities Trust 2006-HE4 * Mortgage Pass Through Certificates, Series 2006-HE4 Class A-1, Assigned Aaa Class A-2, Assigned Aaa Class A-3, Assigned Aaa Class A-4, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa2 Class M-9, Assigned Baa3 Class M-10,Assigned Ba1 Class M-11,Assigned Ba2 MAYPORT CLO: Moody's Rates $20-Million Class B-2L Notes at Ba3 -------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Mayport CLO Ltd.: -- Aaa to $6,560,000 Class X Floating Rate Notes due February 2013; -- Aaa to $250,000,000 Class A-1L Floating Rate Notes due February 2020; -- Aaa to $60,000,000 Class A-1LV Floating Rate Revolving Notes due February 2020; -- Aa2 to $26,000,000 Class A-2L Floating Rate Notes due February 2020; -- A2 to $25,000,000 Class A-3L Deferrable Floating Rate Notes due February 2020; -- Baa2 to $19,500,000 Class B-1L Floating Rate Notes due February 2020 and -- Ba3 to $20,000,000 Class B-2L Floating Rate Notes due February 2020. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting mainly of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Pacific Investment Management Company LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. MERIDIAN AUTOMOTIVE: Ct. OKs Rejection of 18 Contracts & Leases --------------------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware authorized Meridian Automotive Systems Inc. and its debtor-affiliates to reject 18 Contracts and Leases with these counterparties: * Ashland Inc. * Bayer Material Science LLC * ChemProtect Inc. * Craig Shatzer * David White * Du Pont Herberts Automotive Systems * Du Pont Performance Coatings * E.I. Du Pont De Nemours and Co. * Fran LeVeque * Gary Milburn * Randy Wacaser * Richard Newsted * Solvay Engineered Polymers * Steve McKenzie * Superior Oil Company, Inc. * Tom Eggebeen * Z Technologies Corporation The Court also permits the Debtors to reject the Additional Contracts and Leases, except their Heavy Lift Truck lease with GE Capital. Headquartered in Dearborn, Mich., Meridian Automotive Systems Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. Judge Walrath has confirmed the Revised Fourth Amended Reorganization Plan of Meridian. (Meridian Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). MERIDIAN AUTOMOTIVE: Assumes 107 Contracts and Leases ----------------------------------------------------- The Honorable Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware permitted Meridian Automotive Systems Inc. and its debtor-affiliates to assume approximately 107 of the 234 Contracts and Leases with no associated cure amounts. A 9-page list of the 107 Contracts & Leases to be assumed is available for free at http://ResearchArchives.com/t/s?1754 Judge Walrath also permitted the Debtors to assume 11 Additional Contracts and Leases with: ACE Foreign Liability Global Aerospace Non-owned Aircraft Liability Great American Umbrella including Punitive Wrap Liberty Mutual Auto Liability (Canada) Liberty Mutual Auto Liability (U.S.) Liberty Mutual General Liability (Canada) Liberty Mutual General Liability (U.S.) Liberty Mutual Workers' Compensation Midwest Employers Workers' Compensation (MI & OH Excess) XL Specialty Non-owned Aircraft Liability Zurich Excess including Punitive Wrap Headquartered in Dearborn, Mich., Meridian Automotive Systems Inc. -- http://www.meridianautosystems.com/-- supplies technologically advanced front and rear end modules, lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers. Meridian operates 22 plants in the United States, Canada and Mexico, supplying Original Equipment Manufacturers and major Tier One parts suppliers. The Company and its debtor-affiliates filed for chapter 11 protection on April 26, 2005 (Bankr. D. Del. Case Nos. 05-11168 through 05-11176). James F. Conlan, Esq., Larry J. Nyhan, Esq., Paul S. Caruso, Esq., and Bojan Guzina, Esq., at Sidley Austin Brown & Wood LLP, and Robert S. Brady, Esq., Edmon L. Morton, Esq., Edward J. Kosmowski, Esq., and Ian S. Fredericks, Esq., at Young Conaway Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. Eric E. Sagerman, Esq., at Winston & Strawn LLP represents the Official Committee of Unsecured Creditors. The Committee also hired Ian Connor Bifferato, Esq., at Bifferato, Gentilotti, Biden & Balick, P.A., to prosecute an adversary proceeding against Meridian's First Lien Lenders and Second Lien Lenders to invalidate their liens. When the Debtors filed for protection from their creditors, they listed $530 million in total assets and approximately $815 million in total liabilities. Judge Walrath has confirmed the Revised Fourth Amended Reorganization Plan of Meridian. (Meridian Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). MERRILL LYNCH: Fitch Holds Rating on $39-Mil. Class G Certs. at B- ------------------------------------------------------------------ Merrill Lynch Mortgage Investors, Inc.'s commercial mortgage pass- through certificates, series 1996-C2 are affirmed by Fitch Ratings as: -- $7.5 million class C at 'AAA'; -- $56.9 million class D at 'AAA'; -- Interest only class IO at 'AAA'; -- $28.5 million class E at 'AAA'; -- $62.6 million class F at 'BB+'; and, -- $39.8 million class G at 'B-'. Fitch does not rate the $14.4 million class H. Classes A-1 through B have paid in full. Although credit enhancement levels have been improving due to loan payoffs and scheduled amortization since the last Fitch rating action, Fitch remains concerned about the Shilo hotel portfolio. As of the September 2006 distribution date, the pool's aggregate certificate balance has decreased 81.6% to $209.8 million from $1.1 billion at issuance. There are currently 53 loans remaining in the pool of the original 300 at issuance. Currently, six assets are in special servicing, of which four loans comprise the Shilo portfolio. The Shilo portfolio consists of the A- and B-notes on four Shilo hotels, which are located in various cities in Oregon and Washington; both notes are held inside the Trust. The loans are currently in special servicing, although there has been no event of default. The loans remain current, although year-end 2005 data indicate that three of the hotels are not generating sufficient income to meet debt service payments. The largest non-Shilo specially serviced asset is a hotel located in Corvallis, Oregon and is real estate owned. The special servicer is negotiating with a potential purchaser for this asset. The next largest non-Shilo specially serviced loan is secured by an office building in Fort Wayne, Indiana and is 90+ days delinquent. The special servicer is evaluating workout strategies with respect to this loan. Fitch has identified 17 loans as Fitch Loans of Concern, which include the specially serviced loans and those loans with low debt service coverage ratio and declining occupancies. Fitch has incorporated the increased risk associated with these loans into its rating analysis. MOONLIGHT RESTAURANT: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Moonlight Restaurant, Inc. dba Castelli's Moonlight Restaurant and Catering 3400 Fosterburg Road Alton, IL 62002 Bankruptcy Case No.: 06-32186 Type of Business: The Debtor operates a restaurant. See http://www.moonlightrestaurant.com/ Chapter 11 Petition Date: December 19, 2006 Court: Southern District of Illinois (East St. Louis) Debtor's Counsel: Donald M. Samson, Esq. 226 West Main Street, Suite 102 Belleville, IL 62220 Tel: (618) 235-2226 Fax: (618) 235-0037 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sysco Food Services of $230,000 St. Louis 2850 Mueller Road St. Charles, MO 63301 Advance Me, Inc. $50,000 600 Town Park Lane, Suite 500 Kennesaw, GA 30144 ADP Payroll $20,642 Financial Services Division 12200 Weber Hill Road St. Louis, MO 63127 Kane Mechanical, Inc. $10,519 170 East Alton Avenue East Alton, IL 62024 PFG Middendorf $9,435 P.O. Box 790192 St. Louis, MO 63179-0192 Hughes & Assoc., CPA, P.C. $9,375 Manhattan Coffee/ $7,128 Sara Lee Coffee The Telegraph $5,842 Sam's Club $5,537 SB Smart Yellow Pages $4,245 Capital One, F.S.B. $3,776 Muzak-Gateway River $2,550 Southern Wine & Spirits of $2,415 Illinois Tipton Linen Service $1,679 Clean R Ceilings $1,494 Commercial Steam Cleaners, Inc. $1,361 Farrel, Hunter, $1,195 Hamilton and Julian Callison Distributing $1,056 Edward Don & Company $964 Ecolab $942 NEWCOMM WIRELESS: Can Access $16 Million of DIP Financing --------------------------------------------------------- NewComm Wireless Services, Inc., obtained approval from the U.S. Bankruptcy Court for the District of Puerto Rico to draw $16 million from a $38 million debtor-in-possession credit facility. The Debtor will use the postpetition financing to: -- upgrade its network; -- satisfy license-related obligations for US$7.8 million owed to the U.S. Federal Communications Commission; and -- pay its budgeted operating expenses and other chapter 11 administrative expenses. Additionally, the Debtor says the DIP facility is an integral component in a fully integrated transaction involving the stalking horse purchaser of Newcomm's business assets. PR Wireless, Inc., has offered to purchase Newcomm's assets for $103.2 million, subject to various adjustments. The sale agreement is structured so that the net proceeds will be sufficient to, among others, pay for the DIP loan, the Debtor says. The Debtor underscores that part of the DIP loan will be used to fund the build-out and upgrade of its telecommunications network, an essential element of its Chapter 11 case. Once the upgrade is completed, the Debtor says it will be able to service far-flung areas not reached by its competitors. To secure the DIP lenders' interest, they will be given perfected, first-priority security interests and liens upon all unencumbered Newcomm property. The lenders can be reached at: M/C Venture Partners Attn: James F. Wade Brian M. Clark 75 State Street, Suite 2500 Boston, MA 02109 Telecopy: 617-345-7201 -- and -- Columbia Capital LLC Attn: Harry Hopper Reservoir Palace 1601 Trapelo Road, Suite 268 Waltham, MA 02451 The DIP lenders' agent can be reached at: D.B. Zwirn Special Opportunities Fund, L.P. c/0 D.B. Zwirn & Co., L.P. Attn: David C. Lee 745 Fifth Avenue 18th Floor New York, NY 10151 Telecopy: 646-720-9077 The agent is represented by: Martinez Odell & Calabria San Juan, PR -- and -- Sonnenschein Nath & Rosenthal LLP 1221 Avenue of the Americas New York, NY Headquartered in Guaynabo, PR, NewComm Wireless Services, Inc., is a PCS company that provides wireless service to the Puerto Rico market. The company is a joint venture between ClearComm, L.P. and Telefonica Larga Distancia. The company filed for chapter 11 protection on Nov. 28, 2006 (Bankr. D. P.R. Case No. 06-04755). Carmen D. Conde Torres, Esq., at C. Conde & Assoc. and Peter D. Wolfston, Esq., at Sonnenschein Nath & Rosenthal LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it reported assets and liabilities of more than $100 million. NEWCOMM WIRELESS: Selling Assets to PR Wireless for $103.2 Million ------------------------------------------------------------------ NewComm Wireless Services, Inc., asks the U.S. Bankruptcy Court for the District of Puerto Rico authority to sell substantially all of its assets to PR Wireless, Inc., for $103.2 million, subject to higher and better offers. Under the asset purchase agreement, PR Wireless is liable to pay $3 million if it wins the bidding but fails to consummate the sale, while it stands to get $3.3 million break-up fee if it loses to another bidder. Proceeds from the sale will be used to pay NewComm's secured prepetition debt and fund its network upgrade project that would give it a competitive advantage. The Debtor further asks the Court to approve an auction in Feb. 13, 2007. The sale transaction is expected to close by April 15, 2007. A copy of the APA's pertinent points is available free of charge at http://ResearchArchives.com/t/s?175a A copy of the bidding procedures is available free of charge at: http://ResearchArchives.com/t/s?175b Headquartered in Guaynabo, PR, NewComm Wireless Services, Inc., is a PCS company that provides wireless service to the Puerto Rico market. The company is a joint venture between ClearComm, L.P. and Telefonica Larga Distancia. The company filed for chapter 11 protection on Nov. 28, 2006 (Bankr. D. P.R. Case No. 06-04755). Carmen D. Conde Torres, Esq., at C. Conde & Assoc. and Peter D. Wolfston, Esq., at Sonnenschein Nath & Rosenthal LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it reported assets and liabilities of more than $100 million. NORTEK INC: S&P Holds Corporate Credit Rating at B -------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including its 'B' corporate credit rating, on building products manufacturer Nortek Inc. and its parent, NTK Holdings Inc. At the same, Standard & Poor's removed the ratings from CreditWatch, where they were placed on May 8, 2006, with positive implications, in connection with NTK's planned $600 million common stock IPO. The outlook is stable. "The rating actions reflect uncertain financial market conditions and, consequently, our reservations about NTK's ability to complete the IPO in the near term," said Standard & Poor's credit analyst Pamela Rice. "Without the meaningful debt reduction anticipated from the potential IPO proceeds, we expect debt leverage to remain in the 5x-6x range, a level appropriate for a 'B' corporate credit rating." Total debt, including debt at NTK, capitalized operating leases, and postretirement liabilities, was $2 billion at Sept. 30, 2006. "We expect good brand names, well-established positions in the major channels of distribution, new product introductions, and a focus on low-cost operations to help sustain Nortek's solid market shares," Ms. Rice said. Providence, Rhode Island-based Nortek's key product lines include: kitchen range hoods and bath fans; heating, ventilating, and air conditioning systems for site-built residential, custom-designed commercial, and manufactured housing applications; and audio/visual distribution and control systems and security and access control products. Ms. Rice said, "Earnings diversity provided by Nortek's business mix and the likely continuation of improvement in the company's cost position through strategic sourcing and plant ationalization are positives for stable internal cash generation. Aggressive shareholder actions or a step-up in more sizable debt-financed acquisitions could lead to a negative outlook. However, if the company's proposed $600 million IPO is successful, and proceeds are used for debt reduction, we could raise the ratings if market conditions do not soften more than currently expected." ONE IP: Files Voluntary Bankruptcy Petition in Connecticut ---------------------------------------------------------- One IP Voice, Inc., filed for relief under Chapter 11 of the U.S. Bankruptcy Code on Dec. 13, 2006, in Hartford, Connecticut. On Dec. 19, 2006, a preliminary order to use cash collateral through Dec. 29, 2006 was entered by the Court. One IP Voice has retained the firm Development Specialists, Inc. of Chicago, Illinois, to assist it in pursuing strategic alternatives. About One IP Voice Inc. Headquartered in East Hartford, Connecticut, One IP Voice Inc. (OTCBB: OIVO) -- http://www.oneipvoice.com/-- is the parent company for Farmstead Telephone Group and OIPV Corp. One IP Voice Inc. was formed as a result of a name change that took effect on July 19, 2006. Farmstead is one of the full service enterprise telecommunications providers with a comprehensive nationwide systems, services and parts network in the U.S. OIPV Corp. provides Carrier-Based Hosted Voice over Intelligent Protocol solutions to Small to Medium Businesses nationwide. ONE IP: Case Summary & 40 Largest Unsecured Creditors ----------------------------------------------------- Lead Debtor: One IP Voice, Inc. fka Farmstead Telephone Group, Inc. 22 Prestige Park Circle East Hartford, CT 06108 Bankruptcy Case No.: 06-21242 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- OIPV Corp. 06-21243 Type of Business: One IP Voice Inc. is now the parent company for Farmstead Telephone Group and OIPV Corp. The Debtor was formed as a result of a name change that took effect on July 19, 2006. It provides telecommunication parts, systems and services. See http://www.oneipvoice.com/ Chapter 11 Petition Date: December 13, 2006 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtor's Counsel: Jon P. Newton, Esq. Reid & Riege One Financial Plaza Hartford, CT 06103 Tel: (860) 278-1150 Fax: (860) 240-1002 Total Assets Total Debts ------------ ----------- One IP Voice, Inc. $9,452,000 $6,692,000 OIPV Corp. $776,000 $5,273,000 A. One IP Voice, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Catalyst Telecom/Paracon $1,745,181 Attn: Pres./Managing Agent P.O. Box 890222 Charlotte, NC 28289 OTISCO Valley Telecom, Ltd. $591,417 Attn: Pres./Managing Agent 7704 Maltlage Drive Liverpool, NY 13090 Fonesys, Inc. $283,802 Attn: Pres./Managing Agent 140 Pratt Oval Glen Cove, NY 11542 VODA One Corporation $242,011 Attn: Pres./Managing Agent P.O. Box 10040 Church St. New York, NY 10259 Rhyne Communication, Inc. $113,663 Attn: Pres./Managing Agent 20 Chapin Road Pine Brook, NJ 07058 ATL Enterprises, Inc. $94,935 Attn: Pres./Managing Agent Dept. 530 P.O. Box 150473 Hartford, CT 06115 CDW $57,530 Attn: Pres./Managing Agent 200 N. Milwaukee Avenue Vernon