/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/070425.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, April 25, 2007, Vol. 11, No. 97 Headlines ADESA INC: Reports Completed Investors' Purchase for $3.7 Million ADVANCED MICRO: Prices $2 Billion of 6% Senior Notes Offering ADVANCED MICRO: Weak First Quarter Cues Moody's Negative Outlook ADVANCED MICRO: Lower Profits Prompt S&P to Cut Credit Rating to B ADVANCED MICRO: Fitch Holds B Rating & Revises Outlook to Negative ALLIED HOLDINGS: Court Stretches Lease Decision Period to May 31 ALLIED HOLDINGS: Court Extends Removal Period to May 31 AMC ENTERTAINMENT: Loss Ups $2 Mil. in Restated 2006 Annual Report AMCON DISTRIBUTING: Mar. 31 Balance Sheet Upside-Down by $1.1 Mil. AMEREN CORP: S&P Cuts Units' Corp. Credit Ratings from BBB- to BB AMERICAN CASINO: Moody's Revises Outlook to Developing from Stable AMERICAN CASINO: $1.3BB Whitehall Deal Cues S&P's Negative Watch AMERICAN TOWER: S&P Puts BB+ Rating on S. 2007-1 Class F Certs. AMERIQUEST MORTGAGE: Poor Performance Cues S&P's Neg. Credit Watch AMTROL INC: Taps Ernst & Young LLP as Accountant and Auditor APEX TECHNOLOGY: Involuntary Chapter 11 Case Summary ARTISTDIRECT INC: March 31 Balance Sheet Upside-Down by $18.1 Mil. ASARCO LLC: El Paso Residents Oppose Reopening of Asarco Smelter ASSOCIATED BRANDS: Subsidiaries Default Under Bank Credit Pacts AUBURN MEMORIAL: Files for Bankruptcy in New York AUBURN MEMORIAL: Voluntary Chapter 11 Case Summary AUCTENTIA SLU: Chapter 15 Petition Summary BAYONNE MEDICAL: Files for Bankruptcy Protection in New Jersey BAYONNE MEDICAL: Organizational Meeting Scheduled for May 2 BEAR STEARNS: Moody's Holds Low-B Ratings on Six Certificates BERRY PLASTICS: Merger Deal Prompts S&P to Hold Junk Credit Rating BISYS GROUP: Earns $14.3 Million in Quarter Ending December 31 BON-TON STORES: Earns $88.4 Million in 4th Quarter Ended Feb. 3 BUCYRUS INT'L: Moody's Rates $825 Million Secured Term Loan at Ba3 CADMUS COMMS: Moody's Withdraws Ba3 Corporate Family Rating CENVEO CORP: Moody's Affirms B1 Corporate Family Rating CET SERVICES: Recurring Losses Prompt AMEX to Delist Common Stock CHARMING SHOPPES: S&P Rates Proposed $250 Mil. Senior Bonds at BB- COMPLETE RETREATS: Court Extends Plan-Filing Period to May 31 COMPLETE RETREATS: Wants Removal of Action Period Moved to July 19 CONSECO INC: Edward Bonach to Succeed Eugene Bullis as CFO CRAFT NO. 1: Moody's Junks Rating on Class C and D Notes CREDIT SUISSE: Fitch Junks Rating on Four Class Certificates CRUM & FORSTER: S&P Assigns BB Rating on $300 Mil. Senior Notes CVS CORP: Balks at Backdating Charges Against 2 Caremark Directors DAIMLERCHRYSLER AG: Unions Remain Opposed to Chrysler Sale DELUXE ENTERTAINMENT: S&P Rates Proposed $845MM Facilities at 'B' DOUBLECLICK INC: Moody's Withdraws Ratings on Google's Offer ENERGY PARTNERS: Closes Private Placement of $450MM Senior Notes EPIX PHARMACEUTICALS: Dec. 31 Balance Sheet Upside-Down by $32MM EXTENDICARE REAL: Moody's Puts Corporate Family Rating at B1 FINANCE AMERICA: Fitch Cuts Rating on Class M-9 Certs. to BB- FREMONT HOME: DBRS Cuts Rating on S. 2006-B Cl. SL-B1 Certs. to B GE COMMERCIAL: Moody's Holds Low-B Ratings on Nine Certificates GLOBAL CREDIT: S&P Cuts Rating on Global Preferred Shares to BB GOODYEAR TIRE: Closes Amendment & Restatement on Credit Facilities GS MORTGAGE: Fitch Holds Low-B Ratings on Six Loan Classes HANCOCK FABRICS: Court Gives Final Nod on $105 Mil. DIP Financing HANCOCK FABRICS: Panel Wants Cooley Godward as Lead Counsel HAYES LEMMERZ: Distributes Subscription Rights in $180MM Offering HEARTLAND INC: Meyler & Company Raises Going Concern Doubt HERCULES INC: High Court Sustains $119 Mil. Cleanup Costs Judgment INTEGRAL NUCLEAR: Organizational Meeting Scheduled for Friday INTEGRATED SURGICAL: Most & Company Raises Going Concern Doubt INTERPOOL INC: Buyout Deal Cues S&P to Hold Negative CreditWatch IPCS INC: Incurs $46 Million Net Loss in Year Ended December 31 J.P. MORGAN: Fitch Lifts Rating on $7.8MM Class K Certs. to BB+ J.P. MORGAN: Moody's Holds Low-B Ratings on Eight Certificates JO-ANN STORES: Posts $1.9 Million Net Loss in Year Ended Feb. 3 LENAPE HEIGHTS: Case Summary & 19 Largest Unsecured Creditors LENOX GROUP: Completes Refinancing of $275 Mil. Revolving Credit MACDERMID INC: Highly Leveraged Buyout Cues S&P to Lower Ratings MARCAL PAPER: Court Extends Exclusive Plan Filing Date to July 28 MARCAL PAPER: Has Until June 28 to Make Lease-Related Decisions MERRILL LYNCH: Moody's Affirms Low-B Ratings on Six Certificates MESA GLOBAL: S&P Cuts Rating on S. 2001-5 Class M-2 Certs. to D MESA TRUST: Moody's Cuts Rating on Class B Certificates to Caa3 MESABA AVIATION: Emerges from Bankruptcy as Northwest Subsidiary MIRANT CORP: Court OKs Bowline to Assume $200MM Insurance Policy MIRANT CORP: Selling Caribbean Business to Marubeni for $1.082BB MOBILE MINI: S&P Rates $125 Million Senior Unsecured Notes at BB- NEW CENTURY: Board of Directors Adopts Key Employee Incentive Plan NEW CENTURY: Court OKs Bidding Protocol for Sale of 2,000 Loans NORTHWEST AIRLINES: Completes Acquisition of Mesaba Airlines NVF COMPANY: Disclosure Statement Hearing Scheduled Tomorrow OMNOVA SOLUTIONS: Commences $165MM Sr. Notes Cash Tender Offering ORECK CORP: S&P Rates Proposed $150 Mil. Term Loan Facility at B- OREGON IMAGING: Case Summary & Three Largest Unsecured Creditors PARADISE MUSIC: Tinter Scheifley Raises Going Concern Doubt PIONEER NATURAL: Fitch Revises Outlook to Negative from Stable PIONEER NATURAL: Planned Partnerships Cue S&P to Affirm BB+ Rating RECKSON OPERATING: S&P Lowers Rating on Sr. Unsecured Notes to BB+ RELIANT ENERGY: Moody's Changes SGL Rating to SGL-2 from SGL-3 RESMAE MORTGAGE: Disclosure Statement Hearing Set for Friday RESMAE MORTGAGE: Court Approves Three Loan Purchase Agreements RIVIERA TOOL: AMEX Subjects Common Stock Delisting Effective May 1 SACO I TRUST: Moody's Puts Ratings Under Review and May Downgrade SEA CONTAINERS: Selects AP Services as Crisis Managers SEA CONTAINERS: Wants to Implement Non-Insider Retention Plan SHUMATE INDUSTRIES: Malone & Bailey Raises Going Concern Doubt SIX FLAGS: Obtains New $800MM Tranche B & $300MM Credit Facilities SIX FLAGS: Moody's Rates Proposed $1.1 Billion Facility at Ba3 STEWART HOLDINGS: Case Summary & Six Largest Unsecured Creditors STRUCTURED ASSET: Fitch Junks Rating on Two Class Certificates STRUCTURED ASSET: Fitch Cuts Rating on Eight Certificates to BB+ STRUCTURED ASSET: Fitch Junks Rating on 2001-BC5 Class M2 Certs. TELEPHONE & DATA: Delayed Filing Cues S&P to Lower Ratings to BB+ TERWIN MORTGAGE: Moody's Junks Rating on 2 Securitization Classes TERWIN MORTGAGE: Poor Credit Support Cues S&P to Cut Cert. Ratings TRIBUNE COMPANY: Moody's Rates Proposed Senior Facilities at Ba2 TUESDAY MORNING: Amends Existing Revolving Credit Facility US ENERGY: Faces Nasdaq Delisting Due to Late Form 10-K Filing VENOCO INC: Moody's Junks Rating on Proposed $500 Million Loan VENOCO INC: S&P Puts B- Rating on Proposed $500 Million Facility VONAGE HOLDINGS: Appellate Court Okays Sign Up of New Customers WELLS FARGO: DBRS Puts BB Rating on $7.4 Mil. Series 2007-2 Certs. WYNN RESORTS: Posts $55 Mil. Net Loss in Fourth Qtr. Ended Dec. 31 YALE MORTGAGE: Moody's Rates Class B-2 Certificates at Ba2 * Thacher Proffitt Welcomes Back Lynn Bodkin as Bankruptcy Counsel * Stephen D. Susman Named Commercial Litigation Lawyer of the Year * Crowell & Moring Adds 3 Bankr. Lawyers to Fin'l Services Team * Upcoming Meetings, Conferences and Seminars ********* ADESA INC: Reports Completed Investors' Purchase for $3.7 Million ----------------------------------------------------------------- ADESA Inc. disclosed the closing of the acquisition by a group of private equity funds consisting of Kelso & Company, GS Capital Partners, part of the principal investment area of Goldman Sachs, VALUEACT Capital and Parthenon Capital. The total transaction value, including the contribution of IAAI, the assumption or refinancing of approximately $700 million of debt and the payment of related fees and expenses, is approximately $3.7 billion. ADESA stockholders will receive $27.85 per share in cash. As part of the transaction, Insurance Auto Auctions Inc. was contributed to the surviving corporation. Prior to the transaction, Kelso & Company, Parthenon Capital and certain members of its senior management owned IAAI. "With the closing of the deal now behind us, Michael B. Goldberg, managing director of Kelso & Company, said. "The company looks forward to entering the next stage of the company's partnership with ADESA and IAAI. Both ADESA and IAAI have built their organizations into leading competitors in their respective spaces, and the equity sponsors will remain committed to providing the resources necessary to help grow the combined company." About Insurance Auto Auctions Founded in 1982, Insurance Auto Auctions Inc. -- http://www.iaai.com/--is into automotive total loss and specialty salvage services in the United States, it provides insurance companies with cost-effective, turn-key solutions to process and sell total-loss and recovered-theft vehicles. The company currently has 95 sites across the United States. About Kelso & Company Founded in 1971, Kelso & Company -- http://www.kelso.com/-- is one of the oldest and most established firms specializing in private equity investing, has been involved in leveraged acquisitions both as principal and as financial advisor. Kelso makes equity investments on behalf of investment partnerships, which it manages. Since 1980, Kelso has invested in more than 90 companies. About Goldman Sachs Founded in 1869, Goldman Sachs -- http://www.gs.com/pia.com/-- is one of the oldest and largest investment banking firms. Goldman Sachs is also a global leader in private corporate equity and mezzanine investing. Established in 1991, the GS Capital Partners Funds are part of the firm's Principal Investment Area in the Merchant Banking Division. Since 1986, Goldman Sachs' Principal Investment Area has formed 13 investment vehicles aggregating $56 billion of capital to date. About VALUEACT Capital(R) VALUEACT Capital(R) seeks to make strategic-block value investments in a limited number of companies. With offices in San Francisco and Boston and the company has more than $4.8 billion in investments. The Principals have demonstrated expertise in sourcing investments in companies they believe to be fundamentally undervalued, and then working with management and/or the company's board to implement strategies that generate superior returns on invested capital. VALUEACT CAPITAL concentrates primarily on acquiring significant ownership stakes in publicly traded companies, and a select number of control investments, through both open-market purchases and negotiated transactions. About Parthenon Capital Parthenon Capital -- http://www.parthenoncapital.com/ --is a private equity firm with offices in Boston and San Francisco. The firm provides capital and strategic resources to growing middle market companies for acquisitions, internal growth strategies and shareholder liquidity. The firm invests in a wide variety of industries with particular expertise in Business Services, Financial Services and Healthcare. About ADESA Inc. Headquartered in Carmel, Indiana, ADESA, Inc. (NYSE: KAR) -- http://www.adesainc.com/-- is a wholesaler of vehicle auctions and used vehicle dealer floor plan financing. The company's operations span North America with 54 ADESA used vehicle auction sites, 42 impact salvage vehicle auction sites and 85 AFC loan production offices. * * * As reported in the Troubled Company Reporter on Dec. 28, 2006, Standard & Poor's Ratings Services placed its 'BB' corporate credit and debt ratings on ADESA, Inc. on CreditWatch with negative implications. At the same time, S&P placed the 'B' corporate credit and debt ratings on Insurance Auto Auctions, Inc. on CreditWatch with positive implications. The ratings actions follow the announcement that ADESA and IAAI have entered into a definitive merger agreement to be acquired by a group of private equity funds consisting of Kelso & Company, GS Capital Partners, VALUEACT Capital, and Parthenon Capital in a transaction valued at $3.7 billion. ADVANCED MICRO: Prices $2 Billion of 6% Senior Notes Offering ------------------------------------------------------------- Advanced Micro Devices Inc. has priced $2 billion aggregate principal amount of 6% Convertible Senior Notes due 2015 in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. AMD granted to the initial purchasers a 30-day option to purchase up to $200 million aggregate principal amount of additional notes to cover over-allotments. Interest on the notes will be paid semiannually on May 1 and November 1 at a rate of 6% per year. Upon the occurrence of certain events, the notes will be convertible into cash up to the principal amount, and if applicable, shares of common stock in respect of any conversion value above the principal amount, based on an initial conversion rate of 35.6125 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of $28.08 per share. This initial conversion price represents a premium of 100% relative to the last reported sale price on April 23, 2007 of AMD's common stock of $14.04 per share. Holders of the notes may require AMD to repurchase the notes for cash equal to 100% of the principal amount to be repurchased plus accrued and unpaid interest upon the occurrence of certain designated events. In connection with the offering, AMD entered into a capped call transaction which is intended to reduce the potential dilution to AMD's common stockholders upon any conversion of the notes. The capped call transaction will have a strike price that matches the conversion price of the convertible notes and the cap price in the capped call transaction will be $42.12 per share. AMD has been advised that, in connection with establishing the capped call transaction, the counterparty or its affiliates expect to enter into various derivative transactions with respect to AMD's common stock and purchase AMD's common stock in secondary market transactions concurrently with or shortly after the pricing of the notes. The counterparty or its affiliates may also enter into or unwind various derivative transactions with respect to AMD's common stock and purchase or sell AMD's common stock in secondary market transactions following the pricing of the notes. AMD estimates that the net proceeds from the offering will e approximately $1,972 million after deducting discounts, commissions and estimated offering expenses. AMD intends to use a portion of the net proceeds of the offering to pay the cost of the capped call transaction. If the initial purchasers exercise their option to purchase additional notes, AMD expects to use a portion of the net proceeds from the sale of additional notes to enter into an additional capped call transaction. AMD expects to use at least $500 million of the remaining net proceeds of the offering to repay a portion of the term loan AMD entered into with Morgan Stanley Senior Funding, Inc. to finance a portion of the purchase price of, and expenses related to, the acquisition of ATI Technologies Inc. AMD expects to use any amounts not applied to the repayment of the term loan for general corporate purposes, including working capital and capital expenditures. About Advanced Micro Based in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- designs and produces innovative microprocessor and graphics and media solutions for the computer, communications, and consumer electronics industries. The company has corporate locations in Sunnyvale, California, Austin, Texas, and Markham, Ontario, and global operations and manufacturing facilities in the United States, Europe, Japan, and Asia. ADVANCED MICRO: Weak First Quarter Cues Moody's Negative Outlook ---------------------------------------------------------------- Moody's Investors Service changed the outlook for Advanced Micro Devices, Inc. to negative from stable. The action reflects AMD's reduced financial flexibility following the company's weaker than expected operating performance in the first quarter of 2007 and Moody's expectations that the next couple of quarters will remain very challenging even though the company plans to reduce costs and preserve liquidity while at the same time rolling out its new product platform dubbed Barcelona in the third quarter of 2007. AMD's ratings could come under downward pressure to the extent that product launches are delayed, if it experiences operating losses in the second half of 2007, or if cash levels fall below $1 billion. Alternatively, a stabilization of its ratings outlook could emerge if AMD is able to make steady progress towards sustainable free cash flow from operations, which would enhance financial flexibility that is critical in the capital intensive and volatile microprocessor segment. The company ended the first quarter of 2007 with $1.17 billion of cash, slightly above the minimum level of $1 billion that Moody's had previously outlined would be a trigger to downwards rating pressure. Moody's notes that the company benefited in the first quarter from very effective working capital management, particularly the collection of trade receivables that represented nearly a $500 million source of cash, which we do not believe will be repeated over the next few quarters. Absent this success, Moody's believes the company's cash balances would have fallen below $1 billion. While the company's position in the server, desktop and notebook business segments remains good, it lost an estimated 5% of share in the overall microprocessor unit market share in the first quarter after having reached an all time high of about 25% as of year end 2006. Although the company believes it is on track to begin shipping products under its new product platform known as Barcelona in the third quarter of 2007 for the server, desktop, and mobile markets using 65 nanometer process technology, AMD remains about one year behind Intel in introducing 45 nanometer product. To the extent that AMD is able to ship increasing volumes of this more cost effective product, it would help to improve the company's gross margins, however this potential benefit could be muted as Intel begins to ship 45 nanometer product in the fourth quarter of 2007. Moody's recognizes that while the process technology node by itself is not the sole determinant of product competitiveness, it does create differences in manufacturing costs and the ability to be aggressive in pricing. In AMD's case, Moody's believes this represents continued exposure to aggressive pricing actions by Intel that could continue to result in operating losses and the use of cash. The exposure, while not new, is more sensitive given the company's reduced cash balances and the likelihood in Moody's view that AMD will continue to consume cash over the near term. Positively, management is implementing urgent efforts to reduce its cost structure and to improve the company's overall operating efficiency through a combination of hiring restraints, more rigid discretionary cost controls, and a slight push out of its capital expenditure program. Specifically: (1) the company has reduced its capital spending plan in 2007 from $2.5 billion to $2.0 billion and (2) the company is effectively freezing new hires except in very selected areas, with the expectation that operating expenses will decline by approximately $100 million annually and headcount will decline by approximately 500 or 3% by year end 2007. While these actions are moderately helpful in the near term, any delay in ramping efficient production volumes of near-leading edge microprocessor product would negatively impact the company's overall scale of operations, which is a critical success factor given the highly capital intensive nature of the business. As a result, Moody's anticipates that AMD will be more challenged than previously anticipated to internally fund the build out of its 300 millimeter production capacity, which is essential to AMD keeping pace with manufacturing cost reduction and process node advances, while at the same time maintaining strong balance sheet liquidity and reducing debt levels. As Moody's commented in previous reports, to the extent that secured debt declines to below a certain level, the security package benefiting the $390 million senior note holders would be released. Absent any other change, such collateral release would cause the then unsecured senior note rating to decline by up to two notches from its existing Ba3 level, reflecting its more junior position in AMD's capital structure. Advanced Micro Devices, Inc., headquartered in Sunnyvale, California, designs and manufactures microprocessors and other semiconductor products. ADVANCED MICRO: Lower Profits Prompt S&P to Cut Credit Rating to B ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Advanced Micro Devices Inc. to 'B' from 'B+'. The outlook is negative. "The action reflects recent subpar execution of its business plans, as well as marketplace challenges which were significantly more severe than had previously been expected," said Standard & Poor's credit analyst Bruce Hyman. This resulted in substantially lower profitability and cash flows, expected to continue over the intermediate term. Ratings on AMD continue to reflect aggressive competitive conditions, highly volatile operating performance and profitability, and ongoing substantially negative free cash flows, in part offset by a generally improved product line, anticipated adequate near-term liquidity, and expectations that a planned change in business model will reduce the company's asset intensity and capital expenditures. Sunnyvale, California-based AMD is the second-largest supplier of microprocessors and is a major supplier of other chips for personal computers and consumer electronics. AMD did not balance anticipated growth in sales to brand-name PC makers against commitments to support its distributors in the second half of 2006 and into 2007. Branded PC sales proved to be below expectations, while subsequent price discounts to the distributors were not able to recapture the company's share loss in that market, which may take time to recover. Resulting March 2007 quarter revenues were $1.2 billion, well below initial expectations of $1.6 billion-$1.7 billion, and also well below the $2.0 billion reported in the year-ago quarter, pro forma for the acquisition of ATI. As OEM and distributor inventories rebalance in coming months, the company expects revenues in the June 2007 quarter to be flat to slightly above March levels. AMD's March 2007 quarter EBITDA was negative $144 million, versus pro forma $500 million in the year-ago quarter. The negative outlook reflects the significant challenges that AMD faces in recovering its market position, restoring its profitability from currently depressed levels, and stabilizing its cash flows notwithstanding a continued technology lag, while financial metrics are expected to be quite weak for the rating over the intermediate term. If the company is not able to execute those plans, the ratings could be lowered by early 2008. The outlook could be revised to stable over the intermediate term should the company's product plans and marketplace performance result in a rebound of EBITDA that supports the company's debt levels, and as progress is made on its asset-light manufacturing strategy. ADVANCED MICRO: Fitch Holds B Rating & Revises Outlook to Negative ------------------------------------------------------------------ Fitch has changed the Rating Outlook on Advanced Micro Devices Inc. to Negative and affirmed these ratings: -- Issuer Default Rating at 'B'; and -- Senior Secured Term Loan B Facility at 'BB-/RR2'. Fitch has downgraded the 7.75% senior notes due 2014 to 'CCC+/RR6' from 'BB-/RR2', due to potential loss of security and lower recovery prospects, as the indenture and collateral trust agreement permit AMD to remove the collateral securing this tranche of debt. In addition, Fitch expects to rate AMD's $2.0 billion 6% senior unsecured convertible notes due 2015, issued today under Rule 144A, at 'CCC+/RR6'. Initial purchasers also have a 30 day option to purchase up to $200 million of additional notes. The company plans to use the net proceeds to repay at least $500 million of outstanding Term Loan B balances, fund the purchase of a capped call option intended to limit potential dilution, and for general corporate purposes. Fitch's actions affect approximately $5.3 billion of pro forma total debt, assuming AMD reduces $500 million of the Term Loan B. The revision of the Outlook reflects Fitch's expectations that AMD's operating performance will remain challenged over the intermediate-term. AMD's profitability continues to be pressured by meaningfully lower than anticipated microprocessor unit shipments and intensified competitive pressure from Intel Corp., driven by a combination of Intel's manufacturing advantage and strong operating momentum following its product portfolio refresh in the third quarter of 2006. As a result, AMD's revenues declined more than 30% sequentially and gross profits dropped 46% to a Fitch-estimated 31% for the seasonally weak first quarter ended March 31, 2007 from 40% for the fourth quarter of 2006. While AMD's planned cost reduction efforts (headcount reductions, facility sales, and lower discretionary spending) should yield modestly positive results throughout the year, Fitch believes solid market acceptance of AMD's refreshed product portfolio in the second half of 2007 and realization of strong unit shipment from recent design wins with previously under-penetrated original equipment manufacturers will be critical to the company ability to internally fund a significant portion of its substantial ongoing capital spending and investments in research and development. Therefore, a lack of meaningful improvement in profitability and additional market share losses could result in negative rating actions. AMD's liquidity is adequate and has improved from the $2.0 senior unsecured convertible debt placement, which should increase cash balances to approximately $2.7 billion from $1.2 billion as of March 31, 2007 (pro forma for the anticipated $500 million reduction in Term Loan B balances). Fitch believes AMD's plans to reduce capital expenditures by $500 million in 2007, monetize its remaining investment in Spansion Inc., sell 200mm manufacturing equipment, and collect on grants and subsidies associated with its investments in Dresden, Germany throughout the year will enable AMD to maintain adequate liquidity through the near-term. Longer- term, while recognizing the company's need to continue upgrading its manufacturing capabilities to compete with Intel's lower unit cost structure and reliably serve a growing OEM customer base, Fitch believes the company is likely to curtail capital spending further, potentially by pursuing a more asset-light manufacturing model. Despite the aforementioned revenue decline during the first quarter and a likely non-recurring significant reduction in accounts receivable balances, AMD has experienced more rapid than anticipated erosion of financial flexibility as the company burned approximately $375 million cash for the quarter. While Fitch continues to anticipate negative free cash flow for 2007, AMD's failure to curb significant cash burn over the next several quarters could result in further negative rating actions. The Recovery Ratings continue to reflect Fitch's belief that AMD would be reorganized rather than liquidated in a bankruptcy scenario, given Fitch's estimates that AMD's current reorganization value of $2.3 billion is meaningfully higher than its projected liquidation value of $1.2 billion. In estimating reorganization, Fitch assumes a 5 times (x) multiple and 50% stress to AMD's EBITDA for the latest 12 months ended March 31, 2007 of approximately $933 million (pro forma for the ATI acquisition). Fitch arrives at an adjusted reorganization value of $2.0 billion after subtracting administrative and cooperative claims. Based upon these assumptions, the senior secured debt, including the $1.7 billion Term Loan B (pro forma for the assumed repayment of $500 million) recovers approximately 68%. While this results in an 'RR3' (51-70% recovery) rating in Fitch's recovery model, Fitch considers the potential for incremental Term Loan reductions and improved profitability, thereby increasing adjusted reorganization value going forward and, therefore, maintains an 'RR2' rating on the Term Loan B. Minimal recovery would be available for the senior unsecured debt, including the $390 million 7.75% senior notes due 2014. As a result, the estimated 5% recovery results in an 'RR6' rating for all of the senior unsecured debt. The ratings continue to be supported by AMD's: -- meaningfully higher share of the MPU market, which Fitch believes remains at approximately 20% versus less than 10% historically; -- expectations for the ability to provide platform products to the marketplace and additional revenue growth opportunities from the acquisition of ATI Technologies; and -- strengthened and expanding relationships with original equipment manufacturers, including Dell Inc. (rated 'A/F1' on Rating Watch Negative by Fitch). Ratings concerns center on: -- significant product technology risk associated with the MPU market, potentially resulting in meaningful share shifts between AMD and Intel going forward, as well as continued cyclical operating results; -- Intel's meaningful manufacturing technology advantage over AMD, driven by capital expenditures consistently in excess of $5 billion, forcing AMD to aggressively upgrade manufacturing facilities; and -- AMD's limited financial flexibility due to high debt levels coupled with significant spending requirements on capital equipment, R&D investments, and marketing initiatives. Pro forma for the aforementioned debt issuance and anticipated reduction of the Term Loan B, total debt was $5.3 billion at March 31, 2007 and consisted of: i) $893 million Fab 36 Secured Term Loan due 2011 ii) $1.7 billion senior secured Term Loan B facility due 2013; iii) $2.0 billion senior unsecured convertible notes due 2015; iv) $390 million senior unsecured notes due 2014; and v) other debt, including capital leases, of approximately $320 million. ALLIED HOLDINGS: Court Stretches Lease Decision Period to May 31 ---------------------------------------------------------------- The Honorable Ray Mullins of the U.S. Bankruptcy Court for the Northern District of Georgia extended, until May 31, 2007, the period wherein Allied Holdings, Inc. and its debtor-affiliates can assume or reject all of their non-residential real property leases. The Debtors continue to be lessees to 51 non-residential real property leases, Vivieon E. Kelley, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, disclosed. Ms. Kelley told Judge Mullins that cause exists to extend the time for the Debtors to assume or reject the Leases because the Debtors: (1) have paid and will continue to pay all postpetition lease obligations under the Leases; (2) have been diligent in their efforts to reject or assume nonresidential real property leases which, in their business judgment, needed to be rejected and assumed; (3) need additional time to determine whether the Leases should be assumed or rejected given that, in their business judgment, none of the Leases should be rejected or assumed at this point in time; and (4) have filed a joint plan of reorganization and accompanying disclosure statement on March 2, 2007, which will address the ultimate treatment of the Leases. A list of the 51 Leases is available for free at: http://researcharchives.com/t/s?1dd6 About Allied Holdings Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. The Debtors' exclusive period to file a chapter 11 plan expires on April 25, 2007. (Allied Holdings Bankruptcy News, Issue No. 43 and 45; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) Plan Update On March 2, 2007, the Debtors, Yucaipa and Teamsters filed a Co- Sponsored Plan and Disclosure Statement explaining that plan. On April 2, 2007, they filed an Amended Plan and on April 6 filed a Second Amended Plan. The Court approved the adequacy of the disclosure statement explaining the 2nd Amended Plan on April 6, 2007. The Court is set to consider confirming the Co- Sponsored Plan on May 9, 2007. ALLIED HOLDINGS: Court Extends Removal Period to May 31 ------------------------------------------------------- The Honorable Ray Mullins of the U.S. Bankruptcy Court for the Northern District of Georgia extended, until May 31, 2007, the period wherein Allied Holdings, Inc. and its debtor-affiliates can remove any causes of action. Vivieon E. Kelley, Esq., at Troutman Sanders LLP, in Atlanta, Georgia, related that the Debtors sought to remove prepetition claims or causes of actions that are stayed pursuant to Section 362 of the Bankruptcy Code on the later of March 16, 2007, or 30 days after entry of an order terminating the automatic stay. At the outset of the Chapter 11 cases, the Debtors focused on, among others, stabilizing their businesses following the filing, consummating their debtor-in-possession financing facility, retaining professionals to assist them in their cases, and negotiating with various parties-in-interest. Since that time, the Debtors have expended energy rejecting burdensome leases and executory contracts and addressing matters concerning organized labor, Ms. Kelley notes. The Debtors filed a joint plan of reorganization and a disclosure statement on March 2, 2007, that will effect the ultimate treatment of the Causes of Action. Hence, the Debtors believe that the most prudent and efficient course of action is to seek an extension of their Removal Period. According to Ms. Kelley, enlarging the Removal Period will: -- provide the Debtors an opportunity to make informed decisions concerning the removal of the Causes of Action; -- assure that the Debtors do not forfeit any of their rights under Section 1452 of Title 28 of the United States Code; -- permit the Debtors to continue focusing their time and energy on reorganizing; and -- not prejudice the rights of other parties to the Causes of Action because, in the event of removal, any party to a removed action may seek to have the action remanded pursuant to Section 1452(b). About Allied Holdings Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represents the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provides the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provides financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. The Debtors' exclusive period to file a chapter 11 plan expires on April 25, 2007. (Allied Holdings Bankruptcy News, Issue No. 43 and 45; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) Plan Update On March 2, 2007, the Debtors, Yucaipa and Teamsters filed a Co- Sponsored Plan and Disclosure Statement explaining that plan. On April 2, 2007, they filed an Amended Plan and on April 6 filed a Second Amended Plan. The Court approved the adequacy of the disclosure statement explaining the 2nd Amended Plan on April 6, 2007. The Court is set to consider confirming the Co- Sponsored Plan on May 9, 2007. AMC ENTERTAINMENT: Loss Ups $2 Mil. in Restated 2006 Annual Report ------------------------------------------------------------------ AMC Entertainment Inc. restated its financial statements for the year ended March 30, 2006, to record the net effect of the adjustments of the stock options awards that the company granted on Dec. 23, 2004. The net effects of the adjustments recorded to restate the financial statements for the year ended March 30, 2006, include: -- a decrease in other long-term liabilities by $425,000; -- increase in additional paid-in capital by $2,539,000; and -- increase in net loss by $2,114,000. The company, however, stated that the impact of the adjustments for the fiscal year ended March 31, 2005, is not material, and was recorded as part of the 2006 restatement adjustments. The company's restated report for the 52 weeks ended March 30, 2006, reflects these changes as opposed to the previously filed annual report for the same period: -- other general and administrative expenses increased from $38,041,000 to $39,984,000; -- total costs and expenses decreased from $1,710,184,000 to $1,668,017,000; -- loss from continuing operations before income taxes decreased from $96,653,000 to $96,185,000; -- income tax provision decreased from $69,700,000 to $69,400,000; -- other long-term liabilities decreased from $417,018,000 to $416,593,000; -- total liabilities decreased from $3,159,106,000 to $3,158,681,000; -- additional paid-in capital increased from $1,477,667,000 to $1,480,206,000; -- accumulated deficit increased from $223,525,000 to $225,639,000; and -- total stockholders' equity increased from $1,243,484,000 to $1,243,909,000. Stock Option Awards On Dec.23, 2004, certain members of management were granted options to purchase Marquee Holdings Inc. common stock. Due to the existence of certain put options at the time the stock options were granted, the company determined that the stock options for two members of management should be recorded as liabilities with changes in the estimated fair value of those options recorded through a charge or credit to the statement of operations. During February 2007, the company determined that the options held by one member of management that were previously recorded as a liability should have been recorded as a component of permanent equity because Marquee Holdings does not intend to exercise its call option on the vested options and since the put option on the vested options is not within the employee's control. Accordingly, the company has restated its financial statements for the year ended March 30, 2006, to reverse the previously recorded mark to market effects relating to the stock options awarded to this member of management that had been incorrectly classified as liabilities and to reflect these options as additional paid-in capital, rather than as liabilities. There was no impact on net cash provided by operating activities as a result of the above- mentioned items. A full-text copy of the company's restated annual report for the year ended March 30, 2006, is available for free at http://ResearchArchives.com/t/s?1dbe About AMC Entertainment Headquartered in Kansas City, Mo., AMC Entertainment Inc. -- http://www.amctheatres.com/-- is a theatrical exhibition company with interests in about 382 theatres with 5,340 screens as of Dec. 28, 2006. About 87 percent of the company's theatres are located in the U.S. and Canada, and 13 percent in Mexico, Argentina, Brazil, Chile, Uruguay, Hong Kong, France, and the U.K. * * * As reported in the Troubled Company Reporter on April 1, 2007, Standard & Poor's Ratings Services affirmed its ratings, including the 'B' corporate credit ratings, on AMC Entertainment Inc. and its parent company, Marquee Holdings Inc., and removed them from CreditWatch. The ratings were originally placed on CreditWatch with negative implications on July 12, 2006, based on expectations for continuing high leverage. AMCON DISTRIBUTING: Mar. 31 Balance Sheet Upside-Down by $1.1 Mil. ------------------------------------------------------------------ AMCON Distributing Company's balance sheet at March 31, 2007, showed $87.1 million in total assets, $81.9 million in total liabilities, and $6.3 million in cumulative, convertible preferred stock, resulting in a $1.1 million in total shareholders' deficit. AMCON reported a net loss of $407,005 on sales of $201.2 million for the second quarter ended March 31, 2007, compared with a net loss of $499,812 on sales of $195.8 million for the same period ended March 31, 2006. For the first half of fiscal 2007, AMCON reported net income of $868,798 on sales of $410.5 million, compared with a net loss of $1.7 million on sales of $394 million for the first half of fiscal 2006. Operating income was $3 million for the first half of fiscal 2007, compared with operating income of $2.5 million for the same period of fiscal 2006. "Our two core businesses [wholesale distribution and retail health food] are performing in line with our expectations," said Christopher Atayan, AMCON's chief executive officer. "However, we continue to devote considerable resources towards residual litigation in connection with our discontinued operations." "AMCON accounts for its inventory using the LIFO cost flow assumption," said Andrew Plummer, AMCON's chief financial officer. "Our LIFO inventory valuation is driven by changes in the producer price index as published by the Bureau of Labor Statistics. During the second quarter of fiscal 2007, the increases in the applicable producer price index resulted in a $736,000 charge to earnings in our wholesale segment versus $49,000 in the prior year's quarter and in the retail health food segment, the charge was $145,000 versus a benefit of $34,000 in the same period for the prior year. Additionally, our litigation related expenses are accounted for in continuing operations. During the second quarter of fiscal 2007 we incurred approximately $1 million of legal and professional costs," said Plummer. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2007, are available for free at http://researcharchives.com/t/s?1dc6 Litigation Involving Discontinued Operations In fiscal 2006, company management decided to cease operations of its consolidated subsidiary, Trinity Springs Inc. (TSI), due to recurring losses, lack of capital resources, and the litigation involving the company and TSI regarding shareholder approval of the purchase of substantially all of the assets of Trinity Springs Ltd. (which later changed its name to Crystal Paradise Holdings Inc. (CPH). That litigation has been settled and the presiding Court has approved the settlement and dismissed the lawsuit with prejudice. The settlement, however, did not resolve claims that AMCON and TSI may have against CPH, or that CPH may have against AMCON and TSI. On Dec. 21, 2006, CPH filed a first amended complaint in the Fourth Judicial District of the State of Idaho (Elmore County) against AMCON and TSI and other defendants relating to the transfer of the assets of CPH to TSI and TSI's operation of the business thereafter. AMCON disagrees with the assertions made by CPH and intends to vigorously defend against CPH's claims and to pursue its own claims against CPH. AMCON's management, after consulting with trial counsel, is unable at this time to state that any outcome unfavorable to AMCON is either probable or remote and therefore cannot estimate the amount or range of any potential loss, if any, because substantial discovery is needed, several unresolved legal issues exist, and other pretrial work is yet to be completed. About AMCON Distributing AMCON Distributing Company (AMEX: DIT) -- http://www.amcon.com/-- is a wholesale distributor of consumer products, including beverages, candy, tobacco, groceries, food service, frozen and chilled foods, and health and beauty care products with distribution centers in Illinois, Missouri, Nebraska, North Dakota and South Dakota. AMCON also operates six retail health food stores in Florida under the name Chamberlin's Market & Cafe and four in the Midwest under the name Akin's Natural Foods Market. AMEREN CORP: S&P Cuts Units' Corp. Credit Ratings from BBB- to BB ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on utility holding company Ameren Corp. and subsidiaries Union Electric Co. and AmerenEnergy Generating Co. to 'BBB-' from 'BBB'. Standard & Poor's also lowered its long-term corporate credit rating on Ameren's Illinois subsidiaries, Illinois Power Co., Central Illinois Public Service Co., CILCORP Inc., and Central Illinois Light Co., to 'BB' from 'BBB-'. The ratings on all the companies are still on CreditWatch with negative implications. St. Louis, Missouri-based Ameren had about $4.9 billion in consolidated outstanding long-term debt at the end of 2006. Ameren's Illinois subsidiaries have approximately $1.65 billion in outstanding long-term debt, excluding Illinois Power's securitized debt and excluding short-term borrowings. The downgrades follow the passage in the Illinois Senate of an Ameren-specific bill that would roll back electric rates to 2006 levels, freeze rates at those levels for at least one year, and refund to customers increases imposed since Jan. 1, 2007. The rate freeze would not be lifted until at least 33% of the customers in an electric utility's service area that are eligible for tariffed service instead take service from alternative retail electric suppliers. The bill now moves to the Illinois House of Representatives. "If signed into law, SB1592 would result in a significant revenue shortfall and materially affect the liquidity of Ameren's Illinois utilities," said Standard & Poor's credit analyst Barbara Eiseman. "A complete rollback and rate freeze will harm Ameren's consolidated financial profile, but we expect the damage to Ameren, Union Electric, and AmerenEnergy Generating to be contained and would likely keep their corporate credit ratings investment grade," said Ms. Eiseman. AMERICAN CASINO: Moody's Revises Outlook to Developing from Stable ------------------------------------------------------------------ Moody's Investors Service has changed the ratings outlook of American Casino & Entertainment Properties LLC to developing from stable. The outlook change follows the announcement made by ACEP's parent, American Real Estate Partners, L.P., that an agreement has been entered into with Whitehall Real Estate Funds to sell ACEP to a Whitehall affiliate for $1.3 billion. The transaction is subject to approval by the Nevada Gaming Commission and the Nevada State Control Board, as well as customary conditions. The parties expect to close the transaction in approximately eight months; no details regarding how the deal will be financed have been disclosed. The indenture on ACEP's 7.85% senior secured notes due 2012 contain a provision whereby upon a change of control, as defined, the company would be required to repurchase outstanding notes at 101% plus accrued interest. The developing outlook reflects uncertainty regarding the likely credit profile of ACEP following the acquisition by Whitehall. Should likelihood of transaction close and bond repurchase become high, Moody's would expect to stabilize the outlook and withdraw the existing ratings at that time. Moody's last commented on ACEP on March 7, 2007 following AREP's disclosure that it was is evaluating alternatives to refinance the debt of, re capitalize or sell ACEP. Headquartered in Las Vegas, Nevada, ACEP is a wholly-owned, indirect, unrestricted subsidiary of American Real Estate Partners, L.P., a publicly traded firm engaged in both real estate and non-real estate activities. Carl Icahn currently owns approximately 86% of AREP through non-AREP subsidiaries. ACEP had 2006 revenues of $386 million and owns/operates three gaming properties in the Las Vegas metropolitan area and one in Laughlin, Nevada. AMERICAN CASINO: $1.3BB Whitehall Deal Cues S&P's Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its CreditWatch listing on American Casino & Entertainment Properties LLC to negative from developing. The revision follows the announcement by ACEP's parent company, American Real Estate Partners L.P. (AREP; BB+/Stable/--) -- a publicly traded entity engaged in acquiring and managing real estate and other activities and controlled by Carl Icahn -- that it has agreed to sell ACEP to Whitehall Street Real Estate Funds, for $1.3 billion. The deal is expected to close in about eight months, subject to regulatory approval. ACEP had about $255 million in debt outstanding as of Dec. 31, 2006. "We believe that, given the transaction multiple of well more than 10x, debt leverage would increase materially and weaken credit protection measures due to the high likelihood for additional debt to fund the acquisition," said Standard & Poor's credit analyst Michael Scerbo. "However, the company's existing senior note issue does contain a provision whereby ACEP must offer to repurchase the notes at 101% (plus accrued and unpaid interest) upon a change of control." AREP had previously announced that it was evaluating alternatives for refinancing, recapitalizing, or selling ACEP to maximize shareholder value. As a result, the ratings on ACEP were initially placed on CreditWatch that same day. In resolving the CreditWatch listing, S&P will review the proposed capital structure and its impact on the company's existing bond issue. AMERICAN TOWER: S&P Puts BB+ Rating on S. 2007-1 Class F Certs. --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to American Tower Trust I's $1.750 billion commercial mortgage pass-through certificates series 2007-1. The preliminary ratings are based on information as of April 23, 2007. