/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070330.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, March 30, 2007, Vol. 11, No. 76 Headlines ABACUS 2006-13: Fitch Puts Low-B Ratings on Three Note Classes ADVANCED MARKETING: U.S. Trustee Amends Official Panel Composition ADVANCED MARKETING: Court Approves Management Incentive Plan ALLIANCE IMAGING: Oaktree and MTS Buys 49.7% of Common Stock ALTRA INDUSTRIAL: Completes Solicitation of 9% Senior Notes ALTRA INDUSTRIAL: Launches Private Offering for $105 Mil. of Notes ALTRA INDUSTRIAL: Moody's Holds Junk Rating on 11.25% Senior Notes ALTRA INDUSTRIAL: Add-on Cues S&P to Affirm Sr. Notes' Junk Rating AMERICAN LODGING: Plan Proposes to Pay All Unsecured Creditors AMERICAN MEDIA: Posts $160.9 Mil. Net Loss in Yr. Ended March 31 AMERICAN TECH: Posts $792,314 Net Loss in 2nd Qtr. Ended Jan. 31 AMERIGROUP CORP: Offering $200 Million of Convertible Senior Notes AMERIGROUP CORPORATION: Pays $51.7 Million to Bank of America ARVINMERITOR INC: Names R. Sachdev as Asia Pacific President ASSET BACKED: Moody's Review Ratings and May Downgrade ASSOCIATED MATERIALS: Earns $2.3 Million in Quarter Ended Dec. 30 BEAR STEARNS: DBRS Puts Low-B Ratings on Six Certificate Classes BEAR STEARNS: Moody's Assigns Low-B Ratings on Two Cert. Classes BEAZER HOMES: Receives Grand Jury Subpoena BISON BUILDING: Files Schedules of Assets and Liabilities C-BASS: Moody's Rates Class B-4 Certificates at Ba1 CALPINE CORPORATION: Closes New $5 Billion DIP Financing CANAL CAPITAL: Posts $8,271 Net Loss in 1st Quarter Ended Jan. 31 CANYON CAPITAL: S&P Puts Positive Watch on 2 Note Classes' Ratings CHEVY CHASE: Moody's Rates Class B-5 Certificates at B2 CIFC FUNDING: S&P Rates $24 Million Class D Notes at BB CITIMORTGAGE: Fitch Rates $1.7 Mil. Class B-5 Certificates at B CITIZENS COMMS: Completes $750 Mil. Senior Unsec. Notes Offering COMMUNICATION INTELLIGENCE: GHP Horwath Raises Going Concern Doubt CONEXANT SYSTEMS: CEO Dwight Decker to Retire by Fall CWABS INC: S&P Cuts Ratings on Two Cert. Classes & Retains Watch CWMBS: Moody's Junks Rating on Five Class Certificates DAIMLERCHRYSLER: Auto Workers Unions Want Chrysler to Stay DAVID LIEBERMAN: Case Summary & 11 Largest Unsecured Creditors DIVERSA CORP: Insufficient Cash Prompts Going Concern Doubt EAGLE INSURANCE: New York Supreme Court Hearing Set on April 23 EASI FINANCE: DBRS Puts Low-B Ratings on Six Class Certificates EASI FINANCE: Fitch Rates $2 Mil. Class B12 Certificates at B EMERSON RADIO: Earns $3.6 Million in Quarter Ended December 31 ENERGY PARTNERS: Commences Cash Tender Offer for 8,700,000 Shares FIDELITY FUNDING: Fitch Holds BB Rating on Class B Certificates FORD MOTOR: Names Neil Schloss as Vice President and Treasurer GENERAL MOTORS: Europe Division Still Considering Further Job Cuts GEO GROUP: Repays $200 Million of Senior Credit Facility GEO GROUP: S&P Lifts Senior Unsecured Debt's Rating to B+ from B GOODYEAR TIRE: S&P Rates $1.2 Billion Second-lien Term Loan at B+ GRAHAM PACKAGING: Weak Performance Cues S&P's Stable Outlook GREENBRIER COMPANIES: Increased Debt Cues Moody's to Lower Ratings GSC GROUP: Moody's Rates $13 Mil. Class D Deferrable Notes at Ba2 HANCOCK FABRICS: Seeks Court Approval of CRP Employment Agreement HANCOCK FABRICS: Has Until May 21 to File Schedules & Statements HANGER ORTHOPEDIC: Good Performance Cues S&P's Stable Outlook HARVEST ENERGY: High Debt Levels Prompt S&P to Downgrade Ratings HILB ROGAL: Earns $21.4 Million in Quarter Ended December 31 HSI ASSET: Moody's Rates Class M-10 Certificates at Ba1 HUNTSMAN CORP: Moody's Lifts Corp. Family Rating to Ba3 from B1 HUNTSMAN INT'L: Moody's Lifts Corp. Family Rating to Ba3 from B1 IMC INVESTMENT: Judge DeWayne Confirms Chapter 11 Plan INDYMAC HOME: Moody's Assigns Low-B Ratings on 2 Cert. Classes INTERNATIONAL COAL: Moody's Holds Corporate Family Rating at B2 INTERSTATE BAKERIES: New Compensation Structure for Board Approved INTERSTATE BAKERIES: Court Approves Management Incentive Plan IPC SYSTEMS: WestCom Buyout Cues S&P's Negative CreditWatch JADWIGA PAWLOWSKI: Voluntary Chapter 11 Case Summary JENKENS & GILCHRIST: To Pay $76 Million Penalty; Closes Doors JP MORGAN: Moody's Rates Class MV-10 Certificates at Ba1 KING PHARMA: Key Improvements Cue Moody's Stable Outlook LENNAR CORP: Earns $68.6 Million in First Quarter Ended Feb. 28 LODGENET ENT: Add-on Cues S&P to Hold B+ Senior Facilities' Rating LONE STAR: Board Approves $2.1 Billion Sale to U.S. Steel LONE STAR: U.S. Steel Deal Prompts S&P's Positive CreditWatch LS POWER: Moody's Rates $1 Bil. 1st-Lien Credit Facilities at B1 MAGUIRE PROPERTIES: S&P Lowers Corp. Credit Rating to BB- from BB MASONITE CORP: High Leverage Prompts Moody's to Hold B2 Rating MCLEODUSA INC: Proposed IPO Cues Moody's Developing Outlook MERRILL LYNCH: Moody's Eyes Possible Downgrade on Ba2 Rating MITCHELL INT'L: Acquisition Cues Moody's Ratings' Withdrawal NEW CENTURY: Natixis Selling 3,534 Mortgage Loans, Bids Due Apr. 3 NOVASTAR MORTGAGE: Moody's Rates Class M-11 Certificates at Ba2 OAK HILL CREDIT: S&P Holds BB- Rating on $23 Million Notes ONE WALL: Moody's Rates $10.5 Million Class E Junior Notes at Ba2 OPTEUM INC: Balks at Friedman Billings' Research Report OSHKOSH TRUCK: Net Income Lowers to $41 Mil. in Qtr. Ended Dec. 31 PACIFIC LUMBER: Scopac Gets Final OK to Hire Blackstone as Advisor PACIFIC LUMBER: Wants Deloitte & Touche as Auditor PACIFIC LUMBER: Wants to Employ Pierce Baymiller as HR Consultant PARMALAT SPA: Temporary Restraining Order Extended to May 14 PROGRESSIVE GAMING: Warns Bankruptcy if Made to Pay $43.7MM Bond RALI SERIES: S&P Affirms Low-B Ratings on Four Certificate Classes RCN CORP: Moody's Lowers Rating on 1st-Lien Loan to B1 from Ba2 REAL ESTATE: DBRS Places Low-B Ratings on 6 Class Certificates RIM SEMICONDUCTOR: Jan. 31 Balance Sheet Upside-Down by $2.5 Mil. SALTON INC: Board Approves Executed Financing Commitment Letters SIERRA PACIFIC: PUCN Allows Subsidiary to Raise Power Price SIRIUS SATELLITE: Keystone Autonics Files Patent Infringement Suit SOLUTIA INC: Delivers Modifications to 2007 Incentive Program SOLUTIA INC: Discloses Changes to Severance Deals with 7 Officers SOLUTIA INC: Agrees to Defer Calpine's Lease Decision to July 27 SOUNDVIEW HOME: Moody's Rates Class M-10 Certificates at Ba1 ST. LOUIS IDA: S&P Junks Rating on $2.1 Million Revenue Bonds STEEL DYNAMICS: Intends to Sell $400 Million of Debt Securities STEEL DYNAMICS: Moody's Rates $400 Million Debt at Ba2 STEEL DYNAMICS: S&P Rates $400 Mil. Senior Unsecured Notes at BB+ SYMPHONY CLO: S&P Rates $11.5 Million Class E Notes at BB TARO PHARMACEUTICAL: Kost Forer Raises Going Concern Doubt TOWER AUTOMOTIVE: Exclusive Plan-Filing Period Hearing Set Today TOWER AUTOMOTIVE: Files Cerberus Term Sheet; Hearing Set Today TOWER AUTOMOTIVE: Wants OEM Customer Contracts Filed Under Seal TRW AUTOMOTIVE: Closes $500 Million Offering of 7% Senior Notes U.S. STEEL: Board Approves $2.1 Billion Lone Star Acquisition UNITED SURGICAL: Moody's Junks Rating on $240 Million Senior Notes UNITED SURGICAL: S&P Junks Rating on Proposed $240 Mil. Sr. Notes URBAN CHOICE: Case Summary & 12 Largest Unsecured Creditors VICTORY MEMORIAL: Lease Decision Period Extended Through June 13 WAMU COMMERCIAL: Fitch Assigns Low-B Ratings on Six Cert. Classes WAMU MORTGAGE: Fitch Puts Low-B Ratings on $5.2 Mil. Certificates WELLS FARGO: Fitch Assigns Low-B Ratings on $6.3 Mil. Certificates WELLS FARGO: Fitch Assigns Low-B Ratings on 4 Certificates Classes WII COMPONENTS: Moody's Junks Rating on Proposed $64 Million Loan XM SATELLITE: Keystone Autonics Files Patent Infringement Lawsuit * Greenberg Traurig Shareholder Joins Israel Bonds' Board * BOOK REVIEW: Admiralty and Maritime Law ********* ABACUS 2006-13: Fitch Puts Low-B Ratings on Three Note Classes -------------------------------------------------------------- Fitch affirms these classes of ABACUS 2006-13, Ltd.: -- $159,000,000 class A notes due 2046 at 'AAA'; -- $44,718,750 class B notes due 2046 at 'AA+'; -- $10,931,250 class C notes due 2046 at 'AA'; -- $11,925,000 class D notes due 2046 at 'AA-'; -- $11,925,000 class E notes due 2046 at 'A+'; -- $11,925,000 class F notes due 2046 at 'A'; -- $7,950,000 class G notes due 2046 at 'A-'; -- $11,925,000 class H notes due 2046 at 'BBB+'; -- $9,937,500 class J notes due 2046 at 'BBB'; -- $18,943,750 class K notes due 2046 at 'BBB-'; -- $9,937,500 class L notes due 2046 at 'BB+'; -- $7,950,000 class M notes due 2046 at 'BB'; and -- $5,962,500 class N notes due 2046 at 'BB-'. In addition, Fitch assigns these ratings: -- $2,484,500 class O notes due 2046 'B+'; -- $2,981,500 class P notes due 2046 'B'; and -- $994,000 class Q notes due 2046 'B-'. The ratings are based upon the credit quality of the reference portfolio, the legal structure of the transaction, the financial strength of the counterparties and their guarantors, as well as the credit quality of the collateral assets. The ratings assigned to the notes address the timely payment of interest and the ultimate payment of principal at maturity. ADVANCED MARKETING: U.S. Trustee Amends Official Panel Composition ------------------------------------------------------------------ Kelly Beaudin Stapleton, the United States Trustee for Region 3, informs the United States Bankruptcy Court for the District of Delaware that Grove Atlantic Inc., and Wisdom Publications Inc., have resigned from the Official Committee of Unsecured Creditors in Advanced Marketing Services Inc. and its debtor-affiliates Chapter 11, effective March 2, 2007. The U.S. Trustee appointed Harper Collins Publishers, and Workman Publishing Co. Inc., to fill in the vacant posts. The Creditors Committee is currently composed of: (1) Random House, Inc. 400 Hahn Road Westminster, MD 21157 Attn: William C. Sinnott Tel: (410) 386-7480 Fax: (410) 386-7439 (2) Penguin Group USA Inc. 375 Hudson Street New York, NY 10014 Attn: Alexander Gigante Tel: (212) 366-2959 Fax: (212) 366-2867 (3) Hachette Book Group USA 3 Center Plaza Boston, MA 02108 Attn: Dennis J. Balog Tel: (617) 263-1880 Fax: (617) 263-2852 (4) Harper Collins Publishers 1000 Keystone Industrial Park Scranton, PA Attn: John Shearer Tel: (570) 941-1244 Fax: (570) 941-1590 (5) Workman Publishing Co., Inc. 225 Varick Street New York, NY Attn: Philip C. Gerace Tel: (212) 614-7665 Fax: (212) 674-5792 About Advanced Marketing 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. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Apr. 28, 2007. (Advanced Marketing Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) ADVANCED MARKETING: Court Approves Management Incentive Plan ------------------------------------------------------------ The Hon. Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware has approved Advanced Marketing Systems Inc. and its debtor-affiliates' Management Incentive Plan. The Debtors are authorized and directed to pay the Plan Participants with incentive bonuses not exceeding $635,000 in accordance with the terms of the Incentive Plan. As reported in the Troubled Company Reporter on March 22, 2007, Judge Sontchi authorized the Debtors to pay key AMS Employees retention bonuses aggregating $820,000 under the AMS Retention Bonus Plan. According to Judge Sontchi, except as to Gary M. Rautenstrauch, the Debtors' former chief executive officer, to the extent that any Incentive Plan Participant is offered commensurate employment from Baker & Taylor Inc. within 30 days of the closing of the sale of Publishers Group West Incorporated's rights under its distribution agreements with various publishers -- as determined by AMS after consultation with the Official Committee of Unsecured Creditors, and regardless of whether the Plan Participant accepts or rejects the employment offer -- the Plan Participant will only be eligible to receive 50% of the Plan Participant's share of the Bonus Pool. Except as to Mr. Rautenstrauch, unless a Plan Participant is earlier terminated without cause, any payment under the Incentive Plan is conditioned on the completion of the Business Goals provided for in the Incentive Plan, Judge Sontchi adds. Judge Sontchi says Mr. Rautenstrauch will be entitled to receive 70% of his share of the Bonus Pool upon the closing of the Sale. Mr. Rautenstrauch will be paid the remaining 30% of his share of the Bonus Pool on the 90th day after the closing. If Mr. Rautenstrauch receives an offer of commensurate employment from Baker & Taylor before the 90th day after the closing, and regardless of whether Mr. Rautenstrauch accepts or rejects the employment offer, then he will not be entitled to receive the balance of his share of the Bonus Pool. All payments under the Incentive Plan will be in lieu of each Plan Participants' rights, if any, to retention payments or any other claim arising under the Retention Plan adopted by AMS in April 2006. The provision of postpetition payments to the Incentive Plan Participants as authorized will be administrative expenses of the estates pursuant to Section 503(b) of the Bankruptcy Code, Judge Sontchi says. As reported in the Troubled Company Reporter on March 6, 2007, the approval and implementation of the AMS Management Incentive Plan and AMS Employee Retention Plan assures not only continued services for the consenting publishers under the asset purchase agreement between Publishers Group West Inc. and Perseus Books LLC, but also a significant reduction in claims against the estate of PGW. Under the Perseus deal, PGW will continue to provide transition services to Perseus following the closing. As a condition to payment, AMS has required the successful completion of an inventory return program. The Baker & Taylor sale documents currently provide that, unless otherwise agreed by Baker & Taylor, all inventory must be removed from AMS' facilities within 20 days of closing to the extent that it is not sold to Baker & Taylor. About Advanced Marketing 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. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of more than $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on Apr. 28, 2007. (Advanced Marketing Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) ALLIANCE IMAGING: Oaktree and MTS Buys 49.7% of Common Stock ------------------------------------------------------------ Alliance Imaging, Inc., reported that funds managed by Oaktree Capital Management, LLC and MTS Health Investors, LLC have agreed to purchase approximately 24,501,505 shares of the company's common stock from a fund managed by an affiliate of Kohlberg Kravis Roberts & Co., L.P., for approximately $153.1 million or $6.25 per share. Upon completion of the transaction, Oaktree and MTS will own in the aggregate approximately 49.7% and KKR will own less than 3% of the outstanding shares of common stock of the company. The company is not selling any shares in the transaction. In connection with the transaction, Oaktree and MTS have entered into a governance and standstill agreement with the company pursuant to which, among other things, they are prohibited, for a period of three years after closing of the transaction, from increasing their combined beneficial ownership of the Company beyond 49.9% of the outstanding shares of common stock without the prior consent of a majority of independent directors. Upon completion of the transaction, three of the company's directors affiliated with KKR will resign from the company's Board of Directors and each of its committees, three nominees of Oaktree and MTS will join the Board and the Board size will remain at seven directors, unless modified by an affirmative vote of two- thirds of the directors then serving. A Nominating and Corporate Governance Committee consisting of four members will be formed, the Compensation Committee will be increased in size to four members, and two members of each committee will be nominees of Oaktree and MTS. A Finance Committee consisting of three members will also be formed, with one member being a nominee of Oaktree and MTS. The Executive Committee will be discontinued. Oaktree and MTS have agreed to reimburse the company up to $1.25 million of expenses upon completion of the transaction. In connection with the transaction, Oaktree and MTS are not entering into any management fee arrangement with the company. The Board of Directors of the company authorized a Special Committee, composed of the Company's independent directors not affiliated with KKR, to review the sale of the shares of common stock by KKR. The Special Committee hired an independent financial advisor and independent legal counsel. In reviewing the transaction, the Special Committee negotiated the terms of the governance and standstill agreement on behalf of the company, and as part of the sale of the shares of common stock by KKR, approved and recommended the terms of such agreement to the Board of Directors of the company. The Special Committee also approved the three nominees of Oaktree and MTS to the company's Board of Directors, Michael P. Harmon, Curtis S. Lane and Stephen Kaplan. The Board of Directors approved changes to the severance arrangements of certain key executives of the company consisting of increasing the period during which severance is to be paid to these officers by 6 to 15 months. T he Board of Directors also approved, subject to shareholder approval, an amendment to the company's stock option plan to increase by 1,000,000 the number of shares of common stock reserved for grants pursuant to the plan. The transaction is subject to clearance under the Hart-Scott- Rodino Antitrust Improvements Act of 1976 and will require the consent of the company's lenders under its term loan and revolving credit facilities. The transaction is expected to close during the first half of 2007. "For over seven years, Alliance has greatly benefited from KKR's advice and input as our majority shareholder, and I look forward to the contribution of Oaktree and MTS as they assume a significant equity position in the Company and join our Board of Directors," Paul Viviano, Alliance Imaging's Chairman of the Board and Chief Executive Officer, said. "Together, we will continue to pursue the successful implementation of our company-wide initiatives: our focus on providing outstanding, high quality clinical care to our patients and investing in our growth products -- fixed site imaging centers, PET / CT services and radiation oncology centers." "We are pleased and enthusiastic about our investment in Alliance Imaging, which we believe to be the strongest independent platform in the imaging industry," Michael P. Harmon, Managing Director of Oaktree Capital Management, LLC said. "Oaktree and MTS take great pride in this investment and we look forward to supporting the Alliance management team with our collective resources and industry experience." "We've done a considerable amount of work in the diagnostic imaging industry," Curtis Lane, Founder and Senior Managing Director of MTS Health Investors said. "We believe it is the right time to invest, particularly given the opportunity to partner with the industry's premier management team." About Alliance Imaging Based in Anaheim, California, Alliance Imaging Inc. (NYSE: AIQ) -- http://www.allianceimaging.com/-- provides shared-service and fixed-site diagnostic imaging services, based upon annual revenue and number of diagnostic imaging systems deployed. Alliance provides imaging and therapeutic services primarily to hospitals and other healthcare providers on a shared and full-time service basis, in addition to operating a growing number of fixed-site imaging centers. The company had 489 diagnostic imaging systems, including 331 MRI systems and 73 PET or PET/CT systems, and served over 1,000 clients in 43 states at Dec. 31, 2006. Of these 489 diagnostic imaging systems, 68 were located in fixed-sites, which includes systems installed in hospitals or other buildings on or near hospital campuses, medical groups' offices, or medical buildings and retail sites. * * * Moody's Investors Service and Standard & Poor's assigned their single-B ratings to Alliance Imaging's 7.5% Senior Subordinated Notes due 2012. ALTRA INDUSTRIAL: Completes Solicitation of 9% Senior Notes ----------------------------------------------------------- Altra Industrial Motion Inc. has successfully completed its reported consent solicitation relating to its outstanding 9% Senior Secured Notes due 2011. On March 21, 2007, the company had received the consents of holders of $165 million aggregate principal amount of the outstanding 2011 Notes. Altra, the subsidiary guarantors of the 2011 Notes and The Bank of New York Trust Company, N.A., the trustee under the indenture governing the 2011 Notes, have entered into a supplemental indenture effecting the proposed amendments as explained in the consent solicitation statement dated March 7, 2007. In the consent solicitation statement, Altra will make a payment equal to $2.50 in cash for each $1,000 principal amount of 2011 Notes, which a consent is received and accepted before to the 2011 Note Expiration Date after the supplemental indenture becomes operative. The supplemental indenture effecting the amendments will not become operative unless and until Altra pays for shares of common stock of TB Wood's Corporation under its pending tender offer and does not complete a "short-form" back-end merger on the closing date. About Altra Industrial Headquartered in Quincy, Massachusetts, Altra Industrial Motion, Incorporated -- http://www.altramotion.com/-- is a supplier of power transmission and motion control products. ALTRA INDUSTRIAL: Launches Private Offering for $105 Mil. of Notes ------------------------------------------------------------------ Altra Industrial Motion Inc. has commenced a private "tack-on" offering of $105 million aggregate principal amount of its 9% senior secured notes due 2011. The company intends to use the proceeds from the offering to fund, in part, the reported acquisition of TB Wood's Corporation and pay related fees and expenses. The company had issued $165 million of the 9% senior secured notes in November 2004. The company said that the notes have not been registered under the Securities Act or any other state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933, as amended and applicable state securities law. About Altra Industrial Headquartered in Quincy, Massachusetts, Altra Industrial Motion, Incorporated -- http://www.altramotion.com/-- is a supplier of power transmission and motion control products. ALTRA INDUSTRIAL: Moody's Holds Junk Rating on 11.25% Senior Notes ------------------------------------------------------------------ Moody's Investors Service affirmed Altra Industrial Motion Inc.'s B2 corporate family rating in the context of the planned acquisition of TB Wood's Corporation. It also affirmed the Caa1 rating of the 11.25% senior unsecured notes due 2013 and downgraded the rating of the 9% senior secured notes due 2011 to B2, reflecting the anticipated capital structure after the TB Wood's acquisition. The rating outlook was changed to positive. The affirmation of the corporate family rating is based on the computation of a pro forma debt to EBITDA ratio of around 5x as of Dec. 31, 2006, which remains solid for the B2 rating category, despite the debt increase of around $129 million related to the TB Wood's acquisition in part comprising of $105 million tack-on 9% notes due 2011. Moody's recognized the improvement of Altra's operating performance and financial condition prior to the TB Wood's acquisition, providing some leeway within the rating category for such an acquisition. In addition, from a business perspective the rating agency believes that the TB Wood's acquisition is slightly positive as it will broaden Altra's installed base of power transmission products with a new exposure to belt drives and new adjustable speed drives. In the next twelve months, Moody's expects continuously solid operating performance and an improvement of free cash flow primarily due to more favorable working capital movements. Based on this expectation, the rating outlook was changed to positive and the speculative grade liquidity rating was upgraded to SLG-2. Taking into account the cyclicality of Altra's operations, Moody's believes that the corporate family rating could feel some positive rating pressures if Altra increases its cash flow generation such that free cash flow to debt reaches 6% while debt to EBITDA declines to below 5x. Moody's would also expect material weaknesses in Altra's internal control - certain plant locations having encountered difficulty closing their books in a timely and accurate manner in fiscal 2006 -- to be resolved in fiscal 2007. The downgrade of the 9% senior secured notes due 2011 to B2 reflects Moody's assessment that the instrument's recovery rate in an event of default would be closer to the expected family rate after the $105 million tack-on. Ratings affirmed: -- B2 corporate family rating -- B2 probability of default rating -- Caa1 GBP21.5 million 11.25% senior unsecured notes due 2013 with slightly revised LGD assessment: LGD6, 91% Rating downgraded: -- $165 million 9% senior secured notes due 2011 to B2 LGD3, 47% New rating: -- B2 rating assigned to $105 million tack-on 9% senior secured notes due 2011 Rating upgraded: -- SGL-2 Speculative grade liquidity rating Headquartered in Quincy, Massachusetts, Altra Industrial Motion, Inc. is a manufacturer of mechanical power transmission products with revenues of $462 million in fiscal 2006. ALTRA INDUSTRIAL: Add-on Cues S&P to Affirm Sr. Notes' Junk Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Altra Industrial Motion, Inc., including its 'B' corporate credit rating, following the $105 million add-on to the existing $165 million second-lien senior-secured notes. These notes were affirmed at 'CCC+' with a recovery rating of '4'. The Quincy, Massachusetts.-based industrial manufactures intends to use the proceeds, along with a $10 million draw on the revolving credit facility and additional cash, to purchase TB Wood's Corp. The total debt following the acquisition is expected to be approximately $370 million. The outlook is stable. Altra is expected to improve its financial profile by gradually reducing leverage, which will enable it to maintain credit quality consistent with the current rating. If credit metrics are not sustained over the intermediate term, however, the rating agency could revise the outlook to negative or lower the ratings. AMERICAN LODGING: Plan Proposes to Pay All Unsecured Creditors -------------------------------------------------------------- American Lodging Inc. filed a disclosure statement explaining its Chapter 11 Plan of Reorganization with the U.S. Bankruptcy Court for the Northern District of Indiana, South Bend Division. Treatment of Claims Under the Plan, Class 2 Claims of U.S. Bank, Custodian for Plymouth Park Tax Services LLC or its assignee will be canceled in exchange for stock in the newly reorganized Debtor. The Class 3 Secured Claims of Mid Town Acquisition and Vine Garden Limited Partnership will be paid with interest, in monthly installments based upon a 20-year amortization. The payment to this Class is estimated not to exceed approximately $9,000 per month. The Secured Claim of D.I. of Natchez Inc., as successor in interest to Unizan Bank N.A.'s Claim, will be paid in full with interest in monthly installments not exceeding $1,000 based upon a 20-year amortization. The Class 5 Allen County Treasurer Priority Tax Claim will be paid in full within one year after confirmation of the Plan. Telerent Leasing Corporation's claim will be paid in full pursuant to the terms of a prepetition agreement, provided, however, all pre- confirmation arrearages will be cured within one year after confirmation of the Plan and all pre-confirmation default charges will be waived. The Priority Tax Claim of the Internal Revenue Service will be paid in full with interest at the I.R.C. Rate based upon a five year amortization. Payments will be quarterly commencing 90 days after confirmation of the Plan. The payments are estimated to be approximately $3,600 per quarter. The Priority Tax Claim of the Indiana Department of Revenue will be paid in full with interest in quarterly installments of approximately $625 based upon a five-year amortization. All unsecured claims including the unsecured deficiency claim of the holders of claims in Classes 3 and 4, will receive a pro rata distribution from a $5,000 annual lump sum payment made to the Class by the Debtor commencing one year after confirmation of the Plan for five consecutive years. Interest holders in the Debtor will receive nothing under the Plan. All pre-petition equity security interests in the Debtor will be canceled. Liquidation Analysis The Debtor owns and operates a motel located at 3527 North Coliseum Boulevard, Fort Wayne, Ind. The motel does business as the Relax Inn. In the schedules of assets and liabilities, Debtor scheduled the value of the motel at $915,000. The property is subject of a statutory lien as a function of tax sale. In the event of liquidation, and if the Debtor does not redeem the real estate, no proceeds would be available for unsecured creditors. The Debtor anticipates that about $3,083,290 worth of claims will be filed in its case. Disclosure Statement Hearing Objections to the Debtor's disclosure statement, if any, must be submitted by April 4, 2007. The Court will convene a hearing to consider the adequacy of the disclosure statement explaining the Debtor's Chapter 11 Plan of Reorganization on April 11, 2007, at 11:30 a.m. Cash Collateral The Debtor obtained the Court's authority to use cash collateral securing repayment of its obligations to Mid Town Acquisitions, Vine Garden Limited Partneship, and D.I. of Natchez Inc. until May 2007. Mid Town Acquisitions and Vine Garden assert that as of Nov. 10, 2006, they hold a $927,076 claim against the Debtor. D.I. of Natchez asserts that it holds a $614,937 claim against the Debtor as of Nov. 22, 2006. The Debtor will use the funds for its business operations pursuant to a 12-month budget, a copy of which is available for free at http://researcharchives.com/t/s?1c3a As adequate protection, the Debtor agreed to pay: a) $8,000 to Mid Town and Vine Garden every month beginning Feb. 1, 2007; and b) $2,000 to D.I. of Natchez every month beginning Feb. 1, 2007. Headquartered in Indianapolis, Ind., American Lodging Inc. aka Relax Inn operates a hotel and inn. The company filed a chapter 11 petition on November 10, 2006 (Bankr. N.D. Ind. Case No. 06-12067). Scot T. Skekloff, Esq., at Skekloff, Adelsperger & Kleven, LLP represents the Debtor. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor sought protection from its creditors, it listed assets and debts between $1 million to $100 million. AMERICAN MEDIA: Posts $160.9 Mil. Net Loss in Yr. Ended March 31 ---------------------------------------------------------------- American Media Operations, Inc., reported results for the year ended March 31, 2006. For the year ended March 31, 2006, the company had a net loss of $160.9 million on total operating revenues of $496.2 million, as compared with a net loss of $13.8 million on total operating revenues of $501.8 million for the year ended March 31, 2005. The decrease in total operating revenue for the year ended March 31, 2006, was primarily attributable to a $15.2 million decrease in operating revenue relating to the company's Newspaper Publications and a $4.4 million decrease in operating revenue relating to its Women's Health and Fitness Publications, partially offset by an increase in operating revenue relating to its Celebrity Publications of $6.4 million and a $7.6 million increase in operating revenue in Corporate/Other. Total operating expense was $604.9 million and $436.2 million, respectively, for the fiscal years ended March 31, 2006, and March 31, 2005. The increase in operating expense is primarily due to the impairment write down of certain trade names and goodwill in the amount of $147.5 million, higher operating costs of $16.1 million associated with the launches of Celebrity Living and Looking Good Now, higher subscription related costs of $11 million required to maintain the rate base, and Restatement related costs of $4.3 million. These expenses were partially offset by decreased television advertising expenses of $4.8 million and decreased restructuring expenses of $1.8 million. As of March 31, 2006, the company's balance sheet showed total assets of $1.29 billion and total liabilities of $1.28 billion, resulting to total stockholders' equity of $9.32 million. The company's balance sheet as of March 31, 2006, also showed strained liquidity with total current assets of $124.8 million available to pay total current liabilities of $163.6 million. Accumulated deficit as of March 31, 2006, was $272.5 million, as compared with $111.6 million a year earlier. Liquidity and Capital Resources The company's primary sources of liquidity are cash generated from operations and amounts available to be borrowed under its 2006 bank credit agreement. The 2006 Credit Agreement allows for term loans, swingline loans, a $60 million revolving credit commitment and letters of credit in an aggregate principal amount of up to $510 million. As of March 31, 2006, the company had cash and cash equivalents of $19.59 million, no amounts outstanding on the revolving credit facility and a working capital deficit of $38.8 million. A full-text copy of the company's annual report for the year ended March 31, 2006, is available for free at: http://ResearchArchives.com/t/s?1c3f Workforce Reduction During fiscal year 2006, the company initiated a plan to relocate its subscription circulation department and certain Shape magazine editors from Woodland Hills, California, to the company's New York City offices. The company's relocation plan involved the termination of 22 employees. This activity resulted in fiscal year 2006-second quarter charges of $500,000 for termination benefits, which were included in selling, general and administrative expenses in the accompanying Consolidated Statement of Loss. These severance benefits will be fully paid as of the end of the fiscal year 2007 first quarter. Restatement of Financial Reports In December 2006, the company was previously granted a waiver, under which its lenders agreed to extend the delivery date of the company's amended financial reports for the fiscal quarters beginning Dec. 30, 2005, through March 15, 2007. On Feb. 8, 2006, board of directors concluded that the company's previously issued financial statements included or otherwise summarized in its Annual Report on Form 10-K for the fiscal year ended March 31, 2005, and its Quarterly Reports on Form 10-Q for each of the quarters ended June 30, 2005 and Sept. 30, 2005 should no longer be relied upon. This conclusion was based on an evaluation conducted that proved a material weakness in the company's internal control over financial reporting, which existed as of March 31, 2005. About American Media Headquartered in Boca Raton, Florida, American Media Operations Inc., is a publisher of celebrity, health and fitness, and Spanish language magazines, including Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and The National Enquirer. AMI also owns Distribution Services, Inc. * * * American Media Operations, Inc. carries Moody's Investors Service's B2 ratings on the company's $60 million Senior Secured Revolving Credit Facility Due 2012 and $450 million Senior Secured Term Loan Due 2013. It also carries Moody's Caa3 ratings on its $150 million 8.875% Senior Subordinated Notes Due 2011 and $400 million 10.25% Senior Subordinated Notes Due 2009. AMERICAN TECH: Posts $792,314 Net Loss in 2nd Qtr. Ended Jan. 31 ---------------------------------------------------------------- American Technologies Group Inc. disclosed a $792,314 net loss for the fiscal second quarter ended Jan. 31, 2007, on $8.7 million of net sales. The company reported a $1.9 million net loss on $6.3 million of net sales for the three months ended Jan. 31, 2005. Revenues for the quarter ended Jan. 31, 2007, resulted from operations of North Texas Steel and Whitco Poles. The company's revenues for the three months ended Jan. 31, 2007, were about $8.7 million and were about $6.3 million for the three months ended Jan. 31, 2006. A primary reason for the increase in revenue was the inclusion of Whitco's revenue in the 2007-quarter as well as improved market conditions. Whitco was not acquired until April of 2006. Whitco sales for the quarter ended Jan. 31, 2007, were about $959,000. The company listed $17.3 million in total assets and $15.9 million in total liabilities, resulting to $1.4 million in total stockholders' equity. Accumulated deficit as of Dec. 31, 2006, was $77.2 million. Liquidity and Capital Resources As of Jan. 31, 2007, the company had about $562,000 in cash and equivalents. While in prior periods, the company had had sufficient cash on hand to meet its obligations, as a result of the recapitalization, it may not have funds to meet its future working capital and financing needs. As a result, additional financing will be required in order to meet the company's current and projected cash flow deficits from operations and development. Although the company is seeking financing to support its working capital needs, it has no commitments or assurances that it will be successful in raising the funds required. The company believes that it will be successful in meeting working capital needs to fund the current level of operating activities, capital expenditures and debt and other obligations through May 6, 2007, when the Laurus convertible term note B matures. However, if during that period or thereafter, it is not successful in generating sufficient capital resources and/or successfully refinancing the company's debt on terms acceptable to us, this could have a material adverse effect on the company's business, results of operations liquidity and financial condition. Full-text copies of the company's quarter report for the second quarter ended Jan. 31, 2007, are available for free at http://ResearchArchives.com/t/s?1c66 Going Concern Doubt Russell Bedford Stefanou Mirchandani LLP, in New York, expressed substantial doubt about American Technologies Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal year ended July 31, 2006. The auditor pointed to the company's recurring losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. About American Technologies American Technologies Group Inc. (NASDAQ: ATEG) -- http://www.ateg.com/-- through its subsidiary North Texas Steel Company, Inc., provides fabrication and detailing of structural steel components for commercial buildings, office buildings, convention centers, sports arenas, airports, schools, churches and bridges. Customers are general construction contractors who are building projects for owners, developers and government agencies. AMERIGROUP CORP: Offering $200 Million of Convertible Senior Notes ------------------------------------------------------------------ AMERIGROUP Corporation is offering the sale of its convertible senior notes due 2012 with $200 million in aggregate principal amount. Subject to certain requirements, the notes will be convertible into cash and, if applicable, shares of AMERIGROUP's common stock, par value $0.01 per share. In certain circumstances, the notes will be settled in cash up to the principal amount of the notes and, if applicable, shares of common stock for any value in excess thereof. AMERIGROUP intends to use the proceeds from the convertible notes offering to repay a portion of the outstanding amount under a new senior secured credit facility or another financing arrangement that enables it to post a supersedeas bond in connection with the appeal of its Illinois qui tam litigation. AMERIGROUP also intends to use a portion of the proceeds of the offering to pay the net cost of the convertible note hedge and warrant transactions it intends to enter into concurrently with or shortly after the pricing of the notes. The notes is offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. AMERIGROUP expects to grant to the initial purchasers an option to purchase up to an additional $20 million in aggregate principal amount of notes to cover overallotments. Hedge Transaction In connection with the offering, AMERIGROUP intends to enter into convertible note hedge and warrant transactions with an affiliate of one of the initial purchasers or its hedging counterparty. The convertible note hedge and warrant transactions are intended to reduce the potential dilution upon future conversion of the notes. If the initial purchasers exercise their overallotment option to purchase additional notes, AMERIGROUP expects to enter into additional convertible note hedge and warrant transactions with the counterparty. In connection with establishing their initial hedge of these transactions, the counterparty expects to enter into various derivatives transactions with respect to AMERIGROUP's common stock concurrently with or shortly after the pricing of the notes. These activities could have the effect of increasing or minimizing a decline in the price of AMERIGROUP's common stock concurrently with or following the pricing of the notes. Thereafter, such party may modify its hedge positions from time to time by entering into or unwinding various derivative transactions with respect to AMERIGROUP's common stock or by purchasing or selling AMERIGROUP's common stock in secondary market transactions. About AMERIGROUP Based in Virginia Beach, Virginia, AMERIGROUP (NYSE: AGP) -- http://www.amerigroupcorp.com/-- through its subsidiaries, operates as a multi-state managed healthcare company focused on serving people, who