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/raid1/www/Hosts/bankrupt/TCR_Public/070228.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, February 28, 2007, Vol. 11, No. 50 Headlines ACCENTIA BIOPHARMA: Dec. 31 Balance Sheet Upside Down by $53 Mil. ADAMS SQUARE: S&P Rates $10 Million Class E Notes at BB+ ADVANCED MARKETING: Court Gives Final Nod on Cash Collateral Use ADVANCED MARKETING: Panel Wants Lowenstein Sandler as Lead Counsel AEOLUS PHARMA: Posts $949,000 Net Loss in Qtr. Ended December 31 AIDAN CONTRACTING: Voluntary Chapter 11 Case Summary ALLIED WASTE: Moody's Lifts Corporate Family Rating to B1 from B2 ALLIED WASTE: S&P Assigns BB- Rating to Proposed $750 Mil. Notes AMERICAN AXLE: Fitch Rates New Senior Unsecured Notes at BB AMERICAN HOME: Fitch Affirms Rating on Class II-M5 Certs. at B AMERINDO INTERNET: Chapter 15 Petition Summary APRIA HEALTHCARE: Earns $75 Million in Year Ended December 31 ARGENT SECURITIES: Fitch Assigns Low-B Ratings on 11 Cert. Classes ARVINMERITOR INC: Initial Purchasers Buy $25 Mil. Additional Notes ARVINMERITOR INC: Moody's Lifts Rating on Senior Secured Debt ATLANTIS PLASTICS: S&P Junks Corporate Credit Rating from B- B&G FOODS: Completes Brands Purchase from Kraft Foods for $200MM BANC OF AMERICA: Fitch Assigns Low-B Ratings on 91 Cert. Classes BANK OF AMERICA: Fitch Holds Junk Rating on $6.5MM Class P Certs. BEAR STEARNS: Fitch Holds Rating on $4.6 Mil. Class O Certs. at B- BRODERICK CDO: S&P Rates $4 Million Class E Notes at BB+ BUILDING MATERIALS: S&P Rates $325 Million Senior Notes at B C-BASS: Fitch Affirms Low-B Ratings on 21 Certificate Classes CALPINE CORP: Entities Oppose $5 Billion DIP Refinancing CALPINE CORP: Elects Yvonne A. McIntyre as Vice President CALPINE CORP: Wants Dickstein Shapiro as Special Counsel CLEARPOINT BUSINESS: BDO Seidman Raises Going Concern Doubt COLLINS & AIKMAN: Files Solicitation Versions of Amended Plan COLLINS & AIKMAN: Files Amended Solicitation Procedures COLLINS & AIKMAN: Liquidation Analysis Solicitation Version Filed COMMONWEALTH EDISON: Warns Ch. 11 Filing if Rates are Rolled Back CONSOL ENERGY: DBRS Holds BB Rating on Senior Unsecured Debt DAIMLERCHRYSLER: Plans to Cut 1,000 Salaried Jobs by June 2007 DAIMLERCHRYSLER: Chrysler & UAW Ink Two Employee Incentive Deals DAIMLERCHRYSLER: Supervisory Board Approves Small-Car Chery Pact DAIMLERCHRYSLER AG: Considers Accepting Minority Stake in GM DALE GRINAGER: Case Summary & 11 Largest Unsecured Creditors DELPHI CORP: Plans to Close Spain Steering Facility DELTA AIR: Committee Amends SSI's Engagement Letter DOMTAR INC: Earns CDN$328 Million in Year Ended December 31 EASY INC: Case Summary & 19 Largest Unsecured Creditors EL PASO: Earns $15.8 Million in Fourth Quarter Ended December 31 ELCOM INT'L: Appoints David Elliot as VP Finance & Secretary EUGENE FINAN: Case Summary & 12 Largest Unsecured Creditors FIDELITY NATIONAL: Net Earnings Rise to $259.1 Million in 2006 FIRST UNION: Fitch Holds Junk Rating on $6.5 Mil. Class P Certs. FR X OHMSTEDE: Moody's Affirms Corporate Family Rating at B2 FREEPORT-MCMORAN: Moody's Affirms Ba3 Corporate Family Rating GAP INC: Will Close Forth & Towne Store Concept GOLF 255: Ch. 11 Trustee Gets OK to Sell Golf Course for $5 Mil. HILTON HOTELS: Moody's Lifts Corp. Family Rating to Ba1 from Ba2 HOLLINGER INC: Settles Disputes With Former Directors IGNIS PETROLEUM: Dec. 31 Balance Sheet Upside Down by $9.3 Mil. INSIGHT HEALTH: Moody's Junks Rating on $550 Million Notes INTERNATIONAL COAL: Posts $52,000 Net Loss in Fourth Quarter 2006 JP MORGAN: Fitch Holds BB+ Rating on $12.2 Million Certificates KEPLER HOLDINGS: Moody's Rates $200 Million Senior Loan at Ba2 KINDER MORGAN: High Leverage Prompts DBRS to Downgrade Ratings LEGACY ESTATE: Settles 2 Disputes, Inches Way to Plan Confirmation LEVEL 3: Gets Requisite Consents for Unit's 12.25% Senior Notes LIBERTY TAX: Dec. 31 Balance Sheet Upside Down by $49.8 Million LIONEL LLC: Court Gives Open-Ended Exclusive Periods Extension MAGNOLIA VILLAGE: Wants to Assign Real Properties to Basin Street MAGNOLIA VILLAGE: Wants to Sell Properties to Flocchini for $23MM MAKI MAKI: Case Summary & 20 Largest Unsecured Creditors MASTERCRAFT INTERIORS: Court Okays Amended Disclosure Statement MASTERCRAFT INTERIORS: U.S. Trustee Wants Ch. 11 Trustee Named MERITAGE HOMES: Issues $150 Mil. of 7.73% Sr. Subordinated Notes MORTGAGE LENDERS: Accredited Wants to Foreclose Kansas Property NASSAU CDO: Moody's Rates 18,000 Preference Shares at Ba1 NATIONAL SECURITY: A.M. Best Says Financial Strength is Fair NATIONSLINK FUNDING: Fitch Holds Rating on Class G Certs. at BB OMEGA ONE: A.M. Best Affirms B+ Financial Strength Rating OWENS CORNING: Wants San Mateo's $1.5 Million Claim Disallowed PACIFIC LUMBER: Scopac Can Access Cash Collateral Until March 9 PACIFIC LUMBER: Timber Noteholders Object to Intercompany Setoff PELTS & SKINS: Files Amended Disclosure Statement in Louisiana PENNSYLVANIA REAL: Fitch Holds Issuer Default Rating at BB PETER ROSI: Case Summary & Nine Largest Unsecured Creditors PHELPS DODGE: Moody's Lowers Ratings on $556.7 Million Notes to B1 PITTSFIELD WEAVING: Can File Plan of Reorganization Until March 19 PRESIDENTIAL LIFE: A.M. Holds Financial Strength Rating at B+ QT INC: Case Summary & 28 Largest Unsecured Creditors QUE PARK: Case Summary & Largest Unsecured Creditor RALPH BROTHERS: Case Summary & Five Largest Unsecured Creditors SCOTTISH RE: Facing Bankruptcy Without MassMutual/Cerberus Deal SOLOMON DWEK: Court Converts Ch. 7 Case to Ch. 11 with Trustee SOLUTIA INC: Buying Akzo Nobel's 50% Stake in Flexsys Venture SPECTRUM RESTAURANTS: Sells 72 Grandy's Stores to Souper Salad STONEY CREEK: Case Summary & 20 Largest Unsecured Creditors STRUCTURED ASSET: Fitch Holds BB Rating on Two Class Certificates TIME WARNER: Posts $98.8 Million Net Loss in Year Ended Dec. 31 TRANSALTA CORP: To Proceed with $1.6 Billion Project with EPCOR TXU CORP: Buyout Offer Prompts Moody's to Review Ratings * Hunton & Williams Promotes Wendy Spanbauer to Counsel * Upcoming Meetings, Conferences and Seminars ********* ACCENTIA BIOPHARMA: Dec. 31 Balance Sheet Upside Down by $53 Mil. ----------------------------------------------------------------- Accenta BioPharmaceuticals, Inc. filed its quarterly financial statements for the three-month period ended Dec. 31, 2006, with the Securities and Exchange Commission. At Dec. 31, 2006, the company's balance sheet showed $43,499,983 in total assets, $90,850,946 in total liabilities, resulting in a $53,350,963 stockholders' deficit. At Sept. 30, 2006, stockholders' deficit stood at $26,440,832. The company's December 31 balance sheet also showed strained liquidity with $17,640,364 in total current assets available to pay $56,802,596 in total current liabilities coming due within the next 12 months. The company reported a $30,641,013 net loss on $5,881,743 of total net revenues for the quarterly period ended Dec. 31, 2006, compared to a net loss of $317,026 on total revenues of $6,817,966 in the same prior year period. Furthermore, it projects operating deficits for fiscal 2007 before consideration of potential funding sources for the same period. Current funding of the company's working capital requirements has resulted principally from the issuance of common and preferred stock and proceeds from debt. The company is currently engaged in efforts to restructure certain existing indebtedness in order to increase available funds on a near-term basis, and is also seeking additional financing through public or private equity offerings, additional debt financings, corporate collaborations, or licensing transactions. If adequate funds are not available, it may be required to delay, reduce the scope of, or eliminate one or more of the research or development programs or commercialization efforts. Subsidiary Financing The company further anticipates that its subsidiary, Biovest International, Inc., will seek additional financing during the next six months through public and private equity offerings, debt financings, corporate collaborations, or licensing transactions. As of Jan. 31, 2007, an aggregate of $8.9 million intercompany demand notes payable to Accentia by Biovest are outstanding, representing funds advanced to Biovest in excess of the funding commitment under an investment agreement plus intercompany obligations arising from the conversion of Biovest notes into common stock of Accentia in accordance with the terms of such notes. In addition, upon the completion of a Biovest financing transaction, or other contemplated arrangements Management anticipates that Biovest may repay some or all of the outstanding demand notes. A full-text copy of the company's financial statements for the quarterly period ended Dec. 31, 2006, is available for free at http://researcharchives.com/t/s?1a63 Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 5, 2007, Aidman, Piser & Company, P.A. expressed substantial doubt about Accentia Biopharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Sept. 30, 2006, and 2005. The auditing firm pointed to the company's cumulative net losses of approximately $111.4 million during the three years ended Sept. 30, 2006, and working capital deficiency of approximately $20.5 million. About Accentia Biopharmaceuticals Based in Tampa, Florida, Accentia BioPharmaceuticals Inc (Nasdaq: ABPI)-- http://www.accentia.net/-- is a vertically-integrated specialty biopharmaceutical company, formed by the Hopkins Capital Group LLC and affiliates to acquire late-stage targeted therapeutics and to use patented delivery technologies to enhance the performance of these therapeutics. The company consists of two wholly-owned subsidiaries, and a majority, controlling interest in a third company. Accentia has a portfolio of currently marketed respiratory products and a pipeline of products in clinical development. The company's lead respiratory product candidate is SinuNase(TM), which is under clinical development to treat chronic sinusitis (rhinosinusitis). The company's other lead product is BiovaxID(TM), a patient-specific anti-cancer vaccine for the treatment of follicular non-Hodgkin's lymphoma. BiovaxID, which is being developed by Accentia's subsidiary Biovest International, Inc. is currently in a fast-tracked Phase III clinical trial. ADAMS SQUARE: S&P Rates $10 Million Class E Notes at BB+ -------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Adams Square Funding II Ltd./Adams Square Funding II Corp.'s $979.2 billion floating-rate notes due 2047. The preliminary ratings are based on information as of Feb. 26, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The expected commensurate level of credit support in the form of subordination to be provided by the notes junior to the respective classes; -- The cash flow structure, which was subjected to various stresses requested by Standard & Poor's; and -- The legal structure of the transaction, including the bankruptcy remoteness of the issuer. Preliminary Ratings Assigned Adams Square Funding II Ltd. Adams Square Funding II Corp. Class Rating Amount ----- ------ --------------- A1 AAA $600,000,000 S* AAA $15,200,000 A2 AAA $95,000,000 A3 AA $140,000,000 B A $50,000,000 C BBB $49,000,000 D BBB- $20,000,000 E BB+ $10,000,000 Income notes NR $42,850.000 *Due March 10, 2014. NR -- Not rated. ADVANCED MARKETING: Court Gives Final Nod on Cash Collateral Use ---------------------------------------------------------------- The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware has issued a final ruling authorizing the Advanced Marketing Services Inc. and its debtor-affiliates to use the Secured Lenders' Cash Collateral. Judge Sontchi also authorized Debtors to enter into, execute, deliver, perform, and comply with all of the terms and covenants of the Loan Agreement and other Loan Documents. As reported in the Troubled Company Reporter on Jan. 11, 2007, Judge Sontchi granted, on an interim basis, the Debtors authority to use their secured lenders' cash collateral. The Debtors related that it will be an event of default if they use the Lenders' Cash Collateral without further express, written consent of the Lenders. Loan and Security Agreement The Loan and Security Agreement dated April 27, 2004, among the Debtors, Wells Fargo Foothill, Inc., as agent, and a syndicate of lenders, is secured by a first priority security interest on substantially all of the Debtors' assets, all products and proceeds of the assets, and all cash proceeds and all other cash equivalents and cash collateral. Prior to filing for bankruptcy, the Debtors were obligated to the Senior Lenders for the principal amount drawn on the Revolving Loans plus accrued and unpaid interest and certain additional unpaid fees and expenses totaling $41,514,347. Pursuant to an Intercompany Subordination Agreement between the Debtors and certain of their subsidiaries, as Obligors, and Foothill, the parties agreed to subordinate the payment of all indebtedness, liabilities and other obligations of each Obligor owing to any other Obligor to the payment of the $41,514,347 Indebtedness. To secure all postpetition obligations due to the Lenders by the Debtors, the Debtors propose to grant the Lenders a lien with priority and senior to all other liens, other than validly perfected prepetition liens that would otherwise be senior and prior to the Senior Lenders' prepetition liens, on all of the Debtors' prepetition, present and future assets. Moreover, upon the occurrence of a Default or Event of Default, each Borrower waives any right to use Cash Collateral. Based in San Diego, California, Advanced Marketing Services, Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Apr. 28, 2007. (Advanced Marketing Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADVANCED MARKETING: Panel Wants Lowenstein Sandler as Lead Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in Advanced Marketing Services Inc. and its debtor-affiliates bankruptcy cases seeks the authority of the United States Bankruptcy Court for the District of Delaware to retain Lowenstein Sandler PC as its main counsel to perform services relating to the Debtors' bankruptcy cases, effective as of Jan. 12, 2007. The Creditors Committee has selected Lowenstein because of its attorneys' experience and knowledge. The Committee believes that Lowenstein is well qualified to represent it in the Debtors' Chapter 11 cases. As the Creditors Committee's counsel, Lowenstein will: (a) provide legal advise as necessary with respect to the Committee's powers and duties as an official committee appointed under Section 1102 of the Bankruptcy Code; (b) assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the Debtors' business operations, potential claims, and any other matters relevant to the Debtors' bankruptcy cases or to the formulation of a Chapter 11 plan; (c) participate in the formulation of a Plan; (d) provide legal advices with respect to any disclosure statement and Plan filed the Debtors' bankruptcy cases, and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan; (e) prepare on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements and other legal papers; (f) appear in the Court to present necessary motions, applications, and pleadings, and otherwise protecting the interests of those represented by the Committee; (g) assist the Committee in requesting the appointment of a trustee or examiner, should the action be necessary; and (h) perform other legal services as may be required and that are in the best interests of the Committee and creditors. Lowenstein will be paid on an hourly basis, plus reimbursement of the actual and necessary expenses that Lowenstein incurs in accordance with the ordinary and customary rates, which are in effect on the date the services are rendered. Lowenstein's hourly rates are: Professional Hourly Rate ------------ ----------- Partners $320 - $595 Counsel $265 - $425 Associates $165 - $300 Legal Assistants $75 - $150 Kenneth A. Rosen, Esq., a member at Lowenstein, relates that the charges set forth are based on actual time charges on an hourly basis and based on the experience and expertise of the attorney or legal assistant involved. The hourly rates are subject to periodic adjustments to reflect economic and other conditions. Mr. Rosen assures the Court that his firm represents no other entity in connection with the Debtors' bankruptcy cases, is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Creditors Committee with respect to the matters on which it is to be employed. Based in San Diego, California, Advanced Marketing Services, Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Apr. 28, 2007. (Advanced Marketing Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) AEOLUS PHARMA: Posts $949,000 Net Loss in Qtr. Ended December 31 ---------------------------------------------------------------- Aelous Pharmaceuticals, Inc. reported a $949,000 net loss on zero revenues for the quarterly period ended Dec. 31, 2006, compared to a $1,523,000 net loss on zero revenues in the same prior year period, as indicated in its quarterly financial statements for the three-month period ended Dec. 31, 2006. The company also has incurred significant losses from operations of $965,000 and $5,604,000, and cash outflows from operations of $927,000 and $4,867,000, for the three months ended December 31, 2006 and for the fiscal year ended September 30, 2006, respectively. It expects to incur additional losses and negative cash flow from operations during the remainder of fiscal year 2007 and for several more years. The company believes it has adequate financial resources to conduct operations through the third quarter of fiscal year. At Dec. 31, 2006, the company's balance sheet showed $2,598,000 in total assets, $1,565,000 in total liabilities, and $1,033,000 in stockholders' equity. The company also had an accumulated deficit of $153,851,000 at Dec. 31, 2006. Aeolus intends to explore strategic and financial alternatives, including a merger or acquisition with or by another company, the sale of shares of stock, the establishment of new collaborations for current research programs that include initial cash payments and on-going research support and the out-licensing of our compounds for development by a third party. If the company is unable to obtain additional financing to fund operations beyond the third quarter of fiscal year 2007, it will need to eliminate some or all of its activities, merge with another company, sell some or all of its assets to another company, or cease operations entirely. A full-text copy of the company's financial statements for the quarterly period ended December 2006, is available for free at http://researcharchives.com/t/s?1a5a Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 8, 2007, Haskell & White LLP expressed substantial doubt about Aeolus Pharmaceuticals Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Sept. 30, 2006, and 2005. The auditing firm pointed to the company's recurring losses from operations and insufficiennt working capital to fund its operations throughout the next fiscal year. About Aeolus Aeolus Pharmaceuticals, Inc. (OTC BB: AOLS.OB) -- http://www.aeoluspharma.com/-- is developing a variety of therapeutic agents based on its proprietary small molecule catalytic antioxidants, with AEOL 10150 being the first to enter human clinical evaluation. AEOL 10150 is a patented, small molecule catalytic antioxidant that has shown the ability to scavenge a broad range of reactive oxygen species, or free radicals. Because oxygen-derived free radicals are believed to have an important role in the pathogenesis of many diseases, Aeolus' catalytic antioxidants are believed to have a broad range of potential therapeutic uses. AIDAN CONTRACTING: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Aidan Contracting, Inc. 538 Millers Run Road Morgan, PA 15064 Bankruptcy Case No.: 07-21091 Type of Business: The Debtor is a general contractor. Chapter 11 Petition Date: February 23, 2007 Court: Western District of Pennsylvania (Pittsburgh) Judge: Judith K. Fitzgerald Debtor's Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million The Debtor did not file a list of its 20 Largest Unsecured Creditors. ALLIED WASTE: Moody's Lifts Corporate Family Rating to B1 from B2 ----------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating of Allied Waste Industries, Inc to B1 from B2, affirmed the Ba3, LGD2, 30% rating on the senior secured credit facilities of Allied Waste North America, Inc., and upgraded other rated debt tranches of Allied Waste along with Allied Waste NA and its wholly-owned subsidiary, Browning-Ferris Industries, LLC. Concurrently, Moody's assigned a B1, LGD4, 56% rating to the company's proposed $750 million senior secured note due 2017. The outlook for the ratings remains positive, reflecting continuing pricing strength in the industry as a whole and the company's own pricing initiatives in driving enhanced internal revenue growth. Moody's took these rating actions: * Allied Waste Industries, Inc. -- Upgraded the Corporate Family Rating to B1 from B2; -- Upgraded the Probability of Default Rating to B1 from B2; -- Upgraded the $230 million issue of 4.25% guaranteed senior subordinated convertible bonds due 2034 to B3, LGD5, 87% from Caa1, LGD5, 85%; and -- Upgraded the $600 million issue of 6.25% senior mandatory convertible preferred stock -- conversion date of March 2008 to B3, LGD6, 98% from Caa1, LGD6, 98%. The Speculative Grade Liquidity Rating is SGL-1. The outlook for the ratings remains positive. * Allied Waste North America, Inc. -- Assigned a B1, LGD4, 56% rating to the proposed $750 million issue of guaranteed senior secured notes due 2017; -- Affirmed the B2, LGD4, 57% $750 million issue of 8.5% guaranteed senior secured notes due 2008, subject to withdrawal upon completion of the refinancing; -- Affirmed the Ba3m, LGD2, 30% rated $1.575 billion guaranteed senior secured revolving credit facility due 2010; -- Affirmed the Ba3, LGD2, 30% rated $1.105 billion guaranteed senior secured term loan due 2012; -- Affirmed the Ba3, LGD2, 30% rated $490 million guaranteed senior secured Tranche A Letter of Credit Facility due 2012; -- Upgraded the $350 million issue of 6.5% guaranteed senior secured notes due 2010 to B1, LGD4, 56% from B2, LGD4, 57%; -- Upgraded the $400 million issue of 5.75% guaranteed senior secured notes due 2011 to B1, LGD4, 56% from B2, LGD4, 57%; -- Upgraded the $275 million issue of 6.375% guaranteed senior secured notes due 2011 to B1, LGD4, 56% from B2, LGD4, 57%; -- Upgraded the $251 million issue of 9.25% guaranteed senior secured notes due 2012 to B1, LGD4, 56% from B2, LGD4, 57%; -- Upgraded the $450 million issue of 7.875% guaranteed senior secured notes due 2013 to B1, LGD4, 56%) from B2, LGD4, 57%; -- Upgraded the $425 million issue of 6.125% guaranteed senior secured notes due 2014 to B1, LGD4, 56% from B2 LGD4, 57%; -- Upgraded the $595 million issue of 7.125% guaranteed senior secured notes due 2016 to B1, LGD4, 56% from B2, LGD4, 57%; -- Upgraded the $600 million issue of 7.25% guaranteed senior secured notes due 2015 to B1, LGD4, 56% from B2, LGD4, 57%; and -- Upgraded the $400 million issue of 7.375% guaranteed senior unsecured notes due 2014 to B2, LGD4, 69% from B3, LGD4, 64%. * Browning-Ferris Industries, LLC. (assumed by Allied Waste North America, Inc.) -- Upgraded the $155 million issue of 6.375% senior secured notes due 2008 to B1, LGD4, 56% from B2, LGD4, 57%; -- Upgraded the $96 million issue of 9.25% secured debentures due 2021 to B1, LGD4, 56% from B2, LGD4, 57%; -- Upgraded the $294 million issue of 7.4% secured debentures due 2035 to B1, LGD4, 56% from B2, LGD4, 57%; and -- Upgraded the $281 million of industrial revenue bonds with various maturities to B2, LGD4, 69% from B3, LGD4, 64%. The ratings benefit from a stable underlying business with limited available substitutes and the relative lack of cyclicality in the municipal solid waste industry, the company's prominent market position and the company's size and diversified revenue stream as well as ownership of scarce assets. The ratings continue to be constrained by the company's high leverage and weak free cash flow generation. Although the company has made progress with its best practices program over the last year and a half, ongoing implementation costs, fluctuations in fuel costs and cyclical weakness in construction activity may put pressure on operating margins. Although Moody's expects ongoing improvements in free cash flow, such improvements are likely to continue to be constrained by interest payments and high ongoing capital expenditure levels. Sustainable leverage metrics at current levels or lower, combined with improved, sustainable adjusted free cash flow of the order of 5% of debt while maintaining adequate capital expenditures could lead to an upgrade. Indications of pricing weakness in the industry, substantial volume declines which lead to negative free cash flows, debt-financed acquisitions or additional indebtedness, for example in connection with potential developments with respect to the outstanding dispute with the IRS could lead to stabilization of the outlook or place downward pressure on the ratings. Allied Waste North America, Inc., a wholly owned operating subsidiary of Allied Waste Industries, Inc., is based in Phoenix, Arizona. Allied Waste is a vertically integrated, non-hazardous solid waste management company providing collection, transfer, and recycling and disposal services for residential, commercial and industrial customers. As of Dec. 31, 2006, the company operated a network of 304 collection companies, 161 transfer stations, 168 active landfills and 57 recycling facilities in 37 states and Puerto Rico. The company had revenues of approximately $6.0 billion in fiscal 2006. ALLIED WASTE: S&P Assigns BB- Rating to Proposed $750 Mil. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned debt and recovery ratings to Allied Waste North America Inc.'s proposed $750 million senior notes due 2017. The notes are rated 'BB-', one notch lower than the parent's corporate credit rating, with a recovery rating of '4', indicating the expectation for marginal recovery of principal in the event of a payment default. AWNA is a wholly owned subsidiary of Scottsdale, Arizona-based Allied Waste Industries Inc. The notes are a drawdown under Allied Waste's existing shelf and are guaranteed by Allied Waste and subsidiaries of AWNA. At the same time, Standard & Poor's affirmed its ratings, including its 'BB' corporate credit rating, on Allied Waste. The outlook is stable. About $6.9 billion of debt was outstanding as of Dec. 31, 2006. The company will use proceeds from the notes to fund a tender offer for AWNA's outstanding $750 million 8.5% senior notes due 2008. At closing, Standard & Poor's will withdraw the 'BB-' rating on the 8.5% notes. "The ratings on the new notes reflect the disadvantaged position of the noteholders relative to the secured bank lenders, the sizable amount of secured claims on the specific assets pledged as collateral, and the sharing of this collateral with the bank lenders," said Standard & Poor's credit analyst Roman Szuper. The ratings on Allied Waste reflect a highly leveraged financial profile, which outweighs the company's fairly strong competitive business position. Allied Waste is the second-largest solid waste management participant in the U.S., with 2007 revenues and EBITDA estimated at about $6.2 billion and $1.65 billion, respectively. The company provides collection, transfer, disposal, and recycling services to about 10 million residential, commercial, and industrial customers in 37 states and Puerto Rico. Leading shares in most local markets, good collection-route density, and a high rate of waste internalization enhance operations. Allied Waste's highly leveraged financial profile stems mainly from debt incurred in the 1999 acquisition of Browning-Ferris Industries Inc. Since that time, the firm's key focus has been on debt reduction from free cash flow, the issuance of equity, and the proceeds from divestitures. Operating margins stabilized at around 26% in 2006, supported by price increases, modest volume gains, and benefits of ongoing cost reduction programs. AMERICAN AXLE: Fitch Rates New Senior Unsecured Notes at BB ----------------------------------------------------------- Fitch has assigned a 'BB' rating to American Axle & Manufacturing's new senior unsecured notes due 2017. Fitch has also affirmed AXL's existing ratings as: -- Issuer Default Rating 'BB'; -- Senior unsecured bank facility 'BB'; and -- Senior unsecured 'BB'. The Outlook remains Negative. Including the new issuance, the ratings cover approximately $972 million of debt. Fitch's affirmation reflects the risks associated with AXL's dependence on General Motors for roughly 75% of its total revenue and in particular, GM's passenger trucks which compete in segments that will remain under pressure in 2007. Partially offsetting these risks are AXL's margin performance, solid liquidity, competitive position, the financial benefits of recent headcount reduction, and an expected improvement in free cash flow in 2007. Free cash flow over the next several years will benefit from recent restructuring activities and reduced capital expenditure levels following an extended period of higher costs associated with the launch of GM's GMT900 trucks and international growth initiatives. The new business backlog with customers other than GM continues to grow. The Negative Outlook reflects the credit condition of AXL's largest customer, critical labor negotiations later this year between GM and the United Auto Workers union, a financially stressed base of suppliers other than AXL, and the uncertain sustainability of large pickup truck production volume in light of a slump in new home construction. In addition, the uncertainty related to large sport utility vehicle volumes and consumers reaction to fuel prices. Fitch could revise the Outlook to Stable if GM's production outlook stabilizes or AXL's free cash flow materially improves in 2007, providing increased cushion against the uncertainty of the factors listed above. Fitch has also assigned a rating of 'BB' to AXL's new senior unsecured bonds due Feb 2017. The issuance capitalizes on favorable capital market conditions and supplements AXL's liquidity position through an uncertain 2007 industry environment. Fitch anticipates that, in the absence of any labor disruptions at AXL's largest customer, issuance proceeds would be used to keep revolver capacity available with the balance held in cash. Axle will likely use the cash on the balance sheet instead of the revolver to handle mid-period working capital requirements during the year. Upon resolution of GM/UAW contract negotiations, Fitch expects to see a reduction in total debt. A 'Change In Control' clause is included in the new issue terms. Despite a 12.7% decline from 2005 to 2006 in GM light truck sales, AXL 2006 revenue was off 5.8% from $3.4 billion to $3.2 billion. The offsets to the decline in GM's truck sales include AXL's business with customers other than GM and higher content on the new GM SUVs and large pickups. However, lower volumes and higher launch costs brought adjusted operating income down from $105 million last year to $52 million for 2006. Free cash flow was a use of $132 million versus a use of $56 million a year ago primarily due to the special attrition program payments but also higher than normal cap ex related to the launch of the new GM products. To fund operations, the Special Attrition Program, other attrition programs and $37 million in lease buyouts, the company's total debt rose to $672 million in 2006 from $489 million last year. Liquidity at the end of 2006 consisted of $14 million in cash and marketable securities and $476 million in available revolver. The company also has availability under uncommitted and foreign lines of credit totaling $27 million and $92 million, respectively. AXL has maintained its financial discipline through a period of heavy investment and in the midst of difficult industry conditions. While many suppliers have chosen to take advantage of attractive secured financing arrangements, AXL's funding has remained unsecured. AXL's credit metrics are healthy for the current rating, but AXL's credit profile is currently constrained by the company's dependence on GM, exposure to light trucks, and negative free cash flow over the past two years. For 2006 AXL's Total Debt to Operating EBITDA was 2.6x, Total Adjusted Debt to Operating EBITDAR was 2.9x, and FFO Adjusted Leverage was 3.4x. AMERICAN HOME: Fitch Affirms Rating on Class II-M5 Certs. at B -------------------------------------------------------------- Fitch Ratings has affirmed 11 classes of American Home Mortgage Investment Trust residential mortgage-backed certificates, series 2005-SD1, as: Group 1 -- Class I-A1 affirmed at 'AAA'; -- Class I-M1 affirmed at 'AA'; -- Class I-M2 affirmed at 'A'; -- Class I-M3 affirmed at 'BBB'; and -- Class I-M4 affirmed at 'BB'. Group 2 -- Class II-A1 affirmed at 'AAA'; -- Class II-M1 affirmed at 'AA'; -- Class II-M2 affirmed at 'A'; -- Class II-M3 affirmed at 'BBB'; -- Class II-M4 affirmed at 'BB'; and -- Class II-M5 affirmed at 'B'. These affirmations reflect credit enhancement consistent with future loss expectations and affect $92.9 million of outstanding certificates. All the classes detailed above have experienced small to moderate growth in CE since closing. The transaction is seasoned only 13 months. The pool factors range from 65% to 79%. The Group 1 mortgage pool consists of fixed- and adjustable-rate mortgage loans secured by first liens on residential properties. The Group 2 mortgage pool consists of fixed-rate mortgage loans secured by second liens on residential properties. Wells Fargo Bank, N.A. is the Master Servicer and American Home Mortgage Servicing, which is rated 'RPS3+' by Fitch is the Primary Servicer. AMERINDO INTERNET: Chapter 15 Petition Summary --------------------------------------------- Petitioners: David Walker and Lawrence Edwards Joint Official Liquidators and Authorized Foreign Representatives PwC Corporate Finance & Recovery (Cayman) Limited Debtor: Amerindo Internet Growth Fund Limited Strathvale House North Church Street Georgetown, Grand Cayman Cayman Islands Case No.: 07-10327 Type of Business: The Debtor was an open-ended investment company, which was incorporated on Feb. 14, 2000, and began operations on July 3, 2000. The Debtor sought superior intermediate-term capital appreciation through investment in U.S. securities in emerging technology companies, principally in electronics and biotechnology. Chapter 15 Petition Date: February 9, 2007 Foreign Court: Grand Court of the Cayman Islands U.S. Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Petitioners' Counsel: Robert J. Rosenberg, Esq. Henry P. Baer, Jr., Esq. Latham & Watkins LLP 885 Third Avenue New York, NY 10022 Tel: (212) 906-1200 Fax: (212) 751-4864 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million APRIA HEALTHCARE: Earns $75 Million in Year Ended December 31 ------------------------------------------------------------- Apria Healthcare Group Inc. reported net earnings of $21.1 million on net revenues of $391 million for the fourth quarter ended Dec. 31, 2006, compared with net earnings of $19.5 million on net revenues of $359.7 million for the fourth quarter of 2005. For the year ended Dec. 31, 2006, the company earned $75 million on $1,517,307,000 of revenues, compared with net earnings of $66.9 million on $1,474,101,000 of revenues for 2005. The comparison in net revenues and net income between 2006 and 2005 should consider the effect of lower Medicare reimbursement in 2006. Such reimbursement reductions include the decrease in payment for oxygen and oxygen equipment, which went into effect in April 2005, but had a partial year impact on the comparison between 2006 and 2005. Also, reimbursement for inhalation drugs was reduced as Medicare lowered the related dispensing fee, and the manufacturer-reported average sales prices, which serve as the basis for drug reimbursement, were generally lower in 2006 than in 2005. The aggregate effect of these Medicare reimbursement reductions on 2006 net revenues was $15 million. The impact to net income for 2006 was $9.5 million. Net income for the fourth quarter and calendar year 2006 was positively impacted by an income tax benefit related to the completion of the 2003 IRS audit, an excise tax refund, and the cash settlement of an insurance claim filed for losses incurred during the 2005 Katrina hurricane. The net income comparison between 2006 and 2005 are affected by the costs of the 2005 settlement of a qui tam lawsuit. The impact of that settlement to 2005 net income was $16.3 million. Gross margins were stable in 2006 at 65.6% for both the fourth quarter of 2006 and the full fiscal year. Declines from the levels reported in 2005 are primarily attributable to the Medicare reimbursement reductions and shifts in the product mix. The provision for doubtful accounts as a percentage of net revenue was 2.6% for 2006, compared to 3.2% in the prior year. This improvement is a direct result of increased cash collections resulting from initiatives to optimize billing processes and to increase collections of patient co-payments. Selling, distribution and administrative expenses were 53.0% of net revenues in 2006. This compares to 53.7% in 2005. The improvement is directly attributable to the realization of savings from cost control measures implemented in 2005 and in early 2006. The favorable variances in the percentages were reflected in all areas of operations, including labor and other operating expenses. "The objectives and strategies that we set forth at the beginning of 2006 have largely been achieved and in several areas were exceeded," said Lawrence M. Higby, Apria's Chief Executive Officer. "We developed a course of action for the year that emphasized a disciplined execution of our business fundamentals. Additional emphasis was placed on developing the sales organization to drive improved sales growth. The billing and collection initiatives that were executed during 2006 had a single focus: collect cash earlier in the billing cycle. And finally, we leveraged our cost structure to lessen the effects of the Medicare reductions," said Mr. Higby. At Dec. 31, 2006, the company's balance sheet showed $1.2 billion in total assets, $767.4 million in total liabilities, and $410.4 million in total stockholders' equity. Liquidity and Capital Free cash flow was $155.7 million in 2006, up from $87.4 million in 2005. The main drivers of the increase in 2006 were a $35 million reduction in income tax payments due primarily to a favorable IRS ruling on the deductibility of interest on the company's convertible notes, increased cash collections, and decreases in working capital requirements. The 2005 total reflects the negative impact of the cash payment of the qui tam settlement. The company has utilized its free cash flow to reduce its revolving credit line balance by $155 million during 2006, lowering the balance to $235 million at Dec. 31, 2006. Free cash flow is defined as operating cash flow minus capital expenditures and does not include acquisitions or financing activities. It is presented as a supplemental performance measure and is not intended as an alternative to any other cash flow measure calculated in accordance with generally accepted accounting principles. Net purchases of patient service equipment in 2006 were 6.6% of net revenue versus 7.1% in 2005. About Apria Healthcare Headquartered in Lake Forest, California, Apria Healthcare Group Inc. (NYSE:AHG) -- http://www.apria.com/-- provides home respiratory therapy, home infusion therapy and home medical equipment through approximately 500 branches serving patients in all 50 states. With approximately $1.5 billion in annual revenues, it is the United States' leading homecare company. * * * Apria Healthcare currently carries Standard & Poor's Ratings Services BB+ rating with a Stable Outlook. ARGENT SECURITIES: Fitch Assigns Low-B Ratings on 11 Cert. Classes ------------------------------------------------------------------ Fitch has taken rating actions on Argent Securities Inc.'s home equity issues: Series 2003-W1 -- Class M1 upgraded to 'AAA' from 'AA'; -- Class M2 upgraded to 'AA-' from 'A'; -- Class M3 upgraded to 'A+' from 'A-'; -- Class M4 upgraded to 'A' from 'BBB+'; -- Class M5 upgraded to 'A-' from 'BBB'; -- Class MF6 affirmed at 'BBB-'; and -- Class MV6 affirmed at 'BBB-'. Series 2003-W2 -- Class A affirmed at 'AAA'; -- Class M1 upgraded to 'AAA' from 'AA+'; -- Class M2 upgraded to 'AA-' from 'A+'; -- Class M3 upgraded to 'A+' from 'A'; -- Class M4 upgraded to 'A' from 'A-'; -- Class M5 upgraded to 'BBB+' from 'BBB'; and -- Class M6 affirmed at 'BBB-'. Series 2003-W3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; and -- Class M-5 affirmed at 'BBB'. Series 2003-W4 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'BBB+'; -- Class M-4 affirmed at 'BBB'; and -- Class M-5 affirmed at 'BBB-'. Series 2003-W5 -- Class A affirmed at AAA; -- Class M-1 affirmed at AA; -- Class M-2 affirmed at A; -- Class M-3 affirmed at A-; -- Class M-4 affirmed at BBB+; -- Class M-5 affirmed at BBB; -- Class MF6 affirmed at 'BBB-'; -- Class MV6 affirmed at 'BBB-'. Series 2003-W6 -- Class A affirmed at 'AAA'; -- Class M2 affirmed at 'BBB'; and -- Class M3 affirmed at 'BBB-'. Series 2003-W7 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-3A affirmed at 'A-'; -- Class M-3B affirmed at 'A-'; -- Class M-4A affirmed at 'BBB+'; -- Class M-4B affirmed at 'BBB+'; and -- Class M-5 affirmed at 'BBB'. Series 2003-W8 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; and -- Class M-5 affirmed at 'BBB'. Series 2003-W9 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-3A affirmed at 'A-'; -- Class M-3B affirmed at 'A-'; -- Class M-4A affirmed at 'BBB+'; -- Class M-4B affirmed at 'BBB+'; and -- Class M-5 affirmed at 'BBB'. Series 2003-W10 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB'; and -- Class M-6 affirmed at 'BBB-'. Series 2004-W1 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB'; -- Class M-6 affirmed at 'BBB-'; and -- Class M-7 affirmed at 'BB+'. Series 2004-W2 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB'; -- Class M-6 affirmed at 'BBB-'; and -- Class M-7 affirmed at 'BB+'. Series 2004-W3 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'A-'; -- Class M-2 affirmed at 'BBB+'; -- Class M-3 affirmed at 'BBB'; -- Class M-4 affirmed at 'BBB-'; and -- Class M-5 affirmed at 'BB+'. Series 2004-W4 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'BBB+'; -- Class M-2 affirmed at 'BBB'; -- Class M-3 affirmed at 'BBB-'; and -- Class M-4 affirmed at 'BB+'. Series 2004-W5 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB'; -- Class M-6 affirmed at 'BBB-'; and -- Class M-7 affirmed at 'BB+'. Series 2004-W6 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class M-4 affirmed at 'BBB+'; -- Class M-5 affirmed at 'BBB'; -- Class M-6 affirmed at 'BBB-'; and -- Class M-7 affirmed at 'BB+'. Series 2004-W7 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A-'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB'; -- Class M-9 affirmed at 'BBB-'; and -- Class M-10 affirmed at 'BB+'. Series 2004-W8 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 affirmed at 'BBB'; -- Class M-9 affirmed at 'BBB-'; -- Class M-10 affirmed at 'BB+'; and -- Class M-11 affirmed at 'BB'. Series 2004-W10 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A'; -- Class M-5 affirmed at 'A-'; -- Class M-6 affirmed at 'BBB+'; -- Class M-7 affirmed at 'BBB'; -- Class M-8 affirmed at 'BBB-'; and -- Class M-9 affirmed at 'BB+'. Series 2004-W11 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA+'; -- Class M-3 affirmed at 'AA'; -- Class M-4 affirmed at 'AA-'; -- Class M-5 affirmed at 'A+'; -- Class M-6 affirmed at 'A'; -- Class M-7 affirmed at 'A-'; -- Class M-8 affirmed at 'BBB+'; -- Class M-9 affirmed at 'BBB'; -- Class M-10 affirmed at 'BBB-'; and -- Class M-11 affirmed at 'BB+'. The affirmations, affecting approximately $4.09 billion of the outstanding balances, are taken due to a satisfactory relationship of credit enhancement to expected losses. The upgrades, affecting approximately $165.84 million of the outstanding balances, are taken due to improved credit enhancement in relation to expected losses. The transactions that contain upgraded classes are structured with a fixed 60+ delinquency trigger of 16%. Both of these deals are currently failing the delinquency trigger and are expected to continue to fail, which will generally allow credit enhancement to continue to grow relative to the remaining pool balance. For all transactions, the underlying collateral consists of fully amortizing 15 to 30-year fixed- and adjustable-rate mortgages secured by first liens extended to subprime borrowers. As of the December distribution date, the transactions listed above are seasoned from 26 to 40 months. The pool factors range approximately from 11% to 33%. The Argent Securities loans, the wholesale sector for Ameriquest Mortgage Securities Inc., were either originated or acquired by Ameriquest Mortgage Company. Ameriquest Mortgage Company serves as the servicer for the loans and is rated 'RPS2+' by Fitch. ARVINMERITOR INC: Initial Purchasers Buy $25 Mil. Additional Notes ------------------------------------------------------------------ ArvinMeritor, Inc. has reported that the initial purchasers in the company's private offering of $175 million aggregate principal amount of 4% convertible senior unsecured notes due 2027 have exercised in full their option to acquire up to $25 million additional principal amount of the notes, bringing to $200 million the aggregate principal amount of 4% convertible senior unsecured notes due 2027 sold by the company in the private offering to qualified institutional buyers. The company will pay 4% cash interest on the notes semiannually until Feb. 15, 2019, after which no cash interest will be paid. Commencing Feb. 15, 2019, the principal amount of the notes will be subject to accretion at a rate that provides holders with an aggregate annual yield to maturity of 4%. The notes will be convertible in certain circumstances into cash up to the accreted principal amount of the notes, and cash, shares of common stock, or a combination thereof, at the company's election, for the remainder of the conversion obligation, if any, in excess of the accreted principal amount, based on an initial conversion rate, subject to adjustment, equivalent to 37.41 shares of common stock per US$1,000 original principal amount of notes. This represents an initial conversion price of US$26.73 per share. Net proceeds from the recent issue of convertible senior unsecured notes along with other sources were used to fund the repayment in full the $169.5 million aggregate principal amount of the company's outstanding Term Loan B due in 2012. The additional purchase and sale is scheduled to close on Feb. 28, 2007, subject to customary closing conditions. About ArvinMeritor Inc. Based in Troy, Michigan, ArvinMeritor Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components serving light vehicle, commercial truck, trailer and specialty original equipment manufacturers and certain aftermarket. ARVINMERITOR INC: Moody's Lifts Rating on Senior Secured Debt ------------------------------------------------------------- Moody's Investors Service has upgraded ArvinMeritor's senior secured bank debt rating to Baa3, LGD2, 13% from Ba1, LGD2, 20% and affirmed the company's Corporate Family Rating of Ba3, Speculative Grade Liquidity rating of SGL-2, and stable outlook. The actions follow shifts in the company's capital structure, which have enhanced expected recovery rates on secured indebtedness, an amendment to its bank credit facilities, and the disclosure of the pending sale of its Emission Technology business. During February, ARM issued $200 million of unsecured convertible notes with a maturity in 2027. Proceeds will be used to pre-pay a $170 million senior secured bank term loan due in 2012 with the balance after fees and expenses retained for general corporate purposes. The company also amended its bank revolving credit facility. This involved a reduction in the committed amount from $980 million to $900 million and flows from the smaller aggregate size of the organization's requirements which will arise post the disposition of its Emission Technologies business. At the same time, two financial covenants in its bank credit facility were amended which will expand the company's compliance headroom over the intermediate term. Moody's would not expect any material change in key metrics affecting the firm's Corporate Family rating if proceeds were used to reduce indebtedness as total debt in proportion to continuing EBITDA should not appreciably change, nor would those ratios be materially affected by the refinancing. Although interest coverage may improve slightly, other ratios will remain in a range typical of peers in the Ba3 rating category. While Emissions Technology had lower margins than ARM's other business groups, it was expected to contribute to free cash flow. Accordingly, the Corporate Family Rating has been affirmed. ARM will continue to face challenges in certain markets over the coming year. But, it will do so with a solid liquidity profile, the benefits of geographic diversification, participation in multiple remaining segments with market leadership, and contributions from its restructuring initiatives. The Emissions Technology group provided some upside potential from its solutions to changing regulatory requirements, particularly in the commercial vehicle market in advance of the 2010 EPA requirements in North America. However, margins in Emissions Technology were also being affected by higher nickel prices and related costs of stainless steel. Although quantitative metrics for much of 2007 will be affected by the decline in North American Class 8 production, those volume declines will be partially offset by levels of ongoing demand for medium and heavy duty vehicles in Europe as well as contributions from its aftermarket parts, trailer and Asian markets. North American commercial vehicle production is anticipated to recover in 2008 and 2009. On balance, the company's financial performance in 2007 and 2008 should remain within the parameters of its assigned Corporate Family Rating. Consequently, the stable outlook remains appropriate. The refinancing activity alters recovery expectations in downside scenarios on debt in ARM's capital structure. While aggregate enterprise value is essentially unchanged, the reduction in the amount of higher priority secured debt and increase in unsecured obligations beneath their claims has improved recovery rates on the bank facility. This is reflected in results in Moody's Loss Given Default model. On a pro forma basis as of Dec. 31, 2006 and adjusting for the convertible issuance, term loan repayment and revolving credit commitment reduction, the rating on the secured bank debt was raised by one notch to Baa3, LGD2, 13% from Ba1, LGD2, 20%. The recovery rate for unsecured debt was not materially affected. Its recovery assessment at LGD4, 63% declined marginally but remains within the bounds of its B1 rating category. Similarly, ratings on Arvin Capital and ARM's other obligations were not affected. ARM's convertible note issues are not rated by Moody's. The rating on the secured bank term loan has been withdrawn upon its repayment. The SGL-2 liquidity rating represents good liquidity over the coming 12 months. The rating incorporates significant internal sources arising from existing cash, modest free cash flow expectations post the business disposition, and anticipated receipt of proceeds from the announced sale of Emissions Technologies. While external committed facilities have been reduced 8%, the amount remains ample with respect to the requirements of the smaller size of the continuing business. A recent amendment to the bank facilities also established incremental head room under its prescribed leverage and fixed charge covenants. Ratings changed: * ArvinMeritor, Inc. -- Senior secured revolving credit facility to Baa3, LGD2, 13% from Ba1, LGD2, 20% Changes to Loss Given Default Assessments: * ArvinMeritor, Inc. -- Senior unsecured notes to LGD-4, 63% from LGD-4, 65% -- Shelf unsecured to LGD-4, 63% from LGD-4, 65% The last rating action was on Jan. 19, 2007 at which time ARM's Corporate Family Rating was lowered to Ba3 from Ba2. ArvinMeritor, Inc., headquartered in Troy, Michigan, is a global supplier of a broad range of integrated systems, modules and components serving light vehicles, commercial trucks, trailers, and specialty original equipment manufacturers as well as certain aftermarkets. Revenues in fiscal 2006 were approximately $9.2 billion. ATLANTIS PLASTICS: S&P Junks Corporate Credit Rating from B- ------------------------------------------------------------ Standard & Poor's Ratings Services lowered all its ratings on Atlanta, Georgia-based Atlantis Plastics Inc., including its corporate credit rating to 'CCC+' from 'B-'. The outlook is negative. "The downgrade reflects the continuation of challenging industry conditions, which have led to a significant deterioration in credit metrics and continued negative cash flow generation," said Standard & Poor's credit analyst Robyn Shapiro. "In addition, the lower ratings reflect concerns about the company's ability to obtain further financial covenant relief, if necessary." Atlantis recently amended covenants under both first-lien and second-lien term loan credit agreements after the company violated the maximum leverage covenants under both facilities on Sept. 30, 2006. The company's very limited liquidity raises concerns about its ability to absorb additional raw material cost volatility in the near term. Detailed information on fourth-quarter performance is not yet available, but Standard & Poor's expects Atlantis' liquidity was substantially unchanged from Sept. 30, 2006, with cash and unused bank line availability totaling less than $10 million. Because of its limited liquidity, Standard & Poor's is concerned about Atlantis' ability to continue to shoulder its heavy debt burden and to absorb any future raw material cost increases, any further slowdown in demand, or other adverse developments. The company faces higher interest on its bank credit facility in conjunction with the amendments of financial covenants put in place during the fourth quarter of 2006. Atlantis remains highly leveraged. As of Sept. 30, 2006, adjusted debt to EBITDA was about 6x. Debt is adjusted for capitalized operating leases. The ratio of funds from operations to total adjusted debt was about 8%. The company's heavy debt burden stems from the March 2005 dividend recapitalization. Since then a sharp rise in plastic resin costs and declining volumes have plagued the company. Management has recently announced the shutdown and permanent closure of its injection molding plant located in Warren, Ohio and plans to move equipment and production volumes to other existing facilities. Following one-time shutdown costs, the company anticipates this plant closure and capacity consolidation will result in reduced annual operating expenses and improved production efficiencies. With annual revenues of about $440 million, Atlantis Plastics has a competitive position in plastic films--including stretch films and custom films that represent about 65% of revenues--stemming from a decent cost structure and effective distribution capabilities. B&G FOODS: Completes Brands Purchase from Kraft Foods for $200MM ---------------------------------------------------------------- Subsidiaries of B&G Foods Inc. have completed the purchase of the Cream of Wheat and Cream of Rice brands from Kraft Foods Global, Inc., effective Feb. 25, 2007, for the price of $200 million in cash, subject to a post-closing adjustment for inventory at the closing date. As reported in the Troubled Company Reporter on Jan. 26, 2007, B&G Foods, Inc. disclosed that along with its newly-formed, indirect, wholly owned subsidiary COWC Acquisition Corp., it entered into an asset purchase agreement with Kraft Foods. B&G Foods used the proceeds of an additional $205 million of term loan borrowings under its newly amended and restated credit facility to fund the acquisition and pay related transaction fees and expenses. "This is a very exciting acquisition for B&G Foods," David L. Wenner, Chief Executive Officer of B&G Foods, stated. "We have acquired the number two brand in the hot cereal category, a brand with great name recognition and over 100 years of heritage. Cream of Wheat and Cream of Rice fit B&G Foods' acquisition strategy perfectly, and are brands that our company can nurture and hopefully grow through focus and innovation. Significantly, this acquisition together with the related financing brings our company to approximately $1.0 billion in total capitalization, a remarkable milestone for B&G Foods." About Kraft Foods Kraft Foods (NYSE:KFT) -- http://www.kraft.com/-- is one of the world's largest food and beverage companies. Kraft Foods markets many of the world's leading food brands, including Kraft cheeses, dinners and dressings; Oscar Mayer meats, DiGiorno pizzas, Oreo cookies, Ritz crackers and chips, Philadelphia cream cheese, Milka and Cote d'Or chocolates, Planters nuts, Honey Bunches of Oats cereals, Jacobs, Gevalia and Maxwell House coffees; Capri Sun, Crystal Light and Tang refreshment beverages; and a growing range of South Beach Diet and better-for-you Sensible Solution options. About B&G Foods B&G Foods (AMEX: BGF) -- http://www.bgfoods.com/-- and its subsidiaries manufacture, sell and distribute a diversified portfolio of high-quality, shelf-stable foods across the United States, Canada and Puerto Rico. B&G Foods' products include jams, jellies and fruit spreads, canned meats and beans, spices, seasonings, marinades, hot sauces, wine vinegar, maple syrup, molasses, salad dressings, Mexican-style sauces, taco shells and kits, salsas, pickles and peppers and other specialty food products. B&G Foods competes in the retail grocery, food service, specialty store, private label, club and mass merchandiser channels of distribution. Based in Parsippany, New Jersey, B&G Foods' products are marketed under many recognized brands, including Ac'cent, B&G, B&M, Brer Rabbit, Emeril's, Grandma's Molasses, Joan of Arc, Las Palmas, Maple Grove Farms of Vermont, Ortega, Polaner, Red Devil, Regina, San Del, Ac'cent Sa-Son, Trappey's, Underwood, Vermont Maid and Wright's. * * * As reported in the Troubled Company Reporter on Feb. 23, 2007, Standard & Poor's Ratings Services affirmed its loan and recovery ratings on B&G Foods Inc.'s proposed senior secured credit facilities, following the report that the company will increase the term loan C facility by $5 million. Pro forma for the increased add-on portion, the facilities will total $230 million. The secured loan rating is 'B+' and the recovery rating is '1', indicating the expectation for full recovery of principal in the event of a payment default. As reported in the Troubled Company Reporter on Feb. 12, 2007, Moody's Investors Service confirmed the B2 corporate family rating, the Ba2 senior secured bank debt ratings and the Caa1 senior subordinated notes rating of B&G Foods, Inc. Moody's also lowered the rating on the company's senior unsecured notes to B3 from B1. The rating outlook is stable. BANC OF AMERICA: Fitch Assigns Low-B Ratings on 91 Cert. Classes ---------------------------------------------------------------- Fitch Ratings has taken rating actions on Banc of America Mortgage Securities, Inc.'s mortgage pass-through certificates: Series 2004-1 Group 1 -- Class A affirmed at 'AAA'; -- Class 1-B-1 affirmed at 'AA'; -- Class 1-B-2 affirmed at 'A'; -- Class 1-B-3 affirmed at 'BBB'; -- Class 1-B-4 affirmed at 'BB'; and -- Class 1-B-5 affirmed at 'B'. Series 2004-1 Group 3 --Class A affirmed at 'AAA'; --Class 3-B-1 affirmed at 'AA'; --Class 3-B-2 affirmed at 'A'; --Class 3-B-3 affirmed at 'BBB'; and --Class 3-B-5 affirmed at 'B'; Series 2004-1 Group 5 -- Class A affirmed at 'AAA'; Series 2004-1 Groups 2 & 4 -- Class A affirmed at 'AAA'; -- Class X-B-2 affirmed at 'A'; and -- Class X-B-4 affirmed at BB. Series 2004-3 Group 1 -- Class A affirmed at 'AAA'; -- Class 1-B-1 affirmed at 'AA'; -- Class 1-B-2 affirmed at 'A'; -- Class 1-B-3 affirmed at 'BBB'; -- Class 1-B-4 affirmed at 'BB'; and -- Class 1-B-5 affirmed at 'B'. Series 2004-3 Groups 2 & 4 -- Class A affirmed at 'AAA'. Series 2004-3 Group 3 -- Class A affirmed at 'AAA'; -- Class 3-B-1 affirmed at 'AA'; -- Class 3-B-2 affirmed at 'A'; -- Class 3-B-3 affirmed at 'BBB'; -- Class 3-B-4 affirmed at 'BB'; and -- Class 3-B-5 affirmed at 'B'; Series 2004-4 Group 1 -- Class A affirmed at 'AAA'; -- Class 30-B-2 affirmed at 'A'; -- Class 30-B-3 affirmed at 'BBB'; and -- Class 30-B-4 affirmed at 'BB'; Series 2004-4 Groups 2 & 4 -- Class A affirmed at 'AAA'. Series 2004-4 Groups 3 & 5; -- Class A affirmed at 'AAA'. Series 2004-5 Group 1 -- Class A affirmed at 'AAA'; -- Class 30-B-3 affirmed at 'BBB'; and -- Class 30-B-4 affirmed at 'BB'. Series 2004-5 Group 3 -- Class A affirmed at 'AAA'; -- Class 15-B-1 affirmed at 'AA'; -- Class 15-B-2 affirmed at 'A'; -- Class 15-B-3 affirmed at 'BBB'; -- Class 15-B-4 affirmed at 'BB'; and -- Class 15-B-5 affirmed at 'B'. Series 2004-5 Groups 2 & 4 -- Class A affirmed at 'AAA'; Series 2004-6 Group 1 -- Class A affirmed at 'AAA'; -- Class 1-B-2 affirmed at 'A'; and -- Class 1-B-3 affirmed at 'BBB'. Series 2004-6 Group 2 -- Class A affirmed at 'AAA'. Series 2004-7 Groups 1 & 5 -- Class A affirmed at 'AAA'; -- Class 30-B-1 affirmed at 'AA'; -- Class 30-B-2 affirmed at 'A'; -- Class 30-B-3 affirmed at 'BBB'; -- Class 30-B-4 affirmed at 'BB'; and -- Class 30-B-5 affirmed at 'B'. Series 2004-7 Groups 2 & 4 -- Class A affirmed at 'AAA'; and -- Class X-B-3 affirmed at 'BBB'. Series 2004-7 Groups 3, 6 & 7 -- Class A affirmed at 'AAA'. Series 2004-8 Group 2 -- Class A affirmed at 'AAA'. Series 2004-8 Group 5 -- Class A affirmed at 'AAA'. Series 2004-8 Groups 1, 3 & 4 -- Class A affirmed at 'AAA'; -- Class X-B-1 affirmed at 'AA'; -- Class X-B-2 affirmed at 'A'; -- Class X-B-3 affirmed at 'BBB'; -- Class X-B-4 affirmed at 'BB'; and -- Class X-B-5 affirmed at 'B'; Series 2004-9 Group 1 -- Class A affirmed at 'AAA'; -- Class 30-B-1 affirmed at 'AA'; -- Class 30-B-2 affirmed at 'A'; -- Class 30-B-3 affirmed at 'BBB'; -- Class 30-B-4 affirmed at 'BB'; and -- Class 30-B-5 affirmed at 'B'. Series 2004-9 Group 2 --Class A affirmed at 'AAA'; --Class 15-B-1 affirmed at 'AA'; --Class 15-B-2 affirmed at 'A'; and --Class 15-B-3 affirmed at 'BBB'. Series 2004-9 Group 3 -- Class A affirmed at 'AAA'. Series 2004-10 Group 1 -- Class A affirmed at 'AAA'; -- Class 30-B-1 affirmed at 'AA'; -- Class 30-B-2 affirmed at 'A'; -- Class 30-B-3 affirmed at 'BBB'; -- Class 30-B-4 affirmed at 'BB'; and -- Class 30-B-5 affirmed at 'B'. Series 2004-10 Group 2 -- Class A affirmed at 'AAA'; -- Class 15-B-1 affirmed at 'AA'; -- Class 15-B-2 affirmed at 'A'; -- Class 15-B-3 affirmed at 'BBB'; -- Class 15-B-4 affirmed at 'BB'; and -- Class 15-B-5 affirmed at 'B'. Series 2004-11 Groups 1, 3 & 4 -- Class A affirmed at 'AAA'; -- Class X-B-1 affirmed at 'AA'; -- Class X-B-2 affirmed at 'A'; -- Class X-B-3 affirmed at 'BBB'; -- Class X-B-4 affirmed at 'BB'; and -- Class X-B-5 affirmed at 'B'. Series 2004-11 Group 2 -- Class A affirmed at 'AAA'; -- Class 2-B-3 affirmed at 'BBB'; and -- Class 2-B-4 affirmed at 'BB'. Series 2004-11 Group 5 -- Class A affirmed at 'AAA'. Series 2004-A -- Class A affirmed at 'AAA'; -- Class B-1 upgraded from 'AA' to 'AA+'; -- Class B-2 upgraded from 'A' to 'A+'; -- Class B-3 upgraded from 'BBB' to 'BBB+'; and -- Class B-4 affirmed at 'BB'. Series 2004-B -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2004-C -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; and -- Class B-4 affirmed at 'BB'. Series 2004-D -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; and -- Class B-3 affirmed at 'BBB+'. Series 2004-E -- Class A affirmed at 'AAA'; -- Class B-2 affirmed at 'A'; and -- Class B-3 affirmed at 'BBB'. Series 2004-G -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2004-H -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2004-I --Class A affirmed at 'AAA'; --Class B-1 affirmed at 'AA'; --Class B-2 affirmed at 'A'; --Class B-3 affirmed at 'BBB'; --Class B-4 affirmed at 'BB'; and --Class B-5 affirmed at 'B'. Series 2004-J -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2004-K -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2004-L -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-1 Group 1 -- Class A affirmed at 'AAA'; -- Class 30-B-1 affirmed at 'AA'; -- Class 30-B-2 affirmed at 'A'; -- Class 30-B-3 affirmed at 'BBB'; -- Class 30-B-4 affirmed at 'BB'; and -- Class 30-B-5 affirmed at 'B'. Series 2005-1 Group 2 -- Class A affirmed at 'AAA'; -- Class 15-B-1 affirmed at 'AA'; -- Class 15-B-2 affirmed at 'A'; -- Class 15-B-4 affirmed at 'BB'; and -- Class 15-B-5 affirmed at 'B'. Series 2005-2 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; and -- Class B-4 affirmed at 'BB'. Series 2005-3 Group 1 -- Class A affirmed at 'AAA'; -- Class 1-B-1 affirmed at 'AA'; -- Class 1-B-2 affirmed at 'A'; -- Class 1-B-3 affirmed at 'BBB'; -- Class 1-B-4 affirmed at 'BB'; and -- Class 1-B-5 affirmed at 'B'. Series 2005-3 Group 2 -- Class A affirmed at 'AAA'; -- Class 2-B-1 affirmed at 'AA'; -- Class 2-B-2 affirmed at 'A'; -- Class 2-B-3 affirmed at 'BBB'; -- Class 2-B-4 affirmed at 'BB'; and -- Class 2-B-5 affirmed at 'B'. Series 2005-4 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; and -- Class B-4 affirmed at 'BB'. Series 2005-5 Group 1 -- Class A affirmed at 'AAA'; -- Class 30-B-1 affirmed at 'AA'; -- Class 30-B-2 affirmed at 'A'; -- Class 30-B-3 affirmed at 'BBB'; -- Class 30-B-4 affirmed at 'BB'; and -- Class 30-B-5 affirmed at 'B'. Series 2005-5 Group 2 -- Class A affirmed at 'AAA'; -- Class 15-B-1 affirmed at 'AA'; and -- Class 15-B-2 affirmed at 'A'. Series 2005-6 Group 1 -- Class A affirmed at 'AAA'; -- Class 30-B-1 affirmed at 'AA'; -- Class 30-B-2 affirmed at 'A'; -- Class 30-B-3 affirmed at 'BBB'; -- Class 30-B-4 affirmed at 'BB'; and -- Class 30-B-5 affirmed at 'B'. Series 2005-6 Group 2 -- Class A affirmed at 'AAA'; -- Class 15-B-1 affirmed at 'AA'; -- Class 15-B-2 affirmed at 'A'; -- Class 15-B-3 affirmed at 'BBB'; -- Class 15-B-4 affirmed at 'BB'; and -- Class 15-B-5 affirmed at 'B'. Series 2005-7 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-8 --Class A affirmed at 'AAA'; --Class B-1 affirmed at 'AA'; --Class B-2 affirmed at 'A'; --Class B-3 affirmed at 'BBB'; --Class B-4 affirmed at 'BB'; and --Class B-5 affirmed at 'B'. Series 2005-10 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-11 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-12 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-A -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-B -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-C -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-D -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-E --Class A affirmed at 'AAA'; --Class B-1 affirmed at 'AA'; --Class B-2 affirmed at 'A'; --Class B-3 affirmed at 'BBB'; --Class B-4 affirmed at 'BB'; and --Class B-5 affirmed at 'B'. Series 2005-F -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-G -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-H -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-I -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-J -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-K -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. Series 2005-L -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; and -- Class B-5 affirmed at 'B'. The collateral in the aforementioned transactions consists of 30- and 15-year adjustable- and fixed-rate mortgages secured by conventional, fixed-rate, fully amortizing, first-lien, one- to four-family residential properties. Banc of America Mortgage Securities, Inc. deposited the loans into the trusts, which issued the certificates, and is also the servicer for all transactions. Transactions with a number in their series name comprise of fixed- rate loans, and transactions with a letter in their series name comprise of adjustable-rate loans. The affirmations reflect a satisfactory relationship of credit enhancement (CE) to future expected losses, and affect approximately $18.71 billion in outstanding certificates. The upgrades reflect an improvement in the relationship between CE and future expected losses in addition to the doubling of CE levels since origination, and affect approximately $14.45 million in outstanding certificates. For fixed-rate 2004 vintage transactions, the pool factors range from 20.6% to 78.8%, and are seasoned in a range of 25 months to 36 months. For adjustable-rate 2004 vintage, the pool factors range from approximately 44.2% to 71.2%, and are seasoned in a range of 25 months to 36 months. For fixed-rate 2005 vintage transactions, the pool factors range from approximately 74.7% to 94.7%, and are seasoned in range of 13 months to 24 months. For adjustable-rate 2005 vintage transactions, the pool factors range from approximately 72.1% to 91%, and are seasoned in a range of 13 months to 24 months. BANK OF AMERICA: Fitch Holds Junk Rating on $6.5MM Class P Certs. ----------------------------------------------------------------- Fitch ratings upgrades First Union National Bank - Bank of America Commercial Mortgage Trust pass-through certificates, series 2001-C1 as: -- $13.1 million class F to 'AAA' from 'A+'; -- $26.2 million class G to 'AA' from 'A'; and -- $16.4 million class H to 'A+' from 'A-'. Affirmed: -- $769.1 million class A-2 at 'AAA'; -- $58.2 million class A-2F at 'AAA'; -- Interest-only classes IO-I, IO-II and IO-III at 'AAA'; -- $52.3 million class B at 'AAA'; -- $26.2 million class C at 'AAA'; -- $26.2 million class D at 'AAA'; -- $16.4 million class E at 'AAA'; -- $19.6 million class J at 'BBB+'; -- $16.4 million class K at 'BBB-'; -- $13.1 million class L at 'BB+'; -- $6.5 million class M at 'BB'; -- $9.8 million class N at 'B+'; -- $13.1 million class O at 'B'; and -- $6.5 million class P at 'CCC/DR2'. Fitch does not rate the $1.7 million class Q. The class A-1 certificates are paid in full. The upgrades are the result of additional paydown and defeasance since Fitch's last rating action in July 2006. Since issuance, 39 loans (27.5%) have defeased, including the two credit assessed loans, the Cornerstone portfolio and the RFS Hotel portfolio. As of the February 2007 distribution date, the transaction has paid down 16.6% since issuance to $1.09 billion from $1.3 billion. The transaction remains diverse with the top five loans representing less than 14.6% of pool. There is currently one loan (0.2%) in special servicing and no losses are expected. The loan is secured by a multifamily property located in New Orleans, Louisiana. The loan is current and the borrower has completed the re-roofing, siding and interior demolition of the hurricane-damaged units. The borrower has contracted to renovate the interior finish-out on the damaged units and the work is expected to be completed by May 2007. BEAR STEARNS: Fitch Holds Rating on $4.6 Mil. Class O Certs. at B- ------------------------------------------------------------------ Fitch Ratings affirms Bear Stearns Commercial Mortgage Securities Inc. Trust pass-through certificates, series 2006-PWR11, as: -- $100.6 million class A-1 at 'AAA'; -- $93.7 million class A-2 at 'AAA'; -- $44.8 million class A-3 at 'AAA'; -- $90.3 million class A-AB at 'AAA'; -- $830.8 million class A-4 at 'AAA'; -- $131.3 million class A-1A at 'AAA'; -- $185.9 million class A-M at 'AAA'; -- $146.4 million class A-J at 'AAA'; -- Interest-only class X at 'AAA'; -- $37.2 million class B at 'AA'; -- $23.2 million class C at 'AA-'; -- $27.9 million class D at 'A'; -- $18.6 million class E at 'A-'; -- $20.9 million class F at 'BBB+'; -- $18.6 million class G at 'BBB'; -- $23.2 million class H at 'BBB-'; -- $7.0 million class J at 'BB+'; -- $7.0 million class K at 'BB'; -- $7.0 million class L at 'BB-'; -- $2.3 million class M at 'B+'; -- $4.6 million class N at 'B'; and -- $4.6 million class O at 'B-'. Fitch does not rate the $23.2 million class P certificates. The rating affirmations reflect stable performance and limited amortization since issuance. As of the February 2007 distribution date, the transaction has paid down 0.6% to $1.85 billion from $1.89 billion at issuance. There are no delinquent or specially serviced loans. Fitch reviewed the SBC - Hoffman Estates loan (5.31%), the largest credit assessed loan in the transaction. The loan is collateralized by a 1.7 million square foot office property located in Hoffman Estates, Illinois , and is 100% occupied by SBC Services, Inc. on a triple net lease. The loan is guaranteed by SBC Communications, Inc., which has a long-term debt rating of 'A' by Fitch. Based on their stable performance the transactions three credit assessed loans maintain investment grade credit assessments. BRODERICK CDO: S&P Rates $4 Million Class E Notes at BB+ -------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Broderick CDO 3 Ltd./Broderick CDO 3 Corp.'s $1.494 billion floating-rate notes. The preliminary ratings are based on information as of Feb. 26, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The expected commensurate level of credit support in the form of subordination to be provided by the notes junior to each class of rated notes and by the preferred shares; -- The transaction's cash flow structure, which was subjected to various stresses by Standard & Poor's; -- The excess spread and overcollateralization provided by the assets; and -- The legal structure of the transaction, including the bankruptcy remoteness of the issuer. Preliminary Ratings Assigned Broderick CDO 3 Ltd. Broderick CDO 3 Corp. Class Rating Amount ----- ------ --------------- A-1 AAA $750,000,000 A-2 AAA $225,000,000 A-3* AAA $318,750,000 A-4 AAA $56,250,000 A-5 AAA $92,000,000 B AA $28,000,000 C A $10,000,000 D BBB $10,000,000 E BB+ $4,000,000 Preference shares NR $6,000,000 * The class A-3 notes are delayed-draw notes and will be partially funded at closing. The class A-3 noteholders will receive a commitment fee on any unfunded amount of the notes. NR -- Not rated. BUILDING MATERIALS: S&P Rates $325 Million Senior Notes at B ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' senior secured debt rating and '5' recovery rating to the $325 million senior secured notes due 2015 of Building Materials Corp. of America. The notes are to be issued under Rule 144a without registration rights. The '5' indicates the likelihood of negligible recovery of principal in the event of a payment default. Proceeds from the notes will be used to repay the $325 million bridge loan incurred in connection with the company's merger agreement with ElkCorp. Upon completion of the transaction, BMCA will have about $1.8 billion of debt, adjusted for operating leases. The ratings on Wayne, New Jersey-based BMCA incorporate the narrow focus of the company's product line, the company's vulnerability to petroleum-based raw-material costs, its competitive industry, its aggressive debt leverage measures, certain legal risks associated with the bankruptcy proceedings of parent company G-I Holdings Inc., and the related asbestos litigation pending against BMCA. These factors are tempered by the company's position as a significant U.S. producer of asphalt roofing materials, favorable re-roofing market conditions, and the company's satisfactory liquidity and discretionary cash flow. Ratings List: * Building MatSerials Corp. of America -- Corporate Credit Rating at BB-/Stable/ Rating Assigned: * Building MatSerials Corp. of America -- Senior Secured at B, Recovery Rating:5 C-BASS: Fitch Affirms Low-B Ratings on 21 Certificate Classes ------------------------------------------------------------- Fitch has affirmed 236, upgraded 16, downgraded 2, and placed 2 classes on Rating Watch Negative from the following Credit Based Asset Servicing and Securitization LLC issues: Series 1998-1 Group 1: --Classes 1A, 1B and 1X affirmed at 'AAA'; --Class 1C affirmed at 'AAA'; --Class 1D affirmed at 'AA'; --Class 1E affirmed at 'A'. Series 1999-CB1 Group 1: --Classes 1A and 1A-PO affirmed at 'AAA'; --Class 1M-1 affirmed 'AAA'; --Class 1M-2 affirmed at 'AA'; --Class 1M-3 affirmed at 'A'. Series 1999-CB2 Group 1: --Classes 1A, 1A-PO and 1A-IO affirmed at 'AAA'; --Class 1M-1 affirmed 'AAA'; --Class 1M-2 affirmed at 'AA'; --Class 1M-3 affirmed at 'A'; --Class 1B-1 affirmed at 'BB'; --Class 1B-2 affirmed at 'B'. Series 2001-CB2: --Class M-1 affirmed at 'AAA'; --Class M-2 upgraded to 'AAA' from 'AA+'; --Class B-1 upgraded to 'AA-' from 'A'; --Class B-2 affirmed at 'B'. Series 2001-CB3: --Class A-1A affirmed at 'AAA'; --Class M-1 upgraded to 'AAA' from 'AA+'; --Class M-2 upgraded to 'AA' from 'AA-'; --Class B-1 affirmed at 'BBB'; --Class B-2 affirmed at 'B+'. Series 2001-CB4 Group 1: --Class IA-1 affirmed at 'AAA'; --Class IM-1 affirmed at 'AA'; --Class IM-2 affirmed at 'A'; --Class IB-1 affirmed at 'BBB'. Series 2001-CB4 Group 2: --Class IIM-2 affirmed at 'AA-'; --Class IIB-1 affirmed at 'A'. Series 2002-CB1 --Class M-2 upgraded