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying collateral, the experience and financial strength of the sponsor and management company, the terms of the loan, the lease agreements, the organizational documentation, and the securitization documentation. Standard & Poor's analysis determined that the loan has a debt service coverage of 1.34x based on an assumed refinance constant of 10.5%, a DSC of 2.45x on the actual loan constant of approximately 5.75%, and a beginning and ending LTV of 79.53%. Preliminary Ratings Assigned American Tower Trust I Class Preliminary Preliminary Trust LTV rating amount ----- ----------- ------------ --------- A-FX AAA $1,022,000,000* 46.45% A-FL AAA $0* 46.45% B AA $215,000,000 56.22% C A $110,000,000 61.22% D BBB $275,000,000 73.71% E BBB- $55,000,000 76.21% F BB+ $73,000,000 79.53% Total - $1,750,000,000 79.53% *The individual sizing of these pari passu certificates has not been determined, but will total $1.022 billion. AMERIQUEST MORTGAGE: Poor Performance Cues S&P's Neg. Credit Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on four classes of mortgage pass-through certificates from three series issued by Ameriquest Mortgage Securities Inc. and placed them on CreditWatch with negative implications. At the same time, the ratings on two classes from two other Ameriquest series were placed on CreditWatch with negative implications. In addition, the ratings on 10 classes from six Ameriquest series remain on CreditWatch with negative implications. Lastly, ratings on 380 classes from 52 Ameriquest series were affirmed. The downgrades and negative CreditWatch placements reflect the deteriorating performance of the collateral pools, as monthly net losses continue to significantly outpace monthly excess interest cash flows. These losses have caused the steady erosion of the classes' credit support, specifically overcollateralization. As of the March 2007 distribution period, the O/C amounts for nine of the 11 transactions are below their respective targets of 0.50% of the original pool principal balances. O/C for these nine transactions currently ranges from 0.04% for series 2003-2 to 0.42% for series 2003-8. The O/C levels for the other two transactions are also below their targets: O/C for series 2004-R2 is 0.33%, below its target of 0.60%, and O/C for series 2004-R4 is 0.73%, below its target of 1.30%. Total delinquencies for these 11 transactions range from 16.94% of the current pool balance for series 2003-7 to 33.03% for series 2003-2, with severe delinquencies (90-plus days, foreclosure, and REO) accounting for more than half of the total. Cumulative realized losses range from 0.89% of the original pool balance for series 2004-R2 to 2.52% for series 2002-2. Standard & Poor's will continue to closely monitor the performance of the transactions with ratings on CreditWatch negative over the next three months. If losses decline to a point at which they no longer outpace excess interest, and the level of O/C has not been further eroded, we will affirm the ratings on these classes and remove them from CreditWatch negative. Conversely, if losses continue to outpace excess interest, further downgrades can be expected. The affirmed ratings reflect adequate actual and projected credit support percentages, as well as the shifting interest structure of the transactions. As of the March 2007 remittance period, total delinquencies ranged from 1.02% for series 2003-IA1 (Alt-A collateral) to 45.28% for series 2001-2, with severe delinquencies accounting for approximately half of the total. Cumulative realized losses ranged from less than 0.01% for series 2006-M3 to 3.35% for series 2001-A. These transactions are either at or close to their respective O/C targets. Credit support is provided by subordination, O/C, and excess spread. The collateral consists of 30-year, adjustable-rate, fully amortizing, subprime mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered and Placed on Creditwatch Negative Ameriquest Mortgage Securities Inc. Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-AR1 M-3 A/Watch Neg AAA 2002-AR1 M-4 A-/Watch Neg AA+ 2003-7 M-5 BB-/Watch Neg BBB- 2004-R4 M-7 B/Watch Neg BB+ Ratings Placed on Creditwatch Negative Ameriquest Mortgage Securities Inc. Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-AR2 M-3 BBB/Watch Neg BBB 2004-R2 M-9 BBB-/Watch Neg BBB- Ratings Remaining on Creditwatch Negative Ameriquest Mortgage Securities Inc. Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2002-2 M-4 B/Watch Neg 2002-4 M-4 BB/Watch Neg 2003-1 MF-3, MV-3 BBB/Watch Neg 2003-1 M-4 B/Watch Neg 2003-2 M-2 A/Watch Neg 2003-2 M-3 B/Watch Neg 2003-6 M-6 B/Watch Neg 2003-8 MV-6, MF-6 BB-/Watch Neg Ratings Affirmed Ameriquest Mortgage Securities Inc. Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2001-2 M-2 A+ 2001-2 M-3 BBB 2002-2 S AAA 2002-2 M-2 AA 2002-2 M-3 BBB 2002-3 M-2 A+ 2002-3 M-3 BBB 2002-3 M-4 CCC 2002-4 M-2 AA- 2002-4 M-3 BBB 2002-AR1 M-1, M-2 AAA 2002-C M-1 BBB 2002-C M-2 CCC 2002-D M-1 A 2002-D M-2 BBB+ 2003-1 M-1 AA+ 2003-1 M-2 A+ 2003-2 M-1 AA+ 2003-2 M-4 CCC 2003-3 M-2 A 2003-3 M-3 BBB+ 2003-3 M-4 BBB 2003-4 M-2 AA+ 2003-4 M-3 AA 2003-4 M-4 A+ 2003-4 M-5 A 2003-5 A-4, A-5, A-6 AAA 2003-5 M-1 AA+ 2003-5 M-2 AA 2003-5 M-3 A- 2003-6 M-1 AA 2003-6 M-2 A 2003-6 M-3 A- 2003-6 M-4 BBB+ 2003-6 M-5 BBB 2003-7 A, M-1 AAA 2003-7 M-2 AA+ 2003-7 M-3 A+ 2003-7 M-4 A- 2003-8 AV-1, AV-2, AF-5 AAA 2003-8 M-1 AA 2003-8 M-2 A 2003-8 M-3 A- 2003-8 M-4 BBB+ 2003-8 M-5 BBB 2003-9 AV-1, AV-2, AF-2, AF-3 AAA 2003-9 M-1 AA 2003-9 M-2 A 2003-9 M-3 A- 2003-9 M-4 BBB+ 2003-9 M-5 BBB 2003-9 M-6 BBB- 2003-10 AV-1, AV-2, AF-4, AF-5, AF-6 AAA 2003-10 M-1 AA 2003-10 M-2 A 2003-10 M-3 A- 2003-10 M-4 BBB+ 2003-10 M-5 BBB 2003-10 MV-6, MF-6 BBB- 2003-11 AV-1, AV-2, AV-4, AF-5, AF-6 AAA 2003-11 M-1 AA 2003-11 M-2 A 2003-11 M-3, M-3A, M-3B A- 2003-11 M-4A, M-4B BBB+ 2003-11 M-5 BBB 2003-11 M-6 BBB- 2003-12 AV-1, AF AAA 2003-12 M-1 AA 2003-12 M-2 A 2003-12 M-3 A- 2003-12 M-4 BBB+ 2003-12 M-5 BBB 2003-12 M-6 BBB- 2003-13 AV-1, AV-2, AF-4, AF-5, AF-6 AAA 2003-13 M-1 AA 2003-13 M-2 A 2003-13 M-3 A- 2003-13 M-4 BBB+ 2003-13 M-5 BBB 2003-13 M-6 BBB- 2003-AR1 M-1 AA+ 2003-AR1 M-2 A 2003-AR1 M-3 BBB 2003-AR1 M-4 BBB- 2003-AR2 M-1 AAA 2003-AR2 M-2 AA- 2003-AR3 M-2 A+ 2003-AR3 M-3 A 2003-AR3 M-4 BBB+ 2003-AR3 M-5 BBB 2003-AR3 M-6 BBB- 2003-IA1 A-3, A-4, A-5, A-6 AAA 2003-IA1 MV-1, MF-1 AA 2003-IA1 M-2 A 2003-IA1 M-3 BBB 2004-FR1 A-4, A-5, A-6, A-7 AAA 2004-FR1 M-1 AA+ 2004-FR1 M-2 AA 2004-FR1 M-3 AA- 2004-FR1 M-4 A+ 2004-FR1 M-5 A 2004-FR1 M-6 A- 2004-FR1 M-7 BBB+ 2004-FR1 M-8 BBB 2004-FR1 M-9 BBB- 2004-IA1 A-3, M-1 AAA 2004-IA1 M-2 AA 2004-IA1 M-3 AA- 2004-IA1 M-4 A 2004-IA1 M-5 A- 2004-IA1 M-6 BBB+ 2004-IA1 M-7 BBB 2004-IA1 M-8 BBB- 2004-IA1 M-9 BB+ 2004-R1 A-1A, A-1B, A-2 AAA 2004-R1 M-1 AA+ 2004-R1 M-2 AA 2004-R1 M-3 AA- 2004-R1 M-4 A+ 2004-R1 M-5 A 2004-R1 M-6 A- 2004-R1 M-7 BBB+ 2004-R1 M-8 BBB 2004-R1 M-9 BBB- 2004-R1 M-10 BB+ 2004-R2 A-1A, A-1B, A-4 AAA 2004-R2 M-1 AA+ 2004-R2 M-2 AA 2004-R2 M-3 AA- 2004-R2 M-4 A+ 2004-R2 M-5 A 2004-R2 M-6 A- 2004-R2 M-7 BBB+ 2004-R2 M-8 BBB 2004-R3 A-1A, A-1B, A-4 AAA 2004-R3 M-1 AA 2004-R3 M-2 A 2004-R3 M-3 A- 2004-R3 M-4 BBB+ 2004-R3 M-5 BBB 2004-R3 M-6 BBB- 2004-R3 M-7 BB+ 2004-R4 A-1A, A-1B AAA 2004-R4 M-1 AA 2004-R4 M-2 A 2004-R4 M-3 A- 2004-R4 M-4 BBB+ 2004-R4 M-5 BBB 2004-R4 M-6 BBB- 2004-R5 A-1A, A-1B, A-4 AAA 2004-R5 M-1 AA 2004-R5 M-2 A 2004-R5 M-3 A- 2004-R5 M-4 BBB+ 2004-R5 M-5 BBB 2004-R5 M-6 BBB- 2004-R5 M-7 BB+ 2004-R6 A-1, A-4 AAA 2004-R6 M-1 A- 2004-R6 M-2 BBB+ 2004-R6 M-3 BBB 2004-R6 M-4 BBB- 2004-R6 M-5 BB+ 2004-R7 A-1, A-4, A-6, M-1 AAA 2004-R7 M-2, M-3 AA+ 2004-R7 M-4 AA 2004-R7 M-5 AA- 2004-R7 M-6 A+ 2004-R7 M-7 A 2004-R7 M-8 A- 2004-R7 M-9 BBB+ 2004-R7 M-10 BBB 2004-R7 M-11 BBB- 2004-R8 A-1, A-4, A-5 AAA 2004-R8 M-1 AA+ 2004-R8 M-2 AA 2004-R8 M-3 AA- 2004-R8 M-4 A+ 2004-R8 M-5 A 2004-R8 M-6 A- 2004-R8 M-7 BBB+ 2004-R8 M-8 BBB 2004-R8 M-9 BBB- 2004-R8 M-10 BB+ 2004-R9 A-1, A-4 AAA 2004-R9 M-1 AA+ 2004-R9 M-2 AA 2004-R9 M-3 AA- 2004-R9 M-4 A 2004-R9 M-5 A- 2004-R9 M-6 BBB+ 2004-R9 M-7 BBB 2004-R9 M-8 BBB- 2004-R9 M-9 BB+ 2004-R10 A-1, A-3, A-4, A-5 AAA 2004-R10 M-1 AA+ 2004-R10 M-2 AA 2004-R10 M-3 AA- 2004-R10 M-4 A+ 2004-R10 M-5 A 2004-R10 M-6 A- 2004-R10 M-7 BBB+ 2004-R10 M-8 BBB 2004-R10 M-9 BBB- 2004-R10 M-10 BB+ 2004-R11 A-1, A-2 AAA 2004-R11 M-1 AA+ 2004-R11 M-2 AA 2004-R11 M-3 AA- 2004-R11 M-4 A+ 2004-R11 M-5 A 2004-R11 M-6 A- 2004-R11 M-7 BBB+ 2004-R11 M-8 BBB 2004-R11 M-9 BBB- 2004-R11 M-10 BB+ 2004-R12 A-1, A-3, A-4 AAA 2004-R12 M-1 AA+ 2004-R12 M-2 AA 2004-R12 M-3 AA- 2004-R12 M-4 A+ 2004-R12 M-5 A 2004-R12 M-6 A- 2004-R12 M-7 BBB+ 2004-R12 M-8 BBB 2004-R12 M-9 BBB- 2004-R12 M-10 BB+ 2005-R1 A-1A, A-2A, A-3B, A-3C AAA 2005-R1 M-1 AA 2005-R1 M-2 AA- 2005-R1 M-3 A+ 2005-R1 M-4 A 2005-R1 M-5 A- 2005-R1 M-6 BBB+ 2005-R1 M-7 BBB 2005-R1 M-8 BBB- 2005-R1 M-9, M-10 BB 2005-R2 A-1A, A-2A, A-3B, A-3C AAA 2005-R2 M-1 AA+ 2005-R2 M-2 AA 2005-R2 M-3 AA- 2005-R2 M-4 A+ 2005-R2 M-5 A 2005-R2 M-6 A- 2005-R2 M-7 BBB+ 2005-R2 M-8 BBB 2005-R2 M-9 BBB- 2005-R2 M-10 BB+ 2005-R2 M-11 BB 2005-R3 A-1A, A-1B, A-2A, A-2B, A-3C, A-3D AAA 2005-R3 M-1 AA+ 2005-R3 M-2 AA 2005-R3 M-3 AA- 2005-R3 M-4 A+ 2005-R3 M-5 A 2005-R3 M-6 A- 2005-R3 M-7 BBB+ 2005-R3 M-8 BBB 2005-R3 M-9 BBB- 2005-R3 M-10 BB+ 2005-R4 A-1A, A-1B, A-2C, A-2D AAA 2005-R4 M-1 AA+ 2005-R4 M-2 AA 2005-R4 M-3 AA- 2005-R4 M-4 A+ 2005-R4 M-5 A 2005-R4 M-6 A- 2005-R4 M-7 BBB+ 2005-R4 M-8 BBB 2005-R4 M-9 BBB- 2005-R4 M-11 BB 2005-R5 A-1A, A-1B, A-2B, A-2C AAA 2005-R5 M-1 AA+ 2005-R5 M-2 AA 2005-R5 M-3 AA- 2005-R5 M-4 A+ 2005-R5 M-5, M-6 A 2005-R5 M-7 BBB+ 2005-R5 M-8 BBB 2005-R5 M-9 BBB- 2005-R5 M-10 BB+ 2005-R5 M-11 BB 2005-R6 A-1A, A-1B, A-2 AAA 2005-R6 M-1 AA+ 2005-R6 M-2 AA 2005-R6 M-3 AA- 2005-R6 M-4 A+ 2005-R6 M-5 A 2005-R6 M-6 A- 2005-R6 M-7 BBB+ 2005-R6 M-8 BBB 2005-R6 M-9 BBB- 2005-R6 M-10 BB+ 2005-R6 M-11 BB 2005-R7 A-1B, A-1C, A-1D, A-2B, A-2C, A-2D AAA 2005-R7 M-1, M-2 AA+ 2005-R7 M-3, M-4 AA 2005-R7 M-5 A+ 2005-R7 M-6 A 2005-R7 M-7 A- 2005-R7 M-8 BBB+ 2005-R7 M-9, M-10 BBB 2005-R7 M-11 BBB- 2005-R7 M-12 BB 2005-R8 A-1, A-2B, A-2C, A-2D AAA 2005-R8 M-1 AA+ 2005-R8 M-2, M-3 AA 2005-R8 M-4 AA- 2005-R8 M-5 A+ 2005-R8 M-6 A 2005-R8 M-7 A- 2005-R8 M-8 BBB+ 2005-R8 M-9 BBB 2005-R8 M-10 BBB- 2005-R8 M-11 BB+ 2005-R8 M-12 BB 2005-R9 AV-1, AV-2B, AV-2C, AF-1, AF-2, AF-3, AF-4 AAA 2005-R9 AF-5, AF-6 AAA 2005-R9 M-1 AA+ 2005-R9 M-2 AA 2005-R9 M-3 AA- 2005-R9 M-4 A+ 2005-R9 M-5 A 2005-R9 M-6 A- 2005-R9 M-7 BBB+ 2005-R9 M-8 BBB 2005-R9 M-9 BBB- 2005-R9 M-10 BB+ 2005-R9 M-11 BB 2005-R10 A-1, A-2A, A-2B, A-2C AAA 2005-R10 M-1 AA+ 2005-R10 M-2, M-3 AA 2005-R10 M-4 AA- 2005-R10 M-5 A+ 2005-R10 M-6 A 2005-R10 M-7 A- 2005-R10 M-8 BBB+ 2005-R10 M-9, M-10 BBB 2005-R11 A-1, A-2B, A-2C, A-2D AAA 2005-R11 M-1 AA+ 2005-R11 M-2, M-3 AA 2005-R11 M-4 AA- 2005-R11 M-5, M-6 A+ 2005-R11 M-7 A 2005-R11 M-8 A- 2005-R11 M-9 BBB+ 2005-R11 M-10 BBB- 2006-M3 A-1, A-2A, A-2B, A-2C, A-2D AAA 2006-M3 M-1 AA+ 2006-M3 M-2 AA 2006-M3 M-3 AA- 2006-M3 M-4 A+ 2006-M3 M-5 A 2006-M3 M-6 A- 2006-M3 M-7 BBB+ 2006-M3 M-8 BBB 2006-M3 M-9 BBB- 2006-M3 M-10 BB+ 2006-R1 A-1, A-2A, A-2B, A-2C, A-2D AAA 2006-R1 M-1 AA+ 2006-R1 M-2 AA 2006-R1 M-3 AA- 2006-R1 M-4 A+ 2006-R1 M-5 A 2006-R1 M-6 A- 2006-R1 M-7 BBB+ 2006-R1 M-8 BBB 2006-R1 M-9 BBB- 2006-R1 M-10 BB+ 2006-R1 M-11 BB 2006-R2 A-1, A-2A, A-2B, A-2C AAA 2006-R2 M-1 AA+ 2006-R2 M-2 AA 2006-R2 M-3 AA- 2006-R2 M-4 A+ 2006-R2 M-5 A 2006-R2 M-6 A- 2006-R2 M-7, M-8 BBB+ 2006-R2 M-9, M-10 BBB- 2006-R2 M-11 BB+ AMTROL INC: Taps Ernst & Young LLP as Accountant and Auditor ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware gave Amtrol Inc. and its debtor affiliates permission to employ Ernst & Young LLP as their accountant and auditor. As reported in the Troubled Company Reporter on March 28, 2007, Ernst and Young LLP is expected to: a) provide accounting and auditing services to the Debtor; and b) audit and give a report on the Debtors' consolidated financial statements for the year ended Dec. 31, 2006. Kevin M. Higgins, a partner at Ernst & Young, told the Court that the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners and Principals $447 - $480 Senior Manager $384 - $409 Manager $340 - $368 Senior $254 - $289 Staff $127 - $184 Mr. Higgins assured the Court that the Firm is disinterested as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in West Warwick, Rhode Island, Amtrol Inc. -- http://www.amtrol.com/-- manufactures and markets water storage and pressure control products, water heaters and cylinders. The company's major products include pressure tanks used in well water, hydronic heating and potable hot water applications, indirect-fired water heaters, and both LPG and disposable refrigerant gas cylinders. The company and three of its affiliates filed for chapter 11 protection on Dec. 18, 2006 (Bankr. D. Del. Lead Case No. 06-11446). Douglas Gray, Esq., Stuart J. Brown, Esq., and William E. Chipman Jr., Esq., at Edwards Angell Palmer & Dodge LLP, represent the Debtors. The Debtor's financial advisor is Miller Buckfire & Co., LLC. Kara Hammond Coyle, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Official Committee of Unsecured Creditors. As of Apr. 1, 2006, the Debtors' consolidated financial condition showed $229,270,000 in total assets and $235,802,000 in total debts. APEX TECHNOLOGY: Involuntary Chapter 11 Case Summary ---------------------------------------------------- Alleged Debtor: Apex Technology Holdings Inc. dba APEX Design Technology Inc. dba APEX Design Technology 2850 East Coronado Street Anaheim, CA 92806 Case Number: 07-11171 Type of Business: The Debtor is a turnkey design and engineering based manufacturer and integrator of hydraulic, pneumatic and electronics systems. Its products include ground support equipment, factory and special test equipment, electrical and hydraulic test equipment, power units and test benches. See http://www.apexdt.com/ Involuntary Petition Date: April 24, 2007 Court: Central District Of California (Santa Ana) Judge: Robert N. Kwan Petitioners' Counsel: Barry S. Glaser, Esq. Theodora Oringer Miller & Richman P.C. 2029 Century Park East, 6th Floor Los Angeles, CA 90067-2907 Tel: (310) 557-2009 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Harsoyo Lukito Guaranteed Bonus $50,000 c/o Stanley Green, Esq. 468 North Camden Drive Beverly Hills, CA 90210 Meyco Machine & Tool Inc. Vendor $28,392 11579 Martens River Cir Fountain Valley, CA 92708 BK Thorpe Inc. Vendor $14,769 1811E 28th Street Signal Hill, CA 90755 Apex Design Technology Inc. Equipment Lease $10,305 c/o Stanley Green, Esq. 468 North Camden Drive Beverly Hills, CA 90210 NC Servo Technology Corp. Vendor $8,736 38422 Webb Drive Westland, MI 48185-1974 ARTISTDIRECT INC: March 31 Balance Sheet Upside-Down by $18.1 Mil. ------------------------------------------------------------------ ARTISTdirect Inc.'s balance sheet at Sept. 30, 2006, showed $56.1 million in total assets and $74.2 million in total liabilities, resulting in an $18.1 million total stockholders' equity. The company's balance sheet at Sept. 30, 2006, also showed strained liquidity with $13.3 million in total current assets available to pay $42.1 million in total current liabilities. ARTISTdirect Inc. reported net income of $839,000 for the third quarter ended Sept. 30, 2006, compared with a net loss of $18.4 million for the same period ended Sept. 30, 2005. Results for the quarters ended Sept. 30, 2006, and 2005, include a non-cash gain of $1.1 million and a non-cash charge to income of $5.5 million, respectively, to reflect a decrease and an increase in warrant liability, related to the fair value of warrants issued in connection with the financing of the MediaDefender acquisition in July 2005. Results for the quarters ended Sept. 30, 2006, and 2005, also include a non-cash income of $1.2 million and a non-cash charge to income of $11.6 million, respectively, to reflect a decrease and an increase in the derivative liability should the note holders be unable to exercise their rights and options. Net Revenue increased by $2.5 million, or 66.0%, to $6.4 million for the quarter Sept. 30, 2006, as compared to $3.9 million for the same period ended Sept. 30, 2005, primarily as a result of the acquisition of MediaDefender in July 2005, which provided revenue of $4.2 million from its anti-piracy and redirect services. The company's total cost of revenue increased by $1.2 million, or 54.7%, to $3.4 million, partially as a result of an increase in costs associated with a full quarter of activity related to the operation of MediaDefender acquired in July 2005 and increased bandwidth costs associated with increased internet traffic. Operating expenses increased $1.1 million, mainly due to general and administrative expense, which increased $1 million, or 98.4%, to $2.1 million in part as a result of the acquisition of MediaDefender. Full-text copies of the company's consolidated financial statements for the third quarter ended Sept. 30, 2006, are available for free at http://researcharchives.com/t/s?1dcc Events of Default ARTISTdirect Inc. previously disclosed in a Form 8-K filed with the SEC on Jan. 24, 2007, that it had triggered an event of default under the $15 million Senior Financing completed by the company effective July 28, 2005, in conjunction with the acquisition of MediaDefender Inc., thereby allowing the Senior Lenders to declare the outstanding principal amount and accrued interest due under the Senior Financing immediately due and payable. On April 17, 2007, ARTISTdirect Inc. entered into a Forbearance and Consent Agreement with the Senior Lenders, whereby the Senior Lenders agreed to forbear from exercising any of their rights and remedies under the Senior Financing transaction documents through May 31, 2007, in exchange for a payment by the company of $250,000, in the aggregate, to the Senior Lenders, and upon the other terms and conditions in the Agreement. The company may extend the forbearance period through June 30, 2007, by notifying the Senior Lenders of its intention to extend the Agreement prior to May 31, 2007 and paying an additional $125,000, in the aggregate, to the Senior Lenders on or before May 31, 2007. As disclosed in the Form 8-K filed with the SEC on Jan. 24, 2007, the company has also defaulted under the original approximately $31,500,000 of subordinated convertible notes. About ARTISTdirect Inc. Headquartered in Santa Monica, Calif., ARTISTdirect Inc. (OTC BB: ARTDE.OB) -- http://www.artistdirect.com/-- is a digital media entertainment company that is home to an online music network and, through its acquisition of MediaDefender, is a leader in anti-piracy solutions in the Internet piracy protection industry. The ARTISTdirect Network is a network of web-sites offering multi-media content, music news and information, communities organized around shared music interests, music-related specialty commerce and digital music services. ASARCO LLC: El Paso Residents Oppose Reopening of Asarco Smelter ---------------------------------------------------------------- Several residents from El Paso, Texas, urge the Texas Commission on Environmental Quality to deny ASARCO LLC's request for an air quality permit for the possible re-opening of the company's smelter in El Paso, the El Paso Times reports. Daniel Arellano, chairman of the East Side chapter of the Association of Community Organizations for Reform Now, said many of the ASARCO workers in the El Paso smelter have various cancers and blood disorders, which doctors say were caused by environmental factors. ASARCO officials assert that the El Paso smelter's air emissions did not cause lead contamination in soil in west and south El Paso. About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05-21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). (ASARCO Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASSOCIATED BRANDS: Subsidiaries Default Under Bank Credit Pacts --------------------------------------------------------------- Certain subsidiaries of Associated Brands Income Fund were in default as at March 31, 2007 under financial covenants under their credit agreement with a Canadian Chartered Bank and under the exchangeable debentures of Associated Brands Holding L.P. The Fund believes that the expected defaults under the financial covenants are due to an increase in bank indebtedness as at March 31, 2007 resulting from increased inventories to support revenue growth, as well as a lower rolling 12 month Normalized EBITDA. The Fund had anticipated the defaults and based its expectations on its preliminary unaudited interim consolidated financial statements for the three months ended March 31, 2007. These financial statements remain subject to the review and approval by the audit committee of the board of trustees of the Fund's wholly owned subsidiary Associated Brands Operating Trust and by the board of trustees of the Fund and of ABOT, as well as the review by the auditors of the Fund. The financial covenant at issue under the credit agreement requires the Fund to maintain its funded debt (which represents all of the Fund's interest bearing bank indebtedness) at a ratio of not more than 3.25 to 1 over its Normalized EBITDA. The financial covenant at issue under the exchangeable debentures requires the Fund to maintain its specified debt -- which represents the Fund's funded debt -- at a ratio of not greater than 4.75 to 1 over its Normalized EBITDA. The ratios under such financial covenants had become more stringent as of March 31, 2007 as compared to previous months in accordance with the respective terms and conditions of such credit agreement and exchangeable debentures. In addition, a default under the financial covenant at issue under the credit agreement would result in a cross-default under the exchangeable debentures. Upon confirmation that these defaults have occurred, the Fund's long-term debt with the bank and the debenture holders will be reclassified from long-term liabilities to current liabilities on its consolidated financial statements as of March 31, 2007 which will result in an additional default under the covenant under the credit agreement relating to the Fund's working capital ratio. The defaults under the credit agreement would also result in a default under the ISDA Master Agreement between a subsidiary of the Fund and the same bank that is the lender under the credit agreement. The credit agreement and the terms of the debentures provide the bank and the debenture holders, respectively, with certain rights and remedies during the continuance of a default, including the right to accelerate the debt due under the credit agreement and the debentures, respectively, and the right to realize upon security that has been granted by the Fund's subsidiaries. "The Fund has notified the bank and the debenture holders of these expected defaults and will be requesting that the bank and the debentureholders waive such defaults", commented Rob Dougans, President and Chief Executive Officer. Funds managed by Torquest Partners Inc. hold 85.1% aggregate principal amount of the outstanding debentures. The Fund and ABOT have agreed to sell their debt and equity interests in the operating subsidiaries of the Associated Brands business to a wholly-owned subsidiary of a fund managed by an affiliate of Torquest Partners Inc., with proceeds of such sale being distributed to unitholders of the Fund by way of the redemption of outstanding units at a cash redemption price of between $0.80 and $0.82 per unit. A special meeting of unitholders of the Fund has been called for May 4, 2007 to consider, and if deemed advisable, approve such transaction and the termination of the Fund and ABOT. If the bank and the debenture holders do not grant waivers for the expected defaults under the debt agreements as requested by the Fund, then the purchaser under the sale agreement for the Associated Brands operating subsidiaries may claim that a closing condition in its favour under such purchase agreement has not been satisfied and relieves the purchaser of its obligation to complete the sale transaction. About Associated Brands Income Fund Associated Brands Income Fund (TSX: ABF.UN) -- http://www.associatedbrands.com/-- through its operating subsidiaries, is a North American manufacturer and supplier of private-label dry-blend food products and household products. Since beginning operations in 1985, Associated Brands has grown to become one of the three largest suppliers of a diverse range of private-label dry-blend food products in North America, producing over eleven million cases annually across multiple product categories currently sold to 45 of the 50 largest North American food retailers. Associated Brands plans to build unitholder value by leveraging its solid presence in the U.S. private-label market, expanding its product offerings to current and new customers and adding additional contract manufacturing business, and through accretive acquisitions that meet its strict operating and strategic criteria. AUBURN MEMORIAL: Files for Bankruptcy in New York ------------------------------------------------- Auburn Memorial Hospital yesterday filed for chapter 11 protection with the U.S. Bankruptcy Court for the Northern District of New York. Two of the Debtor's affiliates, Auburn Memorial Companies, Inc., and A.M.H. Properties, Inc., also filed for bankruptcy. The Ithaca Journal reports that the action was done to address and resolve the liens recently filed against the Debtor real property by the Pension Benefit Guaranty Corporation. The Debtor also hopes to restructure its obligations owed to certain other creditors under chapter 11 of the Bankruptcy Code. According to the Post-Standard, the Debtor has $20 million in unsecured debt, $13.8 million of which it owes to its employees' pension system. Before filing for bankruptcy, the Debtor had initiated a long-term restructuring plan that aims to guide its operations as well as provide a framework for the Debtor to emerge as a financially sound company, the Ithaca Journal relates. The Ithaca Journal further relates that although it had taken steps to address financial losses for the fiscal years 2004 to 2006, it accrued debt that weakened its finances and caused recent cash flow difficulties. The report also says that First Niagara Bank, Alliance Bank, and Cayuga Bank have planned to provide debtor-in-possession financing in order for the Debtor continue its operations while under the bankruptcy process. Headquartered in Auburn, New York, Auburn Memorial Hospital -- http://www.auburnhospital.com/-- is a community-focused hospital that delivers a full range of acute, outpatient and preventive care services for Cayuga County and the surrounding Finger Lakes region of central New York. AUBURN MEMORIAL: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Auburn Memorial Hospital dba Finger Lakes Center of Living dba Finger Lakes Medical Care Center dba Urgent Medical Care of Skaneateles dba Finger Lakes Weight Loss Program 17 Lansing Street Auburn, NY 13021 Bankruptcy Case No.: 07-31126 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Auburn Memorial Companies, Inc. 07-31127 A.M.H. Properties, Inc. 07-31129 Type of Business: The Debtor is a community-focused hospital that delivers a full range of acute, outpatient and preventive care services for Cayuga County and the surrounding Finger Lakes region of central New York. See http://www.auburnhospital.com/ Chapter 11 Petition Date: April 24, 2007 Court: Northern District of New York (Syracuse) Judge: Margaret M. Cangilos-Ruiz Debtors' Counsel: Stephen A. Donato, Esq. Bond, Schoeneck & King, PLLC One Lincoln Center Syracuse, NY 13202-1355 Tel: (315) 218-8000 Fax: (315) 218-8100 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Total Assets Total Debts ------------ ----------- Auburn Memorial Companies, $4,573,551 $4,866,935 Inc. A.M.H. Properties, Inc. $400,200 $249,831 Auburn Memorial Hospital did not file a list of its 20 largest unsecured creditors. Auburn Memorial Companies and A.M.H. Properties both disclosed that they do not have unsecured creditors who are not insiders. AUCTENTIA SLU: Chapter 15 Petition Summary ------------------------------------------ Petitioners: Javier Diaz Galvez Benito Aguera Marin Debtor: Auctentia, S.L.U. Madrid, Spain Case No.: 07-11173 Type of Business: Foreign Representatives for the Debtor's affiliate, Afinsa Bienes Tangibles, S.A., filed a Chapter 15 petition for Afinsa on March 13, 2007 (Bankr. S.D.N.Y. Case No. 07-10675). Chapter 15 Petition Date: April 24, 2007 Court: Southern District of New York (Manhattan) Petitioner's Counsel: Thomas L. Kent, Esq. Paul, Hastings, Janofsky & Walker LLP 75 East 55th Street New York, NY 10022 Tel: (212) 318-6060 Fax: (212) 230-7899 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million BAYONNE MEDICAL: Files for Bankruptcy Protection in New Jersey -------------------------------------------------------------- Bayonne Medical Center Inc. filed for Chapter 11 protection last week in the U.S. Bankruptcy Court of New Jersey, seeking to reorganize its finances while operating in the ordinary course of business, the Asbury Park Press reports. Marty Daks of NJBIZ relates that the Court entered an interim approval of a two-year, $30 million mortgaged-backed financing package for the hospital from real estate investment trust Kimco Capital Corp., which will help pay for the hospital's expenses and employees' salary. The interim approval is effective until May 15 when the hospital will request a permanent approval and full release of the funds, Mr. Daks says. Acting CEO Daniel A. Kane said that the hospital will also consider terminating costly leases. Mr. Kane met with employee union representatives to discuss a reorganization plan and to save 900 jobs, Asbury Park Press says. Headquartered in Bayonne, New Jersey, Bayonne Medical Center Inc. -- http://www.bayonnemedicalcenter.org/-- provides healthcare services and operates a medical center. The company filed for bankruptcy protection on April 16, 2007 (Bankr. D. N.J. Case No. 07-15195). Stephen V. Falanga, Esq., of Conell Folye LLP, and Adam C. Rogoff, Esq., of Cooley Godward Kronish LLP, represent the Debtor. When the Debtor filed for protection from its creditors, it estimated assets and debts between $1 million and $100 million. BAYONNE MEDICAL: Organizational Meeting Scheduled for May 2 ----------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in Bayonne Medical Center's chapter 11 case at 11:00 a.m., on May 2, 2007, at the U.S. Trustee's Office, Room 1401, 14th Floor, in Newark, New Jersey. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtor's cases. The meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtor will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtor's expense. They may investigate the Debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Bayonne Medical Based in Bayonne, New Jersey, Bayonne Medical Center -- http://www.bayonnemedicalcenter.org/-- provides healthcare services and operates a medical center. The company filed for Chapter 11 protection on April 16, 2007 (Bankr. D. N.J. Case No. 07-15195). Stephen V. Falanga, Esq., at Connell Foley LLP, and Adam C. Rogoff, Esq., at Cooley Godward Kronish LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. BEAR STEARNS: Moody's Holds Low-B Ratings on Six Certificates ------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Bear Stearns Commercial Mortgage Securities Trust 2004-PWR5, Commercial Mortgage Pass-Through Certificates, Series 2004-PWR5 as: - Class A-1, $45,074,443, affirmed at Aaa - Class A-2, $156,000,000, affirmed at Aaa - Class A-3, $134,000,000, affirmed at Aaa - Class A-4, $100,000,000, affirmed at Aaa - Class A-5, $579,079,000, affirmed at Aaa - Class X-1, Notional, affirmed at Aaa - Class X-2, Notional, affirmed at Aaa - Class B, $29,291,000, affirmed at Aa2 - Class C, $9,250,000, affirmed at Aa3 - Class D, $20,042,000, affirmed at A2 - Class E, $13,875,000, affirmed at A3 - Class F, $15,416,000, affirmed at Baa1 - Class G, $9,250,000, affirmed at Baa2 - Class H, $18,500,000, affirmed at Baa3 - Class J, $4,625,000, affirmed at Ba1 - Class K, $4,625,000, affirmed at Ba2 - Class L, $6,167,000, affirmed at Ba3 - Class M, $4,625,000, affirmed at B1 - Class N, $4,625,000, affirmed at B2 - Class P, $3,083,000, affirmed at B3 As of the April 11, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 5.0% to $1.17 billion from $1.23 billion at securitization. The Certificates are collateralized by 129 mortgage loans. The loans range in size from less than 1.0% to 6.3% of the pool, with the top 10 loans representing 37.5% of the pool. The pool includes seven shadow rated loans, representing 14.2% of the outstanding loan balance. Four loans, representing 11.4% of the pool, have defeased. There have been no loans liquidated from the trust. Currently there are no loans in special servicing. Fourteen loans, representing 7.4% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2005 and partial-year 2006 operating results for 97.0% and 64.0%, respectively, of the performing loans. Moody's loan to value ratio for the conduit component is 85.6%, compared to 89.9% at securitization. The largest shadow rated loan is the Reisterstown Plaza Loan ($49.6 million - 4.2%), which is secured by a 792,000 square foot community shopping center located in Baltimore, Maryland. The loan is interest only during its full term. The loan is shadow rated Baa3, the same as at securitization. The second largest shadow rated loan is the World Apparel Center Loan ($37.2 million - 3.2%) which represents a 17.0% participation interest in a $219.0 million first mortgage loan. The loan is secured by a 1.1 million square foot, 40-story Class A office building located in the Times Square submarket of New York City. As of September 2006 occupancy was 95.0%, compared to 97.9% at securitization. The loan is interest-only for the first 36 months of its term, converting to a 360-month amortization schedule thereafter. Moody's current shadow rating is A2, the same as at securitization. The third largest shadow rated loan is the Fullerton Metrocenter Loan ($28.0 million - 2.4%), which is secured by a 242,080 square foot grocery anchored retail center located in Fullerton, California, approximately 30 miles east of Los Angeles. The loan is interest only for its full term. Moody's current shadow rating is Baa2, the same as at securitization. The fourth largest shadow rated loan is the New Castle Marketplace Loan ($14.1 million - 1.2%), which is secured by a 300,000 square foot retail center located in New Castle, Delaware, approximately 17 miles south of Wilmington. Moody's current shadow rating is Aaa, the same as at securitization. The fifth largest shadow rated loan is the Palmetto Business Park Loan ($14.0 million -- 1.2%), which is secured by a 493,000 square foot industrial property located in Palmetto, Florida, approximately 24 miles south of St. Petersburg. Moody's current shadow rating is A2, the same as at securitization. The sixth largest shadow rated loan is the Monticello Mall Loan ($13.3 million - 1.1%), which is secured by a 226,000 square foot retail property in Monticello, New York. Performance has deteriorated due to higher expenses. The loan is on the master servicer's watchlist due to deferred maintenance. The loan is interest only for its entire term. Moody's current shadow rating is Baa3 compared to Baa2 at securitization. The seventh largest shadow rated loan is the New Hampshire Tower Loan ($10.2 million - 0.9%), which is secured by a 207,000 square foot office property located in Manchester, New Hampshire. The loan fully amortizes. Moody's current shadow rating is Aa3, the same as at securitization. The three largest conduit loans represent 32.5% of the pool. The largest conduit loan is the 2941 Fairview Park Drive Loan ($73.3 million - 6.3%), which is secured by a 352,583 square foot office property located in Falls Church, Virginia. Moody's LTV is 94.0%, compared to 94.9% at securitization. The second largest conduit loan is the Summit Louisville Loan ($54.8 million - 4.7%), which is secured by a 341,213 square foot anchored retail property located in Louisville, Kentucky. The loan is interest only for its entire term. Moody's LTV is 84.4%, compared to 86.6% at securitization. The third largest conduit loan is the Lincoln Square Loan ($49.0 million - 4.2%), which represents a 31.2% pari passu interest in a $157.4 million first mortgage loan. The loan is secured by a 404,000 square foot Class A office building located in Washington, D.C. Moody's LTV is 93.3%, compared to 94.0% at securitization. BERRY PLASTICS: Merger Deal Prompts S&P to Hold Junk Credit Rating ------------------------------------------------------------------ Following the merger of Berry Plastics Group Inc. and Covalence Specialty Materials Holding Corp., Standard & Poor's Ratings Services took the following rating actions: -- S&P affirmed its 'B' corporate credit rating on Berry Plastics Holding Corp., a wholly owned subsidiary of Berry Plastics Group, which is now the obligor of substantially all the company's debt. -- S&P affirmed the 'B+' senior secured debt rating and '1' recovery rating on Berry Plastics Holding's $1.2 billion term loan C due 2015. The working name of the borrower had been New Berry Holding at the time the ratings were assigned. -- S&P affirmed the 'CCC+' subordinated debt rating on Berry Plastics Holding's $265 million 10.25% senior subordinated notes due 2016. These notes were formerly obligations of Covalence Specialty Materials Corp. -- S&P raised its rating on Berry Plastic Holding's $750 million second-priority senior secured notes due 2014 to 'B-' from 'CCC+' and removed the rating from CreditWatch where it had been placed with positive implications when the transaction was announced. The recovery rating on these notes has been revised to '3' from '4'. -- S&P withdrew Covalence's corporate credit rating as well as the ratings on Berry's and Covalence's former credit facilities, which were refinanced. The outlook is stable. At the time of the merger, total debt was about $2.7 billion. "The ratings reflect the strength of the merged business and the potential that the company will improve its highly aggressive financial profile to acceptable levels within the next couple of years," said Standard & Poor's credit analyst Liley Mehta. With more than $3.2 billion in annual sales pro forma for the merger, Berry ranks among the largest packaging companies in North America, with leading positions in both the rigid and flexible plastic packaging segments. While primarily domestic in terms of geographic coverage, the company boasts an impressive operating footprint with approximately 65 manufacturing facilities throughout the U.S., serving an array of end markets and customers. The concentration of customers has declined somewhat through the merger, and the combined administrative and manufacturing operations will likely present opportunities to realize synergies. However, the large scale of the businesses to be integrated presents meaningful execution risk and operating uncertainty until tangible progress is achieved. BISYS GROUP: Earns $14.3 Million in Quarter Ending December 31 -------------------------------------------------------------- BISYS Group Inc. filed its quarterly report on Form 10-Q for the second quarter of fiscal 2007 ended Dec. 31, 2006. Consolidated revenues grew to $221.3 million for the quarter, versus revenues of $207.3 million for the same period last year. Income from continuing operations improved from $11.4 million to $14.4 million year-on-year. Income from continuing operations included net interest income of $1.1 million, versus $3.2 million of net interest expense in the prior year, reflecting reduced net borrowings, funded by the proceeds from the sale of the Information Services business in Q3 fiscal 2006. The company earned $14.3 million in GAAP net income, compared to net income of $22.3 million in the prior year. On a pretax operating basis, the company earned $20.5 million from continuing operations in Q2 fiscal 2007 compared to $23.2 million for the same quarter of fiscal year 2006. Q2 2007 included $3.1 million in net excess corporate costs including costs related to the strategic alternatives process, offset by insurance recoveries received. Q2 fiscal 2006 included approximately $4.7 million in excess corporate expenses, including $3.0 million of litigation expenses, as well as professional fees and severance associated with the company's restatement process. Year-to-date fiscal 2007, the company reported pretax operating earnings of $38.2 million compared to $41.9 million for the same period of fiscal year 2006. YTD fiscal 2007 included $6.2 million in excess corporate expenses primarily related to the strategic alternatives process, offset by insurance recoveries received. YTD fiscal 2006 included approximately $11.2 million in excess corporate expenses, including $7.3 million of litigation expenses, as well as professional fees and severance associated with the company's restatement process. Year-to-date fiscal 2007, BISYS reported income from continuing operations of $28.5 million on revenues of $432.8 million compared to a net income of $21.0 million on revenues of $412.9 million for fiscal 2006, based largely on reduced interest expense. Corporate expenses for the quarter were higher than prior year due to the company-wide retention program for key employees during the company's strategic options review process. "We are pleased to be current in our filings and expect to file the Form 10-Q for our third fiscal quarter in a timely manner in May," Bob Casale, chairman of the board, interim president, and acting CEO, commented. "The strategic review is continuing, and we appreciate investors' patience as we look to complete the process. When this effort reaches its conclusion, we will announce the outcome." At Dec. 31, 2006, the company's balance sheet showed total assets of $1.3 billion and total liabilities of $345.6 million, resulting in a $976.8 million stockholders' equity. As of June 30, 2006, stockholders' equity was $341.6 million. Headquartered in New York City, The BISYS Group, Inc. (NYSE: BSG) -- http://www.bisys.com/-- provides outsourcing solutions that enable investment firms, insurance companies, and banks to serve their customers, grow their businesses, and respond to evolving regulatory requirements. Its Investment Services group provides administration and distribution services for mutual funds, hedge funds, private equity funds, retirement plans and other investment products. Through its Insurance Services group, BISYS is the distributes life insurance, commercial property/casualty insurance, long-term care, disability, and annuity products. BISYS' Information Services group provides industry-leading information processing, imaging, and back-office services to banks, insurance companies and corporate clients. * * * On Nov. 15, 2006, BISYS entered into a second amendment to its Credit Agreement dated as of Jan. 3, 2006. The Amendment amends the Credit Agreement to, among other things, extend to Jan. 15, 2007, the time to deliver its Form 10-K for the fiscal year ended June 30, 2006 and the related compliance certificate and to also extend the time to deliver its Form 10-Q for the first and second quarters of fiscal 2007. The Amendment further allows BISYS to seek an extension in the Maturity Date of the Credit Agreement from June 30, 2007 to Dec. 31, 2007, and includes an uncommitted accordion feature that allows BISYS to request a term loan of up to $50 million under the Credit Agreement. SunTrust, or participating lenders if the credit facility is syndicated, has no obligation to make such term loan. BON-TON STORES: Earns $88.4 Million in 4th Quarter Ended Feb. 3 --------------------------------------------------------------- The Bon-Ton Stores Inc. reported net income of $88.4 million, which included a non-recurring state tax benefit of $4.1 million, for the fourth quarter ended Feb. 3, 2007, compared to net income of $38.2 million, for the fourth quarter ended Jan. 28, 2006. For fiscal 2006, the company reported net income of $46.9 million compared to net income of $26 million for the prior year. Net income in fiscal 2006 was positively impacted by a non-recurring state tax adjustment of $4.1 million, and negatively impacted by severance costs incurred in connection with the closing of the Carson Pirie Scott State Street store of approximately $2.4 million on a pre-tax basis. Fiscal 2006 net income include the results