receive healthcare benefits through publicly sponsored programs, such as Medicaid, State Children's Health Insurance Program, FamilyCare, and Special Needs Plans. For 2006, total revenue was $2.8 billion with medical membership of about 1.3 million. As of Dec. 31, 2006, the company reported shareholders' equity of $769 million. * * * As reported in the Troubled Company Reporter on March 29, 2007, Moody's Investors Service assigned a Ba3 senior debt rating to AMERIGROUP's proposed senior secured credit facility consisting of a $150 million synthetic letter of credit and a $50 million revolving credit facility. AMERIGROUP CORPORATION: Pays $51.7 Million to Bank of America ------------------------------------------------------------- AMERIGROUP Corporation reported that it paid, under the Letter of Agreement, approximately $51.7 million to Bank of America N.A., of which, approximately $51.4 million represents cash collateral for the Letter of Credit issued by BofA for the benefit of the United States of America while the balance represents a Letter of Credit fee; attorneys fee and expenses. The company has agreed to cash collateralize the Letter of Credit as soon as (i) the date of its cancellation and return of the original Letter of Credit not drawn to the Bank and (ii) its expiration. Under the Security Agreement dated March 23, 2007 between the company and BofA, the company granted the Bank a security interest in a deposit account to secure its obligations in regards to the Letter of Credit. On March 20, 2007, the company delivered a notice to BofA that it plans to prepay in full, under the Amended and Restated Credit Agreement with its Lender and Guarantors dated Oct. 22, 2003, all of its outstanding obligation on March 23, 2007. The company further said that some Amended and Restated Security and Pledge Agreements with certain subsidiaries and BofA also dated Oct. 22, 2003, were also terminated. The company said that the credit agreement that was terminated, provides for commitments of $150 million and had letter of credit sublimit of $75 million. This agreement contained a provision which allowed the company to obtain an increase in revolving commitments of up to $50 million, which the proceeds agreement were available for general corporate purposes. At the company's option, the borrowings under the Credit Agreement accrued interest at one of these rates: -- Eurodollar plus the applicable margin, or -- an alternate base rate plus the applicable margin. The applicable margin varied depending on the company's leverage ratio. It had a commitment fee on the unused portion of the Credit Agreement that ranged from 0.20% to 0.325%, depending also on the company's leverage ratio. The company granted the lenders a security interest in substantially all of the assets of the Company and its wholly- owned subsidiary, PHP Holdings, Inc., including the stock of their respective wholly-owned managed care subsidiaries under the Terminated Security and the Pledge Agreement. About AMERIGROUP Headquartered in Virginia Beach, Virginia, AMERIGROUP Corporation, through its wholly-owned subsidiaries, is healthcare business for low-income Americans. The company serves over 1.3 million people in Columbia, Florida, Georgia, Maryland, New Jersey, New York, Ohio, Tennessee, Texas, and Virginia. * * * As reported in the Troubled Company Reporter on March 26, 2007, Standard & Poor's Ratings Services assigned its 'BB' counterparty credit rating and assigned its 'BB' senior secured debt ratings to AMERIGROUP Corporation's secured credit facilities, which consists of a five-year $351.3 million synthetic letter of credit and five-year $50 million revolver, both due 2012. ARVINMERITOR INC: Names R. Sachdev as Asia Pacific President ------------------------------------------------------------ Rakesh Sachdev has been named president of ArvinMeritor, Inc. in Asia Pacific, effective immediately. Mr. Sachdev will report directly to ArvinMeritor's Chairman, Chief Executive Officer and President, Charles G. "Chip" McClure. "Rakesh has been a long-standing and integral member of ArvinMeritor's executive management team with extensive experience in several areas including, operations, finance, strategy, and mergers and acquisitions. Rakesh has made many significant contributions to the company's success," Mr. McClure said. "Given the challenging global environment in which we are operating, we are keenly focused on positioning the company for sustainable growth. Rakesh's appointment is further evidence of our commitment to global expansion, especially in Asia where we see tremendous opportunities, both in the passenger car and commercial vehicle markets. His operational expertise and industry knowledge will help us rapidly advance our strategic plan and generate growth." In his new role as President of ArvinMeritor in Asia Pacific, Mr. Sachdev will be responsible for managing existing customer relationships, forging new relationships and overseeing the company's operations in China, India, Australia, Japan, Korea, Singapore, Thailand, Indonesia, Malaysia, the Philippines and Vietnam. Mr. Sachdev will focus on helping ArvinMeritor achieve its stated goals of: * tripling profitable sales in three to five years by adding over $1 billion in revenues with both domestic and global OEM customers, * increasing outsourcing from the region to more than $1 billion in purchases from existing and new suppliers, and * substantially expanding ArvinMeritor's engineering and product development footprint in India and China. Mr. Sachdev most recently served as senior vice president of Strategy and Corporate Development for ArvinMeritor. In this role, Mr. Sachdev was responsible for leading efforts to develop and implement ArvinMeritor's global strategies and all corporate development activities. Prior to leading Strategy and Corporate Development, Mr. Sachdev served as the interim CFO, vice president and controller, and vice president and general manager of Worldwide Braking Systems for ArvinMeritor's Commercial Vehicle Systems business group. Mr. Sachdev joined ArvinMeritor in 1999 as vice president and general manager for CVS' global trailer products group, after more than 18 years of senior management experience with Cummins Engine Company. Operational Plans ArvinMeritor will increase the company's technical capabilities in Asia by building a new technical center in China. In addition, the company plans to double the size of its technical center in India. 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. * * * As reported in the Troubled Company Reporter on Feb. 28, 2007, 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. ASSET BACKED: Moody's Review Ratings and May Downgrade ------------------------------------------------------ Moody's Investors Service has placed nine classes issued by Asset Backed Securities Corporation Home Equity Loan Trust in 2003 and 2004 on review for possible downgrade. The underlying assets in each transaction consist of fixed- and adjustable-rate, subprime residential mortgage loans. The classes being reviewed from each transaction issued in 2003 have experienced deterioration of credit enhancement due to a combination of step-down and back-ended losses. The tranches under review from the 2004-HE4 transaction have experienced a sustained rapid pace of losses stemming at least in part from high loss severities on liquidated collateral. These are the rating actions: * Asset Backed Securities Corporation Home Equity Loan Trust 2003-HE1 -- Class M-3; Currently Baa2, on review for possible downgrade. * Asset Backed Securities Corporation Home Equity Loan Trust 2003-HE2 -- Class M-5; Currently Baa3, on review for possible downgrade. * ABSC Home Equity Loan Trust, Series 2003-HE3 -- Class M-5; Currently Baa3, on review for possible downgrade. * Asset Backed Securities Corporation Home Equity Loan Trust 2003-HE5 -- Class M-5; Currently Baa3, on review for possible downgrade. * Asset Backed Securities Corporation Home Equity Loan Trust 2004-HE4 -- Class M-6; Currently Baa1, on review for possible downgrade, -- Class M-7; Currently Baa2, on review for possible downgrade, -- Class M-8; Currently Ba2, on review for possible downgrade, -- Class M-9; Currently B1, on review for possible downgrade, and -- Class M-10; Currently B3, on review for possible downgrade. ASSOCIATED MATERIALS: Earns $2.3 Million in Quarter Ended Dec. 30 ----------------------------------------------------------------- Associated Materials Incorporated reported net income of $2.3 million on net sales of $299 million for the fourth quarter ended Dec. 30, 2006, compared with net income of $10.3 million on net sales of $311.4 million for the fourth quarter ended Dec. 31, 2005. Fourth quarter 2006 results include a $3.4 million impairment charge on certain long-lived assets, $100,000 of amortization related to prepaid management fees and $200,000 of foreign currency losses. For the fiscal year ended Dec. 30, 2006, net income was $33.3 million on net sales of $1.3 billion, compared with net income of $22.5 million on net sales of $1.2 billion for the 2005 fiscal year. 2006 fiscal year results include separation costs of $2.1 million related to the resignation of the company's former chief executive officer, a $3.4 million impairment charge on certain long-lived assets, $500,000 of amortization related to prepaid management fees, $700,000 of foreign currency gains, non-cash stock compensation expense of less than $100,000, and a gain of $100,000 associated with the sale of the company's former manufacturing facility in Freeport, Texas. Net sales increased by 6.5%, or $76.5 million, for the fiscal year ended Dec. 30, 2006, driven primarily by the continued realization of selling price increases implemented in late 2005 and early 2006, unit volume growth in the company's vinyl window operations, as well as the benefit from a stronger Canadian dollar. Gross profit for the fiscal year ended Dec. 30, 2006 was $302.3 million, or 24.2% of net sales, compared to gross profit of $267.3 million, or 22.8% of net sales, for the same period in 2005. The increase in gross profit as a percentage of net sales was primarily a result of the realization of selling price increases. Selling, general and administrative expense increased to $203.8 million, or 16.3% of net sales, for the fiscal year ended Dec. 30, 2006, versus $198.5 million, or 16.9% of net sales, for the same period in 2005. The increase in selling, general and administrative expense was due primarily to increased expenses in the company's supply center network and the full year impact of expenses relating to new supply centers opened during 2005, as well as increases in EBITDA-based incentive compensation programs and the impact of a stronger Canadian dollar, partially offset by the benefit of headcount reductions implemented in late 2005. Income from operations was $95.1 million for the fiscal year ended Dec. 30, 2006, compared to income from operations of $64.9 million for the same period in 2005. At Dec. 31, 2006, the company's balance sheet showed $786.3 million in total assets, $520.2 million in total liabilities, and $266.1 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 30, 2006, are available for free at http://researcharchives.com/t/s?1c24 * * * Associated Materials Inc. -- http://www.associatedmaterials.com/ is a leading manufacturer of exterior residential building products, which are distributed through company-owned distribution centers and independent distributors across North America. AMI produces a broad range of vinyl windows, vinyl siding, aluminum trim coil, aluminum and steel siding and accessories, as well as vinyl fencing and railing. AMI is a privately held, wholly-owned subsidiary of Associated Materials Holdings Inc., which is a wholly-owned subsidiary of AMH Holdings Inc., which is a wholly- owned subsidiary of AMH Holdings II Inc., which is controlled by affiliates of Investcorp S.A. and Harvest Partners Inc. Investcorp S.A. -- http://www.investcorp.com/-- is a global investment group with offices in New York, London and Bahrain. The firm has four lines of business: corporate investment, real estate investment, asset management and technology investment. It has completed transactions with a total acquisition value of more than $28 billion. Harvest Partners Inc. -- http://www.harvpart.com/-- is a private equity investment firm with a long track record of building value in businesses and generating attractive returns on investment. Founded in 1981, Harvest Partners has approximately $1 billion of invested capital under management. * * * Moody's downgraded the ratings of Associated Materials Inc. and its holding company AMH Holdings Inc. AMH Holdings' corporate family rating and ratings on AMI's senior secured credit facilities were downgraded to B3 from B2, effective Jan. 19, 2006. Moody's said the ratings outlook is stable. BEAR STEARNS: DBRS Puts Low-B Ratings on Six Certificate Classes ---------------------------------------------------------------- Dominion Bond Rating Service assigned provisional ratings to these classes of Bear Stearns Commercial Securities Trust, Series 2007- TOP26 Commercial Mortgage Pass-Through Certificates. The trends are Stable. * Class A-1 at AAA * Class A-2 at AAA * Class A-3 at AAA * Class A-AB at AAA * Class A-4 at AAA * Class A-1A at AAA * Class A-M at AAA * Class A-J at AAA * Class X-1 at AAA * Class X-2 at AAA * Class B at AA * Class C at AA (low) * Class D at A * Class E at A (low) * Class F at BBB (high) * Class G at BBB * Class H at BBB (low) * Class J at BB (high) * Class K at BB * Class L at BB (low) * Class M at B (high) * Class N at B * Class O at B (low) Finalization of ratings is contingent upon receipt of final documents conforming to information already received. The collateral consists of 237 fixed-rate loans secured by 247 multi-family, mobile home parks and commercial properties. The portfolio has a balance of $2,106,003,971. The pool benefits from a high DBRS refinance debt service coverage ratio of 1.22x. Of the 69 loans sampled by DBRS, cash flows were generally underwritten to in-place rents. The pool also benefits from strong sponsorship as indicated by 62.8% of DBRS's sample. DBRS shadow-rates 17 loans, representing 20.88% of the pool, investment grade. The investment-grade shadow-rated loans indicate the long-term stability of the underlying assets. BEAR STEARNS: Moody's Assigns Low-B Ratings on Two Cert. Classes ---------------------------------------------------------------- Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by Bear Stearns Asset Backed Securities I Trust 2007-HE2 and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by adjustable-rate and fixed-rate, closed-end, subprime residential mortgage loans acquired by EMC Mortgage Corporation and Master Funding, LLC. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, and an interest rate swap agreement. Moody's expects collateral losses to range from 5.65% to 6.15% for Group I and collateral losses to range from 5.80% to 6.30% for Group II. EMC Mortgage Corporation will act as the master servicer of the loans in the transaction. These are the rating actions: * Bear Stearns Asset Backed Securities I Trust 2007-HE2 * Asset-Backed Certificates, Series 2007-HE2 -- Class I-A-1, Assigned Aaa -- Class I-A-2, Assigned Aaa -- Class I-A-3, Assigned Aaa -- Class I-A-4, Assigned Aaa -- Class I-M-1, Assigned Aa1 -- Class I-M-2, Assigned Aa2 -- Class I-M-3, Assigned Aa3 -- Class I-M-4, Assigned A1 -- Class I-M-5, Assigned A2 -- Class I-M-6, Assigned A3 -- Class I-M-7, Assigned Baa1 -- Class I-M-8, Assigned Baa2 -- Class I-M-9, Assigned Baa3 -- Class I-M-10, Assigned Ba1 -- Class II-1A-1, Assigned Aaa -- Class II-1A-2, Assigned Aaa -- Class II-1A-3, Assigned Aaa -- Class II-1A-4, Assigned Aaa -- Class II-2A, Assigned Aaa -- Class II-3A, Assigned Aaa -- Class II-M-1, Assigned Aa1 -- Class II-M-2, Assigned Aa2 -- Class II-M-3, Assigned Aa3 -- Class II-M-4, Assigned A1 -- Class II-M-5, Assigned A2 -- Class II-M-6, Assigned A3 -- Class II-M-7, Assigned Baa1 -- Class II-M-8, Assigned Baa2 -- Class II-M-9, Assigned Baa3 -- Class II-M-10, Assigned Ba1 BEAZER HOMES: Receives Grand Jury Subpoena ------------------------------------------ Beazer Homes USA, Inc., disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that it has received a grand jury subpoena from the United States Attorney's Office in the Western District of North Carolina seeking the production of documents. The subpoena was issued upon application of the Office of Housing and Urban Development, Office of Inspector General and focuses on the company's mortgage origination services. The company says that it has not received a request for information or documents from the FBI or IRS in this regard. The company has been in contact with the United States Attorney's Office and is cooperating with the investigation. Investigation on Lending Practices As previously reported in the Troubled Company Reporter, the company confirmed that federal officials were conducting an inquiry into its mortgage-lending business. The company's executives however said that the investigation was merely a request for documents and that the company is cooperating adding that there are no allegations of wrongdoing. According to reports, the investigation was being conducted jointly by the Federal Bureau of Investigation, the Department of Housing and Urban Development, and the Internal Revenue Service. About Beazer Homes Headquartered in Atlanta, Beazer Homes USA, Inc., (NYSE: BZH) -- http://www.beazer.com/-- is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia and also provides mortgage origination and title services to its homebuyers. * * * As reported in the Troubled Company Reporter on March 29, 2007, Standard & Poor's Ratings Services revised its outlook on Beazer Homes USA Inc. to negative from stable. At the same time, the 'BB' corporate credit rating and the 'BB' ratings on $1.6 billion of senior unsecured notes were affirmed. BISON BUILDING: Files Schedules of Assets and Liabilities --------------------------------------------------------- Bison Building Company, LLC, delivered to the U.S. Bankruptcy Court for the Eastern District of Virginia, its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property $6,488,985 B. Personal Property $3,454,469 C. Property Claimed as Exempt D. Creditors Holding $4,094,402 Secured Claims E. Creditors Holding $2,619,687 Unsecured Priority Claims F. Creditors Holding $5,653,811 Unsecured Nonpriority Claims ---------- ----------- Total $9,943,454 $12,367,900 Based in Springfield, Virginia, Bison Building Company, LLC -- http://www.bisonbuildingcompany.com/-- is a custom home-builder. The company filed for chapter 11 protection on Nov. 17, 2006 (Bankr. E.D. Va. Case No. 06-11534). Darrell William Clark, Esq., at Stinson Morrison Hecker, LLP, represents the Debtor in its restructuring efforts. Bradford F. Englander, Esq., at Linowes and Blocher LLP, represents the Debtor's Official Committee of Unsecured Creditors. Bradford F. Englander, Esq., at Linowes and Blocher LLP, represents the Debtor's Official Committee of Unsecured Creditors. When the Debtors filed for protection from its creditors, it estimated total assets and liabilities between $1 million and $100 million. C-BASS: Moody's Rates Class B-4 Certificates at Ba1 --------------------------------------------------- Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-SL1, and ratings ranging from A2 to Ba1 to the mezzanine and subordinate certificates in the deal. The securitization is backed by fixed-rate, closed end second lien mortgage loans acquired by C-BASS. The collateral was originated by Countrywide Home Loans, Inc. (71%), OwnIt Mortgage Solutions, Inc (11%), Mortgage Lenders Network USA, Inc. (6%) and various other originators, none of which originated more than 5% of the mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization, excess spread, a swap and a rate cap agreement. In addition, the Class A Certificates will have the benefit of a financial guaranty insurance policy issued by XL Capital Assurance Inc. Moody's expects collateral losses to range from 12.35% to 12.85%. Litton Loan Servicing LP will service the loans. Moody's has assigned Litton Loan Servicing LP its top servicer quality rating of SQ1 as a primary servicer of subprime loans. These are the rating actions: * C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007- SL1 Class A-1, Assigned Aaa Class A-2, Assigned Aaa Class M-1, Assigned A2 Class M-2, Assigned A3 Class B-1, Assigned Baa1 Class B-2, Assigned Baa2 Class B-3, Assigned Baa3 Class B-4, Assigned Ba1 CALPINE CORPORATION: Closes New $5 Billion DIP Financing -------------------------------------------------------- Calpine Corporation has received funding for its new $5 billion debtor-in-possession credit facility that will be used to refinance the company's existing $2 billion DIP facility and repay approximately $2.5 billion of secured debt at Calpine Generating Company, LLC, one of Calpine's largest operating subsidiaries. Remaining funds will be used for working capital and other general corporate purposes, including repayment of debt. Major benefits of the DIP Facility include the ability to provide liens to counterparties to enhance Calpine's hedging program, which reduces cash collateral and improves the company's ability to stabilize future cash flow; a $2 billion expansion option to refinance existing project level debt; lower annual interest costs; and a rollover option that allows Calpine to put in place attractive exit financing as the company emerges from its Chapter 11 restructuring. Robert P. May, Calpine's Chief Executive Officer, stated, "Completion of this refinancing is a true milestone for Calpine that puts us on stronger financial footing to complete our restructuring. The refinancing will help us to emerge from Chapter 11 as a profitable and competitive power company positioned for future growth. The speed and efficiency with which we have completed this refinancing is a testament to the hard work of everyone involved, including our stakeholders. "The refinancing provides Calpine with significant near-term and long-term benefits. This new facility will lower annual interest cost by approximately $100 million, simplify our capital structure and provide the financial and operational flexibility to enhance the efficiencies and operations of our plants. Furthermore, the option to expand the DIP Facility provides us with additional opportunities to repay other project debt and realize further interest savings and operational enhancements," added Mr. May. Credit Suisse Securities (USA) LLC, Goldman Sachs Credit Partners L.P., JPMorgan Securities Inc. and Deutsche Bank Securities Inc., were collectively lead arrangers for Calpine's DIP Facility, which consists of a: -- $4 billion Senior Secured Term Loan, priced at LIBOR plus 225 basis points; and a -- $1 billion Senior Secured Revolving Credit Facility, priced at LIBOR plus 225 basis points. The DIP Facility will remain in place until the earlier of an effective Plan of Reorganization or the second anniversary of the closing date of the DIP Facility. If the DIP Facility is converted to an exit financing, the final maturity will be seven years from the closing date of the DIP Facility. The DIP Facility will be secured by substantially all of the assets which secure the existing $2 billion DIP facility, liens on all of Calpine's unencumbered assets, and junior liens on all encumbered assets of Calpine and its debtor subsidiaries. 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. The Debtors' exclusive period to file chapter 11 plan of reorganization expires on June 20, 2007. CANAL CAPITAL: Posts $8,271 Net Loss in 1st Quarter Ended Jan. 31 ----------------------------------------------------------------- Canal Capital Corp. reported a net loss of $8,271 on revenues of $1,205,445 for the first quarter ended Jan. 31, 2007, compared with net income of $60,251 on revenues $1,509,165 for the same period ended Jan. 31, 2006. Canal's revenues from continuing operations consist of revenues from its stockyard and real estate operations. The decrease in revenues is due primarily to the $250,000 decrease in sales of real estate. The net loss in the first quarter ended Jan. 31, 2007, is mainly attributable to the decrease in revenues. At Jan. 31, 2007, the company's balance sheet showed $5,477,920 in total assets, $3,692,528 in total liabilities, and $1,785,392 in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2007, are available for free at http://researcharchives.com/t/s?1c59 Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 29, 2007, Todman & Co., in New York, expressed substantial doubt about Canal Capital Corp.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Oct. 31, 2006, and 2005. The auditing firm cited that the company has suffered recurring losses from operations and is obligated to continue making substantial annual contributions to its defined benefit pension plan. About Canal Capital Headquartered in Hauppauge, New York, Canal Capital Corporation (OTC: COWP) is engaged in two distinct businesses -- stockyard and real estate operations. Canal's real estate properties are located in Sioux City, Iowa, South St Paul, Minnesota, St Joseph, Missouri, Omaha, Nebraska and Sioux Falls, South Dakota. The properties consist, for the most part, of a commercial office space, land and structures leased to third parties as well as vacant land available for development or resale. Canal also operates two central public stockyards located in St. Joseph, Missouri and Sioux Falls, South Dakota. CANYON CAPITAL: S&P Puts Positive Watch on 2 Note Classes' Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on the class B-1L, B-2A, and B-2B notes issued by Canyon Capital CDO 2001-1 Ltd., an arbitrage CLO transaction managed by Canyon Capital Advisors LLC, on CreditWatch with positive implications. The CreditWatch placements reflect factors that have positively affected the credit enhancement available to support the notes since the deal was initially rated in April 2001. These factors include the paydown of almost 90% of the class A-1L note balance. According to the most recent trustee report, dated Feb. 20, 2007, the class A-1L notes have paid down approximately $78 million since October 2005, leaving approximately $10 million outstanding. As a result, the class A overcollateralization ratio has improved to 152.32%. Standard & Poor's will be reviewing the results of current cash flow runs generated for Canyon Capital CDO 2001-1 Ltd. to determine the level of future defaults the rated classes can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes. The results of these cash flow runs will be compared with the projected default performance of the performing assets in the collateral pool to determine whether the ratings currently assigned to the notes remain consistent with the credit enhancement available. Ratings Placed On Creditwatch Positive Canyon Capital CDO 2001-1 Ltd. Rating ------ Class To From Balance ----- -- ---- ----------- B-1L BBB/Watch Pos BBB $35,000,000 B-2A BB/Watch Pos BB $6,000,000 B-2B BB/Watch Pos BB $10,000,000 Outstanding Ratings Canyon Capital CDO 2001-1 Ltd. Class Rating Balance ---- ------ ------------ A-1L AAA $10,073,000 A-2L AAA $109,000,000 A-3 AAA $34,000,000 A-3L AAA $10,000,000 CHEVY CHASE: Moody's Rates Class B-5 Certificates at B2 ------------------------------------------------------- Moody's Investors Service has assigned ratings ranging from Aaa to B2 to certificates issued by Chevy Chase Funding LLC, Mortgage-Backed Certificates, Series 2007-1. The securitization is backed by Chevy Chase Bank, F.S.B. originated or acquired 100% adjustable-rate mortgage loans with a negative amortization payment option. The ratings are based primarily on the credit quality of the loans, the structure of the transaction, and on the protection from subordination and primary mortgage insurance. After taking into consideration the benefit from the mortgage insurance, Moody's expects collateral losses to range from 1.15% to 1.35%. Chevy Chase Bank, F.S.B. will service the loans. These are the rating actions: * Chevy Chase Funding LLC * Mortgage-Backed Certificates, Series 2007-1 Class A1, Assigned Aaa Class A-1I,Assigned Aaa Class A-2, Assigned Aaa Class A-2I,Assigned Aaa Class A-NA,Assigned Aaa Class IO, Assigned Aaa Class NIO, Assigned Aaa Class B-1, Assigned Aaa Class B-1I,Assigned Aaa Class B-1NA, Assigned Aaa Class B-2, Assigned Aa2 Class B-2I, Assigned Aa2 Class B-2NA, Assigned Aa2 Class B-3, Assigned A2 Class B-3I, Assigned A2 Class B-3NA, Assigned A2 Class B-4, Assigned Baa3 Class B-5, Assigned B2 The notes are being offered in a privately negotiated transaction without registration under the 1933 Act. The issuance was designed to permit resale under Rule 144A and, in the case of certain certificates, under Regulation S. CIFC FUNDING: S&P Rates $24 Million Class D Notes at BB ------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to CIFC Funding 2007-II Ltd./CIFC Funding 2007-II LLC's $563.5 million floating-rate notes due 2021. The preliminary ratings are based on information as of March 28, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The credit enhancement provided to each class of notes through the subordination of cash flows to the more junior classes and income notes; -- The transaction's cash flow structure, which was subjected to various stresses requested by Standard & Poor's; -- The experience of the collateral manager; and -- The legal structure of the transaction, including the bankruptcy remoteness of the issuer. Preliminary Ratings Assigned CIFC Funding 2007-II Ltd. CIFC Funding 2007-II LLC Class Rating Amount ----- ------ ------ A-1-S AAA $236,000,000 A-1-R* AAA $100,000,000 A-1-J AAA $84,000,000 A-2 AA $56,500,000 B A $35,000,000 C BBB $28,000,000 D BB $24,000,000 Income notes NR $50,000,000 *Variable-funding note. NR -- Not rated. CITIMORTGAGE: Fitch Rates $1.7 Mil. Class B-5 Certificates at B --------------------------------------------------------------- Fitch Rates CitiMortgage Alternative Loan Trust, series 2007-A3 REMIC pass-through certificates: -- $474,288,797 classes IA-1 through IA-12, IA-IO, IIA-1, IIA-IO and A-PO certificates (senior certificates) 'AAA'; -- $12,745,000 class B-1 'AA'; -- $3,998,000 class B-2 'A'; -- $3,249,000 class B-3 'BBB'; -- $2,249,000 class B-4 'BB'; and -- $1,749,000 class B-5 'B'. The $1,499,692 class B-6 is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 5.10% subordination provided by the 2.55% class B-1, the 0.80% class B-2, the 0.65% class B-3, the 0.45% privately offered class B-4, the 0.35% privately offered class B-5, and the 0.30% privately offered class B-6. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and CitiMortgage, Inc.'s servicing capabilities as primary servicer. As of the cut-off date, March 1, 2007, the mortgage pool consists of 1,701 conventional, fully amortizing, 10-30 year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties with an aggregate principal balance of approximately $499,778,489, located primarily in California (30.45%), Florida (6.94%) and New York (6.63%). The weighted average current loan to value ratio of the mortgage loans is 71.20%. Approximately 80.93% of the loans were originated under a reduced documentation program. Condo and co-op properties account for 9.79% of the total pool. Cash-out refinance loans and investor properties represent 45.95% and 10.63% of the pool, respectively. The average balance of the mortgage loans in the pool is approximately $293,815. The weighted average coupon of the loans is 6.592% and the weighted average remaining term to maturity is 352 months. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. The mortgage loans were originated or acquired by CMI and in turn sold to CMSI. A special purpose corporation, CMSI, deposited the loans into the trust, which then issued the certificates. U.S. Bank National Association will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as multiple real estate mortgage investment conduits. CITIZENS COMMS: Completes $750 Mil. Senior Unsec. Notes Offering ---------------------------------------------------------------- Citizens Communications Company completed its reported offering of $750 million aggregate principal amount of senior unsecured notes, which consists of a series due in 2015, 2019, and 2015 notes. The notes were offered to investors in a private placement in reliance on Rule 144A under the Securities Act of 1933 and to non- U.S. investors in reliance on Regulation S under the Securities Act. The company said that the 2015 notes, bears interest at the rate of 6.625% per year and due on March 15, 2015, while the 2019 notes, bears interest at the rate of 7.125% per year and mature on March 15, 2019, were issued pursuant to an indenture dated March 23, 2007 with The Bank of New York as trustee. The interest on each series of notes is payable on March 15 and September 15 of each year, beginning on Sept. 15, 2007. At the company's option, it may redeem some or all of the notes of any series at any time by paying a make-whole premium, plus accrued and unpaid interest, if any, to the redemption date. The company states that these notes are senior unsecured obligations and rank equally with all of its other existing and future senior unsecured indebtedness in which each indenture contains certain covenants, events of default, and other customary provisions. A full-text copy of the Indenture Dated as of March 23,2007, 6.625% Senior Notes due 2015 is available for free at: http://ResearchArchives.com/t/s?1c5a A full-text copy of the Indenture Dated as of March 23,2007, 7.125% Senior Notes due 2019 is available for free at: http://ResearchArchives.com/t/s?1c5b A full-text copy of the Registered Agreement for 6.625% Senior Notes due 2015 is available for free at: http://ResearchArchives.com/t/s?1c5c A full-text copy of the Registered Agreement for 7.125% Senior Notes due 2015 is available for free at: http://ResearchArchives.com/t/s?1c5d Based in Stamford, Conn., Citizens Communications Company f.k.a. Citizens Utilities (NYSE: CZN) -- http://www.czn.net/ -- provides phone, TV, and Internet services to more than two million access lines in parts of 23 states, primarily in rural and suburban markets, where it is the incumbent local-exchange carrier operating under the Frontier brand. * * * As reported in the Troubled Company Reporter on March 21, 2007, Standard & Poor's Ratings Services assigned a 'BB+' rating to Citizens Communications Co.'s $750 million of senior unsecured notes due 2015 and 2019. COMMUNICATION INTELLIGENCE: GHP Horwath Raises Going Concern Doubt ------------------------------------------------------------------ GHP Horwath PC raised substantial doubt about Communication Intelligence Corporation's ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses and accumulated deficit. Except for 2004, the company incurred significant losses since its inception and at Dec. 31, 2006, the company's accumulated deficit was about $87.8 million. The company has primarily funded these losses through the sale of debt and equity securities. For the year ended Dec. 31, 2006, the company had a net loss of $3.3 million on total revenues of $2.3 million, as compared with a net loss of $4 million on total revenues of $3.1 million for the year ended Dec. 31, 2005. Balance sheet as of Dec. 31, 2006, showed total assets of $6.1 million, total liabilities of $2.5 million, and minority interests of $73,000, resulting to total stockholders' equity of $3.6 million. The company's December 31 balance sheet also showed strained liquidity with total current assets of $1.3 million available to pay total current liabilities of $2.1 million. Liquidity and Capital Resources Cash and cash equivalents at Dec. 31, 2006, totaled $727,000, as compared with cash and cash equivalents of $2.8 million at Dec. 31, 2005. This decrease is primarily attributable to $2.1 million used by operations, $603,000 used in investing activities and $8,000 used for principal payments on capital leases. The decrease was offset by $600,000 in proceeds from issuance of long-term debt. The effect of exchange rate changes on cash was $30,000. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c69 2006 Purchase Agreement In August 2006, the company entered into a Note and Warrant Purchase Agreement and a Registration Rights Agreement with a greater than five percent stockholder, each dated as of Aug. 10, 2006. The company secured the right to borrow up to six hundred thousand dollars. On Nov. 19, 2006, the company borrowed the $600,000 available under the 2006 Purchase Agreement. The company expects to use the proceeds of the financing for additional working capital. About Communication Intelligence Based in Redwood Shores, California, Communication Intelligence Corporation (OTC Bulletin Board: CICI) -- http://www.cic.com/-- supplies electronic signature solutions for business process automation in the Financial Industry and a leader in biometric signature verification. The company's products enable companies to achieve paperless workflow in their eBusiness processes by enabling them with "The Power to Sign Online(R)" with multiple signature technologies across virtually all applications. Industry leaders such as AIG, Charles Schwab, Prudential, Nationwide (UK) and Wells Fargo chose the company's products to meet their needs. The company sells directly to enterprises and through system integrators, channel partners and OEMs. CONEXANT SYSTEMS: CEO Dwight Decker to Retire by Fall ----------------------------------------------------- Conexant Systems Inc. reported that Dwight W. Decker intends to retire as the company's chief executive officer in the fall of this year. Mr. Decker, 57, will remain in his current position until a replacement is named. Mr. Decker is expected to continue serving the company as its non-executive chairman of the board. The company's board of directors has established a search committee and initiated the process for selecting the next chief executive officer. Mr. Decker was chief executive officer of Conexant from the time of its spin-off from Rockwell International in 1999 until he retired from the company when GlobespanVirata merger was completed in February 2004. In November of that year, the company's board of directors asked him to return to his previous position. "When I agreed to come back as chief executive officer, Conexant faced significant challenges," Mr. Decker said. "I committed to returning the company to profitability and restructuring the balance sheet, to rebuilding the company's core market-share positions, and to laying the foundation for future growth by focusing on new-product development and leveraging lower-cost offshore resources. "The Conexant team has accomplished a great deal in each of these areas over the past two and one-half years," Mr. Decker said. "We face continuing challenges, most particularly the weaker-than- planned revenue outlook that we outlined earlier this quarter, but the team and I are committed to working through these near-term challenges." "On behalf of Conexant's board of directors, I'd like to thank Dwight for his outstanding leadership, numerous contributions, and unwavering dedication to the company over the years," said Jerre L. Stead, chairman of the board's management development and compensation committee, and chairman of the newly formed chief executive officer search committee. "Dwight made a commitment to come out of retirement and lead Conexant at a critical juncture for the company. "He worked tirelessly to improve the company's financial performance, expand market share, and increase product-development capacity. Over the past year Dwight has discussed with the board his desire to resume his retirement, and we expect a smooth and orderly transition over the next six months or so as we complete our search for a new chief executive officer. At that time, the board and I look forward to working with Dwight in his continuing capacity as non-executive chairman." About Conexant Systems Headquartered in Newport Beach, Calif., Conexant Systems, Inc. (NASDA: CNXT) -- http://www.conexant.com/-- designs, develops and sells semiconductor system solutions that connect personal access products such as set-top boxes, residential gateways, PCs and game consoles to voice, video and data processing services over broadband and dial-up connections. Key semiconductor products include digital subscriber line and cable modem solutions, home network processors, broadcast video encoders and decoders, digital set-top box components and systems solutions, and the company's foundation dial-up modem business. * * * As reported in the Troubled Company Reporter on Oct. 31, 2006, Moody's Investors Service assigned a B1 rating to the senior secured floating rate notes and a Caa1 rating to the corporate family rating of Conexant Systems Inc. Moody's also assigned a Probability of default rating of Caa1, a LGD-2 rating for the senior secured notes and a SGL-3 speculative grade liquidity rating. The rating outlook is stable. CWABS INC: S&P Cuts Ratings on Two Cert. Classes & Retains Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the B-1 classes of asset-backed certificates from CWABS Inc.'s series 2002-BC2 and 2002-BC3. Both ratings remain on CreditWatch, where they were placed with negative implications Sept. 28, 2006. Lastly, the ratings on the remaining classes from these transactions were affirmed. The downgrades and negative CreditWatch placements reflect realized losses that continue to compromise available credit support. As of the March 2007 distribution period, serious delinquencies for series 2002-BC2 were 28.56% at $8.606 million. The available credit support for class B-1 is $772,909, an amount significantly less than that of the severely delinquent loans. Cumulative losses, as a percentage of the original pool balance, are 0.83% at $4.192 million. For series 2002-BC3, adverse collateral performance has generally caused realized losses to outpace monthly excess interest cash flow over the past six periods. This loss pattern has depleted overcollateralization (O/C) to $1,221,446, below its target of $2.5 million. During the March 2007 distribution period, $10.019 million in loans were categorized as severely delinquent. Cumulative realized losses totaled 2.24% at $11.217 million. Standard & Poor's will continue to closely monitor the performance of the certificates with ratings on CreditWatch. If monthly losses continue to compromise available credit support, further downgrades can be expected. Conversely, if pool performance improves and credit support is not further compromised, the rating agency will affirm the ratings and remove them from CreditWatch. The affirmations are based on credit support percentages that are sufficient to maintain the current ratings. Credit enhancement for series 2002-BC2 is provided by a senior/subordinate structure. Credit support for series 2002-BC3 is provided by subordination, excess spread, and O/C. The collateral consists of fixed- and adjustable-rate mortgage loans secured by first liens on residential properties. Ratings Lowered And Remaining On Creditwatch Negative CWABS Inc. Asset-Backed Certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-BC2 B-1 BB/Watch Neg BBB/Watch Neg 2002-BC3 B-1 BB/Watch Neg BBB/Watch Neg Ratings Affirmed CWABS Inc. Asset-Backed Certificates Series Class Rating ------ ----- ------ 2002-BC2 A, A-IO, M-1 AAA 2002-BC2 M-2 AA 2002-BC3 M-1 AA 2002-BC3 M-2 A CWMBS: Moody's Junks Rating on Five Class Certificates ------------------------------------------------------ Moody's Investors Service has downgraded seven certificates from two Countrywide securitizations. The underlying collateral consists of FHA insured and VA guaranteed reperforming loans, virtually all of which were repurchased from GNMA pools. The rating action is based on the fact that the collateral has been underperforming and losses have been higher than expected. Given the recent losses and current delinquency pipeline, the ratings for some of the subordinate tranches seem too high for the projected loss levels and the available credit enhancement. These are the rating actions: * CWMBS Reperforming Loan REMIC Trust * Downgrade: -- Series 2004-R1, Class1-B3, downgraded from Ba2 to Caa2; -- Series 2004-R1, Class1-B4, downgraded from B2 to Ca; -- Series 2004-R1, Class2-B3, downgraded from Ba2 to Caa1; -- Series 2004-R1, Class2-B4, downgraded from B2 to Ca; -- Series 2004-R2, Class-B2, downgraded from Baa2 to Baa3; -- Series 2004-R2, Class-B3, downgraded from Ba2 to B3; and -- Series 2004-R2, Class-B4, downgraded from B2 to Ca. DAIMLERCHRYSLER: Auto Workers Unions Want Chrysler to Stay ---------------------------------------------------------- The unions of the United Auto Workers and the Canadian Auto Workers agreed to work together to present a united front as potential buyers prepare to submit bids for DaimlerChrysler AG's Chrysler Group, Gina Chon of The Wall Street Journal reports. According to the Journal, both the CAW and UAW agree that their preferred outcome is that Chrysler stay within DaimlerChrysler and they will work toward that goal. WSJ relates that the unions' German counterpart, the IG Metall union, supports the CAW and UAW's move. The report said that members of all three unions look unfavorably on a private equity firm taking over Chrysler because they fear it would result in more job losses. At least three potential buyers are expected to submit bids for Chrysler, WSJ says, citing people familiar with the matter. As reported in the Troubled Company Reporter on Mar. 6, 2007, Blackstone Group was reported to be moving forward with a detailed analysis of Chrysler's finances and operations with an eye toward making a formal bid. Meanwhile, Canadian auto-parts supplier Magna International Inc. and an unnamed private equity partner have made an offer, between $4.6 billion and $4.7 billion, to buy 25% of Chrysler. Private equity firm Cerberus Capital Management is also expected to file a bid, WSJ says. Restructuring Plan Last month, as part of DaimlerChrysler's Chrysler Group Recovery and Transformation Plan, the company 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 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 these 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 said citing Chrysler Group spokesman Mike Aberlich. Delayed First Quarter Results This week, DaimlerChrysler said it will not publish its interim report on the first quarter of 2007 on April 26, 2007, as was originally planned, but on May 15, 2007. The company said that the change of date has been caused solely by delays with the preparation of the financial statements for the year 2006 and with the parallel work for the International Financial Reporting Standards financial statements, which have also had an impact on the timeframe for the quarterly financial statements. About DaimlerChrysler Based in Stuttgart, Germany, DaimlerChrysler AG (NYSE:DCX) (FRA: DCX) -- 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 company's worldwide operations are located in: Canada, Mexico, United States, Argentina, Brazil, Venezuela, China, India, Indonesia, Japan, Thailand, Vietnam and Australia. 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. DAVID LIEBERMAN: Case Summary & 11 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: David Lieberman dba Elk Cove Inn P.O. Box 367 Elk, CA 95432 Bankruptcy Case No.: 07-10351 Chapter 11 Petition Date: March 28, 2007 Court: Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: David N. Chandler, Esq. 1747 4th Street Santa Rosa, CA 95404 Tel: (707) 528-4331 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SafeBidco $49,753 1377 Corporate Center Parkway, Suite A Santa Rosa, CA 95407-5432 I.R.S. employment tax, $44,972 777 Sonoma Avenue, Room 112 interest and Santa Rosa, CA 95404 penalties Christine Johnson $39,000 [address not provided] Bank of America M.B.N.A. credit $9,496 Perry, Johnson, Anderson, $8,000 et al. Hogan & Stickel $7,620 Bay West Supply, Inc. $3,835 Fort Bragg Glass & Mirror, Inc. $2,311 Mendocino Coast Plumbing $1,165 Northcoast Refrigeration & $1,067 Electric Pacific Coast Disposal $284 DIVERSA CORP: Insufficient Cash Prompts Going Concern Doubt ----------------------------------------------------------- Ernst & Young LLP raised substantial doubt about the ability of Diversa Corp. to continue as a going concern after auditing the company's financial results for the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's insufficient cash and working capital to effect a merger and fund a combined business plan as contemplated. Merger and Collaborative Agreement In January 2007, in connection with a disclosure of the company's refocused collaborative agreement with Syngenta, the company disclosed a new strategy of vertical integration within biofuels to allow the company to better capture the value that the company believes its technology will bring to this emerging market. On Feb. 12, 2007, as part of this strategy of vertical integration within biofuels, the company said it signed a definitive agreement to merge with Celunol Corp. in Cambridge, Mass., a science- and technology-driven company that is directing its integrated technologies to the production of low-cost cellulosic ethanol from an array of biomass sources. Provided that all required regulatory, stockholder, and other approvals are received, the company expects this merger to close in the second quarter of 2007. Pursuant to the merger agreement, the combined company's headquarters will be located in Cambridge, Mass., and Celunol's chief executive and chief financial officers will become the CEO and CFO of the combined company. Financial Results For the year ended Dec. 31, 2006, the company had a net loss of $39.3 million on total revenues of $49.2 million, as compared with a net loss of $89.8 million on total revenues of $54.3 million for the year ended Dec. 31, 2005. Revenues for 2006 consisted of $30 million collaborative revenues, $3.3 million grant revenues, and $15.9 million product-related revenues. Revenues for 2005 consisted of $34.4 million collaborative revenues, $10.1 million grant revenues, and $9.8 million product-related revenues. Total operating expenses incurred for the year 2006 totaled $89.8 million, as compared with $144.8 million for the year 2005. Loss from operations in 2006 was $40.6 million, down from loss from operations in 2005 of $90.4 million. As of Dec. 31, 2006, the company's balance sheet showed $79.9 million in total assets and $37 million in total liabilities, resulting to $42.9 million in total stockholders' equity. Accumulated deficit as of Dec. 31, 2006, and 2005 was $329.5 million and $290.2 million, respectively. The company held $38.5 million in cash and cash equivalents and $13.4 million in short-term investments as of Dec. 31, 2006. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c64 About Diversa Corp. Diversa Corp. -- http://www.diversa.com/-- customizes enzymes for manufacturers within the biofuel, industrial, and health and nutrition markets to enable higher throughput, lower costs, and improved environmental outcomes. It offers enzymes derived from bio-diverse environments as well as patented DirectEvolution (R) technologies. In addition to the company's internal and partnered research and development programs, it has a portfolio of commercialized enzyme products that generated $15.9 million in revenues in 2006, as well as several late-stage product candidates that either the company or its partners expect to launch in the next several years. EAGLE INSURANCE: New York Supreme Court Hearing Set on April 23 --------------------------------------------------------------- The Supreme Court of the State of New York will convene a hearing at 9:30 a.m. on April 23, 2007, to consider granting a stay of proceedings to all actions pursuant to an order of rehabilitation concerning: -- Eagle Insurance Company, -- Newark Insurance Company, -- GSA Insurance Company, and -- NCIC Insurance Company. The hearing will be held in the Supreme Court of the State of New York, County of Nassaue, at the Courthouse, 100 Supreme Court Drive, in Mineola, New York. As reported in the Troubled Company Reporter on Feb. 22, 2007, the Superior Court of New Jersey granted the application of Steven H. Goldman, the Commissioner of the Department of Banking and Insurance, for the rehabilitation of Eagle Insurance Company and its subsidiaries. Pending the hearing, all actions pending in the State of New York are stayed, except administrative proceedings before the New York State Insurance Department. Headquartered in Bethpage, New York, Eagle Insurance Company is a subsidiary of Robert Plan Corp., a provider of insurance products and services to individuals, businesses, and the insurance industry. EASI FINANCE: DBRS Puts Low-B Ratings on Six Class Certificates --------------------------------------------------------------- Dominion Bond Rating Service assigned these ratings to the EASI Synthetic Investment Notes, Series 2007-1 co-issued by EASI Finance Limited Partnership 2007-1 & EASI Finance DE Corporation 2007-1. * $3,951.9 million Class A Risk Band rated at AAA * $40.3 million Class B1 Risk Band rated at AA * $6 million Class B2 Risk Band rated at AA (low) * $2 million Class B3 rated at A (high) * $4 million Class B4 rated at A * $10.1 million Class B5 rated at BBB * $2 million Class B6 rated at BBB (low) * $2 million Class B7 rated at BB (high) * $2 million Class B8 rated at BB * $2 million Class B9 rated at BB * $2 million Class B10 rated at BB (low) * $2 million Class B11 rated at B (high) * $2 million Class B12 rated at B The rated transaction represents a synthetic securitization. The ratings of the Risk Bands and Notes reflect the quality of the underlying reference assets, the likelihood that the protected party will make payments under the terms of the credit default swap, as well as the integrity of the legal structure of the transactions. In contrast to typical RMBS, interest and principal payments on the issued Notes are not collected from the reference portfolio mortgage loans. Instead, monthly remittances of interest and principal are paid to Noteholders from income earned from eligible investments as well as from payments from the protected party under the credit default swaps. Principal to the Notes will be based on principal received by the protected party on the Reference Portfolio or with respect to principal so allocable as a result of the sale or removal of mortgage loans from the Reference Portfolio. Under a Deposit Account Agreement between the Wells Fargo Bank, N.A. and Bank of America, N.A., proceeds from the sale of issued securities are re-invested in eligible investments, which consist of direct obligations of U.S. government agencies or deposits in an eligible depository institution. Remittances will be distributed on the 25th day of each month commencing in April 2007. Also unlike typical RMBS, ownership of the Reference Portfolio' collateral was not legally transferred from E*Trade Bank's balance sheet to an off-balance-sheet special-purpose vehicle. The Notes, while based on the loss, payment and prepayment characteristics of the assets included in the Reference Portfolio, do not represent an interest in any underlying mortgage loans or any of the payments related thereto. The risks of potential credit losses on the Reference Portfolio, however, are allocated to security holders similar to a traditional RMBS senior-subordinate, shifting interest structure. The loans in the Reference Portfolio were originated or acquired by E*Trade bank. As of the cut-off date the portfolio consists of approximately $4.03 billion of fixed-rate and adjustable-rate first-lien mortgage loans. The weighted-average mortgage rate for the Reference Portfolio is 5.612%, the weighted-average FICO is 756, and the weighted-average original combined loan-to-value ratio is 69.50%. EASI FINANCE: Fitch Rates $2 Mil. Class B12 Certificates at B ------------------------------------------------------------- Fitch assigns these ratings to the notes issued by EASI Finance Limited Partnership 2007-1 and EASI Finance DE Corporation 2007-1: -- $3,951,892,656 class A risk band 'AAA'; -- $40,326,000 class B1 risk band 'AA'; and -- $6,048,000 class B2 risk band 'AA-'. Floating-rate notes, due February 2039: -- $2,016,000 class B3 'A+'; -- $4,032,000 class B4 'A'; -- $10,081,000 class B5 'BBB'; -- $2,016,000 class B6 'BBB-'; -- $2,016,000 class B7 'BB+'; -- $2,016,000 class B8 'BB'; -- $2,016,000 class B9 'BB'; -- $2,016,000 class B10 'BB-'; -- $2,016,000 class B11 'B+'; and -- $2,016,000 class B12 'B'. EMERSON RADIO: Earns $3.6 Million in Quarter Ended December 31 -------------------------------------------------------------- Emerson Radio Corp. filed its Quarterly Report on Form 10-Q for the fiscal quarter ended Dec. 31, 2006 with the Securities and Exchange Commission on March 16, 2007. The company reported a $3,695,000 of net income on $89,339,000 of net revenues for the quarter ending Dec. 31, 2006, compared to a $1,395,000 of net income on $76,514,000 of net revenues for the quarter ended Dec. 31, 2005. At Dec. 31, 2006, the company's balance sheet showed total assets of $117,618,000, and total liabilities of $39,164,000, resulting in a stockholders' equity of $78,454,000. At March 31, 2006, stockholders' equity was $70,155,000. AMEX Compliance As a result of the filing of the Form 10-Q, the company believes that it will be able to regain compliance with the listing requirements of the American Stock Exchange. Default Waiver Obtained The company has also entered into an amendment to its credit facility with its lender under which the company secured a waiver related to related party transactions. As a result of the related party transactions entered into between the company and affiliates of The Grande Holdings Limited, the company's lender had advised the company that it was in breach of certain covenants contained in the company's credit facility, including a covenant restricting the company from lending money and from entering into related party transactions without the consent of its lender and upon shipping or utilizing credit on greater than 150 day terms. The company had approximately $7.8 million outstanding under its credit facility at Dec. 31, 2006 and approximately $15.5 million outstanding under its credit facility at March 13, 2007. On March 16, 2007, the lender under the credit facility and the company executed an amendment to the credit facility. Under the amendment: (i) the company granted the lender a security interest in the $23 million Note and the Guaranty to the company's financial statements, (ii) a failure (following a 15 day cure period) by the borrowers to make payments to the company as required by the terms of the Note will be deemed a default under the credit facility, (iii) the number of field audits by the lender will be increased from two to three each year, at an additional annual cost of $25,000, and (iv) the company paid $125,000 to the lender in connection with the amendment. A full-text copy of the regulatory filing is available for free at http://ResearchArchives.com/t/s?1c63 About Emerson Radio Based in Parsippany, New Jersey, Emerson Radio Corp. (AMEX: MSN) -- www.emersonradio.com/ -- designs, markets and licenses, worldwide, full lines of televisions and other video products, microwaves, clocks, radios, audio and home theater products. ENERGY PARTNERS: Commences Cash Tender Offer for 8,700,000 Shares ----------------------------------------------------------------- Energy Partners, Ltd. has commenced a cash tender offer to purchase up to 8,700,000 issued and outstanding common shares at $23 per share, or approximately $200 million. Assuming the Offer is fully subscribed, the company will repurchase approximately 22% of its currently outstanding common shares. The company's Offer is not subject to any minimum number of shares being tendered. If more than 8,700,000 shares are tendered, the Company will purchase the shares tendered on a pro rata basis pursuant to procedures specified in the Offer to Purchase. The Offer will be subject to a number of conditions, including the receipt of funds. The company has received a commitment from Banc of America Securities LLC and affiliates to provide sufficient funds to finance the Offer, refinance the company's bank credit facility and refinance its 8-3/4% senior notes through a concurrent debt tender and consent solicitation. Banc of America Securities LLC (1-888-583-8900, ext. 8426) will serve as the dealer manager for the Offer. MacKenzie Partners (1-800-322-2885) will serve as the information agent for the Offer. About Energy Partners Ltd. Headquartered in New Orleans, La., Energy Partners Ltd. (NYSE: EPL) -- http://www.eplweb.com/-- is an independent oil and natural gas exploration and production company. Founded in 1998, the company's operations are focused along the U. S. Gulf Coast, both onshore in south Louisiana and offshore in the Gulf of Mexico. * * * As reported in the Troubled Company Reporter on Mar. 14, 2007, Moody's Investors Service downgraded Energy Partners, Ltd.'s Corporate Family Rating to B3 from B2 and its Probability of Default Rating to B3 from B2 following the conclusion of the company's strategic alternative process. FIDELITY FUNDING: Fitch Holds BB Rating on Class B Certificates --------------------------------------------------------------- Fitch Ratings has affirmed one class of Fidelity Funding Mortgage Finance Corp. residential mortgage-backed certificates: Series 1997-1 -- Class B at 'BB'. The above affirmation reflects adequate relationship of credit enhancement (CE) to future loss expectations and affects approximately $1.9 million of outstanding certificates. CE is in the form of excess spread and overcollateralization which has been at target for the past six months. The pool is seasoned 117 months and the pool factor is 5%. The mortgage loans are serviced by Select Portfolio Servicing, Inc., which is rated 'RPS2' for the subprime product by Fitch. FORD MOTOR: Names Neil Schloss as Vice President and Treasurer -------------------------------------------------------------- Ford Motor Company has named Neil Schloss as vice president and treasurer, effective immediately. In his new role, Mr. Schloss will report to Don Leclair, executive vice president and chief financial officer. "Neil has played a critical role in securing the funding the company needs to implement its restructuring plan," Mr. Leclair said. "He's taking the reigns of the office at a key time and his background and experience in treasury will be vital to Ford's success going forward." In his previous assignment, Mr. Schloss was assistant treasurer for Ford, a position he's held since 2003. He joined Ford in 1982 as a senior financial analyst in the controller's office in Ford Aerospace. He has worked in a number of treasury office positions for Ford and Ford Motor Credit since 1991, including: director, Risk Management; director, Financial Strategy; manager, North American and European Financing; manager, European Financing; and manager, Corporate and Domestic Financing. Ann Marie Petach, the former treasurer, has elected to leave the company. She has accepted a position at BlackRock, an investment management firm. "Ann Marie has been a valuable asset to the company and to the Finance team," Mr. Leclair said. "She's worked tirelessly as the company developed plans and implemented actions related to its turnaround efforts. The company wishes her every success." Ms. Petach joined Ford in 1984 as a financial analyst in the Electronics Division. She held a number of finance positions within Ford and Ford Motor Credit, including: director, Global Banking, with responsibility for worldwide banking relationships for Ford Motor Company, Ford Credit, and Ford Credit Europe; treasurer of AutoEuropa, the joint venture between Ford and Volkswagen that produces minivans for Europe; and assistant treasurer of Autolatina, the former joint venture between Ford and Volkswagen in Brazil and Argentina. About Ford Motor Co. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures and distributes automobiles in 200 markets across six continents. With more than 280,000 employees worldwide, the company's core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury, and Volvo. Its automotive-related services include Ford Motor Credit Company and The Hertz Corporation. * * * As reported in the Troubled Company Reporter on Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4'. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's $3 billion of senior convertible notes due 2036. GENERAL MOTORS: Europe Division Still Considering Further Job Cuts ------------------------------------------------------------------ General Motors Corp.'s European division isn't ruling out further job cuts and plant closures in an effort to improve productivity, the Wall Street Journal reports citing Europe division head Carl- Peter Forster. According to Mr. Forster, it was "important to find good solutions for us and for our employees." According to WSJ, over the past few years, 13,000 jobs have been cut and some operations in Western Europe have been closed though new plants were opened in Eastern Europe. WSJ cites GM Europe labor representative Klaus Franz as saying that the company's labor representatives won't accept any plant closures since it only creates losers on both sides. "We've learned our lessons from Azambuja," Mr. Franz added. GM had closed its Azambuja plant in Portugal citing high costs. Around 1,000 jobs were cut while production for its Opel Combo model was transferred to Spain. According to WSJ, GM Europe posted adjusted earnings of $227 million this month, its first full-year profit since 1999. Two-thirds of the profit was from higher revenue was the remaining was due to cost reductions, which included job cuts. 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 including Belgium, France, Germany, India, Mexico, 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. * * * As reported in the Troubled Company Reporter on Dec. 15, 2006, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with negative implications, where they were placed March 29, 2006. S&P said the outlook is negative. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the $1.5 billion secured term loan of General Motors Corp. As reported in the Troubled Company Reporter on Nov. 14, 2006, Moody's Investors Service assigned a Ba3, LGD1, 9% rating to the $1.5 billion secured term loan of General Motors Corp. GEO GROUP: Repays $200 Million of Senior Credit Facility -------------------------------------------------------- The GEO Group reported that it used $200 million of the aggregate net proceeds of approximately $226.3 million from its recent follow-on offering of 5,462,500 shares of its common stock, including underwriters' over-allotment option, which was used on March 23, 2007, to repay debt outstanding under the term loan portion of its senior secured credit facility, which bears interest at LIBOR plus 1.50%. As a result of the debt repayment, the company will write off approximately $2.9 million in after-tax deferred financing fees during the first quarter of 2007. After the debt repayment, the company's total recourse debt will decrease from approximately $515 million to $315 million, comprised of $150 million in senior unsecured notes and $165 million in term loan borrowings, exclusive of capital lease liability balances. George C. Zoley, Chairman of the Board, Chief Executive Officer and Founder of GEO, said: "The successful completion of the follow-on offering of 5.5 million shares of our common stock along with the repayment of our term loan debt following our acquisition of CentraCore Properties Trust will provide us with additional financing capacity to pursue future opportunities through our business units of U.S. Corrections, GEO Care, and International Services." The company estimates that its total net recourse Debt to Adjusted EBITDA ratio will decrease from approximately 5.1x to approximately 2.8x as a result of the debt repayment, based on the company's reported 2006 adjusted EBITDA. The company plans to use the remaining proceeds from the offering for general corporate purposes, which include working capital, capital expenditures, and potential acquisitions of assets. About GEO Group Headquartered in Boca Raton, Florida, The GEO Group, Inc. (NYSE: GEO) -- http://www.thegeogroupinc.com/-- delivers correctional, detention and residential treatment services to federal, state and local government agencies around the globe. It has government clients in the USA, Australia, South Africa, Canada and the United Kingdom. Its operations include 62 correctional and residential treatment facilities, with a total design capacity of 52,000 beds. GEO GROUP: S&P Lifts Senior Unsecured Debt's Rating to B+ from B ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its senior unsecured debt rating and preliminary senior unsecured shelf debt rating on Boca Raton, Florida-based The GEO Group Inc. to 'B+' from 'B'. These ratings were removed from CreditWatch, where they were placed with positive implications on March 15, 2007, following the company's report that it would offer 4.75 million shares of its common stock in an underwritten public offering, and its intention to apply proceeds from the issuance towards debt reduction. Following the March 23, 2007, completion of the offering, GEO repaid $200 million of its senior secured term loan facility. "The rating action reflects our opinion that the senior unsecured lenders' position has improved following the reduction in the company's term loan debt, which is considered a priority obligation," said Standard & Poor's credit analyst Mark Salierno. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating, 'BB' bank loan rating, and '1' recovery rating on GEO's senior secured debt. The outlook is stable. The ratings on GEO reflect the company's narrow business focus, customer concentration, and leveraged financial profile. These factors are somewhat mitigated by the company's strong market position in the highly regulated U.S. private correctional facility management industry, as well as favorable demographic trends. GEO is a narrowly focused company that provides a range of prison, correctional, and mental health services to U.S. federal, state, local, and overseas government agencies. GOODYEAR TIRE: S&P Rates $1.2 Billion Second-lien Term Loan at B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned various ratings to Goodyear Tire & Rubber Co.'s proposed bank financings. At the same time, Standard & Poor's assigned a recovery rating to the existing $650 million senior secured notes. The rating agency will withdraw the ratings on the existing bank facilities that are being refinanced upon closing of the new facilities. The corporate credit rating on Goodyear is B+/Positive/B-2. The ratings on the Akron, Ohio-based company reflect its aggressive financial risk profile, characterized by low earnings in North America, a leveraged capital structure, and significant, albeit declining, underfunded employee benefit liabilities. These factors more than offset the company's business strengths, including its position as one of the three largest global tire manufacturers, its good geographic diversity, its strong distribution, and its well-recognized brand name. Ratings list: * Goodyear Tire & Rubber Co. -- Corporate Credit Rating at B+/Positive/B-2 Assigned: * Goodyear Tire & Rubber Co. -- $1.5 Billion asset-backed revolving credit facility at BB, Recovery rating: 1 -- $1.2 Billion second-lien term loan B+, Recovery rating: 2 -- $650 Million senior secured notes recovery rating: 5 * Goodyear Dunlop Tires Europe B.V. -- EUR350 Million revolving credit facility at BB-, Recovery rating: 1 * Goodyear Dunlop Tires Germany GmbH -- EUR155 Million revolving credit facility at BB-, Recovery rating: 1 GRAHAM PACKAGING: Weak Performance Cues S&P's Stable Outlook ------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Graham Packaging Co. and its parent holding company Graham Packaging Holdings Co. to stable from positive. "The outlook revision reflects challenging business conditions, including lower than expected volume trends and input cost pressures, which have forestalled the expected trend of improvement to the company's financial profile," said Standard & Poor's credit analyst Paul Kurias. "As a result, credit metrics have deteriorated slightly in the past year against our expectations for an improvement." The ratio of total debt to EBITDA was about 6.9x at Sept. 30, 2006. All ratings, including the 'B' corporate credit ratings, are affirmed. Based on preliminary terms and conditions, Standard & Poor's affirmed its 'B' rating on Graham Packaging Co.'s $1.9 billion first-lien term loan B due 2011, which includes a proposed incremental $300 million. Proceeds from the incremental term loan, which is being added through an amendment to Graham's existing $1.6 billion term loan B, will be used to repay outstanding amounts under the second-lien term loan C and pay down approximately $50 million in borrowings under the revolving credit facility. Graham's total adjusted debt was approximately $2.7 billion at Sept. 30, 2006. The ratings on Graham Packaging and its holding company reflect a satisfactory business profile as a leading producer of value-added plastic containers, and its highly leveraged financial profile. The business risk assessment incorporates the company's leading shares in niche markets, strong customer relationships, low-cost position, and technical capabilities, which are offset by participation in highly fragmented and competitive markets, and customer concentration. Graham is a leading manufacturer of customized, blow-molded plastic containers for noncarbonated beverages and foods, household cleaning products, personal care products, and automotive lubricants with sales of approximately $2.5 billion. GREENBRIER COMPANIES: Increased Debt Cues Moody's to Lower Ratings ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of The Greenbrier Companies, Inc. * corporate family to B1, * senior unsecured to B2, LGD5, 72%, and * the speculative grade liquidity rating to SGL-3. The outlook is now stable. These rating actions conclude the review for downgrade prompted by Greenbrier's acquisition of Meridian Rail Holdings Corp in late 2006. "The ratings were downgraded because of a significant weakening of key credit metrics, as the increased debt for two acquisitions combined with an unexpectedly sharp decline in the manufacturing operating margin (to 4.2% from 13.3%)" said Bob Jankowitz at Moody's Investors Service. Manufacturing margins are likely to remain weaker than historic levels as the poor results stem from a range of operating issues including mix, production inefficiencies and lower deliveries not likely to be overcome in the near term. Consequently, while Moody's anticipates some improvement over time as Greenbrier recognizes earnings from the newly acquired operations and better manufacturing profits, measures of retained cash flow to debt, debt to EBITDA, and EBIT to Interest are likely to be consistent with other issuers at the new B1 corporate family rating level. In addition, Moody's had expected the proceeds of debt issued during 2006 to fund growth in Greenbrier's leasing portfolio along with some moderate sized acquisitions. While the two acquisitions were strategic extensions of Greenbrier's core rail car repair business and were purchased at reasonable multiples, the leasing portfolio is still expected to grow somewhat over the coming year adding the potential for higher debt levels. Greenbrier benefits as the nation's leading producer of railroad flat cars which are deployed by the railroads in their high-growth intermodal business. There is considerable cash flow and profit potential yet to be realized in Greenbrier's nearly $1 billion railcar backlog. Demand appears to be slowing, however, and the company may miss recognizing peak manufacturing profits during this cycle unless the operations are improved. Greenbrier's expanded railcar service business should add stability to the cash flows, although near-term integration issues could distract the company from profitably developing the lease portfolio which is a much larger contributor of cash flow. Over time, as the rail cycle continues to moderate, Greenbrier's investment in leases should also decrease and the company should generate free cash flow which could be applied to reduce its debt. Scheduled debt maturities over the near term are modest, although a substantial portion of the bank revolver has been used fund acquisitions. The stable outlook anticipates recovery from recent manufacturing setbacks at its Canadian facilities and steadily improving operating profits as the company works through the manufacturing backlog that should last well into 2008. The rating or the outlook could be raised if Greenbrier is able to sustain a consolidated operating margin above 9% over the cycle, with lowered customer concentration. The ability to sustain EBIT to Interest of approximately 2.5x and debt to EBITDA less than 4x would also be important factors. The rating could be pressured down if Greenbrier loses a key customer or supplier and is unable to quickly replace that revenue or supply, or if the company undertakes a material acquisition, particularly if the investment is outside of the company's integrated business model. If EBIT to Interest falls below 1.5x, or if the company is unable to generate meaningful free cash flow to reduce debt as the railcar cycle turns, the rating could also be pressured down. Downgrades: * Greenbrier Companies, Inc. -- Probability of Default Rating, Downgraded to B1 from Ba3 -- Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 -- Corporate Family Rating, Downgraded to B1 from Ba3 -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to B2 72 - LGD5 from B1 64 - LGD4 -- Senior Unsecured Regular Bond/Debenture, Downgraded to a range of B2 72 - LGD5 from B1 64 - LGD4 Outlook Actions: * Greenbrier Companies, Inc. -- Outlook, Changed To Stable From Rating Under Review The Greenbrier Companies, Inc., based in Lake Oswego Oregon, provides railroad services to Class I railroads including railcar manufacturing, leasing, and railcar refurbishing and repair. GSC GROUP: Moody's Rates $13 Mil. Class D Deferrable Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by GSC Group CDO Fund VIII, Limited: * Aaa to the $267,000,000 Class A-1 Floating Rate Senior Notes Due 2021; * Aa2 to the $14,000,000 Class A-2 Floating Rate Senior Notes Due 2021; * A2 to the $19,400,000 Class B Deferrable Floating Rate Notes Due 2021; * Baa2 to the $17,000,000 Class C Deferrable Floating Rate Notes Due 2021 and * Ba2 to the $13,000,000 Class D Deferrable Floating Rate Notes Due 2021. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting primarily of Senior Secured Loans due to defaults, the transaction's legal structure and the characteristics of the underlying assets. GSCP, L.P. will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. HANCOCK FABRICS: Seeks Court Approval of CRP Employment Agreement ----------------------------------------------------------------- Hancock Fabrics Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for authority to enter into an agreement with Corporate Revitalization Partners LLC, for the provision of temporary staff to Hancock Fabrics Inc. Pursuant to the Engagement Agreement, CRP has agreed to provide certain individuals to serve as Hancock Fabrics' interim officers: 1. Jeff Nerland, as interim executive vice president and chief financial officer; 2. David Hull, as interim executive vice president and chief operating officer; and 3. Brandon Smith, as interim vice president, assistant operating officer and assistant financial officer. J. Nerland's Duties Mr. Nerland, as CFO, will: * coordinate with investment bankers on management and administrative matters, back up coordination on legal and bankruptcy matters; * report daily and weekly cash management; * support business plan; * support sale process and exit financing; * negotiate with vendors on terms and reclamation claims issues; * interact with lenders and other constituents; * provide other necessary financial duties; and * continue involvement in stock keeping unit analysis and inventory management process. The Debtors will pay Mr. Nerland $375 per hour, with a weekly cap of $18,750 for 50 hours. Mr. Nerland has more than 25 years of senior financial management and advisory experience for under-performing companies, Hancock Fabrics discloses in a regulatory filing with the Securities and Exchange Commission. Mr. Nerland has been with CRP since 2005 and became a partner in 2006. From 2002 to 2005, he was senior vice president and group president of the Cabin Management Group of DeCrane Aircraft. Mr. Nerland has a bachelor's degree in business management from the Indiana University and a master's degree in finance from the University of Southern California. D. Hull's Duties Mr. Hull, as COO, will: * organize constituents; * coordinate on legal and bankruptcy matters, back up M&A matters coordination; * sale process and exit financing support; * continue involvement in SKU analysis and inventory management process; * execute store closings, including providing assistance in identifying additional store closings and new site selection and repositioning; * reduce head count and Distribution Center changes; and * coordinate and execute asset sales. The Debtors will pay Mr. Hull $325 per hour, with a weekly cap of $16,250 for 50 hours. Mr. Hull has been with CRP since 2003 and became a partner in 2006. His work at CRP has focused on providing restructuring and interim management services to underperforming companies and companies in Chapter 11 bankruptcy proceedings. From 2000 to 2003, Prudential Capital Group employed Mr. Hull. Mr. Hull has a bachelor's degree in business administration from Southern Methodist University. B. Smith's Duties Mr. Smith, as assistant operating and financial officer, will: * run the cash flow model each week and provide variance reporting and budgets; * run the internal financial model to incorporate store closings, labor reduction and other cost reductions on real time basis; * help manage vendor relations; * provide general bankruptcy support services with legal matters, including monthly operating reports and financial and advisor requests; and * support SKU and inventory management analysis and implementation. The Debtors will pay Mr. Smith $250 per hour, with a weekly cap of $13,750 for 55 hours. The Debtors may, from time to time, require the assistance of four other CRP personnel, according to Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, LLP, in Wilmington, Delaware, the Debtors' proposed bankruptcy counsel: Professional Hourly Rates ------------ ------------ William Snyder $425 Lisa Poulin $400 Paul Ravaris $375 John Kokoska $375 The aggregate weekly amount chargeable to the Debtors for the Additional Staff will not exceed $5,000, Mr. Dehney says. The Debtors will also reimburse CRP for any reasonable and necessary out-of-pocket expenses. Under the Engagement Agreement, the Debtors agree to provide insurance coverage to the Interim Officers. Furthermore, the Debtors will indemnify all CRP personnel who serve as their temporary staff. Mr. Dehney relates that CRP has provided financial advisory and restructuring services to the Debtors before the Petition Date. The Interim Officers and various other CRP employees have devoted substantial amounts of time and efforts, among other things, researching options relative to maximizing the Debtors' enterprise value, advising and assisting them with respect to ongoing bank negotiations, supporting the financial department in the management of its liquidity resources and assisting the Debtors in their contingency planning efforts. The Debtors have been without a chief operating officer since their previous COO resigned in April 2005, Mr. Dehney notes. Moreover, the Debtors' current chief financial officer has tendered his resignation effective March 30, 2007. Mr. Dehney asserts that the Interim Officers will help ensure that critical management functions are effectively discharged for Hancock Fabrics during the pendency of these bankruptcy cases. Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 3, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: Has Until May 21 to File Schedules & Statements ---------------------------------------------------------------- The United States Court for the District of Delaware has extended the deadline by which Hancock Fabrics and its debtor-affiliates must file their Schedules and Statements through and including May 21, 2007. Section 521(a) of the Bankruptcy Code and Rule 1007(b) and (c) of the Federal Rules on Bankruptcy Procedure both require a debtor to file its schedules of assets and liabilities and its statement of financial affairs with the Court within 15 days of filing its Chapter 11 petition. According to the Debtors' proposed counsel, Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell LLP, in Wilmington, Delaware, given the size and complexity of the Debtors' business, a significant amount of information must be accumulated, reviewed and analyzed to properly prepare the Schedules and Statements. As of March 21, 2007, the Debtors have been consumed with a multitude of critical administrative and business decisions arising in conjunction with the commencement of their Chapter 11 cases, Mr. Dehney adds. The Debtors assert that the extension will provide them sufficient time to assemble and verify information and prepare the Schedules and Statements. Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and 6 of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. When the Debtors filed for protection from their creditors, they listed $241,873,900 in total assets and 161,412,000 in total liabilities. The Debtors exclusive period to file a chapter 11 plan expires on July 19, 2007. (Hancock Fabric Bankruptcy News, Issue No. 3, http://bankrupt.com/newsstand/or 215/945-7000). HANGER ORTHOPEDIC: Good Performance Cues S&P's Stable Outlook ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Bethesda, Maryland-based orthotics- and prosthetics -focused patient care provider Hanger Orthopedic Group Inc. to stable from negative. At the same time, Standard & Poor's affirmed its Ratings including the 'B' corporate credit rating on Hanger. "The outlook revision reflects improvements in the reimbursement environment for Hanger's services in 2007, the company's ability to stabilize its operating cash flow in 2006, and our belief that Hanger's performance in 2007 should be at least as good as it was in 2006," explained Standard & Poor's credit analyst Jesse Juliano. The ratings reflect Standard & Poor's concerns with the declining trends in Hanger's core business line, its historically difficult reimbursement environment, cost inflation pressures, and the company's significant debt burden. These concerns are only partially mitigated by the positive reimbursement environment in 2007, the company's industry-leading position, and its Linkia, WalkAide System, and distribution opportunities. Hanger will continue to be constrained by a large debt load. The company's financial profile is expected to remain weak in the near term, with EBITDA interest coverage of about 2x and lease-adjusted debt to EBITDA of more than 5x. The company's financial risk profile should improve in 2007 as reimbursement increases improve EBITDA and cash flow. However, the potential for debt-financed acquisitions could delay these improvements. HARVEST ENERGY: High Debt Levels Prompt S&P to Downgrade Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Calgary, Alberta-based Harvest Energy Trust to 'B' from 'B+' following a review of the trust's CDN$1.6 billion acquisition of North Atlantic Refining Ltd. in Newfoundland. At the same time, Standard & Poor's lowered its ratings on Harvest's senior unsecured debt to 'CCC+' from 'B-'. The ratings were removed from CreditWatch, where they were placed with negative implications Aug. 23, 2006. The outlook is stable. "The downgrade reflects Harvest's high debt levels following the North Atlantic refinery acquisition as well as our expectation that the trust will achieve limited debt reduction in the near to medium term," said Standard & Poor's credit analyst Jamie Koutsoukis. "Furthermore, the trust is at risk of outspending internally generated cash flows if hydrocarbon prices or crack spreads decline without a corresponding decrease in its monthly distributions," Ms. Koutsoukis added. The stable outlook incorporates our expectation that Harvest's debt levels will remain unchanged. Nevertheless, the rating agency expects that Harvest should generate sufficient internal cash flows to fund its capital spending, interest and distribution requirements while sustaining current production levels. The outlook could be revised to negative if Harvest increases its leverage in deference to maintaining its current distributions or pursues any material debt-financed acquisitions. A negative ratings action could also occur if the trust experiences difficulties maintaining throughput levels at NARL. Alternatively, an outlook revision to positive, or an upgrade, is contingent on a material improvement in the trust's financial risk profile. HILB ROGAL: Earns $21.4 Million in Quarter Ended December 31 ------------------------------------------------------------ Hilb Rogal & Hobbs Company reported financial results for the fourth quarter and year ended Dec. 31, 2006. Net income for the quarter was $21.4 million, compared with $19.5 million, for the same period of 2005. The fourth quarter operating net income increased 27.1% to $23 million, compared with $18.1 million for the fourth quarter of 2005. For the fourth quarter, total revenues were $175.5 million, compared with $164 million in the 2005 fourth quarter, an increase of 7%. Commissions and fees rose 10.2% to $174.4 million during the quarter, compared with $158.2 million for the same period in 2005. The increase reflects new business production and acquisitions, partially offset by accelerated declines in commercial property and casualty premium rates. Net income for the year increased 54.8% to $87.0 million from $56.2 million, or $1.55 per share, in the same period of 2005. Net income for 2005 included a $42.3 million regulatory charge primarily for the company's settlement with the Connecticut Attorney General and related legal and administrative costs. For the year ended Dec. 31, 2006, total revenues were up 5.5% to $710.8 million from $673.9 million in the same period of 2005. Commissions and fees increased 5.8% to $696.0 million from $658 million in 2005 and were affected by similar factors that impacted the fourth quarter, in addition to a $4.4 million reduction in contingent commissions. The operating margin for the fourth quarter of 2006 was 26.6% compared with 22.6% for the 2005 fourth quarter. For the year, the operating margin increased to 25.5% for 2006 from 25% for 2005. The margin change for the quarter and year was affected primarily by declines in legal costs, including the aforementioned fourth quarter insurance recovery, offset by the expensing of stock options and, for the year, the decrease in contingent commissions. "In 2006, HRH further increased market share, improved operating margins, and completed a year of outstanding acquisitions," Martin L. Vaughan, III, chairman and chief executive officer, said. "These achievements were all the more impressive having been accomplished in a highly competitive and soft market. I attribute HRH's successful performance to the dynamic combination of our own talented employees, some of whom have been with our organization since its inception, and our newer technical professionals and producers who joined HRH over the past few years and have quickly come up to speed." At Dec. 31, 2006, the company's balance sheet showed total assets of $1,438,147,000, and total liabilities of $834,778,000, resulting in a stockholders' equity of $603,369,000. The company's equity, as of Dec. 31, 2005, was $514,404,000. Headquartered in Richmond, Virginia, Hilb Rogal & Hobbs Company (NYSE:HRH) -- http://www.hrh.com/-- is the eighth largest insurance and risk management intermediary in the U.S. and tenth largest in the world, with over 120 offices throughout the United States and London. HRH assists clients manage risks in property and casualty, employee benefits, professional liability and many other areas of specialized exposure. HRH also offers a full range of personal and corporate financial products and services. * * * Moody's Investors Service assigned a Ba2 rating to Hilb Rogal & Hobbs Co.'s bank loan debt on April 2006. HSI ASSET: Moody's Rates Class M-10 Certificates at Ba1 ------------------------------------------------------- Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by HSI Asset Securitization Corporation Trust 2007-HE1, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by Accredited Home Lender, Inc (65%), Decision One Mortgage Company, LLC (20%), and various other originators (15%) originated adjustable-rate (74%) and fixed-rate (26%) subprime residential mortgage loans. The ratings are based primarily on the credit quality of the loans and on the protection against credit losses provided by subordination, overcollateralization, excess spread, an interest rate cap, and an interest rate swap agreement. Moody's expects collateral losses to range from 5.30% to 5.80%. Wells Fargo Bank, N.A., Countrywide Home Loans Servicing LP, and Option One Mortgage Corporation will service the mortgage loans in the transaction. Wells Fargo Bank, N.A. will act as master servicer. Moody's has assigned both Wells Fargo Bank, N.A. and Option One Mortgage Corporation its top servicer quality rating of SQ1 as primary servicers of subprime residential mortgage loans. Furthermore, Moody's has assigned Wells Fargo Bank, N.A. its top servicer quality rating of SQ1 as a master servicer of residential mortgage loans. These are the rating actions: * HSI Asset Securitization Corporation Trust 2007-HE1 * Mortgage Pass-Through Certificates Series 2007-HE1 Class I-A, Assigned Aaa Class II-A-1, Assigned Aaa Class II-A-2, Assigned Aaa Class II-A-3, Assigned Aaa Class II-A-4, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned A3 Class M-8, Assigned Baa1 Class M-9, Assigned Baa2 Class M-10,Assigned Ba1 HUNTSMAN CORP: Moody's Lifts Corp. Family Rating to Ba3 from B1 --------------------------------------------------------------- Moody's Investors Service upgraded the corporate family rating for Huntsman Corporation and Huntsman International LLC, a subsidiary of Huntsman, to Ba3 from B1, and upgraded other ratings as appropriate. The ratings on recently redeemed debt have been withdrawn. The outlook for Huntsman's ratings was moved to stable from developing. These are the rating actions: * Huntsman Corporation -- Corporate Family Rating, Upgraded to Ba3 from B1 * Huntsman International LLC -- Corporate Family Rating, Upgraded to Ba3 from B1 -- Senior Secured Bank Credit Facility, Upgraded to Ba1 from Ba3, LGD2, 21% -- Senior Subordinated Regular Bond/Debenture, Upgraded to B2 from B3, LGD5, 89% * Huntsman LLC -- Senior Secured Regular Bond/Debenture, Upgraded to Ba1 from Ba3, LGD2, 21% -- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 from B2, LGD4, 57% Outlook Actions: * Huntsman Corporation -- Outlook, Changed To Stable From Developing * Huntsman International LLC -- Outlook, Changed To Stable From Developing * Huntsman LLC -- Outlook, Changed To Stable From Developing Withdrawals: * Huntsman International LLC -- Senior Subordinated Regular Bond/Debenture, Withdrawn, previously rated B3 -- Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated B2 The upgrade of Huntsman's CFR reflects the actions taken by the company over the last 24 months to materially reduce debt and thereby improve credit metrics. Debt has been reduced using cash proceeds generated by an IPO, asset sales and cash from operations. Asset sales have been directed at reducing Huntsman's exposure to pure commodity businesses and increasing its exposure to less volatile, differentiated chemical businesses. Management has also simplified the corporate structure over the last three years such that all debt is now issued out of HI, Huntsman's primary operating subsidiary. In addition to absolute debt reduction, lower interest expense, achieved via refinancing, has improved credit metrics. The ratings take into account Huntsman's strong competitive position in key businesses and significant competitive barriers, including process know-how and requirements for world scale production capabilities. Management's publicly stated leverage target of net debt/adjusted EBITDA of ~2.5 also represents a departure from historic levels. The ratings are nevertheless tempered by its leverage at this point in the chemical cycle, exposure to rising prices in some feed stocks, and weakness in certain end markets, notably automotive and housing. In addition management's new financial philosophy is still relatively short lived. A concern for Moody's is the adherence to the new financial policies in the event that equity returns are less robust than anticipated. Moody's notes that lackluster equity performance was a key factor in management's decision to transform the company. Since reporting the transformation plan, in February 2006, management has successfully sold its commodity businesses and kept its differentiated businesses. As of Dec. 31, 2006, Huntsman's leverage remains elevated with roughly $3.6 billion of balance sheet debt. However, debt to EBITDA has declined significantly over the past two years and is currently at 3.0x, down from 5.0x at the end of 2004; retained cash flow to total debt is 22% and free cash flow to total debt is 9%. When utilizing Moody's Standard Adjustments, which also include the capitalization of pension obligations at $487 million, securitizations at $220 million and operating leases at $313 million, debt rises to almost $4.4 billion, debt to EBITDA is 3.7x, retained cash flow to total debt is 18.6% and free cash flow to total debt is 7.1%. Credit metrics are expected to show further improvement in 2007 if only from the proceeds from already announced asset sales, which are anticipated to reduce debt by roughly $700 million. The stable outlook reflects Moody's expectation that Huntsman's businesses will remain strong for much of 2007 and into 2008, providing good liquidity and the opportunity to reduce debt further using free cash flow and cash. These actions may improve the company's credit profile and raise its metrics over the cycle. If, over the next 12-24 months, the company continues to follow its newly defined financial policies and does not re-lever its balance sheet either through consolidating acquisitions or through participation in other shareholder enhancing events the company's outlook or ratings could be positively affected. The notching of the senior secured credit facilities at Ba1, two levels above the CFR, reflects the combination of anticipated debt reduction at the secured level along with the benefit of a substantial cushion of subordinated debt. For rating purposes Moody's assumed that the bulk of the debt to be paid down was at the bank term debt level although management has yet to designate a specific plan for the use of asset sale proceeds other than the proceeds will be used to reduce debt. Huntsman Corporation is a global manufacturer of differentiated and commodity chemical products. Huntsman's products are used in a wide range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining and synthetic fiber industries. Huntsman had revenues of $10.6 billion for fiscal year 2006. HUNTSMAN INT'L: Moody's Lifts Corp. Family Rating to Ba3 from B1 ---------------------------------------------------------------- Moody's Investors Service upgraded the corporate family rating for Huntsman Corporation and Huntsman International LLC, a subsidiary of Huntsman, to Ba3 from B1, and upgraded other ratings as appropriate. The ratings on recently redeemed debt have been withdrawn. The outlook for Huntsman's ratings was moved to stable from developing. These are the rating actions: * Huntsman Corporation -- Corporate Family Rating, Upgraded to Ba3 from B1 * Huntsman International LLC -- Corporate Family Rating, Upgraded to Ba3 from B1 -- Senior Secured Bank Credit Facility, Upgraded to Ba1 from Ba3, LGD2, 21% -- Senior Subordinated Regular Bond/Debenture, Upgraded to B2 from B3, LGD5, 89% * Huntsman LLC -- Senior Secured Regular Bond/Debenture, Upgraded to Ba1 from Ba3, LGD2, 21% -- Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 from B2, LGD4, 57% Outlook Actions: * Huntsman Corporation -- Outlook, Changed To Stable From Developing * Huntsman International LLC -- Outlook, Changed To Stable From Developing * Huntsman LLC -- Outlook, Changed To Stable From Developing Withdrawals: * Huntsman International LLC -- Senior Subordinated Regular Bond/Debenture, Withdrawn, previously rated B3 -- Senior Unsecured Regular Bond/Debenture, Withdrawn, previously rated B2 The upgrade of Huntsman's CFR reflects the actions taken by the company over the last 24 months to materially reduce debt and thereby improve credit metrics. Debt has been reduced using cash proceeds generated by an IPO, asset sales and cash from operations. Asset sales have been directed at reducing Huntsman's exposure to pure commodity businesses and increasing its exposure to less volatile, differentiated chemical businesses. Management has also simplified the corporate structure over the last three years such that all debt is now issued out of HI, Huntsman's primary operating subsidiary. In addition to absolute debt reduction, lower interest expense, achieved via refinancing, has improved credit metrics. The ratings take into account Huntsman's strong competitive position in key businesses and significant competitive barriers, including process know-how and requirements for world scale production capabilities. Management's publicly stated leverage target of net debt/adjusted EBITDA of ~2.5 also represents a departure from historic levels. The ratings are nevertheless tempered by its leverage at this point in the chemical cycle, exposure to rising prices in some feed stocks, and weakness in certain end markets, notably automotive and housing. In addition management's new financial philosophy is still relatively short lived. A concern for Moody's is the adherence to the new financial policies in the event that equity returns are less robust than anticipated. Moody's notes that lackluster equity performance was a key factor in management's decision to transform the company. Since reporting the transformation plan, in February 2006, management has successfully sold its commodity businesses and kept its differentiated businesses. As of Dec. 31, 2006, Huntsman's leverage remains elevated with roughly $3.6 billion of balance sheet debt. However, debt to EBITDA has declined significantly over the past two years and is currently at 3.0x, down from 5.0x at the end of 2004; retained cash flow to total debt is 22% and free cash flow to total debt is 9%. When utilizing Moody's Standard Adjustments, which also include the capitalization of pension obligations at $487 million, securitizations at $220 million and operating leases at $313 million, debt rises to almost $4.4 billion, debt to EBITDA is 3.7x, retained cash flow to total debt is 18.6% and free cash flow to total debt is 7.1%. Credit metrics are expected to show further improvement in 2007 if only from the proceeds from already announced asset sales, which are anticipated to reduce debt by roughly $700 million. The stable outlook reflects Moody's expectation that Huntsman's businesses will remain strong for much of 2007 and into 2008, providing good liquidity and the opportunity to reduce debt further using free cash flow and cash. These actions may improve the company's credit profile and raise its metrics over the cycle. If, over the next 12-24 months, the company continues to follow its newly defined financial policies and does not re-lever its balance sheet either through consolidating acquisitions or through participation in other shareholder enhancing events the company's outlook or ratings could be positively affected. The notching of the senior secured credit facilities at Ba1, two levels above the CFR, reflects the combination of anticipated debt reduction at the secured level along with the benefit of a substantial cushion of subordinated debt. For rating purposes Moody's assumed that the bulk of the debt to be paid down was at the bank term debt level although management has yet to designate a specific plan for the use of asset sale proceeds other than the proceeds will be used to reduce debt. Huntsman Corporation is a global manufacturer of differentiated and commodity chemical products. Huntsman's products are used in a wide range of applications, including those in the adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, medical, packaging, paints and coatings, power generation, refining and synthetic fiber industries. Huntsman had revenues of $10.6 billion for fiscal year 2006. IMC INVESTMENT: Judge DeWayne Confirms Chapter 11 Plan ------------------------------------------------------ The Honorable Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas confirmed IMC Investment Properties Inc.'s Chapter 11 Plan of Reorganization. Treatment of Claims As reported in the Troubled Company Reporter on Jan. 11, 2007, under the plan, each holder of an Allowed Priority Unsecured Claim will be paid in one cash payment on the later of: 1) the effective date of the Plan or when the claim is first due and payable; and 2) 15 business days following the date the Claim is allowed by final order. (a) Class 2A Claims - Taxing Authorities The Class 2A Claims of Taxing Authorities are entitled to a secured claim and a lien on the Debtor's multi-purpose office building located at 6221 Riverside Drive in Las Colinas, Texas and all rents on that property in the order of priority as existed on the Debtor's bankruptcy filing. (b) Class 2B and 2C - Compass Bank Secured Claim. On or before the effective date of the Plan, the Reorganized IMC Investment, which will refer to the Debtor post-confirmation as owned by David F. Hoff, will execute and deliver a reorganization note to Compass Bank. The principal amount of the Compass Reorganization Note will be equal to the total amount owed to Compass Bank on the Debtor's bankruptcy filing, plus all accrued and unpaid postpetition interest, and all reasonable postpetition attorneys' fees, costs of collection, and other amounts owed under the loan documents and applicable law, without discount, through the date of the Compass Reorganization Note. Interest will accrue on the Compass Reorganization Note at the fixed rate of 7.83% per annum. The principal balance of the Compass Reorganization Note will be no more than $7,658,519 as of Feb. 1, 2007, subject to final reconciliation by the Debtor. The principal balance plus attorneys' fees accruing after Dec. 1, 2006, up to a total of $20,000 additional attorneys' fees. Plains Capital Bank's claims will be treated as: i) Plains Capital's Third Lien Secured Claim has been paid in full prior to confirmation of the Plan and the lien has been extinguished. Accordingly, such lien will not survive confirmation of the Plan. ii) As of Nov. 16, 2006, Plains Capital's Fourth Lien Secured Claim is allowed in the amount of at least $2,084,154, plus additional amounts. The allowed amount of Plains' Fourth Lien Secured Claim will be adjusted to take into account any payments received by Plains prior to the effective date of the Plan, as well as additional accrued but unpaid interest through the effective date of the Plan, and all unpaid amounts owed. iii) On or before the effective date of the Plan, the Reorganized Debtor will execute and deliver to Plains a reorganization note in the principal amount equal to the allowed amount of Plains' Fourth Lien Secured Claim. The outstanding Principal balance of the Plains Reorganization Note will bear interest at the fixed rate of 7.5% per annum. iv) The Plains Reorganization Note will be secured by valid, properly perfected liens in the Reorganized Debtor's assets to the same extent and priority as the Plains Fourth Lien Secured Claim had prior to the confirmation of the Plan. This lien will survive date of confirmation of the Plan. The Class 2F Claim of Crocker & Reynolds Construction LP will receive an allowed secured claim which is secured by a valid perfected lien on the Debtor's Las Colinas multi-purpose office building all rents on that property in the order of priority as such lien existed on the Debtor's bankruptcy filing. Crocker & Reynolds' Secured Claim will accrue interest from the confirmation date of the Plan at the rate of 7% and will be paid in 23 monthly installments of $1,500 per month with the remaining balance on the allowed Secured Claim due and payable on the twenty-fourth month after confirmation of the Plan. Holders of Class 3 Allowed General Unsecured Claims will receive pro rata share of $50,000, which will be paid from the cash contributed by Mr. Hoff or an entity under his control to be contributed to the Debtor under the Plan in an amount not less than $1,575,000 plus the extinguishment of the Plains Third Lien Secured Claim. If causes of actions result in the collection of cash, the Class 3 Claims will share the proceeds pro rata subject only to the costs of litigation. Class 4 Insider Claims will receive nothing under the Plan while each then-issued and outstanding equity interest in any of the Debtor will be deemed cancelled and extinguished. Full-text copy of IMC Investment's Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=070110011247 Based in Dallas, Texas, IMC Investment Properties Inc. filed for chapter 11 protection on July 3, 2006 (Bankr. N.D. Tex. Case No. 06-32754). Edwin Paul Keiffer, Esq., at Hance Scarborough Wright Ginsberg and Brusilow, LLP, and Keith Miles Aurzada, Esq., at Powell Goldstein LLP, represent the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million and $50 million. INDYMAC HOME: Moody's Assigns Low-B Ratings on 2 Cert. Classes -------------------------------------------------------------- Moody's Investors Service has assigned Aaa ratings to the senior certificates issued by IndyMac Home Equity Mortgage Loan Asset-Backed Trust, Series INABS 2007-A, and ratings ranging from Aa1 to Ba2 to the subordinated certificates in the deal. The securitization is backed by IndyMac Bank F.S.B. originated adjustable-rate and fixed-rate subprime mortgage loans. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, overcollateralization (OC), excess spread, and an interest rate swap agreement. Moody's expects collateral losses to range from 5.20% to 5.70%. IndyMac Bank will service the mortgage loans. Moody's has assigned IndyMac Bank F.S.B its SQ2- servicer quality rating as a primary servicer of subprime loans. These are the rating actions: * IndyMac Home Equity Mortgage Loan Asset-Backed Trust, Series INABS 2007-A Class 1A, Assigned Aaa Class 2A-1, Assigned Aaa Class 2A-2, Assigned Aaa Class 2A-3, Assigned Aaa Class 2A-4A,Assigned Aaa Class 2A-4B,Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa1 Class M-9, Assigned Baa2 Class M-10,Assigned Ba1 Class M-11,Assigned Ba2 INTERNATIONAL COAL: Moody's Holds Corporate Family Rating at B2 --------------------------------------------------------------- Moody's Investors Service upgraded International Coal Group Inc.'s speculative grade liquidity rating to SGL-3 from SGL-4, indicating adequate liquidity. The SGL-3 rating reflects Moody's belief that the less restrictive covenants in ICG's newly amended and restated credit agreement dated Jan. 31, 2006, will help the company maintain access to its committed bank facilities with greater ease and certainty, which will enable the company to fund its liquidity requirements more comfortably in the next 12 months. ICG was in compliance with its financial covenants as of Dec. 31, 2006, and Moody's expects that the extra headroom in the amended agreement will enable ICG to maintain continued access to its funding lines over the next 12 months. Moody's notes that the company has a significant capex program underway and there is a very high probability that the company will need to utilize its revolver to fund the program. However, the company has the flexibility to postpone capex and, therefore, can control the extent to which it takes on additional debt through revolver drawings. ICG's B2 corporate family rating reflects the significant challenges facing ICG in meeting its somewhat aggressive production targets and the substantial amount of capex and resultant negative free cash flow that will be associated with these targets, in addition to the capex that will be needed to complete upgrading of the existing equipment fleet. While the company's leverage is reasonable, Moody's anticipates that the debt level will increase significantly as the company funds its development program and deals with lower than expected cash flow from its existing mines, which in Moody's view are likely to continue to provide operating challenges. The ratings favorably reflect the company's ownership of the majority of its reserves, its relatively low level of reclamation, workers' compensation, black lung and other legacy liabilities and its currently low leverage for the rating. Moody's last rating action on ICG, in September 2006, was to raise to Ba3 the rating on the company's guaranteed senior secured facility due 2011, and to lower to Caa1 the rating on its guaranteed senior unsecured notes due 2014. These actions were taken in accordance with the introduction of Moody's LGD methodology. International Coal Group, headquartered in Scott Depot, West Virginia, is engaged in the mining and marketing of coal, and had revenues in the fiscal year ended Dec. 31, 2006 of $892 million. INTERSTATE BAKERIES: New Compensation Structure for Board Approved ------------------------------------------------------------------ The United States Bankruptcy Court for the Western District of Missouri has granted authority to Interstate Bakeries Corp. and eight of its subsidiaries and affiliates to adjust the compensation of the members of Debtor's Board of Directors who are not salaried employees or consultants, nunc pro tunc to Jan. 5, 2007. The eight subsidiaries are: (1) Armour and Main Redevelopment Corporation, (2) Baker's Inn Quality Baked Goods, LLC, (3) IBC Sales Corporation, (4) IBC Services, LLC, (5) IBC Trucking LLC, (6) Interstate Brands Corporation, (7) New England Bakery Distributors, L.L.C, and (8) Mrs. Cubbison's Foods, Inc. As reported in the Troubled Company Reporter on Jan. 8, 2006, the Bankruptcy Court approved on Jan. 5, 2007, the settlement reconstituting IBC's Board of Directors. As reconstituted, the Board will now consist of seven members. As reported in the Troubled Company Reporter on March 1, 2007, most of the members of the reconstituted Board were not serving at the time the Chapter 11 cases were commenced. To attract new members, an increase in Board compensation to market levels was discussed with certain of the Board members prior to their appointment. "Addressing this expectation -- i.e., raising board compensation to competitive levels -- is, therefore, required to meet the legitimate expectations of the new board members and to retain the services of the entire board throughout these cases," J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, related. According to Mr. Ivester, the Debtors, with the assistance of Watson Wyatt Worldwide, evaluated the Directors' existing compensation structure, benchmarked it against director compensation paid by the general market and select peer companies, and developed a revised compensation structure. Existing Revised -------- ------- Base Retainer $30,000 $75,000 Board Meeting Fees In Person $2,000 $2,000 By Telephone $1,000 $1,000 Committee Meeting Fees In Person $1,000 $1,000 By Telephone $500 $500 Audit Chair Retainer $5,000 $15,000 Other Chair Retainers $2,500 $7,500 Equity Award $0 - 50,000 $0 Non-Executive Chairman $150,000 $150,000 In addition, the Debtors made certain adjustments to the Existing Compensation Structure to reflect that: * the Directors' annual retainer will be increased from $30,000 to $75,000; * the Audit Committee Chairman's annual retainer will be increased from $5,000 to $15,000; and * the annual retainers for the Chairmen of other committees will be increased from $2,500 to $7,500. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. The Debtors' exclusive period to file a chapter 11 plan expires on June 2, 2007. (Interstate Bakeries Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). INTERSTATE BAKERIES: Court Approves Management Incentive Plan ------------------------------------------------------------- The United States Bankruptcy Court for the Western District of Missouri has given its permission to Interstate Bakeries Corporation and its debtor-affiliates to implement the IBC Management Incentive Bonus Plan Fiscal 2007. As reported in the Troubled Company Reporter on Sept. 12, 2006, the Incentive Plan is designed to encourage eligible employees to increase the Debtors' enterprise value, and thus increase value and returns for all stakeholders, during the Debtors' Chapter 11 cases by paying cash bonuses to certain eligible employees if the Debtors achieve certain predetermined financial projections, according to J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Chicago, Illinois, The Debtors, with the assistance of Alvarez & Marsal, LLC, evaluated their existing compensation structure and obtained input from their Board of Directors and senior executives to identify Participants and consider the appropriate incentive levels. Annual Incentive Bonus Plan The Debtors have identified 859 employees eligible under the Incentive Plan. The designated bonus target amount for each Participant is determined based on a specified percentage of his base salary. The specified percentages range from approximately 3% to 25%. A Participant's eligibility to receive the annual bonus depends on: (1) whether the Debtors achieve their projected EBITDAR target for fiscal year 2007; (2) whether the Participant's profit center or unit achieves its projected EBITDAR target; and (3) the Participant's individual performance rating. Under the Incentive Plan, the Participants are divided into different categories: * The Corporate Group, * The Business Units Group, and * The Profit Centers and other operating units group. If the Debtors do not achieve their EBITDAR target, the Corporate Group will not receive their designated bonus and the Non- Corporate Groups will only be eligible for 50% of their designated bonuses. For the Non-corporate Groups, if their business unit does not achieve their EBITDAR target, then they will not receive their designated bonuses, irrespective of whether the Debtors achieve their EBITDAR target, unless a discretionary pool is funded. A Participant's designated bonus may be reduced to zero or increased to as much as 150% of the designated amount based on his individual performance ratings. A Participant may receive more if a discretionary pool is funded. Individual performance ratings will be dependent on achieving metrics designated by its unit's leadership. For instance, the sales management's ratings will depend on achieving the profit center sales plan, meeting profit center route return goals, and satisfying profit center safety goals, Mr. Ivester noted. Discretionary Bonus Pool If the Debtors exceed their EBITDAR target before adjustment for the designated bonuses, a separate discretionary bonus pool will be created that will be in addition to the designated bonuses, Mr. Ivester noted. Funding for the discretionary bonus pool will be derived from: -- 15% of the excess of the Debtors' EBITDAR over their EBITDAR target; and -- the funds earmarked to pay the designated bonuses for the business units that do not meet their EBITDAR targets. Bonuses paid from the discretionary bonus pool will be based on each Participant's individual performance and contribution to the Debtors' business objectives. The recipients and bonus amounts will be determined by the IBC Compensation Committee, and the determinations will be reviewed by the Compensation Committee of IBC's Board of Directors. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due Aug. 15, 2014, on Aug. 12, 2004) in total debts. The Debtors' exclusive period to file a chapter 11 plan expires on June 2, 2007. (Interstate Bakeries Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). IPC SYSTEMS: WestCom Buyout Cues S&P's Negative CreditWatch ----------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B+' corporate credit rating for New York City-based IPC Systems Inc. on CreditWatch with negative implications. "The CreditWatch placement follows the announcement that IPC has entered into a definitive agreement to purchase WestCom Corp., a global provider of managed voice and data solutions and services to the financial community," said Standard & Poor's credit analyst Ben Bubeck. Despite the fact that this acquisition bolsters IPC's services business and adds stability to the overall business, IPC's capacity to make additional debt-financed acquisitions was extremely limited following the recent acquisition of Positron Public Safety Systems Inc. While the terms of the acquisition have not yet publicly been disclosed, operating lease-adjusted leverage likely will increase substantially from current levels around 6.5x, given the EBITDA multiples recently paid for similarly positioned services companies and the market's current tolerance for heightened leverage. The ratings on IPC's existing senior secured bank facility were not placed on CreditWatch, as the term loans and any amounts outstanding under the revolving credit facility are expected to be refinanced as part of the transaction. Standard & Poor's will review the financial terms of the acquisition and its assessment of IPC's business position in order to resolve the CreditWatch listing. JADWIGA PAWLOWSKI: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Jadwiga Helena Pawlowski 41-37, 74th Street Elmhurst, NY 11373 Bankruptcy Case No.: 07-41506 Chapter 11 Petition Date: March 28, 2007 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Todd E. Duffy, Esq. Duffy & Atkins, L.L.P. Seven Penn Plaza, Suite 420 New York, NY 10001 Tel: (212) 268-2685 Fax: (212) 500-7972 Estimated Assets: $1 Million to $100 Million Estimated Debts: $100,000 to $1 Million The Debtor did not submit a list of his 20 largest unsecured creditors. JENKENS & GILCHRIST: To Pay $76 Million Penalty; Closes Doors ------------------------------------------------------------- Jenkens & Gilchrist will close its doors amidst a federal probe of criminal tax shelter activity, according to the Internal Revenue Service and U.S. Attorney's Office. IRS Statement In its website, the Internal Revenue Service said that it reached a settlement with Jenkens & Gilchrist, under which the law firm will be subject to a penalty of $76 million. The penalty stems from the firm's promotion of abusive and fraudulent tax shelters and violation of the tax law concerning tax shelter registration and maintenance and turnover to the IRS of tax shelter investor lists. "While it is unfortunate that the 56-year-old national firm of Jenkens & Gilchrist is terminating its legal practice, this should be a lesson to all tax professionals that they must not aid or abet tax evasion by clients or promote potentially abusive or illegal tax shelters, or ignore their responsibilities to register or disclose tax shelters," said IRS Commissioner Mark W. Everson. "Pursuing abusive tax shelters is a top priority for the IRS." The firm aggressively marketed potentially abusive tax shelters to high-net-worth individuals. Some of the packages marketed to these individuals included listed transactions such as: * COBRA (Currency Options Bring Reward Alternatives); * BEST (Short Option/Basis Enhancing Securities Transaction); * BLISS (Basis Leveraged Investment Swap Spreads); * OPS (Option Partnership Strategy); * BEDS (Basis Enhancing Derivatives Structure); and * BOSS (Bond & Option Sale Strategy). The firm also marketed two transactions that are not listed transactions: * HOMER (Hedge Option Monetization of Economic Remainders) and * BART (Basis Adjustment Remainder Trusts). The IRS estimates that 1,400 investors are affected by the firm's advice and will owe interest and penalties on their underpayment of tax. Attorney General's Statement In a statement, Michael J. Garcia, United States Attorney for the Southern District of New York, disclosed that his Office has entered into a non-prosecution cooperation agreement Jenkens & Gilchrist for criminal tax violations arising from J&G's tax shelter activities. In a statement to the United States Attorney's Office for the Southern District of New York, J&G admitted to developing and marketing fraudulent tax shelters, as well as to issuing fraudulent opinion letters. The decision by the Office to enter into a non-prosecution agreement with the law firm was based on four principal factors: * J&G's inability to continue practicing law as a firm; * J&G's acceptance of responsibility for developing and marketing fraudulent tax shelters, and for rendering fraudulent opinions in connection with those shelters; * J&G's cooperation with the Government's investigation into the tax shelter activities of the firm and its individual lawyers; and J&G's entry into an agreement with the Internal Revenue Service to resolve the IRS's promoter penalty audit of J&G, including the payment of a civil penalty. J&G has recognized, in its statements to the Office and in the Agreement, that its tax shelter practice has caused serious damage to its reputation, revenues and stability, and that as a result it ultimately cannot continue in business. It was once a thriving firm with over 600 attorneys and offices across the nation. Approximately two-thirds of those attorneys left, and its revenues declined sharply, as Government scrutiny of the firm's tax shelter practices intensified, as civil suits were filed, and as the firm's reputation was accordingly tarnished. The firm has advised the Office that it has recently closed several of its offices, that it will be closing the last of its offices -- its flagship office in Dallas -- at the end of the month, and that J&G will no longer engage in the practice of law. Mr. Garcia said, "Jenkens & Gilchrist lawyers designed, sold, implemented and provided legal opinions for illegal tax shelters. These fraudulent cookie-cutter shelters purported to generate well over a billion dollars in tax losses and eliminate hundreds of millions of dollars in taxes owed by wealthy clients. They sounded too good to be true, and they were too good to be true. The firm has acknowledged not only that its tax shelter practice was fraudulent and caused serious harm to the United States Treasury, but also that the practice caused such harm to the firm's reputation and revenues that it cannot survive as a going concern. The demise of Jenkens & Gilchrist demonstrates that a lucrative but fraudulent tax shelter practice may provide short- term financial rewards, but at a great long-term cost." About Jenkens & Gilchrist Jenkens & Gilchrist -- http://www.jenkens.com/-- is a full- service law firm providing legal services to businesses and individuals with U.S. and international operations from offices in Austin, Chicago, Dallas, Houston, Los Angeles, New York, Pasadena, San Antonio, and Washington, D.C. Jenkens & Gilchrist serves clients worldwide in all areas of commercial activity. JP MORGAN: Moody's Rates Class MV-10 Certificates at Ba1 -------------------------------------------------------- Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by J.P. Morgan Mortgage Acquisition Trust 2007-CH1, and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by two separate and discrete pools of adjustable-rate and fixed- rate, subprime mortgage loans originated by JP Morgan Chase Bank, National Association. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, excess spread, and overcollateralization. In addition Group 2 will benefit from an interest-rate swap agreement provided by JPMorgan Chase Bank, National Association. Moody's expects collateral losses to range from 2.50% to 3.00% for Group 1 and 3.80% to 4.30% for Group 2. JPMorgan Chase Bank, National Association will service the loans. These are the rating actions: * J.P. Morgan Mortgage Acquisition Trust 2007-CH1 * Asset-Backed Pass-Through Certificates, Series 2007-CH1 Group 1: Class AF-1A, Assigned Aaa Class AF-1B, Assigned Aaa Class AF-2, Assigned Aaa Class AF-3, Assigned Aaa Class AF-4, Assigned Aaa Class AF-5, Assigned Aaa Class AF-6, Assigned Aaa Class MF-1, Assigned Aa1 Class MF-2, Assigned Aa2 Class MF-3, Assigned Aa3 Class MF-4, Assigned A1 Class MF-5, Assigned A2 Class MF-6, Assigned A3 Class MF-7, Assigned Baa1 Class MF-8, Assigned Baa2 Class MF-9, Assigned Baa3 Group 2: Class AV-1, Assigned Aaa Class AV-2, Assigned Aaa Class AV-3, Assigned Aaa Class AV-4, Assigned Aaa Class AV-5, Assigned Aaa Class MV-1, Assigned Aa1 Class MV-2, Assigned Aa2 Class MV-3, Assigned Aa3 Class MV-4, Assigned A1 Class MV-5, Assigned A2 Class MV-6, Assigned A3 Class MV-7, Assigned Baa1 Class MV-8, Assigned Baa2 Class MV-9, Assigned Baa3 Class MV-10, Assigned Ba1 The Class MV-10 certificates were sold in privately negotiated transactions without registration under the Securities Act of 1933 under circumstances reasonably designed to preclude a distribution thereof in violation of the Act. The issuance has been designed to permit resale under Rule 144A. KING PHARMA: Key Improvements Cue Moody's Stable Outlook -------------------------------------------------------- Moody's Investors Service revised the rating outlook on King Pharmaceuticals, Inc. to stable from negative. At the same time, Moody's affirmed King's Ba3 Corporate Family Rating, and the Baa3 rating on King's $400 million secured credit agreement maturing in April 2007. Moody's had maintained a negative rating outlook on King since April 21, 2005. The change in the rating outlook to stable from negative acknowledges several key improvements since that date: * strong cash flows in 2006 driven by sales of Altace, Skelaxin, and Thrombin; * reduced uncertainty regarding the threat of a near-term generic Altace launch; * resolution of certain legal matters including an OIG investigation; and * correction of earlier deficiencies in internal controls over financial reporting. King's Ba3 rating reflects the criteria outlined in Moody's Global Pharmaceutical Rating Methodology. Factors from the methodology consistent with King's rating include size and scale, concentration in Top 3 and Top 5 products, and its litigation profile. Very favorable scores on cash flow relative to debt and cash coverage of debt are offset by unfavorable scores on exposure to patent expirations and exposure to patent challenges. Although several financial measures, such as cash flow to debt, are extremely strong for the Ba3 rating, King's exposure to patent expirations and challenges could result in significant cash flow erosion over the next several years. In addition, the company's acquisition strategy could result in incremental debt levels. Ratings affirmed: * Ba3 Corporate Family Rating * Baa3, LGD2, 12% senior secured revolving credit facility of $400 million due 2007 Moody's does not rate King's $400 million senior unsecured convertible notes due 2026. King Pharmaceuticals, Inc., headquartered in Bristol, Tennessee, manufactures, markets, and sells primarily acquired branded prescription pharmaceutical products. The company reported revenues of approximately $2.0 billion in 2006. LENNAR CORP: Earns $68.6 Million in First Quarter Ended Feb. 28 --------------------------------------------------------------- Lennar Corp. reported that net income for the first quarter ended Feb. 28, 2007, fell to $68.6 million, from net income of $258.1 million a year earlier, on continued softness in the housing market made worse by problems with subprime lenders. Revenue declined 14% to $2.79 billion versus $3.24 billion a year ago. The drop in profits for Lennar come after the U.S. Census Bureau reported Monday that builders sold 848,000 single-family homes in February, 18.3% fewer than the same month last year and 3.9% fewer than January of this year. Stuart Miller, president and chief executive officer of Lennar Corporation, said, "The housing market continues to demonstrate overall weakness. While some markets are performing better than others, the typically stronger spring selling season has not yet materialized. These soft market conditions have been exacerbated by the well-publicized problems in the subprime lending market." Mr. Miller continued, "As weak market conditions have persisted, we have continued to focus on our 'balance sheet first' strategy. Since early 2006, we have focused on fortifying our balance sheet by carefully managing inventory levels (converting both land and home inventory to cash) and significantly reducing land purchases and starts. Concurrently, we have adjusted our land assets where appropriate while we have written-off option deposits and pre- acquisition costs on land we no longer desire to close." "Additionally, we completed the LandSource transaction this quarter, further strengthening our balance sheet with the receipt of approximately $700 million of cash during the quarter. The strong sponsorship of LandSource, coupled with the land availability primarily created by builders walking away from option deposits, positions us for new opportunities to purchase favorably-priced, larger land parcels within LandSource." "We are very pleased that we ended our first quarter with our net homebuilding debt to total capital at 28.6%. Our strong balance sheet will position us well for success as market conditions recover. In the interim, we will continue to manage our business with day-by-day focus on maintaining a very low inventory balance and a consistent pressure on reducing costs as we rebuild our margins." Revenues from home sales decreased 10% in the first quarter of 2007 to $2.6 billion from $2.9 billion in 2006. Revenues were lower primarily due to a 4% decrease in the number of home deliveries and a 7% decrease in the average sales price of homes delivered in 2007. Gross margins on home sales were $360.9 million, or 13.8%, in the first quarter of 2007, compared to gross margin of $727.9 million, or 24.9%, in the first quarter of 2006. Gross margin on home sales in the first quarter of 2007 includes $48.3 million of FAS 144 valuation adjustments in the company's Homebuilding East, Central and West segments and Homebuilding Other segment. Gross margin percentage on home sales decreased compared to last year in all of the company's homebuilding segments and Homebuilding Other segment primarily due to higher sales incentives offered to homebuyers. Selling, general and administrative expenses as a percentage of revenues from home sales increased to 14.1% in the first quarter of 2007, from 13.0% in 2006. The 110 basis point increase was primarily due to lower revenues and an increase in broker commissions, partially offset by lower personnel-related expenses. Loss on land sales totaled $26.5 million in the first quarter of 2007, net of $21 million of write-offs of deposits and pre- acquisition costs related to approximately 4,000 homesites under option that the company does not intend to purchase and $13.2 million of FAS 144 valuation adjustments, compared to gross profit from land sales of $49.1 million last year. In February 2007, the company's LandSource joint venture admitted MW Housing Partners as a new strategic partner. The transaction resulted in a cash distribution to the company of approximately $700 million. As a result of the recapitalization, the company recognized a pretax gain of $175.9 million in the first quarter of 2007. Equity in earnings (loss) from unconsolidated entities was a loss of $14.2 million in the first quarter of 2007, which included $6.5 million of FAS 144 valuation adjustments to the company's investments in unconsolidated entities, compared to equity in earnings from unconsolidated entities of $38.2 million last year. Management fees and other income, net, totaled $13.8 million in the first quarter of 2007 (including $2.6 million of FAS 144 valuation adjustments), compared to $19.4 million in the first quarter of 2006. Minority interest expense, net was $544,000 and $4.4 million, respectively, in the first quarter of 2007 and 2006. Operating earnings for the Financial Services segment were $15.9 million in the first quarter of 2007, compared to $10.6 million last year. The increase was primarily due to improved results from the segment's mortgage operations as a result of an increased capture rate and a higher percentage of fixed-rate loans. Corporate general and administrative expenses as a percentage of total revenues were 1.7% and 1.6%, respectively, in the first quarter of 2007 and 2006. About Lennar Corp. Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/ -- founded in 1954, builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance, and closing services for both buyers of the company's homes and others. * * * In March 2006, Moody's Investors Service raised Lennar Corp.'s senior subordinated debt rating to Ba1. LODGENET ENT: Add-on Cues S&P to Hold B+ Senior Facilities' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its bank loan rating, and lowered its recovery rating, on the senior secured credit facilities of LodgeNet Entertainment Corp. (B+/Stable/--), following the report that the company will add $225 million to its first-lien debt through a delayed-draw term loan. The 'B+' bank loan rating is the same as the corporate credit rating on the company. Standard & Poor's revised the recovery rating to '3', indicating an expectation of meaningful recovery of principal in the event of a payment default. Pro forma for the proposed add-on term loan, the facility will consist of a $50 million revolving credit facility due 2013 and a $625 million term loan due 2014. "The recovery rating was lowered from '3' from '2' because the additional first-lien secured debt reduces the recovery prospects of all first-lien debtholders," said Standard & Poor's credit analyst Tulip Lim. "The repricing of the first-lien debt also decreases the recovery prospects, as we use interest expense as an input in our default scenario." LodgeNet will use proceeds from the proposed add-on term loan to tender for LodgeNet's outstanding $200 million 9.5% senior subordinated notes due 2013. The bank loan and recovery ratings are based on the company completing the tender offer for the subordinated notes. Ratings List: * LodgeNet Entertainment Corp. -- Corporate Credit Rating at B+/Stable/ Rating Affirmed: * LodgeNet Entertainment Corp. -- $675 Million Bank Facilities at B+ Rating Lowered: To From * LodgeNet Entertainment Corp. -- $675 Million Bank Facilities, Recovery Rating downgraded to 3 from 2. LONE STAR: Board Approves $2.1 Billion Sale to U.S. Steel --------------------------------------------------------- United States Steel Corporation and Lone Star Technologies, Inc. disclosed Thursday that they have entered into a definitive agreement under which U.S. Steel will acquire Lone Star for $67.50 per share in cash. The agreement was unanimously approved by the boards of directors of both U.S. Steel and Lone Star. U.S. Steel expects that the acquisition of Lone Star will strengthen its position as a premier producer of tubular products for the energy sector and will create North America's largest tubular producer. The transaction will broaden U.S. Steel's energy product offerings by joining U.S. Steel's predominantly seamless tubular business with Lone Star's complementary welded tubular business, coupling manufacturing and tubular processing services. Following the transaction, U.S. Steel will have annual North American tubular manufacturing capability of approximately 2.8 million tons. U.S. Steel expects that the transaction will be accretive to its 2007 earnings per share before considering expected synergies and excluding the accounting effects of the sale of acquired inventory and other customary purchase accounting adjustments. U.S. Steel projects that the combination with Lone Star's operations will generate annual pre-tax operating synergies in excess of $100 million by the end of 2008. Commenting on the acquisition, U.S. Steel Chairman and CEO, John P. Surma, said, "This transaction represents a compelling strategic opportunity for U.S. Steel to strengthen our position as a supplier to the robust oil and natural gas sector by significantly expanding our tubular product offerings, our production capacity and our geographic footprint. "With a comprehensive portfolio of high-end products, enhanced production capabilities, excellent positions in both welded and seamless pipe, and a strong commitment to quality, service and innovation, U.S. Steel will be better positioned to serve the international oil and natural gas industry as the provider of choice for tubular products. Also, because Lone Star is a significant purchaser of hot bands and slabs, this acquisition should allow us to better optimize our domestic hot-end operations over a range of market conditions." Rhys Best, Chairman and CEO of Lone Star stated, "We are very excited about today's announcement. We believe that this combination will deliver superior value to Lone Star's shareholders as well as provide our employees with an opportunity to be part of a larger enterprise. Our complementary strengths will better position Lone Star to pursue significant new growth opportunities for the benefit of our customers, distributors and end users. This transaction will enable an enhanced and wider range of products, even higher service levels and greater manufacturing efficiencies. We look forward to working with the U. S. Steel team to ensure a smooth transition." Under the terms of the definitive agreement, U.S. Steel will acquire all of the outstanding shares of Lone Star for $67.50 per share in cash - an aggregate value of approximately $2.1 billion. The price per share represents a premium of approximately 39% to Lone Star's closing share price of $48.45 on March 28, 2007, and a premium of approximately 43% to its 90-day average trading price. U. S. Steel will pay for the acquisition through a combination of cash on hand and financing obtained under its existing receivables purchase program and three new fully committed bank credit facilities provided by JPMorgan. The transaction is subject to the approval of Lone Star's shareholders and other customary closing conditions, including regulatory approvals, and is expected to close in the second or third quarter of 2007. J.P. Morgan Securities Inc. and Morgan, Lewis & Bockius LLP acted as financial and legal advisers, respectively, to U. S. Steel. Goldman, Sachs & Co. and Weil, Gotshal & Manges LLP acted as financial and legal advisers, respectively, to Lone Star. About United States Steel Corporation United States Steel Corporation (NYSE: X) is an integrated steel producer with major production operations in the United States and Central Europe. An integrated steelmaker uses iron ore and coke as primary raw materials for steel production, and U. S. Steel has annual raw steel production capability of 19.4 million tons in the United States and 7.4 million tons in Central Europe. The company manufactures a wide range of value-added steel products for the automotive, appliance, container, industrial machinery, construction and oil and gas industries. U.S. Steel's integrated steel facilities include Gary Works in Gary, Ind.; Great Lakes Works in Ecorse and River Rouge, Mich.; Mon Valley Works, which includes the Edgar Thomson Plant and the Irvin Plant near Pittsburgh, Pa., and the Fairless Plant near Philadelphia, Pa.; Granite City Works in Granite City, Ill.; Fairfield Works in Fairfield, Ala.; U. S. Steel Kosice in the Slovak Republic; and U.S. Steel Serbia. U.S. Steel also operates finishing facilities at the Midwest Plant in Portage, Ind., East Chicago Tin in Indiana, and Lorain Tubular Operations in Lorain, Ohio, and is involved in several steel finishing joint ventures. U.S. Steel produces coke at Clairton Works near Pittsburgh and at Gary Works and Granite City Works. The company operates two iron ore mines through its Minnesota Ore Operations on the Mesabi Iron Range in northern Minnesota, one in Mt. Iron and one in Keewatin. In addition, U. S. Steel is involved in transportation services (railroad and barge operations) and real estate operations. About Lone Star Technologies Lone Star Technologies, Inc. (NYSE: LSS) is a $1.4 billion holding company whose principal operating subsidiaries manufacture and market oilfield casing, tubing and line pipe, specialty tubing products, including finned tubes used in a variety of heat recovery applications, and flat rolled steel and other tubular products and services. LONE STAR: U.S. Steel Deal Prompts S&P's Positive CreditWatch ------------------------------------------------------------- Standard & Poor Ratings Services placed its 'BB-' corporate credit rating and its other ratings on Lone Star Technologies Inc. on CreditWatch with positive implications. The CreditWatch followed the announcement that Lone Star definitively agreed to be acquired by United States Steel Corp. (BB+/Stable/--) in a cash transaction valued at $2.1 billion. The agreement was accepted by the boards of directors of both U.S. Steel and Lone Star Technologies. The transaction is expected to close in the second quarter of 2007, subject to a vote by Lone Star shareholders and to regulatory approvals. "The acquisition indicates that strong merger and acquisition activity in the steel industry is likely to continue, driven by favorable market conditions," said Standard & Poor's credit analyst Thomas Watters. Dallas, Texas-based Lone Star Technologies has a leading position in oil country tubular goods, a virtually debt-free balance sheet, and fair liquidity. U.S. Steel is an integrated steel producer, which has experienced strong profitability and healthy cash flows that have allowed it to finance its growth. Combined, the companies will create the largest producer of tubular steel goods in North America. Standard & Poor's expects to resolve the CreditWatch after the closing of the transaction. LS POWER: Moody's Rates $1 Bil. 1st-Lien Credit Facilities at B1 ---------------------------------------------------------------- Moody's Investors Service has assigned ratings of B1 and B3 with a stable outlook to LS Power Acquisition Co I, LLC's first and second lien credit facilities, respectively. The first lien credit facilities include a $700 million term loan, a $165 million letter of credit facility, and a $150 million revolver. The second lien credit facility consists of a $300 million term loan. Proceeds of the term loans will be used along with a $30 million draw on the revolver and a $412 million equity contribution to purchase a portfolio of 6 gas-fired electric generating facilities from the Mirant Corporation. The letter of credit facility will be used to provide a $40 million debt service reserve and support collateral obligations while the remaining revolver capacity will be used for working capital needs and additional letters of credit. The generating facilities, which are distributed throughout the United States, include 4 combined cycle and 4 simple cycle units with a total of 3,736 MW of capacity. All of the facilities utilize GE 7FA technology and are relatively new, with an average age of approximately five years. According to Moody's analyst Aaron Freedman, the assigned ratings reflect the asset portfolio's relatively high leverage, narrow projected financial metrics, and substantial merchant exposure to potential power market volatility. These weaknesses are mitigated by a significant level of contracted revenues through the first four years of the loan life along with the geographic and dispatch diversity and adequate structural protections for lenders. Each facility is located in a different state and interconnects with a different wholesale market; while some of the assets are located in illiquid, bilateral or significantly overbuilt markets and dispatch infrequently, others are in more liquid or transparent markets with stronger demand for intermediate and peaking resources, and exhibit higher dispatch rates. An independent power generation company headquartered in East Brunswick, New Jersey, LS Power Acquisition Co I, LLC is a bankruptcy-remote special purpose entity created to own and operate a portfolio of six gas-fired generating facilities. It is owned by LS Power Equity Partners, a private equity fund managed by the LS Power Group. MAGUIRE PROPERTIES: S&P Lowers Corp. Credit Rating to BB- from BB ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit ratings on Maguire Properties Inc. and Maguire Properties L.P. to 'BB-' from 'BB'. At the same time, Standard & Poor's assigned its 'BB-' rating and '4' recovery rating to a proposed $625 million term loan and a $200 million revolving credit facility. The outlook is stable. "The downgrade reflects the impact of Maguire's pending $3.1 billion fully priced and largely debt-financed acquisition of former Equity Office Properties assets, which we believe could put pressure on an already weak financial profile," explained Standard & Poor's credit analyst Tom Taillon. "The assigned bank loan and recovery ratings reflect the secured nature of the loans and our expectations for marginal recovery prospects in a default scenario." Maguire's revised corporate credit rating reflects an aggressive financial policy, weak cash flow coverage measures, and reliance on a secured financing strategy to fund growth of a geographically concentrated portfolio. Offsetting these credit concerns are a strong competitive position in Southern California, favorable recent experience absorbing relatively large portfolios, and a growing development pipeline that could bolster future cash flow. Maguire's core portfolio should be relatively stable over the next few years. In addition, current robust demand for the assets Maguire plans to sell should facilitate management's post-transaction debt reduction plan. However, the ratings would come under pressure if debt reduction efforts are delayed or impeded. Standard & Poor's views upside momentum in the rating as limited by the company's currently high debt levels. MASONITE CORP: High Leverage Prompts Moody's to Hold B2 Rating -------------------------------------------------------------- Moody's Investors Service has affirmed Masonite Corporation's B2 corporate family rating, as well as affirmed the company's Ba3 rating on its senior secured credit facilities. Masonite's outlook has been changed to negative from stable. Masonite's ratings consider the company's recent loss of business from Home Depot, the company's largest customer, high leverage, and low free cash flow generation relative to debt levels. The ratings benefit from Masonite's market position as leading producer of doors in North America. These ratings have been affirmed for Masonite Corporation: * Corporate family rating, affirmed at B2, * Probability of default rating, affirmed at B2, * $1,172 million Graduated Senior Secured Term Loan due 2013, affirmed at Ba3, LGD3, 32%; * $350 million Graduated Senior Secured Revolver due 2011, rated Ba3, LGD3, 32%; Speculative grade liquidity rating, affirmed at SGL-3. Masonite's negative outlook incorporates the company's recent disclosure of the loss of 50% of Home Depot volume, while balancing the benefits of its revenue mix. The majority of the company's sales come from repair and remodeling. The ratings could come under pressure if free cash flow to debt was projected to fall to below 2% over a 12 month basis, if Debt/EBITDA was to increase to over 7x, if the company violates its covenants, or if additional business is lost from key customers. Further loss of business due to price increases implemented or further weakening market conditions would also pressure the rating downward. The ratings could improve if free cash flow to debt was to increase to above 8% on a projected 12 month basis and if debt to EBITDA fell below 4x and was expected to improve further. Masonite is headquartered in Ontario, Canada. The company is a leading global manufacturer of doors and door components with over 80 facilities in 18 countries in North America, Europe, Latin America, Asia and Africa. Revenues for fiscal year 2006 were approximately $2.5 billion. MCLEODUSA INC: Proposed IPO Cues Moody's Developing Outlook ----------------------------------------------------------- Moody's Investors Service has affirmed the ratings of McLeodUSA Incorporated and changed the outlook for all ratings to developing following the report of the company's proposed initial public offering of its common stock. McLeod plans to use the proceeds from the IPO to redeem a portion of its outstanding 10-1/2% notes due 2011 and to fund capital expenditures or future acquisitions. The company will not receive any proceeds from the sale of shares of common stock held by its existing shareholders. Moody's has taken these action: * McLeodUSA Incorporated -- Corporate Family Rating, Affirmed B3 -- Probability-of-default rating, Affirmed B2 -- 2nd Lien Secured Notes, due 2011, Affirmed B3, LGD4, 62% -- Speculative Grade Liquidity, Affirmed SGL-1 The Outlook has changed to Developing from Stable. The B3 corporate family rating reflects McLeod's financial risk, as it refocuses its sales efforts, lack of free cash flow generation, and the challenging competitive position which is compounded by the low profitability of its current operations. The ratings benefit somewhat from the company's substantial network infrastructure and good liquidity. The developing outlook reflects the uncertainty of successfully consummating the IPO. Assuming a successful IPO, the ratings and the ratings outlook will incorporate the resulting impact on the company's leverage profile, the potential for future debt-driven acquisitions, and a review of the company's growth plans amid intensifying competitive pressures. McLeod, headquartered in Hiawatha, Iowa, is a CLEC serving about 250,000 business and residential customers. MERRILL LYNCH: Moody's Eyes Possible Downgrade on Ba2 Rating ------------------------------------------------------------ Moody's Investors Service confirms the ratings for two classes of certificates from one of Merrill Lynch's Specialty Underwriting and Residential Finance deals from 2005. SURF purchases loans from brokers who underwrite to its guidelines. The B-2 and B-3 certificates were placed on review for possible downgrade based on deteriorating credit enhancement. While the collateral was performing as expected, the overcollateralization had been falling significantly below its target as a result of lower than expected excess spread levels. Excess spread levels and credit enhancement have increased and the credit protection is consistent with the current rating levels. These are the rating actions: * Specialty Underwriting and Residential Finance Trust, Series 2005-AB1 * Review for Possible Downgrade -- Class B-3, confirmed at Ba2 -- Class B-2, confirmed at Baa3 MITCHELL INT'L: Acquisition Cues Moody's Ratings' Withdrawal ------------------------------------------------------------ Moody's Investors Service withdrew the ratings of Mitchell International, Inc. following the completion of the company's acquisition by an investor group led by Aurora Capital Group. All of Mitchell's rated debt was repaid in connection with the acquisition. Moody's withdrew these ratings: * $10 million senior secured revolving credit facility due 2009, B1, LGD3, 32% * $117 million senior secured term loan facility due 2011, B1, LGD3, 32%) * Corporate family rating, B1 * Probability of default rating, B2 Mitchell provides information services and technology solutions designed to automate and optimize the automobile insurance claims process. NEW CENTURY: Natixis Selling 3,534 Mortgage Loans, Bids Due Apr. 3 ------------------------------------------------------------------ Natixis Real Estate Capital Inc. will be conducting a public auction of a portfolio of approximately 3,534 residential mortgage Loans originated by New Century Financial Corporation subsidiaries NC Capital Corporation, New Century Mortgage Corporation, NC Asset Holding LP, Home123 Corporation, and New Century Credit Corporation. The auction will be held at the offices of Natixis at 36th Floor, 9 West 57th Street, in New York. The mortgage loans, having an aggregate unpaid principal balance of approximately $800 million, are being sold "as is, where is" with no representations and warranties. Upon request and execution of a confidentiality agreement to be provided by Natixis, interested bidders will be provided with an electronic data file containing information specific to each mortgage loan. Indicative bids must be submitted by Tuesday, April 3, 2007, at 11:00 a.m. EDT. After receipt of indicative bids, at least three of the highest bidders will be selected to perform due diligence on the mortgage loans and may submit final bids to: William Mannion Licensed Auctioneer DCA No. 796322 JP&R Advertising Agency Inc. Room 905 299 Broadway, NY 10007 For further information, visit http://www.auction@cm.natixis.com/ Morgan Stanley Sells Loans Early this week, one of New Century's major bank lenders, Morgan Stanley Mortgage Capital Inc., moved to sell at a public auction a portfolio of approximately 13,200 residential mortgage loans originated by New Century's subsidiaries. The loans have an aggregate unpaid principal balance of approximately $2.48 billion. Looming Bankruptcy Filing New Century will likely file for bankruptcy protection very soon, The New York Times said on its Web site Wednesday, citing people briefed on the company's plans. The company, NY Times said, is trying to tie up financing that would allow it to reorganize or sell itself through a prepackaged bankruptcy, rather than be forced to liquidate itself. The company has been receiving default and acceleration notices from its lenders under its repurchase credit facilities. Several of the lenders have further notified the company of their intent to sell the outstanding mortgage loans that have been financed by the respective lender and offset the proceeds from the sale against the company's purported obligations to the lender, while reserving their purported rights to seek recovery of any remaining deficiency from the company. Additionally, the company had previously received cease and desist orders from and entered into consent agreements with several states. Delayed Annual Report Filing New Century disclosed in a regulatory filing with the Securities and Exchange Commission that it would not be able to finalize its financial statements for the year ended Dec. 31, 2006, until: (i) the Audit Committee of its Board of Directors completes its previously announced internal investigation into the issues giving rise to the company's need to restate its 2006 interim financial statements, as well as issues pertaining to the company's valuation of residual interests in securitizations in 2006 and prior periods; and (ii) the company provides its independent registered public accounting firm, KPMG LLP, with the information that it needs in order to complete its audit of the company's financial statements and internal control over financial reporting. About New Century Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/ -- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. * * * As reported in the Troubled Company Reporter on Mar. 13, 2007, Standard & Poor's Ratings Services lowered its counterparty credit rating on New Century Financial Corp. to 'D' from 'CC'. The ratings on the senior unsecured debt and preferred stock remain on CreditWatch with negative implications. In addition, Dominion Bond Rating Service downgraded the Issuer Rating of New Century Financial Corporation to C from CCC. The rating remains Under Review with Negative Implications. As reported in the Troubled Company Reporter on Mar. 9, 2007, Fitch Ratings downgraded New Century Mortgage Corporation's, a subsidiary of New Century Financial Corp., residential primary servicer rating for subprime product to 'RPS4' from 'RPS3+', and places the rating on Watch Negative. According to Fitch, an 'RPS4' rated servicer may not be acceptable for new residential mortgage-backed security transactions unless additional support or structural features are incorporated. The Rating Watch Negative indicates that further downgrades are possible, depending upon the stability of the servicer's portfolio and financial condition and the company's ability to obtain satisfactory amendments to or waivers of the covenants in its financing arrangements from a sufficient number of its lenders, or obtain alternative funding. NOVASTAR MORTGAGE: Moody's Rates Class M-11 Certificates at Ba2 --------------------------------------------------------------- Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by NovaStar Mortgage Funding Trust, Series 2007-1 and ratings ranging from Aa1 to Ba2 to subordinate certificates in the deal. The securitization is backed by NovaStar Mortgage, Inc. originated, adjustable-rate (75%) and fixed-rate (25%), subprime mortgage loans acquired by NovaStar Mortgage Funding Corporation. The ratings are based primarily on the credit quality of the loans and on protection against credit losses by mortgage insurance provided by Mortgage Guaranty Insurance Corporation, PMI Mortgage Insurance Co., and Radian Guaranty. The ratings also benefit from subordination, excess spread, and overcollateralization. The ratings also benefit from the interest-rate cap agreements provided by Deutsche Bank AG, The Royal Bank of Scotland plc, and Wachovia Bank, National Association. After taking into consideration the coverage of the primary mortgage insurance, Moody's expects collateral losses to range from 4.20% to 4.70%. NovaStar Mortgage, Inc. will service the mortgage loans. Moody's has assigned NovaStar its servicer quality rating of SQ2 as a servicer of subprime mortgage loans. These are the rating actions: * NovaStar Mortgage Funding Trust, 2007-1 * NovaStar Home Equity Loan Asset-Backed Certificates, Series 2007-1 Class A-1A, Assigned Aaa Class A-2A1,Assigned Aaa Class A-2A2,Assigned Aaa Class A-2B, Assigned Aaa Class A-2C, Assigned Aaa Class A-2D, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa2 Class M-9, Assigned Baa3 Class M-10,Assigned Ba1 Class M-11,Assigned Ba2 OAK HILL CREDIT: S&P Holds BB- Rating on $23 Million Notes ---------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class A-2, B-1, and B-2 notes issued by Oak Hill Credit Partners I Ltd., an arbitrage high-yield CLO transaction, on CreditWatch with positive implications. At the same time, the ratings on the class A-1a, A-1b, C, D-1, and D-2 notes were affirmed due to the level of overcollateralization available to support the notes. The CreditWatch placements reflect factors that have positively affected the credit enhancement available to support the notes since the transaction closed in October 2001. Standard & Poor's notes that since origination, the transaction has paid down approximately $163.474 million to the class A-1a and A-1b notes. Ratings Placed On Creditwatch Positive Oak Hill Credit Partners I Ltd. Rating ------ Class To From Balance ----- -- ---- ------------ A-2 AA-/Watch Pos AA- $102,500,000 B-1 A-/Watch Pos A- $15,000,000 B-2 A-/Watch Pos A- $13,000,000 Ratings Affirmed Oak Hill Credit Partners I Ltd. Class Rating Balance ----- ------ ------------ A-1a AAA $189,922,000 A-1b AAA $28,602,000 C BBB $30,000,000 D-1 BB- $20,500,000 D-2 BB- $2,500,000 ONE WALL: Moody's Rates $10.5 Million Class E Junior Notes at Ba2 ----------------------------------------------------------------- Moody's Investors Service assigned these ratings to Notes issued by One Wall Street CLO II Ltd.: * Aaa to the $244,000,000 Class A-1 Senior Term Notes Due 2019; * Aaa to the $50,000,000 Class A-2 Senior Delayed Draw Notes Due 2019; * Aa2 to the $34,000,000 Class B Senior Notes Due 2019; * A2 to the $15,500,000 Class C Deferrable Mezzanine Notes Due 2019; * Baa2 to the $16,000,000 Class D Deferrable Mezzanine Notes Due 2019; and * Ba2 to the $10,500,000 Class E Deferrable Junior Notes Due 2019. The Moody's ratings of the Notes address the ultimate cash receipt of all required interest and principal payments, as provided by the Notes' governing documents, and are based on the expected loss posed to Noteholders, relative to the promise of receiving the present value of such payments. The ratings reflect the risks due to the diminishment of cash flow from the underlying portfolio consisting of senior secured loans, senior secured notes, second lien loans, senior unsecured loans, senior unsecured bonds and structured finance obligations due to defaults, the transaction's legal structure and the characteristics of the underlying assets. Hamilton Loan Asset Management will manage the selection, acquisition and disposition of collateral on behalf of the Issuer. OPTEUM INC: Balks at Friedman Billings' Research Report ------------------------------------------------------- Opteum Inc. wishes to make several observations in response to a research report released by Friedman Billings Ramsey and Company, Inc. 1. The report questions whether the company will continue to be able to secure covenant waivers on its warehouse lines of credit. As the company stated in its Form 10-K filed March 14, 2007 with the Securities and Exchange Commission, the company has secured all waivers needed to date. At Dec. 31, 2006, Opteum Financial Services, LLC, a wholly owned subsidiary of Opteum Inc. had outstanding balances of approximately $728 million under their various warehouse and aggregation lines and approximately $122 million outstanding on other lines of credit with various lenders. OFS has been in violation of certain covenants with respect to its warehouse lines of credit related to its loan origination operations for four consecutive quarters. While the violations of the covenants have been waived by the lenders, should conditions in the mortgage origination industry continue to deteriorate or fail to recover in sufficient time, it is possible OFS may not be able to obtain such waivers in the future. Under such circumstances, to the extent OFS is unable to transfer outstanding balances to other warehouse lines OFS might be precluded from accessing its warehouse lending agreements to the extent it does now and might have to curtail originations accordingly. Currently, OFS has sufficient capacity on other warehouse lines, to facilitate such transfer. As of Jan. 31, 2007, OFS was not in compliance with respect to one covenant with one lender. The covenant violation at Jan. 31, 2007, pertained to tangible net worth. OFS has obtained a waiver from all lenders with respect to the covenant violation as of Jan. 31, 2007. 