to 'AA' from 'AA-'; --Class B-1 upgraded to 'A' from 'BBB'; --Class B-2 affirmed at 'BB'. Series 2002-CB2: --Classes A-1 and A-2 affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class B-1 affirmed at 'BB+'; --Class B-2 affirmed at 'BB'. Series 2002-CB3: --Class M-1 affirmed at 'AAA'; --Class M-2 upgraded to 'AA+' from 'AA'; --Class B-1 upgraded to 'A' from 'BBB'; --Class B-2 upgraded to 'BBB' from 'BBB-'; --Class B-3 affirmed at 'B'. Series 2002-CB4: --Series AV-1 and AF-4 affirmed at 'AAA'; --Class M-1 affirmed at 'AA+' --Class M-2 affirmed at 'AA-'; --Class B-1 affirmed at 'A-'; --Class B-2 affirmed 'BBB'; --Class B-3 affirmed at 'BB'. Series 2002-CB5: --Series AV-2 and AF-3 affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class B-1 affirmed at 'BB'; --Class B-2 rated 'BB-' is placed on Rating Watch Negative; --Class B-3 rated 'B+' is placed on Rating Watch Negative. Series 2002-CB6: --Class M-1 upgraded to 'AA+' from 'AA'; --Class M-2V and M-2F upgraded to 'A+' from 'A'; --Class B-1 affirmed at 'BBB'; --Class B-2 downgraded to 'BB-' from 'BBB-'; --Class B-3 downgraded to 'B+' from 'BB'. Series 2003-CB1: --Class AF affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class B-1 affirmed at 'BBB'; --Class B-2 affirmed at 'BBB-'. Series 2003-CB2: --Class AF-3 affirmed at 'AAA'; --Class M-1 upgraded to 'AA+' from 'AA'; --Class M-2 affirmed at 'A'; --Class B-1 affirmed at 'BBB'; --Class B-2 affirmed at 'BBB-'. Series 2003-CB3: --Class AF-1 affirmed at 'AAA'; --Class M-1 upgraded to 'AA+' from 'AA'; --Class M-2 upgraded to 'A+' from 'A'; --Class B-1 affirmed at 'BBB+'; --Class B-2 affirmed at 'BBB'; --Class B-3 affirmed at 'BBB-'. Series 2003-CB4: --Class AF-1 affirmed at 'AAA'; --Class M-1 upgraded to 'AA+' from 'AA'; --Class M-2 affirmed at 'A'; --Class B-1 affirmed at 'BBB'; --Class B-2 affirmed at 'BBB-'. Series 2003-CB5: --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BBB+'; --Class B-2 affirmed at 'BBB'; --Class B-3 affirmed at 'BBB-'. Series 2003-CB6: --Classes AF-5 and AF-6 affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'A-'; --Class M-4 affirmed at 'BBB+'; --Class M-5 affirmed at 'BBB'. Series 2004-CB1: --Class AF-1 affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BBB+'; --Class B-2 affirmed at 'BBB'; --Class B-3 affirmed at 'BBB-'; --Class B-4 affirmed at 'BB'. Series 2004-CB2: --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BBB+'; --Class B-2 affirmed at 'BBB'; --Class B-3 affirmed at 'BBB-'; --Class B-4 affirmed at 'BB-'. Series 2004-CB3: --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BBB+'; --Class B-2 affirmed at 'BBB'; --Class B-3 affirmed at 'BBB-'; --Class B-4 affirmed at 'BB'. Series 2004-CB5: --Class AV-3 affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A+'; --Class M-3 affirmed at 'A'; --Class B-1 affirmed at 'A-'; --Class B-2 affirmed at 'BBB+'; --Class B-3 affirmed at 'BBB'; --Class B-4 affirmed at 'BBB-'. Series 2004-CB6: --Classes AF-2, AF-3 and AF-4 affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BBB+'; --Class B-2 affirmed at 'BBB'; --Class B-3 affirmed at 'BBB-'; --Class B-4 affirmed at 'BB'. Series 2004-CB7: --Classes AF-3, AF-4, AF-5, AV-1 and AV-2C affirmed at 'AAA'; --Class M-1 affirmed at 'AA+'; --Class M-2 affirmed at 'A+'; --Class M-3 affirmed at 'A'; --Class B-1 affirmed at 'A'; --Class B-2 affirmed at 'A-'; --Class B-3 affirmed at 'BBB+'; --Class B-4 affirmed at 'BBB-'. Series 2004-CB8: --Classes AF-2, AF-3, AF-4 and AV-1 affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'A'; --Class B-1 affirmed at 'A-'; --Class B-2 affirmed at 'BBB+'; --Class B-3 affirmed at 'BBB'; --Class B-4 affirmed at 'BB'. Series 2005-CB1: --Classes AF-2, AF-3, AF-4, AV-2 and AV-3 affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BBB+'; --Class B-2 affirmed at 'BBB'; --Class B-3 affirmed at 'BBB-'; --Class B-4 affirmed at 'BB+'; --Class B-5 affirmed at 'BB'. Series 2005-CB2: --Classes AF-2, AF-3, AF-4 and AV-2 affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BBB+'; --Class B-2 affirmed at 'BBB'; --Class B-3 affirmed at 'BBB-'; --Class B-4 affirmed at 'BB+'; --Class B-5 affirmed at 'BB'. Series 2005-CB3: -- Classes AF-1A, AF-1B, AF-1C, AF-2, AF-3, AF-4, AV-2 and AV-3 affirmed at 'AAA'; --Class M-1 affirmed at 'AA+'; --Class M-2 affirmed at 'AA-'; --Class M-3 affirmed at 'A+'; --Class M-4 affirmed at 'A'; --Class B-1 affirmed at 'A-'; --Class B-2 affirmed at 'BBB+'; --Class B-3 affirmed at 'BBB+'; --Class B-4 affirmed at 'BBB'; --Class B-5 affirmed at 'BB+'; --Class B-6 affirmed at 'BB'. Series 2005-CB5: -- Classes AF-1, AF-2, AF-3, AF-4, AV-1, AV-2 and AV-3 affirmed at 'AAA'; --Class M-1 affirmed at 'AA+'; --Class M-2 affirmed at 'AA'; --Class M-3 affirmed at 'AA-'; --Class M-4 affirmed at 'A+'; --Class M-5 affirmed at 'A'; --Class M-6 affirmed at 'A-'; --Class B-1 affirmed at 'BBB+'; --Class B-2 affirmed at 'BBB+'; --Class B-3 affirmed at 'BBB'; --Class B-4 affirmed at 'BBB-'; --Class B-5 affirmed at 'BB+'; Series 2005-CB6: --Classes A-1, A-2, A-3 and A-4 affirmed at 'AAA'; --Class M-1 affirmed at 'AA+'; --Class M-2 affirmed at 'AA+'; --Class M-3 affirmed at 'AA+'; --Class M-4 affirmed at 'AA'; --Class M-5 affirmed at 'AA-; --Class M-6 affirmed at 'A+'; --Class B-1 affirmed at 'A'; --Class B-2 affirmed at 'A-': --Class B-3 affirmed at 'BBB+; --Class B-4 affirmed at 'BBB'; --Class B-5 affirmed at 'BBB-'. Series 2005-CB7 --Classes AF-1, AF-2, AF-3 and AF-4 affirmed at 'AAA'; --Class M-1 affirmed at 'AA+'; --Class M-2 affirmed at 'AA+'; --Class M-3 affirmed at 'AA+'; --Class M-4 affirmed at 'AA'; --Class M-5 affirmed at 'AA-'; --Class M-6 affirmed at 'A+; --Class B-1 affirmed at 'A'; --Class B-2 affirmed at 'A-'; --Class B-3 affirmed at 'BBB+; --Class B-4 affirmed at 'BBB'; --Class B-5 affirmed at 'BBB-'. The affirmations reflect adequate relationships of credit enhancement (CE) to future loss expectations and affect approximately $2.5 billion of outstanding certificates. The upgrades reflect an improvement in the relationship of CE to future loss expectations and affect approximately $170 million in outstanding certificates. The classes with negative rating actions and the classes placed on Rating Watch Negative reflect the deterioration in the relationship of CE to future loss expectations and affect approximately $3 million of outstanding certificates. The collateral for 1998 and 1999 vintage trusts consists primarily of mortgage loans insured by FHA or partially guaranteed by VA and sub-performing and re-performing mortgage loans. The collateral for the 2001 and 2002 vintage series is primarily first liens extended to sub-prime borrowers and contains a small amount of FHA/VA loans and sub-performing and re-performing loans, with the exception of series 2001-CB4, which consists of second and third liens extended to sub-prime borrowers with a small percentage of sub-performing loans at origination. The collateral for the 2003, 2004 and 2005 vintage series consists primarily of first liens extended to sub-prime borrowers with minimal percentages of FHA/VA loans and sub and re-performing loans. The upgraded classes in series 2001-CB2, 2001-CB3, 2002-CB1, and 2002-CB3 benefit from failing loss triggers which have allowed the classes to continue to build CE as a percentage of the remaining pool balance, in some case growing to eight times the original enhancement level. The upgrades for series 2003-CB2, 2003-CB3 and 2003-CB4 are a result of excess spread continuously exceeded losses leading to stable OC performance for each of the trusts. After substantial OC release and subordinate certificate payments following the stepdown date, Series 2002-CB6 delinquency trigger has been breached for the past seven months and the subordinate certificates have not received principal. This principal lockout has allowed the CE for the mezzanine bonds M-1 and M-2 to grow to as much as eight times the original CE amount regardless of the several months of OC depletion. However, the depletion of OC due to losses exceeding excess spread increased the credit risk of the subordinate bonds B-2 and B-3. This performance has led Fitch to upgrade the mezzanine bonds and downgrade the subordinate bonds. Fitch will continue to monitor these bonds. Fitch has placed the class B-2 and the class B-3 from series 2002-CB5 on Rating Watch Negative pending an expected recovery to the trust. Once the recovery is posted to the trust, Fitch will review these bonds again to analyze the impact it will have on the trust in relation to future performance. These certificates had also received substantial principal payments following the stepdown date. All the above transactions are being serviced by Litton Loan Servicing LP, which is Rated 'RPS1' by Fitch. 'RPS1' is the highest servicer rating available by Fitch. CALPINE CORP: Entities Oppose $5 Billion DIP Refinancing -------------------------------------------------------- Several entities ask the Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York to deny Calpine Corporation and its debtor-affiliates' request for a $5,000,000,000 replacement financing: 1. Wilmington Trust Company, acting solely in its capacity as collateral agent for the Amended and Restated Credit Agreements, dated March 23, 2004, between Debtor Calpine Generating Company, LLC, and a syndicate of banks and financial institutions; 2. The Bank of Nova Scotia, as Administrative Agent, under the Credit Agreements; 3. Beal Bank Nevada, formerly known as Beal Savings Bank, one of the secured lenders in the $600,000,000 First Priority Secured Institutional Term Loans Due 2009, issued by CalGen; 4. WTC, acting solely in its capacity as successor CalGen First Lien Administrative Agent; 5. Wilmington Trust FSB, acting solely in its capacity as CalGen First Lien Trustee; 6. HSBC Bank USA, National Association, as Indenture Trustee for the holders of the $640,000,000 Second Priority Secured Floating Rate Notes Due 2010 issued by CalGen; 7. The Bank of New York, as successor Administrative Agent, for the holders of the $100,000,000 Second Priority Secured Institutional Term Loans Due 2010; 8. The Official Committee of Second Lien Debtholders; and 9. Manufacturers & Traders Trust Company, as Indenture Trustee, under the Third Priority Secured Floating Rates Notes due 2011 and 11-1/2% Third Priority Secured Notes due 2011. The Creditors object to the Debtors' request to pay the CalGen Secured Debt in full without paying the default interest and Make-Whole Premium. The Creditors contend that under the Credit and Guarantee Agreements, the Debtors cannot voluntarily prepay the CalGen Secured Debt until: (i) April 1, 2007, for the First Lien Debt; (ii) April 1, 2008, for the Second Lien Debt; and (iii) April 1, 2011, for the Third Lien Debt. If the CalGen Secured Debt is paid before the prepayment dates, the Debtors will have to pay substantial secured damages claims and interest, the Creditors say. The Credit Agreements also provide for default interest as a contractual right and, according to the Creditors, the Court need only determine whether the default rate is so high as to disrupt the equities of the Debtors' bankruptcy proceedings. The Debtors, however, cannot make a showing that the default rate under the Credit Agreement is very high because it is only 2% higher than the non-default contract rate and is consistent with other similar commercial loans, the Creditors contend. The Creditors also point out that CalGen is solvent, thus the CalGen Secured Debt is over-secured and CalGen can pay the Secured Debt in full. The law provides that: (a) creditors of a solvent debtor are entitled to recover the full measure of breach of contract damages provided under applicable state law; and (b) a solvent debtor may not produce a windfall for its equityholders by exploiting the provisions of the Bankruptcy Code to eliminate its creditors' rights and claims. The Creditors maintain that the Debtors' proposed repayment of the CalGen Secured Debt is a "voluntary" payment and falls squarely within the no-call provision under the Credit Agreement. Mark R. Somerstein, Esq., at Ropes & Gray, LLP, in New York, counsel to HSBC and BNY, asserts that "courts have consistently held that any 'acceleration' of debt triggered by a debtor's voluntary Chapter 11 filing does not render that debtors' subsequent decision to pay that debt 'involuntary' and does not eliminate the resulting contractual damage claims and premiums." The Creditors argue that if the Court disregards the "no-call" provision and permits the Debtors to pay the CalGen Secured Debt in full before the proposed payment dates, they are entitled to payment of the full amount of the Make-Whole Premium, plus accrued interest at the non-default rate. The Agents and Indenture Trustees also assert that they are entitled to payment of their fees and expenses and that of their professionals. Wilmington Trust Seeks Clarification Wilmington Trust Company, acting solely in its capacity as collateral agent, seeks clarification regarding the preservation and maintenance of the liens it currently holds on behalf of the CalGen Senior Secured Obligations. The Collateral Agent contends that the Replacement Financing Motion does not clearly: -- confirm that the Liens will continue on all assets against certain Debtors as originally granted under the CalGen Senior Secured Documents to secure all amounts that may be due on the CalGen Senior Secured Obligations, including without limitation, make-whole premiums, contract damages, professional fees, default interest and other amounts provided for in the CalGen Senior Secured Documents; and -- provide for the timely payment of its continuing fees and expenses for its ongoing role given the fact that the Replacement Financing anticipates that the Liens will continue. The Collateral Agent asserts that its Liens must continue in place, and may not be altered, until all of the CalGen Senior Secured Obligations are paid, regardless of whether particular claims are allowed in the Debtors' bankruptcy cases as contractually agreed on the Collateral Trust Agreement and the Security Agreement. The Collateral Agent asks the Court to determine that any order approving the Replacement Financing Motion must confirm that its Liens will continue as first priority liens senior to those of any DIP refinancing. Second Lien Noteholders Not Adequately Protected The Second Lien Debt consists of approximately $3,650,000,000 of debt secured by a second priority lien on substantially all of the Debtors' assets, Alan W. Kornberg, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison, LLP, in New York, reminds the Court. As of the Petition Date, the only debt senior to the Second Lien Debt was a $646,000,000 First Lien Debt. After the Petition Date, the Debtors obtained a $2,000,000,000 DIP Facility, a portion of which was used to repay the First Lien Debt. Mr. Kornberg notes that the Debtors provided the Second Lien Noteholders with extensive adequate protection when they were primed by the first $2,000,000,000 of DIP priming liens. Yet, the Debtors now offer no additional protection to the Second Lien Noteholders for the massive additional diminution in the value of their collateral that will result from the Replacement Financing, Mr. Kornberg says. The Second Lien Noteholders Committee argues that the Replacement Financing will not benefit the Second Lien Noteholders. In fact, the Second Lien Noteholders' collateral may very well be subsidizing the payment of the CalGen Secured Debt because the Debtors will be leveraging the assets of the solvent Debtors to pay lenders of the insolvent Debtors, Mr. Kornberg says. Mr. Kornberg also points out that: (a) The Debtors' expectation to realize approximately $100,000,000 in annual savings by using the lower interest rate in the Replacement Financing to repay the higher interest rate of the Existing DIP Facility and the CalGen Secured Debt is mere speculation because there has been no determination whether the Debtors will be required to pay massive make-whole amounts on the CalGen Secured Debt being repaid; (b) The purpose of the Debtors' request to further subordinate the Second Lien Debt up to an additional $2,000,000,000 is not disclosed. The Debtors stated that the additional subordination is to refinance unspecified "secured" project debt and $484,000,000 of debt; (c) The Debtors' request to use the DIP collateral, without restriction or limitation, as "hedging" collateral would subject the Second Lien Noteholders to being primed by "the great unknown," to support hedging obligations, which are not capped in any way; and (e) The Debtors have assumed that the Second Lien Debt is fully secured. If true, the Second Lien Noteholders will not benefit from any savings from the Replacement Financing, rather savings will inure to the benefit of junior creditors. If the Debtors are wrong, then they have undermined the Second Lien Noteholders' collateral package with no corresponding benefit to the Second Lien Noteholders, Mr. Kornberg avers. Mr. Kornberg clarifies that the primary collateral securing the Second Lien Debt is the Geysers Project, not CalGen. The Replacement Financing would encumber the valuable Geyser assets with an additional $3,000,000,000 of debt while the Debtors use the proceeds to repay the CalGen Secured Debt. Getting "closer" to the CalGen assets does not add to or protect the Second Lien Noteholders' liens, Mr. Kornberg maintains. On the contrary, a transaction would put the Second Lien Noteholders at risk because the CalGen Lenders would be paid in full before plan confirmation whether they are under- or unsecured, Mr. Kornberg adds. Hence, the Second Lien Noteholders Committee asks the Court to deny the request for a replacement financing because the Debtors have failed to provide adequate protection to the Second Lien Noteholders. Committees Support Debtors The Official Committee of Unsecured Creditors and the Official Committee of Equity Security Holders agree that entering into the Replacement Financing at this time will enable the Debtors to: (a) save approximately $60,000,000 to $100,000,000 annually in interests upon the repayment of the CalGen Secured Debt; (b) save approximately $5,000,000 annually in the elimination of the burden to pay the fees and expenses of the CalGen Lenders' professionals; (c) cancel the CalGen Indentures, which restrict their cash flow; (d) eliminate cash collateral and letter of credit posting requirements in connection with their hedging business, which reduces their liquidity, constrains their participation in the commodities market, and impedes their hedging opportunities; and (e) increase flexibility in formulating a reorganization plan through a simplified capital structure. The Committees also agree that the "no-call" provisions of the CalGen Indentures do not preclude the Debtors from repaying the CalGen Secured Debt at this time and, based on the express terms of the CalGen Indentures, the proposed repayment of the CalGen Secured Debt does not require the payment of any premium or other penalty. The Committees assert that although the Refinancing Facility modifies the collateral structure of the current DIP facility, the Second Lien Noteholders will be no less secured under the Refinancing Facility than they are under the current collateral structure, and the Noteholders' current stream of adequate protection payments will continue to be honored in accordance with prior Court orders. Thus, the Committees ask the Court to grant the Debtors' request for a replacement financing. About Calpine Corporation 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. (Calpine Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CALPINE CORP: Elects Yvonne A. McIntyre as Vice President --------------------------------------------------------- Calpine Corporation has named Yvonne A. McIntyre as Vice President for Federal Legislative Affairs. In this capacity, Ms. McIntyre, who is located in Calpine's Washington, D.C. office, is responsible for developing, managing and implementing the federal legislative and regulatory strategies for the company and communicating with members of Congress. Ms. McIntyre joined Calpine in 2004 as Director of Federal Legislative Affairs. "Yvonne is an experienced government and regulatory affairs advocate for the power sector. We look forward to her taking the lead on all legislative matters in Congress, with a particular focus on energy and environmental legislation," stated Robert P. May, Calpine's chief executive officer. "As a leader in renewable geothermal energy and low-carbon power generation, Calpine is committed to advocating for legislation to address global warming while assuring the industry delivers power to consumers in the most reliable, fuel-efficient and environmentally responsible manner," he continued. Ms. McIntyre has served in senior government affairs positions within the power industry for more than 12 years. Prior to joining Calpine, she represented major utilities and power companies in Washington, D.C. Ms. McIntyre has worked extensively on matters related to the national energy policy bill, California/Western energy markets and the Clean Air Act, and has also worked on tax and other issues relating to the promotion of renewable fuel technologies. Ms. McIntyre began her professional career with Detroit Edison in 1988 as an electrical engineer working in power plants and distribution systems service centers. She holds a degree in Electrical Engineering from Oakland University and a Master's in Business Administration from Wayne State University. About Calpine Corporation 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. (Calpine Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CALPINE CORP: Wants Dickstein Shapiro as Special Counsel -------------------------------------------------------- Calpine Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Dickstein Shapiro, LLP, as their special counsel, pursuant to Sections 327(e) and 328 of the Bankruptcy Code. Since October 2001, Dickstein Shapiro has represented the Debtors in a variety of matters, principally serving as their counsel with respect to matters pending before the Federal Energy Regulatory Commission. Dickstein has also represented the Debtors in its bankruptcy cases as an ordinary course professional. Currently, Dickstein is representing the Debtors in connection with on-going FERC proceedings relating to the existing Reliability-Must-Run Agreements between the Debtors and the California Independent System Operator Corporation. Dickstein also is advising the Debtors regarding compensation under the Federal Power Act and California Public Utilities Commission orders for newly required Resource Adequacy contracts. As special counsel, Dickstein will continue to represent the Debtors with respect to the FERC-related matters; and continue to assist them in connection with the prosecution, negotiation and ultimate settlement of pending FERC proceedings and the negotiation, drafting and implementation of valuable Resource Adequacy contracts as well as other related regulatory matters that may arise before the FERC. David R. Seligman, Esq., at Kirkland & Ellis LLP, in New York, says Dickstein's representation of the Debtors involves: -- negotiations with multiple parties regarding settlement of on-going disputes; -- preparation and defense of rate filings made at FERC with respect to compensation under the RMR Agreements during 2006 and 2007; and -- drafting and implementation of Resource Adequacy contracts between Debtors and California utilities. -- advising on federal energy regulatory matters that may arise under or be related to the RMR Agreements or Resource Adequacy contracts. As of Feb. 21, 2007, the Debtors have paid $305,570 in fees to Dickstein. On Feb. 12, 2007, Dickstein filed a fee application seeking allowance of $146,493 in fees, in excess of the compensation limitation of OCP Order. The Debtors expect that Dickstein will continue billing approximately $50,000 per month for its services. Hence, Mr. Seligman says Dickstein will exceed the aggregate cap of $500,000 imposed by the OCP Order. The Debtors will pay Dickstein based on its hourly billing rates: Professional Hourly Rates ------------ ------------ Partners $425-$625 Associates $225-$440 Paraprofessionals $150-$175 The Debtors will also reimburse Dickstein for any necessary out- of-pocket expenses. Mark L. Perlis, Esq., a partner at Dickstein, assures the Court that his firm does not represent any interest adverse to the Debtors and their estates, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Perlis discloses that his firm received: -- $194,842 from the Debtors during the year immediately preceding the Petition Date for fees and expenses; and -- $14,319 in the ordinary course of the Debtors' business during the 90-day period before the Petition Date for fees and expenses. Mr. Perlis further discloses that Dickstein has represented or currently represents, these creditor in matters unrelated to the Debtors' bankruptcy proceedings: * Angelo Gordon & Co., LP; * Credit Suisse First Boston; * Dow Chemical Co.; * Duke Energy Corp.; and * HSBC Bank Canada; * KeySpan Energy Corp.; * Loews Corporation; * Merrill Lynch; * Pacific Gas and Electric Co. and PG&E Corp.; * Portland Natural Gas Transmission System; * Sempra Energy; * Siemens AG; * Tampa Electric Company/TECO Energy Inc.; * Tennessee Valley Authority; * TransCanada Pipelines; * U.S. Bancorp; * Wilmington Trust Company/Wilmington Trust Corp. About Calpine Corp. Based in San Jose, California, Calpine Corp. (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. Calpine Corp. has until June 20, 2007, to file a plan, and until Aug. 20, 2007, to solicit acceptances of that plan. CLEARPOINT BUSINESS: BDO Seidman Raises Going Concern Doubt ----------------------------------------------------------- BDO Seidman, LLP, in New York City, raised substantial doubt about the ability of Clearpoint Business Resources, Inc., fka Terra Nova Acquisition Corp., to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. According to the auditor, the company is required to consummate a business combination by April 22, 2007. The company was incorporated in Delaware on July 21, 2004 as a blank check company whose objective is to acquire an operating business. It's initial stockholders purchased 1,200,000 shares of common stock, $.0001 par value, for $25,000 on July 21, 2004. The registration statement for the company's initial public offering was declared effective April 18, 2005. The Company consummated the offering on April 22, 2005 and received net proceeds of approximately $25,594,000. The amount was net of registration costs incurred through that date, including $23,500 that had been incurred as at Dec. 31, 2004. On April 26, 2005 the underwriters exercised their over-allotment option and the company received net proceeds of approximately $3,962,400. The company's management has broad discretion with respect to the specific application of the net proceeds of this Offering, although substantially all of the net proceeds of this Offering are intended to be generally applied toward consummating a business combination with an operating business. At Dec. 31, 2006 an amount of $30,481,202 (December 31, 2005 - $29,305,705 including accrued interest) is being held in an interest-bearing trust account until the earlier of: -- the consummation of a Business Combination; or -- liquidation of the company. Under the agreement governing the Trust Account, funds will only be invested in U.S. government securities (Treasury Bills) with a maturity of 180 days or less, or in money market funds meeting certain conditions under rule 2a-7 promulgated under the Investment Company Act of 1940. The remaining net proceeds which are not held in the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. The company has already signed a definitive agreement for a Business Combination and will submit such transaction for stockholder approval. In the event that stockholders owning 20% or more of the shares sold in the Offering vote against the Business Combination and exercise their conversion rights, the Business Combination will not be consummated. All of the company's stockholders prior to the Offering, including all of the officers and directors of the company, have agreed to vote their 1,200,000 founding shares of common stock in accordance with the vote of the majority in interest of all other stockholders of the Company with respect to any Business Combination. After consummation of a Business Combination, these voting safeguards will no longer be applicable. With respect to a Business Combination which is approved and consummated, any Public Stockholder who voted against the Business Combination may demand that the company convert his shares. Financial Results The company earned a net income of $235,552 on zero revenues for the year ended Dec. 31, 2006, compared to $245,602 on zero revenues at 2005. At Dec. 31, 2006, the company's balance sheet showed $30,548,951 in total assets and $6,581,094 in total liabilities, resulting in a $23,967,857 stockholders' equity, compared to total assets of $29,951,090, total liabilities of $5,983,803, and a stockholders' equity of $23,967,287. A full-text copy of the company's 2006 Annual Report is available for free at http://researcharchives.com/t/s?1a5b About Clearpoint Business Based in Toronto, Ontario, Terra Nova Acquisition Corp. is a blank check company formed on July 21, 2004 to effect a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business. The company's efforts in identifying a target business have not been limited to a particular industry, although it has concentrated on businesses with high-quality management teams and which are not likely to be subject to significant low cost competition or rapid technological change. COLLINS & AIKMAN: Files Solicitation Versions of Amended Plan ------------------------------------------------------------- Collins & Aikman Corp. and its debtor-affiliates filed with the U.S. Bankruptcy Court for the Eastern District of Michigan solicitation versions of their modified First Amended Joint Plan and accompanying Disclosure Statement, for the voters' perusal before casting a ballot. For a ballot to be counted, it must be received by Kurtzman Carson Consultants LLC, the solicitation agent, at 12910 Culver Boulevard, Suite I, Los Angeles, California, no later than 5:00 p.m., Pacific Time, on April 9, 2007. The Debtors incorporated certain non-material changes to the Disclosure Statement. Included is the resignation of Frank E. Macher from the Board of Directors of Collins & Aikman Corp., effective as of Jan. 31, 2007. The Debtors also added, or modified, these provisions in the Disclosure Statement and the Plan: -- In accordance with the subordination provisions of the Senior Subordinated Note Indenture, distributions on account of Class 7 Claims will first be distributed to the Holders of Allowed Senior Note Claims on a Pro Rata basis until the Allowed Senior Note Claims have been paid in full; -- To the extent that any proceeds of any claim would have constituted a litigation trust claim after the effective late becomes available before the effective date, the Debtors will hold the proceeds in a separate interest- bearing account for the benefit of the holders of allowed claims entitled to "Litigation Trust Recovery Interests" pursuant to the Plan; -- Any professional that is entitled pursuant to the Plan or a Bankruptcy Court order to receive payment from the estates for fees and expenses incurred after the Effective Date in connection with the Debtors' Chapter 11 cases may be compensated by the post-consummation trust without further application to the Bankruptcy Court; -- The Litigation Trust and the Post-Consummation Trust will maintain customary insurance coverage for the protection of persons serving as administrators and overseers of the trusts on and after the Effective Date; and -- For tax purposes, distributions received in respect of allowed claims will be allocated first to the principal amount of the Allowed Claims with any excess allocated to the accrued unpaid interest. In addition, the Debtors added a securities class action complaint filed by Stanley Sved on March 24, 2003, to the section in the Disclosure Statement providing for various investigations and litigations involving the Debtors. The lawsuit, which has been consolidated with other related actions, alleged violations by Collins & Aikman and its officers and directors of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Debtors also inform creditors that: -- the Debtors and General Electric Capital Corp. have resumed discovery while settlement discussions continue in connection with the Debtors' decision to recharacterize the 'master lease agreements' the parties entered into beginning in 2001 as sale and financing transactions; -- Debtor Dura Convertible Systems, Inc.'s settlement agreement with ASC, Inc., has been approved by Judge Rhodes. The settlement arises from ASC's complaint against Dura regarding the alleged infringement of four patents. Objections to the confirmation of the Plan must be filed on or before April 9, 2007, at 5:00 p.m., Pacific Time. The hearing to consider the Plan's confirmation is set to begin on April 19, 2007, at 10:00 a.m., Eastern Time. A copy of the solicitation version of the Amended Disclosure Statement is available for free at: http://ResearchArchives.com/t/s?192e A copy of the solicitation version of the Debtors' Amended Joint Plan is available for free at http://ResearchArchives.com/t/s?1a67 Additional Exhibits Filed The Debtors have also filed an amended list of over 14,000 parties to the retained causes of action. A copy of the amended list of Retained Causes of Action is available for free at http://ResearchArchives.com/t/s?1a68 About Collins & Aikman Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and US$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). COLLINS & AIKMAN: Files Amended Solicitation Procedures ------------------------------------------------------- Collins & Aikman Corp. and its debtor-affiliates filed their amended Solicitation Procedures, incorporating the order of U.S. Bankruptcy Court for the Eastern District of Michigan with respect to the Voting Record Date of Jan. 26, 2007, and the Voting Deadline of April 9, 2007. A copy of the Amended Solicitation Procedures is available for free at http://ResearchArchives.com/t/s?1a69 Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and US$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). COLLINS & AIKMAN: Liquidation Analysis Solicitation Version Filed ----------------------------------------------------------------- Collins & Aikman Corp. and its debtor-affiliates filed with the U.S. Bankruptcy Court for the Eastern District of Michigan a solicitation version of their liquidation analysis in connection with the Disclosure Statement to their First Amended Joint Plan. The liquidation analysis did not contain material changes to the document submitted to the Court on Jan. 24, 2007. A copy of the solicitation version of the liquidation analysis is available for free at http://ResearchArchives.com/t/s?1a6a Headquartered in Troy, Michigan, Collins & Aikman Corporation -- http://www.collinsaikman.com/-- is a global leader in cockpit modules and automotive floor and acoustic systems and is a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company has a workforce of approximately 23,000 and a network of more than 100 technical centers, sales offices and manufacturing sites in 17 countries throughout the world. The Company and its debtor-affiliates filed for chapter 11 protection on May 17, 2005 (Bankr. E.D. Mich. Case No. 05-55927). Richard M. Cieri, Esq., at Kirkland & Ellis LLP, represents C&A in its restructuring. Lazard Freres & Co., LLC, provides the Debtor with investment banking services. Michael S. Stammer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors Committee. When the Debtors filed for protection from their creditors, they listed $3,196,700,000 in total assets and US$2,856,600,000 in total debts. (Collins & Aikman Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). COMMONWEALTH EDISON: Warns Ch. 11 Filing if Rates are Rolled Back ----------------------------------------------------------------- Commonwealth Edison Company, a subsidiary of Exelon Corporation, discloses in a regulatory filing with the Securities and Exchange Commission that it may seek chapter 11 protection if a legislation that proposes to rollback and freeze electricity rates is enacted. ComEd argues that if rates are rolled back and the rate freeze period extended for three-years, it would have contractual obligations to purchase electricity under supplier forward contracts at prices higher than the rates it would be allowed to collect from its customers for electricity. The company has estimated that it could incur operating losses of approximately $1.4 billion per year ($850 million after taxes) or more, depending on various factors. Also, ComEd says that its ability to obtain new financing or ability to refinance maturing debt instruments in 2007, would be severely limited due to expected shortfalls in cash flow, likely further credit downgrades to below investment grade. ComEd's projected cash shortfall under a rate freeze extension is anticipated to be approximately $1.4 billion or more in 2007. Consolidated 2006 Results Exelon and its subsidiaries' net income for the year ended Dec. 31, 2006, increased to $2.37 million from $1.38 million in the year ended Dec. 31, 2005. Operating revenues for the current period also increased to $15,655 million from $15,357 million in 2005. Exelon's consolidated balance sheets at Dec. 31, 2006, showed total assets of $44,319 million, total liabilities of $34,259 million, and total shareholders' equity of $9,973 million. Exelon's Dec. 31, 2006 balance sheet also showed negative working capital with $4,992 million in total current assets available to pay $5,795 million in total current liabilities. Segmental 2006 Results ComEd's total revenues for 2006 decreased to $6,101 million compared to $6,264 million in 2005, due to unfavorable weather conditions in 2006 compared to 2005. The demand for electricity is affected by weather conditions. Very warm weather in summer months and very cold weather in other months are referred to as "favorable weather conditions" because these weather conditions result in increased sales of electricity. Conversely, mild weather in non-summer months reduces demand. In ComEd's service territory, cooling and heating degree days were 20% and 8% lower, respectively, than the prior year. In addition, all ComEd customers have the choice to purchase energy from a competitive electric