Hills, IL 60061 Gesmer Updegrove, LLP $52,630 ATTN: Pres./Managing Agent 40 Broad Street Boston, MA 021094310 Carlin, Charron & Rosen LLP $43,000 Attn: Pres./Managing Agent 1400 Computer Drive Worcester, MA 01581 Fremont Prestige Park, LLC $31,307 Attn: Pres./Managing Agent Fremont Management, LLC 65 Lasalle Road, Suite 202 West Hartford, CT 06107 Avaya Inc. $29,229 Attn: Pres./Managing Agent P.O. Box 5332 New York, NY 10087 Deer Technologies $28,836 Attn: Pres./Managing Agent 481 Elm Street West Haven, CT 06516 Communications Supply Corp. $26,692 Attn: Pres./Managing Agent 3050 Payshere Circle Chicago, IL 60674 Advanced Procurement Center $25,721 ATTN: Pres./Managing Agent 31 Westminster Rd. Stamford, CT 06902 Chubb Group of Insurance Co. $18,825 Attn: Pres. TR Solutions, Inc. $17,989 Attn: Pres. Accountemps $15,990 Attn: Pres./Managing Agent 12400 Collections Center Drive Chicago, IL 60693 SDC Solutions, Inc. $14,878 Attn: Pres. Dell Computer $13,065 Attn: Pres./Managing Agent Dept. 57 - 0012763854 P.O. Box 9020 Des Moines, IA 50368 Fontel Inc. $12,483 Attn: Pres./Managing Agent 804 E. Street Aurora, NE 68818 B. One IP Voice, Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Sylantro Systems Corporation $53,580 Attn: Pres./Managing Agent 910 East Hamilton Ave. Ste 300 Campbell, CA 95008 Profitec Billing Services $34,665 Attn: Pres./Managing Agent P.O. Box 845180 Boston, MA 02284 XO Communications $30,805 Attn: Pres./Managing Agent P.O. Box 7158 Pasadena, CA 91109 American Express $24,503 Attn: Pres./Managing Agent P.O. Box 1270 Newark, NJ 07101 Straitshot $13,982 Attn: Pres./Managing Agent 330 112th Ave. NE #301 Bellevue, WA 98004 Genesis Group $13,500 Attn: Pres. Centric Voice $10,419 Attn: Pres./Managing Agent P.O. Box 678395 Dallas, TX 75267 Fathom, LLC $9,250 Attn: Pres./Managing Agent 100 Allyn Street Hartford, CT 06103 Sales Synergy $9,000 Attn: Pres./Managing Agent 7 Knollwood Drive Glenville, NY 12302 Telecom Reseller, Inc. $6,933 Attn: Pres./Managing Agent 62817 E. Terrace Wind Drive Tucson, AZ 85739 Brookwood Tamarac $6,764 Plaza Investors Attn: Pres./Managing Agent Dept. 1877 Denver, CO 80291 Eric Ackerman $4,934 2833 Croix Court Virginia Beach, VA 23451 Lawrence S. Weiner $4,500 35 Fair Oak Drive Easton, CT 06612 Truevance Management, Inc. $4,400 Attn: Pres./Managing Agent P.O. Box 551422 Jacksonville, FL 32255 Level 3 Communications $4,364 Attn: Pres. TNA, LLC $4,051 Attn: Pres./Managing Agent 6 West Downer Place Aurora, IL 60506 Eon Office Furniture $3,581 Attn: Pres./Van Young 60 Tejon Street Denver, CO 80223 Microsoft Live Meeting $3,300 Attn: Pres./Managing Agent 1400 SW 5th Ave. Floor 3 Portland, OR 98052 Corporation Service Company $3,008 Attn: Pres./Managing Agent P.O. Box 13397 Philadelphia, PA 19101 Fedex $2,879 Attn: Pres./Managing Agent P.O. Box 371461 Pittsburgh, PA 15250 OSPREY CDO: Moody's Rates $9-Million Class B-2L Notes at Ba2 ------------------------------------------------------------ Moody's Investors Service assigned these ratings to Notes issued by Osprey CDO 2006-1 Ltd.: -- Aaa to $7,500,000 Class X Notes Due January 2014; -- Aaa to $184,000,000 Class A-1LA Floating Rate Notes Due April 2022; -- Aaa to $28,000,000 Class A-1LB Floating Rate Notes Due April 2022; -- Aa2 to $34,000,000 Class A-2L Floating Rate Notes Due April 2022; -- A2 to $15,000,000 Class A-3L Floating Rate Notes Due April 2022; -- Baa2 to $10,000,000 Class B-1L Floating Rate Notes Due April 2022; and, -- Ba2 to $9,000,000 Class B-2L Floating Rate Notes Due April 2022. Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of Portfolio Loans, high- yield bonds, second lien loans, non-senior secured loans, DIP Loans, CLO Securities and Residential Mortgage-Backed Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Brightwater Capital Management, a division of WestLB Asset Management LLC will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. PAMCO CLO: Moody's Lifts Class B Sr. Notes' Rating to Baa2 from B1 ------------------------------------------------------------------ Moody's Investors Service upgraded these classes of Notes issued by PAMCO CLO Series 1997-1, a collateralized debt obligation issuance: * $330,000,000 Class A-2 Floating Rate Senior Secured Notes due Aug. 6, 2009 -- Prior Rating: A1, on watch for possible upgrade -- Current Rating: Aaa * $90,000,000 Class B Second Senior Secured Notes due Aug. 6, 2009 -- Prior Rating: B1, on watch for possible upgrade -- Current Rating: Baa2 According to Moody's, the rating action reflects the improvement in the credit quality of the transaction's underlying collateral portfolio since the last rating action, as well as the ongoing delevering of the transaction. PEABODY ENERGY: Moody's Rates Proposed $500MM Debentures at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned Peabody Energy Corporation's proposed $500 million convertible junior subordinated debentures a rating of Ba2. Moody's also revised Peabody's outlook to stable from negative. At the same time, Moody's affirmed Peabody's Ba1 corporate family rating and the Ba1 senior unsecured rating on its existing revolver, term loan and notes. The ratings reflect the overall probability of default of the company, to which Moody's affirms a PDR of Ba1. The convertible junior subordinated debentures rating of Ba2 reflects a loss given default of LGD6, 95%. The senior unsecured rating of Ba1 reflects a loss given default of LGD3, 47%. Moody's also affirmed Peabody's SGL-1 Speculative Grade Liquidity rating. The revision in outlook reflects the 75% equity component that Moody's credits to the "Basket D" convertible junior subordinated debentures, and the related notional reduction in debt. The proceeds of the $500 million Debentures, along with proceeds of the recent $900 million senior unsecured notes and drawings under the company's term loan, are being used to provide the long term funding of Peabody's recent acquisition of Australian coal miner, Excel Coal Limited, for $1.9 billion, including assumption of debt and fees. The acquisition of Excel will significantly expand Peabody's operation in Australia and its penetration of both the export metallurgical and thermal coal markets. Excel expects to increase its production from about 6 million tons currently to 15 to 20 million tons in 2007 and 2008. The Ba1 corporate family rating reflects Peabody's: 1) favorable debt to EBITDA and good earnings ratios; 2) diversified low-cost operations; 3) extensive and geographically diversified reserves of high quality coal: 4) strong management; and, 5) portfolio of long-term coal supply agreements with a large number of electricity generation customers. However, the rating also reflects the significant increase in debt to fund the Excel acquisition, which increases Peabody's pro forma Sept. 30, 2006 debt to EBITDA ratio to 3.4x from 2.3x, and, giving equity credit of $375 million to the Debentures, the debt to capitalization ratio to 55.8% from 49.9%. The rating also considers the volatile nature of the coal mining business, and operating and development cost pressures that could continue to constrain Peabody's weak free cash flow. The Debentures will, in Moody's view, have sufficient equity-like features to allow it to receive basket "D" treatment, i.e. 75% equity and 25% debt, for financial leverage purposes. This basket designation will shift from "D" to "C" in ten years, i.e. when the Debentures have less than fifty years to maturity. The basket will shift again to "B" after 20 years and "A" after the next 10 years. The basket allocation is based on these rankings for the three dimensions of equity: * No maturity: Moderate -- The Debentures have a 60-year final maturity with a scheduled redemption after 35 years, subject to a Replacement Capital Covenant. The RCC, which obligates Peabody not to redeem or repurchase the Debenture unless it has previously issued qualifying new equity, will be put in place at inception, but will not be operational until year 35. At year 35, Peabody is required to use its commercially reasonable efforts, subject to a market disruption event, to raise sufficient net proceeds from the issuance of qualifying capital securities and redeem the Debentures in full on each succeeding interest payment date prior to the final 60-year maturity. If a qualifying replacement security can't be issued, the maturity extends from interest payment date to interest payment date until the final maturity in 60 years. For the first 35 years, the security can be called subject to intent-based replacement language where Peabody Energy intends to replace the security with the same or more equity-like security. The Debentures are also convertible into Basket D preferred stock at the option of the investor. * No ongoing payments: Strong -- There is optional deferral of distributions for a maximum of 10 years and mandatory deferral tied to the breach of covenants, without giving rise to an event of default and without causing acceleration. If mandatorily deferred or if there is optional deferral for 5 years, distributions must be settled with the issuance of warrants or benign preferred stock. For warrants, there is an 84 million share cap, and for benign preferred stock, 25% of the principal amount. In bankruptcy, any distributions not settled with warrants or benign preferred stock are limited to a claim of 2 years. * Loss absorption: Moderate -- The Debenture will be the most junior subordinated debt of all existing debt, with limited rights and limited ability to cause acceleration. Moody's last rating action on Peabody was to rate its $900 million senior unsecured notes Ba1 in October 2006. Peabody Energy Corporation, headquartered in St. Louis, Missouri, is the world's largest private-sector coal company with revenues in 2005 of $4.6 billion. PEABODY ENERGY: DBRS Rates New $675-Mil. Junior Notes at B (high) ----------------------------------------------------------------- Dominion Bond Rating Service assigned rating of B (high) to the new $675 Million Convertible Junior Subordinated Debentures of Peabody Energy Corporation. The trend is Stable. The rating assigned to the Debentures reflects their deeply subordinated status, with the Debentures ranking junior to all of the Company's existing and future senior and subordinated debt. In accordance with DBRS's policy to reflect structural subordination, a two-notch rating differential is applied to the Debentures vis-a-vis the senior unsecured debt of Peabody, which is presently rated by DBRS at BB. Peabody reported its intention to issue $675 million of Debentures on Dec. 14, 2006. Additionally, the company has granted the underwriters an option to purchase up to an additional $75 million of debentures in the event of over-allotments. DBRS notes that Peabody intends to allocate the net proceeds of the Debentures toward the repayment of debt assumed to partly finance the acquisition of Excel Coal Limited of Australia. DBRS notes therefore that the offering of the Debentures does not adversely impact the overall credit metrics and financial profile of the company. PRC LLC: S&P Holds Rating on $67-Mil. 2nd Lien Term Loan at B- -------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on the proposed second-lien term loan due 2014 of PRC LLC, after the report that the company will increase the amount of the this loan by $12 million, and increase the amount of first-lien debt by $10 million. "We revised the recovery rating because of the larger amount of first-lien debt in the capital structure," said Standard & Poor's credit analyst Andy Liu. Standard & Poor's revised the recovery rating on the second-lien loan to '5', which, along with the 'B-' bank loan rating, two notches below the 'B+' corporate credit rating, indicates the expectation of negligible recovery of principal in the event of a payment default. The recovery rating was revised from a '4', which, along with the bank loan rating, had indicated the expectation of marginal recovery of principal in the event of a payment default. The first-lien credit facilities are rated 'BB-', one notch higher than the 'B+' corporate credit rating on the company, with a recovery rating of '1', indicating high expectation of full recovery of principal in the event of a payment default. Pro forma for the increase, the first-lien credit facilities will consist of a $20 million revolving credit facility due 2012, a $25 million delayed-draw term loan credit facility due 2013, and a $115 million term loan due 2013. Ratings List: * Recovery Rating Revised, Bank Loan Rating Affirmed * PRC LLC -- $67 Million Second-Lien Term Loan revised to B-,Recovery Rating: 5 from B-, Recovery Rating: 4 Ratings Affirmed: * PRC LLC -- Senior Secured $160 Million First-Lien Bank Loans Local Currency at BB- -- Recovery Rating: 1 RAYMOND PROFESSIONAL: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Lead Debtor: Raymond Professional Group, Inc. 126 East Wing Street, #345 Arlington Heights, IL 60004 Bankruptcy Case No.: 06-16748 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Raymond Professional Group - A/E, Inc. 06-16749 Raymond Professional Group - Government, Inc. 06-16750 Raymond Professional Group - Design/Build, Inc. 06-16753 Raymond International, Incorporated 06-16754 Raymond Professional Group - Puerto Rico, 06-16755 Engineering Services, PSC Type of Business: The Debtor provides engineering, architectural, design/build and other technical services to private and government clients, primarily in the power, industrial and process market sectors. See http://www.raymond-co.com/ Chapter 11 Petition Date: December 18, 2006 Court: Northern District of Illinois (Chicago) Judge: Susan Pierson Sonderby Debtor's Counsel: Jason M. Torf, Esq. Schiff Hardin LLP 6600 Sears Tower Chicago, IL 60606 Tel: (312) 258-5500 Fax: (312) 258-5700 Total Assets: $1 Million to $100 Million Total Debts: $1 Million to $100 Million Debtors' Consolidated List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ CNA Surety Corp. Payment bond $3,634,714 333 S. Wabash Ave., 41st Fl. Chicago, IL 60685 William A. Pope Company Arbitration award $3,634,714 1024 Lunt Avenue Schaumburg, IL 60193 Plaza Warehousing and Lease $250,042 Realty Corp. P.O. Box 363328 San Juan, PR 00936 Internal Revenue Service Taxes $213,669 230 S. Dearborn St. MS 4031 CHI Chicago, IL 60604 5080 California LLC Lease $127,520 c/o Jalmar Properties 12121 Wilshire Blvd. Suite 200 Los Angeles, CA 90025 Key Equipment Finance Lease $77,962 Payment Processing P.O. Box 203901 Houston, TX 77216 YAR Engineering Consultant Subcontractor debt $30,000 PMB 122 35 Calle Juan C Borbon Ste. 67 Guaynabo, PR 00969 Paul Solarz Employee - accrued $23,738 512 S. Pine St. vacation Mount Prospect, IL 60056 Andrew McKendrick Employee - accrued $23,582 4569 Woodland Ave. vacation Western Springs, IL 60558 Solar Turbines Trade debt $20,955 P.O. Box 200580 Houston, TX 77216 Holakouee & Associates, Inc. Subcontractor debt $20,750 704 S. Hampton Blvd. Bakersfield, CA 93311 Douglas Blond Employee - accrued $17,157 10506 High Goal Place vacation Bakersfield, CA 93312 Illinois Department of Customer overpayment $15,951 Transportation Division of Highways 819 Depot Ave. Dixon, IL 61021 Thomas McPartland Employee bonus $15,000 790 S. Roselle Rd. Roselle, IL 60172 Robert Mattern Employee - accrued $14,507 226 N. Wright vacation Naperville, IL 60540 Williams Power Corp. Subcontractor debt $14,035 P.O. Box 198735 Atlanta, GA 30384 Roy Walford Employee - accrued $11,540 9405 Huntsman Oak Court vacation Bakersfield, CA 93311 Edwin Krooswyk Employee - accrued $10,369 10752 Racoon Curve vacation Orland Park, IL 60467 Wright Business Solutions Professional services $10,000 P.O. Box 1008 Alexandria, VA 22310 Luis Valentin Subcontractor debt $9,736 RR2 Box 4038 Toa Alta, PR 00953 REALOGY CORP: S&P Pares Corporate Credit Rating to BB+ from 'BBB' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Realogy Corp. to 'BB+' from 'BBB'. In addition, the rating was placed on CreditWatch with negative implications. At the same time, Standard & Poor's affirmed the 'BBB' rating on the residential real estate company's senior unsecured note issues. The Parsippany, New Jersey-headquartered company had pro forma consolidated debt outstanding at Sept. 30, 2006, including liabilities under management programs and adjusted for operating leases, of about $3.2 billion. "The downgrade and CreditWatch listing reflected Realogy's announcement that it had entered into a definitive agreement to be acquired by Apollo Management L.P. in a transaction valued at approximately $9 billion, including the assumption or repayment of approximately $1.6 billion of net debt and legacy contingent, as well as other liabilities of approximately $750 million," said Standard & Poor's credit analyst Michael Scerbo. "While the ratings on Realogy have historically incorporated a relatively aggressive financial policy, this proposed transaction demonstrates an appetite for a higher level of risk. Thus our financial policy expectations have changed." Mr. Scerbo also said, "If the proposed transaction, or any other transaction, does not close, and the likely refinancing does not occur, we would lower our rating on these notes to a level in line with Realogy's corporate credit rating. We will review our ratings on Realogy when specifics as to the new capital structure