2. The company has incurred a total of just $8 million of margin calls on its warehouse lines in 2007. 3. The company has produced approximately $44 million of sub prime mortgages in 2007, which represents approximately 4.8% of 2007 year to date loan production of approximately $916 million. Forty-four percent of the $44 million (approximately $19 million) subprime mortgages were underwritten by a third party buyer and sold directly to that buyer. The company no longer underwrites sub prime mortgages. The company believes that it is adequately reserved for early payment defaults related to sub prime mortgages as well as all other mortgages. 4. The research report questions whether Opteum Inc. is a going concern. The company completed its 2006 audit and the company received a clean audit opinion and is a going concern. The company continues to believe it has very adequate liquidity. The company currently owns approximately $3 billion in agency mortgage related assets, the value of which has increased during 2007 as rates have declined. These agency assets are guaranteed by an agency of the Unites States Government. 5. The company continues to believe that the carrying value of the servicing rights on its balance sheet correctly reflects the value of the servicing rights. The changes in the value of the servicing rights have been related to changes in prepayment speed assumptions. The changes in prepayment assumptions also apply to our retained interests in securitizations. Losses continue to run, in the aggregate, in line with expectations. About Opteum Inc. Opteum Inc. is a real estate investment trust that operates an integrated mortgage-related investment portfolio and mortgage origination platform. The REIT invests primarily in, but is not limited to, residential mortgage-related securities issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Government National Mortgage Association (Ginnie Mae). It attempts to earn returns on the spread between the yield on its assets and its costs, including the interest expense on the funds it borrows. Opteum's mortgage origination platform, Opteum Financial Services, originates, buys, sells, and services residential mortgages from offices throughout the United States and operates as a taxable REIT subsidiary. OSHKOSH TRUCK: Net Income Lowers to $41 Mil. in Qtr. Ended Dec. 31 ------------------------------------------------------------------ OshKosh Truck Corp.'s net income was down 22.4% to $41.2 million in the first quarter of fiscal 2007 ended Dec. 31, 2006, compared with $53.1 million for last year's first quarter. The decrease in earnings compared to the prior year quarter was driven by the decrease in defense sales and operating income and the timing of the JLG acquisition. Due to the impact of certain purchase accounting adjustments and the closing of the JLG acquisition during the seasonally slow holiday period. "The most exciting news during the quarter was the company's closing on the acquisition of JLG Industries, which becomes another important business segment within Oshkosh." Robert G. Bohn, chairman, president and chief executive officer, said. "JLG is an aerial work platforms and telehandlers. The company's integration work is underway, and it continue to work hard with the JLG team as it become a core component of the company." Factors affecting first quarter results included: -- Sales increased 27.4% in the first quarter of fiscal 2007. Sales grew in the company's fire and emergency and commercial segments, while the company's defense segment sales declined due to a decrease in parts and service sales. The company's new access equipment segment contributed sales of $117.7 million. -- Operating income decreased 3.9% to $83.6 million. Operating income grew at double-digit and triple-digit percentages in the fire and emergency and commercial segments while the defense segment experienced a decrease in operating income as a result of the decrease in sales. The company's access equipment segment contributed operating income of $2.4 million. -- Corporate and other-Operating expenses and inter-segment profit elimination increased $3.9 million to $18.7 million. The increase in the first quarter was due to higher professional services and integration costs associated with the acquisition of JLG. Interest expense net of interest income for the quarter increased $19.8 million to $20.1 million compared to the prior year quarter. Higher interest costs were due to additional acquisition-related debt for the acquisition of JLG. -- The provision for income taxes in the first quarter decreased to 36% of pre-tax income compared to 39% of pre-tax income in the prior year quarter. The lower effective tax rate reflects the impacts of the JLG acquisition and the reinstatement of the federal research and development tax credit. Total debt rose $3.2 billion during the first quarter to $3.3 billion at Dec. 31, 2006, due to borrowings used to fund the acquisition of JLG. In addition, the first quarter of each fiscal year historically has higher seasonal working capital requirements. At Dec. 31, 2006, the company's balance sheet showed $6.1 billion in total assets, $5 billion in total liabilities, and $1.1 billion in shareholder's equity. About Oshkosh Truck Oshkosh, Wis.-based Oshkosh Truck Corp. (NYSE:OSK) -- http://www.oshkoshtruckcorporation.com/-- which was founded in 1997, is a designer, manufacturer and marketer of a broad range of specialty access equipment, military, commercial and fire and emergency vehicles and vehicle bodies. Oshkosh's products are valued worldwide by rental and construction companies, defense forces, fire and emergency units, municipal and airport support services, and concrete placement and refuse businesses where high quality, superior performance, rugged reliability and long-term value are paramount. * * * Moody's Investors Service rated Oshkosh Truck Corp.'s long-term corporate rating and probability of default rating at 'Ba3'. Moody's said the outlook is stable. Standard & Poor's rated Oshkosh Truck Corp.'s foreign and local issuer credit rating at 'BB'. S&P said the outlook is stable. PACIFIC LUMBER: Scopac Gets Final OK to Hire Blackstone as Advisor ------------------------------------------------------------------ The United States Bankruptcy Court for the Southern District of Texas has granted permission to Scotia Pacific Company LLC to employ Blackstone Group LP as its financial advisor pursuant to Sections 327(a) and 328(a) of the Bankruptcy Code. The Court also overruled the remaining objections of The Ad Hoc Committee of Timber Noteholders, the United States Trustee and the Official Committee of Unsecured Creditors. Blackstone Group will only be entitled to the Restructuring Fee if Scopac's proposed plan, or a joint plan in which Scopac is a proponent, is confirmed. The Court also authorizes Scopac to indemnify Blackstone for any claim in connection with the firm's services. As reported in the Troubled Company Reporter on March 6, 2007, as Scopac's financial advisor, Blackstone will: (a) assist in the evaluation of Scopac's business and prospects; (b) assist in the development of Scopac's long-term business plan and related financial projections; (c) assist in the development of financial data and presentations to the Bankruptcy Court, Scopac's Board of Managers, various creditors and other third parties; (d) analyze Scopac's financial liquidity; (e) evaluate Scopac's debt capacity and alternative capital structures; (f) analyze various restructuring scenarios and the potential impact of the scenarios on the ability to maximize Scopac's estate; (g) provide strategic advice with regard to the Plan; (h) assist in the evaluation of and raising of debt and equity as new financing as part of Scopac's bankruptcy case or Scopac's plan of liquidation or reorganization; (i) participate in negotiations among Scopac and its creditors, suppliers, lessors and other interested parties, as appropriate; (j) value securities offered by Scopac in connection with a plan; (k) provide expert witness testimony as needed; and (l) provide other advisory services as are customarily provided in connection with the analysis and negotiation of a plan as requested and mutually agreed. Scopac will pay Blackstone these fees for the firm's contemplated services: * A $150,000 monthly advisory fee beginning payable on the effective date. Subsequent monthly payments will be payable in advance on each monthly anniversary thereafter. * A $4,150,000 restructuring fee, payable on the consummation of a plan. * A debt financing fee of 2% of the total facility size of any debt financing arranged by Blackstone from non-current lenders, payable upon funding of the facility. * An equity financing fee of 4% of the total equity capital secured by Blackstone from third-party sources, payable upon the funding of the equity capital. Steven Zelin, Blackstone Group's senior managing director, related that PALCO retained the firm under a PALCO Prepetition Assignment to represent it in its restructuring and reorganization efforts. In connection with the PALCO Prepetition Assignment, Blackstone was paid a $200,000 retainer and a $25,000 expense advance. Subsequently Blackstone received another $39,133 from PALCO for actual out-of-pocket expenses. Blackstone, thereafter, executed an engagement letter to represent PALCO on Jan, 22, 2007. Objections The Creditors' Committee had objected to Scopac's request to hire Blackstone arguing that: * there was no emergency to hire Blackstone; * Scopac and Pacific Lumber Company's requests to hire Blackstone couldn't be considered independent of one another; and * the Committee needed more time to evaluate the proposed fee structure. The Noteholders' Committee also raised the same objection as that of the Creditors' Committee but later said that their concern was with certain unresolved issues with respect to Blackstone's retention, which may require direction from the Court and further monitoring by the parties-in-interest. In response, Scopac said that the objections didn't have any issues with Blackstone's qualifications to serve as financial Advisor but rather focused on the firm's impartiality, along with the proposed compensation arrangement and Scopac's need for a financial advisor Scopac further said that as disclosed in the affidavit filed by Steven Zelin, senior managing director of Blackstone, the firm doesn't foresee any conflict in the performance of its duties with respect to the Debtors' separate estates. The representation of both PALCO and Scopac by Blackstone is most efficient and cost effective for the estates. About Pacific Lumber Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on May 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 10, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Wants Deloitte & Touche as Auditor -------------------------------------------------- Scotia Pacific Company LLC and The Pacific Lumber Company and Britt Lumber Co. Inc. seek the authority of the United States Bankruptcy Court for the Southern District of Texas to separately employ Deloitte & Touche LLP as their independent accountant and auditor, nunc pro tunc to Jan. 18, 2007. Deloitte & Touche has provided audit services to the Debtors since Sept. 27, 2006, and has completed a substantial portion of the Debtors' 2006 audit work. Because of Deloitte & Touche's experience and expertise, the Debtors believe that the firm is well qualified to act as their accountants and auditors. As accountants and auditors for PALCO and Britt Lumber, Deloitte & Touche will: (a) audit and report on PALCO and Britt Lumber's annual financial statements for the year ending Dec. 31, 2006, in conformity with their secured credit agreements; and (b) perform audit-related tax work incidental to the audit of the financial statements for year ended Dec. 31, 2006. As Scopac's accountants and auditors, Deloitte & Touche will: (a) audit and report on Scopac's annual financial statement for the year ending Dec. 31, 2006; and (b) review Scopac's interim financial information for each of the quarters in the year ending Dec. 31, 2006, prepared for submission to the Securities and Exchange Commission. Deloitte & Touche will also assist Scopac in connection with Scopac and The Bank of New York Trust Company N.A.'s evaluation of Scopac's compliance with the Indenture dated July 20, 1998, by and between Scopac and BoNY for the year ending Dec. 31, 2006. Deloitte & Touche will bill the Debtors for services rendered based on its hourly rates: Professional Hourly Rate ------------ ----------- Partners/Director $370 Senior Manager $315 Manager $295 Senior Auditor $225 Auditor $170 John Harrell, a partner of Deloitte & Touche, relates that Deloitte & Touche has provided prepetition audit and accounting services to the Debtors. The firm has $207,985 from the Debtors 90 days prior to the Petition Date, and holds prepetition claims against Scopac for $34,383, and PALCO and Britt for $29,467. Provided that the Employment Application is approved, Deloitte & Touche will not seek any recovery of its prepetition claims against the Debtors, Mr. Harrell says. Mr. Harrell assures the Court that the Deloitte & Touche does not hold or represent any interest adverse to the Debtors and their creditors, and is deemed a "disinterested person" as the term is defined pursuant to Section 101(14) of the Bankruptcy Code. About Pacific Lumber Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on May 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 10, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: Wants to Employ Pierce Baymiller as HR Consultant ----------------------------------------------------------------- The Pacific Lumber Company, Britt Lumber Co., Inc., and Scotia Pacific Company LLC seek the Court's permission to employ Pierce Baymiller as their consultant, effective as of Feb. 15, 2007. Pursuant to a Consulting Agreement, the parties resolve that Mr. Baymiller will perform various tasks related to human resources and employment matters with respect to the Debtors' Chapter 11 cases. The term of the Consulting Agreement is from Feb. 15, 2007, to Dec. 31, 2008, subject to termination by either party, without penalty. The Debtors assert that it is necessary and prudent to obtain Mr. Baymiller's expertise to assist them with the human resources and employment issues in light of the stresses and uncertainties imposed on them and their employees. Given Mr. Baymiller's extensive experience dealing with human resources and employment issues, the Debtors believe his retention would be in their best interest. Mr. Baymiller agrees to be available to the Debtors on a full- time basis during the term of his engagement. As the Debtors' consultant, Mr. Baymiller will: (a) review the Debtors' existing human resources policies and procedures, and make recommendations concerning updates and modification to insure compliance with existing law and industry standards; (b) create and implement improved processes and programs relating to communications with current and former employees; (c) assist in evaluating potential modifications to the Debtors' workforces, implementing desired modifications and communicating with affected employees concerning those modifications; (d) assist in creating, evaluating, obtaining any necessary approval for and implementing any employee incentive programs designed to maximize worker performance and to ensure continuity of the workforce during the Chapter 11 cases; (e) assist in creating, evaluating, and obtaining any necessary approval for and implementing any severance benefits for terminated employees; (f) assist in other tasks related to workforce issues arising as a consequence of the bankruptcy filing, including employee-related amendments to the Schedules of Assets and Liabilities and Statement of Financial Affairs and with the preparation of Monthly Operating Reports with respect to issues pertinent to the Debtors' employees; (g) assist in communications with the Official Committee of Unsecured Creditors concerning employee and workforce Issues; and (h) advise and assist the Debtors with a variety of other human resources and employment issues as required from time to time. Under the Consulting Agreement, the Debtors agree to pay Mr. Baymiller a flat $17,000 monthly fee for his services, plus reimbursement of necessary expenses incurred. Mr. Baymiller assures the Court that he does not hold nor represent any interest adverse to the Debtors' estate and is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. About Pacific Lumber Headquartered in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jeffrey L. Schaffer, Esq., William J. Lafferty, Esq., and Gary M. Kaplan, Esq., at Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co- counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co-counsel. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors' exclusive period to file a chapter 11 plan expires on May 18, 2007. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 10, http://bankrupt.com/newsstand/or 215/945-7000). PARMALAT SPA: Temporary Restraining Order Extended to May 14 ------------------------------------------------------------ Gordon I. MacRae and James Cleaver, the Joint Official Liquidators of Parmalat Capital Finance Limited, Dairy Holdings Limited, and Food Holdings Limited, on one hand, and Parmalat Finanziaria S.p.A. and its affiliates and subsidiaries, under the direction of Dr. Enrico Bondi, Extraordinary Administrator of the Parmalat companies, on the other, agreed to further extend the Temporary Restraining Order in the Finance Companies' Section 304 cases until May 14, 2007. The Honorable Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York will convene a hearing to consider the Liquidators' application for preliminary injunction on May 14 at 10:00 a.m. Entry of the extension order will be without prejudice to any creditor or party-in-interest to seek relief in terms. Judge Drain rules that nothing in the extension order: -- will prejudice Parmalat's rights to object for preliminary injunctive relief, and each of the Petitioners and Parmalat reserve all rights and arguments with respect to those proceedings under Section 304 of the Bankruptcy Code and Petitioners' application for injunctive relief; -- will be construed as Parmalat's implicit or explicit agreement with any of the positions or actions taken by the JPLs in commencing the ancillary proceedings, or otherwise, in the United States or in the Cayman Islands; and -- restricts or impairs the JPLs' rights to take actions in the 304 proceedings pending further hearings on notice to parties-in-interest. Moreover, Judge Drain orders pursuant to Rule 7065 of the Federal Rules of Bankruptcy Procedure that the security provisions of Rule 65(c) of the Federal Rules of Civil Procedure will be waived. Parmalat's time to answer the Petition commencing the ancillary proceedings is extended until June 15, 2007, unless otherwise ordered by the Bankruptcy Court. Judge Drain orders that should the Petitioners in one or more of the ancillary proceedings seek a preliminary injunction on the Return Date, they will file and serve notice of motion of those intentions by April 13. About Parmalat Based in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/ -- sells nameplate milk products that can be stored at room temperature for months. It also has 40-some brand product line, which includes yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The Company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. PROGRESSIVE GAMING: Warns Bankruptcy if Made to Pay $43.7MM Bond ---------------------------------------------------------------- Progressive Gaming International Corp. disclosed in a regulatory filing with the Securities and Exchange Commission that the company may be forced into bankruptcy if its appeal regarding a $43.7 million judgment fails. The judgment dates back to Dec. 27, 2002, when Derek Webb and related plaintiffs filed a case against the company in the U.S. District Court for the Southern District of Mississippi, Jackson Division, alleging state law interference with business relations claims and federal antitrust violations. The plaintiffs contended that the company illegally restrained trade and attempted to monopolize the proprietary table game market in the United States. At trial, the plaintiffs sought monetary damages, penalties and attorneys' fees in excess of several million dollars based on the attempted monopolization claim only. Trial on the case was held in January and February 2007. In a jury verdict, Mr. Webb was awarded the sum of $13 million for his claims, which amount was trebled in accordance with applicable law. As a result, on Feb. 21, 2007, judgment was entered in favor of the plaintiffs in the amount of $39 million, plus the costs of suit, including a reasonable attorney's fee. The plaintiffs claim that costs of suit and attorney's fees together exceed $4.6 million. The company said it filed post-trial claims for relief and, if necessary, intends to initiate the appeals process. Although it cannot guarantee the outcome of any of its litigation matters, the company believes that it is probable that either the motion for a new trial or motion for judgment as a matter of law will be granted and as a result the jury verdict will be vacated and overturned. Otherwise, the company believes it is probable that the jury verdict will be overturned on appeal. As a result, as of Dec. 31, 2006, no amounts have been accrued relating to the case other than legal defense fees. The company anticipates conclusion of the process on its post trial motion after Dec. 31, 2007. Accordingly, the company explains that other than normal legal expenses, it does not expect the jury verdict to impact its financial position, results of operations or cash flows during the year ended Dec. 31, 2007. However, if the post trial motions are unsuccessful, the company says it may be required to post a bond for $43.7 million representing the full amount of the verdict, including plaintiff's attorneys' fees and costs. "The requirement to post a bond of this magnitude could therefore have a material adverse effect on the company's financial position, results of operations and liquidity, up to and including impacting its ability to continue as a going concern or forcing the company to seek protection under the Federal Bankruptcy laws," Heather A. Rollo, the company's executive vice president, chief financial officer and treasurer, says. Weak Results Cue Lower Ratings August last year, Standard & Poor's Ratings Services lowered its ratings on Progressive including its corporate credit rating to 'CCC' from 'CCC+'. The outlook is negative. The downgrade followed the announcement of the company's operating results for the second quarter ended June 30, 2006. S&P noted that the company's revenues were down 21% to $15 million due to lower slots and table games revenues, offset somewhat by higher systems-related revenues. The EBITDA decline was more significant primarily due to charges of approximately $4.5 million related to severance, charges for inventory reserves and settlement of legal matters. Losses (before interest, taxes, depreciation, and amortization) for the quarter were $6.6 million (excluding stock compensation expense and other non-recurring charges) versus EBITDA of $2.5 million in the same prior-year period. The rating agency said that the increase in losses marks the second consecutive quarter where the company generated losses before interest, taxes, depreciation and amortization. "We do not expect significant revenue growth in the company's slots and tables given its small position in the gaming equipment sector and the high degree of competition. PGIC, however, has benefited from revenue growth in its systems business from demand for its CasinoLink System and from higher software maintenance and system software revenues," Standard & Poor's credit analyst Peggy Hwan Hebard said. In April 2006, Moody's Investors Service downgraded Progressive's Corporate Family and senior secured bond ratings to Caa1 from B3 with a negative outlook, reflecting, among others, a decline in earnings and negative cash flow from operations in the year-ended Dec. 31, 2005, and limited liquidity given the termination of the company's revolving credit facilities; and, to a lesser degree concerns. About Progressive Gaming Headquartered in Las Vegas, Nevada, Progressive Gaming International Corporation formerly Mikohn Gaming Corp. is a supplier of integrated casino management systems software and games for the gaming industry. RALI SERIES: S&P Affirms Low-B Ratings on Four Certificate Classes ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on 24 classes of certificates issued by RALI Series 2005-QA12 Trust and RALI Series 2005-QS14 Trust. The affirmations are based on stable collateral performance as of the March 2007 remittance period. Delinquencies and cumulative realized losses for these transactions are minimal. Total delinquencies and serious delinquencies for series 2005-QA12 are 6.97% and 2.73%, respectively, while total and serious delinquencies for series 2005-QS14 are 5.15% and 1.66%, respectively. Series 2005-QA12 has incurred $145,451 in realized losses to date, while series 2005-QS14 has not incurred any losses. Series 2005-QA12 is aged 14 months and series 2005-QS14 is aged 16 months. Credit enhancement for both transactions is provided by subordination, which is sufficient at the current rating levels. The underlying collateral consists of Alt-A, hybrid, adjustable-rate mortgage loans. Ratings Affirmed RALI Trust Series Class Rating ------ ----- ------ 2005-QA12 CB-I, NB-II, CB-III AAA 2005-QA12 NB-IV, NB-V, R AAA 2005-QA12 M-1 AA 2005-QA12 M-2 A 2005-QA12 M-3 BBB 2005-QA12 B-1 BB 2005-QA12 B-2 B 2005-QS14 II-A-1, III-A-1, III-A-2 AAA 2005-QS14 III-A-3, II-A-P, II-A-V AAA 2005-QS14 R-II, R-III AAA 2005-QS14 II-M-1 AA 2005-QS14 II-M-2 A 2005-QS14 II-M-3 BBB 2005-QS14 II-B-1 BB 2005-QS14 II-B-2 B RCN CORP: Moody's Lowers Rating on 1st-Lien Loan to B1 from Ba2 --------------------------------------------------------------- Moody's confirmed RCN Corporation's B1 corporate family rating and stable outlook, following the company's proposed $375 million special dividend to shareholders and refinancing of the company's existing first lien debt and likely re-financing of its second lien debt with a new $520 million senior secured term loan and approximately $80 million in cash. The company will also have a $75 million revolving credit facility, unused at inception. In addition, Moody's downgraded the company's first lien loan rating to B1, LGD3, 33% from Ba2 and the probability of default rating to B2 from B1 in line with Moody's Loss Given Default Methodology and due to the significant increase in the first lien debt relative to its overall capitalization and the transition to an all bank capital structure, respectively. As a result of the transaction, the company's leverage is expected to increase to about 5x debt-to-EBITDA as of year end 2006 and incorporating standard Moody's adjustments; however, Moody's expects that the company will de-lever to about 4.5x by the end of 2007, as RCN's revenues and EBITDA are likely to continue to grow given increasing opportunities with advanced services. Should the company maintain the second lien debt and choose not to re-finance, RCN's first lien bank rating would likely go up. RCN's B1 corporate family rating reflects the company's higher leverage following the dividend, lower margins relative to both incumbent cable operators and other overbuilders, and execution risk as management continues to pursue new investment opportunities in the residential and commercial space. Moreover, RCN's dividend reflects management's willingness to increase its debt burden despite meaningful capital expenditures as well as intense competition, including from better capitalized operators. However, its high penetration of multiple services, good growth trajectory, and valuable network support the ratings. Confirmed: * B1 Corporate Family Rating * Stable outlook Downgraded: * Probability of Default rating to B2, from B1 * First Lien Credit Facility downgraded to B1, LGD3, 33% from Ba2 RCN Corporation is a facilities-based competitive providers of bundled cable, high-speed internet and phone services delivered over its own fiber-optic local network to residential customers in the high-density northeast and Midwest markets. RCN Business Solutions is a growing business that also provides bulk video, high-capacity data and voice services to business customers. The company reported approximately $600 million in revenues in 2006. REAL ESTATE: DBRS Places Low-B Ratings on 6 Class Certificates -------------------------------------------------------------- Dominion Bond Rating Service assigned provisional ratings to these classes of Real Estate Asset Liquidity Trust, Series 2007-1 Commercial Mortgage Pass-Through Certificates: * Class A-1 at AAA * Class A-2 at AAA * Class XP at AAA * Class XC at AAA * Class B at AA * Class C at A * Class D at BBB * Class E at BBB (low) * Class F at BB (high) * Class G at BB * Class H at BB (low) * Class J at B (high) * Class K at B * Class L at B (low) Finalization of ratings is contingent upon receipt of final documents confirming information that has already been received. The collateral consists of 76 fixed-rate loans secured by 100 multi-family and commercial properties. The portfolio has a balance of $514,023,418. Although approximately 47.5% of loan collateral is located in Ontario, this is mitigated by Ontario being the largest province, with a highly urbanized population with a diversified economy. DBRS inspected 84.7% of the pool by loan balance. Based on DBRS's site inspections, 18.8% of the sample properties were considered to have excellent property quality and 34.9% of the sample to have above-average property quality. Fifty-five loans, representing 75% of the pool, provide full or partial recourse to the loans. The collateral properties are predominantly located in urban locations. DBRS shadow-rates three loans, representing 19.3% of the pool, investment grade. The investment-grade shadow-rated loans indicate the long-term stability of the underlying assets. The shadow-rated investment- grade ratings assigned by DBRS are: * Langley Power Centre - BBB * The Atrium Pooled Interest - A (low) * Port Kells Industrial - BBB (low) Although one loan will not complete the majority of its tenant improvement prior to the transaction close, which increases the risk of default for this loan, the loan is secured by a well- located property that upon completion and stabilization should be a high-quality asset. The pool is heavily concentrated, with the top-ten loans representing 52.1% of the pool balance. However, there are 30 properties that collateralize the top-ten loans, including one loan that is secured by multiple properties, adding diversity to the pool. The three shadow-rated loans are all in the top-ten. The pool weighted-average DBRS-stressed term debt service coverage ratio is 1.38x, the weighted-average DBRS-stressed refinance DSCR is 1.35x. The DBRS-stressed loan-to-value is 79.1% with six loans, 12.4% of the pool, having a DBRS-stressed LTV greater than 90%. RIM SEMICONDUCTOR: Jan. 31 Balance Sheet Upside-Down by $2.5 Mil. ----------------------------------------------------------------- Rim Semiconductor Company's balance sheet at Jan. 31, 2007, showed $7.4 million in total assets and $9.9 million in total liabilities, resulting in a $2.5 million total stockholders' deficit. The company's balance sheet at Jan. 31, 2007, also showed strained liquidity with $761,918 in total assets available to pay $9.6 million in total liabilities. Rim Semiconductor Company reported a net loss of $7.8 million on zero revenues for the first quarter ended Jan. 31, 2007, compared with a net loss of $1.3 million on revenues of $40,176 for the same period ended Jan. 31, 2006. The company had no revenues for the three months ended Jan. 31, 2007. Revenues for the three months ended Jan. 31, 2006, were $40,176 and were entirely from the company's entertainment business. The company received no guarantee or license payments related to the distribution of the film "Step Into Liquid" in the first quarter ended Jan. 31, 2007. For the three months ended Jan. 31, 2007, net loss increased 501% to $7.8 million, from $1.3 million for the three months ended Jan. 31, 2006, primarily as the result of increases in salaries and related taxes and fringe benefits, consulting costs, interest expense, loss on the change in fair value of derivative liabilities, amortization of deferred financing costs, and amortization of technology licenses and capitalized software development fees. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2007, are available for free at http://researcharchives.com/t/s?1c58 About Rim Semiconductor Company Headquartered in Portland, Oregon, Rim Semiconductor Company (OTC BB: RSMI.OB) -- http://www.rimsemi.com/-- through its subsidiaries, develops transmission technology products to transmit data across copper telephone wire in the United States. The company also produces motion pictures, films, and videos. The company's entertainment segment is dependent on future revenues from the company's film "Step Into Liquid". The semiconductor segment is dependent on the company's ability to successfully commercialize its developed technology. SALTON INC: Board Approves Executed Financing Commitment Letters ---------------------------------------------------------------- The board of directors of Salton, Inc. approved the executed financing commitment letters delivered to Salton by APN Holding Company, Inc. as required by the terms of the Agreement and Plan of Merger dated Feb. 7, 2007 by and among Salton, SFP Merger Sub, a wholly owned subsidiary of Salton, and APN Holding Company, Inc. The Merger Agreement provides for the merger of SFP Merger Sub with and into APN Holding Company, Inc., which owns all of the outstanding common shares of Applica Incorporated. The commitment letters are from: (1) Silver Point Finance LLC; (2) Bank of America N.A. and Banc of America Securities LLC; and (3) Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Fund, L.P. The commitment letter from Silver Point Finance LLC provides for borrowings of up to $175 million under several senior secured credit facilities. The commitment letter from Bank of America, N.A. and Banc of America Securities LLC provides for borrowings of up to $250 million under a senior secured credit facility. Pursuant to the commitment letter from Master Fund and Special Fund, they have agreed to purchase shares of a new class of Salton's preferred stock and detachable warrants to purchase 21,000,000 shares of Salton's common stock for an aggregate purchase price of $100 million by exchanging a principal amount of Salton's 12-1/4% Senior Subordinated Notes due 2008 and Second Lien Notes (in each case at the applicable redemption or repurchase price required to be paid in connection with a change of control) plus any accrued and unpaid interest thereon through the closing date of the merger in an aggregate amount equal to the $100 million. The new preferred stock will be entitled to a 16% cumulative dividend payable in kind, and will be redeemable 6 years following the closing of the merger. The warrants will have an exercise price of $2.45 per share and will expire 10 years following the closing of the merger contemplated by the Merger Agreement. Consummation of the merger is subject to various conditions, including the approval by the Company's stockholders, the funding of the financing commitments delivered by APN Holding Company, Inc. or alternative financing, and the absence of legal impediments to the consummation of the merger. The parties previously made all filings required under the Hart-Scott-Rodino Antitrust Improvements Act, and the waiting period thereunder expired in January 2007. Cross-Licensing Agreement with Applica Inc. Salton also has entered into a cross-licensing agreement with Applica Incorporated pursuant to which each company has granted to the other party the right to use certain brand names and other intellectual property in certain markets in exchange for specified royalties. About Applica Applica, Inc. (NYSE: APN) -- http://www.applicainc.com/-- is a marketer and distributor of a range of branded small household appliances in five categories: kitchen products, home products, pest control products, pet care products and personal care products. About Salton Salton, Inc. -- http://www.saltoninc.com/-- designs, markets and distributes branded, high-quality small appliances, home decor and personal care products. Its product mix includes a range of small kitchen and home appliances, electronics for the home, time products, lighting products, picture frames and personal care and wellness products. * * * Moody's Investors Service assigned its Ca rating to Salton Inc.'s 12-1/4% Senior Subordinated Notes due April 15, 2008. SIERRA PACIFIC: PUCN Allows Subsidiary to Raise Power Price ----------------------------------------------------------- The Public Utilities Commission of Nevada unanimously approved two settlement agreements that allow Nevada Power Company, a wholly owned subsidiary of Sierra Pacific Resources, to collect over three years, about $83 million in costs incurred to resolve claims associated with terminated power contracts emanating from western energy crisis. The approved settlements also allow Nevada Power to recover over 10 years, $180 million and certain carrying charges related to a previous regulatory disallowance. As a result of these two agreements, typical residential customers can expect to see an increase of about 2% to their electric bill. Beginning June 1, 2007, the increase from these agreements will be about $2.88 per month for an average residential customer using 1,250 kilowatts per month. Nevada Power Company, the PUCN staff, the Nevada Attorney General's Bureau of Consumer Protection were among the parties to the settlements. "All of the parties worked together to reach a reasonable compromise that mitigates the impact of this recovery on our customers," said Michael Yackira, president and chief operating officer of Sierra Pacific Resources. "These agreements bring closure to many of the negative effects caused by the western energy crisis of 2000-2001." About Nevada Power Nevada Power Company is a regulated public utility that distributes, transmits, generates, purchases and sells electric energy in the southern Nevada communities of Las Vegas, North Las Vegas, Henderson, Searchlight, Laughlin and their adjoining areas. The company also provides electricity to Nellis Air Force Base, the Department of Energy at Mercury and Jackass Flats at the Nevada Test Site. Nevada Power provides electricity to about 800,000 residential and business customers in a 4,500 square mile service area. About Sierra Pacific Headquartered in Las Vegas, Nevada, Sierra Pacific Resources (NYSE: SRP) -- http://www.sierrapacificresources.com/-- is a holding company whose principal subsidiaries, Nevada Power Company and Sierra Pacific Power Company, are electric and electric and gas utilities, respectively. Sierra Pacific Resources also holds relatively modest non-utility investments through other subsidiaries. * * * Sierra Pacific Resources carries Moody's Investors Service's Ba3 Corporate Family Rating. SIRIUS SATELLITE: Keystone Autonics Files Patent Infringement Suit ------------------------------------------------------------------ Texas-based Keystone Autonics filed late last month a patent infringement lawsuit against merger partners Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. with the U.S. District Court for the Eastern District of Texas, various news agencies report. Keystone seeks an injunction, damages and legal fees against XM and Sirius. The patent was awarded to George Hindman of Keystone Autonics on Jan. 16, 2007. It relates to an apparatus for input and output management of data in a mobile environment where access from a wireless signal is restricted based on a "persistent unique hardware identification," Baltimore Business Journal notes. According to The Street, Mr. Hindman also owned an earlier version of the patent, which is applicable to radios and CD players. As reported in the Troubled Company Reporter on Feb. 20, 2007, SIRIUS Satellite Radio Inc. and XM Satellite Radio Inc. have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion. About XM Satellite Headquartered in Washington, D.C., XM Satellite Radio Inc. (Nasdaq: XMSR) -- http://www.xmradio.com/-- is a wholly owned subsidiary of XM Satellite Radio Holdings Inc. XM has been publicly traded on the NASDAQ exchange since Oct. 5, 1999. XM's 2007 lineup includes more than 170 digital channels of choice from coast to coast: commercial-free music channels, premier sports, news, talk, comedy, children's and entertainment programming; and the most advanced traffic and weather information. XM has broadcast facilities in New York and Nashville, and additional offices in Boca Raton, Fla.; Southfield, Mich.; and Yokohama, Japan. About SIRIUS Satellite Radio New York-based SIRIUS Satellite Radio Inc. (NASDAQ: SIRI) -- http://www.sirius.com/-- delivers more than 125 channels of the best programming in all of radio. SIRIUS is the original and only home of 100% commercial free music channels in satellite radio, offering 69 music channels available nationwide. SIRIUS also delivers 65 channels of sports, news, talk, entertainment, traffic, weather, and data. SIRIUS is the Official Satellite Radio Partner and broadcasts live play-by-play games of the NFL, NBA, and NHL and. All SIRIUS programming is available for a monthly subscription fee of only US$12.95. SIRIUS products for the car, truck, home, RV, and boat are available in more than 25,000 retail locations, including Best Buy, Circuit City, Crutchfield, Costco, Target, Wal-Mart, Sam's Club, RadioShack, and at http://shop.sirius.com/ SIRIUS radios are offered in vehicles from Audi, BMW, Chrysler, Dodge, Ford, Infiniti, Jaguar, Jeep(R), Land Rover, Lexus, Lincoln-Mercury, Mazda, Mercedes-Benz, MINI, Nissan, Rolls Royce, Scion, Toyota, Porsche, Volkswagen and Volvo. Hertz also offers SIRIUS in its rental cars at major locations around the country. * * * At Sept. 30, 2006, SIRIUS Satellite Radio's balance sheet showed $1.6 billion in total assets and $1.8 billion in total liabilities, resulting in a $200.3 million stockholders' deficit. As reported in the Troubled Company Reporter on Feb. 22, 2007, Moody's Investors Service affirmed SIRIUS Satellite Radio, Inc.'s Corporate family rating at Caa1, Probability-of-default rating at B3, and 9-5/8% senior notes due 2013 at Caa1, LGD4, 65%. As reported in the Troubled Company Reporter on Feb. 22, 2007, Standard & Poor's Ratings Services placed all its ratings, including the 'CCC' corporate credit rating, on New York City-based Sirius Satellite Radio Inc. on CreditWatch with positive implications. SOLUTIA INC: Delivers Modifications to 2007 Incentive Program ------------------------------------------------------------- At a hearing held March 12, 2006, the U.S. Bankruptcy Court for the Southern District of New York requested Solutia Inc. and its debtor-affiliates to provide their major stakeholders and other affected parties with notice of modifications to the Debtors' 2007 annual incentive program. In addition, Solutia was directed to provide notice of: -- the preliminary determination on the size of the bonus pools, including any adjustments made from actual reported results and consistent with the terms of the 2007 AIP, within five days of the preliminary determination; and -- 10 days of the Executive Compensation and Development Committee of Solutia's Board of Directors' determination of the size of the bonus pools, including any adjustments made from actual reported results and consistent with the terms of the 2007 AIP. Information regarding the allocation of the pools among Solutia employees will not be provided. Modifications to AIP Accordingly, the Debtors delivered their modified 2007 annual incentive program to the Court, a redlined copy of which is available for free at http://researcharchives.com/t/s?1c62 The Debtors relate that certain executives and other key employees have a component of their AIP comprised of an emergence metric related to Solutia's emergence from bankruptcy. The emergence metric will be extended to Jeffry N. Quinn; Kent J. Davies; Luc De Temmerman; James R. Voss; Jonathan P. Wright; Robert T. DeBolt; Rosemary L. Klein; James M. Sullivan; Timothy J. Spihlman; and D. John Srivisal. The incentive to be awarded to the Emergence Metric Employees will be calculated by multiplying the eligible employee's actual bonus target, which will not be less than the employee's target bonus multiplied by the relevant funding by a factor based on the emergence date. The Emergence Metric: No Q2 2007 Q3 2007 Q4 2007 Emergence ------- ------- ------- --------- Quinn 1.5x 1.3x 1.1x 0.8x Sullivan, Klein, 1.5x 1.3x 1.1x 0.9x DeBolt, Srivisal, and Spihlman Wright, Davies, 1.3x 1.2x 1.1x 1.0x De Temmerman, and Voss The bonus pool will be distributed as soon as practicable after the six-month anniversary of the emergence date. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 82; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). In February 2007, the Honorable Prudence Carter Beatty entered a bridge order extending the Debtors' exclusive period to file a plan until April 30, 2007. SOLUTIA INC: Discloses Changes to Severance Deals with 7 Officers ----------------------------------------------------------------- Solutia Inc. and its debtor-affiliates filed with the United States Bankruptcy Court for the Southern District of New York an amended employment agreement that reflects the agreed modifications to the severance and other provisions. Last month, the Debtors sought Court permission to amend the severance provisions in employment contracts for chairman, president and chief executive officer, Jeffry N. Quinn, and six other senior executives. The Executive Compensation and Development Committee of Solutia's Board of Directors has concluded that it needed to amend the severance provisions for Mr. Quinn and six other members of his new management team because the current severance provisions are not consistent with the current market practices and do not provide sufficient incentives given the various paths to emergence that Solutia is pursuing. At the ECDC's request, Mercer Human Resource Consulting recommended that Solutia amend the severance provisions for the Senior Executives on these terms: (a) If terminated and no change in control has occurred, the executive will receive two times base salary and bonus, based on an average of the most recent three years, plus the existing emergence bonus; and (b) If terminated or resigns and a change of control has occurred, the executive will receive three times base salary and bonus, the existing emergence bonus, an accelerated vesting of equity, and a potential tax gross- up. Agreed Modifications Pursuant to the amended agreement, if Solutia Inc. terminates Mr. Quinn's employment other than for cause or if Mr. Quinn will terminate employment for good reason upon a change in control or at any time within 24 hours after the change in control, he will be entitled to, an immediate vesting of all outstanding equity awards granted pursuant to Solutia's equity compensation plan as may be in effect from time to time, and a severance payment of an amount equal to 250% of the sum of: -- his annual base salary immediately prior to the date of termination; and -- the average annualized payment he received for the three most recent years under Solutia's annual incentive program. The effectiveness of a plan of reorganization pursuant to which a majority of the common stock of the reorganized company is distributed: (i) to persons who are (x) holders of claims against Solutia; (y) holders of equity interests in the Company; and (z) designated in the Company's plan of reorganization proposal dated Dec. 8, 2006, to receive common stock of the reorganized company; or (ii) to or for the benefit of company management, will not constitute a Change in Control. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 82; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). In February 2007, the Honorable Prudence Carter Beatty entered a bridge order extending the Debtors' exclusive period to file a plan until April 30, 2007. SOLUTIA INC: Agrees to Defer Calpine's Lease Decision to July 27 ---------------------------------------------------------------- Solutia Inc. and its debtor-affiliates entered into a fourth stipulation with Decatur Energy Center LLC, Calpine Corp., and its affiliates, to further extend the time within which Decatur must assume, assume and assign, or reject certain leases to and including July 27, 2007, in their Chapter 11 cases pending before the U.S. District Court for the Southern District of New York. Decatur and Solutia Inc. are parties to contracts relating to Decatur's cogeneration power project at Solutia's plant in Decatur, Alabama: (i) a Third amended and restated lease, shared services and water supply agreement, dated as of June 1, 2004; and certain contracts relating to switching station equipment. The contracts relate to Decatur's cogeneration power project at Solutia's plant in Decatur, Alabama; and (ii) Ground lease addendum; Shared services addendum; and Water supply addendum, all dated as of June 1, 2004. Decatur and Solutia are also parties to other agreements that constitute leases of non-residential real property. As Decatur would remain free to move to assume or reject any or all of the Leases at any time before the earlier of a plan confirmation and July 27, the Debtors may withdraw from the Fourth Stipulation on 45 days written notice to Decatur and their counsel. Headquartered in St. Louis, Missouri, Solutia Inc. (OTCBB:SOLUQ) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Allen E. Grimes, III, Esq., at Dinsmore & Shohl, LLP and Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. (Solutia Bankruptcy News, Issue No. 82; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). In February 2007, the Honorable Prudence Carter Beatty entered a bridge order extending the Debtors' exclusive period to file a plan until April 30, 2007. SOUNDVIEW HOME: Moody's Rates Class M-10 Certificates at Ba1 ------------------------------------------------------------ Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by Soundview Home Loan Trust 2007-NS1 and ratings ranging from Aa1 to Ba1 to the subordinate certificates in the deal. The securitization is backed by adjustable-rate and fixed-rate, first and second lien, subprime residential mortgage loans originated by Nationstar Mortgage, LLC. The ratings are based primarily on the credit quality of loans and on the protection against credit losses from subordination, overcollateralization, excess spread, interest rate swap and cap agreement. The ratings are also based, in part, on mortgage insurance provided by Mortgage Guaranty Insurance Corporation. After taking into account the benefit of mortgage insurance, Moody's expects collateral losses to range from 5.50% to 6.00%. Nationstar Mortgage, LLC will service the loans. These are the rating actions: * Soundview Home Loan Trust 2007-NS1, Class A-1, Assigned Aaa Class A-2, Assigned Aaa Class A-3, Assigned Aaa Class A-4, Assigned Aaa Class M-1, Assigned Aa1 Class M-2, Assigned Aa2 Class M-3, Assigned Aa3 Class M-4, Assigned A1 Class M-5, Assigned A2 Class M-6, Assigned A3 Class M-7, Assigned Baa1 Class M-8, Assigned Baa2 Class M-9, Assigned Baa3 Class M-10,Assigned Ba1 ST. LOUIS IDA: S&P Junks Rating on $2.1 Million Revenue Bonds ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on St. Louis Industrial Development Authority (Centenary Towers Apartments Project), Missouri's $2.1 million housing revenue bonds series 1997 to 'C' from 'B' and placed the rating on CreditWatch with negative implications. The downgrade reflects the borrower's failure to make two required mortgage payments to the trustee due on Feb. 10, 2007, and March 10, 2007; the decision of the trustee not to use the bond service reserve fund available to make principal and interest payments on the bonds, scheduled for April 1, 2007; the St. Louis Department of Public Safety finding that the project is a public safety nuisance and that it should be closed for one year; and HUD's decision to terminate the Housing Assistance Program payments, which are the primary source of revenue for the project, effective immediately. The trustee has also given notice that principal and interest payments on the bonds, scheduled for April 1, 2007, will not be made. STEEL DYNAMICS: Intends to Sell $400 Million of Debt Securities --------------------------------------------------------------- Steel Dynamics, Inc. plans to sell approximately $400 million in aggregate principal amount of debt securities in a transaction exempt from the registration requirements of the Securities Act of 1933, subject to market and other conditions. Steel Dynamics intends to use the net proceeds from the sale of these debt securities to redeem its existing $300 million 9-1/2% Senior Notes due 2009, to repay amounts outstanding under its senior secured revolving credit facility, to finance certain capital expenditures and for general corporate purposes. Steel Dynamics Inc. -- http://www.steeldynamics.com/-- produces a broad array of high-quality flat-rolled, structural and bar steels at its three Indiana steel mini-mills and steel-processing operations. STEEL DYNAMICS: Moody's Rates $400 Million Debt at Ba2 ------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to Steel Dynamics Inc.'s $400 million debt issuance. Proceeds will be used to refinance the $300 million of 9.5% notes maturing March 2009 and for general corporate purposes. At the same time, Moody's affirmed SDI's Ba1 corporate family rating, the Ba2 rating on its existing senior unsecured bonds and debentures, and the Ba2 rating on its convertible subordinated notes. The rating outlook is positive. SDI's Ba1 corporate family rating recognizes the company's low cost mini-mill operating structure, which contributes to its strong earnings power, its growing production capabilities, and its improving product mix, which is shifting more toward higher value-added steel and specialty alloys. In addition, the robust steel price environment in recent years has enabled the company to significantly uptier its performance and fundamentally improve its financial profile. Overall, SDI's steelmaking process requires only 0.3 man-hours to produce a hot band ton in the flat roll division. Moody's believes that SDI is among the most profitable steel producers in the United States on a per ton basis. Given this fundamental improvement in performance over recent years and SDI's business strategy, which includes both organic growth and growth by acquisition, the company has an acceptable cushion at the Ba1 rating level for a more normalized "through the cycle" earnings scenario. Additionally, SDI benefits from flexible labor arrangements, the absence of a defined benefit pension program, and manageable environmental liabilities. Factors limiting the rating include its modest size relative to investment grade steel producers, the secured nature of its credit facility and the company's acquisition-driven growth strategy. Moody's positive outlook reflects the expectation that SDI will continue to evidence discipline in the management of cash flow generation and its investment/growth plans, and that its margins, low leverage and free cash flow generation will be sustainable over the next 12 to 15 months. Moody's expects that 2007 performance will not be materially different from 2006, that capital expenditures will be in the $400 million range and that the company's liquidity position will continue to be very good. Assignments: * Steel Dynamics, Inc. -- Senior Unsecured Regular Bond/Debenture, Assigned a range of 68 - LGD4 to Ba2 Headquartered in Fort Wayne, Indiana, Steel Dynamics had total consolidated steel shipments of approximately 4.8 million tons and generated revenues of $3.2 billion in 2006. STEEL DYNAMICS: S&P Rates $400 Mil. Senior Unsecured Notes at BB+ ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' senior unsecured rating to the proposed $400 million senior unsecured notes of Steel Dynamics Inc. (BB+/Stable/--) to be offered under Rule 144A with registration rights. The notes will be guaranteed by certain Steel Dynamic subsidiaries and will rank equally with the company's and its guarantor subsidiaries' unsecured liabilities. The rating is based on the rating agency's expectation that the amount of priority obligations, including non-guarantor subsidiary liabilities and borrowings under the company's secured revolving credit facility, will be less than 15% of total consolidated tangible assets. Proceeds from the note offering will be used primarily to repay Steel Dynamics' $300 million 9.5 % senior unsecured notes due 2009 and outstanding balances on its revolving credit facility. Steel Dynamics had approximately $440 million of debt outstanding at Dec. 31, 2006. The ratings on Steel Dynamics reflect its exposure to highly competitive and cyclical markets, significant capital expenditure plans, shareholder-friendly initiatives, and modest size relative to its competitors. The ratings also reflect its very low cost position, strong credit protection measures, conservative balance sheet, and good industry conditions. Ratings List: * Steel Dynamics Inc. -- Corporate Credit Rating at BB+/Stable/ -- Senior unsecured rating, BB+ -- Subordinate rating, BB- Rating Assigned: -- $400 million Senior unsecured notes, BB+ SYMPHONY CLO: S&P Rates $11.5 Million Class E Notes at BB --------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Symphony CLO III Ltd./Symphony CLO III Corp.'s $379 million notes. The preliminary ratings are based on information as of March 28, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The credit enhancement provided through the subordination of cash flows to the respective classes; -- The transaction's cash flow structure, which was subjected to various stresses requested by Standard & Poor's; -- The experience of the collateral manager; and -- The legal structure of the transaction, including the bankruptcy remoteness of the issuer. Preliminary Ratings Assigned Symphony CLO III Ltd. Symphony CLO III Corp. Class Rating Amount ----- ------ ------- A-1a* AAA $204,300,000 A-1b* AAA $22,700,000 A-2a* AAA $75,000,000 A-2b* AAA $1,000,000 B** AA $24,000,000 C** A $22,500,000 D** BBB $18,000,000 E BB $11,500,000 Subordinated notes NR $31,300,000 * Class A-1a, A-1b, A-2a, and A-2b are senior notes. ** Class B, C, and D are deferrable mezzanine notes. NR -- Not rated. TARO PHARMACEUTICAL: Kost Forer Raises Going Concern Doubt ---------------------------------------------------------- Kost Forer Gabbay & Kasierer, in Tel-Aviv, Israel, raised substantial doubt about Taro Pharmaceutical Industries Ltd.'s ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2005, and 2004. The auditing firm pointed to the company's substantial reduction in revenue and cash flows that adversely affected the company's current results of operations and liquidity. Kost Forer added that the company has not compiled with certain covenants of its debt agreements. The company's results for the year ended Dec. 31, 2005, showed net sales of $297.7 million and a net income of $5.7 million, as compared with net sales of $261.1 million and a net loss of $31.5 million for the year ended Dec. 31, 2004. The company incurred high selling, marketing, general and administrative expenses in 2004, which contributed to its operating loss of $24.1 million, as compared with an operating income of $15.2 million for the year 2005. As of Dec. 31, 2005, the company's balance sheet showed $579 million in total assets and $342.1 million in total liabilities, resulting to $236.9 million in total shareholders' equity. Cash Flow and Liquidity The company's cash flows have been negatively impacted by competitive pricing pressures, capital expenditures, research and development costs, operating losses, and reductions in wholesaler inventories. As of Dec. 31, 2005, Net cash provided by operating activities was $17.1 million, net cash used in investing activities was $36 million, and net cash provided by financing activities was $6.5 million. The company held $72.8 million in cash and cash equivalents as of Dec. 31, 2005, as compared with $85.3 million as of Dec. 31, 2004. Since October 2006, the company initiated steps to improve profitability and cash flow and implemented several sales, expense-reduction and research and development, initiatives designed to improve financial results. Expense-reduction initiatives include reduction of full time employees by 15 percent in the 12-month period ended Dec. 31, 2006, and increased control over expenditures throughout the company. In 2007, the company entered into an agreement to sell a parking lot adjacent to its Irish facility for approximately $4.2 million. The net proceeds in the approximate amount of $3.4 million will be used to reduce debt and for general corporate purposes. In 2007, the company entered into an agreement to sell a warehouse building in Canada for about $5.6 million. The net proceeds in the approximate amount of $5 million will be used to reduce debt and for general corporate purposes. In addition, we are in the process of identifying and selling additional non-core assets to further improve liquidity. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1c60 Non-compliance with Covenants Although the company is current with respect to its payment obligations under its various loan agreements, the delay in issuing the audited financial statements for the year ended Dec. 31, 2005, has resulted in the company's non-compliance with certain reporting obligations with respect to certain of its debt instruments. The company is currently in discussions with creditors with respect to this issue. As of Dec. 31, 2005, the company also was not in compliance with two of its financial covenants, for which it obtained waivers. The company has not yet finalized our 2006 financial statements. It is not in compliance with certain of its financial covenants as of Dec. 31, 2006. The company is in discussions with its lenders to obtain the appropriate waivers of these and other covenants. As a result of the foregoing, various creditors have the right to elect to accelerate the company's debt and certain creditors may elect to proceed against the collateral granted to them to secure the debt. Nasdaq Stock Market Delisting On Dec. 12, 2006, Listing Qualifications Department of Nasdaq notifed the company that its ordinary shares were to be delisted from The Nasdaq Global Select Market at the close of the business on Dec. 13, 2006, because the company failed to file its Form 20-F by Dec. 11, 2006. Following delisting, the company's ordinary shares are now quoted on the Pink Sheets under the symbol TAROF. The company requested that the Nasdaq Listing and Hearing Review Council exercise its authority to review the Nasdaq Listing Qualifications Panel decision made on Nov. 15, 2006, and also to stay the delisting of the company's ordinary shares. The Council had until Dec. 29, 2006, to exercise its authority but did not stay the delisting. 2005 Form 10-K Filing Delay On July 3, 2006, the company notified the Securities and Exchange Commission of its delay to file annual report for the year ended Dec. 31, 2005, due to due to the previously announced restatement of its financial statements for prior periods and related delays in the completion of the audit of its 2005 financial statements. On June 22, 2006, the company said it intends to restate its financial statements for the 2003 and 2004 fiscal years to reflect larger accounts receivable reserves than previously reported. The company disclosed on April 20, 2006, that during its 2005 audit process its independent auditors were conducting additional work related to how the company estimated its accounts receivable reserves. About Taro Pharmaceutical Taro Pharmaceutical Industries Ltd. -- http://www.taro.com/-- develops, manufactures and markets prescription and over-the- counter pharmaceutical products, primarily in the U.S., Canada and Israel. It also develops and manufactures active pharmaceutical ingredients primarily for use in the company's finished dosage form products. TOWER AUTOMOTIVE: Exclusive Plan-Filing Period Hearing Set Today ---------------------------------------------------------------- Pending a final ruling on the request, the Honorable Allen L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York extends Tower Automotive Inc. and its debtor-affiliates' exclusive periods through and including March 30, 2007. Judge Gropper adjourns the hearing on the request to March 30. As reported in the Troubled Company Reporter on Feb. 13, 2007, the Debtors asked Judge Gropper to further extend, without prejudice, their exclusive periods to: (a) file a plan of reorganization to May 3, 2007; and (b) solicit acceptances of that plan to June 29, 2007. While the Debtors believed that they have made significant progress in preparing and distributing a draft Chapter 11 Plan to the Official Committee of Unsecured Creditors, negotiations are ongoing, Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, told Judge Gropper. The Debtors stressed that their ability to formulate a Chapter 11 Plan is predicated upon obtaining a substantial equity investment, possibly implemented through a rights offering. As evidence of the their good faith efforts to negotiate the terms of an equity investment, late in December 2006, the Debtors obtained the Court's permission to indemnify and pay fees to certain investment funds managed by Strategic Value Partners LLC, Wayzata Investment Partners LLC and Stark Investments pursuant to a Backstop Commitment Letter and Restructuring Term Sheet, Mr. Sathy noted. While the Debtors later withdrew the Term Sheet Motion after receiving a notice of termination from the Initial Committed Purchasers, the Debtors continued to evaluate other alternatives. Moreover, if the Debtors are unable to locate a suitable investor, the Debtors may consider alternative exit structures that would be implemented through a Plan, Mr. Sathy said. The Debtors have continued to update the Creditors Committee's advisors regarding these discussions. Mr. Sathy maintained that the Debtors' Exclusive Periods should be extended because: (a) The Debtors' Chapter 11 cases are large and complex; (b) The Debtors have made considerable progress in their Chapter 11 cases, are paying their obligations as they come due and are effectively managing their business and preserving the value of their assets; and (c) The Debtors have been actively working with the Creditors Committee and other key parties-in-interest to facilitate the Debtors' emergence from bankruptcy as soon as possible. Headquartered in Grand Rapids, Michigan, Tower Automotive Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. The Debtors' exclusive plan-filing deadline is extended to March 21, 2007, pending a hearing on that date. (Tower Automotive Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TOWER AUTOMOTIVE: Files Cerberus Term Sheet; Hearing Set Today -------------------------------------------------------------- Tower Automotive Inc. and its debtor-affiliates seek authority from the Honorable Allen L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York to sell substantially all of their assets for roughly $1,000,000,000 to Cerberus Capital Management, L.P., pursuant to a restructuring term sheet dated March 28, 2007. The Official Committee of Unsecured Creditors is a signatory to the Restructuring Term Sheet. Proceeds of the transaction will be used to fund the Debtors' Chapter 11 plan. Among others, Cerberus will acquire all of the Debtors' properties, receivables and causes of action under Chapter 5 of the Bankruptcy Code involving key vendors or other parties that have "other material relationships" with the Debtors and all bankruptcy-related administrative claims. Cerberus and the Creditors Committee will work in good faith to determine which Chapter 5 actions constitute acquired assets. Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, relates that based on the Debtors' current estimates, and subject to certain caps set forth in the Term Sheet, the expected value of the Transaction is sufficient to pay the Debtors' prepetition and postpetition secured creditors, including the second lien lenders, and the industrial revenue bonds secured by the Debtors' Bardstown, Kentucky facility in full, as well as provide sufficient funds to confirm a Plan. Moreover, Cerberus will assume the Debtors' pension plans, which have minimum funding commitments of approximately $40,000,000. The Term Sheet also provides a package of recovery for unsecured creditors including $10,000,000 in cash, certain avoidance actions not being purchased by Cerberus, and a commitment by Cerberus to fund the costs and expenses of an unsecured creditor liquidating trust in an amount not to exceed $2,000,000. Mr. Sathy notes that the Term Sheet represents: * A significant increase in value compared to the equity proposal that was terminated in January 2007, and paves the way for the Debtors to confirm a Plan before the expiration of the DIP Credit Facility on August 2, 2007; and * The culmination of a robust marketing and negotiating process during which the Debtors contacted approximately 20 potential investors and actively negotiated proposals with four different investor parties. At the end, the Debtors considered three very attractive proposals, including a proposal to fund a Plan that would have allowed the company to emerge as a stand-alone enterprise, Mr. Sathy says. While the Debtors believe that the Term Sheet represents the best alternative currently available to them, the Debtors and the Creditors Committee have formulated and negotiated with Cerberus a protocol, pursuant to which the Debtors, in consultation with the Creditors Committee, will solicit competing proposals and, if one or more qualified proposal is received, conduct an auction. According to Mr. Sathy, given that the Term Sheet provides no break-up fee or expense reimbursement for Cerberus in the event the Debtors select a competing transaction involving all or substantially all of their assets and operations, the Debtors' estates and creditors will receive the full value of any higher and better offers they are able to receive through the marketing and auction process. The Debtors also ask the Court to approve the Marketing Protocol and related notices, pursuant to which the Debtors and the Creditors Committee will solicit higher and better restructuring proposals. Under the Marketing Protocol, competing bids must be submitted by June 15, 2007. If the bid is for substantially all of the Debtors' assets, the aggregate consideration must equal or exceed the sum of: 1. the purchase price offered by Cerberus; 2. the value of the liabilities to be assumed by Cerberus; and 3. $10,000,000. Each bid must be accompanied by a $25,000,000 deposit. The Debtors will hold an auction on June 21, 2007, if a qualified bid is received. If the Debtors do not proceed with the Cerberus Transaction or with a competing transaction -- and provided that Cerberus has executed and is not in breach of the Purchase Agreement -- Cerberus will be entitled to the reimbursement of eligible expenses, not to exceed $4,000,000. Cerberus may also seek payment of up to $15,000,000 as substantial contribution to the Debtors' restructuring. The Debtors and the Creditors Committee will not oppose the request. If the Debtors pursue a transaction involving the sale of part of their assets or operations, and propose to reorganize around other assets, Cerberus would be eligible for a $10,000,000 break- up fee and the reimbursement of eligible expenses, not to exceed $4,000,000 payable upon consummation of the competing transaction. The Transaction remains subject to definitive documentation, which will include the Plan and a purchase agreement, and various ancillary or related documents that may be required to effectuate the Transaction. The Term Sheet and the Marketing Protocol require Cerberus and the Debtors to file the Plan and the Purchase Agreement with the Court on or before April 20, 2007. The Debtors believe that negotiating and documenting a plan implementing the Transaction set forth in the Term Sheet gives them their best chance of meeting the May 2, 2007 Deadline under the DIP Credit Facility for filing a Plan. The Transaction may be terminated in the event: -- an order approving the Term Sheet is not entered by April 6, 2007; -- a Plan is not filed by April 20; -- a disclosure statement explaining the Plan is not approved by May 21; -- an auction is not held by June 21; -- Cerberus will not be designated as successful bidder by June 22; -- an order confirming the Plan is not entered and does not become final by July 2; -- the acquisition is not closed by July 31; -- the Debtors' cases are converted to one under Chapter 7 of the Bankruptcy Code; or -- a Chapter 11 trustee or an examiner, with expanded powers, is appointed. The Debtors must also deliver to Cerberus their 2006 audited financial statements at least 30 days before the Closing Date. A full-text copy of the Term Sheet is available for free at http://ResearchArchives.com/t/s?1c6b A full-text copy of the Marketing Protocol is available for free at http://ResearchArchives.com/t/s?1c6c The Court will hold a hearing on the Debtors' request on March 30, 2007. Headquartered in Grand Rapids, Michigan, Tower Automotive Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. The Debtors' exclusive plan-filing deadline is extended to March 21, 2007, pending a hearing on that date. (Tower Automotive Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TOWER AUTOMOTIVE: Wants OEM Customer Contracts Filed Under Seal --------------------------------------------------------------- Tower Automotive Inc. and its debtor-affiliates seek permission from the Honorable Allen L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York to file under seal future requests for approval of long-term production agreements with certain key Original Equipment Manufacturer customers. As part of the Debtors' ongoing business strategy to induce lasting sales, the Debtors are currently negotiating several commercial agreements with their key OEM customers. Each of the agreements contains sensitive pricing structures and confidential commercial terms from the viewpoint of both the Debtors and the Key Customers. Anup Sathy, Esq., at Kirkland & Ellis LLP, in Chicago, relates that at the conclusion of the negotiations, the Debtors anticipate presenting to the Court for approval four or five separate requests seeking approval of long-term production agreements and related releases. The Debtors propose that for each Confidential Motion, a hearing be set no less than 20 days from the filing of each Confidential Motion, with the corresponding objection deadline no later than five days in advance of the hearing. The Debtors will serve a copy of each Confidential Motion on: (a) counsel to the Official Committee of Unsecured Creditors; (b) counsel to the administrative agent for the Debtors' senior secured postpetition lenders; and (c) the Office of the United States Trustee. The Debtors also ask the Court: (a) to permit them, with the affirmative consent of the affected Key Customer, to share the Confidential Motions with their potential investors, subject to the existing confidentiality agreements among the Debtors and the investor constituencies; and (b) that the case docket for any proceedings related to the Confidential Motions, including any papers that may be filed by the Notice Parties, be likewise sealed and not available for public access. Mr. Sathy relates that Section 107 of the Bankruptcy Code provides bankruptcy courts with the power to issue orders that will protect entities from potential harm that may result from the disclosure of certain confidential information. The pricing structure and commercial terms contained in the long- term production agreements constitute "commercial information" that ought to be filed under seal pursuant to Section 107(b) and Rule 9018 of the Federal Rules of Bankruptcy Procedure, Mr. Sathy asserts. If the information were disclosed to the public, the Debtors' competitors could use the pricing schedules and commercial terms to evaluate and set their own positions in the marketplace. The Debtors, however, would not have similar information for their competitors, putting them at a competitive disadvantage. Moreover, the Key Customers would be harmed by the public release of their competitive and heavily negotiated agreements with the Debtors. The Creditors Committee does not object to the request, Mr. Sathy tells Judge Gropper. Headquartered in Grand Rapids, Michigan, Tower Automotive Inc. -- http://www.towerautomotive.com/-- is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including BMW, DaimlerChrysler, Fiat, Ford, GM, Honda, Hyundai/Kia, Nissan, Toyota, Volkswagen and Volvo. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The Company and 25 of its debtor-affiliates filed voluntary chapter 11 petitions on Feb. 2, 2005 (Bankr. S.D.N.Y. Case No. 05-10576 through 05-10601). James H.M. Sprayregen, Esq., Ryan B. Bennett, Esq., Anup Sathy, Esq., Jason D. Horwitz, Esq., and Ross M. Kwasteniet, Esq., at Kirkland & Ellis, LLP, represent the Debtors in their restructuring efforts. Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed $787,948,000 in total assets and $1,306,949,000 in total debts. The Debtors' exclusive plan-filing deadline is extended to March 21, 2007, pending a hearing on that date. (Tower Automotive Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TRW AUTOMOTIVE: Closes $500 Million Offering of 7% Senior Notes --------------------------------------------------------------- TRW Automotive Holdings Corp., through its subsidiary TRW Automotive Inc., closed its offering of $500 million in aggregate principal amount of its 7% Senior Notes due 2014, EUR275 million in aggregate principal amount of its 6-3/8% Senior Notes due 2014, and $600 million in aggregate principal amount of its 7-1/4% Senior Notes due 2017. The company initiated the Notes offering on March 12, 2007. The Notes were issued pursuant to a private placement and are expected to be resold by the initial purchasers under Rule 144A and Regulation S under the Securities Act of 1933. The Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act. Upon closing, the net proceeds from the Notes offering were used to purchase any and all notes tendered on or prior to March 23, 2007, in conjunction with the company's cash tender offers and consent solicitations for its outstanding $825 million 9-3/8% Senior Notes due 2013, EUR130 million 10-1/8% Senior Notes due 2013, $195 million 11% Senior Subordinated notes due 2013 and EUR81 million 11-3/4% Senior Subordinated Notes due 2013. In connection with the cash tender offers and consent solicitations for its outstanding $825 million 9-3/8% Senior Notes due 2013, EUR130 million 10-1/8% Senior Notes due 2013, $195 million 11% Senior Subordinated Notes due 2013 and EUR81 million 11-3/4% Senior Subordinated Notes due 2013, it has received the requisite consents to amend the indentures governing each series of Notes. As of March 23, 2007, tenders and consents had been received with respect to $820.7 million aggregate principal amount, of the 9- 3/8% Senior Notes, EUR120.5 million aggregate principal amount, of the 10-1/8% Senior Notes, $189.2 million aggregate principal amount, of the 11% Senior Subordinated Notes, and EUR 78.9 million aggregate principal amount, of the 11-3/4% Senior Subordinated Notes. TRW Automotive Inc. has executed supplemental indentures with The Bank of New York, as trustee, effectuating proposed amendments to the indentures governing each series of Notes, all as described in the Offer to Purchase and Consent Solicitation Statement dated March 12, 2007. The settlement for the early tender of such notes is expected to occur on March 26, 2007. The supplemental indentures will become operative before such early settlement of the tender offers. The tender offers will expire on April 6, 2007, unless extended or earlier terminated. Settlement for all Notes tendered after the Consent Date, but on or prior to the Expiration Date, is expected to be following the Expiration Date. Lehman Brothers Inc., Lehman Brothers International, Banc of America Securities LLC, Banc of America Securities Limited, Deutsche Bank Securities Inc., Deutsche Bank AG, London Branch, Goldman, Sachs & Co. and Merrill Lynch & Co. are each acting as a Dealer Manager and Solicitation Agent for the tender offers and the consent solicitations. The Depositary is The Bank of New York and the Information Agent is Global Bondholder Services Corporation. Requests for documentation should be directed to: a) Global Bondholder Services Corporation Tel: (866) 924-2200; b) The Bank of New York Attention: William Buckley No. 7 East, 101 Barclay Street New York, NY 10286 Tel: (212) 815-5788 Fax: (212) 298-1915; or c) The Bank of New York (Luxembourg) No. 1A, Hoehenhof, L-1736 Senningerberg S.A., Aerogolf Center, Luxembourg Tel: +(352) 34 20 90 5637 Questions regarding the tender offers and the consent solicitations should be directed to: Lehman Brothers Tel: (800) 438-3242(toll-free), or (212) 528-7581 (collect) About TRW Automotive Headquartered in Livonia, Michigan, TRW Automotive Holdings Corp. (NYSE: TRW) -- http://www.trwauto.com/-- is an automotive supplier. Through its subsidiaries, it employs approximately 63,000 people in 25 countries. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services. * * * Fitch assigned a 'BB' on TRW Automotive Holdings Corp.'s LT Issuer Default rating and 'BB-' on its Unsecured Debt rating. The outlook is Stable. U.S. STEEL: Board Approves $2.1 Billion Lone Star Acquisition ------------------------------------------------------------- United States Steel Corporation and Lone Star Technologies, Inc. disclosed Thursday that they have entered into a definitive agreement under which U.S. Steel will acquire Lone Star for $67.50 per share in cash. The agreement was unanimously approved by the boards of directors of both U.S. Steel and Lone Star. U.S. Steel expects that the acquisition of Lone Star will strengthen its position as a premier producer of tubular products for the energy sector and will create North America's largest tubular producer. The transaction will broaden U.S. Steel's energy product offerings by joining U.S. Steel's predominantly seamless tubular business with Lone Star's complementary welded tubular business, coupling manufacturing and tubular processing services. Following the transaction, U.S. Steel will have annual North American tubular manufacturing capability of approximately 2.8 million tons. U.S. Steel expects that the transaction will be accretive to its 2007 earnings per share before considering expected synergies and excluding the accounting effects of the sale of acquired inventory and other customary purchase accounting adjustments. U.S. Steel projects that the combination with Lone Star's operations will generate annual pre-tax operating synergies in excess of $100 million by the end of 2008. Commenting on the acquisition, U.S. Steel Chairman and CEO, John P. Surma, said, "This transaction represents a compelling strategic opportunity for U.S. Steel to strengthen our position as a supplier to the robust oil and natural gas sector by significantly expanding our tubular product offerings, our production capacity and our geographic footprint. "With a comprehensive portfolio of high-end products, enhanced production capabilities, excellent positions in both welded and seamless pipe, and a strong commitment to quality, service and innovation, U.S. Steel will be better positioned to serve the international oil and natural gas industry as the provider of choice for tubular products. Also, because Lone Star is a significant purchaser of hot bands and slabs, this acquisition should allow us to better optimize our domestic hot-end operations over a range of market conditions." Rhys Best, Chairman and CEO of Lone Star stated, "We are very excited about today's announcement. We believe that this combination will deliver superior value to Lone Star's shareholders as well as provide our employees with an opportunity to be part of a larger enterprise. Our complementary strengths will better position Lone Star to pursue significant new growth opportunities for the benefit of our customers, distributors and end users. This transaction will enable an enhanced and wider range of products, even higher service levels and greater manufacturing efficiencies. We look forward to working with the U. S. Steel team to ensure a smooth transition." Under the terms of the definitive agreement, U.S. Steel will acquire all of the outstanding shares of Lone Star for $67.50 per share in cash - an aggregate value of approximately $2.1 billion. The price per share represents a premium of approximately 39% to Lone Star's closing share price of $48.45 on March 28, 2007, and a premium of approximately 43% to its 90-day average trading price. U. S. Steel will pay for the acquisition through a combination of cash on hand and financing obtained under its existing receivables purchase program and three new fully committed bank credit facilities provided by JPMorgan. The transaction is subject to the approval of Lone Star's shareholders and other customary closing conditions, including regulatory approvals, and is expected to close in the second or third quarter of 2007. J.P. Morgan Securities Inc. and Morgan, Lewis & Bockius LLP acted as financial and legal advisers, respectively, to U. S. Steel. Goldman, Sachs & Co. and Weil, Gotshal & Manges LLP acted as financial and legal advisers, respectively, to Lone Star. About Lone Star Technologies Lone Star Technologies, Inc. (NYSE: LSS) is a $1.4 billion holding company whose principal operating subsidiaries manufacture and market oilfield casing, tubing and line pipe, specialty tubing products, including finned tubes used in a variety of heat recovery applications, and flat rolled steel and other tubular products and services. About United States Steel Corporation United States Steel Corporation (NYSE: X) is an integrated steel producer with major production operations in the United States and Central Europe. An integrated steelmaker uses iron ore and coke as primary raw materials for steel production, and U. S. Steel has annual raw steel production capability of 19.4 million tons in the United States and 7.4 million tons in Central Europe. The company manufactures a wide range of value-added steel products for the automotive, appliance, container, industrial machinery, construction and oil and gas industries. U.S. Steel's integrated steel facilities include Gary Works in Gary, Ind.; Great Lakes Works in Ecorse and River Rouge, Mich.; Mon Valley Works, which includes the Edgar Thomson Plant and the Irvin Plant near Pittsburgh, Pa., and the Fairless Plant near Philadelphia, Pa.; Granite City Works in Granite City, Ill.; Fairfield Works in Fairfield, Ala.; U. S. Steel Kosice in the Slovak Republic; and U.S. Steel Serbia. U.S. Steel also operates finishing facilities at the Midwest Plant in Portage, Ind., East Chicago Tin in Indiana, and Lorain Tubular Operations in Lorain, Ohio, and is involved in several steel finishing joint ventures. U.S. Steel produces coke at Clairton Works near Pittsburgh and at Gary Works and Granite City Works. The company operates two iron ore mines through its Minnesota Ore Operations on the Mesabi Iron Range in northern Minnesota, one in Mt. Iron and one in Keewatin. In addition, U. S. Steel is involved in transportation services (railroad and barge operations) and real estate operations. * * * U.S. Steel carries Standard & Poor's BB+ rating. UNITED SURGICAL: Moody's Junks Rating on $240 Million Senior Notes ------------------------------------------------------------------ Moody's Investors Service assigned new ratings to United Surgical Partners International, Inc. in connection with the leveraged buyout of USPI by Welsh, Carson, Anderson & Stowe. The rating outlook for USP Domestic Holdings, Inc. has been changed to stable, concluding a review of the company's ratings for possible downgrade initiated on Jan. 9, 2007. Holdings is a wholly-owned subsidiary of United Surgical Partners International, Inc., the parent company. Moody's assigned these proposed ratings: * United Surgical Partners International, Inc. -- $100 million senior secured revolving credit facility due 2013, rated Ba3, LGD2, 25% -- $390 million senior secured term loan B due 2014, rated Ba3, LGD2, 25% -- $100 million senior secured delayed draw term loan B due 2014, rated Ba3, LGD2, 25% -- $240 million cash pay senior subordinated notes due 2017, rated Caa1, LGD5, 83% -- $240 million senior subordinated toggle notes due 2017, rated Caa1, LGD5, 83% -- Corporate Family Rating, rated B2 (Corporate Family rating has been moved from USP Domestic Holdings, Inc. to United Surgical Partners International, Inc.) -- Probability of Default Rating, rated B2 The ratings outlook is stable. Moody's will withdraw these ratings: * USP Domestic Holdings, Inc. -- $200 million senior secured term loan B, due 2013, rated Ba2, LGD3, 35% -- Corporate Family Rating, Ba2 -- Probability of Default Rating, Ba3 Moody's said that it expects to withdraw USPI's existing debt ratings in connection with the refinancing of this debt upon closing of the buyout. The proceeds from this new indebtedness will be utilized to purchase the company's public equity, repay existing senior bank debt and pay transaction fees and expenses. The assignment of a B2 Corporate Family rating primarily reflects the following factors: * high leverage; * modest free cash flow; and * weak interest coverage resulting from the re-leveraging of the company's balance sheet to effect the buyout. Post-buyout, Moody's considers USPI to be weakly positioned in the B2 category. Factors that serve to mitigate these risks include the company's unique, proven business model, its leading market position in the short-stay, free-standing surgical center space, a favorable payor and case mix, low bad debt expense, an experienced, capable management team as well as strong demographic and industry trends in the outpatient surgery segment. The stable ratings outlook reflects Moody's expectation that USPI will continue to increase top-line growth and improve EBITDA margins with the opening and maturation of new surgery centers in its development pipeline and by successful integration of the new Surgis and St. Louis facilities. Base growth is expected to continue at a rate of 5% or more per year, exclusive of acquisitions. Moody's anticipates that the company will not embark upon a significant acquisition over the medium-term until it makes some material progress with respect to de-leveraging its balance sheet. The ratings could come under upward rating pressure if free cash flow to adjusted debt improves to a sustainable level in the 5 to 10% range or if adjusted debt to EBITDA declines below 5.5x on a sustained basis. Downgrade pressure could occur if the company encounters difficulties in improving its EBITDA margins with the maturation of facilities under development and the integration of its newly acquired St. Louis facilities, resulting in a deterioration of free cash flow to adjusted debt to under 3% on a sustained basis. The ratings could also be downgraded if the company embarks upon new acquisitions, steps up its de novo development above plan or makes a significant dividend, thereby increasing total debt to EBITDA above 7.5x. A downgrade could also occur if regulatory changes require physicians to put their ownership interests back to USPI or that result in the dissolution of the company's joint venture arrangements with hospitals. United Surgical Partners International, which is headquartered in Dallas, Texas, currently maintains ownership interests or operates 141 surgical facilities. Of the company's 138 domestic surgery centers, 78 are jointly owned with not-for-profit healthcare systems. United Surgical also operates three facilities in the United Kingdom. Revenues for the twelve months ended Dec. 31, 2006 were approximately $579 million. UNITED SURGICAL: S&P Junks Rating on Proposed $240 Mil. Sr. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Addison, Texas-based United Surgical Partners International Inc. to 'B' from 'B+'. The rating was removed from CreditWatch, where it had been placed with negative implications on Jan. 9, 2007, following the report that the company had agreed to be acquired by UNCN Acquisition Corp., an affiliate of Welsh, Carson, Anderson & Stowe. The transaction is valued at about $1.8 billion. The rating outlook is stable. At the same time, Standard & Poor's assigned its loan and recovery ratings to United Surgical's proposed $590 million senior secured credit facility. The credit facility is rated 'B' with a recovery rating of '3', indicating the expectation of meaningful recovery of principal in the event of a payment default. In addition, Standard & Poor's assigned its 'CCC+' rating to the company's $240 million proposed senior subordinated notes due 2017 and $240 million senior subordinated toggle notes due 2017. The ratings on United Surgical reflect the company's narrow operating focus as an owner and operator of surgical facilities, its aggressive growth strategy, and third-party reimbursement risks. "The company's recent acquisitions of Surgis Inc. and of several businesses in the St. Louis area indicate its aggressive growth strategy, which is still appropriate for the rating category," explained Standard & Poor's credit analyst David Peknay. "Attractive industry demand characteristics, disciplined operating performance, and a diverse payor base partially mitigate these risks." Solid profitability will now have to support a large debt burden, including about $55 million of additional interest expense. EBITDA margins are expected to be in the mid to high 20%'s. Cash flow protection measures provide only a small financial cushion, given the uncertainties related to United Surgical's operations. Total lease-adjusted debt to EBITDA will be about 6.7x at the close of the transaction. Good patient volume increases, a growing facility portfolio, and improving EBITDA margins due to prudent operating procedures and good pricing gains should help leverage decline to about 5x within two years. URBAN CHOICE: Case Summary & 12 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Urban Choice Apartments, L.L.C. 4816 12th Avenue South Minneapolis, MN 55417 Bankruptcy Case No.: 07-41016 Chapter 11 Petition Date: March 28, 2007 Court: District of Minnesota (Minneapolis) Judge: Gregory F. Kishel Debtor's Counsel: Joel D. Nesset, Esq. Henson & Efron, P.A. 220 South Sixth Street, Suite 1800 Minneapolis, MN 55402 Tel: (612) 339-2500 Total Assets: $1,917,276 Total Debts: $2,101,085 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Imperial Capital Bank mortgage $440,000 100 North Central Avenue, value of Suite 100 collateral: Glendale, AZ 91203 $350,000 mortgage $366,545 value of collateral: $360,00 Center Point Energy utilities $30,088 P.O. Box 1144 Minneapolis, MN 55440 Casey, Menden, Faust & accounting $14,565 Nelson, P.A. services 8585 West 78th Street, Suite 202 Bloomington, MN 55438 Citi Bank Business Master $14,063 Card Home Depot Supply $3,133 B.D.S. Laundry Management laundry leases $1,617 Boone Trucking $1,559 City of Minneapolis utilities $1,403 Xcel Energy utilities $880 Lynde Enterprises snow removal $250 North End Hardware $129 Hirschfields purchases $84 VICTORY MEMORIAL: Lease Decision Period Extended Through June 13 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York extended, until June 13, 2007, the period in which Victory Memorial Hospital and its debtor-affiliates can assume, assume and assign, or reject two nonresidential real property leases. The Debtors related that certain of its affiliates are lessees or sub-lessees under two nonresidential real property leases related to property located at: a) 401 95th Street, Brooklyn, New York, 11209, and b) 5909 8th Avenue, Brooklyn, New York, 11220. The unexpired leases are primarily additional spaces for the Debtors' administrative offices. The Debtors explained that they need additional time to formulate and refine their business plan before they can determine which of the unexpired leases they will assume. About Victory Memorial Based in Brooklyn, New York, Victory Memorial Hospital is a non- profit, full service acute care voluntary hospital with approximately 241 beds and a skilled nursing unit with 150 beds. Victory Hospital provides a full range of medical services with a focus on community care and a program of community outreach to the Brooklyn community. Victory Ambulance Services, Inc. a for-profit subsidiary, provides Victory Hospital with ambulance services. Victory Pharmacy, Inc., a for-profit subsidiary, does not have any employees or assets. The company and its two-subsidiaries filed for chapter 11 protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387 through 06-44389). Timothy W. Walsh, Esq., and Jeremy R. Johnson, Esq., at DLA Piper US LLP, represent the Debtors. When the Debtors filed for protection from their creditors, they listed estimated assets and debts between $1 million and $100 million. The Debtors' exclusive period to file a chapter 11 plan expires on July 15, 2007. WAMU COMMERCIAL: Fitch Assigns Low-B Ratings on Six Cert. Classes ----------------------------------------------------------------- WaMu Commercial Mortgage Securities Trust 2007-SL2, commercial mortgage pass-through certificates are rated by Fitch Ratings: -- $134,594,000 class A 'AAA'; -- $588,553,000 class A-1A 'AAA'; -- $842,092,662 class X* 'AAA'; -- $17,894,000 class B 'AA'; -- $25,263,000 class C 'A'; -- $16,842,000 class D 'BBB+'; -- $6,315,000 class E 'BBB'; -- $7,369,000 class F 'BBB-'; -- $13,684,000 class G 'BB+'; -- $4,210,000 class H 'BB'; -- $5,263,000 class J 'BB-'; -- $2,105,000 class K 'B+'; -- $4,211,000 class L 'B'; and -- $1,053,000 class M 'B-'. The $14,736,662 class N is not rated by Fitch. *Notional Amount and Interest Only All classes are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 664 fixed- and floating-rate loans having an aggregate principal balance of approximately $842,092,662 as of the cutoff date. WAMU MORTGAGE: Fitch Puts Low-B Ratings on $5.2 Mil. Certificates ----------------------------------------------------------------- Fitch rates WaMu Mortgage pass-through certificates, WMALT series 2007-HY2 classes: Groups 1, 2, and 3: -- $388,441,300 classes 1-A-1, 1-A-2, 1-X-PPP, 2-A-1 through 2-A-4, 2-A-1-X, 2-PPP, 3-A-1, 3-A-2, 3-PPP and R (senior certificates) 'AAA'; -- $8,862,000 class B-1 'AA'; -- $4,945,000 class B-2 'A'; -- $2,885,000 class B-3 'BBB'; -- $3,091,000 class B-4 'BB'; and -- $2,267,000 class B-5 'B'. The class B-6 certificate is not rated by Fitch. The 'AAA' rating on the Group 1, 2, and 3 senior certificates reflects the 5.75% subordination provided by the 2.15% class B-1, the 1.20% class B-2, the 0.70% class B-3, the 0.75% privately offered class B-4, the 0.55% privately offered class B-5, and the 0.40% privately offered class B-6. The class B-6 is not rated by Fitch. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and Washington Mutual Bank's servicing capabilities as servicer. Fitch currently rates Washington Mutual Bank 'RMS2+' for prime servicing. The certificates represent ownership interests in a trust fund that consists of three pools of mortgage loans. The senior certificates whose class designation begins with 1, 2 and 3, correspond to pools 1, 2, and 3, respectively. In certain limited circumstances, principal and interest collected from loan group 1, 2, or 3 may be used to pay principal or interest, or both, to the senior certificates related to the other of those three loan groups. Group 1 consists of 444 conventional, hybrid adjustable-rate mortgage loans secured by first liens on one to four family residential properties, all of which have original terms to maturity of approximately 30 years. The loans have an initial fixed interest rate period of approximately five years. Thereafter, the interest rate will adjust annually for all the group 1 mortgage loans based on an index plus a margin. Approximately 83.5% of the mortgage loans have interest only payments scheduled, with principal and interest payments beginning on the first interest rate adjustment date. The aggregate principal balance of this group is $184,296,969 and the average principal balance as of the cut-off date is $415,083. The original weighted average loan-to-value ratio is 74.4%. Cash-out and rate/term refinance loans represent 32.32% and 18.28% of the loan group, respectively. The states that represent the largest portion of mortgage loans are California (52.65%), Nevada (6.30%), and Arizona (5.61%). All other states represent less than 5% of the loan pool. Group 2 consists of 318 conventional, hybrid adjustable-rate mortgage loans secured by first liens on one to four family residential properties, all of which have original terms to maturity of approximately 30 years. The loans have an initial fixed interest rate period of approximately seven years. Thereafter, the interest rate will adjust annually for all the group 2 mortgage loans based on an index plus a margin. Approximately 88.9% of the mortgage loans have interest only payments scheduled, with principal and interest payments beginning on the first interest rate adjustment date. The aggregate principal balance of this group is $178,913,576 and the average principal balance as of the cut-off date is $562,621. The original weighted average loan-to-value ratio is 70.9%. Cash-out and rate/term refinance loans represent 35.82% and 24.47% of the loan group, respectively. The states that represent the largest portion of mortgage loans are California (62.66%), Illinois (5.69%), and Washington (5.26%). All other states represent less than 5% of the loan pool. Group 3 consists of 122 conventional, hybrid adjustable-rate mortgage loans secured by first liens on one to four family residential properties, all of which have original terms to maturity of approximately 30 years. The loans have an initial fixed interest rate period of approximately ten years. Thereafter, the interest rate will adjust annually for all the group 3 mortgage loans based on an index plus a margin. Approximately 88.9% of the mortgage loans have interest only payments scheduled, with principal and interest payments beginning on the first interest rate adjustment date. The aggregate principal balance of this group is $48,929,774 and the average principal balance as of the cut-off date is $401,063. The original weighted average loan-to-value ratio is 65.6%. Cash-out and rate/term refinance loans represent 45.89% and 32.51% of the loan group, respectively. The states that represent the largest portion of mortgage loans are California (59.25%), Florida (8.52%), New York (8.05%), and Washington (6.04%). All other states represent less than 5% of the loan pool. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. The certificates are issued pursuant to a pooling and servicing agreement dated Mar. 1, 2007, among WaMu Asset Acceptance Corp., as depositor, Washington Mutual Bank, as servicer, and LaSalle Bank National Association, as trustee. WELLS FARGO: Fitch Assigns Low-B Ratings on $6.3 Mil. Certificates ------------------------------------------------------------------ Wells Fargo mortgage pass-through certificates, series 2007-4, are rated by Fitch Ratings: -- $1,737,058,422 classes A-1 to A-21, A-PO, and A-R 'AAA' senior certificates; -- $37,801,000 class B-1 'AA'; -- $10,801,000 class B-2 'A'; -- $5,400,000 class B-3 'BBB'; -- $3,600,000 class B-4 'BB'; and -- $2,700,000 class B-5 'B'. The 'AAA' ratings on the senior certificates reflect the 3.50% subordination provided by the 2.10% class B-1, the 0.60% class B-2, the 0.30% class B-3, the 0.20% privately offered class B-4, the 0.15% privately offered class B-5, and the 0.15% privately offered class B-6. The ratings on the class B-1, B-2, B-3, B-4, and B-5 certificates are based on their respective subordination. Class B-6 is not rated by Fitch. Fitch believes the amount of credit enhancement available will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral, the integrity of the legal and financial structures, and the primary servicing capabilities of Wells Fargo Bank, N.A. The transaction consists of one group of 3,278 fully amortizing, fixed interest rate, first lien mortgage loans, with an original weighted average term to maturity of approximately 30 years. The aggregate unpaid principal balance of the pool is $1,800,061,020 as of the March 1, 2007, the cut-off date, and the average principal balance is $549,134. The weighted average original loan-to-value ratio (OLTV) of the loan pool is approximately 72.38%; 1.68% of the loans have an OLTV greater than 80%. The weighted average coupon (WAC) of the mortgage loans is 6.341%, and the weighted average FICO score is 743. The states that represent the largest geographic concentration are California (37.38%), New York (6.14%), and Virginia (5.53%). All other states represent less than 5% of the outstanding balance of the pool. None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. All of the mortgage loans were generally originated in conformity with underwriting standards of WFB. WFB sold the loans to Wells Fargo Asset Securities Corporation, a special purpose corporation, who deposited the loans into the trust. The trust issued the certificates in exchange for the mortgage loans. WFB will act as servicer and custodian, and HSBC Bank USA, National Association will act as trustee. Elections will be made to treat the trust as two separate real estate mortgage investment conduit for federal income tax purposes. WELLS FARGO: Fitch Assigns Low-B Ratings on 4 Certificates Classes ------------------------------------------------------------------ Wells Fargo mortgage pass-through certificates, series 2007-3, are rated by Fitch Ratings: Groups I & II: --$1,063,783,247 classes I-A-1 through I-A-20, II-A-1 through II-A-5, I-A-PO, II-A-PO, A-E and I-A-R 'AAA'; --$23,149,000 class Cr-B-1 'AA'; --$6,615,000 class Cr-B-2 'A'; --$3,307,000 class Cr-B-3 'BBB'; --$2,204,000 class Cr-B-4 'BB'; and --$1,654,000 class Cr-B-5 'B'. Group III: -- $245,784,926 classes III-A-1 and III-A-PO 'AAA'; -- $4,664,000 class III-B-1 'AA'; -- $504,000 class III-B-2 'A'; -- $378,000 class III-B-3 'BBB'; -- $252,000 class III-B-4 'BB'; and -- $252,000 class III-B-5 'B'. The 'AAA' ratings on the Group I and Group II senior certificates reflect the 3.50% subordination provided by the 2.10% class Cr-B-1, the 0.60% class Cr-B-2, the 0.30% class Cr-B-3, the 0.20% privately offered class Cr-B-4, the 0.15% privately offered class Cr-B-5, and the 0.15% privately offered class Cr-B-6. The ratings on the class Cr-B-1, Cr-B-2, Cr-B-3, Cr-B-4, and Cr-B-5 certificates are based on their respective subordination. Class Cr-B-6 is not rated by Fitch. The 'AAA' ratings on the Group III senior certificates reflect the 2.50% subordination provided by the 1.85% class III-B-1, the 0.20% class III-B-2, the 0.15% class III-B-3, the 0.10% privately offered class III-B-4, the 0.10% privately offered class III-B-5, and the 0.10% privately offered class III-B-6. The ratings on the class III-B-1, III-B-2, III-B-3, III-B-4, and III-B-5 certificates are based on their respective subordination. Class III-B-6 is not rated by Fitch. This transaction contains certain classes designated as Exchangeable REMIC certificates and Exchangeable Certificates. Exchangeable REMIC Certificates: I-A-9, I-A-10, I-A-11, I-A-12, I- A-13, I-A-14, I-A-15, I-A-16, II-A-2, II-A-3, and II-A-4. Exchangeable Certificates: I-A-4, I-A-5, I-A-6, I-A-17, I-A-18, I- A-19, I-A-20, II-A-1, II-A-5, and A-E. All other classes are regular certificates. All or a portion of certain classes of offered exchangeable REMIC certificates may be exchanged for a proportionate interest in the related exchangeable certificates. All or a portion of the exchangeable certificates may also be exchanged for the related offered exchangeable REMIC certificates in the same manner. This process may occur repeatedly. The classes of offered exchangeable REMIC certificates and of exchangeable certificates that are outstanding at any given time, and the outstanding principal balances and notional amounts of these classes, will depend upon any related distributions of principal, as well as any exchanges that occur. Offered exchangeable REMIC certificates and exchangeable certificates in any combination may be exchanged only in the proportions shown in the governing documents. Holders of exchangeable certificates will be the beneficial owners of a proportionate interest in the certificates in the related combination group and will receive a proportionate share of the distributions on those certificates. With respect to any distribution date, the aggregate amount of principal and interest distributable to, and amount of principal and interest losses and interest shortfalls on, all of the exchangeable certificates in any exchangeable combination on such distribution date will be identical to the aggregate amount of principal and interest distributable to, and amount of principal and interest losses and interest shortfalls on, all of the exchangeable REMIC certificates in the related REMIC combination on such distribution date. Fitch believes the amount of credit enhancement available will be sufficient to cover credit losses. The ratings also reflect the high quality of the underlying collateral, the integrity of the legal and financial structures, and the primary servicing capabilities of Wells Fargo Bank, N.A. Group I and Group II consist of 2,025 fixed interest rate, first lien mortgage loans, with an original weighted average term to maturity of approximately 30 years. The aggregate unpaid principal balance of the pool is $1,102,366,207 as of the March 1, 2007, the cut-off date, and the average principal balance is $544,378. The weighted average original loan-to-value ratio (OLTV) of the loan pool is approximately 72.56%; 1.62% of the loans have an OLTV greater than 80%. The weighted average coupon of the mortgage loans is 6.345%, and the weighted average FICO score is 742. The states that represent the largest geographic concentration are California (32.03%), New York (6.21%), Virginia (5.58%), and Maryland (5.02%). All other states represent less than 5% of the outstanding balance of the pool. Group III consists of 419 fixed interest rate, first lien mortgage loans, with an original WAM of approximately 15 years. The aggregate unpaid principal balance of the pool is $252,087,787 as of March 1, 2007, the cut-off date, and the average principal balance is $601,641. The weighted average OLTV of the loan pool is approximately 61.98%; 0.51% of the loans have an OLTV greater than 80%. The WAC of the mortgage loans is 5.921%, and the weighted average FICO score is 748. The states that represent the largest geographic concentration are California (22.63%), Florida (7.87%), Colorado (5.94%), and Texas (5.57%). All other states represent less than 5% of the outstanding balance of the pool. None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. All of the mortgage loans were generally originated in conformity with underwriting standards of WFB. WFB sold the loans to Wells Fargo Asset Securities Corporation, a special purpose corporation, who deposited the loans into the trust. The trust issued the certificates in exchange for the mortgage loans. WFB will act as servicer and custodian, and HSBC Bank USA, National Association will act as trustee. Elections will be made to treat the trust as two separate real estate mortgage investment conduit for federal income tax purposes. WII COMPONENTS: Moody's Junks Rating on Proposed $64 Million Loan ----------------------------------------------------------------- Moody's Investors Service has assigned a B2 corporate family rating to WII Components, Inc., a B1 rating to the company's proposed $179 million senior secured credit facility, and a Caa1 rating to the company's proposed $64 million second lien term loan. WII's ratings consider the company's high leverage, anticipated low free cash flow generation relative to debt levels, and customer concentration. The ratings benefit from WII's variable cost structure based on the implementation of customer indexing agreements. Assigned: * WII Components, Inc.: -- $154 million Guaranteed Senior Secured Term Loan B due 2013, rated B1, LGD3, 37%; -- $25 million Guaranteed Senior Secured Revolver due 2013, rated B1, LGD3, 37%; -- $64 million Guaranteed Senior Secured Second Lien Term Loan, Caa1, LGD5, 89%; -- Corporate Family Rating, rated B2; and -- Probability of Default Rating, rated B2. The following ratings at WII Components, Inc. have been changed to refelct the interim financing and will be withdrawn upon the transactions close: -- Corporate Family Rating, downgraded to B2 from B1; -- Probability of Default Rating, downgraded to B2 from B1; and -- $120 million 10% Senior Notes due 2012, upgraded to B1, LGD3, 35% from B2, LGD4, 65%. The B2 CFR rating reflects the increased leverage that resulted from Olympus' acquisition of the company in January of this year. Moody's understands that the tender offer for the 10% senior notes due 2012 is likely to be successful based on the company's press release dated March 21, 2007. Nevertheless, Moody's will wait to withdraw the ratings until the transaction's close. The B2 corporate family rating considers the company's strong competitive position and the expectation that expense reduction and lower capital expenditures will help offset some of the pressure that is arising from the homebuilding and remodeling slowdown. The ratings on WII Components credit facilities are subject to the receipt of final documentation that is consistent with that relied upon by Moody's in its analysis. This rating action concludes the ratings review that began Dec. 18, 2006, and that was initiated as a result of the reported acquisition. The company's ratings or outlook would be pressured if debt to EBITDA increased to over 6x and if free cash flow to total debt was projected to decline below 3% annually. The company's ratings or outlook could improve if debt to EBITDA was to decline to below 4x and free cash flow to debt was to increase over 8% and be deemed to be sustainable. WII Components, Inc. is a leading manufacturer of wood cabinet doors, hardwood components, and engineered wood products in the U.S., selling primarily to kitchen and bath cabinet OEM's. Revenues for FYE 2006 were $286 million. XM SATELLITE: Keystone Autonics Files Patent Infringement Lawsuit ----------------------------------------------------------------- Texas-based Keystone Autonics filed late last month a patent infringement lawsuit against merger partners XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. with the U.S. District Court for the Eastern District of Texas, various news agencies report. Keystone seeks an injunction, damages and legal fees against XM and Sirius. The patent was awarded to George Hindman of Keystone Autonics on Jan. 16, 2007. It relates to an apparatus for input and output management of data in a mobile environment where access from a wireless signal is restricted based on a "persistent unique hardware identification," Baltimore Business Journal notes. According to The Street, Mr. Hindman also owned an earlier version of the patent, which is applicable to radios and CD players. As reported in the Troubled Company Reporter on Feb. 20, 2007, SIRIUS Satellite Radio Inc. and XM Satellite Radio Inc. have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion. About SIRIUS Satellite Radio New York-based SIRIUS Satellite Radio Inc. (NASDAQ: SIRI) -- http://www.sirius.com/-- delivers more than 125 channels of the best programming in all of radio. SIRIUS is the original and only home of 100% commercial free music channels in satellite radio, offering 69 music channels available nationwide. SIRIUS also delivers 65 channels of sports, news, talk, entertainment, traffic, weather, and data. SIRIUS is the Official Satellite Radio Partner and broadcasts live play-by-play games of the NFL, NBA, and NHL and. All SIRIUS programming is available for a monthly subscription fee of only US$12.95. SIRIUS products for the car, truck, home, RV, and boat are available in more than 25,000 retail locations, including Best Buy, Circuit City, Crutchfield, Costco, Target, Wal-Mart, Sam's Club, RadioShack, and at http://shop.sirius.com/ SIRIUS radios are offered in vehicles from Audi, BMW, Chrysler, Dodge, Ford, Infiniti, Jaguar, Jeep(R), Land Rover, Lexus, Lincoln-Mercury, Mazda, Mercedes-Benz, MINI, Nissan, Rolls Royce, Scion, Toyota, Porsche, Volkswagen and Volvo. Hertz also offers SIRIUS in its rental cars at major locations around the country. About XM Satellite Headquartered in Washington, D.C., XM Satellite Radio Inc. (Nasdaq: XMSR) -- http://www.xmradio.com/-- is a wholly owned subsidiary of XM Satellite Radio Holdings Inc. XM has been publicly traded on the NASDAQ exchange since Oct. 5, 1999. XM's 2007 lineup includes more than 170 digital channels of choice from coast to coast: commercial-free music channels, premier sports, news, talk, comedy, children's and entertainment programming; and the most advanced traffic and weather information. XM has broadcast facilities in New York and Nashville, and additional offices in Boca Raton, Fla.; Southfield, Mich.; and Yokohama, Japan. * * * XM Satellite Radio Holdings Inc. carries Standard & Poor's Long Term Foreign Issuer Credit rating of 'CCC+' and Long Term Local Issuer Credit rating of 'CCC+' effective Feb. 20, 2007. * Greenberg Traurig Shareholder Joins Israel Bonds' Board --------------------------------------------------------- Ned R. Nashban, a shareholder with the Boca Raton office of Greenberg Traurig, LLP, has been inducted as a member of State of Israel Bonds' National Board of Directors, its highest governance body. Mr. Nashban is a member of the President's Club, an honor society of men and women who purchase at least $100,000 annually in Israel Bonds to build and develop Israel's economy. He is also a former director of both the South Beach County Jewish Federation and the Jewish Community Foundation, a former trustee of B'nai Torah Congregation in Boca Raton, and a member of the North American Jewish Forum and the Israel Forum. "Mr. Nashban is an outstanding Jewish communal leader who has served with distinction since 1999 as Israel Bonds chairman in Palm Beach County and a member of our organization's National Campaign Cabinet," said Bonds President and CEO Joshua Matza. "At this critical period in Israel's history, I am confident his participation on the Board will help us achieve this year's goal of $1 billion in bond sales." At Greenberg Traurig, Mr. Nashban has a global practice in the areas of business law, commercial litigation, bankruptcy, creditor's rights and problem loan workouts. His practice includes counseling businesses and investors in business turnarounds, mergers and acquisitions, Chapter 11 proceedings, and creditor representation in similar situations. He works with clients worldwide, including clients from the United Kingdom, Brazil, Mexico, Canada and China. Mr. Nashban earned both his B.A. and J.D at the University of Wisconsin. He is a member of the Florida Bar, Bankruptcy Bar of South Florida, Palm Beach County Bar Association, American Bar Association and Commercial Law League of America. Mr. Nashban has visited Israel many times and has led several delegations for Israel Bonds. He and his wife have five children who have been to Israel with them. State of Israel Bonds is an international organization offering securities issued by the Israeli government. Since the first bond was sold in 1951, Israel Bonds has secured $25 billion in investment capital to develop Israel's economy and Israel has made every payment of principal and interest on time and in full. About Greenberg Traurig Greenberg Traurig, LLP -- http://www.gtlaw.com/-- is an international, full-service law firm with 1,600 attorneys and governmental affairs professionals in the U.S., Europe and Asia. The firm is ranked seventh on The American Lawyer's Am Law 100 listing of the largest law firms in the U.S., based on number of lawyers. Greenberg Traurig serves clients from offices in: Albany, New York; Amsterdam, The Netherlands; Atlanta, Georgia; Boca Raton, Florida; Boston, Massachusetts; Chicago, Illinois; Dallas, Texas; Denver, Colorado; Fort Lauderdale, Florida; Houston, Texas; Las Vegas, Nevada; Los Angeles, California; Miami, Florida; Morristown, New Jersey; New York City; Orange County, California; Orlando, Florida; Philadelphia, Pennsylvania; Phoenix, Arizona; Sacramento, California; Silicon Valley, California; Tallahassee, FL; Tampa Bay, Florida; Tokyo, Japan; Tysons Corner, Virginia; Washington, D.C.; West Palm Beach, Florida; Wilmington, Delaware; and Zurich, Switzerland. Additionally, the firm has strategic alliances with these independent law firms: Olswang, London and Brussels; Studio Santa Maria, Milan and Rome; and Hayabusa Kokusai Law Offices in Tokyo. * BOOK REVIEW: Admiralty and Maritime Law ----------------------------------------- Author: Robert Force, A.N. Yiannopoulos, and Martin Davies Publisher: Beard Books Paperback: 752 pages List Price: $149.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1587982900/internetbankrupt The book Admiralty and Maritime Law is written by Robert Force, A.N.Yiannopoulos, and Martin Davies. This two-volume casebook on Admiralty and Maritime law is a thorough and comprehensive work by experts at the Tulane Maritime Law Center. It is replete with case law, statutes, textual notes, questions and analysis on every aspect of this area of the law. Robert Force, Niels F. Johnsen Professor of Maritime Law and Director Emeritus, Maritime Law Center BS, 1955, LLB, 1958, Temple University; LLM, 1960, New York University Professor Force clerked for state and federal judges in Pennsylvania, practiced law in Philadelphia, and taught law at Indiana University before coming to Tulane in 1968. He teaches courses in admiralty and criminal law. Professor Force was named special master to the United States District Court for the Eastern District of Louisiana for a major case involving conditions in the Orleans Parish Prison. His current research activities are largely in the area of admiralty and maritime law, but he has co-authored the Louisiana Code of Evidence as well as numerous articles on maritime law. Professor Force and his colleagues, Professor Yiannopoulos and Professor Davies, have co-authored two course books used in Admiralty I and II. Professor Force is currently revising two well-known admiralty texts, Norris on The Law of Seamen I and Norris on The Law of Maritime Personal Injuries. Professor Force is director of the Maritime Law Center and holds the only endowed chair in maritime law in the United States. He was Acting Dean from 1977 through 1978. In 2001, Professor Force was honored by the Seamen's Church Institute as a maritime law legend and received its Distinguished Maritime Law Award. In 2002, he was honored by the President of Panama, who designated him a member of the Order de Vasco Nunez de Balboa. In addition, Force has authored well over 30 books on admiralty as well as criminal law and countless other essays and teaching materials. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Cherry A. Soriano-Baaclo, Melvin C. Tabao, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, 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 ***