generation supplier. The choice does not impact the volume of deliveries, but affects revenue collected from customers related to supplied energy and generation service. As of Dec. 31, 2006, one competitive electric generation supplier had been granted approval to serve residential customers in the ComEd service territory. However, they are not currently supplying electricity to any residential customers. For 2006 and 2005, 23% and 21%, respectively, of energy delivered to ComEd's retail customers was provided by competitive electric generation suppliers. Most of the customers previously receiving energy under the power purchase option are now electing either to buy their power from a competitive electric generation supplier or from ComEd under bundled rates. ComEd's net loss for 2006 decreased to $112 million from $685 million in 2005 due to smaller impairment of goodwill in 2006, lower purchased power expense and one-time benefits associated with reversing previously incurred expenses as a result of the July 2006 and December 2006 ICC rate orders partially offset by lower operating revenues. ComEd Residential Rate Stabilization On Dec. 20, 2006, the ICC approved a residential rate stabilization program that allows residential customers the choice to limit the impact of any rate increase over the next three years. For customers choosing to participate in the program, electric rate increases would be capped at 10% in each of 2007, 2008 and 2009. Costs that exceed the caps would be deferred and recovered over three years from 2010 to 2012. Deferred balances will be assessed an annual carrying charge of 3.25%. If ComEd's rate increases are less than the caps in 2008 and 2009, ComEd would begin to recover deferred amounts up to the caps with carrying costs. The order also strongly encouraged, but did not require, ComEd to make contributions totaling $30 million to environmental and customer assistance programs. ComEd is currently evaluating the request. The order is subject to rehearing and appeal. ComEd Rate Case On July 26, 2006, the ICC issued its order in the Rate Case approving a revenue increase of approximately $8 million and the recovery of several items that previously were recorded as expense. On December 20, 2006, the ICC approved an amended order on the rehearing of the Rate Case allowing an additional revenue increase of approximately $74 million, including a partial return on the pension asset, for a total rate increase of $83 million. ComEd and various other parties have appealed the rate order to the courts. As a result of the July 26, 2006 ICC rate order, ComEd recorded an after-tax impairment charge of $776 million associated with the write-off of goodwill. A full-text copy of the financial report is available for free at: http://researcharchives.com/t/s?1a6d About Commonwealth Edison Company Headquartered in Chicago, Ill., Commonwealth Edison Company's energy delivery business consists of the purchase and regulated retail and wholesale sale of electricity and the provision of distribution and transmission services to retail and wholesale customers in northern Illinois, including the City of Chicago. The company was organized in the State of Illinois in 1913 as a result of the merger of Cosmopolitan Electric Company into the original corporation named Commonwealth Edison Company, which was incorporated in 1907. * * * Commonwealth Edison Company's preferred stock carries Moody's Ba2 rating. CONSOL ENERGY: DBRS Holds BB Rating on Senior Unsecured Debt ------------------------------------------------------------ Dominion Bond Rating Service confirmed the rating of the Senior Unsecured Debt of CONSOL Energy Inc. at BB with a Stable trend. The rating reflects the company's acceptable business profile as the third-largest coal producer in the United States, behind Peabody Energy Corporation and Arch Coal Inc. As is the case with Peabody and Arch, Consol has extensive coal reserves, amounting to approximately 50 years of production at current rates. But Consol's coal operations are less diversified than for Peabody and Arch, with the majority of the company's production and reserves located in Northern Appalachia, and minimal operations in the Powder River Basin (PRB) region of Wyoming. Consol's coal production is essentially wholly derived from underground mining, which is more costly and more susceptible to production outages than the surface mining that is more common in the PRB. While PRB coal is low in energy content relative to Northern Appalachian coal, it does have a lower level of sulphur, enabling it to comply with current environmental regulations. This makes PRB the fastest-growing coal-production region in the United States. However, in the medium to long term, Consol stands to benefit from the planned roll-out of scrubbers in the United States, as this should reduce emissions concerns associated with Northern Appalachian coal and increase its competitiveness. Consol's earnings improved in 2005 and 2006 despite essentially flat production, as increases in realized prices more than offset moderately higher production costs. The company's stronger margins result from the expiration of older coal contracts and their replacement with new contracts at higher pricing. DBRS notes that Consol has fixed-priced agreements for approximately 93% and 60% of 2007 and 2008 production respectively. This leaves the company only moderately exposed to spot coal prices. The company may be slightly affected next year by the current decline in coal prices across the United States that is attributable to mild weather patterns and increased inventories. DBRS notes that the long-term prospects for coal remain positive, given its relatively low cost and availability compared with competing energy sources. Unlike its primary competitors, Consol's business does not solely consist of coal operations. The company also has significant gas activities that provide diversity and a steady source of free cash flow to fund the coal business. Although the company's debt has been materially reduced during the past few years as a result of improved earnings, Consol's leverage remains aggressive, constraining the assigned rating. While gross debt-to-total capital is moderate at 43%, as of Dec. 31, 2006, this does not include the substantial underfunded pension and other post-retirement employee obligations, the servicing costs of which undermine the Company's earnings. Additionally, the company's capex requirements over the medium term will remain significant as the company seeks to expand gas-production capacity and increase the efficiency of its coal operations. For these reasons, DBRS expects the ratings to remain unchanged over the near to medium term. DAIMLERCHRYSLER: Plans to Cut 1,000 Salaried Jobs by June 2007 -------------------------------------------------------------- As part of DaimlerChrysler AG's Chrysler Group Recovery and Transformation Plan, the company has targeted the reduction of 2,000 salaried positions by 2008. The Chrysler Group intends to reach that target through attrition and special programs. The special programs include the following separation incentive and early retirement packages for non- bargaining unit, or salaried employees. The aim of the packages is to reach the 2007 reduction target of 1,000 salaried positions by June 30, 2007. The packages include the following programs: Separation Incentive Program: * Eligibility All non-union salaried employees aged 62 or older with 10 or more years of service as of May 31, 2007. * Program Terms: -- Offers made May 7, 2007, and returned by May 31, 2007. -- Retirements effective May 31, 2007. -- Program incentives include three months salary and either a $20,000 car voucher grossed up for taxes, or a $20,000 contribution to the Retirement Health Care Account. -- 100% Retiree Choice medical credits through aged 64 and at age 65 100% Credits in the Health Care Retirement Account. Ordinarily, an employee must be aged 60 with 30 years of service to receive 100%. Special Early Retirement: * Eligibility All non-union salaried employees aged 53 to 61 years old with 10 or more years of service, with earnings in 2006 of less than $100,000 and select non-union salaried employees, aged 55 to 61 years old with 10 or more years of service with 2006 earnings of $100,000 or greater. -- This is in compliance with Internal Revenue Service guidelines. -- Eligibility requirements must be satisfied by June 30, 2007. * Program Terms: -- Offers will be made to select employees June 4, 2007, and returned by June 29, 2007. -- Retirements effective June 30, 2007. -- Retirement benefits will not be reduced by an early retirement reduction percent. -- 100% Retiree Choice medical credits through age 64 and at age 65 100% credits in the Health Care Retirement Account. Ordinarily, an employee must be age 60 with 30 years of service to receive 100%. DaimlerChrysler had about 16,800 salaried workers and about 82,500 total employees as of Dec. 31, 2006, Reuters reports citing Chrysler Group spokesman Mike Aberlich. About DaimlerChrysler Headquartered in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DAIMLERCHRYSLER: Chrysler & UAW Ink Two Employee Incentive Deals ---------------------------------------------------------------- DaimlerChrysler AG's Chrysler Group and the United Auto Workers agreed to two special programs that will provide retirement and separation incentives for the Company's bargaining-unit employees in the United States as part of the Chrysler Group's Recovery and Transformation Plan. The negotiated programs include an Incentive Program for Retirement with $70,000 cash lump-sum amount for employees with 30 or more years of credited service, or who meet a combination of age and years-of-service eligibility, and an Enhanced Voluntary Termination of Employment Program, which provides a lump sum payment of $100,000 for employees with at least one year of credited service. "These actions enable us to become more competitive going forward," Chrysler Group Communications Vice President Jason Vines said. "Chrysler Group and the UAW want to ensure that we have socially responsible separation incentives that will allow us to align our workforce needs with the capacity needs of our manufacturing operations." A letter outlining the plans was sent to affected employees yesterday. About DaimlerChrysler Headquartered in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DAIMLERCHRYSLER: Supervisory Board Approves Small-Car Chery Pact ---------------------------------------------------------------- The DaimlerChrysler AG Supervisory Board approved the framework of a limited partnership to develop small vehicles between the Chrysler Group and Chery Motor Company of China. The deal is still contingent upon approval by the Chinese government, but the final pact of the framework is expected to be signed by the end of March. Under the non-equity partnership, Chery-built vehicles will be distributed under Chrysler Group brands, primarily in North America and Western Europe. Chrysler Group indicated that the partnership would allow the company to become a bigger player on the global automotive stage by giving it access to products in new segments more quickly, with less capital spending. Small vehicles such as these will allow Chrysler Group brands to compete in segments in which the brands do not currently compete, and which are especially important in price- and fuel-economy sensitive markets. Some 67% of all vehicles sold outside of North America are in these segments. Chrysler Group's major competitors in the U.S. and Western Europe have similar arrangements with Asian manufacturers for vehicles in these segments. About DaimlerChrysler Headquartered in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DAIMLERCHRYSLER AG: Considers Accepting Minority Stake in GM ------------------------------------------------------------- DaimlerChrysler AG mulls accepting a minority stake in General Motors Corp. in return for Chrysler if both groups come to an agreement on the sale of the unit, John Reed writes for the Financial Times. As reported in the Troubled Company Reporter on Feb. 19, citing German publication Manager Magazin, DaimlerChrysler and General Motors are in talks about a possible purchase of the Chrysler Group by GM. If the all-equity deal pushes through, DaimlerChrysler stands to save billions of dollars in synergies and merger costs, FT states. According to the report, both companies have not confirmed the discussions, although at least two of DaimlerChrysler institutional shareholders are in favor of the all-share deal. DaimlerChrysler also has the option to sell the ailing unit to private equity or industry investors and is relying on JPMorgan Chase for advice on its available alternatives, FT relates. About General Motors Corp. General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- is the world's largest automaker and has been the global industry sales leader since 1931. Founded in 1908, GM employs about 284,000 people around the world. It has manufacturing operations in 33 countries and its vehicles are sold in 200 countries. GM sells cars and trucks under these brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, and Vauxhall. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG -- http://www.daimlerchrysler.com/-- develops, manufactures, distributes, and sells various automotive products, primarily passenger cars, light trucks, and commercial vehicles worldwide. It primarily operates in four segments: Mercedes Car Group, Chrysler Group, Commercial Vehicles, and Financial Services. The Chrysler Group segment offers cars and minivans, pick-up trucks, sport utility vehicles, and vans under the Chrysler, Jeep, and Dodge brand names. It also sells parts and accessories under the MOPAR brand. The Chrysler Group is facing a difficult market environment in the United States with excess inventory, non-competitive legacy costs for employees and retirees, continuing high fuel prices and a stronger shift in demand toward smaller vehicles. At the same time, key competitors have further increased margin and volume pressures -- particularly on light trucks -- by making significant price concessions. In addition, increased interest rates caused higher sales & marketing expenses. In order to improve the earnings situation of the Chrysler Group as quickly and comprehensively, measures to increase sales and cut costs in the short term are being examined at all stages of the value chain, in addition to structural changes being reviewed as well. DALE GRINAGER: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Dale Ross Grinager 49484 Senilis Avenue Morongo Valley, CA 92256 Bankruptcy Case No.: 07-10968 Type of Business: The Debtor is the president of Tri-State Land Surveyors in La Quinta, Calif. He previously filed two chapter 13 petitions on June 21, 1995 (Bankr. C.D. Calif. Case No. 95-18568) and on Aug. 6, 1997 (Bankr. C.D. Calif. Case No. 97-23600). Chapter 11 Petition Date: February 26, 2007 Court: Central District Of California (Riverside) Judge: Peter Carroll Debtor's Counsel: Don E. Bokovoy, Esq. Bernard J. Gartland, PC 69930 Highway 111, Suite 212 Rancho Mirage, CA 92270 Tel: (760) 202-7020 Fax: (760) 202-7021 Total Assets: $2,542,665 Total Debts: $2,202,030 Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Federal Income $594,972 Insolvency Group 1 MS 5501 Tax 24000 Avila Road Laguna Niguel, CA 92677 Federal Income Unknown Tax M. Muscatel Land purchase $371,000 32 Colonial Drive unrecorded deed Rancho Mirage, CA 92270 on 40 acres parcel GMAC 2006 Chevy $75,366 P.O. Box 12699 Corvette Coupe Glendale, AZ 85318 15,000 miles Value of Security: $39,360 2006 Chevy $26,260 Silverado 2500 Pickup 20,000 miles Value of Security $25,570 Chase 2005 Cadillac $52,010 900 Stewart Avenue Escalade SUV Garden City, NY 11530 55,000 miles Value of Security: $28,550 R. Thacher 40 acres $50,000 7144 Airway undeveloped Yucca Valley, CA 92284 land Parcel #0584-151-08 in Morongo Valley GEMB/Jewelry Accents Charge Account $38,331 P.O. Box 981439 El Paso, TX 79998 Amex Credit Card $32,820 P.O. Box 297871 Fort Lauderdale, FL 33329 HSBC/SAKS Charge Account $6,430 140 W. Industrial Drive Elmhurst, IL 60126 Monogram Bank N. America Credit Card $3,864 P.O. Box 17054 Wilmington, DE 19884 Franchise Tax Board State Income Tax Unknown Attention: Bankruptcy P.O. Box 2952 Sacramento, CA 95812-2952 Yvette Dube Based on Unknown 49964 Mountain View Drive agreement Morongo Valley, CA 92256 relating to profits from sale of land (minimum $5,000 up to 50% of the profits from the sale of the 40 acres). DELPHI CORP: Plans to Close Spain Steering Facility --------------------------------------------------- Delphi Corp. is planning to shut down a Cadiz, Spain facility, which manufactures steering mechanisms, Jeff Bennett of Bloomberg News reports. The company employs approximately 1,570 employees. Due to high operating costs, the Cadiz Facility has incurred losses aggregating $196,000,000 in the last five years, the Associated Press relates in a separate news report. Delphi did not disclose the date of the planned closure. The company, however, has informed the Facility's labor unions of the imminent closure, Delphi spokeswoman Cheryl Kilborn told Bloomberg. Among the labor unions representing Cadiz Facility workers are the Confederacion Sindical de Comisiones Obreras and the Union General de Trabajadores. The Facility is not part of Delphi's proposal to sell its steering division to Platinum Equity Holdings LLC. The contemplated plant closure will not only affect the Facility's workers, but will also indirectly affect 4,000 related jobs, Jose Barriga, a UGT union official, noted in a press statement. UGT is set to hold a strike March 1. Troy, Mich.-based Delphi Corporation (OTC: DPHIQ) -- http://www.delphi.com/-- is the single largest global supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. The Company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2005, the Debtors' balance sheet showed $17,098,734,530 in total assets and $22,166,280,476 in total debts. (Delphi Corporation Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DELTA AIR: Committee Amends SSI's Engagement Letter --------------------------------------------------- The Official Committee of Unsecured Creditors of Delta Air Lines, Inc., and its debtor-affiliates has entered into its amendment to the engagement letter with SSI (U.S.), Inc., doing business as Spencer Stuart, to provide for certain limited modifications to the terms of the firm's employment: (a) in addition to the $200,000 paid to Spencer Stuart, the Debtors will be authorized to make a second payment of $150,000; and (b) Spencer Stuart will be paid a minimum fee in the event that: * the Creditors Committee terminates the retention prior to the effective date of a plan of reorganization for Delta Air Lines, Inc.; or * fewer than five new members, excluding any existing member of the Board or any Delta employee, are recruited to the Board of Reorganized Delta. The Debtors and the Creditors Committee recently reached an agreement, in connection with the Debtors' Joint Plan of Reorganization, that the Committee will select 10 out of 11 members of the New Delta Board, at least three of which will be current members of Delta's Board. Spencer Stuart will assist the Creditors Committee, with the Debtors participating in the board search process, in locating as many as seven new members for the New Board. The process, the Creditors Committee relates, will involve additional work performed by Spencer Stuart than was originally contemplated when the Engagement Letter was negotiated in November 2006. Accordingly, the Creditors Committee asks the U.S. Bankruptcy Court for the Southern District of New York to approve the limited modifications of the terms of Spencer Stuart's engagement. The Debtors and the U.S. Trustee have no objection to the application. As reported in the Troubled Company Reporter on Dec. 26, 2006, the Court gave the Committee authority to retain SSI as board search consultant, effective as of November 17, 2006, pursuant to a letter of engagement dated November 17. 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. 63; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) DOMTAR INC: Earns CDN$328 Million in Year Ended December 31 ----------------------------------------------------------- Domtar Inc. reported net earnings of CDN$328 million on sales of CDN$4 billion for the year ended Dec. 31, 2006, compared to a net loss of CDN$388 million on sales of CDN4.2 billion in 2005. At Dec. 31, 2006, the company's balance sheet showed CDN$4.9 billion in total assets, CDN$3 billion in total liabilities, and CDN$1.9 billion in total stockholders' equity. Commenting on the 2006 results, Raymond Royer stated: "The past year has been one of decisive actions for Domtar. With the support of our employees, we successfully executed the restructuring plan announced in November 2005. The plan resulted in the permanent closure of six paper machines at three mills, two sawmilling operations, as well as the implementation of cost reduction initiatives across all of the organization. "More recently, Domtar sold its 50% investment in Norampac (Inc.). Finally, throughout the year we continued to adjust our production to changing market conditions. All of these measures, coupled with the duties refund and higher overall selling prices, contributed to Domtar's strengthened financial position. "Our transaction to combine Domtar with Weyerhaeuser (Company)'s fine paper business and related assets is progressing well and is on schedule with an expected closing in March. The transaction will be submitted to our shareholders at a special meeting to be held on February 26th. This combination of assets is a transformational event for Domtar that will create the largest fine paper producer in North America, and we believe that our customers and shareholders will benefit from this leadership position in our core uncoated freesheet business", added Mr. Royer. During the fourth quarter of 2006, the company sold its packaging segment, which consisted of a 50% interest in Norampac. In accordance with Canadian generally accepted accounting principles, effective in the fourth quarter of 2006, the information pertaining to Norampac is disclosed as a discontinued operation. Effective Oct. 11, 2006, three of the company's sawmills (two in Abitibi, Quebec, and one in Ontario) were closed indefinitely due to the pressures of higher timber costs and lower demand for both lumber and wood chips. Effective Oct. 12, 2006, Domtar was entitled to receive a refund for duties collected by the U.S. Government since 2002 plus interest. Domtar received the refund, amounting to CDN$178 million plus interest of CDN$22 million, during the fourth quarter of 2006. This refund is subject to a special charge of approximately 18% by the Canadian Government. As of Dec. 31, 2006, Domtar recorded a provision relating to this special charge. Free cash flow increased by CDN$301 million in 2006 compared to 2005. This improvement mainly reflects an increase in profitability offset by working capital requirements. Free cash flow is a non-GAAP measure that is defined as the amount by which cash flows provided from continuing operating activities, as determined in accordance with GAAP, exceed net additions to property, plant and equipment, as determined in accordance with GAAP. Domtar's net debt-to-total capitalization ratio at Dec. 31, 2006, stood at 40.2% compared to 57.7% at Dec. 31, 2005. Domtar's total long-term debt decreased by CDN$368 million, largely due to the positive impact of a stronger Canadian dollar on its US dollar denominated debt and debt repayments made on its revolving credit facility resulting from the sale of Domtar's 50% interest in Norampac. Net debt-to-total capitalization ratio is a non-GAAP measure that is calculated as long-term debt and bank Indebtedness, net of cash and cash equivalents, to the sum of net debt and shareholders' equity. About Domtar Inc. Headquartered in Montreal, Quebec, Domtar Inc. (TSX/NYSE: DTC) -- http://www.domtar.com/ -- is the third largest producer of uncoated freesheet paper in North America. It is also a leading manufacturer of business papers, commercial printing and publication papers, and technical and specialty papers. Domtar manages according to internationally recognized standards 17 million acres of forestland in Canada and the United States, and produces lumber and other wood products. Domtar has 8,500 employees across North America. * * * As reported in the Troubled Company Reporter on Feb. 6, 2007, Standard & Poor's Ratings Services affirmed its 'BB-' long-term corporate credit rating on Domtar Inc., as well as its 'B+' senior unsecured debt rating, its 'B-' global scale, and P-4 Canadian national scale preferred share ratings. Outlook is stable. EASY INC: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------- Debtor: EASY, Inc. 1537 E. Pierson Road Flushing, MI 48433 Bankruptcy Case No.: 07-30639 Chapter 11 Petition Date: February 26, 2007 Court: Eastern District of Michigan (Flint) Judge: Daniel S. Opperman.Flint Debtor's Counsel: George E. Jacobs, Esq. 2503 S. Linden Road, Suite 230 Flint, MI 48532 Tel: (810) 720-4333 Estimated Assets: $100,000 to $1 Million Estimated Debts: $1 Million to $100 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fifth Third Bank Secured with $680,032 P.O. Box 740789 unlimited Cincinnati, OH 45274 guaranties of the Debtor's principal, John & Maryanna Bonardelli, and with limited guaranty of Frank Szabo for $250,000 Internal Revenue Service Unpaid payroll $513,601 Cincinnati, OH 45999 withholding taxes FUTA taxes for $2,567 various quarters Jack Goggins Unsecured loan $343,419 1136 East Main Street Flushing, MI 48433 FMS Construction Construction $155,000 4053 Commerce Drive services Flushing, MI 48433 Cheryl L. Viar Note $106,867 c/o Jody L. Aaron reimbursement Charfoos & Christenson, PC 5510 Woodward Avenue Detroit, MI 48202 Gordon's Food Service Produce & $59,618 inventory Donlan Fish & Seafood, Inc. Inventory $43,758 Sysco Detroit Inventory $38,740 Michigan Dept. of Treasury Sales, use & $27,000 withholding taxes Otto W. Liebold & Co. Inventory $15,614 First National Bank Credit card $10,538 Home Depot CRC Misc. supplies $9,386 Flint Radio Center Advertising $8,245 Michigan Fence Co. Fence installation $4,845 Michigan Unemployment Agency Unemployment $4,685 taxes Webster, Looby & Baumgarten, PC Accounting service $3,215 Ameritech Advertising Service Advertising $2,962 Trade Exchange Barter services $2,931 Gillroys $2,527 EL PASO: Earns $15.8 Million in Fourth Quarter Ended December 31 ---------------------------------------------------------------- El Paso Electric reported results for fourth quarter and year ended Dec. 31, 2006. For the fourth quarter 2006, EE reported net income of $15.8 million, with a gain of $6.1 million compared to a net income of $6.7 million, including a net loss of $1.1 million in the fourth quarter of 2005. For the twelve months ended Dec. 31, 2006, EE reported net income of $67.5 million, with a gain of $6.1 million. Net income for the twelve months ended Dec.31, 2005 was $35.5 million, which included a net loss of $1.1 million. EE's recognized extraordinary gain of $6.1 million for the twelve months ended Dec. 31, 2006 was to account for the re-application of Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation" to its Texas regulatory jurisdiction. Capital and Liquidity At Dec. 31, 2006, common stock equity comprised 47.6% of the company's permanent capitalization. Cash flows from operations for the twelve months ended Dec. 31, 2006 increased to $220.2 million from $107.5 million in the corresponding period in 2005 due to the company's recovery of fuel costs on a current basis and its recovery of deferred fuel revenues through fuel surcharges. In Texas, fuel costs are recovered through a fixed fuel factor, which may be adjusted twice a year. The company record deferred fuel revenues and a deferred asset for the under-recovery of fuel costs until they can be recovered from Texas customers. In October 2005, the company began recovering through a fuel surcharge $53.6 million of fuel under-recoveries over a 24-month period. In February 2006, the company increased its fuel factors on an interim basis and implemented an additional fuel surcharge to recover $34 million of fuel under-recoveries, including interest through the surcharge period, over a twelve-month period. In the twelve month period ended Dec. 31, 2006, the company collected $56.9 million of deferred fuel revenues in Texas through fuel surcharges compared to $6 million collected in 2005. The company also over-collected fuel costs by $3.7 million compared to fuel under-collections of $79.5 million for the same time period last year. The increase in cash flows from operations has allowed the company to internally finance additional investments in electric utility plant, to repurchase $62.4 million of common stock and to increase its balance of cash and temporary investments by $32.1 million in 2006. During the fourth quarter of 2006, EE repurchased 862,720 shares of common stock in the open market at an aggregate cost of $21.0 million. In September 2006, the Board of Directors authorized the repurchase of up to 2.3 million shares of common stock. The shares authorized under the 2006 Plan were in addition to the shares, which remained available under a buyback program previously approved by the Board of Directors in February 2004. During the third quarter of 2006, EE completed the repurchase of all shares available under the 2004 Plan. As of Dec. 31, 2006, 1.3 million shares remain available for repurchase under the 2006 Plan. About El Paso Headquartered in El Paso, Texas, El Paso Electric (NYSE: EE) -- http://www.epelectric.com/-- is an electric utility providing generation, transmission and distribution service to 316,000 retail customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico, including wholesale customers in Texas, and Mexico. * * * As reported in the Troubled Company Reporter on Feb. 12, 2007, Moody's Investors Service upgraded the ratings for El Paso Electric Company, Inc. including its senior unsecured rating, which was upgraded to Baa2 from Baa3. This rating action concludes the review for possible upgrade that was initiated for El Paso Electric on Aug. 29, 2006. The ratings that were upgraded also include EPE's S-3 shelf registration statement, which includes a senior secured rating, upgraded to Baa1 from Baa2 and preferred stock to Ba1 from Ba2. The rating outlook is stable. ELCOM INT'L: Appoints David Elliot as VP Finance & Secretary ------------------------------------------------------------------ Elcom International Inc. appointed David Elliott as its Vice President of Finance and Secretary, effective immediately. Mr. Elliott, 32, will serve as the principal financial and accounting officer of the company. He joined the company on Nov. 14, 2006. He has been responsible for introducing a new financial system in the company's UK operations and improving financial controls and reporting. The company said that Mr. Elliott has been employed in a number of financial roles with Volkswagen Group. He is most recently responsible for Volkswagen Group's Development Ventures Fund. About Elcom Elcom International, Inc. (OTC Bulletin Board: ELCO and AIM: ELC and ELCS) -- http://www.elcominternational.com/-- operates Elcom Inc., an international B2B Commerce Service Provider offering affordable solutions for buyers, sellers and commerce communities to automate many or all of their purchasing processes and conduct business online. PECOS, Elcom's remotely hosted flagship solution, enables enterprises of all sizes to achieve the many benefits of B2B eCommerce without the burden of infrastructure investment and ongoing content and system management. Going Concern Doubt Vitale Caturano & Company Ltd. in Boston, Massachusetts, expressed substantial doubt about Elcom International's ability to continue as a going concern after it audited the company's financial statements for the years ended Dec. 31, 2005 and 2004. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit. EUGENE FINAN: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Eugene M. Finan 72 Physicians Drive Jackson, TN 38305 Bankruptcy Case No.: 07-10548 Type of Business: The Debtor is a physician working at EMF Services Inc. in Jackson, Tenn. Chapter 11 Petition Date: February 22, 2007 Court: Western District of Tennessee (Jackson) Judge: G. Harvey Boswell Debtor's Counsel: Michael T. Tabor, Esq. 203 S. Shannon P.O. Box 2877 Jackson, TN 38302-2877 Tel: (731) 424-3074 Total Assets: $422,429 Total Debts: $1,176,799 Debtor's 12 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Arkansas Methodist Hospital Corp. $550,000 900 E. Kingshighway Paragould, AR 72450 InSouth Bank $248,339 180 Peachtree Plaza Brownsville, TN 38012 CitiMortgage $200,578 P.O. Box 9438 Gaithersburg, MD 20898-9438 Regional Hospital of Jackson $45,000 Capital One $24,523 GMAC Finance $21,432 American Honda Finance $13,365 MBNA Mastercard $12,746 Citibank $12,217 CitiBank - EMF Services $12,217 Capital One $8,982 MBNA Mastercard $8,146 FIDELITY NATIONAL: Net Earnings Rise to $259.1 Million in 2006 -------------------------------------------------------------- Fidelity National information Services Inc. reported net earnings of $259.1 million on revenues of $4.1 billion for the year ended Dec. 31, 2006, compared with net earnings of $196.5 million for the year ended Dec. 31, 2005. For the fourth quarter ended Dec. 31, 2006, the company reported net earnings of $75.1 million on revenues of $1.1 billion, compared with net earnings of $45.5 million on revenues of $707.7 million. "Fidelity National Information Services reported excellent fourth quarter results with pro forma revenue growth of 12.5%, EBITDA growth of 11.0% and adjusted cash earnings of $0.58 per diluted share," stated FIS Chairman William P. Foley, II. "We are extremely pleased with the outstanding results we achieved in 2006, which was our first year as a new public company. Our strong operating performance provides an excellent foundation for the continued growth and success of our company." Fourth Quarter Pro Forma Segment Information The company's Transaction Processing Services generated revenue of $694.7 million, or 16.1% over the prior-year period, driven by 55% growth in International, 8.9% growth in Enterprise Solutions and 8.6% growth in Integrated Financial Solutions. The company's new item processing operation in Brazil, new account wins and deeper penetration of the existing customer base contributed to the strong revenue growth. Lender Processing Services revenue increased 7.9% to $437.1 million, driven by 10.6% growth in Information Services, which continues to benefit from strong results within the default solutions and appraisal product lines. About Fidelity National Based in Jacksonville, Florida, Fidelity National Information Services Inc. (NYSE: FIS) -- http://www.fidelityinfoservices.com/ -- provides core processing for financial institutions; card issuer and transaction processing services; mortgage loan processing and mortgage related information products; and outsourcing services to financial institutions, retailers, mortgage lenders and real estate professionals. Fidelity has processing and technology relationships with 35 of the top 50 global banks, including nine of the top ten. Nearly 50% of all US residential mortgages are processed using Fidelity software. Fidelity maintains a strong global presence, serving over 7,800 financial institutions in more than 60 countries worldwide. * * * As reported in the Troubled Company Reporter on Jan. 24, 2007, Fitch Ratings assigned a 'BB+' rating on Fidelity National Information Services Inc.'s new $2.1 billion term loan and $900 million revolving credit facility. FIRST UNION: Fitch Holds Junk Rating on $6.5 Mil. Class P Certs. ---------------------------------------------------------------- Fitch ratings upgrades First Union National Bank - Bank of America Commercial Mortgage Trust pass-through certificates, series 2001-C1 as: -- $13.1 million class F to 'AAA' from 'A+'; -- $26.2 million class G to 'AA' from 'A'; and -- $16.4 million class H to 'A+' from 'A-'. Affirmed: -- $769.1 million class A-2 at 'AAA'; -- $58.2 million class A-2F at 'AAA'; -- Interest-only classes IO-I, IO-II and IO-III at 'AAA'; -- $52.3 million class B at 'AAA'; -- $26.2 million class C at 'AAA'; -- $26.2 million class D at 'AAA'; -- $16.4 million class E at 'AAA'; -- $19.6 million class J at 'BBB+'; -- $16.4 million class K at 'BBB-'; -- $13.1 million class L at 'BB+'; -- $6.5 million class M at 'BB'; -- $9.8 million class N at 'B+'; -- $13.1 million class O at 'B'; and -- $6.5 million class P at 'CCC/DR2'. Fitch does not rate the $1.7 million class Q. The class A-1 certificates are paid in full. The upgrades are the result of additional paydown and defeasance since Fitch's last rating action in July 2006. Since issuance, 39 loans (27.5%) have defeased, including the two credit assessed loans, the Cornerstone portfolio and the RFS Hotel portfolio. As of the February 2007 distribution date, the transaction has paid down 16.6% since issuance to $1.09 billion from $1.3 billion. The transaction remains diverse with the top five loans representing less than 14.6% of pool. There is currently one loan (0.2%) in special servicing and no losses are expected. The loan is secured by a multifamily property located in New Orleans, Louisiana. The loan is current and the borrower has completed the re-roofing, siding and interior demolition of the hurricane-damaged units. The borrower has contracted to renovate the interior finish-out on the damaged units and the work is expected to be completed by May 2007. FR X OHMSTEDE: Moody's Affirms Corporate Family Rating at B2 ------------------------------------------------------------ Moody's Investors Service has affirmed FR X Ohmstede Acquisitions Co.'s B2 corporate family rating. Concurrently, Moody's has also affirmed the company's B1 first lien bank debt rating and Caa1 second lien bank debt rating in accordance with Moody's Loss Given Default methodology. The rating outlook remains stable. Moody's rating affirmation pertains to Ohmstede's forthcoming dividend recapitalization and upsizing of its first lien term loan by $65 million to $170 million and its second lien term loan by $20 million to $70 million. Proceeds from the term loan upsizing will be used to pay an $86 million dividend to shareholders -- a distribution, which Moody's notes, comes less than one year after First Reserve acquired the company from Tanglewood Investments and which materially exceeds