are announced. In addition, an important consideration will also be management's long-term business and financial strategies following the buyout." SACO I: S&P Removes Watch on Junk Rated Class B-2 Certificates -------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on class M-2, affirmed its rating on class B-1, and lowered its rating on class B-2 from SACO I Trust 2004-1. At the same time, the rating on class B-2 was removed from CreditWatch, where it was placed with negative implications on Oct. 18, 2006. The upgrade of class M-2 reflects a significant increase in credit support due to the paydown of the senior classes and the shifting interest feature of the transaction. Before this transaction reaches its step-down date, class M-2, the most senior class outstanding, will continue to receive all principal payments. After the step-down date, this deal will likely continue to pay sequentially due to the failed cumulative loss and delinquency triggers. As of the November remittance period, cumulative losses were $7,354,206, or 2.87% of the original pool balance, which is significantly higher than the trigger threshold of 1.75%. This deal has been failing its delinquency triggers since November 2005. Currently, the 60-plus-day delinquency rate is 9.748% of the current pool balance, exceeding the 5% trigger threshold. The failed triggers will prevent subordinated classes from receiving any principal payments until the principal balances of the senior classes are reduced to zero. The downgrade of class B-2 reflects the deteriorating collateral performance of this pool. Credit support for this transaction is derived from a combination of subordination, excess interest, and overcollateralization . Realized losses have been consistently outpacing excess interest spread and have eroded O/C to an extent that class B-2 does not have sufficient credit enhancement to maintain the prior 'B' rating. As of the November 2006 remittance period, O/C had been reduced to $839,907, or 0.30% of the original pool balance, which is significantly below its target of 3.65%. As mentioned above, this deal has been failing both the cumulative loss and delinquency triggers, so class B-2 has been locked out from receiving any principal payments. Total delinquencies for the pool are 14.42% of the current pool balance, and severe delinquencies are 6.6% of the current pool balance. Based on Standard & Poor's expected loss severity for the severely delinquent loans, credit support percentages for class B-2 are projected to be close to zero. The rating on class B-2 was removed from CreditWatch because it was lowered to 'CCC', and according to Standard & Poor's surveillance practices, ratings lower than 'B-' on classes of certificates or notes from RMBS transactions are not eligible to be on CreditWatch. The affirmation of the rating on class B-1 is based on credit support percentages that are sufficient to maintain the current rating. The pool securing the mortgage pass-through certificates consists of conventional, fixed-rate, fully amortizing and balloon second- lien mortgage loans, with original terms to maturity of up to 30 years. The guidelines used in the origination process generally employed standards that assess the credit risk of borrowers with imperfect credit histories or relatively high ratios of monthly mortgage payments to income. Rating Raised SACO I Trust 2004-1 Rating ------ Class To From ----- -- ---- M-2 AAA A Rating Lowered And Removed From Creditwatch Negative SACO I Trust 2004-1 Rating ------ Class To From ----- -- ---- B-2 CCC B/Watch Neg Rating Affirmed SACO I Trust 2004-1 Class Rating ----- ------ B-1 BBB SALTON SEA: S&P Lifts BB+ Rating on $256.8-Mil. Senior Bonds ------------------------------------------------------------ Standard & Poor's Ratings Services raised its rating to 'BBB-' from 'BB+' on Salton Sea Funding Corp.'s $256.8 million senior secured bonds series C, E, and F after an annual review of the project. Standard & Poor's also raised its rating on CE Generation LLC's $400 million senior secured notes to 'BB+' from 'BB-', concomitant with the raised rating on subsidiary Salton Sea's debt. The outlook is stable. The raised ratings primarily reflect the Oct. 19, 2006 approval by the California Public Utilities Commission of a settlement with Southern California Edison), the primary offtaker from Salton Sea. The settlement provides for a fixed price for energy under the contracts for a five-year period from May 1, 2007 to April 30, 2012. The fixed price will be 6.15 cents/kWh, escalated 1% annually from May 1, 2008. The current price of 5.37 cents/kWh will remain in effect through April 30, 2007. These prices result in about $86 million in additional revenues per year compared to the current price of 5.37 cents/kWh. The ratings are removed from CreditWatch with positive implications, where they were placed on June 13, 2006 following the settlement with SCE. The outlook is stable. "The settlement also removes the major credit concern for the project, namely the prospect of a shift to short-run avoided cost pricing for energy from the project, which would have exposed power prices to volatile natural gas prices and uncertain market heat rates in California," said Standard & Poor's credit analyst Swami Venkataraman. "This settlement allows Salton Sea to maintain strong coverage through the maturity of the bonds, even under conservative short-run avoided cost pricing assumptions after the fixed-price period ends in May 2012." Salton Sea is a project-funding vehicle that financed the purchase and construction of 10 geothermal power projects in Southern California. It is a wholly owned subsidiary of Magma Power Co., which, in turn, is wholly owned by CE Gen. CE Gen is owned 50% by MidAmerican Energy Holdings Co. and 50% by TransAlta USA Inc., a wholly owned subsidiary of TransAlta Corp. CE Gen owns and operates the Salton Sea Units I-V and the partnership projects Vulcan, Del Ranch, Elmore, Turbo, and Leathers. The total capacity of these projects is about a net 327 MW. SECURITIZED ASSET: Moody's Rates Class B-4 Certificates at Ba1 -------------------------------------------------------------- Moody's Investors Service assigned an Aaa rating to the senior certificates issued by Securitized Asset Backed Receivables LLC Trust 2006-WM3 and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by WMC Mortgage Corp originated adjustable-rate and fixed-rate first and second-lien subprime mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, an interest rate swap agreement and an interest rate cap agreement. Moody's expects collateral losses to range from 4.55% to 5.15%. Barclays Capital Real Estate Inc., dba HomEq Servicing, will service the loans. Moody's has assigned an SQ1- rating to Barclays as a primary servicer of subprime first lien loans. These are the rating actions: * Securitized Asset Backed Receivables LLC Trust 2006-WM3 * Mortgage Pass-Through Certificates, Series 2006-WM3 Class A-1, assigned Aaa Class A-2, assigned Aaa Class A-3, assigned Aaa Class M-1, assigned Aa1 Class M-2, assigned Aa2 Class M-3, assigned Aa3 Class M-4, assigned A2 Class M-5, assigned A3 Class B-1, assigned Baa1 Class B-2, assigned Baa2 Class B-3, assigned Baa3 Class B-4, assigned Ba1 Class B-4 has been sold in a privately negotiated transaction without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under rule 144A. SHOSHONE SILVER: Williams & Webster Raises Going Concern Doubt -------------------------------------------------------------- Shoshone Silver Mining Co. Inc. filed its financial statements for the year ended Dec. 31, 2005 with the Securities and Exchange Commission on Dec. 4, 2006. Williams & Webster, PS, in Spokane, Washington, raised substantial doubt about Shoshone Silver Mining Company Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005 and 2005. The auditing firm pointed to the company's significant operating losses. Shoshone Silver Mining Company Inc. reported an $84,681 net loss on $1,373 of revenues for the year ended Dec. 31, 2005, compared with a $567,085 net loss on $131,249 of revenues for the prior year. None of the company's properties are in production, and consequently the company reported zero operating income. The decrease in net loss is primarily due to the $566,000 decrease in operating expenses and the $54,000 increase in net gain on sale of securities. At Dec. 31, 2005, the company's balance sheet showed $1.3 million in total assets, $1,461 in total liabilities, and $1.3 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2005, are available for free at http://researcharchives.com/t/s?1756 About Shoshone Silver Headquartered in Idaho's Silver Valley, Shoshone Silver Mining Company Inc. (Other OTC: SHSH.PK) -- http://www.shoshonesilvermining.com/-- has a core portfolio of silver projects in North Idaho's Lakeview District supplemented by a silver project in Mexico's historic Zacatecas Silver district and a variety of platinum group metal, gold and uranium projects located in the western United States. Shoshone Silver Mining operated its three Lakeview District Mines and Lakeview Mill successfully producing silver, gold and base metals for much of the two decades following the company's founding in 1969. As silver prices declined into the early 1990's, Shoshone closed much of its production and shifted its policy towards acquiring new properties and diversifying its interest. The company's activities have been limited to exploring and acquiring rights to explore properties which the company believes are prospective for platinum group metals. None of the company's properties are in production. SIERRA PACIFIC: Offers for Up To $110 Million of Sr. Notes Expire ----------------------------------------------------------------- Sierra Pacific Resources disclosed the expiration of its tender offers for up to $25 million in aggregate principal amount of its outstanding 7.803% Senior Notes due 2012 and up to $85 million in aggregate principal amount of its outstanding 8.625% Senior Notes due 2014. A total of $25,308,000 in aggregate principal amount of the 7.803% Senior Notes and $130,415,000 in aggregate principal amount of the 8.625% Senior Notes were tendered prior to 12:00 midnight, New York City time, on Dec. 14, 2006. The Company accepted for purchase $24,972,000 aggregate principal amount of the 7.803% Senior Notes and $84,961,000 aggregate principal amount of the 8.625% Senior Notes. The settlement of the Offers was completed on Dec. 15, 2006. All holders that tendered Notes that were accepted for payment received accrued and unpaid interest up to, but excluding, Dec. 15, 2006. Since the principal amount validly tendered and not withdrawn at the Expiration Time of both series of Notes exceeded the principal purchase amount of each such series, the company accepted both series on a pro rata basis as described in the Offer to Purchase dated Nov. 15, 2006. The pro ration factor with respect to the 7.803% Senior Notes was approximately 98.8%. The pro ration factor with respect to the 8.625% Senior Notes was approximately 65.2%. Credit Suisse (USA) LLC acted as the exclusive Dealer Manager for the Offers and Morrow & Co., Inc. served as the Information Agent. Headquartered in Las Vegas, Nevada, Sierra Pacific Resources (NYSE: SRP) -- http://www.sierrapacificresources.com/ -- is a holding company whose principal subsidiaries, Nevada Power Company and Sierra Pacific Power Company, are electric and electric and gas utilities, respectively. Sierra Pacific Resources also holds relatively modest non-utility investments through other subsidiaries. * * * As reported in the Troubled Company Reporter on Oct. 16, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology, the rating agency downgraded its Ba2 Corporate Family Rating for Sierra Pacific Resources to Ba3. SINGA FUNDING: Moody's Rates $2-Mil. Class D Fixed Notes at Ba2 --------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes and Combination Securities issued by Singa Funding, Ltd.: -- Aaa to $600,000,000 Class A1M Floating Rate Notes Due 2046; -- Aaa to $260,000,000 Class A1Q Floating Rate Notes Due 2046; -- Aaa to $40,000,000 Class A2 Floating Rate Notes Due 2046; -- Aaa to $48,000,000 Class A3 Floating Rate Notes Due 2046; -- Aa2 to $30,000,000 Class A4 Floating Rate Notes Due 2046; -- A2 to $10,000,000 Class B Deferrable Floating Rate Notes Due 2046; -- Baa3 to $9,000,000 Class C Deferrable Floating Rate Notes Due 2046; -- Ba2 to $2,000,000 Class D Deferrable Fixed Rate Notes Due 2046; and, -- A3 to $5,000,000 Class Q Notes Due 2046. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The Moody's rating of the Class D Notes addresses only the ultimate receipt of the principal and the Moody's rating of the Class Q Notes addresses the ultimate receipt of the Class Q Note Notional Balance and the Class Q Periodic Interest Rate. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of RMBS Securities and other Asset-Backed Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Lion Capital Management Limited will act as the Collateral Manager for the portfolio of assets. SEARS CANADA: DBRS Holds Term Facilities' Rating at BB ------------------------------------------------------ Dominion Bond Rating Service confirmed the ratings of Sears Canada Inc.'s Revolving Term Facility; Non-Revolving Term Facility; and Unsecured Debentures at BB. The trends are now Stable. The confirmations resolve the Under Review with Developing Implications status that all the Company's long-term ratings were placed under on Dec. 5, 2005, when Sears Holdings Corporation offered to purchase the minority shares of Sears Canada. Sears Holdings' offer to purchase the minority shares expired Nov. 28, 2006, with Sears Holdings increasing ownership to 70.2% of the total shares. As such, the attempt to privatize Sears Canada will not go forward, reducing DBRS's concerns about the future capital structure of the business. Sears Canada has recently presented an improving financial profile with improved profitability and reduced leverage, however, its ratings remain constrained by the ongoing challenges facing the business in the fiercely competitive retail environment. DBRS will continue to monitor the ongoing financial strategy at Sears Canada with a particular emphasis on any transaction which may result in significant erosion of Sears Canada's current strong liquidity position. In addition, DBRS will watch for any sign that recent cost-cutting at Sears Canada will erode business operations with a particular regard for any change in key performance areas such as erosion in the Company's dominant market share in the appliance sector or deterioration in service levels, which have been an historic strength. SEARS HOLDINGS: Earns $196 Million in Quarter Ended October 28 -------------------------------------------------------------- Sears Holdings Corporation reported net income of $196 million for the third quarter ended Oct. 28, 2006, compared with net income of $58 million for the third quarter ended Oct. 29, 2005. Third quarter results for 2006 include $101 million of income from the company's investment of a portion of its surplus cash. Third quarter fiscal 2006 results also include $6 million of net income in the form of lower tax expense, related to the resolution of certain income tax matters related to Kmart Corporation. Additionally, both the current and prior year third quarter periods included restructuring charges, $4 million in 2006 and $59 million in 2005. The company's improved quarterly results reflect increased operating income, driven primarily by reduced expenses across all businesses and increased gross margins at both Sears Domestic and Sears Canada. Third quarter operating results at both Sears Domestic and Sears Canada improved relative to the same quarter last year, while operating results at Kmart declined due to lower sales levels and gross margins, partially offset by reduced expenses. "We continue to manage our costs effectively as we make the changes necessary to become a customer-driven organization," said Aylwin Lewis, Sears Holdings' chief executive officer and president. He added, "We are excited to enter the holiday sales period with the products we believe our customers want and an approach that focuses our entire organization in support of our stores in delivering superior customer service across all our businesses and formats." For the quarter, domestic comparable store sales declined 3% in the aggregate, with Sears Domestic comparable store sales declining 4.8% and Kmart comparable store sales declining 0.7%. The comparable store sales declines at both Kmart and Sears Domestic reflect the impact of increased competition and lower transaction volumes. At Kmart, comparable store sales declined across a number of categories, including home goods, hardlines, food and consumables, and general merchandise, partially offset by increased comparable store sales within apparel and pharmacy. At Sears Domestic, comparable store sales declined across most categories and formats, with more pronounced sales declines within both the home fashion and lawn and garden categories. These declines were partially offset by pronounced sales increases in women's apparel, reflecting what the company believes are improved assortments in this business relative