of the Northern Department Store Group from March 5, 2006, the effective date of its acquisition from Saks Incorporated, and the results of five Parisian store locations from Oct. 29, 2006, the effective date of their acquisition from Belk Inc. Bud Bergren, president and chief Executive Officer, commented, "We are pleased with our fourth quarter and fiscal 2006 results, and I am extremely proud of the team that came together on March 6, 2006, and what they accomplished as we integrated the Bon-Ton and Carson's operations. Along with achieving our earnings goals for fiscal 2006, we succeeded in meeting key milestones during the fourth quarter and throughout the year." Mr. Bergren added, "Our accomplishments in 2006 position us well to achieve our 2007 goals. This is just the beginning of realizing the potential benefits we can achieve as we begin the second year as a bigger, smarter, stronger company which strives to exceed the expectations of our customers, associates and shareholders." For the fourth quarter of fiscal 2006, total sales increased 169% to $1.2 billion compared to $464.6 million for the prior year period. Fourth quarter sales include $805.7 million from Carson's and Parisian stores. Bon-Ton comparable store sales for the thirteen weeks ended Jan. 27, 2007, decreased 5.6% compared to the prior year thirteen-week period. Fiscal 2006 total sales increased 161% to $3.4 billion, compared to $1.3 billion for the prior year period. Fiscal 2006 sales include $2.1 billion from Carson's stores and Parisian stores. Bon-Ton comparable store sales for the fifty-two week period ended Jan. 27, 2007, decreased 2.7% compared to the prior year fifty-two week period. Other income increased $21.6 million to $35.9 million in the fourth quarter of fiscal 2006, compared to $14.3 million in the prior year period, primarily due to the inclusion of the Carson's operations in the fourth quarter of fiscal 2006. For the fifty- three weeks ended Feb. 3, 2007, other income increased $73.1 million to $93.5 million, compared to $20.4 million in the prior year fifty-two week period, primarily due to the inclusion of the Carson's operations for 11 months of fiscal 2006 and credit card revenues having been reflected as an offset to selling, general and administrative expenses through the third quarter in the prior year. In the fourth quarter of fiscal 2006, gross margin dollars increased $305.1 million compared to the prior year period. The gross margin rate increased 1.0 percentage point, to 38.3% of net sales, as compared to 37.3% reported in the prior year period. Fiscal 2006 gross margin dollars increased $778.5 million compared to the prior year period. The fiscal 2006 gross margin rate increased 0.9 percentage point to 37.0% of net sales, as compared to 36.1% reported in the prior year period. EBITDA, defined as net income before interest, income taxes, depreciation and amortization, increased $123.2 million in the fourth quarter of fiscal 2006 to $189.3 million compared to $66.2 million in the fourth quarter of fiscal 2005. Fiscal 2006 EBITDA increased $202.3 million to $280.6 million compared to $78.3 million in the prior year period. Depreciation and amortization expense in the fourth quarter of fiscal 2006 increased $23.7 million to $30.2 million compared to $6.6 million in the prior year period. Fiscal 2006 depreciation and amortization expense increased $78.8 million to $106.9 million compared to $28.1 million in the prior year period. Depreciation and amortization in the fourth quarter and fiscal 2006 reflects the impact of purchase accounting for the acquired Carson's operations. Fiscal 2006 includes a charge of approximately $3 million to reduce the value of duplicate and impaired assets. Interest expense, net, in the fourth quarter of fiscal 2006 increased $25.7 million to $28.1 million compared to $2.3 million in the prior year period. Fiscal 2006 interest expense, net, increased $95.1 million to $107.1 million compared to $12.1 million in the prior year period. In the first quarter of fiscal 2006, the company recorded a charge of $6.8 million reflecting the write-off of fees associated with a bridge facility and the early payoff of the company's previous debt. At Feb. 3, 2007, the company's balance sheet showed $2.1 billion in total assets, $1.8 billion in total liabilities, and $346.4 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Feb. 3, 2007, are available for free at http://researcharchives.com/t/s?1dc0 About The Bon-Ton Stores The Bon-Ton Stores Inc. (NasdaqGS: BONT) -- http://www.bonton.com/ -- operates 280 department stores, which includes eight furniture galleries in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, under the Parisian nameplate, two stores in the Detroit area. The stores offer a broad assortment of brand-name fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings. * * * The Bon-Ton Stores Inc.'s $1 billion senior secured credit facility carries Fitch's 'B+/RR2' rating. The company's $260 million mortgage loan facility carries Fitch's 'B+/RR2' rating and its $525 million of senior unsecured notes is rated 'CCC/RR6'. Fitch also rated the company's Issuer default rating at 'B-'. Moody's Investors Service's rated the company's $525 million of senior unsecured guaranteed notes at B2 and Corporate family rating at B1. BUCYRUS INT'L: Moody's Rates $825 Million Secured Term Loan at Ba3 ------------------------------------------------------------------ Moody's Investors Service confirmed the corporate family rating of Bucyrus International, Inc. at Ba3. Moody's also assigned Ba3 ratings to Bucyrus': * $400 million revolving credit facility, * EUR50 million revolving credit facility, and * $825 million secured term loan. Bucyrus' rating outlook is stable. This action concludes the ratings review initiated on December 18, 2006. The aforementioned credit arrangements will be utilized to finance the acquisition of DBT GmbH, a subsidiary of RAG Coal International, for $731 million, primarily in cash, and to refinance existing debt. The acquisition significantly transforms Bucyrus' existing operations, as revenues will increase approximately 160% over Bucyrus' 2006 sales. DBT's product line and its geographic footprint will facilitate Bucyrus' expansion into markets in which its presence is currently non-existent or minimal. Furthermore, the acquisition of DBT's underground mining machinery product lines enables Bucyrus to become a more diversified entity. Historically, Bucyrus' operations focused on the above-ground mining sector. Coupled with the opportunities for synergies and the existing mining and metals upcycle, the combined entity should experience several years of solid sales and bookings of original equipment and aftermarket parts, high factory utilization, higher margins, and healthy operating cash flow. Moody's estimates that on a pro forma basis at December 31, 2006, Bucyrus' Debt/EBITDA will be approximately 3.4x, the highest it has been since 2003. However, Moody's ratings anticipate that Bucyrus will use its strong cash flow in the current upcycle to reduce debt fairly quickly. During 2006, in response to strong demand, Bucyrus commenced a $112 million three-phase expansion of its South Milwaukee manufacturing operations. The first two phases are essentially completed and the third phase is expected to be completed by the first quarter of 2008. The remaining capex for the expansion is approximately $50-60 million. Moody's believes that operating cash flow will fund much of the expansion capex but the expansion capex will limit debt reduction in 2007. The expansion will enable Bucyrus to maintain, if not increase, OE market share in the current upcycle. While metal and commodity demand are notoriously cyclical, Moody's expects demand among the key commodities that drive Bucyrus' results -- coal, copper, oil sands and iron ore -- will remain strong for at least several years and propel higher levels of both OE and aftermarket sales of mining machine sales. Bucyrus' ratings are supported throughout the cycle by its high proportion of sales, historically approximately 70%, of aftermarket parts and services sales, which tend to be more stable than OE sales and which help keep the company's installed base of machines producing at maximum efficiency. With the acquisition of DBT, Bucyrus' installed base will increase proportionally, allowing the company to continue its strategy of minimizing sales volatility by providing aftermarket parts and services to its installed base. These ratings are associated with this rating action: Rating confirmed: * Corporate family rating -- Ba3 * Probability of Default Rating -- adjusted to Ba3 Ratings assigned: * $400 million five-year revolving credit facility -- Ba3 (LGD3, 43%) * EUR50 million five-year revolving credit facility -- Ba3 (LGD3, 43%) * $825 million seven-year secured term loan -- Ba3 (LGD3, 43%) Rating Withdrawn: * Senior secured revolving credit facility (due 2010) -- Ba1 (LGD2, 18%) Bucyrus International is a global manufacturer of electric mining shovels, walking draglines and rotary blasthole drills and provides aftermarket replacement parts and services for these machines. In 2006, it had sales of $738 million. Bucyrus is headquartered in South Milwaukee, Wisconsin. CADMUS COMMS: Moody's Withdraws Ba3 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service withdrew the Ba3 corporate family rating of Cadmus Communications Corporation and downgraded the Cadmus senior subordinated notes rating to B3. In conjunction with its acquisition of Cadmus, Cenveo Corporation executed supplemental indentures so that bondholders of both Cadmus and Cenveo bonds benefit from guarantees from all domestic subsidiaries of the combined entity and are equally subordinate to all senior debt. As such, Moody's views the Cadmus bonds as pari passu with the B3 rated Cenveo senior subordinate bonds. Cenveo offered to purchase the $125 million outstanding Cadmus senior subordinated notes. However, the majority of bondholders did not tender, and approximately $105 million of these bonds remain outstanding. Moody's is also revising the LGD assessments to reflect the capital structure following this redemption. The outlook remains negative. Cadmus Communications Corporation - Senior Subordinated Bond Downgraded to B3, LGD5 84%, from B1 - Ba3 Corporate Family Rating Withdrawn - Ba3 Probability of Default Rating Withdrawn Cenveo Corporation - B1 Corporate Family Rating Affirmed - Senior Subordinated Bond, Affirmed B3, LGD5 84% - Senior Secured Bank Credit Facility, Affirmed Ba3, LGD3 31% - Outlook Negative Headquartered in Stamford, Connecticut, Cenveo Corporation is a leading provider of envelopes, offset and digital printing services, and printed office products. Pro forma for its acquisition of Cadmus (closed in March 2007), annual revenue is approximately $2 billion. CENVEO CORP: Moody's Affirms B1 Corporate Family Rating ------------------------------------------------------- Moody's Investors Service withdrew the Ba3 corporate family rating of Cadmus Communications Corporation and downgraded the Cadmus senior subordinated notes rating to B3. In conjunction with its acquisition of Cadmus, Cenveo Corporation executed supplemental indentures so that bondholders of both Cadmus and Cenveo bonds benefit from guarantees from all domestic subsidiaries of the combined entity and are equally subordinate to all senior debt. As such, Moody's views the Cadmus bonds as pari passu with the B3 rated Cenveo senior subordinate bonds. Cenveo offered to purchase the $125 million outstanding Cadmus senior subordinated notes. However, the majority of bondholders did not tender, and approximately $105 million of these bonds remain outstanding. Moody's is also revising the LGD assessments to reflect the capital structure following this redemption. The outlook remains negative. Cadmus Communications Corporation - Senior Subordinated Bond Downgraded to B3, LGD5 84%, from B1 - Ba3 Corporate Family Rating Withdrawn - Ba3 Probability of Default Rating Withdrawn Cenveo Corporation - B1 Corporate Family Rating Affirmed - Senior Subordinated Bond, Affirmed B3, LGD5 84% - Senior Secured Bank Credit Facility, Affirmed Ba3, LGD3 31% - Outlook Negative Headquartered in Stamford, Connecticut, Cenveo Corporation is a leading provider of envelopes, offset and digital printing services, and printed office products. Pro forma for its acquisition of Cadmus (closed in March 2007), annual revenue is approximately $2 billion. CET SERVICES: Recurring Losses Prompt AMEX to Delist Common Stock ----------------------------------------------------------------- CET Services Inc. has received notice from the American Stock Exchange advising the company that it intends to file a delisting application with the Securities and Exchange Commission to remove CET's common stock from the exchange, because the company is not in compliance with the continued listing standards outlined in Section 1003(a)(ii) of the AMEX Company Guide in that the company had stockholders' equity of less than $4 million and losses from continuing operations or net losses in three out of its four recent fiscal years. Following a review of the company's Annual Report on Form 10-KSB for the year ended Dec. 31, 2006, AMEX concluded that the company has not made progress consistent with a plan of compliance submitted in response to a prior notice from AMEX in October 2005, and therefore has not demonstrated an ability to regain compliance by May 1, 2007 as required by the AMEX, in connection with its acceptance of the plan. In addition, AMEX stated that the company has fallen out of compliance with certain additional continued listing standards. In particular, AMEX pointed out that the company is not in compliance with Section 1003(a)(iii) in that it has shareholders' equity of less than $6 million and losses from continuing operations and net losses in its five most recent fiscal years. AMEX also stated that based on its review of the preliminary proxy statement filed in connection with the proposed merger with Zoi interactive Technologies Inc., CET will not satisfy the AMEX initial listing requirements at the time of closing of the merger and will not be eligible for continued listing on the AMEX. This determination was based on the failure to satisfy requirements relating to the minimum market price per share, minimum market capitalization and minimum assets and revenues. CET has a limited right to appeal the determination by the AMEX staff. If CET desires to appeal the determination it is required to submit a request for a hearing before a Listing Qualifications Panel with the AMEX by April 26, 2007. The company has not yet decided whether it will appeal the determination. CET has filed a preliminary proxy statement in connection with the merger agreement with Zoi Interactive Technologies Inc. CET and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of CET in connection with the merger. Information regarding the special interests of these directors and executive officers in the transaction described herein is included in the preliminary proxy statement of CET. About CET Services Headquartered in Centennial, Colorado, CET Services Inc. (AMEX: ENV) provides environmental consulting, engineering, remediation, and related construction activities. It operates in two segments: water/wastewater construction and management and residential housing development and construction. The company currently redevelops a project under an agreement with the City of Westminster, Colorado. The project includes the purchase of certain property, the demolition of existing structures, environmental remediation and construction of 50 new affordable housing units. CET Services Inc. reported a net loss of $339,096 on revenue of $2,980,970 for the year ended Dec. 31, 2006, compared with a net loss of $396,770 on revenue of $3,223,072 for the year ended Dec. 31, 2005. * * * GHP Horwath P.C., in Denver, expressed substantial doubt about CET Services Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's net losses during 2006 and 2005, and notes payable of $1,410,000 due in May and June 2007. CHARMING SHOPPES: S&P Rates Proposed $250 Mil. Senior Bonds at BB- ------------------------------------------------------------------ Standard & Poor's Ratings Service assigned its 'BB-' rating to Bensalem, Pennsylvania-based Charming Shoppes Inc.'s proposed $250 million convertible senior unsecured bonds due 2014. Standard & Poor's has also affirmed Charming Shoppe's existing ratings, including the 'BB-' corporate credit rating. The outlook is stable. Proceeds from the $250 million convertible bonds will be used to refund all or a portion of the company's existing $150 million 4.75% senior convertible notes due 2012. Remaining proceeds will be used for share repurchases (approximately $140 million) and to pay the cost of convertible note hedge transactions. S&P expect pro forma leverage to increase to about 3.0x with this transaction from 2.7x, but still consistent with the current rating. "The stable outlook anticipates that Charming Shoppes will be able to maintain credit ratios which are currently better than average for the rating, given the relatively high business risk," explained Standard & Poor's credit analyst Jackie E. Oberoi. S&P would consider a positive outlook if the company successfully grows its catalog business, which results in stronger cash flow protection measures (total debt to EBITDA consistently less than 2.8x). COMPLETE RETREATS: Court Extends Plan-Filing Period to May 31 ------------------------------------------------------------- The Honorable Alan H.W. Shiff of the U.S. Bankruptcy Court for the District of Connecticut further extended the exclusive period of Complete Retreats LLC and its debtor-affiliates to: (a) file a Chapter 11 plan through and including May 31, 2007; and (b) solicit votes on that plan through and including July 31, 2007. As reported in the Troubled Company Reporter on March 29, 2007, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, asserted that an extension of the Exclusive Periods is justified by the progress the Debtors have made in their Chapter 11 cases and in attempting to formulate and develop an exit strategy. Since filing for bankruptcy, the Debtors have made significant progress toward stabilizing their business operations, Mr. Daman averred. Among others, the Debtors have been successful in obtaining a replacement DIP financing facility from Ableco Finance, LLC. The Debtors have also conducted numerous depositions and interrogatories on certain employees and other parties. Most importantly, Mr. Daman noted, the Debtors have sought and obtained the Court's approval to sell substantially all of their assets for $98,000,000 to Ultimate Resort, LLC. An extension, Mr. Daman explained, will also afford the Debtors time to: (1) close a Global Asset Sale; (2) continue to sell properties not included in the Asset Sale; and (3) finalize discussions and negotiations with the Official Committee of Unsecured Creditors regarding a consensual liquidating plan of reorganization and the appropriate procedure to wind-down the Debtors' estates and affairs. The Debtors are hopeful that they will finalize and file a consensual reorganization plan prior to May 31, 2007. "Extending the Exclusive Periods is also warranted because the Debtors have generally been paying their postpetition debts as they become due," Mr. Daman told the Court. Mr. Daman also reminded the Court that the Debtors' cases are large and complex with more than 60 Debtors, and $130,000,000 in total consolidated assets and $400,000,000 in total consolidated debts as of the Petition Date. About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). COMPLETE RETREATS: Wants Removal of Action Period Moved to July 19 ------------------------------------------------------------------ Complete Retreats LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Connecticut to further extend the time by which they may remove state court proceedings, through and including July 19, 2007. When the Debtors filed for bankruptcy, they were party to approximately 21 state court proceedings. The Debtors, though, have not completed a thorough review of those proceedings to determine whether any individual actions should be removed under Rule 9027(a) of the Federal Rules of Bankruptcy Procedure, Jeffrey K. Daman, Esq., at Dechert LLP, in Hartford, Connecticut, tells the Court. The Debtors' cases are complex and the Debtors have focused primarily on stabilizing their business, addressing various creditor concerns; working on closing the sale of their assets to to Ultimate Resort, LLC, and preparing a liquidating plan and disclosure statement, Mr. Daman relates. Moreover, in the last few month, the Debtors have begun investigating and commencing adversary proceedings against various parties. An extension of Removal Period will afford the Debtors sufficient opportunity to assess whether the Proceedings, and any others, can and should be removed, and will consequently protect the Debtors' valuable right to adjudicate lawsuits pursuant to Section 1452, Mr. Daman avers. The Debtors' adversaries will not be prejudiced by an extension, as they may not prosecute actions absent relief from the automatic stay, Mr. Daman points out. Furthermore, an extension will not prejudice any party to a proceeding that the Debtors seek to remove from pursuing a remand pursuant to Section 1452(b), Mr. Daman adds. About Complete Retreats Headquartered in Westport, Connecticut, Complete Retreats LLC operates five-star hospitality and real estate management businesses. In addition to its mainline destination club business, the Debtor also operates an air travel program for destination club members, a villa business, luxury car rental services, wine sales services, fine art sales program, and other amenity programs for members. Complete Retreats and its debtor-affiliates filed for chapter 11 protection on July 23, 2006 (Bankr. D. Conn. Case No. 06-50245). Nicholas H. Mancuso, Esq. and Jeffrey K. Daman, Esq. at Dechert LLP represent the Debtors in their restructuring efforts. Michael J. Reilly, Esq., at Bingham McCutchen LP, in Hartford, Connecticut, serves as counsel to the Official Committee of Unsecured Creditors. No estimated assets have been listed in the Debtors' schedules, however, the Debtors disclosed $308,000,000 in total debts. (Complete Retreats Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). CONSECO INC: Edward Bonach to Succeed Eugene Bullis as CFO ---------------------------------------------------------- Edward J. Bonach, FSA, MAAA, will become executive vice president and chief financial officer of Conseco Inc., effective May 10, 2007, succeeding Eugene M. Bullis, who is retiring. "Ed Bonach is one of the most able financial executives in our industry," Conseco CEO C. James Prieur said. "He brings to Conseco a wealth of experience as a chief actuary, as a business leader, and as a CFO. He has a strong record of achievement and leadership, and we are very happy to welcome him to our management team. "At the same time," Mr. Prieur said, "we congratulate Gene Bullis on his well- earned retirement, and we thank him for his many contributions to Conseco. Gene was a pillar of strength during the company's reorganization and emergence from bankruptcy." "Conseco has made real progress toward its goal of becoming a pre- eminent provider of life and health insurance to America's working families," Mr. Bonach said, "and I'm delighted to have the opportunity to help Conseco realize its potential, strategically partnering with Jim Prieur and the leadership team." Mr. Bonach will be responsible for the actuarial and finance areas and will report to Mr. Prieur. Mr. Bonach joins Conseco from National Life Group, where he was executive vice president and chief financial officer. Before joining National Life in 2002, he was with Allianz Life for 23 years, where his positions included President - Reinsurance Division and chief financial officer. Mr. Bonach holds a B.A. degree (cum laude) in mathematics from St. Johns University, Collegeville, Minnesota. Headquartered in Carmel, Indiana, Conseco, Inc. (NYSE:CNO) -- http://www.conseco.com/-- is a holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company operates in two segments, Bankers Life and Conseco Insurance Group, and a third segment comprised of businesses in run-off, which includes blocks of business that the company no longer markets or underwrites and are managed separately from its other businesses. The company also has a corporate segment which consists of holding company activities and certain noninsurance company businesses that are not related to its operating segments. * * * Fitch Rating affirmed the BB+ Issuer Default rating, the BBB- Senior secured debt, and BB- Preferred stock rating of Conseco Inc. in November 2006. CRAFT NO. 1: Moody's Junks Rating on Class C and D Notes -------------------------------------------------------- Moody's Investors Service has downgraded two classes of notes and two classes of certificates issued by CRAFT No. 1 Trust 1998-A. The securities were issued by CRAFT, a Delaware statutory trust, in April 1998. The complete rating action is: Issuer: CRAFT No. 1 Trust 1998-A * Class A Floating Rate Notes due May 15, 2020, downgraded to Baa3 from A1; * Class B Floating Rate Notes due May 15, 2020, downgraded to B3 from Baa1; * Class C Fixed Rate Certificates due May 15, 2020, downgraded to Caa2 from Ba2; * Class D Fixed Rate Certificates due May 15, 2020, downgraded to Caa3 from B2. The CRAFT transaction is backed by lease cashflows and aircraft values associated with a portfolio of 59 Bombardier Dash 8 and CRJ aircraft. In the wake of airline bankruptcies, a number of aircraft in the CRAFT portfolio came off their original finance leases, and many aircraft in the portfolio have spent varying periods of time off-lease, which lowered leasing revenues and slowed amortization. This month, the Contingency Reserve Account, which supported expenses associated with the off-lease aircraft, was depleted, and further expenses associated with these aircraft (including placement, refurbishment, and so on) will be paid at the top of the waterfall. In addition to the aforementioned factors, potential increased risk to the transaction stems from the increasing proportion of operating leases in the portfolio, which may be subject to uncertainty in future lease rates as well as potential remarketing expenses, as opposed to full payout finance leases and loans. Additionally, recent sale prices for the CRJ aircraft have been roughly 25-40% lower than the appraised base values, in part due to the "as is" nature of the sales (whereby purchaser bears refurbishment costs), and in part to current market prices being less than appraisal base values. Bombardier, as Servicer on behalf of CRAFT, has remarketed most of the off-lease aircraft. In the last year, four CRJs have been sold, five CRJs have been placed into operating leases, and one CRJ has been placed in a U.S. leveraged lease. In addition, three Dash 8 aircraft recently off lease from a North American carrier have been delivered to a South American carrier, and six more will be delivered to the same in coming months, on operating lease. Six CRJ aircraft remain on the ground, with one slated for delivery in conjunction with a signed operating lease commitment, and the others are being marketed with likely sales proceeds and conditions to be similar to those related to the recent CRJ sales. CREDIT SUISSE: Fitch Junks Rating on Four Class Certificates ------------------------------------------------------------ Fitch Ratings has taken rating actions on these Credit Suisse First Boston Home Equity Asset Trust transactions: CSFB Home Equity Asset Trust, series 2002-4 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B-1 downgraded to 'BB' from 'BBB-'. CSFB Home Equity Asset Trust, series 2002-5 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B-1 downgraded to 'B+' from 'BB+'. CSFB Home Equity Asset Trust, series 2003-1 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A+'; -- Class M-3 affirmed at 'A'; -- Class B-1 downgraded to 'BBB' from 'BBB+'; -- Class B-2 downgraded to 'B' from 'BB'; -- Class B-3 downgraded to 'C' from 'B+', and assigned a Distressed Recovery rating of DR5. CSFB Home Equity Asset Trust, series 2003-2 -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'A-' from 'A+'; -- Class M-3 downgraded to 'BBB-' from 'A'; -- Class B-1 downgraded to 'B' from 'BB+'; -- Class B-2 downgraded to 'C' from 'B', and assigned a Distressed Recovery rating of DR5. CSFB Home Equity Asset Trust, series 2003-3 -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'A-' from 'A+'; -- Class M-3 downgraded to 'BBB+' from 'A-'; -- Class B-1 downgraded to 'BB+' from 'BBB+'; -- Class B-2 downgraded to 'BB-' from 'BBB-'; -- Class B-3 downgraded to 'B' from 'BB+'. CSFB Home Equity Asset Trust, series 2003-4 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 downgraded to 'BBB-' from 'BBB+'; -- Class B-2 downgraded to 'BB-' from 'BB+'; -- Class B-3 downgraded to 'B+' from 'BB'. CSFB Home Equity Asset Trust, series 2003-5 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'A-' from 'A'; -- Class M-3 downgraded to 'BBB-' from 'A-'; -- Class B-1 downgraded to 'BB' from 'BBB+'; -- Class B-2 downgraded to 'B' from 'BB'; -- Class B-3 downgraded to 'C' from 'B+', and assigned a Distressed Recovery rating of DR6. CSFB Home Equity Asset Trust, series 2003-6 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 downgraded to 'BB' from 'BBB-'; -- Class B-3 downgraded to 'C' from 'BB-', and assigned a Distressed Recovery rating of DR4. CSFB Home Equity Asset Trust, series 2003-7 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 downgraded to 'BBB' from 'BBB+'; -- Class B-2 downgraded to 'BB-' from 'BB+'; -- Class B-3 downgraded to 'B' from 'B+'. CSFB Home Equity Asset Trust, series 2003-8 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 downgraded to 'BB+' from 'BBB-'; -- Class B-3 downgraded to 'B' from 'BB-'. CSFB Home Equity Asset Trust, Series 2004-1 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'. CSFB Home Equity Asset Trust, Series 2004-2 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A'; -- Class B-1 affirmed at 'A-'; -- Class B-2 affirmed at 'BBB+'; -- Class B-3 affirmed at 'BBB-'. CSFB Home Equity Asset Trust, Series 2004-3 -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class M-3 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'. CSFB Home Equity Asset Trust, Series 2004-4 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'. CSFB Home Equity Asset Trust, Series 2004-5 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class B-1 affirmed at 'BBB+'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 affirmed at 'BBB-'. CSFB Home Equity Asset Trust, Series 2004-6 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A+'; -- Class M-6 affirmed at 'A'; -- Class B-1 affirmed at 'A-'; -- Class B-2 affirmed at 'BBB+'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BBB-'. CSFB Home Equity Asset Trust, Series 2004-7 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA+'; -- Class M-3 affirmed at 'AA'; -- Class M-4 affirmed at 'AA-'; -- Class M-5 affirmed at 'A+'; -- Class M-6 affirmed at 'A'; -- Class B-1 affirmed at 'A-'; -- Class B-2 affirmed at 'BBB+'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BBB-'. CSFB Home Equity Asset Trust, Series 2004-8 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA+'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA-'; -- Class M-4 affirmed at 'A+'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A'; -- Class B-1 affirmed at 'A-'; -- Class B-2 affirmed at 'BBB+'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BBB-'. The collateral of the above transactions consists of first and second lien fixed-rate and adjustable-rate subprime mortgage loans. As of the March 2007 distribution date, the transactions are seasoned from a range of 26 to 56 months, and the pool factors (current collateral balance as a percentage of original collateral balance) range from approximately 6% to 29%. All of the mortgage loans were purchased by an affiliate of the depositor from various sellers in secondary market transactions. The affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $2.151 billion of outstanding certificates. The classes with negative rating actions reflect the deterioration in the relationship of CE to future loss expectations and affect approximately $165.995 million of outstanding certificates. All of the affected transactions have pool factors below 15%. The HEAT 2002 and 2003 vintage collateral pools have generally experienced faster prepayments than the industry average due to higher than average ARM and California concentrations. The fast prepayments and rising interest rates have reduced the excess spread available to cover losses while adverse selection in the remaining pool has resulted in rising delinquency and loss rates. As a result, monthly losses are generally exceeding excess spread resulting in overcollateralization amounts below their target amounts. The mortgage loans are being serviced by various entities which include Ocwen Financial Corp. ('RPS2' rated by Fitch), Wells Fargo Home Mortgage, Inc. ('RPS1'), Chase Home Finance, LLC ('RPS1') and Select Portfolio Servicing, Inc. ('RPS2'). The depositor is Credit Suisse First Boston Mortgage Securities Corp. Fitch will continue to closely monitor the above transactions. CRUM & FORSTER: S&P Assigns BB Rating on $300 Mil. Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' senior unsecured debt rating to Crum & Forster Holdings Corp.'s (BB/Negative/--; C&F) $300 million senior notes issuance due 2017. The new debt issuance is expected to pay down the existing senior notes outstanding of $300 million due 2013 and therefore leverage figures are not expected to change materially. At year-end 2006, C&F's standalone debt-to-capital ratio was 21%. However, the new issuance is expected to have a longer maturity and a lower interest rate. The interest rate on the existing notes is 10.375%. As a nonpublic company, core to its parent Fairfax Financial Holdings Ltd., C&F's financial flexibility is limited. "The rating reflects C&F's historical utilization of finite reinsurance and past reserve charges, a significant portion of which were related to latent asbestos reserves," explained Standard & Poor's credit analyst Damien Magarelli. The company is also retaining more property risk, which could increase earnings and capital volatility. "Offsetting these negative factors are good capitalization, a good competitive position, and improving earnings," Mr. Magarelli added. As a core company within FFH, C&F's outlook is directly linked to FFH and is based on the view that the qualitative factors of governance, accounting control, and enterprise risk management are negative at this time and support the negative outlook. However, FFH's earnings in 2006 were strong. FFH maintains a good competitive position, and expectations published in the July 2006 CreditWatch report have been met. Prospectively, FFH is expected to improve its governance, accounting control, and ERM. Since its CreditWatch in July 2006, FFH has made improvements and started enhancing some risk controls, but the effectiveness and implementation of all these governance and risk control initiatives remain unproven in the near term. Standard & Poor's Ratings Services expects these issues will be addressed in 2007. From a governance perspective, we believe FFH's corporate governance has reduced the effectiveness of the Board at identifying and actively addressing emerging issues, and has limited its focus on operational risk controls. Risk control weaknesses are being addressed but are largely within the accounting function and contributed to the restatement. A downgrade is possible if FFH is unable to further improve its governance oversight, accounting risk controls, and overall risk management by October 2007. A revision to a stable outlook is possible if FFH meets these expectations, along with underwriting profits and a combined ratio of less than 100% at the consolidated continuing operations, if reserve charges are within expectations, the capital ratio is consistent with the rating, and as long as holding company cash is maintained at more than $250 million. CVS CORP: Balks at Backdating Charges Against 2 Caremark Directors ------------------------------------------------------------------ CVS/Caremark Corporation strenuously disagrees with the position taken by a group purporting to represent certain union pension funds urging CVS/Caremark shareholders to withhold their vote from two directors recommended for election at CVS/Caremark's shareholder meeting. "We are looking forward to working with Roger Headrick and Lance Piccolo as members of the CVS/Caremark Board," Tom Ryan, President and Chief Executive Officer of CVS/Caremark Corporation, said. "Both of these individuals have substantial industry experience and expertise. They have overseen prior large and successful Caremark acquisitions, which should prove invaluable to CVS/Caremark as we move forward in integrating our retail, pharmacy benefit management and specialty pharmacy businesses." It is also important to note that Mr. Headrick and Mr. Piccolo were members of the Caremark board during a period of outstanding performance by that company, which resulted in tremendous shareholder value creation. In addition, the merger process overseen by the Caremark Board resulted in an overwhelming vote (73% of those voting) for the merger. In regard to the issue of stock option grants, Caremark has undertaken and completed a review of its granting practices, including options granted to directors, and concluded that these practices were entirely appropriate. Furthermore, any allegation that Caremark directors received any special protection against backdating as a result of the merger with CVS is simply not true. While as part of the merger agreement Caremark directors and officers received contractual assurance of standard Directors and Officers insurance, this is usual for almost all companies. This same type of insurance applied to both Caremark and CVS directors separately before the merger. "We're very excited about the prospects for our new company," Mr. Ryan said. "CVS/Caremark will create significant shareholder value while transforming the delivery of health care and providing significant benefits to employers, health plans and consumers." About CVS/Caremark CVS/Caremark Corporation -- http://www.cvs.com/-- fka CVS Corporation operates in the retail drugstore industry in the United States. As of Dec. 30, 2006, it operated 6,202 retail and specialty pharmacy stores in 43 states and the District of Columbia. It has two segments: Retail Pharmacy and Pharmacy Benefit Management. It sells prescription drugs and an assortment of general merchandise, including over-the-counter drugs, beauty products and cosmetics, film and photo finishing services, seasonal merchandise, greeting cards and convenience foods, through its CVS/pharmacy retail stores. The PBM business provides a range of prescription benefit management services to managed care and other organizations. On June 2, 2006, it acquired approximately 700 standalone drugstores and a distribution center (collectively, the Standalone Drug Business) from Albertson's, Inc. In March 2007, CVS Corporation completed the acquisition of Caremark Rx Inc. The combined company is named CVS/Caremark Corporation. * * * As reported in the Troubled Company Reporter on March 8, 2007, Moody's Investors Service confirmed the Ba1 rating of CVS Corp.'s $125 million Series A-2 lease obligations. DAIMLERCHRYSLER AG: Unions Remain Opposed to Chrysler Sale ---------------------------------------------------------- Representatives from the United Auto Workers, the Canadian Auto Workers and IG Metall unions reiterated their opposition to DaimlerChrysler AG's plan to sell Chrysler Group, especially if private equity groups take over, Gina Chon reports for The Wall Street Journal. The union leaders said "it made absolute sense to hold on to Chrysler" in the wake of a restructuring plan and new product launches as they made their case during a meeting in Germany with DaimlerChrysler Chief Executive Dieter Zetsche, the WSJ states. However, Ms. Chon notes that the labor representatives learned nothing new about the looming sale as Dr. Zetsche repeated what he has said publicly: The company is talking to potential partners and all options were on the table. The TCR-Europe reported on April 24 that UAW members, who have proposed a 70% employee-stock-ownership plan for Chrysler, met with representatives of billionaire investor Kirk Kerkorian's Tracinda Corp., which has submitted a US$4.5 billion bid for the U.S. unit. The company is presently negotiating with all Chrysler bidders, including Cerberus Capital Management LP; joint bidders Blackstone Group and Centerbridge Capital Partners LP; and the tandem of Magna International Inc. and Onex Corp., but has ignored Tracinda Corp. 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. DELUXE ENTERTAINMENT: S&P Rates Proposed $845MM Facilities at 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its bank loan and recovery ratings to an aggregate $845 million in credit facilities proposed by motion picture services company Deluxe Entertainment Services Group Inc. At the same time, S&P affirmed the corporate credit rating on the company at 'B' and the outlook at stable. The 'B' bank loan rating, at the same level as the corporate credit rating on Los Angeles-based Deluxe, and '3' recovery rating on the company's proposed $735 million first-lien credit facilities indicate the expectation for meaningful (50%-80%) recovery of principal in the event of a payment default. At the same time, S&P assigned a 'CCC+' bank loan rating, two notches below the corporate credit rating on Deluxe, and '5' recovery rating to the company's proposed $110 million second-lien term loan due 2013, indicating the expectation for negligible (0%- 25%) recovery of principal in the event of a payment default. Proceeds from the proposed transactions will be used to refinancing existing debt, to pay a $132 million dividend, and to meet general corporate needs. The ratings on Deluxe reflect the company's significant exposure to wide adoption of digital projection, dependence on several large movie studios, likelihood for future advance payments to movie studios to secure contracts, and aggressive financial policy as evidenced by the debt-financed dividend. These factors are only partially offset by the company's leading market share in motion picture film processing and duplication, good near-term growth prospects in its creative services and European film laboratory businesses, and long-term contracts with movie studios. "Because of the short-term growth potential at its Creative Services and European film laboratories businesses," said Standard & Poor's credit analyst Tulip Lim, "Deluxe should be able to reduce debt over the near term, but longer term prospects are uncertain." DOUBLECLICK INC: Moody's Withdraws Ratings on Google's Offer ------------------------------------------------------------ Moody's Investors Service announced the withdrawal of DoubleClick's ratings following Google Inc.'s recent announcement of the signing of a definitive agreement to acquire DoubleClick Inc. for $3.1 billion in cash. The announcement represents the culmination of a series of restructuring activities by DoubleClick management since being taken private in July 2005 by an investor group including Hellman & Friedman LLC, JMI Equity Fund, LP, and company management for approximately $1.1 billion including cash, equity, and approximately $405 million in first and second lien debt financing. During this time period, management reduced expenses, made strategic acquisitions such as Klipmart Corporation, and divested business lines including the Abacus division. The sale of the Abacus division produced approximately $435 million in cash, a portion of which was subsequently used to pay down all outstanding balances on the company's first and second lien borrowings. Consequently, with no remaining rated debt and the expectation that the company is unlikely to continue as a standalone entity, Moody's has withdrawn DoubleClick's remaining ratings including its corporate family rating. Headquartered in New York City, New York, DoubleClick Inc. is a leading provider of technology and services to web publishers, advertisers and advertising agencies to help manage online advertising operations, as well as a provider of tools, products and services to enable direct marketers to optimize their marketing programs. ENERGY PARTNERS: Closes Private Placement of $450MM Senior Notes ---------------------------------------------------------------- Energy Partners, Ltd. completed the offering of $450 million aggregate principal amount of senior unsecured notes, consisting of $300 million aggregate principal amount of 9-3/4% Senior Notes due 2014 and $150 million aggregate principal amount of Senior Floating Rate Notes. The interest rate on the Senior Floating Rate Notes for a particular interest period will be an annual rate equal to the three-month LIBOR as determined on the related interest determination date plus 5.125%. Additionally, the company also has secured a new $300 million revolving credit facility with an initial availability of $225 million and a borrowing base of $200 million to replace its existing credit facility. The company also stated that it had purchased $143.4 million in principal amount of its outstanding Senior Notes due 2010 (CUSIP No. 29270UAC9) all of which had been tendered by the Consent Payment Deadline on April 9, 2007 pursuant to its cash tender offer to purchase any and all of the Notes, or approximately 96% of the Notes outstanding. The tender offer for the Notes is set to expire at 5:00 p.m. EDT, on May 3, 2007. Any other outstanding Notes may be tendered up until such time. "We are pleased to have successfully completed our equity tender offer, debt placement, refinancing of our revolving credit facility and repurchase of our previously outstanding Notes within the time frame we initially established," Richard A. Bachmann, EPL's Chairman and CEO, commented. "While there are a few items to be wrapped up, we look forward to focusing our full attention on our core business including our exciting drilling program." Equity Self-Tender Offer Results EPL also has disclosed the preliminary results of its cash tender offer to purchase up to 8,700,000 issued and outstanding common shares at $23 per share, which expired April 23, 2007, at 5:00 p.m. EDT. Based on the preliminary count by the depositary for the tender offer, an aggregate of 38,988,994 shares of EPL common stock were properly tendered and not withdrawn at a price of $23 per share, including 6,564,036 shares that were tendered through notice of guaranteed delivery. This represents approximately 97% of the issued and outstanding common shares of EPL. Based on these preliminary results, the company expects to purchase 8,700,000 shares in the tender on a pro rata basis pursuant to procedures specified in EPL's Tender Offer Statement. The results are preliminary and subject to verification by the depositary of the proper delivery of the shares validly tendered and not withdrawn. Final results will be reported following the completion of the verification and the proration process. The company expects payment for the shares accepted for purchase and the return of all shares tendered and not accepted for purchase to occur within one week. About Energy Partners Based in New Orleans, Louisiana, 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. EPIX PHARMACEUTICALS: Dec. 31 Balance Sheet Upside-Down by $32MM ---------------------------------------------------------------- As of Dec. 31, 2006, EPIX Pharmaceuticals Inc.'s balance sheet showed $125,027,492 in total assets and $157,048,773 in total liabilities, resulting in a $32,021,281 total stockholders' deficit. The company incurred $157,393,198 in net loss on $6,040,542 total revenues for the year ended Dec. 31, 2006, as compared with $21,268,958 in net loss on $7,189,661 total revenues for the year ended Dec. 31, 2005. As of Dec. 31, 2006, the company had cash, cash equivalents and short-term investments of $30,332,468 and $79,210,430, respectively, as compared with $72,502,906 and $52,225,590, respectively, at the end of Dec. 31, 2005. The company had $100,000,000 of convertible debt outstanding at Dec. 31, 2006. About 32,500,000 million shares of common stock were outstanding. The decrease in cash, cash equivalents and available-for-sale marketable securities was primarily attributed to funding of ongoing operations and a net cash payment of $7,100,000 to former Predix shareholders in connection with the merger with Predix. The company used about $15,000,000 of cash to fund operating activities for year ended Dec. 31, 2006, as compares with $24,300,000 to fund operations for the same period in 2005. The company estimated that cash, cash equivalents and marketable securities on hand as of Dec. 31, 2006, and anticipated revenue the company will earn in 2007 and 2008 will fund its operations through 2008. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1dcf Key operational goals of the company for 2007 include: -- Initiating a Phase 2b trial for PRX-00023 in major depression during the first half of 2007; -- Obtaining results from a Phase 2a trial of PRX-08066 in pulmonary hypertension associated with chronic obstructive pulmonary disease in mid-2007; -- Obtaining data from a Phase 1b tolerability trial of PRX-07034 in mid-2007; -- Obtaining results from a Phase 2a trial of PRX-03140 in Alzheimer's disease during the second half of 2007; and -- Filing a formal appeal with the Center for Drug Evaluation and Research (CDER) at the FDA asking the CDER director to approve the company's novel blood-pool imaging agent Vasovist(TM), a gadofosveset trisodium injection, which is approved for marketing in 30 countries outside of the U.S. NASDAQ Delisting Proceedings The company was notified on April 3, 2007, that it was not in compliance with NASDAQ listing rules because it failed to timely file its annual report on Form 10-K with the Securities and Exchange Commission. The delay was due to the special committee investigation conducted on the company. With the filing of the company's 2006 annual report on Form 10-K, the company believes it has returned to full compliance with SEC reporting requirements and NASDAQ listing requirements. In addition, although the company's 3% Convertible Senior Notes do not mature until 2024, note holders may require the company to repurchase these notes at par, plus accrued and unpaid interest, on June 15, 2011, 2014 and 2019 and upon certain other designated events including, but not limited to, the termination of trading of the company's common stock on the NASDAQ Global Market. About EPIX Pharmaceuticals EPIX Pharmaceuticals Inc. (NasdaqGM: EPIX), headquartered in Lexington, Mass. -- http://www.epixmed.com/-- discovers, develops and commercializes novel pharmaceutical products to better diagnose, treat and manage patients. The company has four therapeutic product candidates in clinical trials targeting conditions such as depression, Alzheimer's disease, cardiovascular disease and obesity. In addition, the company has two imaging agents in various stages of clinical development. Its blood-pool imaging agent, Vasovist is approved for marketing in the European Union, Canada, Iceland, Norway, Switzerland and Australia, and is currently marketed in Europe. The company also has collaborations with SmithKline Beecham Corporation, Amgen Inc., Cystic Fibrosis Foundation Therapeutics Incorporated, and Bayer Schering Pharma AG, Germany. EXTENDICARE REAL: Moody's Puts Corporate Family Rating at B1 ------------------------------------------------------------ Moody's Investors Service has assigned a B1 Corporate Family Rating to Extendicare Real Estate Investment Trust. Extendicare is a healthcare REIT and operator that provides skilled nursing facility care and related services in Canada and the USA. In November 2006, Extendicare completed a reorganization that included the spin-off of its assisted living business in the USA, and its conversion into a Canadian REIT. Moody's has also withdrawn the Ba3 Corporate Family Rating of Extendicare Health Services, Inc., the company's US subsidiary. Extendicare's rating outlook is stable. "Moody's ratings reflect Extendicare's good operating performance, as the REIT has been successfully shifting its US patient mix to focus on more profitable, higher acuity Medicare patients," say Lori Marks, Moody's analyst. The REIT's leverage is consistent with its rating category, and fixed charge coverage is solid. In addition, Extendicare is well-diversified geographically, with about one-third of its facilities in Canada and two-thirds in the USA. The REIT realizes lower returns from its Canadian operations; however, this business provides a more stable cash flow stream, reflecting Canadian health policy. The stability of Extendicare's Canadian operations is an important counterbalance to its US SNF business, which is heavily reliant on government reimbursement and subject to a higher degree of earnings volatility. Moody's also notes that Extendicare's financial flexibility is limited: most of its assets are encumbered, and its debt maturities are clustered, with 68% of total debt maturing in 2011. In addition, Extendicare is also a healthcare operator, and operates most all of the facilities it owns. This exposes the REIT to various contingent and liability risks that other US healthcare REITs do not have, as well as operational volatility. Moody's stable rating outlook for Extendicare is based on our expectation that the REIT will continue its focus on improving core operations, while demonstrating measured growth on a leverage-neutral basis. The stable outlook also assumes that the REIT will maintain fixed charge coverage above 2.5x, including rent payments, as a counterbalance to the high amount of potential earnings volatility. Moody's stated that upward rating movement would result from greater property type diversification resulting in a decreased reliance on US Government reimbursement, secured debt below 30% of gross assets, and gross assets above C$2.5 billion, without a material increase in leverage. Downward rating pressure would come if fixed charge coverage (EBITDAR/(interest expense + rent payments)) were to fall below 2.5x, or Net Debt/EBITDA were to rise above 5.0x. This rating was assigned with a stable outlook: Extendicare Real Estate Investment Trust -- B1 Corporate Family Rating This rating was withdrawn: Extendicare Health Services, Inc. -- Ba3 Corporate Family Rating Extendicare Real Estate Investment Trust (TSX: EXE.UN) is a major provider of long-term care and related services in North America. Through its subsidiaries, Extendicare operates 234 nursing and assisted living facilities in North America, with capacity for close to 27,000 residents. As well, through its operations in the USA, Extendicare offers medical specialty services such as subacute care and rehabilitative therapy services, while home healthcare services are provided in Canada. FINANCE AMERICA: Fitch Cuts Rating on Class M-9 Certs. to BB- ------------------------------------------------------------- Fitch Ratings has taken rating actions on these Finance America Mortgage Loan Trust issues: Series 2004-1 -- Class A-SIO affirmed at 'AAA'; -- Class M-1 affirmed at 'AAA'; -- Class M-2 affirmed at 'AA'; -- Class M-3 affirmed at 'AA'; -- Class M-4 affirmed at 'AA-'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7, rated 'BBB+', placed on Rating Watch Negative; -- Class M-8, rated 'BBB', placed on Rating Watch Negative. Series 2004-2 -- Class M-1 upgraded to 'AAA' from 'AA+'; -- Class M-2 affirmed at 'AA+'; -- Class M-3 affirmed at 'AA'; -- Class M-4 affirmed at 'AA-'; -- Class M-5 affirmed at 'A'; -- Class M-6 affirmed at 'A-'; -- Class M-7 affirmed at 'BBB+'; -- Class M-8 downgraded to 'BBB-'from 'BBB'; -- Class M-9 downgraded to 'BB-'from 'BBB-'. The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $180 million of outstanding certificates, as of the March 2007 distribution date. The upgrade of the M-1 class of series 2004-2 ($22,998,404 outstanding, as of March 2007) reflects an improvement in the relationship between CE and future expected losses. The negative rating actions, affecting approximately $36 million of outstanding certificates, reflect deterioration of CE relative to expected future losses. As of the March 2007 distribution date, the transactions are seasoned 34 months and 31 months, respectively. The pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) are 14% and 19%, respectively. The 60+ delinquencies are 23.45% of the current collateral balance for the series 2004-1. This includes foreclosures and real estate owned of 4.16% and 6.09%, respectively. For the series 2004-2, the 60+ delinquencies are 19.68% of the current collateral balance. This number includes foreclosures and REO of 7.78% and 5.76%, respectively. Cumulative losses to date on these transactions are 1.48% and 1.01% of respective original collateral balances. All of the mortgage loans in the aforementioned transactions were either originated or acquired by Finance America, LLC. The mortgage loans consist of fixed- and adjustable-rate, fully amortizing and balloon payment mortgage loans and are secured by first and second liens, primarily on one- to four-family residential properties. Aurora Loan Services LLC, (rated 'RMS1-' for master servicing by Fitch) is the master servicer for the series 2004-1 transaction. Litton Loan Servicing LP (rated 'RPS1' for subprime products) is the servicer for this transaction. HomeEq Servicing Corporation (rated 'RPS1' for subprime products) is the servicer for the series 2004-2 transaction. Fitch will continue to closely monitor these transactions. FREMONT HOME: DBRS Cuts Rating on S. 2006-B Cl. SL-B1 Certs. to B ----------------------------------------------------------------- Dominion Bond Rating Service has downgraded three classes and placed three classes Under Review with Negative Implications from Fremont Home Loan Trust, Mortgage-Backed Certificates, Series 2006-B. * $6,519,000 Mortgage-Backed Certificates, Fremont Series 2006-B, Class SL-M8 downgraded to BB (high) from BBB * $5,811,000 Mortgage-Backed Certificates, Fremont Series 2006-B, Class SL-M9 downgraded to BB (low) from BBB (low) * $6,034,100 Mortgage-Backed Certificates, Fremont Series 2006-B, Class SL-B1 downgraded to B (low) from BB These classes were downgraded as a result of the increased 90+ days delinquency pipeline relative to the available level of credit enhancement. The mortgage loans consist of fixed rate mortgage loans that are secured by second liens on residential properties. * $6,9450 Mortgage-Backed Certificates, Fremont Series 2006- B, Class SL-M7, currently rated A (low) * $6,523,000 Mortgage-Backed Certificates, Series 2006-B, Class M-10, currently rated BBB (low) * $10,043,000 Mortgage-Backed Certificates, Series 2006-B, Class M-11, currently rated BBB (low) These classes were placed Under Review with Negative Implications as a result of the increased 90+ day delinquency pipeline relative to the available level of credit enhancement. GE COMMERCIAL: Moody's Holds Low-B Ratings on Nine Certificates --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of GE Commercial Mortgage Corporation, Commercial Mortgage Pass-Through Certificates, Series 2004-C3 as: - Class A-1, $41,084,197, affirmed at Aaa - Class A-2, $240,728,000, affirmed at Aaa - Class A-3, $221,265,000, affirmed at Aaa - Class A-4, $301,331,000, affirmed at Aaa - Class A1A, $320,962,324, affirmed at Aaa - Class X-1, Notional, affirmed at Aaa - Class X-2, Notional, affirmed at Aaa - Class B, $32,727,000, affirmed at Aa2 - Class C, $15,502,000, affirmed at Aa3 - Class D, $27,559,000, affirmed at A2 - Class E, $15,502,000, affirmed at A3 - Class F, $15,502,000, affirmed at Baa1 - Class G, $12,057,000, affirmed at Baa2 - Class H, $18,947,000 affirmed at Baa3 - Class J, $6,890,000 affirmed at Ba1 - Class K, $6,890,000, affirmed at Ba2 - Class L, $6,890,000, affirmed at Ba3 - Class M, $5,167,000, affirmed at B1 - Class N, $5,168,000, affirmed at B2 - Class SHP-1, $4,976,952, affirmed at Ba2 - Class SHP-2, $10,428,588, affirmed at Ba3 - Class SHP-3, $3,378,682, affirmed at B1 - Class SHP-4, $13,471,182, affirmed at B1 As of the April 10, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 4.5% to $1.32 billion from $1.38 billion at securitization. The Certificates are collateralized by 126 mortgage loans. The loans range in size from less than 1.0% to 5.0% of the pool, with the top 10 loans representing 32.5% of the pool. The pool includes three shadow rated loans representing 13.4% of the outstanding pool balance. Seven loans, representing 5.8% of the pool, have defeased and are secured by U.S. Government securities. There have been no loans liquidated from the trust. Currently there are no loans in special servicing. Fourteen loans, representing 10.6% of the pool, are on the master servicer's watchlist. In addition to the pooled portion there is also $32.5 million of non-pooled subordinate debt which secures Classes SHP-1, SHP-2, SHP-3 and SHP-4. Moody's was provided with full-year 2005 and partial-year 2006 operating results for 67.0% and 44.8%, respectively, of the performing loans. Moody's loan to value ratio for the conduit component is 92.5%, compared to 96.4% at last review and compared to 97.1% at securitization. The largest shadow rated loan is the DDR Portfolio Loan ($66.0 million - 5.0%), which is secured by a portfolio of 20 retail properties totaling 3.3 million square feet. The properties are located in New York, Minnesota, Pennsylvania, Arizona, North Carolina and Tennessee. The loan represents a 30.7% pari-passu interest of a senior portion of a first mortgage loan totaling $215.0 million. The portfolio has suffered because of a decrease in base rent and increase expenses. The loan is interest only for its entire five-year term. Moody's current shadow rating is Ba2, compared to Baa2 at securitization. The second largest shadow rated loan is the 731 Lexington Avenue Loan ($63.0 million - 4.8%), which is secured by a 694,000 square foot office condominium. The collateral is part of a 1.4 million square foot complex in midtown Manhattan on Lexington Avenue between 58th and 59th Streets. The loan represents a 20.5% pari- passu interest of a senior portion of a first mortgage loan totaling $308.0 million. In addition there is $86.0 million of subordinate debt held outside of the trust. Built in 2005, the condominium is 100.0% leased to Bloomberg, LP through 2028. If the loan is not financed at its balloon date in 2014, 100.0% of the excess cash flow will be applied to loan amortization. Moody's current shadow rating is A3, the same as at securitization. The third largest shadow rated loan is the Strategic Hotel Portfolio Loan ($48.1 million - 3.7%), which is secured by three Hyatt hotels located in New Orleans, Louisiana (46.0%), Phoenix, Arizona (23.0%) and La Jolla, California (31.0%). The loan represents a 24.1% pari-passu interest of a senior portion of a first mortgage loan totaling $200.1 million. There is $32.5 million of subordinate debt that secures non-pooled Classes SHP-1, SHP-2, SHP-3 and SHP-4. The properties were built between 1976 and 1989 and contain a total of 2,315 rooms. The loan is on the master servicer's watchlist as the New Orleans Hyatt was severely damaged during Hurricane Katrina. The property is currently under redevelopment and is not open for business. The property is scheduled to be re-opened in September 2007. Portfolio occupancy, ADR and RevPAR are 34.0%, $152.85 and $51.96, respectively; compared to 64.6%, $144.41 and $93.26, respectively, at securitization. Excluding the New Orleans Hyatt, portfolio occupancy, ADR and RevPAR are 70.09%, $152.85 and $107.13, respectively. RevPAR for the two operational hotels was $102.10 at securitization. Moody's current shadow rating on the pooled senior note is Ba1, compared to Baa2 at securitization. Moody's current shadow ratings on Classes SHP-1, SHP-2, SHP-3 and SHP-4 are Ba2 to B1, the same as at last review and compared to Baa2 to Ba1 at securitization. The three largest conduit loans represent 10.0% of the pool. The largest conduit loan is the Bank of America Plaza Loan ($57.5 million - 4.4%), which consists of a 750,000 square foot Class A office building in St. Louis, Missouri. Moody's LTV is 92.4%, compared to 94.4% at last review and compared to 98.8% at securitization. The second largest conduit loan is the Sun Communities Portfolio 5 Loan ($40.8 million - 3.1%), which is secured by six manufactured home communities containing 1,418 pads and 831 RV spaces. The properties are located in Michigan (2), Texas (2), Florida and Ohio. Portfolio's performance has improved due to increased revenue. The loan was interest only for the first 24 months of its loan term but now amortizes on a 360-month schedule. Moody's LTV is 90.9%, compared to 99.4% at last review and compared to 99.8% at securitization. The third largest conduit loan is the Extra Space Portfolio #2 Loan ($33.4 million - 2.5%), which is secured by 10 self storage facilities totaling 5,893 units or 598,000 square feet. The properties are located in Florida (4), California (2), Missouri (2), Pennsylvania and Massachusetts. The portfolio's performance has improved due to increases in revenue and occupancy. In addition the loan has amortized by approximately 6.5% since securitization. Moody's LTV is 85.0%, compared to 87.7% at last review and compared to 91.8% at securitization. GLOBAL CREDIT: S&P Cuts Rating on Global Preferred Shares to BB --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Global Credit Pref. Corp.'s preferred shares and removed them from CreditWatch Negative, where they were placed Jan. 12, 2007. The lowering of the ratings on the preferred shares of Global Credit Pref Corp. mirrors the lowering today of the rating on the credit-linked note to which the preferred shares are linked. Ratings Lowered And Removed From CreditWatch Negative Global Credit Pref Corp. To From -- ---- Preferred shares Global scale BB BB+/Watch Neg National scale P-3 P-3(High)/Watch Neg GOODYEAR TIRE: Closes Amendment & Restatement on Credit Facilities ------------------------------------------------------------------ The Goodyear Tire & Rubber Company has closed on an amendment and restatement of three of its credit facilities. Significant changes to the amended and restated agreements include: - an extension of maturity until 2013, a reduction of the applicable interest rate by between 50 and 75 basis points and a more flexible covenant package on the company's $1.5 billion asset-based revolving credit facility; - an extension of maturity until 2014, a reduction of the applicable interest rate by 100 basis points, which will be further reduced by 25 basis points if Goodyear's credit ratings are 'BB-' and 'Ba3' or higher, and a more flexible covenant package on the company's $1.2 billion second lien term loan; and - the conversion of the EUR155 million term loan portion of the existing facility to a revolving facility, an extension of maturity until 2012, a reduction of the applicable interest rate by 75 basis points and 37.5 basis points and a more flexible covenant package on the company's EUR505 million European credit facility. "This refinancing action reduces the company's interest expense," Richard J. Kramer, president, North American Tire and chief financial officer, said. "Creates additional operational flexibility, extends maturities and helps address the company's efforts to improve Goodyear's balance sheet. The company anticipates annualized interest expense savings of $15 million to $20 million." About Goodyear Tire and Rubber Company Headquartered in Akron, Ohio, Goodyear Tire and Rubber Company (NYSE:GT) -- http://www.goodyear.com/-- manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries around the world. Goodyear employs more than 75,000 people worldwide. * * * As reported in the Troubled Company Reporter on April 10, 2007, Fitch Ratings has affirmed ratings for The Goodyear Tire & Rubber Company, including 'B' Issuer Default Rating; 'BB/RR1' rating of its $1.5 billion first-lien credit facility; 'BB/RR1' rating of its $1.2 billion second-lien term loan; 'B/RR4' rating of its $300 million third-lien term loan; 'B/RR4' rating of its $650 million third-lien senior secured notes; and 'CCC+/RR6' Senior unsecured debt rating. GS MORTGAGE: Fitch Holds Low-B Ratings on Six Loan Classes ---------------------------------------------------------- Fitch Ratings upgrades GS Mortgage Securities Corp. II Series 2004-C1 as: -- $20.1 million class B to 'AAA' from 'AA+'; -- $7.8 million class C to 'AA+' from 'AA'; -- $16.7 million class D to 'AA-' from 'A+'. In addition, Fitch affirms the ratings on these classes: -- $373.5 million class A-1 at 'AAA'; -- $190.5 million class A-2 at 'AAA'; -- $153.3 million class A-1A at 'AAA'; -- Interest only classes X-1 and X-2 at 'AAA'; -- $12.3 million class E at 'A'; -- $13.4 million class F at 'A-'; -- $7.8 million class G at 'BBB'; -- $7.8 million class H at 'BBB-'; -- $5.6 million class J at 'BB+'; -- $3.3 million class K at 'BB'; -- $3.3 million class L at 'BB-'; -- $4.5 million class M at 'B+'; -- $3.3 million class N at 'B'; -- $3.3 million class O at 'B-'. Fitch does not rate the $13.4 million class P. The upgrades reflect the improved credit enhancement levels from the prepayment of five loans, including the credit assessed Inland Portfolio, scheduled amortization, and the defeasance of the largest loan in the pool (6.5%). As of the April 2007 distribution date, the pool has paid down 5.9%, to $839.9 million from $892.3 million at issuance. There are currently no delinquent or specially serviced loans. The two remaining credit assessed loans, The Water Tower Center (6.4%) and The DDR Portfolio (5.4%), maintain the investment grade credit assessments based on their stable performance. The Water Tower Place loan is secured by a regional anchored shopping mall located in Chicago, Illinois. There are a total of six pari passu notes A-1 through A-6 with the A-3 and A-4 pieces included in the trust. The year-end 2006 occupancy remained strong at 97%, compared to 96.1% at issuance. The DDR Portfolio loan is secured by 10 anchored retail malls located in eight states. There are three pari passu notes A-1, A- 2, and A-3 with the A-2 piece included in the trust. The YE 2006 occupancy increased to 96.8% from 92.9% at issuance. HANCOCK FABRICS: Court Gives Final Nod on $105 Mil. DIP Financing ----------------------------------------------------------------- The Hon. Judge Brendan Linehan Shannon of the United States Bankruptcy Court for the District of Delaware, authorized Hancock Fabrics Inc. and its debtor-affiliates, on a final basis, to borrow and obtain loans and letters of credits of up to $105,000,000 from Wachovia Bank N.A., and certain lenders, pursuant to financing agreements, as amended by a Ratification and Amendment Agreement. The Debtors and the DIP Lenders may amend and supplement the Financing Agreements without further Court approval as long as the amendment is not "material" and the Debtors consult the Official Committee of Unsecured Creditors and notify the U.S. Trustee and counsel to the Creditors Committee, the Court rules. The Debtors will pay the Prepetition Lenders all prepetition obligations in accordance with the Financing Agreements. As of March 21, 2007, the Debtors owe not less than $64,936,402, plus interests and fees under the Prepetition Financing Agreements. All prepetition practices and procedures for the payment and collection of proceeds of the Collateral, the turnover of cash, the delivery of property to the Lenders and the funding pursuant to the Financing Agreements, including the Blocked Account Agreement and any other similar lockbox or blocked depository bank account arrangements will continue postpetition without interruption. To secure the prompt payment and performance of all of the Debtors' Obligations under the Financing Agreements, the DIP Lenders are granted, as of March 21, 2007, valid and perfected first priority security interests and liens, superior to all other liens, claims or security interests that any creditor to the Debtors' estates may have, in the Collateral. For all obligations existing or thereafter arising pursuant to the Final DIP Order and the Financing Agreements, the DIP Lenders are granted, an allowed superpriority administrative claim pursuant to Section 364(c)(1) of the Bankruptcy Code. The Superpriority Claim will only be subject to the Permitted Liens and Claims. The Superpriority Claim will extend to 50% of the proceeds of the Debtors' real property leasehold interests. Before the occurrence of an Event of Default under the DIP Financing, the Debtors may use, sell, lease or pledge as security the Real Property Leasehold Interests and use their proceeds at their own discretion. After the occurrence of an Event of Default, any sale, use, or lease of the Real Property Leasehold Interests will require the prior written consent of Wachovia. Upon the occurrence of an Event of Default, the DIP Lenders' liens, claims and security interests in the Collateral and their Superpriority Claim will only be subject to: (a) statutory fees payable to the U.S. Trustee pursuant to Section 1930(a)(6) of the Judicial and Judiciary Procedures Code; (b) fees payable to the Clerk of the Bankruptcy Court; and (c) allowed professional fees not exceeding $500,000 in the aggregate. A full-text copy of the Final DIP Order is available for free at: http://researcharchives.com/t/s?1dbb On April 19, 2007, the Debtors filed another amendment to the Ratification and Amendment Agreement and the Loan and Security Agreement. Among others, the Amendments provide that the DIP Lenders' consent is not required for the Debtors to implement the going-out-of-business sale of certain of their stories. A full-text copy of the Amendment to the Ratification Agreement filed with the Court on April 19, 2007, is available for free at: http://researcharchives.com/t/s?1dbc About Hancock Fabrics 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. 6, http://bankrupt.com/newsstand/or 215/945-7000). HANCOCK FABRICS: Panel Wants Cooley Godward as Lead Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors in Hancock Fabrics Inc. and its debtor-affiliates' bankruptcy cases seeks the authority of the United States Bankruptcy Court for the District of Delaware to retain Cooley Godward Kronish, LLP, as its lead bankruptcy counsel, nunc pro tunc to April 4, 2007. Michael McDonagh, the co-chairperson of the Committee, informs the Court that Cooley has extensive experience in representing creditors' committees in Chapter 11 retail proceedings like Federated Department Stores, Bob's Stores, Gateway Apparel, Jacobson's Stores, Levitz Home Furnishings, Stage Stores and Liberty House. Cooley also has extensive experience in representing creditors' committees in Delaware cases, including Copelands Enterprises, Weiner's Stores, Lid Corporation, Just for Feet, Today's Man and Loehmann's. As lead counsel to the Creditors Committee, Cooley will: (a) attend meetings of the Committee; (b) review financial information furnished by the Debtors to the Committee; (c) review and investigate the liens of the purported secured parties; (d) confer with the Debtors' management and counsel; (e) coordinate efforts to sell the Debtors' assets in a manner that maximizes the value for unsecured creditors; (f) review the Debtors' proposed business plan; (g) advise the Committee as to the ramifications regarding all of the Debtors' activities and motions before the Court; (h) investigate potential causes of action that may inure to the benefit of the Committee's constituency; (i) file appropriate pleadings on the Committee' behalf; (j) review and analyze accountant's work product and reports to the Committee; (k) provide the Committee with legal advice in relation to the Debtors' Chapter 11 cases; (l) prepare various applications and memoranda of law and handle all other matters relating to the representation of the Committee that may arise; (m) assist the Committee in negotiations with the Debtors and other parties-in-interest on any plan of reorganization that may be proposed; and (n) provide information to creditors in accordance with Section 1102(b)(3) of the Bankruptcy Code, subject to confidentiality agreements and court orders. Cooley's services will be paid according to the firm's customary hourly rates: Professional Hourly Rates ------------ ------------ Jay Indyke, Esq. $680 Cathy Hershcopf $605 Gregory Plotko $480 Brent Weisenberg $460 Michael Klein $350 Cooley will also be reimbursed for any out-of-pocket expenses the firm incurs in connection with its representation of the Creditors Committee. Jay Indyke, Esq., a partner at Cooley Godward Kronish, LLP, assures the Court that his firm does not represent any interest adverse to the Creditors Committee, the Debtors and their estates, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. According to Mr. Indyke, Cooley previously represented, currently represents and may represent Wachovia Bank, N.A., the CIT Group and PricewaterhouseCoopers in matters totally unrelated to the Debtors' Chapter 11 cases. About Hancock Fabrics 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. 6, http://bankrupt.com/newsstand/or 215/945-7000). HAYES LEMMERZ: Distributes Subscription Rights in $180MM Offering ----------------------------------------------------------------- Hayes Lemmerz International Inc. disclosed the distribution of non-transferable subscription rights in its $180 million rights offering and the execution of a commitment letter for a new $495 million senior secured credit facility. The company is distributing to stockholders of record as of April 10, 2007, rights to purchase shares of its common stock in connection with the Rights Offering. Stockholders on the record date will receive 1.4 rights for each share of the company's common stock held on the record date. Each right entitles the holder to purchase one share of common stock at a price of $3.25 per share until 5:00 p.m., Eastern Daylight Time, on Monday, May 21, 2007, unless extended by the company. Stockholders who receive rights through a bank or broker will receive instructions for exercising rights from their bank or broker and may be required to act prior to the stated expiration time. Hayes Lemmerz may terminate the Rights Offering for any reason prior to the expiration time. The Rights Offering and the related agreements are subject to the approval of the company's stockholders. A special meeting to approve the rights offering and certain other matters is scheduled on May 4, 2007, at the company's headquarters in Northville, Michigan. Hayes Lemmerz also has executed a commitment letter with Citigroup Global Markets Inc. and Deutsche Bank AG, New York Branch and Deutsche Bank Securities Inc. to provide new senior secured credit facilities in an amount of up to $495 million. Citigroup and Deutsche Bank will act as joint arrangers and joint book-runners for the syndication of the new credit facilities. The new credit facilities are expected to consist of a term loan facility of up to $350 million, which will be denominated in euros and placed with a subsidiary in Europe, a revolving credit facility of up to $125 million and a synthetic letter of credit facility of up to $20 million. The proceeds of the new credit facilities will be used, together with the proceeds of other financing activities; to refinance the company's obligations under its Amended and Restated Credit Agreement dated April 11, 2005. The refinancing of the Amended and Restated Credit Agreement and the placement of a portion of the company's debt outside the United States are conditions to the obligation of Deutsche Bank Securities Inc. and SPCP Group LLC, an affiliate of Silver Point Capital LP, to backstop the Rights Offering. Additional proceeds will be used to replace existing letters of credit and to provide for working capital and other general corporate purposes, and to pay the fees and expenses associated with the new credit facilities. The company and its officers and directors may be deemed participants in the solicitation of proxies from the company's stockholders in connection with the approval of the Rights Offering and certain related proposals. About Hayes Lemmerz International Inc. Hayes Lemmerz International Inc. (Nasdaq: HAYZ) -- http://www.hayes-lemmerz.com/-- is a global supplier of automotive and commercial highway wheels, brakes and powertrain components. The company has 30 facilities and approximately 8,500 employees worldwide. * * * As reported in the Troubled Company Reporter on March 20, 2007, Standard & Poor's Ratings Services placed its 'B-' corporate credit rating and related issue ratings on Hayes Lemmerz International Inc. on CreditWatch with positive implications, After the company's disclosure that it plans to repurchase its senior unsecured debt with proceeds from an equity rights offering. Hayes' recovery ratings were not placed on CreditWatch. HEARTLAND INC: Meyler & Company Raises Going Concern Doubt ---------------------------------------------------------- Meyler & Company LLC, in Middletown, N.J., expressed substantial doubt about Heartland Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditing company pointed to the company's negative working capital of $505,516, accumulated deficit of $13,958,625, and existing uncertain conditions relative to the company's obtaining capital in the equity markets. Heartland Inc. reported net income of $4.1 million on sales of $20.2 million for the year ended Dec. 31, 2006, compared with a net loss of $13.5 million on sales of $16.4 million for the year ended Dec. 31, 2005. The company incurred operating expenses of $22.7 million in 2006 and $21.2 million in 2005. The primary factor contributing to the net earnings increase were from a $4 million gain on disposition of discontinued operations and a $2.9 million gain on disposal of discontinued operations of variable interest entities in 2006. At Dec. 31, 2006, the company's balance sheet showed $8.1 million in total assets, $7.2 million in liabilities, and approximately $900,000 in total stockholders' equity. The company's balance sheet at Dec. 31, 2006, also showed strained liquidity with $5.8 million in total current assets available to pay $6.2 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?1dca About Heartland Inc. Heartland Inc. (OTC BB: HTLJ.OB) through its two major subsidiaries, Mound Technologies Inc. and Karkela Construction Inc., is engaged in steel fabrication and construction. HERCULES INC: High Court Sustains $119 Mil. Cleanup Costs Judgment ------------------------------------------------------------------ The United States Supreme Court affirmed a lower federal court's $119 million judgment against Hercules Incorporated, Mark H. Anderson of The Wall Street Journal reports. The ruling relates to Hercules' Petition for Writ of Certiorari in a lawsuit captioned United States of America v. Vertac Chemical Corp., et al (Civil No. 4:80CV00109 GH, U.S. District Court, Eastern District of Arkansas, Western Division). In its Petition for Writ of Certiorari, Hercules requested the Supreme Court to review a decision by the Court of Appeals for the Eighth Circuit affirming a final judgment entered against the Company by the U.S. District Court. Hercules says in a regulatory filing that it has previously accrued total net liability of $124.9 million, including interest, which is recorded as a current liability as of March 31, 2007. The company expects to pay the amount promptly, together with interest accruing up to the date of payment. Vertac Litigation The Vertac Litigation is a cost-recovery action based upon the Comprehensive Environmental Response, Compensation and Liability Act, as well as other statutes. The case has been in litigation since 1980, and involves liability for costs in connection with the investigation and remediation of the Vertac Chemical Corporation site in Jacksonville, Arkansas. According to the company, it owned and operated the site from December 1961 until 1971. The site was used for the manufacture of certain herbicides and, at the order of the United States, Agent Orange. In 1971, the company says the site was leased to Vertac's predecessor. In 1976, the company sold the site to Vertac. The site was abandoned by Vertac in 1987, and Vertac was subsequently placed into receivership. Both prior to and following the abandonment of the site, the EPA and the Arkansas Department of Pollution Control and Ecology were involved in the investigation and remediation of contamination at and around the site. Pursuant to several orders issued under CERCLA, the Company actively participated in many of those activities. The cleanup is essentially complete, except for certain on-going maintenance and monitoring activities. The litigation primarily concerns the responsibility and allocation of liability for the costs incurred in connection with the activities undertaken by the EPA. EPA Judgment Claim In 1999, the District Court finalized a ruling holding the company and Uniroyal jointly and severally liable for approximately $100 million in costs incurred by the EPA, as well as costs to be incurred in the future. In 2000, the District Court allocated 2.6% of the amounts to Uniroyal and 97.4% of the amounts to the company. Both the company and Uniroyal appealed those rulings to the U.S. Court of Appeals for the Eighth Circuit. In 2001, the Court of Appeals reversed the District Court's rulings as to joint and several liability and allocation, and remanded the case back to the District Court for several determinations, including a determination of whether the harms at the site giving rise to the EPA's claims were divisible. The trial on remand occurred in late 2001. By Memorandum Opinion and Order dated March 30, 2005, the District Court largely affirmed its prior findings and prior judgment against the company and Uniroyal, and the prior allocation with respect to the company and Uniroyal, although the District Court did agree that the company should not be liable for costs associated with a particular off-site landfill, and held that the judgment should be reduced accordingly. By Order dated June 6, 2005, the District Court entered a Final Judgment in favor of the United States and against the company for $119.3 million, of which amount Uniroyal has been held jointly and severally liable for $110.4 million, with the company alone liable for the difference. The Final Judgment also provided that both the company and Uniroyal are responsible for any additional response costs incurred or to be incurred by the United States after June 1, 1998, as well as post-judgment interest running from the date of the Final Judgment. In addition, the District Court re-affirmed its prior holding which allocated 2.6% of the $110.4 million in response costs for which Uniroyal is jointly and severally liable, or $2.9 million, to Uniroyal. Finally, the Final Judgment found Uniroyal liable to the company for 2.6% of the response costs incurred by the company of approximately $27.4 million, or $0.7 million. Both the company and Uniroyal appealed the Final Judgment to the Court of Appeals, asserting that the District Court had committed reversible error. Court of Appeals Affirms Final Judgment On July 13, 2006, a panel of the Court of Appeals affirmed the Final Judgment of the District Court. The company requested that the panel's determination be reviewed en banc, but that request was denied by Order dated Sept. 19, 2006. On Dec. 14, 2006, the company filed a Petition for a Writ of Certiorari with the United States Supreme Court, requesting that the Supreme Court review the matter. About Hercules Inc. Headquartered in Wilmington, Delaware, Hercules Inc. (NYSE: HPC) -- http://www.herc.com/-- is a global manufacturer and marketer of specialty chemicals and related services. Its principal products are chemicals for the paper industry, water-soluble polymers, and specialty resins. * * * Hercules Inc. carries Moody's Ba2 Long-term Corporate Family, Senior Unsecured Debt, and Probability of Default Ratings, and B1 Junior Subordinated Debt Rating. The company also carries Standard & Poor's BB Long-term Foreign and Local Issuer Credit Ratings. INTEGRAL NUCLEAR: Organizational Meeting Scheduled for Friday ------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, will hold an organizational meeting to appoint an official committee of unsecured creditors in Integral Nuclear Associates, LLC and its debtor-affiliates' chapter 11 cases this Friday, April 27, 2007, at 10:00 a.m., at the U.S. Trustee's Office, Room 1401, 14th Floor, in Newark, New Jersey. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a representative of the Debtor will attend and provide background information regarding the cases. Creditors interested in serving on a Committee should complete and return to the U.S. Trustee a statement indicating their willingness to serve on an official committee. Official creditors' committees, constituted under Section 1102 of the Bankruptcy Code, ordinarily consist of the seven largest creditors who are willing to serve on a committee. In some Chapter 11 cases, the U.S. Trustee is persuaded to appoint multiple creditors' committees. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes that the reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Integral Nuclear Based in Paoli, Pennsylvania, Integral Nuclear Associates, LLC -- http://www.integralpet.com/-- operates nuclear imaging centers. The company and 25 of its affiliates filed for Chapter 11 protection on April 15, 2007 (Bankr. D. N.J. Case Nos. 07-15183 through 07-15215). Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $1 million to $100 million. INTEGRATED SURGICAL: Most & Company Raises Going Concern Doubt -------------------------------------------------------------- Most & Company LLP cited conditions that raise substantial doubt about Integrated Surgical Systems Inc.'s ability to continue as a going concern after auditing the company's financial statements as of Dec. 31, 2006. The conditions were the company's recurring operating losses, working capital of $587,392, and accumulated deficit of $64,694,975 as of Dec. 31, 2006. Net income available to common stockholders was $1,587,800 on net revenues of $2,593,584 for the year ended Dec. 31, 2006. The company had net income available to common stockholders of $2,004,696 on net revenues of $3,429,802 for the prior year- period. The company's balance sheet as of Dec. 31, 2006, showed total stockholders' deficit of $2,250,921, total assets of $1,932,391, and total liabilities of $4,183,312. At Dec. 31, 2006, the cash balance of the company increased to $1,327,000 from $159,000 primarily as the result of cash provided by financing operations of $2,558,000, which were partially reduced by cash used in operating activities of $1,386,000. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1dbd About Integrated Surgical Based in Sacramento, Calif., Integrated Surgical Systems Inc. (PNK: RDOC.PK) -- http://www.robodoc.com/-- designs, manufactures, sells, and services image-directed computer controlled robotics products for use in orthopedic and neurosurgical procedures. The company's principal product, the ROBODOC(R) Surgical System is a robotic system that integrates the ORTHODOC(R) Presurgical Planner for hip and knee replacement surgery. INTERPOOL INC: Buyout Deal Cues S&P to Hold Negative CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Interpool Inc. (BB/Watch Neg/--) remain on CreditWatch with negative implications, where they were placed on Jan. 16, 2007. The CreditWatch update follows Interpool's announcement that it has entered into a definitive agreement to be acquired by certain private equity funds. The ratings were initially placed on CreditWatch after Interpool announced it had received an offer to be acquired. "We will meet with management to discuss the Interpool's financial profile to resolve the CreditWatch listing," said Standard & Poor's credit analyst Betsy Snyder. Interpool is the largest lessor of chassis in North America. Chassis are wheeled frames attached to cargo containers that, when combined, are equivalent to a trailer that can be trucked to its destination. Interpool's only major competitor in this business is privately held Flexi-Van Leasing Inc. Interpool also manages chassis for shipping lines and neutral pools at railroad and marine terminals. The chassis leasing business has tended to generate strong and stable cash flow, even in periods of economic weakness. Interpool is one the larger participants in the marine cargo container leasing market, its other major business. The company focuses on long-term operating and finance leases. Marine cargo container leasing is a cyclical business, dependent on global economic merchandise trends. However, Interpool's earnings and cash flow from marine cargo container leasing benefit from the long-term nature of its leases. IPCS INC: Incurs $46 Million Net Loss in Year Ended December 31 --------------------------------------------------------------- iPCS Inc. delivered financial and operational results for its fourth quarter and fiscal year ended Dec. 31, 2006, supplementing the company's activity results, which it previously disclosed on Jan. 25, 2007. For the full year ended Dec. 31, 2006, the company generated total revenues of $492,422,000, versus total revenues for the comparable year 2005, with a period ended Sept. 30, 2005, of $280,047,000. Net loss for the full year 2006 was $46,039,000, versus a net loss for the full year 2005 of $50,938,000. As of Dec. 31, 2006, the company had $627,071,000 in total assets and $412,886,000 in total liabilities, resulting in a $214,185,000 total stockholders' equity. The company held $120,499,000 in cash and cash equivalents as of Dec. 31, 2006, versus $110,837,000 as of Dec. 31, 2005. Changes in Fiscal Year Period In February 2006, the company changed its fiscal year-end from September 30 to December 31, commencing in 2006. Accordingly, the company's 2005 fiscal year ended on Sept. 30, 2005, and its 2006 fiscal year ended on Dec. 31, 2006. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1dd1 Highlights for the quarter ended Dec. 31, 2006: -- Total revenues of $133 million, as compared with $109.6 million in the quarter ended Dec. 31, 2005; -- Net loss of $12 million, as compared with a net loss of $17.2 million, or $1.03 per share, in the quarter ended Dec. 31, 2005; -- Capital expenditures of $15.7 million, as compared with $8.9 million for the quarter ended Dec. 31, 2005. As previously disclosed on Jan. 25, 2007: -- Gross additions of about 74,000, as compared with 64,200 for the quarter ended Dec. 31, 2005; -- Net additions of about 27,000, as compared with 18,900 for the quarter ended Dec. 31, 2005; -- Monthly churn, net of 30-day deactivations, of about 2.4%, as compared with 2.6% for the quarter ended Dec. 31, 2005; and -- Ending subscribers of about 561,300, as compared with 495,300 for the quarter ended Dec. 31, 2005. "[Also] in 2006, we participated in trials in Delaware and Illinois courts related to our lawsuits against Sprint regarding its merger with Nextel, and we received two rulings that we believe are favorable to us. Sprint has appealed the Illinois ruling, and we expect the appellate court to rule in late 2007 or early 2008." Timothy M. Yager, president and chief executive officer of iPCS, said. Business Outlook for 2007 A range of the company's selected financial and operational guidance for 2007 include gross additions of 260,000 to 280,000 and capital expenditures of $38 million to $42 million. "We have experienced a strong start to 2007 regarding our gross additions and feel confident that we have built the distribution network required to continue our growth. As we look into 2008, assuming no changes in the disputed rates as a result of negotiation or arbitration, we believe that we should see Adjusted EBITDA growth of between 20% and 25%," stated Mr. Yager. About iPCS Inc. iPCS Inc. (Nasdaq: IPCS) -- http://www.ipcswirelessinc.com/-- is an affiliate of Sprint Nextel Corporation headquartered in Schaumburg, IL. The company relies on Sprint for a number of its competitive advantages, such as some of its distribution relationships, spectrum position, roaming revenues, and support services. It has exclusive right to sell wireless mobility communications network products and services under the Sprint brand in 80 markets including markets in Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee. The territory includes key markets such as Grand Rapids (MI), Fort Wayne (IN), Tri-Cities (TN), Scranton (PA), Saginaw-Bay City (MI) and Quad Cities (IA/IL). * * * As reported in the Troubled Company Reporter on April 11, 2007, Moody's Investors Service affirmed its B3 corporate family rating for iPCS Inc. The company's SGL-3 rating has also been affirmed. Moody's has changed its outlook for iPCS to developing. J.P. MORGAN: Fitch Lifts Rating on $7.8MM Class K Certs. to BB+ --------------------------------------------------------------- Fitch upgrades JP Morgan Chase Commercial Mortgage Securities Corporation's commercial mortgage pass-through certificates, series 2003-CIBC6 as: -- $32.5 million class C to 'AA+' from 'AA'; -- $11.7 million class D to 'AA' from 'A+'; -- $14.3 million class E to 'A+' from 'A'; -- $10.4 million class F to 'A' from 'A-'; -- $13 million class G to 'A-' from 'BBB+'; -- $15.6 million class H to 'BBB' from 'BBB-'; -- $5.2 million class J to 'BBB-' from 'BB+'; -- $7.8 million class K to 'BB+' from 'BB'; -- $5.2 million class L to 'BB-' from "B+'; -- $3.9 million class M to 'B+' from 'B'; -- $1.3 million class N to 'B' from 'B-'. In addition, Fitch affirms the ratings on these certificates: -- $153.2 million class A-1 at 'AAA'; -- $653.2 million class A-2 at 'AAA'; -- Interest-only classes X-1 and X-2 at 'AAA'; -- $31.2 million class B at 'AAA'; Fitch does not rate the $18.1 million class NR. The upgrades result from increased subordination levels due to the defeasance of an additional five loans (6.5%), the payoff of one loan, as well as scheduled amortization since Fitch's last rating action. In total, twelve loans (17.7%) have defeased, including One Alliance Center, the second largest loan (5.8%) in the pool. As of the April 2007 distribution date, the pool has paid down 6.1%, to $976.6 million from $1.04 billion at issuance. Currently, there are no delinquent or specially serviced loans in the transaction. The remaining credit assessed loan, The Battlefield Mall (8.3%), maintains an investment-grade credit assessment due to stable performance. The loan is secured by a 1 million square foot (sf) retail property located in Springfield, Missouri. Occupancy as of the end of 3Q06 remained strong at 95%. J.P. MORGAN: Moody's Holds Low-B Ratings on Eight Certificates -------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes and affirmed the ratings of 14 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2002-CIBC5 as: - Class A-1, $237,093,844, Fixed, affirmed at Aaa - Class A-2, $487,155,000, Fixed, affirmed at Aaa - Class X-1, Notional, affirmed at Aaa - Class X-2, Notional, affirmed at Aaa - Class B, $36,405,000, affirmed at Aaa - Class C, $13,809,000, affirmed at Aaa - Class D, $27,618,000, upgraded to Aaa from Aa3 - Class E, $13,809,000, upgraded to Aa1 from A1 - Class F, $28,873,000, upgraded to A2 from Baa1 - Class G, $16,320,000, upgraded to Baa1 from Baa3 - Class H, $18,831,000, affirmed at Ba1 - Class J, $12,553,000, affirmed at Ba2 - Class K, $5,022,000, affirmed at Ba3 - Class L, $5,021,000, affirmed at B1 - Class M, $8,788,000, affirmed at B2 - Class S-1, $5,575,358, affirmed at Ba1 - Class S-2, $6,236,841, affirmed at Ba2 - Class S-3, $5,008,372, affirmed at Ba3 As of the April 12, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 7.3% to $946.9 million from $1.0 billion at securitization. The Certificates are collateralized by 113 loans, ranging in size from less than 1.0% to 10.7% of the pool, with the top 10 loans representing 37.3% of the pool. The pool's largest loan is shadow rated investment grade. Thirty-one loans, representing 30.4% of the pool, have defeased and are collateralized by U.S. Government securities. The defeased loans include three of the pool's top 10 loans. Two loans have been liquidated from the pool resulting in an aggregate realized loss of approximately $1.3 million. Currently there are two loans, representing 1.1% of the pool, in special servicing. Moody's has estimated aggregate losses of approximately $5.3 million for the specially serviced loans. Twenty loans, representing 13.5% of the pool, are on the master servicer's watchlist. Moody's was provided with year-end 2005 and partial-year 2006 operating results for 93.7% and 85.1%, respectively, of the performing loans, excluding the defeased loans. Moody's weighted average loan to value ratio for the conduit component is 83.9%, compared to 87.4% at Moody's last full review in February 2006 and compared to 84.8% at securitization. Moody's is upgrading Classes D, E, F and G due to defeasance, increased credit support and improved overall pool performance. The shadow rated loan is the Simon Mall Portfolio Loan ($101.1 million - 10.7%), which is the pooled component of a $118.9 loan secured by a portfolio of four regional malls totaling 2.5 million square feet (1.5 million square feet of borrower owned collateral). The non-pooled $16.8 million loan is held within the trust and secures Classes S-1, S-2 and S-3. The properties are located in Ohio (Richmond Town Square), Texas (Midland Park Mall), Indiana (Markland Mall) and Wisconsin (Forest Mall). All of the are considered middle-market and contain at least three anchors. The overall in-line occupancy was 85.1% as of September 2006, essentially the same as at last review. Moody's shadow ratings of the pooled and non-pooled loans are Baa3 and Ba3, respectively, the same as at last review. The top three non-defeased conduit loans represent 7.6% of the pool. The largest conduit loan is the Fountains at Bay Hill Loan ($21.0 million - 2.2%), which is secured by a 104,000 square foot retail center located in Orlando, Florida. The property was 100.0% occupied as of September 2006. Moody's LTV is 79.3%, compared to 79.8% at last review. The second largest conduit loan is the Southern Wine & Spirits Building Loan ($20.4 million - 2.1%), which is secured by a 385,000 square feet warehouse/distribution facility located in Las Vegas, Nevada. The property is 100.0% leased to Southern Wine & Spirits under a 20-year, triple net lease. Moody's LTV is 71.4%, compared to 74.3% at last review. The third largest conduit exposure is the Edgewater Apartments Loan ($18.3 million - 1.9%), which is secured by a 316-unit apartment complex located in Seattle, Washington. Moody's LTV is 69.8%, compared to 74.3% at last review. JO-ANN STORES: Posts $1.9 Million Net Loss in Year Ended Feb. 3 --------------------------------------------------------------- Jo-Ann Stores Inc. reported a net loss for the year ended Feb. 3, 2007, of $1.9 million, compared with a net loss of $23 million for the year ended Jan. 28, 2006. Net earnings for the fourth quarter of fiscal 2007 were $25.8 million, compared with a net loss of $18.0 million, in the prior year fourth quarter. Fiscal 2006 results for the fourth quarter included a charge of $27.1 million for goodwill impairment. For the fourth quarter, net sales decreased 0.5% to $600.8 million from $604.1 million last year. On a comparable 13-week basis, fourth quarter same-store sales decreased 6.0% versus a same-store sales decrease of 3.0% last year. The decrease in sales was impacted by planned reductions of holiday inventory and less clearance merchandise in the stores. Net sales for the fiscal year ended Feb. 3, 2007, decreased 1.7% to $1.851 billion from $1.883 billion last year. On a comparable 52-week basis, same-store sales decreased 5.9% versus a same-store sales decrease of 0.8% last year. Review of Operating Results Gross margins for the fourth quarter of fiscal 2007 increased 310 basis points to 45.0% from 41.9% due to a less promotional pricing strategy, better sell-through on seasonal goods and reduced sales of clearance inventory. Selling, general and administrative expenses for the fourth quarter, decreased to $215.4 million, or 35.9% of net sales, from $218.0 million, or 36.1% of net sales, in the prior year fourth quarter. Operating profit for the fourth quarter was $42.3 million, versus an $8.9 million operating loss for the prior year fourth quarter. "During the quarter we continued to make progress on our merchandising strategy and inventory position," said Darrell Webb, chairman, president and chief executive officer. "While our actions have resulted in a decline in same-store sales, we were able to realize significant gross margin improvement in the fourth quarter compared to the same period last year. Our strategic plan is gaining traction, evidenced by the expansion in margins, improvement in earnings and debt reduction, as we shift our focus to achieving profitable sales. I am confident that by enhancing the customer shopping experience and product assortment, implementing supply chain efficiencies, and capitalizing on competitive opportunities, Jo-Ann's will be well-positioned to sustain profitable growth in the coming years." At Feb. 3, 2007, the company's balance sheet showed $856.7 million in total assets, $446.9 million in total liabilities, and $409.8 million in total stockholders' equity. Liquidity Sources Net cash provided by operating activities was $105.8 million in fiscal 2007, compared with net cash used for operations of $31.5 million in fiscal 2006, an increase of $137.3 million. The increase was generated by changes in operating assets and liabilities, which in fiscal 2007 represented a $48.8 million source of cash versus a $69.1 million use in cash in fiscal 2006. Net cash used for investing activities totaled $33.4 million in fiscal 2007, which was comprised of capital expenditures of $58.1 million, partially offset by proceeds of $24.7 million from the sale-leaseback of the company's distribution center in Visalia, California. Net cash used for investing activities was $142.8 million in fiscal 2006 and consisted entirely of capital expenditures. Net cash used for financing activities was $71.9 million in fiscal 2007 compared with net cash provided by financing activities of $112.6 million during fiscal 2006. Long-term debt at the end of fiscal 2007 was $125.3 million and consisted of $25.3 million on the company's senior bank credit facility and $100 million of 7.5 percent senior subordinated notes. Debt levels decreased $78.4 million during fiscal 2007, compared with a net increase of $103.7 million in the prior year, primarily due to the decreases in inventory and other working capital improvements. In addition, the company used the proceeds from the sale-leaseback transaction to pay down borrowings on our Credit Facility. Full-text copies of the company's consolidated financial statements for the year ended Feb. 3, 2007, are available for free at http://researcharchives.com/t/s?1dc4 Store Openings and Closings The past year, the company opened 21 superstores and five traditional stores, and closed 61 traditional stores and two superstores. The year-end store count was 628 traditional stores and 173 superstores, for a total of 801 stores. Total store square footage as of year-end was 16.2 million square feet, which was slightly higher than last year-end. About Jo-Ann Stores Hudson, Ohio-based Jo-Ann Stores, Inc. (NYSE: JAS) -- http://www.joann.com/-- is the leading national fabric and craft retailer with locations in 47 states. As of Feb. 3, 2007, the company operates 628 Jo-Ann Fabric and Craft traditional stores and 173 Jo-Ann superstores. * * * As reported in the Troubled Company Reporter on Nov. 15, 2006, Moody's Investors Service downgraded Jo-Ann Stores Inc.'s corporate family rating and probability-of-default rating to B1 from B3 and the $100 million senior subordinated note (2012) to Caa2 from B3. LENAPE HEIGHTS: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Lenape Heights Development Corp. dba Lenape Heights Golf Course 950 Golf Course Lane Ford City, PA 16226 Bankruptcy Case No.: 07-22573 Type of Business: The Debtor operates a golf course. Chapter 11 Petition Date: April 24, 2007 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Erik Sobkiewicz, Esq. Campbell & Levine LLC 1700 Grant Building Pittsburgh, PA 15219 Tel: (412) 261-0310 Fax: (412) 261-5066 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Director, Tax Claim Bureau Real Estate Taxes $87,938 Armstrong County 450 East Market Street Kittanning, PA 16201 Blue Cross Employee Medical $8,514 P.O. Box 382146 Benefits Pittsburgh, PA 15250 MBNC America Trade Debt $6,773 P.O. Box 15137 Wilmington, DE 19886 Sysco Foods Trade Debt $4,921 Nationwide Insurance Insurance $4,827 Bradigan's Incorporated Trade Debt $3,675 Classic Tent Trade Debt $3,303 Dominion Peoples Utility - Gas Service $2,754 Reinhart Trade Debt $2,221 Zanotti Golf Cars Trade Debt $1,708 F.C. National Bakery Trade Debt $1,645 Golfers Lifestyle Magazine Trade Debt $1,400 Obade Candy Company Trade Debt $1,400 D.M. Boyd Trade Debt $1,243 MTJMA Trade Debt $1,223 Horse Trader Trade Debt $1,219 Young Interior Trade Debt $1,000 Allegheny Power Utility - Electric $925 Spic & Span Trade Debt $714 LENOX GROUP: Completes Refinancing of $275 Mil. Revolving Credit ---------------------------------------------------------------- Lenox Group Inc. has completed the refinancing of its $275 million revolving credit and term loans. The new financing package includes a $100 million secured term loan, which bears interest at LIBOR plus 450 basis points and has a final maturity date of April 20, 2013, and a $175 million revolving credit facility, which initially bears interest at LIBOR plus 200 basis points and has a final maturity date of April 20, 2012. "The company is pleased to have completed this new financing package, Marc L. Pfefferle, interim chief executive officer, said. "This refinancing provides the company with increased flexibility to finance the company's ongoing operations. Together with the new business plan the company has begun executing, this refinancing is an important step in positioning the company to move forward with a stable financial platform for growth and sustained profitability." About Lenox Group Inc. Based in Eden Prarie, Minnesota, Lenox Group Inc (NYSE: LNX) was formed on Sept. 1, 2005, when Department 56 Inc., a designer, wholesaler and retailer of collectibles and giftware products purchased Lenox Inc., a designer, manufacturer and marketer of fine china, dinnerware, silverware, crystal, and giftware products. The company sells its products through wholesale customers who operate gift, specialty and department store locations in the United States and Canada, company-operated retail stores, and direct-to-the-consumer through catalogs, direct mail, and the Internet. Going Concern Doubt As reported in the Troubled Company Reporter on March 20, 2007, Deloitte & Touche, LLP, in Minneapolis, Minnesota, raised substantial doubt about Lenox Group Inc.'s ability to continue as a going concern after auditing the Company's consolidated financial statements for the year ended Dec. 31, 2006. The auditor pointed to the company's difficulties in meeting its loan agreement covenants and financing needs. MACDERMID INC: Highly Leveraged Buyout Cues S&P to Lower Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on MacDermid Inc. to 'B' from 'BB+' and removed the rating from CreditWatch where it had been placed with negative implications on Sept. 6, 2006. "The resolution of the CreditWatch follows the closing of the merger involving an acquisition vehicle formed by Daniel H. Leever, MacDermid's chairman and chief executive officer, Court Square Capital Partners II, and Weston Presidio V.," said Standard & Poor's credit analyst David Bird. The downgrade reflects the highly leveraged transaction. At the same time, we affirmed our senior secured and subordinated debt ratings previously assigned in connection with the financing of the transaction. The outlook is stable. The ratings on MacDermid reflect its satisfactory business position, offset by a highly leveraged financial profile. MacDermid manufactures and markets specialty chemicals to a variety of industries, including graphic arts, electronic materials, and metal finishing. Graphic arts include liquid and solid-sheet photopolymer plates for flexographic printing, and offset blankets for the offset printing segment. In electronic materials, the company focuses on chemicals used in the fabrication of printed circuit boards. Metal finishing products include decorative and functional metal and plastic plating, and surface treatment chemicals used in a variety of end-markets, including automotive, electronic equipment, and appliances. MacDermid, with more than $800 million in annual sales, benefits from solid business positions, with leading market shares in products that make up a majority of sales. The company's diverse product line and end markets lend relative stability to earnings and cash flow generation. Still, some of the company's products are used in electronic, automotive, oilfield and other industrial applications, which could result in the modest deterioration of margins or volume shortfalls during periods of key end market contraction. MARCAL PAPER: Court Extends Exclusive Plan Filing Date to July 28 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey further extended Marcal Paper Mills Inc.'s exclusive periods to: a) file a plan until July 28, 2007; b) solicit acceptances of that plan until Sept. 26, 2007. As reported in the Troubled Company Reporter on Feb. 26, 2007, the Debtor's exclusive period to file a plan expired on March 30, 2007. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A. told the Court that since its bankruptcy filing, the Debtor and its professionals have devoted significant efforts to the critical tasks relating to operating as a debtor-in- possession, while seeking to reduce overhead and reinforce relationships with its vendors and customers. In connection with its Chapter 11 filing, Mr. Sirota stated that the Debtor also has expended a substantial amount of time negotiating and obtaining postpetition financing, preparing and filing detailed schedules and statements of financial affairs, preparing for the first meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code, preparing and filing monthly operating reports, and addressing a myriad of other complex matters inherent in any large Chapter 11 case. "These duties, coupled with the relative infancy of the Debtor's case, have made it difficult at this early stage for the Debtor to develop a definitive plan for emerging from Chapter 11," Mr. Sirota explained. The Debtor and its counsel have been working closely with JH Cohn LLP, its financial advisors; NatCity Investments, its investment bankers; and other retained professionals to develop an effective reorganization strategy. The Debtor has been exploring various potential restructuring alternatives. However, the Debtor needs additional time to closely examine all alternatives and, simultaneously, commence a dialogue with its creditor constituents. Hence, until the process is completed, the Debtor said it would be difficult to begin to propose a plan of reorganization. DIP Financing On Jan. 5, 2007, the Debtor obtained Court approval to borrow up to $84.5 million in postpetition financing from Highland Financial Corporation, including an immediate availability of a $20 million revolving credit facility. The Debtor said that the financing package will allow it to use all of its cash balances and provide it with greater liquidity to fund normal business operations during the restructuring process. About Marcal Paper Mills Inc. Headquartered in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from-home use in hotels, restaurants, hospitals offices and factories. Marcal, founded in 1932, is a privately-held, fourth generation family business. It employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A. represent the Debtor. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. MARCAL PAPER: Has Until June 28 to Make Lease-Related Decisions --------------------------------------------------------------- The United States Bankruptcy Court for the District of New Jersey further extended Marcal Paper Mills Inc.'s period within which it can assume or reject unexpired leases of nonresidential real property through and including June 28, 2007. The Debtor's time to assume or reject unexpired leases expired on March 30, 2007. Since its bankruptcy filing, the Debtor has been conducting its operations from including, but not limited to, the facilities leased pursuant to the unexpired commercial property leases identified in a full list available for free at: http://researcharchives.com/t/s?1a4f The unexpired leases relate to the Debtor's office, manufacturing and warehousing space. The Debtor assured the Court that it is, and will continue to be, current on its postpetition obligations under the unexpired leases in accordance with Section 365(d)(3) of the Bankruptcy Code. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A. told the Court that the unexpired leases represent important assets of the Debtor's estate. Given the relative infancy of this case, however, the Debtor has not had sufficient opportunity to determine precisely how the unexpired leases will tie into its reorganization efforts, he explains. Hence, Mr. Sirota said, extending the period to assume or reject the unexpired leases will provide the Debtor the time and flexibility it needs to coordinate the assumption or rejection of its unexpired leases with the formulation of its Chapter 11 plan. Mr. Sirota warned that if the requested extension is not granted, the Debtor will be compelled either to assume, in some instances, large, long-term liabilities, thereby potentially creating substantial administrative expense claims at any early stage in this cases, or forfeit leases prematurely, impairing its ability to operate and preserve the going concern value of its business. Headquartered in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from-home use in hotels, restaurants, hospitals offices and factories. Marcal, founded in 1932, is a privately-held, fourth generation family business. It employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A. represent the Debtor. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. MERRILL LYNCH: Moody's Affirms Low-B Ratings on Six Certificates ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings of two classes and affirmed the ratings of 18 classes of Merrill Lynch Mortgage Trust 2004-MKB1, Commercial Mortgage Pass-Through Certificates, Series 2004-MKB1 as: - Class A-1, $25,145,842, affirmed at Aaa - Class A-1A, $154,039,662, affirmed at Aaa - Class A-2, $379,800,000, affirmed at Aaa - Class A-3, $65,000,000, affirmed at Aaa - Class A-4, $169,657,000, affirmed at Aaa - Class X-P, Notional, affirmed at Aaa - Class X-C, Notional, affirmed at Aaa - Class B, $26,946,000, upgraded to Aaa from Aa2 - Class C, $11,023,000, upgraded to Aa2 from Aa3 - Class D, $25,721,000, affirmed at A2 - Class E, $11,024,000, affirmed at A3 - Class F, $13,473,000, affirmed at Baa1 - Class G, $12,248,000, affirmed at Baa2 - Class H, $11,023,000, affirmed at Baa3 - Class J, $3,675,000, affirmed at Ba1 - Class K, $4,899,000, affirmed at Ba2 - Class L, $4,899,000, affirmed at Ba3 - Class M, $4,899,000, affirmed at B1 - Class N, $2,450,000, affirmed at B2 - Class P, $3,674,000, affirmed at B3 As of the April 12, 2007 distribution date, the transaction's aggregate certificate balance has decreased by approximately 3.8% to $943.0 million from $979.9 million at securitization. The Certificates are collateralized by 69 mortgage loans ranging in size from less than 1.0% to 15.9% of the pool, with the top 10 loans representing 55.9% of the pool. The pool includes two shadow rated loans representing 21.7% of the pool. Three loans, representing 10.9% of the pool, have defeased and are secured by U.S. Government securities. There have been no losses since securitization. Currently there is one loan, representing less than 1.0% of the pool, in special servicing. Moody's is estimating a loss of approximately $400,000 from this specially serviced loan. Three loans, representing 2.4% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2005 and partial-year 2006 operating results for approximately 98.5% and 94.2%, respectively, of the pool. Moody's loan to value ratio for the conduit component is 89.4%, compared to 93.4% at securitization. Moody's is upgrading Classes B and C due to increased credit support, improved overall pool performance and defeasance. The largest shadow rated loan is the Great Mall of the Bay Area Loan ($151.0 million - 16.0%), which is secured by the borrower's interest in a 1.3 million square foot regional mall located in Milpitas, California. The property was 88.0% leased as of September 2006, the same as at securitization. The loan is interest only for its entire five year term. Moody's current shadow rating is Baa2, the same as at securitization. The second shadow rated loan is the Galileo Pool #2 Loan ($54.0 million - 5.7%), which is secured by 14 retail centers totaling 965,000 square feet. The centers are located in eight states with the largest concentration in Georgia (3), Tennessee (2) and Florida (2). Moody's current shadow rating is A2, the same as at securitization. The top three non-defeased conduit loans represent 17.2% of the outstanding pool balance. The largest conduit loan is the Galileo Pool #1 Loan ($77.0 million - 8.2%), which is secured by 10 retail properties totaling 1.3 million square feet and located in eight states. Moody's LTV is 76.1%, the same as at securitization. The second largest conduit loan is the ARC MHC Portfolio Loan ($58.5 million - 6.2%), which is secured by 16 manufactured housing facilities totaling 3,273 pads. The facilities are located in eight states with the largest concentrations in Utah (3) and Georgia (2). Moody's LTV is 92.3%, compared to 95.5% at securitization. The third largest conduit loan is the West Point Crossing Shopping Center Loan ($26.9 million - 2.8%), which is secured by a 241,000 square foot retail center located in Tucson, Arizona. The property is currently 99.0% occupied. Moody's LTV is 92.4%, compared to 95.7% at securitization. MESA GLOBAL: S&P Cuts Rating on S. 2001-5 Class M-2 Certs. to D --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three certificates from three transactions issued by MESA Global Issuance Co. Concurrently, the rating on one class from MESA Trust 2001-5 was lowered, while the ratings on the remaining two classes from this transaction and various MESA Global Issuance Co. series were affirmed. The raised ratings reflect pool performance and/or the shifting interest structures of the deals, which have led to projected credit support percentages that are at least 2x the percentage at the higher rating levels. For series 2001-4 and 2002-2, the upgraded classes are the only classes outstanding in the respective transactions. These deals have paid down to 8.66% and 10.51% of their original principal balances, respectively, and have moderate amounts of overcollateralization. The sequential payment of principal to series 2002-3, due to a failing delinquency and cumulative loss trigger, warrants the upgrade of class M-2. S&P do not expect these tranches to absorb any future realized losses. The downgrade of class M-2 from MESA Trust 2001-5 is due to the $336,532 in cumulative losses absorbed by the class during the January through March 2007 remittance periods. This class was downgraded to 'CCC' on Sept. 29, 2006, and O/C for the deal was continually eroded each month until its default in January. As of the March 2007 remittance period, this transaction had realized $18.78 million (11.57% of the original principal balance) in cumulative realized losses, and the six- and 12-month average monthly loss amounts were comparable, at $245,858 and $259,442, respectively. The affirmations reflect sufficient current and projected credit support at the respective rating levels. The seasoning of these pools ranges from 52 to 67 months, while losses range from $11.78 million (series 2002-3) to $43.208 million (series 2002-1). Series 2001-4 and 2001-5 consist of scratch-and-dent (document-deficient, reperforming) collateral; series 2002-1 and 2002-2 consist of second-lien high CLTV loans; and series 2002-3 consists of subprime collateral. Credit enhancement for these transactions is provided by O/C, excess interest, and subordination. Additionally, class A from series 2001-5 benefits from bond insurance provided by Ambac Assurance Corp. Ratings Raised MESA Global Issuance Co. Rating ------ Series Class To From ------ ----- -- ----- 2001-4 B A+ BBB 2002-2 B-2 A+ BBB 2002-3 M-2 AAA AA Rating Lowered MESA Trust Rating ------ Series Class To From ------ ----- -- ---- 2001-5 M-2 D CCC Ratings Affirmed MESA Trust Series Class Rating ------ ----- ------ 2001-5 A AAA 2001-5 M-1 A MESA Global Issuance Co. Series Class Rating ------ ----- ------ 2002-1 M-2 AAA 2002-1 B-1 BBB 2002-1 B-2 CCC 2002-3 M-1 AAA 2002-3 B-1 BBB 2002-3 B-2 BB MESA TRUST: Moody's Cuts Rating on Class B Certificates to Caa3 --------------------------------------------------------------- Moody's Investors Service has downgraded the Class B certificates issued by Mesa Trust 2001-2. The action is based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. The transaction is backed by first and second-lien fixed and adjustable-rate subprime mortgage loans. The complete rating action is: Issuer: Mesa Trust 2001-2 Downgrade: * Class B, downgrade to Caa3 from B3. MESABA AVIATION: Emerges from Bankruptcy as Northwest Subsidiary ---------------------------------------------------------------- Mesaba Aviation Inc. dba Mesaba Airlines Inc. emerged from Chapter 11 bankruptcy protection yesterday, April 24, 2007. As reported in the Troubled Company Reporter on April 11, 2007, The U.S. Bankruptcy Court for the District of Minnesota has confirmed Mesaba's Plan of Reorganization. In confirming the plan, the Court determined that the Plan had been accepted by creditors and otherwise satisfied the requirements of the Bankruptcy Code. The company's creditors voted overwhelmingly in support of the Plan. The Plan implements a stock purchase and reorganization agreement with Northwest Airlines Corporation under which Mesaba would become a wholly owned subsidiary of Northwest Airlines. Mesaba expected to exit from Chapter 11 bankruptcy protection when the POR becomes effective and the acquisition by Northwest Airlines will be completed. "We are pleased to have completed the restructuring process and to become a member of the Northwest Airlines' family," John Spanjers, president and chief operating officer, Mesaba Airlines, said. "A great deal of thanks goes to the employees of Mesaba who remained committed and worked extremely hard during the restructuring process to position Mesaba for long-term success. The support of Northwest Airlines will further enable us to accomplish this goal." The airline was successfully restructured under the guidance of the Court and Mesaba's Official Committee of Unsecured Creditors. About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines(OTC:NWACQ.PK). The company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05- 39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. MIRANT CORP: Court OKs Bowline to Assume $200MM Insurance Policy ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas approved Mirant Bowline LLC, an affiliate of Mirant Corp., to assume an insurance policy -- Owner's Title of Insurance Policy No. 26-031- 92-56864 -- issued by Fidelity National Title Insurance Company of New York for $200,716,836. As reported in the Troubled Company Reporter on March 21, 2007, Jeff P. Prostok, Esq., at Forshey & Prostok LLP, in Fort Worth, Texas, informs the Court that the Insurance Policy covered certain real property purchased by Mirant Bowline located in the Town of Haverstraw and the Village of West Haverstraw, County of Rockland, New York. The Insurance Policy became effective on July 1, 1999. Mr. Prostok asserts that the Fidelity Insurance Policy is economically beneficial to Mirant Bowline. In addition, Mirant Bowline is current on all prepetition and postpetition obligations under the Insurance Policy, and the requirements of Section 365(b)(1) of the Bankruptcy Code governing the treatment of defaults in contracts and unexpired leases do not apply. Accordingly, Mr. Prostok said, there are no cure amounts as of the assumption of the Insurance Policy. About Mirant Corp. Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. Mirant NY-Gen, LLC, Mirant Bowline, LLC, Mirant Lovett, LLC, Mirant New York, Inc., and Hudson Valley Gas Corporation, were not included and have yet to submit their plans of reorganization. (Mirant Bankruptcy News, Issue No. 121; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). MIRANT CORP: Selling Caribbean Business to Marubeni for $1.082BB ---------------------------------------------------------------- Mirant Corporation has entered into a definitive purchase and sale agreement with a subsidiary of Marubeni Corporation for the sale of its Caribbean business for $1.082 billion, which includes related debt of approximately $350 million, power purchase obligations of approximately $153 million and estimated working capital at closing. The net proceeds to Mirant from the sale are expected to be approximately $565 million after payment of transaction costs estimated to be approximately $14 million. Upon completion of the transaction, Mirant expects to realize a pre-tax gain of approximately $65 million for financial reporting purposes and a gain for tax reporting purposes of approximately $150 million. The transaction is expected to close by mid-2007 after the satisfaction of various conditions to closing. Mirant's Caribbean business includes controlling interests in two integrated utilities: Jamaica Public Service Company ("JPS") of which Mirant owns 80% and Grand Bahama Power Company of which Mirant owns 55%. Mirant also owns 39% of PowerGen, the owner and operator of three power plants in Trinidad, 25% of Curacao Utilities Company which provides electricity and other utility services and a $40 million convertible preferred equity interest in Aqualectra, an integrated water and electric company in Curacao. JPS purchases power under power purchase agreements ("PPAs") with two independent generation companies. The sole purpose of these independent companies is to generate power for sale to JPS. Prior to the third quarter of 2006, Mirant had accounted for the PPAs as capital leases. During the third quarter of 2006, Mirant reevaluated these PPAs based on evolving interpretations of the Financial Accounting Standards Board (FASB) Interpretation No. 46, "Consolidation of Variable Interest Entities," as amended. As a result of this reevaluation, beginning with the third quarter of 2006, Mirant now consolidates the assets and liabilities of the two independent generation companies and, accordingly, does not reflect the PPAs as capital leases. The PPAs will remain obligations of JPS after the sale is completed. "We have valued doing business in Curacao, Grand Bahama, Jamaica and Trinidad," said Edward R. Muller, Chairman and Chief Executive Officer of Mirant Corporation. "We wish the people of all four countries and Marubeni Corporation great success." Mirant was advised in the transaction by J.P. Morgan Securities Inc., as financial advisor. Mirant is a competitive energy company that produces and sells electricity in the United States, the Caribbean, and the Philippines. Mirant owns or leases approximately 17,300 megawatts of electric generating capacity globally. The company operates an asset management and energy marketing organization from its headquarters in Atlanta. For more information, please visit http://www.mirant.com About Mirant Corp. Headquartered in Atlanta, Georgia, Mirant Corporation (NYSE: MIR) -- http://www.mirant.com/-- is an energy company that produces and sells electricity in North America, the Caribbean, and the Philippines. Mirant owns or leases more than 18,000 megawatts of electric generating capacity globally. Mirant Corporation filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590), and emerged under the terms of a confirmed Second Amended Plan on Jan. 3, 2006. Thomas E. Lauria, Esq., at White & Case LLP, represented the Debtors in their successful restructuring. When the Debtors filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. The Debtors emerged from bankruptcy on Jan. 3, 2006. Mirant NY-Gen, LLC, Mirant Bowline, LLC, Mirant Lovett, LLC, Mirant New York, Inc., and Hudson Valley Gas Corporation, were not included and have yet to submit their plans of reorganization. (Mirant Bankruptcy News, Issue No. 121; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). MOBILE MINI: S&P Rates $125 Million Senior Unsecured Notes at BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB-' rating to Mobile Mini Inc.'s $125 million senior unsecured notes due 2015. At the same time, S&P affirmed its ratings on Mobile Mini, including the 'BB' corporate credit rating. The outlook was revised to positive from stable. "Proceeds from the unsecured notes will be used to redeem the outstanding $98 million balance of 9.5% unsecured notes as well as repay a portion of bank debt," said Standard & Poor's credit analyst Betsy Snyder. "The outlook revision is based on the positive effect of the recapitalization, which includes the new notes and an amended and increased unrated credit facility, as well as continuing strong earnings and cash flow, on the company's financial profile." Ratings on Mobile Mini reflect its relatively small revenue base and the narrow business segment of the industry in which it operates-the leasing of portable storage units. Ratings also incorporate the company's leading market position and moderate financial profile. Mobile Mini's fleet is composed of over 156,000 units, primarily steel storage containers, as well as a smaller fleet of mobile offices and van trailers. The company is one of only two national participants in a fragmented industry, operating out of 63 branches in North America, the U.K., and the Netherlands. Major competitors include Mobile Storage Group Inc. (B+/Stable/--, with a fleet of over 102,000 units operating out of 78 locations, and, to a much lesser extent, Williams Scotsman Inc. (BB-/Stable/--). The leasing of portable storage units has grown over the past several years, as it provides a flexible, low-cost, and convenient alternative to permanent warehouse space and self-storage sites. However, portable storage is a relatively narrow segment of the large self-storage business. The company's mobile storage unit leasing business has tended to be somewhat recession-resistant. This is due to a diverse customer base (approximately 91,000), which includes construction (40% of units on lease, primarily nonresidential); consumer service and retail businesses (36%); with the balance consumers, industrial and commercial businesses, institutions, and government agencies. As a result, the company's utilization rates, while seasonal, have historically tended to be fairly stable in the high-70% to mid-80% range, resulting in relatively predictable and stable cash flow. The company also benefits from the ability to redeploy assets to different geographic areas if demand and/or supply necessitates. Mobile Mini's earnings and cash flow should improve with continuing strong demand in both its existing and acquired operations. If the company's credit ratios continue to improve, despite an ongoing heavy capital spending program, ratings could be raised modestly. A larger-than-expected increase in capital spending or significant debt-financed acquisitions could result in a stable outlook. NEW CENTURY: Board of Directors Adopts Key Employee Incentive Plan ------------------------------------------------------------------ New Century Financial Corporation disclosed in a regulatory filing with the Securities and Exchange Commission that its board of directors adopted the Key Employee Incentive Plan and the Executive Incentive Plan on April 10, 2007. New Century Financial disclosed that eight executives are expected to participate in the Executive Incentive Plan: 1. Brad Morrice, president and chief executive officer of New Century Financial; 2. Tajvinder S. Bindra, executive vice president and chief financial officer of New Century Financial; 3. Kevin M. Cloyd, executive vice president of New Century Financial and president of NC Capital Corporation, New Century Financial's secondary marketing subsidiary; 4. Patti M. Dodge, executive vice president of New Century Financial; 5. Joseph F. Eckroth, Jr., executive vice president of New Century Financial; 6. Robert J. Lambert, New Century Financial senior vice president for Leadership and Organizational Development; 7. Anthony T. Meola, New Century Financial's executive vice president for Loan Production; and 8. Stergios Theologides, New Century Financial's executive vice president for Corporate Affairs and General Counsel. The eight executives will not participate in the Key Employee Incentive Retention Plan. New Century Financial expects that approximately 120 employees could participate in the Incentive Retention Plan. Payments under the Incentive Plan will be in lieu of any other performance bonus or retention compensation from the company or any of its subsidiaries under any other plan, program, agreement, applicable law, or policy otherwise applicable to the plan participants, New Century clarified. A full-text copy of the New Century Financial Corporation Key Employee Incentive Retention Plan is available at no charge at: http://researcharchives.com/t/s?1db7 A full-text copy of the New Century Financial Corporation Executive Incentive Plan is available at no charge at: http://researcharchives.com/t/s?1db8 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. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a chapter 11 plan expires on July 31, 2007. (New Century Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NEW CENTURY: Court OKs Bidding Protocol for Sale of 2,000 Loans --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the bidding procedures New Century Financial Corporation and its debtor-affiliates proposed in connection with the sale of a pool of roughly 2,000 mortgage loans and mortgage-backed residual interests in securitization trusts to Greenwich Capital Financial Products Inc. The Honorable Kevin J. Carey authorized the Debtors to pay a $945,000 breakup fee to Greenwich in the event they consummate a sale with another buyer. The breakup fee will be paid in cash as an administrative expense of the Debtors with priority over any and all administrative expenses of the kind specified in Sections 503(b) or 507(b) of the Bankruptcy Code, the Court rules. All competing bids are due April 30, 2007. If a qualifying competing bid is received, the Debtors will conduct an auction on May 2 at the offices of O'Melveny & Myers LLP in New York. The Court will hold a hearing to consider approval of the winning bid on May 7. Any overbid submitted by Greenwich will be deemed to include the full amount of the breakup fee potentially payable by the Debtors, Judge Carey adds. Objections, if any, to the sale of the Purchased Assets are due May 2, 2007. Judge Carey overruled all objections to the Bidding Procedures Motion that have not been withdrawn, waived or settled. The Debtors filed with the Court on April 13, 2007, schedules of the LNFA Mortgage Loans and Residuals subject to the sale. A schedule of the LNFA Mortgage Loans is available at no charge at http://researcharchives.com/t/s?1db5 A schedule of the Residuals is available at no charge at http://researcharchives.com/t/s?1db6 As reported in the Troubled Company Reporter on Apr. 13, 2007, the Debtors sought to sell those mortgage loans for $50,000,000 in the aggregate, to Greenwich, subject to higher and better offers. The Debtors further asked Judge Carey to approve competitive bidding procedures to flush out offers for the mortgage loans. The Debtors also sought permission to pay a $1,000,000 breakup fee to Greenwich in the event they consummate a sale with another party. Most of the loans were originated by the Debtors and then sold to securitization trusts and whole loan buyers. Because the borrowers on the loans defaulted soon after the disposition occurred, the Debtors have been required to repurchase the loans. The mortgage-backed securities consist of residual class interests issued by various securitization trusts that the Debtors received when they disposed of loans. Pursuant to an Asset Purchase Agreement dated April 2, 2007, the purchase price will be paid by satisfying any obligations outstanding under the DIP facility at the time of the closing, up to the amount of the purchase price. Any remaining balance will be paid in cash, subject to a holdback for certain contingent costs and potential deductions. The Asset Purchase Agreement contains minimal representations and warranties. The deal provides for a $3,000,000 45-day holdback to cover: (i) the Debtors releasing the borrower on a loan that was sold to Greenwich; (ii) material changes in the foreclosure laws of the state in which the property is located; and (iii) the Debtors' failure to transfer servicing of the loans to a servicer selected by the buyer. 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. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a chapter 11 plan expires on July 31, 2007. (New Century Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NORTHWEST AIRLINES: Completes Acquisition of Mesaba Airlines ------------------------------------------------------------ Northwest Airlines Corporation disclosed that Mesaba Aviation dba Mesaba Airlines Inc., which emerged from Chapter 11 bankruptcy protection yesterday, has been acquired by Northwest Airlines. Mesaba, which becomes a wholly owned subsidiary, operates a fleet of 50 regional aircraft under the Northwest Airlink banner. "Mesaba Airlines has served our customers for more than 22 years, and now Northwest is pleased to strengthen this long-standing relationship," Doug Steenland, president and chief executive officer, Northwest Airlines, said. "The acquisition of Mesaba by Northwest ensures that our passengers will continue to enjoy conveniently-timed flights that connect to the Northwest global network through our three domestic hubs at Detroit, Minneapolis/St. Paul and Memphis." "We are pleased to have completed the restructuring process and to become a member of the Northwest Airlines' family," John Spanjers, president and chief operating officer, Mesaba Airlines, said. "A great deal of thanks goes to the employees of Mesaba who remained committed and worked extremely hard during the restructuring process to position Mesaba for long-term success. The support of Northwest Airlines will further enable us to accomplish this goal." Northwest acquired Mesaba after that airline was successfully restructured under the guidance of the U.S. Bankruptcy Court for the District of Minnesota and Mesaba's Official Committee of Unsecured Creditors. About Mesaba Aviation Headquartered in Eagan, Minnesota, Mesaba Aviation Inc., dba Mesaba Airlines -- http://www.mesaba.com/-- operates as a Northwest Airlink affiliate under code-sharing agreements with Northwest Airlines(OTC:NWACQ.PK). The company filed for chapter 11 protection on Oct. 13, 2005 (Bankr. D. Minn. Case No. 05- 39258). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman PA, represents the Debtor in its restructuring efforts. Craig D. Hansen, Esq., at Squire Sanders & Dempsey, L.L.P., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $108,540,000 and total debts of $87,000,000. The U.S. Bankruptcy Court for the District of Minnesota confirmed Mesaba Aviation Inc., dba Mesaba Airlines' Plan of Reorganization on April 10, 2007. About Northwest Airlines Northwest Airlines Corp. (OTC: NWACQ) -- http://www.nwa.com/ -- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents. The Company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for protection from their creditors, they listed $14.4 billion in total assets and $17.9 billion in total debts. Plan Update On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed wan Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. The hearing to consider confirmation of the Debtors' Plan is set for May 16, 2007. NVF COMPANY: Disclosure Statement Hearing Scheduled Tomorrow ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware will convene a hearing tomorrow, April 26, 2007, 10:00 a.m., at Courtroom No. 2, 824 Market Street, 6th Floor in Wilmington, Delaware, to consider the adequacy of NVF Company's Disclosure Statement explaining its Chapter 11 Plan of Reorganization. Overview of the Plan The Plan contemplates distribution of cash from the sale of: i. Kenneth Square Property and Surplus Yorklyn Property; and ii. additional borrowings of approximately $500,000 under the DIP Loan. The Debtor says that additional borrowings under the DIP Loan will be used to pay all allowed administrative, tax, and other priority claims on the Plan effective date. Treatment of Claims Under the Plan, holders of Other Priority Claims will be paid in full, in cash. Each holder of Secured Claims will also be paid in full, either by: i. payment in cash; ii. abandonment of the property securing its claim; or iii. other treatment as agreed to by the Debtor and the holder. New Castle County's claim will be treated solely as stated in the Agreed Plan Term Sheet agreed upon by the Debtor, New Castle and the Official Committee of Unsecured Creditors. On account of the Pension Benefit Guaranty Corporation's claim, it will paid in accordance with the terms of that certain agreement between the Debtor and Posner Estate, dated April 25, 1996. Additionally, Pension Benefit will be permitted to pursue claims against the Debtor after the Plan is confirmed. Pension Benefit refers to the claim against the Debtor related to the underfunded pension plan for hourly paid employees in Broadview, Illinois; Los Angeles, California; Holyoke, Massachusetts; Delaware; and Pennsylvania. Posner Estate DIP Financing Claims will receive cash proceeds remaining from the sale of: i. Kenneth Square Property after payment of the Unsecured Credtors Kennett Distribution; and ii. Yorklyn Property after payment of New Castle County Claims. Prepetition Posner Estate Claims will receive all proceeds from the sale of: i. Kenneth Square Property, if any, that remain after of the Unsecured Creditors Kennett Distribution, which payment will satisfy the Unsecured Creditors Secured Plan Note and the GUC Plan Mortgage, and Posner Estate DIP Financing Claims; and ii. Surplus Yorklyn Property that remain after payment of New Castle County Claim and any remaining portion of the Posner Estate DIP Financing Claims. In addition, Posner Estate will receive 100% of the Debtor's common stock after the effective date of the Plan. Each holder of Unsecured Claims will be paid in full, in consideration of the settlement, release and discharge of the holder's: i. pro rata share of the cash payment or the Unsecured Creditors Kennett Distribution, which will be made pursuant to the GUC Plan Trust Agreement by the GUC Plan Trustee; or ii. pro rata share of the proceeds of the Unsecured Creditors Plan Secured Note. All holders of Asbestos Claims will retain their claims and will be permitted to pursue their claims against the Debtor after the Plan is confirmed. Holders of Equity Interest will not receive any distribution under the Plan. A full-text copy of NVF's Chapter 11 Plan of Reorganization is available for a fee at: http://www.researcharchives.com/bin/download?id=070424022512 Based in Yorklyn, Delaware, NVF Company -- http://www.nvf.com/-- manufactures thermoset composites (glass, Kevlar), vulcanized fiber, custom containers, circuitry materials, custom fabrication, and welding products. The Company along with its wholly owned subsidiary, Parsons Paper Company Inc., filed for chapter 11 protection on June 20, 2005 (Bankr. D. Del. Case Nos. 05-11727 and 05-11728). Rebecca L. Booth, Esq., at Richards, Layton & Finger, P.A., represents the Debtors in their restructuring efforts. Elizabeth A. Wilburn, Esq., and Jason W. Staib, Esq., at Blank Rome LLP represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets between $10 million to $50 million and estimated debts of more than $100 million. OMNOVA SOLUTIONS: Commences $165MM Sr. Notes Cash Tender Offering ----------------------------------------------------------------- OMNOVA Solutions Inc. commenced a cash tender offer to purchase any and all of its outstanding 11-1/4% senior secured notes due 2010 (CUSIP No. 682129AC5). The aggregate principal amount of the Notes outstanding is $165 million. In conjunction with the tender offer, the company is soliciting noteholder consents to effect certain amendments to the indenture governing the Notes to eliminate substantially all of the restrictive covenants. The tender offer is scheduled to expire at 8:00 a.m., New York City time, on May 18, 2007, unless extended or earlier terminated. The consent solicitation will expire at 5:00 p.m., New York City time, on May 3, 2007, unless extended or earlier terminated. The tender offer is conditioned upon the consummation of a new term loan of approximately $150 million to be entered into on or prior to the Expiration Date and the amendment of, and additional borrowings under, the company's existing senior secured credit facility, well as other general conditions. The tender offer is being made pursuant to an Offer to Purchase and Consent Solicitation Statement dated April 20, 2007, which sets forth more fully the terms and conditions of the tender offer and consent solicitation. Assuming the payment date for Notes purchased in the tender offer is before June 1, 2007, the purchase price for each $1,000 principal amount of Notes tendered and accepted for payment pursuant to the tender offer will be determined at 2:00 p.m., New York City time, on the tenth business day prior to the Expiration Date, which price determination date is expected to be May 4, 2007, in the manner described in the Offer to Purchase. The total consideration per $1,000 principal amount of Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the Consent Date will be calculated based on the present value on the payment date of the sum of $1,056.25 plus interest payments through June 1, 2007, determined using a discount factor equal to the yield on May 4, 2007 of the 3.5% U.S. Treasury Note due May 31, 2007, plus a fixed spread of 50 basis points, less accrued and unpaid interest to, but not including, the payment date. If the payment date for the Notes purchased in the tender offer is on or after June 1, 2007, the purchase price will be $1,060.94, which represents the redemption price on June 1, 2007, plus the equivalent of two weeks of interest. Holders who tender on or prior to the Consent Date will receive the total consideration, which includes a $30 consent payment per $1,000 principal amount of Notes. Holders who tender after the Consent Date and on or prior to the Expiration Date will receive the total consideration minus the $30 consent payment. In either case, the company will pay Holders of record on May 15, 2007 whose Notes are validly tendered and accepted for purchase accrued and unpaid interest up to, but not including, the payment date. Payments will be made promptly on or after the Expiration Date. The company has retained Deutsche Bank Securities Inc. to serve as the Dealer Manager for the tender offer and the consent solicitation. Questions concerning the terms of the tender offer may be directed to: Deutsche Bank Securities Inc. Tel: (212) 250-5655 (collect) Copies of the Offer to Purchase may be obtained by calling the information agent: MacKenzie Partners Inc. Tel: (800) 322-2885 (toll free) About OMNOVA Solutions Inc. Based in Fairlawn, Ohio, OMNOVA Solutions Inc. (NYSE: OMN) -- http://www.OMNOVA.com/-- is a specialty chemical producer. The company has leading positions in styrene-butadiene latex production, vinyl wallcovering, coated fabrics and decorative laminates. For the last 12 months ended Aug. 31, 2006, the company had operating EBITDA of $50.1 million on sales of $812.2 million unadjusted for the recent divestiture. * * * As reported in the Troubled Company Reporter on Dec. 19, 2006, Fitch Ratings affirmed these credit ratings for OMNOVA Solutions Inc. (i) Issuer default rating at 'B+'; (ii) Senior secured credit facility at 'BB+, recovery rating 1'; and (iii) Senior secured notes at 'B+/RR4'. The Rating Outlook is Stable. ORECK CORP: S&P Rates Proposed $150 Mil. Term Loan Facility at B- ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit ratings on New Orleans, Louisiana- based Oreck Corp. At the same time, it removed all ratings from CreditWatch with negative implications, where they were placed on March 12, 2007, reflecting concerns about Oreck's liquidity and continued significantly weaker-than-expected operating performance triggered by the impact of Hurricane Katrina on the Company's operations. The outlook is negative. Also, Standard & Poor's assigned its loan and recovery ratings to Oreck's proposed $130 million first-lien term loan facility and $20 million first-lien revolving credit facility. The loans were rated 'B-', with a recovery rating of '3', indicating the expectation of meaningful (50%-80%) recovery of principal in the event of a payment default. Standard & Poor's also assigned ratings to Oreck's proposed $50 million second-lien term loan facility. The second-lien facility received a 'CCC' rating, with a recovery rating of '5', indicating the expectation of negligible (0%-25%) recovery of principal in the event of a payment default. Proceeds from the new bank facilities will be used to repay all existing outstanding bank debt, and to pay fees and expenses. "While the structure of the new bank facilities should provide the company with some enhanced liquidity," said Standard & Poor's credit analyst Christopher Johnson, "we remain concerned about the company's very weak operating trends as it continues to put in place new infrastructure and fill key senior management positions." These initiatives were prompted primarily by the impact of Hurricane Katrina on the company's operations. OREGON IMAGING: Case Summary & Three Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Oregon Imaging, L.P. 2600 North Oregon Street, Suite 200 El Paso, TX 79902 Bankruptcy Case No.: 07-30453 Chapter 11 Petition Date: April 23, 2007 Court: Western District of Texas (El Paso) Judge: Robert C. McGuire Debtor's Counsel: Bernard R. Given, II, Esq. Beck & Given, P.C. 5915 Silver Springs Drive, Building 4 El Paso, TX 79912 Tel: (915) 544-5545 Fax: (915) 544-1620 Total Assets: $2,288,510 Total Debts: $1,009,535 Debtor's Three Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Hitachi Capital America Corp. $104,569 800 Connecticut Avenue Secured: Norwalk, CT 06854 $200,000 $22,732 Debbie & Hugo Isuani $49,561 810 Forest Willow El Paso, TX 79922 GE Healthcare Financial Services $71,167 20225 Watertown Boulevard Brookfield, WI 53045 PARADISE MUSIC: Tinter Scheifley Raises Going Concern Doubt ----------------------------------------------------------- Paradise Music & Entertainment Inc. filed its audited financial statements for the year ended Dec. 31, 2005, with the Securities Exchange Commission on April 19, 2007. Tinter Scheifley Tang LLP, in Denver, expressed substantial doubt about Paradise Music & Entertainment Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditing firm pointed to the company's loss from operations and working capital and stockholders' deficits. The company reported a net loss of $124,411 on sales of $2.9 million for the year ended Dec. 31, 2005, compared with a net loss of $126,803 on zero revenues for the year ended Dec. 31, 2004. At Dec. 31, 2005, the company's balance sheet showed $1.7 million in total assets and $9.3 million in total liabilities, resulting in a $7.6 million total stockholders' deficit. The company's balance sheet at Dec. 31, 2005, also showed strained liquidity with $842,772 in total current assets, available to pay $8.9 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2005, are available for free at http://researcharchives.com/t/s?1dc8 About Paradise Music Paradise Music & Entertainment Inc. (Other OTC: PDSE.PK) is a diversified holding company which, through its wholly owned subsidiary, Environmental Testing Laboratories Inc., operates in the environmental testing industry. The company is seeking to attract and subsequently acquire additional companies operating in the environmental testing industry and manufacturing industries. The company operates offices in New York and Colorado. PIONEER NATURAL: Fitch Revises Outlook to Negative from Stable -------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook for Pioneer Natural Resources' debt ratings to Negative from Stable following the announcement that it will create two master limited partnerships and contribute a portion of the company's ownership interest in the Spraberry and Raton fields. In addition, the company announced that its Board of Directors approved a $450 million increase in the share repurchase program. Fitch currently rates Pioneer's Issuer Default Rating and senior unsecured debt 'BB+'. Pioneers' announcement indicates the company will be creating two MLPs. The first of these will be created in the second half of 2007 and will acquire an interest in the company's Spraberry field of West Texas. Pioneer intends to sell MLP units to generate proceeds of $250 million; however, the company plans to retain the general partner interest as well as hold a majority ownership in the units of the MLP. The second MLP will be created in 2008 and will acquire an interest in the company's Raton Basin field in southern Colorado. The company expects to generate additional proceeds of $250 million from the sale of MLP units while again retaining majority ownership of the MLP units and the GP interest. It is important to note that a number of the key details regarding the announced transactions remain unknown at this time. Still unknown are the ultimate size and form of the interest in the Spraberry and Raton fields, which will be contributed to the MLPs in addition to the use of proceeds that are generated from the sale of interests to the MLPs. Despite these unknowns, Fitch believes the revision of the Rating Outlook to Negative incorporates Fitch's generally negative views on these transactions as well as Pioneer's trend over the past 2-3 years of selling assets and using proceeds to fund primarily share repurchases. While the company made no mention of proceeds being used to repay borrowings, this remains a possibility and could mitigate the otherwise negative views regarding the announcement. Additionally, a sustained improvement in the valuation of Pioneer's reserves by equity markets would be viewed positively by Fitch as this could imply fewer shareholder-friendly transactions in the future. Pioneer's debt/barrels of oil equivalent and debt/proved developed producing metrics, while expected to deteriorate, likely will not look significantly leveraged relative to the company's peer group upon completion of the announced transactions. However, Pioneer will be selling ownership interest in its two primary reserve basins with proceeds expected to fund share repurchases. Additionally, Pioneer will have the ability of additional asset drop downs to the MLPs in the future which could result in a continued liquidation of the company's reserves. Future ratings changes will be evaluated based on the size and nature of the interest sold to the MLPs, the loss of production and resulting expectations for free cash flow of the company, use of proceeds generated by the sales, and the timing of share repurchases. Pioneer is a large independent oil & gas exploration and production company with operations in the U.S. (Permian Basin, Mid-Continent, Rockies, Gulf Coast & Alaska), Canada and Africa (Tunisa and South Africa). At year-end 2006, the company had approximately 905 million boe of proven reserves. Its headquarters are in Irving, Texas. PIONEER NATURAL: Planned Partnerships Cue S&P to Affirm BB+ Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating on oil and gas exploration and production company Pioneer Natural Resources Co. The outlook is stable. Irving, Texas-based Pioneer had $1.6 billion of balance sheet debt at Dec. 31, 2006. "The affirmation follows Pioneer's announcement that it intends to form two master limited partnerships using certain of its oil & natural gas producing properties in the Raton and Spraberry basins," said Standard & Poor's credit analyst Ben Tsocanos. Pioneer expects the MLPs to raise about $500 million through IPOs, which Standard & Poor's expects would be used to fund the transfer of properties from the parent. Pioneer believes the properties will receive a higher market valuation in an MLP because of the tax characteristics the structure. The properties associated with the MLPs are mature, long-lived, slow-producing, and relatively predictable reserves. S&P view the formation of the partnership as unfavorable for Pioneer's credit quality, because lower-risk reserves are removed from the company's direct asset base, and because proceeds are likely to be used to fund a recently announced increase in share repurchases. However, S&P expect that the amount of reserves associated with the formation of the MLPs will represent a relatively small proportion of Pioneer's total reserves. Sufficient flexibility exists in the company's credit profile at the current rating to absorb the transaction without change in rating or outlook. S&P will continue to treat the partnerships and the company as consolidated entities because Pioneer will owns the general partnership interests and has an economic incentive to support them. "The stable outlook reflects our expectation that Pioneer will focus on developing its core properties to rebuild production," Mr. Tsocanos said. "Significant deterioration in operating performance or financial leverage could result in a negative outlook. To raise the ratings, we would have to see demonstrated moderation of the company's aggressive financial policies." RECKSON OPERATING: S&P Lowers Rating on Sr. Unsecured Notes to BB+ ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BBB-' corporate credit rating on Reckson Operating Partnership L.P. and removed it from CreditWatch, where it was placed with negative implications on Aug. 4, 2006. At the same time, the 'BBB-'corporate credit rating on Reckson Associates Realty Corp. was withdrawn, following the acquisition of that entity by unrated SL Green Realty Corp. Additionally, the rating on Reckson's senior unsecured notes was lowered to 'BB+' and removed from CreditWatch. The outlook on Reckson is positive. In January 2007, SL Green acquired Reckson's New York City and southern Connecticut assets, most of Reckson's Westchester County, New York assets, and interests in Reckson's structured finance notes and Reckson Strategic Venture Partner, for $4.0 billion net consideration. As a result of the acquisitions, Reckson, the issuer of the rated notes, is now a subsidiary of SL Green, whose total assets are now estimated at roughly $9.5 billion on undepreciated cost basis. The credit quality of Reckson now reflects the implied credit quality of its unrated parent, SL Green, which has agreed to provide a full and unconditional guarantee of all obligations under the indenture governing Reckson's senior unsecured notes. The ratings on the Reckson bonds are notched from the issuer credit rating, reflecting their subordination to secured creditors at SL Green. "The ratings acknowledge the exceptionally strong market conditions in Midtown Manhattan, which have resulted in embedded rental growth potential within the combined, predominantly Manhattan-based, office properties," said credit analyst Beth Campbell. "SL Green management's demonstrated track record of recycling capital has resulted in strong and stable cash flow and above-average debt coverage measures historically. However, we expect weaker gain-adjusted credit metrics in the near term as a result of the leveraged Reckson merger. Additional credit considerations include significant geographic concentration, as well as moderate property and tenant concentrations." SL Green's cash flow stream is expected to benefit from the realization of rent growth embedded within its portfolio of well- located office properties, which is bolstered by current extraordinarily strong demand for office space in Midtown Manhattan. S&P would consider raising our rating in the medium term if SL Green profitably integrates the Reckson portfolio and moderately deleverages its balance sheet post- merger. The company's unique, essentially single-market-focused business strategy and demonstrated local market capital-recycling expertise mitigates downward rating pressure at this time, although single-market concentration remains a credit consideration. RELIANT ENERGY: Moody's Changes SGL Rating to SGL-2 from SGL-3 -------------------------------------------------------------- Moody's Investors Service changed the Speculative Grade Liquidity rating for Reliant Energy to SGL-2 from SGL-3. The SGL rating had been changed to SGL-3 from SGL-4 on December 19, 2006. The SGL-2 rating reflects Moody's view that over the next 12 months the company's liquidity profile has improved and is good, reflecting an improved quality of the company's liquidity to meet its over- all funding needs compared to the most recent twelve-month period. In Moody's opinion, Reliant's over-all liquidity position is expected to remain reasonably stable over the next twelve months as a result of several recently completed transactions, including a credit hedging sleeve with Merrill Lynch for the retail electric provider operations and an expectation for reduced debt associated with a pending asset sales program, which could lower debt service obligations. In addition, Reliant's 2006 tender and conversion of its convertible securities into equity and its continuing asset optimization plans should provide additional relief to its financial covenants and possibly generate incremental asset sales proceeds which could be viewed as positive developments for the liquidity profile. On a consolidated basis, Moody's observes that Reliant produced approximately $1.4 billion of adjusted cash from operations for the year ended December 31, 2006, although $1.3 billion of that came from the return of posted collateral and margin deposits. Capital expenditures were approximately $97 million but are expected to rise to roughly $250 million to $300 million annually over the next few years. Although Reliant does not currently pay a common stock dividend, the liquidity profile could be modestly impaired due to the company's recent announcements regarding the institution of a common dividend and / or share repurchases over the near-term. Moody's would view any new dividend policy as a fixed obligation. Reliant is expected to generate positive free cash flow over the next several years. Reliant recently refinanced its parent company credit facilities and completed its retail credit structure with Merrill Lynch at the end of 2006. As a result, the company now has a $700 million revolver (maturing in December 2009), a $300 million special LC facility (maturing in December 2010) and a $300 million working capital facility at its retail operations (maturing in March 2012). All of the credit facilities are secured. Prospectively, Moody's expects the revolver to have only a modest amount of drawings (approximately $100 million) and modest drawings on the retail working capital facility (approximately $100 million), which will result in a significant amount of net available liquidity. In Moody's opinion, access to the revolver improved over 2006, in part due to the financial covenant relief incorporated into the new facilities and in part due to the cash collateral being returned to the company as a result of its new retail credit structure and new "open" operating strategy. Prospectively, Moody's believes as certain legacy hedge losses begin to unwind over the course of 2007, Reliant's headroom under its financial covenants will also improve, positioning the company to meet the more stringent financial covenants that begin to ratchet up in the second half of 2007, but we remain cautious on the relatively low headroom (EBITDA cushion) over the near-term. These financial covenants include a minimum consolidated interest coverage (EBITDA to interest) ratio set initially at 1.5x through the 2Q of 2007, then stair-stepping up to 1.8x in the 3Q 2007 and 2.0x in the 4Q 2007 and thereafter. Similarly, a maximum consolidated leverage (total debt to EBITDA) ratio will remain at 6.0x until the 2Q of 2007, then fall to 5.5x in the 3Q 2007 and 5.0x in the 4Q 2007 and thereafter. According to the company, Reliant was in compliance with its financial covenants for the twelve months ended December 2006. Reliant's total posted collateral began to decline in 2006, consistent with the over-all strategic and financial plans articulated earlier in the year. As a result of the Merrill Lynch credit sleeve transaction, however, the total posted collateral fell materially in December 2006. The cash from the returned posted collateral was used as part of the over-all credit facility refinancing, and resulted in a consolidated reduction of debt of approximately $580 million. Prospectively, Reliant's collateral postings, largely related to its wholesale generation operations, are expected to remain relatively modest, and will be primarily funded through its $300 million Special LC facility. Additional sources of liquidity have primarily been generated through asset sales, which may also be available on a limited basis going forward, such as additional emission credits and/or generating plants. However, depending on the use of proceeds, the sale of additional generating assets may not have much of an impact on liquidity, as the proceeds could be ear-marked for debt reduction. Apart from asset sales, various contemplated alternatives to effect debt reduction, such as in the case of the Reliant Energy Channelview, L.P. subsidiary, could be the transfer of ownership to creditors or even placing Channelview in bankruptcy. In addition, Moody's notes Reliant's tender and conversion of its $275 million subordinated convert into equity in December 2006. Although the equity conversion did not generate incremental cash for Reliant (in fact, a small cash outlay occurred related to the conversion premium), it reduced interest expense and lowered the aggregate amount of debt outstanding. Reliant Energy's Corporate Family Rating is B2. The rating outlook is stable. Reliant is headquartered in Houston, Texas. RESMAE MORTGAGE: Disclosure Statement Hearing Set for Friday ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware set a hearing on Friday, April 27, 2007, at 10:00 a.m., to consider the adequacy of the Disclosure Statement explaining ResMAE Mortgage Corporation's Chapter 11 plan of Reorganization. The plan is sponsored by RMC Mortgages Holdings LLC, the successful bidder in an auction held March 2, 2007, for the sale of substantially all of the Debtor's assets. Asset Sale In its bid, RMC proposed to: 1) purchase specified assets and assume certain mutually agreed upon liabilities from the Debtor prior to confirmation of the Plan; and 2) sponsor the Plan, under which the Debtor would issue new equity to RMC in exchange for RMC's agreement to support and facilitate the Debtor's operations pending confirmation of the Plan. Pursuant to an asset sale agreement approved by the Court on March 6, 2007, the parties consummated the asset sale with RMC paying $22.4 million and providing other consideration to the Debtor in exchange for a majority of the real and personal property of the Debtor used in the Debtor's operations. The Debtor's employees and licenses and certain other assets remained with the Debtor's estate. RMC has granted the Debtor the right to utilize the assets necessary to conduct its business during the pendency of the bankruptcy case. Upon the occurence of the effective date of the Plan, the Debtor's existing equity securities will be cancelled and new equity securities, representing 100% of the equity securities of Reorganized ResMAE, will be issued to RMC. Overview of the Plan Under the Plan, Reorganized ResMAE will receive a discharge of all claims arising before the occurrence of the effective date of the Plan other than a small category of assumed liabilities related to certain postpetition obligations. Claims against the Debtor will be satisfied in accordance with the terms of the Plan from the: 1) balance of the purchase price paid by RMC at the first closing, if any; 2) net proceeds realized from the liquidation of certain assets that were excluded from the asset sale; and 3) proceeds of certain causes of action referred to in the Plan as "Retained Rights of Action." The assets will be transferred to, and administered by, a liquidating trust for the benefit of holders of claims entitled to receive distribution under the Plan. Continued Operations The Debtor retained approximately $12 million of the proceeds of the asset sale to support its continued operations. RMC also agreed to fund up to $15 million of certain identified fixed costs and much of the Debtor's variable costs. In addition to working capital, the Debtor also has access to a $500 million facility for the funding of new mortgage loans. Sale Related Incentive Plan On March 22, 2007, the Court approved a performance-based, sale- related incentive plan for certain members of the Debtor's senior management. Eligible employees will be entitled to payments from a pool of $700,000 upon the effective date of the Plan. Treatment of Claims Class 1 Other Priority Claims will be paid in full in cash. Class 2 Secured Claims will either be paid in full, in cash, or receive the collateral securing the claims. Holders of Class 3 General Unsecured Claims will receive pro rata share of their claims and holders of Class 4 Convenience Claims will get a percentage of the face amount of their claims. Subordinated Claims will receive nothing under the Plan while old equity interests in the Debtor will be cancelled. About ResMAE Mortgage Corp. Headquartered in Brea, California, ResMAE Mortgage Corp. -- http://www.resmae.com/-- is a subsidiary of ResMAE Financial Corp., a specialty finance company engaged in the business of originating, selling, and servicing subprime residential mortgage loans. The company serves the needs of borrowers who do not conform to traditional "A" credit lending criteria due to credit history, debt to income ratios, or other factors. It has regional processing centers nationwide, including Northern and Southern California, Texas, New Jersey, Illinois, Florida and Hawaii. ResMAE Mortgage filed for chapter 11 protection on February 12, 2007 (Bankr. D. Del. Case No. 07-10177). Daniel J. DeFranceschi, Esq. and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., represent the Debtor in its restructuring efforts. Adam G. Landis, Esq., and Richard Scott Cobb, Esq., at Landis Rath & Cobb LLP serve as counsel to the Official Committee of Unsecured Creditors. At reporting month ended Feb. 28, 2007, the Debtor's balance sheet showed total assets of $255,429,000 and total debts of $254,062,000. RESMAE MORTGAGE: Court Approves Three Loan Purchase Agreements -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave ResMAE Mortgage Corporation authority, on an interim basis, to: a) enter into a loan purchase agreement with DB Structured Products Inc.; b) enter into an amendment to a loan purchase agreement with Lehman Brothers Bank FSB; and c) sell mortgage loans to RMC Mortgages Holdings LLC. DB Loan Purchase Agreement The Debtor agreed to sell to DB fixed and adjustable rate, first and second lien mortgage loans originated by the Debtor for $500,000,000. Proceeds of the sale will be used to effect the origination of mortgage loans. The collateral securing the DB Obligation is subject to a carve- out for fees payable to a chapter 7 trustee not exceeding $10,000 and for professional fees not exceeding $750,000. Lehman Loan Purchase Agreement The Debtor and Lehman agreed to increase the aggregate amount of mortgage loans that can be sold to Lehman to $800,000,000 from $500,000,000. The amendment agreement is approved nunc pro tunc to April 12, 2007. Sale of Loans to RMC Simultaneously with the execution of the DB Loan Purchase Agreement, an affiliate of RMC entered into a total return swap agreement with an affiliate of DB, pursuant to which the affiliate of RMC has agreed to assume certain economic risks of ownership of the mortgage loans purchased by DB. RMC is the successful bidder in an auction held March 2, 2007, for the sale of substantially all of the Debtor's assets. RMC is sponsoring the Debtor's proposed chapter 11 reorganization plan. Accordingly, to provide additional level of liquidity and flexibility to the Debtor, the Court gave the Debtor authority to sell whole loans to RMC. The Court is set to convene a final hearing on the matter on May 8, 2007, at 1:30 p.m. ET. Objections to the motion are due May 4, 2007, at 4:00 p.m. ET. About ResMAE Mortgage Corp. Headquartered in Brea, California, ResMAE Mortgage Corp. -- http://www.resmae.com/-- is a subsidiary of ResMAE Financial Corp., a specialty finance company engaged in the business of originating, selling, and servicing subprime residential mortgage loans. The company serves the needs of borrowers who do not conform to traditional "A" credit lending criteria due to credit history, debt to income ratios, or other factors. It has regional processing centers nationwide, including Northern and Southern California, Texas, New Jersey, Illinois, Florida and Hawaii. ResMAE Mortgage filed for chapter 11 protection on February 12, 2007 (Bankr. D. Del. Case No. 07-10177). Daniel J. DeFranceschi, Esq. and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., represent the Debtor in its restructuring efforts. Adam G. Landis, Esq., and Richard Scott Cobb, Esq., at Landis Rath & Cobb LLP serve as counsel to the Official Committee of Unsecured Creditors. At reporting month ended Feb. 28, 2007, the Debtor's balance sheet showed total assets of $255,429,000 and total debts of $254,062,000. RIVIERA TOOL: AMEX Subjects Common Stock Delisting Effective May 1 ------------------------------------------------------------------ Riviera Tool Company disclosed that the American Stock Exchange LLC(R)'s final determination to remove the company's common stock from listing on the Exchange. Amex has filed an application on Form 25 to strike the Securities from listing with the Securities and Exchange Commission. The delisting will become effective on May 1, 2007 unless postponed by the SEC. Pursuant to its rules, the Exchange an opportunity to appeal the decision to a panel designated by the Exchange's board of governors. On March 30, 2007, the company received a notice from the American Stock Exchange indicating that the company no longer complies with the Exchange's continued listing standards due to net losses in three out of its four most recent fiscal years, and the resulting deficit of shareholders' equity of less than $4,000,000, as set forth in Section 1003(a) (ii) of the company guide, and that its securities are, therefore, being delisted from the Exchange. The company intended to apply for listing on the OTC Bulletin Board for its common stock to be quoted for trading on the OTC Bulletin Board. About Riviera Tool Riviera Tool Company (ASE: RTC) -- http://www.rivieratool.com/-- designs and manufactures die systems for the production of underbody panels, inter-structural panels, outer body panels, and bumper systems. A majority of the company's sales are to DaimlerChrysler, General Motors Corporation, Mercedes-Benz, BMW and their tier one suppliers of sheet metal stamped parts and assemblies. Going Concern Doubt BDO Seidman LLP expressed substantial doubt about Riviera Tool Company's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Aug. 31, 2006. The auditing firm pointed to the company's recurring losses from operations and retained deficit. SACO I TRUST: Moody's Puts Ratings Under Review and May Downgrade ----------------------------------------------------------------- Moody's Investors Service has placed on review for possible downgrade certain certificates from deals issued by SACO I Trust. These actions are based on the analysis of the credit enhancement provided by subordination, overcollateralization and excess spread relative to the expected loss. These transactions are backed by closed end second lien loans, and have seen recent losses that have exceeded the excess spread available thereby depleting the overcollateralization. Complete rating actions are: Review for Possible Downgrade: Issuer: SACO I Trust * 2006-2, Class I-B-4, Current rating Ba1, under review for possible downgrade * 2006-2, Class II-B-4, Current rating Ba1, under review for possible downgrade, * 2006-3, Class B-4, Current rating Ba1, under review for possible downgrade, * 2006-4, Class B-4, Current rating Ba1, under review for possible downgrade, * 2006-5, Class I-B-4, Current rating Ba1, under review for possible downgrade, * 2006-5, Class II-B-1, Current rating Baa1, under review for possible downgrade, * 2006-5, Class II-B-2, Current rating Baa2, under review for possible downgrade, * 2006-5, Class II-B-3, Current rating Baa3, under review for possible downgrade, * 2006-5, Class II-B-4, Current rating Ba1, under review for possible downgrade, * 2006-6, Class B-2, Current rating Baa2, under review for possible downgrade, * 2006-6, Class B-3, Current rating Baa3, under review for possible downgrade, * 2006-6, Class B-4, Current rating Ba1, under review for possible downgrade, * 2006-7, Class B-2, Current rating Baa2, under review for possible downgrade, * 2006-7, Class B-3, Current rating Baa3, under review for possible downgrade, * 2006-7, Class B-4, Current rating Ba1, under review for possible downgrade. SEA CONTAINERS: Selects AP Services as Crisis Managers ------------------------------------------------------ Sea Containers, Ltd. and its debtor-affiliates ask authority from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to employ AP Services LLC to provide them certain temporary employees and interim management to oversee and manage their restructuring efforts. The Debtors and AP Services executed an engagement letter on April 12, 2007, for the firm's provision of temporary staff to the Debtors. Under the APS Engagement Letter, Laura Barlow will serve as the Debtors' chief financial officer and chief restructuring officer, and Craig Cavin will act as the Debtors' restructuring manager. Working collaboratively with the Debtors, Ms. Barlow and Mr. Cavin will oversee the Debtors' evaluation and implementation of strategic and tactical options through the restructuring process. As interim management for the Debtors, Ms. Barlow, Mr. Caving and any designated Temporary Staff will, among others: -- manage the Debtors' financial, treasury and tax functions; -- oversee negotiations with potential acquirers of the Debtors' assets; -- oversee management of the "working group" professionals who are assisting the Debtors in the reorganization process or who are working for the Debtors' various stakeholders to improve coordination of their effort and individual work product to be consistent with the Debtors' restructuring goal; -- work with the Debtors to further identify and implement both short-term and long-term liquidity generating initiatives; -- oversee the Debtors' execution of its planned disposal program in respect of various non-core assets; -- oversee the Debtors' management of the relationship with its stakeholders and their advisers and in meeting its requirements to provide information to those stakeholders; -- oversee the Debtors' negotiation and restructuring of its current indebtedness with its key stakeholders, including liaising and negotiating with the different stakeholders; and -- manage other matters as may be requested by the Debtors that fall within APS Services' expertise and that are mutually agreeable. AP Services will also occasionally provide part-time temporary employees for certain activities related to the administration of the Debtors' Chapter 11 cases. AP Services will be paid a monthly fee of GBP75,000 for Ms. Barlow's services and GBP50,000 for Mr. Cavin's services, Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates. With respect to any assisting Temporary Staff member, APS Services will be paid on an hourly rate basis: Assisting Member Hourly Rate ---------------- ----------- Managing Directors GBP485-GBP545 Directors GBP415-GBP440 Vice Presidents GBP315-GBP360 Associates GBP220-GBP285 In addition, the Debtors will pay AP Services a success fee, not to exceed GBP500,000, for the first six-month period of the engagement at an amount to be agreed between the parties by May 2, 2007. The Debtors have paid a GBP100,000 retainer to APS Services, Mr. Brady says. It will be applied against fees and expenses incurred by the firm in connection with the contemplated services. Ms. Barlow assures the Court that AP Services does not hold or represent any interest adverse to the Debtors' estate, and is deemed a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers Ltd. disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). The Debtors' exclusive period to file a Chapter 11 plan of reorganization expires on June 12, 2007. SEA CONTAINERS: Wants to Implement Non-Insider Retention Plan ------------------------------------------------------------- Sea Containers, Ltd. and its debtor-affiliates ask authority from the Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware to implement a non-insider retention plan, pursuant to Sections 363(b) and 503(c)(3) of the Bankruptcy Code. Since the Debtors' filing for bankruptcy, the stresses on the Debtors' employees have continued to build as the Debtors downsize their organization, and the workload of the remaining employees has grown, Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates. Moreover, the Debtors' difficult work environment has been amplified by the additional requirements of running a business in bankruptcy. As a result of their financial difficulties, the Debtors no longer offer their annual bonus programs. The perceived value of the Debtors' pension programs has also decreased and those programs are currently closed to future accrual, Mr. Brady adds. The circumstances translate to a loss of morale among the Debtors' employees and instability in the workforce, Mr. Brady says. Under the circumstances, the Debtors believe that a more traditional retention plan for their critical non-insider employees is appropriate. After careful consideration and detailed planning, the Debtors and their compensation consultants, Towers Perrin, structured a narrowly focused retention plan that identifies certain non- insider, critical employees. The Non-Insider Retention Plan provides for retention payments to the Debtors' eligible non-insider, critical employees based on the U.K. market but do so within the framework of a traditional Chapter 11 retention plan, Mr. Brady states. Under the Retention Plan, the Debtors will make cash payments in multiple installments to 12 Eligible Employees, ranging from GBP5,000 to GBP95,000, or approximately $9,800 to $186,000. The Debtors estimate the maximum cost of the Retention Plan to be about GBP455,000, or $891,000, plus approximately GBP60,000 in social security costs associated with the payments. The retention payments, Mr. Brady avers, are aimed at: -- narrowing the gap between the Eligible Employees' current compensation and market compensation; -- rewarding the Eligible Employees for past performance; and -- incentivizing the Eligible Employees to remain with the Debtors and continue to perform up to the requirements of the job. The Debtors' senior management will also consider these factors in determining each Eligible Employee's retention payment: 1. The effectiveness of an Employee's position, 2. The Employee's knowledge of the Debtors' business, 3. The Employee's demonstration of teamwork and work ethic, 4. The need to incentivize an Employee to continue to perform at a high level through the Debtors' restructuring process, and 5. The harm suffered by the Debtors if the Employee leaves. With the exception of three employees who will receive their entire retention payment on the first installment date, the Retention Payments will be paid in three installments on: (i) October 15, 2007, (ii) January 15, 2008, and (iii) April 15, 2008. The Employees who will receive their full retention payment on a one-time basis are those employees whose current tasks involve overseeing the outsourcing or elimination of their departments or whose tasks will be completed prior to subsequent installments. Notwithstanding the schedule of payments, the Debtors retain the discretion to decrease or eliminate payments if any of the Eligible Employees do not meet their objectives or other circumstances warrant it. The proposed cash payments are not guaranteed to any Eligible Employee, Mr. Brady clarifies, but merely set the upper bound of any bonus payments. Furthermore, Eligible Employees who are terminated for cause will forfeit their right to receive any accrued but unpaid amounts under the Retention Plan. For Eligible Employees who voluntarily terminate their employment with the Debtors or who are terminated without cause, the Board of Directors of Sea Containers Ltd. will determine the level of vesting, if any. Any retention payments forfeited will not become available for reallocation to other Eligible Employees. Mr. Brady notes that the 12 Eligible Employees identified by the Debtors were selected on the basis of the critical nature of the Employee's job functions to the Debtors' overall restructuring efforts and the Employee's individual performance within those critical functions. Each Eligible Employee has special skills that relate to, among other things, the Debtors' non-core asset sales, SCL's financial interest in GE SeaCo, accounting, payroll, tax planning and reporting, cash flow, human resources and other operational needs. Retained Employee Data Confidential The critical knowledge and skills the Eligible Employees possess, which cannot be replaced readily on the open market, are necessary to maintain ongoing operations and assure successful completion of the Debtors' restructuring process, Mr. Brady maintains. Thus, the Eligible Employees should be compensated at par with job market standards due to their significant contribution to the Debtors. The proposed Retention Plan contains highly confidential information, Mr. Brady informs the Court, that if exposed, may be used by the Debtors' competitors to lure the Eligible Employees away from the Debtors' business by offering enhanced compensation and bonuses. Thus, the Debtors seek the Court's authority to file the Retention Plan under seal so that it may only be made available to the Court, the U.S. Trustee and the counsel to the Official Committee of Unsecured Creditors for Sea Containers Ltd., Sea Containers Services Ltd. and Sea Containers Caribbean Inc. About Sea Containers Headquartered in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers Ltd. disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). The Debtors' exclusive period to file a Chapter 11 plan of reorganization expires on June 12, 2007. SHUMATE INDUSTRIES: Malone & Bailey Raises Going Concern Doubt -------------------------------------------------------------- Malone & Bailey PC reported that Shumate Industries Inc.'s recurring losses and accumulated deficit raise substantial doubt about the company's ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. Net loss for the year 2006 was $1,309,131, as compared with a net income of $1,978,484 for the year 2005. The company generated revenues of $7,719,882 for the year 2006, as compared with revenues of $4,964,544 for the year 2005. As of Dec. 31, 2006, the company had an accumulated deficit of $19,876,997. It also listed $5,908,706 in total assets and $5,790,219 in total liabilities, resulting in $118,487 stockholders' equity in 2006. The company financed operations, acquisitions, debt service, and capital requirements through cash flows generated from operations, debt financing, capital leases, and issuance of equity securities. It had working capital of $338,874 at Dec. 31, 2006. It had cash of $1,547,326 as of Dec. 31, 2006, as compared with having cash of $214,218 at Dec. 31, 2005. In addition, the company had a $1,000,000 secured revolving line of credit facility, subject to qualifying accounts receivable and inventory, with Stillwater National Bank. The outstanding balance on this line of credit was about $778,916 at Dec. 31, 2006. On Feb. 8, 2007, and effective Jan.19, 2007, the company renewed its $1,000,000 secured revolving line of credit facility with Stillwater. The line of credit expires on April 19, 2008. A full-text copy of the company's annual report is available for free at http://ResearchArchives.com/t/s?1dcd About Shumate Industries Headquartered in Conroe, Texas, Shumate Industries Inc. (OTCBB: SHMT) -- http://www.shumateinc.com/-- formerly known as Excalibur Industries serves the energy field services market through its Shumate Machine Works operating subsidiary. With its roots going back more than 25 years, Shumate is a contract machining and manufacturing company utilizing 3-D modeling software, computer numeric controlled machinery and manufacturing expertise to perform close tolerance and precision machining for energy field service applications. SIX FLAGS: Obtains New $800MM Tranche B & $300MM Credit Facilities ------------------------------------------------------------------ Six Flags Inc. disclosed a new senior secured credit facility that will consist of an $800 million Tranche B term loan maturing in April 2015 and a $300 million revolving credit facility maturing in March 2013. The company has hired: a) J.P. Morgan Securities Inc., Credit Suisse Securities (USA) LLC, and Lehman Commercial Paper Inc. as joint lead arrangers and joint book runners for the New Facility; b) Credit Suisse and Lehman as co-syndication agents; and c) JPMorgan Chase Bank, N.A. as administrative agent. The company intends to use the proceeds from the New Facility to refinance amounts outstanding under its existing credit facility which consists of a $637 million Tranche B term loan, a $300 million revolving credit facility and an $82.5 million multicurrency facility. Any remaining proceeds from the New Facility will be used for working capital and general corporate purposes. About Six Flags Headquartered in New York City, Six Flags Inc. (NYSE: SIX) -- http://www.sixflags.com/-- is a regional theme park company. Founded in 1961, Six Flags is a publicly traded corporation. * * * As reported in the Troubled Company Reporter on Jan. 15, 2007, Standard & Poor's Ratings Services said that its ratings, including the 'B-' corporate credit rating, on Six Flags Inc. remain on CreditWatch with negative implications, where they were placed on Sept. 18, 2006. The CreditWatch update followed the company's announcement that it had reached an agreement to sell seven of its parks for $312 million. SIX FLAGS: Moody's Rates Proposed $1.1 Billion Facility at Ba3 -------------------------------------------------------------- Moody's Investors Service affirmed the B3 corporate family rating for Six Flags, Inc. and assigned a Ba3 rating to its proposed senior secured credit facility. The proposed facility consists of a $300 million revolving credit facility and $800 million term loan, with proceeds intended to refinance the existing revolving credit facilities ($300 million US and $82.5 million multi-currency) and term loan (approximately $640 million outstanding) and to create additional liquidity. Six Flags' B3 corporate family rating reflects high financial risk, including unsustainable double digit leverage and negative free cash flow, and continued concerns over execution risk. The current capital structure provides Six Flags limited financial flexibility to manage the transition to its unproven strategy, which created increased costs prior to any revenue benefits. Improved liquidity, resulting from the April 2007 asset sales and the proposed refinancing, as well as scale and geographic diversity, support the ratings. The outlook remains stable, and Moody's also affirmed all other Six Flags ratings. Six Flags Theme Parks Inc. - Assigned Ba3 to proposed Senior Secured Bank Credit Facility, LGD2, 17% Six Flags, Inc. - Affirmed B3 corporate family rating - Affirmed Caa1 rating on Senior Unsecured Notes - Affirmed Caa2 rating on PIERS Mandatorily Convertible Preferred Stock Outlook Stable Six Flags, Inc., headquartered in New York City, is the world's largest regional theme park company with annual revenue of approximately $1 billion. STEWART HOLDINGS: Case Summary & Six Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Stewart Holdings, L.L.C. 5327 East Orchid Lane Paradise Valley, AZ 85253 Tel: (602) 909-6605 Bankruptcy Case No.: 07-01780 Chapter 11 Petition Date: April 20, 2007 Court: District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Dale C. Schian, Esq. Schian Walker, P.L.C. 3550 North Central Avenue, Suite 1700 Phoenix, AZ 85012-2115 Tel: (602) 277-1501 Fax: (602) 297-9633 Estimated Assets: $1 Million to $100 Million Estimated Debts: $1 Million to $100 Million Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kevin McAndrews professional fees $250,000 10300 North 49t Place Paradise Valley, AZ 85253 Lemme Engineering trade debt $36,333 3608 West Bethany Home Road Phoenix, AZ 85019-1942 Hebert Schenk, Esq. professional fees $21,756 Attorneys at Law 4742 North, 24th Street, Suite 100 Phoenix, AZ 85016 S.W.C.A. trade debt $3,100 Akribis Engineering trade debt $1,725 Ikon trade debt $1,111 STRUCTURED ASSET: Fitch Junks Rating on Two Class Certificates -------------------------------------------------------------- Fitch Ratings has taken rating actions on these Structured Asset Securities Corp. residential mortgage-backed certificates: Series 1998-2 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; Series 1998-3 -- Class M-1 affirmed at 'AA'; Series 1998-8 POOLS 1-4 -- Class A affirmed at 'AAA'; -- Class M-1(1) affirmed at 'AA'; -- Class M-2(1) affirmed at 'A'; Series 1999-BC4 -- Class A affirmed at 'AAA'; Series 1999-SP1 POOLS 1, 2 & 3 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class B downgraded from 'BBB' to 'BB+'; Series 2002-BC1 -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'BBB+'; -- Class M3 downgraded from 'CCC' to 'CC' and Distressed Recovery Rating remains at 'DR2'; Series 2002-HF2 -- Class M1 affirmed at 'AAA'; -- Class M2 affirmed at 'AA-'; -- Class M3 affirmed at 'BBB-'; -- Class B1 affirmed at 'BB'; -- Class B2 downgraded from 'B' to 'CC/DR2'; Series 2003-AM1 -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class M4 affirmed at 'BBB+'; -- Class B2 affirmed at 'BB+'; Series 2003-BC1 -- Class M-1 affirmed at 'AAA'; -- Class M-2 affirmed at 'A+'; -- Class B-1 affirmed at 'BBB-'; -- Class B-2 affirmed at 'BB-'; Series 2003-BC2 -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'BBB+'; -- Class M4 affirmed at 'BBB'; -- Class B1 affirmed at 'B'; -- Class B2 affirmed at 'C' and Distressed Recovery Rating changed from 'DR6' to 'DR2'; Series Encore 2003-1 -- Class M1 upgraded from 'AA+' to 'AAA'; -- Class M2 upgraded from 'A' to 'AA-'; Series Wells Fargo Home Equity Trust 2004-1 -- Class A affirmed at 'AAA'; -- Class A3 affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'AA-'; -- Class M3 affirmed at 'A'; -- Class M4 affirmed at 'A-'; -- Class M5 affirmed at 'BBB'. The affirmations, affecting approximately $682.28 billion of the outstanding balances, are taken due to a satisfactory relationship of credit enhancement to expected losses. The upgrades, affecting approximately $21.88 million of the outstanding balances, are taken due to improved credit enhancement in relation to expected losses. In Series Encore 2003-1, losses and serious delinquencies have remained relatively low. Additionally, the initial overcollateralization amount was also the floor amount, preventing any release of OC at the stepdown date. The OC has continued to build as a percentage of the remaining balance which has resulted in the credit enhancement percentage for the remaining classes to increase well above two-times their initial CE percentages. The negative rating actions, affecting approximately $25.35 million of the outstanding balances reflect deterioration in the relationship between CE and expected losses. All of the affected transactions have pool factors below 15% and 60+ delinquencies (including loans in foreclosure, Real Estate Owned and bankruptcy) above 35%, reflecting material adverse selection on the remaining pool balance. Monthly losses are generally exceeding monthly excess spread amounts, causing deterioration in the OC. The transactions are seasoned from a range of 36 (Wells 2004-1) to 110 (1998-3) months and the pool factors range from approximately 2% (1998-3) to 23% (Wells 2004-1). The mortgage pools consist of conventional, fixed rate, fully- amortizing and balloon, second lien residential mortgage loans. The mortgage loans were acquired by Lehman Brothers Holdings Inc. from various banks and other mortgage lending institutions and are master serviced by Aurora Loan Services, Inc., which is rated 'RMS1-' by Fitch and Wells Fargo Bank Minnesota, rated 'RMS1' by Fitch. STRUCTURED ASSET: Fitch Cuts Rating on Eight Certificates to BB+ ---------------------------------------------------------------- Fitch Ratings has taken rating actions on these Structured Asset Investment Loan mortgage pass-through certificates: Series 2003-BC1 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'BBB+'; Series 2003-BC2 -- Class A affirmed at 'AAA'; -- Class M1 downgraded from 'AA' to 'A'; -- Class M2 downgraded from 'A' to 'BBB+'; -- Class M3 affirmed at 'BBB+'; -- Class B affirmed at 'BBB-'; Series 2003-BC3 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class M5 affirmed at 'BBB'; -- Class B affirmed at 'BBB-'; Series 2003-BC4 -- Class M1 affirmed at 'AA'; -- Class M2 downgraded from 'A' to 'A-'; -- Class M3 downgraded from 'A-' to 'BBB+'; -- Class M4 downgraded from 'BBB+' to 'BBB'; -- Class B affirmed at 'BBB-'; Series 2003-BC6 -- Class M1 affirmed at 'AA'; -- Class M2 downgraded from 'A' to 'A-'; -- Class M3 downgraded from 'A-' to 'BBB'; -- Class M4 downgraded from 'BBB+' to 'BBB-'; -- Class B affirmed at 'BBB-'; Series 2003-BC7 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 downgraded from 'A' to 'A-'; -- Class M3 downgraded from 'A-' to 'BBB'; -- Class M4 downgraded from 'BBB+' to 'BB+'; -- Class M5 downgraded from 'BBB' to 'BB+'; -- Class B downgraded from 'BBB-' to 'BB+'; Series 2003-BC8 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 downgraded from 'A-' to 'BBB+'; -- Class M4 downgraded from 'BBB' to 'BB+'; -- Class M5 downgraded from 'BB' to 'B+'; -- Class B downgraded from 'BB-' to 'B'; Series 2003-BC9 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 downgraded from 'A' to 'A-'; -- Class M3 downgraded from 'A-' to 'BBB'; -- Class M4 downgraded from 'BBB+' to 'BB+'; -- Class M5 downgraded from 'BBB' to 'BB'; -- Class B downgraded from 'BBB-' to 'BB-'; Series 2003-BC10 -- Class 1-A2 affirmed at 'AAA'; -- Class A4 affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 downgraded from 'A' to 'BBB+'; -- Class M3 downgraded from 'A-' to 'BBB-'; -- Class M4 downgraded from 'BBB+' to 'BBB-'; -- Class M5 downgraded from 'BBB' to 'BBB-'; -- Class B downgraded from 'BBB-' to 'BB+'; Series 2003-BC11 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 downgraded from 'A' to 'A-'; -- Class M3 downgraded from 'A-' to 'BBB'; -- Class M4 downgraded from 'BBB+' to 'BB+'; -- Class M5 downgraded from 'BBB' to 'BB'; -- Class B downgraded from 'BBB-' to 'BB-'; Series 2003-BC12 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 downgraded from 'A' to 'BBB+'; -- Class M3 downgraded from 'A-' to 'BBB'; -- Class M4 downgraded from 'BBB' to 'BB+'; -- Class M5 downgraded from 'BB+' to 'BB-'; -- Class M6 downgraded from 'BB+' to 'BB-'; -- Class B downgraded from 'B' to 'C', and is assigned a Distressed Recovery rating of 'DR5'; Series 2003-BC13 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class M4 downgraded from 'BBB+' to 'BBB'; -- Class M5 downgraded from 'BBB' to 'BBB-'; -- Class M6 affirmed at 'BBB-'; -- Class B affirmed at 'BB'; Series 2004-1 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class M4 affirmed at 'BBB+'; -- Class M5 affirmed at 'BBB'; -- Class M6 affirmed at 'BBB-'; -- Class B affirmed at 'BB+'; Series 2004-2 -- Class A4 affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class M4 affirmed at 'BBB+'; -- Class M5 affirmed at 'BBB'; -- Class M6 affirmed at 'BBB-'; -- Class B affirmed at 'BB'; Series 2004-3 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'A-'; -- Class M4 downgraded from 'BBB+' to 'BBB'; -- Class M5 downgraded from 'BBB' to 'BBB-'; -- Class M6 affirmed at 'BBB-'; -- Class B downgraded from 'BB+' to 'BB'; Series 2004-4 -- Class A affirmed at 'AAA'; -- Class A4 affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'AA-'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 downgraded from 'A' to 'A-'; -- Class M6 downgraded from 'BBB+' to 'BBB-'; -- Class M7 downgraded from 'BBB' to 'BB'; -- Class M8 downgraded from 'BBB-' to 'BB-'; -- Class B downgraded from 'BB' to 'B+'; Series 2004-5 -- Class M1 affirmed at 'AAA'; -- Class M2 affirmed at 'AA+'; -- Class M3 affirmed at 'AA'; -- Class M4 affirmed at 'AA-'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-'; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'; Series 2004-6 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 downgraded from 'A-' to 'BBB+'; -- Class M4 downgraded from 'BBB+' to 'BBB'; -- Class M5 downgraded from 'BBB' to 'BB'; -- Class M6 downgraded from 'BBB-' to 'BB'; Series 2004-7 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A'; -- Class M5 affirmed at 'A-'; -- Class M6 downgraded from 'BBB+' to 'BBB'; -- Class M7 downgraded from 'BBB' to 'BB'; Series 2004-8 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA'; -- Class M4 affirmed at 'AA'; -- Class M5 affirmed at 'A'; -- Class M6 downgraded from 'A-' to 'BBB+'; -- Class M7 downgraded from 'BBB+' to 'BBB-'; -- Class M8 downgraded from 'BBB' to 'BB'; -- Class M9 downgraded from 'BBB-' to 'BB-'; Series 2004-9 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'A+'; -- Class M4 affirmed at 'A'; -- Class M5 affirmed at 'A-'; -- Class M6 affirmed at 'BBB+'; -- Class M7 affirmed at 'BBB'; -- Class B1 affirmed at 'BBB-'; -- Class B2 affirmed at 'BBB-'; Series 2004-BNC1 -- Classes A2, A4, and A-SIO affirmed at 'AAA'; -- Class A5 affirmed at 'AA+'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'AA-'; -- Class M3 affirmed at 'A+'; -- Class M4 affirmed at 'A'; -- Class M5 affirmed at 'BBB+'; -- Class M6 affirmed at 'BBB'; -- Class M7 affirmed at 'BBB-'; -- Class B1 affirmed at 'BB'; Series 2004-BNC2 -- Class A affirmed at 'AAA'; The collateral in the aforementioned transactions consist primarily of conventional, first and second lien, adjustable and fixed rate, fully amortizing and balloon loans secured by residential properties. The collateral was originated by multiple lenders including BNC Mortgage, Inc., Option One Mortgage Corporation, Wells Fargo Home Mortgage, Inc., Aames Capital Corporation, Finance America, LLC, Fieldstone Mortgage Company, and others. The master servicer for all transactions is Aurora Loan Services, Inc., which is rated 'RMS1'- by Fitch. The affirmations reflect a stable relationship of credit enhancement to future expected losses, and affect approximately $4.26 billion in outstanding certificates. The downgrades reflect deterioration in the relationship between CE to future expected losses, and affect approximately $890.17 million in outstanding certificates. All of the SAIL transactions listed above benefit from mortgage insurance, typically covering a percentage of the loans with loan- to-values above 80% down to an effective loan-to-value of 60%. The transactions have generally experienced faster prepayments than the vintage industry averages due to higher concentrations of Adjustable Rate Mortgages and loans located in California. The faster prepayments and rising interest rates have reduced the excess spread available to cover losses, while causing adverse selection in the remaining pools. High prepayment rates also result in a rapid and significant amount of principal distribution to the subordinate and mezzanine classes after the stepdown date if the performance trigger tests are passing, typically lowering the credit enhancement of each class to two-times the initial credit enhancement percentage. However, most of the transactions have overcollateralization target amounts at their respective floors, preventing any release of OC and often providing the most subordinate class with more than 2 times (x) its initial credit enhancement. As the OC grows as a percentage of the remaining pool balance, the separation in credit enhancement (and credit risk) between subordinate and mezzanine classes is compressed. This has resulted in some transactions incurring downgrades in the mezzanine classes while the subordinate class ratings were affirmed. For the 2003 vintage, the pool factors (current collateral balance as a percentage of initial collateral balance) range from 7% to 15%, and are seasoned in a range of 39 months to 48 months. The amount of loans in the 60+ buckets (includes bankruptcy, foreclosure, and real estate owned) range from 14.97% to 28.92%, and losses to date range from approximately 0.59% to 1.26%. Of the loans that are seriously delinquent, approximately 31% benefits from mortgage insurance. The WAVG LTV is approximately 83% and the WAVG FICO is approximately 593. Approximately 1% are second lien loans. For the 2004 vintage, the pool factors (current collateral balance as a percentage of initial collateral balance) range from 14% to 25%, and are seasoned in a range of 28 months to 37 months. The amount of loans in the 60+ buckets (includes bankruptcy, foreclosure, and real estate owned) range from 13.41% to 20.13%, and losses to date range from approximately 0.36% to 0.84%. Of the loans that are seriously delinquent, approximately 27% benefits from mortgage insurance. The WAVG LTV is approximately 83% and the original WAVG FICO is approximately 602. Approximately 11% of all loans are interest only (IO), and 2% are second lien loans. Fitch will continue to closely monitor the relationships of CE to losses for all transactions. STRUCTURED ASSET: Fitch Junks Rating on 2001-BC5 Class M2 Certs. ---------------------------------------------------------------- Fitch Ratings has taken rating actions on these Structured Asset Securities Corp. Amortizing Residential Collateral residential mortgage-backed certificates: Series ARC 2001-BC5 -- Class A affirmed at 'AAA'; -- Class M1 downgraded to 'BB+' from 'A-'; -- Class M2 downgraded to 'C/DR5' from 'BB+'; Series ARC 2001-BC6 -- Class A affirmed at 'AAA'; -- Class M-1 downgraded to 'AA-' from 'AA'; -- Class M-2 downgraded to 'BBB' from 'A'; Series ARC 2002-BC1 -- Class A affirmed at 'AAA'; -- Class M1 downgraded to 'AA-' from 'AA'; -- Class M2 downgraded to 'BBB' from 'A'; -- Class B affirmed at 'BBB'; Series ARC 2002-BC3 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class B-1 affirmed at 'BBB-'; Series ARC 2002-BC5 -- Class M1 affirmed at 'AA'; -- Class M2 affirmed at 'A'; -- Class M3 affirmed at 'BBB'; Series ARC 2002-BC6 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'A-' from 'A+'; -- Class M-3 downgraded to 'BBB-' from 'BBB+'; -- Class B downgraded to 'BB+' from 'BBB-'; Series ARC 2002-BC7 -- Class A affirmed at 'AAA'; -- Class M-1 downgraded from 'AA+' to 'AA'; -- Class M-2 downgraded from 'AA' to 'A+'; -- Class M-3 downgraded from 'AA-' to 'A-'; -- Class M-4 downgraded to 'BBB+' from 'A+'; -- Class M-5 downgraded to 'BBB' from 'A'; -- Class M-6 downgraded to 'BBB-' from 'BBB+'; -- Class B-1 affirmed at 'BB+'; -- Class B-2 affirmed at 'BB'; -- Class B-3 affirmed at 'BB'; Series ARC 2002-BC8 -- Class A affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'BBB+' from 'A'; -- Class M-3 downgraded to 'BB' from 'BB+'; -- Class M-4 downgraded to 'BB-' from 'BB'; Series ARC 2002-BC9 -- Class M1 affirmed at 'AA'; -- Class M2 downgraded to 'A' from 'AA'; -- Class M3 downgraded to 'BBB-' from 'A'; -- Class M4 downgraded to 'B+' from 'BB+'; -- Class B downgraded to 'B' from 'BB'; Series ARC 2002-BC10 -- Class M2 downgraded to 'BBB' from 'A'; -- Class M3 downgraded to 'BB+' from 'BBB+'; Series ARC 2004-1 -- Class A affirmed at 'AAA'; -- Class M1 affirmed at 'AA+'; -- Class M2 affirmed at 'AA'; -- Class M3 affirmed at 'AA-'; -- Class M4 affirmed at 'A+'; -- Class M5 affirmed at 'A'; -- Class M6 affirmed at 'A-'; -- Class M7 affirmed at 'BBB+'; -- Class M8 affirmed at 'BBB'; -- Class M9 downgraded to 'BB+' from 'BBB-'; The affirmations, affecting approximately $560.1 million of the outstanding balances, are taken due to a satisfactory relationship of credit enhancement to expected losses. The negative rating actions affecting approximately $165.14 million of the outstanding balances reflect deterioration in the relationship between credit enhancement and expected losses. All of the affected transactions with the exception of series 2004-1 have pool factors of below 10% and 60+ delinquency percentages (including foreclosure, Real Estate Owned and Bankruptcy) ranging from 35% to 44%, reflecting material adverse selection on the remaining pool balance. While the serious delinquency rate for series 2004-1 remains relatively low (15%), the negative rating action reflects the erosion in CE due to losses exceeding excess spread for the past eight consecutive months. The transactions are seasoned from a range of 30 (ARC 2004-1) to 67 (ARC 2001-BC5) months and the pool factors (current mortgage loan principal outstanding as a percentage of the initial pool) range from approximately 5% (ARC 2001-BC5) to 30% (ARC 2004-1). The mortgage pools consist of conventional, fixed rate, fully amortizing and balloon, second lien residential mortgage loans. The mortgage loans were acquired by Lehman Brothers Holdings Inc. from various banks and other mortgage lending institutions and are master serviced by Aurora Loan Services, Inc., which is rated 'RMS1-' by Fitch. TELEPHONE & DATA: Delayed Filing Cues S&P to Lower Ratings to BB+ ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered the ratings on Chicago- based diversified communications provider Telephone & Data Systems Inc. and over-80%-owned wireless subsidiary United States Cellular Corp., including the 'BBB-' corporate credit ratings, which were lowered to 'BB+'. The ratings remain on CreditWatch, where they were placed with negative implications on Nov. 7, 2006. These actions follow the company's latest announcement that while it expects to file the 2006 10-K for US Cellular on April 23, TDS' own 10-K will be delayed due to additional issues surrounding accounting for stock repurchases and the need to restate prior-period financial statements. "The downgrade reflects our reduced confidence regarding management's ability to effectively oversee its financial reporting requirements and implement improvements to its internal control and accounting systems," said Standard & Poor's credit analyst Catherine Cosentino. Since late 2005, the company has continued to experience problems in filing its financial statements on a timely basis, and has had to restate prior-period reporting due to a series of accounting issues, including income tax expenses and deferred taxes, prepaid forward contracts, universal service accounting, leases, contract termination fees, and equity accounting for wireless partnerships. Previous delays in financial reporting had required the company to obtain several waivers from its bank lenders and certain transaction counterparties; this latest delay required additional waivers through June 30, 2007, for the 10-K, and no later than Aug. 14, 2007, for the first-quarter 10-Q. No other waivers are required by the company since bondholders at either TDS or US Cellular have not triggered the commencement of an event of default. The latest announcement suggests that the company's accounting systems remain inadequate and contribute to a significant-enough increase in overall business risk to warrant a speculative-grade rating. If the company experiences more delays in financial reporting, the ratings could be lowered further. However, when the company is current on its filings, the ratings will be affirmed and removed from CreditWatch. TERWIN MORTGAGE: Moody's Junks Rating on 2 Securitization Classes ----------------------------------------------------------------- Moody's Investors Service has downgraded two classes of Terwin Mortgage Trust 2006-2HGS securitization. Moody's also placed three classes of the same deal under review for possible downgrade. Moody's also placed two certificates of Terwin Mortgage Trust 2006-4SL on review for possible downgrade. The watchlisting action is driven by the fact that recent losses have led to an erosion of subordination and as a result the current levels of credit enhancement seem too low to support the existing ratings. The complete rating action is: Issuer: Terwin Mortgage Trust Downgraded: * Series 2006-2HGS, Class B-6, downgraded from B1 to Caa3; * Series 2006-2HGS, Class B-7, downgraded from Caa3 to C; Under review for possible downgrade: * Series 2006-2HGS, Class B-3, current rating Baa2, under review for possible downgrade; * Series 2006-2HGS, Class B-4, current rating Baa3, under review for possible downgrade; * Series 2006-2HGS, Class B-5, current rating Ba3, under review for possible downgrade; * Series 2006-4SL, Class B-4, current rating Baa3, under review for possible downgrade; * Series 2006-4SL, Class B-5, current rating Ba1, under review for possible downgrade. TERWIN MORTGAGE: Poor Credit Support Cues S&P to Cut Cert. Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on six certificates from four transactions issued by Terwin Mortgage Trust. The ratings on three of these downgraded classes remain on CreditWatch with negative implications, while the ratings on two of these classes were removed from CreditWatch negative. At the same time, the ratings on three separate classes from one of the aforementioned deals and two others were placed on CreditWatch with negative implications. The lowered ratings and CreditWatch placements reflect the early deterioration of credit support initially provided by overcollateralization, excess interest, and subordination to the respective classes. As of the March 2007 remittance period, seasoning of these transactions ranged from six months (series 2006-8) to 16 months (series 2005-11). Excessive losses have eroded O/C below the respective target balances for all of the loan groups with lowered ratings and/or CreditWatch placements. A number of these transactions had building O/C balances that never reached their respective targets. Sizable losses began to deteriorate O/C balances, and for three of these pools, O/C has been completely eroded, causing defaults of the most subordinate classes. Series 2005-11 loan group 2, series 2006-1 loan group 2, and series 2006-HGS2 each have classes with ratings placed or remaining on CreditWatch due to the continued erosion of the defaulted subordinated classes. Cumulative realized losses range from 0.34% (series 2006-8, loan group 1) to 3.08% (series 2006-HF- 1) of the original pool principal balances. The early deterioration of credit support due to losses and the increased levels of serious delinquencies in these pools indicate a negative performance trend that is likely to continue. The ratings on classes 1-B7 and B-6 from series 2005-11 and 2006- HF-1, respectively, were removed from CreditWatch because they were lowered to 'CCC'. According to Standard & Poor's surveillance practices, ratings lower than 'B-' on classes of certificates or notes from RMBS transactions are not eligible to be on CreditWatch negative. Standard & Poor's will continue to closely monitor the six transactions with ratings on CreditWatch negative. If losses decline to a point at which they no longer exceed monthly excess interest, and the level of credit enhancement is not further eroded, S&P will affirm the ratings on these classes and remove them from CreditWatch. Conversely, if delinquencies continue to translate into substantial realized losses in the coming months and continue to erode available credit enhancement, further negative rating actions can be expected on these classes and possibly on the more senior tranches. The collateral for these transactions consists of a mix of subprime, closed-end second liens and HELOCs. Ratings Lowered and Remaining on Creditwatch Negative Terwin Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-6 I-B-7 BB-/Watch Neg BB+/Watch Neg 2006-HF-1 B-5 BB/Watch Neg BB+/Watch Neg 2006-HGS2 B-5 B-/Watch Neg B/Watch Neg Ratings Lowered and Removed From Creditwatch Negative Terwin Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-11 1-B7 CCC BB+/Watch Neg 2006-HF-1 B-6 CCC B/Watch Neg Rating Lowered Terwin Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-11 II-B-5 CCC BB+ Ratings Placed on Creditwatch Negative Terwin Mortgage Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-11 II-B-4 BBB-/Watch Neg BBB- 2006-1 II-B-4 BBB-/Watch Neg BBB- 2006-8 I-B-7 BB+/Watch Neg BB+ TRIBUNE COMPANY: Moody's Rates Proposed Senior Facilities at Ba2 ---------------------------------------------------------------- Moody's Investors Service downgraded Tribune Company's Corporate Family rating to Ba3 from Ba1, existing senior unsecured notes to B2 from Ba1, and subordinated notes to B2 from Ba2. The rating actions reflect the significant increase in leverage that will result from Tribune's repurchase of approximately $4.2 billion of common stock through a tender offer in the first step of its plan to go private, and that the increase in leverage is occurring at a time of pressure on Tribune's advertising revenue and operating margins. Moody's also assigned Ba2 ratings to Tribune's proposed guaranteed senior secured credit facilities consisting of a $750 million revolver, $7.015 billion term loan B and $263 million delayed drawn term loan. Tribune plans to utilize the proceeds to refinance its existing $2.8 billion of credit facilities and fund the first step tender offer. All ratings remain on review for downgrade. Moody's specific rating actions are detailed as follows: Downgrades: Issuer: Tribune Company * Corporate Family Rating, Downgraded to Ba3 from Ba1 * Probability of Default Rating, Downgraded to Ba3 from Ba1 * Issuer Rating, Downgraded to B2 from Ba1 * Senior Unsecured Regular Bond/Debenture, Downgraded to B2 (LGD5-84) from Ba1 (LGD3-48) * Senior Unsecured Medium-Term Note Program, Downgraded to B2 from Ba1 * Subordinate Conv./Exch. Bond/Debenture, Downgraded to B2 from Ba2 * Multiple Seniority Shelf, Downgraded to (P)B2 from (P) Ba1 and (P)Ba2 Assignments: Issuer: Tribune Company * Senior Secured Bank Credit Facility, Assigned Ba2 (LGD3-37) Tribune is planning to go private for a combined common stock purchase price, including transaction fees, of approximately $8.7 billion (at $34 per share) in a two-step transaction. The second step involves a buyout of the remaining approximate $4.2 billion of common stock and is subject to shareholder and regulatory approval. Moody's expects to conclude the review for downgrade once these contingencies are resolved. Moody's will likely downgrade the CFR to B2 with a stable rating outlook if: (1) the second step is completed in accordance with the transaction structure outlined in Tribune's April 1, 2007 Form 8-K and; (2) industry conditions, the company's cash flow generation and anticipated asset sale proceeds are in line with Moody's expectations. The Ba3 CFR, individual debt instrument ratings, and Loss Given Default assessments are based on the anticipated debt mix and leverage (7.1x debt-to-EBITDA pro forma 12/31/06) upon completion of the first step and do not incorporate the effect of the second step or proposed asset sales. A downgrade of the CFR to B2 would likely result in the ratings for the proposed bank credit facilities moving to B1 from Ba2 based on the capital mix outlined in Tribune's April 1, 2007 Form 8-K (prior to the effect on the debt mix from proposed asset sales). In addition, Moody's would downgrade the ratings for the existing senior unsecured notes and PHONES to Caa1 from B2. The Loss Given Default assessments and point estimates for Tribune's debt instruments are also subject to change based upon the company's debt structure upon completion of the second step and execution of definitive agreements for proposed asset sales. If the second step is not completed, Moody's will review the company's asset composition, operating strategies, tax status, ownership, and financial policies to determine the appropriate rating level but expects that the current leverage profile would result in a CFR no higher than Ba3. The Ba2 rating on the proposed credit facilities reflects the first priority status relative to other debt as a result of the senior unsecured guarantees from all material operating subsidiaries and the pledge of the stock of certain subsidiaries. The collateral pledge of the stock to the credit facilities will trigger the negative pledge in the existing senior unsecured notes and, accordingly, those notes will become secured with the same collateral package as the proposed credit facilities. The B2 rating on the existing notes nevertheless reflects that they will remain unguaranteed and are subordinate to a material amount of credit facilities because of this absence of subsidiary guarantees. The B2 rating on the PHONES reflects that the notes will remain unguaranteed and unsecured obligations of Tribune and will be contractually subordinate to the new credit facilities and the existing senior notes. Tribune's existing Ba1 bank credit facility ratings remain on review for downgrade pending completion of the tender offer. Moody's will withdraw the ratings on these existing bank facilities upon completion of the step one financing. Tribune Company, headquartered in Chicago, Illinois, is a leading media company with operations in television and radio broadcasting, publishing, education and interactive services. TUESDAY MORNING: Amends Existing Revolving Credit Facility ---------------------------------------------------------- Tuesday Morning Corporation has amended the terms of its existing revolving credit facility. The amended revolving credit facility provides for: a) an extension of the original maturity date from Dec. 22, 2009 to Dec. 22, 2010; b) the reduction of the revolving credit facility from $210 million to $200 million; c) a change in the leverage ratio covenant from 3x to 2.5x; and d) an increase in pricing of 5 bps at each pricing level. "The company is pleased with the support it received from the company's financial institutions and believe this amendment gives the company additional flexibility to continue to execute its operating plans," Kathleen Mason, president and chief executive officer, stated. The first amendment to the credit facility will be filed with the SEC on a Current Report on Form 8-K. About Tuesday Morning Tuesday Morning Corporation (Nasdaq: TUES) -- http://www.tuesdaymorning.com/-- is a retailer of decorative home accessories and gifts in the United States. The company opened its first store in 1974 and currently operates 762 stores in 46 states during periodic "sale events." * * * As reported in the Troubled Company Reporter on Aug. 7, 2006, Tuesday Morning Corp. carries Moody's Investors Service's 'Ba3' issuer rating, 'Ba2' corporate family rating and 'Ba3' senior subordinated debt rating. US ENERGY: Faces Nasdaq Delisting Due to Late Form 10-K Filing -------------------------------------------------------------- U.S. Energy Systems, Inc. received a Staff Determination Letter from the Nasdaq Stock Market on April 18, 2007, notifying the company of its non-compliance with Marketplace Rule 4310(c)(14) for the company's failure to file its Form 10-K for the period ended Dec. 31, 2006. The Letter states that unless the company files an appeal with the Nasdaq Hearings Department by no later than 4:00 p.m. Eastern Time, today, April 25, 2007, trading of the company's common stock will be suspended at the opening of business on April 27, 2007 and a Form 25-NSE will be filed with the Securities and Exchange Commission, removing the company's securities from listing and registration on the Nasdaq Stock Market. USEY stated its intention to request a hearing, thereby meeting the Nasdaq requirements for continuous listing while the appeal proceeds. There can be no assurance that the Nasdaq Hearings Panel will grant the company's appeal. As reported in the Troubled Company Reporter on April 3, 2007, the restatement of the accounting treatment for the August 2006 acquisition of the UK assets and the November 2006 acquisition of Cinergy's ownership interest in USEB has resulted in a delay in the completion of the company's year-end financial statements. The company intends to file its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2006 as soon as practicable after the preparation and audit of the company's financial statements is completed. About USEY Based in New York City, U.S. Energy Systems Inc. (Nasdaq: USEY) -- http://www.usenergysystems.com/-- owns and operates energy and power projects in the United States and the United Kingdom through its two subsidiaries, UK Energy Systems, Ltd. and U.S. Energy Renewables, Inc. Going Concern Doubt Bagell, Josephs, Levine & Company LLC in Gibbsboro, New Jersey, expressed substantial doubt about U.S. Energy Systems Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. The auditing firm pointed to the company's operating losses and capital deficits. VENOCO INC: Moody's Junks Rating on Proposed $500 Million Loan -------------------------------------------------------------- Moody's Investors Service assigned a Caa1, LGD 4 (61%) rating to Venoco, Inc.'s proposed $500 million second lien term loan facility. At the same time, Moody's affirmed Venoco's B3 Corporate Family Rating, B3 Probability of Default Rating, Caa1, LGD 4 (61%, changed from 64%) senior note rating, and SGL-3 Speculative Grade Liquidity rating. The rating outlook remains negative. Proceeds from the new term loan are being used to fund Venoco's $106 million purchase of the West Montalvo field in California and several Texas Gulf Coast fields, primarily the Manvel field; refinance Venoco's existing $350 million second lien term loan facility; and repay bank borrowings under the company's senior secured credit facility. Moody's will withdraw the rating on the existing second lien term loan credit facility once it has been repaid. The ratings affirmation reflects Venoco's increasing scale and diversification, a fairly durable core reserve base, exploitation opportunities for production growth, its improved track record in demonstrating drilling success and production growth, and substantial hedging at favorable prices; offset by a full-cycle cost structure that remains high, a small production base, risks associated with its high growth profile, very high leverage levels, and uncertainty concerning the credit profile of the possible formation of a master limited partnership on certain reserves. The negative outlook reflects Venoco's continued high debt burden, which despite debt repayment from the company's IPO in November 2006, has remained high due to continued reliance on debt to fund acquisitions and cash flow deficits from an aggressive drilling program. Venoco's two most recent acquisitions consist of approximately 9.7 mmboe of proven reserves and current production of about 1.5 mboe per day. Moody's estimates that the company is paying a high $17.80 per boe of total proven reserves plus future capital spending, $20.43 per boe