First Reserve's and management's original equity contribution. The B2 corporate family rating reflects Moody's concern that shareholders are extracting significant capital from the company relative to their initial investment and re-levering the balance sheet to do so. Given cyclicality in Ohmstede's end markets, Moody's believes a somewhat more conservative stance towards the capital structure might better position the company to weather less robust points in the market cycle. The company's pro forma leverage at the end of 2006 is within -- but on the high end -- of the range for typical B2-rated companies. While the shareholder distribution could signal the beginning of future capital withdrawals from the company that would limit upward rating momentum, Moody's expects the company to generate mid to high single digit revenue growth, solid interest coverage and near-term cash flows, which thereby support the B2 rating. The B2 rating also reflects the working capital usage required to finance Ohmstede's organic growth, its impact on operating cash flow, and the company's small scale and limited end-market and customer diversification. Additionally, the ratings reflect potential volatility in the Ohmstede's EBITDA and cash flow given that demand for Ohmstede's products and services is largely tied to the capacity utilization rates of Gulf Coast oil refineries, which are unpredictable. Ohmstede's better than expected performance relative to when Moody's first rated the company in July 2006, as well as Ohmstede's competitive advantage as a one-stop provider of products and services support the B2 rating. Additionally, Ohmstede's capital investments, which have improved productivity and turnaround times, operating initiatives that have reinforced its competitive position, and the significant percentage of revenues generated from recurring maintenance and repair work in the more durable refinery turnaround segment help maintain the B2 rating. The stable outlook reflects Moody's expectation of supportive oil prices and continued high utilization of Gulf Coast refining capacity over the near term resulting in stable demand for Ohmstede's products and services, the visibility offered by the company's "shop" backlog, and Moody's expectation that aftermarket and service revenues targeting the more durable turnaround segment will continue to grow as a percentage of sales. Ohmstede, headquartered in Beaumont, Texas, is a leading North American provider of aftermarket shop repair, in-plant turnaround and specialty services, as well as manufacturing of replacement parts and new shell and tube heat exchangers. Total revenues for the twelve months ended Dec. 31, 2006 were approximately $220 million. FREEPORT-MCMORAN: Moody's Affirms Ba3 Corporate Family Rating ------------------------------------------------------------- Moody's Investors Service confirmed Freeport-McMoRan Copper & Gold Inc.'s Ba3 corporate family rating and reported a number of rating actions with respect to Freeport and Phelps Dodge Corporation. The ratings actions are based on the assumption that Freeport completes the acquisition of Phelps Dodge on substantially the terms agreed. The ratings reflect the overall probability of default of Freeport, to which Moody's assigns a PDR of Ba3, LGD4, 50%. The outlook for both Freeport and Phelps Dodge is stable. In related rating actions, Moody's assigned a Baa3, LGD1, 1.0% senior secured rating to Freeport's $500 million secured revolver and Ba2, LGD2, 29% senior secured ratings to each of Freeport's $1 billion secured revolver, $2.5 billion secured Term Loan A, and $7.5 billion secured Term Loan B. Freeport's existing 6.875%, 10.125% and 7.20% senior unsecured notes, which are being granted a security and guarantee package equivalent to the $1 billion revolver and Term Loans A & B, were upgraded to Ba2, LGD2, 29% from B1. Moody's downgraded Phelps Dodge's Cyprus Amax notes, which mature in May 2007, as well as the ratings on Phelps Dodge's other existing senior unsecured notes to B1, LGD4, 63% from Baa2. Moody's also affirmed Freeport's SGL-1 Speculative Grade Liquidity rating. This concludes Moody's review of the ratings of Freeport and Phelps Dodge begun on Nov. 20, 2006 following the disclosure that Freeport had agreed to acquire Phelps Dodge for $26 billion. The Ba3 corporate family rating reflects Freeport's very high debt level of approximately $19 billion and what Moody's believes will be a protracted time frame for debt reduction in the face of softening metals prices and continued high cost challenges. The rating also considers the high concentration in copper and resultant variability in earnings and cash flow, significant capital expenditures, and a high level of reliance on the Grasberg mine in Indonesia. The rating also reflects the cultural challenges inherent in the acquisition of the larger Phelps Dodge by Freeport, and the execution and political risk of Phelps Dodge's development project in the Congo. The Ba3 rating favorably considers the company's leading positions in copper and molybdenum, a significant amount of gold production, the low cost, long-life reserves at PT-FI, and improved operating and political diversity. Ratings confirmed: * Freeport-McMoRan Copper & Gold Inc. -- Corporate Family Rating: Ba3 -- Probability of Default Rating: Ba3 Ratings assigned: * Freeport-McMoRan Copper & Gold Inc. -- $0.5 billion Senior Secured Revolving Credit facility, Baa3, LGD1, 1.0% -- $1.0 billion Senior Secured Revolving Credit Facility, Ba2, LGD2, 29% -- $2.5 billion Senior Secured Term Loan A, Ba2, LGD2, 29% -- $7.5 billion Senior Secured Term Loan B, Ba2, LGD2, 29% Ratings to be upgraded: * Freeport-McMoRan Copper & Gold Inc. -- $340 million 6.875% Senior Unsecured Notes due 2014, B1 to Ba2, LGD2, 29% -- $272 million 10.125% Senior Unsecured Notes due 2010, B1 to Ba2, LGD2, 29% -- $0.2 million 7.20% Senior Unsecured Notes due 2026, B1 to Ba2, LGD2, 29% Ratings to be downgraded: * Cyprus Amax Minerals Company -- $60.1 million 7.375% Senior Notes due 2007, Baa2 to B1, LGD4, 63% * Phelps Dodge Corporation -- $107.9 million 8.75% Senior Notes due 2011, Baa2 to B1, LGD4, 63% -- $115 million 7.125% Senior Notes due 2027, Baa2 to B1, LGD4, 63% -- $150 million 6.125% Senior Notes due 2034, Baa2 to B1, LGD4, 63% -- $193.8 million 9.50% Senior Notes due 2031, Baa2 to B1, LGD4, 63% Ratings to be withdrawn: * PD Capital Trust I -- Preferred Stock Shelf, currently (P)Baa3 * PD Capital Trust II -- Preferred Stock Shelf, currently (P)Baa3 * Phelps Dodge Corporation -- Multiple Seniority Shelf, currently (P)Ba1 Outlook Actions: * Freeport-McMoRan Copper & Gold Inc. -- Outlook, Changed To Stable from Rating Under Review * Cyprus Amax Minerals Company -- Outlook, Changed To Stable from Rating Under Review * Phelps Dodge Corporation -- Outlook, Changed To Stable from Rating Under Review Phelps Dodge Corporation is a Phoenix based producer of copper and molybdenum and had revenue in 2006 of $11.9 billion. Freeport-McMoRan Copper & Gold Inc. is a Louisiana based producer of copper and gold through its Grasberg mine in Indonesia. Freeport had revenue in 2006 of $5.8 billion. GAP INC: Will Close Forth & Towne Store Concept ----------------------------------------------- Gap Inc. disclosed that after a thorough assessment of its store concept, Forth & Towne, it has decided not move forward with a full rollout. As a result, the company will close its Forth & Towne store concept after an 18-month pilot that began August 2005. While the company was encouraged by the initial performance of Forth & Towne, a thorough analysis revealed the concept was not demonstrating enough potential to deliver an acceptable long-term return on investment. Instead, the company believes that future investments should be focused on turning around its Gap and Old Navy brands as well as supporting other growth initiatives that have greater potential of creating shareholder value. "Forth & Towne was a great test of a promising concept and an illustration of the innovative risks you need to take in our business," Bob Fisher, Gap Inc.'s chairman of the board and interim president and CEO, said. "We made the tough decision to close the brand and focus our efforts on stabilizing the existing businesses." "I want to thank the talented Forth & Towne team for their hard work in bringing this brand to life," Gary Muto, President of Forth & Towne, said. The company plans to close its 19 Forth & Towne stores located in 10 U.S. markets. Closures are expected to occur by the end of June 2007. The company anticipates the pre-tax expenses associated with the closure of Forth & Towne to be approximately $40 million, which will be recognized primarily over the first and second quarters of fiscal year 2007. The closure will impact about 550 employees. Gap Inc. is looking at ways to redeploy employees to positions in its Gap, Banana Republic and Old Navy brands, where feasible. Headquartered in San Francisco, California, Gap Inc. (NYSE: GPS) -- http://www.gapinc.com/-- is an international specialty retailer offering clothing, accessories and personal care products for men, women, children and babies under the Gap, Banana Republic, Old Navy, Forth & Towne and Piperlime brand names. Gap Inc. operates more than 3,100 stores in the United States, the United Kingdom, Canada, France, Ireland and Japan. In addition, Gap Inc. is expanding its international presence with franchise agreements for Gap and Banana Republic in Southeast Asia and the Middle East. * * * As reported in the Troubled Company Reporter on Feb. 7, 2007, Moody's Investors Service downgraded Gap Inc. senior unsecured notes to Ba1 and assigned a corporate family rating of Ba1 and speculative grade liquidity rating of SGL-1. The rating outlook is stable. GOLF 255: Ch. 11 Trustee Gets OK to Sell Golf Course for $5 Mil. ---------------------------------------------------------------- The chapter 11 trustee appointed in Golf 255 Inc.'s bankruptcy case obtained authority from the U.S. Bankruptcy Court for the Southern District of Illinois in East St. Louis to sell the Debtor's Arlington Golf Course for $5 million to The Collinsville Area Recreation District, sources say. The 220-acre 18-hole golf course is located in Granite City, Ill., near St. Louis. The district's Board of Commissioners approved an ordinance last week authorizing the issuance of bonds that will provide funding for the purchase of the golf course, Alene Hill of Granite City Press-Record reports. Belleville News-Democrat relates that the bond issue was approved last fall for immediate capital improvement needs but was withheld pending completion of the purchase agreement. Along with the $5 million purchase price for the course, the funding will also provide a cash flow for the first year of operation including any necessary golf equipment and work on the facility before opening, Alene Hill says, citing executive director Mark Badasch. The bonds would be paid by revenue from the golf course and that no tax increase was expected as a result of the purchase of the property, Mr. Badasch added. Golf 255 Inc.'s unsecured creditors -- Michael Kielty, M. Thompson Company P.C., Supreme Turf Product Inc., and TNT Golf Cart & Equipment Company -- sought chapter 11 protection in behalf of the company on October 12, 2006 (Bankr. S.D. Ill. Case No. 06-31728). Laura K. Grandy, Esq. at Mathis Marifian Richter and Grandy Ltd. represents the petitioning creditors. HILTON HOTELS: Moody's Lifts Corp. Family Rating to Ba1 from Ba2 ---------------------------------------------------------------- Moody's Investors Service upgraded Hilton Hotels Corporation's corporate family rating to Ba1 from Ba2 reflecting a reduction in leverage from a faster than expected pace of asset sales and strong earnings during 2006. Adjusted debt to EBITDAR has improved to around 5.0x from 6.0x in January 2006. Moody's capitalizes total rent at 8x and adds a debt equivalent of approximately 20% of Hilton's guaranty exposure to debt. The rating outlook is stable reflecting the solid outlook for demand and limited supply additions. Hilton's rating outlook could move to positive if the company continues to execute it asset sale program at reasonable multiples and uses the proceeds to repay debt resulting in adjusted debt to EBITDAR around 3.75x. The ratings could be considered for upgrade, if leverage is likely to remain at lower levels in the context of the industry operating environment, management's financial policy and willingness to manage the company's growth initiatives in the context of an investment grade rating. Absent event risk, Moody's does not anticipate downward rating pressure given the strong earnings outlook, the success of the asset disposition program to date and the strong appetite for lodging assets by third parties. Pursuant to Moody's Lodging Rating Methodology, Hilton maps to an overall rating in the Baa category reflecting a strong Baa rating with respect to diversification, and profitability, and mid-Ba rating with respect to leverage and coverage. The difference between its assigned and methodology implied rating is expected during peak industry cycles that currently exists, and Hilton's reliance on asset sales to improve credit metrics more in line with the Baa rating category. Moody's notes that once Hilton's reduces its total leverage ratio at or below 4.5x for two consecutive quarter, Hilton's bank and public debt will no longer be guaranteed or secured by stock pledges. The release of this collateral is expected to occur during 2007. Ratings upgraded: -- Corporate family rating to Ba1 from Ba2 -- Senior secured bank facility to Ba1, LGD4 from Ba2, LGD4 -- Senior bonds, debenture and convertible notes to Ba1, LGD4 from Ba2, LGD4 -- Multiple seniority shelf to (P)Ba1, LGD4, from (P)Ba2, LGD4, and to (P)Ba2, LGD6 from (P)B1, LGD6 Rating confirmed: -- Commercial paper at Not Prime. Hilton Hotels Corporation,based in Beverly Hills, California, is a leading hotel company that generated revenues, net of cost reimbursements, of $6.3 billion during its 2006 fiscal year. HOLLINGER INC: Settles Disputes With Former Directors ----------------------------------------------------- Hollinger Inc. has entered into an agreement to settle all of its disputes with five of its former directors, Gordon Walker, Paul Carroll, Robert Metcalfe, Allan Wakefield, and Donald Vale. Under the terms of the settlement, two trusts that were established by Hollinger during the tenure of the former directors holding an aggregate of $8 million in cash will be collapsed. An aggregate of $1.25 million will be paid to the former directors in full satisfaction of all of their claims against Hollinger, including claims exceeding $6 million for unpaid directors fees and departure bonuses. An additional $700,000 will be paid out of the trusts towards the legal fees and disbursements of the former directors. The balance of approximately $6 million will be returned to Hollinger. All legal proceedings between the parties will be dismissed and the parties will release each other from all claims. G. Wesley Voorheis, a director of Hollinger, commented: "Hollinger is satisfied to have these disputes resolved. Settling these disputes is consistent with our principal goal of spending less of our time and resources dealing with historical issues and focussing on finding ways to enhance the value of our investment in Sun-Times Media Group." About Hollinger Inc. Based in Toronto, Ontario, Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B) -- http://www.hollingerinc.com/-- owns approximately 70.1% voting and 19.7% equity interest in Sun-Times Media Group Inc. (formerly Hollinger International Inc.), a newspaper publisher with assets, which include the Chicago Sun-Times and a large number of community newspapers in the Chicago area. Hollinger also owns a portfolio of commercial real estate in Canada. Litigation Risks Hollinger Inc. faces various court cases and investigations: (1) a consolidated class action complaint filed in Chicago, Illinois; (2) a class action lawsuit that was filed in the Saskatchewan Court of Queen's Bench on Sept. 7, 2004; (3) a $425,000,000 fraud and damage suit filed in the State of Illinois by International; (4) a lawsuit seeking enforcement of a Nov. 15, 2003, restructuring proposal to uphold a Shareholders' Rights Plan, a declaration that corporate by-laws were invalid and to prevent the closing of a certain transaction; (5) a lawsuit filed by International seeking injunctive relief for the return of documents of which it claims ownership; (6) a $5,000,000 damage action commenced by a lessor of an aircraft lease, in which Hollinger was the guarantor; (7) an action commenced by the United States Securities and Exchange Commission on Nov. 15, 2004, seeking injunctive, monetary and other equitable relief; and (8) investigation by the enforcement division of the OSC. IGNIS PETROLEUM: Dec. 31 Balance Sheet Upside Down by $9.3 Mil. --------------------------------------------------------------- Ignis Petroleum Group, Inc. filed its quarterly financial statements for the three-month period ended Dec. 31, 2006, with the Securities and Exchange Commission. The company's balance sheet at Dec. 31, 2006 showed $3,140,186 in total assets, $12,447,165 in total liabilities, resulting in a $9,306,978 stockholders' deficit. At June 30, 2006, stockholders' deficit stood at $4,111,905. For the quarter ended Dec. 31, 2006, the company reported a $2,163,655 net loss on $234,909 of total operating revenues, compared to a net loss of $893,251 on total revenues of $223,933 for the same period in 2005. The company's December 31 balance sheet also showed strained liquidity with $1,245,428 in total current assets available to pay $1,736,759 in total current liabilities coming due within the next 12 months. The company intends to finance acquisitions of oil and gas properties and drilling programs with combination of issuances of equity, access to capital markets, and cash flow from operations. The company notes that equity financing may result in dilution of existing stockholders and my involve securities that have rights, preferences, or privileges that are senior to its common stock. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 20, 2006, De Meo, Young McGrath at Fort Lauderdale, Florida expressed substantial doubt about Ignis Petroleum Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended June 30, 2006, and inception period ended June 30, 2005. The auditing firm pointed to the company's dependence on outside financing, lack of sufficient working capital, and recurring losses from operations. The company observes that it is impossible at this point in time to state an amount of profitable operations and additional funding which it believes would remove the going concern opinion. A full-text copy of the company's financial statements for the quarterly period ended Dec. 31, 2006, is available for free at http://researcharchives.com/t/s?1a61 Based in Dallas, Texas, Ignis Petroleum Group, Inc. -- http://www.ignispetroleum.com/-- engages in the exploration, acquisition, and development of crude oil and natural gas properties in the United States. INSIGHT HEALTH: Moody's Junks Rating on $550 Million Notes ---------------------------------------------------------- Moody's Investors Service downgraded Insight Health Services Corp.'s credit ratings. The ratings are under review for possible further downgrade. Ratings downgraded: -- $300 million, senior secured floating rate notes due 2011, to Caa1, LGD2, 27% from B2, LGD2, 27% -- $250 million, 9.875% senior subordinated notes due 2011, to Ca, LGD5, 83% from Caa2, LGD5, 83% -- Corporate Family Rating, to Caa3 from Caa1 -- Probability of Default Rating, to Caa3 from Caa1 The downgrade of the Corporate Family Rating to Caa3 primarily reflects the company's recent solicitation for the exchange of all of its senior subordinated indebtedness for the company's common stock. While the exchange, if consummated, will save material interest costs, it is Moody's belief that this action will serve to only temporarily relieve the company's financial difficulties. The downgrade also reflects a continuation of poor operating results characterized by declining revenues and cash flow, increasing costs and an incremental goodwill write-down of $29 million taken during the quarter ended Dec. 31, 2006. It is Moody's continued expectation that the company will experience significant reductions in revenues and cash flows as a result of recent changes in Medicare reimbursements for its diagnostic imaging services. These concerns are reflected in the downgrade to a Caa3 Corporate Family Rating and are underscored by the fact that the ratings are under review for possible further downgrade. On the day that the exchange of the senior subordinated notes for equity is completed, the issue will be assigned a Limited Default rating. Subsequently, the ratings on the notes will be withdrawn by Moody's. Further downward rating pressure could develop if the company is unable to successfully restructure its debt or effect a sale of its operations. Moody's does not foresee an upgrade in the ratings in the near-term unless there is a permanent reduction of debt achieved through a material restructuring or debt forgiveness agreement. InSight, headquartered in Lake Forest, California, provides diagnostic imaging and information, treatment and related management services. It serves managed care entities, hospitals and other contractual customers in more than 30 states, including the following targeted regional markets: New England, California, Florida, Arizona, the Carolinas and the Mid-Atlantic states. As of Dec. 31, 2006 the company's network consisted of 109 fixed-site centers and 108 mobile facilities. For the twelve months ended Dec. 31, 2006 the company recognized revenues of approximately $298 million. INTERNATIONAL COAL: Posts $52,000 Net Loss in Fourth Quarter 2006 ----------------------------------------------------------------- International Coal Group, Inc. reported its results for the fourth quarter and year ended Dec. 31, 2006. The company reported a net loss of $52,000 for the fourth quarter of 2006, compared to net income of $3.3 million for the same period in 2005. Quarterly earnings were reduced by adjustments to income taxes of $1.4 million resulting from a change in estimated state income taxes and lower than expected depletion deductions. The company's revenue was $226.7 million for the three months ended Dec. 31, 2006, compared to $183 million for the fourth quarter of 2005. Fourth quarter results include a $7 million gain resulting from an agreement with a brokered coal supplier to terminate certain contractual coal delivery obligations effective Dec. 31, 2006. "The company was pleased to achieve its earnings guidance for both the quarter and the year despite multiple operating challenges," Ben Hatfield, President and CEO of ICG, said. "Production costs for the quarter were substantially improved by stronger operational performance, coupled with the idling of several high-cost production units. The company also overcame a significant shortfall in brokered coal income as the contracted suppliers encountered various production and shipping hurdles." Revenues for the year ended Dec. 31, 2006 totaled $891.6 million, compared to $650.5 million for the year ended Dec. 31, 2005. Net loss for 2006 was $9.3 million versus net income of $31.8 million for 2005. The 2006 full year results were adversely affected by the Sago mine accident and the Viper mine fire, which negatively impacted earnings by $15 million, and by the unplanned idling of the Sycamore No. 2 mine due to geologic and unmapped gas well issues. At Dec. 31, 2006, the company's balance sheet showed $1.32 billion in total assets compared to $1.06 billion in 2005, total liabilities of $663.4 million compared to $389.3 million in 2005 and total stockholders' equity of $657.3 million compared to $665.9 million. About International Coal Headquartered in Scott Depot, West Virginia and founded in 2004, International Coal Group, Inc. (NYSE: ICO) -- http://www.intlcoal.com/-- is a producer of coal in Northern and Central Appalachia and the Illinois Basin. The Company has 11 active mining complexes, of which 10 are located in Northern and Central Appalachia and one in Central Illinois. ICG's mining operations and reserves are strategically located to serve utility, metallurgical and industrial customers throughout the Eastern United States. * * * International Coal's 10-1/4% Senior Notes due 2014 carry Moody's Investors Service's Caa1 rating and Standard & Poor's CCC+ rating. JP MORGAN: Fitch Holds BB+ Rating on $12.2 Million Certificates --------------------------------------------------------------- Fitch Ratings affirms J.P. Morgan Commercial Mortgage Finance Corp.'s mortgage pass-through certificates, series 1997-C4, as: -- Interest-only class X at 'AAA' -- $12.2 million class G at 'BB+' Fitch does not rate the $9.5 million class NR certificates. Classes A-1, A-2, A-3, B, C, D, E and F have been paid in full. As of the January 2007 distribution date, the pool's aggregate balance has been reduced by 94.7% to $21.7 million from $407 million at issuance. Twelve loans remain in the pool. Two loans (11%) are currently in special servicing. The larger loan in special servicing (6.6%) is secured by a 49,220 square foot shopping center in Freeport, Illinois. The loan was transferred to the special servicer after the borrower failed to pay the loan off at maturity. The special servicer is currently negotiating a workout with the borrower. Any losses will be absorbed by the class NR certificates. The second loan in special servicing (4.4%) is secured by a 99-unit multifamily property located in Huntsville, Texas, and is 90 days delinquent. KEPLER HOLDINGS: Moody's Rates $200 Million Senior Loan at Ba2 -------------------------------------------------------------- Moody's Investors Service has assigned a provisional Ba2 rating to the $200 million senior secured term loan facility of Bermuda-domiciled Kepler Holdings Limited. The outlook for the provisional rating is stable. The rating agency expects to remove the provisional status and assign a definitive rating at the same level upon review of final executed documentation, provided the documentation is consistent with the terms and conditions specified to date that underlie this provisional rating. The privately-placed senior secured term loan facility, which is being syndicated to financial institutions and other institutional lenders, is sponsored by Hannover Ruckversicherung AG and its affiliates, E+S Ruckversicherung AG and Hannover Re (Bermuda) Limited, for natural catastrophe risks. Investors will provide aggregate catastrophe excess of loss reinsurance protection -- on an indemnity basis -- to Hannover Re for the portion of losses in excess of a stipulated attachment point up to a stipulated exhaustion point. The annual attachment and exhaustion probabilities will be 120bps and 40bps, respectively. The gross dollar values corresponding to these points will be based on the average of the Kepler portfolio annual aggregate exceedance curves as of January 1 and July 1 of each year. The gross dollar values will be determined once in 2007 and will be reset in 2008 to keep the attachment and exhaustion probabilities constant. Incurred losses and incurred but not reported losses will be included only in the final commutation calculation which will occur no later than June 30, 2009. The rating for the term loan is supported by a probabilistic analysis -- using a custom financial model -- to determine both the probability of loss P(D) and expected loss E(L) to Kepler Holdings' lenders over the two risk periods. This approach involves these steps: * assessing the promise of interest and principal to investors; * examining potential loss scenarios and their associated probabilities; * calculating P(D) and E(L) relative to the promised interest and principal; * comparing P(D) and E(L) to those of a set of benchmark securities with the same average duration, in order to arrive at a rating. Moody's has made certain probabilistic assumptions in its financial model with regard to: * the risk of overstated reserves at the time of commutation, * the uncertainty underlying the annual exceedance curve, * Hannover's ability to pay quarterly reinsurance premiums (e.g., interest payments) and to make the collateral trust whole for any investment losses, and * the investment performance of the collateral assets. The rating also reflects qualitative considerations such as Hannover's option to buy reinsurance on its retained share, the risk that reinsurers, including Hannover Re, may relax contract terms and conditions as the market becomes more competitive, and the fact that segregated cell technology has never been tested in bankruptcy. Moody's analysis is sensitive to assumptions about the overall annual aggregate exceedance probability curve. As such, Moody's has increased AEP modeled losses by various percentages. While the Kepler portfolio is designed to be highly modellable using industry vendor models, Hannover mainly uses aggregate-level models, instead of detailed-level models, which means that it relies largely on industry average assumptions -- instead of property specific information -- to assemble its AEP curves. Vendor models also do not capture certain contract elements such as loss adjustment expenses and extra-contractual obligations, which are covered under this excess of loss agreement. Further, the Kepler portfolio has significant exposure to regions outside the U.S., particularly to European windstorms, where data quality tends to be less detailed. That said, Hannover does perform a number of data quality checks before starting the vendor models, especially for US business where about 30% of the underlying treaties are modeled using detailed-level models. The company uses a data quality tool to analyze detailed loss data supplied by clients and, in general, prefers not to rely solely on client data. Moody's also acknowledges some of the conservatism that Hannover embeds into its practices such as aggregating exposures on a peril/territory level first before deriving the overall AEP curve. This introduces conservatism into the process by not allowing for the potential erosion of aggregate limits or limited reinstatements across different peril/territory classes. Further, Hannover assumes full correlation between exposures modeled using different approaches or vendor models. Moody's also views favorably that an assessment of Hannover's aggregation management and catastrophe modeling practices was done by an independent third party. The rating will be monitored quarterly to reflect the build-up of losses that have occurred up to that time. If a meaningful catastrophe event occurs, Moody's will reconstitute the overall AEP curve using the curves for individual perils and territories that are relevant for the remainder of the year. The financial model will be updated to reflect this new curve along with an estimated build-up of losses and any anticipated changes to Hannover's credit profile. The probability of default and expected loss to lenders will be updated, and Moody's will take rating actions, if any, accordingly. The Kepler portfolio represents roughly 80% (by limits) of Hannover Re's entire property catastrophe reinsurance book. European windstorm and U.S. hurricane perils are the biggest contributors to modeled losses, particularly in the tails. Roughly three-quarters of the underlying business is transacted at Jan. 1, such that Moody's expects only modest deviation from the projected portfolio for 2007. These provisional rating has been assigned with a stable outlook: * Kepler Holdings Limited -- $200 million senior secured term loan facility due June 2009 at (P)Ba2. Kepler Holdings Limited is a newly formed Bermuda exempted company, wholly owned by a charitable purpose trust. Kepler Holdings will enter into the $200 million senior secured credit facility, the proceeds of which will be deposited into a segregated account, Kepler Re. Kepler Re is a newly formed segregated account of Kaith Re Ltd., an existing licensed Class 3 Bermuda reinsurer and Bermuda segregated accounts company. Kaith Re, on behalf of Kepler Re, will enter into an aggregate indemnity catastrophe excess of loss reinsurance agreement with Hannover Re. KINDER MORGAN: High Leverage Prompts DBRS to Downgrade Ratings -------------------------------------------------------------- Dominion Bond Rating downgraded the rating of Kinder Morgan, Inc.'s Medium-Term Notes & Unsecured Debentures to BB from BBB and placed it Under Review with Developing Implications. DBRS has also discontinued the rating on KMI's Commercial Paper, which has no amount currently outstanding. The rating downgrade principally reflects KMI's potentially highly levered position after the proposed management buyout detailed below. The closing is now expected in the first half of 2007, subject to approvals by the California regulators. The Under Review with Developing Implications status reflects the various proposed asset sales during 2007 and 2008, which would help to reduce KMI's debt load and could improve its financial profile. The more significant among these is the announcement today of the proposed sale of all of the outstanding shares of Terasen Inc., a 100%-owned subsidiary of KMI, for CDN$3.7 billion, including assumed debt of approximately CDN$2.3 billion. The proposed sale includes only Terasen's natural gas distribution businesses: Terasen Gas Inc., Terasen Gas Inc. and Terasen Gas Inc. The sale does not include the petroleum transportation assets of Kinder Morgan Canada, a wholly owned subsidiary of Terasen, which consist primarily of refined and crude oil pipelines. These businesses will be retained by KMI. The proposed sale proceeds are expected to be used for debt reduction for KMI, which is considered positive. KMI was originally placed Under Review with Negative Implications on May 30, 2006, following the announcement of the proposed MBO led by Richard Kinder, the Chairman of KMI, and others, to acquire all of the outstanding shares of KMI for approximately $22 billion. The rating downgrade reflects KMI's potentially highly leveraged position with total debt-to-capital estimated at approximately 65% and thin cash flow/debt coverage at 4.7% on MBO closing. These credit metrics are expected to somewhat improve upon closing of the Terasen sale. Further, execution risk exists regarding KMI's future efforts to restore its financial profile through asset sales. Tax, legal and regulatory issues could arise related to the proposed sales, including that of Terasen Pipelines Inc., an indirectly wholly owned subsidiary, to Kinder Morgan Energy Partners, a 13% affiliate. DBRS will continue to monitor developments, particularly with respect to KMI's capital structure and capital programs, which could have rating implications. The current rating of BB, Under Review - Developing also takes into consideration the following positive aspects: 1. KMI benefits from mostly regulated and mainly fee-based business, providing certain stability of earnings and cash flow. Further, equity earnings from KMP are expected to continue to be substantial, accounting for about 47% of KMI's EBITDA in 2006 on a pro forma basis, and to increase over time. KMP has continued to record strong performance with substantial growth prospects expected upon commencement of its development projects in stages, such as Rocky Express and Louisiana pipelines scheduled by 2007 to 2009. 2. The proceeds from the proposed sale of Terasen and TM, and potentially other assets, are expected to be used to pay down KMI's debt. The foregoing together with increased distributions from KMP on start-ups of its growth projects during 2007 to 2009 should help to partly restore KMI's financial profile over the next several years. In addition, the proposed asset sales would substantially reduce KMI's obligation, through its wholly owned subsidiary, Terasen Inc., to fund the equity portion of considerable development projects for the next few years. 