to last year. Last year, Sears Domestic modified its apparel assortment to a more "fashion forward" offering, which was not successful and led to significant sales declines within Sears Domestic's apparel business during the second half of fiscal 2005. Total revenues declined $300 million to $11.9 billion for the 13 weeks ended Oct. 28, 2006, as compared to total revenues of $12.2 billion for the 13 weeks ended October 29, 2005. Sears revenues declined $100 million as compared to the third quarter last year, primarily reflecting the impact of comparable store sales declines, partially offset by an increase in the total number of Sears Full-line stores in operation, resulting mainly due to conversions from the Kmart format. Total revenues at Kmart declined $200 million as compared to the prior year period, primarily reflecting a reduction in the total number of Kmart stores in operation and, to a lesser degree, the impact of comparable store sales declines. Operating income was $276 million for the 13 weeks ended Oct. 28, 2006, as compared to $119 million for the 13 weeks ended Oct. 29, 2005. Operating income in the third quarter of last year was negatively impacted by $59 million in restructuring charges at Sears Canada and Kmart as compared with $4 million in such charges at Kmart in the current year quarter. Excluding the impact of these charges, prior year third quarter operating income was $178 million. In addition to the above-noted impact of lower restructuring charges, reduced selling and administrative expenses and increased total gross margin dollars also favorably impacted overall operating income in the current year quarter. Financial Position The company had cash and cash equivalents of $2.1 billion at Oct. 28, 2006 as compared to $1.2 billion at Oct. 29, 2005 and $4.4 billion at Jan. 28, 2006. During the current quarter, cash and cash equivalents declined $1.6 billion from the $3.7 billion balance at the end of the second quarter. Approximately $1.1 billion of that decrease was due to cash being used to build inventories for the holiday selling season. Other cash uses in the quarter included $289 million for share repurchases, $267 million for pension contributions, debt repayments of $258 million and $153 million of capital expenditures. Merchandise inventories at Oct. 28, 2006 were approximately $11.5 billion, as compared to $10.8 billion as of Oct. 29, 2005. The increase reflects planned increases due to earlier receipt of product, the expansion of product assortment this year and increases in apparel and other merchandise categories where the company believes business trends support higher inventory levels. Merchandise payables were $4.2 billion at Oct. 28, 2006, as compared to $4.3 billion as of Oct. 29, 2005. As the result of resolving certain tax matters during the third quarter of 2006 pertaining to the bankruptcy of Kmart Corporation, a predecessor operating company of Kmart, the company recorded approximately $104 million of deferred tax assets with an offsetting credit recorded to capital in excess of par value. During the third quarter of 2006, the company repurchased approximately 2 million common shares at a total cost of $289 million, or an average price of $141.89 per share. As of Oct. 28, 2006, the company had remaining authorization to repurchase $618 million of common shares under its existing share repurchase program approved by the board of directors. At Oct. 28, 2006, the company's balance sheet showed $30.5 billion in total assets, $18.8 million in total liabilities, and $11.6 billion in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Oct. 28, 2006, are available for free at http://researcharchives.com/t/s?175c About Sears Holdings Sears Holdings Corporation -- http://www.searsholdings.com/-- is the nation's third largest broadline retailer with approximately 3,800 full-line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, home electronics and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. The company is the nation's largest provider of home services, with more than 13 million service calls made annually. * * * As reported in the Troubled Company Reporter on Oct. 27, 2006, Moody's Investors Service affirmed its Ba1 Corporate Family Rating for Sears Holdings Corporation, and its Baa3 rating on the company's $4 billion Sr. Sec. Revolving Credit Facility. Additionally, Moody's assigned an LGD2 rating to the facility, suggesting creditors will experience a 24% loss in the event of a default. As reported in the Troubled Company Reporter on June 23, 2006, Standard & Poor's Ratings Services revised its outlook on Sears Holdings Corp. to stable from negative. All ratings, including the 'BB+' corporate credit rating, and the 'B-1' short-term rating for Sears Roebuck Acceptance Corp., are affirmed. As reported in the Troubled Company Reporter on Jun 22, 2006, Fitch affirms its ratings of Sears Holdings Corporation including its Issuer Default Rating (IDR) at 'BB'; Senior notes at 'BB'; and Secured bank facility at 'BBB-'. SMG ENTERTAINMENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: SMG Entertainment, Inc. dba Scores dba Scores Miami 533 West 27th Street New York, NY 10001 Bankruptcy Case No.: 06-12989 Chapter 11 Petition Date: December 11, 2006 Court: Southern District of New York (Manhattan) Judge: Robert E. Gerber Debtor's Counsel: Jonathan S. Pasternak, Esq. Joseph Corneau, Esq. Rattet, Pasternak & Gordon Oliver, LLP 550 Mamaroneck Avenue, Suite 510 Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Gunster, Yoakley & Stewart $57,662 Phillips Point, Suite 500 East 777 South Flagler Drive West Palm Beach, FL 3340 Red Uniform $7,012 475 Oberlin Avenue South Lakewood, NJ 08701-6904 Soroka's International, Inc. $5,600 1233 Stirling Road, Suite 8A Dania, FL 33004 Mandalay Bay $5,174 Stewart M. Jacobsen $4,885 1717 Southwest 1st Way, Bay 13 Deerfield, FL 33441 AICCO $3,285 City of North Miami Beach $2,418 Elite Tent Company $1,685 BMI $1,600 Bell South $1,105 Bar Plex $886 Michael's Landscaping Service $796 Orkin $643 The Match Group $560 Premier Beverage Company $551 Spinnaker Marina, Ltd. $542 Peachtree Checks & Forms $541 Sassafras Cigarette & Cigar Group, Inc. $539 Florida Department of Financial Services $505 Marketing Magic $500 SOLUTIA INC: Receives Commitment for $1.075 Billion DIP Financing ----------------------------------------------------------------- Solutia Inc. has received a fully underwritten commitment for $1.075 billion of debtor-in-possession financing, maturing March 31, 2008. This represents a $250 million increase and a one-year extension over Solutia's current DIP financing. The increased availability under the DIP financing provides Solutia with further liquidity for operations and the ability to fund mandatory pension payments that come due in 2007. The agreement also allows for Solutia to purchase Akzo Nobel's stake in Flexsys, the 50%/50% joint venture between Azko Nobel and Solutia. As reported in the Troubled Company Reporter on Dec. 20, 2006, Solutia reached an agreement in principle to purchase Akzo Nobel N.V.'s stake in Flexsys as well as Akzo Nobel's Crystex, a "non-blooming vulcanizing agents for unsaturated elastomers" business in Japan. To facilitate the Flexsys acquisition, up to $150 million of additional funds could be raised under this DIP financing through an accordion feature, bringing the total to $1.225 billion. The DIP financing can be repaid by Solutia at any time without prepayment penalties. Citigroup is acting as lead arranger. This amendment requires the approval of the U.S. Bankruptcy Court for the Southern District of New York. About Solutia Inc. Headquartered in St. Louis, Missouri, Solutia, Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., at Kirkland & Ellis. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. SOS REALTY: Files Disclosure Statement in Massachusetts ------------------------------------------------------- SOS Realty LLC delivered to the U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, on December 14, a disclosure statement relating to its Joint Plan of Reorganization with The Geneva LLC. Prior to March 2006, The Debtor and Geneva were part of a group involved in the DNH Voting Trust. Following a dispute over the management of the DNH Trust, the trust members agreed on the dismantling of the Trust. The settlement provided, among other things, for each member assuming responsibility for continuation and completion of their projects. The settlement was intended to be an equitable sharing of the assets pledged to the DNH Trust and the liabilities associated with these assets. The Debtor is one of five related entities and individuals in bankruptcy proceedings before the Bankruptcy Court. Geneva filed a voluntary Chapter 11 bankruptcy petition on June 15, 2006 (Bankr. D. Mass. Case No. 06-11854-JNF). 655 Corporation filed a voluntary Chapter 11 bankruptcy petition on Sept. 1, 2006 (Bankr. D. Mass. Case No. 06-13020-JNF). Georgette O. Clements filed a voluntary Chapter 11 bankruptcy petition on Aug. 2, 2006. BLJ Realty LLC filed a voluntary bankruptcy petition on Sept. 28, 2006 (Chapter 11 Case No. 06-13415). While the cases are related due to the fact that all of the parties and properties were previously involved in the development group, they are not jointly administered nor substantively consolidated. Plan Overview The Debtor owns a partially completed condominium development, known as the Washington Grove Condominiums, located at 5168-70 Washington Street and 11 Cheriton Road in West Roxbury Massachusetts. Since filing for bankruptcy, the Debtor has obtained debtor-in-possession financing, with up to $4 million available, in order to complete construction of the project. The Plan contemplates the completion of the construction and sale of all unsold condominium units. In summary, the Plan provides for payment in full to holders of Allowed Administrative Expense Claims, Allowed Professional Fee Claims, Allowed Priority Tax Claims, Allowed Secured Claims of Framingham Co-operative Bank and LBM Financial LLC on account of its debtor-in-possession loan, and a distribution to Allowed General Unsecured Claims estimated to be approximately 10% of the Allowed General Unsecured Claims. Payments under the Plan will be funded through: -- the completion and sale by the Debtor, in the ordinary course of business, of the unsold units and unsold parking spaces on the condominium; -- a Third Party Plan Proponent Contribution; and -- the prosecution, compromise or other liquidation of the avoidance actions transferred to a Creditors' Trust to be created pursuant to the Plan. Treatment of Claims The City of Boston's allowed secured claim will be paid in full. Payment to the city will include accrued interest at a rate agreed upon by the Cit and the Debtor or as determined by Court. Framingham Cooperative's $5,698,645 secured claim will also be paid in full. In full and complete satisfaction and discharge of the $4,000,000 LBM Financial DIP claim, the holder will receive, after the payment in full of Framingham and the City of Boston, the net proceeds from the sale of the Debtor's assets, until paid in full. LBM Financial's prepetition secured claim will also be paid in full. The Debtor intends to object to Kelly Roofing's $60,000 claim, PAD Construction, Inc.'s $18,000 claim and Stock Building Supply's $478,194 claim on various grounds, including, among others, that any security interest is avoidable under certain provisions of the Bankruptcy Code, and that, as of the Petition Date, there was no value in the Collateral securing the creditors' claims. To the extent any of these claims are allowed, it will be treated as a general unsecured claim. Holders of general unsecured claims, estimated to total $1,100,000 to $1,700,000 will get a pro rata share of the Plan Funding until paid in full. All equity interests will be deemed cancelled on the effective date and new equity interests will be issued to the Third Party Plan Proponent in exchange for his contribution. A copy of the Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=061219204454 Based in West Roxbury, Massachusetts, SOS Realty LLC, owns a condominium development known as the "Washington Grove Condominiums." The company filed for chapter 11 protection on May 11, 2006 (Bankr. D. Mass. Case No. 06-11381). Jennifer L. Hertz, Esq., at Duane Morris LLP, represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been filed in the Debtor's case. In its schedules of assets and liabilities, it listed $12,009,000 in total assets and $6,734,279 in total liabilities. STANLEY-MARTIN: Moody's Pares Corp. Family Rating to B2 from B1 --------------------------------------------------------------- Moody's Investors Service lowered Stanley-Martin Communities, LLC's ratings, including its corporate family rating to B2 from B1 and its probability of default rating to B2 from B1. The rating on the company's senior sub notes was confirmed at B3. The ratings outlook is stable. The downgrade was triggered by the company's continuing to build inventory and generate negative cash flow, by Moody's expectation that headroom under the company's interest coverage covenant will continue to narrow, and by the company's failure to reduce its debt leverage in line with Moody's expectations. When Moody's first rated the company in July 2005, we expected the company to reduce its debt to capitalization to close to 60% in a timely fashion. The confirmation of the B3 rating on the senior sub notes reflects that there is no additional debt above the senior sub notes in the capital structure that would push its rating down further. The stable outlook reflects Moody's expectation that the company will continue to generate modestly negative free cash flow in the coming year and that debt leverage will stay in the 70's%. Stanley-Martin's ratings are constrained by the company's relatively small size and scale as well as limited geographic reach and product diversity. Stanley-Martin conducts its operations in the Washington, D.C. market, with homebuilding revenues of around $200 million. This geographic concentration and relatively small size make the company more susceptible to the downturn in the housing industry than its more geographically diversified and larger competitors. The ratings are also constrained by the company's lot supply that as of Sept. 30, 2006 was 10.3 years. In July 2005, the company's lot supply was around 5.5 years. At the same time, the company's ratings recognize its conservative speculative building practices and relatively high, although declining, margins. For nine months ended Sept. 30, 2006, the company's homebuilding gross margin stood at 27.1%. Going forward, the outlook or ratings would be pressured if the company were to become more heavily free cash flow negative in 2007 than Moody's expects, if covenant compliance became problematic, or if the company's debt to capitalization reached 80% in 2007. The outlook and ratings could benefit by a strengthening of the company's free cash flow generation and a permanent reduction in its debt leverage metric to well below 70%. These ratings were changed: -- Corporate Family Rating lowered to B2 from B1; -- Probability of Default Rating lowered to B2 from B1; -- $150 million of senior subordinated notes due 2015 confirmed at B3; and, -- Loss-Given-Default assessment and rating lowered to LGD5, 77%, from LGD 5, 76% Speculative grade liquidity rating confirmed at SGL-3. Headquartered in Reston, Virginia Stanley-Martin is one of the largest private homebuilders in the Washington, D.C. metropolitan area. The company designs and builds single-family homes and town homes geared to the entry level and first- and second-time move up buyers. Homebuilding revenues for FYE 2005 were approximately $251 million. STEINWAY MUSICAL: Selected as Lead Bidder in Woodwind Auction ------------------------------------------------------------- Steinway Musical Instruments, Inc., has been named the lead bidder in the auction for bankrupt music retailer The Woodwind & The Brasswind. The Woodwind & The Brasswind filed for Chapter 11 bankruptcy protection in November after losing a lawsuit. In a court order, a judge appointed Steinway's bid of approximately $40 million as the stalking-horse bid for the auction scheduled for Jan. 24, 2007. In order to ensure that creditors recover as much as possible, companies selling their assets while operating under Chapter 11 protection must submit to an auction even when there is a buyer available. "The Woodwind & The Brasswind was a growing, profitable business before its recent issues," Dana Messina, CEO of Steinway Musical Instruments, commented. "There is a great deal of work to do between now and the auction, but we believe this is an undervalued asset which can add to the profitability of our company." "The Woodwind & The Brasswind will continue to be an industry competitor regardless of who owns it," John Stoner, President of Steinway's Conn-Selmer band instrument division, noted. "We feel that we are in a unique position to enhance the business model of our existing dealers through this acquisition." About The Woodwind & The Brasswind Headquartered in South Bend, Indiana, Dennis Bamber, Inc. dba The Woodwind & The Brasswind sells musical instruments through its retail