of total proved developed reserves, and $72,667 per daily production for the two acquisitions. Moody's notes that the acquired California reserves have a substantial proved undeveloped component (58%), which will require significant capital to develop. Pro forma for the transaction, Moody's estimates Venoco's debt (as adjusted for operating leases) to proved developed reserves will increase to $12.20 from $10.75 at year-end 2006. Moreover, Venoco's increased debt burden will further pressure its cash-on-cash returns, with the company's pro-forma leveraged full-cycle ratio declining to 78% from 92%. The B3 Corporate Family Rating has little flexibility at current leverage levels for additional debt financed acquisitions. Moody's believes there is a risk that leverage could be further pressured if there is a material production shortfall below Venoco's aggressive 30% or more growth plan. The possibility of Venoco forming an MLP comprised of up to 20% of the PV-10 value of its reserves creates uncertainty regarding the future capital structure and leverage profile of the combined company, which could pressure Venoco's ratings. While Moody's notes that proceeds from a possible MLP IPO would be used to reduce debt, the leverage profile of the MLP remains uncertain. Moreover, MLPs require substantial and growing distributions, which necessitates the need to balance material, continuous capital expenditure needs with heavy cash payouts to unit holders in the context of volatile prices and inherent drilling and acquisition risk in a depleting asset business. Furthermore, due to the typically higher multiple at which MLP units trade and would be issued in comparison to common share multiples, MLP acquirers have been willing to pay more richly for what they deem to be suitable assets. The E&P sector remains fairly untested in the MLP model, and established MLPs are showing evidence of the strain of simultaneously growing their distributions, pursuing organic and acquisition growth, and maintaining their credit profile. The ratings have limited upside in the near term due to the uncertainty surrounding the possible formation of an MLP and the significant challenge the company faces in order to reduce its heavy debt burden. The ratings would likely be downgraded or placed on review for possible downgrade if Venoco further increases its financial leverage through a debt financed acquisition or the inability to maintain capital spending within cash flow, or the company's sequential quarterly production trends significantly deteriorate. Without sufficiently reduced leverage, the formation of an MLP could also create pressure on the ratings due to the challenges the MLP model presents for an E&P company. The outlook could stabilize if Venoco is successful in reducing its financial leverage to a range more consistent with a B3 Corporate Family Rating. Venoco, Inc. is headquartered in Denver, California. VENOCO INC: S&P Puts B- Rating on Proposed $500 Million Facility ---------------------------------------------------------------- Standard & Poor's Ratings Services raised the corporate credit rating on independent exploration and production company Venoco Inc. to 'B' from 'B-'. In addition, a 'B-' issue rating and '3' recovery rating (indicating the expectation of meaningful (50%-80%) recovery of principal in the event of a payment default) were assigned to Venoco's proposed $500 million second-lien term loan facility. Venoco's existing $150 million senior notes were affirmed at 'B-' and assigned a '3' recovery rating. The rating actions follow a full review of Venoco after the company announced in April 2007 that it will be pursuing two acquisitions. The combined net acquisition cost at closing is expected to be $106 million for the two transactions, and internal estimates of proved reserves associated with the acquisition are approximately 9.7 million barrels of oil equivalent. Venoco will use proceeds from the new second-lien facility to fund acquisition costs and refinance a portion of existing secured debt. "The upgrade reflects Venoco's improving oil and gas reserve scale and diversification, stronger operating performance over the past year with regard to reserve replacement costs and production growth, and the expectation that leverage and coverage measures will remain within acceptable tolerances for the rating over the intermediate term," said Standard & Poor's credit analyst Jeffrey Morrison. The outlook is stable. Pro forma the aforementioned transactions, Denver, Colorado-based Venoco Inc. will have $685 million in long-term debt. "The ratings on Venoco reflect an acquisitive growth strategy, some reserve and production concentration in coastal California, a high full-cycle cost structure, and a highly leveraged financial risk profile," Mr. Morrison added. "Concerns are not fully mitigated by improving scale and geographic diversification, a long reserve life, a substantive hedging program to support cash flows, and improving internal reserve replacement measures." The stable outlook is predicated on our view that Venoco should have sufficient liquidity and organic cash flow to support expected capital spending and cover fixed-charge requirements in the near to intermediate term. In addition, S&P view positive trends in reserve replacement, finding and development cost improvement, and a substantive hedging program as supportive of credit quality. Nevertheless, current ratings could be pressured if Venoco funds additional acquisitions in an unbalanced manner and/or if credit measures and liquidity decline appreciably from current levels. Conversely, in the long term, additional positive rating actions could occur if Venoco continues to demonstrate operational improvement and can materially reduce its debt burden. VONAGE HOLDINGS: Appellate Court Okays Sign Up of New Customers --------------------------------------------------------------- The U.S. Court of Appeals for the Federal Circuit has allowed Vonage Holdings Corp. to continue to sign up new customers while Vonage appeals a previous court decision that it violated patents held by Verizon Communications Inc., Jessica E. Vascellaro of The Wall Street Journal reports. According to WSJ, the Federal Circuit Court issued Vonage a stay of the previous court's injunction that would have barred it from signing up new customers throughout its appeal. Oral arguments on the matter are set to begin June 25, 2007, WSJ says. Verizon Litigation The Federal Circuit Court's ruling dates back to June 12, 2006, when Verizon Services Corp., Verizon Laboratories Inc., and Verizon Communications Inc. filed a suit against Vonage and its subsidiary Vonage America Inc., with the U.S. District Court for the Eastern District of Virginia. Verizon alleged that the company infringed seven patents in connection with providing VoIP services and sought injunctive relief, compensatory and treble damages and attorneys' fees. Verizon dismissed its claims with respect to two of its patents prior to trial, which commenced on Feb. 21, 2007. After trial on the merits, a jury returned a verdict finding that the company infringed three of the patents-in-suit. The jury rejected Verizon's claim for willful infringement, treble damages, and attorneys' fees, and awarded compensatory damages in the amount of $58 million. The trial court subsequently indicated that it would award Verizon $1.6 million in prejudgment interest on the $58 million jury award. The trial court issued a permanent injunction with respect to the three patents the jury found to be infringed effective April 12, 2007. According to Vonage, the trial court has permitted the company to continue to service existing customers pending appeal, subject to deposit into escrow of a 5.5% royalty on a quarterly basis. The trial court also ordered that the company may not use its technology that was found to be infringing to provide services to new customers. In addition, Vonage posted a $66 million bond to stay execution of the monetary judgment pending appeal. On April 6, 2007, the company filed an appeal with the Federal Circuit Court regarding the trial court's ruling. Likely Effects of Litigation The company said in its Form 10-K filing for the year ended Dec. 31, 2006, with the Securities and Exchange Commission that that its ongoing patent litigation with Verizon, if determined against the company, could: * result in the loss of a substantial number of existing customers or prohibit the acquisition of new customers; * lead to an event of default under the terms of the company's convertible notes, which could accelerate the payment of approximately $253.6 million of principal and interest under the notes; * cause the company to accelerate expenditures to preserve existing revenues; * cause existing or new vendors to require prepayments or letters of credit; * cause the company to lose access to key distribution channels; * result in substantial employee layoffs or risk the permanent loss of highly-valued employees; * materially and adversely affect the company's brand in the market place and cause a substantial loss of goodwill; * cause the company's stock price to decline significantly or otherwise cause the company to fail to meet the continued listing requirements of the New York Stock Exchange, which could result in the delisting of its common stock from the Exchange; * materially and adversely affect the company's liquidity, including its ability to pay debts and other obligations as they become due; and * lead to the bankruptcy or liquidation of the company. Reduction-in-Force On April 11, 2007, the company reduced its total workforce by approximately 10% to reduce costs and improve efficiency. The company anticipates incurring a charge of approximately $5 million, all of which would be for one-time employee termination benefits. Resignation of Chief Executive Officer On April 12, 2007, Michael Snyder stepped down from his position as Chief Executive Officer and resigned from the company's Board of Directors, effective April 11, 2007. Jeffrey A. Citron, Chairman and Chief Strategist was appointed, effective April 11, 2007, as the company's interim Chief Executive Officer and is expected to serve on a short-term basis. Full Year 2006 Results For the year ended Dec. 31, 2006, Vonage incurred significant operating losses since inception and as a result, generated negative cash flows from operations, and has an accumulated deficit of $720.9 million at Dec. 31, 2006. The company's primary sources of funds has been proceeds from: * private placements of its preferred stock, * private placement of its convertible notes, * an initial public offering of its common stock, * operating revenues and borrowings under notes payable from its principal stockholder and Chairman, which were subsequently converted into shares of the company's preferred stock. In 2005, the company raised proceeds, net of expenses, of: * $195.7 million from the issuance of preferred stock and * $240.0 million in December 2005 and January 2006 in a private placement of convertible notes. In 2006, the company raised $491.1 million in net proceeds from an initial public offering, or IPO, of common stock which includes costs of $1.9 million incurred in 2005. The company relates that it has used the proceeds from the convertible note offering and intends to use the proceeds from the IPO for working capital and other general corporate purposes, including funding operating losses. For the year ended Dec. 31, 2006, the company reported a net loss of $338,573,000 on revenues of $607,397,000 compared to a net loss of $261,334,000 on revenues of $269,196,000 for the year ended Dec. 31, 2005. At Dec. 31, 2006, the company's balance showed total assets of $757,524 and total liabilities of $574,323. About Vonage Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- is a provider of broadband telephone services with over 1.4 million subscriber lines as of February 8, 2006. Utilizing its voice over Internet protocol technology platform, the company offers feature- rich, low-cost communications services with a call quality comparable to traditional telephone services. While customers in the United States represent over 95% of its subscriber lines, Vonage continues to expand internationally, having launched its service in Canada in November 2004, and in the United Kingdom in May 2005. WELLS FARGO: DBRS Puts BB Rating on $7.4 Mil. Series 2007-2 Certs. ------------------------------------------------------------------ Dominion Bond Rating Service has assigned these ratings to the Home Equity Asset-Backed Certificates, Series 2007-2 issued by Wells Fargo Home Equity Asset-Backed Securities 2007-2 Trust. * $223.2 million Class A-1 rated at AAA * $22.9 million Class A-2 rated at AAA * $96.4 million Class A-3 rated at AAA * $28.0 million Class A-4 rated at AAA * $24.8 million Class M-1 rated at AA (high) * $13.7 million Class M-2 rated at AA * $7.9 million Class M-3 rated at AA (low) * $7.4 million Class M-4 rated at A (high) * $7.2 million Class M-5 rated at "A" * $4.9 million Class M-6 rated at A (low) * $4.2 million Class M-7 rated at BBB (high) * $4.2 million Class M-8 rated at BBB * $3.5 million Class M-9 rated at BBB (low) * $3.5 million Class B-1 rated at BB (high) * $3.9 million Class B-2 rated at BB The AAA ratings on the Class A Certificates reflect 20.20% of credit enhancement provided by the subordinate classes, initial and target overcollateralization, and monthly excess spread. The AA (high) rating on Class M-1 reflects 14.85% of credit enhancement. The AA rating on Class M-2 reflects 11.90% of credit enhancement. The AA (low) rating on Class M-3 reflects 10.20% of credit enhancement. The A (high) rating on Class M-4 reflects 8.60% of credit enhancement. The "A" rating on Class M-5 reflects 7.05% of credit enhancement. The A (low) rating on Class M-6 reflects 6.00% of credit enhancement. The BBB (high) rating on Class M-7 reflects 5.10% of credit enhancement. The BBB rating on Class M-8 reflects 4.20% of credit enhancement. The BBB (low) rating on Class M-9 reflects 3.45% of credit enhancement. The BB (high) rating on Class B-1 reflects 2.70% of credit enhancement. The BB rating on Class B-2 reflects 1.85% of credit enhancement. The ratings on the Certificates also reflect the quality of the underlying assets and the capabilities of Wells Fargo Bank, N.A. as Servicer, as well as the integrity of the legal structure of the transaction. HSBC Bank USA, National Association will act as Trustee. The trust will enter into an interest rate swap agreement with Natixis Financial Products Inc. The Trust will pay to the Swap Provider a fixed payment ranging from 4.85% to 5.44% per annum in exchange for a floating payment at LIBOR from the Swap Provider. In addition, the Certificate holders will receive the benefits of an interest rate cap agreement with Natixis Financial Products Inc. with a strike rate of 6.50%. Interest and principal payments collected from the mortgage loans will be distributed on the 25th day of each month commencing in May 2007. nterest will be paid first to the Class A Certificates on a pro rata basis and then sequentially to the subordinate Certificates. Until the step-down date, principal collected will be paid exclusively to the Class A Certificates unless their respective note balances have been reduced to zero. After the step-down date, and provided that certain performance tests have been met, principal payments will be distributed among all classes on a pro rata basis. In addition, provided that certain performance tests have been met, the level of overcollateralization may be allowed to step down to 3.70% of the then-current balance of the mortgage loans. All of the mortgage loans in the Underlying Trust were originated or acquired by Wells Fargo Bank, N.A. As of the cut-off date, the aggregate principal balance of the mortgage loans is $464,299,545. The weighted-average mortgage rate is 8.791%, the weighted-average FICO is 615, and the weighted-average original combined loan-to- value ratio is 87.93%. WYNN RESORTS: Posts $55 Mil. Net Loss in Fourth Qtr. Ended Dec. 31 ------------------------------------------------------------------ Wynn Resorts Limited reported a net loss for the fourth quarter of 2006 of $55.4 million, as compared with a net loss for the fourth quarter of 2005 of $9.8 million. The company reported $628.7 million in net income for the year 2006, as compared with $90.8 million in net loss for the year 2005. Net revenues for the fourth quarter of 2006 were $563.6 million, as compared with $269.4 million in the fourth quarter of 2005. Results for this quarter include a full quarter of operations for Wynn Macau, which opened on Sept. 6, 2006. Net revenues for 2006 were $1.4 billion, a 98.5% increase over 2005. The revenue increase in 2006 was driven primarily by the opening of Wynn Macau in 2006 and a full year of operations for Wynn Las Vegas, versus 248 days in 2005. The company's total cash balances at the end of the quarter were $1 billion, including unrestricted cash balances of $789 million and cash balances restricted for the company's construction and development projects of $237 million. Total debt outstanding at the end of the quarter was $2.4 billion, including $1.7 billion of Wynn Las Vegas debt, $224 million of Convertible Debentures and $497 million of Wynn Macau-related debt. Capital expenditures during the fourth quarter of 2006, net of changes in construction payables and retention, totaled about $186.6 million, of which about $100.7 million was related to Wynn Macau and the remainder was primarily attributable to Encore. As of Dec. 31, 2006, the company had total assets of approximately $4.6 billion, total liabilities of about $3 billion, and total stockholders' equity of about $1.6 billion. The company paid a $6.00 per share special cash distribution to holders of our common stock and convertible debentures on Dec. 4, 2006. Wynn Las Vegas Wynn Las Vegas had net casino revenues in the fourth quarter of 2006 of $163.7 million, as compared with $131.9 million for the fourth quarter of 2005. For the full year 2006, Wynn Las Vegas generated net casino revenues were $535.6 million. In 2006, Wynn Las Vegas became the first casino resort to receive both the Mobil Five Star and AAA Five Diamond ratings. Encore at Wynn Las Vegas The company is constructing Encore on about 20 acres on the Las Vegas Strip, immediately adjacent to Wynn Las Vegas. The property is expected to open in early 2009. The project budget is currently estimated at about $2.1 billion, consisting of about $2 billion for Encore and about $100 million for an employee-parking garage on the company's Koval property. On Feb. 27, 2007, the company entered into a Design Build Architectural, Engineering and Construction Services Agreement with Tutor-Saliba Corporation for the design and construction of Encore. As of Dec. 31, 2006, the company incurred about $277.6 million of project costs related to the development and construction of Encore and related capital improvements. Wynn Macau The first phase of Wynn Macau opened on Sept. 6, 2006, and in the fourth quarter of 2006, Wynn Macau generated net revenues of $248.7 million. For the quarter, Wynn Macau generated an average daily room rate of $248, with occupancy averaging 81.9%. Net non- casino revenues, consisting of rooms, food and beverage, retail and other, were $23.8 million. In February 2007, the company expanded Wynn Macau. Construction on the second phase is progressing and is expected to open in the third quarter of 2007. After the completion of this expansion, Wynn Macau is expected to have a total of about 420 table games and 1,280 slot machines. In addition, the company continues to develop the plans and budget for Wynn Diamond Suites, a further expansion of Wynn Macau, which was first announced in November 2006. The company continues to work on a budget and final design for Wynn Diamond Suites. As of Dec. 31, 2006, the company incurred about $877.1 million of a total project budget, excluding Wynn Diamond Suites, of about $1.2 billion. Wynn Macau completed the sale of a sub-concession right to Publishing & Broadcasting, Limited for $900 million in cash, received on Sept. 11, 2006. The one time gain on the sale substantially increased net income for the quarter ended Sept. 30, 2006 and for the fiscal year ended 2006. Cotai Land Development The company submitted an application to the Macau government for a concession of land in Cotai for future development. It recently reconfigured its site plans for 52 acres and is waiting final approval. A full-text copy of the company's report for the year ended Dec. 31, 2006, is available for free at http://ResearchArchives.com/t/s?1dcb About Wynn Resorts Wynn Resorts Limited (Nasdaq: WYNN) -- http://www.wynnresorts.com/ -- together with its subsidiaries, develops, owns, and operates destination casino resorts in the U.S. It owns and operates Wynn Las Vegas, a luxury hotel and destination casino resort located on the Las Vegas Strip. * * * Wynn Resorts Ltd. and its wholly owned subsidiary Wynn Las Vegas LLC carry Standard & Poor's Ratings Services' 'BB-' corporate credit ratings. YALE MORTGAGE: Moody's Rates Class B-2 Certificates at Ba2 ---------------------------------------------------------- Moody's Investors Service has assigned a Aaa rating to the senior certificates issued by Yale Mortgage Loan Trust 2007-1 and ratings ranging from Aa2 to Ba2 to the mezzanine certificates in the deal. The securitization is backed by Yale Mortgage Corporation originated, adjustable-rate subprime mortgage loans. The ratings are based primarily on the credit quality of the loans and on protection against credit losses from subordination, excess spread, and overcollateralization. Moody's expects collateral losses to range from 6.55% to 7.05%. Yale Mortgage Corporation will service the mortgage loans, and Wells Fargo Bank (Wells Fargo) will act as master servicer. Moody's has assigned Wells Fargo its top servicer quality rating of SQ1 as a master servicer. The complete rating actions are: Issuer: Yale Mortgage Loan Trust 2007-1 Mortgage Pass-Through Certificates, Series 2007-1 * Cl. A, Assigned Aaa * Cl. M-1, Assigned Aa2 * Cl. M-2, Assigned A2 * Cl. B-1, Assigned Baa2 * Cl. B-2, Assigned Ba2 * Thacher Proffitt Welcomes Back Lynn Bodkin as Bankruptcy Counsel ------------------------------------------------------------------ Thacher Proffitt & Wood LLP disclosed that Lynn M. Bodkin has joined Thacher Proffitt as Counsel, effective April 23, 2007. Lynn is a member of the Real Estate Practice Group and resides in the New York office. "We welcome Lynn back to the Firm," Donald Simone, chair of the Real Estate Practice Group, said. "Lynn has significant experience in structuring financings for real estate investments, and she is a great asset to the company's team, particularly in the areas of mortgage and mezzanine loans." Lynn comes to Thacher Proffitt from Metropolitan Life Insurance Company, where she was an Assistant General Counsel in the real estate investments unit. Prior to Metropolitan Life, she was an Associate General Counsel in the investment section of the real estate unit at New York Life Insurance Company. Lynn was an associate with Thacher Proffitt from 1986-1989. About Lynn M. Bodkin Lynn Bodkin's practice focuses on commercial debt, equity and joint venture transactions, and capital markets transactions, including structuring real estate financings such as warehouse/credit facilities, mortgage and mezzanine loans, and loan participations and syndications. She created and implemented the capital markets program at Metropolitan Life, and was responsible for all aspects of real estate transactions and the management of its real estate investment portfolio. Lynn received her JD from Benjamin N. Cardozo School of Law, a Master of Music from Boston University, and both a Bachelor of Education and a Bachelor of Music, with honors, from the University of Western Ontario, Canada. She is admitted to the New York bar, as well as the Eastern and Southern Districts of New York. About Thacher Proffitt & Wood LLP A 158-year-old law firm that focuses on the capital markets and financial services industries, Thacher Proffitt & Wood LLP -- http://www.tpw.com/-- advises domestic and global clients in a wide range of areas, including corporate and financial institutions law, securities, structured finance, international trade matters, investment funds, swaps and derivatives, cross- border transactions, real estate, commercial lending, insurance, admiralty and ship finance, litigation and dispute resolution, technology and intellectual property, executive compensation and employee benefits, taxation, trusts and estates, bankruptcy, reorganizations and restructurings. The Firm has over 300 lawyers with five offices located in New York City; Washington, DC; White Plains, New York; Summit, New Jersey and Mexico City. * Stephen D. Susman Named Commercial Litigation Lawyer of the Year ------------------------------------------------------------------ Stephen Susman of Susman Godfrey LLP has been named Commercial Litigation Lawyer of the Year 2007 in the Who's Who Legal Awards. This is the second consecutive time he has been recognized in this way, having also won the award last year. With the benefit of more than ten years of independent research, Who's Who Legal used the thousands of nominations it has received from clients and private practice professionals to identify the leading individual and firm in 27 practice areas. The winners were formally announced in The International Who's Who of Business Lawyers 2007, a compendium edition of all the individual Who's Who Legal publications which was released in April. "It is an outstanding achievement to win the Who's Who Legal; The International Who's Who of Business Lawyers Commercial Litigation Lawyer of the Year Award for a second time," Editor in chief Callum Campbell said. "Stephen Susman's continuing success demonstrates a consistent and unparalleled level of performance and service to clients. We have no hesitation in declaring him the world's leading commercial litigator." The awards are based on a number of factors, including the feedback received in the ongoing research process, past performance in the research and the overall aggregate number of weighted votes cast in their favor. In addition to identifying the leading firm and individual in each practice area, the awards also recognize the overall leading firm in 48 countries and five US states. Who's Who Legal lists only the leading practitioners in each field, based exclusively on the findings of a six-month independent research process. About Susman Godfrey L.L.P. Susman Godfrey L.L.P. -- http://www.susmangodfrey.com/-- a law firm with more than 80 lawyers, was recently named one of the top litigation boutiques in the country by The American Lawyer. The firm represents plaintiffs and defendants in a broad range of commercial litigation matters, including antitrust, patent and intellectual property, securities and corporate governance litigation, energy, commercial and products liability litigation, bankruptcy and financial restructuring, accounting malpractice, arbitration, climate change litigation, and foreign and international litigation matters. The firm has offices in Houston, Dallas, Seattle, Los Angeles, and New York. * Crowell & Moring Adds 3 Bankr. Lawyers to Fin'l Services Team --------------------------------------------------------------- Crowell & Moring LLP has bolstered its financial services team with the addition of three bankruptcy and restructuring attorneys just months after it added nine lawyers to the same practice. The additions include Monique D. Almy, who joins Crowell & Moring's Corporate and Bankruptcy groups as a partner from Orrick, Herrington & Sutcliffe LLP and will practice in the Washington, D.C. office, and Mark S. Lichtenstein, who joins Crowell & Moring's New York office as a partner from Buchanan Ingersoll & Rooney PC. He will be a member of the firm's Bankruptcy and Litigation groups. Bankruptcy and creditors' rights lawyer Matthew W. Cheney will also join Crowell & Moring's Corporate and Bankruptcy Groups as counsel in the Washington office. "The addition of Monique, Mark, and Matt to our Bankruptcy Group rounds out the firm's ability to serve our clients in all kinds of bankruptcy cases. They also will strengthen and work closely with our financial services team, which represents leading financial institutions in a range of concerns, including litigation, loan workouts, and restructurings," said Mark D. Plevin, chair of Crowell & Moring's Bankruptcy Group. The three lawyers will work closely with partner William M. O'Connor and other members of the New York-based financial institutions team, whose representative institutional and hedge fund clients include Wachovia Bank, Lehman Brothers, UBS, and Silver Point Capital. "Monique and Mark are each held in high regard by the bankruptcy bar and have the complete package of bankruptcy skills that provide for creative approaches in complex cases. I've enjoyed working with Mark for the past three years and have always appreciated the innovative work Monique has done as our practices have crossed paths. We're thrilled to have these three top lawyers join our burgeoning financial services team," said O'Connor. Almy has 19 years of experience in bankruptcy and creditors' rights matters. She has represented commercial banks and other financial institutions in bankruptcy-related litigation, SBA and state-guaranteed transactions, and contested mortgage foreclosure and distressed loan workouts. Other clients include DIP lenders, official creditors' committees, health care providers, retailers, and long distance providers. She is a Chapter 7 panel trustee in the District of Maryland. Almy is a graduate of University of Baltimore School of Law. With 15 years of experience, Lichtenstein represents secured and unsecured creditors, equity holders, indenture trustees, debtors in Chapter 11 proceedings, Chapter 7 and Chapter 11 Trustees, landlords and acquirers of assets in bankruptcy cases. Lichtenstein also counsels clients in out of court restructurings and workouts. He regularly handles bankruptcy litigation matters, including the representation of plaintiffs and defendants in fraudulent conveyance, preferential transfer, breach of fiduciary duty, recharacterization, and equitable subordination cases, as well as non-bankruptcy litigation matters. He is a graduate of Benjamin N. Cardozo School of Law. Over the last nine years, Cheney has gained broad experience in bankruptcy cases and distressed debt situations, including the representation of utility companies in large energy bankruptcy cases and other clients in the automotive and heath care industries. Cheney also represents financial institutions and other creditors in loan workouts, restructurings, and litigation. He is a graduate of Ohio Northern University, Pettit College of Law. In February, Crowell & Moring bolstered its New York office through the addition of nine financial services and distressed debt lawyers, including O'Connor. The office, now comprised of 39 lawyers, has grown rapidly since it opened in September 2006. About Crowell & Moring LLP Crowell & Moring LLP is a full-service law firm with more than 350 lawyers practicing in litigation, antitrust, government contracts, corporate, intellectual property and more than 40 other practice areas. More than two-thirds of the firm's lawyers regularly litigate disputes on behalf of domestic and international corporations, start-up businesses, and individuals. Crowell & Moring's extensive client work ranges from advising on one of the world's largest telecommunications mergers to representing governments and corporations on international arbitration matters. Based in Washington, D.C., the firm also has offices in California, New York, London, and Brussels. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- April 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION Jacksonville Zoo Turnaround University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ April 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION 1st Annual Credit & Bankruptcy Symposium Golf/Spa Outing Fox Hopyard Golf Club, East Haddam, Connecticut Contact: 203-265-2048 or http://www.turnaround.org/ April 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION Spa Outing Mohegan Sun, Uncasville, Connecticut Contact: 203-265-2048 or http://www.turnaround.org/ April 26-27, 2007 TURNAROUND MANAGEMENT ASSOCIATION 1st Annual Credit & Bankruptcy Symposium Mohegan Sun, Uncasville, Connecticut Contact: http://www.turnaround.org/ April 26-28, 2007 ALI-ABA Fundamentals of Bankruptcy Law Philadelphia, Pennsylvania Contact: http://www.ali-aba.org/ April 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Working Effectively with the Media to Create Publicity for Your Business Contact: http://www.turnaround.org/ April 27, 2007 TURNAROUND MANAGEMENT ASSOCIATION 13 Week CF Program Washington University, St. Louis, Missouri Contact: http://www.turnaround.org/ April 27, 2007 TURNAROUND MANAGEMENT ASSOCIATION Equity Sponsor Panel Breakfast Westin Buckhead, Atlanta, Georgia Contact: http://www.turnaround.org/ April 29 - May 1, 2007 INTERNATIONAL BAR ASSOCIATION International Insolvency Conference Zurich, Switzerland Contact: http://www.ibanet.org/ May 1, 2007 TURNAROUND MANAGEMENT ASSOCIATION Networking Organization of Women Visit King Tut Exhibit Franklin Institute, Philadelphia, Pennsylvania Contact: 215-657-5551 or www.turnaround.org/ May 2-4, 2007 TURNAROUND MANAGEMENT ASSOCIATION Association for Corporate Growth Arizona Chapter Meeting Washington University, Arizona Contact: http://www.turnaround.org/ May 4, 2007 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - NYC Alexander Hamilton US Custom House, SDNY New York, New York Contact: http://www.abiworld.org/ May 7, 2007 AMERICAN BANKRUPTCY INSTITUTE 9th Annual New York City Bankruptcy Conference Millennium Broadway Hotel & Conference Center New York, New York Contact: http://www.abiworld.org/ May 14-16, 2007 TURNAROUND MANAGEMENT ASSOCIATION 1st Annual TMA Regional Conference - Texas Hyatt Regency Resort & Spa Lost Pines, Texas Contact: http://www.turnaround.org/ May 15, 2007 TURNAROUND MANAGEMENT ASSOCIATION Corporate Restructuring Workshop Cable Center, Denver, Colorado Contact: http://www.turnaround.org/ May 15, 2007 TURNAROUND MANAGEMENT ASSOCIATION Corporate Restructuring Workshop Cable Center, Denver, Colorado Contact: http://www.turnaround.org/ May 16, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South Florida Contact: 561-882-1331 or http://www.turnaround.org/ May 16, 2007 TURNAROUND MANAGEMENT ASSOCIATION Bankruptcy Judges Panel Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org/ May 17-18, 2007 TURNAROUND MANAGEMENT ASSOCIATION 6th Annual Great Lakes Regional Conference Renaissance Quail Hollow Resort, Painesville, Ohio Contact: http://www.turnaround.org/ May 17, 2007 TURNAROUND MANAGEMENT ASSOCIATION Enterprise Valuation / Sale of the Distressed Business Athletic Club, Seattle, Washington Contact: http://www.turnaround.org/ May 17, 2007 TURNAROUND MANAGEMENT ASSOCIATION Women's Networking Lunch TBD, Arizona Contact: 623-581-3597 or www.turnaround.org/ May 18, 2007 TURNAROUND MANAGEMENT ASSOCIATION 13 Week CF Program Kansas City, Missouri Contact: http://www.turnaround.org/ May 21, 2007 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Annual Golf Outing TBD, Long Island, New York Contact: 631-251-6296 or http://www.turnaround.org/ May 22, 2007 TURNAROUND MANAGEMENT ASSOCIATION Hedge Funds Standard Club, Chicago, Illinois Contact: http://www.turnaround.org/ May 23, 2007 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Calaloo Caf,, Morristown, New Jersey Contact: 908-575-7333 or www.turnaround.org/ May 24-25, 2007 BEARD GROUP AND RENAISSANCE AMERICAN CONFERENCES Fourth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London, UK Contact: 800-726-2524; http://renaissanceamerican.com/ May 24, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona and RMA Joint Meeting Hotel Valley Ho, Scottsdale, Arizona Contact: http://www.turnaround.org/ May 29, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Bankruptcy Judges Panel Citrus Club, Orlando, Florida Contact: http://www.turnaround.org/ May 30-31, 2007 FINANCIAL RESEARCH ASSOCIATES Distressed Debt Harvard Club, New York, New York Contact: http://www.frallc.com/ May 31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Wine Tasting and Casino Night Mayfair Farms, West Orange, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ May 31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Speaker Series E&Y Tower, Calgary, Alberta Contact: http://www.turnaround.org/ May 31 - June 1, 2007 TURNAROUND MANAGEMENT ASSOCIATION 2nd Annual TMA Southeast Regional Conference Marriott Resort at Grande Dunes Myrtle Beach, South Carolina Contact: http://www.turnaround.org/ June 4-7, 2008 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 24th Annual Bankruptcy & Restructuring Conference JW Marriott Spa and Resort, Las Vegas, Nevada Contact: http://http://www.airacira.org/ June 6-8, 2007 TURNAROUND MANAGEMENT ASSOCIATION 5th Annual Mid-Atlantic Regional Symposium Borgata Hotel Casino & Spa Atlantic City, New Jersey Contact: http://www.turnaround.org/ June 6-9, 2007 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 23rd Annual Bankruptcy & Restructuring Conference Westin River North, Chicago, Illinois Contact: http://www.airacira.org/ June 7-8, 2007 TURNAROUND MANAGEMENT ASSOCIATION Mealey's Asbestos Bankruptcy Conference Intercontinental Hotel, Chicago, Illinois Contact: http://www.turnaround.org/ June 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Association for Corporate Growth Arizona Chapter Meeting Biltmore Hotel, Phoenix, Arizona Contact: http://www.turnaround.org/ June 14, 2007 TURNAROUND MANAGEMENT ASSOCIATION Economic Update at the 1/2 Year Mark University Club, Portland, Oregon Contact: http://www.turnaround.org/ June 14-17, 2007 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ June 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Clarion Hotel, Princeton, New Jersey Contact: 908-575-7333 or www.turnaround.org/ June 21-22, 2007 BEARD GROUP AND RENAISSANCE AMERICAN CONFERENCES Tenth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel - Chicago Contact: 800-726-2524; http://renaissanceamerican.com/ June 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Bankruptcy Judges Panel Centre Club, Tampa, Florida Contact: http://www.turnaround.org/ June 28 - July 1, 2007 NORTON INSTITUTES Norton Bankruptcy Litigation Institute Jackson Lake Lodge, Jackson Hole, Wyoming Contact: http://www2.nortoninstitutes.org/ July 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Bankruptcy Judges Panel University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ July 12-15, 2007 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Marriott, Newport, Rhode Island Contact: 1-703-739-0800; http://www.abiworld.org/ July 12, 2007 TURNAROUND MANAGEMENT ASSOCIATION Young Professionals Billiards Night TBD, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 13, 2007 TURNAROUND MANAGEMENT ASSOCIATION Body of Knowledge - CTP Review Class Chicago, Illinois Contact: http://www.turnaround.org/ July 18, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South Florida Contact: 561-882-1331 or http://www.turnaround.org/ July 25-28, 2007 AMERICAN BANKRUPTCY INSTITUTE 12th Annual Southeast Bankruptcy Workshop The Sanctuary, Kiawah Island, South Carolina Contact: http://www.abiworld.org/ July 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting Contact: http://www.turnaround.org/ July 30, 2007 TURNAROUND MANAGEMENT ASSOCIATION Annual Golf Outing Raritan Valley Country Club, Bridgewater, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ July 31, 2007 TURNAROUND MANAGEMENT ASSOCIATION Enterprise Florida: Improving Florida's Business Climate and Helping Florida Companies Market Overseas Citrus Club, Orlando, Florida Contact: http://www.turnaround.org/ Aug. 3, 2007 TURNAROUND MANAGEMENT ASSOCIATION Women's Spa Event Short Hills Hilton, Livingston, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ Aug. 10, 2007 TURNAROUND MANAGEMENT ASSOCIATION Body of Knowledge - CTP Review Class Chicago, Illinois Contact: http://www.turnaround.org/ Aug. 9-11, 2007 AMERICAN BANKRUPTCY INSTITUTE 3rd Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, Maryland Contact: http://www.abiworld.org/ Aug. 23-26, 2007 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Convention Drake Hotel, Chicago, Illinois Contact: http://www.nabt.com/ Aug. 24, 2007 TURNAROUND MANAGEMENT ASSOCIATION Annual Fishing Trip Point Pleasant, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ Aug. 28, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Healthcare Panel Centre Club, Tampa, Florida Contact: http://www.turnaround.org/ Aug. 29-30, 2007 TURNAROUND MANAGEMENT ASSOCIATION 3rd Annual Northeast Regional Conference Gideon Putnam Resort and Spa, Saratoga Springs, New York Contact: http://www.turnaround.org/ Sept. 6-7, 2007 TURNAROUND MANAGEMENT ASSOCIATION Complex Financial Restructuring Program Four Seasons, Las Vegas, Nevada Contact: http://www.turnaround.org/ Sept. 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Southwest Bankruptcy Conference Four Seasons Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 14, 2007 TURNAROUND MANAGEMENT ASSOCIATION Body of Knowledge - CTP Review Class Chicago, Illinois Contact: http://www.turnaround.org/ Sept. 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION Buying and Selling Troubled Companies Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org/ Sept. 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South Florida Contact: 561-882-1331 or http://www.turnaround.org/ Sept. 25, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Retail Panel Citrus Club, Orlando, Florida Contact: http://www.turnaround.org/ Sept. 26, 2007 TURNAROUND MANAGEMENT ASSOCIATION Joint Educational & Networking Reception TBD, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ Sept. 27, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting Contact: http://www.turnaround.org/ Sept. 27-30, 2007 TURNAROUND MANAGEMENT ASSOCIATION 8th Annual Cross Border Business Restructuring & Turnaround Conference Contact: http://www.turnaround.org/ Oct. 2, 2007 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast TBD, Bridgewater, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ Oct. 9-10, 2007 IWIRC Orlando, Florida IWIRC Annual Fall Conference Contact: http://www.iwirc.org/ Oct. 10-13, 2007 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES 81st Annual National Conference of Bankruptcy Judges Contact: http://www.ncbj.org/ Oct. 11, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, Florida Contact: 561-882-1331 or http://www.turnaround.org/ Oct. 16-19, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Copley Place Boston, Massachussets Contact: 312-578-6900; http://www.turnaround.org/ Oct. 25, 2007 TURNAROUND MANAGEMENT ASSOCIATION Capital Markets Case Study Contact: http://www.turnaround.org/ Oct. 25, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting Contact: http://www.turnaround.org/ Oct. 30, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ Oct. 30, 2007 TURNAROUND MANAGEMENT ASSOCIATION Crisis Communications With Employees,Vendors and Media Centre Club, Tampa, Florida Contact: http://www.turnaround.org/ Nov. 1, 2007 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast TBD, Hackensack, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ Nov. 14, 2007 TURNAROUND MANAGEMENT ASSOCIATION Dinner South Florida Contact: 561-882-1331 or http://www.turnaround.org/ Nov. 15, 2007 TURNAROUND MANAGEMENT ASSOCIATION TMA Portland Holiday Party University Club, Portland, Oregon Contact: 206-223-5495 or http://www.turnaround.org/ Nov. 22, 2007 TURNAROUND MANAGEMENT ASSOCIATION Networking Mixer TBA, Vancouver Contact: 206-223-5495 or www.turnaround.org/ Nov. 27, 2007 TURNAROUND MANAGEMENT ASSOCIATION Luncheon - Real Estate Panel Citrus Club, Orlando, Florida Contact: http://www.turnaround.org/ Nov. 29, 2007 TURNAROUND MANAGEMENT ASSOCIATION Special Speaker TBD, New Jersey Contact: 908-575-7333 or http://www.turnaround.org/ Nov. 29, 2007 TMA Arizona Chapter Meeting TURNAROUND MANAGEMENT ASSOCIATION Contact: http://www.turnaround.org/ Dec. 6, 2007 TURNAROUND MANAGEMENT ASSOCIATION Seattle Holiday Party Athletic Club, Seattle, Washington Contact: 206-223-5495 or http://www.turnaround.org/ Dec. 6-8, 2007 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Westin Mission Hills Resort, Rancho Mirage, California Contact: 1-703-739-0800; http://www.abiworld.org/ Dec. 19, 2007 TURNAROUND MANAGEMENT ASSOCIATION South Florida Dinner TBA, South Florida Contact: 561-882-1331 or http://www.turnaround.org/ Jan. 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Luncheon University Club, Jacksonville, Florida March 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ April 3-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 26th Annual Spring Meeting The Renaissance, Washington, District of Columbia Contact: http://www.abiworld.org/ June 12-14, 2008 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: http://www.abiworld.org/ July 10-13, 2008 TURNAROUND MANAGEMENT ASSOCIATION 16th Annual Northeast Bankruptcy Conference Ocean Edge Resort Brewster, Massachussets Contact: http://www.turnaround.org/ July 31 - Aug. 2, 2008 AMERICAN BANKRUPTCY INSTITUTE 4th Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, Maryland Contact: http://www.abiworld.org/ Aug. 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, Florida Contact: http://www.abiworld.org/ Sept. 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Scottsdale, Arizona Contact: http://www.ncbj.org/ Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Dec. 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ 2009 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Las Vegas, Nevada Contact: http://www.ncbj.org/ June 21-24, 2009 INSOL 8th International World Congress TBA Contact: http://www.insol.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ 2010 (TBA) NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges New Orleans, Louisiana Contact: http://www.ncbj.org/ BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency - Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergers-the New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Marie Therese V. Profetana, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Jason A. Nieva, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, 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 ***