3. KMI's shareholders are committed to injecting new capital up to a certain amount to maintain certain cash flow coverage levels in the medium term, should the de-leveraging plans be delayed. LEGACY ESTATE: Settles 2 Disputes, Inches Way to Plan Confirmation ------------------------------------------------------------------ To facilitate confirmation of its Chapter 11 Plan of Liquidation filed on Oct. 13, 2006, The Legacy Estate Group LLC entered into separate settlement agreements with its parent, Connaught Capital Partners LLC, and John M. Bryan and Red Barn Ranch LLC. The Creditors Committee is co-proponent to Legacy Estate's Plan. Connaught Capital, together with Legacy Estate, sought chapter 11 protection in November 2005. Andrea Wirum is the chapter 11 trustee appointed in Connaught Capital's case. Red Barn Settlement Agreement On Aug. 22, 2006, Legacy Estate obtained authority from the U.S. Bankruptcy Court for Northern District of California to sell substantially all of its assets to Kendall-Jackson Wine Estates Ltd. The sale was closed on Sept. 13, 2006. Subsequently, John M. Bryan and Red Barn jointly filed Claim No. 122 in Legacy's bankruptcy case, in an amount not exceeding $20 million, for damages allegedly caused by Legacy's rejection of an agreement dated Aug. 31, 2001, for the purchase and sale of grapes. Mr. Bryan and Red Barn also opposed the confirmation of the Plan asserting that their claims are secured by statutory and consensual liens. On Nov. 17, 2006, the Committee, on behalf of Legacy, commenced an adversary proceeding commonly known as Official Committee of Unsecured Creditors of The Legacy Estate Group LLC v. John M. Bryan, et al., AP No. 06-01773, with respect to transactions and events involving the Debtors' current and former "insiders" and "affiliates." The Committee contended that prior to the Debtors' bankruptcy filing, the defendants in the Bryan Action arranged or received fraudulent conveyances and improper distributions amounting, in the aggregate, to over $13 million, to the detriment of Legacy, its creditors, and its shareholders. The Committee also objected to Red Barn's claim arguing that the claim is only entitled to a $258,000 payment, with respect to the 2006 grape harvest and all future crops to be delivered under Red Barn's agreement with Legacy. To resolve the dispute, the parties entered into a settlement agreement, which was approved by the Court in a hearing held Feb. 23, 2007. Under the compromise, Legacy will pay to Red Barn the sum of $750,000 in full and final settlement and compromise of any and all claims. Connaught Capital Settlement Agreement Prior to the commencement of the Debtors' respective bankruptcy cases, Connaught and other insiders managed and controlled the finances, assets and operations of Legacy. Subsequently, in Legacy's chapter 11 case, Connaught's Chapter 11 Trustee filed a proof of claim asserting claims relating to management of the Debtors. The Trustee also opposed confirmation of the Plan. The Committee objected to the Trustee's claim contending that the insiders, including Connaught, breached their respective fiduciary duties to Legacy, causing damage to Legacy in an amount that may exceed $30 million. The Trustee asserted that at least a portion of the $30 million mismanagement damages were not the responsibility of Connaught and involved conduct harmful to Connaught's estate and note holders, as well as Legacy's estate, and thus should properly be asserted or prosecuted by the Connaught estate. To resolve the dispute, Legacy through the Committee and Connaught through its Chapter 11 Trustee, agreed among others, that: 1) they will jointly control and prosecute any and all claims that may be asserted by either or both of the Debtors' estates against any insider, including, without limitation, all transfer claims and all mismanagement claims; 2) all proceeds arising from judgments or settlements obtained will be apportioned between the Debtors' estates, with 50% allocated to Legacy's estate and 50% to Connaught's estate; 3) Legacy will hold an $8,500,000 allowed general unsecured claim against Connaught's estate; and 4) the Trustee's objection to the Plan will be deemed withdrawn with prejudice. The U.S. Bankruptcy Court for Northern District of California has continued the hearing on Legacy's settlement agreement with Connaught to March 14, 2007, at 10:00 a.m. Liquidation Plan As reported in the Troubled Company Reporter on Nov. 23, 2006, the Plan provides for the distribution of Legacy's cash on hand, including the net proceeds from the sale of its assets, in accordance of the priorities established by the Bankruptcy Code. Any excess of the proceeds will be distributed to equity security holders. Laminar Subordinated Claim Laminar Direct Capital L.P. made loans to the Debtor to finance its acquisition of two wineries, Byron Vineyard & Winery in Santa Maria, California and Arrowood Vineyards & Winery in Glen Ellen, California from Constellation Brands, Inc. Liens and security interests in substantially all of the Debtor's assets secured the loans. As a result of the debt incurred to finance the acquisitions, the Debtor became over-leveraged, was unable to service that debt and eventually defaulted in its obligations to Laminar. Laminar was entitled to enforce its legal rights and remedies against the Debtor, including foreclosure of its liens and security interests. The Court on Aug. 16, 2006, approved a stipulation among the Debtor, Laminar, the Committee and Connaught fixing the amount of Laminar's claims. Laminar received $87.2 million from the sale proceeds. Its remaining subordinated claim amounted to $1.3 million. Treatment of Claims Holders of tax claims will receive a cash payment of the allowed amount of those claim. In addition, if all allowed unsecured claims are paid in full, then each allowed tax claim holder would receive a pro rate basis of interest on that claim. Red Barn's Claims will be paid in full, including interest and attorneys' fees, if any. If a Red Barn Claim is known to be an allowed administrative claim or an allowed unsecured claim, that Red Barn Claim will receive the same treatment provided to other creditors holding similar allowed claims. Each holder of an allowed Class 2 Secured Claim will receive, at the Debtor's option: (a) 100% of the net proceeds from the sale of its collateral; (b) the return of the collateral; or (c) other less favorable treatment as agreed by the Debtor and secured claim holder. Priority claims will be paid in full. In addition, if all allowed unsecured claims are paid in full, then each holder of an allowed priority claim will receive interest on that claim at the legal rate of 4.35% from the bankruptcy filing through the date of payment in full to the extent of remaining available cash, on a pro rata basis with holders of allowed tax and unsecured claims and the Laminar Subordinated Claim. Holders of Allowed Class 5 Timely Filed Unsecured Claim will receive their pro rata share of available cash under one or more distributions, until paid in full. In addition, if all allowed class 7 Late Filed Claims are in full payment, then each holder of Allowed Class 5 claim, will receive interest on that claim at the legal rate of 4.35% from the bankruptcy filing through the date of payment in full to the extent of remaining available cash, on a pro rata basis with holders of allowed tax, priority and late filed unsecured claims and the Laminar Subordinated Claim. Pursuant to the Laminar Stipulation, holders of the Laminar Subordinated Claim will receive half of each additional dollar in excess of $1.15 million available for distribution to allowed Class 5 claims, until paid in full of the Laminar Subordinated Claim. In addition, if all allowed class 7 Late Filed Claims are in full payment, then each holder of Laminated Subordinated Claim, will receive interest on that claim at the legal rate of 4.35% from the bankruptcy filing through the date of payment in full to the extent of remaining available cash, on a pro rata basis with holders of allowed tax, priority and unsecured claims. All Allowed Class 7 Late Filed Claim holders will receive its pro rata share of all available cash remaining after payment in full of Class 5 and 6. In addition, if all allowed class 7 Late Filed Claims are in full payment, then each holder of Allowed Class 7 claim, will receive interest on that claim at the legal rate of 4.35% from the bankruptcy filing through the date of payment in full to the extent of remaining available cash, on a pro rata basis with holders of allowed tax, priority and Timely Filed Unsecured Claims and the Laminar Subordinated Claim. Equity Interest holders, who will lose all rights to control the management and governance of the Debtor, will receive its pro rata share of all available cash remaining after payment in full of all allowed claims. A full-text copy of the Debtor's Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=061121204459 About The Legacy Estate Group Headquartered in Saint Helena, California, The Legacy Estate Group LLC -- http://www.freemarkabbey.com/-- owns Freemark Abbey Winery, which produces a range of red, white, and dessert wines. Legacy Estate and its parent, Connaught Capital Partners LLC, filed for chapter 11 protection on November 18, 2005 (Bankr. N.D. Calif. Case No. 05-14659). John Walshe Murray, Esq., Lovee Sarenas, Esq., and Robert A. Franklin, Esq., at the Law Offices of Murray and Murray represent the Debtors in their restructuring efforts. Lawyers at Winston & Strawn LLP represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts between $50 million and $100 million. LEVEL 3: Gets Requisite Consents for Unit's 12.25% Senior Notes --------------------------------------------------------------- As part of Level 3 Communications, Inc.'s consent solicitation relating to Level 3 Financing, Inc.'s 12.25% Senior Notes due 2013, as of 5:00 p.m., New York City time, on Feb. 23, 2007, Level 3 Communications had received valid consents from the holders of substantially all of the outstanding 12.25% Notes to amend the indenture relating to the 12.25% Notes to provide that, on a one- time basis at any time between the date the indenture is amended and Sept. 30, 2007, Level 3 Communications may incur debt that is permitted based upon a multiple of cash flow available for fixed charges on a "pro forma" basis giving effect to any acquisition, merger or consolidation that was completed prior to Feb. 1, 2007. The Amendment provides for the calculation of the ability to incur this type of debt in a manner that is consistent with such calculation under the indentures of Level 3 Financing governing its 9.25% Senior Notes due 2013, Floating Rate Senior Notes due 2015 and 8.75% Senior Notes due 2017 other than with respect to the one-time nature of the adjustment and the limitation with respect to transactions that had been completed prior to Feb. 1, 2007. As of the Requisite Consent Time, holders of 12.25% Notes representing approximately 99.8% of the aggregate principal amount of the outstanding 12.25% Notes had consented to the Amendment. In connection with the consent solicitation and the Amendment, on Feb. 23, 2007, Level 3 Financing, Inc. entered into a Supplemental Indenture supplementing the Indenture, dated as of March 14, 2006, among Level 3, as Guarantor, Level 3 Financing, Inc., as Issuer, and The Bank of New York, as Trustee, relating to the 12.25% Notes. The Supplemental Indenture was entered into among Level 3, Level 3 Financing, Inc., Level 3 Communications, LLC, Broadwing Financial Services, Inc. and The Bank of New York, as Trustee. About Level 3 Headquartered in Broomfield, Colorado, Level 3 Communications Inc. (Nasdaq: LVLT) -- http://www.level3.com/-- is an international communications company. The company provides a comprehensive suite of services over its broadband fiber optic network including Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice services and voice over IP services. * * * As reported in the Troubled Company Reporter on Feb. 23, 2007, Standard & Poor's Rating Services raised its ratings on Broomfield, Colorado-based Level 3 Communications Inc. and wholly owned subsidiary, Level 3 Financing Inc., including the corporate credit rating, which was raised to 'B-' from 'CCC+'. The outlook is stable. As reported in the Troubled Company Reporter on Feb. 14, 2007, Moody's Investors Service assigned a B1 rating to Level 3 Financing Inc.'s new $1 billion term loan and a B3 rating to the $1 billion fixed and floating rate notes at Financing. Moody's affirmed Level 3 Communications, Inc.'s corporate family rating at Caa1 with a stable outlook, as the pro-forma leverage is expected to remain in the 8.5x range, as Moody's expects the company to use the additional liquidity to refinance higher coupon debt. LIBERTY TAX: Dec. 31 Balance Sheet Upside Down by $49.8 Million --------------------------------------------------------------- Liberty Tax Credit Plus II L.P. filed its quarterly financial statements for the three-month period ended Dec. 31, 2006, with the Securities and Exchange Commission. At Dec. 31, 2006, the company's balance sheet showed $49,804,757 in total assets, $61,701,595 in total liabilities, resulting in a $12,598,384 stockholders' deficit. Stockholders' deficit was $6,869,110 at March 31, 2006. The company's December 31 balance sheet also showed strained liquidity with $46,220,824 in total current assets available to pay $61,451,595 in total current liabilities coming due within the next 12 months. The company reported a $4,978,178 net loss on $2,281,967 of total revenues for the quarterly period ended Dec. 31, 2006, compared to a net income of $579,543 on 2,137,108 of total revenues for the same prior year period. The results of operations for the three-month period ended Dec. 31, 2006 consisted primarily of the results of the partnership's investment in the consolidated Local Partnerships, excluding the results of its discontinued operations. Rental income increased approximately 5% for the three-months ended Dec. 31, 2006 as compared to the corresponding periods in 2005, primarily due to increases in occupancy at three Local Partnerships. Other income increased approximately $32,000 for the three-months ended Dec. 31, 2006 as compared to the corresponding periods in 2005, primarily due to an increase in interest income earned on a promissory note from the sale of a Local Partnership at the Partnership level, a real estate tax rebate received at one Local Partnership, an increase in interest income due to higher reserve balances at a second Local Partnership, and an increase in tenant charges including charges for property damage and late fees at two additional Local Partnerships. A full-text copy of the company's financial statements for the quarterly period ended Dec. 31, 2006, is available for free at http://researcharchives.com/t/s?1a5c About Liberty Tax Liberty Tax Credit Plus II L.P. invests in other limited partnerships owning leveraged low-income multifamily residential complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, and to a lesser extent in Local Partnerships owning properties that are eligible for the historic rehabilitation tax credit. LIONEL LLC: Court Gives Open-Ended Exclusive Periods Extension -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended Lionel LLC and its debtor-affiliate Liontech Company's exclusive periods to file a chapter 11 reorganization plan and solicit acceptances of that plan. The Debtors has until 75 days after: i) the date on which the Sixth Circuit enters and order on the Debtors' docket denying Mike's Train House Inc.'s rehearing petition; or ii) if the Sixth Circuit grants Mike's Train House Inc.'s rehearing petition, the date on which the Sixth Circuit issues a final decision in respect of the appeal. At present, Mike's Train House's rehearing petition remains pending before the Sixth Circuit. Mike's Train House is a member of the Official Committee of Unsecured Creditors. The Court also extended the Debtors' solicitation period to 60 days after the exclusivity deadline. Mike's Train Litigation As reported in the Trouble Company Reporter on Oct. 9, 2007, in 2000, Mike's Train sued the Debtors in the Michigan District Court accusing the Debtors of, among other things, violation of the Michigan Uniform Trade Secrets Act, Mich. Comp. Laws Section 445.1901 et seq. Lionel disputed all of Mike's Train's allegations. On June 9, 2004, the jury in the Mike's Train Litigation returned a verdict in favor of Mike's Train and against the Debtors in the amount of $38,608,305, and on Nov. 3, 2004, the Michigan District Court entered judgment in favor of Mike's Train in the amount of the jury verdict. The Michigan District Court also granted Mike's Train certain injunctive relief against the Debtors. As they did not have sufficient liquidity to post a bond to stay enforcement of the judgment pending the Appeal, the Debtors filed a chapter 11 petition to provide protection against precipitous efforts to collect on the judgment, and to provide suppliers and customers with a degree of certainty while they pursue their appeal. Headquartered in Chesterfield, Michigan, Lionel LLC -- http://www.lionel.com/-- markets model train products, including steam and die engines, rolling stock, operating and non-operating accessories, track, transformers and electronic control devices. The Company filed for chapter 11 protection on Nov. 15, 2004 (Bankr. S.D.N.Y. Case No. 04-17324). Abbey Walsh, Esq., at O'Melveny & Myers LLP and Adam Craig Harris, Esq., at Schulte Roth & Zabel LLP represent the Debtor in its restructuring efforts. David M. LeMay, Esq., and Francisco Vazquez, Esq., at Chadbourne & Parke, LLP, represented the Official Committee of Unsecured Creditors. When the Company filed for protection from its creditors, it estimated assets between $10 million and $50 million and estimated debts more than $50 million. MAGNOLIA VILLAGE: Wants to Assign Real Properties to Basin Street ----------------------------------------------------------------- Magnolia Village LLC and its debtor-affiliates ask the United State Bankruptcy Court for the District of Nevada for permission to assume and assign non-residential real property leases to Basin Street Properties. The Debtors will assume and assign: a. Magnolia Double R.I., LLC -- three commercial buildings and two vacant land parcels located at Sandhill Drive in Reno, Nevada; b. Building C -- leased by Jeff Codega planning & Design Inc; and c. Magnolia South Meadows, IV, LLC -- an 18,784 sq. ft. office at 595 Double Eagle Court in Reno, Nevada. As reported in the Troubled Company Reporter on Feb. 7, 2007, The Debtors wants to sell the property at $24,000,000 subject to better and higher offers. The debtor-affiliates are offering $22,362,500 for the real property holdings. On Feb. 15, 2007, the Court denied the Debtors' motion to sell its properties to Basin Street for $22,012,500. The Court will convene a hearing at 2:00 p.m., on March 12, 2007, to consider the Debtors' request. About Magnolia Village Based in Reno, Nevada, Magnolia Village LLC, is a luxurious resort-style Class A Office Park. The company and its affiliates filed for chapter 11 protection on Sept. 8, 2006 (Bankr. D. Nev. Case No. 06-51649). Stephen R. Harris, Esq. at Belding, Harris & Petroni Ltd. represents the Debtors. No Official Committee of Unsecured Creditors has been appointed in this case. When Magnolia Village filed for protection from its creditors, it listed estimated assets between $10 million and $50 million and debts between $100,000 to $500,000. MAGNOLIA VILLAGE: Wants to Sell Properties to Flocchini for $23MM ----------------------------------------------------------------- Magnolia Village LLC and its debtor-affiliates ask the United States Bankruptcy Court for the District of Nevada for authority to sell certain real properties to Flocchini Associates LLC. Specifically, the Debtors want to sell: Property Amount -------- ------ Building #A office building $7,300,000 Building #C office building $4,950,000 Three vacant parcels $2,750,000 South Meadows III office building $4,000,000 South Meadows IV office building $4,000,000 ----------- $23,000,000 The Debtors tell the Court that Flocchinni Associates will also assume a $5,223,183 loan balance and two secured loans. The Court will convene a hearing at 9:30 p.m., on March 2, 2007, to consider the Debtors' request. About Magnolia Village Based in Reno, Nevada, Magnolia Village LLC, is a luxurious resort-style Class A Office Park. The company and its affiliates filed for chapter 11 protection on Sept. 8, 2006 (Bankr. D. Nev. Case No. 06-51649). Stephen R. Harris, Esq. at Belding, Harris & Petroni Ltd. represents the Debtors. No Official Committee of Unsecured Creditors has been appointed in this case. When Magnolia Village filed for protection from its creditors, it listed estimated assets between $10 million and $50 million and debts between $100,000 to $500,000. MAKI MAKI: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Maki Maki at Farmer's Market LLC 3582 Wilshire Boulevard #1050 Los Angeles, CA 90010 Bankruptcy Case No.: 07-11501 Type of Business: The Debtor is a restaurant serving Japanese dishes. Chapter 11 Petition Date: February 26, 2007 Court: Central District Of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Amanda J. Fornwatt, Esq. Horwitz Cron & Jasper Inc. 4 Venture, Suite 390 Irvine, CA 92618 Tel: (949) 450-4942 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 ------ --------------- ------------ A.F. Gilmore Co. Lease Agreement $600,000 6333 West 3rd Street Los Angeles, CA 90036 Han, Minsoo Private Loan $250,000 [address not provided] Ra, Weonju Private Loan $200,000 9 Seven Kings Place Aliso Vicjo, CA 92656 Yu, Bobby Private Loan $200,000 3055 Wilshire Blvd., Suite 700 Los Angeles, CA 90010 Yang, Karen Private Loan $125,000 Han, Minsoo (Father)(sic) Private Loan $50,000 J.M.M. Stainless Construction Debt $46,329 R.C. Plumbing Construction Debt $42,611 MC Construction Construction Debt $42,611 Alpha Systems Construction Debt $40,000 Friend of Chung Yujin (sic) Private Loan $20,000 Hanlim Construction Construction Debt $20,000 John's Air Construction Debt $10,000 Brother Glass Construction Debt $8,500 Shade Sail Construction Debt $7,800 Dabbco Service Construction Debt $5,250 AJ Equipment Construction Debt $5,000 SBR Roofing Construction Debt $5,000 Spicy Brown Construction Debt $2,500 P&P Upholstery Construction Debt $2,000 MASTERCRAFT INTERIORS: Court Okays Amended Disclosure Statement --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Maryland has approved the Disclosure Statement explaining the Joint Plan of Liquidation filed by Mastercraft Interiors Ltd., Kimels of Rockville Inc., and the Official Committee of Unsecured Creditors. The Court determined that the Disclosure Statement contained adequate information for creditors to make an informed decision about the Plan. The Debtors can now solicit acceptances of that Plan. The Court fixed March 14, 2007, as the last day for filing written acceptances or rejections of the Plan. The Court will convene a hearing on March 28, 2007, at 10:30 a.m. to consider confirmation of the plan. Confirmation Objections must be filed by March 14. Plan Overview & Treatment of Claims As reported in the Troubled Company Reporter on Dec. 28, 2006, the Joint Plan contemplates the substantive consolidation of the Debtors' assets wherein it will be pooled and used to pay pro rata all of their creditors. Under the Joint Plan, Administrative Claims and Priority Tax Claims against the Debtors will be paid in full. Holders priority non-tax deposit claims, totaling approximately $1,000,000, will be paid in full within 60 days after the effective date provided that the Debtors or Plan Administrator will not object to the claim. The Debtors disclose that Bank of America, a prepetition lender holding a secured claim, has received substantially all of the proceeds from the liquidation of its collateral. BofA has agreed to subordinate its deficiency claim. BofA retains certain residual claim recovery rights under the final DIP financing orders. To the extent not already repaid, all amounts owed to the BofA, as DIP Lender, will be paid in full. Holders other secured claims will have the collateral securing their claims returned. Deficiencies, if any, will be treated as an unsecured claim. General Unsecured Claim Holders will receive their pro rata share of any cash remaining after all other claims are paid. The Debtors estimate that unsecured creditors will receive less than 10% of their claims. Equity interests will be cancelled and holders of these interests will get nothing under the Joint Plan. The Plan Administrator and the Debtor's Designee on behalf of the post-confirmation estate will each reserve $40,000 to be used to fund the prosecution of litigation, including but not limited to, the filing of avoidance actions to recover funds that constitute fraudulent conveyances or preferences under the Bankruptcy Code, as well as other actions that may exist, including but not limited to actions against the Debtor's Insiders, which may be commenced by the Plan Administrator and the Debtor's Designee. The Debtors and the Committee filed an amended Plan and Disclosure Statement on Feb. 6, 2007. The documents do not contain any material changes from the original plan and disclosure statement filed last year. About Mastercraft Interiors Headquartered in Beltsville, Maryland, Mastercraft Interiors Ltd. -- http://www.mastercraftinteriors.com/-- manufactures furniture and other home furnishings. The Company and its subsidiary, Kimels of Rockville, Inc., filed for bankruptcy on May 15, 2006, (Bankr. D. Md. Case No. 06-12769). Morton A. Faller, Esq., Michael J. Lichtenstein, Esq., and Stephen A. Metz, Esq., at Shulman, Rogers, Gandal, Pordy & Ecker, P.A., represent the Debtors in their liquidation efforts. Bradford F. Englander, Esq., at Linowes and Blocher LLP, represents the Official Committee Unsecured Creditors. When Mastercraft Interiors filed for bankruptcy, it reported assets amounting to $10,600,288 and debts amounting to $25,485,847. Kimels of Rockville reported assets totaling $704,227 and debts amounting to $10,341,704 when it filed for bankruptcy. Harold Hackerman was appointed as examiner in the chapter 11 cases of Mastercraft Interiors, Ltd., and Kimels of Rockville, Inc. MASTERCRAFT INTERIORS: U.S. Trustee Wants Ch. 11 Trustee Named -------------------------------------------------------------- W. Clarkson McDow, Jr., the United States Trustee for Region 4, asks the U.S. Bankruptcy Court for the District of Maryland to appoint a Chapter 11 Trustee in Mastercraft Interiors Ltd. and Kimels of Rockville Inc.'s bankruptcy cases. Mr. McDow points the Court to the report of Harold Hackerman, the examiner who was charged with investigating (i) issues related to an Order to Show Cause Why a Constructive Trust Should Not Be Imposed Upon the Assets of the Debtors for the Benefit of the Individuals Making Deposits for the Purchase of Merchandise, and allegations arising from fraud or dishonesty in connection with the issues relating to the Show Cause Order; and (ii) the Debtors' transactions with insiders and family members of insiders. As to the issues relating to the Show Cause Order, the Examiner found that the Debtors collected deposits totaling $370,000 from 606 customers for furniture from specific manufacturers after the Debtors were notified from those specific manufacturers that those specific manufacturers would no longer make shipments to the Debtors. As to the transactions with insiders, the Examiner found that within two weeks of the bankruptcy filing, Mastercraft paid its President, Douglas Gomez, a $35,000 bonus, and paid its Chief Financial Officer, Dean Nelson, a $20,000 bonus. The bonuses were taken as a loan reduction. In addition, the Examiner found that the Debtors paid Danny Gomez, the President's brother and a former stockholder, $153,214 during the year prior to the bankruptcy filing, even though Danny Gomez performed virtually no work for the Debtors. Representing the U.S. Trustee, Lynn A. Kohen, Esq., argues that a Chapter 11 Trustee should be appointed because the Debtors committed fraud, acted dishonestly, were incompetent or grossly mismanaged the Debtors' affairs by taking orders for furniture with monetary deposits from consumers knowing that those orders could not be filled. At the very least, the Debtors' actions amounted to intentional misrepresentation. The Debtors also diverted corporate funds to pay insiders unwarranted and unearned bonuses and other forms of compensation. According to Mr. McDow, the unsecured consumer creditors, which were the victims of the Debtors' fraud, dishonesty, incompetence or gross mismanagement, are not well represented in the Debtors' cases. The Official Committee of Unsecured Creditors, whose responsibility it is to represent all the unsecured creditors, is comprised entirely of trade creditors, which were not the intended prey of the Debtors' fraud. Mr. McDow asserts that a Chapter 11 Trustee represents the unsecured consumer creditors' best chance at a fair and equitable treatment under the proposed Plan of Liquidation. The Court will convene a hearing on March 28, 2007, at 10:30 a.m. to consider the U.S. Trustee's request. About Mastercraft Interiors Headquartered in Beltsville, Maryland, Mastercraft Interiors Ltd. -- http://www.mastercraftinteriors.com/-- manufactures furniture and other home furnishings. The Company and its subsidiary, Kimels of Rockville, Inc., filed for bankruptcy on May 15, 2006, (Bankr. D. Md. Case No. 06-12769). Morton A. Faller, Esq., Michael J. Lichtenstein, Esq., and Stephen A. Metz, Esq., at Shulman, Rogers, Gandal, Pordy & Ecker, P.A., represent the Debtors in their liquidation efforts. Bradford F. Englander, Esq., at Linowes and Blocher LLP, represents the Official Committee Unsecured Creditors. When Mastercraft Interiors filed for bankruptcy, it reported assets amounting to $10,600,288 and debts amounting to $25,485,847. Kimels of Rockville reported assets totaling $704,227 and debts amounting to $10,341,704 when it filed for bankruptcy. Harold Hackerman was appointed as examiner in the chapter 11 cases of Mastercraft Interiors, Ltd., and Kimels of Rockville, Inc. The Court approved the Disclosure Statement explaining the Chapter 11 Joint Plan of Liquidation filed by the Debtors and the Creditors Committee. MERITAGE HOMES: Issues $150 Mil. of 7.73% Sr. Subordinated Notes ---------------------------------------------------------------- Meritage Homes Corporation disclosed that the private placement of $150 million aggregate principal amount of 7.73% Senior Subordinated Notes due April 30, 2017 to qualified institutional buyers. The company used the proceeds of $147.2 million from the offering to pay down borrowings under its revolving credit facility. On Feb. 23, 2007 Meritage Homes completed an offering of $150 million aggregate principal amount of 7.731% Senior Subordinated Notes due 2017 that are guaranteed on a senior subordinated basis by all of the Company's subsidiaries. The Securities were offered to investors in a private placement in reliance on Rule 144A under the Securities Act of 1933, as amended. The Securities were issued pursuant to an indenture dated Feb. 23, 2007 among the company, the Guarantors and Wells Fargo Bank, National Association, as trustee. The Notes issued by the company are the general unsecured obligations of the company, are subordinated in right of payment to all of the company's existing and future senior indebtedness, rank pari passu in right of payment with all of the company's existing and future senior subordinated indebtedness, and are senior in right of payment to all of the company's existing and future subordinated obligations. The Notes bear interest at 7.731% per annum, payable quarterly on January 30, April 30, July 30 and October 30 of each year, commencing on April 30, 2007. The company may redeem the Notes, in whole or in part, at any time on or after March 1, 2012. The redemption price for the Notes will be: (i) 103.900% if redeemed during the 12-month period commencing on March 1 of 2012, (ii) 102.900% if redeemed during the 12-month period commencing on March 1 of 2013, (iii) 101.900% if redeemed during the 12-month period commencing on March 1 of 2014, (iv) 101.00% if redeemed during the 12-month period commencing on March 1 of 2015 and (v) 100% if redeemed on or after March 1, 2015, plus accrued and unpaid interest, if any to the redemption date. The company may also redeem all or part of the Notes at any time prior to March 1, 2012 at a redemption price equal to 100% of the aggregate principal amount of the Notes to be redeemed plus the Make Whole Amount and accrued and unpaid interest to the redemption date. Additionally, the company may redeem up to 35% of the principal amount of the Notes prior to March 1, 2010 with the net cash proceeds of certain sales of its capital stock at 107.731% of the Principal amount of the Notes, plus accrued and unpaid interest, if any to the date of redemption only if, after the redemption, at least 65% of the aggregate principal amount of the Notes originally issued remains outstanding and the notice of redemption is mailed within 90 days of such sale of capital stock. The terms of the Indenture, among other things, generally limit the ability of the company and certain of its subsidiaries to (i) incur additional indebtedness, (ii) pay dividends, redeem equity interests and make certain investments, (iii) create liens, (iv) sell or exchange assets and (v) effect mergers. A full-text copy of the Indenture is available for free at: http://ResearchArchives.com/t/s?1a62 About Meritage Homes Corp. Headquartered in Scottsdale, Arizona, Meritage Homes Corporation (NYSE: MTH) -- http://www.meritagehomes.com/-- is a leader in the consolidating homebuilding industry. Meritage operates in fast- growing states of the southern and western United States, including six of the top 10 single-family housing markets in the country, and has reported 18 consecutive years of record revenue and net earnings. * * * As reported in the Troubled Company Reporter on Feb. 13, 2007, Fitch affirms Meritage Homes Corporation's 'BB' Issuer Default Rating; 'BB' Senior unsecured; and 'BB' Unsecured bank credit facility. The rating applies to approximately $479 million in senior notes and the $850 million revolving credit facility. The Rating Outlook has been changed from Positive to Stable. MORTGAGE LENDERS: Accredited Wants to Foreclose Kansas Property --------------------------------------------------------------- Accredited Home Lenders, Inc., asks the U.S. Bankruptcy Court for the District of Delaware to terminate the automatic stay under Section 362 of the Bankruptcy Code with respect to mortgaged property located at 1920 East Mohawk Drive, in Olathe, Kansas. Specifically, Accredited seeks lift stay relief to: (1) foreclose on its Mortgage against the Property; (2) name Mortgage Lenders Network USA, Inc., as a defendant in its foreclosure action; and (3) take legal action for enforcement of its right to possession of the Premises. Susan and Robert Gillam executed an adjustable rate note for Accredited in the principal sum of $121,600 on August 24, 2004. The Note is secured by a first priority perfected lien against the Property and evidenced by a Mortgage executed on the same date and in the same amount, according to Adam R. Elgart, Esq., at Mattleman, Weinroth & Miller, P.C., in Newark, Delaware. The Gillams defaulted on the Mortgage and Accredited filed a complaint in foreclosure in the District Court of Johnson County, the state of Kansas, Civil Department. As of January 2007, Accredited was granted, with the consent and approval of the Debtor's attorneys, a judgment of foreclosure for $119,161, plus all accrued and default interest, and all applicable legal fees and expenses. Mr. Elgart informs the Court that, incidentally, the Debtor was named as a defendant as the second lien holder by virtue of the Note and Mortgage against the Mortgaged Premises executed in August 2004, for $30,400. The total amount due to Accredited as of February 14, 2007, is $125,954. An appraisal for the Mortgaged Property sets forth a fair market value at $157,000. Mr. Elgart says the request should be granted for several reasons, including: * insubstantial equity in the Mortgaged Premises exists; * the Premises are not necessary to Debtor's rehabilitation in the Chapter 11 case; and * Accredited's security interest is not adequately protected. About Mortgage Lenders Middletown, Conn.-based Mortgage Lenders Network USA Inc. -- http://www.mlnusa.com/-- is a privately held company offering a full range of Alt-A/Non-Conforming and Conforming loan products through its retail and wholesale channels. The company filed for chapter 11 protection on Feb. 5, 2007 (Bankr. D. Del. Case No. 07-10146). Pachulski Stang Ziehl Young Jones & Weintraub LLP represents the Debtor. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. The Debtor's exclusive period to file a chapter 11 plan expires on June 5, 2007. (Mortgage Lenders Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NASSAU CDO: Moody's Rates 18,000 Preference Shares at Ba1 --------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes and Preference Shares issued by Nassau CDO I, Ltd.: (1) Aaa to $600,000,000 Class A-1A First Priority Senior Secured Delayed Draw Floating Rate Notes Due 2051; (2) Aaa to $600,000,000 Class A-1B First Priority Senior Secured Floating Rate Notes Due 2051; (3) Aaa to $120,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2051; (4) Aaa to $111,000,000 Class A-3 Third Priority Senior Secured Floating Rate Notes Due 2051; (5) Aa2 to $36,000,000 Class B Fourth Priority Senior Secured Floating Rate Notes Due 2051; (6) A2 to $10,000,000 Class C Fifth Priority Mezzanine Secured Floating Rate Notes Due 2051; (7) Baa2 to $5,000,000 Class D Sixth Priority Mezzanine Secured Floating Rate Notes Due 2051 and (8) Ba1 to 18,000 Preference Shares Par Value $0.01 Per Share. 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 Preference Shares addresses only the ultimate receipt of the "Rated Balance". The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of RMBS Securities, CDO Obligations, CMBS Securities and Other ABS Securities due to defaults, the transaction's legal structure and the characteristics of the underlying assets. NATIONAL SECURITY: A.M. Best Says Financial Strength is Fair ------------------------------------------------------------ A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of "bbb" of National Security Fire and Casualty Company and the FSR of B+ (Good) and ICR of "bbb-" of its wholly-owned subsidiary, Omega One Insurance Company, Inc., both members of the National Security Group. Concurrently, A.M. Best has affirmed the FSR of B (Fair) and has assigned an ICR of "bb" to the life/health company, National Security Insurance Company. A.M. Best has also affirmed the ICR of "bb" of The National Security Group, Inc. [NASDAQ: NSEC]. The outlook for all ratings is stable. All companies are domiciled in Elba, Alabama. The ratings of National Security reflect its adequate risk- adjusted capitalization and well-established niche position as a provider of dwelling/fire coverage in the Southeast. However, somewhat offsetting these positive rating factors is the group's geographic and product concentration in the Gulf Coast states, which subjects National Security's earnings and surplus to weather-related catastrophes. The ratings of Omega One acknowledge its low underwriting leverage and favorable operating performance. Partially offsetting these positive rating factors is the company's geographic concentration that leaves it susceptible to severe weather-related losses, as well as competitive and regulatory pressures. The ratings of National Security Insurance Company recognize the recent decline in its capital and surplus, fluctuating operating results and limited geographic profile. Partially offsetting these positive attributes are the company's adequate level of risk-adjusted capitalization, recent-albeit modest-growth of new premium and improved level of persistency on its ordinary life line. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. NATIONSLINK FUNDING: Fitch Holds Rating on Class G Certs. at BB --------------------------------------------------------------- Fitch Ratings upgrades NationsLink Funding Corporation's commercial mortgage pass-through certificates, series 1999-SL, as: -- $14.3 million class D to 'AA+' from 'AA' -- $7.7 million class E to 'A+' from 'A' Affirmed: -- $40.2 million class A-5 at 'AAA'; -- $377,437 class A-6 at 'AAA'; -- $21.6 million class A-IV at 'AAA'; -- $17.6 million class B at 'AAA'; -- $15.4 million class C to 'AAA'; -- $17.6 million class F at 'BB+'; and -- $6.6 million class G at 'BB'. Fitch does not rate the notional $159 million class X. Classes A-1, A-2, A-3, and A-4 have paid in full. The upgrades are a result of additional paydown since Fitch's last rating action. As of the February 2007 distribution date, the pool's collateral balance has been reduced 88%, to $141.6 million from $1.18 billion at issuance. Although, the transaction has paid down significantly, the pool still remains diverse by property type with 461 loans of the original 2,755 remaining. The transaction's structure has reverted to a modified sequential pay structure with only the A classes receiving principal. The deal includes an overcollateralization (OC) feature which creates a first loss piece that absorbs any losses that otherwise would result in principal loss to the trust. The current OC amount is equal to $13 million (8.4% of the pool). To date, the OC structure of the pool has prevented any principal losses to the trust. The transaction continues to perform well with a history of low delinquencies. Currently, there are no delinquent or specially serviced loans in the deal. OMEGA ONE: A.M. Best Affirms B+ Financial Strength Rating --------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of B++ (Good) and the issuer credit rating of "bbb" of National Security Fire and Casualty Company and the FSR of B+ (Good) and ICR of "bbb-" of its wholly-owned subsidiary, Omega One Insurance Company, Inc., both members of the National Security Group. Concurrently, A.M. Best has affirmed the FSR of B (Fair) and has assigned an ICR of "bb" to the life/health company, National Security Insurance Company. A.M. Best has also affirmed the ICR of "bb" of The National Security Group, Inc. [NASDAQ: NSEC]. The outlook for all ratings is stable. All companies are domiciled in Elba, Alabama. The ratings of National Security reflect its adequate risk- adjusted capitalization and well-established niche position as a provider of dwelling/fire coverage in the Southeast. However, somewhat offsetting these positive rating factors is the group's geographic and product concentration in the Gulf Coast states, which subjects National Security's earnings and surplus to weather-related catastrophes. The ratings of Omega One acknowledge its low underwriting leverage and favorable operating performance. Partially offsetting these positive rating factors is the company's geographic concentration that leaves it susceptible to severe weather-related losses, as well as competitive and regulatory pressures. The ratings of National Security Insurance Company recognize the recent decline in its capital and surplus, fluctuating operating results and limited geographic profile. Partially offsetting these positive attributes are the company's adequate level of risk-adjusted capitalization, recent-albeit modest-growth of new premium and improved level of persistency on its ordinary life line. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. OWENS CORNING: Wants San Mateo's $1.5 Million Claim Disallowed -------------------------------------------------------------- Owens Corning and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to disallow and expunge a $1,500,000 claim -- Claim No. 12695 -- filed by the San Mateo County Health Department, in San Mateo, California, on May 1, 2006. The Claim asserted that Owens Corning is legally obligated to investigate and remediate soil and groundwater contamination caused by an underground storage tank, which is owned and operated by the Debtors at 477 Forbes Boulevard, in South San Francisco, California, before January 1986. In an attached letter to the Claim, San Mateo County stated that the amount is an estimated "reasonable upper limit" of investigating and remediating similar sites and that the "exact amount is unknown." Based on correspondence and other records provided by the County, Owens Corning believes that Robert J. Miller Co. removed the Tank from the Site in January 1986. San Mateo County asserted that the Tank removal was not conducted accordance with applicable removal laws and regulations in 1986. The County stated that it notified Robert Miller soon after the Storage Tank was removed. The County further alleged that hydrocarbons were reportedly detected in a groundwater sample from the Storage Tank excavation pit at the time of the Removal. At some point in time, the County referred the case to the California Regional Water Quality Control Board, which subsequently referred the matter back to the County. In 1994, San Mateo County named Pacific Agri Products, Inc., the current owner of the Site, as a responsible party. Pacific Agri Products performed sampling of soils and groundwater at the Site, which data indicated presence of gasoline in soil and groundwater. By a letter dated January 29, 2004 -- 18 years after the Tank Removal -- the County stated that it should have also named Owens Corning as a responsible party for the contamination since the company was the operator of the Tank. On April 17, 2004, San Mateo County issued to Owens Corning a notice of responsibility for the Tank containing "diesel fuel oil and additives," and listed the reported date of the release as January 17, 1986. In a May 3, 2006 letter, San Mateo County further stated that "Owens Corning was the last known owner of the [Tank] identified as the source of the contamination," based on the Application listing Owens Corning Fiberglass as the owner of the Tank. The letter also asserted that EROM Second Corp. was the owner at the time the contamination was discovered at the Site, and that Owens Corning leased the Site from EROM from 1966 until 1988. Norman L. Pernick, Esq., at Saul Ewing, LLP, in Wilmington, Delaware, contends that it is appropriate to disallow the Claim because: (a) the County failed to demonstrate that any Debtor is legally responsible for any contamination on the Site; (b) it is barred by applicable statute of limitations, which provides that civil claims under applicable provisions of the California Health and Safety Code must be brought within five years after discovery of the facts underlying a claim; and (c) it is filed more than four years after the April 15, 2002 Claims Bar Date. Mr. Pernick asserts that the Robert Miller Application is not proof of the Tank ownership, and does not contain information about the tank operator's identity. Moreover, in the event the Claim is allowed in any amount, Owens Corning insists that San Mateo County should not be entitled to a priority status under Section 507(a)(8) of the Bankruptcy Code because the Claim cannot be classified as neither a "tax claim" nor a "custom duty." Headquartered in Toledo, Ohio, Owens Corning (OTC: OWENQ.OB) -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. The company filed for chapter 11 protection on Oct. 5, 2000 (Bankr. D. Del. Case. No. 00-03837). Norman L. Pernick, Esq., at Saul Ewing LLP, represents the Debtors. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represents the Official Committee of Asbestos Creditors. James J. McMonagle serves as the Legal Representative for Future Claimants and is represented by Edmund M. Emrich, Esq., at Kaye Scholer LLP. (Owens Corning Bankruptcy News, Issue No. 150; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). As reported in the Troubled Company Reporter on Oct. 9, 2006, the Honorable John P. Fullam, Sr., of the U.S. District Court for the Eastern District of Pennsylvania affirmed on Sept. 28, 2006, the order of the Honorable Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware, confirming Owens Corning's Sixth Amended Plan of Reorganization. The Plan took effect on Oct. 31, 2006, marking the company's emergence from Chapter 11. PACIFIC LUMBER: Scopac Can Access Cash Collateral Until March 9 --------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, gave Scotia Pacific Company LLC, authority, until March 9, 2007, to: (a) use cash collateral in which Bank of America National Trust and Savings Association and Bank of New York Trust each possess an interest, including funds in the SAR Account; and (b) provide adequate protection to both banks to the extent of any diminution in the value of their interests in the Prepetition Collateral. The Court has set a March 6 final hearing to consider Scopac's proposed third interim order for the continued use of cash collateral. As reported in the Troubled Company Reporter on Jan. 24, 2007, the Court had granted authority to Scopac to use the cash collateral until Feb. 16, 2007. As reported in the Troubled Company Reporter on Feb. 14, 2007, the Committee of Timber Noteholders opposed Scopac's use of cash collateral because Scopac had not satisfied any of the conditions of the second interim order. Creditors Committee's Objection The Official Committee of Unsecured Creditors asks Judge Schmidt to deny approval of the proposed third Interim Order. The Creditors Committee points out that: (a) the proposed Interim Order does not presently contemplate Scopac sharing budget and other information with the Committee in the same fashion as it is to be shared with other interested parties; and (b) there is no reason why Scopac should pay the Indenture Trustee's fees and expenses pending the Court's determination that the bondholders are oversecured The Committee also asks the Court to give it full and fair opportunity under the proposed Interim Order to review and examine the liens and debts asserted by Scopac's lenders. Additionally, the Debtors' proposed Third Interim Order states that "(Scotia Pacific Company LLC) has expressly reserved its rights with respect to the status of the (Official Committee of Unsecured Creditors) as a joint committee (for all the Debtors)," Maxim B. Litvak, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub LLP, in San Francisco, California, points out. Mr. Litvak argues that the proposed language does not belong in a Court order and it has nothing to do with the issue of cash collateral. Scopac can state on the record what rights it believes should be reserved, but as time passes and Scopac take positions contrary to the interests of Scopac's unsecured creditors, the Creditors Committee will continue to resist those positions and fulfill its duties to unsecured creditors, Mr. Litvak says. Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transactions pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on May 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 6, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Timber Noteholders Object to Intercompany Setoff ---------------------------------------------------------------- The Ad Hoc Committee of Timber Noteholders in Pacific Lumber Company and its debtor-affiliates' bankruptcy cases objects to any setoff or recoupment of the amounts purportedly owed by Scotia Pacific LLC to Pacific Lumber Company. Specifically, the Committee disputes the Debtors' request with respect to any amounts purportedly owed by Scopac to PALCO. With respect however to the amounts due to Scopac under the Master Purchase Agreement dated July 20, 1998, the Court should require that PALCO pay Scopac the full $3,195,000 that it indisputably owes to Scopac, Mr. Melko asserts. As reported in the Troubled Company Reporter on Feb. 21, 2007, Pacific Lumber and Scotia Pacific Company asked the U.S. Bankruptcy Court for the Southern District of Texas to authorize (i) PALCO to pay Scopac $3,195,000 for logs purchased for January 2007; and (ii) Scopac to pay PALCO $995,000 for services rendered for January 2007, pursuant to a Master Purchase Agreement and a Services Agreement entered into between the two companies on July 20, 1998. The settlement of the obligations between the two debtor companies would be effected by PALCO exercising setoff or recoupment of the $995,000, thus making a $2,200,000 payment to Scopac. There is no dispute that Scotia Pacific Company LLC is a critical vendor of The Pacific Lumber Company, John P. Melko, Esq., at Gardere Wynne Sewell LLP, in Houston, Texas, avers. Without Scopac's timber, PALCO would lose its primary source of timber for milling operations. Accordingly, the Ad Hoc Committee of Timber Noteholders does not object to the Debtors' request to permit PALCO to pay Scopac. The Noteholder Committee, however, disputes the Debtors' request with respect to any amounts purportedly owed by Scopac to PALCO. The relationship between PALCO and Scopac is a matter that deserves further investigation and consideration before PALCO can be granted any benefits, Mr. Melko points out. "Whether PALCO has abused its control over Scopac or acted in any improper or inequitable manner is an issue that needs to be resolved before PALCO is to be granted any definitive relief regarding any claim -- whether prepetition or postpetition -- that it purports to have against Scopac," Mr. Melko says. Mr. Melko argues that PALCO cannot be characterized as a "critical vendor" of Scopac. PALCO has contractual obligations to perform services related to its timber harvesting activities on Scopac's land. PALCO's activities are inextricably intertwined with its purchase of timber from its own critical vendor -- Scopac -- and not the reverse, Mr. Melko states. "The services performed by PALCO are simply part-and-parcel of the consideration that PALCO pays for the timber that it purchases from Scopac." Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transactions pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on May 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 6, http://bankrupt.com/newsstand/or 215/945-7000). PELTS & SKINS: Files Amended Disclosure Statement in Louisiana -------------------------------------------------------------- Pelts & Skins LLC and its debtor-affiliate, PS Chez Sidney LLC, filed with the United States Bankruptcy Court for the Eastern District of Louisiana an Amended Disclosure Statement explaining their Chapter 11 Plan of Reorganization. Treatment of Claims Under the Plan, Audi Financial Service, DeLage Landen Financial Services, and Ford Motor Credit will be paid in full from the Operating Cash Flow based upon a 5 year amortization, with quarterly payments of principal at a 7% interest rate, to begin on June 30, 2007. Priority Non-Tax Claims will also receive the same treatment as Audi, DeLage and Ford, with the exception that quarterly payments will begin on Jan. 1, 2008. Holders of Unsecured Claim totaling $1,000 or less will be paid in full within 30 days of the effective date. JPMC RLOC Revolver/Term Loan Claim JP Morgan Chase Bank N.A. RLOC Revolver and Term Loan Claim will bear interest rate of Prime minus of 2.25% if Pelts & Skins is not performing within a 15% variance of the budget. Deferred interest will be rolled over to the end of the RLOC Revolver/Term Loan. Payment of interest is to be deferred until April 2007. However, the Debtor says it won't be required to pay interest, to be paid monthly beginning May 1, 2007, if its cash flow is negative. If interest payments are over 90 days delinquent, then JP Morgan will declare the Revolver or Term Loan in default. All proceeds from the sale of working capital assets will be paid to the RLOC Revolver, and the sale of "hard" assets and insurance proceeds will be paid to the Term Loan. Beginning June 2007, 30% of the positive JP Morgan's Cash Flow will be applied to the principal payments on the RLOC Revolver, while 70% will be placed to the Term Loan. General Unsecured Claims Holders of Unsecured Claims can elect either: i) payment in full of their claims 3 years after the effective date from these sources: -- Unsecured Payment Cash Flow and the Operating Cash Flow, and -- 50% of net recoveries from Avoidance Claims or Causes of Action of the Debtors against Zachary Casey and any of his affiliates. Under this option, Unsecured Creditors will receive no less than an interest-only payment on an annual basis based on an interest rate of 7%, commencing Jan. 1, 2007. ii) early discounted pay of the Unsecured Claim within 1 year of the effective date. Under this option, Unsecured Creditors will have the right to tender to the Debtors' Unsecured Creditors' Allowed Unsecured Claim. The Debtor will pay the Unsecured Creditors 25% of the Allowed Unsecured Claim from the Unsecured Payment Cash Flow within 30 days of the tender. In the event the Debtors can't pay the 25% claim, BGKP Properties Inc. will pay for the Debtor and will: -- take ownership of the claim; -- be paid as an Unsecured Creditor; and -- not be considered Affiliates/Member/Insiders. Other Claims Affiliates/Members/Insiders Claim Holders will be paid in full using funds from the Unsecured Payment Cash Flow within 10 years of the effective date, after: -- payment in full made to the holders of Unsecured Claims, and -- the Debtors receive written approval from JP Morgan pursuant to the terms of the JP Morgan Chase Loans, or JP Morgan Chase Loans are paid in full. Equity Interests in the Debtor will remain in full force and effect until the DIP loan is paid in full or JP Morgan consents only tax distributions may be made to interest holders. A full-text copy of Pelts & Skins' Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=070227220445 About Pelts & Skins Headquartered in Covington, Louisiana, Pelts & Skins, L.L.C. -- http://www.pelts.com/-- produces, processes, and sells alligator skins to tanneries throughout the United States. The Company's subsidiary, PS Chez Sidney, LLC, distributes alligator meat packaged as Chef Penny's brand. The Company and its subsidiary filed for chapter 11 protection on Aug. 1, 2006 (Bankr. E.D. La. Case No. 06-10742). Douglas S. Draper, Esq., at Heller, Draper, Hayden, Patrick & Horn, L.L.C., represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for protection from their creditors, they estimated assets and debts between $10 million and $50 million. PENNSYLVANIA REAL: Fitch Holds Issuer Default Rating at BB ---------------------------------------------------------- Fitch has affirmed the preferred stock rating of 'B+' on Pennsylvania Real Estate Investment Trust. Fitch has also affirmed the Issuer Default Rating of 'BB' for PREIT and maintains its Positive Outlook. The affirmations reflect PREIT's relatively solid debt service coverage and leverage metrics. For a primarily secured borrower, PEI does have some degree of financial flexibility through a relatively reasonable use of leverage and an unencumbered asset pool that represents approximately 21% of total assets. In addition, the company upholds a $500 million unsecured line of credit with $223 million of availability as of Sept. 30, 2006. Furthermore, Fitch calculates that PEI has a capital ratio of 1.13x at a 'BB' stress level, which is adequate for the rating category. Moreover, the company has a manageable lease expiration schedule, with an average of 11% of annual base rents expiring over the next four years. The quality of the company's underlying portfolio continues to improve, as 15 of PREIT's 39 malls have sales per square foot above $350. The ratings are balanced by PREIT's geographic concentration in the mid-Atlantic and Pennsylvania region, which, accounts for approximately 78% and 56% of annualized base rent, respectively. Same-store net operating income decreased 0.5% in the third quarter of 2006, which has moderated in the last three quarters and appears to be partially affected by the 14 properties currently undergoing various phases of redevelopment. These projects represent about $346 million of commitments and are expected to be substantially completed within the next year. Additionally, PEI has a somewhat lumpy near-term debt maturity schedule with a rather onerous 45% of its total debt maturing in 2008 and 2009. The bulk of this is represented by a REMIC consisting of 15 properties maturing in 2008 and the company's revolving line of credit that comes due in 2009. Fitch is also concerned about asset concentration risk as P-REIT's portfolio comprises only 51 total properties with the five largest properties by investment constituting approximately 28% of total assets. Moreover, the portfolio is fairly aged at an average of 28 years. However, PREIT has done a solid job of updating their properties to keep them competitive, and 29 of the 50 retail properties have undergone a major rehabilitation within the last ten years. Finally, PEI has minimal sources of unsecured capital and no demonstrated access to the public unsecured debt market, which limits its potential financial flexibility relative to more highly rated peers. Interest coverage and fixed charge coverage ratios of 2.4x and 1.4x, respectively, are comparable to similarly rated real estate investment trusts. Debt leverage stood at 58.9% of undepreciated book capitalization and debt plus preferred stock was 62.7% of undepreciated book at the end of third quarter 2006, which is also in line with comparably rated REITs. As of Sept.30, 2006, the company had a sound unencumbered asset coverage of unsecured debt of 2.4x. Fitch is retaining the Positive Outlook. Since the rating agency's last review, PREIT demonstrated less reliance on its credit facility, although its leverage and coverage metrics also declined slightly, particularly its fixed charge coverage ratio. However, it is not yet evident whether the company's current redevelopment projects will lead to substantially improved property operating performance once in the stabilized portfolio. Fitch anticipates resolving the Outlook over the next 9-12 months. Two primary factors will ultimately determine the resolution. First, Fitch would like to see if PREIT can exhibit improved operating performance in the portfolio as a result of the company's redevelopment projects. Second, Fitch would like to see an indication that PEI will be able to successfully manage its rather burdensome debt maturity schedule in the next two years. Pennsylvania Real Estate Investment Trust, headquartered in Philadelphia, is a $3.1 billion owner, manager, and developer of regional malls and strip and power centers located predominantly throughout the Mid-Atlantic United States. The portfolio consists of 51 properties containing approximately 35 million square feet, including 39 shopping malls, 11 strip and power centers, and one office property. PETER ROSI: Case Summary & Nine Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Peter S. L. Rosi aka Peter Shambaugh Louis Rosi, MD aka Peter SL Rosi, MD 205 E. Marion Prospect Heights, IL 60070 Bankruptcy Case No.: 07-03190 Type of Business: The Debtor is a physician employed by Homefirst Homecare in Rolling Meadows, Ill. Chapter 11 Petition Date: February 23, 2007 Court: Northern District of Illinois (Chicago) Judge: Jack B. Schmetterer Debtor's Counsel: Joy E. Levy, Esq. Arnstein & Lehr LLP 120 S. Riverside Plaza, Suite 1200 Chicago, IL 60606 Tel: (312) 876-7880 Fax: (312) 876-0288 In his Schedules of Assets and Liabilities, the Debtor indicated that he has: Total Assets: $56,280 Total Debts: $189,000 In his chapter 11 petition, the Debtor indicated that he has: Estimated Assets: $10,000 to $100,000 Estimated Debts: $1 Million to $100 Million Debtor's 9 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Countrywide Home Loans Mortgage secured $170,000 P.O. Box 10219 by a residence Van Nuys, CA 91410-0229 owned by the Debtor's spouse in trust Mount Prospect National Bank Home Equity Loan $19,000 on residence owned by Debtor's spouse in trust Ayesha El Amin Medical Unknown c/o Hegarty & Heath Malpractice Attn: Tim Heath Action 70 W. Madinson St., Suite 2070 07 L 000099 and Chicago, IL 60602 00 L 000734 Donna Williams, et al. Medical Unknown c/o Ashman & Gary Assoc. Malpractice 150 N. Wacker St., Suite 3000 Action Chicago, IL 60606 05 L 012346 Louis Weiss Memorial Lawsuits Unknown c/o Querrey Harrow 06 L 007938, 175 W. Jackson St., Suite 1600 05 L 012048, and Chicago, IL 60604 02 L 012151 Mark T. Neil & Associates Unknown 55 W. Monroe St., Suite 3330 Chicago, IL 60603 Paul Howey, et al. Medical Unknown c/o John J. Dwyer Malpractice 30 N. LaSalle St., Suite 3900 Action Chicago, IL 60602 00 L 006832 Sara and Michael Meline Medical Unknown c/o Baizer & Kolar PC Malpractice 513 Central Avenue Action Highland Park, IL 60035 96 L 015232 Sears Credit card Unknown P.O. Box 182149 Columbus, OH 43218-2149 PHELPS DODGE: Moody's Lowers Ratings on $556.7 Million Notes to B1 ------------------------------------------------------------------ Moody's Investors Service confirmed Freeport-McMoRan Copper & Gold Inc.'s Ba3 corporate family rating and reported a number of rating actions with respect to Freeport and Phelps Dodge Corporation. The ratings actions are based on the assumption that Freeport completes the acquisition of Phelps Dodge on substantially the terms agreed. The ratings reflect the overall probability of default of Freeport, to which Moody's assigns a PDR of Ba3, LGD4, 50%. The outlook for both Freeport and Phelps Dodge is stable. In related rating actions, Moody's assigned a Baa3, LGD1, 1.0% senior secured rating to Freeport's $500 million secured revolver and Ba2, LGD2, 29% senior secured ratings to each of Freeport's $1 billion secured revolver, $2.5 billion secured Term Loan A, and $7.5 billion secured Term Loan B. Freeport's existing 6.875%, 10.125% and 7.20% senior unsecured notes, which are being granted a security and guarantee package equivalent to the $1 billion revolver and Term Loans A & B, were upgraded to Ba2, LGD2, 29% from B1. Moody's downgraded Phelps Dodge's Cyprus Amax notes, which mature in May 2007, as well as the ratings on Phelps Dodge's other existing senior unsecured notes to B1, LGD4, 63% from Baa2. Moody's also affirmed Freeport's SGL-1 Speculative Grade Liquidity rating. This concludes Moody's review of the ratings of Freeport and Phelps Dodge begun on Nov. 20, 2006 following the disclosure that Freeport had agreed to acquire Phelps Dodge for $26 billion. The Ba3 corporate family rating reflects Freeport's very high debt level of approximately $19 billion and what Moody's believes will be a protracted time frame for debt reduction in the face of softening metals prices and continued high cost challenges. The rating also considers the high concentration in copper and resultant variability in earnings and cash flow, significant capital expenditures, and a high level of reliance on the Grasberg mine in Indonesia. The rating also reflects the cultural challenges inherent in the acquisition of the larger Phelps Dodge by Freeport, and the execution and political risk of Phelps Dodge's development project in the Congo. The Ba3 rating favorably considers the company's leading positions in copper and molybdenum, a significant amount of gold production, the low cost, long-life reserves at PT-FI, and improved operating and political diversity. Ratings confirmed: * Freeport-McMoRan Copper & Gold Inc. -- Corporate Family Rating: Ba3 -- Probability of Default Rating: Ba3 Ratings assigned: * Freeport-McMoRan Copper & Gold Inc. -- $0.5 billion Senior Secured Revolving Credit facility, Baa3, LGD1, 1.0% -- $1.0 billion Senior Secured Revolving Credit Facility, Ba2, LGD2, 29% -- $2.5 billion Senior Secured Term Loan A, Ba2, LGD2, 29% -- $7.5 billion Senior Secured Term Loan B, Ba2, LGD2, 29% Ratings to be upgraded: * Freeport-McMoRan Copper & Gold Inc. -- $340 million 6.875% Senior Unsecured Notes due 2014, B1 to Ba2, LGD2, 29% -- $272 million 10.125% Senior Unsecured Notes due 2010, B1 to Ba2, LGD2, 29% -- $0.2 million 7.20% Senior Unsecured Notes due 2026, B1 to Ba2, LGD2, 29% Ratings to be downgraded: * Cyprus Amax Minerals Company -- $60.1 million 7.375% Senior Notes due 2007, Baa2 to B1, LGD4, 63% * Phelps Dodge Corporation -- $107.9 million 8.75% Senior Notes due 2011, Baa2 to B1, LGD4, 63% -- $115 million 7.125% Senior Notes due 2027, Baa2 to B1, LGD4, 63% -- $150 million 6.125% Senior Notes due 2034, Baa2 to B1, LGD4, 63% -- $193.8 million 9.50% Senior Notes due 2031, Baa2 to B1, LGD4, 63% Ratings to be withdrawn: * PD Capital Trust I -- Preferred Stock Shelf, currently (P)Baa3 * PD Capital Trust II -- Preferred Stock Shelf, currently (P)Baa3 * Phelps Dodge Corporation -- Multiple Seniority Shelf, currently (P)Ba1 Outlook Actions: * Freeport-McMoRan Copper & Gold Inc. -- Outlook, Changed To Stable from Rating Under Review * Cyprus Amax Minerals Company -- Outlook, Changed To Stable from Rating Under Review * Phelps Dodge Corporation -- Outlook, Changed To Stable from Rating Under Review Phelps Dodge Corporation is a Phoenix based producer of copper and molybdenum and had revenue in 2006 of $11.9 billion. Freeport-McMoRan Copper & Gold Inc. is a Louisiana based producer of copper and gold through its Grasberg mine in Indonesia. Freeport had revenue in 2006 of $5.8 billion. PITTSFIELD WEAVING: Can File Plan of Reorganization Until March 19 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of New Hampshire extended the exclusive periods of Pittsfield Weaving Company: a) to file a plan of reorganization until March 19, 2007; and b) to solicit acceptances of that plan until May 18, 2007. The Debtors' exclusive period to file a plan expired on Jan. 18, 2007. The Debtor tells the Court that Official Committee of Unsecured Creditors appointed in the Debtor's bankruptcy cases has been reviewing a draft plan of reorganization several weeks ago. Since the Debtor provided a second draft of the plan on Jan. 17, 2007, participation and support of a number of parties would be needed to assure adequacy of the terms of the plan. The Debtor has also been delayed due to the inordinately large amount of time spent in discovery done in connection with cash collateral motions. Based in Pittsfield, New Hampshire, Pittsfield Weaving Company -- -- http://www.pwcolabel.com/-- provides brand identification to the apparel and soft goods industries, and manufactures woven and printed labels and RFID/EADS solutions. The company filed it chapter 11 protection on Sept. 20, 2006 (Bankr. D. NH Case No. 06-11214). Williams S. Gannon, Esq., at William S. Gannon PLLC represent the Debtor in its restructuring efforts. Bruce A. Harwood, Esq., at Sheehan Phinney Bass + Green, PA serves as counsel to the Official Committee of Unsecured Creditors. Pittsfield Weaving estimated its assets and debts at $10 million to $50 million when it filed for protection from its creditors. PRESIDENTIAL LIFE: A.M. Holds Financial Strength Rating at B+ ------------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of B+ (Good) and the issuer credit rating of "bbb-" of Presidential Life Insurance Company. Concurrently, A.M. Best has affirmed the ICR of "bb-"and the debt rating of "bb-" of $100 million 7.875% senior notes due 2009 for the parent company of Presidential, Presidential Life Corporation [NASDAQ: PLFE] (both of Nyack, NY). The outlook for all ratings is stable. The ratings reflect Presidental's continued profitability, the increase in its absolute capital and surplus account and the adequate leverage ratios at the holding company. As a result of recent improvement in capitalization, Presidential Life Corporation's financial leverage-defined as total debt-to-capital- has improved to under 20% in 2006. The ratings also continue to recognize Presidential's good cost controls and operating profitability and diverse distribution relationships. However, Presidential's risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio remains modest. The company also has a highly concentrated operational focus in the interest sensitive individual annuity market and high exposure to higher risk securities, including less than investment grade bonds and relatively illiquid private placements and limited partnerships. For the past several years, Presidential has moderated its rapid growth rate to reduce capital strain from new business writings. Following a period of reported net losses and weak risk-adjusted capitalization, the company's financial operations have stabilized and net income has improved. This improvement is a result of management's efforts to improve operations and reduce capital volatility by lowering crediting rates, while gradually moderating sales as well as the risk and volatility in its investment portfolio and discontinuing unprofitable product lines. Nonetheless, Presidential's investment portfolio includes an exposure to asset-backed and structured securities, less than investment grade bonds and illiquid investments in private placements and limited partnerships. A.M. Best continues to view this investment portfolio with concern, given Presidential's modest risk-adjusted capital. A.M. Best also notes the risk associated with Presidential's concentrated market profile, which primarily consists of fixed annuity products, and the uncertainty regarding the future performance of its investment portfolio. While recognizing the historically good persistency of its inforce block, the company remains exposed to disintermediation risk. Presidential has taken several steps to moderate interest rate risk. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. QT INC: Case Summary & 28 Largest Unsecured Creditors ----------------------------------------------------- Lead Debtor: QT, Inc. 500 West Algonquin Road Mount Prospect, IL 60056 Bankruptcy Case No.: 07-03227 Debtor affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Q-Ray Company 07-03228 Type of Business: Que T. Park, the president of the Debtors, also filed for bankruptcy on the same date (Bankr. N.D. Ill. Case No. 07-03217) (J. Wedoff). Chapter 11 Petition Date: February 23, 2007 Court: Northern District of Illinois (Chicago) Judge: Susan Pierson Sonderby Debtors' Counsel: Lewis J. Todhunter, Esq. Defrees & Fiske 200 S. Michigan Avenue Chicago, IL 60604 Tel: (312) 372-4000 Fax: (312) 939-5617 Estimated Assets Estimated Debts ---------------- --------------- QT, Inc. $1 Million to $1 Million to $100 Million $100 Million Q-Ray Company $1 Million to $1 Million to $100 Million $100 Million A. QT, Inc.'s 27 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Federal Trade Commission $87,019,840 Attn: Theodore Hoppock 600 Pennsylvania Avenue NW NJ-3212 Washington, DC 20580 Ungaretti & Harrie $926,642 3500 Three First National Plaza Chicago, IL 60602-4283 Bio-Ray, S.A. $852,775 Palma Nova, Calvia 07181 Spain Que Te Park/Q&T LLC $832,753 510 Alexander Court Barrington, IL 60010 Internal Revenue Service $230,432 P.O. Box 145585 Stop B420G Cincinnati, OH 45250-5585 State of Illinois $68,270 QT Inc. $55,172 Keukdong Ltd. $43,288 Welsh & Katz, Ltd. $27,667 STAIB Germany $23,279 Que T. Park $17,091 Ion Ray $8,422 Positive Packaging Inc. $8,408 North Town Mechanical Contractor $6,389 Schiele Graphics $5,212 Dydacomp Development $4,887 Precisioneconowind $2,795 Peters & Associates $2,720 HQC Inc. $2,592 Professional Plating Inc. $2,342 Construct Data $1,962 Kim's Electrical Service $1,305 Riebandt & DeWald P.C. $1,205 Stephen Fossler Company Inc. $931 Shanghai Sonhai Industrial Trading $865 Tanury Industries $556 West Payment Center $293 B. Q-Ray Company's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Federal Trade Commission $87,019,840 Attn: Theodore Hoppock 600 Pennsylvania Avenue NW NJ-3212 Washington, DC 20580 QUE PARK: Case Summary & Largest Unsecured Creditor --------------------------------------------------- Debtor: Que T. Park aka Andrew Park aka Andrew Q Park 510 Alexander Court Barrington, IL 60010 Bankruptcy Case No.: 07-03217 Type of Business: The Debtor's three affiliates, Bio-Metal Inc., Q-Ray Company, and QT Inc., also filed for bankruptcy. Chapter 11 Petition Date: February 23, 2007 Court: Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Lester A. Ottenheimer, III, Esq. Ottenheimer Teplinsky & Rosenbloom, LLC 750 Lake Cook Road, Suite 140 Buffalo Grove, IL 60090 Tel: (847) 520-9400 Fax: (847) 520-9411 Estimated Assets: Less than $10,000 Estimated Debts: $1 Million to $100 Million Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Federal Trade Commission $15,900,000 Attn: Steven M. Wernikoff 55 East Monroe Street, Suite 1860 Chicago, IL 60603 RALPH BROTHERS: Case Summary & Five Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Ralph Brothers Farms 1242 Bride Road Covington, TN 38019 Bankruptcy Case No.: 07-10580 Type of Business: The Debtor is a cotton and soybean grower. Chapter 11 Petition Date: February 26, 2007 Court: Western District of Tennessee (Jackson) Judge: G. Harvey Boswell Debtor's Counsel: Thomas H. Strawn, Esq. P.O. Box 908 222 East Court Street, Suite C Dyersburg, TN 38025 Tel: (901) 285-3375 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Scruggs Farm Lawn & Garden LLC Trade Debt $1,350,000 3575 Tom Watson Drive Saltillo, MS 38866 Ricardo Kelley Trade Debt $56,000 dba Burlison Gin Inc. 46 Garland Drive Covington, TN 38019 Two-Way Gin Co. Trade Debt $15,000 333 S. Washington Brownsville, TN 38012 Monsanto Company Judgment/Trade $3,000 800 North Lindberg Boulevard St. Louis, MO 63167 Farm Credit Services of Unknown Mid-America 104 Brighton Drive Humboldt, TN 38343 SCOTTISH RE: Facing Bankruptcy Without MassMutual/Cerberus Deal --------------------------------------------------------------- Scottish Re Group Ltd. has postponed until March 2 a shareholders' meeting to vote on a $600 million takeover bid proposed by U.S. companies MassMutual Capital Partners LLC and Cerberus Capital Management L.P. The meeting has been delayed to allow shareholders an opportunity to consider an amendment that would indemnify MassMutual/Cerberus by $68.5 million should they be approved the majority owners, the company's chief executive officer said in a statement. Institutional Shareholder Services and Glass Lewis & Co., both independent proxy advisory firms, recommended to Scottish Re's shareholders to accept the offer. In an article written by Scott Neil at the Royal Gazette, he quoted company executives as saying that shareholders should accept the takeover offer, or seek bankruptcy protection. The company's fourth quarter release doesn't bode well for its future. Its $231.6 million quarter loss prompted ratings downgrade from Fitch. The rating agency said in its release that should the Cerberus/MassMutual deal goes down the drain, the company's Insurer Financial Strength could suffer a further downgrade to junk level from its BB+ rating. In last week's conference call, Chief Executive Officer Paul Goldean was quoted by the Royal Gazette as saying: "Without a transaction such as MassMutual/Cerberus, further rating downgrades are certain. The rating agencies have also indicated that simply raising additional capital will not result in an increase in our ratings. This was a significant consideration in evaluating a potential rights offering. "An increase in our ratings is critical not only in order to write new business but more importantly for us to be able to successfully to complete financing facilities in order to meet our significant collateral. "If the MassMutual/Cerberus transaction or a similar transaction is not completed in the very near term the company will have no alternative but to seek protection under applicable bankruptcy and insolvency laws almost immediately. "2006 was a difficult year for all the stakeholders of ScottishRe. With the closing the MassMutual/Cerberus transaction we look forward to returning our full attention of the company to our reinsurance business to regain our former status as one of the industries leading participants." Scottish Re Group Ltd. -- http://www.scottishre.com/-- provides reinsurance of life insurance, annuities and annuity- type products through its operating companies in Bermuda, Charlotte, North Carolina, Dublin, Ireland, Grand Cayman, and Windsor, England. * * * As of Feb. 15, Scottish Re's Senior Unsecured Debt carry Moody's Ba3 rating and its Preferred Stock carry Moody's B2 rating. The company's Long-Term Local Issuer Credit rating carry Standard & Poor's B rating. Fitch rates the company's Long-Term Issuer Default at BB; Senior Unsecured Debt at BB-; and Preferred Stock at B+. A.M. Best rates the company's Long-Term Issuer Credit at b-. SOLOMON DWEK: Court Converts Ch. 7 Case to Ch. 11 with Trustee -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey has converted Solomon Dwek's involuntary Chapter 7 liquidation case into a Chapter 11 reorganization under the supervision of a trustee, Bill Rochelle of Bloomberg News reports. As reported in the Troubled Company Reporter on Feb. 23, 2007, Mr. Dwek, a real estate developer, agreed to have the Chapter 7 case filed against him by his creditors converted into a reorganization proceeding and to have the case controlled by a chapter 11 trustee. Creditors PNC Financial Services Group Inc., subsidiary of PNC Bank NA, Washington Mutual, Four Star Builders, and Washington Mutual Bank sought liquidation of the company on February 9. According to Mr. Rochelle, the creditors contended that a New Jersey state court previously froze Mr. Dwek's assets and those of his companies, and that Mr. Dwek "transferred numerous properties" to his uncle for "no apparent consideration." PNC, the source said, asserts that Mr. Dwek owes the bank more than $22 million. The case is In re Solomon Dwek (Bankr. D. N.J. Case No: 07-11757). Peter A. Forgosh, Esq., and Scott Zuber, Esq., at Day Pitney LLP, and Stephen M. Packman, Esq., at Archer & Greiner, P.C., represent the petitioning creditors. Timothy P. Neumann, Esq., at Broege, Neumann, Fischer & Shaver, represents Mr. Dwek. SOLUTIA INC: Buying Akzo Nobel's 50% Stake in Flexsys Venture ------------------------------------------------------------- Solutia Inc. has reached a definitive agreement to purchase Akzo Nobel N.V.'s stake in Flexsys, the 50%/50% rubber chemicals joint venture between Akzo Nobel and Solutia. As reported in the Troubled Company Reporter on Dec. 20, 2006, Solutia and Akzo Nobel entered into a letter agreement committing the parties to execute the definitive agreement upon completion of consultation with Dutch employee works council representatives. The parties are moving forward to obtain the required approval of the U.S. Bankruptcy Court before which Solutia's Chapter 11 proceedings are pending, the receipt of required regulatory approvals, finalizing the definitive purchase agreement for Akzo Nobel's Crystex business in Japan and the fulfillment of other customary closing conditions. About Flexsys Based in Brussels, Belgium, Flexsys -- http://www.flexsys.com/-- supplies chemicals for the rubber industry. With 2005 sales of approximately $600 million, Flexsys employs about 600 people worldwide. Formed in 1995, Flexsys products play a role in the manufacture of tires and other rubber products such as belts, hoses, seals and footwear. These chemicals help cure and protect rubber, increase durability, lengthen product life, and provide color control and heat resistance. Flexsys' products are manufactured at facilities across Europe, North America, South America and Asia. Flexsys also operates three technology centers as well as sales offices around the world. 