store, catalogs and Internet sites. The company filed for chapter 11 protection on Nov. 21, 2006 (Bankr. N.D. Ind. Case No. 06-31800). Howard L. Adelman, Esq., at Adelman & Gettleman, Ltd., in Chicago, Illinois, represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $1 million and $100 million. About Steinway Musical Instruments Steinway Musical Instruments, Inc. (NYSE: LVB), through its Steinway and Conn-Selmer divisions, manufactures musical instruments. Its notable products include Bach Stradivarius trumpets, Selmer Paris saxophones, C.G. Conn French horns, Leblanc clarinets, King trombones, Ludwig snare drums and Steinway & Sons pianos. * * * As reported in the Troubled Company Reporter on Nov. 7, 2006, Standard & Poor's Ratings Services placed its ratings for Steinway Musical Instruments Inc., including the 'BB-' corporate credit rating, on CreditWatch with negative implications. As reported in the Troubled Company Reporter on Oct. 3, 2006, in connection with Moody's Investors Service's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology for the U.S. consumer products sector, the rating agency confirmed its Ba3 Corporate Family Rating for Steinway Musical Instruments, and downgraded its Ba3 rating to B1 on the company's $175 million senior unsecured notes. Additionally, Moody's assigned an LGD4 rating to those bonds, suggesting noteholders will experience a 64% loss in the event of a default. STONE ENERGY: S&P's Neg. Watch on Corp. Credit Rating Continues --------------------------------------------------------------- Standard & Poor's Ratings Services reported that its 'B+' corporate credit rating on Stone Energy Corp. remains on CreditWatch with negative implications after the company's report that its board of directors had approved and endorsed a strategic plan to refocus on exploiting Gulf of Mexico exploitation properties. In addition, the company reported that it could sell select properties in the Rockies and Gulf of Mexico to reduce debt. Stone's board has also determined that it will not actively seek a merger partner at this time. The report comes after the termination of Stone's previous merger agreement with Energy Partners Ltd. in October 2006. The CreditWatch negative listing reflects the likelihood that ratings could be either lowered or affirmed in the near term. "We expect to resolve the CreditWatch in the near term following a meeting with management to discuss Stone's new strategic direction as well as gain greater clarity with regards to the magnitude of debt reduction that could occur in 2007," said Standard & Poor's credit analyst Jeffrey Morrison. Standard & Poor's also said that it is concerned about the company's leverage on a per barrel basis, which has materially worsened over the past 18 months. This increased leverage is largely the result of the company's debt-financed acquisition of additional interests in Mississippi Canyon Blocks 108 and 109 in 2006 and the adverse effects of 2005 reserve write-downs. SUNSET BRANDS: Posts $9.1 Million Net Loss in 2006 Third Quarter ---------------------------------------------------------------- Sunset Brands Inc. incurred a $9.1 million net loss on $3.9 million of net revenues for the three months ended Sept. 30, 2006, compared with a $3.2 million net loss on zero revenues for the same period in 2005. The company's balance sheet at Sept. 30, 2006, showed $11.3 million in total assets and $20.3 million in total liabilities resulting in an $8.9 million stockholders' deficit. The company's accumulated deficit stood at $31.9 million at Sept. 30, 2006. As of Sept. 30, 2006, the company's balance sheet also showed strained liquidity with $2.3 million in total current assets available to pay $14.7 million in total current liabilities. Full-text copies of the company's third quarter financials are available for free at http://researcharchives.com/t/s?1769 IBF's Acquisition On Oct. 23, 2006, IBF Liquidating Fund LLC acquired all rights, title and interests in the company's note and revolving credit facility with CapitalSource Finance LLC. Later, IBF Liquidating filed an emergency motion in the U.S. Bankruptcy Court for the Southern District of New York seeking a temporary restraining order against the company and all persons acting on its behalf from taking any actions on U.S. Mills' behalf, or with respect to U.S. Mills' property or that may interfere in any way with IBF Liquidating Fund LLC's exercise of its contractual rights with respect to U.S. Mills, including its rights to replace U.S. Mills' board of directors or IBF Liquidating Fund LLC's efforts to sell the U.S. Mills business. In addition, that the company be required to seek approval of the Court prior to taking any actions on behalf of U.S. Mills or in respect of any property of U.S. Mills. The company chose not to oppose the motion and the requested preliminary injunction was granted on Oct. 30, 2006. The company is currently in settlement discussions with IBF Liquidating Fund LLC and is cooperating on the potential sale of the U.S. Mills business. The company was previously in default of several financial covenants under the Credit Agreement and, accordingly, $8,066,667 of long-term notes payable have been classified as current liabilities. On June 7, 2006, the company entered into a Forbearance and Amendment agreement with CapitalSource whereby CapitalSource agreed to forbear from exercising its rights and remedies under the previously executed loan agreements through Aug. 28, 2006 or upon the occurrence of any event of default other than the existing forbearance defaults. In addition, CapitalSource agreed to amend and restate the financial covenants. At Sept. 30, 2006, the company was in compliance with the financial covenants of the loan agreement. Going Concern Doubt As reported in the Troubled Company Reporter on June 27, 2006, Hansen, Barnett & Maxwell in Salt Lake City, Utah, raised substantial doubt about Sunset Brands, Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the years ended Dec. 31, 2005, and 2004. The auditor pointed to the Company's losses from operations, negative cash flows, and working capital and accumulated deficiencies. About Sunset Brands Based in Los Angeles, California, Sunset Brands, Inc. -- http://www.sunsetbrands.com/-- intends to capitalize on the growing demand for healthy foods. The Company wants to become a category leader in this field through expanded marketing of existing products under brands owned or licensed by US Mills and the introduction of new products. US Mills, Inc., sells natural, organic and specialty ready-to-eat cereals, hot cereals, cookies and crackers. US Mills sells five brands -- Uncle Sam Cereal, Erewhon, New Morning, Farina, and Skinner's Raisin Bran -- in all 50 states, Canada, and Puerto Rico. SWIFT & COMPANY: Moody's Places Ratings on Review for Upgrade ------------------------------------------------------------- Moody's Investors Service placed Swift & Company's B3 senior unsecured rating, its Caa1 senior subordinated rating, and B2 corporate family rating under review for possible downgrade. The review for downgrade was prompted by the continuing challenges in the US beef industry, and the possibility that these challenges could slow Swift's ability to improve its operating performance and restore its debt protection measures to levels acceptable for its current rating. The review will focus on the company's ability to improve operating performance and reduce debt in the near term, and to maintain its financial flexibility in the light of continued challenging industry conditions. It will also focus on the impact -- if any -- that recent raids on Swift facilities by the US Immigration and Customs Enforcement Bureau and related temporary plant disruptions and slowdowns will have on Swift's operating performance and future labor profile and cost structure. Ratings placed under review for possible downgrade: -- Corporate family rating at B2; -- Probability of default rating at B2; -- Senior unsecured notes at B3, LGD4, 61%; and, -- Senior subordinated notes at Caa1, LGD5, 77%. Swift & Company, headquartered in Greeley, Colorado, is a major processor of beef and pork, with operations in the US and Australia. TECH DATA: Earns $9.6 Million in Quarter Ended October 31 --------------------------------------------------------- Tech Data Corp. reported net sales for the third quarter ended Oct. 31, 2006 of $5.4 billion, an increase of 7 percent from $5.1 billion in the third quarter of fiscal 2006. The company recorded net income of $9.6 million for the third quarter ended Oct. 31, 2006. This compares to net income of $23 million, including income from discontinued operations of $1 million, for the prior-year period. Third-quarter results for fiscal 2007 include $6.1 million of restructuring charges and $2.8 million of consulting costs related to the company's EMEA (Europe, Middle East and export sales to Africa) restructuring program launched in May 2005. Excluding these charges and costs, net income on a non-GAAP basis for the third quarter of fiscal 2007 totaled $18 million. Results for the third quarter of fiscal 2006 included $4.8 million of restructuring charges and $3.2 million of consulting costs. Excluding these charges and costs, net income on a non-GAAP basis for the third quarter of fiscal 2006 totaled $30.7 million, including $1 million in income from discontinued operations. "The third quarter results exceeded our expectations, driven by revenue growth in EMEA and solid performance in the Americas," said Robert M. Dutkowsky, Tech Data's chief executive officer. "The conclusion of our EMEA restructuring program will allow us to focus more intently on new opportunities with our business partners and customers." Gross margin for the third quarter of fiscal 2007 was 4.56 percent of net sales compared to 4.95 percent in the third quarter of fiscal 2006. The year-over-year decline in gross margin was primarily attributable to a more challenging market environment and the related competitive margin conditions in both regions. Selling, general and administrative expenses were $209.3 million including $2.1 million in stock-based compensation, compared to $203.7 million in the third quarter of fiscal 2006. Excluding the $2.8 million of consulting costs incurred in the EMEA region during the third quarter of fiscal 2007, SG&A totaled $206.5 million. This compares to SG&A of $200.5 million, excluding $3.2 million of consulting costs incurred in the EMEA region. As a percentage of net sales, the year-over-year decline in SG&A is primarily attributable to productivity improvements and cost saving initiatives. For the third quarter of fiscal 2007, operating income was $32.1 million. This compared to operating income of $42.5 million in the third quarter of fiscal 2006. On a non-GAAP basis, excluding restructuring charges and consulting costs of $9 million, operating income for the third quarter of fiscal 2007 was $41.0 million. This compares to operating income on a non- GAAP basis of $50.5 million in the same period last year, excluding restructuring charges and consulting costs of $8.0 million. EMEA Restructuring Program In the third quarter of fiscal 2007, the company completed its restructuring program in the EMEA region. The program and related actions were designed to better align the EMEA operating cost structure and improve overall operating efficiencies. The company recorded $6.1 million of charges during the third quarter of fiscal 2007 related to the program, comprised of $4.8 million in workforce reductions and $1.3 million in facility costs. Since initiating the EMEA restructuring program in May 2005, the company has recorded a total of $54.7 million in restructuring charges. Founded in 1974, Tech Data Corporation (NASDAQ GS:TECD) -- http://www.techdata.com/-- is a leading distributor of IT products, with more than 90,000 customers in over 100 countries. The company's business model enables technology solution providers, manufacturers and publishers to cost-effectively sell to and support end users ranging from small-to-midsize businesses to large enterprises. Tech Data is ranked 107th on the FORTUNE 500(R). * * * As reported in the Troubled Company Reporter on Dec. 19, 2006, Moody's Investors Service assigned a Ba2 rating to Tech Data Corporation's proposed offering of up to $350 million convertible senior notes due 2026 and affirmed the company's Ba1 corporate family rating and Ba1 probability of default rating. TEEKAY SHIPPING: Moody's Pares Corporate Rating to Ba2 from Ba1 --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Teekay Shipping Corporation -- Corporate Family to Ba2 from Ba1; and, -- senior unsecured to Ba3 from Ba2. Moody's also affirmed the SGL-2 Speculative Grade Liquidity rating. The rating outlook was changed to negative. These actions resolve the review for downgrade of all ratings initiated on Sept. 5, 2006. The lower Corporate Family rating reflects the weakening of credit metrics from the primarily debt-financed acquisition of a majority interest in Petrojarl ASA, and from ongoing payments to shipyards as construction on the substantial order book progresses during a period of expected lower earnings due to softening of tanker spot rates. Teekay's credit metrics are at levels that align to the single-B category under Moody's Global Shipping Rating Methodology; Retained Cash Flow to Net Debt declined to 14.7%, Debt to EBITDA increased to 6.0x and EBIT to Interest declined to 2.1x since Dec. 31, 2005. However, Teekay's large size, diverse fleet, of which approximately 55% is committed to long-term fixed-rate contracts with large-petroleum company customers, strong EBIT margins, solid liquidity and the generation of substantial operating cash flow, balance the weaker metrics and support the Ba2 Corporate Family rating. The lowered ratings also reflect the recent financial policies of Teekay, which in Moody's view, have prioritized returns to equity-holders rather than to debt-holders. Teekay repurchased over $700 million of shares, primarily with proceeds of sales of vessels, during the up-cycle rather than de- lever. Consequently, the capital structure is highly leveraged as the outlook for the spot tanker market weakens. Further, the creation of two Master Limited Partnerships has complicated the company's organization and capital structures. Moody's expects total debt of Teekay to be approximately $6.5 billion after funding the purchase of approximately 64% of the outstanding shares of Petrojarl ASA, a provider of FPSO vessels in the North Sea. The tender offer price implied an approximate $1.1 billion enterprise value of Petrojarl, and a low double digit multiple of EBITDA, based on reported EBITDA of about $60 million in the first nine months of 2006. Moody's believes that the entry into this capital intensive sector, while increasing diversification of revenues, increases Teekay's operating risk profile. As well, Moody's anticipates increased competition in the global FPSO sector due to the recent heightened focus on this market as a potential source of growth. The negative outlook reflects Moody's expectation that credit metrics could face further pressure over the next 12 to 18 months due to on-going progress payments to shipyards for newbuildings and the potential of lower earnings by the spot tanker segment due to expected weakening of spot tanker rates. The ratings may be downgraded if Retained Cash Flow to Net Debt declines to below 10%, if Debt to EBITDA is sustained above 6.0x or if EBIT to Interest is sustained below 1.7x. The ratings may be upgraded if Retained Cash Flow to Net Debt is sustained above 15% or if the company becomes free cash flow positive and can sustain a lower debt level. Debt to EBITDA below 5.0x or EBIT to Interest above 3.0x could also result in an upgrade. The senior unsecured rating is one notch below the corporate family rating, to reflect the effective subordination of the senior unsecured notes, that are issued by Teekay but that do not benefit from upstream guarantees of Teekay's subsidiaries. Downgrades: * Teekay Shipping Corporation -- Corporate Family Rating, Downgraded to Ba2 from Ba1 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ba3 from Ba2 Outlook Actions: * Teekay Shipping Corporation -- Outlook, Changed To Negative From Rating Under Review Teekay Shipping Corporation, a Marshall Islands corporation headquartered in Nassau, Bahamas, having its main operating office in Vancouver, Canada, operates a fleet of 151 owned, chartered-in or managed crude, refined products, LNG, LPG and FPSO vessels, including 26 newbuildings on order. TEREX CORPORATION: Moody's Holds Corporate Family Rating at Ba3 --------------------------------------------------------------- Moody's Investors Services affirmed the debt ratings of Terex Corporation: -- corporate family rating at Ba3; -- senior secured bank credit facility Ba1, LGD2, 22%; and, -- senior subordinate notes B1, LGD5, 76%. The speculative grade liquidity rating is upgraded to SGL-1 from SGL-2. The outlook is stable. Moody's said that Terex's Ba3 corporate family rating reflects the company's leading competitive position in the global construction equipment markets. The company is also benefiting from robust demand in its end markets including the non-residential construction and mining industries. "Terex is benefiting from the replacement and expansion of equipment rental fleets and the global demand for construction, mining and infrastructure equipment," Moody's analyst Peter Doyle said. Additionally, Terex continues to gain from its cost reduction initiatives. Credit metrics have also improved with interest coverage reaching 5.0x and debt/EBITDA falling to 2.1x through LTM September 2006. These metrics will strengthen further once the company completes the anticipated call of its $200 million 9 �% Sr. Sub. Notes during mid-January 2007. The B1, LGD5, 76% rating on this debt instrument will be withdrawn once these notes are called. The stable outlook reflects Moody's expectations that Terex's debt protection measures will continue to improve as a result of the robust demand in Terex's end markets and the prudent financial policies being embraced by management. The key risk that Terex will continue to face is the cyclicality in the company's end markets and the potential widening of the Securities and Exchange Commission and US Department of Justice investigations. Should the SEC and DOJ investigations be resolved without materially adverse implications for the company, there would be potential for improvement in the company's rating outlook. Notwithstanding these risks, Moody's anticipates that Terex will be able to weather future cyclical downturns much better than in the past due to its expanding product offerings, an improving balance sheet, and a commitment to maintain ample liquidity. The SGL-1 Speculative Grade Liquidity Rating anticipates that the company will maintain a very good liquidity profile over the next 12-month period. Moody's expectation is that Terex's solid operating cash flow generation combined with about $554 million available under its committed revolving credit facility and about $428 million in cash at the end of September 2006 should be sufficient to fund the company's normal operating requirements, capital spending and projected debt amortization and calls over the next 12 months. Terex Corporation, headquartered in Westport, Connecticut, is a diversified global manufacturer of construction, infrastructure and surface mining equipment. TEXAS WESLEYAN: Moody's Retains Ba2 Rating on Series 1997A Bonds ---------------------------------------------------------------- Moody's Investors Service affirmed the Ba2 rating on Texas Wesleyan University's Series 1997A bonds, with $7.7 million outstanding. The rating outlook is stable. Strengths: -- Rebounding enrollment, reaching 2,700 full-time equivalent students for Fall 2006 after dipping to a low of 2,235 students in 2004 due to accrediting scrutiny in the earlier part of the decade. All accrediting issues are now resolved. Located in Fort Worth, approximately half of Texas Wesleyan's students are undergraduates, with the remaining students at the law school and in some graduate programs. A significant portion of TWU's undergraduate enrollment is derived from transfer students. -- Law school in Fort Worth continues to generate growing enrollment and positive financial results, now contributing notably to the University's credit profile, although the purchase of the law school in the 1990s, and subsequent investment to attain accreditation led to the University's currently weak financial condition. -- Multi-year trend of improving operational performance and strengthening cash flow, driven by good tuition revenue growth and close expense monitoring. The University achieved a 5% operating margin and 12.6% operating cash flow margin in 2006, resulting in 2.4x coverage of annual debt service requirements. -- Management team is highly focused on generating positive operating results, given limited financial reserves, and on rebuilding liquidity. University plans to retain all unrestricted gifts rather than using for operations and has limited endowment spending to a fixed rate of $2.5 million until liquidity is improved. Challenges: -- University has no unrestricted financial resources and would be highly vulnerable to any enrollment declines or unexpected expense spikes. Total financial resources are in excess of $30 million, but all funds are externally restricted. -- TWU faces strong competition from multiple public universities and community colleges in the area, many of which are investing in smaller class sizes and facilities and becoming more attractive choices themselves. High reliance on student charges leads to need for careful enrollment and financial aid management. University of North Texas is discussing opening a law school in the area- such action would likely take multiple years but could be a competitive threat if it occurs. -- Continued need for capital investment to enhance the appeal of the campus and remain competitive. University currently does not plan on any additional borrowing but rather to fund projects through gifts and operations. Residence facility financed by $6.5 million private placement in 2003 is open and reportedly generating positive cash flow. Outlook: The stable outlook is based on the College's enrollment rebound and positive operating performance, offset by no financial reserves. What could change the rating-up Improvement in the College's liquidity position. What could change the rating-down Enrollment declines or operating deficits. Key data and ratios: -- Total Enrollment: 2,696 full-time equivalent students -- Total Debt: $20.8 million -- Total Resources: $30.0 million -- Unrestricted Resources to Debt: 0.0x -- Unrestricted Resources to Operations: 0.0x -- Total Resources per Student: $11,497 -- Average Actual Debt Service Coverage: 2.1x TIMKEN CO: Sells Automotive Steering Biz to DriveSol Worldwide -------------------------------------------------------------- The Timken Company has completed the sale of its automotive steering business, which operates facilities in Watertown, Connecticut, and Nova Friburgo, Brazil, to DriveSol Worldwide, Inc. Terms of the sale were not disclosed. "The sale of this business, which has not been profitable in recent quarters, is part of the structural changes we are pursuing to improve our ability to create shareholder value," said Timken President and Chief Executive Officer James W. Griffith. The steering business employs approximately 600 people at the Watertown plant and about 300 people in Brazil and had 2005 sales of $110 million. DriveSol, which is an affiliate of Sun Capital Partners, Inc., will continue to manufacture steering tilt shafts, intermediate shafts and steering components at the Watertown plant and steering columns at the Nova Friburgo plant. The products at both facilities are focused on tube forming, coating, painting and precision assembly. "As a result of our focus on driving innovation in the core areas of friction management and power transmission, we have decided to exit this non-strategic business," said Jacqueline A. Dedo, president of Timken's Automotive Group. "In addition to our previously announced restructuring programs, we are continuing to examine and implement further actions to improve financial performance in our Automotive Group." The Blackstone Group advised Timken on this transaction. About The Timken Company Headquartered in Canton, Ohio, The Timken Company (NYSE: TKR) -- http://www.timken.com/-- manufactures highly engineered bearings and alloy steels. It also provides related components and services such as bearing refurbishment for the aerospace, medical, industrial, and railroad industries. The Company has operations in 27 countries and employs 27,000 employees. * * * As reported in the Troubled Company Reporter on Oct. 30, 2006, Moody's Investors Service confirmed The Timken Company's Ba1 Corporate Family Rating and the Ba1 rating on the company's $300 Million Unsecured Medium Term Notes Series A due 2028 in connection with the rating agency's implementation of its new Probability-of-Default and Loss-Given-Default rating methodology. TODD MCFARLANE: Can Use BofA's Cash Collateral Until November 2007 ------------------------------------------------------------------ The Honorable Charles G. Case of the U.S. Bankruptcy Court for the District of Arizona has approved a stipulation allowing Todd McFarlane Productions, Inc., to access cash collateral securing repayment of its debts to Bank of America, N.A., until Nov. 30, 2007. Bank of America is the assignee of Solano Holdings & Investments, LLC, which in turn was the assignee for a Loan Agreement, Promissory Note, Security Agreement and Consent Agreement of Guarantors the Debtor entered into with Stephen A. McConnell. The Debtor will use the cash collateral to funds its operating expenses, pay freelance artists, continue its operations and administer and preserve the value of its estate. In consideration for Bank of America's consent to the permanent use of cash collateral: a) the Debtor agrees to pay to Bank of America interest at the regular rate per year specified in the Loan Modification Agreement executed by the parties on Nov. 21, 2005, which will be equal to the BBA LIBOR Daily Floating Rate plus 100 percentage points. B) Bank of America will have a continuing replacement lien in all collateral and its proceeds of the same type and priority held by the lender on the petition date. Headquartered in Tempe, Arizona, Todd McFarlane Productions, Inc. -- http://www.spawn.com/-- publishes comic books including Spawn, Hellspawn, and Sam and Twitch. The Company filed for chapter 11 protection on Dec. 17, 2004 (Bankr. D. Ariz. Case No. 04-21755). Josefina F. McEvoy, Esq., and Kelly Singer, Esq., at Squire Sanders & Dempsey, LLP, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in the Debtor's case. When the Company filed for protection from its creditors, it listed more than $10 million in assets and more than $50 million in debts. TRANSDIGM INC: Improved Results Cue Moody's Stable Outlook ---------------------------------------------------------- Moody's Investors Service has affirmed the ratings of TransDigm Inc., Corporate Family Rating of B1, and has changed the ratings outlook to stable from negative. The change in outlook was prompted by the recent trend in improved operating results and Moody's expectations for continued growth and improvement in a strong commercial aviation aftermarket environment. All ratings were affirmed. The operating results reported over the past year has largely restored credit metrics - leverage and interest coverage in particular - to levels the company enjoyed prior to the November 2005 debt-financed shareholder distribution. At that time Moody's changed the ratings outlook to negative. Although total debt levels have not been materially reduced since then, the company has continued to achieve strong sales growth at consistent margins, resulting in reduction in leverage from 5.4x as of December 2005 to 4.8x as of FY2006. Interest coverage similarly improved, from about 1.8x to 2.3x. These ratios are appropriate for a B1 rating. Despite the improvement, the ratings continue to reflect the company's substantial debt levels, high leverage and the potential for the use of additional leverage for equity distributions, and uncertainty about the size and funding of potential future acquisitions. The ratings also consider TransDigm's history of stable profit margins and revenue growth in an improving commercial aerospace environment, as well as the company's stable free cash flow -- strong for the rating category. The stable outlook reflects Moody's expectation that the commercial aviation aftermarket sector will be continue to be robust enough to allow TransDigm to achieve approximately 10% sales growth in FY 2007 while maintaining gross margins of approximately 50%. This should allow the company to generate sufficient free cash flows to cover a modest level of acquisitions over the next year. Although free cash flow is expected to be positive over this time, Moody's does not expect debt to be reduced materially. These ratings have been affirmed: -- Senior secured revolving credit facility at Ba3, LGD3, 36%; -- Senior secured term loan at Ba3, 36%; -- Senior subordinated notes at B3, LGD5, 89%; -- Corporate Family Rating of B1; and, -- Probability of Default Rating of B1. Headquartered in Cleveland, Ohio, TransDigm Inc. is a leading manufacturer of highly engineered aerospace components to commercial airlines, aircraft maintenance facilities, original equipment manufacturers and various agencies of the U.S. Government. The company had FY 2006 revenues of $435 million. TRITON PETROLEUM: Posts $601,193 Net Loss in 2006 Third Quarter --------------------------------------------------------------- Triton Petroleum Group Inc. reported a $601,193 net loss on $627,930 of net sales for the quarter ended Sept. 30, 2006, compared with a $599,629 net loss on $537,692 of net sales for the same period in 2005. Net loss for the current quarter was consistent with the net loss for the same period in 2005, with only a slight increase of $1,564 of net loss in the current quarter. The $90,000 increase in net sales and the $103,000 decrease in selling, general and administrative expenses, was negated by a $164,000 increase in cost of goods sold. At Sept. 30, 2006, the company's balance sheet showed $1.1 million in total assets and $4.8 million in total liabilities, resulting in a $3.7 million total stockholders' deficit. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $926,282 in total current assets available to pay $4.8 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?1758 Going Concern Doubt Brown Smith Wallace LLC in St. Louis, Missouri raised substantial doubt about Triton Petroleum Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the company's accumulated losses of $20,179,828 since inception. The auditing firm further cited that its ability to continue as a going concern is dependent on its ability to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. About Triton Petroleum Triton Petroleum Group Inc., via its subsidiary American Petroleum Products Company, is in the manufacturing and distribution of petroleum and related products for the automotive industry. Specifically, American Petroleum Products Company is in the business of blending, bottling, and distributing private label motor oil, transmission fluid, and related products for the automotive aftermarket. These products are sold, both direct and through distributors, to retail outlets that include oil change shops, automotive aftermarket chains, gas stations, department stores, and convenience stores. U.S. ENERGY: Countryside Loses Right to Convert Claims to Equity ---------------------------------------------------------------- Countryside Power Income Fund, a secured lender of U.S. Energy Biogas Corp., stipulated in proceedings before the Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York that USEB's April 8, 2004 Royalty Agreement gives rise to no more than a pre-petition claim in USEB's bankruptcy case. As a result of the stipulation, Countryside will no longer have the right to convert its royalty interests into a 49% equity interest in USEB, and none of Countryside's claims under the Royalty Agreement will have administrative priority status. Countryside's stipulation led to the same result as that sought by USEB in its motion to reject the Royalty Agreement, rendering further prosecution of USEB's motion unnecessary. "This is a very important step toward establishing a viable capital structure for USEB and its healthy business operations," said Asher E. Fogel, Chairman of USEB and Chief Executive Officer of USEB's parent company, U.S. Energy Systems, Inc. "In particular, USEB no longer will be exposed to a significant equity conversion right, which had represented a significant obstacle to our past efforts to refinance the business." Under terms of the Royalty Agreement, USEB was required to pay a royalty to Countryside equal to 7% of USEB's cash flow distributable to USEB shareholders, plus 1.8% of USEB's gross revenues. In certain circumstances, the Royalty Agreement also provided that Countryside could convert its royalty interests into a 49% non-voting, equity interest in USEB. Today's Court action follows USEB's Nov. 30, 2006 announcement that it had voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code, as well as the Court's Dec. 1, 2006 approval of the subsidiary's critical "first day pleadings". USEB's Chapter 11 filing did not include USEB's parent company, USEY, or the parent company's other subsidiary, U.K. Energy Systems. Moreover, neither USEY's nor UKES's operations are affected by USEB's Chapter 11 filing. About the Fund Based in London, Ontario, Countryside Power Income Fund (TSX: COU.UN) -- http://www.countrysidepowerfund.com/-- has investments in two district energy systems in Canada, with a combined thermal and electric generation capacity of approximately 122 megawatts, and two gas-fired cogeneration plants in California with a combined power generation capacity of 94 megawatts. In addition, the Fund has an indirect investment in 22 renewable power and energy projects located in the United States, which currently have approximately 51 megawatts of electric generation capacity and sold approximately 710,000 MMBtus of boiler fuel in 2005. The Fund's investment in the projects consists of loans to, and a convertible