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. SPECTRUM RESTAURANTS: Sells 72 Grandy's Stores to Souper Salad -------------------------------------------------------------- Souper Salad Inc. has acquired certain assets of Grandy's Inc. via a 363 bankruptcy sale when Spectrum Restaurant Group, the seller, received approval for the sale from the United States Bankruptcy Court for the Central District of California at an auction conducted Feb. 5, 2007. The sale includes substantially all of Grandy's assets, including one Grandy's-owned store, four stores managed by Grandy's, and the marketing, management, and operations of its 67 franchised restaurants. Grandy's will become a wholly owned subsidiary of Souper Salad. Souper Salad is an affiliated portfolio company of Sun Capital Partners Inc., a leading private investment firm specializing in leveraged buyouts and investments in market-leading companies. Hazem Ouf, Souper Salad's president and chief executive officer, stated, "The acquisition of Grandy's sets the stage for the expansion of both concepts and will generate new efficiencies for both brands by reaching out to a larger audience. With a combined footprint of nearly 160 restaurants, the Grandy's acquisition strengthens Souper Salad's market position, enhances career and growth opportunities for employees, and provides new franchise and growth opportunities to both concepts." About Souper Salad Inc. Headquartered in San Antonio, Texas, Souper Salad Inc. -- http://www.soupersalad.com/-- operates a chain of 87 restaurants located in twelve states with primary concentrations in Texas, Colorado, and Arizona. Its restaurants feature a selection of salad items, soups, pasta salads, lettuce wraps, baked potatoes, breads, and dessert items that are made fresh daily at each location. Souper Salad filed for chapter 11 protection on June 6, 2005 (Bankr. D. Ariz. Case No. 05-10160). Daniel Collins, Esq., at Collins, May, Potenza, Baran & Gillespie, P.C., and Mark W. Wege, Esq., at Bracewell Giuliani, represented the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $16,115,715 in assets and $50,383,179 in debts. The Court confirmed the Souper Salad's Reorganization Plan on Oct. 31, 2005. About Grandy's Inc. Headquartered in Lewisville, Texas, Grandy's is a restaurant franchisor of family style, quick service restaurants located in nine states, primarily in Texas, Oklahoma, and Indiana. Grandy's specializes in wholesome, modestly priced, Southern home-style foods and offers full breakfast, lunch, and dinner menus featuring eggs, sausage, breakfast meats, shrimp, catfish, and Southern fried chicken. About Spectrum Restaurant Headquartered in Irvine, Calif., Spectrum Restaurant Group Inc. -- http://www.spectrumfoods.com/-- operates a franchise of fine dining restaurants, including Grandy's Inc., Crabby Bob's Franchise Corp. and Spoons Restaurant Inc. The company filed a chapter 22 petition on August 29, 2006 (Bankr. C.D. Calif. Case No. 06-11444). The Debtor filed its first chapter 11 petition on August 6, 2003 (Bankr. C.D. Calif. Case No. 03-15911). Evan D. Smiley, Esq. at Weiland, Golden, Smiley, Wang, Ekvall & Strok, LLP represents the Debtor in its restructuring efforts. When the Debtor sought protection from its creditors, it listed assets and debts between $10 million to $50 million. STONEY CREEK: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Stoney Creek Technologies, LLC 330 West 4th Street Trainer, PA 19061 Bankruptcy Case No.: 07-11085 Type of Business: The Debtor offers custom toll processing capabilities for the manufacture, blending, and storage of various chemical products. See http://www.sctsaci.com/ Chapter 11 Petition Date: February 22, 2007 Court: Eastern District of Pennsylvania (Philadelphia) Judge: Diane W. Sigmund Debtor's Counsel: Paul Brinton Maschmeyer, Esq. Robert W. Seitzer, Esq. Maschmeyer Karalis P.C. 1900 Spruce Street Philadelphia, PA 19103 Tel: (215) 546-4500 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Synthetic Oils & Lubricants of Texas Inc. $5,000,000 c/o Joseph M. Armstrong, Esq. Two Commerce Square, 34th Floor 2001 Market Street Philadelphia, PA 19103 PECO Energy $275,000 P.O. Box 7888 Philadelphia, PA 19101 Chichester School District $151,870 P.O. Box 48248 Newark, NJ 07101-4848 Brenntag Northeast Inc. $105,605 White and Williams LLP $89,522 Praxair Inc. $84,360 UGI Energy Services Inc. $82,225 Teamsters Health & Welfare Fund $81,851 General Chemical $58,000 Ergon Inc. $51,499 Petresa Canada Inc. $50,779 Borough of Trainer $49,145 Dunlap, Mellor and Company Inc. $49,125 ChemTreat Inc. $47,461 Air Products $45,861 Delcore $45,725 The Lubrizol Corporation $40,429 Hase Petroleum Wax Co. $38,969 CitiCapital $36,149 Linde Gas LLC $32,410 STRUCTURED ASSET: Fitch Holds BB Rating on Two Class Certificates ----------------------------------------------------------------- Fitch Ratings has affirmed 34 classes of Structured Asset Securities Corp. residential mortgage-backed certificates, as: Series 2004-GEL1 --Class A at 'AAA'; --Class M1 at 'AA'; --Class M2 at 'A'; --Class M3 at 'BBB'; --Class M4 at 'BBB-'. Series 2004-GEL2 --Classes A1, A2 at 'AAA'; --Class M1 at 'AA'; --Class M2 at 'A'; --Class M3 at 'BBB'; --Class M4 at 'BBB'; --Class B at 'BB'. Series 2004-GEL3 --Class A at 'AAA'; --Class M1 at 'AA'; --Class M2 at 'A'; --Class B at 'BBB'. Series 2005-GEL1 --Class A at 'AAA'; --Class M1 at 'AA'; --Class M2 at 'A'; --Class M3 at 'BBB'; --Class M4 at 'BBB-'; --Class B at 'BB'. Series 2005-GEL2 --Class A at 'AAA'; --Class M1 at 'AA'; --Class M2 at 'A+'; --Class M3 at 'A-'; --Class M4 at 'BBB+'; --Class B at 'BBB'. Series 2005-GEL3 --Class A at 'AAA'; --Class M1 at 'AA+'; --Class M2 at 'AA+'; --Class M3 at 'A+'; --Class M4 at 'A-'; --Class M5 at 'BBB+'. The above affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $372.2 million of certificates. CE is in the form of subordination, overcollateralization and excess spread. The above classes have experienced moderate growth in CE since closing while cumulative losses as a percent of the original collateral balance range from 0.41% to 2.48%. The pools are seasoned from a range of 19 to 34 months. The pool factors range from 33% to 51%. The mortgage pools consist primarily of first and second liens on adjustable and fixed rate, fully amortizing and balloon, residential mortgage loans. The mortgage loans were originated in accordance with underwriting guidelines that are not as strict as Fannie Mae and Freddie Mac guidelines and a significant number of the mortgage loans represent one or more exceptions to the applicable underwriting guidelines. The mortgage loans are master serviced by Aurora Loan Services, Inc., which is rated 'RMS1-' by Fitch. TIME WARNER: Posts $98.8 Million Net Loss in Year Ended Dec. 31 --------------------------------------------------------------- Time Warner Telecom Inc. reported a net loss of $98.8 million on $812.4 million of revenue for the year ended Dec. 31, 2006, compared with a net loss of $108.1 million on $708.7 million of revenue for 2005. For 2006, the company: -- Grew total revenue $103.6 million or 15% for the year, which included the impact of the acquired operations and strong organic growth from core operations -- Grew data and Internet revenue by 33% for the year, which included the impact of the acquired operations and strong organic growth from core operations -- Completed refinancing of $1.1 billion of debt and redeemed $640 million of senior notes and $199 million of term loan indebtedness, improving the effective interest costs. Moved the nearest scheduled debt maturity to 2013, excluding minimal annual amortization of the secured term loan -- Achieved modified gross margin of 62% -- Achieved $15.2 million of levered free cash flow For the fourth quarter, the company reported a net loss of $24.8 million on $238.8 million of revenue, compared with a $22.3 million net loss on $184.5 million of revenue for the fourth quarter of 2005. The primary components of the change in revenue included: -- $44.6 million increase in revenue from enterprise customers, which included the impact of the acquired operations and a $17 million increase from core operations -- $8.5 million increase in revenue from carriers, which included the impact of the acquired operations and a $700,000 increase from core operations "This was an incredibly strong year for the Company," said Larissa Herda, Time Warner Telecom's Chairman, Chief Executive Officer and President. "Our organic results including revenue growth, M-EBITDA, margins, cash flow and customer growth were all impressive. We successfully executed a strategic acquisition, and accelerated free cash flow through accretive refinancing activities while maintaining our financial flexibility. "We leveraged the positive momentum of our business to facilitate two equity offerings, which resulted in us becoming a non- controlled company, eliminating our Class B super-voting shares. In addition, we continued to invest in the business to focus on delivering complex solutions and serving large customer opportunities, all positioned to capture greater market share and grow revenue." At Dec. 31, 2006, the company's balance sheet showed $2.25 billion in total assets, $1.70 billion in total liabilities, and $552.6 million in total stockholders' equity. Acquisition of Xspedius On Oct. 31, 2006, the company completed its strategic acquisition of Xspedius Communications LLC. The company paid $216 million in cash and issued 18.2 million Class A common shares. The company achieved the following integration milestones in the first 60 days: -- Consolidated sales and marketing management, including the regional sales structure, field operations and field engineering -- Integrated acquired IP backbone into the company's nationwide network -- Integrated human resource and financial reporting systems and launched a consolidated view of critical customer information Capital Expenditures Capital expenditures for 2006 were $192.7 million compared to $162.5 million for 2005. Capital expenditures for core operations were $187 million for the current year. About Time Warner Telecom Headquartered in Littleton, Colorado, Time Warner Telecom Inc. (Nasdaq: TWTC) -- http://www.twtelecom.com/provides managed network services, specializing in Ethernet and transport data networking, Internet access, local and long distance voice, VoIP and security, to enterprise organizations and communications services companies throughout the United States. * * * As reported in the Troubled Company Reporter on Sept. 13, 2006, Moody's Investors Service took these rating actions on Time Warner Telecom Inc.: Speculative grade liquidity rating upgraded to SGL-1 from SGL-2; corporate family rating affirmed at B2; Convertible senior notes due 2026 affirmed at Caa1 and assigned LGD5 rating, indicating noteholders could experience an 89% loss in the event of a default. TRANSALTA CORP: To Proceed with $1.6 Billion Project with EPCOR --------------------------------------------------------------- TransAlta Corporation and EPCOR Utilities Inc. said they will proceed with building the 450 megawatt Keephills 3 power project about 70 kilometres west of Edmonton, Alberta. The capital cost for the project, including mine capital, is expected to be approximately $1.6 billion. Construction is expected to be completed by the end of the first quarter of 2011. TransAlta and EPCOR will be equal partners in the ownership of Keephills 3, with EPCOR responsible for construction. Upon completion, TransAlta will operate the facility and EPCOR and TransAlta will independently dispatch and market their share of the unit's electrical output. The project has received approval from the Alberta Energy and Utilities Board and Alberta Environment. "We're proud of our record as partners on the Genesee 3 project," said EPCOR President and CEO Don Lowry. "Together, EPCOR and TransAlta introduced supercritical technology to Canada, and we delivered Genesee 3 on-budget, on-time and with a lost-time injury rate 25 times better than the average Alberta construction site. Our objective is to repeat that success with Keephills 3." "The Keephills 3 plant is an important step in ensuring Alberta's future power needs are met with reliable and cost-effective electricity," said Steve Snyder, TransAlta President and CEO. "Together TransAlta and EPCOR have almost 200 years of combined expertise in developing, building and operating power generation facilities. We're pleased to be working together with our partner EPCOR on this project." According to the Alberta Electric System Operator, if the demand for power and the rate of growth in Alberta continues as forecast, the addition of up to 3,800 megawatts of new generation may be required by 2016. Keephills 3 will use supercritical boiler technology to provide improved environmental performance. The plant will emit 24% less carbon dioxide in producing the same amount of power as the four obsolete Wabamun units being fully retired by TransAlta by 2010. In addition, emissions of sulphur dioxide, nitrogen oxides, and mercury will each be reduced by 60% to 80% in comparison to power produced by the four Wabamun units. Keephills 3 will be the best available technology economically achievable for use with sub-bituminous coal. Both companies examined the application of gasification with carbon capture and sequestration for this project, but concluded that gasification- based power generation had not yet reached acceptable standards for reliability, cost competitiveness or operation. TransAlta and EPCOR are continuing their commitment to be good neighbours and contributors to the local economy. Employment for Keephills 3 is projected to be up to 1,000 workers during the peak construction period and 30 full-time employees once the plant is operational. Hitachi Canada Ltd. is the supplier for Keephills 3's power island and is responsible for the supply of Hitachi's high efficiency turbine-generator and advanced supercritical boiler technology. About EPCOR EPCOR Utilities Inc. builds, owns and operates power plants, electrical transmission and distribution networks, water and wastewater treatment facilities and infrastructure in Canada and the United States. EPCOR has been named one of Canada's Top 100 employers for seven consecutive years, and is headquartered in Edmonton, Alberta. About TransAlta Corp. TransAlta Corp. (TSX: TA) (NYSE: TAC) -- http://www.transalta.com/ -- is a power generation and wholesale marketing company. TransAlta Corp. has two principal operating subsidiaries: TransAlta Utilities Corp. and TransAlta Energy Corp., all incorporated under the laws of Canada. TransAlta Utilities owns and operates coal-fired and hydroelectric power plants supplying approximately one-half of Alberta's total electric energy needs. TransAlta Energy and its subsidiaries are in the business of electric and thermal energy supply, energy marketing and energy services in Canada, the United States, Mexico and Australia. * * * As reported in the Troubled Company Reporter on Oct. 2, 2006, Moody's Investors Service revised its rating outlook on TransAlta Corp. to stable from negative and affirmed the company's (P)Ba1 first preferred share shelf rating and Baa2 senior unsecured rating. TXU CORP: Buyout Offer Prompts Moody's to Review Ratings -------------------------------------------------------- Moody's Investors Service has placed the ratings of TXU Corp. and its primary operating subsidiaries, TXU Electric Delivery Company and TXU Energy Company LLC, on review for possible downgrade. The ratings for TXU US Holdings Company have also been placed on review for possible downgrade. The review for a possible downgrade is a reaction to the company's report that it has agreed to be acquired by a consortium of private equity investors, including Kohlberg, Kravis Roberts & Co, Texas Pacific Group, and Goldman Sachs among others. The review for possible downgrade reflects our expectation that the financial profile of TXU will experience a significant increase in leverage associated with the proposed acquisition and that the key financial credit metrics, which include ratios of cash flow to adjusted total debt, will deteriorate meaningfully. "There is a reasonable possibility that a multi-notch downgrade may occur at one or more of TXU's rated entities" said Jim Hempstead, Vice President, "including both operating subsidiaries, TXU Electric Delivery and TXU Energy." TXU's strong financial profile has been a key factor underpinning the company's rating, given its over-all business and operating risks. For the latest twelve months ended September 2006, Moody's calculates a cash flow to adjusted total debt ratio of approximately 35% on a consolidated basis and a retained cash flow to adjusted total debt ratio of over 20%. These metrics are considered appropriate for a high Ba-rating given that a majority of the revenues, earnings and cash flow are produced by quasi-regulated business activities. "Moody's expects a significant amount of regulatory and legislative scrutiny for this transaction" said Hempstead "so the execution risks associated with closing are going to be relatively high." TXU and TXU Energy could be at the greatest risk for a multi-notch downgrade. TXU Energy is a wholly-owned subsidiary of TXU US Holdings, an intermediate holding company of TXU Corp, and owns roughly 18GW of generation capacity, almost half of which are base-load coal and nuclear fired, and owns an electric supply business that serves approximately 2 million customers. TXU Electric Delivery is the entity most likely to experience the least amount of negative rating action. TXU Delivery's review for possible downgrade reflects our expectation that the private equity consortium will seek some form of divestiture or sale of the company, and that the structure may result in a modest deterioration of key financial credit metrics. However, Moody's also believes that any divestiture structure will include some form of regulatory approval -- either explicit or implicit -- and that the Public Utility Commission of Texas approval process will likely be rigorous. As noted in Moody's rating methodology for Global Electric Utilities, the Texas regulatory environment is viewed as being reasonably supportive to credit. "To the extent that TXU Delivery is able to maintain its key financial credit metrics at current levels, the ratings could conceivably be affirmed" said Mr. Hempstead. "But it is our expectation that the metrics will be coming down, thereby prompting the review for downgrade," Mr. Hempstead added. TXU Corp. is headquartered in Dallas, Texas. On Review for Possible Downgrade: * Brazos River Authority, Texas -- Senior Unsecured Revenue Bonds, Placed on Review for Possible Downgrade, currently Baa2 * Sabine River Authority, Texas -- Senior Unsecured Revenue Bonds, Placed on Review for Possible Downgrade, currently Baa2 * TXU Capital I -- Preferred Stock Preferred Stock, Placed on Review for Possible Downgrade, currently Ba2 -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Ba2 * TXU Capital III -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Ba2 * TXU Capital IV -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Ba2 * TXU Corp. -- Multiple Seniority Shelf, Placed on Review for Possible Downgrade, currently (P)Ba3 -- Senior Unsecured Conv./Exch. Bond/Debenture, Placed on Review for Possible Downgrade, currently Ba1 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Ba1 -- Senior Unsecured Shelf, Placed on Review for Possible Downgrade, currently (P)Ba1 * TXU Electric Capital IV -- Preferred Stock Preferred Stock, Placed on Review for Possible Downgrade, currently Baa3 * TXU Electric Capital V -- Preferred Stock Preferred Stock, Placed on Review for Possible Downgrade, currently Baa3 * TXU Electric Capital VI -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Baa3 * TXU Electric Capital VII -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Baa3 * TXU Electric Capital VIII -- Preferred Stock Shelf, Placed on Review for Possible Downgrade, currently (P)Baa3 * TXU Electric Delivery Company -- Issuer Rating, Placed on Review for Possible Downgrade, currently Baa2 -- Preferred Stock Preferred Stock, Placed on Review for Possible Downgrade, currently Ba2 -- Senior Unsecured Commercial Paper, Placed on Review for Possible Downgrade, currently P-2 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Baa3 -- Senior Unsecured Sec. Lease Oblig. Bond, Placed on Review for Possible Downgrade, currently Baa3 * TXU Energy Company LLC -- Issuer Rating, Placed on Review for Possible Downgrade, currently Baa2 -- Senior Unsecured Commercial Paper, Placed on Review for Possible Downgrade, currently P-2 -- Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently Baa2 * TXU US Holdings Company -- Issuer Rating, Placed on Review for Possible Downgrade, currently Baa3 * Trinity River Authority, TX -- Senior Unsecured Revenue Bonds, Placed on Review for Possible Downgrade, currently Baa2 Outlook Actions: * TXU Capital I -- Outlook, Changed To Rating Under Review From Stable * TXU Capital III -- Outlook, Changed To Rating Under Review From Stable * TXU Capital IV -- Outlook, Changed To Rating Under Review From Stable * TXU Corp. -- Outlook, Changed To Rating Under Review From Stable * TXU Electric Capital IV -- Outlook, Changed To Rating Under Review From Stable * TXU Electric Capital V -- Outlook, Changed To Rating Under Review From Stable * TXU Electric Capital VI -- Outlook, Changed To Rating Under Review From Stable * TXU Electric Capital VII -- Outlook, Changed To Rating Under Review From Stable * TXU Electric Capital VIII -- Outlook, Changed To Rating Under Review From Stable * TXU Electric Delivery Company -- Outlook, Changed To Rating Under Review From Stable * TXU Energy Company LLC -- Outlook, Changed To Rating Under Review From Stable * TXU US Holdings Company -- Outlook, Changed To Rating Under Review From Stable * Hunton & Williams Promotes Wendy Spanbauer to Counsel ------------------------------------------------------- Hunton & Williams LLP promoted Wendy L. Spanbauer to Counsel, effective Feb. 24, 2007. Based in the firm's 43-lawyer Charlotte office, Spanbauer is a member of the firm's global capital markets and mergers and acquisition practice. Her practice focuses on asset securitization, corporate finance transactions, and transactional work for financial institutions, including conduit transactions, repurchase facilities, and residential mortgage loan acquisition transactions. "Wendy is a talented and hard working lawyer who is playing a critical role in a thriving practice area," Wally Martinez, the managing partner of Hunton & Williams, said. Mike Nedzbala, co-head of the firm's asset securitization group and a member of the global capital markets team, noted: "Wendy plays a substantial role in our capital markets practice for a number of important clients and has been extremely responsive and effective in meeting growing client and team needs." "I am proud to recognize Wendy for her achievements, commitment to the firm, and dedication to our clients," Mr. Martinez continued. "She has demonstrated excellent leadership skills and has the determination, ambition, and smarts to play a significant leadership role for the practice, the office and the firm." Admitted to practice in North Carolina, Ms. Spanbauer received her law degree with honors from the University of North Carolina School of Law. Since joining Hunton & Williams, she has made many contributions to the firm including assuming a leadership role in the Women's Networking Forum. A successful initiative in Charlotte and its other offices, the Women's Networking Forum has received wide praise and attracted the participation of Duke Energy, Bank of America, Wachovia, and other firm clients. About Hunton & Williams Hunton & Williams LLP -- http://www.hunton.com/-- provides legal services to corporations, financial institutions, governments and individuals, as well as to a broad array of other entities. Since its establishment more than a century ago, Hunton & Williams has grown to more than 875 attorneys serving clients in 100 countries from 18 offices around the world. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Upcoming Meetings, Conferences and Seminars March 1, 2007 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - West Regency Beverly Wilshire, Los Angeles, CA Contact: http://www.abiworld.org/ March 2, 2007 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Bankruptcy Battleground West Regency Beverly Wilshire, Los Angeles, CA Contact: http://www.abiworld.org/ March 6, 2007 BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ March 14, 2007 TURNAROUND MANAGEMENT ASSOCIATION The Great Debate Sydney, Australia Contact: http://www.turnaround.org/ March 14-15, 2007 TURNAROUND MANAGEMENT ASSOCIATION Atlanta, GA Contact: http://www.turnaround.org/ March 15, 2007 TURNAROUND MANAGEMENT ASSOCIATION LI Turnaround Management Event Long Island, NY Contact: http://www.turnaround.org/ March 15-18, 2007 NATIONAL ASSOCIATION OF BANKRUTPCY TRUSTEES NABT Spring Seminar Ritz-Carlton Buckhead, Atlanta, GA Contact: http://www.NABT.com/ March 15, 2007 TURNAROUND MANAGEMENT ASSOCIATION Martini Madness Cocktail Reception with Geraldine Ferraro Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ March 20, 2007 THOMSON WEST LEGALWORKS Insurance and Reinsurance Allocation Superbowl New York, NY Contact: http://www.westlegalworks.com/ March 21, 2007 TURNAROUND MANAGEMENT ASSOCIATION The Next Wave of Distressed Businesses: A Panel Discussion South Florida Contact: http://www.turnaround.org/ March 21, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ March 27, 2007 TURNAROUND MANAGEMENT ASSOCIATION "The Six Keys of Sustained Profitable Growth" Rodney Page, Senior Partner of Blue Springs Partners Citrus Club, Orlando, FL Contact: http://www.turnaround.org/ March 27-31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spring Conference Four Seasons Las Colinas, Dallas, TX Contact: http://www.turnaround.org/ March 29-31, 2007 AMERICAN LAW INSTITUTE - AMERICAN BAR ASSOCIATION Chapter 11 Business Reorganizations Scottsdale, AZ Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 5, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Case Study "When Everything Goes Wrong" University of Florida, Gainesville, FL Contact: http://www.turnaround.org/ April 11-15, 2007 AMERICAN BANKRUPTCY INSTITUTE ABI Annual Spring Meeting J.W. Marriott, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ April 12, 2007 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC 4th Spring Luncheon and Founders Awards Washington, DC Contact: http://www.iwirc.org/ April 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club Jacksonville, FL Contact: 561-882-1331 or http://www.turnaround.org/ April 12, 2007 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - East JW Marriott, Washington, DC Contact: http://www.abiworld.org/ April 19-20, 2007 BEARD GROUP AND RENAISSANCE AMERICAN CONFERENCES Eighth Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures, and Restructurings The Millennium Knickerbocker Hotel - Chicago Contact: 800-726-2524; http://renaissanceamerican.com/ April 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION Wine Tasting Social TBA, Long Island, NY Contact: 631-251-6296 or http://www.turnaround.org/ April 20, 2007 TURNAROUND MANAGEMENT ASSOCIATION Breakfast meeting with Chapter President, Bruce Sim Westin Buckhead, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ April 24, 2007 TURNAROUND MANAGEMENT ASSOCIATION "Why Prospects Become Clients" Mark Fitzgerald, President of Sales Training Institute Inc Centre Club, Tampa, FL Contact: http://www.turnaround.org/ April 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION Jacksonville Zoo Turnaround University Club, Jacksonville, FL Contact: http://www.turnaround.org/ April 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION 1st Annual Credit & Bankruptcy Symposium Golf/Spa Outing Fox Hopyard Golf Club, East Haddam, CT Contact: 203-265-2048 or http://www.turnaround.org/ April 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spa Outing Mohegan Sun, Uncasville, CT Contact: 203-265-2048 or http://www.turnaround.org/ April 26-27, 2007 TURNAROUND MANAGEMENT ASSOCIATION 1st Annual Credit & Bankruptcy Symposium Mohegan Sun, Uncasville, CT Contact: http://www.turnaround.org/ April 26-28, 2007 ALI-ABA Fundamentals of Bankruptcy Law Philadelphia, PA Contact: http://www.ali-aba.org April 29 - May 1, 2007 INTERNATIONAL BAR ASSOCIATION International Insolvency Conference Zurich, Switzerland Contact: http://www.ibanet.org/ May 4, 2007 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - NYC Alexander Hamilton US Custom House, SDNY New York, NY Contact: http://www.abiworld.org/ May 7, 2007 AMERICAN BANKRUPTCY INSTITUTE 9th Annual New York City Bankruptcy Conference Millennium Broadway Hotel & Conference Center New York, NY Contact: http://www.abiworld.org/ May 14, 2007 TURNAROUND MANAGEMENT ASSOCIATION Annual TMA Atlanta Golf Outing White Columns, Atlanta, GA Contact: 678-795-8103 or http://www.turnaround.org/ May 16, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ May 16, 2007 TURNAROUND MANAGEMENT ASSOCIATION Bankruptcy Judges Panel Marriott North, Fort Lauderdale, FL Contact: http://www.turnaround.org/ May 17-18, 2007 TURNAROUND MANAGEMENT ASSOCIATION 6th Annual Great Lakes Regional Conference Renaissance Quail Hollow Resort, Painesville, OH Contact: http://www.turnaround.org/ May 24-25, 2007 BEARD GROUP AND RENAISSANCE AMERICAN CONFERENCES Fourth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London, UK Contact: 800-726-2524; http://renaissanceamerican.com/ May 29, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Bankruptcy Judges Panel Citrus Club, Orlando, FL Contact: http://www.turnaround.org/ May 30-31, 2007 FINANCIAL RESEARCH ASSOCIATES Distressed Debt Harvard Club, New York, NY Contact: http://www.frallc.com/ June 4-7, 2008 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 24th Annual Bankruptcy & Restructuring Conference JW Marriott Spa and Resort, Las Vegas, NV Contact: http://http://www.airacira.org// June 6-8, 2007 TURNAROUND MANAGEMENT ASSOCIATION 5th Annual Mid-Atlantic Regional Symposium Borgata Hotel Casino & Spa Atlantic City, NJ Contact: http://www.turnaround.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, IL Contact: http://www.airacira.org/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, MI Contact: 1-703-739-0800; http://www.abiworld.org/ June 21-22, 2007 BEARD GROUP AND RENAISSANCE AMERICAN CONFERENCES Tenth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel - Chicago Contact: 800-726-2524; http://renaissanceamerican.com/ June 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Bankruptcy Judges Panel Centre Club, Tampa, FL Contact: http://www.turnaround.org/ June 28 - July 1, 2007 NORTON INSTITUTES Norton Bankruptcy Litigation Institute Jackson Lake Lodge, Jackson Hole, WY Contact: http://www2.nortoninstitutes.org July 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Bankruptcy Judges Panel University Club, Jacksonville, FL Contact: http://www.turnaround.org/ July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, RI Contact: 1-703-739-0800; http://www.abiworld.org/ July 18, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ July 25-28, 2007 AMERICAN BANKRUPTCY INSTITUTE 12th Annual Southeast Bankruptcy Workshop The Sanctuary, Kiawah Island, SC Contact: http://www.abiworld.org/ August 9-11, 2007 AMERICAN BANKRUPTCY INSTITUTE 3rd Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, MD Contact: http://www.abiworld.org/ September 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Southwest Bankruptcy Conference Four Seasons Las Vegas, NV Contact: http://www.abiworld.org/ August 23-26, 2007 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Convention Drake Hotel, Chicago, IL Contact: http://www.nabt.com/ August 28, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Healthcare Panel Centre Club, Tampa, FL Contact: http://www.turnaround.org/ September 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION Buying and Selling Troubled Companies Marriott North, Fort Lauderdale, FL Contact: http://www.turnaround.org/ September 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ September 25, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Retail Panel Citrus Club, Orlando, FL Contact: http://www.turnaround.org/ October 11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL Contact: 561-882-1331 or http://www.turnaround.org/ October 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Orlando, FL Contact: http://www.ncbj.org/ October 16-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place Boston, MA Contact: 312-578-6900; http://www.turnaround.org/ October 30, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, FL Contact: 561-882-1331 or http://www.turnaround.org/ October 30, 2007 TURNAROUND MANAGEMENT ASSOCIATION Crisis Communications With Employees,Vendors and Media Centre Club, Tampa, FL Contact: http://www.turnaround.org/ November 14, 2007 TURNAROUND MANAGEMENT ASSOCIATION Dinner South FL Contact: 561-882-1331 or http://www.turnaround.org/ December 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, CA Contact: 1-703-739-0800; http://www.abiworld.org/ December 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South FL Contact: 561-882-1331 or http://www.turnaround.org/ January 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, FL March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, FL Contact: http://www.turnaround.org/ April 3-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 26th Annual Spring Meeting The Renaissance, Washington, DC Contact: http://www.abiworld.org/ June 12-14, 2008 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, MI Contact: http://www.abiworld.org/ August 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, FL Contact: http://www.abiworld.org/ September 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, AZ Contact: http://www.ncbj.org/ October 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, LA Contact: 312-578-6900; http://www.turnaround.org/ December 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, AZ Contact: http://www.abiworld.org/ October 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, AZ Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, NV Contact: http://www.ncbj.org/ June 21-24, 2009 INSOL 8th International World Congress TBA Contact: http://www.insol.org/ October 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, FL Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, LA Contact: http://www.ncbj.org/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergers-the New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency - Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Cherry A. Soriano-Baaclo, Melvin C. Tabao, Tara Marie A. Martin, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2007. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***