royalty interest in, U.S. Energy Biogas Corp. About U.S. Energy Headquartered in Avon, Connecticut, U.S. Energy Biogas Corp. -- http://www.usenergysystems.com/-- develops landfill gas projects in the United States. Formerly known as Zahren Alternative Power Corporation or ZAPCO, the company was formed in May 2001 after ZAPCO's acquisition by U.S. Energy Systems, Inc. Currently, the Debtor owns and operates 23 LFG to energy projects with 52 megawatts of generating capacity. The Debtor and 31 of its affiliates filed separate voluntary chapter 11 petitions on Nov. 29, 2006 (Bankr. S.D.N.Y. Case Nos. 06-12827 through 06- 12857). Joseph J. Saltarelli, Esq., at Hunton & Williams represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. UNION CINEMA: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Union Cinema Corporation aka El Dorado Cinemas 1936 Northwest Avenue El Dorado, AR 71730 Bankruptcy Case No.: 06-72943 Chapter 11 Petition Date: December 15, 2006 Court: Western District of Arkansas (El Dorado) Judge: James G. Mixon Debtor's Counsel: Robert L. Depper, Jr., Esq. Depper Law Firm 314 East Oak Street El Dorado, AR 71730-5834 Tel: (870) 862-5505 Fax: (870) 862-7591 Estimated Assets: Unknown Estimated Debts: Less than $50,000 The Debtor did not file a list of its 20 largest unsecured creditors. VESTA INSURANCE: Panel Asks Court to Cancel XL Policy Extension --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Vesta Insurance Group, Inc., asks the U.S. Bankruptcy Court for the Northern District of Alabama to compel Vesta to cancel the XL Specialty Insurance Company Management Liability and Company Reimbursement Policy extension no later than Dec. 28, 2006, and to compel XL Specialty to refund the $1,250,000 extension premium promptly upon written notification by Vesta of the Policy Extension cancellation. The VIG Committee relates that after the Involuntary Petition Date, but before the Conversion Date of the Debtors' bankruptcy cases, Vesta extended the term of the XL Policy from Dec. 31, 2006, to 12:01 a.m. on Dec. 31, 2007. A total of $1,250,000 was paid for the policy extension. The XL Policy contains a cancellation endorsement that returns the policy extension premium to Vesta in the event the policy is canceled. Vesta also has a Lloyd's excess liability policy that will expire on Dec. 31, 2006. On Nov. 20, the VIG Committee sought, and was granted, derivative standing to assert and prosecute, for the benefit of the bankruptcy estate and the Debtors' creditors, any and all claims that Vesta or its estate may have against its current and former officers and members of the Board of Directors. Either the Committee or, upon the Effective Date of the Plan, the Plan Trustee will be able to assert the claims before December 31, 2006, thereby triggering coverage under the Policies. Colin M. Bernardino, Esq., at Kilpatrick Stockton LLP, in Atlanta, Georgia, states that because the VIG Committee or the Plan Trustee will be able to assert the Claims before December 31, the Policy Extension is not necessary and will not benefit Vesta's bankruptcy estate or its creditors. An order compelling the cancellation of the Policy Extension and return of the Extension Premium is necessary and appropriate to maximize the return to Vesta's estate and its creditors, Mr. Bernardino asserts. Directors Object Norman Gayle, III, is a director and former officer of Vesta Insurance Group, Inc. Alan Farrior, Michael Gough, and Owen Vickers, are directors of Vesta. The directors are beneficiaries of an insurance policy issued by XL Specialty, the Policy Extension, and of an insurance policy issued by Lloyd's, which has not been extended. Mitchell D. Greggs, Esq., at Lightfoot, Franklin & White, L.L.C., in Birmingham, Alabama, states that under the terms of the policies, the directors are entitled to the advancement of costs and expenses incurred in defending claims, and according to the priority of payments provision of the policies, the Directors are "first in line" for any payments. Additionally, the Directors are entitled to indemnification from Vesta for the costs and expenses associated with defending an action brought against them. The Directors have already been made defendants in a state court action, Pate v. Lacefield, Civil Action No. CV-06-4257 in the Circuit Court of Jefferson County, Alabama. The Bankruptcy Court ruled that the Pate Action may not proceed to the extent that it may impact the availability of funds potentially recoverable by the bankruptcy estate. Over the VIG Committee's effort to strip the Directors of a defense in the Pate action, XL Specialty was allowed to reimburse defense costs, Mr. Greggs says. The VIG Committee's standing to assert and prosecute derivative claims against Vesta's directors and officers indicates that the Directors will likely face additional lawsuits, Mr. Greggs points out. The VIG Committee also has permission to conduct a Bankruptcy Rule 2004 examination on Mr. Gayle, and David Lacefield, a corporate representative of Vesta. Mr. Greggs argues that if the Policy Extension is cancelled, and if claims that would have been entitled to coverage are brought after Dec. 31, 2006, the Directors will be exposed to substantial personal liability. Vesta will likewise be exposed to a claim for indemnity. With respect to the VIG Committee's statement that the Policy Extension is not necessary, will not benefit the estate, and will not benefit Vesta's creditors because the VIG Committee or the Plan Trustee will be in a position to assert the Claims before December 31, Mr. Greggs asserts that there is no reasonable assurance that all Claims will be brought before December 31. The endorsement does not strip the coverage, Mr. Greggs clarifies. Rather, the XL Policy contemplates that the Extension Premium will be returned and the Policy Extension deemed void ab initio, if Vesta is compelled to cancel the Policy Extension. The endorsement does not give any party a right or rationale to compel a cancellation, Mr. Greggs maintains. "The Court must undertake to balance the equities, consistent with the fact of the priority-of-payments provision of the insurance contract," he adds. The Directors ask the Court to deny the VIG Committee's request. Lacefield Responds David W. Lacefield, president and chief executive officer of Vesta, is also insured under the XL Policy. The endorsement requires that Mr. Lacefield, along with the Debtor and all potential insured persons, cancel the policy. Tom E. Ellis, Esq., at Ellis & Boom LLC, in Birmingham, Alabama, states that while the Bankruptcy Court may have authority to compel the Debtor to cancel the policy, it possesses no jurisdiction or authority to compel all potential insured persons to cancel the policy. The VIG Committee cites policy endorsement no. 15 as basis for cancellation of the policy, but in reality bases its motion merely upon the position that since it intends to file its claims before December 31, 2006, it will have protected its rights to coverage, and the Court need not be concerned about the rights to coverage post December 31, of any other insured person or other potential claimants to the policy, Mr. Ellis contends. The VIG Committee's proposal that the enrichment of the Debtors' estate by the $1,250,000 return premium is justification for cancellation essentially trumps any rights of Mr. Lacefield and all other persons in the Policy, he says. While the Court has considered and perhaps decided that the Debtor has some property interest in a part of the policy, it has not ruled that the interest of the Debtor is superior to, and extinguishes the rights of others in the XL Policy. Endorsement No. 8 is the Priority of Payments provision of the policy. One policy under it is the liability policy that protects the officers and directors. The other policy, the reimbursement policy, protects the indemnification obligations of the Debtor. While the two policies share the same aggregate limit, Endorsement No. 8 unequivocally gives priority to the liability coverage policy, and consequently the rights of insured persons under "insuring agreement A," Mr. Ellis asserts. The VIG Committee's position ignores the priority rights of the liability policy and the insured persons, like Mr. Lacefield, Mr. Ellis tells the Court. Furthermore, for the basis of the VIG Committee's motion to have any validity, the entire XL Policy would have to be deemed property of the estate, Mr. Ellis argues. If that were the case, any cancellation of the policy would be subject to the stay provisions of 11 U.S.C. 362(a)(3). The VIG Committee has conspicuously not requested relief from the stay, Mr. Ellis contends. Mr. Ellis notes that Mr. Lacefield has a competing interest in the continuation of the XL Policy through its extended policy period. The extension was obviously an inducement and a type of compensation for Mr. Lacefield continuing his service as president and CEO of Vesta during the bankruptcy to date. The VIG Committee's interest in the rejection of the XL Policy's extension provisions is the return of premium paid as a part of the inducement and compensation to Mr. Lacefield. "Faced with this opposing interest, the polestar is for this Court to do equity, and to carefully balance the equities of those competing interest," Mr. Ellis says. Mr. Lacefield has already presented evidence concerning the hardship placed upon him by the VIG Committee's and Debtors' resistance to advancement of defense cost. He asks the Court to deny the VIG Committee's Motion. Headquartered in Birmingham, Alabama, Vesta Insurance Group, Inc. (Other OTC: VTAI.PK) -- http://www.vesta.com/-- is a holding company for a group of insurance companies that primarily offer property insurance in targeted states. Wyatt R. Haskell, Luther S. Pate, UV, and Costa Brava Partnership III, L.P., filed an involuntary chapter 7 petition against the Company on July 18, 2006 (Bankr. N.D. Ala. Case No. 06-02517). The case was converted to a voluntary chapter 11 case on Aug. 8, 2006 (Bankr. N.D. Ala. Case No. 06-02517). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represents the Debtor. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, represents the petitioning creditors. In its schedules of assets and liabilities, Vesta listed $14,919,938 in total assets and $214,278,847 in total liabilities. J. Gordon Gaines, Inc., is a Vesta Insurance-owned unit that manages the company's numerous insurance subsidiaries and employs the headquarters workers. The Company filed for chapter 11 protection on Aug. 7, 2006 (Bankr. N.D. Ala. Case No. 06-02808). Eric W. Anderson, Esq., at Parker Hudson Rainer & Dobbs, LLP, represent the Debtor in its restructuring efforts. In its schedules of assets and liabilities, Gaines listed $19,818,094 in total assets and $16,046,237 in total liabilities. On Aug. 1, 2006, the District Court of Travis County, Texas entered the Order appointing the Texas Commissioner of Insurance as Liquidator of Vesta Insurance's Texas-domiciled subsidiaries: Vesta Fire Insurance Corporation; The Shelby Insurance Company; Shelby Casualty Insurance Corporation; Texas Select Lloyds Insurance Company; and Select Insurance Services, Inc. (Vesta Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WEST SPEEDWAY: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: West Speedway Partners, LLC 5001 Arundel Drive Woodland Hills, CA 91364 Bankruptcy Case No.: 06-01632 Type of Business: The Debtor develops residential real property. The Debtor's affiliate, Villas at Hacienda del Sol, Inc., filed for chapter 11 protection on March 28, 2005 (Bankr. D. Ariz. Case No. 05- 01482). Chapter 11 Petition Date: December 15, 2006 Court: District of Arizona (Tucson) Judge: Eileen W. Hollowell Debtor's Counsel: Jonathan M. Saffer, Esq. Snell & Wilmer, LLP One South Church Avenue Tucson, AZ 85701-1630 Tel: (520) 882-1236 Fax: (520) 884-1294 Debtor's financial condition as of December 15, 2006: Total Assets: $4,100,853 Total Debts: $346,177 Debtor's 14 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Miles Construction, Inc. $40,370 5168 East 9th Street Tucson, AZ 85711 GC Enterprises $22,790 15760 Ventura Boulevard, Suite 828 Encino, CA 91436 Villas at Hacienda del Sol, Inc. $15,737 2550 East River Road Tucson, AZ Beth Ford, Pirna County Treasurer $15,170 Precision Land Surveying, Inc. $5,422 CMG Drainage Engineering, Inc. $4,900 CBIZ Southern California LLC $4,581 SouthWestern Consulting Engineers, LLC $3,545 Thompson Krone, PLC $1,651 Acuna Coffeen Landscape $1,500 Chandler & Udall $1,348 Structural Concepts, Inc. $1,096 Prof. Archaeological Service of Tucson $870 CJ's Detailed Yard $62 WESTBROOK CLO: Moody's Rates $14-Million Class E Notes at Ba2 ------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by Westbrook CLO Ltd.: -- Aaa to $254,800,000 Class A-1 Senior Secured Floating Rate Notes due 2020; -- Aaa to $30,000,000 Class A-2 Senior Secured Floating Rate Notes due 2020; -- Aa2 to $21,200,000 Class B Senior Secured Floating Rate Notes due 2020; -- A2 to $24,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2020; -- Baa2 to $26,000,000 Class D Secured Deferrable Floating Rate Notes due 2020; and, -- Ba2 to $14,000,000 Class E Secured Deferrable Floating Rate Notes due 2020. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting mainly of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Shenkman Capital Management, Inc. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. WINN-DIXIE: Court Approves Ohio Casualty Insurance Settlement ------------------------------------------------------------- The Honorable Jerry A. Funk of the U.S. Bankruptcy Court for the Middle District of Florida approved Winn-Dixie Stores Inc. and its debtor-affiliates' settlement and compromise with The Ohio Casualty Insurance Company. The Debtors will undertake and assume the liabilities and obligations under the Ohio Casualty Indemnity Agreement, exclusive of any post-cancellation premiums with respect to Ohio Casualty's continuing exposure under the Bonds and the fees and expenses arising in connection with the bankruptcy cases through the Plan Effective Date. The undertaking of the liabilities and obligations under the Ohio Casualty Indemnity Agreement is implicitly acknowledged in the Final Insurance Order and supported by the provisions in the Debtors' Plan. The Debtors, in connection with the operation of their business, must post, or have a surety post, bonds or other forms of security to comply with certain state workers compensation insurance regulations allowing them to operate as self-insured employers for workers' compensation purposes in those states. In connection with the Debtors' qualification as a self-insured employer for workers' compensation purposes in Mississippi, Ohio Casualty issued two surety bonds, each amounting to $500,000, before the Debtors filed for bankruptcy: Bond No. Principal Obligee -------- --------- ------- 3-696-391 Winn-Dixie Louisiana, Inc. State of Mississippi 3-696-392 Winn-Dixie Montgomery, Inc. State of Mississippi Ohio Casualty issued the Bonds in reliance upon the Debtors' execution of the Ohio Casualty Indemnity Agreement pursuant to which the Debtors agreed, among other things, to pay Ohio Casualty upon demand: (i) amounts sufficient to reimburse Ohio Casualty for all loss and expense, including reasonable attorneys' fees, incurred by Ohio Casualty by reason of having executed any bond or bonds; (ii) amounts sufficient to reimburse Ohio Casualty on account of any breach of the Ohio Casualty Indemnity Agreement by the Debtors; (iii) amounts sufficient to discharge any claim made against Ohio Casualty on any bond, whether issued on behalf of any of the Debtors; and (iv) any premium due for any bond or bonds, including renewal premiums with respect to the Bonds until proof satisfactory to Ohio Casualty is furnished demonstrating Ohio Casualty's discharge from liability under the Bonds. Additionally, under the Ohio Casualty Indemnity Agreement, the Debtors are required to procure the discharge of Ohio Casualty from any bond and all liability accruing or to accrue by reason thereof, and in support, deposit collateral with Ohio Casualty to cover its exposure under its Bonds. Recognizing the importance of their insurance programs, including the self-insurance workers' compensation programs supported by surety bonds, on Feb. 22, 2005, the Debtors filed a request to continue their prepetition insurance and workers compensation programs, and pay prepetition premiums in relation to the programs. The Court approved the Insurance Motion on a final basis on March 15, 2005. Ohio Casualty issued the Bonds effective May 3, 2002. Ohio Casualty provided the Debtors with notice of cancellation of the Bonds on Jan. 28, 2005, which, under a 60-day notice of cancellation provision under the Bonds, means that the effective date of cancellation for the Bonds occurred March 28, 2005. The Ohio Casualty's cancellation did not terminate the enforceability of the Bonds; rather, the Bonds remain in force from the date of issuance to the effective date of cancellation. Thus, the Debtors qualify as self-insured employers for workers' compensation purposes in Mississippi during the Effective Period. As a result, the Debtors and Ohio Casualty, as surety, continue to be exposed to liability for workers' compensation claims that arise during the Effective Period. When the Debtors filed for bankruptcy, Bonds in the aggregate amount of $1,000,000 remained outstanding. As a result of its continuing exposure under its Bonds despite their cancellation, Ohio Casualty filed Claim Nos. 9993 and 9994 against Winn-Dixie Stores and certain of its subsidiaries, alleging contingent claims of up to $1,000,000, plus attorneys' fees, expenses and including bond premiums arising with respect to the Bonds. Ohio Casualty further asserted that it was the holder of secured claims against the Debtors pursuant to: (i) compensation liens or preference and priority claims and interests with respect to and in the assets of the Debtors under Miss. Code Ann. Section 71-3-45 (1990); and (ii) its rights of equitable subrogation. In furtherance of the obligations and programs assumed pursuant to the Final Insurance Order, the Debtors proposed in their Joint Plan of Reorganization to pay all Workers Compensation Claims that are determined to be valid under applicable state law and the corresponding programs they maintained, and in accordance with the terms and conditions of the state law and the programs. The Debtors' Plan also provides that a "Workers Compensation Claim" means a "Claim held by an employee of the Debtors for workers compensation coverage under the workers compensation program applicable in the particular state in which the employee is employed by the Debtors." By its terms, the Plan contemplates payment of the workers compensation obligations that, if not satisfied by the Debtors, would impair their qualification under Mississippi and other state workers' compensation regulations, and possibly prevent an effective reorganization. Pursuant to the Settlement, the Debtors agreed to compromise Ohio Casualty's claims for payment of post cancellation premiums with respect to its continuing exposure under its Bonds. The Debtors also agreed to compromise Ohio Casualty's claims for fees and expenses arising in connection with the bankruptcy cases through Nov. 21, 2006, the effective date of the Plan. Ohio Casualty's claims will be disallowed, without prejudice to the insurer's right to file an administrative claim within the time allowed in the event of a default by the Debtors under the Ohio Casualty Indemnity Agreement before Nov. 21, 2006. In exchange for the release of its claims for post-cancellation premiums and attorneys' fees and expenses, Ohio Casualty has requested a more formal acknowledgment by the Debtors of their obligations under the Ohio Casualty Indemnity Agreement. Headquartered in Jacksonville, Florida, Winn-Dixie Stores Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. The Honorable Jerry A. Funk confirmed Winn-Dixie's Joint Plan of Reorganization on Nov. 9, 2006. Winn-Dixie emerged from bankruptcy on Nov. 21, 2006. (Winn-Dixie Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WINN-DIXIE: Wants Coca-Cola & VR Global Settlement Pact Okayed -------------------------------------------------------------- Winn-Dixie Stores Inc. and its debtor-affiliates ask the Honorable Jerry A. Funk of the U.S. Bankruptcy Court for the District of Florida to approve their settlement with Coca-Cola Enterprises Inc. and VR Global Partners LP. In September 2005, Coca-Cola Enterprises asserted a reclamation demand against the Debtors, which was later adjusted to $2,149,270. CCE opted into the Court-approved stipulation between the Debtors and certain trade vendors regarding reconciliation and treatment of the trade vendors' reclamation claims. Accordingly, CCE is deemed to be a participating reclamation vendor. The Debtors and CCE agreed to reduce the Reclamation Claim to $2,136,192, which the Debtors paid pursuant to their agreement. The Agreement not only resolved the Reclamation Claim but also: (i) resulted in a waiver by the Debtors of any preference claims against CCE under Section 547 of the Bankruptcy Code, except for $340,034 in transfers; and (ii) preserved the Debtors' rights with respect to preference claims based upon the $340,034 in payments made to CCE between Feb. 10, 2005, and Feb. 21, 2005. In July 2005, CCE filed four proofs of claim in the Debtors' Chapter 11 cases: Claim No. Amount Debtor --------- ------ ------ 8347 $8,530,810 Winn-Dixie Stores, Inc. 8348 8,530,810 Winn-Dixie Montgomery, Inc. 8349 8,530,810 Winn-Dixie Procurement, Inc. 8350 8,530,810 Winn-Dixie Raleigh, Inc. Each of the CCE Claims consisted of an unsecured non-priority claim for $6,381,540, an unsecured priority claim for $2,149,270, and a contingent indemnification claim. In May 2006, CCE transferred the CCE Claims to Credit Suisse Cayman Islands Branch, who in turn transferred the CCE Claims to VR Global Partners LP in June. VR Global currently holds the CCE Claims. The Debtors have sought to reduce and reclassify the CCE Claims. The parties have determined that CCE overpaid the Debtors $221,910 in postpetition payments pursuant to the marketing agreements between them, D.J. Baker, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in New York, informed the Court. Mr. Baker said the parties seek to settle and compromise the Claim Objections, the overpayments by CCE, the possible preference claims or other claims under Sections 547 and 550, to the extent that Section 550 provides authority for the recovery of a preferential transfer without further litigation. The Debtors, VR Global, and CCE agree that upon Court approval of their Stipulation: (a) Claim No. 8347 will be allowed as an unsecured non- priority claim for $5,836,730, and will be treated as a Class 14 Claim. Claim Nos. 8348, 8349, and 8350 will be disallowed in their entirety; (b) All claims that originated as between the Debtors and CCE for products delivered to the Debtors or any credits or debits that arise pursuant to marketing agreements, which accrued prepetition or arise from marketing agreements in effect postpetition, are resolved by allowance of Claim No. 8347; (c) In consideration of the allowance of Claim No. 8347 and the waiver by CCE of the right to recover postpetition payments made to the Debtors for $221,910, CCE will be released from the Possible Preference Claims or other claims; and (d) Claim No. 8347, as allowed, will not be subject to any rights of set-off. Headquartered in Jacksonville, Florida, Winn-Dixie Stores Inc. -- http://www.winn-dixie.com/-- is one of the nation's largest food retailers. The Company operates 527 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi. The Company, along with 23 of its U.S. subsidiaries, filed for chapter 11 protection on Feb. 21, 2005 (Bankr. S.D.N.Y. Case No. 05-11063, transferred Apr. 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840). D.J. Baker, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Sarah Robinson Borders, Esq., and Brian C. Walsh, Esq., at King & Spalding LLP, represent the Debtors in their restructuring efforts. Paul P. Huffard at The Blackstone Group, LP, gives financial advisory services to the Debtors. Dennis F. Dunne, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, and John B. Macdonald, Esq., at Akerman Senterfitt give legal advice to the Official Committee of Unsecured Creditors. Houlihan Lokey & Zukin Capital gives financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they listed $2,235,557,000 in total assets and $1,870,785,000 in total debts. The Honorable Jerry A. Funk confirmed Winn-Dixie's Joint Plan of Reorganization on Nov. 9, 2006. Winn-Dixie emerged from bankruptcy on Nov. 21, 2006. (Winn-Dixie Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). WINDWARD HARBOR: Case Summary & Three Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Windward Harbor Marina - Melbourne LLC fka Diamond 99 Marina 4399 N US 1 Melbourne, FL 32935 Bankruptcy Case No.: 06-03476 Type of Business: Chapter 11 Petition Date: December 19, 2006 Court: Middle District of Florida (Orlando) Judge: Arthur B. Briskman Debtor's Counsel: James H. Monroe, Esq. James H. Monroe, P.A. P.O. Box 540163 Orlando, FL 32854 Tel: (407) 872-7447 Fax: (407) 246-0008 Total Assets: $3,534,931 Total Debts: $3,000,000 Debtor's Three Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Thomas Lihan $200,000 2455 East Sunrise Boulevard Suite AR-1 Fort Lauderdale, FL 33304 Harry W. Walker $50,000 2010 Club Drive Vero Beach, FL 32963 Webster U. Walker Jr. $50,000 WU Walker Associates L.P. 101 Taintor Drive Southport, CT 06490 WOODWIND & BRASSWIND: Meeting of Creditors Scheduled Tomorrow ------------------------------------------------------------- The U.S. Trustee for Region 10 will convene a meeting of Dennis Bamber Inc., dba The Woodwind & the Brasswind's creditors at 1:30 p.m. tomorrow, Dec. 22, 2006, at One Michiana Square, 5th Floor, 100 East Wayne Street, in South Bend, Indiana. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in South Bend, Indiana, The Woodwind & the Brasswind -- http://www.wwbw.com/-- sells musical instruments and accessories. The Company filed for chapter 11 protection on Nov. 24, 2006 (Bankr. N.D. Ind. Case No. 06-31800). Chad H. Gettleman, Esq., Henry B. Merens, Howard L. Adelman, Esq., and Nathan Q. Rugg, Esq., at Adelman, Gettleman, Ltd., represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors appointed in the Debtors' cases has selected James M. Carr, Esq., at Baker & Daniels LLP as its counsel. When the Debtors filed for protection from their creditors, they estimated assets and debts between $1 million and $100 million. WOODWIND & BRASSWIND: Court Approves Steinway's Staking-Horse Bid ----------------------------------------------------------------- Steinway Musical Instruments, Inc. has been named the lead bidder in the auction for bankrupt music retailer The Woodwind & The Brasswind. The Woodwind & The Brasswind filed for Chapter 11 bankruptcy protection in November after losing a lawsuit. In a court order, a judge appointed Steinway's bid of approximately $40 million as the stalking-horse bid for the auction scheduled for Jan. 24, 2007. In order to ensure that creditors recover as much as possible, companies selling their assets while operating under Chapter 11 protection must submit to an auction even when there is a buyer available. "The Woodwind & The Brasswind was a growing, profitable business before its recent issues," Dana Messina, CEO of Steinway Musical Instruments, commented. "There is a great deal of work to do between now and the auction, but we believe this is an undervalued asset which can add to the profitability of our company." "The Woodwind & The Brasswind will continue to be an industry competitor regardless of who owns it," John Stoner, President of Steinway's Conn-Selmer band instrument division, noted. "We feel that we are in a unique position to enhance the business model of our existing dealers through this acquisition." About Steinway Musical Instruments Steinway Musical Instruments, Inc. (NYSE: LVB), through its Steinway and Conn-Selmer divisions, manufactures musical instruments. Its notable products include Bach Stradivarius trumpets, Selmer Paris saxophones, C.G. Conn French horns, Leblanc clarinets, King trombones, Ludwig snare drums and Steinway & Sons pianos. About The Woodwind & The Brasswind Headquartered in South Bend, Indiana, Dennis Bamber, Inc. dba The Woodwind & The Brasswind sells musical instruments through its retail store, catalogs and Internet sites. The company filed for chapter 11 protection on Nov. 21, 2006 (Bankr. N.D. Ind. Case No. 06-31800). Howard L. Adelman, Esq., at Adelman & Gettleman, Ltd., in Chicago, Illinois, represents the Debtor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $1 million and $100 million. * North American Automotive Output to Decline 1.1% in 2007 ---------------------------------------------------------- North American production will continue its slide in 2007, despite falling to a longtime low in 2006. Ward's AutoForecasts projects total output in 2007 at 15.65 million units, 1.1% down from 2006's estimated 15.83 million, itself a 3.0% decline from 2005. Slow demand in the year's first half due to expectations of sluggish economic growth will be the primary reason for the production drop. Also negatively impacting production, several auto makers will continue trimming stocks of slow sellers heading into 2007, even though inventory levels are at their lowest in years. Thus, first-quarter 2007 output is forecast to fall 6.2% from like-2006, followed by a 4.0% decline in the second quarter. Production will make its first quarterly increase over prior year in the July-September period, followed by another gain in the fourth quarter. These will mark the first growth since first- quarter 2006. Production is expected to continue its recovery on an annual basis, with output rebounding to 16.23 million in 2008. A contributor to next year's decline will be the falloff in production of medium- and heavy-duty trucks. Output surged this year as demand rose prior to new emission regulations that take effect in January, which will raise the cost of diesel-equipped trucks built after 2006. Ward's forecasts output of medium-/heavy-duty trucks will top 630,000 this year, followed by a 30.0% decline in 2007. Conversely, production of light trucks will increase 3.9% in 2007 to 8.70 million units from an estimated 8.37 million units this year. The increase will be spurred by capacity expansion of light trucks at Toyota Motor Engineering and Mfg. North America Inc. and Honda of America Mfg. Inc. Cross/utility vehicles from General Motors Corp., Ford Motor Co. and DaimlerChrysler AG will add to the truck mix. Meanwhile, after two consecutive increases, car production will fall 4.8% to 6.50 million units in 2007. Estimated 2006 output of 6.83 million cars will be the highest since 2002, but the ratio of cars to light trucks is expected to continue a gradual decline through the end of the decade. Ward's AutoForecasts -- http://wardsauto.com/-- details forecast North American production by manufacturer, plant, platform, and vehicle line. A product of Ward's Automotive Group, Ward's AutoForecasts draws from Ward's extensive automotive database and from the many experts employed at Ward's for news, data, and analysis services. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent chapter 11 cases filed with assets and liabilities below $1,000,000: In re Bishop Development Corp. Bankr. W.D. Tex. Case No. 06-52607 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/txwb06-52607.pdf In re Dupree & Associates, Inc. Bankr. W.D. N.C. Case No. 06-20098 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/ncwb06-20098.pdf In re Food & Lifestyles Media, LLC Bankr. D. Ariz. Case No. 06-04238 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/azb06-04238.pdf In re Fox & Fox CPAs, P.C. Bankr. D. Ariz. Case No. 06-04230 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/azb06-04230.pdf In re Highlands Point Design & Development, LLC Bankr. W.D. N.C. Case No. 06-20099 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/ncwb06-20099.pdf In re John F. Benson Bankr. W.D. Pa. Case No. 06-26380 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/pawb06-26380.pdf In re Lawrence & Sons, Inc. Bankr. N.D. Ohio Case No. 06-52742 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/ohnb06-52742.pdf In re MKDD, Inc. Bankr. M.D. Fla. Case No. 06-07181 Chapter 11 Petition filed December 15, 2006 See http://bankrupt.com/misc/flmb06-07181.pdf In re Accuware Inc. Bankr. M.D. Fla. Case No. 06-07197 Chapter 11 Petition filed December 16, 2006 See http://bankrupt.com/misc/flmb06-07197.pdf In re Duke Heating Oil, Inc. Bankr. M.D. Pa. Case No. 06-02931 Chapter 11 Petition filed December 18, 2006 See http://bankrupt.com/misc/pamb06-02931.pdf In re Josab Corporation Bankr. W.D. Mich. Case No. 06-06590 Chapter 11 Petition filed December 18, 2006 See http://bankrupt.com/misc/miwb06-06590.pdf In re Matt Maziar Ariana Bankr. D. Md. Case No. 06-18307 Chapter 11 Petition filed December 19, 2006 See http://bankrupt.com/misc/mdb06-18307.pdf In re Miles Drawhorn Bankr. E.D. Tenn. Case No. 06-33064 Chapter 11 Petition filed December 19, 2006 See http://bankrupt.com/misc/tneb06-33064.pdf In re Modular Furniture Group, Inc. Bankr. E.D. Va. Case No. 06-11775 Chapter 11 Petition filed December 18, 2006 See http://bankrupt.com/misc/vaeb06-11775.pdf In re Nexgenix Inc. Bankr. C.D. Calif. Case No. 06-12391 Chapter 11 Petition filed December 18, 2006 See http://bankrupt.com/misc/cacb06-12391.pdf In re Robert Mathew Pellkofer Bankr. C.D. Calif. Case No. 06-12403 Chapter 11 Petition filed December 19, 2006 See http://bankrupt.com/misc/cacb06-12403.pdf In re Ronald Rollins Bankr. E.D. La. Case No. 06-11438 Chapter 11 Petition filed December 19, 2006 See http://bankrupt.com/misc/laeb06-11438.pdf In re ScanAmerica-Springfield, LLC Bankr. C.D. Ill. Case No. 06-71801 Chapter 11 Petition filed December 19, 2006 See http://bankrupt.com/misc/ilcb06-71801.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero Jainga, Joel Anthony G. Lopez, Robert Max Quiblat, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Cherry A. Soriano-Baaclo, Christian Q. Salta, Jason A. Nieva, Lucilo M. Pinili, Jr., Tara Marie A. Martin and Peter A. Chapman, Editors. Copyright 2006. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $725 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***